UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 File No.  333-147273

Pre-Effective Amendment No.	o
Post-Effective Amendment No. 3	þ

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940                                                                                                                                                     File No.  811-3330

Amendment No. 264 þ

(Check appropriate box or boxes.)

NATIONWIDE VARIABLE ACCOUNT – II

(Exact Name of Registrant)

NATIONWIDE LIFE INSURANCE COMPANY

(Name of Depositor)

One Nationwide Plaza, Columbus, Ohio 43215

(Address of Depositor's Principal Executive Offices)                                                                                     (Zip Code)

Depositor's Telephone Number, including Area Code (614) 249-7111

Robert W. Horner, III, Vice President - Corporate Governance and Secretary, One Nationwide Plaza, Columbus, Ohio 43215

(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering May 1, 2009

It is proposed that this filing will become effective (check appropriate box)

o      immediately upon filing pursuant to paragraph (b)

þ      on May 1, 2009 pursuant to paragraph (b)

o      60 days after filing pursuant to paragraph (a)(1)

o      on (date) pursuant to paragraph (a)(1)

If appropriate, check the following box:

o      this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Title of Securities Being Registered Individual Flexible Premium Deferred Variable Annuity Contract

Schwab Income Choice Variable Annuity

Nationwide Life Insurance Company

Individual Flexible Premium Deferred Variable Annuity Contracts

Issued by Nationwide Life Insurance Company through its Nationwide Variable Account-II

The date of this prospectus is May 1, 2009 .

This prospectus contains basic information you should understand about the contracts before investing.  Please read this prospectus carefully and keep it for future reference.

Variable annuities are complex investment products with unique benefits and advantages that may be particularly useful in meeting long-term savings and retirement needs.  There are costs and charges associated with these benefits and advantages - costs and charges that are different, or do not exist at all, within other investment products.  With help from a Charles Schwab Representative, investors are encouraged to compare and contrast the costs and benefits of the variable annuity described in this prospectus against those of other investment products.  Nationwide offers a wide array of such products, many with different charges, benefit features and underlying investment options.  This process of comparison and analysis should aid in determining whether the purchase of the contract described in this prospectus is consistent with your investment objectives, risk tolerance, investment time horizon, marital status, tax situation and other personal characteristics and needs.

The Statement of Additional Information (dated May 1, 2009 ), which contains additional information about the contracts and the variable account, has been filed with the Securities and Exchange Commission ("SEC") and is incorporated herein by reference.  The table of contents for the Statement of Additional Information is on page 41.  To obtain free copies of the Statement of Additional Information and other information about the variable account that has been filed with the SEC, call Nationwide's service center at 1-888-421-5368 (TDD 1-800-238-3035); go on-line to: www.nationwide.com; or write:

Nationwide Life Insurance Company

5100 Rings Road, RR1-04-F4

Dublin, Ohio 43017-1522

Information about Nationwide and the variable annuity contract described in this prospectus (including the Statement of Additional Information) may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C., or may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street NE, Washington, D.C. 20549-0102.  Additional information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090.  The SEC also maintains a web site (www.sec.gov) that contains the prospectus, the Statement of Additional Information, material incorporated by reference, and other information.

Before investing, understand that annuities and/or life insurance products are not insured by the FDIC,  or any other Federal government agency, and are not deposits or obligations of, guaranteed by, or insured by the depository institution where offered or any of its affiliates.  Annuities that involve investment risk may lose value.  These securities have not been approved or disapproved by the SEC, nor has the SEC passed upon the accuracy or adequacy of the prospectus.  Any representation to the contrary is a criminal offense.

The sub-accounts available under this contract invest in the underlying mutual funds of the companies listed below. For a complete list of the available sub-accounts, please refer to the Appendix A.   For more information on the underlying mutual funds, please refer to the prospectus for the mutual fund.

AIM Variable Insurance Funds

AllianceBernstein Variable Products Series Fund, Inc.

American Century Variable Portfolios II, Inc.

American Century Variable Portfolios, Inc.

BlackRock Variable Series Funds, Inc.

Dreyfus

Dreyfus Investment Portfolios

Dreyfus Variable Investment Fund

Fidelity Variable Insurance Products Fund

Franklin Templeton Variable Insurance Products Trust

Ivy Funds Variable Insurance Portfolios, Inc.

Janus Aspen Series

MFS® Variable Insurance Trust

Nationwide Variable Insurance Trust

Neuberger Berman Advisers Management Trust

Oppenheimer Variable Account Funds

PIMCO Variable Insurance Trust

Schwab Annuity Portfolios

T. Rowe Price Equity Series, Inc.

The Universal Institutional Funds, Inc.

Wells Fargo Advantage Funds® Variable Trust

Purchase payments not invested in the underlying mutual funds of the Nationwide Variable Account-II ("variable account") may be allocated to the Guaranteed Term Options (Guaranteed Term Options may not be available in every jurisdiction - refer to your contract for specific information).

To contact Charles Schwab Insurance Services:

call:           1-888-311-4887

write:           Schwab Insurance Services

P.O. Box 7666

San Francisco, California  94120-7666

or go on-line to:

www.schwab.com

1

Glossary of Special Terms

Accumulation unit- An accounting unit of measure used to calculate the contract value allocated to the variable account before the annuitization date.

Annuitization date - The date the contract annuitizes and annuity payments begin.

Annuity commencement date - The date that annuity payments are scheduled to begin.

Annuity unit - An accounting unit of measure used to calculate the value of variable annuity payments.

Contract owner - The person(s) who owns all rights under the contract.  All references in this prospectus to “you” shall also mean the contract owner.

Contract value - The value of all accumulation units in a contract plus any amount held under Guaranteed Term Options.

Contract year - Each year the contract is in force beginning with the date the contract is issued.

Current Income Benefit Base - For purposes of the 7% and 5% Lifetime Income Options, the amount that is multiplied by the lifetime withdrawal percentage to arrive at the benefit amount for any given year.

Daily Net Assets - A figure that is calculated at the end of each valuation date and represents the sum of all the contract owners’ interests in the variable Sub-accounts after the deduction of contract and underlying mutual fund expenses.

FDIC - Federal Deposit Insurance Corporation.

General account - All assets of Nationwide other than those of the variable account or in other separate accounts that have been or may be established by Nationwide.

Guaranteed Term Option - Investment options that are part of the Multiple Maturity Separate Account providing a guaranteed interest rate paid over certain periods of time (or terms), if certain conditions are met.

Individual Retirement Account - An account that qualifies for favorable tax treatment under Section 408(a) of the Internal Revenue Code, but does not include Roth IRAs.

Individual Retirement Annuity or IRA - An annuity contract that qualifies for favorable tax treatment under Section 408(b) of the Internal Revenue Code, but does not include Roth IRAs.

Investment-Only Contract - A contract purchased by a qualified pension, profit-sharing or stock bonus plan as defined by Section 401(a) of the Internal Revenue Code.

Multiple Maturity Separate Account - A separate account of Nationwide funding the Guaranteed Term Options.

Nationwide - Nationwide Life Insurance Company.  All references in this prospectus to “we” or “us” shall also mean Nationwide.

Net asset value - The value of one share of an underlying mutual fund at the close of the New York Stock Exchange.

Non-Qualified Contract - A contract which does not qualify for favorable tax treatment as a Qualified Plan, IRA, Roth IRA, SEP IRA, Simple IRA, or Tax Sheltered Annuity.

Original Income Benefit Base - For purposes of the 7% and 5% Lifetime Income Options, the initial benefit base calculated on the date the contract is issued, which is equal to the contract value.

Qualified Plan - A retirement plan that receives favorable tax treatment under Section 401 of the Internal Revenue Code, including Investment-Only Contracts.  In this prospectus, all provisions applicable to Qualified Plans also apply to Investment-Only Contracts unless specifically stated otherwise.

Roth IRA - An annuity contract which qualifies for favorable tax treatment under Section 408A of the Internal Revenue Code.

SEC - Securities and Exchange Commission.

SEP IRA - An annuity contract which qualifies for favorable tax treatment under Section 408(k) of the Internal Revenue Code.

Simple IRA - An annuity contract which qualifies for favorable tax treatment under Section 408(p) of the Internal Revenue Code.

Sub-accounts - Divisions of the variable account for which accumulation units and annuity units are separately maintained – each sub-account corresponds to a single underlying mutual fund.

Tax Sheltered Annuity - An annuity that qualifies for favorable tax treatment under Section 403(b) of the Internal Revenue Code.  Contracts issued pursuant to this prospectus cannot be issued as Tax Sheltered Annuities.

Valuation date - Each day the New York Stock Exchange is open for business, or any other day during which there is a sufficient degree of trading of underlying mutual fund shares such that the current net asset value of accumulation units or annuity units might be materially affected.  Values of the variable account are determined as of the close of the New York Stock Exchange which generally closes at 4:00 p.m. Eastern Time, but may close earlier on certain days and as conditions warrant.

Valuation period - The period of time commencing at the close of a valuation date and ending at the close of the New York Stock Exchange for the next succeeding valuation date.

Variable account - Nationwide Variable Account-II, a separate account of Nationwide that contains variable account allocations.  The variable account is divided into sub-accounts, each of which invests in shares of a separate underlying mutual fund.

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Table of Contents	Page
Glossary of Special Terms	2
Contract Expenses	5
Underlying Mutual Fund Annual Expenses	6
Example	7
Synopsis of the Contracts	7
Purpose of the Contract
Minimum Initial and Subsequent Purchase Payments
Dollar Limit Restrictions Charges and Expenses
Annuity Payments
Taxation
Ten Day Free Look
Condensed Financial Information	9
Financial Statements	9
Nationwide Life Insurance Company	9
Nationwide Investment Services Corporation	10
Charles Schwab and Co., Inc.	10
Investing in the Contract	10
The Variable Account and Underlying Mutual Funds
Guaranteed Term Options
The Contract in General	11
Distribution, Promotional and Sales Expenses
Underlying Mutual Fund Payments
Profitability
Contract Modification
Standard Charges and Deductions	13
Sales Charges
Mortality and Expense Risk Charge
Administrative Charge
Premium Taxes
Short-Term Trading Fees
Optional Contract Benefits, Charges and Deductions	14
Death Benefit Options
Lifetime Income Options - Generally
7% Lifetime Income Option
5% Lifetime Income Option(New York only)
Spousal Continuation Benefit
Lifetime Income Option Investment Options
Ownership and Interests in the Contract	22
Contract Owner
Joint Owner
Contingent Owner
Annuitant
Contingent Annuitant
Co-Annuitant
Joint Annuitant
Beneficiary and Contingent Beneficiary
Changes to the Parties to the Contract
Operation of the Contract	24
Minimum Initial and Subsequent Purchase Payments
Pricing
Application and Allocation of Purchase Payments
Determining the Contract Value
Transfer Requests
Transfer Restrictions
Transfers Prior to Annuitization
Transfers After Annuitization
Right to Examine and Cancel	27

3

Table of Contents (continued)	Page
Surrender (Redemption) Prior to Annuitization	27
Partial Surrenders (Partial Redemptions)
Full Surrenders (Full Redemptions)
Surrender (Redemption) After Annuitization	28
Assignment	28
Contract Owner Services	28
Asset Rebalancing
Dollar Cost Averaging
Systematic Withdrawals Nationwide Allocation Architect
Death Benefits	31
Death of Contract Owner
Death of Annuitant
Death of Contract Owner/Annuitant
Death Benefit Payment
Death Benefit Calculations
Spousal Protection Feature
Summary of Contract Ownership and Distribution upon Death	34
Annuity Commencement Date	35
Annuitizing the Contract	35
Annuitization Date
Annuitization
Fixed Annuity Payments
Variable Annuity Payments
Frequency and Amount of Annuity Payments
Annuity Payment Options	36
Annuity Payment Options for Contracts with Total Purchase Payments Less Than or Equal to $2,000,000
Annuity Payment Options for Contracts with Total Purchase Payments Greater Than $2,000,000
Statements and Reports	37
Legal Proceedings	37
Table of Contents of Statement of Additional Information	41
Appendix A: Underlying Mutual Funds	42
Appendix B: Condensed Financial Information	53
Appendix C: Contract Types and Tax Information Appendix D: State Variations Information	74 83

4

Contract Expenses

The following tables describe the fees and expenses that you will pay when buying, owning, or surrendering the contract.

The first table describes the fees and expenses you will pay at the time the contract is purchased, surrendered, or when cash value is transferred between investment options.

Contract Owner Transaction Expenses

Maximum Premium Tax Charge (as a percentage of purchase payments)                                                                                                                                                          5%1

Maximum Short-Term Trading Fee (as a percentage of transaction amount2)                                                                                                                                                          1%

The next table describes the fees and expenses that a contract owner will pay periodically during the life of the contract (not including underlying mutual fund fees and expenses).

Recurring Contract Expenses
Variable Account Annual Expenses (annualized rate of total variable account charges as a percentage of the Daily Net Assets )3
Mortality and Expense Risk Charge	0.45%
Administrative Charge	0.20%
Optional Riders (with charges assessed as an annualized rate of total variable account charges as a percentage of the Daily Net Assets ):
Death Benefit Options (eligible applicants must elect only one)
Return of Premium Death Benefit Option                                                                                                                                      Total Variable Account Charges (including this option only)	0.10% 0.75%
One-Year Enhanced Death Benefit Option                                                                                                                                      Total Variable Account Charges (including this option only)	0.20% 0.85%
Return of Contract Value Death Benefit Option (only available if a Lifetime Income Option is elected) Total Variable Account Charges (including this option only)	None 0.65%4
Optional Riders (with charges assessed annually, as a percentage of the Current Income Benefit Base)5:
Lifetime Income Options (an applicant may elect only one)
5% Lifetime Income Option (available in New York only)	1.00%6
7% Lifetime Income Option (not available in New York)	1.00%7
Spousal Continuation Benefit	0.30%8

The next table shows the fees and expenses that a contract owner would pay if he/she elected all of the optional benefits available under the contract (and the most expensive of mutually exclusive optional benefits).

Summary of Maximum Contract Expenses (New York Only) (annualized rate, as a percentage of the Daily Net Assets )
Mortality and Expense Risk Charge	0.45%
Administrative Charge	0.20%
One-Year Enhanced Death Benefit Option	0.20%
5% Lifetime Income Option	1.00%9
Spousal Continuation Benefit	0.30%10
Maximum Possible Total Variable Account Charges	2.15%

 

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The next table shows the fees and expenses that a contract owner would pay if he/she elected all of the optional benefits under the contract (and the most expensive of mutually exclusive optional benefits).

Summary of Maximum Contract Expenses (Non New York) (annualized rate, as a percentage of the Daily Net Assets )
Mortality and Expense Risk Charge	0.45%
Administrative Charge	0.20%
One-Year Enhanced Death Benefit Option	0.20%
7% Lifetime Income Option	1.00%11
Spousal Continuation Benefit	0.30%12
Maximum Possible Total Variable Account Charges	2.15%

Underlying Mutual Fund Annual Expenses

The next table provides the minimum and maximum total operating expenses, as of December 31, 2008, charged by the underlying mutual funds that you may pay periodically during the life of the Contract.   The table does not reflect Short-Term Trading Fees.  More detail concerning each underlying mutual fund’s fees and expenses is contained in the prospectus for each underlying mutual fund.

Total Annual Underlying Mutual Fund Operating Expenses	Minimum	Maximum
(expenses that are deducted from underlying mutual fund assets, including management fees, distribution (12b-1) fees, and other expenses, as a percentage of the underlying mutual fund's average net assets)	0.42 %	2.30 %

The minimum and maximum underlying mutual fund operating expenses indicated above do not reflect voluntary or contractual reimbursements and/or waivers applied to some underlying mutual funds.  Therefore, actual expenses could be lower.

1 Nationwide will charge between 0% and 5% of purchase payments for premium taxes levied by state or government entities.

2 See “Short-Term Trading Fees” later in this prospectus for a description of transactions which are assessed this fee.

 

3 These charges apply only to sub-account allocations.  They do not apply to allocations made to the Guaranteed Term Options.  They are charged on a daily basis at the annualized rate noted above.

 

4 The charge associated with the Lifetime Income Option is assessed annually, based on the Current Income Benefit Base (for more information on the Current Income Benefit Base, please see pp. 15 and 18 for the 7% Lifetime Income Option and the 5% Lifetime Income Option, respectively).

 

5 For information about how the Current Income Benefit Base is calculated, please see “Determination of the Income Benefit Base Prior to the First Surrender” later in this prospectus.

 

6 Currently, the charge associated with the 5% Lifetime Income Option is equal to 0. 85 % of the Current Income Benefit Base.

 

7 Currently, the charge associated with the 7% Lifetime Income Option is equal to 0. 95 % of the Current Income Benefit Base.

 

8 The Spousal Continuation Benefit is only available if either the 5% or the 7% Lifetime Income Option is elected.

 

9 This charge is 0.15% of the Current Income Benefit Base.  For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the Daily Net Assets .

 

10 This charge is a percentage of the Current Income Benefit Base.  For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the Daily Net Assets .

11 This charge is a percentage of the Current Income Benefit Base.  For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the Daily Net Assets .

 

12 This charge is a percentage of the Current Income Benefit Base.  For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the Daily Net Assets .

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Example

The example is intended to help contract owners compare the cost of investing in the contract with the cost of investing in other variable annuity contracts.  These costs include contract owner transaction expenses, contract fees, variable account annual expenses, and underlying mutual fund fees and expenses.  The Example does not reflect premium taxes or Short-Term Trading Fees which, if reflected, would result in higher expenses.

The Example assumes:

·   a $10,000 investment in the contract for the time periods indicated;1

·   a 5% return each year;

·   the maximum and the minimum fees and expenses of any of the underlying mutual funds; and

·   the total variable account charges associated with the most expensive combination of optional benefits (2.15%)2.

·   Election of the 7% Lifetime Income Option and Spousal Continuation Benefit.

·   The Current Income Benefit Base equals $10,000.

For those contracts that do not elect the most expensive combination of optional benefits, the expenses would be lower.

	If you surrender your contract at the end of the applicable time period				If you annuitize your contract at the end of the applicable time period				If you do not surrender your contract
	1 Yr.	3 Yrs.	5 Yrs.	10 Yrs	1 Yr.	3 Yrs.	5 Yrs.	10 Yrs	1 Yr.	3 Yrs.	5 Yrs.	10 Yrs
Maximum Total Underlying Mutual Fund Operating Expenses ( 2.30 %)	$ 467	$ 1,406	$2,352	$4,742	*	$ 1,406	$2,352	$4,742	$467	$ 1,406	$2,352	$4,742
Minimum Total Underlying Mutual Fund Operating Expenses ( 0.42 %)	$ 270	$ 828	$1,413	$2,996	*	$ 828	$1,413	$2,996	$270	$ 828	$1,413	$2,996

*Contracts sold under this prospectus do not permit annuitization during the first two contract years.

 

1 The minimum initial purchase payment is $25,000.

 

2 The total variable account charges associated with the most expensive combination of optional benefits may be higher or lower than 2.15% depending on whether the Current Income Benefit Base is higher or lower than the Daily Net Assets .  For purposes of these tables, Nationwide assumes the Current Income Benefit Base is equal to the Daily Net Assets .

Synopsis of the Contracts

The contracts described in this prospectus are individual flexible purchase payment contracts.

The contracts can be categorized as:

·   Charitable Remainder Trusts;

·   Individual Retirement Annuities;

·   Investment-Only Contracts (Qualified Plans);

·   Non-Qualified Contracts;

·   Roth IRAs;

·   SEP IRAs; and

·   Simple IRAs.

For more detailed information with regard to the differences in contract types, please see Appendix C: Contract Types and Tax Information later in this prospectus.

Purpose of the Contract

The annuity described in this prospectus is intended to provide benefits to a single individual and his/her beneficiaries.  It is not intended to be used:

·   by institutional investors;

·   in connection with other Nationwide contracts that have the same annuitant; or

·   in connection with other Nationwide contracts that have different annuitants, but the same contract owner.

By providing these annuity benefits, Nationwide assumes certain risks.  If Nationwide determines that the risks it intended to assume in issuing the contract have been altered by misusing the contract as described above, Nationwide reserves the right to take any action it deems necessary to reduce or eliminate the altered risk, including, but not limited to, rescinding the contract and returning the contract value (less any market value adjustment).  Nationwide also reserves the right to take any action it deems necessary to reduce or eliminate altered risk resulting from materially false, misleading, incomplete or otherwise deficient information provided by the contract owner.

Minimum Initial and Subsequent Purchase Payments

Contract Type	Minimum Initial Purchase Payment	Minimum Subsequent Payments*
Charitable Remainder Trust	$25,000	$500
IRA	$25,000	$500
Investment-Only	$25,000	$500
Non-Qualified	$25,000	$500
Roth IRA	$25,000	$500
SEP IRA	$25,000	$500
Simple IRA	$25,000	$500

*For subsequent purchase payments sent via electronic deposit, the minimum subsequent purchase payment is $50.

Subsequent purchase payments may not be permitted in all states.

7

Nationwide reserves the right to refuse any purchase payment that would result in the cumulative total for all contracts issued by Nationwide on the life of any one annuitant to exceed $1,000,000.    Its decision as to whether or not to accept a purchase payment in excess of that amount will be based on one or more factors, including, but not limited to: age, spouse age (if applicable), annuitant age, state of issue, total purchase payments, optional benefits elected, current market conditions, and current hedging costs. All such decisions will be based on internally established actuarial guidelines and will be applied in a non-discriminatory manner.  In the event that we do not accept a purchase payment under these guidelines, we will immediately return the purchase payment in its entirety in the same manner as it was received.  If we accept the purchase payment, it will be applied to the contract immediately and will receive the next calculated Accumulation unit value.  Any references in this prospectus to purchase payment amounts in excess of $1,000,000 are assumed to have been approved by Nationwide.

Dollar Limit Restrictions

In addition to the potential purchase payment restriction listed above, certain features of the contract have additional purchase payment and/or Contract value limitations associated with them:

Annuitization.   Your annuity payment options will be limited if you submit total purchase payments in excess of $2,000,000.  Furthermore, if the amount to be annuitized is greater than $5,000,000, we may limit both the amount that can be annuitized on a single life and the annuity payment options.

Death benefit calculations.   Purchase payments up to $3,000,000 will result in a higher death benefit payment than purchase payments in excess of $3,000,000.

Guaranteed Term Options

Guaranteed Term Options are separate investment options under the contract.  The minimum amount that may be allocated to a Guaranteed Term Option is $1,000.

Charges and Expenses

Underlying Mutual Fund Annual Expenses

The underlying mutual funds charge fees and expenses that are deducted from underlying mutual fund assets.  These fees and expenses are in addition to the fees and expenses assessed by the contract.  The prospectus for each underlying mutual fund provides information regarding the fees and expenses applicable to the fund.

Short-Term Trading Fees

Some underlying mutual funds may assess (or reserve the right to assess) a short-term trading fee in connection with transfers from a sub-account that occur within 60 days after the date of allocation to the Sub-account.  Any short-term trading fee assessed by any underlying mutual fund available in conjunction with the contracts described in this prospectus will equal 1% of the amount determined to be engaged in short-term trading.

Mortality and Expense Risk Charge

Nationwide deducts a Mortality and Expense Risk Charge equal to an annualized rate of 0.45% of the Daily Net Assets of the variable account.

The Mortality and Expense Risk Charge compensates Nationwide for providing the insurance benefits under the contract.  It also compensates Nationwide for assuming the risk that annuitants will live longer than assumed.  Finally, the Mortality and Expense Risk Charge compensates Nationwide for guaranteeing that charges will not increase regardless of actual expenses.  Nationwide may realize a profit from this charge, which Nationwide may use to finance the distribution of the contracts.

Administrative Charge

Nationwide deducts an Administrative Charge equal to an annualized rate of 0.20% of the Daily Net Assets of the variable account.

The Administrative Charge reimburses Nationwide for administrative costs it incurs resulting from providing contract benefits, including preparation of the contract and prospectus, confirmation statements, annual account statements and annual reports, legal and accounting fees as well as various related expenses.  Nationwide may realize a profit from this charge, which Nationwide may use to finance the distribution of the contracts.

Death Benefit Options

An applicant must elect one of the following death benefit options at the time of application:

Death Benefit Options	Charge*
One-Year Enhanced Death Benefit Option1	0.20%
Return of Premium Death Benefit Option	0.10%
Return of Contract Value Death Benefit Option2	None

*The charges shown are the annualized rates charged as a percentage of the Daily Net Assets of the variable account.

1 The One-Year Enhanced Death Benefit Option is only for contracts with annuitants age 80 or younger at the time of application.

2The Return of Contract Value Death Benefit Option is only available if a Lifetime Income Option is elected.

For more information about the optional death benefits, please see "Death Benefit Calculations" later in this prospectus.

7% Lifetime Income Option

The 7% Lifetime Income Option is available under the contract at the time of application.  The primary contract owner (or the primary annuitant in the case of a non-natural contract owner) must be between age 45 and 85 at the time of application.

8

If the applicant elects the 7% Lifetime Income Option, Nationwide will deduct an additional charge equal to a rate not to exceed 1.00% of the Current Income Benefit Base, which is the amount upon which the annual benefit is based.  The current charge for the 7% Lifetime Income Option is 0. 95 % of the Current Income Benefit Base.  The charge is deducted on each contract anniversary and is taken from the sub-accounts proportionally based on contract allocations at the time the charge is deducted.

5% Lifetime Income Option

The 5% Lifetime Income Option is available under the contract at the time of application, and is only available in the state of New York.  The primary contract owner (or the primary annuitant in the case of a non-natural contract owner) must be between age 45 and 85 at the time of application.

If the applicant elects the 5% Lifetime Income Option, Nationwide will deduct an additional charge equal to a rate not to exceed 1.00% of the Current Income Benefit Base, which is the amount upon which the annual benefit is based.  The current charge for the 5% Lifetime Income Option is 0. 85 % of the Current Income Benefit Base.  The charge is deducted on each contract anniversary and is taken from the sub-accounts proportionally based on contract allocations at the time the charge is deducted.

Spousal Continuation Benefit

The Spousal Continuation Benefit is available under the contract at the time of application for those contracts that have also elected a Lifetime Income Option.  The primary contract owner’s spouse (or the primary annuitant’s spouse in the case of a non-natural contract owner) must be between age 45 and 85 at the time of application.

If the applicant elects the Spousal Continuation Benefit, Nationwide will deduct an additional charge equal to a rate not to exceed 0.30% of the Current Income Benefit Base.  The current charge for the Spousal Continuation Benefit is 0.15% of the Current Income Benefit Base.  The charge is deducted at the same time and in the same manner as the Lifetime Income Option charge.

Charges for Optional Benefits

The charges associated with optional benefits are only assessed prior to annuitization.

Annuity Payments

Annuity payments begin on the annuitization date and will be based on the annuity payment option chosen prior to annuitization.  Annuity payments will generally be received within 7 to 10 days after each annuity payment date.

Taxation

How a contract is taxed depends on the type of contract issued and the purpose for which the contract is purchased. Nationwide will charge against the contract any premium taxes levied by any governmental authority.  Premium tax rates currently range from 0% to 5% (see "Federal Tax Considerations" in “Appendix C: Contract Types and Tax Information” and "Premium Taxes").

Ten Day Free Look

Under state insurance laws, contract owners have the right, during a limited period of time, to examine their contract and decide if they want to keep it or cancel it.  This right is referred to as a “free look” right.  The length of this time period depends on state law and may vary depending on whether your purchase is replacing another annuity contract you own.

If the contract owner elects to cancel the contract pursuant to the free look provision, where required by law, Nationwide will return the greater of the Contract value or the amount of purchase payment(s) applied during the free look period, and applicable federal and state income tax withholding.  Otherwise, Nationwide will return the Contract value, less any applicable federal and state income tax withholding.

See “Right to Examine and Cancel” later in this prospectus for more information.

Condensed Financial Information

The value of an accumulation unit is determined on the basis of changes in the per share value of the underlying mutual funds and the assessment of variable account charges which may vary from contract to contract (for more information on the calculation of accumulation unit values, see "Determining Variable Account Value – Valuing an Accumulation Unit").  Since this annuity contract was first available for sale on June 19, 2008, there are no accumulation unit values available.

Financial Statements

Financial statements for the variable account and the consolidated financial statements for Nationwide Life Insurance Company are located in the Statement of Additional Information.  A current Statement of Additional Information may be obtained, without charge, by contacting Nationwide’s home office at the telephone number listed on page 1 of this prospectus.

Nationwide Life Insurance Company

Nationwide is a stock life insurance company organized under Ohio law in March 1929, with its home office at One Nationwide Plaza, Columbus, Ohio 43215.  Nationwide is a provider of life insurance, annuities and retirement products.  It is admitted to do business in all states, the District of Columbia and Puerto Rico.

Nationwide is a member of the Nationwide group of companies.  Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (the "Companies") are the ultimate controlling persons of the Nationwide group of companies.  The Companies were organized under Ohio law in December 1925 and 1933 respectively.  The Companies engage in a general insurance and reinsurance business, except life insurance.

Nationwide is relying on the exemption in Rule 12h-7 of the Securities Exchange Act of 1934 (the “’34 Act”) relating to its duty to file reports otherwise required by Sections 15(d) and 13(a) of the ‘34 Act.

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Nationwide Investment Services Corporation

The contracts are distributed by the general distributor, Nationwide Investment Services Corporation ("NISC"), One Nationwide Plaza, Columbus, Ohio 43215.  NISC is a wholly owned subsidiary of Nationwide.

Prospective purchasers may apply to purchase a contract through broker dealers that have entered into a selling agreement with NISC.

Charles Schwab & Co., Inc.

The contracts are sold exclusively by representatives of Charles Schwab & Co., Inc., ("Schwab") Charles Schwab Insurance Services, P.O. Box 7666, San Francisco, California 94120-7666.  Schwab is not affiliated with Nationwide or NISC.

Investing in the Contract

The Variable Account and Underlying Mutual Funds

Nationwide Variable Account-II is a variable account that invests in the underlying mutual funds listed in Appendix A.  Nationwide established the variable account on October 7, 1981 pursuant to Ohio law.  Although the variable account is registered with the SEC as a unit investment trust pursuant to the Investment Company Act of 1940 ("1940 Act"), the SEC does not supervise the management of Nationwide or the variable account.

Income, gains, and losses credited to, or charged against, the variable account reflect the variable account’s own investment experience and not the investment experience of Nationwide’s other assets.  The variable account’s assets are held separately from Nationwide’s assets and are not chargeable with liabilities incurred in any other business of Nationwide.  Nationwide is obligated to pay all amounts promised to contract owners under the contracts.

The variable account is divided into sub-accounts, each corresponding to a single underlying mutual fund.  Nationwide uses the assets of each sub-account to buy shares of the underlying mutual funds based on contract owner instructions.

Each underlying mutual fund’s prospectus contains more detailed information about that fund.  Prospectuses for the underlying mutual funds should be read in conjunction with this prospectus.

Contract owners receive underlying mutual prospectues when they make their initial sub-account allocations and any time they change those allocations.  Contract ownerscan obtain prospectuses for underlying mutual funds at any other time by contacting our home office at the telephone number listed on page 1 of this prospectus.  Contract owners should read these prospectuses carefully before investing.

Underlying mutual funds in the variable account are NOT publicly traded mutual funds.  They are only 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.

The investment advisers of the underlying mutual funds may manage publicly traded mutual funds with similar names and investment objectives.  However, the underlying mutual funds are NOT directly related to any publicly traded mutual fund.  Contract owners should not compare the performance of a publicly traded fund with the performance of underlying mutual funds participating in the variable account.  The performance of the underlying mutual funds could differ substantially from that of any publicly traded funds.

The particular underlying mutual funds available under the contract may change from time to time.  Specifically, underlying mutual funds or underlying mutual fund share classes that are currently available may be removed or closed off to future investment.  New underlying mutual funds or new share classes of currently available underlying mutual funds may be added.  Contract owners will receive notice of any such changes that affect their contract.

In the future, additional underlying mutual funds managed by certain financial institutions, brokerage firms or their affiliates may be added to the variable account.  These additional underlying mutual funds may be offered exclusively to purchasing customers of the particular financial institution or brokerage firm, or through other exclusive distribution arrangements.

Voting Rights

Contract owners who have allocated assets to the underlying mutual funds are entitled to certain voting rights.  Nationwide will vote contract owner shares at special shareholder meetings based on contract owner instructions.  However, if the law changes and Nationwide is allowed to vote in its own right, it may elect to do so.

Contract owners with voting interests in an underlying mutual fund will be notified of issues requiring the shareholders’ vote as soon as possible before the shareholder meeting.  Notification will contain proxy materials and a form with which to give Nationwide voting instructions.  Nationwide will vote shares for which no instructions are received in the same proportion as those that are received.  What this means to you is that when only a small number of contract owners vote, each vote has a greater impact and may control the outcome.

The number of shares which a contract owner may vote is determined by dividing the cash value of the amount they have allocated to an underlying mutual fund by the net asset value of that underlying mutual fund.  Nationwide will designate a date for this determination not more than 90 days before the shareholder meeting.

Material Conflicts

The underlying mutual funds may be offered through separate accounts of other insurance companies, as well as through other separate accounts of Nationwide.  Nationwide does not anticipate any disadvantages to this.  However, it is possible that a conflict may arise between the interests of the variable account and one or more of the other separate accounts in which these underlying mutual funds participate.

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Material conflicts may occur due to a change in law affecting the operations of variable life insurance policies and variable annuity contracts, or differences in the voting instructions of the contract owners and those of other companies.  If a material conflict occurs, Nationwide will take whatever steps are necessary to protect contract owners and variable annuity payees, including withdrawal of the variable account from participation in the underlying mutual fund(s) involved in the conflict.

Substitution of Securities

Nationwide may substitute, eliminate, or combine shares of another underlying mutual fund for shares already purchased or to be purchased in the future if either of the following occurs:

(1)   shares of a current underlying mutual fund are no longer available for investment; or

(2)   further investment in an underlying mutual fund is inappropriate.

No substitution of shares may take place without the prior approval of the SEC.  All affected contract owners will be notified in the event there is a substitution, elimination or combination of shares.

Deregistration of the Variable Account

Nationwide may deregister the variable account under the 1940 Act in the event the variable account meets an exemption from registration under the 1940 Act, if there are no shareholders in the separate account, or for any other purpose approved by the SEC.

No deregistration may take place without the prior approval of the SEC.  All affected contract owners will be notified in the event Nationwide deregisters the variable account.

Guaranteed Term Options

Guaranteed Term Options ("GTOs") are separate investment options under the contract.  The minimum amount that may be allocated to a GTO is $1,000.  Allocations to a Guaranteed Term Option are held in a separate account, established by Nationwide pursuant to Ohio law, to aid in the reserving and accounting for Guaranteed Term Option obligations.  The separate account's assets are held separately from Nationwide's other assets and are not chargeable with liabilities incurred in any other business of Nationwide.  However, the general assets of Nationwide are available for the purpose of meeting the guarantees of any Guaranteed Term Option, subject to Nationwide's claims-paying ability.  A Guaranteed Term Option prospectus should be read along with this prospectus.

Guaranteed Term Options provide a guaranteed rate of interest over four different maturity durations: three (3), five (5), seven (7) or ten (10) years.  Note:  The guaranteed term may last for up to 3 months beyond the 3, 5, 7 or 10 year period since every guaranteed term will end on the final day of a calendar quarter.

For the duration selected, Nationwide will declare a guaranteed interest rate. The guaranteed interest rate will be credited to amounts allocated to the Guaranteed Term Option(s) unless a distribution is taken before the maturity date.  If a distribution occurs before the maturity date, the amount distributed will be subject to a market value adjustment.  A market value adjustment can increase or decrease the amount distributed depending on fluctuations in constant maturity treasury rates.  No market value adjustment will be applied if Guaranteed Term Option allocations are held to maturity.

Because a market value adjustment can affect the value of a distribution, its effects should be carefully considered before surrendering or transferring from Guaranteed Term Options.  Please refer to the prospectus for the Guaranteed Term Options for further information.  Contract owners can obtain a GTO prospectus at no charge by contacting Nationwide’s home office at the telephone number listed on page 1 of this prospectus.

Guaranteed Term Options are available only during the accumulation phase of a contract.  They are not available after the annuitization date.  In addition, Guaranteed Term Options are not available for use with Asset Rebalancing, Dollar Cost Averaging, or Systematic Withdrawals.

Guaranteed Term Options may not be available in every state.

The Contract in General

Not all benefits, programs, features and investment options described in this prospectus are available or approved for use in every state.   For more detailed information regarding provisions that vary by state, please see “Appendix D: State Variations” later in this prospectus.

In order to comply with the USA Patriot Act and rules promulgated thereunder, Nationwide has implemented procedures designed to prevent contracts described in this prospectus from being used to facilitate money laundering or the financing of terrorist activities.

If this contract is purchased to replace another variable annuity, be aware that the mortality tables used to determine the amount of annuity payments may be less favorable than those in the contract being replaced.

These contracts are offered exclusively through Schwab.  Schwab is not responsible for the guarantees under the contracts.  Guarantees under the contracts are the sole responsibility of Nationwide.

Investors who purchase the variable annuity described in this prospectus may be eligible to apply the contract value to the total amount of the investor's household assets maintained at Schwab.  If the total amount of the investor's household assets at Schwab meet certain predetermined breakpoints, the investor may be eligible for certain fee reductions or other related benefits offered by Schwab.  All terms and conditions regarding the fees and account types eligible for such consideration are determined by Schwab.  Charges and expenses of the variable annuity contract described in this prospectus are NOT subject to reduction or waiver by Schwab.  Please consult a Schwab representative for more information.

In general, deferred variable annuities are long-term investments; they are not intended as short-term investments.  Accordingly, Nationwide has designed the contract to offer features, pricing, and investment options that encourage long-

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term ownership.  It is very important that contract owners and prospective contract owners understand all the costs associated with owning a contract, and if and how those costs change during the lifetime of the contract.  Contract and optional charges may not be the same in later contract years as they are in early contract years.  The various contract and optional benefit charges are assessed in order to compensate Nationwide for administrative services, distribution and operational expenses, and assumed actuarial risks associated with the contract.

Following is a discussion of some relevant factors that may be of particular interest to prospective investors.

Distribution, Promotional and Sales Expenses

Nationwide pays commissions to Schwab for selling the contracts.  The maximum gross commission that Nationwide will pay on the sale of the contracts is 0.60%.  Nationwide may also, instead of a premium-based commission, pay an asset-based commission (sometimes referred to as "trails" or "residuals"), or a combination of the two.

Underlying Mutual Fund Payments

Nationwide’s Relationship with the Underlying Mutual Funds

The underlying mutual funds incur expenses each time they sell, administer, or redeem their shares.  The variable account aggregates contract owner purchase, redemption, and transfer requests and submits net or aggregated purchase/redemption requests to each underlying mutual fund daily.   The variable account (not the contract owners) is the underlying mutual fund shareholder.  When the variable account aggregates transactions, the underlying mutual fund does not incur the expense of processing individual transactions it would normally incur if it sold its shares directly to the public.  Nationwide incurs these expenses instead.

Nationwide also incurs the distribution costs of selling the contract (as discussed above), which benefit the underlying mutual funds by providing contract owners with sub-account options that correspond to the underlying mutual funds.

An investment adviser or sub-adviser of an underlying mutual fund or its affiliates may provide Nationwide or its affiliates with wholesaling services that assist in the distribution of the contract and may pay Nationwide or its affiliates to participate in educational and/or marketing activities.  These activities may provide the adviser or sub-adviser (or their affiliates) with increased exposure to persons involved in the distribution of the contract.

Types of Payments Nationwide Receives

In light of the above, the underlying mutual funds and their affiliates make certain payments to Nationwide or its affiliates (the “payments”).  The amount of these payments is typically based on a percentage of assets invested in the underlying mutual funds attributable to the contracts and other variable contracts Nationwide and its affiliates issue, but in some cases may involve a flat fee.  These payments may be used by Nationwide for any corporate purpose, which include reducing the prices of the contracts, paying expenses that Nationwide or its affiliates incur in promoting, marketing, and administering the contracts and the underlying mutual funds, and achieving a profit.

Nationwide or its affiliates receive the following types of payments:

·   Underlying mutual fund 12b-1 fees, which are deducted from underlying mutual fund assets;

·   Sub-transfer agent fees or fees pursuant to administrative service plans adopted by the underlying mutual fund, which may be deducted from underlying mutual fund assets; and

·   Payments by an underlying mutual fund’s adviser or sub-adviser (or its affiliates).  Such payments may be derived, in whole or in part, from the advisory fee, which is deducted from underlying mutual fund assets and is reflected in mutual fund charges.

Furthermore, Nationwide benefits from assets invested in Nationwide’s affiliated underlying mutual funds (i.e., Nationwide Variable Insurance Trust) because its affiliates also receive compensation from the underlying mutual funds for investment advisory, administrative, transfer agency, distribution, and/or other services.  Thus, Nationwide may receive more revenue with respect to affiliated underlying mutual funds than unaffiliated underlying mutual funds.

Nationwide took into consideration the anticipated payments from the underlying mutual funds when it determined the charges imposed under the contracts (apart from fees and expenses imposed by the underlying mutual funds).  Without these payments, Nationwide would have imposed higher charges under the contract.

Amount of Payments Nationwide Receives

Most underlying mutual funds or their affiliates have agreed to make payments to Nationwide or its affiliates, although the applicable percentages may vary from underlying mutual fund to underlying mutual fund and some may not make any payments at all.  Because the amount of the actual payments Nationwide and its affiliates receive depends on the assets of the underlying mutual funds attributable to the contract, Nationwide and its affiliates may receive higher payments from underlying mutual funds with lower percentages (but greater assets) than from underlying mutual funds that have higher percentages (but fewer assets).

For additional information related to amount of payments Nationwide receives, go to www.nationwide.com.

Identification of Underlying Mutual Funds

Nationwide may consider several criteria when identifying the underlying mutual funds, including some or all of the following:  investment objectives, investment process, investment performance, risk characteristics, investment capabilities, experience and resources, investment consistency, and fund expenses.  Another factor Nationwide considers during the identification process is whether the underlying mutual fund’s adviser or sub-adviser is one of Nationwide's affiliates or whether the underlying mutual fund, its adviser, its sub-adviser(s), or an affiliate will make payments to Nationwide or its affiliates.

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There may be underlying mutual funds with lower fees, as well as other variable contracts that offer underlying mutual funds with lower fees.  A potential purchaser should consider all of the fees and charges of the contract in relation to its features and benefits when making the decision to invest.   Please note that higher contract and underlying mutual fund fees and charges have a direct effect on and may lower your investment performance.

Profitability

Nationwide does consider profitability when determining the charges in the contract.  In early contract years, Nationwide does not anticipate earning a profit, since that is a time when administrative and distribution expenses are typically higher.  Nationwide does, however, anticipate earning a profit in later contract years.  In general, Nationwide's profit will be greater the higher the investment return and the longer the contract is held.

Contract Modification

Nationwide may modify the contract, but no modification will affect the amount or term of any annuity contract unless a modification is required to conform the contract to applicable federal or state law.  No modification will affect the method by which the contract values are determined.

Standard Charges and Deductions

Sales Charges

There are no sales charges assessed upon purchase payments or surrenders from the contract.

Mortality and Expense Risk Charge

Nationwide deducts a Mortality and Expense Risk Charge from the variable account.  This amount is computed on a daily basis and is equal to an annualized rate of 0.45% of the Daily Net Assets of the variable account.  This fee compensates Nationwide for providing insurance benefits under the contract.  It also compensates Nationwide for assuming the risk that annuitants will live longer than assumed.  Finally, the Mortality and Expense Risk Charge compensates Nationwide for guaranteeing that charges will not increase regardless of actual expenses.  Nationwide may realize a profit from this charge, which Nationwide may use to finance distribution of the contracts.

Administrative Charge

Nationwide deducts an Administrative Charge from the variable account.  This amount is computed on a daily basis and is equal to an annualized rate of 0.20% of the Daily Net Assets of the variable account.  This fee reimburses Nationwide for the administrative costs it incurs resulting from providing contract benefits, including preparation of the contract and prospectus, confirmation statements, annual account statements and annual reports, legal and accounting fees, as well as various related expenses.  Nationwide may realize a profit from this charge, which Nationwide may use to finance the distribution of the contracts.

Premium Taxes

Nationwide will charge against the contract value any premium taxes levied by a state or other government entity.  Premium tax rates currently range from 0% to 5%.  This range is subject to change.  Nationwide will assess premium taxes to the contract at the time Nationwide is assessed the premium taxes by the state.  Premium tax requirements vary from state to state.

Premium taxes may be deducted from death benefit proceeds.

Short-Term Trading Fees

Some underlying mutual funds may assess (or reserve the right to assess) a short-term trading fee in connection with transfers from a sub-account that occur within 60 days after the date of allocation to the sub-account.

Short-term trading fees are intended to compensate the underlying mutual fund (and contract owners with interests allocated in the underlying mutual fund) for the negative impact on fund performance that may result from frequent, short-term trading strategies.  Short-term trading fees are not intended to affect the large majority of contract owners not engaged in such strategies.

Any short-term trading fee assessed by any underlying mutual fund available in conjunction with the contracts described in this prospectus will equal 1% of the amount determined to be engaged in short-term trading.  Short-term trading fees will only apply to those sub-accounts corresponding to underlying mutual funds that charge such fees (see the underlying mutual fund prospectus).  Any short-term trading fees paid are retained by the underlying mutual fund, not by Nationwide, and are part of the underlying mutual fund’s assets.  Contract owners are responsible for monitoring the length of time allocations are held in any particular underlying mutual fund.  Nationwide will not provide advance notice of the assessment of any applicable short-term trading fee.

If a short-term trading fee is assessed, the underlying mutual fund will charge the variable account 1% of the amount determined to be engaged in short-term trading.  The variable account will then pass the short-term trading fee on to the specific contract owner that engaged in short-term trading by deducting an amount equal to the short-term trading fee from that contract owner’s sub-account value.  All such fees will be remitted to the underlying mutual fund; none of the fee proceeds will be retained by Nationwide or the variable account.

When multiple purchase payments (or exchanges) are made to a sub-account that is subject to short-term trading fees, transfers will be considered to be made on a first in/first out (FIFO) basis for purposes of determining short-term trading fees.  In other words, units held the longest time will be treated as being transferred first, and units held for the shortest time will be treated as being transferred last.

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Some transactions are not subject to the short-term trading fees.  Transactions that are not subject to short-term trading fees include:

·   scheduled and systematic transfers, such as Dollar Cost Averaging, Asset Rebalancing, and Systematic Withdrawals;

·   surrenders;

·   surrenders of annuity units to make annuity payments;

·   surrenders of accumulation units to pay a death benefit; or

·   transfers made upon annuitization of the contract.

New share classes of certain currently available underlying mutual funds may be added as investment options under the contracts.  These new share classes may require the assessment of short-term trading or redemption fees.  When these new share classes are added, new purchase payment allocations and exchange reallocations to the underlying mutual funds in question may be limited to the new share class.

Optional Contract Benefits, Charges and Deductions

For an additional charge, the following optional benefits are available to contract owners.  Not all optional benefits are available in every state.  Unless otherwise indicated:

(1)   optional benefits must be elected at the time of application;

(2)   optional benefits, once elected, may not be terminated prior to annuitization; and

(3)   the optional benefits (including associated charges) will terminate upon annuitization.

Death Benefit Options

At the time of application, the contract owner must elect one of three death benefit options.

Return of Premium Death Benefit Option

Applicants can elect the Return of Premium Death Benefit Option for an additional charge equal to an annualized rate of 0.10% of the Daily Net Assets of the variable account.  If the annuitant dies before the annuitization date, the death benefit will be the greater of:

(1) the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit; or

(2) the total of all purchase payments, less an adjustment for amounts surrendered.

The contract value in item (1) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.

The adjustment for amounts surrendered will reduce item (2) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).

Note: For contracts that have elected this option, if the total of all purchase payments made to this contract is greater than $3,000,000, the death benefit will be adjusted as described in the "Death Benefit Calculations" provision on page 32.

The Return of Premium Death Benefit Option also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.  Please see "Spousal Protection Feature" later in this prospectus.

One-Year Enhanced Death Benefit Option

Applicants with annuitants age 80 or younger at the time of application may elect the One-Year Enhanced Death Benefit Option for an additional charge equal to an annualized rate of 0.20% of the Daily Net Assets of the variable account.  If the annuitant dies before the annuitization date, the death benefit will be the greatest of:

(1) the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;

(2) the total of all purchase payments, less an adjustment for amounts surrendered; or

(3) the highest contract value on any contract anniversary prior to the annuitant's 86th birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that contract anniversary.

The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.

The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).

Note: For contracts that have elected this option, if the total of all purchase payments made to this contract is greater than $3,000,000, the death benefit will be adjusted as described in the "Death Benefit Calculations" provision on page 32.

The One-Year Enhanced Death Benefit Option also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.  Please see "Spousal Protection Feature" later in this prospectus.

Return of Contract Value Death Benefit Option

Applicants that elect a Lifetime Income Option may elect the Return of Contract Value Death Benefit Option for no additional charge.  If the annuitant dies before the annuitization date, the death benefit will equal the contract value as of the date Nationwide receives all the information necessary to pay the death benefit.

Lifetime Income Options – Generally

The 7% and 5% Lifetime Income Options are designed exclusively as withdrawal benefits.  Nationwide determines a benefit base that it uses to calculate how much the contract owner can withdraw each year.  Additionally, if the contract

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owner delays taking withdrawals for 10 years, Nationwide will guarantee growth of the contract value at a rate of either 5% or 7% of the benefit base for each of those 10 years.

While the tax treatment of surrenders under withdrawal benefits such as the 5% and 7% Lifetime Income Optionis not clear under federal tax law, Nationwide currently treats these surrenders as taxable to the extent that the cash value of the contract exceeds the contract owner’s investment at the time of the surrender.  Please consult a qualified tax advisor.

7% Lifetime Income Option

The 7% Lifetime Income Option provides for lifetime withdrawals, up to a certain amount each year, even after the contract value is zero.  The age of the person upon which the benefit depends (the “determining life”) must be between 45 and 85 years old at the time of application.  For most contracts, the determining life is that of the primary contract owner.  For those contracts where the contract owner is a non-natural person, for purposes of this option, the determining life is that of the primary annuitant, and all references in this option to “contract owner” shall mean primary annuitant.   If in addition to the annuitant, a co-annuitant or joint annuitant has been elected, the determining life will be that of the younger annuitant.   The determining life may not be changed.

The 7% Lifetime Income Option may only be elected at the time of application.  The 7% Lifetime Income Option may not be elected if the 5% Lifetime Income Option is elected.  The contract owner may also not participate in any of the dollar cost averaging programs otherwise available under the contract.   The 7% Lifetime Income Option is not available on beneficially owned contracts.

In exchange for this lifetime withdrawal benefit, Nationwide will assess an annual charge not to exceed 1.00% of the Current Income Benefit Base.  The current charge for the 7% Lifetime Income Option is 0. 95 % of the Current Income Benefit Base.  The charge associated with the 7% Lifetime Income Option will not change, except, possibly, upon the contract owner’s election to reset the benefit base, as discussed herein.  The charge will be assessed on each contract anniversary (the “7% L.Inc anniversary”) and will be deducted via redemption of accumulation units.  A prorated charge will also be deducted upon full surrender of the contract.  Accumulation units will be redeemed proportionally from each sub-account in which the contract owner is invested at the time the charge is taken.  Amounts redeemed as the 7% Lifetime Income Option charge will not negatively impact calculations associated with other benefits elected or available under the contract.

Election of the 7% Lifetime Income Option requires that the contract owner, until annuitization, allocate the entire contract value to a specified set of investment options currently available in the contract.  For the list of investment options available under this benefit, please see “Lifetime Income Option Investment Options” later in this prospectus.  Allocations to investment options other than those listed in the “Lifetime Income Option Investment Options” provision will not be honored; they will be treated as though no allocation request was submitted.  Allocation to a GTO is not permitted.  The contract owner may reallocate the contract value among the limited set of investment options in accordance with the “Transfers Prior to Annuitization” provision.

Currently, subsequent purchase payments are permitted under the 7 % Lifetime Income Option as long as the Contract value is greater than zero.  There may be instances where a subsequent purchase payment creates a financial risk that Nationwide is unwilling to bear.  If this occurs, Nationwide may exercise its right to refuse subsequent purchase payments which total in aggregate $50,000 or more in any calendar year.  If Nationwide exercises this right to refuse a purchase payment, the entire purchase payment that causes the aggregate amount to exceed $50,000 will be immediately returned to the contract owner in the same form in which it was received.

Determination of the Income Benefit Base Prior to the First Surrender

Upon contract issuance, the Original Income Benefit Base is equal to the contract value.  Each time the benefit base is recalculated, as described below, the resulting benefit base is the Current Income Benefit Base.  For the first 10 years after the 7% Lifetime Income Option is elected (provided no surrenders are taken from the contract), the Current Income Benefit Base will equal the greater of:

(1)   the highest contract value on any 7% L.Inc anniversary plus purchase payments submitted after that L.Inc anniversary; or

(2) the sum of the following (the “7% simple interest calculation”):

(a) the Original Income Benefit Base, plus 7% of the Original Income Benefit Base for each attained 7% L.Inc anniversary; and

(b) purchase payments applied after contract issuance, plus 7% of such purchase payments for each attained 7% L.Inc anniversary after the first, plus a prorated amount based upon the number of days from the date of such purchase payment to the first 7% L.Inc anniversary.

After the 10th 7% L.Inc anniversary (provided no surrenders are taken from the contract), the Current Income Benefit Base will equal the greater of:

(1) the highest contract value on any 7% L.Inc anniversary plus purchase payments submitted after that 7% L.Inc anniversary; or

(2) the 7% simple interest calculation calculated on the 10th 7% L.Inc anniversary plus any purchase payments submitted after the 10th 7% L.Inc anniversary.

However, if at any time prior to the first surrender the contract value equals zero, no further income benefit base calculations will be made.  The Current Income Benefit Base will be set equal to the income benefit base calculated on the most recent 7% L.Inc anniversary, and the annual benefit amount will be based on that Current Income Benefit Base.

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Lifetime Income Surrenders

At any time after the 7% Lifetime Income Option is elected, the contract owner may begin taking the lifetime income benefit by taking a surrender from the contract.  The first surrender under the contract constitutes the first lifetime income surrender, even if such surrender is taken to meet minimum distribution requirements under the Internal Revenue Code.  Nationwide will surrender accumulation units proportionally from the sub-accounts as of the date of the surrender request.  As with any surrender, lifetime income surrenders reduce the contract value and consequently, the amount available for annuitization.

At the time of the first surrender, the Current Income Benefit Base is locked in and will not change unless the contract owner takes excess surrenders, elects a reset opportunity (both discussed later in this provision), or submits additional purchase payments.  Additional purchase payments submitted after the first surrender from the contract will increase the Current Income Benefit Base by the amount of the purchase payment.

Simultaneously, the lifetime withdrawal percentage is determined based on the age of the contract owner as indicated in the following tables:

For contracts issued before May 1, 2009, or the date of state approval (whichever is later):

Contract Owner’s Age (at time of first surrender)	Lifetime Withdrawal Percentage
45 up to 59½	4%
59½ through 66	5%
67 through 71	5.5%
72 through 80	6%
81 and older	7%

For contracts issued on or after May 1, 2009, or the date of state approval (whichever is later):

Contract Owner’s Age (at time of first surrender)	Lifetime Withdrawal Percentage
45 up to 59½	3%
59½ through 64	4%
65 through 80	5%
81 and older	6%

A contract owner will receive the 7% lifetime withdrawal percentage only if he or she does not take a surrender from the contract prior to age 81.  Note: The Internal Revenue Code requires that IRAs, SEP IRAs, and Simple IRAs begin distributions no later than April 1 of the calendar year following the calendar year in which the contract owner reaches age 70½.  Thus, if the contract is subject to these minimum distribution rules and distributions are taken at the latest date possible under the tax rules, the maximum lifetime withdrawal percentage available to that contract is 5.5%.  Contract owners may be eligible to take the minimum required distributions from other IRA, SEP IRA, or Simple IRA contracts or accounts, and thus may be able to receive a lifetime withdrawal percentage greater than 5.5%.  Consult a qualified tax advisor.

At the time of the first surrender and on each 7% L.Inc anniversary thereafter, the lifetime withdrawal percentage is multiplied by the Current Income Benefit Base to determine the benefit amount for that year.  The benefit amount is the maximum amount that can be surrendered from the contract before the next 7% L.Inc anniversary without reducing the Current Income Benefit Base.  The ability to surrender the current benefit amount will continue until the earlier of the contract owner’s death or annuitization.

Although surrenders up to the benefit amount do not reduce the Current Income Benefit Base, they do reduce the contract value and the death benefit.

Impact of Withdrawals in Excess of the Lifetime Withdrawal Percentage Limit

The contract owner is permitted to surrender contract value in excess of that year’s benefit amount provided that the contract value is greater than zero.  Surrenders in excess of the benefit amount will reduce the Current Income Benefit Base, and consequently, the benefit amount calculated for subsequent years.  In the event of excess surrenders, the Current Income Benefit Base will be reduced by the greater of:

(1)   the dollar amount of the surrender in excess of the benefit amount; or

(2)   the ratio of the dollar amount of the excess surrender to the contract value (which has been reduced by the amount of the benefit amount surrendered), multiplied by the Current Income Benefit Base.

In situations where the contract value exceeds the existing Current Income Benefit Base, excess surrenders will typically result in a dollar amount reduction to the new Current Income Benefit Base.  In situations where the contract value is less than the existing Current Income Benefit Base, excess surrenders will typically result in a proportional reduction to the new Current Income Benefit Base.

Currently, Nationwide allows for an “RMD privilege” whereby Nationwide permits a contract owner to surrender contract value in excess of the benefit amount without reducing the Current Income Benefit Base if such excess surrender is for the sole purpose of meeting Internal Revenue Code required minimum distributions for this contract.  This RMD privilege is not available for contracts issued as IRAs that are taken over, upon a contract owner’s death, by a non-spouse.  In order to qualify for the RMD privilege, the contract owner must:

(1)   be at least 70 ½ years old as of the date of the request;

(2)   own the contract as an IRA, Roth IRA, SEP IRA, Simple IRA, or Investment-Only Contract; and

(3)   submit a completed administrative form to Nationwide’s home office.

Nationwide reserves the right to modify or eliminate the RMD privilege if there is any change to the Internal Revenue Code or IRS rules relating required minimum distributions, including the issuance of relevant IRS guidance.  If

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Nationwide exercises this right, any surrender in excess of the benefit amount will reduce the remaining Current Income Benefit Base.

Once the contract value falls to zero, the contract owner is no longer permitted to submit additional purchase payments or take surrenders in excess of the benefit amount.   Additionally, there is no Contract value to annuitize, making the payment of the benefit associated with this option the only income stream producing benefit remaining in the contract.

Reset Opportunities

Nationwide offers an automatic reset of the income benefit base.  If, on any 7% L.Inc anniversary, the contract value exceeds the existing Current Income Benefit Base, Nationwide will automatically reset the Current Income Benefit Base to equal that contract value.  This higher amount will be the new Current Income Benefit Base.  This automatic reset will continue until any terms and conditions associated with the 7% Lifetime Income Option change.

In the event one or more terms and conditions of the 7% Lifetime Income Option change, the reset opportunities still exist, but are no longer automatic.  An election to reset the Current Income Benefit Base must be made by the contract owner to Nationwide.  On or about each 7% L.Inc anniversary, Nationwide will provide the contract owner with information necessary to make this determination.  Specifically, Nationwide will provide: the contract value; the Current Income Benefit Base; the current terms and conditions associated with the 7% Lifetime Income Option; and instructions on how to communicate an election to reset the benefit base.

If the contract owner elects to reset the Current Income Benefit Base, it will be at the then current terms and conditions of the option as described in the most current prospectus.  This could result in higher fees.  If Nationwide does not receive a contract owner’s election to reset the Current Income Benefit Base within 60 days after the 7% L.Inc anniversary, Nationwide will assume that the contract owner does not wish to reset the Current Income Benefit Base.  If the Current Income Benefit Base is not reset, it will remain the same and the terms and conditions of the 7% Lifetime Income Option will not change (as applicable to that particular contract).

Contract owners may cancel the automatic reset feature of the 7% Lifetime Income Option by notifying Nationwide as to such election.  Nationwide reserves the right to modify or terminate the automatic reset feature at any time upon written notice to contract owners.

Settlement Options

If, after beginning lifetime income surrenders, a contract owner’s contract value falls to zero (thus, there is nothing to annuitize) and there is still a positive Current Income Benefit Base, Nationwide will provide the contract owner with one or more settlement options (in addition to the option of continuing to take or receive annual benefit payments).  Specifically, Nationwide will provide a notification to the contract owner describing the following three options, along with instructions on how to submit the election to Nationwide:

(1)   The contract owner can continue to take annual surrenders of no more than the annual benefit amount until the death of the contract owner;

(2)   The contract owner can elect the Age Based Lump Sum Settlement Option, as described below; or

(3)   If the contract owner qualifies after a medical examination, the contract owner can elect the Underwritten Lump Sum Settlement Option, as described below.

The options listed above each result in a different amount ultimately received under the 7% Lifetime Income Option.  The Underwritten Lump Sum Settlement Option will generally pay a larger amount than the Age Based Lump Sum Settlement Option when a contract owner is healthier than the normal population.  Regardless of age or health, the Underwritten Lump Sum Settlement Option amount will never be less than the Age Based Lump Sum Settlement Option amount.  Election of the Age Based Lump Sum Settlement Option enables the contract owner to receive payment without a medical exam, which could potentially delay payment.  Before selecting a settlement option, consult with a qualified financial advisor to determine which option is best for you based on your individual financial situation and needs.

The contract owner will have 60 days from the date of Nationwide’s notification letter to make an election.  Once the contract owner makes an election, the election is irrevocable.  If the contract owner does not make an election within 60 days of the date of the notification letter, Nationwide will assume that the contract owner intends to continue to take surrenders of the annual benefit amount.

Age Based Lump Sum Settlement Option.  Under the Age Based Lump Sum Settlement Option, in lieu of taking surrenders of the annual benefit amount, Nationwide will pay the contract owner a lump sum equal to the contract owner’s most recently calculated annual benefit amount multiplied by the Annual Benefit Multiplier listed in the following table:

Contract Owner’s Age	Annual Benefit Multiplier
Up to Age 70	5.5
71-75	4.5
76-80	3.5
81-85	2.5
86-90	2.0
91-95	1.5
96+	1.0

For contracts that have elected the Spousal Continuation Benefit, if both spouses are living on the date the Age Based Lump Sum Settlement Option is elected, Nationwide will use the age of the younger contract owner minus three years to determine the Annual Benefit Multiplier.  If only one spouse is living on the date the Age Based Lump Sum Settlement Option is elected, Nationwide will use the age of the living spouse to determine the Annual Benefit Multiplier.

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Underwritten Lump Sum Settlement Option.  Under the Underwritten Lump Sum Settlement Option, in lieu of taking surrenders of the annual benefit amount, for those who qualify based on a medical exam, Nationwide will pay the contract owner a lump sum based upon the attained age, sex, and health of the contract owner and joint owner, if applicable.  Such information must be submitted by the contract owner to Nationwide on a Nationwide form that is attested to by a certified physician chosen by the contract owner.

Termination of Benefit

Upon annuitization of the contract, the charge associated with this option will no longer be assessed and all benefits associated with the 7% Lifetime Income Option will terminate.  Additionally, upon the contract owner’s death the benefits associated with the option terminate (unless the Spousal Continuation Benefit was also elected).

5% Lifetime Income Option (New York only)

The 5% Lifetime Income Option provides for lifetime withdrawals, up to a certain amount each year, even after the contract value is zero.  The age of the person upon which the benefit depends (the “determining life”) must be between 45 and 85 years old at the time of application.  For most contracts, the determining life is that of the primary contract owner.  For those contracts where the contract owner is a non-natural person, for purposes of this option, the determining life is that of the primary annuitant, and all references in this option to “contract owner” shall mean primary annuitant.   If in addition to the annuitant, a co-annuitant or joint annuitant has been elected, the determining life will be that of the younger annuitant.   The determining life may not be changed.

Currently, the 5% Lifetime Income Option is only available in the state of New York.  The 5% Lifetime Income Option may not be elected if the 7% Lifetime Income Option is elected.  Once this option is elected, the contract owner may not participate in any of the dollar cost averaging programs otherwise available under the contract.   The 5% Lifetime Income Option is not available on beneficially owned contracts.

In exchange for this lifetime withdrawal benefit, Nationwide will assess an annual charge not to exceed 1.00% of the Current Income Benefit Base.  The current charge for the 5% Lifetime Income Option is 0. 85 % of the Current Income Benefit Base.  The charge associated with the 5% Lifetime Income Option will not change, except, possibly, upon the contract owner’s election to reset the benefit base, as discussed herein.  The charge will be assessed on each contract anniversary (the “5% L.Inc anniversary”) and will be deducted via redemption of accumulation units.  A prorated charge will also be deducted upon full surrender of the contract.  Accumulation units will be redeemed proportionally from each sub-account in which the contract owner is invested at the time the charge is taken.  Amounts redeemed as the 5% Lifetime Income Option charge will not negatively impact calculations associated with other benefits elected or available under the contract.

Election of the 5% Lifetime Income Option requires that the contract owner, until annuitization, allocate the entire contract value to a specified set of investment options currently available in the contract.  For the list of investment options available under this benefit please see “Lifetime Income Option Investment Options” later in this prospectus.  Allocations to investment options other than those listed in the “Lifetime Income Option Investment Options” provision will not be honored; they will be treated as though no allocation request was submitted.  Allocation to a GTO is not permitted.  The contract owner may reallocate the contract value among the limited set of investment options in accordance with the “Transfers Prior to Annuitization” provision.

Currently, subsequent purchase payments are permitted under the 5 % Lifetime Income Option as long as the Contract value is greater than zero.  There may be instances where a subsequent purchase payment creates a financial risk that Nationwide is unwilling to bear.  If this occurs, Nationwide may exercise its right to refuse subsequent purchase payments which total in aggregate $50,000 or more in any calendar year.  If Nationwide exercises this right to refuse a purchase payment, the entire purchase payment that causes the aggregate amount to exceed $50,000 will be immediately returned to the contract owner in the same form in which it was received.

Determination of the Income Benefit Base Prior to the First Surrender

Upon contract issuance, the Original Income Benefit Base is equal to the contract value.  Each time the benefit base is recalculated, as described below, the resulting benefit base is the Current Income Benefit Base.  For the first 10 years after the 5% Lifetime Income Option is elected (provided no surrenders are taken from the contract), the Current Income Benefit Base will equal the greater of:

(1)   the highest contract value on any 5% L.Inc anniversary plus purchase payments submitted after that 5% L.Inc anniversary; or

(2)   the sum of the following (the “5% simple interest calculation”):

(a)   the Original Income Benefit Base, plus 5% of the Original Income Benefit Base for each attained 5% L.Inc anniversary; and

(b) Purchase Payments with Roll-up: any purchase payments submitted after contract issuance and before the 10 th 5% L.Inc Anniversary, increased by a simple interest rate of 5% through the 10 th 5% L.Inc anniversary.

After the 10th 5% L.Inc anniversary (provided no surrenders are taken from the contract), the Current Income Benefit Base will equal the greater of:

(1)   the highest contract value on any 5% L.Inc anniversary plus purchase payments submitted after that 5% L.Inc anniversary; or

(2)   the 5% simple interest calculation calculated on the 10th 5% L.Inc anniversary plus any purchase payments submitted after the 10th 5% L.Inc anniversary.

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However, if at any time prior to the first surrender the contract value equals zero, no further Income Benefit Base calculations will be made.  The Current Income Benefit Base will be set equal to the Current Income Benefit Base calculated on the most recent 5% L.Inc anniversary, and the annual benefit amount will be based on that Income Benefit Base.

Lifetime Income Surrenders

At any time after the 5% Lifetime Income Option is elected, the contract owner may begin taking the lifetime income benefit by taking a surrender from the contract.  The first surrender under the contract constitutes the first lifetime income surrender, even if such surrender is taken to meet minimum distribution requirements under the Internal Revenue Code.  Nationwide will surrender accumulation units proportionally from the sub-accounts as of the date of the surrender request.  As with any surrender, lifetime income surrenders reduce the contract value and consequently, the amount available for annuitization.

At the time of the first surrender, the Current Income Benefit Base is locked in and will not change unless the contract owner takes excess surrenders, elects a reset opportunity (both discussed later in this provision), or submits additional purchase payments.  Additional purchase payments submitted after the first surrender from the contract will increase the Current Income Benefit Base by the amount of the purchase payment.

Simultaneously, the lifetime withdrawal percentage is determined based on the age of the contract owner as indicated in the following tables:

For contracts issued before May 1, 2009, or the date of state approval (whichever is later):

Contract Owner’s Age (at time of first surrender)	Lifetime Withdrawal Percentage
45 up to 59½	4%
59½ through 66	5%
67 through 71	5.5%
72 through 80	6%
81 and older	7%

For contracts issued on or after May 1, 2009, or the date of state approval (whichever is later):

Contract Owner’s Age (at time of first surrender)	Lifetime Withdrawal Percentage
45 up to 59½	3%
59½ through 64	4%
65 through 80	5%
81 and older	6%

A contract owner will receive the 7% lifetime withdrawal percentage only if he or she does not take a surrender from the contract prior to age 81.  Note: The Internal Revenue Code requires that IRAs, SEP IRAs, and Simple IRAs begin distributions no later than April 1 of the calendar year following the calendar year in which the contract owner reaches age 70½.  Thus, if the contract is subject to these minimum distribution rules and distributions are taken at the latest date possible under the tax rules, the maximum lifetime withdrawal percentage available to that contract is 5.5%.  Contract owners may be eligible to take the minimum required distributions from other IRA, SEP IRA, or Simple IRA contracts or accounts, and thus may be able to receive a lifetime withdrawal percentage greater than 5.5%.  Consult a qualified tax advisor.

At the time of the first surrender and on each 5% L.Inc anniversary thereafter, the lifetime withdrawal percentage is multiplied by the Current Income Benefit Base to determine the benefit amount for that year.  The benefit amount is the maximum amount that can be surrendered from the contract before the next 5% L.Inc anniversary without reducing the Current Income Benefit Base.  The ability to surrender the current benefit amount will continue until the earlier of the contract owner’s death or annuitization.

Although surrenders up to the benefit amount do not reduce the lifetime benefit base, they do reduce the contract value and the death benefit.

Impact of Withdrawals in Excess of the Lifetime Withdrawal Percentage Limit

The contract owner is permitted to surrender contract value in excess of that year’s benefit amount provided that the contract value is greater than zero.  Surrenders in excess of the benefit amount will reduce the Current Income Benefit Base, and consequently, the benefit amount calculated for subsequent years.  In the event of excess surrenders, the Current Income Benefit Base will be reduced by the greater of:

(1)   the dollar amount of the surrender in excess of the benefit amount; or

(2)   the ratio of the dollar amount of the excess surrender to the contract value (which has been reduced by the amount of the benefit amount surrendered), multiplied by the Current Income Benefit Base.

In situations where the contract value exceeds the existing Current Income Benefit Base, excess surrenders will typically result in a dollar amount reduction to the new Current Income Benefit Base.  In situations where the contract value is less than the existing Current Income Benefit Base, excess surrenders will typically result in a proportional reduction to the new Current Income Benefit Base.

Currently, Nationwide allows for an “RMD privilege” whereby Nationwide permits a contract owner to surrender contract value in excess of the benefit amount without reducing the Current Income Benefit Base if such excess surrender is for the sole purpose of meeting Internal Revenue Code required minimum distributions for this contract.  This RMD privilege is not available for contracts issued as IRAs that are taken over, upon a contract owner’s death, by a non-spouse.  In order to qualify for the RMD privilege, the contract owner must:

(1) be at least 70 ½ years old as of the date of the request;

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(2) own the contract as an IRA, Roth IRA, SEP IRA, Simple IRA, or Investment-only Contract; and

(3) submit a completed administrative form to Nationwide’s home office.

Nationwide reserves the right to modify or eliminate the RMD privilege if there is any change to the Internal Revenue Code or IRS rules relating required minimum distributions, including the issuance of relevant IRS guidance.  If Nationwide exercises this right, any surrender in excess of the benefit amount will reduce the remaining Current Income Benefit Base.

Once the contract value falls to zero, the contract owner is no longer permitted to submit additional purchase payments or take surrenders in excess of the benefit amount.   Additionally, there is no Contract value to annuitize, making the payment of the benefit associated with this option the only income stream producing benefit remaining in the contract.

Reset Opportunities

Nationwide offers an automatic reset of the income benefit base.  If, on any 5% L.Inc anniversary, the contract value exceeds the existing Current Income Benefit Base, Nationwide will automatically reset the Current Income Benefit Base to equal that contract value.  This higher amount will be the new Current Income Benefit Base.  This automatic reset will continue until any terms and conditions associated with the 5% Lifetime Income Option change.

In the event one or more terms and conditions of the 5% Lifetime Income Option change, the reset opportunities still exist, but are no longer automatic.  An election to reset the Current Income Benefit Base must be made by the contract owner to Nationwide.  On or about each 5% L.Inc anniversary, Nationwide will provide the contract owner with information necessary to make this determination.  Specifically, Nationwide will provide: the contract value; the Current Income Benefit Base; the current terms and conditions associated with the 5% Lifetime Income Option; and instructions on how to communicate an election to reset the benefit base.

If the contract owner elects to reset the Current Income Benefit Base, it will be at the then current terms and conditions of the option as described in the most current prospectus.  This could result in higher fees.  If Nationwide does not receive a contract owner’s election to reset the Current Income Benefit Base within 60 days after the 5% L.Inc anniversary, Nationwide will assume that the contract owner does not wish to reset the Current Income Benefit Base.  If the Current Income Benefit Base is not reset, it will remain the same and the terms and conditions of the 5% Lifetime Income Option will not change (as applicable to that particular contract).

Contract owners may cancel the automatic reset feature of the 5% Lifetime Income Option by notifying Nationwide as to such election.  Nationwide reserves the right to modify or terminate the automatic reset feature at any time upon written notice to contract owners.

Settlement Options

If, after beginning lifetime income surrenders, a contract owner’s contract value falls to zero (thus, there is nothing to annuitize) and there is still a positive Current Income Benefit Base, Nationwide will provide the contract owner with one or more settlement options (in addition to the ability to continue annual benefit payments).  Specifically, Nationwide will provide a notification to the contract owner describing the following three options, along with instructions on how to submit the election to Nationwide:

(1)   The contract owner can continue to take annual surrenders of no more than the annual benefit amount until the death of the contract owner;

(2)   The contract owner can elect the Age Based Lump Sum Settlement Option, as described below; or

(3)   If the contract owner qualifies after a medical examination, the contract owner can elect the Underwritten Lump Sum Settlement Option, as described below.

The options listed above each result in a different amount ultimately received under the 5% Lifetime Income Option.  The Underwritten Lump Sum Settlement Option will generally pay a larger amount than the Age Based Lump Sum Settlement Option when a contract owner is healthier than the normal population.  Regardless of age or health, the Underwritten Lump Sum Settlement Option amount will never be less than the Age Based Lump Sum Settlement Option amount.  Election of the Age Based Lump Sum Settlement Option enables the contract owner to receive payment without a medical exam, which could potentially delay payment.  Before selecting a settlement option, consult with a qualified financial advisor to determine which option is best for you based on your individual financial situation and needs.

The contract owner will have 60 days from the date of Nationwide’s notification letter to make an election.  Once the contract owner makes an election, the election is irrevocable.  If the contract owner does not make an election within 60 days of the date of the notification letter, Nationwide will assume that the contract owner intends to continue to take surrenders of the annual benefit amount.

Age Based Lump Sum Settlement Option.  Under the Age Based Lump Sum Settlement Option, in lieu of taking surrenders of the annual benefit amount, Nationwide will pay the contract owner a lump sum equal to the contract owner’s most recently calculated annual benefit amount multiplied by the Annual Benefit Multiplier listed below:

Contract Owner’s Age	Annual Benefit Multiplier
Up to Age 70	5.5
71-75	4.5
76-80	3.5
81-85	2.5
86-90	2.0
91-95	1.5
96+	1.0

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For contracts that have elected the Spousal Continuation Benefit, if both spouses are living on the date the Age Based Lump Sum Settlement Option is elected, Nationwide will use the age of the younger contract owner minus three years to determine the Annual Benefit Multiplier.  If only one spouse is living on the date the Age Based Lump Sum Settlement Option is elected, Nationwide will use the age of the living spouse to determine the Annual Benefit Multiplier.

Underwritten Lump Sum Settlement Option.  Under the Underwritten Lump Sum Settlement Option, in lieu of taking surrenders of the annual benefit amount, for those who qualify based on a medical exam, Nationwide will pay the contract owner a lump sum based upon the attained age, sex, and health of the contract owner and joint contract owner, if applicable.  Such information must be submitted by the contract owner to Nationwide on a Nationwide form that is attested to by a certified physician chosen by the contract owner.

Termination of Benefit

Upon annuitization of the contract, the charge associated with this option will no longer be assessed and all benefits associated with the 5% Lifetime Income Option will terminate.  Additionally, upon the contract owner’s death the benefits associated with the option terminate (unless the Spousal Continuation Benefit was also elected).

Spousal Continuation Benefit

For an additional charge not to exceed 0.30% of the Current Income Benefit Base, the contract owner can elect to add a Spousal Continuation Benefit (not available for contracts issued as Charitable Remainder Trusts).  Currently, the charge associated with this option is 0.15% of the Current Income Benefit Base.  The charge is assessed annually in the same manner as the Lifetime Income Option charge.  The Spousal Continuation Benefit allows a surviving spouse to continue to receive, for the duration of his/her lifetime, the benefit associated with the elected Lifetime Income Option, provided that the following conditions are satisfied:

(1) The Spousal Continuation Benefit must be elected at the time of application, and both spouses must be between 45 and 85 years old at that time.

(2) Both spouses must be age 45 before either spouse is eligible to begin withdrawals. Note : the Internal Revenue Code imposes a penalty tax if a distribution is made before the contract owner reaches age 59½ unless certain exceptions are met.  See "Federal Tax Considerations’" in “Appendix C: Contract Types and Tax Information” for additional information.

(3) The lifetime withdrawal percentage will be based on the age of the younger spouse as of the date of the first surrender from the contract.

(4) One or both spouses (or a revocable trust of which either or both of the spouses is/are grantor(s)) must be named as the contract owner.  For contracts issued as IRAs and Roth IRAs, only the person for whom the IRA or Roth IRA was established may be named as the contract owner.

(5) Both spouses must be named as beneficiaries.  For contracts with non-natural owners, both spouses must be named as annuitants.

(6) No person other than the spouse may be named as contract owner, annuitant or primary beneficiary.

(7) If both spouses are alive upon annuitization, the contract owner must specify which spouse is the annuitant upon whose continuation of life any annuity payments involving life contingencies depend (for IRA and Roth IRA contracts, this person must be the contract owner).

If, prior to taking any surrenders from the contract, the marriage terminates due to divorce, dissolution, or annulment, the contract owner may remove the Spousal Continuation Benefit from the contract.  Nationwide will remove the benefit and the associated charge upon the contract owner’s written request and evidence of the marriage termination satisfactory to Nationwide.  Once the Spousal Continuation Benefit is removed from the contract, the benefit may not be re-elected or added to cover a subsequent spouse.

Note: The Spousal Continuation Benefit is distinct from the Spousal Protection Feature associated with the two optional death benefits.  The Spousal Continuation Benefit allows a surviving spouse to continue receiving the lifetime income payments associated with the Lifetime Income Options.  In contrast, the Spousal Protection Feature is a death benefit bump-up feature associated with the One-Year Enhanced Death Benefit Option and the Return of Premium Death Benefit Option.

Lifetime Income Option Investment Options

The following list of investment options is the complete list of investment options available for contracts that have elected a Lifetime Income Option.  Allocations must remain invested in one or more of the following investment options, as indicated herein, for the duration of the contract until annuitization.

Nationwide Variable Insurance Trust

·    American Funds NVIT Asset Allocation Fund: Class II

·    NVIT Investor Destinations Conservative Fund: Class II

·    NVIT Investor Destinations Balanced Fund: Class II

·    NVIT Investor Destinations Moderately Conservative Fund: Class II

·    NVIT Investor Destinations Capital Appreciation Fund: Class II

·    NVIT Investor Destinations Moderate Fund: Class II

·    NVIT Investor Destinations Moderately Aggressive Fund: Class II 1

 

1 Effective March 2, 2009, the following underlying investment option will no longer be available to new investors in this Income Benefit Investment Option (5% L.Inc and 7% L.Inc):

NVIT - NVIT Investor Destinations Moderately Aggressive Fund: Class II

If you are invested in this Income Benefit Investment Option prior to March 2, 2009, you are permitted to make subsequent purchase payments as long as you remain invested in this

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Static Asset Allocation Models

·    American Funds Option (33% NVIT American Funds

NVIT Asset Allocation Fund: Class II,

(33% NVIT American Funds NVIT Bond Fund: Class II, and

34% NVIT American Funds NVIT Growth Income Fund: Class II)

·    Balanced Option (50% NVIT Nationwide NVIT Investor Dest.

Moderate Fund: Class II and 50% NVIT Nationwide NVIT Investor Dest. Moderately Conservative Fund: Class II)

·    Capital Appreciation Option (50% NVIT Nationwide NVIT

Investor Dest. Moderate Fund: Class II and 50% NVIT Nationwide NVIT Investor Dest. Moderately Aggressive Fund: Class II)

The conditions associated with the Lifetime Income Options require that the contract owner allocate their contract value to one or more NVIT funds of funds for the life of the contract until annuitization.  Since funds of funds involve layering of underlying investments, the contract owner will pay higher underlying mutual fund fees while the option is in effect, than had the option not been elected.  Please consult the prospectuses for these investment options, which can be obtained free of charge by contacting Nationwide at the address and/or phone number listed on page 1.

Static Asset Allocation Models

A Static Asset Allocation Model is an allocation strategy comprised of two or more underlying mutual funds that together provide a unique allocation mix not available as a single underlying mutual fund.  Contract owners that elect a Static Asset Allocation Model directly own sub-account units of the underlying mutual funds that comprise the particular model.  In other words, a Static Asset Allocation Model is not a portfolio of underlying mutual funds with one accumulation/annuity unit value, but rather, direct investment in a certain allocation of sub-accounts.  There is no additional charge associated with investing in a Static Asset Allocation Model.

Each of the Static Asset Allocation Models is just that: static.  The allocations or “split” between one or more sub-accounts is not monitored and adjusted to reflect changing market conditions.  However, a contract owner’s investment in a Static Asset Allocation Model is rebalanced quarterly to ensure that the assets are allocated to the percentages in the same proportion that they were allocated at the time of election.

Only one Static Asset Allocation Model may be elected at any given time.  Additionally, the entire contract value must be allocated to the elected model.

With respect to transferring into and out of a Static Asset Allocation Model, the models are treated like an underlying mutual fund and are subject to the “Transfers Prior to Annuitization” provision.  You may request to transfer from one model to another, or transfer from a model to a permitted underlying mutual fund.  Each transfer into or out of a Static Asset Allocation Model is considered one transfer event.

For additional information about the underlying mutual funds that comprise each Static Asset Allocation Model, see “Appendix A: Underlying Mutual Funds.”

Ownership and Interests in the Contract

Contract Owner

Prior to the annuitization date, the contract owner has all rights under the contract, unless a joint owner is named.  If a joint owner is named, each joint owner has all rights under the contract.  Purchasers who name someone other than themselves as the contract owner will have no rights under the contract.

On the annuitization date, the annuitant becomes the contract owner, unless the contract owner is a Charitable Remainder Trust.  If the contract owner is a Charitable Remainder Trust, the Charitable Remainder Trust continues to be the contract owner after annuitization.

Contract owners of Non-Qualified Contracts may name a new contract owner at any time before the annuitization date.  Any change of contract owner automatically revokes any prior contract owner designation.  Changes in contract ownership may result in federal income taxation and may be subject to state and federal gift taxes.

Joint Owner

Joint owners each own an undivided interest in the contract.

Non-Qualified contract owners can name a joint owner at any time before annuitization.  However, joint owners must be

Income Benefit Investment Option.  No transfers into this Income Benefit Investment Option will be permitted on or after March 2, 2009.  Any asset rebalancing program established prior to March 2, 2009, that includes this Income Benefit Investment Option will continue to rebalance; however, you will not be permitted to increase the percentage of contract value that is rebalanced into this Income Benefit Investment Option.

In addition, effective March 2, 2009, the Nationwide Allocation Architect (“NAA”) Moderately Aggressive model will no longer be available to new investors that have elected a Lifetime Income Option.  If you invested in this model prior to March 2, 2009, you are permitted to make subsequent purchase payments as long as you remain invested in the model.  If you transfer contract value out of the NAA Moderately Aggressive model on or after March 2, 2009, you will not be permitted to subsequently transfer contract value back into the model.

In addition, the NAA Moderately Aggressive model and the Income Benefit Investment Option listed above will no longer be available for any dollar cost averaging program established on or after March 2, 2009.  Any dollar cost averaging program established prior to March 2, 2009, that includes the NAA Moderately Aggressive model or the Income Benefit Investment Option listed above will continue uninterrupted, however, you will not be permitted to increase the percentage of contract value that is transferred through your dollar cost averaging program into either of these investments.

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spouses at the time joint ownership is requested, unless state law requires Nationwide to allow non-spousal joint owners.

Generally, the exercise of any ownership rights under the contract must be in writing and signed by both joint owners.  However, if a written election, signed by both contract owners, authorizing Nationwide to allow the exercise of ownership rights independently by either joint owner is submitted, Nationwide will permit joint owners to act independently.  If such an authorization is submitted, Nationwide will not be liable for any loss, liability, cost, or expense for acting in accordance with the instructions of either joint owner.

If either joint owner dies before the annuitization date, the contract continues with the surviving joint owner as the remaining contract owner.

Contingent Owner

The contingent owner succeeds to the rights of a contract owner if a contract owner who is not the annuitant dies before the annuitization date, and there is no surviving joint owner.

If a contract owner who is the annuitant dies before the annuitization date, the contingent owner will not have any rights under the contract, unless such contingent owner is also the beneficiary.

The contract owner may name a contingent owner at any time before the annuitization date.

Annuitant

The annuitant is the person who will receive annuity payments and upon whose continuation of life any annuity payment involving life contingencies depends.  This person must be age 85 or younger at the time of contract issuance, unless Nationwide approves a request for an annuitant of greater age.

Only Non-Qualified Contract owners may name someone other than himself/herself as the annuitant.

The contract owner may not name a new annuitant without Nationwide’s consent.

Contingent Annuitant

If the annuitant dies before the annuitization date, the contingent annuitant becomes the annuitant.  The contingent annuitant must be age 85 or younger at the time of contract issuance, unless Nationwide approves a request for a contingent annuitant of greater age.

If a contingent annuitant is named, all provisions of the contract that are based on the annuitant’s death prior to the annuitization date will be based on the death of the last survivor of the annuitant and contingent annuitant.

Co-Annuitant

A co-annuitant, if named, must be the annuitant’s spouse.  The co-annuitant may be named at any time prior to annuitization and will receive the benefit of the Spousal Protection Feature (subject to the conditions set forth in the "Spousal Protection Feature" provision).

If either co-annuitant dies before the annuitization date, the surviving co-annuitant may continue the contract and will receive the benefit of the Spousal Protection Feature.

Joint Annuitant

The joint annuitant is designated as a second person (in addition to the annuitant) upon whose continuation of life any annuity payment involving life contingencies depend.  This person must be age 85 or younger at the time of contract issuance, unless Nationwide approves a request for a joint annuitant of greater age.

The contract owner may name a joint annuitant at any time before the annuitization date.

Beneficiary and Contingent Beneficiary

The beneficiary is the person who is entitled to the death benefit if the annuitant dies before the annuitization date and there is no joint owner.  The contract owner can name more than one beneficiary.  Multiple beneficiaries will share the death benefit equally, unless otherwise specified.

A contingent beneficiary will succeed to the rights of the beneficiary if no beneficiary is alive when a death benefit is paid.  The contract owner can name more than one contingent beneficiary.  Multiple contingent beneficiaries will share the death benefit equally, unless otherwise specified.

Changes to the Parties to the Contract

Prior to the annuitization date (and subject to any existing assignments), the contract owner may request to change the following:

·   contract owner (Non-Qualified Contracts only);

·   joint owner (must be the contract owner’s spouse);

·   contingent owner;

·   annuitant (subject to Nationwide’s underwriting and approval);

·   contingent annuitant (subject to Nationwide’s underwriting and approval);

·   co-annuitant (must be the annuitant’s spouse);

·   joint annuitant (subject to Nationwide’s underwriting and approval);

·   beneficiary; or

·   contingent beneficiary.

If the contract owner has elected a Lifetime Income Option, additional restrictions apply (see “7% Lifetime Income Option” or “5% Lifetime Income Option”).

The contract owner must submit the request to Nationwide in writing and Nationwide must receive the request at its home office before the annuitization date.  Once Nationwide receives and records the change request, the change will be effective as of the date the written request was signed, whether or not the contract owner or annuitant is living at the time it was recorded.  The change will not affect any action taken by Nationwide before the change was recorded.

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In addition to the above requirements, any request to change the contract owner must be signed by the existing contract owner and the person designated as the new contract owner.  Nationwide may require a signature guarantee.

If the contract owner is not a natural person and there is a change of the annuitant, distributions will be made as if the contract owner died at the time of the change, regardless of whether the contract owner named a contingent annuitant, as per Internal Revenue Service guidelines.  Distributions will be made in accordance with the “Death of Annuitant” provision.

Nationwide reserves the right to reject any change request that would alter the nature of the risk that Nationwide assumed when it originally issued the contract (see "Purpose of the Contract" earlier in this prospectus).

Operation of the Contract

Minimum Initial and Subsequent Purchase Payments

Contract Type	Minimum Initial Purchase Payment	Minimum Subsequent Payments*
Charitable Remainder Trust	$25,000	$500
IRA	$25,000	$500
Investment-Only	$25,000	$500
Non-Qualified	$25,000	$500
Roth IRA	$25,000	$500
SEP IRA	$25,000	$500
Simple IRA	$25,000	$500

*For subsequent purchase payments sent via electronic deposit, the minimum subsequent purchase payment is $50.

The cumulative total of all purchase payments under contracts issued by Nationwide on the life of any one annuitant cannot exceed $1,000,000 without Nationwide’s prior consent.  Any references in this prospectus to purchase payment amounts in excess of $1,000,000 are assumed to have been approved by Nationwide. Nationwide prohibits subsequent purchase payments made after death of the contract owner(s), the annuitant or co-annuitant.  If upon notification of death of the contract owner(s), the annuitant or co-annuitant, it is determined that death occurred prior to a subsequent purchase payment being made, Nationwide reserves the right to return the purchase payment subject to investment performance.

Guaranteed Term Options

Guaranteed Term Options are separate investment options under the contract.  The minimum amount that may be allocated to a Guaranteed Term Option is $1,000.

Pricing

Generally, Nationwide prices accumulation unit values of the sub-accounts on each day that the New York Stock Exchange is open.  (Pricing is the calculation of a new accumulation unit value that reflects that day’s investment experience.)  Accumulation units are not priced when the New York Stock Exchange is closed or on the following nationally recognized holidays:

·New Year’s Day	·Independence Day
·Martin Luther King, Jr. Day	·Labor Day
·Presidents’ Day	·Thanksgiving
·Good Friday	·Christmas
·Memorial Day

Nationwide also will not price purchase payments if:

(1)   trading on the New York Stock Exchange is restricted;

(2)   an emergency exists making disposal or valuation of securities held in the variable account impracticable; or

(3)   the SEC, by order, permits a suspension or postponement for the protection of security holders.

Rules and regulations of the SEC will govern as to when the conditions described in (2) and (3) exist.  On those days when the NYSE is open and Nationwide is closed, contract value may change and the contract owners will not have access to their accounts.

Application and Allocation of Purchase Payments

Initial Purchase Payments

Initial purchase payments allocated to sub-accounts will be priced at the accumulation unit value next determined no later than 2 business days after receipt of an order to purchase if the application and all necessary information are complete and are received at Nationwide’s home office before the close of the New York Stock Exchange, which generally occurs at 4:00 p.m. Eastern Time.  If the order is received after the close of the New York Stock Exchange, the initial purchase payment will be priced within 2 business days after the next business day.

If an incomplete application is not completed within 5 business days of receipt at Nationwide’s home office, the prospective purchaser will be informed of the reason for the delay.  The purchase payment will be returned to the prospective purchaser unless he or she specifically consents to allow Nationwide to hold the purchase payment until the application is completed.

Where state law requires the return of purchase payments upon cancellation of the contract during the free look period, Nationwide will allocate initial purchase payments allocated to sub-accounts to the money market sub-account during the free look period.  After the free look period, Nationwide will reallocate the contract value among the sub-accounts based on the instructions contained on the application.  Where state law requires the return of contract value upon cancellation of the contract during the free look period, Nationwide will immediately allocate initial purchase payments to the investment options based on the instructions contained on the application.

Subsequent Purchase Payments

Any subsequent purchase payment received at Nationwide’s home office (along with all necessary information) before the close of the New York Stock Exchange will be priced at the accumulation unit value next determined after receipt of the purchase payment.  If a subsequent purchase payment is received at Nationwide’s home office (along with all the necessary information) after the close of the New York Stock Exchange, it will be priced at the accumulation unit value determined on the following Valuation day.

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Allocation of Purchase Payments

Nationwide allocates purchase payments to sub-accounts as instructed by the contract owner.  Shares of the underlying mutual funds allocated to the sub-accounts are purchased at net asset value, then converted into accumulation units.

Contract owners can change allocations or make exchanges among the sub-accounts.  However, no change may be made that would result in an amount less than 1% of the purchase payments being allocated to any sub-account.  In the event that Nationwide receives such a request, Nationwide will inform the contract owner that the allocation instructions are invalid and that the contract’s allocations among the sub-accounts prior to the request will remain in effect.  Certain transactions may be subject to conditions imposed by the underlying mutual funds, as well as those set forth in this prospectus.

Determining the Contract Value

The contract value is the sum of:

(1)   the value of amounts allocated to the sub-accounts of the variable account; and

(2)   amounts allocated to a Guaranteed Term Option.

If charges are assessed against the whole contract value, Nationwide will deduct a proportionate amount from each sub-account and any Guaranteed Term Option based on current cash values.

Determining Variable Account Value – Valuing an Accumulation Unit

Sub-account allocations are accounted for in accumulation units.  Accumulation unit values (for each sub-account) are determined by calculating the net investment factor for the underlying mutual funds for the current valuation period and multiplying that result with the accumulation unit values determined on the previous valuation period.

Nationwide uses the net investment factor as a way to calculate the investment performance of a sub-account from valuation period to valuation period.  For each sub-account, the net investment factor shows the investment performance of the underlying mutual fund in which a particular sub-account invests, including the charges assessed against that sub-account for a valuation period.

The net investment factor for any particular sub-account is determined by dividing (a) by (b), and then subtracting (c) from the result, where:

(a) is the sum of:

(1)   the net asset value of the underlying mutual fund as of the end of the current valuation period; and

(2)   the per share amount of any dividend or income distributions made by the underlying mutual fund (if the date of the dividend or income distribution occurs during the current valuation period).

(b) is the net asset value of the underlying mutual fund determined as of the end of the preceding valuation period.

(c) is a factor representing the daily total variable account charges, which may include charges for optional benefits elected by the contract owner.  The factor is equal to an annualized rate ranging from 0.65% to 2.15% of the Daily Net Assets of the variable account, depending on which optional benefits the contract owner elects.

Based on the change in the net investment factor, the value of an accumulation unit may increase or decrease.  Changes in the net investment factor may not be directly proportional to changes in the net asset value of the underlying mutual fund shares because of the deduction of variable account charges.

Though the number of accumulation units will not change as a result of investment experience, the value of an accumulation unit may increase or decrease from valuation period to valuation period.

Determining the Guaranteed Term Option Value

Nationwide determines the value of a Guaranteed Term Option by:

(1)   adding all amounts allocated to the Guaranteed Term Options, minus amounts previously transferred or surrendered (including any market value adjustment);

(2)   adding any interest earned on the amounts allocated to the Guaranteed Term Options; and

(3)   subtracting charges deducted in accordance with the contract.

Transfer Requests

Contract owners may submit transfer requests in writing, over the telephone, or via the internet.  Nationwide will use reasonable procedures to confirm that instructions are genuine and will not be liable for following instructions that it reasonably determined to be genuine.  Nationwide may restrict or withdraw the telephone and/or internet transfer privilege at any time.

Generally, sub-account transfers will receive the accumulation unit value next determined after the transfer request is received.  However, if a contract that is limited to submitting transfer requests via U.S. mail submits a transfer request via internet or telephone pursuant to Nationwide’s one-day delay policy, the transfer will be executed on the next business day after the exchange request is received by Nationwide (see “Managers of Multiple Contracts”).

Transfer Restrictions

Neither the contracts described in this prospectus nor the underlying mutual funds are designed to support active trading strategies that require frequent movement between or among sub-accounts (sometimes referred to as "market-timing" or "short-term trading").  A contract owner who intends to use an active trading strategy should consult his/her registered representative and request information on other variable annuity contracts that offer underlying mutual funds that are designed specifically to support active trading strategies.

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Nationwide discourages (and will take action to deter) short-term trading in this contract because the frequent movement between or among sub-accounts may negatively impact other investors in the contract.  Short-term trading can result in:

·   the dilution of the value of the investors’ interests in the underlying mutual fund;

·   underlying mutual fund managers taking actions that negatively impact performance (keeping a larger portion of the underlying mutual fund assets in cash or liquidating investments prematurely in order to support redemption requests); and/or

·   increased administrative costs due to frequent purchases and redemptions.

To protect investors in this contract from the negative impact of these practices, Nationwide has implemented, or reserves the right to implement, several processes and/or restrictions aimed at eliminating the negative impact of active trading strategies.Nationwide makes no assurances that all risks associated with short-term trading will be completely eliminated by these processes and/or restrictions.

Nationwide cannot guarantee that its attempts to deter active trading strategies will be successful.  If we are unable to deter active trading strategies, the performance of the sub-accounts that are actively traded may be adversely impacted.

Redemption Fees

Some underlying mutual funds assess a short-term trading fee in connection with transfers from a sub-account that occur within 60 days after the date of the allocation to the sub-account.  The fee is assessed against the amount transferred and is paid to the underlying mutual fund.  Redemption fees compensate the underlying mutual fund for any negative impact on fund performance resulting from short-term trading.  For more information on short-term trading fees, please see the "Short-Term Trading Fees" provision.

U.S. Mail Restrictions

Nationwide monitors transfer activity in order to identify those who may be engaged in harmful trading practices.  Transaction reports are produced and examined.  Generally, a contract may appear on these reports if the contract owner (or a third party acting on their behalf) engages in a certain number of "transfer events" in a given period.  A "transfer event" is any transfer, or combination of transfers, occurring on a given trading day (valuation period).  For example, if a contract owner executes multiple transfers involving 10 underlying mutual funds in one day, this counts as one transfer event.  A single transfer occurring on a given trading day and involving only 2 underlying mutual funds will also count as one transfer event.

As a result of this monitoring process, Nationwide may restrict the method of communication by which transfer orders will be accepted.  In general, Nationwide will adhere to the following guidelines:

Trading Behavior	Nationwide's Response
6 or more transfer events in one calendar quarter	Nationwide will mail a letter to the contract owner notifying them that: ·they have been identified as engaging in harmful trading practices; and ·if their transfer events exceed 11 in 2 consecutive calendar quarters or 20 in one calendar year, the contract owner will be limited to submitting transfer requests via U.S. mail on a Nationwide issued form .
More than 11 transfer events in 2 consecutive calendar quarters OR More than 20 transfer events in one calendar year	Nationwide will automatically limit the contract owner to submitting transfer requests via U.S. mail on a Nationwide issued form .

Each January 1st, Nationwide will start the monitoring anew, so that each contract starts with 0 transfer events each January 1.  See, however, the "Other Restrictions" provision below.

Managers of Multiple Contracts

Some investment advisers/representatives manage the assets of multiple Nationwide contracts pursuant to trading authority granted or conveyed by multiple contract owners.  These multi-contract advisers will generally be required by Nationwide to submit all transfer requests via U.S. mail.

Nationwide may, as an administrative practice, implement a "one-day delay" program for these multi-contract advisers, which they can use in addition to or in lieu of submitting transfer requests via U.S. mail.  The one-day delay option permits multi-contract advisersto continue to submit transfer requests via the internet or telephone.  However, transfer requests submitted by multi-contract advisers via the internet or telephone will not receive the next available accumulation unit value.  Rather, they will receive the accumulation unit value that is calculated on the following business day.  Transfer requests submitted under the one-day delay program are irrevocable.  Multi-contract advisers will receive advance notice of being subject to the one-day delay program.

Other Restrictions

Contract owners that are required to submit transfer requests via U.S. mail will be required to use a Nationwide issued form for their transfer request.  Nationwide will refuse transfer requests that either do not use the Nationwide issued form for their transfer request or fail to provide accurate and complete information on their transfer request form.  In the event that a contract owner's transfer request is refused by Nationwide, they will receive notice in writing by U.S. Mail and will be required to resubmit their transfer request on a Nationwide issued form.

Nationwide reserves the right to refuse or limit transfer requests, or take any other action it deems necessary, in order to protect contract owners, annuitants, and beneficiaries from the negative investment results that may result from short-term trading or other harmful investment practices employed by some contract owners (or third parties acting on their behalf).

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In particular, trading strategies designed to avoid or take advantage of Nationwide's monitoring procedures (and other measures aimed at curbing harmful trading practices) that are nevertheless determined by Nationwide to constitute harmful trading practices, may be restricted.

Any restrictions that Nationwide implements will be applied consistently and uniformly.

Underlying Mutual Fund Restrictions and Prohibitions

Pursuant to regulations adopted by the SEC, Nationwide is required to enter into written agreements with the underlying mutual funds which allow the underlying mutual funds to:

(1) request the taxpayer identification number, international taxpayer identification number, or other government issued identifier of any Nationwide contract owner;

  (2) request the amounts and dates of any purchase, redemption, transfer or exchange request (“transaction information”); and

 (3)        instruct Nationwide to restrict or prohibit further purchases by contract owners that violate policies established by the underlying mutual fund (whose policies may be more restrictive than Nationwide’s policies).

Nationwide is required to provide such transaction information to the underlying mutual funds upon their request.  In addition, Nationwide is required to restrict or prohibit further purchases upon instruction from the underlying mutual fund.  Nationwide and any affected contract owner may not have advance notice of such instructions from an underlying mutual fund to restrict or prohibit further purchases.  If an underlying mutual fund refuses to accept a purchase submitted by Nationwide, Nationwide will keep any affected contract owner in their current underlying mutual fund allocation.

Transfers Prior to Annuitization

Transfers from a Guaranteed Term Option

A contract owner may request to transfer allocations from a Guaranteed Term Option to the sub-accounts at any time.  Transfers from a Guaranteed Term Option prior to maturity are subject to a market value adjustment.

Nationwide reserves the right to limit the number of transfers out of the Guaranteed Term Options to one per calendar year.

Nationwide is required by state law to reserve the right to postpone the transfer of assets from the Guaranteed Term Options for a period of up to 6 months from the date of the transfer request.

Transfers from the Sub-Accounts

A contract owner may request to transfer allocations from the sub-accounts to a Guaranteed Term Option at any time, subject to terms and conditions imposed by the contract and the underlying mutual funds.

Nationwide reserves the right to limit the number of transfers from the sub-accounts to the Guaranteed Term Options to one per calendar year.

Transfers Among the Sub-Accounts

A contract owner may request to transfer allocations among the Sub-accounts at any time, subject to terms and conditions imposed by this prospectus and the underlying mutual funds.

Transfers After Annuitization

After annuitization, the portion of the contract value allocated to fixed annuity payments and the portion of the contract value allocated to variable annuity payments may not be changed.

After annuitization, transfers among sub-accounts may only be made on the anniversary of the annuitization date.  Guaranteed Term Options are not available after annuitization.

Right to Examine and Cancel

If the contract owner elects to cancel the contract, he/she may return it to Nationwide’s home office within a certain period of time known as the “free look” period.  Depending on the state in which the contract was purchased (and, in some states, if the contract is purchased as a replacement for another annuity contract), the free look period may be 10 days or longer.  For ease of administration, Nationwide will honor any free look cancellation that is received at Nationwide’s home office or postmarked within 30 days after the contract issue date.   For contracts issued in the State of California, Nationwide will honor any free look cancellation that is received at Nationwide’s home office or postmarked within 35 days after the contract issue date.   The contract issue date is the next business day after the initial purchase payment is applied to the contract.

If the contract owner elects to cancel the contract pursuant to the free look provision, where required by law, Nationwide will return the greater of the contract value or the amount of purchase payment(s) applied during the free look period, less any applicable federal and state income tax withholding.  Otherwise, Nationwide will return the contract value, less any applicable federal and state income tax withholding.

Where state law requires the return of purchase payments upon cancellation of the contract during the free look period, Nationwide will allocate initial purchase payments allocated to sub-accounts to the money market sub-account during the free look period. After the free look period, Nationwide will reallocate the contract value among the sub-accounts based on the instructions contained on the application.  Where state law requires the return of contract value upon cancellation of the contract during the free look period .  In other states , Nationwide will immediately allocate initial purchase payments to the investment options based on the instructions contained on the application.

Liability of the variable account under this provision is limited to the contract value in each sub-account on the date of revocation.  Any additional amounts refunded to the contract owner will be paid by Nationwide.

Surrender (Redemption) Prior to Annuitization

Prior to annuitization and before the annuitant’s death, contract owners may generally surrender some or all of their contract value.  There may be income tax and/or penalty taxes

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assessed upon surrenders.  Please see "Federal Tax Considerations" in Appendix C: Contract Types and Tax Information for more information.

Surrender requests must be in writing and Nationwide may require additional information.  When taking a full surrender, the contract must accompany the written request.  Nationwide may require a signature guarantee.

Nationwide will pay any amounts surrendered from the sub-accounts within 7 days.  However, Nationwide may suspend or postpone payment when it is unable to price a purchase payment or transfer  (see “Pricing”).

Nationwide is required by state law to reserve the right to postpone payment of assets in the Guaranteed Term Options for a period of up to 6 months from the date of the surrender request.

Partial Surrenders (Partial Redemptions)

If a contract owner requests a partial surrender, Nationwide will surrender accumulation units from the sub-accounts and then from the Guaranteed Term Options only after the sub-account has been depleted.  The amount withdrawn from each investment option will be in proportion to the value in each option at the time of the surrender request.

Partial Surrenders to Pay Financial Advisor Fees

The contract may be available for use with investment accounts at Schwab that charge an annual fee.  Fees for these accounts would be specified in the respective account agreements.  Any fees and expenses associated with these accounts are separate from and in addition to the fees and expenses of the contract described in this prospectus.  Surrenders taken from this contract to pay advisory or investment management fees may be subject to income tax and/or tax penalties.  Please consult a Schwab representative for more information on the tax status of surrenders made for this purpose.

Full Surrenders (Full Redemptions)

Upon full surrender, the contract value may be more or less than the total of all purchase payments made to the contract.  The contract value will reflect:

·   variable account charges;

·   underlying mutual fund charges;

·   the investment performance of the underlying mutual funds; and

·   amounts allocated to the Guaranteed Term Options, plus or minus any market value adjustment.

Surrender (Redemption) After Annuitization

After the annuitization date, surrenders other than regularly scheduled annuity payments are not permitted.

Assignment

Contract rights are personal to the contract owner and may not be assigned without Nationwide’s written consent.  Nationwide reserves the right to refuse to recognize assignments that alter the nature of the risks that Nationwide assumed when it originally issued the contract.

A Non-Qualified Contract owner may assign some or all rights under the contract.  An assignment must occur before annuitization while the annuitant is alive.  Once proper notice of assignment is recorded by Nationwide’s home office, the assignment will become effective as of the date the written request was signed.

Investment-Only Contracts, IRAs, Roth IRAs, SEP IRAs and Simple IRAs may not be assigned, pledged or otherwise transferred except where allowed by law.

Nationwide is not responsible for the validity or tax consequences of any assignment.  Nationwide is not liable for any payment or settlement made before the assignment is recorded.  Assignments will not be recorded until Nationwide receives sufficient direction from the contract owner and the assignee regarding the proper allocation of contract rights.

Amounts pledged or assigned will be treated as distributions and will be included in gross income to the extent that the cash value exceeds the investment in the contract for the taxable year in which it was pledged or assigned.  Amounts assigned may be subject to a tax penalty equal to 10% of the amount included in gross income.

Assignment of the entire contract value may cause the portion of the contract value exceeding the total investment in the contract and previously taxed amounts to be included in gross income for federal income tax purposes each year that the assignment is in effect.

Contract Owner Services

Asset Rebalancing

Asset Rebalancing is the automatic reallocation of contract values to the sub-accounts on a predetermined percentage basis.  Asset Rebalancing is not available for assets held in the Guaranteed Term Options.  Requests for Asset Rebalancing must be on a Nationwide form.

Asset Rebalancing occurs every three months or on another frequency if permitted by Nationwide.  If the last day of the three-month period falls on a Saturday, Sunday, recognized holiday, or any other day when the New York Stock Exchange is closed, Asset Rebalancing will occur on the next business day.  Each Asset Rebalancing reallocation is considered a transfer event.  Once Asset Rebalancing is elected, it will only be terminated upon specific instruction from the contract owner; manual transfers will not automatically terminate the program.

Nationwide reserves the right to stop establishing new Asset Rebalancing programs.

Dollar Cost Averaging

Dollar Cost Averaging is a long-term transfer program that allows you to make regular, level investments over time.  It involves the automatic transfer of a specified amount from certain sub-accounts into other sub-accounts.  Nationwide

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does not guarantee that this program will result in profit or protect contract owners from loss.

Contract owners direct Nationwide to automatically transfer specified amounts from the:

Fidelity Variable Insurance Products Fund

·    VIP Investment Grade Bond Portfolio: Service Class 2

Nationwide Variable Insurance Trust

·    NVIT Government Bond Fund: Class I

·    NVIT Investor Destinations Funds: Class II

Ø    NVIT Investor Destinations Conservative Fund: Class II

·    NVIT Money Market Fund: Class I

Neuberger Berman Advisers Management Trust

·    AMT Short Duration Bond Portfolio: I Class

Schwab Annuity Portfolios

·    Schwab Money Market Portfolio ™

to any other underlying mutual fund(s).  Dollar Cost Averaging transfers may not be directed to the Guaranteed Term Options.

Transfers occur monthly or on another frequency if permitted by Nationwide.  Dollar Cost Averaging transfers are not considered transfer events.  Nationwide will process transfers until either the value in the originating investment option is exhausted, or the contract owner instructs Nationwide in writing to stop the transfers.

Nationwide reserves the right to stop establishing new Dollar Cost Averaging programs.

Systematic Withdrawals

Systematic Withdrawals allow contract owners to receive a specified amount (of at least $100) on a monthly, quarterly, semi-annual, or annual basis.  Requests for Systematic Withdrawals and requests to discontinue Systematic Withdrawals must be in writing.

The withdrawals will be taken from the sub-accounts proportionately unless Nationwide is instructed otherwise.  Systematic Withdrawals are not available from the Guaranteed Term Options.

Nationwide will withhold federal income taxes from Systematic Withdrawals unless otherwise instructed by the contract owner.  The Internal Revenue Service may impose a 10% penalty tax if the contract owner is under age 59½ unless the contract owner has made an irrevocable election of distributions of substantially equal payments.

Nationwide reserves the right to stop establishing new Systematic Withdrawal programs.  Systematic Withdrawals are not available before the end of the free-look period.

Nationwide Allocation Architect

Prior to annuitization, Nationwide may make available for use by contract owners the Nationwide Allocation Architect, an asset allocation service that enables contract owners to have their variable account allocations invested according to an investment model.  The investment models in Nationwide Allocation Architect diversify among asset classes to achieve specific investment goals and are based on different profiles of an investor's willingness to accept investment risk.  Participants in the program may elect one of 7 available models:

·   Conservative;

·   Moderately Conservative;

·   Balanced;

·   Moderate;

·   Capital Appreciation;

·   Moderately Aggressive1; and

·   Aggressive.

Each model is comprised of sub-accounts of underlying funds that are currently available as investment options in this contract.   Certain sub-accounts that are not available in other Nationwide products that offer Nationwide Allocation Architect are not considered for inclusion in the models.  In addition, sub-accounts that are no longer available to all contract owners (as indicated in “Appendix A: Underlying Mutual Funds”) are not considered for inclusion in the models.  The sub-accounts within each model and their weightings are selected according to each model's risk tolerance and investment goal.  More information about Nationwide Allocation Architect and the models is available in the brochure (“Form ADV Brochure”) for the program.

Nationwide Investment Advisors, LLC (“NIA”) as Investment Adviser

For those contract owners who elect Nationwide Allocation Architect, NIA will serve as investment adviser to each participating contract owner for the sole purposes of developing and maintaining the models.   Currently, NIA develops and maintains the models based on information received from an independent third-party analytical firm.  NIA reserves the right to change the third-party firm (where permitted by law) upon 30 days' written notice to contract owners.  To participate in Nationwide Allocation Architect, contract owners will grant NIA limited discretionary authority to allocate and rebalance their variable account assets in accordance with the model they selected.  Contract owners may terminate this limited discretionary investment authority and participation in the service upon proper written notice to Nationwide and NIA.  Contract owners will receive a copy of

 

1On or after March 2, 2009, the Moderately Aggressive model will no longer be available to new investors that have elected a Lifetime Income Option.  If you invested in this model prior to March 2, 2009, you are permitted to make subsequent purchase payments as long as you remain invested in that model.  If you transfer out of the Moderately Aggressive model on or after March 2, 2009, you will not be permitted to subsequently transfer contract value back into that model.

In addition, the Moderately Aggressive model will also no longer be available for any dollar cost averaging program established on or after March 2, 2009.  Any dollar cost averaging program established prior to March 2, 2009 that includes the Moderately Aggressive model will continue uninterrupted, however, you will not be permitted to increase the percentage of contract value that is transferred through your dollar cost averaging program into this investment.

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NIA's Form ADV Brochure at the time of application or prior to electing the service.  The Form ADV Brochure contains more information about NIA's role as investment adviser and the independent third-party analytical firm it relies upon when providing these services to contract owners.

Evaluating and Updating the Models

At least twice each calendar year, NIA will evaluate the models to assess whether the combination and allocation percentages of the sub-accounts within each model optimizes the return potential for that model , given its particular level of risk tolerance .   If necessary the models will be updated on or about the second Friday in January and July of each year.  NIA may evaluate and update the models more frequently at its sole discretion.

Updating the models could entail adding or removing one or more sub-accounts from a model, or changing the allocation percentages among existing sub-accounts.  Currently, NIA updates the models based on information received from an independent third-party analytical firm.  NIA takes sole responsibility for monitoring and updating the models.

Nationwide will send contract owners written notice of model updates approximately 30 days before the model changes are to be implemented.  Contract owners should review these notices carefully.  If the contract owner is comfortable with the model changes, the contract owner need not take any action.  If the contract owner is not comfortable with the model changes, the contract owner may switch to a different model or terminate their participation in the service.   A contract owner who terminates their participation in the service cannot re-elect it.

On or about the second Friday in January and July of each year (or any other day that NIA updates the models), Nationwide will reallocate the variable account contract values of contracts participating in the service based on the updated model allocation information received from NIA.   The reallocation will rebalance the variable account contract allocations to the updated model allocations.  If the scheduled date for the reallocation is a  recognized holiday, or any other day that the New York Stock Exchange is closed, the reallocation will occur on the next business day.  Each reallocation is considered a transfer event.  However, the automatic reallocation transfers within the Nationwide Allocation Architect are not subject to Short-Term Trading Fees.

Quarterly Rebalancing

In addition to reallocating the variable account contract value when the models change, Nationwide will also reallocate the variable account contract value on or about the second Friday in January, April, July, and October of each year, referred to as quarterly rebalancing.  If the scheduled date for a rebalance is a recognized holiday or any day that the New York Stock Exchange is closed, the quarterly rebalancing will occur on the next business day.  Each quarterly rebalancing is considered a transfer event.  However, quarterly rebalancing transfers within Nationwide Allocation Architect are not subject to Short-Term Trading Fees.

Election of the Nationwide Allocation Architect

There is no additional charge for participating in the Nationwide Allocation Architect.  If the service is available, a contract owner may elect to begin participating at any time by communicating the election to Nationwide in writing to Nationwide's service center.  Once the election is received in good order and processed, Nationwide will allocate the entire contract value that is allocated to the variable account in accordance with the model selected by the contract owner .  Allocations to the fixed account or the GTO will remain so invested.  Only one model may be elected at any given time.

While the Nationwide Allocation Architect is in effect,  contract owner s will not be permitted to transfer contract value among the sub-accounts or out of the sub-accounts (to the fixed account or the GTO) without first terminating their participation in the service.   Contract owners may transfer maturing fixed account contract value into the variable account (and thus, the selected model) only at the end of the guarantee term.   Any subsequent payments submitted that are to be allocated to the sub-accounts will also be allocated according to the currently selected model.   Any surrenders taken from the contract while the Nationwide Allocation Architect is in effect will be taken proportionally from all investments in the contract.  Any charges assessed to the contract will be taken proportionally from all investments in the contract.  A contract owner participating in the Nationwide Allocation Architect may not participate in Asset Rebalancing or Dollar Cost Averaging.

When s electing a model, please consult a qualified financial adviser to determine the most appropriate model based on the contract owner's particular financial needs, time horizon, and willingness to accept investment risk.   The qualified financial adviser may use tools to make this determination that are either independently acquired or provided by Nationwide.  However, neither Nationwide nor NIA is responsible for determining the appropriateness of the model contract owners select.  Contract owners are responsible for notifying their financial adviser of any changes to their financial situation or risk profile.  Contract owners should periodically review with their financial adviser, their financial situation and risk profile to evaluate the appropriateness of their selected model

Changing Models

Contract owners participating in the Nationwide Allocation Architect may elect to change models at any time.  An election to change models must be communicated to Nationwide in writing or over the telephone to Nationwide's service center.     An election to change models, received in good order by Nationwide, will be immediately implemented and will not be subject to Short-Term Trading Fees.

Nationwide reserves the right to limit the number of times a contract owner can change models each year.

Terminating Participation in the Nationwide Allocation Architect

Once participation in the service has begun, it may only be terminated upon the specific written request of the contract owner.  Once a contract owner's participation in the service is terminated, the contract value will remain invested as it was

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on the last day of participation in the program unless and until Nationwide is instructed otherwise.  Additionally, please be aware that the terms of the "Transfer Restrictions" provision apply.

Nationwide reserves the right to terminate the availability of this service at any time.

Risks Associated with the Nationwide Allocation Architect

The models are designed to optimize returns based on different risk tolerances.  However, the models may not perform as intended and neither Nationwide nor NIA guarantees that participation in the Nationwide Allocation Architect will result in a profit or protect against a loss. A contract owner’s contract value could be better or worse by participating in Nationwide Allocation Architect than if the contract owner had not participated.  A model may perform better or worse than any single sub-account or asset class or other combinations of sub-accounts and asset classes.

NIA may be subject to competing interests related to the selection of sub-accounts in the models.  Specifically, some of the sub-accounts offered in Nationwide Allocation Architect correspond to underlying mutual funds managed by a NIA-affiliated company and some underlying mutual funds may pay more revenue to Nationwide than others.  The independent third-party analytical firm provides the models, selects the sub-accounts to be used to populate the models (within the universe of sub-accounts available in the contract determined by Nationwide and described previously) and provides changes to the models’ asset allocation or sub-account selection.  NIA believes that its reliance on the recommendations of a third-party analytical firm to develop, and maintain, and update the models reduces or eliminates the potential for NIA to be influenced by these competing interests, but there can be no assurance of this.

Death Benefits

Death of Contract Owner

If a contract owner (including a joint owner) who is not the annuitant dies before the annuitization date, there is no death benefit payable and the surviving joint owner becomes the contract owner.

If no joint owner is named, the contingent owner becomes the contract owner.

If no contingent owner is named, the beneficiary becomes the contract owner.

If no beneficiary survives the contract owner, the last surviving contract owner’s estate becomes the contract owner.

Distributions will be made pursuant to the "Required Distributions for Non-Qualified Contracts" in Appendix C: Contract Types and Tax Information.

Death of Annuitant

If the annuitant who is not a contract owner dies before the annuitization date, the contingent annuitant becomes the annuitant and no death benefit is payable.  If no contingent annuitant is named, a death benefit is payable to the beneficiary.  Multiple beneficiaries will share the death benefit equally unless otherwise specified.

If no beneficiaries survive the annuitant, the contingent beneficiary receives the death benefit.  Multiple contingent beneficiaries will share the death benefit equally unless otherwise specified.

If no beneficiaries or contingent beneficiaries survive the annuitant, the contract owner or the last surviving contract owner’s estate will receive the death benefit.  If the contract owner is a Charitable Remainder Trust and the annuitant dies before the annuitization date, the death benefit will accrue to the Charitable Remainder Trust.  Any designation in conflict with the Charitable Remainder Trust’s right to the death benefit will be void.

If the annuitant dies after the annuitization date, any benefit that may be payable will be paid according to the selected annuity payment option.

Death of Contract Owner/Annuitant

If a contract owner (including a joint owner) who is also the annuitant dies before the annuitization date, a death benefit is payable to the surviving joint owner.

If there is no surviving joint owner, the death benefit is payable to the beneficiary.  Multiple beneficiaries will share the death benefit equally unless otherwise specified.

If no beneficiaries survive the contract owner/annuitant, the contingent beneficiary receives the death benefit.  Multiple contingent beneficiaries will share the death benefit equally unless otherwise specified.

If no contingent beneficiaries survive the contract owner/annuitant, the last surviving contract owner’s estate will receive the death benefit.

If the contract owner/annuitant dies after the annuitization date, any benefit that may be payable will be paid according to the selected annuity payment option.

Death Benefit Payment

The recipient of the death benefit may elect to receive the death benefit:

(1)   in a lump sum;

(2)   as an annuity (please see the “Annuity Payment Options” section for additional information); or

(3)   in any other manner permitted by law and approved by Nationwide.

If the recipient of the death benefit does not elect the form in which to receive the death benefit payment, Nationwide will pay the death benefit in a lump sum.  Nationwide will pay (or will begin to pay) the death benefit upon receiving proof of death and the instructions as to the payment of the death benefit.  Contract value will continue to be allocated according to the most recent allocation instructions until the death benefit is paid.

If the contract has multiple beneficiaries entitled to receive a portion of the death benefit, the contract value will continue to be allocated according to the most recent allocation instructions until the first beneficiary provides Nationwide

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with instructions for payment of death benefit proceeds. .   After the first beneficiary provides these instructions, the contract value for all beneficiaries will be allocated to the available money market sub-account until instructions are received from the beneficiary(ies) to allocate their contract value in another manner.

Death Benefit Calculations

An applicant must elect one of three death benefit options available under the contract.

The value of each component of the applicable death benefit calculation will be determined as of the date of the annuitant’s death, except for the contract value component, which will be determined as of the date described in the applicable death benefit calculation.

Nationwide reserves the right to refuse purchase payments in excess of $1,000,000 (see "Synopsis of the Contracts").   If you do not submit purchase payments in excess of $1,000,000, or if Nationwide has refused to accept purchase payments in excess of $1,000,000, the references in this provision to purchase payments in excess of $1,000,000 will not apply to your contract.

Return of Premium Death Benefit Option

For an additional charge equal to an annualized rate of 0.10% of the Daily Net Assets of the variable account, an applicant can purchase the Return of Premium Death Benefit Option.  If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is less than or equal to $3,000,000, this death benefit will be the greater of:

(1) the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit; or

(2) the total of all purchase payments, less an adjustment for amounts surrendered.

The contract value in item (1) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.

The adjustment for amounts surrendered will reduce item (2) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).

If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is greater than $3,000,000, the death benefit will be determined using the following formula:

(A x F) + B(1 - F), where

A = the greater of:

(1)   the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit; or

(2)   the total of all purchase payments, less an adjustment for amounts surrendered.

The contract value in item (1) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.

The adjustment for amounts surrendered will reduce item (2) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).

B = the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit.

F = the ratio of $3,000,000 to the total of all purchase payments made to the contract.

The practical effect of this formula is that the beneficiary recovers a lesser percentage of purchase payments in excess of $3,000,000 than for purchase payments up to $3,000,000.  In no event will the beneficiary receive less than the contract value.

The Return of Premium Death Benefit also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.

One-Year Enhanced Death Benefit Option

For an additional charge equal to an annualized rate of 0.20% of the Daily Net Assets of the variable account, an applicant can purchase the One-Year Enhanced Death Benefit Option.  This option is only available to contracts with annuitants age 80 or younger at the time of application.

If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is less than or equal to $3,000,000, the death benefit will be the greatest of:

(1) the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;

(2) the total of all purchase payments, less an adjustment for amounts surrendered; or

(3) the highest contract value on any contract anniversary prior to the annuitant's 86th birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that contract anniversary.

The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.

The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).

If Nationwide does not receive all information necessary to pay the death benefit within one year of the annuitant’s death, the death benefit will be the greater of (1) or (2) above.

If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is greater than $3,000,000, the death benefit will be determined using the following formula:

(A x F) + B(1 - F), where

A = the greatest of:

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(1) the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;

(2) the total of all purchase payments, less an adjustment for amounts surrendered; or

(3)   the highest contract value on any contract anniversary prior to the annuitant’s 86th birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that contract anniversary.

The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.

The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).

If Nationwide does not receive all information necessary to pay the death benefit within one year of the annuitant’s death, the calculation for A above will be the greater of (1) or (2) above.

B = the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit.

F = the ratio of $3,000,000 to the total of all purchase payments made to the contract.

The practical effect of this formula is that the beneficiary recovers a lesser percentage of purchase payments in excess of $3,000,000 than for purchase payments up to $3,000,000.  In no event will the beneficiary receive less than the contract value.

The One-Year Enhanced Death Benefit Option also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.

Return of Contract Value Death Benefit Option

If an applicant elects a Lifetime Income Option, the applicant can also elect the Return of Contract Value Death Benefit Option at no extra charge.

If the annuitant dies prior to the annuitization date, the death benefit will equal the contract value as of the date Nationwide receives all the information necessary to pay the death benefit.

Spousal Protection Feature

The One-Year Enhanced Death Benefit Option and the Return of Premium Death Benefit Option include a Spousal Protection Feature at no additional charge.  The Spousal Protection Feature is not available for contracts issued as Charitable Remainder Trusts.  The Spousal Protection Feature allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse, provided the conditions described below are satisfied:

(1)   One or both spouses (or a revocable trust of which either or both of the spouses is/are grantor(s)) must be named as the contract owner.  For contracts issued as IRAs and Roth IRAs, only the person for whom the IRA or Roth IRA was established may be named as the contract owner;

(2)   The spouses must be co-annuitants;

(3)   Both spouses must be age 85 or younger for the Return of Premium Death Benefit Option or age 80 or younger for the One-Year Enhanced Death Benefit Option at the time the contract is issued;

(4)   Both spouses must be named as primary beneficiaries;

(5)   No person other than the spouse may be named as contract owner, annuitant or primary beneficiary;

(6)   If both spouses are alive upon annuitization, the contract owner must specify which spouse is the annuitant upon whose continuation of life any annuity payments involving life contingencies depend (for IRA and Roth IRA contracts, this person must be the contract owner); and

(7)   If the contract owner requests to add a co-annuitant after contract issuance, the date of marriage must be after the contract issue date and Nationwide will require the contract owner to provide a copy of the marriage certificate.

If a co-annuitant dies before the annuitization date, the surviving spouse may continue the contract as its sole contract owner.  Additionally, if the death benefit value is higher than the contract value at the time of the first co-annuitant’s death, Nationwide will adjust the contract value to equal the death benefit value.  The surviving co-annuitant may then name a new beneficiary but may not name another co-annuitant.

If the marriage terminates due to the death of a spouse, divorce, dissolution, or annulment, the surviving spouse may not elect the Spousal Protection Option to cover a subsequent spouse.

Note: The Spousal Protection Feature is distinct from the Spousal Continuation Benefit associated with the Lifetime Income Options.  The Spousal Protection Feature is a death benefit bump-up feature associated with the One-Year Enhanced Death Benefit Option and the Return of Premium Death Benefit Option.  In contrast, the Spousal Continuation Benefit allows a surviving spouse to continue receiving the lifetime income payments associated with the Lifetime Income Options.

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Summary of Contract Ownership and Distribution upon Death

The following chart shows some examples of how different ownership structures result in different consequences in the event of the death of a contract owner and/or annuitant prior to annuitization.

If the deceased is the …	and …	and …	then the …
Contract owner	The contract owner is not the annuitant	There is a surviving joint contract owner	Surviving joint contract owner becomes the contract owner and no death benefit is paid.
Contract owner	The contract owner is not the annuitant	There is a contingent owner but no surviving joint contract owner	Contingent owner becomes the contract owner and no death benefit is paid.
Contract owner	The contract owner is not the annuitant	There is no surviving joint contract owner or surviving contingent owner	Estate of the last surviving contract owner becomes the new contract owner and no death benefit is paid.
Contract owner	The contract owner is the annuitant	There is a surviving contingent annuitant	Surviving contingent annuitant becomes the annuitant and no death benefit is paid1.
Contract owner	The contract owner is the annuitant	There is a surviving joint contract owner	Death benefit is paid to the surviving joint contract owner.
Contract owner	The contract owner is the annuitant	There is no surviving joint contract owner	Death benefit is paid to the beneficiary.
Contract owner	The contract owner is the annuitant	There is no surviving joint contract owner and no surviving beneficiary	Death benefit is paid to the contingent beneficiary.
Contract owner	The contract owner is the annuitant	There is no surviving joint contract owner, no surviving beneficiary and no surviving contingent beneficiary	Death benefit is paid to the estate of the contract owner.
Annuitant	The annuitant is not the contract owner	There is a surviving contingent annuitant	Surviving contingent annuitant becomes the annuitant and no death benefit is paid.
Annuitant	The annuitant is not the contract owner	There is no surviving contingent annuitant	Death benefit is paid to the beneficiary.
Annuitant	The annuitant is not the contract owner	There is no surviving contingent annuitant, no surviving beneficiary	Death benefit is paid to contingent beneficiary.
Annuitant	The annuitant is not the contract owner	There is no surviving contingent annuitant, no surviving beneficiary and no surviving contingent beneficiary	Death benefit is paid to the contract owner.
Annuitant	The annuitant is not the contract owner	There is no surviving contingent annuitant, no surviving beneficiary, no surviving contingent beneficiary and no surviving contract owner	Death benefit is paid to the last surviving contract owner’s estate.

1 If you selected the Spousal Continuation Option, the death benefit will not be paid until both spouses die.  This means that if you selected the Spousal Continuation Option, upon your death, your spouse will continue to receive Guaranteed Lifetime Withdrawals until their death or upon annuitization.  Only upon death of both spouses, will the death benefit be paid if you selected the Spousal Continuation Option.

If you do not elect the Spousal Continuation Benefit and upon your death the joint or contingent owner is not the surviving spouse, the joint or contingent owner may receive the death benefit or the contract must be paid out either (1) entirely within 5 years or (2) in annual (or more frequent) substantially equal periodic payments for life or over a period not to exceed life expectancy.  Please see “Required Distributions for Non-Qualified Contracts” and “Required Distributions for IRAs, SEP IRAs, Simple IRAs and Roth IRAs” in Appendix C for

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 more information about required distributions upon death of the contract owner.

Annuity Commencement Date

The annuity commencement date is the date on which annuity payments are scheduled to begin.

Generally, the contract owner designates the annuity commencement date at the time of application.  If no annuity commencement date is designated at the time of application, Nationwide will establish the annuity commencement date as the date the annuitant reaches age 90 for Non-Qualified Contracts and the date the contract owner reaches age 70½ for all other contract types.

The contract owner may change the annuity commencement date before annuitization.  This change must be in writing and approved by Nationwide.  The annuity commencement date may not be later than the first day of the first calendar month after the annuitant’s 90th birthday (or the 90th birthday of the oldest annuitant if there are joint annuitants) unless approved by Nationwide.

Annuity Commencement Date and Lifetime Income Options

If the contract owner elected a Lifetime Income Option, Nationwide will, approximately three months before the annuity commencement date, notify the contract owner of the impending annuity commencement date and give the contract owner the opportunity to defer the annuity commencement date in order to preserve the benefit associated with the Lifetime Income Option.  Deferring the annuity commencement date may have negative tax consequences.  See “Required Distributions for IRAs, SEP IRAs, Simple IRAs and Roth IRAs” in Appendix C, the “7% Lifetime Income Option,” and the “5% Lifetime Income Option provisions in this prospectus.  Consult a qualified tax advisor.

Annuitizing the Contract

Annuitization Date

The annuitization date is the date that annuity payments begin.  Annuity payments will not begin until the contract owner affirmatively elects to begin annuity payments.  If the contract owner has elected a Lifetime Income Option, an election to begin annuity payments will terminate all benefits, conditions, guarantees, and charges associated with the Lifetime Income Option.

The annuitization date will be the first day of a calendar month unless otherwise agreed.  The annuitization date must be at least 2 years after the contract is issued, but may not be later than either:

·   the age (or date) specified in your contract; or

·   the age (or date) specified by state law, where applicable.

On the annuitization date, the annuitant becomes the contract owner unless the contract owner is a Charitable Remainder Trust.

The Internal Revenue Code may require that distributions be made prior to the annuitization dates specified above see "Required Distributions" in Appendix C: Contract Types and Tax Information.

Annuitization

Annuitization is the period during which annuity payments are received.  It is irrevocable once payments have begun.  Upon arrival of the annuitization date, the annuitant must choose:

(1)   an annuity payment option; and

(2)   either a fixed payment annuity, variable payment annuity, or an available combination.

Nationwide guarantees that each payment under a fixed payment annuity will be the same throughout annuitization.  Under a variable payment annuity, the amount of each payment will vary with the performance of the underlying mutual funds chosen by the contract owner.

Fixed Annuity Payments

Fixed annuity payments provide for level annuity payments.  Premium taxes are deducted prior to determining fixed annuity payments.  The fixed annuity payments will remain level unless the annuity payment option provides otherwise.

Variable Annuity Payments

Variable annuity payments will vary depending on the performance of the underlying mutual funds selected.  The underlying mutual funds available during annuitization are those underlying mutual funds shown in the Appendix A .  The Nationwide Allocation Architect and the Static Asset Allocation Models are not available after annuitization.

First Variable Annuity Payment

The following factors determine the amount of the first variable annuity payment:

·   the portion of purchase payments allocated to provide variable annuity payments;

·   the variable account value on the annuitization date;

·   the age and sex of the annuitant (and joint annuitant, if any);

·   the annuity payment option elected;

·   the frequency of annuity payments;

·   the annuitization date;

·   the assumed investment return (the net investment return required to maintain level variable annuity payments);

·   the deduction of applicable premium taxes; and

·   the date the contract was issued.

Subsequent Variable Annuity Payments

Variable annuity payments after the first will vary with the performance of the underlying mutual funds chosen by the contract owner after the investment performance is adjusted by the assumed investment return factor.

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The dollar amount of each subsequent variable annuity payment is determined by taking the portion of the first annuity payment funded by a particular sub-account divided by the annuity unit value for that sub-account as of the annuitization date.  This establishes the number of annuity units provided by each sub-account for each variable annuity payment after the first.

The number of annuity units comprising each variable annuity payment, on a s ub -account basis, will remain constant, unless the contract owner transfers value from one underlying mutual fund to another.  After annuitization, transfers among sub-accounts may only be made on the anniversary of the annuitization date.

The number of annuity units for each sub-account is multiplied by the annuity unit value for that sub-account for the valuation period for which the payment is due.  The sum of these results for all the sub-accounts in which the contract owner invests establishes the dollar amount of the variable annuity payment.

Subsequent variable annuity payments may be more or less than the previous variable annuity payment, depending on whether the net investment performance of the elected underlying mutual funds is greater or lesser than the assumed investment return.

Assumed Investment Return

An assumed investment return is the net investment return required to maintain level variable annuity payments.  Nationwide uses a 3.5% assumed investment return factor.  Therefore, if the net investment performance of each sub-account in which the contract owner invests exactly equals 3.5% for every payment period, then each payment will be the same amount.  To the extent that investment performance is not equal to 3.5% for given payment periods, the amount of the payments in those periods will not be the same.  Payments will increase from one payment date to the next if the annualized net rate of return is greater than 3.5% during that time.  Conversely, payments will decrease from one payment to the next if the annualized net rate of return is less than 3.5% during that time.

Nationwide uses the assumed investment rate of return to determine the amount of the first variable annuity payment.

Value of an Annuity Unit

Annuity unit values for sub-accounts are determined by:

(1)   multiplying the annuity unit value for each sub-account for the immediately preceding valuation period by the net investment factor for the sub-account for the subsequent valuation period (see "Determining the Contract Value – Determining Variable Account Value – Valuing an Accumulation Unit"); and then

(2)   multiplying the result from (1) by a factor to neutralize the assumed investment return factor.

Frequency and Amount of Annuity Payments

Annuity payments are based on the annuity payment option elected.

If the net amount to be annuitized is less than $2,000, Nationwide reserves the right to pay this amount in a lump sum instead of periodic annuity payments.

Nationwide reserves the right to change the frequency of payments if the amount of any payment becomes less than $100.  The payment frequency will be changed to an interval that will result in payments of at least $100.

Annuity payments will generally be received within 7 to 10 days after each annuity payment date.

Annuity Payment Options

The annuitant must elect an annuity payment option before the annuitization date.  If the annuitant does not elect an annuity payment option, a variable payment life annuity with a guarantee period of 240 months will be assumed as the automatic form of payment upon annuitization.  Once elected or assumed, the annuity payment option may not be changed.

Not all of the annuity payment options may be available in all states.  Additionally, the annuity payment options available may be limited based on the annuitant’s age (and the joint annuitant’s age, if applicable) or requirements under the Internal Revenue Code.

Nationwide reserves the right to refuse purchase payments in excess of $1,000,000 (see “Synopsis of the Contracts”).   If you do not submit purchase payments in excess of $1,000,000, or if Nationwide has refused to accept purchase payments in excess of $1,000,000, the references in this provision to purchase payments in excess of $1,000,000 will not apply to your contract.  If you are permitted to submit purchase payments in excess of $1,000,000, additional restrictions apply, as follows.

Annuity Payment Options for Contracts with Total Purchase Payments Less Than or Equal to $2,000,000

If, at the annuitization date, the total of all purchase payments made to the contract is less than or equal to $2,000,000, the annuity payment options available are:

(1)   Single Life;

(2)   Standard Joint and Survivor; and

(3)   Single Life with a 10 or 20 Year Term Certain.

Each of the annuity payment options is discussed more thoroughly below.

Single Life

The Single Life annuity payment option provides for annuity payments to be paid during the lifetime of the annuitant.  Payments will cease with the last payment before the annuitant’s death.  No death benefit will be paid.  It is possible, under this annuity payment option to receive only one annuity payment.

No withdrawals other than the scheduled annuity payments are permitted.

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Standard Joint and Survivor

The Standard Joint and Survivor annuity payment option provides for annuity payments to continue during the joint lifetimes of the annuitant and joint annuitant.  After the death of either the annuitant or joint annuitant, payments will continue for the life of the survivor.

Payments will cease with the last payment due prior to the death of the last survivor of the annuitant and joint annuitant.  No death benefit will be paid. It is possible, under this annuity payment option to receive only one annuity payment.

No withdrawals other than the scheduled annuity payments are permitted.

Single Life with a 10 or 20 Year Term Certain

The Single Life with a 10 or 20 Year Term Certain annuity payment option provides that monthly annuity payments will be paid during the annuitant’s lifetime or for the term selected, whichever is longer.  The term may be either 10 or 20 years.

If the annuitant dies before the end of the 10 or 20 year term, payments will be paid to the beneficiary for the remainder of the term.

No withdrawals other than the scheduled annuity payments are permitted.

Any Other Option

Annuity payment options not set forth in this provision may be available.  Any annuity payment option not set forth in this provision must be approved by Nationwide.

Annuity Payment Options for Contracts with Total Purchase Payments Greater Than $2,000,000

If, at the annuitization date, the total of all purchase payments made to the contract is greater than $2,000,000, Nationwide may limit the annuity payment option to the longer of:

(1)   a Fixed Life Annuity with a 20 Year Term Certain; or

(2)   a Fixed Life Annuity with a Term Certain to Age 95.

Annuitization of Amounts Greater than $5,000,000

Additionally, we may limit the amount that may be annuitized on a single life to $5,000,000.  If the total amount to be annuitized is greater than $5,000,000, the contract owner must:

(1) reduce the amount to be annuitized to $5,000,000 or less by taking a partial surrender from the contract;

(2) reduce the amount to be annuitized to $5,000,000 or less by exchanging the portion of the contract value in excess of $5,000,000 to another annuity contract; or

(3) annuitize the portion of the contract value in excess of $5,000,000 under an annuity payment option with a term certain, if available.

Statements and Reports

Nationwide will mail contract owners statements and reports.  Therefore, contract owners should promptly notify Nationwide of any address change.

These mailings will contain:

·   statements showing the contract’s quarterly activity;

·   confirmation statements showing transactions that affect the contract's value.  Confirmation statements will not be sent for recurring transactions (i.e., Dollar Cost Averaging or salary reduction programs).  Instead, confirmation of recurring transactions will appear in the contract’s quarterly statements; and

·  semi-annual and annual reports of allocated underlying mutual funds.

Contract owners can receive information from Nationwide faster and reduce the amount of mail they receive by signing up for Nationwide’s eDelivery program.  Nationwide will notify contract owners by email when important documents (statements, prospectuses and other documents) are ready for a contract owner to view, print, or download from Nationwide’s secure server. To choose this option, go to www.nationwide.com/login.

Contract owners should review statements and confirmations carefully.  All errors or corrections must be reported to Nationwide immediately to assure proper crediting to the contract.  Unless Nationwide is notified within 30 days of receipt of the statement, Nationwide will assume statements and confirmation statements are correct.

IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS

When multiple copies of the same disclosure document(s), such as prospectuses, supplements, proxy statements and semi-annual and annual reports are required to be mailed to multiple contract owners in the same household, Nationwide will mail only one copy of each document, unless notified otherwise by the contract owner(s).  Household delivery will continue for the life of the contracts.  Please call 1-866-223-0303 to resume regular delivery.  Please allow 30 days for regular delivery to resume.

Legal Proceedings

Nationwide Financial Services, Inc. (NFS, or collectively with its subsidiaries, the Company) was formed in November 1996. NFS is the holding company for Nationwide Life Insurance Company (NLIC), Nationwide Life and Annuity Insurance Company (NLAIC) and other companies that comprise the life insurance and retirement savings operations of the Nationwide group of companies (Nationwide). This group includes Nationwide Financial Network (NFN), which refers to Nationwide Life Insurance Company of America (NLICA), Nationwide Life and Annuity Company of America (NLACA) and subsidiaries, including the affiliated distribution network. NFS is incorporated in Delaware and maintains its principal executive offices in Columbus, Ohio.

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The Company is a party to litigation and arbitration proceedings in the ordinary course of its business. It is often not possible to determine the ultimate outcome of the pending investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs’ claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. The Company does not believe, based on information currently known by management, that the outcomes of such pending investigations and legal proceedings are likely to have a material adverse effect on the Company’s consolidated financial position. However, given the large and/or indeterminate amounts sought in certain of these matters and inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could have a material adverse effect on the Company’s consolidated financial position or results of operations in a particular period.

In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits relating to life insurance and annuity pricing and sales practices. A number of these lawsuits have resulted in substantial jury awards or settlements against life insurers other than the Company.

The financial services industry, including mutual fund, variable annuity, retirement plan, life insurance and distribution companies, has also been the subject of increasing scrutiny by regulators, legislators and the media over the past few years. Numerous regulatory agencies, including the SEC, the Financial Industry Regulatory Authority and the New York State Attorney General, have commenced industry-wide investigations regarding late trading and market timing in connection with mutual funds and variable insurance contracts, and have commenced enforcement actions against some mutual fund and life insurance companies on those issues. The Company has been contacted by or received subpoenas from the SEC and the New York State Attorney General, who are investigating market timing in certain mutual funds offered in insurance products sponsored by the Company. The Company has cooperated with these investigations. Information requests from the New York State Attorney General and the SEC with respect to investigations into late trading and market timing were last responded to by the Company and its affiliates in December 2003 and June 2005, respectively, and no further information requests have been received with respect to these matters.

In addition, state and federal regulators and other governmental bodies have commenced investigations, proceedings or inquiries relating to compensation and bidding arrangements and possible anti-competitive activities between insurance producers and brokers and issuers of insurance products, and unsuitable sales and replacements by producers on behalf of the issuer. Also under investigation are compensation and revenue sharing arrangements between the issuers of variable insurance contracts and mutual funds or their affiliates, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, funding agreements issued to back medium-term note (MTN) programs, recordkeeping and retention compliance by broker/dealers, and supervision of former registered representatives. Related investigations, proceedings or inquiries may be commenced in the future. The Company and/or its affiliates have been contacted by or received subpoenas from state and federal regulatory agencies and other governmental bodies, state securities law regulators and state attorneys general for information relating to certain of these investigations, including those relating to compensation, revenue sharing and bidding arrangements, anti-competitive activities, unsuitable sales or replacement practices, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, and funding agreements backing the NLIC MTN program. The Company is cooperating with regulators in connection with these inquiries and will cooperate with Nationwide Mutual Insurance Company (NMIC) in responding to these inquiries to the extent that any inquiries encompass NMIC’s operations.

A promotional and marketing arrangement associated with the Company’s offering of a retirement plan product and related services in Alabama is under investigation by the Alabama Securities Commission. The Company currently expects that any damages paid to settle this matter will not have a material adverse impact on its consolidated financial position. It is not possible to predict what effect, if any, the outcome of this investigation may have on the Company’s retirement plan operations with respect to promotional and marketing arrangements in general in the future.

These proceedings are expected to continue in the future and could result in legal precedents and new industry-wide legislation, rules and regulations that could significantly affect the financial services industry, including mutual fund, retirement plan, life insurance and annuity companies. These proceedings also could affect the outcome of one or more of the Company’s litigation matters. There can be no assurance that any such litigation or regulatory actions will not have a material adverse effect on the Company’s consolidated financial position or results of operations in the future.

Nationwide Financial Services, Inc. (NFS), NMIC, Nationwide Mutual Fire Insurance Company (NMFIC), Nationwide Corporation and the directors of NFS have been named as defendants in several class actions brought by NFS shareholders. These lawsuits arose following the announcement of the joint offer by NMIC, NMFIC and Nationwide Corporation to acquire all of the outstanding shares of NFS’ Class A common stock. The defendants deny

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any and all allegations of wrongdoing and have defended these lawsuits vigorously. On August 6, 2008, NFS and NMIC, NMFIC and Nationwide Corporation announced that they had entered into a definitive agreement for the acquisition of all of the outstanding shares of NFS’ Class A common stock for $52.25 per share by Nationwide Corporation, subject to the satisfaction of specific closing conditions. Simultaneously, the plaintiffs and defendants entered into a memorandum of understanding for the settlement of these lawsuits. The memorandum of understanding provides, among other things, for the settlement of the lawsuits and release of the defendants and, in exchange for the release and without admitting any wrongdoing, defendant NMIC shall acknowledge that the pending lawsuits were a factor, among others, that led it to offer an increased share price in the transaction. NMIC shall agree to pay plaintiffs’ attorneys’ fees and the costs of notifying the class members of the settlement. The memorandum of understanding is conditioned upon court approval of the proposed settlement. The court has scheduled the fairness hearing for approval of the proposed settlement for June 23, 2009. The lawsuits are pending in multiple jurisdictions and allege that the offer price was inadequate, that the process for reviewing the offer was procedurally unfair and that the defendants have breached their fiduciary duties to the holders of the NFS Class A common stock. NFS continues to defend these lawsuits vigorously.

On November 20, 2007, Nationwide Retirement Solutions, Inc. (NRS) and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z . On December 2, 2008, the plaintiffs filed an amended complaint. The plaintiffs claim to represent a class of all participants in the Alabama State Employees Association (ASEA) Plan, excluding members of the Deferred Compensation Committee, members of the Board of Control, ASEA’s directors, officers and board members, and PEBCO’s directors, officers and board members. The class period is from November 20, 2001, to the date of trial. In the amended class action complaint, the plaintiffs allege breach of fiduciary duty, wantonness and breach of contract. The amended class action complaint seeks a declaratory judgment, an injunction, an appointment of an independent fiduciary to protect Plan participants, disgorgement of amounts paid, reformation of Plan documents, compensatory damages and punitive damages, plus interest, attorneys’ fees and costs and such other equitable and legal relief to which plaintiffs and class members may be entitled. Also, on December 2, 2008, the plaintiffs filed a motion for preliminary injunction seeking an order requiring periodic payments made by NRS and/or NLIC to ASEA or PEBCO to be held in a trust account for the benefit of Plan participants. On December 4, 2008, the Alabama State Personnel Board and the State of Alabama by, and through the State Personnel Board, filed a motion to intervene and a complaint in intervention. On December 16, 2008, the Companies filed their Answer. On February 4, 2009, the court provisionally agreed to add the State of Alabama, by and through the State Personnel Board as a party. NRS and NLIC continue to defend this case vigorously.

On July 11, 2007, NLIC was named in a lawsuit filed in the United States District Court for the Western District of Washington at Tacoma entitled Jerre Daniels-Hall and David Hamblen, Individually and on behalf of All Others Similarly Situated v. National Education Association, NEA Member Benefits Corporation, Nationwide Life Insurance Company, Security Benefit Life Insurance Company, Security Benefit Group, Inc., Security Distributors, Inc., et. al . The plaintiffs seek to represent a class of all current or former National Education Association (NEA) members who participated in the NEA Valuebuilder 403(b) program at any time between January 1, 1991 and the present (and their heirs and/or beneficiaries). The plaintiffs allege that the defendants violated the Employee Retirement Income Security Act of 1974, as amended (ERISA) by failing to prudently and loyally manage plan assets, by failing to provide complete and accurate information, by engaging in prohibited transactions, and by breaching their fiduciary duties when they failed to prevent other fiduciaries from breaching their fiduciary duties. The complaint seeks to have the defendants restore all losses to the plan, restoration of plan assets and profits to participants, disgorgement of endorsement fees, disgorgement of service fee payments, disgorgement of excessive fees charged to plan participants, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. On May 23, 2008, the Court granted the defendants’ motion to dismiss. On June 19, 2008, the plaintiffs filed a notice of appeal. On October 17, 2008, the plaintiffs filed their opening brief. On December 19, 2008 the defendants filed their briefs. On January 26, 2009, the plaintiffs filed Appellants’ Reply Brief. NLIC continues to defend this lawsuit vigorously.

On November 15, 2006, NFS, NLIC and NRS were named in a lawsuit filed in the United States District Court for the Southern District of Ohio entitled Kevin Beary, Sheriff of Orange County, Florida, In His Official Capacity, Individually and On Behalf of All Others Similarly Situated v. Nationwide Life Insurance Co., Nationwide Retirement Solutions, Inc. and Nationwide Financial Services, Inc. The plaintiff seeks to represent a class of all sponsors of 457(b) deferred compensation plans in the United States that had variable annuity contracts with the defendants at any time during the class period, or in the alternative, all sponsors of 457(b) deferred compensation plans in Florida that had variable annuity contracts with the defendants during the class period. The class period is from January 1, 1996 until the class notice is provided. The plaintiff alleges that the defendants breached their fiduciary duties by arranging for and retaining service payments from certain mutual funds. The complaint seeks an accounting, a declaratory judgment, a permanent injunction and disgorgement or restitution of the service fee payments allegedly received by the defendants, including interest. On January 25, 2007, NFS, NLIC and NRS filed a motion to dismiss. On September 17, 2007, the Court granted

39

the motion to dismiss. On October 1, 2007, the plaintiff filed a motion to vacate judgment and for leave to file an amended complaint. On September 15, 2008, the Court denied the plaintiffs’ motion to vacate judgment and for leave to file an amended complaint. On October 15, 2008, the plaintiffs filed a notice of appeal. NFS, NLIC and NRS continue to defend this lawsuit vigorously.

On February 11, 2005, NLIC was named in a class action lawsuit filed in Common Pleas Court, Franklin County, Ohio entitled Michael Carr v. Nationwide Life Insurance Company . The complaint seeks recovery for breach of contract, fraud by omission, violation of the Ohio Deceptive Trade Practices Act and unjust enrichment. The complaint also seeks unspecified compensatory damages, disgorgement of all amounts in excess of the guaranteed maximum premium and attorneys’ fees. On February 2, 2006, the court granted the plaintiff’s motion for class certification on the breach of contract and unjust enrichment claims. The court certified a class consisting of all residents of the United States and the Virgin Islands who, during the class period, paid premiums on a modal basis to NLIC for term life insurance policies issued by NLIC during the class period that provide for guaranteed maximum premiums, excluding certain specified products. Excluded from the class are NLIC; any parent, subsidiary or affiliate of NLIC; all employees, officers and directors of NLIC; and any justice, judge or magistrate judge of the State of Ohio who may hear the case. The class period is from February 10, 1990 through February 2, 2006, the date the class was certified. On January 26, 2007, the plaintiff filed a motion for summary judgment. On April 30, 2007, NLIC filed a motion for summary judgment. On February 4, 2008, the Court granted the class’s motion for summary judgment on the breach of contract claims arising from the term policies in 43 of 51 jurisdictions. The Court granted NLIC’s motion for summary judgment on the breach of contract claims on all decreasing term policies. On November 7, 2008, the case was settled.

On April 13, 2004, NLIC was named in a class action lawsuit filed in Circuit Court, Third Judicial Circuit, Madison County, Illinois, entitled Woodbury v. Nationwide Life Insurance Company . NLIC removed this case to the United States District Court for the Southern District of Illinois on June 1, 2004. On December 27, 2004, the case was transferred to the United States District Court for the District of Maryland and included in the multi-district proceeding entitled In Re Mutual Funds Investment Litigation . In response, on May 13, 2005, the plaintiff filed the first amended complaint purporting to represent, with certain exceptions, a class of all persons who held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing or stale price trading activity. The first amended complaint purports to disclaim, with respect to market timing or stale price trading in NLIC’s annuities sub-accounts, any allegation based on NLIC’s untrue statement, failure to disclose any material fact, or usage of any manipulative or deceptive device or contrivance in connection with any class member’s purchases or sales of NLIC annuities or units in annuities sub-accounts. The plaintiff claims, in the alternative, that if NLIC is found with respect to market timing or stale price trading in its annuities sub-accounts, to have made any untrue statement, to have failed to disclose any material fact or to have used or employed any manipulative or deceptive device or contrivance, then the plaintiff purports to represent a class, with certain exceptions, of all persons who, prior to NLIC’s untrue statement, omission of material fact, use or employment of any manipulative or deceptive device or contrivance, held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing activity. The first amended complaint alleges common law negligence and seeks to recover damages not to exceed $75,000 per plaintiff or class member, including all compensatory damages and costs. On June 1, 2006, the District Court granted NLIC’s motion to dismiss the plaintiff’s complaint. On January 30, 2009, the United States Court of Appeals for the Fourth Circuit affirmed that dismissal. NLIC continues to defend this lawsuit vigorously.

On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. Currently, the plaintiffs’ fifth amended complaint, filed March 21, 2006, purports to represent a class of qualified retirement plans under ERISA that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NFS and NLIC, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. To date, the District Court has rejected the plaintiffs’ request for certification of the alleged class. On September 25, 2007, NFS’ and NLIC’s motion to dismiss the plaintiffs’ fifth amended complaint was denied. On October 12, 2007, NFS and NLIC filed their answer to the plaintiffs’ fifth amended complaint and amended counterclaims. On November 1, 2007, the plaintiffs filed a motion to dismiss NFS’ and NLIC’s amended counterclaims. On November 15, 2007, the plaintiffs filed a motion for class certification. On February 8, 2008, the Court denied the plaintiffs’ motion to dismiss the amended counterclaim, with the exception that it was tentatively granting the plaintiffs’ motion to dismiss with respect to NFS’ and NLIC’s claim that it could recover any “disgorgement remedy” from plan sponsors. On April 25, 2008, NFS and NLIC filed their opposition to the plaintiffs’ motion for class certification. On September 29, 2008, the plaintiffs filed their reply to NFS’ and NLIC’s opposition to class certification. The Court has set a hearing on the class certification motion for February 27, 2009. NFS and NLIC continue to defend this lawsuit vigorously.

The general distributor, NISC, is not engaged in any litigation of any material nature.

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Table of Contents of the Statement of Additional Information	Page
General Information and History	1
Services	1
Purchase of Securities Being Offered	2
Underwriters	2
Advertising	2
Annuity Payments	2
Condensed Financial Information	3
Financial Statements	43

To learn more about this product, you should read the Statement of Additional Information (the "SAI") dated the same date as this prospectus.  For a free copy of the SAI and to request other information about this product please call our Service Center at 1-800-848-6331 (TDD 1-800-238-3035) or write to us at Nationwide Life Insurance Company, 5100 Rings Road, RR1-04-F4, Dublin, Ohio 43017-1522.

The SAI has been filed with the SEC and is incorporated by reference into this prospectus.  The SEC maintains an Internet website (http://www.sec.gov) that contains the SAI and other information about us and the product.  Information about us and the product (including the SAI) may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C., or may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street NE, Washington, D.C. 20549-0102.  Additional information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090.

Investment Company Act of 1940 Registration File No. 811-3330

Securities Act of 1933 Registration File No. 333-147273

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Appendix A: Underlying Mutual Funds

The underlying mutual funds listed below are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies.  There is no guarantee that the investment objectives will be met.

Please refer to the prospectus for each underlying mutual fund for more detailed information.

AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series II Shares

Investment Adviser:	Invesco Aim Advisors, Inc.
Sub-adviser:	Invesco Trimark Investment Management, Inc.; Invesco Global Asset
	Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior
	Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
	Management Limited; Invesco Asset Management (Japan) Limited; Invesco
	Asset Management Deutschland, GmbH; and Invesco Australia Limited
Investment Objective:	Long-term capital growth.

This underlying mutual fund or sub account may invest in other funds.  Therefore, a proportionate share of the fees and expenses

of any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub account than a fund that does not invest in other funds.

AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B

Investment Adviser:	AllianceBernstein L.P.
Investment Objective:	Long-term growth of capital.

American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II

Investment Adviser:	American Century Investment Management, Inc.
Investment Objective:	Long-term total return using a strategy that seeks to protect against U.S. inflation.

American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class II

Investment Adviser:	American Century Investment Management, Inc.
Investment Objective:	Long-term capital growth with income as a secondary objective.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II

This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2009

Investment Adviser:	American Century Investment Management, Inc.
Investment Objective:	Long-term capital growth with income as a secondary objective.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

BlackRock Variable Series Funds, Inc. - BlackRock Global Allocation V.I. Fund: Class III

Investment Adviser:	BlackRock Advisors, LLC
Sub-adviser:	BlackRock Investment Management, LLC; BlackRock Asset Management U.K.
	Limited
Investment Objective:	Seeks high total investment return.

This underlying mutual fund or sub account may invest in other funds.  Therefore, a proportionate share of the fees and expenses

of any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub account than a fund that does not invest in other funds.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares

Investment Adviser:	The Dreyfus Corporation
Sub-adviser:	Mellon Capital Management
Investment Objective:	To match performance of the S&P SmallCap 600 Index®.

Dreyfus Stock Index Fund, Inc.: Service Shares

Investment Adviser:	The Dreyfus Corporation
Sub-adviser:	Mellon Capital Management
Investment Objective:	To match performance of the S&P 500.

Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares

Investment Adviser:	The Dreyfus Corporation
Sub-adviser:	Fayez Sarofim
Investment Objective:	Long-term capital growth consistent with the preservation of capital.

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Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research &
	Analysis Company (FRAC)
Investment Objective:	Capital appreciation.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research &
	Analysis Company (FRAC)
Investment Objective:	Reasonable income.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research &
	Analysis Company (FRAC)
Investment Objective:	Capital appreciation.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research &
	Analysis Company (FRAC)
Investment Objective:	High level of current income.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research &
	Analysis Company (FRAC)
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research &
	Analysis Company (FRAC)
Investment Objective:	Long-term capital growth.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2

Investment Adviser:	Franklin Advisors, Inc.
Investment Objective:	Maximum income while maintaining prospects for capital appreciation.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2

Investment Adviser:	Franklin Advisory Services, LLC
Investment Objective:	Long-term total return.

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This underlying mutual fund or sub account may invest in other funds.  Therefore, a proportionate share of the fees and expenses

of any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub account than a fund that does not invest in other funds.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2

Investment Adviser:	Franklin Templeton Services, LLC
Investment Objective:	Capital appreciation with income as a secondary goal.

This underlying mutual fund or sub account may invest in other funds.  Therefore, a proportionate share of the fees and expenses

of any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub account than a fund that does not invest in other funds.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3

This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2009

Investment Adviser:	Templeton Investment Counsel, LLC
Investment Objective:	Long-term capital growth.

This underlying mutual fund or sub account may invest in other funds.  Therefore, a proportionate share of the fees and expenses

of any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub account than a fund that does not invest in other funds.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3 (formerly, Templeton Global Income Securities Fund: Class 2)

This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2009

Investment Adviser:	Franklin Advisors, Inc.
Investment Objective:	High current income consistent with preservation of capital, with capital
	appreciation as a secondary consideration.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Ivy Funds Variable Insurance Portfolios, Inc. - Asset Strategy

Investment Adviser:	Waddell & Reed Investment Management Company
Investment Objective:	High total return over the long run.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Janus Aspen Series - Forty Portfolio: Service Shares

Investment Adviser:	Janus Capital Management LLC
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub account may invest in other funds.  Therefore, a proportionate share of the fees and expenses

of any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub account than a fund that does not invest in other funds.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Janus Aspen Series - Overseas Portfolio: Service II Shares (formerly, International Growth Portfolio: Service II Shares)

Investment Adviser:	Janus Capital Management LLC
Investment Objective:	Long-term growth of capital.

44

This underlying mutual fund or sub account may invest in other funds.  Therefore, a proportionate share of the fees and expenses

of any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub account than a fund that does not invest in other funds.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

MFS® Variable Insurance Trust - MFS Value Series: Service Class

Investment Adviser:	Massachusetts Financial Services Company
Investment Objective:	To seek capital appreciation.

Nationwide Variable Insurance Trust - AllianceBernstein NVIT Global Fixed Income Fund: Class III

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	AllianceBernstein L.P.
Investment Objective:	Seeks a high level of current income consistent with preserving capital.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - American Century NVIT Multi Cap Value Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	American Century Investment Management, Inc.
Investment Objective:	Seeks capital appreciation.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II

Investment Adviser:	Capital Research and Management Company
Investment Objective:	Seeks to provide high total return (including income and capital gains) consistent
	with the preservation of capital over the long term.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II

Investment Adviser:	Capital Research and Management Company
Investment Objective:	Seeks to provide investors with high total return (including income and capital
	gains) consistent with the preservation of capital over the long term.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II

Investment Adviser:	Capital Research and Management Company
Investment Objective:	Capital appreciation through stocks.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II

Investment Adviser:	Capital Research and Management Company
Investment Objective:	Capital appreciation principally through investment in stocks.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - American Funds NVIT Growth-Income Fund: Class II

Investment Adviser:	Capital Research and Management Company
Investment Objective:	Seeks returns from both capital gains as well as income generated by dividends
	paid by stock issuers.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

45

Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Federated Investment Management Company
Investment Objective:	High current income.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class VI

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Gartmore Global Partners
Investment Objective:	Long-term capital growth by investing primarily in equity securities of
	companies located in emerging market countries.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class VI

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Gartmore Global Partners
Investment Objective:	The Fund seeks long-term capital growth by investing primarily in equity
	securities of companies in Europe, Australasia, the Far East and other regions,
	including developing countries.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Gartmore NVIT Worldwide Leaders Fund: Class VI

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Gartmore Global Partners
Investment Objective:	The Fund seeks long-term capital growth.  The Fund invests at least 80% of the
	value of its net assets in equity securities issued by companies located
	throughout the world (including the U.S.) that the subadviser believes are, or
	have the potential to be, Worldwide Leaders.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Neuberger Berman Management Inc.
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Neuberger Berman Management Inc.
Investment Objective:	The Fund seeks long-term total return by investing primarily in securities of
	companies that meet the fund's financial criteria and social policy.

Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Nationwide Asset Management, LLC
Investment Objective:	The Fund seeks a high level of current income consistent with preserving capital.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

46

Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Lehman Brothers Asset Management LLC
Investment Objective:	The Fund seeks long-term total return consistent with reasonable risk.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Nationwide Asset Management, LLC
Investment Objective:	To provide a high level of income as is consistent with the preservation of capital.

Nationwide Variable Insurance Trust - NVIT Health Sciences Fund: Class VI

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.
Investment Objective:	Long-term capital appreciation.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VIII

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	BlackRock Investment Management, LLC
Investment Objective:	To match the performance of the Morgan Stanley Capital International Europe,
	Australasia and Far East Index ("MSCI EAFE® Index") as closely as possible
	before the deduction of Fund expenses.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	To maximize growth of capital consistent with a more aggressive level of risk as
	compared to the other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees

and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT

Investor Destinations Funds for more information.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Balanced Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Balanced Fund (“Balanced Fund” or the
	“Fund”) seeks a high level of total return through investment in both equity and
	fixed-income securities.  The Balanced Fund is a “fund-of-funds” that invests its
	assets primarily in underlying portfolios of Nationwide Variable Insurance Trust
	(each, an “Underlying Fund” or collectively, “Underlying Funds”) that represent
	several asset classes. Each of the Underlying Funds in turn invests in equity or
	fixed-income securities, as appropriate to its respective objective and strategies.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees

and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT

Investor Destinations Funds for more information.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

47

Nationwide Variable Insurance Trust - NVIT Investor Destinations Capital Appreciation Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Capital Appreciation Fund (“Capital
	Appreciation Fund” or the “Fund”) seeks growth of capital, but also seeks
	income consistent with a less aggressive level of risk as compared to other NVIT
	Investor Destinations Funds.  The Capital Appreciation Fund is a “fund-of-
	funds” that invests its assets primarily in underlying portfolios of Nationwide
	Variable Insurance Trust (each, an “Underlying Fund” or collectively,
	“Underlying Funds”) that represent several asset classes. Each of the Underlying
	Funds in turn invests in equity or fixed-income securities, as appropriate to its
	respective objective and strategies.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees

and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT

Investor Destinations Funds for more information.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	High level of return consistent with a conservative level of risk compared to the
	other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees

and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT

Investor Destinations Funds for more information.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	High level of total return consistent with a moderate level of risk as compared to
	other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees

and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT

Investor Destinations Funds for more information.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Growth of capital, but also seeks income consistent with a moderately aggressive
	level of risk as compared to the other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees

and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT

Investor Destinations Funds for more information.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	High level of total return consistent with a moderately conservative level of risk.

48

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees

and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT

Investor Destinations Funds for more information.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	BlackRock Investment Management, LLC
Investment Objective:	Capital appreciation.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Federated Investment Management Company
Investment Objective:	The fund seeks as high a level of current income as is consistent with preserving
	capital and maintaining liquidity.

Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Logan Circle Partners, L.P.
Investment Objective:	Above average total return over a market cycle of three to five years.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class VI

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Invesco AIM Capital Management, Inc. and American Century Global
	Investment Management, Inc.
Investment Objective:	The fund seeks long-term capital growth.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class VI

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	AllianceBernstein L.P.; JPMorgan Investment Management, Inc.
Investment Objective:	Long-term capital appreciation.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Goldman Sachs Asset Management, L.P.; Neuberger Berman Management Inc.;
	Wells Capital Management, Inc.
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Goldman Sachs Asset Management L.P.; Neuberger Berman Management, Inc.
	and Wells Capital Management, Inc.
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Neuberger Berman Management Inc. and American Century Investment
	Management Inc.
Investment Objective:	The fund seeks long-term capital growth.

49

Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	American Century Investment Management; RiverSource Investment
	Management; Thompson, Siegel & Walmsley, Inc.
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Waddell & Reed Investment Management Company; OppenheimerFunds, Inc.
Investment Objective:	Capital growth.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.; Epoch Investment Partners, Inc.; J.P.
	Morgan Investment Management Inc.
Investment Objective:	Capital appreciation.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.: American Century Investment Management
	Inc.; Gartmore Global Partners; Morgan Stanley Investment Management;
	Neuberger Berman Management, Inc.; Putnam Investment Management, LLC;
	Waddell & Reed Investment Management Company
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.
Investment Objective:	Total return through a flexible combination of capital appreciation and current
	income.

Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Nationwide Asset Management, LLC
Investment Objective:	The fund seeks to provide a high level of current income while preserving capital
	and minimizing fluctuations in share value.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Technology and Communications Fund: Class VI

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.
Investment Objective:	Long-term capital appreciation.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - NVIT U.S. Growth Leaders Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Oppenheimer NVIT Large Cap Growth Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	OppenheimerFunds, Inc.
Investment Objective:	Seeks long-term capital growth.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

50

Nationwide Variable Insurance Trust - Templeton NVIT International Value Fund: Class III

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Templeton Investment Counsel, LLC
Investment Objective:	Seeks to maximize total return, consisting of capital appreciation and/or current
	income.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Van Kampen Asset Management
Investment Objective:	Seeks capital growth and income through investments in equity securities,
	including common stocks, preferred stocks and convertible securities.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Van Kampen Asset Management
Investment Objective:	The Fund seeks current income and long-term capital appreciation.

Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class

Investment Adviser:	Neuberger Berman Management LLC.
Sub-adviser:	Lehman Brothers Asset Management LLC
Investment Objective:	Highest available current income consistent with liquidity and low risk to
	principal; total return is a secondary goal.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class

Investment Adviser:	Neuberger Berman Management LLC.
Sub-adviser:	Neuberger Berman, LLC
Investment Objective:	Long-term growth by investing primarily in securities of companies that meet
	financial criteria and social policy.

Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: Service Shares

This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2009

Investment Adviser:	OppenheimerFunds, Inc.
Investment Objective:	Capital appreciation by investing in securities of well-known established
	companies.

Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 4

Investment Adviser:	OppenheimerFunds, Inc.
Investment Objective:	Long-term capital appreciation by investing a substantial portion of its assets in
	securities of foreign issuers, "growth-type" companies, cyclical industries and
	special situations that are considered to have appreciation possibilities.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Oppenheimer Variable Account Funds - Oppenheimer High Income Fund/VA: Class 4

This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2009

Investment Adviser:	OppenheimerFunds, Inc.
Investment Objective:	High level of current income.

This underlying mutual fund or sub account assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

51

Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Service Shares

Investment Adviser:	OppenheimerFunds, Inc.
Investment Objective:	High total return which includes growth in the value of its shares as well as
	current income from equity and debt securities.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Service Shares

Investment Adviser:	OppenheimerFunds, Inc.
Investment Objective:	Capital appreciation.

PIMCO Variable Insurance Trust - Foreign Bond Portfolio (Unhedged): Advisor Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Seeks maximum total return, consistent with preservation of capital and prudent
	investment management.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

PIMCO Variable Insurance Trust - Low Duration Portfolio: Advisor Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Seeks maximum total return, consistent with preservation of capital and prudent
	investment management.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Schwab Annuity Portfolios - Schwab Money Market Portfolio ™

Investment Adviser:	Charles Schwab Investment Management, Inc.
Investment Objective:	Money market.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: Class II

This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2009

Investment Adviser:	T. Rowe Price Investment Services
Investment Objective:	Long-term capital growth and, secondarily, income.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

T. Rowe Price Equity Series, Inc. - T. Rowe Price Equity Income Portfolio: Class II

This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2009

Investment Adviser:	T. Rowe Price Investment Services
Investment Objective:	Substantial dividend income as well as long-term growth of capital through
	investments in the common stocks of established companies.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class II

This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2009

Investment Adviser:	Morgan Stanley Investment Management Inc.
Investment Objective:	Above-average total return over a market cycle of three to five years by investing
	primarily in a diversified portfolio of fixed income securities.

This underlying mutual fund or sub account may invest in other funds.  Therefore, a proportionate share of the fees and expenses

of any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub account than a fund that does not invest in other funds.

This underlying mutual fund or sub account may invest in lower quality debt securities commonly referred to as junk bonds.

Wells Fargo Advantage Funds® Variable Trust - VT Small Cap Growth Fund

Investment Adviser:	Wells Fargo Funds Management, LLC
Sub-adviser:	Wells Capital Management Incorporated
Investment Objective:	Long-term capital appreciation.

52

Appendix B: Condensed Financial Information

The following tables list the Condensed Financial Information (the accumulation unit value information for accumulation units outstanding) for contracts with no optional benefits (the minimum variable account charge of 0.65%) and contracts with all optional benefits available on December 31, 2008 (the maximum variable account charge of 2.15%).  The term "Period" is defined as a complete calendar year, unless otherwise noted.  Those Periods with an asterisk (*) reflect Accumulation unit information for a partial year only.  Should the Variable account charges applicable to your contract fall between the maximum and minimum charges, AND you wish to see a copy of the Condensed Financial Information applicable to your contract, such information can be obtained in the Statement of Additional Information FREE OF CHARGE by:

calling:	1-888-421-5368, TDD 1-800-238-3035
writing:	Nationwide Life Insurance Company
	5100 Rings Road, RR1-04-F4
	Dublin, Ohio 43017-1522
checking
on-line at:	www.nationwide.com

The following funds were added to the variable account effective May 1, 2009, therefore, no Condensed Financial Information is available.

BlackRock Variable Series Funds, Inc.

·    BlackRock Global Allocation V.I. Fund - Class III

Nationwide Variable Insurance Trust (“NVIT”)

·    AllianceBernstein NVIT Global Fixed Income Fund-Class III

·    American Century NVIT Multi Cap Value Fund-Class II

·    Gartmore NVIT Worldwide Leaders Fund-Class VI

·    NVIT Investor Destinations Balanced Fund-Class II

·    NVIT Investor Destinations Capital Appreciation Fund-Class II

·    Oppenheimer NVIT Large Cap Growth Fund-Class II

·    Templeton NVIT International Value Fund-Class III

PIMCO Variable Insurance Trust

·    Foreign Bond Portfolio (Unhedged): Advisor Class

·    Low Duration Portfolio: Advisor Class

Ivy Funds Variable Insurance Portfolios, Inc.

·    Asset Strategy

Wells Fargo Advantage Funds® Variable Trust

·    VT Small Cap Growth Fund

53

No Additional Contract Options Elected (Total 0.65%)
(Variable account charges of 0.65% of the daily net assets of the variable account)
Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series II Shares - Q/NQ	10.278087	5.398851	-47.47%	0	2008
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B - Q/NQ	10.000000	6.227496	-37.73%	0	2008
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II - Q/NQ	10.310708	10.080949	-2.23%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class II - Q/NQ	10.022987	7.517260	-25.00%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II - Q/NQ	10.059915	7.315603	-27.28%	0	2008
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares - Q/NQ	10.141974	6.961141	-31.36%	0	2008
Dreyfus Stock Index Fund, Inc.: Service Shares - Q/NQ	10.255684	6.386420	-37.73%	0	2008

54

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares - Q/NQ	10.203009	7.123833	-30.18%	0	2008
Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2 - Q/NQ	11.235450	5.089521	-54.70%	0	2008
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2 - Q/NQ	10.247008	5.821914	-43.18%	0	2008
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2 - Q/NQ	10.339164	5.412448	-47.65%	0	2008
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2 - Q/NQ	10.048595	9.637710	-4.09%	5,687	2008
Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2 - Q/NQ	10.330850	6.198564	-40.00%	0	2008
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R - Q/NQ	10.323841	5.749327	-44.31%	0	2008

55

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2 - Q/NQ	10.174718	7.110737	-30.11%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2 - Q/NQ	10.368424	6.899927	-33.45%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2 - Q/NQ	10.000000	6.627193	-33.73%	0	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3 - Q/NQ	10.410364	6.165012	-40.78%	4,982	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3 - Q/NQ	9.974589	10.524816	5.52%	0	2008
Janus Aspen Series - Forty Portfolio: Service Shares - Q/NQ	10.713326	5.927465	-44.67%	0	2008*
Janus Aspen Series - Overseas Portfolio: Service II Shares - Q/NQ	10.215023	4.850012	-52.52%	1,261	2008

56

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
MFS® Variable Insurance Trust - MFS Value Series: Service Class - Q/NQ	10.243154	6.844487	-33.18%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II - Q/NQ	10.102619	7.048381	-30.23%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II - Q/NQ	10.028387	8.979634	-10.46%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II - Q/NQ	10.219414	6.230143	-39.04%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II - Q/NQ	10.162242	5.632301	-44.58%	313	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth- Income Fund: Class II - Q/NQ	10.132679	6.234938	-38.47%	0	2008
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III - Q/NQ	10.051223	7.180046	-28.57%	0	2008
Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class VI - Q/NQ	10.210850	4.274561	-58.14%	0	2008

57

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class VI - Q/NQ	10.000000	5.484013	-45.16%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II - Q/NQ	10.000000	5.131862	-48.68%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II - Q/NQ	10.000000	6.149628	-38.50%	7,620	2008
Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class II - Q/NQ	10.000000	9.880103	-1.20%	0	2008
Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class II - Q/NQ	10.000000	9.885944	-1.14%	0	2008
Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I - Q/NQ	10.077277	10.784612	7.02%	6,262	2008
Nationwide Variable Insurance Trust - NVIT Health Sciences Fund: Class VI - Q/NQ	10.104573	7.484633	-25.93%	0	2008
Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VIII - Q/NQ	10.154122	5.741079	-43.46%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II - Q/NQ	10.210693	6.406798	-37.25%	0	2008

58

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II - Q/NQ	10.096585	9.426818	-6.63%	37,906	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II - Q/NQ	10.155912	7.749467	-23.70%	21,147	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II - Q/NQ	10.189420	6.945387	-31.84%	31,301	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II - Q/NQ	10.126588	8.547225	-15.60%	6,694	2008
Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I - Q/NQ	10.269855	6.482696	-36.88%	0	2008
Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I - Q/NQ	10.060917	10.200798	1.39%	795	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class VI - Q/NQ	10.000000	6.097743	-39.02%	5,597	2008

59

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class VI - Q/NQ	10.216909	5.435381	-46.80%	3,073	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class II - Q/NQ	10.000000	6.332945	-36.67%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class II - Q/NQ	10.000000	6.321024	-36.79%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class II - Q/NQ	10.000000	6.242907	-37.57%	2,446	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II - Q/NQ	10.000000	6.728480	-32.72%	4,470	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class II - Q/NQ	10.330041	5.486920	-46.88%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class II - Q/NQ	10.062360	6.767895	-32.74%	0	2008

60

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class II - Q/NQ	10.141079	6.210861	-38.76%	535	2008
Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I - Q/NQ	9.993736	8.211959	-17.83%	0	2008
Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class II - Q/NQ	10.290051	5.969157	-41.99%	8,495	2008
Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II - Q/NQ	10.000000	9.900180	-1.00%	0	2008
Nationwide Variable Insurance Trust - NVIT Technology and Communications Fund: Class VI - Q/NQ	10.232305	5.204080	-49.14%	0	2008
Nationwide Variable Insurance Trust - NVIT U.S. Growth Leaders Fund: Class II - Q/NQ	10.622735	6.177074	-41.85%	0	2008
Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class II - Q/NQ	9.958644	6.211480	-37.63%	672	2008

61

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class II - Q/NQ	10.000000	5.608954	-43.91%	0	2008
Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class - Q/NQ	9.984819	8.587795	-13.99%	5,851	2008
Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class - Q/NQ	10.303152	6.198726	-39.84%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: Service Shares - Q/NQ	10.380833	5.604096	-46.01%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 4 - Q/NQ	10.146312	6.013227	-40.73%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer High Income Fund/VA: Class 4 - Q/NQ	10.106628	2.145685	-78.77%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Service Shares - Q/NQ	10.271750	6.263213	-39.02%	6,979	2008

62

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Service Shares - Q/NQ	10.184546	6.272975	-38.41%	2,291	2008
Schwab Annuity Portfolios - Schwab ™ Money Market Portfolio - Q/NQ	10.043522	10.189513	1.45%	0	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: Class II - Q/NQ	10.291392	5.863658	-43.02%	3,517	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Equity Income Portfolio: Class II - Q/NQ	10.209400	6.464591	-36.68%	0	2008
The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class II - Q/NQ	10.027444	8.920662	-11.04%	4,408	2008

63

Maximum Contract Options Elected (Total 2.15%)
(Variable account charges of 2.15% of the daily net assets of the variable account)
Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series II Shares - Q/NQ	20.585603	10.649344	-48.27%	0	2008
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B - Q/NQ	19.832168	12.468133	-37.13%	0	2008
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II - Q/NQ	11.323944	10.904447	-3.70%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class II - Q/NQ	12.517607	9.246206	-26.13%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II - Q/NQ	16.619982	11.903258	-28.38%	0	2008
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares - Q/NQ	19.706561	13.321224	-32.40%	0	2008
Dreyfus Stock Index Fund, Inc.: Service Shares - Q/NQ	16.891228	10.359253	-38.67%	0	2008

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Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares - Q/NQ	15.639524	10.754509	-31.24%	0	2008
Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2 - Q/NQ	21.661696	9.663708	-55.39%	0	2008
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2 - Q/NQ	17.818898	9.970573	-44.04%	0	2008
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2 - Q/NQ	18.537976	9.557413	-48.44%	0	2008
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2 - Q/NQ	10.806111	10.207763	-5.54%	0	2008
Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2 - Q/NQ	24.922137	14.727075	-40.91%	0	2008
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R - Q/NQ	16.836394	9.234195	-45.15%	0	2008

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Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2 - Q/NQ	11.223320	7.724985	-31.17%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2 - Q/NQ	20.177183	13.224120	-34.46%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2 - Q/NQ	10.000000	6.560161	-34.40%	0	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3 - Q/NQ	16.579664	9.669894	-41.68%	0	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3 - Q/NQ	11.683525	12.141911	3.92%	0	2008
Janus Aspen Series - Forty Portfolio: Service Shares - Q/NQ	22.492026	12.255874	-45.51%	0	2008
Janus Aspen Series - Overseas Portfolio: Service II Shares - Q/NQ	26.334937	12.314057	-53.24%	0	2008

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Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
MFS® Variable Insurance Trust - MFS Value Series: Service Class	18.944360	12.467076	-34.19%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II - Q/NQ	10.806270	7.425270	-31.29%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II - Q/NQ	10.466687	9.230548	-11.81%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II - Q/NQ	11.957998	7.179740	-39.96%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II - Q/NQ	11.184549	6.105029	-45.42%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth- Income Fund: Class II - Q/NQ	9.749596	5.908398	-39.40%	0	2008
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III - Q/NQ	11.350392	7.985550	-29.65%	0	2008
Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class VI - Q/NQ	28.817018	11.880662	-58.77%	0	2008

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Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class VI - Q/NQ	10.000000	5.428443	-45.72%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II - Q/NQ	10.000000	5.079792	-49.20%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II - Q/NQ	10.000000	6.087288	-39.13%	0	2008
Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class II - Q/NQ	10.000000	9.780422	-2.20%	0	2008
Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class II - Q/NQ	10.000000	9.786216	-2.14%	0	2008
Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I - Q/NQ	10.833282	11.418724	5.40%	0	2008
Nationwide Variable Insurance Trust - NVIT Health Sciences Fund: Class VI - Q/NQ	11.501148	8.390233	-27.05%	0	2008
Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VIII - Q/NQ	11.565008	6.439806	-44.32%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II - Q/NQ	19.083119	11.792638	-38.20%	0	2008

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Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II	11.847685	10.894700	-8.04%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II - Q/NQ	15.133667	11.373158	-24.85%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II - Q/NQ	17.380205	11.667610	-32.87%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II	13.426978	11.161635	-16.87%	0	2008
Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I - Q/NQ	20.025742	12.449566	-37.83%	0	2008
Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I - Q/NQ	10.244899	10.230509	-0.14%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class VI	10.000000	6.035998	-39.64%	0	2008

69

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class VI - Q/NQ	15.040018	7.880097	-47.61%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class II	10.000000	6.268781	-37.31%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class II - Q/NQ	10.000000	6.256962	-37.43%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class II - Q/NQ	10.000000	6.179627	-38.20%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II - Q/NQ	10.000000	6.660337	-33.40%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class II - Q/NQ	17.241595	9.019312	-47.69%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class II - Q/NQ	19.923089	13.197321	-33.76%	0	2008

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Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class II - Q/NQ	20.253200	12.216178	-39.68%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I - Q/NQ	11.886963	9.620128	-19.07%	0	2008
Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class II - Q/NQ	17.180693	9.815428	-42.87%	0	2008
Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II - Q/NQ	10.000000	9.800278	-2.00%	0	2008
Nationwide Variable Insurance Trust - NVIT Technology and Communications Fund: Class VI - Q/NQ	13.394919	6.709329	-49.91%	0	2008
Nationwide Variable Insurance Trust - NVIT U.S. Growth Leaders Fund: Class II - Q/NQ	20.717702	11.864780	-42.73%	0	2008
Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class II	17.019524	10.454779	-38.57%	0	2008

71

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class II - Q/NQ	10.000000	5.551826	-44.48%	0	2008
Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class - Q/NQ	10.236686	8.671443	-15.29%	0	2008
Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class - Q/NQ	16.560730	9.812617	-40.75%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: Service Shares	17.057905	9.069190	-46.83%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 4 - Q/NQ	15.267879	8.911568	-41.63%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer High Income Fund/VA: Class 4 - Q/NQ	9.509700	1.988324	-79.09%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Service Shares - Q/NQ	16.487121	9.900851	-39.95%	0	2008

72

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Service Shares - Q/NQ	20.364636	12.353254	-39.34%	0	2008
Schwab Annuity Portfolios - Schwab ™ Money Market Portfolio - Q/NQ	10.365782	10.357677	-0.08%	0	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: Class II - Q/NQ	13.132327	7.368996	-43.89%	0	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Equity Income Portfolio: Class II - Q/NQ	12.270985	7.652337	-37.64%	0	2008
The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class II - Q/NQ	10.879266	9.532302	-12.38%	0	2008

73

Appendix C: Contract Types and Tax Information

Types of Contracts

The contracts described in this prospectus are classified according to the tax treatment to which they are subject under the Internal Revenue Code.  Following is a general description of the various contract types.  Eligibility requirements, tax benefits (if any), limitations, and other features of the contracts will differ depending on contract type.

Charitable Remainder Trusts

Charitable Remainder Trusts are trusts that meet the requirements of Section 664 of the Internal Revenue Code.  Non-Qualified Contracts that are issued to Charitable Remainder Trusts will differ from other Non-Qualified Contracts in two respects:

(1)   Contract ownership at annuitization.  On the annuitization date, if the contract owner is a Charitable Remainder Trust, the Charitable Remainder Trust will continue to be the contract owner and the annuitant will NOT become the contract owner.

(2)   Recipient of death benefit proceeds.  With respect to the death benefit proceeds, if the contract owner is a Charitable Remainder Trust, the death benefit is payable to the Charitable Remainder Trust.  Any designation in conflict with the Charitable Remainder Trust’s right to the death benefit will be void.

While these provisions are intended to facilitate a Charitable Remainder Trust's ownership of this contract, the rules governing Charitable Remainder Trusts are numerous and complex.  A Charitable Remainder Trust that is considering purchasing this contract should seek the advice of a qualified tax and/or financial advisor prior to purchasing the contract.  An annuity that has a Charitable Remainder Trust endorsement is not a charitable remainder trust; the endorsement is merely to facilitate ownership of the contract by a Charitable Remainder Trust.

Investment Only (Qualified Plans)

Contracts that are owned by Qualified Plans are not intended to confer tax benefits on the beneficiaries of the plan; they are used as investment vehicles for the plan.  The income tax consequences to the beneficiary of a Qualified Plan are controlled by the operation of the plan, not by operation of the assets in which the plan invests.

Beneficiaries of Qualified Plans should contact their employer and/or trustee of the plan to obtain and review the plan, trust, summary plan description and other documents for the tax and other consequences of being a participant in a Qualified Plan.

Individual Retirement Annuities (IRAs)

IRAs are contracts that satisfy the provisions of Section 408(b) of the Internal Revenue Code, including the following requirements:

·   the contract is not transferable by the owner;

·    the premiums are not fixed;

·    if the contract owner is younger than age 50, the annual premium cannot exceed $5,000; if the contract owner is age 50 or older, the annual premium cannot exceed $6,000 (although rollovers of greater amounts from qualified plans, Tax Sheltered Annuities and other IRAs can be received);

·   certain minimum distribution requirements must be satisfied after the owner attains the age of 70½;

·   the entire interest of the owner in the contract is nonforfeitable; and

·   after the death of the owner, additional distribution requirements may be imposed to ensure distribution of the entire balance in the contract within the statutory period of time.

Depending on the circumstance of the owner, all or a portion of the contributions made to the account may be deducted for federal income tax purposes.

IRAs may receive rollover contributions from other Individual Retirement Accounts, other Individual Retirement Annuities, certain 457 governmental plans and qualified retirement plans (including 401(k) plans).

When the owner of an IRA attains the age of 70½, the Internal Revenue Code requires that certain minimum distributions be made.  In addition, upon the death of the owner of an IRA, mandatory distribution requirements are imposed by the Internal Revenue Code to ensure distribution of the entire contract value within the required statutory period.  Due to recent changes in Treasury Regulations, the amount used to compute the mandatory distributions may exceed the contract value.

Failure to make the mandatory distributions can result in an additional penalty tax of 50% of the excess of the amount required to be distributed over the amount that was actually distributed.

For further details regarding IRAs, please refer to the disclosure statement provided when the IRA was established and the annuity contract’s IRA endorsement .

Non-Qualified Contracts

A Non-Qualified Contract is a contract that does not qualify for certain tax benefits under the Internal Revenue Code, and which is not an IRA, a Roth IRA, a SEP IRA, or a Simple IRA,.

Upon the death of the owner of a Non-Qualified Contract, mandatory distribution requirements are imposed to ensure distribution of the entire balance in the contract within a required period.

74

Non-Qualified Contracts that are owned by natural persons allow the deferral of taxation on the income earned in the contract until it is distributed or deemed to be distributed.  Non-Qualified Contracts that are owned by non-natural persons, such as trusts, corporations and partnerships are generally subject to current income tax on the income earned inside the contract, unless the non-natural person owns the contract as an “agent” of a natural person.

Roth IRAs

Roth IRA Contracts are contracts that satisfy the provisions of Section 408A of the Internal Revenue Code, including the following requirements:

·   the contract is not transferable by the owner;

·    the premiums are not fixed;

·    if the contract owner is younger than age 50, the annual premium cannot exceed $5,000; if the contract owner is age 50 or older, the annual premium cannot exceed $6,000 (although rollovers of greater amounts from other Roth IRAs and IRAs can be received);

·   the entire interest of the owner in the contract is nonforfeitable; and

·   after the death of the owner, certain distribution requirements may be imposed to ensure distribution of the entire balance in the contract within the statutory period of time.

A Roth IRA can receive a rollover from an IRA or another eligible retirement plan ; however, the amount rolled over from the IRA or other eligible retirement plan to the Roth IRA is required to be included in the owner's federal gross income at the time of the rollover, and will be subject to federal income tax.

There are income limitations on eligibility to participate in a Roth IRA rollover and additional income limitations for eligibility to rollover amounts from an IRA or other eligible retirement plan to a Roth IRA.

For further details regarding Roth IRAs, please refer to the disclosure statement provided when the Roth IRA was established and the annuity contract's IRA endorsement .

Simplified Employee Pension IRAs (SEP IRA)

A SEP IRA is a written plan established by an employer for the benefit of employees which permits the employer to make contributions to an IRA established for the benefit of each employee.

An employee may make deductible contributions to a SEP IRA subject to the same restrictions and limitations as an IRA.  In addition, the employer may make contributions to the SEP IRA, subject to dollar and percentage limitations imposed by both the Internal Revenue Code and the written plan.

A SEP IRA plan must satisfy:

·   minimum participation rules;

·   top-heavy contribution rules;

·   nondiscriminatory allocation rules; and

·   requirements regarding a written allocation formula.

In addition, the plan cannot restrict withdrawals of non-elective contributions, and must restrict withdrawals of elective contributions before March 15th of the following year.

When the owner of SEP IRA attains the age of 70½, the Internal Revenue Code requires that certain minimum distributions be made.  Due to recent changes in Treasury Regulations, the amount used to compute the minimum distributions may exceed the contract value. In addition, upon the death of the owner of a SEP IRA, mandatory distribution requirements are imposed by the Internal Revenue Code to ensure distribution of the entire contract value within the required statutory period.

Simple IRAs

A Simple IRA is an individual retirement annuity that is funded exclusively by a qualified salary reduction arrangement and satisfies:

·   vesting requirements;

·   participation requirements; and

·   administrative requirements.

The funds contributed to a Simple IRA cannot be commingled with funds in IRAs or SEP IRAs.

A Simple IRA cannot receive rollover distributions except from another Simple IRA.

When the owner of Simple IRA attains the age of 70½, the Internal Revenue Code requires that certain minimum distributions be made. Due to recent changes in Treasury Regulations, the amount used to compute the minimum distributions may exceed the contract value.

In addition, upon the death of the owner of a Simple IRA, mandatory distribution requirements are imposed by the Internal Revenue Code to ensure distribution of the entire contract value within the required statutory period.

Federal Tax Considerations

Federal Income Taxes

The tax consequences of purchasing a contract described in this prospectus will depend on:

·   the type of contract purchased;

·   the purposes for which the contract is purchased; and

·   the personal circumstances of individual investors having interests in the contracts.

Existing tax rules are subject to change, and may affect individuals differently depending on their situation.  We do not guarantee the tax status of any contracts or any transactions involving the contracts.

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Representatives of the Internal Revenue Service have informally suggested, from time to time, that the number of underlying mutual funds available or the number of transfer opportunities available under a variable product may be relevant in determining whether the product qualifies for the desired tax treatment.  In 2003, the Internal Revenue Service issued formal guidance, in Revenue Ruling 2003-91, that indicates that if the number of underlying mutual funds available in a variable insurance product does not exceed 20, the number of underlying mutual funds alone would not cause the contract to not qualify for the desired tax treatment.  The Internal Revenue Service has also indicated that exceeding 20 investment options may be considered a factor, along with other factors including the number of transfer opportunities available under the contract, when determining whether the contract qualifies for the desired tax treatment.  The revenue ruling did not indicate the actual number of underlying mutual funds that would cause the contract to not provide the desired tax treatment.  Should the U.S. Secretary of the Treasury issue additional rules or regulations limiting the number of underlying mutual funds, transfers between underlying mutual funds, exchanges of underlying mutual funds or changes in investment objectives of underlying mutual funds such that the contract would no longer qualify for tax deferred treatment under Section 72 of the Internal Revenue Code, we will take whatever steps are available to remain in compliance.

If the contract is purchased as an investment of certain retirement plans (such as qualified retirement plans, Individual Retirement Accounts, and custodial accounts as described in Sections 40 1 and 408(a) of the Internal Revenue Code), tax advantages enjoyed by the contract owner and/or annuitant may relate to participation in the plan rather than ownership of the annuity contract.  Such plans are permitted to purchase investments other than annuities and retain tax-deferred status.

The following is a brief summary of some of the federal income tax considerations related to the contracts.  In addition to the federal income tax, distributions from annuity contracts may be subject to state and local income taxes.  The tax rules across all states and localities are not uniform and therefore will not be discussed in this prospectus.  Tax rules that may apply to contracts issued in U.S. territories such as Puerto Rico and Guam are also not discussed.  Nothing in this prospectus should be considered to be tax advice.  contract owners and prospective contract owners should consult a financial consultant, tax advisor or legal counsel to discuss the taxation and use of the contracts.

IRAs, SEP IRAs and Simple IRAs

Distributions from IRAs, SEP IRAs and Simple IRAs are generally taxed as ordinary income when received.  If any of the amount s contributed to the Individual Retirement Annuity was nondeductible for federal income tax purposes, then a portion of each distribution is excludable from income.

If distributions of income from an IRA are made prior to the date that the owner attains the age of 59½ years, the income is subject to both the regular income tax , and an additional penalty tax of 10% is generally applicable.  (For Simple IRAs, the 10% penalty is increased to 25% if the distribution is made during the 2-year period beginning on the date that the individual first participated in the Simple IRA.)  The 10% penalty tax can be avoided if the distribution is:

·   made to a beneficiary on or after the death of the owner;

·   attributable to the owner becoming disabled (as defined in the Internal Revenue Code);

·   part of a series of substantially equal periodic payments made not less frequently than annually made for the life (or life expectancy) of the owner, or the joint lives (or joint life expectancies) of the owner and his or her designated beneficiary;

·   used for qualified higher education expenses; or

·   used for expenses attributable to the purchase of a home for a qualified first-time buyer.

If the contract owner dies before the contract is completely distributed, the balance will be included in the contract owner’s gross estate for tax purposes.

Roth IRAs

Distributions of earnings from Roth IRAs are taxable or nontaxable depending upon whether they are "qualified distributions" or "non-qualified distributions."  A "qualified distribution" is one that satisfies the five-year rule and meets one of the following requirements:

·   it is made on or after the date on which the contract owner attains age 59½;

·   it is made to a beneficiary (or the contract owner’s estate) on or after the death of the contract owner;

·   it is attributable to the contract owner’s disability; or

·   it is used for expenses attributable to the purchase of a home for a qualified first-time buyer.

The five-year rule generally is satisfied if the distribution is not made within the five year period beginning with the first taxable year in which a contribution is made to any Roth IRA established for the owner.

A qualified distribution is not included in gross income for federal income tax purposes.

A non-qualified distribution is not includable in gross income to the extent that the distribution, when added to all previous distributions, does not exceed the total amount of contributions made to the Roth IRA.  Any non-qualified distribution in excess of total contributions is includable in the contract owner’s gross income as ordinary income in the year that it is distributed to the contract owner.

Special rules apply for Roth IRAs that have proceeds received from an IRA prior to January 1, 1999 if the owner elected the special 4-year income averaging provisions that were in effect for 1998.

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If non-qualified distributions of income from a Roth IRA are made prior to the date that the owner attains the age of 59½ years, the income is subject to both the regular income tax and an additional penalty tax of 10%.  The penalty tax can be avoided if the distribution is:

·   made to a beneficiary on or after the death of the owner;

·   attributable to the owner becoming disabled (as defined in the Internal Revenue Code);

·   part of a series of substantially equal periodic payments made not less frequently than annually made for the life (or life expectancy) of the owner, or the joint lives (or joint life expectancies) of the owner and his or her designated beneficiary;

·   for qualified higher education expenses; or

·   used for expenses attributable to the purchase of a home for a qualified first-time buyer.

If the contract owner dies before the contract is completely distributed, the balance will be included in the contract owner’s gross estate for tax purposes.

Non-Qualified Contracts - Natural Persons as Contract Owners

Generally, the income earned inside a Non-Qualified Annuity Contract that is owned by a natural person is not taxable until it is distributed from the contract.

Distributions before the annuitization date are taxable to the contract owner to the extent that the cash value of the contract exceeds the contract owner’s investment in the contract at the time of the distribution.  In general, the investment in the contract is equal to the purchase payment s made with after-tax dollars.  Distributions, for this purpose, include full and partial surrenders, any portion of the contract that is assigned or pledged, amounts borrowed from the contract, or any portion of the contract that is transferred by gift.  For these purposes, a transfer by gift may occur upon annuitization if the contract owner and the annuitant are not the same individual.

With respect to annuity distributions on or after the annuitization date, a portion of each annuity payment is excludable from taxable income.   The amount excludable from each annuity payment is determined by multiplying the annuity payment by a fraction which is equal to the contract owner’s investment in the contract, divided by the expected return on the contract.   Once the entire investment in the contract is recovered, all distributions are fully includable in income.  The maximum amount excludable from income is the investment in the contract.  If the annuitant dies before the entire investment in the contract has been excluded from income, and as a result of the annuitant's death no more payments are due under the contract, then the unrecovered investment in the contract may be deducted on his or her final tax return.

In determining the taxable amount of a distribution, all annuity contracts issued after October 21, 1988 by the same company to the same contract owner during the same calendar year will be treated as one annuity contract.

A special rule applies to distributions from contracts that have investments that were made prior to August 14, 1982.  For those contracts, distributions that are made prior to the annuitization date are treated first as a recovery of the investment in the contract as of that date.  A distribution in excess of the amount of the investment in the contract as of August 14, 1982, will be treated as taxable income.

The Internal Revenue Code imposes a penalty tax if a distribution is made before the contract owner reaches age 59½.  The amount of the penalty is 10% of the portion of any distribution that is includable in gross income.  The penalty tax does not apply if the distribution is:

·   the result of a contract owner’s death;

·   the result of a contract owner’s disability, (as defined in the Internal Revenue Code);

·   one of a series of substantially equal periodic payments made over the life (or life expectancy) of the contract owner or the joint lives (or joint life expectancies) of the contract owner and the beneficiary selected by the contract owner to receive payment under the annuity payment option selected by the contract owner; or

·   is allocable to an investment in the contract before August 14, 1982.

If the contract owner dies before the contract is completely distributed, the balance will be included in the contract owner’s gross estate for tax purposes.

Non-Qualified Contracts - Non-Natural Persons as Contract Owners

The previous discussion related to the taxation of Non-Qualified Contracts owned by individuals.  Different rules (the so-called "non-natural persons" rules) apply if the contract owner is not a natural person.

Generally, contracts owned by corporations, partnerships, trusts, and similar entities are not treated as annuity contracts under the Internal Revenue Code.  Therefore, income earned under a Non-Qualified Contract that is owned by a non-natural person is taxed as ordinary income during the taxable year that it is earned.  Taxation is not deferred, even if the income is not distributed out of the contract.  The income is taxable as ordinary income, not capital gain.

The non-natural persons rules do not apply to all entity-owned contracts. For purposes of the non-natural persons rule, a contract that is owned by a non-natural person as an agent of an individual is treated as owned by the individual.   This would cause the contract to be treated as an annuity under the Internal Revenue Code, allowing tax deferral.  However, this exception does not apply when the non-natural person is an employer that holds the contract under a non-qualified deferred compensation arrangement for one or more employees.

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The non-natural persons rules also do not apply to contracts that are:

·   acquired by the estate of a decedent by reason of the death of the decedent;

·   issued in connection with certain qualified retirement plans and individual retirement plans;

·   purchased by an employer upon the termination of certain qualified retirement plans; or

·   immediate annuities within the meaning of Section 72(u) of the Internal Revenue Code.

If the annuitant dies before the contract is completely distributed, the balance may be included in the annuitant’s gross estate for tax purposes, depending on the obligations that the non-natural owner may have owed to the annuitant.

Taxation of Lifetime Surrenders Under a Lifetime Income Option

While the tax treatment for surrenders for benefits such as the Lifetime Income Options is not clear under federal tax law, Nationwide intends to treat surrenders under these options as distributions prior to annuitization, and taxable to the extent that the cash value of the contract exceeds the contract owner’s investment at the time of the surrender.  Specifically, we intend to treat the following amount of each surrender as a taxable distribution:

The greater of:

(1)   A – C; or

(2)   B – C,

Where

A = the contract value immediately before the surrender;

B = the guaranteed annual benefit amount immediately before the surrender; and

C = the remaining investment in the contract.

By treating the surrenders as distributions prior to annuitization, your basis in the contract (the amount of unrecovered purchase payments you applied to the contract) is also reduced.  Depending on market performance, these reductions to basis could result in the contract value being less than the remaining basis in your contract.  If this is the case, and you subsequently surrender your contract, you would have a loss that may be claimed as a deduction for federal income tax purposes.

If you purchase one of these options in an IRA, surrenders in excess of the annual benefit amount may be required to satisfy the minimum distribution requirements under the Internal Revenue Code.  Please consult a qualified tax advisor.

Exchanges

As a general rule, federal income tax law treats exchanges of property in the same manner as a sale of the property.  However, pursuant to Section 1035 of the Code , an annuity contract may be exchange d tax-free for another annuity, provided that the oblige e (the person to whom the annuity obligation is owed) is the same for both contracts .   If the exchange includes the receipt of property in addition to another annuity contract, such as cash, special rules may cause a portion of the transaction to be taxable.

In March 2008, the IRS issued Rev. Proc. 2008-24, which addresses the income tax consequences of the direct transfer of a portion of the cash value of an annuity contract in exchange for the issuance of a second annuity contract, sometimes referred to as a “partial exchange.”  A direct transfer that satisfies the revenue procedure will be treated as a tax-free exchange under section 1035 of the Internal Revenue Code if, for a period of at least 12 months from the date of the direct transfer, there are no distributions or surrenders from either annuity contract involved in the exchange.  In addition, the tax-free status of the exchange may still be preserved despite a distribution or surrender from either contract if the contract owner can show that between the date of the direct transfer and the distribution or surrender, one of the conditions described under section 72(q)(2) of the Internal Revenue Code that would exempt the distribution from the 10% early distribution penalty (such as turning age 59½, or becoming disabled; but not a series of substantially equal periodic payments or an immediate annuity) or “other similar life event” such as divorce or loss of employment occurred.  Absent a showing of such an occurrence, Rev. Proc. 2008-24 concludes that the direct transfer would fail to qualify as a tax-free 1035 exchange, and the full amount transferred from the original contract would be treated as a taxable distribution, followed by the purchase of a new annuity contract.  Rev. Proc. 2008-24 applies to direct transfers completed on or after June 30, 2008.

Withholding

Pre-death distributions from the contracts are subject to federal income tax. Nationwide will withhold the tax from the distributions unless the contract owner requests otherwise.

In addition, under some circumstances, the Internal Revenue Code will not permit contract owners to waive withholding.  Such circumstances include:

·   if the payee does not provide Nationwide with a taxpayer identification number; or

·   if Nationwide receive notice from the Internal Revenue Service that the taxpayer identification number furnished by the payee is incorrect.

If a contract owner is prohibited from waiving withholding, as described above, the distribution will be subject to mandatory back-up withholding.  The mandatory back-up withholding rate is established by Section 3406 of the Internal Revenue Code and is applied against the amount of income that is distributed.

Non-Resident Aliens

Generally, a pre-death distribution from a contract to a non-resident alien is subject to federal income tax at a rate of 30% of the amount of income that is distributed.   Nationwide is required to withhold this amount and send it to the Internal Revenue Service.  Some distributions to non-resident aliens

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may be subject to a lower (or no) tax if a treaty applies.  In order to obtain the benefits of such a treaty, the non-resident alien must:

(1)   provide Nationwide with a properly completed withholding certificate claiming the treaty benefit of a lower tax rate or exemption from tax; and

(2)   provide Nationwide with an individual taxpayer identification number.

If the non-resident alien does not meet the above conditions, Nationwide will withhold 30% of income from the distribution.

Another exemption from the 30% withholding is for the non-resident alien to provide Nationwide with sufficient evidence that:

(1)   the distribution is connected to the non-resident alien’s conduct of business in the United States;

(2)   the distribution is  includable in the non-resident alien’s gross income for United States federal income tax purposes; and

(3)   provide Nationwide with a properly completed withholding certificate claiming the exemption.

Note that for the preceding exemption, the distributions would be subject to the same withholding rules that are applicable to payments to United States persons, including back-up withholding, which is currently at a rate of 28%, if a correct taxpayer identification number is not provided.

Federal Estate, Gift and Generation Skipping Transfer Taxes

The following transfers may be considered a gift for federal gift tax purposes:

·   a transfer of the contract from one contract owner to another; or

·   a distribution to someone other than a contract owner.

Upon the contract owner’s death, the value of the contract may be subject to estate taxes, even if all or a portion of the value is also subject to federal income taxes.

Section 2612 of the Internal Revenue Code may require Nationwide to determine whether a death benefit or other distribution is a "direct skip" and the amount of the resulting generation skipping transfer tax, if any.  A direct skip is when property is transferred to, or a death benefit or other distribution is made to:

·   an individual who is two or more generations younger than the contract owner; or

·   certain trusts, as described in Section 2613 of the Internal Revenue Code (generally, trusts that have no beneficiaries who are not 2 or more generations younger than the contract owner).

If the contract owner is not an individual, then for this purpose only, "contract owner" refers to any person:

·   who would be required to include the contract, death benefit, distribution, or other payment in his or her federal gross estate at his or her death; or

·   who is required to report the transfer of the contract, death benefit, distribution, or other payment for federal gift tax purposes.

If a transfer is a direct skip, Nationwide will deduct the amount of the transfer tax from the death benefit, distribution or other payment, and remit it directly to the Internal Revenue Service.

Charge for Tax

Nationwide are not required to maintain a capital gain reserve liability on Non-Qualified Contracts.  If tax laws change requiring a reserve, Nationwide may implement and adjust a tax charge.

Diversification

Internal Revenue Code Section 817(h) contains rules on diversification requirements for variable annuity contracts.  A variable annuity contract that does not meet these diversification requirements will not be treated as an annuity, unless:

·   the failure to diversify was accidental;

·   the failure is corrected; and

·   a fine is paid to the Internal Revenue Service.

The amount of the fine will be the amount of tax that would have been paid by the contract owner if the income, for the period the contract was not diversified, had been received by the contract owner.

If the violation is not corrected, the contract owner will be considered the owner of the underlying securities and will be taxed on the earnings of his or her contract.   Nationwide believe that the investments underlying this contract meet these diversification requirements.

Tax Changes

The foregoing tax information is based on Nationwide's understanding of federal tax laws.  It is NOT intended as tax advice.  All information is subject to change without notice.  You should consult with your personal tax and/or financial advisor for more information.

In 2001, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) was enacted.  EGTRRA made numerous changes to the Internal Revenue Code, including the following:

·   generally lowering federal income tax rates;

·   increasing the amounts that may be contributed to various retirement plans, such as IRAs, and Qualified Plans;

·   increasing the portability of various retirement plans by permitting IRAs, Qualified Plans and certain governmental 457 plans to "roll" money from one plan to another;

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·   eliminating and/or reducing the highest federal estate tax rates;

·   increasing the estate tax credit; and

·   for persons dying after 2009, repealing the estate tax.

In 2006, the Pension Protection Act of 2006 made permanent the EGTRRA provisions noted above that increase the amounts that may be contributed to various retirement plans and that increase the portability of various retirement plans. However, all of the other changes resulting from EGTRRA are scheduled to "sunset," or become ineffective, after December 31, 2010 unless they are extended by additional legislation.  If changes resulting from EGTRRA are not extended, beginning January 1, 2011, the Internal Revenue Code will be restored to its pre-EGTRRA form.

This creates uncertainty as to future tax requirements and implications.  Please consult a qualified tax or financial advisor for further information relating to EGTRRA and other tax issues.

Required Distributions

The Internal Revenue Code requires that certain distributions be made from the contracts issued in conjunction with this prospectus.  Following is an overview of the required distribution rules applicable to each type of contract.  Please consult a qualified tax or financial advisor for more specific required distribution information.

If you purchase one of the Lifetime Income Options, surrenders in excess of the annual benefit amount may be required to satisfy the minimum distribution requirements under the Internal Revenue Code.  Please consult a qualified tax advisor.

Required Distributions – General Information

In general, a beneficiary is an individual or other entity that the contract owner designates to receive death proceeds upon the contract owner’s death.  The distribution rules in the Internal Revenue Code make a distinction between "beneficiary" and "designated beneficiary" when determining the life expectancy that may be used for payments that are made from IRAs, SEP IRAs, Simple IRAs, and Roth IRAs after the death of the annuitant, or that are made from Non-Qualified Contracts after the death of the contract owner.  A designated beneficiary is a natural person who is designated by the contract owner as the beneficiary under the contract.  Non-natural beneficiaries (e.g. charities or certain trusts) are not designated beneficiaries for the purpose of required distributions and the life expectancy of such a beneficiary is zero.

Life expectancies and joint life expectancies will be determined in accordance with the relevant guidance provided by the Internal Revenue Service and the Treasury Department, including but not limited to Treasury Regulation 1.72-9 and Treasury Regulation 1.401(a)(9)-9.

Required distributions paid upon the death of the contract owner are paid to the beneficiary or beneficiaries stipulated by the contract owner.  How quickly the distributions must be made may be determined with respect to the life expectancies of the beneficiaries.  For Non-Qualified Contracts, the beneficiaries used in the determination of the distribution period are those in effect on the date of the contract owner’s death.  For contracts other than Non-Qualified Contracts, the beneficiaries used in the determination of the distribution period do not have to be determined until September 30 of the year following the contract owner’s death.  If there is more than one beneficiary, the life expectancy of the beneficiary with the shortest life expectancy is used to determine the distribution period.  Any beneficiary that is not a designated beneficiary has a life expectancy of zero.

Required Distributions for Non-Qualified Contracts

Internal Revenue Code Section 72(s) requires us to make certain distributions when a contract owner dies.  The following distributions will be made in accordance with the following requirements:

(1)   If any contract owner dies on or after the annuitization date and before the entire interest in the contract has been distributed, then the remaining interest must be distributed at least as rapidly as the distribution method in effect on the contract owner's death.

(2)   If any contract owner dies before the annuitization date, then the entire interest in the contract (consisting of either the death benefit or the contract value reduced by charges set forth elsewhere in the contract) will be distributed within 5 years of the contract owner’s death, provided however:

(a)   any interest payable to or for the benefit of a designated beneficiary may be distributed over the life of the designated beneficiary or over a period not longer than the life expectancy of the designated beneficiary.  Payments must begin within one year of the contract owner's death unless otherwise permitted by federal income tax regulations; and

(b)   if the designated beneficiary is the surviving spouse of the deceased contract owner, the spouse can choose to become the contract owner instead of receiving a death benefit.  Any distributions required under these distribution rules will be made upon that spouse’s death.

In the event that the contract owner is not a natural person (e.g., a trust or corporation), for purposes of these distribution provisions:

(a) the death of the annuitant will be treated as the death of a contract owner;

(b) any change of annuitant will be treated as the death of a contract owner; and

(c) in either case, the appropriate distribution will be made upon the death or change, as the case may be.

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These distribution provisions do not apply to any contract exempt from Section 72(s) of the Internal Revenue Code by reason of Section 72(s)(5) or any other law or rule.

Required Distributions for IRAs, SEP IRAs, Simple IRAs and Roth IRAs

Distributions from an IRA, SEP IRA or Simple IRA must begin no later than April 1 of the calendar year following the calendar year in which the contract owner reaches age 70½.  Distributions may be paid in a lump sum or in substantially equal payments over:

(a)   the life of the contract owner or the joint lives of the contract owner and the contract owner’s designated beneficiary; or

(b)   a period not longer than the period determined under the table in Treasury Regulation 1.401(a)(9)-9, which is the deemed joint life expectancy of the contract owner and a person 10 years younger than the contract owner.  If the designated beneficiary is the spouse of the contract owner, the period may not exceed the longer of the period determined under such table or the joint life expectancy of the contract owner and the contract owner’s spouse, determined in accordance with Treasury Regulation 1.72-9, or such additional guidance as may be provided pursuant to Treasury Regulation 1.401(a)(9)-9.

For IRAs, SEP IRAs and Simple IRAs, required distributions do not have to be withdrawn from this contract if they are being withdrawn from another IRA, SEP IRA or Simple IRA of the contract owner.

The Worker, Retiree, and Employer Recovery Act of 2008 provides that the normal required distribution rules will not be applicable to defined contribution plans (which generally includes IRAs, TSAs and SEP IRAs) during 2009.  However, annuitized distributions from such plans may not receive the exception and should continue to be made.  Consequently, if you desire to forego the distribution that would be required to be made to you during 2009, you should consult with your advisor and notify us of your decision.

If the contract owner’s entire interest in an IRA, SEP IRA or Simple IRA will be distributed in equal or substantially equal payments over a period described in (a) or (b) above, the payments must begin on or before the required beginning date.  The required beginning date is April 1 of the calendar year following the calendar year in which the contract owner reaches age 70½.  The rules for Roth IRAs do not require distributions to begin during the contract owner’s lifetime, therefore, the required beginning date is not applicable to Roth IRAs.

Due to recent changes in Treasury Regulations, the amount used to compute the minimum distribution requirement may exceed the contract value.  This may result in the cash value of your contract being depleted more rapidly than if the distribution were computed solely with respect to the cash value.

If the contract owner dies before the required beginning date (in the case of an IRA, SEP IRA or Simple IRA) or before the entire contract value is distributed (in the case of Roth IRAs), any remaining interest in the contract must be distributed over a period not exceeding the applicable distribution period, which is determined as follows:

(a) if the designated beneficiary is the contract owner’s spouse, the applicable distribution period is the surviving spouse’s remaining life expectancy using the surviving spouse’s birthday for each distribution calendar year after the calendar year of the contract owner’s death.  For calendar years after the death of the contract owner’s surviving spouse, the applicable distribution period is the spouse’s remaining life expectancy using the spouse’s age in the calendar year of the spouse’s death, reduced by one for each calendar year that elapsed since the calendar year immediately following the calendar year of the spouse’s death;

(b) if the designated beneficiary is not the contract owner’s surviving spouse, the applicable distribution period is the designated beneficiary’s remaining life expectancy using the designated beneficiary’s birthday in the calendar year immediately following the calendar year of the contract owner’s death, reduced by one for each calendar year that elapsed thereafter; and

(c) if there is no designated beneficiary, the entire balance of the contract must be distributed by December 31 of the fifth year following the contract owner’s death.

If the contract owner dies on or after the required beginning date, the interest in the IRA, SEP IRA or Simple IRA must be distributed over a period not exceeding the applicable distribution period, which is determined as follows:

(a)   if the designated beneficiary is the contract owner’s spouse, the applicable distribution period is the surviving spouse’s remaining life expectancy using the surviving spouse’s birthday for each distribution calendar year after the calendar year of the contract owner’s death.  For calendar years after the death of the contract owner’s surviving spouse, the applicable distribution period is the greater of (a) the contract owner’s remaining life expectancy using the contract owner’s birthday in the calendar  year of the contract owner’s death, reduced by one for each year thereafter; or (b) the spouse’s remaining life expectancy using the spouse’s age in the calendar year of the spouse’s death, reduced by one for each calendar year that elapsed since the calendar year immediately following the calendar year of the spouse’s death;

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(b)   if the designated beneficiary is not the contract owner’s surviving spouse, the applicable distribution period is the greater of (a) the contract owner’s remaining life expectancy using the contract owner’s birthday in the calendar year of the contract owner’s death, reduced by one for each year thereafter; or (b) the designated beneficiary’s remaining life expectancy using the designated beneficiary’s birthday in the calendar year immediately following the calendar year of the contract owner’s death, reduced by one for each calendar year that elapsed thereafter; and

(c)   if there is no designated beneficiary, the applicable distribution period is the contract owner’s remaining life expectancy using the contract owner’s birthday in the calendar year of the contract owner’s death, reduced by one for each year thereafter.

If distribution requirements are not met, a penalty tax of 50% is levied on the difference between the amount that should have been distributed for that year and the amount that actually was distributed for that year.

For IRAs, SEP IRAs and Simple IRAs, all or a portion of each distribution will be included in the recipient’s gross income and taxed at ordinary income tax rates.  The portion of a distribution that is taxable is based on the ratio between the amount by which non-deductible purchase payments exceed prior non-taxable distributions and total account balances at the time of the distribution.  The owner of an IRA, SEP IRA or Simple IRA must annually report the amount of non-deductible purchase payments, the amount of any distribution, the amount by which non-deductible purchase payments for all years exceed non taxable distributions for all years, and the total balance of all IRAs, SEP IRAs or Simple IRAs.

Distributions from Roth IRAs may be either taxable or nontaxable, depending upon whether they are "qualified distributions" or "non-qualified distributions."

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APPENDIX D Schwab Income Choice Variable Annuity

Appendix D: State Variations Information

Described below are the variations to certain prospectus disclosure resulting from state law or the instruction provided by state insurance authorities as of the date of this prospectus.   Information regarding a state’s requirements does not mean that Nationwide currently offers contracts within that jurisdiction. These variations are subject to change without notice and additional variations may be imposed as required by specific states.

Alabama – The Annuity Commencement date cannot extend past the Annuitant’s 90 th birthday for any reason.  See the “Annuity Commencement Date” earlier in this prospectus for more information.

Connecticu t - Joint owners are not limited to spouses.  See “Ownership and Interests in the Contract” subsection “Joint Owners” earlier in this prospectus for more information.

Hawaii - Joint owners are not limited to spouses.  See “Ownership and Interests in the Contract” subsection “Joint Owners” earlier in this prospectus for more information.

Maine - Nationwide reserves the right to change the frequency of payments if the amount of any payment becomes less than $20.  See “Annuitizing the Contract” subsection “Frequency and Amount of Annuity Payments” subsection earlier in this prospectus for more information.

Maryland – Guaranteed Term Options are not available.  See “Investing in the Contract” subsection “Guaranteed Term Options” earlier in this prospectus for more information.

Oregon - Joint owners are not limited to spouses.  See “Ownership and Interests in the Contract” subsection “Joint Owners” earlier in this prospectus for more information.

The Lifetime Income option allows for the election of a Spousal/Domestic Partner Continuation Benefit extending guaranteed lifetime withdrawals to the spouse of the Determining Life.  See “Optional Contract Benefits, Charges and Deductions” subsection “Spousal Continuation Benefit” earlier in the prospectus for more information.

Pennsylvania - Joint owners are not limited to spouses.  See “Ownership and Interests in the Contract” subsection “Joint Owners” earlier in this prospectus for more information.

Guaranteed Term Options are not available.  See “Investing in the Contract” subsection “Guaranteed Term Options” earlier in this prospectus for more information.

Vermont - Joint owners are not limited to spouses.  See “Ownership and Interests in the Contract” subsection “Joint Owners” earlier in this prospectus for more information.

Washington - Guaranteed Term Options are not available.  See “Investing in the Contract” subsection “Guaranteed Term Options” earlier in this prospectus for more information.

83

STATEMENT OF ADDITIONAL INFORMATION

May 1, 2009

Individual Flexible Premium Deferred Variable Annuity Contracts

Issued by Nationwide Life Insurance Company

through its Nationwide Variable Account-II

This Statement of Additional Information is not a prospectus.  It contains information in addition to and more detailed than set forth in the prospectus and should be read in conjunction with the prospectus dated May 1, 2009 .  The prospectus may be obtained from Nationwide Life Insurance Company by writing 5100 Rings Road, RR1-04-F4, Dublin, Ohio 43017-1522, or calling 1-800-848-6331, TDD 1-800-238-3035.

Table of Contents of the Statement of Additional Information	Page
General Information and History	1
Services	1
Purchase of Securities Being Offered	2
Underwriters	2
Advertising	2
Annuity Payments	2
Condensed Financial Information	3
Financial Statements	43

General Information and History

The Nationwide Variable Account-II is a separate investment account of Nationwide Life Insurance Company ("Nationwide").  Nationwide is a member of the Nationwide group of companies.  All of Nationwide's common stock is owned by Nationwide Financial Services, Inc. ("NFS"), a holding company. The Nationwide group of companies is one of America’s largest insurance and financial services family of companies, with combined assets of over $ 135 billion as of December 31, 2008 .

Services

Nationwide, which has responsibility for administration of the contracts and the variable account, maintains records of the name, address, taxpayer identification number, and other pertinent information for each contract owner and the number and type of contract issued to each contract owner and records with respect to the contract value.

The custodian of the assets of the variable account is Nationwide.  Nationwide will maintain a record of all purchases and redemptions of shares of the underlying mutual funds.  Nationwide, or its affiliates may have entered into agreements with the underlying mutual funds and/or their affiliates.  The agreements relate to services furnished by Nationwide or an affiliate of Nationwide.  Some of the services provided include distribution of underlying fund prospectuses, semi-annual and annual fund reports, proxy materials and fund communications, as well as maintaining the websites and voice response systems necessary for contract owners to execute trades in the funds.  Nationwide also acts as a limited agent for the fund for purposes of accepting the trades.

See “Underlying Mutual Fund Payments” located in the prospectus.

Distribution, Promotional, and Sales Expenses

In addition to or partially in lieu of commission, Nationwide may pay the selling firms a marketing allowance, which is based on the firm’s ability and demonstrated willingness to promote and market Nationwide's products.  How any marketing allowance is spent is determined by the firm, but generally will be used to finance firm activities, such as training and education, that may contribute to the promotion and marketing of Nationwide's products.  Nationwide makes certain assumptions about the amount of marketing allowance it will pay and takes these assumptions into consideration when it determines the charges that will be assessed under the contracts.  For the contracts described in the prospectus, Nationwide assumed 0.75 % (of the premium received) for marketing allowance when determining the charges for the contracts.  The actual amount of the marketing allowance may be higher or lower than this assumption.  If the actual amount of marketing allowance paid is more than what was assumed, Nationwide will fund the difference.  Nationwide generally does not profit from any excess marketing allowance if the amount assumed was higher than what is actually paid.  Any excess would be spent on additional marketing for the contracts.  For more information about marketing allowances or how a particular selling firm uses marketing allowances, please consult with your registered representative.

Independent Registered Public Accounting Firm

The financial statements of Nationwide Variable Account-II and the consolidated financial statements and schedules of Nationwide Life Insurance Company and subsidiaries for the periods indicated have been included herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.  The audit report of KPMG LLP covering the December 31, 2008 consolidated financial statements and schedules of Nationwide Life Insurance Company and subsidiaries contains an explanatory paragraph that states that Nationwide Life

1

Insurance Company and subsidiaries adopted the American Institute of Certified Public Accountants' Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts, in 2007.  KPMG LLP is located at 191 West Nationwide Blvd., Columbus, Ohio 43215.

Purchase of Securities Being Offered

The contracts will be sold by licensed insurance agents in the states where the contracts may be lawfully sold. Such agents will be registered representatives of broker-dealers registered under the Securities Exchange Act of 1934 who are members of the Financial Industry Regulatory Authority (“FINRA”).

Underwriters

The contracts, which are offered continuously, are distributed by Nationwide Investment Services Corporation ("NISC"), One Nationwide Plaza, Columbus, Ohio 43215, a wholly owned subsidiary of Nationwide.  For contracts issued in Michigan, all references to NISC will mean Nationwide Investment Svcs. Corporation.  During the fiscal years ended December 31, 2008 , 2007 and 2006 , no underwriting commissions were paid by Nationwide to NISC.

Advertising

Historical Performance of the Sub-Accounts

Nationwide will advertise historical performance of the sub-accounts in accordance with SEC prescribed calculations.  Performance information is annualized.  However, if a sub-account has been available in the variable account for less than one year, the performance information for that sub-account is not annualized.

Performance information is based on historical earnings and is not intended to predict or project future results.

Standardized performance will reflect the maximum variable account charges possible under the contract.  Non-standardized performance, which will be accompanied by standardized performance, will reflect other expense structures contemplated under the contract.  The expense assumptions will be stated in the advertisement.

Additional Materials

Nationwide may provide information on various topics to contract owners and prospective contract owners in advertising, sales literature or other materials.

Performance Comparisons

Each sub-account may, from time to time, include in advertisements the ranking of its performance figures compared with performance figures of other annuity contracts’ sub-accounts with the same investment objectives which are created by Lipper Analytical Services, Morningstar, Inc. or other recognized ranking services.

Annuity Payments

See "Frequency and Amount of Annuity Payments" located in the prospectus.

2

No Additional Contract Options Elected (Total 0.65%)
(Variable account charges of 0.65% of the daily net assets of the variable account)
Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series II Shares - Q/NQ	10.278087	5.398851	-47.47%	0	2008
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B - Q/NQ	10.000000	6.227496	-37.73%	0	2008
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II - Q/NQ	10.310708	10.080949	-2.23%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class II - Q/NQ	10.022987	7.517260	-25.00%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II - Q/NQ	10.059915	7.315603	-27.28%	0	2008
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares - Q/NQ	10.141974	6.961141	-31.36%	0	2008
Dreyfus Stock Index Fund, Inc.: Service Shares - Q/NQ	10.255684	6.386420	-37.73%	0	2008

3

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares - Q/NQ	10.203009	7.123833	-30.18%	0	2008
Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2 - Q/NQ	11.235450	5.089521	-54.70%	0	2008
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2 - Q/NQ	10.247008	5.821914	-43.18%	0	2008
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2 - Q/NQ	10.339164	5.412448	-47.65%	0	2008
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2 - Q/NQ	10.048595	9.637710	-4.09%	5,687	2008
Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2 - Q/NQ	10.330850	6.198564	-40.00%	0	2008
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R - Q/NQ	10.323841	5.749327	-44.31%	0	2008

4

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2 - Q/NQ	10.174718	7.110737	-30.11%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2 - Q/NQ	10.368424	6.899927	-33.45%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2 - Q/NQ	10.000000	6.627193	-33.73%	0	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3 - Q/NQ	10.410364	6.165012	-40.78%	4,982	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3 - Q/NQ	9.974589	10.524816	5.52%	0	2008
Janus Aspen Series - Forty Portfolio: Service Shares - Q/NQ	10.713326	5.927465	-44.67%	0	2008
Janus Aspen Series - Overseas Portfolio: Service II Shares - Q/NQ	10.215023	4.850012	-52.52%	1,261	2008

5

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
MFS® Variable Insurance Trust - MFS Value Series: Service Class - Q/NQ	10.243154	6.844487	-33.18%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II - Q/NQ	10.102619	7.048381	-30.23%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II - Q/NQ	10.028387	8.979634	-10.46%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II - Q/NQ	10.219414	6.230143	-39.04%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II - Q/NQ	10.162242	5.632301	-44.58%	313	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth- Income Fund: Class II - Q/NQ	10.132679	6.234938	-38.47%	0	2008
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III - Q/NQ	10.051223	7.180046	-28.57%	0	2008
Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class VI - Q/NQ	10.210850	4.274561	-58.14%	0	2008

6

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class VI - Q/NQ	10.000000	5.484013	-45.16%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II - Q/NQ	10.000000	5.131862	-48.68%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II - Q/NQ	10.000000	6.149628	-38.50%	7,620	2008
Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class II - Q/NQ	10.000000	9.880103	-1.20%	0	2008
Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class II - Q/NQ	10.000000	9.885944	-1.14%	0	2008
Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I - Q/NQ	10.077277	10.784612	7.02%	6,262	2008
Nationwide Variable Insurance Trust - NVIT Health Sciences Fund: Class VI - Q/NQ	10.104573	7.484633	-25.93%	0	2008
Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VIII - Q/NQ	10.154122	5.741079	-43.46%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II - Q/NQ	10.210693	6.406798	-37.25%	0	2008

7

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II - Q/NQ	10.096585	9.426818	-6.63%	37,906	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II - Q/NQ	10.155912	7.749467	-23.70%	21,147	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II - Q/NQ	10.189420	6.945387	-31.84%	31,301	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II - Q/NQ	10.126588	8.547225	-15.60%	6,694	2008
Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I - Q/NQ	10.269855	6.482696	-36.88%	0	2008
Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I - Q/NQ	10.060917	10.200798	1.39%	795	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class VI - Q/NQ	10.000000	6.097743	-39.02%	5,597	2008

8

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class VI - Q/NQ	10.216909	5.435381	-46.80%	3,073	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class II - Q/NQ	10.000000	6.332945	-36.67%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class II - Q/NQ	10.000000	6.321024	-36.79%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class II - Q/NQ	10.000000	6.242907	-37.57%	2,446	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II - Q/NQ	10.000000	6.728480	-32.72%	4,470	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class II - Q/NQ	10.330041	5.486920	-46.88%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class II - Q/NQ	10.062360	6.767895	-32.74%	0	2008

9

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class II - Q/NQ	10.141079	6.210861	-38.76%	535	2008
Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I - Q/NQ	9.993736	8.211959	-17.83%	0	2008
Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class II - Q/NQ	10.290051	5.969157	-41.99%	8,495	2008
Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II - Q/NQ	10.000000	9.900180	-1.00%	0	2008
Nationwide Variable Insurance Trust - NVIT Technology and Communications Fund: Class VI - Q/NQ	10.232305	5.204080	-49.14%	0	2008
Nationwide Variable Insurance Trust - NVIT U.S. Growth Leaders Fund: Class II - Q/NQ	10.622735	6.177074	-41.85%	0	2008
Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class II - Q/NQ	9.958644	6.211480	-37.63%	672	2008

10

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class II - Q/NQ	10.000000	5.608954	-43.91%	0	2008
Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class - Q/NQ	9.984819	8.587795	-13.99%	5,851	2008
Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class - Q/NQ	10.303152	6.198726	-39.84%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: Service Shares - Q/NQ	10.380833	5.604096	-46.01%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 4 - Q/NQ	10.146312	6.013227	-40.73%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer High Income Fund/VA: Class 4 - Q/NQ	10.106628	2.145685	-78.77%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Service Shares - Q/NQ	10.271750	6.263213	-39.02%	6,979	2008

11

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Service Shares - Q/NQ	10.184546	6.272975	-38.41%	2,291	2008
Schwab Annuity Portfolios - Schwab ™ Money Market Portfolio - Q/NQ	10.043522	10.189513	1.45%	0	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: Class II - Q/NQ	10.291392	5.863658	-43.02%	3,517	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Equity Income Portfolio: Class II - Q/NQ	10.209400	6.464591	-36.68%	0	2008
The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class II - Q/NQ	10.027444	8.920662	-11.04%	4,408	2008

12

Additional Contract Options Elected (Total 0.75%)
(Variable account charges of 0.75% of the daily net assets of the variable account)
Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series II Shares - Q/NQ	10.276893	5.392767	-47.53%	0	2008
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B - Q/NQ	10.000000	6.223294	-37.77%	0	2008
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II - Q/NQ	10.308973	10.069107	-2.33%	5,644	2008
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class II - Q/NQ	10.021827	7.508812	-25.08%	3,497	2008
American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II - Q/NQ	10.058749	7.307378	-27.35%	6,983	2008
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares - Q/NQ	10.140797	6.953305	-31.43%	0	2008
Dreyfus Stock Index Fund, Inc.: Service Shares - Q/NQ	10.254495	6.379229	-37.79%	0	2008

13

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares - Q/NQ	10.201821	7.115823	-30.25%	7,268	2008
Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2 - Q/NQ	11.234149	5.083785	-54.75%	9,364	2008
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2 - Q/NQ	10.245823	5.815367	-43.24%	0	2008
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2 - Q/NQ	10.337967	5.406359	-47.70%	0	2008
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2 - Q/NQ	10.047432	9.626901	-4.19%	44,816	2008
Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2 - Q/NQ	10.329650	6.191592	-40.06%	4,202	2008
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R - Q/NQ	10.322645	5.742856	-44.37%	0	2008

14

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2 - Q/NQ	10.173541	7.102751	-30.18%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2 - Q/NQ	10.367223	6.892158	-33.52%	3,709	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2 - Q/NQ	10.000000	6.622734	-33.77%	0	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3 - Q/NQ	10.409160	6.158081	-40.84%	29,446	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3 - Q/NQ	9.973435	10.513012	5.41%	0	2008
Janus Aspen Series - Forty Portfolio: Service Shares - Q/NQ	10.712087	5.920797	-44.73%	0	2008*
Janus Aspen Series - Overseas Portfolio: Service II Shares - Q/NQ	10.213840	4.844541	-52.57%	12,260	2008

15

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
MFS® Variable Insurance Trust - MFS Value Series: Service Class - Q/NQ	10.241967	6.836792	-33.25%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II - Q/NQ	10.101448	7.040446	-30.30%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II - Q/NQ	10.027228	8.969550	-10.55%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II - Q/NQ	10.218224	6.223139	-39.10%	12,747	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II - Q/NQ	10.161064	5.625966	-44.63%	4,670	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth- Income Fund: Class II - Q/NQ	10.131505	6.227924	-38.53%	0	2008
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III - Q/NQ	10.050057	7.171989	-28.64%	0	2008
Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class VI - Q/NQ	10.209666	4.269743	-58.18%	12,264	2008

16

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class VI - Q/NQ	10.000000	5.480312	-45.20%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II - Q/NQ	10.000000	5.128403	-48.72%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II - Q/NQ	10.000000	6.145475	-38.55%	53,237	2008
Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class II - Q/NQ	10.000000	9.873481	-1.27%	0	2008
Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class II - Q/NQ	10.000000	9.879312	-1.21%	0	2008
Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I - Q/NQ	10.076109	10.772524	6.91%	62,337	2008
Nationwide Variable Insurance Trust - NVIT Health Sciences Fund: Class VI - Q/NQ	10.103403	7.476213	-26.00%	0	2008
Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VIII - Q/NQ	10.152942	5.734623	-43.52%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II - Q/NQ	10.209508	6.399586	-37.32%	0	2008

17

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II - Q/NQ	10.095415	9.416233	-6.73%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II - Q/NQ	10.154737	7.740760	-23.77%	46,361	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II - Q/NQ	10.188243	6.937582	-31.91%	6,563	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II - Q/NQ	10.125416	8.537622	-15.68%	48,604	2008
Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I - Q/NQ	10.268665	6.475409	-36.94%	0	2008
Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I - Q/NQ	10.059224	10.188816	1.29%	14,864	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class VI - Q/NQ	10.000000	6.093631	-39.06%	40,412	2008

18

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class VI - Q/NQ	10.215726	5.429265	-46.85%	20,279	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class II - Q/NQ	10.000000	6.328674	-36.71%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class II - Q/NQ	10.000000	6.316761	-36.83%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class II - Q/NQ	10.000000	6.238693	-37.61%	15,772	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II - Q/NQ	10.000000	6.723950	-32.76%	29,103	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class II - Q/NQ	10.328845	5.480741	-46.94%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class II - Q/NQ	10.061194	6.760284	-32.81%	0	2008

19

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class II - Q/NQ	10.139900	6.203868	-38.82%	2,152	2008
Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I - Q/NQ	9.992580	8.202741	-17.91%	0	2008
Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class II - Q/NQ	10.288860	5.962441	-42.05%	48,023	2008
Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II - Q/NQ	10.000000	9.893529	-1.06%	0	2008
Nationwide Variable Insurance Trust - NVIT Technology and Communications Fund: Class VI - Q/NQ	10.231119	5.198221	-49.19%	0	2008
Nationwide Variable Insurance Trust - NVIT U.S. Growth Leaders Fund: Class II - Q/NQ	10.621507	6.170129	-41.91%	0	2008
Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class II - Q/NQ	9.957486	6.204493	-37.69%	7,808	2008

20

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class II - Q/NQ	10.000000	5.605155	-43.95%	0	2008
Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class - Q/NQ	9.983666	8.578155	-14.08%	58,906	2008
Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class - Q/NQ	10.301956	6.191754	-39.90%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 4 - Q/NQ	10.145134	6.006455	-40.79%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer High Income Fund/VA: Class 4 - Q/NQ	10.105459	2.143264	-78.79%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Service Shares - Q/NQ	10.270557	6.256161	-39.09%	42,148	2008
Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Service Shares - Q/NQ	10.183363	6.265928	-38.47%	12,733	2008

21

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Schwab Annuity Portfolios - Schwab ™ Money Market Portfolio - Q/NQ	10.042248	10.177965	1.35%	8,036	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: Class II - Q/NQ	10.290201	5.857061	-43.08%	26,040	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Equity Income Portfolio: Class II - Q/NQ	10.208212	6.457314	-36.74%	0	2008
The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class II - Q/NQ	10.026281	8.910649	-11.13%	26,580	2008

22

Additional Contract Options Elected (Total 0.85%)
(Variable account charges of 0.85% of the daily net assets of the variable account)
Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series II Shares - Q/NQ	10.275704	5.386693	-47.58%	0	2008
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B - Q/NQ	10.000000	6.219088	-37.81%	0	2008
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II - Q/NQ	10.307236	10.057268	-2.43%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class II - Q/NQ	10.020661	7.500355	-25.15%	4,096	2008
American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II - Q/NQ	10.057579	7.299150	-27.43%	8,228	2008
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares - Q/NQ	10.139622	6.945473	-31.50%	0	2008
Dreyfus Stock Index Fund, Inc.: Service Shares - Q/NQ	10.253305	6.372048	-37.85%	0	2008

23

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares - Q/NQ	10.200638	7.107818	-30.32%	0	2008
Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2 - Q/NQ	11.232848	5.078055	-54.79%	28,464	2008
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2 - Q/NQ	10.244634	5.808816	-43.30%	0	2008
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2 - Q/NQ	10.336767	5.400263	-47.76%	6,993	2008
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2 - Q/NQ	10.046264	9.616076	-4.28%	43,309	2008
Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2 - Q/NQ	10.328452	6.184619	-40.12%	6,484	2008
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R - Q/NQ	10.321449	5.736396	-44.42%	0	2008

24

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2 - Q/NQ	10.172359	7.094758	-30.25%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2	10.366022	6.884404	-33.59%	6,032	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2 - Q/NQ	10.000000	6.618282	-33.82%	0	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3 - Q/NQ	10.407955	6.151148	-40.90%	26,461	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3 - Q/NQ	9.972282	10.501205	5.30%	0	2008
Janus Aspen Series - Forty Portfolio: Service Shares - Q/NQ	10.710846	5.914117	-44.78%	6,043	2008
Janus Aspen Series - Overseas Portfolio: Service II Shares - Q/NQ	10.212654	4.839082	-52.62%	4,863	2008

25

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
MFS® Variable Insurance Trust - MFS Value Series: Service Class - Q/NQ	10.240781	6.829091	-33.31%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II - Q/NQ	10.100276	7.032522	-30.37%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II - Q/NQ	10.026063	8.959468	-10.64%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II - Q/NQ	10.217041	6.216133	-39.16%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II - Q/NQ	10.159886	5.619625	-44.69%	1,168	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth- Income Fund: Class II - Q/NQ	10.130330	6.220908	-38.59%	0	2008
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III - Q/NQ	10.048894	7.163920	-28.71%	0	2008
Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class VI - Q/NQ	10.208479	4.264927	-58.22%	0	2008

26

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class VI - Q/NQ	10.000000	5.476617	-45.23%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II - Q/NQ	10.000000	5.124941	-48.75%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II - Q/NQ	10.000000	6.141334	-38.59%	42,089	2008
Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class II - Q/NQ	10.000000	9.866843	-1.33%	0	2008
Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class II - Q/NQ	10.000000	9.872675	-1.27%	0	2008
Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I - Q/NQ	10.074938	10.760419	6.80%	78,711	2008
Nationwide Variable Insurance Trust - NVIT Health Sciences Fund: Class VI - Q/NQ	10.102230	7.467795	-26.08%	0	2008
Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VIII - Q/NQ	10.151766	5.728165	-43.57%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II - Q/NQ	10.208323	6.392377	-37.38%	13,377	2008

27

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II - Q/NQ	10.094245	9.405658	-6.82%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II - Q/NQ	10.153559	7.732057	-23.85%	14,634	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II	10.187059	6.929775	-31.97%	14,382	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II - Q/NQ	10.124241	8.528026	-15.77%	0	2008
Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I - Q/NQ	10.267476	6.468116	-37.00%	0	2008
Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I - Q/NQ	10.057530	10.176837	1.19%	5,273	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class VI - Q/NQ	10.000000	6.089524	-39.10%	30,215	2008

28

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class VI - Q/NQ	10.214544	5.423158	-46.91%	15,217	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class II - Q/NQ	10.000000	6.324408	-36.76%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class II - Q/NQ	10.000000	6.312495	-36.88%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class II - Q/NQ	10.000000	6.234486	-37.66%	13,337	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II - Q/NQ	10.000000	6.719420	-32.81%	21,996	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class II - Q/NQ	10.327644	5.474557	-46.99%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class II - Q/NQ	10.060024	6.752667	-32.88%	4,587	2008

29

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class II - Q/NQ	10.138724	6.196883	-38.88%	5,485	2008
Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I - Q/NQ	9.991424	8.193524	-17.99%	0	2008
Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class II - Q/NQ	10.287662	5.955726	-42.11%	41,126	2008
Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II - Q/NQ	10.000000	9.886890	-1.13%	0	2008
Nationwide Variable Insurance Trust - NVIT Technology and Communications Fund: Class VI - Q/NQ	10.229925	5.192359	-49.24%	0	2008
Nationwide Variable Insurance Trust - NVIT U.S. Growth Leaders Fund: Class II - Q/NQ	10.620277	6.163174	-41.97%	0	2008
Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class II - Q/NQ	9.956333	6.197497	-37.75%	5,667	2008

30

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class II - Q/NQ	10.000000	5.601357	-43.99%	0	2008
Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class - Q/NQ	9.982505	8.568517	-14.16%	37,368	2008
Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class - Q/NQ	10.300762	6.184775	-39.96%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: Service Shares - Q/NQ	10.378425	5.591479	-46.12%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 4 - Q/NQ	10.143957	5.999699	-40.85%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer High Income Fund/VA: Class 4 - Q/NQ	10.104289	2.140850	-78.81%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Service Shares - Q/NQ	10.269365	6.249118	-39.15%	37,077	2008

31

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Service Shares - Q/NQ	10.182181	6.258864	-38.53%	10,646	2008
Schwab Annuity Portfolios - Schwab ™ Money Market Portfolio - Q/NQ	10.040972	10.166417	1.25%	372,424	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: Class II - Q/NQ	10.289005	5.850458	-43.14%	16,381	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Equity Income Portfolio: Class II - Q/NQ	10.207031	6.450047	-36.81%	0	2008
The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class II - Q/NQ	10.025120	8.900636	-11.22%	24,359	2008

32

Maximum Contract Options Elected (Total 2.15%)
(Variable account charges of 2.15% of the daily net assets of the variable account)
Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series II Shares - Q/NQ	20.585603	10.649344	-48.27%	0	2008
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B - Q/NQ	19.832168	12.468133	-37.13%	0	2008
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II - Q/NQ	11.323944	10.904447	-3.70%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class II - Q/NQ	12.517607	9.246206	-26.13%	0	2008
American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II - Q/NQ	16.619982	11.903258	-28.38%	0	2008
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares - Q/NQ	19.706561	13.321224	-32.40%	0	2008
Dreyfus Stock Index Fund, Inc.: Service Shares - Q/NQ	16.891228	10.359253	-38.67%	0	2008

33

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares - Q/NQ	15.639524	10.754509	-31.24%	0	2008
Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2 - Q/NQ	21.661696	9.663708	-55.39%	0	2008
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2 - Q/NQ	17.818898	9.970573	-44.04%	0	2008
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2 - Q/NQ	18.537976	9.557413	-48.44%	0	2008
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2 - Q/NQ	10.806111	10.207763	-5.54%	0	2008
Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2 - Q/NQ	24.922137	14.727075	-40.91%	0	2008
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R - Q/NQ	16.836394	9.234195	-45.15%	0	2008

34

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2 - Q/NQ	11.223320	7.724985	-31.17%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2 - Q/NQ	20.177183	13.224120	-34.46%	0	2008
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2 - Q/NQ	10.000000	6.560161	-34.40%	0	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3 - Q/NQ	16.579664	9.669894	-41.68%	0	2008
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3 - Q/NQ	11.683525	12.141911	3.92%	0	2008
Janus Aspen Series - Forty Portfolio: Service Shares - Q/NQ	22.492026	12.255874	-45.51%	0	2008
Janus Aspen Series - Overseas Portfolio: Service II Shares - Q/NQ	26.334937	12.314057	-53.24%	0	2008

35

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
MFS® Variable Insurance Trust - MFS Value Series: Service Class	18.944360	12.467076	-34.19%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II - Q/NQ	10.806270	7.425270	-31.29%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II - Q/NQ	10.466687	9.230548	-11.81%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II - Q/NQ	11.957998	7.179740	-39.96%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II - Q/NQ	11.184549	6.105029	-45.42%	0	2008
Nationwide Variable Insurance Trust - American Funds NVIT Growth- Income Fund: Class II - Q/NQ	9.749596	5.908398	-39.40%	0	2008
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III - Q/NQ	11.350392	7.985550	-29.65%	0	2008
Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class VI - Q/NQ	28.817018	11.880662	-58.77%	0	2008

36

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class VI - Q/NQ	10.000000	5.428443	-45.72%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II - Q/NQ	10.000000	5.079792	-49.20%	0	2008
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II - Q/NQ	10.000000	6.087288	-39.13%	0	2008
Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class II - Q/NQ	10.000000	9.780422	-2.20%	0	2008
Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class II - Q/NQ	10.000000	9.786216	-2.14%	0	2008
Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I - Q/NQ	10.833282	11.418724	5.40%	0	2008
Nationwide Variable Insurance Trust - NVIT Health Sciences Fund: Class VI - Q/NQ	11.501148	8.390233	-27.05%	0	2008
Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VIII - Q/NQ	11.565008	6.439806	-44.32%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II - Q/NQ	19.083119	11.792638	-38.20%	0	2008

37

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II	11.847685	10.894700	-8.04%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II - Q/NQ	15.133667	11.373158	-24.85%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II - Q/NQ	17.380205	11.667610	-32.87%	0	2008
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II	13.426978	11.161635	-16.87%	0	2008
Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I - Q/NQ	20.025742	12.449566	-37.83%	0	2008
Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I - Q/NQ	10.244899	10.230509	-0.14%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class VI	10.000000	6.035998	-39.64%	0	2008

38

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class VI - Q/NQ	15.040018	7.880097	-47.61%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class II	10.000000	6.268781	-37.31%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class II - Q/NQ	10.000000	6.256962	-37.43%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class II - Q/NQ	10.000000	6.179627	-38.20%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II - Q/NQ	10.000000	6.660337	-33.40%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class II - Q/NQ	17.241595	9.019312	-47.69%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class II - Q/NQ	19.923089	13.197321	-33.76%	0	2008

39

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class II - Q/NQ	20.253200	12.216178	-39.68%	0	2008
Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I - Q/NQ	11.886963	9.620128	-19.07%	0	2008
Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class II - Q/NQ	17.180693	9.815428	-42.87%	0	2008
Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II - Q/NQ	10.000000	9.800278	-2.00%	0	2008
Nationwide Variable Insurance Trust - NVIT Technology and Communications Fund: Class VI - Q/NQ	13.394919	6.709329	-49.91%	0	2008
Nationwide Variable Insurance Trust - NVIT U.S. Growth Leaders Fund: Class II - Q/NQ	20.717702	11.864780	-42.73%	0	2008
Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class II	17.019524	10.454779	-38.57%	0	2008

40

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class II - Q/NQ	10.000000	5.551826	-44.48%	0	2008
Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class - Q/NQ	10.236686	8.671443	-15.29%	0	2008
Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class - Q/NQ	16.560730	9.812617	-40.75%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: Service Shares	17.057905	9.069190	-46.83%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 4 - Q/NQ	15.267879	8.911568	-41.63%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer High Income Fund/VA: Class 4 - Q/NQ	9.509700	1.988324	-79.09%	0	2008
Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Service Shares - Q/NQ	16.487121	9.900851	-39.95%	0	2008

41

Sub-Accounts	Accumulation Unit Value at Beginning of Period	Accumulation Unit Value at End of Period	Percentage Change in Accumulation Unit Value	Number of Accumulation Units at End of Period	Period
Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Service Shares - Q/NQ	20.364636	12.353254	-39.34%	0	2008
Schwab Annuity Portfolios - Schwab ™ Money Market Portfolio - Q/NQ	10.365782	10.357677	-0.08%	0	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: Class II - Q/NQ	13.132327	7.368996	-43.89%	0	2008
T. Rowe Price Equity Series, Inc. - T. Rowe Price Equity Income Portfolio: Class II - Q/NQ	12.270985	7.652337	-37.64%	0	2008
The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class II - Q/NQ	10.879266	9.532302	-12.38%	0	2008

42

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life Insurance Company and

Contract Owners of Nationwide Variable Account-II:

We have audited the accompanying statement of assets, liabilities and contract owners’ equity of Nationwide Variable Account-II (comprised of the sub-accounts listed in note 1(b) (collectively, “the Accounts”)) as of December 31, 2008, and the related statements of operations and changes in contract owners’ equity, and the financial highlights for each of the periods indicated herein. These financial statements and financial highlights are the responsibility of the Accounts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights 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, 2008, by correspondence with the transfer agents of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Accounts as of December 31, 2008, and the results of their operations, changes in contract owners’ equity, and financial highlights for each of the periods indicated herein, in conformity with accounting principles generally accepted in the United States of America.

/s/    KPMG LLP

Columbus, Ohio

March 13, 2009

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2008

Assets:
Investments at fair value:
AIM VIF - Basic Value Fund - Series II (AVBV2)
5,212,420 shares (cost $48,917,184 )	$	21,214,549
AIM VIF - Capital Appreciation Fund - Series II (AVCA2)
460,978 shares (cost $11,849,744 )		7,656,845
AIM VIF - Capital Development Fund - Series II (AVCD2)
1,655,514 shares (cost $26,738,693 )		12,813,679
Alger American Balanced Portfolio - Class S (ALBS)
18,357 shares (cost $267,770 )		173,105
Alger American Mid Cap Growth Portfolio - Class S (ALMCS)
39,061 shares (cost $739,485 )		267,961
AllianceBernstein VPS - Growth and Income Portfolio - Class B (ALVGIB)
722,255 shares (cost $16,173,337 )		9,367,650
AllianceBernstein VPS - Small-Mid Cap Value Portfolio - Class B (ALVSVB)
1,200,147 shares (cost $16,978,054 )		11,845,451
American Century VP - Balanced Fund - Class I (ACVB)
8,228,193 shares (cost $53,193,572 )		43,444,861
American Century VP - Capital Appreciation Fund - Class I (ACVCA)
8,884,279 shares (cost $79,499,394 )		70,541,173
American Century VP - Income & Growth Fund - Class I (ACVIG)
3,417,793 shares (cost $23,390,422 )		16,473,763
American Century VP - Income & Growth Fund - Class II (ACVIG2)
1,356,731 shares (cost $9,667,772 )		6,525,875
American Century VP - Inflation Protection Fund - Class II (ACVIP2)
12,225,423 shares (cost $128,116,608 )		121,031,687
American Century VP - International Fund - Class I (ACVI)
4,463,481 shares (cost $30,358,697 )		26,513,075
American Century VP - International Fund - Class II (ACVI2)
273,937 shares (cost $1,943,081 )		1,624,446
American Century VP - International Fund - Class III (ACVI3)
2,589,452 shares (cost $19,841,881 )		15,381,346
American Century VP - International Fund - Class IV (ACVI4)
1,540,253 shares (cost $16,054,265 )		9,133,700
American Century VP - Mid Cap Value Fund - Class I (ACVMV1)
461,411 shares (cost $5,782,098 )		4,512,597
American Century VP - Mid Cap Value Fund - Class II (ACVMV2)
2,834,995 shares (cost $34,716,445 )		27,697,904
American Century VP - Ultra(R) Fund - Class I (ACVU1)
304,794 shares (cost $3,096,536 )		1,847,049
American Century VP - Ultra(R) Fund - Class II (ACVU2)
1,316,055 shares (cost $13,071,253 )		7,883,171
American Century VP - Value Fund - Class I (ACVV)
13,547,320 shares (cost $101,565,607 )		63,401,459
American Century VP - Value Fund - Class II (ACVV2)
15,452,419 shares (cost $111,497,195 )		72,317,320
American Century VP - Vista(SM) Fund - Class I (ACVVS1)
347,595 shares (cost $7,046,087 )		3,743,593

(Continued)

2

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

American Century VP - Vista(SM) Fund - Class II (ACVVS2)
1,169,302 shares (cost $22,931,090 )	$	12,523,222
American Funds IS - Growth Fund - Class 1 (AFGF)
264,462 shares (cost $13,292,431 )		8,862,127
American Funds IS - High Income Bond Fund - Class 1 (AFHY)
161,533 shares (cost $1,450,455 )		1,301,959
American Funds IS - U.S. Government/AAA-Rated Securities Fund - Class 1 (AFGC)
123,677 shares (cost $1,480,955 )		1,519,989
Charles Schwab Money Market Portfolio (CHSMM)
25,826,688 shares (cost $25,826,688 )		25,826,688
Credit Suisse Trust - Global Small Cap Portfolio (WVCP)
191,251 shares (cost $1,783,534 )		1,407,606
Credit Suisse Trust - International Focus Portfolio (WIEP)
2,020,595 shares (cost $17,854,062 )		18,528,853
Credit Suisse Trust - Small Cap Core I Portfolio (WSCP)
3,301,194 shares (cost $38,170,206 )		33,375,075
Dreyfus IP - Small Cap Stock Index Portfolio - Service Class (DVSCS)
3,362,022 shares (cost $52,849,158 )		34,830,547
Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)
10,419,143 shares (cost $267,513,761 )		239,431,910
Dreyfus Stock Index Fund, Inc. - Service Class (DSIFS)
3,204,837 shares (cost $100,501,778 )		73,711,241
Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)
873,415 shares (cost $30,255,024 )		25,224,232
Dreyfus VIF - Appreciation Portfolio - Service Class (DCAPS)
644,542 shares (cost $23,182,091 )		18,498,368
Dreyfus VIF - Developing Leaders Portfolio - Service Class (DVDLS)
65,644 shares (cost $2,398,511 )		1,232,134
Dreyfus VIF - Growth and Income Portfolio - Initial Class (DGI)
1,062,081 shares (cost $19,786,390 )		14,093,818
Federated IS - American Leaders Fund II - Service Class (FALFS)
111,294 shares (cost $1,751,100 )		900,368
Federated IS - Capital Appreciation Fund II - Service Class (FCA2S)
388,140 shares (cost $2,250,650 )		1,971,752
Federated IS - Market Opportunity Fund II - Service Class (FVMOS)
895,118 shares (cost $9,213,847 )		8,951,175
Federated IS - Quality Bond Fund II - Primary Class (FQB)
1,170,233 shares (cost $12,846,780 )		11,702,330
Federated IS - Quality Bond Fund II - Service Class (FQBS)
4,850,044 shares (cost $54,026,822 )		48,257,941
Fidelity(R) VIP - Equity-Income Portfolio - Initial Class (FEIP)
27,629,055 shares (cost $632,621,248 )		364,150,944
Fidelity(R) VIP - Equity-Income Portfolio - Service Class 2 (FEI2)
7,223,832 shares (cost $171,353,452 )		93,909,814
Fidelity(R) VIP - Growth Portfolio - Initial Class (FGP)
13,889,266 shares (cost $476,951,638 )		326,814,420
Fidelity(R) VIP - Growth Portfolio - Service Class 2 (FG2)
1,563,479 shares (cost $60,685,892 )		36,444,691

(Continued)

3

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Fidelity(R) VIP - High Income Portfolio - Initial Class (FHIP)
14,183,368 shares (cost $85,776,412 )	$	56,166,136
Fidelity(R) VIP - High Income Portfolio - Initial Class R (FHIPR)
3,605,189 shares (cost $17,606,138 )		14,240,496
Fidelity(R) VIP - Overseas Portfolio - Initial Class (FOP)
5,654,215 shares (cost $90,173,862 )		68,811,794
Fidelity(R) VIP - Overseas Portfolio - Initial Class R (FOPR)
2,846,978 shares (cost $53,447,766 )		34,562,318
Fidelity(R) VIP - Overseas Portfolio - Service Class 2 (FO2)
333,860 shares (cost $5,791,957 )		4,029,689
Fidelity(R) VIP - Overseas Portfolio - Service Class 2 R (FO2R)
2,967,427 shares (cost $62,882,671 )		35,549,778
Fidelity(R) VIP II - Asset Manager Portfolio - Initial Class (FAMP)
15,602,059 shares (cost $225,120,055 )		160,857,228
Fidelity(R) VIP II - Contrafund(R) Portfolio - Initial Class (FCP)
21,638,693 shares (cost $522,447,095 )		333,019,479
Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class 2 (FC2)
13,338,752 shares (cost $387,396,721 )		201,948,705
Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class (FIGBS)
1,590,264 shares (cost $19,646,439 )		18,685,601
Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class 2 (FIGBP2)
34,886,019 shares (cost $427,647,761 )		405,375,543
Fidelity(R) VIP III - Growth Opportunities Portfolio - Initial Class (FGOP)
1,141,590 shares (cost $16,493,618 )		11,404,486
Fidelity(R) VIP III - Mid Cap Portfolio - Service Class (FMCS)
743,626 shares (cost $23,271,344 )		13,630,661
Fidelity(R) VIP III - Mid Cap Portfolio - Service Class 2 (FMC2)
7,326,245 shares (cost $227,928,256 )		132,751,563
Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)
981,012 shares (cost $11,385,291 )		4,826,577
Fidelity(R) VIP III - Value Strategies Portfolio - Service Class 2 (FVSS2)
1,786,762 shares (cost $20,672,695 )		8,862,338
Fidelity(R) VIP IV - Energy Portfolio - Service Class 2 (FNRS2)
4,806,564 shares (cost $110,920,829 )		54,794,826
Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class (FF10S)
548,687 shares (cost $6,194,150 )		4,515,690
Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class 2 (FF10S2)
5,070,704 shares (cost $56,575,696 )		41,630,483
Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class (FF20S)
706,887 shares (cost $8,016,471 )		5,443,033
Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class 2 (FF20S2)
7,805,810 shares (cost $89,898,406 )		60,026,682
Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class (FF30S)
478,221 shares (cost $5,506,020 )		3,404,934
Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class 2 (FF30S2)
1,882,187 shares (cost $21,628,898 )		13,382,353
Franklin Templeton VIP - Developing Markets Securities Fund - Class 3 (FTVDM3)
3,409,211 shares (cost $45,646,711 )		20,523,451

(Continued)

4

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Franklin Templeton VIP - Foreign Securities Fund - Class 2 (TIF2)
461,920 shares (cost $6,388,492 )	$	4,970,258
Franklin Templeton VIP - Foreign Securities Fund - Class 3 (TIF3)
23,118,167 shares (cost $409,999,759 )		247,364,385
Franklin Templeton VIP - Founding Funds Allocation Fund - Class 2 (FTVFA2)
536,542 shares (cost $4,030,450 )		3,010,002
Franklin Templeton VIP - Global Income Securities Fund - Class 3 (FTVGI3)
4,227,749 shares (cost $70,232,032 )		72,252,229
Franklin Templeton VIP - Income Securities Fund - Class 2 (FTVIS2)
7,395,440 shares (cost $127,507,730 )		83,864,290
Franklin Templeton VIP - Rising Dividends Securities Fund - Class 2 (FTVRD2)
5,045,793 shares (cost $88,530,111 )		69,228,283
Franklin Templeton VIP - Small Cap Value Securities Fund - Class 2 (FTVSV2)
4,929,201 shares (cost $82,622,314 )		52,003,074
Janus Aspen Series - Balanced Portfolio - Service Class (JABS)
447,559 shares (cost $12,197,658 )		10,629,533
Janus Aspen Series - Forty Portfolio - Service Class (JACAS)
2,763,239 shares (cost $94,567,522 )		62,780,788
Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)
587,892 shares (cost $2,070,873 )		1,704,887
Janus Aspen Series - Global Technology Portfolio - Service II Class (JAGTS2)
923,070 shares (cost $3,859,284 )		2,732,289
Janus Aspen Series - INTECH Risk Managed Core Portfolio - Service Class (JARLCS)
455,168 shares (cost $5,723,239 )		3,604,932
Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)
246,146 shares (cost $7,251,137 )		6,402,246
Janus Aspen Series - International Growth Portfolio - Service II Class (JAIGS2)
4,333,707 shares (cost $230,118,727 )		113,326,431
JPMorgan Series Trust II - Mid Cap Value Portfolio (JPMCVP)
325,844 shares (cost $9,167,233 )		6,164,963
Lehman Brothers AMT - Short Duration Bond Portfolio - I Class (AMTB)
33,233,291 shares (cost $426,317,154 )		355,928,547
MFS(R) VIT - Investors Growth Stock Series - Service Class (MIGSC)
1,672,354 shares (cost $15,296,267 )		11,622,860
MFS(R) VIT - Value Series - Service Class (MVFSC)
7,412,844 shares (cost $102,344,805 )		71,682,205
MTB Large Cap Growth Fund II (VFLG2)
95,645 shares (cost $946,738 )		641,778
MTB Large Cap Value Fund II (VFLV2)
131,890 shares (cost $1,456,788 )		912,676
MTB Managed Allocation Fund - Aggressive Growth II (MBVAG2)
28,703 shares (cost $306,244 )		166,479
MTB Managed Allocation Fund - Conservative Growth II (MBVCG2)
24,991 shares (cost $242,967 )		198,928
MTB Managed Allocation Fund - Moderate Growth II (VFMG2)
735,069 shares (cost $7,514,758 )		5,101,378
Nationwide VIT - American Funds Asset Allocation Fund - Class II (GVAAA2)
46,856,053 shares (cost $837,368,040 )		609,597,253

(Continued)

5

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Nationwide VIT - American Funds Bond Fund - Class II (GVABD2)
32,206,313 shares (cost $353,552,575 )	$	306,926,167
Nationwide VIT - American Funds Global Growth Fund - Class II (GVAGG2)
3,405,350 shares (cost $80,403,322 )		50,875,936
Nationwide VIT - American Funds Growth Fund - Class II (GVAGR2)
2,676,344 shares (cost $173,433,897 )		98,890,894
Nationwide VIT - American Funds Growth-Income Fund - Class II (GVAGI2)
8,587,048 shares (cost $320,630,796 )		225,409,998
Nationwide VIT - Cardinal Aggressive Fund - Class II (NVCRA2)
664,620 shares (cost $5,614,695 )		4,366,556
Nationwide VIT - Cardinal Balanced Fund - Class II (NVCRB2)
17,444,007 shares (cost $157,491,399 )		141,470,897
Nationwide VIT - Cardinal Capital Appreciation Fund - Class II (NVCCA2)
14,825,639 shares (cost $133,296,140 )		110,154,495
Nationwide VIT - Cardinal Conservative Fund - Class II (NVCCN2)
5,176,836 shares (cost $48,930,929 )		47,264,508
Nationwide VIT - Cardinal Moderate Fund - Class II (NVCMD2)
13,490,666 shares (cost $121,777,183 )		104,822,473
Nationwide VIT - Cardinal Moderately Aggressive Fund - Class II (NVCMA2)
13,511,434 shares (cost $118,509,511 )		95,660,953
Nationwide VIT - Cardinal Moderately Conservative Fund - Class II (NVCMC2)
4,666,414 shares (cost $42,816,814 )		39,524,529
Nationwide VIT - Core Bond Fund - Class I (NVCBD1)
43,737 shares (cost $419,538 )		423,809
Nationwide VIT - Core Bond Fund - Class II (NVCBD2)
284,168 shares (cost $2,754,479 )		2,747,909
Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)
1,708,633 shares (cost $13,418,252 )		8,526,079
Nationwide VIT - Federated High Income Bond Fund - Class III (HIBF3)
6,073,524 shares (cost $42,150,691 )		30,246,147
Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)
69,064 shares (cost $831,522 )		486,903
Nationwide VIT - Gartmore Emerging Markets Fund - Class II (GEM2)
257,910 shares (cost $3,163,797 )		1,800,213
Nationwide VIT - Gartmore Emerging Markets Fund - Class III (GEM3)
4,003,266 shares (cost $63,225,667 )		28,142,963
Nationwide VIT - Gartmore Emerging Markets Fund - Class VI (GEM6)
4,608,461 shares (cost $78,251,371 )		32,397,482
Nationwide VIT - Gartmore Global Utilities Fund - Class II (GVGU2)
51,778 shares (cost $577,195 )		404,387
Nationwide VIT - Gartmore Global Utilities Fund - Class III (GVGU)
661,520 shares (cost $7,969,839 )		5,166,472
Nationwide VIT - Gartmore International Equity Fund - Class I (GIG)
9,826 shares (cost $70,396 )		61,416
Nationwide VIT - Gartmore International Equity Fund - Class III (GIG3)
2,368,605 shares (cost $26,249,237 )		14,827,466
Nationwide VIT - Gartmore International Equity Fund - Class VI (NVIE6)
445,011 shares (cost $4,160,344 )		2,781,321

(Continued)

6

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Nationwide VIT - Gartmore Worldwide Leaders Fund - Class III (GEF3)
332,799 shares (cost $5,207,686 )	$	2,748,922
Nationwide VIT - Global Financial Services Fund - Class II (GVGF2)
109,120 shares (cost $1,318,440 )		623,077
Nationwide VIT - Global Financial Services Fund - Class III (GVGFS)
359,132 shares (cost $3,544,935 )		2,057,824
Nationwide VIT - Government Bond Fund - Class I (GBF)
59,147,274 shares (cost $687,519,241 )		710,358,758
Nationwide VIT - Growth Fund - Class I (CAF)
3,509,630 shares (cost $31,802,787 )		31,095,325
Nationwide VIT - Health Sciences Fund - Class II (GVGH2)
168,086 shares (cost $1,746,079 )		1,341,323
Nationwide VIT - Health Sciences Fund - Class III (GVGHS)
557,899 shares (cost $6,004,362 )		4,518,986
Nationwide VIT - Health Sciences Fund - Class VI (GVGH6)
1,892,671 shares (cost $20,572,082 )		15,217,074
Nationwide VIT - International Index Fund - Class VIII (GVIX8)
1,008,585 shares (cost $10,919,537 )		6,515,461
Nationwide VIT - Investor Destinations Aggressive Fund - Class II (GVIDA)
49,443,261 shares (cost $554,269,798 )		340,664,071
Nationwide VIT - Investor Destinations Conservative Fund - Class II (GVIDC)
20,948,305 shares (cost $212,906,891 )		194,190,791
Nationwide VIT - Investor Destinations Moderate Fund - Class II (GVIDM)
204,023,937 shares (cost $2,323,051,563 )		1,726,042,509
Nationwide VIT - Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)
152,616,226 shares (cost $1,791,309,957 )		1,214,825,160
Nationwide VIT - Investor Destinations Moderately Conservative Fund - Class II (GVDMC)
54,143,221 shares (cost $588,815,523 )		479,167,509
Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)
316,956 shares (cost $3,269,453 )		2,218,689
Nationwide VIT - Lehman Brothers Core Plus Bond Fund - Class II (NVLCP2)
225,108 shares (cost $2,183,134 )		2,199,308
Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)
288,922 shares (cost $8,493,087 )		5,064,795
Nationwide VIT - Mid Cap Growth Fund - Class II (SGRF2)
1,082,036 shares (cost $29,930,820 )		18,751,676
Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)
6,038,991 shares (cost $106,830,484 )		67,938,645
Nationwide VIT - Money Market Fund - Class I (SAM)
801,478,784 shares (cost $801,478,784 )		801,478,784
Nationwide VIT - Multi-Manager International Growth Fund - Class III (NVMIG3)
225,022 shares (cost $2,098,120 )		1,442,388
Nationwide VIT - Multi-Manager International Growth Fund - Class VI (NVMIG6)
31,840,785 shares (cost $302,750,566 )		203,781,025
Nationwide VIT - Multi-Manager International Value Fund - Class II (GVDIV2)
138,198 shares (cost $1,944,004 )		1,064,125
Nationwide VIT - Multi-Manager International Value Fund - Class III (GVDIV3)
1,227,304 shares (cost $19,252,000 )		9,450,244

(Continued)

7

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Nationwide VIT - Multi-Manager International Value Fund - Class VI (GVDIV6)
15,616,785 shares (cost $249,521,804 )	$	119,780,740
Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
4,671 shares (cost $33,288 )		31,486
Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class II (NVMLG2)
93,648 shares (cost $704,460 )		631,187
Nationwide VIT - Multi-Manager Large Cap Value Fund - Class II (NVMLV2)
511,262 shares (cost $3,850,234 )		3,379,440
Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
78,122 shares (cost $722,984 )		515,606
Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class II (NVMMG2)
12,582,482 shares (cost $128,527,628 )		82,918,559
Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
23,933,332 shares (cost $237,456,535 )		169,208,658
Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)
518,075 shares (cost $8,328,039 )		4,999,423
Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class II (SCGF2)
949,075 shares (cost $15,627,185 )		9,006,724
Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)
5,542,844 shares (cost $65,307,676 )		36,693,627
Nationwide VIT - Multi-Manager Small Cap Value Fund - Class II (SCVF2)
2,610,303 shares (cost $29,692,431 )		17,071,381
Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)
7,165,307 shares (cost $146,756,253 )		77,098,708
Nationwide VIT - Multi-Manager Small Company Fund - Class II (SCF2)
5,860,385 shares (cost $123,942,907 )		61,709,853
Nationwide VIT - Nationwide Fund - Class I (TRF)
21,490,112 shares (cost $228,966,624 )		140,115,528
Nationwide VIT - Nationwide Fund - Class II (TRF2)
43,179,868 shares (cost $527,298,112 )		280,669,145
Nationwide VIT - Nationwide Leaders Fund - Class III (GVUSL)
440,602 shares (cost $5,858,451 )		2,855,098
Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class I (NVNMO1)
11,790 shares (cost $78,621 )		65,317
Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class II (NVNMO2)
153,047 shares (cost $1,132,478 )		843,290
Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class I (NVNSR1)
243,399 shares (cost $2,385,267 )		1,567,489
Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class II (NVNSR2)
39,382,165 shares (cost $387,445,433 )		253,621,140
Nationwide VIT - Short Term Bond Fund - Class II (NVSTB2)
1,632,953 shares (cost $16,106,057 )		15,953,952
Nationwide VIT - Technology and Communications Fund - Class I (GGTC)
60,817 shares (cost $201,425 )		135,623
Nationwide VIT - Technology and Communications Fund - Class II (GGTC2)
269,692 shares (cost $1,016,327 )		593,323
Nationwide VIT - Technology and Communications Fund - Class III (GGTC3)
1,068,459 shares (cost $4,070,027 )		2,404,033

(Continued)

8

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Nationwide VIT - Technology and Communications Fund - Class VI (GGTC6)
2,112,963 shares (cost $9,357,603 )	$	4,669,648
Nationwide VIT - U.S. Growth Leaders Fund - Class II (GVUG2)
2,180,317 shares (cost $22,092,064 )		12,820,263
Nationwide VIT - U.S. Growth Leaders Fund - Class III (GVUGL)
467,610 shares (cost $4,969,690 )		2,810,339
Nationwide VIT - Van Kampen Comstock Value Fund - Class II (EIF2)
12,352,037 shares (cost $148,498,842 )		85,970,178
Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)
6,870,207 shares (cost $64,959,363 )		50,289,916
Nationwide VIT - Van Kampen Real Estate Fund - Class I (NVRE1)
143,568 shares (cost $1,148,269 )		819,771
Nationwide VIT - Van Kampen Real Estate Fund - Class II (NVRE2)
312,253 shares (cost $2,655,356 )		1,779,840
Neuberger Berman AMT - Growth Portfolio - Class I (AMTG)
6,179,334 shares (cost $59,758,190 )		67,169,355
Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)
644,482 shares (cost $10,251,806 )		8,023,798
Neuberger Berman AMT - International Portfolio - Class S (AMINS)
1,061,611 shares (cost $13,606,039 )		7,739,145
Neuberger Berman AMT - Mid Cap Growth Portfolio - Class S (AMMCGS)
303,224 shares (cost $6,798,119 )		4,818,226
Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)
10,058,879 shares (cost $136,274,361 )		71,518,630
Neuberger Berman AMT - Regency Portfolio - Class S (AMRS)
897,574 shares (cost $15,616,758 )		8,275,630
Neuberger Berman AMT - Small Cap Growth Portfolio - Class S (AMFAS)
443,962 shares (cost $6,030,244 )		3,707,080
Neuberger Berman AMT - Socially Responsive Portfolio - Class I (AMSRS)
2,582,910 shares (cost $40,391,548 )		24,253,524
Oppenheimer VAF - Balanced Fund - Non-Service Class (OVMS)
6,199,792 shares (cost $94,714,767 )		52,388,239
Oppenheimer VAF - Capital Appreciation Fund - Service Class (OVCAFS)
1,310,402 shares (cost $48,377,277 )		33,310,413
Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)
1,549,971 shares (cost $54,158,177 )		39,787,749
Oppenheimer VAF - Core Bond Fund - Non-Service Class (OVB)
7,468,704 shares (cost $81,798,158 )		48,173,139
Oppenheimer VAF - Global Securities Fund - Class 3 (OVGS3)
2,763,444 shares (cost $80,684,847 )		56,208,455
Oppenheimer VAF - Global Securities Fund - Class 4 (OVGS4)
2,695,053 shares (cost $86,237,083 )		53,981,919
Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)
5,808,119 shares (cost $127,307,892 )		117,382,084
Oppenheimer VAF - Global Securities Fund - Service Class (OVGSS)
472,905 shares (cost $12,930,018 )		9,467,557
Oppenheimer VAF - High Income Fund - Class 3 (OVHI3)
169,958 shares (cost $661,339 )		266,834

(Continued)

9

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Oppenheimer VAF - High Income Fund - Class 4 (OVHI4)
2,616,683 shares (cost $11,187,830 )	$	4,160,526
Oppenheimer VAF - High Income Fund - Non-Service Class (OVHI)
32,497 shares (cost $258,585 )		51,346
Oppenheimer VAF - High Income Fund - Service Class (OVHIS)
2,329,212 shares (cost $18,784,030 )		3,680,155
Oppenheimer VAF - Main Street Small Cap Fund(R) - Non-Service Class (OVSC)
248,178 shares (cost $4,448,679 )		2,643,097
Oppenheimer VAF - Main Street Small Cap Fund(R) - Service Class (OVSCS)
9,991,715 shares (cost $179,009,365 )		105,312,675
Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)
891,085 shares (cost $18,213,472 )		12,974,205
Oppenheimer VAF - Main Street(R) - Service Class (OVGIS)
18,916,369 shares (cost $447,247,747 )		272,774,035
Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)
257,858 shares (cost $12,146,744 )		7,101,405
Pioneer VCT - Pioneer Small Cap Value Portfolio - Class I (PISVP1)
94,451 shares (cost $1,453,576 )		646,048
Putnam VT - Growth and Income Fund - Class IB (PVGIB)
298,441 shares (cost $6,800,117 )		3,423,113
Putnam VT - International Equity Fund - Class IB (PVTIGB)
81,517 shares (cost $1,160,725 )		724,683
Putnam VT - Voyager Fund - Class IB (PVTVB)
59,430 shares (cost $1,642,719 )		1,187,410
T. Rowe Price Blue Chip Growth Portfolio - II (TRBCG2)
21,965,035 shares (cost $237,627,913 )		147,165,735
T. Rowe Price Equity Income Portfolio - II (TREI2)
4,211,207 shares (cost $96,314,775 )		60,262,376
T. Rowe Price Limited Term Bond Portfolio - Class II (TRLT2)
9,536,081 shares (cost $47,043,336 )		46,059,270
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
1,945,514 shares (cost $48,018,029 )		38,637,907
Van Eck Worldwide Insurance Trust - Bond Fund - Class R1 (VWBFR)
696,443 shares (cost $8,072,404 )		8,023,029
Van Eck Worldwide Insurance Trust - Bond Fund - Initial Class (VWBF)
1,336,781 shares (cost $16,002,835 )		15,399,722
Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Class R1 (VWEMR)
1,392,542 shares (cost $23,850,806 )		8,174,223
Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)
2,072,073 shares (cost $33,104,760 )		12,183,790
Van Eck Worldwide Insurance Trust - Hard Assets Fund - Class R1 (VWHAR)
1,138,763 shares (cost $37,708,690 )		21,340,423
Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)
1,321,785 shares (cost $28,728,389 )		24,783,462
Van Kampen UIF - Core Plus Fixed Income Portfolio - Class I (MSVFI)
302,693 shares (cost $3,392,430 )		2,999,688
Van Kampen UIF - Core Plus Fixed Income Portfolio - Class II (MSVF2)
21,903,915 shares (cost $246,911,911 )		214,877,404

(Continued)

10

NATIONWIDE VARIABLE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)
661,629 shares (cost $5,329,983 )	$	4,280,738
Van Kampen UIF - Emerging Markets Debt Portfolio - Class II (MSEMB)
204,596 shares (cost $1,670,494 )		1,317,599
Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)
7,200,451 shares (cost $127,235,516 )		59,115,702
Van Kampen UIF - U.S. Real Estate Portfolio - Class II (MSVREB)
5,259,741 shares (cost $101,270,810 )		42,814,288
Victory VIF - Diversified Stock Fund - Class A (VYDS)
81,164 shares (cost $920,084 )		564,899
Wells Fargo AVT - Discovery Fund(SM) (SVDF)
2,883,066 shares (cost $32,776,493 )		32,261,513
Wells Fargo AVT - Large Company Growth Fund (WFVLCG)
12,315 shares (cost $107,322 )		77,339
Wells Fargo AVT - Money Market Fund (WFVMM)
218,397 shares (cost $218,397 )		218,397
Wells Fargo AVT - Opportunity Fund(SM) (SVOF)
14,215,961 shares (cost $258,707,214 )		144,434,164
Wells Fargo AVT - Small-Mid Cap Value Fund (WFVSMV)
1,320 shares (cost $12,666 )		6,532
Wells Fargo AVT - Total Return Bond Fund (WFVTRB)
2,407 shares (cost $23,579 )		23,351
Total Investments		16,006,555,754
Total Assets		16,006,555,754
Accounts Payable - Oppenheimer VAF - High Income Fund - Class 3 (OVHI3)		14,094
Other Payables		60,587
Total Accounts Payable		74,681
	$	16,006,481,073
Contract Owners’ Equity:
Accumulation units		15,999,027,868
Contracts in payout (annuitization) period		7,453,205
Total Contract Owners’ Equity (note 5)	$	16,006,481,073

See accompanying notes to financial statements.

11

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS

Year Ended December 31, 2008

	Total			AVBV2		AVCA2		AVCD2		ALBS		ALMCS		ALVGIB		ALVSVB
Investment Activity:
Reinvested dividends	$	447,742,020		176,477		-		-		-		-		257,206		28,427
Mortality and expense risk charges (note 2)		(321,513,955	)	(605,376	)	(215,299	)	(335,078	)	(2,305	)	(6,746	)	(221,576	)	(160,152	)
Net investment income (loss)		126,228,065		(428,899	)	(215,299	)	(335,078	)	(2,305	)	(6,746	)	35,630		(131,725	)
Proceeds from mutual fund shares sold		4,395,835,145		7,524,076		4,405,144		5,629,060		142,898		305,665		3,232,576		4,404,800
Cost of mutual fund shares sold		(4,706,263,126	)	(8,504,192	)	(4,317,664	)	(6,478,453	)	(147,482	)	(454,955	)	(4,010,058	)	(5,996,936	)
Realized gain (loss) on investments		(310,427,981	)	(980,116	)	87,480		(849,393	)	(4,584	)	(149,290	)	(777,482	)	(1,592,136	)
Change in unrealized gain (loss) on investments		(8,653,538,654	)	(30,516,067	)	(6,888,377	)	(13,524,418	)	(108,519	)	(555,854	)	(9,465,089	)	(5,296,111	)
Net gain (loss) on investments		(8,963,966,635	)	(31,496,183	)	(6,800,897	)	(14,373,811	)	(113,103	)	(705,144	)	(10,242,571	)	(6,888,247	)
Reinvested capital gains		1,250,139,523		6,864,081		-		2,534,704		25,679		214,876		2,653,838		669,521
Net increase (decrease) in contract owners’ equity resulting from operations	$	(7,587,599,047	)	(25,061,001	)	(7,016,196	)	(12,174,185	)	(89,729	)	(497,014	)	(7,553,103	)	(6,350,451	)
	ACVB			ACVCA		ACVIG		ACVIG2		ACVIP2		ACVI		ACVI2		ACVI3
Investment Activity:
Reinvested dividends	$	1,523,970		-		514,757		171,351		5,225,514		373,343		18,236		216,961
Mortality and expense risk charges (note 2)		(755,779	)	(1,575,013	)	(324,672	)	(141,549	)	(1,737,643	)	(589,706	)	(39,647	)	(341,074	)
Net investment income (loss)		768,191		(1,575,013	)	190,085		29,802		3,487,871		(216,363	)	(21,411	)	(124,113	)
Proceeds from mutual fund shares sold		13,414,938		23,447,660		6,347,053		2,104,262		19,313,156		10,016,528		471,880		5,453,359
Cost of mutual fund shares sold		(14,519,729	)	(17,974,195	)	(6,139,012	)	(2,241,395	)	(20,163,266	)	(7,066,440	)	(366,223	)	(3,611,932	)
Realized gain (loss) on investments		(1,104,791	)	5,473,465		208,041		(137,133	)	(850,110	)	2,950,088		105,657		1,841,427
Change in unrealized gain (loss) on investments		(17,216,134	)	(82,357,794	)	(13,619,377	)	(5,069,288	)	(8,364,625	)	(31,398,271	)	(1,847,797	)	(18,705,807	)
Net gain (loss) on investments		(18,320,925	)	(76,884,329	)	(13,411,336	)	(5,206,421	)	(9,214,735	)	(28,448,183	)	(1,742,140	)	(16,864,380	)
Reinvested capital gains		4,415,765		9,948,547		3,083,841		1,184,600		-		4,385,457		268,891		2,548,520
Net increase (decrease) in contract owners’ equity resulting from operations	$	(13,136,969	)	(68,510,795	)	(10,137,410	)	(3,992,019	)	(5,726,864	)	(24,279,089	)	(1,494,660	)	(14,439,973	)

(Continued)

12

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	ACVI4			ACVMV1		ACVMV2		ACVU1		ACVU2		ACVV		ACVV2		ACVVS1
Investment Activity:
Reinvested dividends	$	107,450		5,122		45,028		-		-		2,223,685		1,895,517		-
Mortality and expense risk charges (note 2)		(241,011	)	(71,646	)	(874,224	)	(39,139	)	(213,195	)	(1,156,910	)	(1,336,327	)	(102,981	)
Net investment income (loss)		(133,561	)	(66,524	)	(829,196	)	(39,139	)	(213,195	)	1,066,775		559,190		(102,981	)
Proceeds from mutual fund shares sold		5,333,115		3,774,646		55,565,172		1,476,117		4,877,285		24,782,147		16,742,643		6,942,332
Cost of mutual fund shares sold		(4,581,687	)	(4,628,796	)	(62,678,098	)	(1,636,127	)	(5,200,020	)	(29,084,027	)	(24,048,008	)	(7,738,075	)
Realized gain (loss) on investments		751,428		(854,150	)	(7,112,926	)	(160,010	)	(322,735	)	(4,301,880	)	(7,305,365	)	(795,743	)
Change in unrealized gain (loss) on investments		(10,985,764	)	(803,204	)	(5,479,215	)	(1,877,650	)	(8,385,285	)	(35,779,967	)	(31,535,146	)	(4,296,789	)
Net gain (loss) on investments		(10,234,336	)	(1,657,354	)	(12,592,141	)	(2,037,660	)	(8,708,020	)	(40,081,847	)	(38,840,511	)	(5,092,532	)
Reinvested capital gains		1,584,327		-		-		511,993		2,339,161		11,805,540		10,753,584		440,464
Net increase (decrease) in contract owners’ equity resulting from operations	$	(8,783,570	)	(1,723,878	)	(13,421,337	)	(1,564,806	)	(6,582,054	)	(27,209,532	)	(27,527,737	)	(4,755,049	)
	ACVVS2			AFGF		AFHY		AFGC		CHSMM		WVCP		WIEP		WSCP
Investment Activity:
Reinvested dividends	$	-		144,219		52,234		41,270		492,869		41,851		487,593		39,278
Mortality and expense risk charges (note 2)		(412,904	)	(178,215	)	(11,331	)	(17,340	)	(238,971	)	(31,833	)	(389,367	)	(659,280	)
Net investment income (loss)		(412,904	)	(33,996	)	40,903		23,930		253,898		10,018		98,226		(620,002	)
Proceeds from mutual fund shares sold		22,677,448		1,665,682		2,356,433		361,778		11,086,649		429,988		5,634,016		10,514,159
Cost of mutual fund shares sold		(25,684,210	)	(1,868,977	)	(2,469,234	)	(371,271	)	(11,086,649	)	(367,555	)	(3,814,078	)	(7,309,158	)
Realized gain (loss) on investments		(3,006,762	)	(203,295	)	(112,801	)	(9,493	)	-		62,433		1,819,938		3,205,001
Change in unrealized gain (loss) on investments		(13,687,213	)	(8,557,306	)	(66,558	)	79,800		-		(1,453,797	)	(16,519,318	)	(22,557,519	)
Net gain (loss) on investments		(16,693,975	)	(8,760,601	)	(179,359	)	70,307		-		(1,391,364	)	(14,699,380	)	(19,352,518	)
Reinvested capital gains		1,199,839		1,504,481		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(15,907,040	)	(7,290,116	)	(138,456	)	94,237		253,898		(1,381,346	)	(14,601,154	)	(19,972,520	)

(Continued)

13

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	DVSCS			DSIF		DSIFS		DCAP		DCAPS		DVDLS		DGI		FALFS
Investment Activity:
Reinvested dividends	$	374,229		7,365,849		1,807,709		699,169		329,608		11,314		140,053		20,358
Mortality and expense risk charges (note 2)		(672,079	)	(4,782,951	)	(1,555,674	)	(453,625	)	(314,316	)	(28,695	)	(294,572	)	(21,313	)
Net investment income (loss)		(297,850	)	2,582,898		252,035		245,544		15,292		(17,381	)	(154,519	)	(955	)
Proceeds from mutual fund shares sold		11,188,252		71,497,798		17,427,179		7,626,471		2,834,581		875,983		4,727,637		465,607
Cost of mutual fund shares sold		(14,704,446	)	(65,841,513	)	(16,424,839	)	(6,072,604	)	(2,702,411	)	(1,347,366	)	(4,437,735	)	(784,608	)
Realized gain (loss) on investments		(3,516,194	)	5,656,285		1,002,340		1,553,867		132,170		(471,383	)	289,902		(319,001	)
Change in unrealized gain (loss) on investments		(21,355,555	)	(168,144,260	)	(47,525,903	)	(16,138,718	)	(8,439,529	)	(569,521	)	(13,969,271	)	(629,269	)
Net gain (loss) on investments		(24,871,749	)	(162,487,975	)	(46,523,563	)	(14,584,851	)	(8,307,359	)	(1,040,904	)	(13,679,369	)	(948,270	)
Reinvested capital gains		6,476,393		-		-		2,604,428		1,429,961		109,712		2,875,266		395,831
Net increase (decrease) in contract owners’ equity resulting from operations	$	(18,693,206	)	(159,905,077	)	(46,271,528	)	(11,734,879	)	(6,862,106	)	(948,573	)	(10,958,622	)	(553,394	)
	FCA2S			FVMOS		FQB		FQBS		FEIP		FEI2		FGP		FG2
Investment Activity:
Reinvested dividends	$	501		111,093		823,035		2,723,008		13,520,111		3,162,974		4,202,077		330,190
Mortality and expense risk charges (note 2)		(40,779	)	(177,630	)	(196,620	)	(901,669	)	(7,842,608	)	(2,240,307	)	(7,298,624	)	(1,037,818	)
Net investment income (loss)		(40,278	)	(66,537	)	626,415		1,821,339		5,677,503		922,667		(3,096,547	)	(707,628	)
Proceeds from mutual fund shares sold		519,205		12,830,670		6,315,579		11,902,363		125,604,888		18,519,390		102,270,059		33,071,497
Cost of mutual fund shares sold		(444,896	)	(13,612,696	)	(6,731,151	)	(12,789,213	)	(148,458,442	)	(23,671,378	)	(140,503,466	)	(26,997,423	)
Realized gain (loss) on investments		74,309		(782,026	)	(415,572	)	(886,850	)	(22,853,554	)	(5,151,988	)	(38,233,407	)	6,074,074
Change in unrealized gain (loss) on investments		(993,863	)	(255,965	)	(1,429,335	)	(6,204,635	)	(291,661,312	)	(72,236,312	)	(284,292,945	)	(42,230,125	)
Net gain (loss) on investments		(919,554	)	(1,037,991	)	(1,844,907	)	(7,091,485	)	(314,514,866	)	(77,388,300	)	(322,526,352	)	(36,156,051	)
Reinvested capital gains		57,519		-		-		-		644,601		147,652		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(902,313	)	(1,104,528	)	(1,218,492	)	(5,270,146	)	(308,192,762	)	(76,317,981	)	(325,622,899	)	(36,863,679	)

(Continued)

14

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	FHIP			FHIPR		FOP		FOPR		FO2		FO2R		FAMP		FCP
Investment Activity:
Reinvested dividends	$	6,392,965		1,131,533		2,696,110		1,357,875		144,518		1,266,324		5,599,880		4,865,263
Mortality and expense risk charges (note 2)		(1,102,090	)	(170,847	)	(1,468,278	)	(744,764	)	(93,238	)	(863,238	)	(3,042,887	)	(7,063,948	)
Net investment income (loss)		5,290,875		960,686		1,227,832		613,111		51,280		403,086		2,556,993		(2,198,685	)
Proceeds from mutual fund shares sold		23,515,084		15,727,951		22,449,593		11,926,410		1,133,309		16,867,784		41,657,376		102,633,649
Cost of mutual fund shares sold		(27,162,258	)	(17,491,157	)	(16,194,893	)	(9,702,379	)	(1,045,505	)	(16,089,035	)	(51,366,599	)	(120,450,577	)
Realized gain (loss) on investments		(3,647,174	)	(1,763,206	)	6,254,700		2,224,031		87,804		778,749		(9,709,223	)	(17,816,928	)
Change in unrealized gain (loss) on investments		(23,167,718	)	(2,437,907	)	(82,518,425	)	(41,003,814	)	(4,593,216	)	(38,945,580	)	(90,964,532	)	(275,843,406	)
Net gain (loss) on investments		(26,814,892	)	(4,201,113	)	(76,263,725	)	(38,779,783	)	(4,505,412	)	(38,166,831	)	(100,673,755	)	(293,660,334	)
Reinvested capital gains		-		-		14,196,989		7,179,319		822,369		7,101,800		24,368,853		16,152,805
Net increase (decrease) in contract owners’ equity resulting from operations	$	(21,524,017	)	(3,240,427	)	(60,838,904	)	(30,987,353	)	(3,631,763	)	(30,661,945	)	(73,747,909	)	(279,706,214	)
	FC2			FIGBS		FIGBP2		FGOP		FMCS		FMC2		FVSS		FVSS2
Investment Activity:
Reinvested dividends	$	2,348,318		839,218		17,423,006		83,431		67,502		457,024		56,146		79,773
Mortality and expense risk charges (note 2)		(5,119,018	)	(266,107	)	(7,869,817	)	(294,093	)	(251,473	)	(3,130,085	)	(121,423	)	(258,694	)
Net investment income (loss)		(2,770,700	)	573,111		9,553,189		(210,662	)	(183,971	)	(2,673,061	)	(65,277	)	(178,921	)
Proceeds from mutual fund shares sold		58,638,626		5,046,514		91,985,673		6,061,528		3,768,025		35,204,637		3,153,067		4,764,307
Cost of mutual fund shares sold		(71,448,941	)	(5,239,960	)	(96,164,804	)	(4,289,076	)	(5,115,340	)	(41,031,970	)	(5,040,428	)	(7,081,859	)
Realized gain (loss) on investments		(12,810,315	)	(193,446	)	(4,179,131	)	1,772,452		(1,347,315	)	(5,827,333	)	(1,887,361	)	(2,317,552	)
Change in unrealized gain (loss) on investments		(165,897,358	)	(1,327,820	)	(29,568,921	)	(17,621,870	)	(10,922,741	)	(116,415,162	)	(6,183,535	)	(11,614,273	)
Net gain (loss) on investments		(178,707,673	)	(1,521,266	)	(33,748,052	)	(15,849,418	)	(12,270,056	)	(122,242,495	)	(8,070,896	)	(13,931,825	)
Reinvested capital gains		9,589,329		16,585		351,270		-		2,951,026		31,427,590		2,098,363		3,632,807
Net increase (decrease) in contract owners’ equity resulting from operations	$	(171,889,044	)	(931,570	)	(23,843,593	)	(16,060,080	)	(9,503,001	)	(93,487,966	)	(6,037,810	)	(10,477,939	)

(Continued)

15

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	FNRS2			FF10S		FF10S2		FF20S		FF20S2		FF30S		FF30S2		FTVDM3
Investment Activity:
Reinvested dividends	$	-		153,129		1,356,775		172,602		1,861,102		98,845		379,663		1,105,539
Mortality and expense risk charges (note 2)		(1,737,258	)	(71,244	)	(898,437	)	(81,198	)	(1,198,901	)	(49,901	)	(318,804	)	(635,182	)
Net investment income (loss)		(1,737,258	)	81,885		458,338		91,404		662,201		48,944		60,859		470,357
Proceeds from mutual fund shares sold		31,664,776		2,051,956		4,473,721		1,795,669		9,616,464		608,401		2,027,261		16,174,342
Cost of mutual fund shares sold		(34,466,451	)	(2,348,687	)	(4,612,073	)	(2,069,973	)	(9,595,064	)	(717,914	)	(2,223,158	)	(19,181,040	)
Realized gain (loss) on investments		(2,801,675	)	(296,731	)	(138,352	)	(274,304	)	21,400		(109,513	)	(195,897	)	(3,006,698	)
Change in unrealized gain (loss) on investments		(73,540,004	)	(1,585,913	)	(16,682,727	)	(2,577,127	)	(32,866,723	)	(2,111,373	)	(9,367,301	)	(33,613,986	)
Net gain (loss) on investments		(76,341,679	)	(1,882,644	)	(16,821,079	)	(2,851,431	)	(32,845,323	)	(2,220,886	)	(9,563,198	)	(36,620,684	)
Reinvested capital gains		3,709,816		225,333		2,023,856		333,979		3,851,746		293,628		1,294,149		8,020,747
Net increase (decrease) in contract owners’ equity resulting from operations	$	(74,369,121	)	(1,575,426	)	(14,338,885	)	(2,426,048	)	(28,331,376	)	(1,878,314	)	(8,208,190	)	(28,129,580	)
	TIF2			TIF3		FTVFA2		FTVGI3		FTVIS2		FTVRD2		FTVSV2		JABS
Investment Activity:
Reinvested dividends	$	193,460		7,795,710		82,967		2,678,428		6,051,679		1,711,186		716,124		308,611
Mortality and expense risk charges (note 2)		(120,910	)	(5,371,624	)	(21,960	)	(1,033,702	)	(1,687,562	)	(1,551,724	)	(1,004,564	)	(182,677	)
Net investment income (loss)		72,550		2,424,086		61,007		1,644,726		4,364,117		159,462		(288,440	)	125,934
Proceeds from mutual fund shares sold		2,062,388		10,555,863		780,737		16,136,659		15,854,124		18,713,607		13,447,274		2,674,199
Cost of mutual fund shares sold		(1,777,077	)	(11,018,472	)	(1,002,831	)	(14,471,676	)	(18,788,468	)	(18,336,740	)	(16,528,982	)	(2,366,166	)
Realized gain (loss) on investments		285,311		(462,609	)	(222,094	)	1,664,983		(2,934,344	)	376,867		(3,081,708	)	308,033
Change in unrealized gain (loss) on investments		(5,172,569	)	(195,001,260	)	(1,020,448	)	(1,226,528	)	(43,482,423	)	(31,168,994	)	(29,546,354	)	(3,702,766	)
Net gain (loss) on investments		(4,887,258	)	(195,463,869	)	(1,242,542	)	438,455		(46,416,767	)	(30,792,127	)	(32,628,062	)	(3,394,733	)
Reinvested capital gains		791,782		30,093,721		82,293		-		2,533,976		738,658		4,959,744		878,177
Net increase (decrease) in contract owners’ equity resulting from operations	$	(4,022,926	)	(162,946,062	)	(1,099,242	)	2,083,181		(39,518,674	)	(29,894,007	)	(27,956,758	)	(2,390,622	)

(Continued)

16

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	JACAS			JAGTS		JAGTS2		JARLCS		JAIGS		JAIGS2		JPMCVP		AMTB
Investment Activity:
Reinvested dividends	$	8,737		2,313		3,853		34,638		326,454		5,410,980		111,752		19,050,351
Mortality and expense risk charges (note 2)		(1,210,982	)	(35,720	)	(56,820	)	(79,386	)	(167,635	)	(2,997,084	)	(130,217	)	(7,406,797	)
Net investment income (loss)		(1,202,245	)	(33,407	)	(52,967	)	(44,748	)	158,819		2,413,896		(18,465	)	11,643,554
Proceeds from mutual fund shares sold		14,468,764		442,613		1,150,276		1,475,736		2,578,063		40,244,287		3,644,971		66,619,658
Cost of mutual fund shares sold		(9,021,351	)	(404,129	)	(1,021,933	)	(1,782,051	)	(1,377,390	)	(39,355,919	)	(3,926,981	)	(73,536,001	)
Realized gain (loss) on investments		5,447,413		38,484		128,343		(306,315	)	1,200,673		888,368		(282,010	)	(6,916,343	)
Change in unrealized gain (loss) on investments		(52,133,402	)	(1,494,358	)	(2,559,215	)	(2,186,695	)	(11,032,905	)	(164,883,295	)	(4,220,454	)	(69,873,829	)
Net gain (loss) on investments		(46,685,989	)	(1,455,874	)	(2,430,872	)	(2,493,010	)	(9,832,232	)	(163,994,927	)	(4,502,464	)	(76,790,172	)
Reinvested capital gains		-		-		-		315,293		1,749,821		29,018,198		757,541		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(47,888,234	)	(1,489,281	)	(2,483,839	)	(2,222,465	)	(7,923,592	)	(132,562,833	)	(3,763,388	)	(65,146,618	)
	MIGSC			MVFSC		VFLG2		VFLV2		MBVAG2		MBVCG2		VFMG2		GVAAA2
Investment Activity:
Reinvested dividends	$	52,978		862,726		3,924		16,920		1,431		3,151		90,410		18,149,375
Mortality and expense risk charges (note 2)		(292,812	)	(1,351,745	)	(13,113	)	(19,345	)	(4,534	)	(1,638	)	(101,674	)	(9,621,450	)
Net investment income (loss)		(239,834	)	(489,019	)	(9,189	)	(2,425	)	(3,103	)	1,513		(11,264	)	8,527,925
Proceeds from mutual fund shares sold		3,647,440		10,380,443		111,313		176,989		147,014		10,794		1,181,167		1,613,457
Cost of mutual fund shares sold		(3,351,235	)	(11,240,157	)	(125,344	)	(212,741	)	(156,544	)	(11,249	)	(1,327,696	)	(1,621,883	)
Realized gain (loss) on investments		296,205		(859,714	)	(14,031	)	(35,752	)	(9,530	)	(455	)	(146,529	)	(8,426	)
Change in unrealized gain (loss) on investments		(8,713,387	)	(36,555,708	)	(415,411	)	(612,992	)	(153,303	)	(45,297	)	2,529,186		(230,496,031	)
Net gain (loss) on investments		(8,417,182	)	(37,415,422	)	(429,442	)	(648,744	)	(162,833	)	(45,752	)	2,675,715		(230,504,457	)
Reinvested capital gains		884,134		3,527,887		-		-		27,030		5,733		375,196		7,726,101
Net increase (decrease) in contract owners’ equity resulting from operations	$	(7,772,882	)	(34,376,554	)	(438,631	)	(651,169	)	(138,906	)	(38,506	)	2,311,783		(214,250,431	)

(Continued)

17

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	GVABD2			GVAGG2		GVAGR2		GVAGI2		NVCRA2		NVCRB2		NVCCA2		NVCCN2
Investment Activity:
Reinvested dividends	$	16,815,561		1,853,476		2,733,290		5,681,837		49,335		1,449,736		1,197,690		532,103
Mortality and expense risk charges (note 2)		(4,191,922	)	(980,045	)	(1,983,958	)	(3,193,012	)	(28,164	)	(901,743	)	(709,815	)	(238,874	)
Net investment income (loss)		12,623,639		873,431		749,332		2,488,825		21,171		547,993		487,875		293,229
Proceeds from mutual fund shares sold		13,719,979		5,965,426		4,334,721		-		469,911		-		195,783		3,421,075
Cost of mutual fund shares sold		(14,827,218	)	(6,506,611	)	(4,797,927	)	-		(654,049	)	-		(284,386	)	(3,710,194	)
Realized gain (loss) on investments		(1,107,239	)	(541,185	)	(463,206	)	-		(184,138	)	-		(88,603	)	(289,119	)
Change in unrealized gain (loss) on investments		(42,404,672	)	(34,038,519	)	(80,329,880	)	(92,277,536	)	(1,248,138	)	(16,020,501	)	(23,141,646	)	(1,666,421	)
Net gain (loss) on investments		(43,511,911	)	(34,579,704	)	(80,793,086	)	(92,277,536	)	(1,432,276	)	(16,020,501	)	(23,230,249	)	(1,955,540	)
Reinvested capital gains		198,457		2,196,350		7,748,903		65,984		85,124		661,128		1,022,826		78,376
Net increase (decrease) in contract owners’ equity resulting from operations	$	(30,689,815	)	(31,509,923	)	(72,294,851	)	(89,722,727	)	(1,325,981	)	(14,811,380	)	(21,719,548	)	(1,583,935	)
	NVCMD2			NVCMA2		NVCMC2		NVCBD1		NVCBD2		HIBF		HIBF3		GEM
Investment Activity:
Reinvested dividends	$	1,092,493		1,031,186		422,518		7,722		46,553		1,127,120		3,246,931		11,343
Mortality and expense risk charges (note 2)		(585,469	)	(569,071	)	(214,091	)	(1,584	)	(11,807	)	(196,038	)	(531,827	)	(13,141	)
Net investment income (loss)		507,024		462,115		208,427		6,138		34,746		931,082		2,715,104		(1,798	)
Proceeds from mutual fund shares sold		-		1,546,379		2,191,385		211,668		201,817		3,664,195		17,915,007		212,330
Cost of mutual fund shares sold		-		(2,108,922	)	(2,483,299	)	(218,360	)	(206,176	)	(4,494,196	)	(21,012,307	)	(123,373	)
Realized gain (loss) on investments		-		(562,543	)	(291,914	)	(6,692	)	(4,359	)	(830,001	)	(3,097,300	)	88,957
Change in unrealized gain (loss) on investments		(16,954,710	)	(22,848,558	)	(3,292,285	)	4,272		(6,570	)	(3,973,615	)	(10,412,486	)	(1,048,078	)
Net gain (loss) on investments		(16,954,710	)	(23,411,101	)	(3,584,199	)	(2,420	)	(10,929	)	(4,803,616	)	(13,509,786	)	(959,121	)
Reinvested capital gains		670,143		1,049,798		114,676		-		-		-		-		205,161
Net increase (decrease) in contract owners’ equity resulting from operations	$	(15,777,543	)	(21,899,188	)	(3,261,096	)	3,718		23,817		(3,872,534	)	(10,794,682	)	(755,758	)

(Continued)

18

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	GEM2			GEM3		GEM6		GVGU2		GVGU		GIG		GIG3		NVIE6
Investment Activity:
Reinvested dividends	$	36,085		685,786		734,189		17,871		241,989		1,327		354,475		34,822
Mortality and expense risk charges (note 2)		(64,994	)	(822,992	)	(1,159,009	)	(10,258	)	(111,338	)	(1,239	)	(373,080	)	(21,855	)
Net investment income (loss)		(28,909	)	(137,206	)	(424,820	)	7,613		130,651		88		(18,605	)	12,967
Proceeds from mutual fund shares sold		1,546,586		26,673,342		34,981,890		279,261		5,987,772		7,766		9,491,559		964,468
Cost of mutual fund shares sold		(1,332,061	)	(22,741,715	)	(35,703,278	)	(267,978	)	(7,133,530	)	(4,033	)	(8,870,134	)	(1,639,226	)
Realized gain (loss) on investments		214,525		3,931,627		(721,388	)	11,283		(1,145,758	)	3,733		621,425		(674,758	)
Change in unrealized gain (loss) on investments		(4,449,186	)	(63,187,446	)	(70,764,600	)	(305,200	)	(2,502,951	)	(73,028	)	(20,554,644	)	(1,379,023	)
Net gain (loss) on investments		(4,234,661	)	(59,255,819	)	(71,485,988	)	(293,917	)	(3,648,709	)	(69,295	)	(19,933,219	)	(2,053,781	)
Reinvested capital gains		894,114		12,320,324		14,918,890		7,334		93,739		14,111		4,015,655		555,554
Net increase (decrease) in contract owners’ equity resulting from operations	$	(3,369,456	)	(47,072,701	)	(56,991,918	)	(278,970	)	(3,424,319	)	(55,096	)	(15,936,169	)	(1,485,260	)
	GEF3			GVGF2		GVGFS		GBF		CAF		GVGH2		GVGHS		GVGH6
Investment Activity:
Reinvested dividends	$	32,535		16,933		57,678		28,463,851		125,942		1,740		15,265		4,987
Mortality and expense risk charges (note 2)		(63,578	)	(14,763	)	(35,242	)	(11,044,071	)	(610,753	)	(25,557	)	(75,438	)	(252,797	)
Net investment income (loss)		(31,043	)	2,170		22,436		17,419,780		(484,811	)	(23,817	)	(60,173	)	(247,810	)
Proceeds from mutual fund shares sold		2,528,159		172,121		1,380,441		98,483,676		9,586,035		330,893		3,104,909		8,459,717
Cost of mutual fund shares sold		(2,710,257	)	(254,323	)	(2,407,647	)	(104,250,487	)	(8,055,470	)	(349,182	)	(3,554,231	)	(9,773,492	)
Realized gain (loss) on investments		(182,098	)	(82,202	)	(1,027,206	)	(5,766,811	)	1,530,565		(18,289	)	(449,322	)	(1,313,775	)
Change in unrealized gain (loss) on investments		(3,463,851	)	(528,767	)	(809,971	)	27,289,008		(23,224,436	)	(622,134	)	(2,027,689	)	(6,408,550	)
Net gain (loss) on investments		(3,645,949	)	(610,969	)	(1,837,177	)	21,522,197		(21,693,871	)	(640,423	)	(2,477,011	)	(7,722,325	)
Reinvested capital gains		899,110		-		-		-		-		132,482		509,267		1,634,517
Net increase (decrease) in contract owners’ equity resulting from operations	$	(2,777,882	)	(608,799	)	(1,814,741	)	38,941,977		(22,178,682	)	(531,758	)	(2,027,917	)	(6,335,618	)

(Continued)

19

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	GVIX8			GVIDA		GVIDC		GVIDM		GVDMA		GVDMC		BF		NVLCP2
Investment Activity:
Reinvested dividends	$	172,587		9,925,662		6,126,083		57,505,471		38,299,731		16,231,774		83,664		32,446
Mortality and expense risk charges (note 2)		(146,383	)	(9,398,485	)	(2,898,247	)	(37,150,944	)	(26,926,194	)	(9,068,109	)	(40,306	)	(12,073	)
Net investment income (loss)		26,204		527,177		3,227,836		20,354,527		11,373,537		7,163,665		43,358		20,373
Proceeds from mutual fund shares sold		4,084,983		56,191,538		26,784,053		70,504,517		60,444,187		28,466,612		1,019,466		250,440
Cost of mutual fund shares sold		(4,557,061	)	(54,391,847	)	(27,593,811	)	(67,754,621	)	(55,195,987	)	(30,770,305	)	(1,175,019	)	(259,530	)
Realized gain (loss) on investments		(472,078	)	1,799,691		(809,758	)	2,749,896		5,248,200		(2,303,693	)	(155,553	)	(9,090	)
Change in unrealized gain (loss) on investments		(4,570,675	)	(300,876,772	)	(19,003,897	)	(756,815,995	)	(757,715,705	)	(123,547,592	)	(1,136,182	)	16,174
Net gain (loss) on investments		(5,042,753	)	(299,077,081	)	(19,813,655	)	(754,066,099	)	(752,467,505	)	(125,851,285	)	(1,291,735	)	7,084
Reinvested capital gains		12,607		81,756,834		3,249,361		176,276,488		160,150,500		26,949,413		340,160		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(5,003,942	)	(216,793,070	)	(13,336,458	)	(557,435,084	)	(580,943,468	)	(91,738,207	)	(908,217	)	27,457
	SGRF			SGRF2		MCIF		SAM		NVMIG3		NVMIG6		GVDIV2		GVDIV3
Investment Activity:
Reinvested dividends	$	-		-		1,277,400		14,087,146		1,466		-		28,070		296,582
Mortality and expense risk charges (note 2)		(123,059	)	(2,479,111	)	(1,473,783	)	(10,690,744	)	(11,628	)	(2,147,134	)	(27,080	)	(228,387	)
Net investment income (loss)		(123,059	)	(2,479,111	)	(196,383	)	3,396,402		(10,162	)	(2,147,134	)	990		68,195
Proceeds from mutual fund shares sold		4,551,717		265,385,061		26,115,201		275,836,473		280,220		11,644,981		409,148		7,259,287
Cost of mutual fund shares sold		(4,637,443	)	(284,311,436	)	(24,928,092	)	(275,836,473	)	(373,330	)	(14,908,150	)	(407,458	)	(8,272,424	)
Realized gain (loss) on investments		(85,726	)	(18,926,375	)	1,187,109		-		(93,110	)	(3,263,169	)	1,690		(1,013,137	)
Change in unrealized gain (loss) on investments		(5,035,578	)	(29,421,175	)	(51,644,636	)	-		(655,732	)	(98,969,541	)	(1,294,257	)	(11,226,552	)
Net gain (loss) on investments		(5,121,304	)	(48,347,550	)	(50,457,527	)	-		(748,842	)	(102,232,710	)	(1,292,567	)	(12,239,689	)
Reinvested capital gains		-		-		6,693,594		-		-		-		252,332		2,344,677
Net increase (decrease) in contract owners’ equity resulting from operations	$	(5,244,363	)	(50,826,661	)	(43,960,316	)	3,396,402		(759,004	)	(104,379,844	)	(1,039,245	)	(9,826,817	)

(Continued)

20

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	GVDIV6			NVMLG1		NVMLG2		NVMLV2		NVMMG1		NVMMG2		NVMMV2		SCGF
Investment Activity:
Reinvested dividends	$	2,662,009		58		979		15,898		-		-		1,644,879		-
Mortality and expense risk charges (note 2)		(2,889,527	)	(75	)	(2,397	)	(14,928	)	(4,409	)	(908,477	)	(1,844,773	)	(100,242	)
Net investment income (loss)		(227,518	)	(17	)	(1,418	)	970		(4,409	)	(908,477	)	(199,894	)	(100,242	)
Proceeds from mutual fund shares sold		95,951,229		25,226		125,199		265,020		246,274		4,107,348		12,119,592		2,067,737
Cost of mutual fund shares sold		(99,475,425	)	(28,645	)	(150,538	)	(281,012	)	(356,096	)	(5,424,796	)	(14,344,337	)	(2,341,505	)
Realized gain (loss) on investments		(3,524,196	)	(3,419	)	(25,339	)	(15,992	)	(109,822	)	(1,317,448	)	(2,224,745	)	(273,768	)
Change in unrealized gain (loss) on investments		(123,480,526	)	(1,802	)	(73,273	)	(470,794	)	(207,378	)	(45,609,068	)	(68,247,877	)	(4,480,517	)
Net gain (loss) on investments		(127,004,722	)	(5,221	)	(98,612	)	(486,786	)	(317,200	)	(46,926,516	)	(70,472,622	)	(4,754,285	)
Reinvested capital gains		25,226,921		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(102,005,319	)	(5,238	)	(100,030	)	(485,816	)	(321,609	)	(47,834,993	)	(70,672,516	)	(4,854,527	)
	SCGF2			SCVF		SCVF2		SCF		SCF2		TRF		TRF2		GVUSL
Investment Activity:
Reinvested dividends	$	-		597,725		218,247		950,217		536,468		3,115,523		4,698,513		40,282
Mortality and expense risk charges (note 2)		(288,642	)	(725,487	)	(360,981	)	(1,578,611	)	(1,412,114	)	(2,974,305	)	(6,852,564	)	(68,233	)
Net investment income (loss)		(288,642	)	(127,762	)	(142,734	)	(628,394	)	(875,646	)	141,218		(2,154,051	)	(27,951	)
Proceeds from mutual fund shares sold		12,842,449		16,603,272		7,073,446		27,045,824		9,320,291		43,832,082		20,219,211		1,666,988
Cost of mutual fund shares sold		(16,120,098	)	(21,249,543	)	(10,414,290	)	(24,445,668	)	(13,908,733	)	(49,700,104	)	(27,208,122	)	(2,236,842	)
Realized gain (loss) on investments		(3,277,649	)	(4,646,271	)	(3,340,844	)	2,600,156		(4,588,442	)	(5,868,022	)	(6,988,911	)	(569,854	)
Change in unrealized gain (loss) on investments		(7,898,515	)	(15,763,686	)	(5,751,018	)	(80,834,655	)	(54,288,868	)	(142,301,333	)	(259,873,044	)	(2,627,709	)
Net gain (loss) on investments		(11,176,164	)	(20,409,957	)	(9,091,862	)	(78,234,499	)	(58,877,310	)	(148,169,355	)	(266,861,955	)	(3,197,563	)
Reinvested capital gains		-		-		-		24,186,634		18,955,245		35,459,862		65,856,346		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(11,464,806	)	(20,537,719	)	(9,234,596	)	(54,676,259	)	(40,797,711	)	(112,568,275	)	(203,159,660	)	(3,225,514	)

(Continued)

21

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	NVNMO1			NVNMO2		NVNSR1		NVNSR2		NVSTB2		GGTC		GGTC2		GGTC3
Investment Activity:
Reinvested dividends	$	-		-		5,280		744,288		179,851		-		-		-
Mortality and expense risk charges (note 2)		(313	)	(6,195	)	(9,913	)	(2,132,031	)	(72,846	)	(2,897	)	(14,563	)	(54,115	)
Net investment income (loss)		(313	)	(6,195	)	(4,633	)	(1,387,743	)	107,005		(2,897	)	(14,563	)	(54,115	)
Proceeds from mutual fund shares sold		26,320		440,028		230,533		15,372,951		801,981		62,347		296,254		2,535,081
Cost of mutual fund shares sold		(38,794	)	(577,514	)	(302,658	)	(19,286,027	)	(808,150	)	(57,592	)	(309,589	)	(3,221,542	)
Realized gain (loss) on investments		(12,474	)	(137,486	)	(72,125	)	(3,913,076	)	(6,169	)	4,755		(13,335	)	(686,461	)
Change in unrealized gain (loss) on investments		(13,303	)	(289,189	)	(817,778	)	(133,824,294	)	(152,105	)	(184,347	)	(774,070	)	(2,582,469	)
Net gain (loss) on investments		(25,777	)	(426,675	)	(889,903	)	(137,737,370	)	(158,274	)	(179,592	)	(787,405	)	(3,268,930	)
Reinvested capital gains		-		-		-		-		-		31,306		141,073		574,822
Net increase (decrease) in contract owners’ equity resulting from operations	$	(26,090	)	(432,870	)	(894,536	)	(139,125,113	)	(51,269	)	(151,183	)	(660,895	)	(2,748,223	)
	GGTC6			GVUG2		GVUGL		EIF2		MSBF		NVRE1		NVRE2		AMTG
Investment Activity:
Reinvested dividends	$	-		-		-		2,947,677		4,252,913		25,041		50,334		-
Mortality and expense risk charges (note 2)		(147,037	)	(311,336	)	(71,465	)	(3,075,572	)	(900,043	)	(4,443	)	(12,651	)	(1,396,437	)
Net investment income (loss)		(147,037	)	(311,336	)	(71,465	)	(127,895	)	3,352,870		20,598		37,683		(1,396,437	)
Proceeds from mutual fund shares sold		7,504,762		4,421,298		2,861,455		181,737,547		17,189,519		457,065		378,912		19,399,836
Cost of mutual fund shares sold		(8,742,220	)	(5,543,853	)	(3,598,688	)	(222,083,744	)	(19,658,895	)	(556,770	)	(524,207	)	(10,626,989	)
Realized gain (loss) on investments		(1,237,458	)	(1,122,555	)	(737,233	)	(40,346,197	)	(2,469,376	)	(99,705	)	(145,295	)	8,772,847
Change in unrealized gain (loss) on investments		(6,238,541	)	(12,259,077	)	(2,929,553	)	(38,696,150	)	(14,608,639	)	(328,498	)	(875,516	)	(65,611,990	)
Net gain (loss) on investments		(7,475,999	)	(13,381,632	)	(3,666,786	)	(79,042,347	)	(17,078,015	)	(428,203	)	(1,020,811	)	(56,839,143	)
Reinvested capital gains		1,280,684		3,863,225		1,066,610		1,829,623		1,473,787		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(6,342,352	)	(9,829,743	)	(2,671,641	)	(77,340,619	)	(12,251,358	)	(407,605	)	(983,128	)	(58,235,580	)

(Continued)

22

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	AMGP			AMINS		AMMCGS		AMTP		AMRS		AMFAS		AMSRS		OVMS
Investment Activity:
Reinvested dividends	$	64,410		316		-		685,345		125,657		-		793,757		2,760,866
Mortality and expense risk charges (note 2)		(160,058	)	(2,790,157	)	(119,115	)	(1,846,237	)	(208,506	)	(86,385	)	(5,169,680	)	(1,234,310	)
Net investment income (loss)		(95,648	)	(2,789,841	)	(119,115	)	(1,160,892	)	(82,849	)	(86,385	)	(4,375,923	)	1,526,556
Proceeds from mutual fund shares sold		2,879,258		293,711,542		2,549,722		25,575,018		4,492,261		1,760,273		481,799,210		21,954,995
Cost of mutual fund shares sold		(1,953,041	)	(333,425,786	)	(1,726,016	)	(25,144,677	)	(5,067,393	)	(1,971,377	)	(482,749,809	)	(27,230,865	)
Realized gain (loss) on investments		926,217		(39,714,244	)	823,706		430,341		(575,132	)	(211,104	)	(950,599	)	(5,275,870	)
Change in unrealized gain (loss) on investments		(6,509,053	)	4,414,284		(4,987,095	)	(108,474,235	)	(6,852,966	)	(2,468,343	)	(50,706,776	)	(48,998,634	)
Net gain (loss) on investments		(5,582,836	)	(35,299,960	)	(4,163,389	)	(108,043,894	)	(7,428,098	)	(2,679,447	)	(51,657,375	)	(54,274,504	)
Reinvested capital gains		441,400		1,035		-		21,625,094		27,332		187,423		2,713,949		6,658,903
Net increase (decrease) in contract owners’ equity resulting from operations	$	(5,237,084	)	(38,088,766	)	(4,282,504	)	(87,579,692	)	(7,483,615	)	(2,578,409	)	(53,319,349	)	(46,089,045	)
	OVCAFS			OVGR		OVB		OVGS3		OVGS4		OVGS		OVGSS		OVHI3
Investment Activity:
Reinvested dividends	$	-		100,573		3,993,920		1,359,248		1,006,045		2,984,617		200,198		30,010
Mortality and expense risk charges (note 2)		(858,109	)	(889,903	)	(1,119,851	)	(1,134,110	)	(1,182,296	)	(2,460,942	)	(219,888	)	(8,648	)
Net investment income (loss)		(858,109	)	(789,330	)	2,874,069		225,138		(176,251	)	523,675		(19,690	)	21,362
Proceeds from mutual fund shares sold		9,680,576		13,825,297		21,159,501		15,819,403		12,940,849		42,285,108		3,823,128		545,473
Cost of mutual fund shares sold		(8,895,092	)	(11,225,360	)	(23,976,514	)	(12,700,264	)	(13,494,608	)	(27,714,019	)	(3,617,609	)	(849,648	)
Realized gain (loss) on investments		785,484		2,599,937		(2,817,013	)	3,119,139		(553,759	)	14,571,089		205,519		(304,175	)
Change in unrealized gain (loss) on investments		(30,391,351	)	(38,741,679	)	(34,742,735	)	(52,083,596	)	(45,533,159	)	(119,409,989	)	(8,774,045	)	(388,706	)
Net gain (loss) on investments		(29,605,867	)	(36,141,742	)	(37,559,748	)	(48,964,457	)	(46,086,918	)	(104,838,900	)	(8,568,526	)	(692,881	)
Reinvested capital gains		-		-		-		5,983,984		5,591,832		13,114,068		1,073,516		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(30,463,976	)	(36,931,072	)	(34,685,679	)	(42,755,335	)	(40,671,337	)	(91,201,157	)	(7,514,700	)	(671,519	)

(Continued)

23

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	OVHI4			OVHI		OVHIS		OVSC		OVSCS		OVGI		OVGIS		OVAG
Investment Activity:
Reinvested dividends	$	611,212		28,849		1,283,577		19,950		471,192		315,774		4,577,435		-
Mortality and expense risk charges (note 2)		(166,606	)	(4,335	)	(259,399	)	(51,277	)	(2,846,246	)	(266,407	)	(6,632,658	)	(162,354	)
Net investment income (loss)		444,606		24,514		1,024,178		(31,327	)	(2,375,054	)	49,367		(2,055,223	)	(162,354	)
Proceeds from mutual fund shares sold		8,072,499		171,319		6,836,489		1,416,795		40,762,932		4,802,428		38,687,998		2,826,008
Cost of mutual fund shares sold		(11,343,624	)	(294,645	)	(9,001,693	)	(1,774,357	)	(47,184,869	)	(4,363,379	)	(43,338,028	)	(2,628,523	)
Realized gain (loss) on investments		(3,271,125	)	(123,326	)	(2,165,204	)	(357,562	)	(6,421,937	)	439,049		(4,650,030	)	197,485
Change in unrealized gain (loss) on investments		(6,889,235	)	(193,406	)	(14,303,261	)	(1,543,450	)	(71,083,896	)	(11,241,564	)	(195,684,358	)	(7,546,706	)
Net gain (loss) on investments		(10,160,360	)	(316,732	)	(16,468,465	)	(1,901,012	)	(77,505,833	)	(10,802,515	)	(200,334,388	)	(7,349,221	)
Reinvested capital gains		-		-		-		221,525		9,799,136		1,372,064		24,059,956		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(9,715,754	)	(292,218	)	(15,444,287	)	(1,710,814	)	(70,081,751	)	(9,381,084	)	(178,329,655	)	(7,511,575	)
	PISVP1			PVGIB		PVTIGB		PVTVB		TRBCG2		TREI2		TRLT2		DSRG
Investment Activity:
Reinvested dividends	$	5,737		113,249		25,037		-		219,402		1,602,003		1,617,561		439,644
Mortality and expense risk charges (note 2)		(9,390	)	(82,771	)	(17,157	)	(29,047	)	(3,294,869	)	(1,131,418	)	(733,066	)	(750,646	)
Net investment income (loss)		(3,653	)	30,478		7,880		(29,047	)	(3,075,467	)	470,585		884,495		(311,002	)
Proceeds from mutual fund shares sold		110,001		1,332,789		197,904		325,134		10,628,647		5,048,887		9,970,329		11,435,580
Cost of mutual fund shares sold		(202,858	)	(1,943,011	)	(185,588	)	(361,690	)	(11,970,584	)	(6,095,594	)	(9,998,992	)	(17,512,490	)
Realized gain (loss) on investments		(92,857	)	(610,222	)	12,316		(36,556	)	(1,341,937	)	(1,046,707	)	(28,663	)	(6,076,910	)
Change in unrealized gain (loss) on investments		(490,494	)	(2,900,852	)	(833,657	)	(756,377	)	(101,401,814	)	(34,340,847	)	(1,262,177	)	(16,689,844	)
Net gain (loss) on investments		(583,351	)	(3,511,074	)	(821,341	)	(792,933	)	(102,743,751	)	(35,387,554	)	(1,290,840	)	(22,766,754	)
Reinvested capital gains		153,345		973,768		192,364		-		-		2,107,353		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(433,659	)	(2,506,828	)	(621,097	)	(821,980	)	(105,819,218	)	(32,809,616	)	(406,345	)	(23,077,756	)

(Continued)

24

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	VWBFR			VWBF		VWEMR		VWEM		VWHAR		VWHA		MSVFI		MSVF2
Investment Activity:
Reinvested dividends	$	737,048		1,575,185		-		-		147,703		150,802		155,633		11,110,613
Mortality and expense risk charges (note 2)		(122,540	)	(232,000	)	(276,248	)	(380,161	)	(564,132	)	(651,055	)	(46,668	)	(4,708,310	)
Net investment income (loss)		614,508		1,343,185		(276,248	)	(380,161	)	(416,429	)	(500,253	)	108,965		6,402,303
Proceeds from mutual fund shares sold		5,202,015		4,343,785		12,001,322		6,865,677		15,170,674		10,631,149		1,784,492		82,755,990
Cost of mutual fund shares sold		(5,244,963	)	(4,714,974	)	(18,922,758	)	(6,958,074	)	(14,883,270	)	(4,668,409	)	(1,903,525	)	(88,057,594	)
Realized gain (loss) on investments		(42,948	)	(371,189	)	(6,921,436	)	(92,397	)	287,404		5,962,740		(119,033	)	(5,301,604	)
Change in unrealized gain (loss) on investments		(458,896	)	(583,411	)	(22,684,555	)	(40,435,269	)	(27,898,131	)	(37,368,416	)	(437,219	)	(36,033,941	)
Net gain (loss) on investments		(501,844	)	(954,600	)	(29,605,991	)	(40,527,666	)	(27,610,727	)	(31,405,676	)	(556,252	)	(41,335,545	)
Reinvested capital gains		-		-		11,631,611		15,223,007		6,617,535		8,257,790		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	112,664		388,585		(18,250,628	)	(25,684,820	)	(21,409,621	)	(23,648,139	)	(447,287	)	(34,933,242	)
	MSEM			MSEMB		MSVRE		MSVREB		VYDS		SVDF		WFVLCG		WFVMM
Investment Activity:
Reinvested dividends	$	412,398		120,393		3,346,870		1,974,939		6,262		-		293		1,131
Mortality and expense risk charges (note 2)		(77,277	)	(24,848	)	(1,319,140	)	(1,084,623	)	(11,745	)	(713,564	)	(2,270	)	(878	)
Net investment income (loss)		335,121		95,545		2,027,730		890,316		(5,483	)	(713,564	)	(1,977	)	253
Proceeds from mutual fund shares sold		1,821,006		391,701		26,179,740		23,033,354		181,637		10,757,175		11,800		3,106
Cost of mutual fund shares sold		(2,123,013	)	(480,736	)	(23,803,400	)	(34,033,073	)	(166,669	)	(7,192,922	)	(11,191	)	(3,106	)
Realized gain (loss) on investments		(302,007	)	(89,035	)	2,376,340		(10,999,719	)	14,968		3,564,253		609		-
Change in unrealized gain (loss) on investments		(1,228,571	)	(357,750	)	(81,704,272	)	(48,143,342	)	(507,003	)	(31,921,510	)	(51,732	)	-
Net gain (loss) on investments		(1,530,578	)	(446,785	)	(79,327,932	)	(59,143,061	)	(492,035	)	(28,357,257	)	(51,123	)	-
Reinvested capital gains		238,029		70,024		36,706,467		27,428,028		127,929		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(957,428	)	(281,216	)	(40,593,735	)	(30,824,717	)	(369,589	)	(29,070,821	)	(53,100	)	253

(Continued)

25

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

	SVOF			WFVSMV		WFVTRB
Investment Activity:
Reinvested dividends	$	4,379,091		-		1,107
Mortality and expense risk charges (note 2)		(3,073,319	)	(87	)	(266	)
Net investment income (loss)		1,305,772		(87	)	841
Proceeds from mutual fund shares sold		43,614,107		1,781		266
Cost of mutual fund shares sold		(50,706,807	)	(2,091	)	(267	)
Realized gain (loss) on investments		(7,092,700	)	(310	)	(1	)
Change in unrealized gain (loss) on investments		(152,729,190	)	(6,144	)	(559	)
Net gain (loss) on investments		(159,821,890	)	(6,454	)	(560	)
Reinvested capital gains		51,688,115		2,098		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(106,828,003	)	(4,443	)	281

See accompanying notes to financial statements.

26

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2008 and 2007

	Total					AVBV2				AVCA2				AVCD2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	126,228,065		77,413,198		(428,899	)	(693,037	)	(215,299	)	(270,276	)	(335,078	)	(429,544	)
Realized gain (loss) on investments		(310,427,981	)	485,395,129		(980,116	)	1,490,822		87,480		510,756		(849,393	)	4,782,696
Change in unrealized gain (loss) on investments		(8,653,538,654	)	(217,917,170	)	(30,516,067	)	(3,913,690	)	(6,888,377	)	1,229,188		(13,524,418	)	(4,096,869	)
Reinvested capital gains		1,250,139,523		884,447,637		6,864,081		3,025,887		-		-		2,534,704		1,987,004
Net increase (decrease) in contract owners’ equity resulting from operations		(7,587,599,047	)	1,229,338,794		(25,061,001	)	(90,018	)	(7,016,196	)	1,469,668		(12,174,185	)	2,243,287
Equity transactions:
Purchase payments received from contract owners (note 3)		3,842,471,180		5,383,787,102		1,909,197		5,491,976		747,816		1,949,580		2,308,849		5,068,365
Transfers between funds		-		-		(2,612,477	)	(4,067,516	)	(2,274,283	)	976,741		(2,556,881	)	1,128,624
Redemptions (note 3)		(2,376,357,188	)	(2,290,276,483	)	(3,601,566	)	(3,384,442	)	(1,418,392	)	(1,139,095	)	(1,721,565	)	(2,375,924	)
Annuity benefits		(2,149,504	)	(2,273,176	)	(6,468	)	(9	)	(1,368	)	(500	)	-		-
Contract maintenance charges (note 2)		(23,305,962	)	(10,969,296	)	(10,992	)	(6,533	)	(2,937	)	(2,182	)	(9,692	)	(3,316	)
Contingent deferred sales charges (note 2)		(21,839,980	)	(14,863,496	)	(54,007	)	(59,115	)	(17,143	)	(19,187	)	(35,193	)	(50,013	)
Adjustments to maintain reserves		627		(199,934	)	(926	)	(1,230	)	(487	)	(375	)	(190	)	(1,071	)
Net equity transactions		1,418,819,173		3,065,204,717		(4,377,239	)	(2,026,869	)	(2,966,794	)	1,764,982		(2,014,672	)	3,766,665
Net change in contract owners’ equity		(6,168,779,874	)	4,294,543,511		(29,438,240	)	(2,116,887	)	(9,982,990	)	3,234,650		(14,188,857	)	6,009,952
Contract owners’ equity beginning of period		22,175,260,947		17,880,717,436		50,652,126		52,769,013		17,639,514		14,404,864		27,002,291		20,992,339
Contract owners’ equity end of period	$	16,006,481,073		22,175,260,947		21,213,886		50,652,126		7,656,524		17,639,514		12,813,434		27,002,291
CHANGES IN UNITS:
Beginning units		1,216,943,704		932,018,159		2,902,901		3,021,464		1,044,738		936,992		1,288,902		1,088,041
Units purchased		851,755,113		753,989,495		488,063		531,430		156,250		340,425		370,858		1,170,724
Units redeemed		(614,133,702	)	(469,063,950	)	(821,583	)	(649,993	)	(396,224	)	(232,679	)	(483,036	)	(969,863	)
Ending units		1,454,565,115		1,216,943,704		2,569,381		2,902,901		804,764		1,044,738		1,176,724		1,288,902

(Continued)

27

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	ALBS					ALMCS				ALVGIB				ALVSVB
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(2,305	)	(2,614	)	(6,746	)	(7,633	)	35,630		(79,178	)	(131,725	)	(77,905	)
Realized gain (loss) on investments		(4,584	)	21,314		(149,290	)	(11,115	)	(777,482	)	1,197,419		(1,592,136	)	475,856
Change in unrealized gain (loss) on investments		(108,519	)	6,981		(555,854	)	113,309		(9,465,089	)	(1,435,206	)	(5,296,111	)	(954,005	)
Reinvested capital gains		25,679		8,320		214,876		84,212		2,653,838		1,069,949		669,521		616,957
Net increase (decrease) in contract owners’ equity resulting from operations		(89,729	)	34,001		(497,014	)	178,773		(7,553,103	)	752,984		(6,350,451	)	60,903
Equity transactions:
Purchase payments received from contract owners (note 3)		-		39,613		6,553		99,026		181,053		253,983		2,587,624		108,605
Transfers between funds		(54,028	)	8,464		(60,412	)	75,806		(1,323,322	)	(2,649,285	)	9,031,174		(361,374	)
Redemptions (note 3)		(384	)	(370	)	(139,531	)	(3,270	)	(1,651,289	)	(1,640,339	)	(1,221,058	)	(724,985	)
Annuity benefits		-		-		-		-		-		-		(1,307	)	(1,551	)
Contract maintenance charges (note 2)		(5	)	(5	)	(12	)	(7	)	(1,315	)	(1,614	)	(1,650	)	(456	)
Contingent deferred sales charges (note 2)		-		-		-		-		(15,630	)	(23,593	)	(15,711	)	(13,376	)
Adjustments to maintain reserves		(20	)	33		(3	)	(34	)	(113	)	(2,679	)	(87	)	388
Net equity transactions		(54,437	)	47,735		(193,405	)	171,521		(2,810,616	)	(4,063,527	)	10,378,985		(992,749	)
Net change in contract owners’ equity		(144,166	)	81,736		(690,419	)	350,294		(10,363,719	)	(3,310,543	)	4,028,534		(931,846	)
Contract owners’ equity beginning of period		317,270		235,534		958,371		608,077		19,731,218		23,041,761		7,816,800		8,748,646
Contract owners’ equity end of period	$	173,104		317,270		267,952		958,371		9,367,499		19,731,218		11,845,334		7,816,800
CHANGES IN UNITS:
Beginning units		23,143		19,445		52,160		42,969		1,095,470		1,318,088		394,975		436,802
Units purchased		6,639		27,487		6,910		43,504		57,087		50,237		979,830		100,417
Units redeemed		(11,066	)	(23,789	)	(23,607	)	(34,313	)	(260,779	)	(272,855	)	(439,948	)	(142,244	)
Ending units		18,716		23,143		35,463		52,160		891,778		1,095,470		934,857		394,975

(Continued)

28

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	ACVB					ACVCA				ACVIG				ACVIG2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	768,191		618,549		(1,575,013	)	(1,909,097	)	190,085		212,814		29,802		19,738
Realized gain (loss) on investments		(1,104,791	)	(142,185	)	5,473,465		7,091,532		208,041		3,063,481		(137,133	)	769,609
Change in unrealized gain (loss) on investments		(17,216,134	)	(1,703,985	)	(82,357,794	)	46,411,032		(13,619,377	)	(3,535,813	)	(5,069,288	)	(980,678	)
Reinvested capital gains		4,415,765		3,985,043		9,948,547		-		3,083,841		-		1,184,600		-
Net increase (decrease) in contract owners’ equity resulting from operations		(13,136,969	)	2,757,422		(68,510,795	)	51,593,467		(10,137,410	)	(259,518	)	(3,992,019	)	(191,331	)
Equity transactions:
Purchase payments received from contract owners (note 3)		1,334,843		2,152,150		2,200,741		2,646,596		1,249,253		1,956,626		160,347		205,377
Transfers between funds		(2,815,950	)	(2,940,683	)	(6,497,441	)	4,758,532		(2,075,781	)	(1,863,837	)	(1,023,013	)	(1,574,342	)
Redemptions (note 3)		(10,653,581	)	(14,550,008	)	(16,686,951	)	(23,520,062	)	(4,593,071	)	(7,643,389	)	(824,435	)	(995,324	)
Annuity benefits		(14,148	)	(5,950	)	(30,100	)	(31,162	)	(9,324	)	(12,628	)	-		-
Contract maintenance charges (note 2)		(31,189	)	(35,461	)	(74,252	)	(79,717	)	(14,945	)	(18,907	)	(1,313	)	(1,439	)
Contingent deferred sales charges (note 2)		(19,145	)	(23,998	)	(20,604	)	(44,600	)	(20,251	)	(25,724	)	(9,720	)	(10,420	)
Adjustments to maintain reserves		(5,796	)	(3,911	)	(3,448	)	275		3		(519	)	(324	)	(383	)
Net equity transactions		(12,204,966	)	(15,407,861	)	(21,112,055	)	(16,270,138	)	(5,464,116	)	(7,608,378	)	(1,698,458	)	(2,376,531	)
Net change in contract owners’ equity		(25,341,935	)	(12,650,439	)	(89,622,850	)	35,323,329		(15,601,526	)	(7,867,896	)	(5,690,477	)	(2,567,862	)
Contract owners’ equity beginning of period		68,777,460		81,427,899		160,161,645		124,838,316		32,075,167		39,943,063		12,216,196		14,784,058
Contract owners’ equity end of period	$	43,435,525		68,777,460		70,538,795		160,161,645		16,473,641		32,075,167		6,525,719		12,216,196
CHANGES IN UNITS:
Beginning units		2,885,081		3,544,356		3,530,839		3,982,752		2,391,422		2,937,946		727,674		861,606
Units purchased		149,630		164,132		237,473		518,243		212,092		294,916		35,352		70,272
Units redeemed		(720,378	)	(823,407	)	(885,850	)	(970,156	)	(701,016	)	(841,440	)	(160,775	)	(204,204	)
Ending units		2,314,333		2,885,081		2,882,462		3,530,839		1,902,498		2,391,422		602,251		727,674

(Continued)

29

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	ACVIP2					ACVI				ACVI2				ACVI3
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	3,487,871		2,182,688		(216,363	)	(401,954	)	(21,411	)	(32,076	)	(124,113	)	(218,644	)
Realized gain (loss) on investments		(850,110	)	(141,095	)	2,950,088		6,609,226		105,657		148,910		1,841,427		3,501,478
Change in unrealized gain (loss) on investments		(8,364,625	)	3,465,401		(31,398,271	)	3,452,959		(1,847,797	)	398,558		(18,705,807	)	1,851,629
Reinvested capital gains		-		-		4,385,457		-		268,891		-		2,548,520		-
Net increase (decrease) in contract owners’ equity resulting from operations		(5,726,864	)	5,506,994		(24,279,089	)	9,660,231		(1,494,660	)	515,392		(14,439,973	)	5,134,463
Equity transactions:
Purchase payments received from contract owners (note 3)		16,337,034		7,128,502		29,167		624		-		72		2,021,786		2,506,015
Transfers between funds		49,176,521		244,494		(1,873,224	)	(3,568,605	)	(115,871	)	(131,906	)	(1,527,717	)	(19,795	)
Redemptions (note 3)		(18,196,008	)	(7,731,076	)	(7,544,488	)	(11,335,017	)	(312,236	)	(191,148	)	(4,723,752	)	(6,281,026	)
Annuity benefits		(17,191	)	(3,423	)	(16,625	)	(18,494	)	-		-		(3,739	)	(4,649	)
Contract maintenance charges (note 2)		(43,400	)	(9,157	)	(21,043	)	(25,454	)	(382	)	(440	)	(10,257	)	(11,550	)
Contingent deferred sales charges (note 2)		(150,711	)	(57,153	)	(5,706	)	(12,760	)	(3,625	)	(2,132	)	(26,291	)	(28,407	)
Adjustments to maintain reserves		(1,513	)	(2,868	)	(1,988	)	1,448		(63	)	(46	)	(150	)	(128	)
Net equity transactions		47,104,732		(430,681	)	(9,433,907	)	(14,958,258	)	(432,177	)	(325,600	)	(4,270,120	)	(3,839,540	)
Net change in contract owners’ equity		41,377,868		5,076,313		(33,712,996	)	(5,298,027	)	(1,926,837	)	189,792		(18,710,093	)	1,294,923
Contract owners’ equity beginning of period		79,642,850		74,566,537		60,218,672		65,516,699		3,551,239		3,361,447		34,091,343		32,796,420
Contract owners’ equity end of period	$	121,020,718		79,642,850		26,505,676		60,218,672		1,624,402		3,551,239		15,381,250		34,091,343
CHANGES IN UNITS:
Beginning units		6,820,642		6,878,406		2,292,787		2,905,577		152,551		167,745		1,893,113		2,121,586
Units purchased		9,379,817		2,483,250		25		-		-		4		286,486		391,938
Units redeemed		(5,491,222	)	(2,541,014	)	(440,067	)	(612,790	)	(24,032	)	(15,198	)	(610,828	)	(620,411	)
Ending units		10,709,237		6,820,642		1,852,745		2,292,787		128,519		152,551		1,568,771		1,893,113

(Continued)

30

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	ACVI4					ACVMV1				ACVMV2				ACVU1
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(133,561	)	(145,512	)	(66,524	)	(45,770	)	(829,196	)	(324,984	)	(39,139	)	(55,577	)
Realized gain (loss) on investments		751,428		951,213		(854,150	)	183,929		(7,112,926	)	1,165,306		(160,010	)	123,513
Change in unrealized gain (loss) on investments		(10,985,764	)	1,026,391		(803,204	)	(576,330	)	(5,479,215	)	(2,761,280	)	(1,877,650	)	665,830
Reinvested capital gains		1,584,327		-		-		58,875		-		233,279		511,993		-
Net increase (decrease) in contract owners’ equity resulting from operations		(8,783,570	)	1,832,092		(1,723,878	)	(379,296	)	(13,421,337	)	(1,687,679	)	(1,564,806	)	733,766
Equity transactions:
Purchase payments received from contract owners (note 3)		1,485,832		2,747,769		297,075		571,041		10,824,397		10,184,886		206,585		268,221
Transfers between funds		(1,513,937	)	4,306,639		1,098,432		2,990,853		6,157,103		4,254,320		(738,829	)	145,297
Redemptions (note 3)		(1,335,186	)	(992,288	)	(968,838	)	(673,127	)	(3,575,869	)	(1,491,203	)	(631,416	)	(927,937	)
Annuity benefits		-		-		(583	)	(413	)	(76	)	(14	)	-		-
Contract maintenance charges (note 2)		(6,608	)	(1,279	)	(2,172	)	(1,988	)	(46,525	)	(2,369	)	(1,912	)	(2,191	)
Contingent deferred sales charges (note 2)		(18,299	)	(8,646	)	(2,395	)	(1,871	)	(70,081	)	(20,016	)	(3,698	)	(5,782	)
Adjustments to maintain reserves		(476	)	(312	)	(4	)	(890	)	(582	)	(726	)	(56	)	(84	)
Net equity transactions		(1,388,674	)	6,051,883		421,515		2,883,605		13,288,367		12,924,878		(1,169,326	)	(522,476	)
Net change in contract owners’ equity		(10,172,244	)	7,883,975		(1,302,363	)	2,504,309		(132,970	)	11,237,199		(2,734,132	)	211,290
Contract owners’ equity beginning of period		19,305,697		11,421,722		5,814,970		3,310,661		27,830,529		16,593,330		4,581,136		4,369,846
Contract owners’ equity end of period	$	9,133,453		19,305,697		4,512,607		5,814,970		27,697,559		27,830,529		1,847,004		4,581,136
CHANGES IN UNITS:
Beginning units		1,081,252		741,894		544,568		299,448		2,191,006		1,253,439		371,822		423,522
Units purchased		367,090		573,628		540,746		635,105		6,567,379		2,001,407		52,561		108,285
Units redeemed		(504,424	)	(234,270	)	(519,114	)	(389,985	)	(5,808,519	)	(1,063,840	)	(164,919	)	(159,985	)
Ending units		943,918		1,081,252		566,200		544,568		2,949,866		2,191,006		259,464		371,822

(Continued)

31

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	ACVU2					ACVV				ACVV2				ACVVS1
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(213,195	)	(266,453	)	1,066,775		469,525		559,190		(176,377	)	(102,981	)	(75,605	)
Realized gain (loss) on investments		(322,735	)	330,099		(4,301,880	)	9,598,435		(7,305,365	)	360,924		(795,743	)	477,054
Change in unrealized gain (loss) on investments		(8,385,285	)	2,660,033		(35,779,967	)	(29,809,947	)	(31,535,146	)	(16,245,949	)	(4,296,789	)	987,151
Reinvested capital gains		2,339,161		-		11,805,540		12,263,481		10,753,584		8,796,015		440,464		-
Net increase (decrease) in contract owners’ equity resulting from operations		(6,582,054	)	2,723,679		(27,209,532	)	(7,478,506	)	(27,527,737	)	(7,265,387	)	(4,755,049	)	1,388,600
Equity transactions:
Purchase payments received from contract owners (note 3)		263,514		592,859		3,710,303		6,043,313		7,568,576		19,940,784		462,143		285,619
Transfers between funds		(1,378,995	)	(313,951	)	(10,174,729	)	(13,596,891	)	(30,522	)	(10,105,311	)	(3,450,251	)	11,726,422
Redemptions (note 3)		(1,445,503	)	(991,683	)	(15,459,272	)	(25,715,312	)	(7,506,778	)	(6,503,115	)	(1,028,529	)	(1,027,911	)
Annuity benefits		(6,086	)	-		(31,982	)	(42,121	)	(6,538	)	(7,593	)	(359	)	-
Contract maintenance charges (note 2)		(2,170	)	(2,156	)	(41,310	)	(51,366	)	(36,824	)	(12,631	)	(2,988	)	(1,326	)
Contingent deferred sales charges (note 2)		(22,156	)	(20,329	)	(47,861	)	(62,941	)	(126,133	)	(121,106	)	(1,609	)	(2,245	)
Adjustments to maintain reserves		(433	)	(763	)	3,193		8,322		(578	)	(1,741	)	1,042		(66	)
Net equity transactions		(2,591,829	)	(736,023	)	(22,041,658	)	(33,416,996	)	(138,797	)	3,189,287		(4,020,551	)	10,980,493
Net change in contract owners’ equity		(9,173,883	)	1,987,656		(49,251,190	)	(40,895,502	)	(27,666,534	)	(4,076,100	)	(8,775,600	)	12,369,093
Contract owners’ equity beginning of period		17,056,680		15,069,024		112,653,074		153,548,576		99,983,420		104,059,520		12,519,496		150,403
Contract owners’ equity end of period	$	7,882,797		17,056,680		63,401,884		112,653,074		72,316,886		99,983,420		3,743,896		12,519,496
CHANGES IN UNITS:
Beginning units		1,079,627		1,132,582		4,831,480		6,165,160		5,881,576		5,699,037		951,361		15,762
Units purchased		195,819		180,174		484,315		693,676		2,046,396		1,890,605		485,752		1,521,816
Units redeemed		(406,930	)	(233,129	)	(1,552,054	)	(2,027,356	)	(2,011,068	)	(1,708,066	)	(876,626	)	(586,217	)
Ending units		868,516		1,079,627		3,763,741		4,831,480		5,916,904		5,881,576		560,487		951,361

(Continued)

32

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	ACVVS2					AFGF				AFHY				AFGC
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(412,904	)	(275,300	)	(33,996	)	(66,475	)	40,903		137,895		23,930		93,791
Realized gain (loss) on investments		(3,006,762	)	933,269		(203,295	)	(100,047	)	(112,801	)	34,710		(9,493	)	(9,996	)
Change in unrealized gain (loss) on investments		(13,687,213	)	3,233,694		(8,557,306	)	902,392		(66,558	)	(139,329	)	79,800		(1,552	)
Reinvested capital gains		1,199,839		-		1,504,481		1,271,561		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(15,907,040	)	3,891,663		(7,290,116	)	2,007,431		(138,456	)	33,276		94,237		82,243
Equity transactions:
Purchase payments received from contract owners (note 3)		2,968,968		6,978,160		61,398		116,923		2,469		13,231		43,875		2,744
Transfers between funds		(9,785,775	)	26,192,187		(185,975	)	(638,499	)	87,135		117,519		202,246		(38,480	)
Redemptions (note 3)		(2,609,875	)	(1,996,213	)	(1,301,749	)	(2,726,132	)	(102,509	)	(155,659	)	(272,926	)	(347,846	)
Annuity benefits		-		-		(667	)	(786	)	(2,852	)	(8,268	)	(1,585	)	(5,171	)
Contract maintenance charges (note 2)		(9,137	)	(628	)	(5,075	)	(5,928	)	(561	)	(644	)	(946	)	(1,016	)
Contingent deferred sales charges (note 2)		(71,144	)	(64,323	)	(1,883	)	(5,694	)	(445	)	(144	)	(188	)	(36	)
Adjustments to maintain reserves		(332	)	(326	)	229		402		373		647		147		50
Net equity transactions		(9,507,295	)	31,108,857		(1,433,722	)	(3,259,714	)	(16,390	)	(33,318	)	(29,377	)	(389,755	)
Net change in contract owners’ equity		(25,414,335	)	35,000,520		(8,723,838	)	(1,252,283	)	(154,846	)	(42	)	64,860		(307,512	)
Contract owners’ equity beginning of period		37,937,432		2,936,912		17,586,233		18,838,516		1,457,104		1,457,146		1,455,245		1,762,757
Contract owners’ equity end of period	$	12,523,097		37,937,432		8,862,395		17,586,233		1,302,258		1,457,104		1,520,105		1,455,245
CHANGES IN UNITS:
Beginning units		2,291,468		242,388		204,499		243,531		35,586		35,506		49,215		62,699
Units purchased		1,475,763		2,821,443		1,406		1,475		65,926		54,582		11,737		1,843
Units redeemed		(2,267,374	)	(772,363	)	(20,018	)	(40,507	)	(59,149	)	(54,502	)	(12,607	)	(15,327	)
Ending units		1,499,857		2,291,468		185,887		204,499		42,363		35,586		48,345		49,215

(Continued)

33

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	CHSMM					WVCP				WIEP				WSCP
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	253,898		697,675		10,018		(52,984	)	98,226		(135,165	)	(620,002	)	(991,391	)
Realized gain (loss) on investments		-		-		62,433		436,074		1,819,938		3,944,993		3,205,001		5,787,037
Change in unrealized gain (loss) on investments		-		-		(1,453,797	)	(529,304	)	(16,519,318	)	1,913,594		(22,557,519	)	(5,736,186	)
Reinvested capital gains		-		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		253,898		697,675		(1,381,346	)	(146,214	)	(14,601,154	)	5,723,422		(19,972,520	)	(940,540	)
Equity transactions:
Purchase payments received from contract owners (note 3)		9,962,432		16,682,708		-		(14	)	598		(223	)	1,694,645		2,238,058
Transfers between funds		(1,639,364	)	(11,848,998	)	(99,463	)	(316,739	)	(1,133,926	)	(1,511,923	)	(3,587,750	)	(5,447,253	)
Redemptions (note 3)		(4,945,856	)	(750,909	)	(295,926	)	(720,027	)	(4,085,991	)	(7,100,252	)	(7,660,323	)	(13,676,975	)
Annuity benefits		(31,171	)	(31,426	)	(293	)	(1,477	)	(9,663	)	(11,624	)	(3,488	)	(5,787	)
Contract maintenance charges (note 2)		(972	)	(869	)	(1,817	)	(2,496	)	(13,018	)	(15,210	)	(29,426	)	(36,099	)
Contingent deferred sales charges (note 2)		-		-		(166	)	(1,117	)	(3,058	)	(7,133	)	(17,023	)	(33,382	)
Adjustments to maintain reserves		243		424		(242	)	22		354		327		(784	)	(474	)
Net equity transactions		3,345,312		4,050,930		(397,907	)	(1,041,848	)	(5,244,704	)	(8,646,038	)	(9,604,149	)	(16,961,912	)
Net change in contract owners’ equity		3,599,210		4,748,605		(1,779,253	)	(1,188,062	)	(19,845,858	)	(2,922,616	)	(29,576,669	)	(17,902,452	)
Contract owners’ equity beginning of period		22,227,469		17,478,864		3,186,684		4,374,746		38,374,431		41,297,047		62,950,779		80,853,231
Contract owners’ equity end of period	$	25,826,679		22,227,469		1,407,431		3,186,684		18,528,573		38,374,431		33,374,110		62,950,779
CHANGES IN UNITS:
Beginning units		2,030,093		1,650,023		219,613		285,608		2,123,568		2,629,775		3,619,869		4,550,318
Units purchased		1,563,593		2,170,101		-		2		-		-		159,549		193,707
Units redeemed		(1,225,845	)	(1,790,031	)	(34,987	)	(65,997	)	(361,684	)	(506,207	)	(806,052	)	(1,124,156	)
Ending units		2,367,841		2,030,093		184,626		219,613		1,761,884		2,123,568		2,973,366		3,619,869

(Continued)

34

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	DVSCS					DSIF				DSIFS				DCAP
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(297,850	)	(568,150	)	2,582,898		1,702,520		252,035		(65,459	)	245,544		118,620
Realized gain (loss) on investments		(3,516,194	)	2,455,166		5,656,285		24,784,603		1,002,340		2,593,161		1,553,867		3,243,400
Change in unrealized gain (loss) on investments		(21,355,555	)	(5,013,759	)	(168,144,260	)	(5,280,793	)	(47,525,903	)	1,445,442		(16,138,718	)	(764,379	)
Reinvested capital gains		6,476,393		2,189,792		-		-		-		-		2,604,428		-
Net increase (decrease) in contract owners’ equity resulting from operations		(18,693,206	)	(936,951	)	(159,905,077	)	21,206,330		(46,271,528	)	3,973,144		(11,734,879	)	2,597,641
Equity transactions:
Purchase payments received from contract owners (note 3)		5,287,868		7,624,894		12,316,477		16,656,824		9,967,791		16,504,464		1,378,999		1,712,433
Transfers between funds		4,561,416		(4,262,537	)	(16,341,811	)	(25,968,939	)	(4,029,597	)	(4,769,132	)	(1,566,848	)	(2,887,234	)
Redemptions (note 3)		(5,585,685	)	(6,166,157	)	(61,431,940	)	(94,651,744	)	(10,684,717	)	(8,194,832	)	(5,785,964	)	(7,576,992	)
Annuity benefits		(5,203	)	(6,099	)	(151,569	)	(185,413	)	(36,345	)	(9,717	)	(4,653	)	(5,312	)
Contract maintenance charges (note 2)		(15,192	)	(12,508	)	(210,970	)	(254,516	)	(22,521	)	(16,579	)	(19,321	)	(22,507	)
Contingent deferred sales charges (note 2)		(66,343	)	(53,959	)	(156,662	)	(194,471	)	(143,724	)	(142,539	)	(21,882	)	(22,983	)
Adjustments to maintain reserves		11,543		(696	)	40,218		(6,384	)	1,492		(874	)	3,246		813
Net equity transactions		4,188,404		(2,877,062	)	(65,936,257	)	(104,604,643	)	(4,947,621	)	3,370,791		(6,016,423	)	(8,801,782	)
Net change in contract owners’ equity		(14,504,802	)	(3,814,013	)	(225,841,334	)	(83,398,313	)	(51,219,149	)	7,343,935		(17,751,302	)	(6,204,141	)
Contract owners’ equity beginning of period		49,335,431		53,149,444		465,297,842		548,696,155		124,929,701		117,585,766		42,977,034		49,181,175
Contract owners’ equity end of period	$	34,830,629		49,335,431		239,456,508		465,297,842		73,710,552		124,929,701		25,225,732		42,977,034
CHANGES IN UNITS:
Beginning units		2,789,752		3,003,653		14,260,866		17,471,027		7,232,672		7,034,417		2,667,862		3,227,567
Units purchased		1,571,725		686,685		901,740		993,906		1,795,788		1,528,406		259,379		235,278
Units redeemed		(1,511,555	)	(900,586	)	(3,333,298	)	(4,204,067	)	(2,124,671	)	(1,330,151	)	(675,347	)	(794,983	)
Ending units		2,849,922		2,789,752		11,829,308		14,260,866		6,903,789		7,232,672		2,251,894		2,667,862

(Continued)

35

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	DCAPS					DVDLS				DGI				FALFS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	15,292		(33,687	)	(17,381	)	(35,119	)	(154,519	)	(190,325	)	(955	)	(7,777	)
Realized gain (loss) on investments		132,170		1,230,059		(471,383	)	(122,864	)	289,902		1,218,489		(319,001	)	(10,298	)
Change in unrealized gain (loss) on investments		(8,439,529	)	(25,241	)	(569,521	)	(767,321	)	(13,969,271	)	(350,037	)	(629,269	)	(463,936	)
Reinvested capital gains		1,429,961		-		109,712		510,033		2,875,266		1,493,814		395,831		242,233
Net increase (decrease) in contract owners’ equity resulting from operations		(6,862,106	)	1,171,131		(948,573	)	(415,271	)	(10,958,622	)	2,171,941		(553,394	)	(239,778	)
Equity transactions:
Purchase payments received from contract owners (note 3)		1,801,955		1,670,025		16,386		51,666		863,225		1,253,719		35,715		55,265
Transfers between funds		3,009,492		(4,240,799	)	(204,289	)	(882,557	)	(1,070,537	)	(2,223,188	)	(126,176	)	(292,059	)
Redemptions (note 3)		(1,596,643	)	(1,336,835	)	(241,992	)	(505,113	)	(4,036,911	)	(6,123,237	)	(250,624	)	(135,357	)
Annuity benefits		(10,838	)	(12,231	)	(80	)	(147	)	(707	)	(253	)	-		-
Contract maintenance charges (note 2)		(5,305	)	(2,476	)	(453	)	(535	)	(14,857	)	(17,894	)	(327	)	(407	)
Contingent deferred sales charges (note 2)		(27,844	)	(30,536	)	(3,884	)	(9,329	)	(10,118	)	(11,539	)	(3,429	)	(2,799	)
Adjustments to maintain reserves		(476	)	(670	)	(127	)	(308	)	(316	)	(317	)	2,258		1
Net equity transactions		3,170,341		(3,953,522	)	(434,439	)	(1,346,323	)	(4,270,221	)	(7,122,709	)	(342,583	)	(375,356	)
Net change in contract owners’ equity		(3,691,765	)	(2,782,391	)	(1,383,012	)	(1,761,594	)	(15,228,843	)	(4,950,768	)	(895,977	)	(615,134	)
Contract owners’ equity beginning of period		22,189,811		24,972,202		2,615,040		4,376,634		29,322,317		34,273,085		1,796,271		2,411,405
Contract owners’ equity end of period	$	18,498,046		22,189,811		1,232,028		2,615,040		14,093,474		29,322,317		900,294		1,796,271
CHANGES IN UNITS:
Beginning units		1,388,567		1,641,093		189,656		278,075		1,896,207		2,372,008		123,768		147,270
Units purchased		633,546		221,676		33,234		15,250		99,197		138,241		13,542		7,368
Units redeemed		(343,706	)	(474,202	)	(77,401	)	(103,669	)	(446,203	)	(614,042	)	(42,071	)	(30,870	)
Ending units		1,678,407		1,388,567		145,489		189,656		1,549,201		1,896,207		95,239		123,768

(Continued)

36

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FCA2S					FVMOS				FQB				FQBS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(40,278	)	(33,938	)	(66,537	)	(21,841	)	626,415		504,947		1,821,339		1,487,892
Realized gain (loss) on investments		74,309		169,112		(782,026	)	(62,910	)	(415,572	)	(370,067	)	(886,850	)	(335,016	)
Change in unrealized gain (loss) on investments		(993,863	)	115,435		(255,965	)	(80,754	)	(1,429,335	)	469,113		(6,204,635	)	675,015
Reinvested capital gains		57,519		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(902,313	)	250,609		(1,104,528	)	(165,505	)	(1,218,492	)	603,993		(5,270,146	)	1,827,891
Equity transactions:
Purchase payments received from contract owners (note 3)		46,785		33,041		392,337		1,320,499		682,154		822,035		4,553,687		6,956,938
Transfers between funds		(142,954	)	(186,697	)	8,099,609		(1,064,658	)	(591,959	)	2,084,685		(1,231,820	)	(14,262	)
Redemptions (note 3)		(191,860	)	(155,237	)	(1,362,130	)	(499,766	)	(3,190,091	)	(3,229,978	)	(6,367,770	)	(3,762,736	)
Annuity benefits		-		-		-		-		(628	)	(648	)	-		-
Contract maintenance charges (note 2)		(368	)	(342	)	(1,634	)	(197	)	(6,742	)	(6,537	)	(13,411	)	(4,764	)
Contingent deferred sales charges (note 2)		(1,902	)	(2,705	)	(16,249	)	(3,714	)	(11,311	)	(7,792	)	(77,276	)	(66,058	)
Adjustments to maintain reserves		(198	)	(116	)	(1,312	)	(161	)	2,976		(127	)	1,091		(925	)
Net equity transactions		(290,497	)	(312,056	)	7,110,621		(247,997	)	(3,115,601	)	(338,362	)	(3,135,499	)	3,108,193
Net change in contract owners’ equity		(1,192,810	)	(61,447	)	6,006,093		(413,502	)	(4,334,093	)	265,631		(8,405,645	)	4,936,084
Contract owners’ equity beginning of period		3,164,519		3,225,966		2,944,941		3,358,443		16,036,345		15,770,714		56,663,144		51,727,060
Contract owners’ equity end of period	$	1,971,709		3,164,519		8,951,034		2,944,941		11,702,252		16,036,345		48,257,499		56,663,144
CHANGES IN UNITS:
Beginning units		192,944		212,094		295,662		326,855		1,330,368		1,361,037		5,168,222		4,875,943
Units purchased		17,557		18,628		2,376,509		387,050		431,388		646,485		1,451,987		1,423,771
Units redeemed		(36,515	)	(37,778	)	(1,753,712	)	(418,243	)	(700,470	)	(677,154	)	(1,775,828	)	(1,131,492	)
Ending units		173,986		192,944		918,459		295,662		1,061,286		1,330,368		4,844,381		5,168,222

(Continued)

37

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FEIP					FEI2				FGP				FG2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	5,677,503		2,995,154		922,667		92,924		(3,096,547	)	(3,571,883	)	(707,628	)	(897,117	)
Realized gain (loss) on investments		(22,853,554	)	24,425,527		(5,151,988	)	3,087,061		(38,233,407	)	(42,957,388	)	6,074,074		2,736,045
Change in unrealized gain (loss) on investments		(291,661,312	)	(86,433,660	)	(72,236,312	)	(19,046,126	)	(284,292,945	)	209,381,825		(42,230,125	)	11,949,939
Reinvested capital gains		644,601		66,552,673		147,652		14,939,748		-		613,327		-		57,287
Net increase (decrease) in contract owners’ equity resulting from operations		(308,192,762	)	7,539,694		(76,317,981	)	(926,393	)	(325,622,899	)	163,465,881		(36,863,679	)	13,846,154
Equity transactions:
Purchase payments received from contract owners (note 3)		15,056,540		19,300,641		13,979,845		27,141,443		15,928,324		19,860,403		11,554,495		7,302,047
Transfers between funds		(30,606,125	)	(30,635,671	)	(6,409,760	)	(8,257,031	)	(22,846,169	)	(32,437,815	)	(21,081,780	)	23,190,504
Redemptions (note 3)		(101,550,592	)	(147,869,726	)	(13,282,440	)	(11,613,840	)	(86,975,995	)	(127,274,990	)	(6,360,602	)	(6,086,121	)
Annuity benefits		(212,404	)	(260,951	)	(1,681	)	(264	)	(249,627	)	(301,610	)	(1,241	)	(265	)
Contract maintenance charges (note 2)		(298,088	)	(364,544	)	(46,832	)	(17,067	)	(366,984	)	(421,427	)	(11,925	)	(6,506	)
Contingent deferred sales charges (note 2)		(184,181	)	(219,204	)	(186,746	)	(189,295	)	(190,856	)	(251,043	)	(129,239	)	(135,571	)
Adjustments to maintain reserves		15,230		11,568		(927	)	(2,493	)	(9,836	)	(12,473	)	(637	)	(981	)
Net equity transactions		(117,779,620	)	(160,037,887	)	(5,948,541	)	7,061,453		(94,711,143	)	(140,838,955	)	(16,030,929	)	24,263,107
Net change in contract owners’ equity		(425,972,382	)	(152,498,193	)	(82,266,522	)	6,135,060		(420,334,042	)	22,626,926		(52,894,608	)	38,109,261
Contract owners’ equity beginning of period		790,131,218		942,629,411		176,175,854		170,040,794		747,146,384		724,519,458		89,338,917		51,229,656
Contract owners’ equity end of period	$	364,158,836		790,131,218		93,909,332		176,175,854		326,812,342		747,146,384		36,444,309		89,338,917
CHANGES IN UNITS:
Beginning units		16,421,321		19,837,866		9,650,205		9,285,688		12,473,199		15,379,782		4,763,730		3,396,781
Units purchased		496,435		701,813		2,227,397		2,386,885		479,120		638,127		2,037,068		2,778,168
Units redeemed		(3,669,599	)	(4,118,358	)	(2,734,670	)	(2,022,368	)	(2,637,203	)	(3,544,710	)	(3,050,263	)	(1,411,219	)
Ending units		13,248,157		16,421,321		9,142,932		9,650,205		10,315,116		12,473,199		3,750,535		4,763,730

(Continued)

38

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FHIP					FHIPR				FOP				FOPR
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	5,290,875		6,731,888		960,686		919,612		613,111		1,481,116		1,227,832		3,036,963
Realized gain (loss) on investments		(3,647,174	)	(1,014,187	)	(1,763,206	)	(163,737	)	2,224,031		6,851,811		6,254,700		15,212,922
Change in unrealized gain (loss) on investments		(23,167,718	)	(3,213,240	)	(2,437,907	)	(927,735	)	(41,003,814	)	(2,461,123	)	(82,518,425	)	(5,920,382	)
Reinvested capital gains		-		-		-		-		7,179,319		4,937,611		14,196,989		10,719,798
Net increase (decrease) in contract owners’ equity resulting from operations		(21,524,017	)	2,504,461		(3,240,427	)	(171,860	)	(30,987,353	)	10,809,415		(60,838,904	)	23,049,301
Equity transactions:
Purchase payments received from contract owners (note 3)		897		1,356,902		2,490,054		2,036,790		4,566,925		5,478,045		(11,571	)	33,919
Transfers between funds		(7,375,107	)	(32,864,736	)	4,981,696		12,741,219		(5,043,846	)	(562,141	)	(4,060,821	)	(4,929,862	)
Redemptions (note 3)		(14,961,277	)	(24,416,043	)	(2,179,479	)	(2,409,590	)	(9,493,858	)	(12,645,384	)	(16,807,021	)	(25,565,742	)
Annuity benefits		(11,911	)	(17,044	)	-		-		(2,336	)	(1,367	)	(25,661	)	(35,793	)
Contract maintenance charges (note 2)		(43,012	)	(53,063	)	(4,253	)	(1,820	)	(20,961	)	(23,507	)	(63,642	)	(76,516	)
Contingent deferred sales charges (note 2)		(23,303	)	(43,593	)	(7,054	)	(2,128	)	(32,545	)	(47,528	)	(10,816	)	(25,077	)
Adjustments to maintain reserves		(4,812	)	1,254		16		7,298		(9,386	)	22,881		2,591		(8,103	)
Net equity transactions		(22,418,525	)	(56,036,323	)	5,280,980		12,371,769		(10,036,007	)	(7,779,001	)	(20,976,941	)	(30,607,174	)
Net change in contract owners’ equity		(43,942,542	)	(53,531,862	)	2,040,553		12,199,909		(41,023,360	)	3,030,414		(81,815,845	)	(7,557,873	)
Contract owners’ equity beginning of period		100,103,750		153,635,612		12,199,909		-		75,578,818		72,548,404		150,627,421		158,185,294
Contract owners’ equity end of period	$	56,161,208		100,103,750		14,240,462		12,199,909		34,555,458		75,578,818		68,811,576		150,627,421
CHANGES IN UNITS:
Beginning units		4,420,785		7,076,863		1,244,598		-		3,885,215		4,321,249		4,559,645		5,556,872
Units purchased		-		499,761		2,792,494		2,989,379		515,738		863,243		-		-
Units redeemed		(1,086,911	)	(3,155,839	)	(2,077,002	)	(1,744,781	)	(1,197,183	)	(1,299,277	)	(817,638	)	(997,227	)
Ending units		3,333,874		4,420,785		1,960,090		1,244,598		3,203,770		3,885,215		3,742,007		4,559,645

(Continued)

39

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FO2					FO2R				FAMP				FCP
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	51,280		129,897		403,086		892,230		2,556,993		13,211,165		(2,198,685	)	(3,214,011	)
Realized gain (loss) on investments		87,804		482,769		778,749		3,107,671		(9,709,223	)	(2,449,644	)	(17,816,928	)	31,808,380
Change in unrealized gain (loss) on investments		(4,593,216	)	34,575		(38,945,580	)	425,517		(90,964,532	)	17,639,565		(275,843,406	)	(93,687,021	)
Reinvested capital gains		822,369		605,213		7,101,800		3,454,152		24,368,853		8,056,729		16,152,805		171,059,909
Net increase (decrease) in contract owners’ equity resulting from operations		(3,631,763	)	1,252,454		(30,661,945	)	7,879,570		(73,747,909	)	36,457,815		(279,706,214	)	105,967,257
Equity transactions:
Purchase payments received from contract owners (note 3)		(167	)	-		9,704,743		12,104,049		5,213,048		6,023,184		16,761,861		21,316,246
Transfers between funds		(557,841	)	(873,526	)	(8,438,623	)	7,490,542		(5,935,338	)	(9,534,366	)	(27,428,407	)	(16,810,481	)
Redemptions (note 3)		(473,569	)	(397,450	)	(6,502,983	)	(4,835,717	)	(37,525,307	)	(46,666,315	)	(83,447,730	)	(124,597,427	)
Annuity benefits		-		-		(7,195	)	(8,406	)	(55,470	)	(56,534	)	(126,245	)	(129,623	)
Contract maintenance charges (note 2)		(774	)	(854	)	(14,892	)	(4,849	)	(132,736	)	(146,796	)	(245,299	)	(277,997	)
Contingent deferred sales charges (note 2)		(7,550	)	(3,020	)	(60,537	)	(88,045	)	(41,623	)	(58,951	)	(169,102	)	(238,305	)
Adjustments to maintain reserves		(218	)	(14	)	(459	)	(1,143	)	(5,658	)	3,565		7,927		3,590
Net equity transactions		(1,040,119	)	(1,274,864	)	(5,319,946	)	14,656,431		(38,483,084	)	(50,436,213	)	(94,646,995	)	(120,733,997	)
Net change in contract owners’ equity		(4,671,882	)	(22,410	)	(35,981,891	)	22,536,001		(112,230,993	)	(13,978,398	)	(374,353,209	)	(14,766,740	)
Contract owners’ equity beginning of period		8,701,501		8,723,911		71,531,400		48,995,399		273,081,048		287,059,446		707,372,081		722,138,821
Contract owners’ equity end of period	$	4,029,619		8,701,501		35,549,509		71,531,400		160,850,055		273,081,048		333,018,872		707,372,081
CHANGES IN UNITS:
Beginning units		341,789		395,811		4,158,503		3,262,947		8,375,163		10,118,900		18,212,023		21,578,263
Units purchased		-		-		1,663,221		2,001,464		289,886		241,950		1,249,080		1,567,253
Units redeemed		(54,954	)	(54,022	)	(2,082,459	)	(1,105,908	)	(1,698,734	)	(1,985,687	)	(4,349,635	)	(4,933,493	)
Ending units		286,835		341,789		3,739,265		4,158,503		6,966,315		8,375,163		15,111,468		18,212,023

(Continued)

40

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FC2					FIGBS				FIGBP2				FGOP
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(2,770,700	)	(3,017,896	)	573,111		493,230		9,553,189		3,080,879		(210,662	)	(413,842	)
Realized gain (loss) on investments		(12,810,315	)	8,826,918		(193,446	)	(200,098	)	(4,179,131	)	(1,658	)	1,772,452		2,373,422
Change in unrealized gain (loss) on investments		(165,897,358	)	(51,712,817	)	(1,327,820	)	236,054		(29,568,921	)	5,288,689		(17,621,870	)	3,988,330
Reinvested capital gains		9,589,329		97,774,253		16,585		-		351,270		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(171,889,044	)	51,870,458		(931,570	)	529,186		(23,843,593	)	8,367,910		(16,060,080	)	5,947,910
Equity transactions:
Purchase payments received from contract owners (note 3)		24,540,391		67,268,011		1,162,018		1,568,970		54,687,190		129,090,048		827,653		938,683
Transfers between funds		(22,808,450	)	(13,029,550	)	2,734,818		3,693,224		(36,533,551	)	130,207,389		(1,519,935	)	511,508
Redemptions (note 3)		(31,452,400	)	(21,253,658	)	(4,592,430	)	(3,441,214	)	(27,861,079	)	(13,914,283	)	(3,782,398	)	(5,670,702	)
Annuity benefits		(17,617	)	(8,710	)	(4,346	)	(4,478	)	(7,410	)	(7,306	)	-		(547	)
Contract maintenance charges (note 2)		(65,845	)	(34,466	)	(7,149	)	(5,677	)	(980,104	)	(289,833	)	(14,775	)	(17,715	)
Contingent deferred sales charges (note 2)		(455,251	)	(394,201	)	(13,406	)	(8,999	)	(505,009	)	(182,075	)	(11,890	)	(12,140	)
Adjustments to maintain reserves		(1,646	)	(4,781	)	(98	)	114		(1,076	)	(3,732	)	(44	)	(248	)
Net equity transactions		(30,260,818	)	32,542,645		(720,593	)	1,801,940		(11,201,039	)	244,900,208		(4,501,389	)	(4,251,161	)
Net change in contract owners’ equity		(202,149,862	)	84,413,103		(1,652,163	)	2,331,126		(35,044,632	)	253,268,118		(20,561,469	)	1,696,749
Contract owners’ equity beginning of period		404,097,470		319,684,367		20,337,651		18,006,525		440,419,419		187,151,301		31,965,894		30,269,145
Contract owners’ equity end of period	$	201,947,608		404,097,470		18,685,488		20,337,651		405,374,787		440,419,419		11,404,425		31,965,894
CHANGES IN UNITS:
Beginning units		18,440,700		16,826,492		1,827,483		1,663,367		39,988,032		17,350,200		2,355,583		2,712,499
Units purchased		3,715,233		5,959,072		790,286		780,274		11,211,521		25,764,127		255,235		299,340
Units redeemed		(5,817,564	)	(4,344,864	)	(856,904	)	(616,158	)	(12,404,128	)	(3,126,295	)	(717,512	)	(656,256	)
Ending units		16,338,369		18,440,700		1,760,865		1,827,483		38,795,425		39,988,032		1,893,306		2,355,583

(Continued)

41

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FMCS					FMC2				FVSS				FVSS2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(183,971	)	(110,208	)	(2,673,061	)	(2,392,348	)	(65,277	)	(84,586	)	(178,921	)	(280,001	)
Realized gain (loss) on investments		(1,347,315	)	220,132		(5,827,333	)	7,782,216		(1,887,361	)	193,171		(2,317,552	)	191,427
Change in unrealized gain (loss) on investments		(10,922,741	)	736,988		(116,415,162	)	1,323,816		(6,183,535	)	(1,040,611	)	(11,614,273	)	(1,569,302	)
Reinvested capital gains		2,951,026		1,197,867		31,427,590		17,794,132		2,098,363		1,660,822		3,632,807		2,754,390
Net increase (decrease) in contract owners’ equity resulting from operations		(9,503,001	)	2,044,779		(93,487,966	)	24,507,816		(6,037,810	)	728,796		(10,477,939	)	1,096,514
Equity transactions:
Purchase payments received from contract owners (note 3)		1,242,554		1,404,189		31,139,795		39,733,200		621,435		1,020,007		207,268		350,805
Transfers between funds		3,881,020		9,801,087		(15,335,365	)	(6,889,505	)	(1,670,391	)	(203,694	)	(2,333,561	)	(1,457,584	)
Redemptions (note 3)		(3,115,704	)	(2,352,959	)	(17,969,094	)	(13,052,427	)	(1,338,013	)	(2,788,618	)	(1,402,382	)	(2,088,186	)
Annuity benefits		(1,648	)	(1,345	)	(12,539	)	(13,759	)	(1,652	)	(2,185	)	-		-
Contract maintenance charges (note 2)		(7,176	)	(5,295	)	(69,752	)	(18,182	)	(4,279	)	(6,146	)	(2,429	)	(3,124	)
Contingent deferred sales charges (note 2)		(11,593	)	(5,821	)	(273,436	)	(273,159	)	(10,903	)	(10,035	)	(28,661	)	(29,920	)
Adjustments to maintain reserves		397		1,122		(3,479	)	(3,858	)	(82	)	(62	)	(389	)	(692	)
Net equity transactions		1,987,850		8,840,978		(2,523,870	)	19,482,310		(2,403,885	)	(1,990,733	)	(3,560,154	)	(3,228,701	)
Net change in contract owners’ equity		(7,515,151	)	10,885,757		(96,011,836	)	43,990,126		(8,441,695	)	(1,261,937	)	(14,038,093	)	(2,132,187	)
Contract owners’ equity beginning of period		21,146,530		10,260,773		228,760,061		184,769,935		13,268,239		14,530,176		22,900,224		25,032,411
Contract owners’ equity end of period	$	13,631,379		21,146,530		132,748,225		228,760,061		4,826,544		13,268,239		8,862,131		22,900,224
CHANGES IN UNITS:
Beginning units		1,880,661		1,041,179		8,968,155		8,219,016		841,048		959,780		1,045,050		1,184,531
Units purchased		974,883		1,436,561		3,298,099		3,375,566		126,574		493,569		104,473		233,355
Units redeemed		(824,655	)	(597,079	)	(3,487,133	)	(2,626,427	)	(332,690	)	(612,301	)	(304,847	)	(372,836	)
Ending units		2,030,889		1,880,661		8,779,121		8,968,155		634,932		841,048		844,676		1,045,050

(Continued)

42

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FNRS2					FF10S				FF10S2				FF20S
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(1,737,258	)	(1,085,512	)	81,885		70,444		458,338		208,068		91,404		64,766
Realized gain (loss) on investments		(2,801,675	)	677,253		(296,731	)	144,814		(138,352	)	808,691		(274,304	)	70,701
Change in unrealized gain (loss) on investments		(73,540,004	)	22,153,876		(1,585,913	)	(146,708	)	(16,682,727	)	220,289		(2,577,127	)	(29,909	)
Reinvested capital gains		3,709,816		4,665,935		225,333		102,779		2,023,856		1,113,763		333,979		152,908
Net increase (decrease) in contract owners’ equity resulting from operations		(74,369,121	)	26,411,552		(1,575,426	)	171,329		(14,338,885	)	2,350,811		(2,426,048	)	258,466
Equity transactions:
Purchase payments received from contract owners (note 3)		13,947,269		18,747,996		260,274		267,883		9,245,526		8,174,884		719,159		902,302
Transfers between funds		10,630,753		35,298,613		2,427,197		3,393,807		4,366,667		5,603,004		2,450,958		3,646,238
Redemptions (note 3)		(13,721,131	)	(6,729,964	)	(1,752,731	)	(371,701	)	(3,195,339	)	(1,810,389	)	(1,265,296	)	(292,758	)
Annuity benefits		(1,017	)	-		(9,088	)	(7,620	)	-		-		-		-
Contract maintenance charges (note 2)		(18,714	)	(8,600	)	(2,045	)	(1,030	)	(39,167	)	(2,141	)	(3,543	)	(1,791	)
Contingent deferred sales charges (note 2)		(185,659	)	(86,561	)	(619	)	(1,046	)	(64,656	)	(41,992	)	(3,114	)	(289	)
Adjustments to maintain reserves		2,373		7,080		1,600		3,901		(264	)	(937	)	(41	)	(52	)
Net equity transactions		10,653,874		47,228,564		924,588		3,284,194		10,312,767		11,922,429		1,898,123		4,253,650
Net change in contract owners’ equity		(63,715,247	)	73,640,116		(650,838	)	3,455,523		(4,026,118	)	14,273,240		(527,925	)	4,512,116
Contract owners’ equity beginning of period		118,510,583		44,870,467		5,167,038		1,711,515		45,656,435		31,383,195		5,970,926		1,458,810
Contract owners’ equity end of period	$	54,795,336		118,510,583		4,516,200		5,167,038		41,630,317		45,656,435		5,443,001		5,970,926
CHANGES IN UNITS:
Beginning units		5,413,172		2,923,524		450,333		162,866		3,748,220		2,744,382		521,510		138,522
Units purchased		4,290,235		4,130,822		344,061		506,460		1,573,560		1,686,206		414,570		491,287
Units redeemed		(4,108,920	)	(1,641,174	)	(259,726	)	(218,993	)	(676,491	)	(682,368	)	(220,226	)	(108,299	)
Ending units		5,594,487		5,413,172		534,668		450,333		4,645,289		3,748,220		715,854		521,510

(Continued)

43

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FF20S2					FF30S				FF30S2				FTVDM3
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	662,201		361,556		48,944		42,417		60,859		53,768		470,357		142,302
Realized gain (loss) on investments		21,400		931,099		(109,513	)	29,172		(195,897	)	384,447		(3,006,698	)	1,856,941
Change in unrealized gain (loss) on investments		(32,866,723	)	226,850		(2,111,373	)	(11,503	)	(9,367,301	)	131,830		(33,613,986	)	4,448,163
Reinvested capital gains		3,851,746		1,988,265		293,628		114,826		1,294,149		707,001		8,020,747		2,542,511
Net increase (decrease) in contract owners’ equity resulting from operations		(28,331,376	)	3,507,770		(1,878,314	)	174,912		(8,208,190	)	1,277,046		(28,129,580	)	8,989,917
Equity transactions:
Purchase payments received from contract owners (note 3)		22,776,707		20,625,979		578,100		372,998		2,613,199		2,333,052		4,579,194		14,153,137
Transfers between funds		(2,330,118	)	9,880,933		1,649,955		2,370,626		725,979		3,306,770		(9,723,919	)	10,471,829
Redemptions (note 3)		(2,832,453	)	(1,658,227	)	(501,886	)	(254,255	)	(605,084	)	(1,557,617	)	(4,096,581	)	(2,862,236	)
Annuity benefits		-		-		-		-		-		-		-		-
Contract maintenance charges (note 2)		(93,340	)	(5,086	)	(3,146	)	(1,204	)	(3,615	)	(2,325	)	(4,953	)	(3,356	)
Contingent deferred sales charges (note 2)		(64,725	)	(47,115	)	(3,986	)	(408	)	(29,498	)	(12,709	)	(40,311	)	(29,483	)
Adjustments to maintain reserves		(362	)	(1,030	)	(52	)	(43	)	(220	)	(472	)	(296	)	(1,074	)
Net equity transactions		17,455,709		28,795,454		1,718,985		2,487,714		2,700,761		4,066,699		(9,286,866	)	21,728,817
Net change in contract owners’ equity		(10,875,667	)	32,303,224		(159,329	)	2,662,626		(5,507,429	)	5,343,745		(37,416,446	)	30,718,734
Contract owners’ equity beginning of period		70,902,100		38,598,876		3,564,229		901,603		18,889,628		13,545,883		57,939,683		27,220,949
Contract owners’ equity end of period	$	60,026,433		70,902,100		3,404,900		3,564,229		13,382,199		18,889,628		20,523,237		57,939,683
CHANGES IN UNITS:
Beginning units		5,452,403		3,209,353		307,780		85,450		1,398,391		1,094,121		2,877,413		1,703,817
Units purchased		2,745,262		2,900,617		254,240		254,884		465,516		478,215		898,785		2,132,537
Units redeemed		(1,224,809	)	(657,567	)	(80,959	)	(32,554	)	(232,154	)	(173,945	)	(1,594,885	)	(958,941	)
Ending units		6,972,856		5,452,403		481,061		307,780		1,631,753		1,398,391		2,181,313		2,877,413

(Continued)

44

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	TIF2					TIF3				FTVFA2			FTVGI3
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	72,550		50,631		2,424,086		591,786		61,007		-	1,644,726		414,754
Realized gain (loss) on investments		285,311		583,592		(462,609	)	1,988,833		(222,094	)	-	1,664,983		247,886
Change in unrealized gain (loss) on investments		(5,172,569	)	267,413		(195,001,260	)	13,541,621		(1,020,448	)	-	(1,226,528	)	2,350,963
Reinvested capital gains		791,782		497,111		30,093,721		8,774,230		82,293		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(4,022,926	)	1,398,747		(162,946,062	)	24,896,470		(1,099,242	)	-	2,083,181		3,013,603
Equity transactions:
Purchase payments received from contract owners (note 3)		240		(45	)	45,352,141		92,115,792		3,293,358		-	10,685,522		14,948,684
Transfers between funds		(1,010,456	)	(794,699	)	105,133,869		41,279,493		877,152		-	19,578,727		13,791,640
Redemptions (note 3)		(921,631	)	(691,964	)	(17,474,546	)	(9,135,075	)	(61,177	)	-	(9,521,295	)	(2,937,332	)
Annuity benefits		(263	)	(492	)	(112	)	-		-		-	(8,798	)	(1,027	)
Contract maintenance charges (note 2)		(596	)	(664	)	(737,024	)	(181,635	)	(64	)	-	(8,568	)	(2,501	)
Contingent deferred sales charges (note 2)		(8,216	)	(10,506	)	(295,887	)	(119,663	)	(26	)	-	(63,625	)	(32,894	)
Adjustments to maintain reserves		(215	)	(173	)	(1,162	)	(3,185	)	256		-	3,595		47
Net equity transactions		(1,941,137	)	(1,498,543	)	131,977,279		123,955,727		4,109,499		-	20,665,558		25,766,617
Net change in contract owners’ equity		(5,964,063	)	(99,796	)	(30,968,783	)	148,852,197		3,010,257		-	22,748,739		28,780,220
Contract owners’ equity beginning of period		10,934,251		11,034,047		278,332,427		129,480,230		-		-	49,505,618		20,725,398
Contract owners’ equity end of period	$	4,970,188		10,934,251		247,363,644		278,332,427		3,010,257		-	72,254,357		49,505,618
CHANGES IN UNITS:
Beginning units		462,809		531,179		16,511,364		8,716,921		-		-	4,159,217		1,905,578
Units purchased		-		2		11,702,008		9,858,507		579,634		-	4,652,546		3,029,384
Units redeemed		(104,196	)	(68,372	)	(3,107,113	)	(2,064,064	)	(122,746	)	-	(3,014,367	)	(775,745	)
Ending units		358,613		462,809		25,106,259		16,511,364		456,888		-	5,797,396		4,159,217

(Continued)

45

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FTVIS2					FTVRD2				FTVSV2				JABS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	4,364,117		1,755,877		159,462		908,977		(288,440	)	(640,922	)	125,934		112,280
Realized gain (loss) on investments		(2,934,344	)	925,152		376,867		5,371,438		(3,081,708	)	2,722,686		308,033		667,846
Change in unrealized gain (loss) on investments		(43,482,423	)	(2,969,736	)	(31,168,994	)	(13,232,060	)	(29,546,354	)	(10,194,969	)	(3,702,766	)	338,043
Reinvested capital gains		2,533,976		602,382		738,658		1,911,675		4,959,744		5,066,896		878,177		-
Net increase (decrease) in contract owners’ equity resulting from operations		(39,518,674	)	313,675		(29,894,007	)	(5,039,970	)	(27,956,758	)	(3,046,309	)	(2,390,622	)	1,118,169
Equity transactions:
Purchase payments received from contract owners (note 3)		20,534,987		60,359,911		841,265		1,515,716		6,614,969		13,328,207		92,722		944,500
Transfers between funds		(3,303,357	)	16,101,939		(9,232,143	)	(13,460,323	)	10,769,000		(4,905,520	)	524,745		59,092
Redemptions (note 3)		(14,126,080	)	(9,092,430	)	(7,905,203	)	(9,724,106	)	(6,034,552	)	(4,733,429	)	(1,356,200	)	(1,621,227	)
Annuity benefits		(20,210	)	(1,664	)	(6,273	)	-		(7,064	)	(7,707	)	-		-
Contract maintenance charges (note 2)		(13,345	)	(7,056	)	(10,764	)	(11,823	)	(16,944	)	(7,032	)	(1,174	)	(1,103	)
Contingent deferred sales charges (note 2)		(66,637	)	(45,423	)	(147,926	)	(173,592	)	(65,128	)	(74,562	)	(24,357	)	(13,382	)
Adjustments to maintain reserves		(1,253	)	(2,108	)	(1,279	)	(2,577	)	(574	)	(1,304	)	(252	)	(329	)
Net equity transactions		3,004,105		67,313,169		(16,462,323	)	(21,856,705	)	11,259,707		3,598,653		(764,516	)	(632,449	)
Net change in contract owners’ equity		(36,514,569	)	67,626,844		(46,356,330	)	(26,896,675	)	(16,697,051	)	552,344		(3,155,138	)	485,720
Contract owners’ equity beginning of period		120,378,140		52,751,296		115,583,625		142,480,300		68,699,772		68,147,428		13,784,481		13,298,761
Contract owners’ equity end of period	$	83,863,571		120,378,140		69,227,295		115,583,625		52,002,721		68,699,772		10,629,343		13,784,481
CHANGES IN UNITS:
Beginning units		10,613,089		4,753,427		7,191,142		8,485,936		3,336,527		3,184,805		908,896		946,961
Units purchased		3,826,878		8,902,568		317,559		432,490		2,181,594		1,214,966		156,392		162,416
Units redeemed		(3,773,231	)	(3,042,906	)	(1,502,746	)	(1,727,284	)	(1,670,665	)	(1,063,244	)	(216,739	)	(200,481	)
Ending units		10,666,736		10,613,089		6,005,955		7,191,142		3,847,456		3,336,527		848,549		908,896

(Continued)

46

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	JACAS					JAGTS				JAGTS2				JARLCS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(1,202,245	)	(557,024	)	(33,407	)	(38,698	)	(52,967	)	(51,839	)	(44,748	)	(34,949	)
Realized gain (loss) on investments		5,447,413		3,764,608		38,484		191,855		128,343		339,669		(306,315	)	1,291
Change in unrealized gain (loss) on investments		(52,133,402	)	10,754,973		(1,494,358	)	529,683		(2,559,215	)	662,657		(2,186,695	)	158,956
Reinvested capital gains		-		-		-		-		-		-		315,293		36,765
Net increase (decrease) in contract owners’ equity resulting from operations		(47,888,234	)	13,962,557		(1,489,281	)	682,840		(2,483,839	)	950,487		(2,222,465	)	162,063
Equity transactions:
Purchase payments received from contract owners (note 3)		20,346,851		9,223,467		27		14,664		365,224		425,897		599,323		1,107,810
Transfers between funds		29,860,354		18,248,615		(102,694	)	(210,318	)	(135,789	)	260,877		67,925		804,100
Redemptions (note 3)		(10,166,360	)	(6,682,388	)	(298,831	)	(779,204	)	(688,250	)	(877,884	)	(352,383	)	(436,812	)
Annuity benefits		(700	)	-		(2,111	)	(3,601	)	-		-		-		-
Contract maintenance charges (note 2)		(34,096	)	(16,647	)	(2,238	)	(2,894	)	(2,457	)	(2,838	)	(3,940	)	(1,150	)
Contingent deferred sales charges (note 2)		(71,277	)	(34,003	)	(993	)	(1,793	)	(7,011	)	(7,614	)	(4,733	)	(2,672	)
Adjustments to maintain reserves		1,719		(748	)	(42	)	192		(61	)	(105	)	(335	)	(88	)
Net equity transactions		39,936,491		20,738,296		(406,882	)	(982,954	)	(468,344	)	(201,667	)	305,857		1,471,188
Net change in contract owners’ equity		(7,951,743	)	34,700,853		(1,896,163	)	(300,114	)	(2,952,183	)	748,820		(1,916,608	)	1,633,251
Contract owners’ equity beginning of period		70,732,848		36,031,995		3,601,007		3,901,121		5,684,417		4,935,597		5,521,409		3,888,158
Contract owners’ equity end of period	$	62,781,105		70,732,848		1,704,844		3,601,007		2,732,234		5,684,417		3,604,801		5,521,409
CHANGES IN UNITS:
Beginning units		4,763,489		3,715,916		733,774		957,855		394,297		411,359		321,741		237,661
Units purchased		5,477,446		2,704,592		11		11		89,588		126,431		116,016		156,119
Units redeemed		(3,481,914	)	(1,657,019	)	(105,346	)	(224,092	)	(141,691	)	(143,493	)	(104,073	)	(72,039	)
Ending units		6,759,021		4,763,489		628,439		733,774		342,194		394,297		333,684		321,741

(Continued)

47

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	JAIGS					JAIGS2				JPMCVP				AMTB
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	158,819		(156,708	)	2,413,896		(1,624,324	)	(18,465	)	(73,909	)	11,643,554		4,970,246
Realized gain (loss) on investments		1,200,673		2,057,006		888,368		17,415,838		(282,010	)	1,183,682		(6,916,343	)	(51,493	)
Change in unrealized gain (loss) on investments		(11,032,905	)	1,953,928		(164,883,295	)	20,757,709		(4,220,454	)	(1,501,526	)	(69,873,829	)	4,373,193
Reinvested capital gains		1,749,821		-		29,018,198		-		757,541		751,956		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(7,923,592	)	3,854,226		(132,562,833	)	36,549,223		(3,763,388	)	360,203		(65,146,618	)	9,291,946
Equity transactions:
Purchase payments received from contract owners (note 3)		16		680		26,061,804		47,534,341		2,388		506		46,151,488		109,786,029
Transfers between funds		(569,698	)	(699,357	)	25,621,230		12,721,092		(1,897,401	)	(2,912,693	)	(16,349,739	)	103,535,867
Redemptions (note 3)		(1,825,649	)	(2,609,197	)	(18,399,288	)	(15,310,850	)	(1,524,694	)	(2,876,707	)	(32,682,793	)	(22,142,382	)
Annuity benefits		-		-		(9,306	)	(2,576	)	-		-		(109,799	)	(107,624	)
Contract maintenance charges (note 2)		(5,719	)	(6,647	)	(248,258	)	(63,339	)	(3,944	)	(5,913	)	(820,871	)	(276,139	)
Contingent deferred sales charges (note 2)		(5,216	)	(8,581	)	(158,807	)	(111,548	)	(3,168	)	(7,222	)	(403,006	)	(157,552	)
Adjustments to maintain reserves		(159	)	(205	)	(1,829	)	(1,366	)	(107	)	1,852		(501	)	(3,531	)
Net equity transactions		(2,406,425	)	(3,323,307	)	32,865,546		44,765,754		(3,426,926	)	(5,800,177	)	(4,215,221	)	190,634,668
Net change in contract owners’ equity		(10,330,017	)	530,919		(99,697,287	)	81,314,977		(7,190,314	)	(5,439,974	)	(69,361,839	)	199,926,614
Contract owners’ equity beginning of period		16,732,189		16,201,270		213,023,938		131,708,961		13,355,230		18,795,204		425,289,341		225,362,727
Contract owners’ equity end of period	$	6,402,172		16,732,189		113,326,651		213,023,938		6,164,916		13,355,230		355,927,502		425,289,341
CHANGES IN UNITS:
Beginning units		879,729		1,090,672		7,719,861		6,010,855		934,069		1,328,877		38,220,042		19,400,879
Units purchased		2		-		4,890,572		5,553,636		3		194		11,189,513		22,942,764
Units redeemed		(168,548	)	(210,943	)	(3,808,428	)	(3,844,630	)	(279,772	)	(395,002	)	(11,252,893	)	(4,123,601	)
Ending units		711,183		879,729		8,802,005		7,719,861		654,300		934,069		38,156,662		38,220,042

(Continued)

48

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	MIGSC					MVFSC				VFLG2				VFLV2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(239,834	)	(371,681	)	(489,019	)	(686,069	)	(9,189	)	(11,477	)	(2,425	)	(6,292	)
Realized gain (loss) on investments		296,205		873,208		(859,714	)	3,943,426		(14,031	)	10,523		(35,752	)	15,420
Change in unrealized gain (loss) on investments		(8,713,387	)	1,587,059		(36,555,708	)	(741,302	)	(415,411	)	2,807		(612,992	)	(71,080	)
Reinvested capital gains		884,134		-		3,527,887		1,109,528		-		78,019		-		57,469
Net increase (decrease) in contract owners’ equity resulting from operations		(7,772,882	)	2,088,586		(34,376,554	)	3,625,583		(438,631	)	79,872		(651,169	)	(4,483	)
Equity transactions:
Purchase payments received from contract owners (note 3)		235,657		288,059		17,889,714		20,068,045		17,061		28,060		35,992		103,164
Transfers between funds		(1,661,844	)	(1,704,916	)	7,683,235		6,096,628		3,759		(5,919	)	30,223		91,259
Redemptions (note 3)		(1,760,534	)	(1,866,683	)	(7,284,229	)	(4,958,785	)	(70,267	)	(28,878	)	(114,095	)	(26,857	)
Annuity benefits		-		-		(1,856	)	(1,291	)	-		-		-		-
Contract maintenance charges (note 2)		(1,548	)	(1,738	)	(39,200	)	(6,065	)	(158	)	(187	)	(371	)	(288	)
Contingent deferred sales charges (note 2)		(26,310	)	(25,278	)	(71,790	)	(50,946	)	(273	)	(588	)	(1,047	)	(423	)
Adjustments to maintain reserves		(358	)	(837	)	(612	)	(841	)	(66	)	21		66		(204	)
Net equity transactions		(3,214,937	)	(3,311,393	)	18,175,262		21,146,745		(49,944	)	(7,491	)	(49,232	)	166,651
Net change in contract owners’ equity		(10,987,819	)	(1,222,807	)	(16,201,292	)	24,772,328		(488,575	)	72,381		(700,401	)	162,168
Contract owners’ equity beginning of period		22,610,416		23,833,223		87,883,194		63,110,866		1,130,341		1,057,960		1,613,063		1,450,895
Contract owners’ equity end of period	$	11,622,597		22,610,416		71,681,902		87,883,194		641,766		1,130,341		912,662		1,613,063
CHANGES IN UNITS:
Beginning units		1,427,758		1,642,788		4,556,477		3,466,377		90,603		91,381		111,241		100,046
Units purchased		45,321		60,622		2,760,441		2,935,129		7,443		4,516		11,553		16,943
Units redeemed		(288,236	)	(275,652	)	(1,694,000	)	(1,845,029	)	(12,268	)	(5,294	)	(17,220	)	(5,748	)
Ending units		1,184,843		1,427,758		5,622,918		4,556,477		85,778		90,603		105,574		111,241

(Continued)

49

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	MBVAG2					MBVCG2				VFMG2				GVAAA2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(3,103	)	(534	)	1,513		1,243		(11,264	)	47,018		8,527,925		3,667,513
Realized gain (loss) on investments		(9,530	)	7,299		(455	)	70		(146,529	)	62,305		(8,426	)	81,539
Change in unrealized gain (loss) on investments		(153,303	)	(5,275	)	(45,297	)	264		(2,529,186	)	63,901		(230,496,031	)	(962,937	)
Reinvested capital gains		27,030		18,885		5,733		1,824		375,196		259,167		7,726,101		144,817
Net increase (decrease) in contract owners’ equity resulting from operations		(138,906	)	20,375		(38,506	)	3,401		(2,311,783	)	432,391		(214,250,431	)	2,930,932
Equity transactions:
Purchase payments received from contract owners (note 3)		600		57,179		-		1,113		34,646		340,254		248,396,163		266,728,417
Transfers between funds		(111,280	)	34,450		145,955		-		(263,545	)	(178,749	)	145,373,791		66,508,920
Redemptions (note 3)		(13,080	)	(12,074	)	(507	)	(526	)	(735,098	)	(764,758	)	(28,276,708	)	(10,237,381	)
Annuity benefits		-		-		-		-		-		-		(2,955	)	(2,035	)
Contract maintenance charges (note 2)		(67	)	-		(11	)	(19	)	(2,056	)	(2,247	)	(2,105,668	)	(589,069	)
Contingent deferred sales charges (note 2)		-		-		(3	)	(3	)	(4,877	)	(23,509	)	(323,689	)	(79,110	)
Adjustments to maintain reserves		(21	)	(17	)	(4	)	(4	)	(109	)	496		(262	)	(2,654	)
Net equity transactions		(123,848	)	79,538		145,430		561		(971,039	)	(628,513	)	363,060,672		322,327,088
Net change in contract owners’ equity		(262,754	)	99,913		106,924		3,962		(3,282,822	)	(196,122	)	148,810,241		325,258,020
Contract owners’ equity beginning of period		429,215		329,302		92,000		88,038		8,384,121		8,580,243		460,786,908		135,528,888
Contract owners’ equity end of period	$	166,461		429,215		198,924		92,000		5,101,299		8,384,121		609,597,149		460,786,908
CHANGES IN UNITS:
Beginning units		33,329		27,147		8,194		8,142		651,956		703,592		42,263,897		12,975,664
Units purchased		1,612		7,132		15,171		102		12,294		38,890		46,307,079		32,535,961
Units redeemed		(12,811	)	(950	)	(859	)	(50	)	(96,337	)	(90,526	)	(7,409,892	)	(3,247,728	)
Ending units		22,130		33,329		22,506		8,194		567,913		651,956		81,161,084		42,263,897

(Continued)

50

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVABD2					GVAGG2				GVAGR2				GVAGI2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	12,623,639		5,187,817		873,431		624,057		749,332		(715,974	)	2,488,825		548,501
Realized gain (loss) on investments		(1,107,239	)	57,966		(541,185	)	492,123		(463,206	)	4,030,744		-		(628,019	)
Change in unrealized gain (loss) on investments		(42,404,672	)	(4,637,429	)	(34,038,519	)	2,859,178		(80,329,880	)	3,605,787		(92,277,536	)	(2,943,263	)
Reinvested capital gains		198,457		-		2,196,350		-		7,748,903		25,869		65,984		-
Net increase (decrease) in contract owners’ equity resulting from operations		(30,689,815	)	608,354		(31,509,923	)	3,975,358		(72,294,851	)	6,946,426		(89,722,727	)	(3,022,781	)
Equity transactions:
Purchase payments received from contract owners (note 3)		90,238,362		46,979,002		15,712,870		24,279,156		36,392,316		52,710,282		88,885,170		33,402,993
Transfers between funds		130,224,709		68,646,459		9,682,475		15,983,159		18,006,009		24,488,614		154,504,897		49,870,276
Redemptions (note 3)		(13,369,608	)	(3,533,620	)	(7,761,292	)	(2,538,830	)	(10,219,568	)	(4,743,918	)	(7,859,811	)	(377,505	)
Annuity benefits		-		-		-		-		-		-		(883	)	-
Contract maintenance charges (note 2)		(227,954	)	(3,343	)	(37,970	)	(4,074	)	(149,137	)	(43,164	)	(150,540	)	(496	)
Contingent deferred sales charges (note 2)		(186,091	)	(18,253	)	(63,605	)	(15,938	)	(117,815	)	(47,470	)	(117,963	)	(211	)
Adjustments to maintain reserves		(808	)	(441	)	2,971		(1,737	)	1,661		(2,658	)	(9,261	)	(300	)
Net equity transactions		206,678,610		112,069,804		17,535,449		37,701,736		43,913,466		72,361,686		235,251,609		82,894,757
Net change in contract owners’ equity		175,988,795		112,678,158		(13,974,474	)	41,677,094		(28,381,385	)	79,308,112		145,528,882		79,871,976
Contract owners’ equity beginning of period		130,936,805		18,258,647		64,844,710		23,167,616		127,268,601		47,960,489		79,871,976		-
Contract owners’ equity end of period	$	306,925,600		130,936,805		50,870,236		64,844,710		98,887,216		127,268,601		225,400,858		79,871,976
CHANGES IN UNITS:
Beginning units		12,421,457		1,749,769		5,365,947		2,159,481		11,269,769		4,677,116		8,176,408		-
Units purchased		26,107,114		11,754,421		3,688,385		4,223,047		7,670,142		7,934,364		32,655,573		8,444,895
Units redeemed		(5,495,584	)	(1,082,733	)	(2,084,507	)	(1,016,581	)	(2,984,876	)	(1,341,711	)	(2,793,446	)	(268,487	)
Ending units		33,032,987		12,421,457		6,969,825		5,365,947		15,955,035		11,269,769		38,038,535		8,176,408

(Continued)

51

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVCRA2				NVCRB2			NVCCA2			NVCCN2
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	21,171		-	547,993		-	487,875		-	293,229		-
Realized gain (loss) on investments		(184,138	)	-	-		-	(88,603	)	-	(289,119	)	-
Change in unrealized gain (loss) on investments		(1,248,138	)	-	(16,020,501	)	-	(23,141,646	)	-	(1,666,421	)	-
Reinvested capital gains		85,124		-	661,128		-	1,022,826		-	78,376		-
Net increase (decrease) in contract owners’ equity resulting from operations		(1,325,981	)	-	(14,811,380	)	-	(21,719,548	)	-	(1,583,935	)	-
Equity transactions:
Purchase payments received from contract owners (note 3)		3,246,074		-	43,186,562		-	59,959,588		-	21,912,130		-
Transfers between funds		2,643,727		-	113,901,917		-	72,716,703		-	28,618,092		-
Redemptions (note 3)		(196,801	)	-	(791,634	)	-	(771,468	)	-	(1,590,700	)	-
Annuity benefits		-		-	-		-	-		-	-		-
Contract maintenance charges (note 2)		(215	)	-	(7,564	)	-	(23,260	)	-	(22,818	)	-
Contingent deferred sales charges (note 2)		(251	)	-	(7,000	)	-	(7,518	)	-	(68,260	)	-
Adjustments to maintain reserves		(36	)	-	(158	)	-	(122	)	-	(13	)	-
Net equity transactions		5,692,498		-	156,282,123		-	131,873,923		-	48,848,431		-
Net change in contract owners’ equity		4,366,517		-	141,470,743		-	110,154,375		-	47,264,496		-
Contract owners’ equity beginning of period		-		-	-		-	-		-	-		-
Contract owners’ equity end of period	$	4,366,517		-	141,470,743		-	110,154,375		-	47,264,496		-
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	-		-
Units purchased		760,717		-	18,770,628		-	15,894,579		-	6,246,078		-
Units redeemed		(72,623	)	-	(806,014	)	-	(540,626	)	-	(1,019,822	)	-
Ending units		688,094		-	17,964,614		-	15,353,953		-	5,226,256		-

(Continued)

52

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVCMD2				NVCMA2			NVCMC2			NVCBD1
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	507,024		-	462,115		-	208,427		-	6,138		-
Realized gain (loss) on investments		-		-	(562,543	)	-	(291,914	)	-	(6,692	)	-
Change in unrealized gain (loss) on investments		(16,954,710	)	-	(22,848,558	)	-	(3,292,285	)	-	4,272		-
Reinvested capital gains		670,143		-	1,049,798		-	114,676		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(15,777,543	)	-	(21,899,188	)	-	(3,261,096	)	-	3,718		-
Equity transactions:
Purchase payments received from contract owners (note 3)		85,686,807		-	100,023,474		-	28,008,430		-	7,945		-
Transfers between funds		36,370,815		-	19,845,537		-	16,824,730		-	466,944		-
Redemptions (note 3)		(1,439,755	)	-	(2,281,490	)	-	(2,030,164	)	-	(54,751	)	-
Annuity benefits		-		-	-		-	-		-	-		-
Contract maintenance charges (note 2)		(11,237	)	-	(19,445	)	-	(4,212	)	-	(47	)	-
Contingent deferred sales charges (note 2)		(6,617	)	-	(7,934	)	-	(13,163	)	-	-		-
Adjustments to maintain reserves		(162	)	-	(161	)	-	(92	)	-	6		-
Net equity transactions		120,599,851		-	117,559,981		-	42,785,529		-	420,097		-
Net change in contract owners’ equity		104,822,308		-	95,660,793		-	39,524,433		-	423,815		-
Contract owners’ equity beginning of period		-		-	-		-	-		-	-		-
Contract owners’ equity end of period	$	104,822,308		-	95,660,793		-	39,524,433		-	423,815		-
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	-		-
Units purchased		14,697,180		-	15,187,849		-	5,484,014		-	68,502		-
Units redeemed		(794,061	)	-	(1,161,753	)	-	(706,525	)	-	(25,511	)	-
Ending units		13,903,119		-	14,026,096		-	4,777,489		-	42,991		-

(Continued)

53

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVCBD2				HIBF				HIBF3				GEM
	2008			2007	2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	34,746		-	931,082		1,010,583		2,715,104		2,335,716		(1,798	)	(8,576	)
Realized gain (loss) on investments		(4,359	)	-	(830,001	)	(163,556	)	(3,097,300	)	(55,399	)	88,957		230,018
Change in unrealized gain (loss) on investments		(6,570	)	-	(3,973,615	)	(549,973	)	(10,412,486	)	(1,864,058	)	(1,048,078	)	109,023
Reinvested capital gains		-		-	-		-		-		-		205,161		136,510
Net increase (decrease) in contract owners’ equity resulting from operations		23,817		-	(3,872,534	)	297,054		(10,794,682	)	416,259		(755,758	)	466,975
Equity transactions:
Purchase payments received from contract owners (note 3)		792,318		-	80		1,355		3,843,612		7,898,196		2,018		60,297
Transfers between funds		2,035,592		-	(1,683,295	)	(2,339,827	)	1,215,930		4,122,373		(55,727	)	(71,273	)
Redemptions (note 3)		(103,187	)	-	(1,755,261	)	(1,539,774	)	(4,842,559	)	(2,200,434	)	(104,842	)	(269,912	)
Annuity benefits		-		-	(178	)	(277	)	(6,990	)	-		(5,717	)	(12,903	)
Contract maintenance charges (note 2)		(559	)	-	(1,536	)	(1,679	)	(3,836	)	(2,483	)	(451	)	(552	)
Contingent deferred sales charges (note 2)		(75	)	-	(26,780	)	(20,390	)	(50,361	)	(32,824	)	(189	)	(620	)
Adjustments to maintain reserves		(59	)	-	(260	)	(444	)	(434	)	(697	)	1,703		1,361
Net equity transactions		2,724,030		-	(3,467,230	)	(3,901,036	)	155,362		9,784,131		(163,205	)	(293,602	)
Net change in contract owners’ equity		2,747,847		-	(7,339,764	)	(3,603,982	)	(10,639,320	)	10,200,390		(918,963	)	173,373
Contract owners’ equity beginning of period		-		-	15,865,684		19,469,666		40,885,129		30,684,739		1,406,108		1,232,735
Contract owners’ equity end of period	$	2,747,847		-	8,525,920		15,865,684		30,245,809		40,885,129		487,145		1,406,108
CHANGES IN UNITS:
Beginning units		-		-	1,099,805		1,370,433		3,534,655		2,697,783		40,673		52,896
Units purchased		314,418		-	-		5,462		2,594,510		2,482,164		71		201
Units redeemed		(34,500	)	-	(266,093	)	(276,090	)	(2,440,926	)	(1,645,292	)	(7,165	)	(12,424	)
Ending units		279,918		-	833,712		1,099,805		3,688,239		3,534,655		33,579		40,673

(Continued)

54

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GEM2					GEM3				GEM6				GVGU2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(28,909	)	(66,937	)	(137,206	)	(473,171	)	(424,820	)	(740,940	)	7,613		5,499
Realized gain (loss) on investments		214,525		659,796		3,931,627		6,291,024		(721,388	)	6,208,311		11,283		98,285
Change in unrealized gain (loss) on investments		(4,449,186	)	943,399		(63,187,446	)	12,912,275		(70,764,600	)	13,723,638		(305,200	)	(113,730	)
Reinvested capital gains		894,114		668,182		12,320,324		7,732,403		14,918,890		7,529,370		7,334		178,906
Net increase (decrease) in contract owners’ equity resulting from operations		(3,369,456	)	2,204,440		(47,072,701	)	26,462,531		(56,991,918	)	26,720,379		(278,970	)	168,960
Equity transactions:
Purchase payments received from contract owners (note 3)		54		-		2,806,420		3,499,854		9,510,638		19,247,840		-		-
Transfers between funds		(1,063,063	)	(765,070	)	(14,653,649	)	18,153,033		(21,822,485	)	12,260,157		(130,877	)	(201,340	)
Redemptions (note 3)		(408,302	)	(658,447	)	(9,031,132	)	(12,087,175	)	(7,803,509	)	(6,823,152	)	(137,571	)	(68,033	)
Annuity benefits		-		-		(4,511	)	(3,408	)	(9,080	)	(9,942	)	-		-
Contract maintenance charges (note 2)		(764	)	(828	)	(26,943	)	(26,260	)	(8,056	)	(6,233	)	(71	)	(78	)
Contingent deferred sales charges (note 2)		(9,133	)	(23,372	)	(28,596	)	(29,811	)	(129,210	)	(113,025	)	(432	)	(423	)
Adjustments to maintain reserves		(292	)	(313	)	(20,234	)	10,927		(12,871	)	(1,928	)	(115	)	(49	)
Net equity transactions		(1,481,500	)	(1,448,030	)	(20,958,645	)	9,517,160		(20,274,573	)	24,553,717		(269,066	)	(269,923	)
Net change in contract owners’ equity		(4,850,956	)	756,410		(68,031,346	)	35,979,691		(77,266,491	)	51,274,096		(548,036	)	(100,963	)
Contract owners’ equity beginning of period		6,651,015		5,894,605		96,175,648		60,195,957		109,663,693		58,389,597		952,362		1,053,325
Contract owners’ equity end of period	$	1,800,059		6,651,015		28,144,302		96,175,648		32,397,202		109,663,693		404,326		952,362
CHANGES IN UNITS:
Beginning units		134,775		171,105		2,599,261		2,337,802		3,749,821		2,839,512		35,923		46,958
Units purchased		-		115		600,333		1,434,676		1,328,948		2,488,841		-		3,949
Units redeemed		(46,573	)	(36,445	)	(1,372,251	)	(1,173,217	)	(2,397,324	)	(1,578,532	)	(12,805	)	(14,984	)
Ending units		88,202		134,775		1,827,343		2,599,261		2,681,445		3,749,821		23,118		35,923

(Continued)

55

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVGU					GIG				GIG3				NVIE6
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	130,651		137,889		88		(1,122	)	(18,605	)	(311,541	)	12,967		-
Realized gain (loss) on investments		(1,145,758	)	1,238,324		3,733		20,647		621,425		1,966,640		(674,758	)	-
Change in unrealized gain (loss) on investments		(2,502,951	)	(1,592,250	)	(73,028	)	(2,047	)	(20,554,644	)	3,044,701		(1,379,023	)	-
Reinvested capital gains		93,739		2,383,457		14,111		10,021		4,015,655		2,755,597		555,554		-
Net increase (decrease) in contract owners’ equity resulting from operations		(3,424,319	)	2,167,420		(55,096	)	27,499		(15,936,169	)	7,455,397		(1,485,260	)	-
Equity transactions:
Purchase payments received from contract owners (note 3)		234,481		466,216		-		-		960,920		1,512,013		1,048,409		-
Transfers between funds		(2,473,042	)	(1,783,306	)	-		(12,151	)	(4,070,673	)	5,917,106		3,757,297		-
Redemptions (note 3)		(1,786,383	)	(1,788,226	)	(6,410	)	(25,147	)	(3,965,983	)	(4,519,361	)	(535,352	)	-
Annuity benefits		(577	)	(1,754	)	-		-		(7,650	)	(8,290	)	-		-
Contract maintenance charges (note 2)		(2,993	)	(3,530	)	(68	)	(101	)	(9,177	)	(9,378	)	(476	)	-
Contingent deferred sales charges (note 2)		(6,173	)	(3,392	)	(26	)	(157	)	(10,881	)	(10,056	)	(3,296	)	-
Adjustments to maintain reserves		(2,813	)	1,807		(47	)	18		191		(13,871	)	(58	)	-
Net equity transactions		(4,037,500	)	(3,112,185	)	(6,551	)	(37,538	)	(7,103,253	)	2,868,163		4,266,524		-
Net change in contract owners’ equity		(7,461,819	)	(944,765	)	(61,647	)	(10,039	)	(23,039,422	)	10,323,560		2,781,264		-
Contract owners’ equity beginning of period		12,628,240		13,573,005		123,047		133,086		37,867,142		27,543,582		-		-
Contract owners’ equity end of period	$	5,166,421		12,628,240		61,400		123,047		14,827,720		37,867,142		2,781,264		-
CHANGES IN UNITS:
Beginning units		549,810		703,436		7,935		10,735		1,528,618		1,396,070		-		-
Units purchased		155,805		273,487		-		-		261,187		687,368		804,829		-
Units redeemed		(365,239	)	(427,113	)	(498	)	(2,800	)	(665,899	)	(554,820	)	(294,198	)	-
Ending units		340,376		549,810		7,437		7,935		1,123,906		1,528,618		510,631		-

(Continued)

56

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GEF3					GVGF2				GVGFS				GBF
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(31,043	)	(74,842	)	2,170		20,907		22,436		61,257		17,419,780		14,090,873
Realized gain (loss) on investments		(182,098	)	1,356,451		(82,202	)	32,424		(1,027,206	)	4,009		(5,766,811	)	(859,478	)
Change in unrealized gain (loss) on investments		(3,463,851	)	57,833		(528,767	)	(302,621	)	(809,971	)	(596,623	)	27,289,008		13,514,655
Reinvested capital gains		899,110		-		-		212,457		-		474,162		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(2,777,882	)	1,339,442		(608,799	)	(36,833	)	(1,814,741	)	(57,195	)	38,941,977		26,746,050
Equity transactions:
Purchase payments received from contract owners (note 3)		190,960		421,962		-		44		102,633		107,372		62,701,970		124,293,484
Transfers between funds		(1,191,214	)	323,784		(88,300	)	(302,658	)	1,071,229		(554,925	)	104,224,844		108,590,023
Redemptions (note 3)		(1,016,808	)	(1,033,090	)	(67,375	)	(131,525	)	(368,193	)	(719,184	)	(73,321,377	)	(43,562,145	)
Annuity benefits		-		-		-		-		-		-		(28,423	)	(26,813	)
Contract maintenance charges (note 2)		(1,832	)	(2,265	)	(128	)	(149	)	(963	)	(1,092	)	(1,215,104	)	(343,875	)
Contingent deferred sales charges (note 2)		(4,490	)	(1,533	)	(1,480	)	(1,997	)	(634	)	(1,013	)	(692,113	)	(262,267	)
Adjustments to maintain reserves		(77	)	(108	)	(18	)	(143	)	(90	)	(29	)	9,817		(7,719	)
Net equity transactions		(2,023,461	)	(291,250	)	(157,301	)	(436,428	)	803,982		(1,168,871	)	91,679,614		188,680,688
Net change in contract owners’ equity		(4,801,343	)	1,048,192		(766,100	)	(473,261	)	(1,010,759	)	(1,226,066	)	130,621,591		215,426,738
Contract owners’ equity beginning of period		7,550,213		6,502,021		1,389,160		1,862,421		3,068,547		4,294,613		579,745,968		364,319,230
Contract owners’ equity end of period	$	2,748,870		7,550,213		623,060		1,389,160		2,057,788		3,068,547		710,367,559		579,745,968
CHANGES IN UNITS:
Beginning units		376,901		384,266		65,660		85,448		168,520		230,182		42,800,012		24,042,781
Units purchased		55,737		295,806		-		-		169,198		61,052		24,461,705		25,971,953
Units redeemed		(182,885	)	(303,171	)	(9,940	)	(19,788	)	(124,949	)	(122,714	)	(16,111,421	)	(7,214,722	)
Ending units		249,753		376,901		55,720		65,660		212,769		168,520		51,150,296		42,800,012

(Continued)

57

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	CAF					GVGH2				GVGHS				GVGH6
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(484,811	)	(720,469	)	(23,817	)	(33,066	)	(60,173	)	(84,697	)	(247,810	)	(208,479	)
Realized gain (loss) on investments		1,530,565		3,213,954		(18,289	)	23,821		(449,322	)	140,223		(1,313,775	)	176,991
Change in unrealized gain (loss) on investments		(23,224,436	)	7,713,002		(622,134	)	204,176		(2,027,689	)	533,110		(6,408,550	)	1,234,473
Reinvested capital gains		-		-		132,482		43,771		509,267		130,535		1,634,517		276,420
Net increase (decrease) in contract owners’ equity resulting from operations		(22,178,682	)	10,206,487		(531,758	)	238,702		(2,027,917	)	719,171		(6,335,618	)	1,479,405
Equity transactions:
Purchase payments received from contract owners (note 3)		1,708,798		2,493,393		-		13		265,986		390,423		1,792,888		3,339,511
Transfers between funds		(2,681,188	)	(1,510,182	)	(157,411	)	(234,858	)	342,680		(246,944	)	6,210,066		(937,951	)
Redemptions (note 3)		(7,534,551	)	(10,725,115	)	(145,569	)	(119,327	)	(916,430	)	(950,334	)	(1,603,825	)	(863,715	)
Annuity benefits		(19,292	)	(19,641	)	-		-		-		-		-		-
Contract maintenance charges (note 2)		(44,511	)	(51,685	)	(259	)	(256	)	(2,522	)	(2,577	)	(1,404	)	(1,241	)
Contingent deferred sales charges (note 2)		(24,109	)	(35,579	)	(1,966	)	(1,610	)	(4,497	)	(2,651	)	(24,512	)	(13,890	)
Adjustments to maintain reserves		3,401		(2,032	)	(130	)	(127	)	(93	)	(125	)	(283	)	(545	)
Net equity transactions		(8,591,452	)	(9,850,841	)	(305,335	)	(356,165	)	(314,876	)	(812,208	)	6,372,930		1,522,169
Net change in contract owners’ equity		(30,770,134	)	355,646		(837,093	)	(117,463	)	(2,342,793	)	(93,037	)	37,312		3,001,574
Contract owners’ equity beginning of period		61,866,057		61,510,411		2,178,340		2,295,803		6,861,700		6,954,737		15,179,536		12,177,962
Contract owners’ equity end of period	$	31,095,923		61,866,057		1,341,247		2,178,340		4,518,907		6,861,700		15,216,848		15,179,536
CHANGES IN UNITS:
Beginning units		3,094,521		3,637,231		124,698		146,024		476,539		539,659		1,289,936		1,150,570
Units purchased		161,267		262,271		-		-		258,162		147,991		1,611,370		563,371
Units redeemed		(687,778	)	(804,981	)	(20,265	)	(21,326	)	(309,276	)	(211,111	)	(1,136,911	)	(424,005	)
Ending units		2,568,010		3,094,521		104,433		124,698		425,425		476,539		1,764,395		1,289,936

(Continued)

58

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVIX8					GVIDA				GVIDC				GVIDM
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	26,204		(4,382	)	527,177		(300,250	)	3,227,836		2,768,464		20,354,527		17,763,656
Realized gain (loss) on investments		(472,078	)	244,480		1,799,691		9,413,679		(809,758	)	290,929		2,749,896		3,473,107
Change in unrealized gain (loss) on investments		(4,570,675	)	(115,393	)	(300,876,772	)	(5,955,926	)	(19,003,897	)	(1,139,808	)	(756,815,995	)	14,706,275
Reinvested capital gains		12,607		14,888		81,756,834		19,109,348		3,249,361		3,373,408		176,276,488		31,622,176
Net increase (decrease) in contract owners’ equity resulting from operations		(5,003,942	)	139,593		(216,793,070	)	22,266,851		(13,336,458	)	5,292,993		(557,435,084	)	67,565,214
Equity transactions:
Purchase payments received from contract owners (note 3)		2,071,638		3,403,536		11,265,451		19,066,259		35,256,794		25,798,627		181,168,496		248,870,226
Transfers between funds		(1,262,371	)	4,815,936		(1,389,851	)	18,863,373		49,392,147		2,751,499		70,769,721		271,715,717
Redemptions (note 3)		(893,035	)	(475,331	)	(47,108,261	)	(38,397,320	)	(31,747,845	)	(14,114,454	)	(176,289,322	)	(120,538,406	)
Annuity benefits		-		-		(5,864	)	(31	)	(9,017	)	(18,883	)	(16,430	)	(3,811	)
Contract maintenance charges (note 2)		(6,013	)	(536	)	(77,819	)	(74,778	)	(279,020	)	(89,786	)	(2,095,467	)	(1,083,086	)
Contingent deferred sales charges (note 2)		(4,589	)	(4,602	)	(646,844	)	(920,361	)	(437,246	)	(213,682	)	(3,179,421	)	(2,348,554	)
Adjustments to maintain reserves		(303	)	(187	)	(4,625	)	1,582		(613	)	5,604		(3,603	)	(28,725	)
Net equity transactions		(94,673	)	7,738,816		(37,967,813	)	(1,461,276	)	52,175,200		14,118,925		70,353,974		396,583,361
Net change in contract owners’ equity		(5,098,615	)	7,878,409		(254,760,883	)	20,805,575		38,838,742		19,411,918		(487,081,110	)	464,148,575
Contract owners’ equity beginning of period		11,613,924		3,735,515		595,422,765		574,617,190		155,351,567		135,939,649		2,213,119,510		1,748,970,935
Contract owners’ equity end of period	$	6,515,309		11,613,924		340,661,882		595,422,765		194,190,309		155,351,567		1,726,038,400		2,213,119,510
CHANGES IN UNITS:
Beginning units		994,418		344,723		31,376,425		31,476,825		12,824,884		11,627,252		145,018,915		119,084,540
Units purchased		516,219		935,713		2,166,636		3,510,307		10,611,071		4,727,545		27,292,458		40,127,613
Units redeemed		(514,614	)	(286,018	)	(4,566,911	)	(3,610,707	)	(6,113,620	)	(3,529,913	)	(22,467,023	)	(14,193,238	)
Ending units		996,023		994,418		28,976,150		31,376,425		17,322,335		12,824,884		149,844,350		145,018,915

(Continued)

59

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVDMA					GVDMC				BF				NVLCP2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	11,373,537		8,312,081		7,163,665		6,287,640		43,358		30,006		20,373		-
Realized gain (loss) on investments		5,248,200		5,114,434		(2,303,693	)	2,057,306		(155,553	)	159,006		(9,090	)	-
Change in unrealized gain (loss) on investments		(757,715,705	)	16,619,247		(123,547,592	)	(4,024,461	)	(1,136,182	)	(178,937	)	16,174		-
Reinvested capital gains		160,150,500		31,508,133		26,949,413		11,304,928		340,160		100,860		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(580,943,468	)	61,553,895		(91,738,207	)	15,625,413		(908,217	)	110,935		27,457		-
Equity transactions:
Purchase payments received from contract owners (note 3)		173,375,309		274,585,188		61,809,695		62,457,136		508,008		493,852		577,870		-
Transfers between funds		(2,417,980	)	96,424,641		59,643,269		112,766,052		(191,551	)	(41,897	)	1,628,979		-
Redemptions (note 3)		(124,241,518	)	(86,883,614	)	(54,352,009	)	(31,817,589	)	(469,649	)	(694,426	)	(34,044	)	-
Annuity benefits		(41,224	)	(48,287	)	(72,696	)	(9,173	)	-		-		-		-
Contract maintenance charges (note 2)		(2,658,313	)	(1,381,069	)	(492,590	)	(226,982	)	(2,549	)	(2,483	)	(179	)	-
Contingent deferred sales charges (note 2)		(2,591,429	)	(1,535,234	)	(836,910	)	(424,987	)	(6,627	)	(2,903	)	(883	)	-
Adjustments to maintain reserves		1,747		(23,493	)	8,046		(7,885	)	(28	)	(43	)	17		-
Net equity transactions		41,426,592		281,138,132		65,706,805		142,736,572		(162,396	)	(247,900	)	2,171,760		-
Net change in contract owners’ equity		(539,516,876	)	342,692,027		(26,031,402	)	158,361,985		(1,070,613	)	(136,965	)	2,199,217		-
Contract owners’ equity beginning of period		1,754,341,369		1,411,649,342		505,207,682		346,845,697		3,289,279		3,426,244		-		-
Contract owners’ equity end of period	$	1,214,824,493		1,754,341,369		479,176,280		505,207,682		2,218,666		3,289,279		2,199,217		-
CHANGES IN UNITS:
Beginning units		100,235,949		84,334,918		37,093,457		26,410,052		265,247		285,299		-		-
Units purchased		16,868,580		25,558,563		13,641,421		16,795,696		100,214		113,232		264,266		-
Units redeemed		(14,407,336	)	(9,657,532	)	(8,522,390	)	(6,112,291	)	(121,957	)	(133,284	)	(40,153	)	-
Ending units		102,697,193		100,235,949		42,212,488		37,093,457		243,504		265,247		224,113		-

(Continued)

60

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SGRF					SGRF2				MCIF				SAM
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(123,059	)	(205,390	)	(2,479,111	)	(3,820,149	)	(196,383	)	(120,080	)	3,396,402		17,439,080
Realized gain (loss) on investments		(85,726	)	1,607,797		(18,926,375	)	2,702,736		1,187,109		10,586,973		-		-
Change in unrealized gain (loss) on investments		(5,035,578	)	(208,038	)	(29,421,175	)	10,592,206		(51,644,636	)	(6,362,000	)	-		-
Reinvested capital gains		-		-		-		-		6,693,594		3,813,927		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(5,244,363	)	1,194,369		(50,826,661	)	9,474,793		(43,960,316	)	7,918,820		3,396,402		17,439,080
Equity transactions:
Purchase payments received from contract owners (note 3)		612,424		961,319		27,669,502		102,689,359		7,581,291		11,119,708		1,430,358,609		1,927,937,796
Transfers between funds		(2,909,573	)	(1,870,588	)	(238,033,667	)	59,352,089		(3,937,868	)	(10,528,835	)	(901,317,576	)	(1,483,193,903	)
Redemptions (note 3)		(1,243,542	)	(2,396,109	)	(7,438,982	)	(8,282,778	)	(13,432,112	)	(19,055,066	)	(369,678,377	)	(274,130,109	)
Annuity benefits		(2,902	)	(3,801	)	-		-		(6,544	)	(8,283	)	(117,752	)	(101,802	)
Contract maintenance charges (note 2)		(4,717	)	(6,220	)	(246,501	)	(233,269	)	(38,051	)	(33,264	)	(281,792	)	(211,126	)
Contingent deferred sales charges (note 2)		(9,344	)	(9,485	)	(157,220	)	(132,054	)	(102,645	)	(106,253	)	(2,116,021	)	(984,114	)
Adjustments to maintain reserves		285		(88	)	(768	)	(3,208	)	(8,130	)	(693	)	29,626		5,591
Net equity transactions		(3,557,369	)	(3,324,972	)	(218,207,636	)	153,390,139		(9,944,059	)	(18,612,686	)	156,876,717		169,322,333
Net change in contract owners’ equity		(8,801,732	)	(2,130,603	)	(269,034,297	)	162,864,932		(53,904,375	)	(10,693,866	)	160,273,119		186,761,413
Contract owners’ equity beginning of period		13,866,657		15,997,260		287,785,579		124,920,647		121,837,883		132,531,749		641,214,847		454,453,434
Contract owners’ equity end of period	$	5,064,925		13,866,657		18,751,282		287,785,579		67,933,508		121,837,883		801,487,966		641,214,847
CHANGES IN UNITS:
Beginning units		2,013,233		2,500,190		16,359,805		7,591,461		6,776,727		7,922,124		46,091,872		30,582,760
Units purchased		336,292		678,750		4,189,570		10,894,843		1,871,331		1,954,355		213,942,367		259,380,061
Units redeemed		(968,742	)	(1,165,707	)	(18,543,078	)	(2,126,499	)	(2,682,590	)	(3,099,752	)	(201,147,785	)	(243,870,949	)
Ending units		1,380,783		2,013,233		2,006,297		16,359,805		5,965,468		6,776,727		58,886,454		46,091,872

(Continued)

61

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVMIG3				NVMIG6			GVDIV2				GVDIV3
	2008			2007	2008		2007	2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(10,162	)	-	(2,147,134	)	-	990		3,695		68,195		217,814
Realized gain (loss) on investments		(93,110	)	-	(3,263,169	)	-	1,690		140,680		(1,013,137	)	1,821,724
Change in unrealized gain (loss) on investments		(655,732	)	-	(98,969,541	)	-	(1,294,257	)	(292,064	)	(11,226,552	)	(3,464,042	)
Reinvested capital gains		-		-	-		-	252,332		189,645		2,344,677		2,051,680
Net increase (decrease) in contract owners’ equity resulting from operations		(759,004	)	-	(104,379,844	)	-	(1,039,245	)	41,956		(9,826,817	)	627,176
Equity transactions:
Purchase payments received from contract owners (note 3)		79,857		-	3,075,087		-	-		(35	)	879,493		1,407,754
Transfers between funds		2,295,639		-	312,984,584		-	(292,353	)	(303,123	)	(4,327,626	)	(2,274,443	)
Redemptions (note 3)		(172,747	)	-	(7,259,908	)	-	(86,340	)	(218,730	)	(3,148,934	)	(4,850,327	)
Annuity benefits		-		-	(109	)	-	-		-		-		(363	)
Contract maintenance charges (note 2)		(582	)	-	(501,462	)	-	(169	)	(226	)	(6,726	)	(9,064	)
Contingent deferred sales charges (note 2)		(771	)	-	(137,315	)	-	(1,487	)	(2,885	)	(10,611	)	(10,423	)
Adjustments to maintain reserves		(26	)	-	(511	)	-	(45	)	(182	)	509		(8,106	)
Net equity transactions		2,201,370		-	308,160,366		-	(380,394	)	(525,181	)	(6,613,895	)	(5,744,972	)
Net change in contract owners’ equity		1,442,366		-	203,780,522		-	(1,419,639	)	(483,225	)	(16,440,712	)	(5,117,796	)
Contract owners’ equity beginning of period		-		-	-		-	2,483,741		2,966,966		25,890,831		31,008,627
Contract owners’ equity end of period	$	1,442,366		-	203,780,522		-	1,064,102		2,483,741		9,450,119		25,890,831
CHANGES IN UNITS:
Beginning units		-		-	-		-	114,548		138,583		1,163,407		1,414,407
Units purchased		284,810		-	35,617,350		-	-		3		99,236		247,721
Units redeemed		(47,827	)	-	(1,944,787	)	-	(21,317	)	(24,038	)	(460,661	)	(498,721	)
Ending units		236,983		-	33,672,563		-	93,231		114,548		801,982		1,163,407

(Continued)

62

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVDIV6					NVMLG1			NVMLG2			NVMLV2
	2008			2007		2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	(227,518	)	599,089		(17	)	-	(1,418	)	-	970		-
Realized gain (loss) on investments		(3,524,196	)	790,553		(3,419	)	-	(25,339	)	-	(15,992	)	-
Change in unrealized gain (loss) on investments		(123,480,526	)	(17,532,969	)	(1,802	)	-	(73,273	)	-	(470,794	)	-
Reinvested capital gains		25,226,921		14,181,881		-		-	-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(102,005,319	)	(1,961,446	)	(5,238	)	-	(100,030	)	-	(485,816	)	-
Equity transactions:
Purchase payments received from contract owners (note 3)		22,048,620		95,812,453		6,402		-	642,606		-	2,614,895		-
Transfers between funds		(62,323,275	)	59,608,515		38,487		-	328,367		-	1,304,010		-
Redemptions (note 3)		(11,602,213	)	(9,480,830	)	(244	)	-	(397,261	)	-	(51,743	)	-
Annuity benefits		(50	)	-		-		-	-		-	-		-
Contract maintenance charges (note 2)		(378,836	)	(204,996	)	(5	)	-	(34,781	)	-	(1,795	)	-
Contingent deferred sales charges (note 2)		(168,618	)	(136,430	)	(18	)	-	(6,797	)	-	(113	)	-
Adjustments to maintain reserves		(1,122	)	(3,660	)	(7,896	)	-	199,076		-	(4	)	-
Net equity transactions		(52,425,494	)	145,595,052		36,726		-	731,210		-	3,865,250		-
Net change in contract owners’ equity		(154,430,813	)	143,633,606		31,488		-	631,180		-	3,379,434		-
Contract owners’ equity beginning of period		274,210,858		130,577,252		-		-	-		-	-		-
Contract owners’ equity end of period	$	119,780,045		274,210,858		31,488		-	631,180		-	3,379,434		-
CHANGES IN UNITS:
Beginning units		17,958,586		8,623,100		-		-	-		-	-		-
Units purchased		5,189,283		11,586,232		8,950		-	119,739		-	560,274		-
Units redeemed		(8,230,490	)	(2,250,746	)	(3,962	)	-	(19,360	)	-	(21,656	)	-
Ending units		14,917,379		17,958,586		4,988		-	100,379		-	538,618		-

(Continued)

63

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVMMG1				NVMMG2			NVMMV2			SCGF
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	(4,409	)	-	(908,477	)	-	(199,894	)	-	(100,242	)	(149,026	)
Realized gain (loss) on investments		(109,822	)	-	(1,317,448	)	-	(2,224,745	)	-	(273,768	)	714,173
Change in unrealized gain (loss) on investments		(207,378	)	-	(45,609,068	)	-	(68,247,877	)	-	(4,480,517	)	259,737
Reinvested capital gains		-		-	-		-	-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(321,609	)	-	(47,834,993	)	-	(70,672,516	)	-	(4,854,527	)	824,884
Equity transactions:
Purchase payments received from contract owners (note 3)		21,417		-	1,767,510		-	2,741,504		-	617,494		785,795
Transfers between funds		877,821		-	132,040,874		-	243,858,343		-	(372,164	)	(513,823	)
Redemptions (note 3)		(56,205	)	-	(2,660,483	)	-	(6,184,704	)	-	(1,243,052	)	(2,118,746	)
Annuity benefits		-		-	(54	)	-	(98	)	-	(1,951	)	(2,732	)
Contract maintenance charges (note 2)		(170	)	-	(157,062	)	-	(417,361	)	-	(4,510	)	(5,562	)
Contingent deferred sales charges (note 2)		(162	)	-	(51,527	)	-	(116,420	)	-	(8,750	)	(9,435	)
Adjustments to maintain reserves		(5,516	)	-	(186,150	)	-	(554	)	-	(22	)	(189	)
Net equity transactions		837,185		-	130,753,108		-	239,880,710		-	(1,012,955	)	(1,864,692	)
Net change in contract owners’ equity		515,576		-	82,918,115		-	169,208,194		-	(5,867,482	)	(1,039,808	)
Contract owners’ equity beginning of period		-		-	-		-	-		-	10,866,809		11,906,617
Contract owners’ equity end of period	$	515,576		-	82,918,115		-	169,208,194		-	4,999,327		10,866,809
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	1,333,156		1,582,686
Units purchased		121,649		-	14,178,502		-	27,273,886		-	314,278		385,823
Units redeemed		(38,818	)	-	(793,522	)	-	(1,933,958	)	-	(487,775	)	(635,353	)
Ending units		82,831		-	13,384,980		-	25,339,928		-	1,159,659		1,333,156

(Continued)

64

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SCGF2					SCVF				SCVF2				SCF
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(288,642	)	(275,339	)	(127,762	)	(249,459	)	(142,734	)	(228,137	)	(628,394	)	(2,257,206	)
Realized gain (loss) on investments		(3,277,649	)	515,457		(4,646,271	)	6,211,516		(3,340,844	)	398,855		2,600,156		11,357,868
Change in unrealized gain (loss) on investments		(7,898,515	)	383,434		(15,763,686	)	(23,099,324	)	(5,751,018	)	(7,289,825	)	(80,834,655	)	(29,995,311	)
Reinvested capital gains		-		-		-		10,842,772		-		4,369,559		24,186,634		23,765,705
Net increase (decrease) in contract owners’ equity resulting from operations		(11,464,806	)	623,552		(20,537,719	)	(6,294,495	)	(9,234,596	)	(2,749,548	)	(54,676,259	)	2,871,056
Equity transactions:
Purchase payments received from contract owners (note 3)		2,099,517		3,471,673		2,222,401		3,352,758		1,907,884		3,891,494		4,043,063		5,226,577
Transfers between funds		(7,287,769	)	9,979,648		(7,480,926	)	(12,943,919	)	(1,943,708	)	(12,492,212	)	(9,284,263	)	(9,313,114	)
Redemptions (note 3)		(1,315,039	)	(1,390,650	)	(9,590,975	)	(17,568,430	)	(2,723,480	)	(2,589,311	)	(19,098,257	)	(31,720,529	)
Annuity benefits		-		-		(12,634	)	(17,008	)	(168	)	(285	)	(20,131	)	(29,247	)
Contract maintenance charges (note 2)		(3,704	)	(1,526	)	(28,224	)	(37,544	)	(6,642	)	(4,462	)	(58,417	)	(74,394	)
Contingent deferred sales charges (note 2)		(18,475	)	(32,856	)	(40,587	)	(37,712	)	(52,541	)	(35,332	)	(49,015	)	(64,920	)
Adjustments to maintain reserves		(275	)	(489	)	8,369		(1,118	)	(528	)	(994	)	1,309		(2,510	)
Net equity transactions		(6,525,745	)	12,025,800		(14,922,576	)	(27,252,973	)	(2,819,183	)	(11,231,102	)	(24,465,711	)	(35,978,137	)
Net change in contract owners’ equity		(17,990,551	)	12,649,352		(35,460,295	)	(33,547,468	)	(12,053,779	)	(13,980,650	)	(79,141,970	)	(33,107,081	)
Contract owners’ equity beginning of period		26,997,038		14,347,686		72,161,428		105,708,896		29,124,890		43,105,540		156,240,530		189,347,611
Contract owners’ equity end of period	$	9,006,487		26,997,038		36,701,133		72,161,428		17,071,111		29,124,890		77,098,560		156,240,530
CHANGES IN UNITS:
Beginning units		1,534,096		874,697		3,462,637		4,662,412		1,429,150		1,931,451		4,226,617		5,162,695
Units purchased		692,193		936,985		279,906		308,114		399,346		322,328		245,726		305,540
Units redeemed		(1,257,650	)	(277,586	)	(1,113,220	)	(1,507,889	)	(573,898	)	(824,629	)	(1,053,489	)	(1,241,618	)
Ending units		968,639		1,534,096		2,629,323		3,462,637		1,254,598		1,429,150		3,418,854		4,226,617

(Continued)

65

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SCF2					TRF				TRF2				GVUSL
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(875,646	)	(1,510,106	)	141,218		(963,231	)	(2,154,051	)	(2,629,959	)	(27,951	)	(19,609	)
Realized gain (loss) on investments		(4,588,442	)	1,222,201		(5,868,022	)	9,542,893		(6,988,911	)	1,615,094		(569,854	)	27,507
Change in unrealized gain (loss) on investments		(54,288,868	)	(13,256,004	)	(142,301,333	)	(2,088,130	)	(259,873,044	)	(885,898	)	(2,627,709	)	(374,270	)
Reinvested capital gains		18,955,245		12,722,927		35,459,862		15,101,664		65,856,346		13,993,209		-		1,026,221
Net increase (decrease) in contract owners’ equity resulting from operations		(40,797,711	)	(820,982	)	(112,568,275	)	21,593,196		(203,159,660	)	12,092,446		(3,225,514	)	659,849
Equity transactions:
Purchase payments received from contract owners (note 3)		12,024,898		26,826,849		4,918,810		6,712,260		44,578,887		145,240,668		279,142		565,138
Transfers between funds		(1,699,612	)	(16,165,263	)	(8,741,990	)	(9,746,211	)	55,656,769		73,622,766		105,123		350,014
Redemptions (note 3)		(7,154,280	)	(4,726,654	)	(36,610,286	)	(55,635,722	)	(19,908,808	)	(10,877,472	)	(958,807	)	(1,215,152	)
Annuity benefits		(5,436	)	-		(113,249	)	(144,650	)	(188	)	-		(2,667	)	(5,649	)
Contract maintenance charges (note 2)		(100,187	)	(33,136	)	(160,726	)	(189,588	)	(1,044,804	)	(352,952	)	(1,831	)	(2,035	)
Contingent deferred sales charges (note 2)		(113,785	)	(63,487	)	(66,796	)	(97,129	)	(411,934	)	(168,812	)	(2,538	)	(2,608	)
Adjustments to maintain reserves		(733	)	(2,063	)	(14,164	)	17,140		(879	)	(4,519	)	(101	)	823
Net equity transactions		2,950,865		5,836,246		(40,788,401	)	(59,083,900	)	78,869,043		207,459,679		(581,679	)	(309,469	)
Net change in contract owners’ equity		(37,846,846	)	5,015,264		(153,356,676	)	(37,490,704	)	(124,290,617	)	219,552,125		(3,807,193	)	350,380
Contract owners’ equity beginning of period		99,556,181		94,540,917		293,444,091		330,934,795		404,959,033		185,406,908		6,662,259		6,311,879
Contract owners’ equity end of period	$	61,709,335		99,556,181		140,087,415		293,444,091		280,668,416		404,959,033		2,855,066		6,662,259
CHANGES IN UNITS:
Beginning units		4,806,056		4,583,575		4,753,992		5,881,078		23,169,599		11,257,455		397,523		416,108
Units purchased		1,339,837		2,241,927		117,311		125,165		7,811,740		13,921,285		107,066		218,435
Units redeemed		(1,230,251	)	(2,019,446	)	(1,035,213	)	(1,252,251	)	(2,935,177	)	(2,009,141	)	(159,709	)	(237,020	)
Ending units		4,915,642		4,806,056		3,836,090		4,753,992		28,046,162		23,169,599		344,880		397,523

(Continued)

66

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVNMO1				NVNMO2			NVNSR1			NVNSR2
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	(313	)	-	(6,195	)	-	(4,633	)	-	(1,387,743	)	-
Realized gain (loss) on investments		(12,474	)	-	(137,486	)	-	(72,125	)	-	(3,913,076	)	-
Change in unrealized gain (loss) on investments		(13,303	)	-	(289,189	)	-	(817,778	)	-	(133,824,294	)	-
Reinvested capital gains		-		-	-		-	-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(26,090	)	-	(432,870	)	-	(894,536	)	-	(139,125,113	)	-
Equity transactions:
Purchase payments received from contract owners (note 3)		920		-	714,662		-	75,494		-	3,630,688		-
Transfers between funds		94,850		-	566,947		-	2,547,964		-	397,446,743		-
Redemptions (note 3)		(4,353	)	-	(5,382	)	-	(159,988	)	-	(7,704,356	)	-
Annuity benefits		-		-	-		-	-		-	(194	)	-
Contract maintenance charges (note 2)		(10	)	-	(3	)	-	(553	)	-	(491,316	)	-
Contingent deferred sales charges (note 2)		-		-	(66	)	-	(889	)	-	(146,603	)	-
Adjustments to maintain reserves		(8	)	-	34		-	(39	)	-	10,849		-
Net equity transactions		91,399		-	1,276,192		-	2,461,989		-	392,745,811		-
Net change in contract owners’ equity		65,309		-	843,322		-	1,567,453		-	253,620,698		-
Contract owners’ equity beginning of period		-		-	-		-	-		-	-		-
Contract owners’ equity end of period	$	65,309		-	843,322		-	1,567,453		-	253,620,698		-
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	-		-
Units purchased		16,482		-	227,026		-	295,913		-	43,850,216		-
Units redeemed		(3,768	)	-	(61,413	)	-	(39,964	)	-	(2,289,246	)	-
Ending units		12,714		-	165,613		-	255,949		-	41,560,970		-

(Continued)

67

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVSTB2				GGTC				GGTC2				GGTC3
	2008			2007	2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	107,005		-	(2,897	)	(5,002	)	(14,563	)	(22,191	)	(54,115	)	(77,920	)
Realized gain (loss) on investments		(6,169	)	-	4,755		37,888		(13,335	)	18,515		(686,461	)	724,880
Change in unrealized gain (loss) on investments		(152,105	)	-	(184,347	)	30,123		(774,070	)	250,553		(2,582,469	)	277,144
Reinvested capital gains		-		-	31,306		-		141,073		-		574,822		-
Net increase (decrease) in contract owners’ equity resulting from operations		(51,269	)	-	(151,183	)	63,009		(660,895	)	246,877		(2,748,223	)	924,104
Equity transactions:
Purchase payments received from contract owners (note 3)		4,983,930		-	-		-		809		20		247,281		368,603
Transfers between funds		11,559,450		-	(5,879	)	(20,302	)	(185,303	)	(97,752	)	(790,842	)	(503,429	)
Redemptions (note 3)		(509,049	)	-	(52,997	)	(132,970	)	(95,808	)	(52,936	)	(490,237	)	(696,479	)
Annuity benefits		(5,464	)	-	-		-		-		-		(1,304	)	(1,647	)
Contract maintenance charges (note 2)		(6,122	)	-	(487	)	(518	)	(271	)	(327	)	(2,080	)	(2,378	)
Contingent deferred sales charges (note 2)		(17,594	)	-	(46	)	(14	)	(1,001	)	(1,685	)	(4,445	)	(3,310	)
Adjustments to maintain reserves		24		-	(37	)	(29	)	(45	)	(106	)	343		18
Net equity transactions		16,005,175		-	(59,446	)	(153,833	)	(281,619	)	(152,786	)	(1,041,284	)	(838,622	)
Net change in contract owners’ equity		15,953,906		-	(210,629	)	(90,824	)	(942,514	)	94,091		(3,789,507	)	85,482
Contract owners’ equity beginning of period		-		-	346,234		437,058		1,535,827		1,441,736		6,193,756		6,108,274
Contract owners’ equity end of period	$	15,953,906		-	135,605		346,234		593,313		1,535,827		2,404,249		6,193,756
CHANGES IN UNITS:
Beginning units		-		-	89,808		134,349		77,916		86,480		430,126		503,432
Units purchased		1,837,099		-	-		-		-		-		191,566		222,107
Units redeemed		(218,817	)	-	(20,488	)	(44,541	)	(18,427	)	(8,564	)	(293,176	)	(295,413	)
Ending units		1,618,282		-	69,320		89,808		59,489		77,916		328,516		430,126

(Continued)

68

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GGTC6					GVUG2				GVUGL				EIF2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(147,037	)	(167,062	)	(311,336	)	(349,562	)	(71,465	)	(82,972	)	(127,895	)	(732,968	)
Realized gain (loss) on investments		(1,237,458	)	428,250		(1,122,555	)	419,715		(737,233	)	235,796		(40,346,197	)	5,742,329
Change in unrealized gain (loss) on investments		(6,238,541	)	1,111,471		(12,259,077	)	3,756,289		(2,929,553	)	1,033,629		(38,696,150	)	(35,248,122	)
Reinvested capital gains		1,280,684		-		3,863,225		-		1,066,610		-		1,829,623		14,670,431
Net increase (decrease) in contract owners’ equity resulting from operations		(6,342,352	)	1,372,659		(9,829,743	)	3,826,442		(2,671,641	)	1,186,453		(77,340,619	)	(15,568,330	)
Equity transactions:
Purchase payments received from contract owners (note 3)		1,056,718		3,586,587		1,499,037		2,044,389		243,721		278,221		25,035,928		114,555,929
Transfers between funds		(5,042,206	)	4,774,646		(269,587	)	(898,114	)	462,688		(442,438	)	(166,120,494	)	26,777,495
Redemptions (note 3)		(945,279	)	(776,526	)	(1,765,627	)	(1,482,144	)	(1,121,741	)	(1,852,875	)	(10,822,473	)	(12,815,993	)
Annuity benefits		-		-		-		-		(628	)	(711	)	(6,504	)	(308	)
Contract maintenance charges (note 2)		(881	)	(785	)	(3,924	)	(2,046	)	(2,124	)	(2,250	)	(333,824	)	(250,731	)
Contingent deferred sales charges (note 2)		(19,629	)	(12,947	)	(41,705	)	(32,689	)	(2,681	)	(4,411	)	(207,660	)	(198,301	)
Adjustments to maintain reserves		(264	)	(344	)	(268	)	(760	)	77		(46	)	(1,635	)	(4,511	)
Net equity transactions		(4,951,541	)	7,570,631		(582,074	)	(371,364	)	(420,688	)	(2,024,510	)	(152,456,662	)	128,063,580
Net change in contract owners’ equity		(11,293,893	)	8,943,290		(10,411,817	)	3,455,078		(3,092,329	)	(838,057	)	(229,797,281	)	112,495,250
Contract owners’ equity beginning of period		15,963,363		7,020,073		23,231,890		19,776,812		5,902,742		6,740,799		315,766,285		203,271,035
Contract owners’ equity end of period	$	4,669,470		15,963,363		12,820,073		23,231,890		2,810,413		5,902,742		85,969,004		315,766,285
CHANGES IN UNITS:
Beginning units		1,169,229		606,445		1,094,930		1,117,672		329,074		454,175		18,188,564		11,215,121
Units purchased		364,731		997,186		328,528		300,117		178,685		110,256		3,161,290		10,726,354
Units redeemed		(856,677	)	(434,402	)	(375,906	)	(322,859	)	(237,528	)	(235,357	)	(13,339,318	)	(3,752,911	)
Ending units		677,283		1,169,229		1,047,552		1,094,930		270,231		329,074		8,010,536		18,188,564

(Continued)

69

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	MSBF					NVRE1			NVRE2			AMTG
	2008			2007		2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	3,352,870		1,552,915		20,598		-	37,683		-	(1,396,437	)	(1,952,495	)
Realized gain (loss) on investments		(2,469,376	)	92,539		(99,705	)	-	(145,295	)	-	8,772,847		11,205,135
Change in unrealized gain (loss) on investments		(14,608,639	)	121,056		(328,498	)	-	(875,516	)	-	(65,611,990	)	18,662,353
Reinvested capital gains		1,473,787		2,979		-		-	-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(12,251,358	)	1,769,489		(407,605	)	-	(983,128	)	-	(58,235,580	)	27,914,993
Equity transactions:
Purchase payments received from contract owners (note 3)		6,997,174		9,131,401		27,355		-	1,749,887		-	2,631,410		3,250,011
Transfers between funds		(2,814,864	)	7,009,865		1,295,747		-	1,066,015		-	(5,390,896	)	(4,559,259	)
Redemptions (note 3)		(7,184,441	)	(8,639,355	)	(95,501	)	-	(52,248	)	-	(15,054,296	)	(24,624,339	)
Annuity benefits		(4,544	)	(5,157	)	-		-	-		-	(22,641	)	(33,640	)
Contract maintenance charges (note 2)		(35,639	)	(8,767	)	(86	)	-	(40	)	-	(67,876	)	(80,342	)
Contingent deferred sales charges (note 2)		(58,954	)	(55,237	)	(136	)	-	(641	)	-	(30,501	)	(36,280	)
Adjustments to maintain reserves		(418	)	(825	)	(23	)	-	(82	)	-	(1,321	)	2,405
Net equity transactions		(3,101,686	)	7,431,925		1,227,356		-	2,762,891		-	(17,936,121	)	(26,081,444	)
Net change in contract owners’ equity		(15,353,044	)	9,201,414		819,751		-	1,779,763		-	(76,171,701	)	1,833,549
Contract owners’ equity beginning of period		65,642,687		56,441,273		-		-	-		-	143,341,084		141,507,535
Contract owners’ equity end of period	$	50,289,643		65,642,687		819,751		-	1,779,763		-	67,169,383		143,341,084
CHANGES IN UNITS:
Beginning units		5,127,598		4,491,128		-		-	-		-	2,896,657		3,507,840
Units purchased		2,260,043		2,007,823		229,503		-	406,534		-	97,490		196,503
Units redeemed		(2,498,806	)	(1,371,353	)	(83,019	)	-	(87,365	)	-	(582,777	)	(807,686	)
Ending units		4,888,835		5,127,598		146,484		-	319,169		-	2,411,370		2,896,657

(Continued)

70

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	AMGP					AMINS				AMMCGS				AMTP
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(95,648	)	(188,430	)	(2,789,841	)	893,348		(119,115	)	(155,544	)	(1,160,892	)	(1,450,072	)
Realized gain (loss) on investments		926,217		2,228,550		(39,714,244	)	3,646,804		823,706		991,090		430,341		12,995,201
Change in unrealized gain (loss) on investments		(6,509,053	)	(992,676	)	4,414,284		(25,301,310	)	(4,987,095	)	884,746		(108,474,235	)	(15,107,994	)
Reinvested capital gains		441,400		-		1,035		16,952,840		-		-		21,625,094		18,552,371
Net increase (decrease) in contract owners’ equity resulting from operations		(5,237,084	)	1,047,444		(38,088,766	)	(3,808,318	)	(4,282,504	)	1,720,292		(87,579,692	)	14,989,506
Equity transactions:
Purchase payments received from contract owners (note 3)		472,361		633,097		30,883,696		109,134,858		86,080		127,225		3,747,736		4,751,390
Transfers between funds		(650,151	)	(1,183,810	)	(271,128,744	)	43,256,992		(1,071,305	)	1,014,492		(6,713,471	)	(9,222,420	)
Redemptions (note 3)		(1,968,691	)	(3,484,514	)	(7,125,192	)	(8,308,402	)	(862,499	)	(907,455	)	(19,892,990	)	(33,553,930	)
Annuity benefits		(23	)	(29	)	(567	)	(432	)	-		-		(27,970	)	(40,423	)
Contract maintenance charges (note 2)		(7,321	)	(8,410	)	(299,202	)	(270,924	)	(966	)	(1,101	)	(64,786	)	(77,144	)
Contingent deferred sales charges (note 2)		(5,998	)	(8,902	)	(147,591	)	(128,412	)	(9,573	)	(14,107	)	(36,006	)	(57,688	)
Adjustments to maintain reserves		(94	)	(127	)	(23,716	)	(157,119	)	(111	)	(628	)	(4,762	)	868
Net equity transactions		(2,159,917	)	(4,052,695	)	(247,841,316	)	143,526,561		(1,858,374	)	218,426		(22,992,249	)	(38,199,347	)
Net change in contract owners’ equity		(7,397,001	)	(3,005,251	)	(285,930,082	)	139,718,243		(6,140,878	)	1,938,718		(110,571,941	)	(23,209,841	)
Contract owners’ equity beginning of period		15,420,721		18,425,972		293,668,744		153,950,501		10,958,939		9,020,221		182,085,723		205,295,564
Contract owners’ equity end of period	$	8,023,720		15,420,721		7,738,662		293,668,744		4,818,061		10,958,939		71,513,782		182,085,723
CHANGES IN UNITS:
Beginning units		1,105,261		1,399,614		20,563,376		10,936,799		507,184		502,810		4,821,251		5,867,088
Units purchased		103,249		146,835		4,427,649		13,048,694		44,307		143,330		296,845		292,792
Units redeemed		(280,347	)	(441,188	)	(23,965,733	)	(3,422,117	)	(151,272	)	(138,956	)	(1,087,050	)	(1,338,629	)
Ending units		928,163		1,105,261		1,025,292		20,563,376		400,219		507,184		4,031,046		4,821,251

(Continued)

71

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	AMRS					AMFAS				AMSRS				OVMS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(82,849	)	(196,089	)	(86,385	)	(99,651	)	(4,375,923	)	(6,234,194	)	1,526,556		1,681,503
Realized gain (loss) on investments		(575,132	)	409,822		(211,104	)	305,755		(950,599	)	3,869,047		(5,275,870	)	310,478
Change in unrealized gain (loss) on investments		(6,852,966	)	(654,737	)	(2,468,343	)	(345,149	)	(50,706,776	)	14,801,627		(48,998,634	)	(9,279,705	)
Reinvested capital gains		27,332		427,951		187,423		47,921		2,713,949		1,439,364		6,658,903		10,773,436
Net increase (decrease) in contract owners’ equity resulting from operations		(7,483,615	)	(13,053	)	(2,578,409	)	(91,124	)	(53,319,349	)	13,875,844		(46,089,045	)	3,485,712
Equity transactions:
Purchase payments received from contract owners (note 3)		1,045,318		4,597,919		397,168		407,850		46,225,071		172,758,426		2,224,523		3,061,296
Transfers between funds		(1,088,053	)	(4,982,275	)	335,102		152,085		(454,123,273	)	96,742,273		(6,680,025	)	(3,005,472	)
Redemptions (note 3)		(917,406	)	(986,306	)	(474,467	)	(646,740	)	(14,201,621	)	(14,290,978	)	(16,122,495	)	(22,129,672	)
Annuity benefits		-		-		-		-		(3,746	)	(4,900	)	(14,739	)	(24,724	)
Contract maintenance charges (note 2)		(7,274	)	(1,114	)	(984	)	(629	)	(535,421	)	(417,935	)	(46,481	)	(54,842	)
Contingent deferred sales charges (note 2)		(10,738	)	(11,451	)	(3,758	)	(7,195	)	(277,421	)	(205,511	)	(30,360	)	(41,123	)
Adjustments to maintain reserves		(335	)	(689	)	(283	)	(320	)	(14,130	)	(3,988	)	(162	)	(114	)
Net equity transactions		(978,488	)	(1,383,916	)	252,778		(94,949	)	(422,930,541	)	254,577,387		(20,669,739	)	(22,194,651	)
Net change in contract owners’ equity		(8,462,103	)	(1,396,969	)	(2,325,631	)	(186,073	)	(476,249,890	)	268,453,231		(66,758,784	)	(18,708,939	)
Contract owners’ equity beginning of period		16,737,536		18,134,505		6,032,559		6,218,632		500,502,898		232,049,667		119,146,353		137,855,292
Contract owners’ equity end of period	$	8,275,433		16,737,536		3,706,928		6,032,559		24,253,008		500,502,898		52,387,569		119,146,353
CHANGES IN UNITS:
Beginning units		1,309,013		1,440,361		392,938		399,331		29,683,131		14,567,602		3,793,326		4,523,880
Units purchased		448,561		770,522		183,533		148,639		5,126,351		18,326,427		105,577		154,382
Units redeemed		(541,555	)	(901,870	)	(170,101	)	(155,032	)	(32,417,442	)	(3,210,898	)	(926,743	)	(884,936	)
Ending units		1,216,019		1,309,013		406,370		392,938		2,392,040		29,683,131		2,972,160		3,793,326

(Continued)

72

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	OVCAFS					OVGR				OVB				OVGS3
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(858,109	)	(1,063,666	)	(789,330	)	(1,051,833	)	2,874,069		4,270,510		225,138		14,013
Realized gain (loss) on investments		785,484		1,745,319		2,599,937		7,994,724		(2,817,013	)	1,158,307		3,119,139		8,615,762
Change in unrealized gain (loss) on investments		(30,391,351	)	6,879,777		(38,741,679	)	4,577,013		(34,742,735	)	(2,274,931	)	(52,083,596	)	(8,487,804	)
Reinvested capital gains		-		-		-		-		-		-		5,983,984		5,921,773
Net increase (decrease) in contract owners’ equity resulting from operations		(30,463,976	)	7,561,430		(36,931,072	)	11,519,904		(34,685,679	)	3,153,886		(42,755,335	)	6,063,744
Equity transactions:
Purchase payments received from contract owners (note 3)		3,218,037		6,664,178		2,962,134		4,025,527		2,358,634		2,979,705		8,062,393		10,978,070
Transfers between funds		(3,581,330	)	(4,884,743	)	(4,256,541	)	(7,198,506	)	(6,919,838	)	(437,324	)	(7,797,458	)	(4,254,366	)
Redemptions (note 3)		(5,118,259	)	(3,967,446	)	(11,259,806	)	(18,459,504	)	(14,719,464	)	(19,412,680	)	(14,006,293	)	(21,091,727	)
Annuity benefits		-		-		(16,600	)	(27,553	)	(13,895	)	(15,406	)	(13,922	)	(17,312	)
Contract maintenance charges (note 2)		(9,871	)	(7,312	)	(43,748	)	(53,097	)	(37,593	)	(42,756	)	(35,584	)	(41,927	)
Contingent deferred sales charges (note 2)		(97,866	)	(79,364	)	(46,118	)	(65,062	)	(26,530	)	(35,011	)	(70,898	)	(74,532	)
Adjustments to maintain reserves		(523	)	(1,617	)	851		(468	)	(16,532	)	3,421		(6,525	)	(2,232	)
Net equity transactions		(5,589,812	)	(2,276,304	)	(12,659,828	)	(21,778,663	)	(19,375,218	)	(16,960,051	)	(13,868,287	)	(14,504,026	)
Net change in contract owners’ equity		(36,053,788	)	5,285,126		(49,590,900	)	(10,258,759	)	(54,060,897	)	(13,806,165	)	(56,623,622	)	(8,440,282	)
Contract owners’ equity beginning of period		69,363,812		64,078,686		89,378,932		99,637,691		102,216,189		116,022,354		112,825,784		121,266,066
Contract owners’ equity end of period	$	33,310,024		69,363,812		39,788,032		89,378,932		48,155,292		102,216,189		56,202,162		112,825,784
CHANGES IN UNITS:
Beginning units		3,981,882		4,129,863		4,805,480		6,037,158		4,466,808		5,265,751		4,898,499		5,524,646
Units purchased		593,773		677,935		309,176		374,836		210,261		336,055		626,175		901,762
Units redeemed		(999,034	)	(825,916	)	(1,137,207	)	(1,606,514	)	(1,203,753	)	(1,134,998	)	(1,390,212	)	(1,527,909	)
Ending units		3,576,621		3,981,882		3,977,449		4,805,480		3,473,316		4,466,808		4,134,462		4,898,499

(Continued)

73

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	OVGS4					OVGS				OVGSS				OVHI3
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(176,251	)	(409,508	)	523,675		107,501		(19,690	)	(64,097	)	21,362		(3,811	)
Realized gain (loss) on investments		(553,759	)	2,279,459		14,571,089		33,187,135		205,519		843,896		(304,175	)	(15,415	)
Change in unrealized gain (loss) on investments		(45,533,159	)	(2,392,817	)	(119,409,989	)	(32,914,580	)	(8,774,045	)	(858,575	)	(388,706	)	(5,799	)
Reinvested capital gains		5,591,832		4,840,272		13,114,068		13,947,556		1,073,516		1,087,160		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(40,671,337	)	4,317,406		(91,201,157	)	14,327,612		(7,514,700	)	1,008,384		(671,519	)	(25,025	)
Equity transactions:
Purchase payments received from contract owners (note 3)		5,741,670		18,266,347		2,978		64,085		392		(15	)	82,434		59,395
Transfers between funds		(8,941,891	)	(5,839,186	)	(12,042,430	)	(12,276,553	)	(2,102,702	)	(1,192,815	)	517,811		468,880
Redemptions (note 3)		(6,378,346	)	(6,786,433	)	(27,599,474	)	(47,883,816	)	(1,479,756	)	(1,333,789	)	(129,846	)	(34,749	)
Annuity benefits		-		-		(41,466	)	(53,984	)	-		-		-		-
Contract maintenance charges (note 2)		(10,104	)	(9,984	)	(82,306	)	(101,227	)	(1,498	)	(1,787	)	(230	)	(68	)
Contingent deferred sales charges (note 2)		(88,268	)	(85,826	)	(36,774	)	(60,514	)	(19,408	)	(18,680	)	(209	)	(7	)
Adjustments to maintain reserves		(507	)	(1,945	)	33,911		601		(343	)	(466	)	(14,104	)	(23	)
Net equity transactions		(9,677,446	)	5,542,973		(39,765,561	)	(60,311,408	)	(3,603,315	)	(2,547,552	)	455,856		493,428
Net change in contract owners’ equity		(50,348,783	)	9,860,379		(130,966,718	)	(45,983,796	)	(11,118,015	)	(1,539,168	)	(215,663	)	468,403
Contract owners’ equity beginning of period		104,330,390		94,470,011		248,379,318		294,363,114		20,585,407		22,124,575		468,403		-
Contract owners’ equity end of period	$	53,981,607		104,330,390		117,412,600		248,379,318		9,467,392		20,585,407		252,740		468,403
CHANGES IN UNITS:
Beginning units		6,661,852		6,304,392		5,756,123		7,165,665		862,593		967,988		48,923		-
Units purchased		850,439		1,602,889		4		78		-		479		180,064		123,135
Units redeemed		(1,649,122	)	(1,245,429	)	(1,150,144	)	(1,409,620	)	(186,643	)	(105,874	)	(102,308	)	(74,212	)
Ending units		5,863,169		6,661,852		4,605,983		5,756,123		675,950		862,593		126,679		48,923

(Continued)

74

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	OVHI4					OVHI				OVHIS				OVSC
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	444,606		(73,737	)	24,514		46,386		1,024,178		2,270,099		(31,327	)	(39,661	)
Realized gain (loss) on investments		(3,271,125	)	(193,283	)	(123,326	)	15,202		(2,165,204	)	(113,025	)	(357,562	)	115,913
Change in unrealized gain (loss) on investments		(6,889,235	)	(138,069	)	(193,406	)	(53,334	)	(14,303,261	)	(2,341,567	)	(1,543,450	)	(399,329	)
Reinvested capital gains		-		-		-		-		-		-		221,525		100,187
Net increase (decrease) in contract owners’ equity resulting from operations		(9,715,754	)	(405,089	)	(292,218	)	8,254		(15,444,287	)	(184,493	)	(1,710,814	)	(222,890	)
Equity transactions:
Purchase payments received from contract owners (note 3)		2,125,672		2,695,813		(12	)	25,804		4,546		2,507,174		364,635		356,322
Transfers between funds		3,348,619		7,924,707		(54,310	)	(313,066	)	(4,372,402	)	(17,858,509	)	381,324		2,286,190
Redemptions (note 3)		(1,059,579	)	(728,500	)	(112,505	)	(134,949	)	(2,181,812	)	(3,185,760	)	(480,271	)	(603,915	)
Annuity benefits		-		-		-		-		(2,944	)	(2,979	)	(372	)	(276	)
Contract maintenance charges (note 2)		(916	)	(240	)	(117	)	(230	)	(2,031	)	(2,910	)	(1,617	)	(1,113	)
Contingent deferred sales charges (note 2)		(9,956	)	(14,043	)	(3	)	(208	)	(21,980	)	(31,362	)	(1,786	)	(282	)
Adjustments to maintain reserves		(1,667	)	(128	)	(30	)	(28	)	(712	)	(812	)	(46	)	39
Net equity transactions		4,402,173		9,877,609		(166,977	)	(422,677	)	(6,577,335	)	(18,575,158	)	261,867		2,036,965
Net change in contract owners’ equity		(5,313,581	)	9,472,520		(459,195	)	(414,423	)	(22,021,622	)	(18,759,651	)	(1,448,947	)	1,814,075
Contract owners’ equity beginning of period		9,472,520		-		510,531		924,954		25,701,219		44,460,870		4,092,040		2,277,965
Contract owners’ equity end of period	$	4,158,939		9,472,520		51,336		510,531		3,679,597		25,701,219		2,643,093		4,092,040
CHANGES IN UNITS:
Beginning units		991,751		-		49,246		87,967		1,877,575		3,180,409		418,752		227,665
Units purchased		2,688,244		1,766,260		-		91,604		7		666,017		239,302		348,899
Units redeemed		(1,609,756	)	(774,509	)	(25,722	)	(130,325	)	(603,240	)	(1,968,851	)	(217,197	)	(157,812	)
Ending units		2,070,239		991,751		23,524		49,246		1,274,342		1,877,575		440,857		418,752

(Continued)

75

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	OVSCS					OVGI				OVGIS				OVAG
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(2,375,054	)	(1,669,977	)	49,367		(94,475	)	(2,055,223	)	(3,558,101	)	(162,354	)	(240,177	)
Realized gain (loss) on investments		(6,421,937	)	2,322,762		439,049		2,190,869		(4,650,030	)	8,289,626		197,485		1,172,555
Change in unrealized gain (loss) on investments		(71,083,896	)	(9,482,308	)	(11,241,564	)	(1,174,857	)	(195,684,358	)	(3,241,859	)	(7,546,706	)	7,421
Reinvested capital gains		9,799,136		2,837,156		1,372,064		-		24,059,956		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(70,081,751	)	(5,992,367	)	(9,381,084	)	921,537		(178,329,655	)	1,489,666		(7,511,575	)	939,799
Equity transactions:
Purchase payments received from contract owners (note 3)		21,061,258		43,133,931		1,404,950		1,963,139		44,131,538		136,524,143		967,480		1,388,265
Transfers between funds		38,121,966		22,344,161		(1,354,116	)	96,324		26,238,707		41,566,777		(928,902	)	(1,907,552	)
Redemptions (note 3)		(8,881,039	)	(4,527,923	)	(3,920,948	)	(5,751,994	)	(20,776,884	)	(12,264,290	)	(2,111,631	)	(3,132,552	)
Annuity benefits		(59	)	-		(8,536	)	(13,036	)	(149	)	-		-		-
Contract maintenance charges (note 2)		(379,953	)	(83,951	)	(12,837	)	(14,617	)	(900,873	)	(311,701	)	(10,809	)	(13,679	)
Contingent deferred sales charges (note 2)		(175,869	)	(75,353	)	(19,254	)	(22,732	)	(393,034	)	(198,454	)	(23,441	)	(19,771	)
Adjustments to maintain reserves		(1,041	)	(2,197	)	242		997		(1,071	)	(5,081	)	(97	)	(142	)
Net equity transactions		49,745,263		60,788,668		(3,910,499	)	(3,741,919	)	48,298,234		165,311,394		(2,107,400	)	(3,685,431	)
Net change in contract owners’ equity		(20,336,488	)	54,796,301		(13,291,583	)	(2,820,382	)	(130,031,421	)	166,801,060		(9,618,975	)	(2,745,632	)
Contract owners’ equity beginning of period		125,648,459		70,852,158		26,266,088		29,086,470		402,804,694		236,003,634		16,720,309		19,465,941
Contract owners’ equity end of period	$	105,311,971		125,648,459		12,974,505		26,266,088		272,773,273		402,804,694		7,101,334		16,720,309
CHANGES IN UNITS:
Beginning units		6,050,092		3,305,000		2,487,109		2,841,846		24,014,369		14,409,505		2,576,050		3,147,364
Units purchased		5,302,603		3,945,305		279,986		553,940		7,491,233		13,464,733		316,968		325,096
Units redeemed		(3,015,352	)	(1,200,213	)	(744,488	)	(908,677	)	(4,500,024	)	(3,859,869	)	(716,694	)	(896,410	)
Ending units		8,337,343		6,050,092		2,022,607		2,487,109		27,005,578		24,014,369		2,176,324		2,576,050

(Continued)

76

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	PISVP1					PVGIB				PVTIGB				PVTVB
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(3,653	)	(4,220	)	30,478		(23,689	)	7,880		23,236		(29,047	)	(42,282	)
Realized gain (loss) on investments		(92,857	)	(11,971	)	(610,222	)	196,292		12,316		125,163		(36,556	)	172,829
Change in unrealized gain (loss) on investments		(490,494	)	(385,889	)	(2,900,852	)	(1,946,049	)	(833,657	)	(244,489	)	(756,377	)	(42,275	)
Reinvested capital gains		153,345		299,112		973,768		1,219,908		192,364		210,562		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(433,659	)	(102,968	)	(2,506,828	)	(553,538	)	(621,097	)	114,472		(821,980	)	88,272
Equity transactions:
Purchase payments received from contract owners (note 3)		266		25,508		58,637		78,232		-		-		34,791		15,004
Transfers between funds		(67,029	)	(33,794	)	(311,802	)	(620,149	)	(123,387	)	(161,735	)	(48,541	)	(229,217	)
Redemptions (note 3)		(27,061	)	(56,766	)	(676,400	)	(760,481	)	(55,007	)	(184,528	)	(243,758	)	(356,133	)
Annuity benefits		-		-		-		-		-		-		-		-
Contract maintenance charges (note 2)		(56	)	(96	)	(977	)	(1,016	)	(137	)	(157	)	(367	)	(376	)
Contingent deferred sales charges (note 2)		-		-		(15,573	)	(15,079	)	(613	)	(4,199	)	(3,785	)	(12,418	)
Adjustments to maintain reserves		(10	)	(1	)	(142	)	(322	)	(139	)	16		(137	)	(266	)
Net equity transactions		(93,890	)	(65,149	)	(946,257	)	(1,318,815	)	(179,283	)	(350,603	)	(261,797	)	(583,406	)
Net change in contract owners’ equity		(527,549	)	(168,117	)	(3,453,085	)	(1,872,353	)	(800,380	)	(236,131	)	(1,083,777	)	(495,134	)
Contract owners’ equity beginning of period		1,173,591		1,341,708		6,876,101		8,748,454		1,525,012		1,761,143		2,271,117		2,766,251
Contract owners’ equity end of period	$	646,042		1,173,591		3,423,016		6,876,101		724,632		1,525,012		1,187,340		2,271,117
CHANGES IN UNITS:
Beginning units		117,897		124,148		468,881		551,603		71,037		87,538		168,443		213,216
Units purchased		782		6,820		36,053		16,334		-		3,847		10,344		27,232
Units redeemed		(12,946	)	(13,071	)	(117,846	)	(99,056	)	(9,857	)	(20,348	)	(36,603	)	(72,005	)
Ending units		105,733		117,897		387,088		468,881		61,180		71,037		142,184		168,443

(Continued)

77

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	TRBCG2					TREI2				TRLT2				DSRG
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(3,075,467	)	(1,569,018	)	470,585		(23,766	)	884,495		378,387		(311,002	)	(618,117	)
Realized gain (loss) on investments		(1,341,937	)	1,053,580		(1,046,707	)	1,048,729		(28,663	)	855		(6,076,910	)	(4,934,921	)
Change in unrealized gain (loss) on investments		(101,401,814	)	9,175,145		(34,340,847	)	(5,255,297	)	(1,262,177	)	241,676		(16,689,844	)	10,518,224
Reinvested capital gains		-		-		2,107,353		4,427,360		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(105,819,218	)	8,659,707		(32,809,616	)	197,026		(406,345	)	620,918		(23,077,756	)	4,965,186
Equity transactions:
Purchase payments received from contract owners (note 3)		25,390,342		44,889,392		16,738,483		26,252,958		5,361,860		9,270,073		2,399,674		2,967,102
Transfers between funds		105,779,333		61,775,612		7,299,559		1,470,811		13,383,565		13,839,582		(2,989,401	)	(4,928,781	)
Redemptions (note 3)		(11,097,363	)	(4,007,375	)	(7,204,544	)	(5,737,988	)	(3,734,295	)	(1,346,062	)	(9,931,828	)	(13,039,667	)
Annuity benefits		(1,113	)	-		(3,457	)	(4,222	)	-		-		(7,490	)	(2,996	)
Contract maintenance charges (note 2)		(488,777	)	(86,315	)	(35,967	)	(5,633	)	(51,706	)	(1,500	)	(52,268	)	(60,604	)
Contingent deferred sales charges (note 2)		(185,760	)	(49,070	)	(85,680	)	(47,203	)	(84,785	)	(6,230	)	(36,264	)	(41,484	)
Adjustments to maintain reserves		(885	)	(1,604	)	5,242		(1,162	)	417		1,658		3,746		(2,861	)
Net equity transactions		119,395,777		102,520,640		16,713,636		21,927,561		14,875,056		21,757,521		(10,613,831	)	(15,109,291	)
Net change in contract owners’ equity		13,576,559		111,180,347		(16,095,980	)	22,124,587		14,468,711		22,378,439		(33,691,587	)	(10,144,105	)
Contract owners’ equity beginning of period		133,588,581		22,408,234		76,363,727		54,239,140		31,585,239		9,206,800		72,329,772		82,473,877
Contract owners’ equity end of period	$	147,165,140		133,588,581		60,267,747		76,363,727		46,053,950		31,585,239		38,638,185		72,329,772
CHANGES IN UNITS:
Beginning units		10,055,319		1,860,568		6,128,523		4,412,317		2,984,605		897,335		2,887,153		3,504,269
Units purchased		12,281,690		9,459,193		3,457,161		3,579,944		2,850,776		2,462,859		123,980		140,091
Units redeemed		(2,663,603	)	(1,264,442	)	(1,862,608	)	(1,863,738	)	(1,474,432	)	(375,589	)	(630,537	)	(757,207	)
Ending units		19,673,406		10,055,319		7,723,076		6,128,523		4,360,949		2,984,605		2,380,596		2,887,153

(Continued)

78

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	VWBFR					VWBF				VWEMR				VWEM
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	614,508		353,900		1,343,185		1,058,302		(276,248	)	(295,139	)	(380,161	)	(386,311	)
Realized gain (loss) on investments		(42,948	)	(195,683	)	(371,189	)	(457,001	)	(6,921,436	)	3,358,355		(92,397	)	6,302,960
Change in unrealized gain (loss) on investments		(458,896	)	502,780		(583,411	)	957,901		(22,684,555	)	1,029,821		(40,435,269	)	(536,696	)
Reinvested capital gains		-		-		-		-		11,631,611		4,720,791		15,223,007		7,864,824
Net increase (decrease) in contract owners’ equity resulting from operations		112,664		660,997		388,585		1,559,202		(18,250,628	)	8,813,828		(25,684,820	)	13,244,777
Equity transactions:
Purchase payments received from contract owners (note 3)		448,071		585,309		-		33		934,783		1,557,545		(109	)	61,761
Transfers between funds		708,740		1,325,285		(1,281,269	)	(789,366	)	(7,027,224	)	4,471,559		(2,457,480	)	(3,266,318	)
Redemptions (note 3)		(2,150,571	)	(1,419,562	)	(2,817,333	)	(3,619,530	)	(2,883,313	)	(4,428,298	)	(4,000,717	)	(8,036,349	)
Annuity benefits		(1,516	)	-		(2,538	)	(2,401	)	(3,759	)	(4,205	)	(14,082	)	(25,209	)
Contract maintenance charges (note 2)		(2,594	)	(1,885	)	(8,944	)	(9,360	)	(6,659	)	(8,265	)	(13,922	)	(17,603	)
Contingent deferred sales charges (note 2)		(3,862	)	(2,748	)	(1,750	)	(2,787	)	(8,254	)	(9,717	)	(4,502	)	(10,463	)
Adjustments to maintain reserves		3,575		(67	)	(2,298	)	477		331		1,011		2,584		4,999
Net equity transactions		(998,157	)	486,332		(4,114,132	)	(4,422,934	)	(8,994,095	)	1,579,630		(6,488,228	)	(11,289,182	)
Net change in contract owners’ equity		(885,493	)	1,147,329		(3,725,547	)	(2,863,732	)	(27,244,723	)	10,393,458		(32,173,048	)	1,955,595
Contract owners’ equity beginning of period		8,910,518		7,763,189		19,122,232		21,985,964		35,419,465		25,026,007		44,356,883		42,401,288
Contract owners’ equity end of period	$	8,025,025		8,910,518		15,396,685		19,122,232		8,174,742		35,419,465		12,183,835		44,356,883
CHANGES IN UNITS:
Beginning units		731,903		690,934		889,847		1,107,173		1,152,258		1,106,434		1,599,935		2,079,717
Units purchased		498,428		316,826		-		-		278,549		822,360		59		-
Units redeemed		(587,917	)	(275,857	)	(186,622	)	(217,326	)	(666,891	)	(776,536	)	(335,936	)	(479,782	)
Ending units		642,414		731,903		703,225		889,847		763,916		1,152,258		1,264,058		1,599,935

(Continued)

79

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	VWHAR					VWHA				MSVFI				MSVF2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(416,429	)	(480,374	)	(500,253	)	(638,683	)	108,965		65,016		6,402,303		3,602,936
Realized gain (loss) on investments		287,404		3,935,670		5,962,740		6,186,747		(119,033	)	17,379		(5,301,604	)	(42,096	)
Change in unrealized gain (loss) on investments		(27,898,131	)	5,938,356		(37,368,416	)	7,046,890		(437,219	)	24,449		(36,033,941	)	3,634,710
Reinvested capital gains		6,617,535		4,275,584		8,257,790		6,400,431		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(21,409,621	)	13,669,236		(23,648,139	)	18,995,385		(447,287	)	106,844		(34,933,242	)	7,195,550
Equity transactions:
Purchase payments received from contract owners (note 3)		1,483,188		1,673,206		(348	)	(147	)	244,265		245,605		32,437,863		90,733,170
Transfers between funds		1,123,860		2,203,387		(3,564,995	)	(2,798,775	)	312,810		2,222,183		(53,307,697	)	83,043,132
Redemptions (note 3)		(5,905,125	)	(5,183,512	)	(6,382,193	)	(6,481,955	)	(663,809	)	(432,077	)	(14,800,091	)	(7,534,522	)
Annuity benefits		(2,101	)	(2,020	)	(10,577	)	(9,427	)	-		-		(157	)	-
Contract maintenance charges (note 2)		(12,808	)	(10,338	)	(18,850	)	(19,103	)	(1,420	)	(740	)	(536,688	)	(200,588	)
Contingent deferred sales charges (note 2)		(7,187	)	(9,290	)	(3,372	)	(4,895	)	(2,703	)	(196	)	(254,674	)	(106,087	)
Adjustments to maintain reserves		(161	)	(411	)	8,518		3,363		(105	)	(156	)	(862	)	(2,904	)
Net equity transactions		(3,320,334	)	(1,328,978	)	(9,971,817	)	(9,310,939	)	(110,962	)	2,034,619		(36,462,306	)	165,932,201
Net change in contract owners’ equity		(24,729,955	)	12,340,258		(33,619,956	)	9,684,446		(558,249	)	2,141,463		(71,395,548	)	173,127,751
Contract owners’ equity beginning of period		46,070,345		33,730,087		58,405,783		48,721,337		3,557,887		1,416,424		286,272,488		113,144,737
Contract owners’ equity end of period	$	21,340,390		46,070,345		24,785,827		58,405,783		2,999,638		3,557,887		214,876,940		286,272,488
CHANGES IN UNITS:
Beginning units		1,400,348		1,470,219		1,118,247		1,340,984		328,510		136,094		25,887,057		10,572,601
Units purchased		753,375		733,623		-		-		209,243		299,366		6,060,614		17,222,645
Units redeemed		(934,439	)	(803,494	)	(225,882	)	(222,737	)	(225,136	)	(106,950	)	(9,815,302	)	(1,908,189	)
Ending units		1,219,284		1,400,348		892,365		1,118,247		312,617		328,510		22,132,369		25,887,057

(Continued)

80

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	MSEM					MSEMB				MSVRE				MSVREB
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	335,121		490,613		95,545		128,297		2,027,730		(478,010	)	890,316		(659,517	)
Realized gain (loss) on investments		(302,007	)	(110,214	)	(89,035	)	(39,384	)	2,376,340		38,936,051		(10,999,719	)	12,497,447
Change in unrealized gain (loss) on investments		(1,228,571	)	(238,725	)	(357,750	)	(55,822	)	(81,704,272	)	(83,713,845	)	(48,143,342	)	(41,769,776	)
Reinvested capital gains		238,029		256,821		70,024		69,222		36,706,467		15,636,180		27,428,028		9,597,092
Net increase (decrease) in contract owners’ equity resulting from operations		(957,428	)	398,495		(281,216	)	102,313		(40,593,735	)	(29,619,624	)	(30,824,717	)	(20,334,754	)
Equity transactions:
Purchase payments received from contract owners (note 3)		(253	)	(13	)	-		(65	)	3,320,519		5,875,599		3,411,631		20,486,120
Transfers between funds		(670,164	)	(1,085,960	)	(135,747	)	(231,100	)	(8,237,395	)	(42,565,173	)	(3,947,039	)	(27,023,886	)
Redemptions (note 3)		(1,064,832	)	(1,739,155	)	(227,330	)	(295,201	)	(16,854,491	)	(30,308,534	)	(7,599,851	)	(7,783,265	)
Annuity benefits		-		-		-		-		(10,608	)	(14,143	)	(10,188	)	(10,721	)
Contract maintenance charges (note 2)		(3,433	)	(4,305	)	(266	)	(261	)	(45,151	)	(68,065	)	(10,148	)	(11,149	)
Contingent deferred sales charges (note 2)		(3,772	)	(1,774	)	(3,208	)	(6,665	)	(52,621	)	(53,891	)	(132,793	)	(120,741	)
Adjustments to maintain reserves		(16	)	(24	)	(112	)	(176	)	1,594		1,090		(717	)	(1,037	)
Net equity transactions		(1,742,470	)	(2,831,231	)	(366,663	)	(533,468	)	(21,878,153	)	(67,133,117	)	(8,289,105	)	(14,464,679	)
Net change in contract owners’ equity		(2,699,898	)	(2,432,736	)	(647,879	)	(431,155	)	(62,471,888	)	(96,752,741	)	(39,113,822	)	(34,799,433	)
Contract owners’ equity beginning of period		6,980,725		9,413,461		1,965,340		2,396,495		121,588,720		218,341,461		81,927,743		116,727,176
Contract owners’ equity end of period	$	4,280,827		6,980,725		1,317,461		1,965,340		59,116,832		121,588,720		42,813,921		81,927,743
CHANGES IN UNITS:
Beginning units		351,451		498,158		113,859		145,536		2,592,043		3,810,701		3,568,905		4,145,461
Units purchased		-		-		-		4		342,609		397,450		1,176,390		1,492,789
Units redeemed		(94,560	)	(146,707	)	(22,828	)	(31,681	)	(878,625	)	(1,616,108	)	(1,684,282	)	(2,069,345	)
Ending units		256,891		351,451		91,031		113,859		2,056,027		2,592,043		3,061,013		3,568,905

(Continued)

81

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	VYDS					SVDF				WFVLCG				WFVMM
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(5,483	)	(7,868	)	(713,564	)	(955,911	)	(1,977	)	(2,929	)	253		535
Realized gain (loss) on investments		14,968		6,827		3,564,253		5,574,290		609		1,146		-		-
Change in unrealized gain (loss) on investments		(507,003	)	189		(31,921,510	)	8,715,338		(51,732	)	8,869		-		-
Reinvested capital gains		127,929		82,411		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(369,589	)	81,559		(29,070,821	)	13,333,717		(53,100	)	7,086		253		535
Equity transactions:
Purchase payments received from contract owners (note 3)		44,635		21,666		795,007		966,397		45		-		-		611,166
Transfers between funds		(41,110	)	(1,786	)	(1,750,799	)	(2,103,615	)	-		-		202,791		(535,087	)
Redemptions (note 3)		(131,922	)	(7,632	)	(7,473,539	)	(11,056,240	)	(5,759	)	(7,517	)	(2,200	)	(76,167	)
Annuity benefits		-		-		(16,627	)	(18,780	)	-		-		-		-
Contract maintenance charges (note 2)		(175	)	(189	)	(27,318	)	(31,618	)	(35	)	(43	)	(30	)	(30	)
Contingent deferred sales charges (note 2)		-		(266	)	(10,655	)	(10,297	)	(168	)	(348	)	-		-
Adjustments to maintain reserves		-		(11	)	(6,920	)	(1,381	)	(17	)	(21	)	45		113
Net equity transactions		(128,572	)	11,782		(8,490,851	)	(12,255,534	)	(5,934	)	(7,929	)	200,606		(5	)
Net change in contract owners’ equity		(498,161	)	93,341		(37,561,672	)	1,078,183		(59,034	)	(843	)	200,859		530
Contract owners’ equity beginning of period		1,063,078		969,737		69,816,019		68,737,836		136,370		137,213		17,585		17,055
Contract owners’ equity end of period	$	564,917		1,063,078		32,254,347		69,816,019		77,336		136,370		218,444		17,585
CHANGES IN UNITS:
Beginning units		66,078		65,321		1,793,964		2,138,630		12,402		13,143		1,632		1,635
Units purchased		3,099		1,779		107,174		80,276		-		-		18,728		58,314
Units redeemed		(11,802	)	(1,022	)	(393,126	)	(424,942	)	(626	)	(741	)	(206	)	(58,317	)
Ending units		57,375		66,078		1,508,012		1,793,964		11,776		12,402		20,154		1,632

(Continued)

82

NATIONWIDE VARIABLE ACCOUNT-II

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SVOF					WFVSMV				WFVTRB
	2008			2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	1,305,772		(2,392,205	)	(87	)	(1	)	841		768
Realized gain (loss) on investments		(7,092,700	)	7,758,603		(310	)	1		(1	)	(1	)
Change in unrealized gain (loss) on investments		(152,729,190	)	(32,879,682	)	(6,144	)	9		(559	)	325
Reinvested capital gains		51,688,115		45,422,273		2,098		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(106,828,003	)	17,908,989		(4,443	)	9		281		1,092
Equity transactions:
Purchase payments received from contract owners (note 3)		4,928,968		6,610,961		11,333		372		-		-
Transfers between funds		(11,139,737	)	(16,577,163	)	783		(10	)	-		-
Redemptions (note 3)		(33,723,685	)	(51,566,086	)	(1,514	)	-		-		-
Annuity benefits		(42,388	)	(60,812	)	-		-		-		-
Contract maintenance charges (note 2)		(117,994	)	(138,185	)	-		-		-		-
Contingent deferred sales charges (note 2)		(69,229	)	(74,200	)	-		-		-		-
Adjustments to maintain reserves		14,276		66,243		(1	)	(3	)	(1	)	(1	)
Net equity transactions		(40,149,789	)	(61,739,242	)	10,601		359		(1	)	(1	)
Net change in contract owners’ equity		(146,977,792	)	(43,830,253	)	6,158		368		280		1,091
Contract owners’ equity beginning of period		291,426,019		335,256,272		368		-		23,072		21,981
Contract owners’ equity end of period	$	144,448,227		291,426,019		6,526		368		23,352		23,072
CHANGES IN UNITS:
Beginning units		5,757,665		7,005,669		39		-		2,116		2,116
Units purchased		181,645		173,167		1,409		40		-		-
Units redeemed		(1,123,382	)	(1,421,171	)	(188	)	(1	)	-		-
Ending units		4,815,928		5,757,665		1,260		39		2,116		2,116

See accompanying notes to financial statements.

83

NATIONWIDE VARIABLE ACCOUNT-II

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

(1) Background and Summary of Significant Accounting Policies

(a) Organization and Nature of Operations

The Nationwide Variable Account-II (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on October 7, 1981. The Account is 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, and Individual Modified Single Premium Deferred Variable Annuity Contracts through the Account. The primary distribution for the contracts is through the brokerage community; however, other distributors are utilized.

(b) The Contracts

Only contracts without a 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 the following:

Portfolios of the AIM Variable Insurance Funds (AIM VIF);

AIM VIF - Basic Value Fund - Series II (AVBV2)

AIM VIF - Capital Appreciation Fund - Series II (AVCA2)

AIM VIF - Capital Development Fund - Series II (AVCD2)

Alger American Balanced Portfolio - Class S (ALBS)

Alger American Mid Cap Growth Portfolio - Class S (ALMCS)

Portfolios of the AllianceBernstein Variable Products Series Fund, Inc. (AllianceBernstein VPS);

AllianceBernstein VPS - Growth and Income Portfolio - Class B (ALVGIB)

AllianceBernstein VPS - Small-Mid Cap Value Portfolio - Class B (ALVSVB)

Portfolios of the American Century Variable Portfolios, Inc. (American Century VP);

American Century VP - Balanced Fund - Class I (ACVB)

American Century VP - Capital Appreciation Fund - Class I (ACVCA)

American Century VP - Income & Growth Fund - Class I (ACVIG)

American Century VP - Income & Growth Fund - Class II (ACVIG2)

American Century VP - Inflation Protection Fund - Class II (ACVIP2)

American Century VP - International Fund - Class I (ACVI)

American Century VP - International Fund - Class II (ACVI2)

American Century VP - International Fund - Class III (ACVI3)

American Century VP - International Fund - Class IV (ACVI4)

American Century VP - Mid Cap Value Fund - Class I (ACVMV1)

American Century VP - Mid Cap Value Fund - Class II (ACVMV2)

American Century VP - Ultra(R) Fund - Class I (ACVU1)

American Century VP - Ultra(R) Fund - Class II (ACVU2)

American Century VP - Value Fund - Class I (ACVV)

American Century VP - Value Fund - Class II (ACVV2)

American Century VP - Vista(SM) Fund - Class I (ACVVS1)

American Century VP - Vista(SM) Fund - Class II (ACVVS2)

Portfolios of the American Funds Insurance Series(R) (American Funds IS);

American Funds IS - Growth Fund - Class 1 (AFGF)

American Funds IS - High Income Bond Fund - Class 1 (AFHY)

American Funds IS - U.S. Government/AAA-Rated Securities Fund - Class 1 (AFGC)

Portfolios of the BB&T Variable Insurance Funds;

BB&T Variable Insurance Funds - Capital Manager Equity Fund (BBCMAG)*

BB&T Variable Insurance Funds - Large Cap Fund (BBGI)*

BB&T Variable Insurance Funds - Large Cap Growth Fund (BBLCG)*

BB&T Variable Insurance Funds - Mid Cap Growth Fund (BBCA)*

Charles Schwab Money Market Portfolio (CHSMM)

Portfolios of the Credit Suisse Trust;

Credit Suisse Trust - Global Small Cap Portfolio (WVCP)

Credit Suisse Trust - International Focus Portfolio (WIEP)

Credit Suisse Trust - Small Cap Core I Portfolio (WSCP)

Portfolios of the Dreyfus Investment Portfolios (Dreyfus IP);

Dreyfus IP - European Equity Portfolio (DVEE)*

Dreyfus IP - Small Cap Stock Index Portfolio - Service Class (DVSCS)

(Continued)

84

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)

Dreyfus Stock Index Fund, Inc. - Service Class (DSIFS)

Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF);

Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)

Dreyfus VIF - Appreciation Portfolio - Service Class (DCAPS)

Dreyfus VIF - Developing Leaders Portfolio - Service Class (DVDLS)

Dreyfus VIF - Growth and Income Portfolio - Initial Class (DGI)

Portfolios of the Federated Insurance Series (Federated IS);

Federated IS - American Leaders Fund II - Service Class (FALFS)

Federated IS - Capital Appreciation Fund II - Service Class (FCA2S)

Federated IS - Market Opportunity Fund II - Service Class (FVMOS)

Federated IS - Quality Bond Fund II - Primary Class (FQB)

Federated IS - Quality Bond Fund II - Service Class (FQBS)

Portfolios of the Fidelity(R) Variable Insurance Products Fund (Fidelity(R) VIP);

Fidelity(R) VIP - Equity-Income Portfolio - Initial Class (FEIP)

Fidelity(R) VIP - Equity-Income Portfolio - Service Class 2 (FEI2)

Fidelity(R) VIP - Growth Portfolio - Initial Class (FGP)

Fidelity(R) VIP - Growth Portfolio - Service Class 2 (FG2)

Fidelity(R) VIP - High Income Portfolio - Initial Class (FHIP)

Fidelity(R) VIP - High Income Portfolio - Initial Class R (FHIPR)

Fidelity(R) VIP - Overseas Portfolio - Initial Class (FOP)

Fidelity(R) VIP - Overseas Portfolio - Initial Class R (FOPR)

Fidelity(R) VIP - Overseas Portfolio - Service Class 2 (FO2)

Fidelity(R) VIP - Overseas Portfolio - Service Class 2 R (FO2R)

Portfolios of the Fidelity(R) Variable Insurance Products Fund II (Fidelity(R) VIP II);

Fidelity(R) VIP II - Asset Manager Portfolio - Initial Class (FAMP)

Fidelity(R) VIP II - Contrafund(R) Portfolio - Initial Class (FCP)

Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class 2 (FC2)

Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class (FIGBS)

Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class 2 (FIGBP2)

Portfolios of the Fidelity(R) Variable Insurance Products Fund III (Fidelity(R) VIP III);

Fidelity(R) VIP III - Growth Opportunities Portfolio - Initial Class (FGOP)

Fidelity(R) VIP III - Mid Cap Portfolio - Service Class (FMCS)

Fidelity(R) VIP III - Mid Cap Portfolio - Service Class 2 (FMC2)

Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)

Fidelity(R) VIP III - Value Strategies Portfolio - Service Class 2 (FVSS2)

Portfolios of the Fidelity(R) Variable Insurance Products Fund IV (Fidelity(R) VIP IV);

Fidelity(R) VIP IV - Energy Portfolio - Service Class 2 (FNRS2)

Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class (FF10S)

Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class 2 (FF10S2)

Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class (FF20S)

Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class 2 (FF20S2)

Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class (FF30S)

Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class 2 (FF30S2)

Portfolios of the Financial Investors Variable Insurance Trust (Financial Investors VIT);

Financial Investors VIT - First Horizon Core Equity Portfolio (FHGIP)*

First Horizon Capital Appreciation Portfolio (FHCAP)*

Portfolios of the Franklin Templeton Variable Insurance Products Trust (Franklin Templeton VIP);

Franklin Templeton VIP - Developing Markets Securities Fund - Class 3 (FTVDM3)

Franklin Templeton VIP - Foreign Securities Fund - Class 2 (TIF2)

Franklin Templeton VIP - Foreign Securities Fund - Class 3 (TIF3)

Franklin Templeton VIP - Founding Funds Allocation Fund - Class 2 (FTVFA2)

Franklin Templeton VIP - Global Income Securities Fund - Class 3 (FTVGI3)

Franklin Templeton VIP - Income Securities Fund - Class 2 (FTVIS2)

Franklin Templeton VIP - Rising Dividends Securities Fund - Class 2 (FTVRD2)

Franklin Templeton VIP - Small Cap Value Securities Fund - Class 2 (FTVSV2)

Portfolios of the Janus Aspen Series;

Janus Aspen Series - Balanced Portfolio - Service Class (JABS)

Janus Aspen Series - Forty Portfolio - Service Class (JACAS)

Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)

Janus Aspen Series - Global Technology Portfolio - Service II Class (JAGTS2)

Janus Aspen Series - INTECH Risk Managed Core Portfolio - Service Class (JARLCS)

Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)

(Continued)

85

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

Janus Aspen Series - International Growth Portfolio - Service II Class (JAIGS2)

Portfolios of the JPMorgan Insurance Trust;

JPMorgan Insurance Trust - Balanced Portfolio 1 (OGAA)*

JPMorgan Insurance Trust - Core Bond Portfolio 1 (OGBDP)*

JPMorgan Insurance Trust - Diversified Equity Portfolio 1 (OGDEP)*

JPMorgan Insurance Trust - Diversified Mid Cap Growth Portfolio 1 (OGGO)*

JPMorgan Insurance Trust - Diversified Mid Cap Value Portfolio 1 (OGMVP)*

JPMorgan Insurance Trust - Equity-Index Portfolio 1 (OGEI)*

JPMorgan Insurance Trust - Government Bond Portfolio 1 (OGGB)*

JPMorgan Insurance Trust - Intrepid Growth Portfolio - Class 1 (OGLG) (formerly Large Cap Growth Portfolio -Class 1)*

JPMorgan Insurance Trust - Intrepid Mid Cap Portfolio 1 (OGDMP)*

Portfolios of the JPMorgan Series Trust II;

JPMorgan Series Trust II - Mid Cap Value Portfolio (JPMCVP)

Portfolios of the Lehman Brothers Advisers Management Trust (Lehman Brothers AMT);

Lehman Brothers AMT - Short Duration Bond Portfolio - I Class (AMTB)

Portfolios of the MFS(R) Variable Insurance Trust (MFS(R) VIT);

MFS(R) VIT - Investors Growth Stock Series - Service Class (MIGSC)

MFS(R) VIT - Value Series - Service Class (MVFSC)

MTB Large Cap Growth Fund II (VFLG2)

MTB Large Cap Value Fund II (VFLV2)

MTB Managed Allocation Fund - Aggressive Growth II (MBVAG2)

MTB Managed Allocation Fund - Conservative Growth II (MBVCG2)

MTB Managed Allocation Fund - Moderate Growth II (VFMG2)

Portfolios of the Nationwide Variable Insurance Trust (Nationwide VIT);

Nationwide VIT - American Funds Asset Allocation Fund - Class II (GVAAA2)

Nationwide VIT - American Funds Bond Fund - Class II (GVABD2)

Nationwide VIT - American Funds Global Growth Fund - Class II (GVAGG2)

Nationwide VIT - American Funds Growth Fund - Class II (GVAGR2)

Nationwide VIT - American Funds Growth-Income Fund - Class II (GVAGI2)

Nationwide VIT - Cardinal Aggressive Fund - Class II (NVCRA2)

Nationwide VIT - Cardinal Balanced Fund - Class II (NVCRB2)

Nationwide VIT - Cardinal Capital Appreciation Fund - Class II (NVCCA2)

Nationwide VIT - Cardinal Conservative Fund - Class II (NVCCN2)

Nationwide VIT - Cardinal Moderate Fund - Class II (NVCMD2)

Nationwide VIT - Cardinal Moderately Aggressive Fund - Class II (NVCMA2)

Nationwide VIT - Cardinal Moderately Conservative Fund - Class II (NVCMC2)

Nationwide VIT - Core Bond Fund - Class I (NVCBD1)

Nationwide VIT - Core Bond Fund - Class II (NVCBD2)

Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)

Nationwide VIT - Federated High Income Bond Fund - Class III (HIBF3)

Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)

Nationwide VIT - Gartmore Emerging Markets Fund - Class II (GEM2)

Nationwide VIT - Gartmore Emerging Markets Fund - Class III (GEM3)

Nationwide VIT - Gartmore Emerging Markets Fund - Class VI (GEM6)

Nationwide VIT - Gartmore Global Utilities Fund - Class II (GVGU2)

Nationwide VIT - Gartmore Global Utilities Fund - Class III (GVGU)

Nationwide VIT - Gartmore International Equity Fund - Class I (GIG) (formerly Gartmore International Growth Fund - Class I)

Nationwide VIT - Gartmore International Equity Fund - Class III (GIG3) (formerly Gartmore International Growth Fund - Class III)

Nationwide VIT - Gartmore International Equity Fund - Class VI (NVIE6)

Nationwide VIT - Gartmore Worldwide Leaders Fund - Class III (GEF3)

Nationwide VIT - Global Financial Services Fund - Class II (GVGF2)

Nationwide VIT - Global Financial Services Fund - Class III (GVGFS)

Nationwide VIT - Government Bond Fund - Class I (GBF)

Nationwide VIT - Growth Fund - Class I (CAF)

Nationwide VIT - Health Sciences Fund - Class II (GVGH2) (formerly Global Health Sciences Fund - Class II)

Nationwide VIT - Health Sciences Fund - Class III (GVGHS) (formerly Global Health Sciences Fund - Class III)

Nationwide VIT - Health Sciences Fund - Class VI (GVGH6) (formerly Global Health Sciences Fund - Class IV)

Nationwide VIT - International Index Fund - Class VIII (GVIX8)

Nationwide VIT - Investor Destinations Aggressive Fund - Class II (GVIDA)

Nationwide VIT - Investor Destinations Conservative Fund - Class II (GVIDC)

Nationwide VIT - Investor Destinations Moderate Fund - Class II (GVIDM)

Nationwide VIT - Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)

(Continued)

86

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

Nationwide VIT - Investor Destinations Moderately Conservative Fund - Class II (GVDMC)

Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)

Nationwide VIT - Lehman Brothers Core Plus Bond Fund - Class II (NVLCP2)

Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)

Nationwide VIT - Mid Cap Growth Fund - Class II (SGRF2)

Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)

Nationwide VIT - Money Market Fund - Class I (SAM)

Nationwide VIT - Multi-Manager International Growth Fund - Class III (NVMIG3)

Nationwide VIT - Multi-Manager International Growth Fund - Class VI (NVMIG6)

Nationwide VIT - Multi-Manager International Value Fund - Class II (GVDIV2) (formerly International Value Fund - Class II)

Nationwide VIT - Multi-Manager International Value Fund - Class III (GVDIV3) (formerly International Value Fund - Class III)

Nationwide VIT - Multi-Manager International Value Fund - Class VI (GVDIV6) (formerly International Value Fund - Class VI)

Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)

Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class II (NVMLG2)

Nationwide VIT - Multi-Manager Large Cap Value Fund - Class II (NVMLV2)

Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)

Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class II (NVMMG2)

Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)

Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)

Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class II (SCGF2)

Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)

Nationwide VIT - Multi-Manager Small Cap Value Fund - Class II (SCVF2)

Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)

Nationwide VIT - Multi-Manager Small Company Fund - Class II (SCF2)

Nationwide VIT - Nationwide Fund - Class I (TRF)

Nationwide VIT - Nationwide Fund - Class II (TRF2)

Nationwide VIT - Nationwide Leaders Fund - Class III (GVUSL)

Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class I (NVNMO1)

Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class II (NVNMO2)

Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class I (NVNSR1)

Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class II (NVNSR2)

Nationwide VIT - Short Term Bond Fund - Class II (NVSTB2)

Nationwide VIT - Technology and Communications Fund - Class I (GGTC) (formerly Global Technology and Communications Fund - Class I)

Nationwide VIT - Technology and Communications Fund - Class II (GGTC2) (formerly Global Technology and Communications Fund - Class II)

Nationwide VIT - Technology and Communications Fund - Class III (GGTC3) (formerly Global Technology and Communications Fund - Class III)

Nationwide VIT - Technology and Communications Fund - Class VI (GGTC6) (formerly Global Technology and Communications Fund - Class VI)

Nationwide VIT - U.S. Growth Leaders Fund - Class II (GVUG2)

Nationwide VIT - U.S. Growth Leaders Fund - Class III (GVUGL)

Nationwide VIT - Van Kampen Comstock Value Fund - Class II (EIF2)

Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)

Nationwide VIT - Van Kampen Real Estate Fund - Class I (NVRE1)

Nationwide VIT - Van Kampen Real Estate Fund - Class II (NVRE2)

Portfolios of the Neuberger Berman Advisers Management Trust (Neuberger Berman AMT);

Neuberger Berman AMT - Growth Portfolio - Class I (AMTG)

Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)

Neuberger Berman AMT - International Portfolio - Class S (AMINS)

Neuberger Berman AMT - Mid Cap Growth Portfolio - Class S (AMMCGS)

Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)

Neuberger Berman AMT - Regency Portfolio - Class S (AMRS)

Neuberger Berman AMT - Small Cap Growth Portfolio - Class S (AMFAS) (formerly Fasciano Portfolio - Class S)

Neuberger Berman AMT - Socially Responsive Portfolio - Class I (AMSRS)

Portfolios of the Oppenheimer Variable Account Funds (Oppenheimer VAF);

Oppenheimer VAF - Balanced Fund - Non-Service Class (OVMS)

Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)

Oppenheimer VAF - Capital Appreciation Fund - Service Class (OVCAFS)

Oppenheimer VAF - Core Bond Fund - Non-Service Class (OVB)

Oppenheimer VAF - Global Securities Fund - Class 3 (OVGS3)

Oppenheimer VAF - Global Securities Fund - Class 4 (OVGS4)

Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)

(Continued)

87

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

Oppenheimer VAF - Global Securities Fund - Service Class (OVGSS)

Oppenheimer VAF - High Income Fund - Class 3 (OVHI3)

Oppenheimer VAF - High Income Fund - Class 4 (OVHI4)

Oppenheimer VAF - High Income Fund - Non-Service Class (OVHI)

Oppenheimer VAF - High Income Fund - Service Class (OVHIS)

Oppenheimer VAF - Main Street Small Cap Fund(R) - Non-Service Class (OVSC)

Oppenheimer VAF - Main Street Small Cap Fund(R) - Service Class (OVSCS)

Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)

Oppenheimer VAF - Main Street(R) - Service Class (OVGIS)

Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)

Pioneer Small Cap Value II VCT Portfolio - Class I (SFRSCV)*

Portfolios of the Pioneer Variable Contracts Trust (Pioneer VCT);

Pioneer VCT - Pioneer Small Cap Value Portfolio - Class I (PISVP1)

Portfolios of the Putnam Variable Trust (Putnam VT);

Putnam VT - Growth and Income Fund - Class IB (PVGIB)

Putnam VT - International Equity Fund - Class IB (PVTIGB)

Putnam VT - Voyager Fund - Class IB (PVTVB)

Strong Variable Insurance Funds, Inc. - Strong International Stock Fund II (SVIF)*

Portfolios of T. Rowe Price;

T. Rowe Price Blue Chip Growth Portfolio - II (TRBCG2)

T. Rowe Price Equity Income Portfolio - II (TREI2)

T. Rowe Price Limited Term Bond Portfolio - Class II (TRLT2)

The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)

Turner GVIT Growth Focus Fund - Class I (TGF)*

Turner GVIT Growth Focus Fund - Class III (TGF3)*

Portfolios of the Van Eck Worldwide Insurance Trust;

Van Eck Worldwide Insurance Trust - Bond Fund - Class R1 (VWBFR)

Van Eck Worldwide Insurance Trust - Bond Fund - Initial Class (VWBF)

Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Class R1 (VWEMR)

Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)

Van Eck Worldwide Insurance Trust - Hard Assets Fund - Class R1 (VWHAR)

Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)

Portfolios of the Van Kampen Life Investment Trust (Van Kampen LIT);

Van Kampen LIT - Morgan Stanley Real Estate Securities Fund (ACRE)*

Portfolios of the Van Kampen - The Universal Institutional Funds, Inc. (Van Kampen UIF);

Van Kampen UIF - Core Plus Fixed Income Portfolio - Class I (MSVFI)

Van Kampen UIF - Core Plus Fixed Income Portfolio - Class II (MSVF2)

Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)

Van Kampen UIF - Emerging Markets Debt Portfolio - Class II (MSEMB)

Van Kampen UIF - Global Real Estate Portfolio - Class II (VKVGR2)*

Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)

Van Kampen UIF - U.S. Real Estate Portfolio - Class II (MSVREB)

Portfolios of the Victory Variable Insurance Funds (Victory VIF);

Victory VIF - Diversified Stock Fund - Class A (VYDS)

Victory VIF - Investment Quality Bond Fund - Class A (VYIQB)*

Victory VIF - Small Company Opportunity Fund - Class A (VYSCO)*

Portfolios of the Wells Fargo Advantage Variable Trust Funds(SM) (Wells Fargo AVT);

Wells Fargo AVT - Asset Allocation Fund (WFVAA)*

Wells Fargo AVT - Discovery Fund(SM) (SVDF)

Wells Fargo AVT - Large Company Growth Fund (WFVLCG)

Wells Fargo AVT - Money Market Fund (WFVMM)

Wells Fargo AVT - Opportunity Fund(SM) (SVOF)

Wells Fargo AVT - Small Cap Growth Fund (WFVSCG)*

Wells Fargo AVT - Small-Mid Cap Value Fund (WFVSMV)

Wells Fargo AVT - Total Return Bond Fund (WFVTRB)

* At December 31, 2008, contract owners were not invested in the fund.

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.

(Continued)

88

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans.

Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially.

A purchase payment could be presented as a negative equity transaction in the Statements of Changes in Contract Owners’ Equity if a prior period purchase payment is refunded to a contract owner due to a contract cancellation during the free look period, and/or if a gain is realized by the contract owner during the free look period.

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued on the closing net asset value per share at December 31, 2008 of such funds, which value their investment securities at fair value. The cost of investments sold is determined on a first in – first out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed), and dividends and capital gain distributions are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.

(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 generally 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 U.S. 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% unless the annuitant elects otherwise, in which case the rate may vary from 3.5% to 7%, 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.

(g) Recently Issued Accounting Standard

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 provides enhanced guidance for using fair value to measure assets and liabilities and requires new disclosures about fair value measurements. SFAS 157 also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. For assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition, the reporting entity shall disclose information that enables financial statement users to assess the inputs used to develop those measurements. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. The Company adopted SFAS 157 effective January 1, 2008. The adoption of SFAS 157 did not have a material impact on the Account’s financial position or results of operations.

(Continued)

89

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

(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 redeemed, the Company will, with certain exceptions, deduct from a contract owners’ contract value a contingent deferred sales charge. For BOA IV contracts issued prior to December 15, 1988, the contingent deferred sales charge will be equal to 5% of the lesser of purchase payments or the amount redeemed. For America’s Vision, America’s Future II, All American Gold, Future Venue, Choice Venue II and for BOA IV contracts issued on or after December 15, 1988, the contingent deferred sales charge will not exceed 7% of purchase payments redeemed, such charge declining a specified percentage each year. After the purchase payment has been held in the contract for 7 years this charge is 0%. For Achiever contracts, this charge will not exceed 8% of purchase payments redeemed, such charge declining a specified percentage each year. After the purchase payment has been held in the contract for 8 years this charge is 0%. For Elite Venue contracts, the contingent deferred sales charge will not exceed 7% of purchase payments redeemed, such charge declining a specified percentage each year. After the purchase payment has been held in the contract for 4 years this charge is 0%. No contingent deferred sales charge is deducted on NEBA, Exclusive Venue or Schwab contracts. No sales charges are deducted on redemptions used to purchase units in the fixed investment options of the company.

The Company may deduct a contract maintenance charge of up to $30, dependent upon contract type and issue date, which is satisfied by redeeming units. The Company deducts a mortality and expense risk charge assessed through a reduction of the unit value. The Option tables on the following two pages illustrate the annual rate for all contract level charges by product, as well as the maximum variable account charge per product. The table also summarizes the contract level options available to contract holders. The options and related charges are described in more detail in the applicable product prospectus.

(Continued)

90

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

Nationwide Variable Account - II Options	BOA IV	America’s   Vision	NEBA	Schwab   Custom   Solutions		Schwab   Income   Choice
Variable Account Charges - Recurring	1.30%	1.40%	0.80%	0.95%		0.65%
Death Benefit Options - Allows enhanced provisions in place of the standard death benefit.
One-Year Enhanced	-	-	-	0.10%		0.20%
Combination Enhanced	-	-	-	0.40%		-
Return of Premium						0.10%
Beneficiary Protector II Option	-	-	-	0.35%		0.30%
Upon death of the annuitant, in addition to any death benefit payable, the contract will be credited an additional amount.
Capital Preservation and Income Options:
Capital Preservation Plus Option	-	-	-	0.50%		-
Lifetime Income Option
5% Lifetime Income Option (New York)	-	-	-	-		1.00%(13)
7% Lifetime Income Option (Non-New York)	-	-	-	-		1.00%(14)
Maximum Variable Account Charges*	1.30%	1.40%	0.80%	2.20%		2.15%
Nationwide Variable Account - II Options	America’s   Future II	All   American   Gold	Acheiver	Income   Architect
Variable Account Charges - Recurring	1.15%	1.15%	1.55%	0.40%
CDSC Options:
Four Year CDSC	0.30%	0.50%	0.20%	-
No CDSC	0.35%	0.55%	0.25%	-
Death Benefit Options - Allows enhanced provisions in place of the standard death benefit.
One-Year Enhanced II	0.20%(2)	0.20%(2)	-	-
One-Year Enhanced	0.10%(4)	0.10%(4)	-	-
One-Month Enhanced	-	0.35%(2)	0.20%(2)	-
Combination Enhanced II	-	-	0.45%(12)	-
Combination Enhanced	-	0.40%(5)	0.30%(5)	-
Beneficiary Protector II Option	-	0.35%	0.35%	-
Upon death of the annuitant, in addition to any death benefit payable, the contract will be credited an additional amount.
Capital Preservation and Income Options:
Capital Preservation Plus Lifetime Income Option	1.00%	1.00%	1.00%	-
Capital Preservation Plus Option	0.50%(17)	0.50%(17)	0.50%(17)	-
Lifetime Income Option
5% Lifetime Income Option (New York)	1.00%(13)	1.00%(13)	1.00%(13)	-
7% Lifetime Income Option (Non-New York)	1.00%(14)	1.00%(14)	1.00%(14)	-
10% Lifetime Income Option	-	1.20%(15)	1.20%(15)	-
Spousal Continuation Benefit Option
5% Spousal Continuation Benefit (New York)	0.15%	0.15%	0.15%	-
7% Spousal Continuation Benefit (Non-New York)	0.15%	0.15%	0.15%	-
10% Spousal Continuation Benefit (Non-New York)	-	0.30%(16)	0.30%(16)	-
Guaranteed Lifetime Withdrawal Fee	-	-	-	0.60	%(18)
Spousal Continuation Benefit Option	-	-	-	0.10	%(18)
Extra Value Options (EV):
Fee assessed to assets of the variable account and to allocations made to the fixed account or guaranteed term options in exchange for application of Extra Value Credit of purchase payments made during the first 12 months contract is in force.
3% Extra Value Credit Option	0.30%	0.45%(9)	0.10%	-
4% Extra Value Credit Option	0.40%	-	0.25%	-
5% Extra Value Credit Option	-	0.70%(2)	0.45%(10)	-
5% Extra Value Credit Option	-	-	0.55%(11)	-
Maximum Variable Account Charges*	3.05%	4.60%(1)	4.60%(1)	1.10%(1)

(Continued)

91

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

Nationwide Variable Account - II Options	Future     Venue	Exclusive     Venue	Elite       Venue	Choice     Venue II
Variable Account Charges - Recurring	1.10%	1.60%	1.75%	1.50%
Death Benefit Options - Allows enhanced provisions in place of the standard death benefit.
One-Year Enhanced II	0.15%(3)	-	-	-
One-Year Enhanced	0.10%(4)	-	-	-
One-Month Enhanced II	0.35%(3)	0.20%(2)	0.20%(2)	0.20%(2)
One-Month Enhanced	0.30%(6)	0.20%(6)	0.20%(6)	0.20%(6)
Combination Enhanced II	0.45%(3)	0.35%(2)	0.35%(2)	0.35%(2)
Combination Enhanced	0.40%(7)	0.30%(7)	0.30%(7)	0.30%(7)
Return of Premium
Spousal Protection Annuity Option - Allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse
Spousal Protection Annuity Option II	0.20%(3)	-	-	-
Spousal Protection Annuity Option	0.10%(8)	0.20%	0.20%	0.20%
Beneficiary Protector II Option	0.35%	0.35%	0.35%	0.35%
Upon death of the annuitant, in addition to any death benefit payable, the contract will be credited an additional amount.
Capital Preservation and Income Options:
Capital Preservation Plus Lifetime Income Option	1.00%	-	1.00%	1.00%
Capital Preservation Plus Option	0.50%(17)	0.50%	0.50%(17)	0.50%(17)
Lifetime Income Option
5% Lifetime Income Option (New York)	1.00%(13)	-	1.00%(13)	1.00%(13)
7% Lifetime Income Option (Non-New York)	1.00%(14)	-	1.00%(14)	1.00%(14)
10% Lifetime Income Option	1.20%(15)	-	1.20%(15)	1.20%(15)
Spousal Continuation Benefit Option
5% Spousal Continuation Benefit (New York)	0.15%	-	0.15%	0.15%
7% Spousal Continuation Benefit (Non-New York)	0.15%	-	0.15%	0.15%
10% Spousal Continuation Benefit (Non-New York)	0.30%(16)	-	0.30%(16)	0.30%(16)
Extra Value Options (EV):
Fee assessed to assets of the variable account and to allocations made to the fixed account or guaranteed term options in exchange for application of Extra Value Credit of purchase payments made during the first 12 months contract is in force.
3% Extra Value Credit Option	0.45%	-	-	-
Maximum Variable Account Charges*	4.05%(1)	3.00%	4.15%(1)	3.90%(1)

(*)  The contract charges indicated in bold, when summarized, represent the Maximum Variable Account Charges if all optional benefits available under the contract are elected including the most expensive of the mutually exclusive optional benefits.

(1)  The total variable account charges associated with this product may be higher or lower than this amount, depending on whether the Current Income Benefit Base or Guaranteed Lifetime Withdrawal Base is higher or lower than the daily net assets. For purposes of this table, the Company assumes the Current Income Benefit Base or Guaranteed Lifetime Withdrawal Base is equal to the daily net assets.

(2)  Available beginning May 1, 2004 or a later date if state law requires

(3)  Available beginning September 1, 2004 or a later date if state law requires

(4)  Available until state approval is received for the One-Year Enhanced Death Benefit II Option

(5)  Available until state approval is received for the One-Month Enhanced Death Benefit Option

(6)  Available until state approval is received for the One-Month Enhanced Death Benefit II Option

(7)  Available until state approval is received for the Combination Enhanced Death Benefit II Option

(8)  Available until state approval is received for the Spousal Protection Annuity II Option

(9)  Available until state approval is received for the 5% Extra Value Option

(10)  Non-NY residents

(11)  NY residents

(12)  Available beginning May 1, 2007 or a later date if state law requires

(13)  Currently, the charge associated with the 5% Lifetime Income Option is equal to 0.60% of the current income base and is assessed through the reduction of units.

(14)  Currently, the charge associated with the 7% Lifetime Income Option is equal to 0.70% of the current income base and is assessed through the reduction of units.

(15)  Currently, the charge associated with the 10% Lifetime Income Option is equal to 0.75% of the current income base and is assessed through the reduction of units.

(16)  Currently, the charge associated with the 10% Spousal Continuation Benefit is equal to 0.20% of the current income base and is assessed through the reduction of units.

(17)  No longer available.

(18)  This charge is a percentage of the Guaranteed Lifetime Withdrawal Base.

(Continued)

92

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

The following table provides mortality and expense risk charges by asset fee rates for the period ended December 31, 2008.

	Total		AVBV2	AVCA2	AVCD2	ALBS	ALMCS	ALVGIB	ALVSVB
0.65%	$	1,912	-	-	-	-	-	-	-
0.75%		11,194	-	-	-	-	-	-	-
0.80%		239,472	4	57	155	-	-	-	1
0.85%		11,844	-	-	-	-	-	-	1
0.95%		409,923	1,031	1,160	1,271	834	1,261	2,581	1,475
1.05%		408,672	211	2,179	233	1,354	4,312	2,351	3,133
1.10%		1,509,320	2,178	873	1,544	-	-	531	577
1.15%		22,482,941	64,657	21,429	34,558	-	-	21,364	11,306
1.20%		186,070	1,412	12	369	-	-	880	136
1.25%		3,171,515	21,888	4,713	10,036	-	-	18,474	5,403
1.30%		59,642,789	4,888	4,518	10,539	-	-	1,721	1,993
1.35%		5,861,535	15,095	2,045	7,931	-	214	83	499
1.40%		26,843,029	9,116	4,439	6,005	-	-	4,635	1,249
1.45%		5,439,737	17,226	7,307	10,240	117	886	17,287	4,773
1.50%		4,525,038	31,072	8,702	8,688	-	-	16,420	4,350
1.55%		21,749,541	93,826	25,540	41,851	-	44	35,058	27,501
1.60%		1,636,587	8,963	1,617	3,574	-	-	5,390	2,539
1.65%		10,566,039	39,458	5,953	15,367	-	-	14,649	7,151
1.70%		3,381,074	23,186	8,084	6,492	-	-	7,372	9,637
1.75%		41,826,410	57,716	23,390	32,722	-	-	12,820	8,437
1.80%		8,709,796	58,457	18,684	17,476	-	29	22,599	26,645
1.85%		3,461,005	23,059	9,072	7,721	-	-	3,742	5,469
1.90%		2,156,577	5,358	5,730	1,906	-	-	5,435	3,176
1.95%		6,964,411	9,544	7,485	12,601	-	-	4,179	3,689
2.00%		16,368,574	24,588	7,965	12,641	-	-	2,967	9,895
2.05%		4,650,440	20,615	8,070	9,609	-	-	6,547	4,997
2.10%		4,312,059	11,976	3,310	18,248	-	-	3,626	1,735
2.15%		11,829,281	15,630	8,108	21,493	-	-	2,153	5,464
2.20%		3,942,567	3,587	898	2,559	-	-	1,207	217
2.25%		7,406,162	13,843	5,894	3,917	-	-	1,706	508
2.30%		1,603,148	6,513	3,064	5,714	-	-	3,269	212
2.35%		28,354,954	9,720	6,862	9,490	-	-	57	2,195
2.40%		2,612,819	2,046	1,668	3,603	-	-	905	362
2.45%		1,997,943	2,033	856	4,544	-	-	-	14
2.50%		962,222	1,778	2,574	2,791	-	-	152	357
2.55%		2,848,008	1,185	461	3,010	-	-	198	234
2.60%		1,421,599	2,198	1,429	310	-	-	696	167
2.65%		212,253	322	-	52	-	-	-	-
2.70%		801,769	354	140	441	-	-	-	37
2.75%		212,627	21	48	2,391	-	-	-	-
2.80%		308,003	339	590	2,451	-	-	176	4,618
2.85%		43,383	-	63	2	-	-	-	-
2.90%		235,102	-	-	-	-	-	346	-
2.95%		47,340	283	310	444	-	-	-	-
3.00%		49,765	-	-	89	-	-	-	-
3.05%		37,310	-	-	-	-	-	-	-
3.10%		42,873	-	-	-	-	-	-	-
3.15%		1,437	-	-	-	-	-	-	-
3.20%		1,027	-	-	-	-	-	-	-
3.25%		14,859	-	-	-	-	-	-	-
Totals	$	321,513,955	605,376	215,299	335,078	2,305	6,746	221,576	160,152

(Continued)

93

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	ACVB		ACVCA	ACVIG	ACVIG2	ACVIP2	ACVI	ACVI2	ACVI3
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	70	-	-	-
0.80%		1,611	2,090	501	-	1,121	1,718	-	937
0.85%		-	-	-	-	-	-	-	-
0.95%		-	-	-	5,998	11,226	-	117	-
1.05%		-	-	-	5,317	8,541	-	-	-
1.10%		-	-	-	21	5,286	-	174	-
1.15%		-	-	-	19,042	175,331	-	7,599	-
1.20%		-	-	-	80	505	-	282	-
1.25%		-	-	-	7,045	49,875	-	4,115	-
1.30%		508,509	1,288,762	239,823	-	209,046	345,665	-	268,032
1.35%		-	-	-	366	32,203	-	-	-
1.40%		245,659	284,161	84,348	2,733	120,708	242,323	570	72,105
1.45%		-	-	-	7,913	73,260	-	3,943	-
1.50%		-	-	-	4,212	39,167	-	4,930	-
1.55%		-	-	-	28,136	231,727	-	3,522	-
1.60%		-	-	-	1,514	17,476	-	2,276	-
1.65%		-	-	-	7,877	71,142	-	1,490	-
1.70%		-	-	-	2,163	18,492	-	1,701	-
1.75%		-	-	-	4,292	144,791	-	343	-
1.80%		-	-	-	13,785	105,627	-	2,930	-
1.85%		-	-	-	4,963	39,570	-	1,442	-
1.90%		-	-	-	2,632	5,857	-	332	-
1.95%		-	-	-	6,327	34,468	-	294	-
2.00%		-	-	-	972	64,132	-	-	-
2.05%		-	-	-	1,994	41,991	-	2,382	-
2.10%		-	-	-	9,096	57,718	-	736	-
2.15%		-	-	-	701	32,144	-	469	-
2.20%		-	-	-	1,896	40,784	-	-	-
2.25%		-	-	-	404	20,161	-	-	-
2.30%		-	-	-	225	18,445	-	-	-
2.35%		-	-	-	400	27,951	-	-	-
2.40%		-	-	-	174	4,414	-	-	-
2.45%		-	-	-	-	13,708	-	-	-
2.50%		-	-	-	136	5,416	-	-	-
2.55%		-	-	-	156	7,195	-	-	-
2.60%		-	-	-	722	6,542	-	-	-
2.65%		-	-	-	138	156	-	-	-
2.70%		-	-	-	-	302	-	-	-
2.75%		-	-	-	-	25	-	-	-
2.80%		-	-	-	31	250	-	-	-
2.85%		-	-	-	88	18	-	-	-
2.90%		-	-	-	-	378	-	-	-
2.95%		-	-	-	-	37	-	-	-
3.00%		-	-	-	-	80	-	-	-
3.05%		-	-	-	-	307	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	755,779	1,575,013	324,672	141,549	1,737,643	589,706	39,647	341,074

(Continued)

94

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	ACVI4		ACVMV1	ACVMV2	ACVU1	ACVU2	ACVV	ACVV2	ACVVS1
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	31	-	-	-	62	-
0.80%		-	848	-	135	-	3,302	-	1,220
0.85%		-	-	32	-	-	-	64	-
0.95%		1,606	-	110	-	716	-	5,563	-
1.05%		2,454	-	428	-	2,082	-	9,082	-
1.10%		1,919	-	5,550	-	339	-	6,774	-
1.15%		38,432	-	80,130	-	17,605	-	188,581	-
1.20%		413	-	391	-	942	-	904	-
1.25%		7,466	-	7,754	-	5,574	-	44,972	-
1.30%		239	47,487	597	30,269	21	807,725	1,441	71,799
1.35%		6,986	-	23,091	-	4,223	-	71,207	-
1.40%		5,501	23,311	13,039	8,735	2,019	345,883	36,900	29,962
1.45%		24,169	-	23,841	-	5,993	-	64,004	-
1.50%		3,907	-	17,783	-	6,244	-	38,359	-
1.55%		42,016	-	100,608	-	20,992	-	154,393	-
1.60%		5,128	-	5,321	-	5,169	-	19,687	-
1.65%		8,130	-	34,071	-	15,866	-	89,835	-
1.70%		3,274	-	14,973	-	14,054	-	31,214	-
1.75%		21,285	-	133,738	-	17,035	-	145,027	-
1.80%		19,461	-	41,597	-	15,726	-	92,730	-
1.85%		16,085	-	10,304	-	5,882	-	30,204	-
1.90%		3,477	-	3,121	-	2,984	-	12,173	-
1.95%		4,856	-	21,983	-	7,272	-	24,251	-
2.00%		7,016	-	58,991	-	6,737	-	37,104	-
2.05%		3,707	-	7,601	-	9,229	-	35,662	-
2.10%		916	-	21,746	-	5,923	-	18,325	-
2.15%		2,196	-	41,537	-	15,066	-	47,433	-
2.20%		1,397	-	24,488	-	1,736	-	9,742	-
2.25%		2,396	-	18,498	-	8,634	-	20,882	-
2.30%		195	-	2,659	-	2,232	-	12,076	-
2.35%		4,076	-	121,490	-	4,223	-	39,171	-
2.40%		493	-	9,611	-	1,881	-	14,406	-
2.45%		756	-	5,578	-	323	-	11,552	-
2.50%		-	-	1,865	-	3,981	-	5,828	-
2.55%		49	-	8,008	-	704	-	1,880	-
2.60%		20	-	7,171	-	386	-	2,975	-
2.65%		326	-	468	-	137	-	555	-
2.70%		66	-	4,087	-	471	-	3,221	-
2.75%		280	-	726	-	93	-	101	-
2.80%		318	-	540	-	580	-	5,414	-
2.85%		-	-	50	-	49	-	140	-
2.90%		-	-	553	-	72	-	2,358	-
2.95%		-	-	27	-	-	-	75	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	12	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	25	-	-	-	-	-
Totals	$	241,011	71,646	874,224	39,139	213,195	1,156,910	1,336,327	102,981

(Continued)

95

NATIONWIDE VARIABLE ACCOUNT- II (NOTES TO FINANCIAL STATEMENTS, Continued)

	ACVVS2		AFGF	AFHY	AFGC	CHSMM	WVCP	WIEP	WSCP
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	599	-	-	-
0.80%		-	-	-	-	-	63	380	1,962
0.85%		-	-	-	-	3,054	-	-	-
0.95%		925	-	-	-	114,375	-	-	-
1.05%		828	-	-	-	113,183	-	-	-
1.10%		2,433	-	-	-	-	-	-	-
1.15%		43,738	-	-	-	-	-	-	-
1.20%		49	-	-	-	-	-	-	-
1.25%		4,616	-	-	-	-	-	-	-
1.30%		279	178,215	11,331	17,340	-	21,277	197,863	442,026
1.35%		10,342	-	-	-	3,264	-	-	-
1.40%		4,485	-	-	-	-	10,493	191,124	215,292
1.45%		14,329	-	-	-	3,007	-	-	-
1.50%		12,413	-	-	-	-	-	-	-
1.55%		56,096	-	-	-	1,368	-	-	-
1.60%		4,223	-	-	-	-	-	-	-
1.65%		19,531	-	-	-	-	-	-	-
1.70%		9,410	-	-	-	-	-	-	-
1.75%		44,238	-	-	-	-	-	-	-
1.80%		21,658	-	-	-	-	-	-	-
1.85%		9,887	-	-	-	121	-	-	-
1.90%		7,732	-	-	-	-	-	-	-
1.95%		17,168	-	-	-	-	-	-	-
2.00%		13,759	-	-	-	-	-	-	-
2.05%		6,995	-	-	-	-	-	-	-
2.10%		6,706	-	-	-	-	-	-	-
2.15%		27,727	-	-	-	-	-	-	-
2.20%		8,057	-	-	-	-	-	-	-
2.25%		4,744	-	-	-	-	-	-	-
2.30%		3,181	-	-	-	-	-	-	-
2.35%		19,025	-	-	-	-	-	-	-
2.40%		7,311	-	-	-	-	-	-	-
2.45%		15,422	-	-	-	-	-	-	-
2.50%		1,198	-	-	-	-	-	-	-
2.55%		5,362	-	-	-	-	-	-	-
2.60%		3,911	-	-	-	-	-	-	-
2.65%		89	-	-	-	-	-	-	-
2.70%		506	-	-	-	-	-	-	-
2.75%		810	-	-	-	-	-	-	-
2.80%		3,721	-	-	-	-	-	-	-
2.85%		-	-	-	-	-	-	-	-
2.90%		-	-	-	-	-	-	-	-
2.95%		-	-	-	-	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	412,904	178,215	11,331	17,340	238,971	31,833	389,367	659,280

(Continued)

96

NATIONWIDE VARIABLE ACCOUNT- II (NOTES TO FINANCIAL STATEMENTS, Continued)

	DVSCS		DSIF	DSIFS	DCAP	DCAPS	DVDLS	DGI	FALFS
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	63	-	-	-
0.80%		408	9,418	-	1,259	-	-	948	-
0.85%		-	-	-	-	-	-	-	-
0.95%		3,063	-	22,837	-	3,929	756	-	63
1.05%		3,894	-	17,137	-	2,025	189	-	-
1.10%		1,540	-	5,624	-	805	-	-	-
1.15%		75,517	-	269,715	-	39,011	8,823	-	1,561
1.20%		724	-	2,990	-	23	-	-	-
1.25%		18,022	-	57,171	-	12,489	1,217	-	1,322
1.30%		140,553	3,112,824	1,631	317,980	802	-	197,101	-
1.35%		15,747	-	59,232	-	5,755	78	-	-
1.40%		56,987	1,660,709	30,930	134,386	3,621	643	96,523	487
1.45%		34,226	-	88,969	-	15,241	1,298	-	603
1.50%		16,855	-	59,129	-	13,525	696	-	1,362
1.55%		77,534	-	206,693	-	50,115	4,204	-	5,275
1.60%		7,083	-	30,110	-	2,348	626	-	1,560
1.65%		29,477	-	107,448	-	25,037	1,245	-	1,601
1.70%		12,029	-	18,804	-	8,086	1,171	-	1,258
1.75%		41,673	-	128,504	-	30,036	436	-	182
1.80%		50,908	-	78,259	-	14,896	2,039	-	665
1.85%		10,040	-	39,771	-	12,896	816	-	308
1.90%		2,966	-	14,199	-	4,577	76	-	401
1.95%		11,674	-	25,771	-	6,106	894	-	1,455
2.00%		19,560	-	92,207	-	11,092	93	-	164
2.05%		6,505	-	52,956	-	6,311	1,234	-	618
2.10%		7,975	-	18,792	-	6,391	104	-	123
2.15%		4,504	-	28,324	-	10,423	-	-	1,261
2.20%		5,986	-	12,434	-	2,750	-	-	13
2.25%		1,402	-	22,680	-	7,639	1,814	-	807
2.30%		3,071	-	6,093	-	4,894	-	-	4
2.35%		7,913	-	16,998	-	4,253	-	-	32
2.40%		1,505	-	20,066	-	1,189	243	-	73
2.45%		152	-	2,064	-	1,042	-	-	-
2.50%		437	-	8,254	-	1,592	-	-	-
2.55%		102	-	1,490	-	215	-	-	93
2.60%		1,550	-	4,491	-	3,294	-	-	-
2.65%		137	-	1,119	-	89	-	-	-
2.70%		29	-	2,186	-	641	-	-	-
2.75%		241	-	136	-	66	-	-	22
2.80%		90	-	19	-	904	-	-	-
2.85%		-	-	91	-	64	-	-	-
2.90%		-	-	350	-	-	-	-	-
2.95%		-	-	-	-	-	-	-	-
3.00%		-	-	-	-	81	-	-	-
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	672,079	4,782,951	1,555,674	453,625	314,316	28,695	294,572	21,313

(Continued)

97

NATIONWIDE VARIABLE ACCOUNT- II (NOTES TO FINANCIAL STATEMENTS, Continued)

	FCA2S		FVMOS	FQB	FQBS	FEIP	FEI2	FGP	FG2
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	-	-	-	-
0.80%		-	25	852	-	8,175	-	9,935	-
0.85%		-	-	-	-	-	-	-	158
0.95%		423	135	-	2,274	-	386	-	666
1.05%		162	204	-	1,472	-	545	-	1,875
1.10%		204	193	-	2,647	-	10,880	-	5,158
1.15%		5,701	7,527	-	106,538	-	338,115	-	119,643
1.20%		472	92	-	1,220	-	3,963	-	246
1.25%		3,103	735	-	41,570	-	84,478	-	27,542
1.30%		-	20,720	136,101	54	5,348,160	4,244	5,702,180	1,961
1.35%		-	1,875	-	36,279	-	87,574	-	18,431
1.40%		710	11,196	59,667	9,617	2,486,273	30,642	1,586,509	11,738
1.45%		1,662	14,822	-	44,917	-	114,257	-	45,735
1.50%		2,487	1,267	-	37,794	-	72,528	-	31,180
1.55%		4,945	17,008	-	114,583	-	296,810	-	124,030
1.60%		1,076	6,087	-	12,958	-	38,751	-	9,156
1.65%		3,891	1,876	-	54,983	-	151,028	-	71,926
1.70%		1,464	394	-	24,189	-	35,687	-	17,726
1.75%		886	10,503	-	112,829	-	234,027	-	90,192
1.80%		1,897	16,622	-	91,500	-	162,502	-	83,111
1.85%		1,686	10,627	-	16,861	-	73,108	-	25,421
1.90%		910	2,670	-	7,980	-	17,176	-	12,817
1.95%		949	729	-	18,371	-	43,306	-	21,882
2.00%		694	18,459	-	32,263	-	81,801	-	50,221
2.05%		3,035	128	-	18,234	-	63,549	-	43,715
2.10%		413	8,562	-	14,406	-	40,137	-	34,751
2.15%		173	516	-	35,566	-	61,452	-	32,716
2.20%		1,563	1,886	-	9,071	-	35,258	-	62,385
2.25%		1,478	71	-	11,289	-	30,843	-	12,170
2.30%		70	6,880	-	7,829	-	15,056	-	8,755
2.35%		185	10,868	-	15,586	-	52,402	-	12,286
2.40%		-	-	-	4,090	-	10,228	-	13,722
2.45%		10	149	-	2,497	-	14,634	-	13,882
2.50%		-	-	-	2,158	-	5,745	-	4,468
2.55%		339	60	-	54	-	22,283	-	17,520
2.60%		21	-	-	6,602	-	2,233	-	1,474
2.65%		-	-	-	-	-	149	-	555
2.70%		-	-	-	1,736	-	1,183	-	297
2.75%		-	-	-	74	-	146	-	471
2.80%		44	4,744	-	1,402	-	2,456	-	6,961
2.85%		-	-	-	125	-	119	-	698
2.90%		-	-	-	-	-	145	-	-
2.95%		-	-	-	51	-	481	-	-
3.00%		-	-	-	-	-	-	-	177
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		126	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	40,779	177,630	196,620	901,669	7,842,608	2,240,307	7,298,624	1,037,818

(Continued)

98

NATIONWIDE VARIABLE ACCOUNT- II (NOTES TO FINANCIAL STATEMENTS, Continued)

	FHIP		FHIPR	FOP	FOPR	FO2	FO2R	FAMP	FCP
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	-	-	-	-
0.80%		2,391	205	510	1,415	-	-	1,264	10,924
0.85%		-	-	-	-	-	1	-	-
0.95%		-	-	-	-	-	603	-	-
1.05%		-	-	-	-	-	2,804	-	-
1.10%		-	-	-	-	1,290	4,044	-	-
1.15%		-	-	-	-	24,107	127,716	-	-
1.20%		-	-	-	-	-	213	-	-
1.25%		-	-	-	-	10,585	19,275	-	-
1.30%		685,897	112,821	1,158,281	596,753	-	1,815	2,418,828	4,797,642
1.35%		-	-	-	-	-	32,957	-	-
1.40%		413,802	57,821	309,487	146,596	1,537	13,943	622,795	2,255,382
1.45%		-	-	-	-	4,277	54,256	-	-
1.50%		-	-	-	-	7,095	39,827	-	-
1.55%		-	-	-	-	8,437	137,232	-	-
1.60%		-	-	-	-	5,071	15,096	-	-
1.65%		-	-	-	-	7,719	44,096	-	-
1.70%		-	-	-	-	4,513	33,206	-	-
1.75%		-	-	-	-	2,959	87,316	-	-
1.80%		-	-	-	-	8,280	83,792	-	-
1.85%		-	-	-	-	2,578	20,180	-	-
1.90%		-	-	-	-	620	11,151	-	-
1.95%		-	-	-	-	1,169	14,854	-	-
2.00%		-	-	-	-	623	44,499	-	-
2.05%		-	-	-	-	998	5,624	-	-
2.10%		-	-	-	-	562	11,132	-	-
2.15%		-	-	-	-	575	10,808	-	-
2.20%		-	-	-	-	-	5,764	-	-
2.25%		-	-	-	-	39	3,363	-	-
2.30%		-	-	-	-	204	7,831	-	-
2.35%		-	-	-	-	-	13,694	-	-
2.40%		-	-	-	-	-	1,022	-	-
2.45%		-	-	-	-	-	3,118	-	-
2.50%		-	-	-	-	-	888	-	-
2.55%		-	-	-	-	-	1,473	-	-
2.60%		-	-	-	-	-	1,915	-	-
2.65%		-	-	-	-	-	811	-	-
2.70%		-	-	-	-	-	525	-	-
2.75%		-	-	-	-	-	110	-	-
2.80%		-	-	-	-	-	6,282	-	-
2.85%		-	-	-	-	-	2	-	-
2.90%		-	-	-	-	-	-	-	-
2.95%		-	-	-	-	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	1,102,090	170,847	1,468,278	744,764	93,238	863,238	3,042,887	7,063,948

(Continued)

99

NATIONWIDE VARIABLE ACCOUNT- II (NOTES TO FINANCIAL STATEMENTS, Continued)

	FC2		FIGBS	FIGBP2	FGOP	FMCS	FMC2	FVSS	FVSS2
0.65%	$	-	-	90	-	-	-	-	-
0.75%		-	-	932	-	-	31	-	-
0.80%		-	580	-	1,007	1,498	-	1,076	-
0.85%		-	-	759	-	-	159	-	-
0.95%		2,327	-	1,406	-	-	932	-	-
1.05%		4,342	-	3,813	-	-	2,824	-	-
1.10%		20,236	-	63,978	-	-	14,318	-	429
1.15%		692,035	-	788,879	-	-	396,525	-	32,334
1.20%		4,827	-	5,539	-	-	3,015	-	-
1.25%		173,700	-	81,067	-	-	78,559	-	10,697
1.30%		8,024	188,876	9,134	194,973	187,541	5,712	95,472	116
1.35%		289,423	-	178,696	-	-	141,043	-	9,502
1.40%		80,340	76,651	91,151	98,113	62,434	43,219	24,875	2,973
1.45%		258,609	-	152,150	-	-	118,975	-	7,763
1.50%		188,234	-	121,523	-	-	113,909	-	11,243
1.55%		699,102	-	666,401	-	-	388,178	-	44,871
1.60%		82,768	-	33,454	-	-	45,258	-	4,663
1.65%		320,362	-	232,523	-	-	177,490	-	30,674
1.70%		95,312	-	105,359	-	-	71,143	-	3,417
1.75%		579,723	-	1,536,737	-	-	409,037	-	14,155
1.80%		337,612	-	249,091	-	-	199,701	-	13,246
1.85%		140,693	-	71,344	-	-	62,706	-	8,824
1.90%		37,377	-	24,350	-	-	30,250	-	3,476
1.95%		126,169	-	194,231	-	-	72,673	-	5,904
2.00%		173,657	-	602,270	-	-	130,493	-	6,046
2.05%		120,675	-	75,637	-	-	107,070	-	11,708
2.10%		130,516	-	110,925	-	-	74,428	-	5,024
2.15%		145,959	-	385,405	-	-	107,749	-	9,656
2.20%		72,815	-	125,266	-	-	84,325	-	1,824
2.25%		70,186	-	209,120	-	-	59,643	-	6,181
2.30%		47,899	-	27,708	-	-	21,521	-	638
2.35%		112,709	-	1,309,909	-	-	81,930	-	4,545
2.40%		29,446	-	112,074	-	-	24,056	-	856
2.45%		13,873	-	63,850	-	-	14,764	-	1,336
2.50%		14,836	-	8,394	-	-	10,321	-	494
2.55%		15,683	-	95,764	-	-	12,458	-	1,370
2.60%		6,605	-	67,571	-	-	6,042	-	4,188
2.65%		2,144	-	2,342	-	-	1,280	-	335
2.70%		8,626	-	23,189	-	-	2,267	-	-
2.75%		2,339	-	11,118	-	-	3,659	-	-
2.80%		8,924	-	12,706	-	-	10,608	-	206
2.85%		197	-	1,075	-	-	-	-	-
2.90%		261	-	10,528	-	-	1,635	-	-
2.95%		261	-	761	-	-	179	-	-
3.00%		192	-	-	-	-	-	-	-
3.05%		-	-	510	-	-	-	-	-
3.10%		-	-	643	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	56	-	-	-	-	-
3.25%		-	-	389	-	-	-	-	-
Totals	$	5,119,018	266,107	7,869,817	294,093	251,473	3,130,085	121,423	258,694

(Continued)

100

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	FNRS2		FF10S	FF10S2	FF20S	FF20S2	FF30S	FF30S2	FTVDM3
0.65%	$	-	-	-	-	-	-	-	-
0.75%		69	-	-	-	-	-	-	-
0.80%		2,933	23	-	85	-	292	-	703
0.85%		370	-	-	-	-	-	-	-
0.95%		3,402	-	-	-	-	-	-	520
1.05%		4,313	-	-	-	-	-	-	871
1.10%		4,664	-	4,481	-	7,056	-	1,354	4,127
1.15%		172,851	-	50,991	-	100,632	-	16,370	70,062
1.20%		23	-	-	-	-	-	199	253
1.25%		19,175	-	1,763	-	6,199	-	60	5,326
1.30%		296,733	53,015	-	69,990	430	42,695	-	64,510
1.35%		57,627	-	7,744	-	18,556	-	9,392	21,365
1.40%		113,060	18,206	8,076	11,123	11,617	6,914	778	27,333
1.45%		54,087	-	33,762	-	51,820	-	5,090	15,287
1.50%		29,758	-	8,519	-	4,800	-	441	19,335
1.55%		235,233	-	68,965	-	133,211	-	31,279	102,013
1.60%		9,195	-	10,527	-	18,214	-	1,438	6,974
1.65%		76,298	-	11,150	-	29,925	-	4,280	18,470
1.70%		23,899	-	4,123	-	8,527	-	2,737	9,219
1.75%		127,448	-	119,490	-	338,863	-	76,084	72,997
1.80%		104,449	-	18,431	-	7,946	-	2,963	40,684
1.85%		21,910	-	4,294	-	9,840	-	1,362	7,167
1.90%		15,402	-	810	-	8,669	-	70	2,935
1.95%		31,742	-	15,436	-	68,522	-	12,704	22,137
2.00%		53,652	-	69,274	-	86,382	-	7,490	21,491
2.05%		9,102	-	2,772	-	9,713	-	12,505	4,045
2.10%		144,259	-	33,975	-	8,298	-	7,286	38,139
2.15%		19,867	-	159,468	-	117,050	-	47,728	18,689
2.20%		64,197	-	15,387	-	19,805	-	789	6,869
2.25%		2,173	-	12,994	-	2,813	-	12,525	2,380
2.30%		13,006	-	157	-	8,438	-	14,660	5,991
2.35%		2,656	-	208,558	-	92,338	-	32,469	273
2.40%		3,119	-	1,885	-	14,989	-	3,390	1,235
2.45%		10,280	-	11,126	-	4,702	-	4,066	15,319
2.50%		1,044	-	644	-	208	-	1,204	687
2.55%		3,355	-	8,411	-	6,198	-	7,342	2,220
2.60%		-	-	3,326	-	988	-	47	-
2.65%		1,076	-	-	-	-	-	-	159
2.70%		411	-	1,898	-	-	-	702	-
2.75%		2,418	-	-	-	3	-	-	341
2.80%		2,002	-	-	-	-	-	-	5,056
2.85%		-	-	-	-	94	-	-	-
2.90%		-	-	-	-	2,055	-	-	-
2.95%		-	-	-	-	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	1,737,258	71,244	898,437	81,198	1,198,901	49,901	318,804	635,182

(Continued)

101

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	TIF2		TIF3	FTVFA2	FTVGI3	FTVIS2	FTVRD2	FTVSV2	JABS
0.65%	$	-	57	-	-	-	-	-	-
0.75%		-	409	-	-	-	-	30	-
0.80%		-	930	-	352	450	-	1,059	-
0.85%		-	322	-	-	-	-	166	-
0.95%		364	2,619	-	566	287	2,292	4,790	10,766
1.05%		38	3,096	-	902	2,478	2,135	4,130	15,855
1.10%		490	45,359	550	5,404	15,462	5,495	9,121	177
1.15%		18,110	508,871	1,634	140,354	181,935	167,186	126,013	21,539
1.20%		521	4,956	-	237	2,489	3,876	1,996	311
1.25%		10,452	41,430	42	19,912	28,050	55,539	29,118	8,800
1.30%		201	51,287	4,082	155,225	184,255	3,679	64,888	123
1.35%		-	129,436	1,722	54,740	92,231	52,236	48,585	259
1.40%		3,586	67,211	639	72,805	120,287	13,571	48,018	2,462
1.45%		6,572	113,834	435	75,367	56,896	46,842	49,683	6,818
1.50%		7,497	119,354	420	40,409	57,739	69,306	39,096	9,396
1.55%		19,570	560,023	3,697	109,058	231,335	216,571	134,670	38,806
1.60%		11,835	38,141	160	9,682	27,213	23,293	14,943	3,427
1.65%		6,529	150,757	730	40,684	77,801	113,840	46,064	14,932
1.70%		4,252	81,120	909	10,199	24,279	26,466	19,489	4,414
1.75%		3,904	1,194,797	2,653	93,665	240,053	130,254	100,285	8,332
1.80%		11,123	168,500	282	73,656	128,262	96,614	71,271	11,365
1.85%		2,574	57,951	1,259	14,374	24,713	52,716	25,456	1,097
1.90%		2,877	17,188	162	5,769	2,888	20,889	8,492	137
1.95%		2,097	168,717	7	10,398	28,589	35,697	21,584	3,702
2.00%		1,492	354,798	1,496	44,124	61,839	62,750	39,526	2,799
2.05%		2,550	52,205	-	6,267	6,402	76,078	12,903	6,910
2.10%		2,705	87,331	142	11,780	21,259	51,168	21,531	530
2.15%		1,047	287,685	55	14,004	22,767	44,661	12,511	1,156
2.20%		-	71,759	27	4,567	6,582	39,988	18,800	38
2.25%		524	86,239	-	3,135	7,635	33,729	3,363	1,724
2.30%		-	26,816	-	1,810	6,401	24,432	6,442	2,866
2.35%		-	653,027	-	1,249	12,970	33,742	8,914	484
2.40%		-	73,172	-	435	3,263	6,401	577	-
2.45%		-	33,447	-	3,712	2,623	8,724	2,267	3,299
2.50%		-	4,963	-	333	952	12,738	903	18
2.55%		-	51,816	-	1,249	4,844	4,397	855	135
2.60%		-	33,415	-	1,776	1,281	6,750	1,310	-
2.65%		-	1,627	857	1,110	-	1,356	297	-
2.70%		-	13,672	-	364	201	1,959	404	-
2.75%		-	4,061	-	741	-	1,874	-	-
2.80%		-	2,426	-	3,288	104	1,056	4,914	-
2.85%		-	516	-	-	-	392	-	-
2.90%		-	4,078	-	-	-	163	-	-
2.95%		-	620	-	-	747	790	14	-
3.00%		-	-	-	-	-	79	-	-
3.05%		-	565	-	-	-	-	86	-
3.10%		-	800	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	69	-	-	-	-	-	-
3.25%		-	152	-	-	-	-	-	-
Totals	$	120,910	5,371,624	21,960	1,033,702	1,687,562	1,551,724	1,004,564	182,677

(Continued)

102

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	JACAS		JAGTS	JAGTS2	JARLCS	JAIGS	JAIGS2	JPMCVP	AMTB
0.65%	$	-	-	-	-	-	15	-	77
0.75%		-	-	-	-	-	161	-	1,106
0.80%		3,071	47	448	1	486	5,663	122	219
0.85%		150	-	-	-	-	60	-	657
0.95%		9,443	-	-	4,157	89	26,046	-	9,283
1.05%		12,977	-	-	4,971	388	25,929	-	3,685
1.10%		2,069	-	-	660	86	17,380	-	58,243
1.15%		90,188	-	-	6,645	9,626	285,810	-	554,017
1.20%		834	-	-	113	-	728	-	5,431
1.25%		20,094	-	-	881	5,202	30,260	-	42,594
1.30%		330,444	22,066	49,361	894	81,792	626,616	92,315	411,928
1.35%		35,576	-	-	1,669	-	88,160	-	112,636
1.40%		109,641	13,607	7,011	153	38,317	177,258	37,780	273,113
1.45%		33,214	-	-	676	1,173	73,553	-	123,072
1.50%		14,610	-	-	6,377	1,868	39,789	-	101,700
1.55%		111,125	-	-	6,331	6,209	314,330	-	506,223
1.60%		9,011	-	-	381	5,155	20,470	-	18,030
1.65%		50,390	-	-	2,743	1,545	102,732	-	195,393
1.70%		21,648	-	-	2,361	4,027	36,722	-	93,738
1.75%		88,774	-	-	12,956	1,188	441,095	-	1,234,139
1.80%		36,780	-	-	3,550	5,035	103,781	-	170,742
1.85%		12,136	-	-	892	827	32,986	-	65,106
1.90%		20,261	-	-	256	-	22,933	-	22,958
1.95%		15,519	-	-	1,676	1,175	65,582	-	159,438
2.00%		29,703	-	-	1,502	-	94,291	-	564,981
2.05%		15,947	-	-	3,749	2,183	24,914	-	169,342
2.10%		18,286	-	-	460	940	49,208	-	68,741
2.15%		27,429	-	-	3,460	324	102,729	-	314,772
2.20%		19,300	-	-	605	-	27,165	-	119,261
2.25%		7,223	-	-	2,779	-	10,781	-	217,630
2.30%		10,569	-	-	174	-	10,203	-	16,835
2.35%		28,000	-	-	4,480	-	79,657	-	1,383,480
2.40%		9,482	-	-	675	-	23,543	-	102,482
2.45%		3,387	-	-	1,177	-	9,144	-	64,361
2.50%		2,444	-	-	19	-	967	-	3,360
2.55%		6,077	-	-	-	-	16,265	-	97,468
2.60%		3,331	-	-	1,963	-	2,239	-	69,401
2.65%		-	-	-	-	-	1,025	-	2,559
2.70%		897	-	-	-	-	2,701	-	22,530
2.75%		223	-	-	-	-	1,116	-	14,038
2.80%		630	-	-	-	-	1,177	-	2,948
2.85%		99	-	-	-	-	90	-	765
2.90%		-	-	-	-	-	1,004	-	6,256
2.95%		-	-	-	-	-	225	-	626
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	148	-	765
3.10%		-	-	-	-	-	395	-	212
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	34	-	18
3.25%		-	-	-	-	-	4	-	438
Totals	$	1,210,982	35,720	56,820	79,386	167,635	2,997,084	130,217	7,406,797

(Continued)

103

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	MIGSC		MVFSC	VFLG2	VFLV2	MBVAG2	MBVCG2	VFMG2	GVAAA2
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	-	-	-	30
0.80%		-	148	-	-	-	-	-	263
0.85%		-	-	-	-	-	-	-	-
0.95%		157	735	-	-	-	-	-	172
1.05%		-	542	-	-	-	-	-	6,548
1.10%		659	12,218	-	-	-	-	-	153,508
1.15%		21,919	134,979	2,925	3,455	574	618	19,021	1,042,944
1.20%		1,138	794	-	-	-	-	-	1,046
1.25%		13,984	27,991	2,897	3,618	-	-	19,247	72,825
1.30%		282	83,287	-	-	-	-	-	131,199
1.35%		2,963	40,352	74	986	2,289	224	4,402	235,010
1.40%		2,644	60,071	116	92	-	-	274	232,758
1.45%		7,114	61,278	585	564	-	-	125	170,037
1.50%		30,321	48,302	902	556	-	-	64	209,861
1.55%		38,007	146,935	10	7	-	690	2,636	1,061,725
1.60%		6,082	10,550	2,293	2,846	-	-	19,719	68,220
1.65%		19,960	69,063	1,108	889	-	-	4,615	285,664
1.70%		8,252	21,180	590	1,412	-	-	10,390	159,033
1.75%		24,102	186,737	453	3,781	798	106	13,109	2,171,855
1.80%		20,296	68,569	-	-	-	-	-	289,663
1.85%		19,052	30,243	-	90	873	-	625	84,517
1.90%		3,038	19,223	796	104	-	-	599	25,886
1.95%		5,897	33,178	124	587	-	-	5,403	321,593
2.00%		10,980	48,987	-	-	-	-	220	578,791
2.05%		17,232	33,061	-	-	-	-	-	97,566
2.10%		8,989	38,733	39	-	-	-	-	146,660
2.15%		6,183	43,060	-	-	-	-	-	258,633
2.20%		4,309	15,733	-	83	-	-	638	100,841
2.25%		6,215	16,775	-	54	-	-	-	398,820
2.30%		5,023	11,820	-	-	-	-	-	38,400
2.35%		3,305	50,126	201	209	-	-	244	916,152
2.40%		580	9,510	-	12	-	-	-	70,150
2.45%		2,100	3,131	-	-	-	-	-	70,997
2.50%		965	3,659	-	-	-	-	-	74,338
2.55%		311	7,222	-	-	-	-	-	72,488
2.60%		111	8,170	-	-	-	-	343	21,463
2.65%		121	-	-	-	-	-	-	16,974
2.70%		240	3,918	-	-	-	-	-	14,634
2.75%		99	119	-	-	-	-	-	4,971
2.80%		27	563	-	-	-	-	-	7,933
2.85%		-	139	-	-	-	-	-	2,725
2.90%		-	-	-	-	-	-	-	2,615
2.95%		95	109	-	-	-	-	-	1,157
3.00%		-	-	-	-	-	-	-	86
3.05%		-	465	-	-	-	-	-	651
3.10%		-	-	-	-	-	-	-	48
3.15%		60	70	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	292,812	1,351,745	13,113	19,345	4,534	1,638	101,674	9,621,450

(Continued)

104

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	GVABD2		GVAGG2	GVAGR2	GVAGI2	NVCRA2	NVCRB2	NVCCA2	NVCCN2
0.65%	$	-	-	5	-	-	-	-	-
0.75%		32	95	77	30	-	-	-	-
0.80%		331	330	1,051	108	6	-	60	1
0.85%		-	-	22	-	-	-	-	-
0.95%		5,932	1,251	1,888	410	-	-	-	-
1.05%		5,753	2,739	3,233	854	-	-	-	-
1.10%		51,405	7,846	24,612	45,958	1,045	7,610	9,084	1,249
1.15%		246,460	106,496	202,871	139,392	2,716	25,821	54,188	26,559
1.20%		2,326	1,284	955	1,311	-	-	-	-
1.25%		30,502	17,560	24,469	15,867	557	502	6,910	1,489
1.30%		113,286	117,712	148,908	30,993	3,885	2,611	4,451	3,509
1.35%		54,695	43,733	77,761	38,266	110	7,231	26,071	8,419
1.40%		77,129	51,230	66,630	13,661	1,743	2,397	651	3,175
1.45%		90,330	33,285	42,560	43,552	1,829	5,062	5,472	4,320
1.50%		44,323	33,146	59,152	32,721	904	3,429	5,071	1,968
1.55%		283,540	115,080	266,753	186,272	2,699	34,459	47,458	16,641
1.60%		19,625	10,117	27,804	14,146	-	-	-	40
1.65%		110,146	31,867	73,721	55,733	346	17,910	11,390	8,227
1.70%		101,313	28,113	32,462	77,457	178	14,186	46,593	89
1.75%		632,044	170,874	409,718	449,865	1,951	99,934	186,030	39,775
1.80%		90,155	63,104	85,079	67,253	2,168	5,757	9,145	12,195
1.85%		46,250	9,791	21,961	32,060	143	6,310	13,616	1,438
1.90%		11,868	3,729	5,313	10,241	520	5,356	16,918	1,231
1.95%		68,411	19,601	51,007	49,046	330	10,791	24,602	11,834
2.00%		130,888	36,828	86,386	103,390	2,163	13,806	10,992	26,809
2.05%		103,299	8,035	14,739	82,471	41	19,302	10,121	1,658
2.10%		42,327	12,816	44,269	22,892	1,743	6,553	5,313	32,213
2.15%		183,243	12,681	65,617	160,960	-	32,618	47,152	1,392
2.20%		32,737	6,163	20,595	30,137	2,475	10,325	26,776	4,566
2.25%		423,154	5,550	18,077	390,095	-	91,616	13,704	9,204
2.30%		12,490	3,335	11,564	13,429	15	2,726	22,693	875
2.35%		891,087	14,855	59,725	821,444	372	283,024	76,466	14,412
2.40%		34,912	1,357	10,430	31,132	-	12,842	5,870	805
2.45%		50,539	1,763	5,521	46,590	-	26,335	3,349	6
2.50%		75,166	1,269	2,607	72,322	-	116,134	14,280	4,345
2.55%		56,286	2,136	6,576	52,516	-	22,035	2,832	89
2.60%		24,381	2,437	3,248	18,774	225	2,645	-	-
2.65%		16,484	557	1,124	15,762	-	-	-	57
2.70%		13,414	69	1,572	12,009	-	7,197	2,057	150
2.75%		1,219	27	588	1,174	-	2,336	-	-
2.80%		7,732	406	627	6,294	-	-	-	-
2.85%		2,890	-	3	2,760	-	1,606	222	-
2.90%		1,769	644	1,985	1,693	-	-	-	-
2.95%		1,242	20	111	1,172	-	187	278	134
3.00%		89	-	-	89	-	-	-	-
3.05%		671	114	368	661	-	602	-	-
3.10%		47	-	197	50	-	488	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	16	-	-	-	-	-
3.25%		-	-	1	-	-	-	-	-
Totals	$	4,191,922	980,045	1,983,958	3,193,012	28,164	901,743	709,815	238,874

(Continued)

105

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	NVCMD2		NVCMA2	NVCMC2	NVCBD1	NVCBD2	HIBF	HIBF3	GEM
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	-	-	-	-
0.80%		93	-	1	-	-	-	264	59
0.85%		-	-	-	-	-	-	-	-
0.95%		-	-	-	-	-	1,060	8,028	-
1.05%		-	-	-	-	723	349	6,181	-
1.10%		10,255	9,473	5,478	-	59	470	923	-
1.15%		71,673	76,384	28,522	-	1,920	25,267	110,256	-
1.20%		-	-	282	-	-	1,353	288	-
1.25%		5,028	4,489	3,929	-	-	14,510	15,419	-
1.30%		10,995	5,495	2,550	1,351	27	34	23,011	7,565
1.35%		13,870	20,632	2,810	-	168	8,550	30,445	-
1.40%		2,136	3,560	262	233	1,033	1,777	18,672	5,517
1.45%		24,722	15,001	2,479	-	304	6,689	34,042	-
1.50%		4,943	9,891	4,028	-	662	8,197	22,864	-
1.55%		75,534	96,220	20,077	-	757	38,554	72,270	-
1.60%		449	-	361	-	-	4,462	7,299	-
1.65%		36,553	27,984	7,846	-	375	22,926	42,773	-
1.70%		13,561	2,536	3,431	-	836	6,414	6,509	-
1.75%		175,280	151,390	39,281	-	1,318	10,042	43,218	-
1.80%		9,066	8,783	6,926	-	992	18,015	25,893	-
1.85%		3,594	8,459	4,274	-	268	10,798	7,081	-
1.90%		7,100	802	1,428	-	32	3,400	3,727	-
1.95%		21,360	14,522	3,102	-	99	1,082	7,983	-
2.00%		22,583	47,106	16,454	-	810	3,015	15,180	-
2.05%		4,427	2,766	973	-	63	1,214	6,932	-
2.10%		4,995	5,362	3,661	-	267	3,998	6,564	-
2.15%		18,030	15,420	9,791	-	88	1,651	2,848	-
2.20%		9,594	18,237	3,222	-	247	1,251	2,976	-
2.25%		1,203	215	10,688	-	-	-	5,198	-
2.30%		1,870	8,914	3,418	-	77	52	2,502	-
2.35%		24,036	10,884	12,939	-	501	908	1,087	-
2.40%		9,489	1,427	5,087	-	38	-	312	-
2.45%		92	1,878	-	-	-	-	465	-
2.50%		1,449	163	4,805	-	128	-	-	-
2.55%		1,158	-	251	-	-	-	201	-
2.60%		-	989	467	-	-	-	-	-
2.65%		273	-	376	-	-	-	5	-
2.70%		-	89	3,360	-	15	-	124	-
2.75%		-	-	114	-	-	-	283	-
2.80%		-	-	-	-	-	-	4	-
2.85%		-	-	228	-	-	-	-	-
2.90%		-	-	-	-	-	-	-	-
2.95%		58	-	1,190	-	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	585,469	569,071	214,091	1,584	11,807	196,038	531,827	13,141

(Continued)

106

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	GEM2		GEM3	GEM6	GVGU2	GVGU	GIG	GIG3	NVIE6
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	72	-	-	-	-	-
0.80%		-	5,001	-	-	224	65	1,200	-
0.85%		-	-	1	-	-	-	-	-
0.95%		-	-	2,202	38	-	-	-	-
1.05%		-	-	2,498	-	-	-	-	123
1.10%		288	-	3,101	-	-	-	-	65
1.15%		16,111	-	208,257	1,339	-	-	-	2,118
1.20%		-	-	381	-	-	-	-	-
1.25%		2,615	-	21,050	1,902	-	-	-	276
1.30%		-	647,364	11	-	75,932	327	259,073	174
1.35%		-	-	51,966	-	-	-	-	569
1.40%		3,017	170,627	16,257	121	35,182	847	112,807	878
1.45%		2,145	-	49,882	215	-	-	-	1,684
1.50%		1,301	-	34,520	69	-	-	-	942
1.55%		11,903	-	225,202	1,824	-	-	-	3,009
1.60%		2,093	-	16,416	-	-	-	-	97
1.65%		3,222	-	61,759	258	-	-	-	337
1.70%		1,266	-	16,047	653	-	-	-	919
1.75%		1,420	-	96,562	43	-	-	-	3,704
1.80%		6,657	-	73,280	1,477	-	-	-	130
1.85%		3,710	-	18,131	534	-	-	-	1,165
1.90%		1,466	-	11,081	1,083	-	-	-	183
1.95%		1,254	-	31,938	-	-	-	-	705
2.00%		73	-	47,651	-	-	-	-	1,064
2.05%		1,674	-	7,369	-	-	-	-	633
2.10%		1,623	-	34,977	702	-	-	-	212
2.15%		1,299	-	22,164	-	-	-	-	194
2.20%		199	-	14,340	-	-	-	-	62
2.25%		1,097	-	8,449	-	-	-	-	135
2.30%		-	-	7,149	-	-	-	-	327
2.35%		-	-	1,299	-	-	-	-	932
2.40%		-	-	2,554	-	-	-	-	125
2.45%		561	-	35,676	-	-	-	-	944
2.50%		-	-	836	-	-	-	-	131
2.55%		-	-	27,670	-	-	-	-	4
2.60%		-	-	-	-	-	-	-	9
2.65%		-	-	713	-	-	-	-	-
2.70%		-	-	94	-	-	-	-	-
2.75%		-	-	908	-	-	-	-	-
2.80%		-	-	6,546	-	-	-	-	5
2.85%		-	-	-	-	-	-	-	-
2.90%		-	-	-	-	-	-	-	-
2.95%		-	-	-	-	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	64,994	822,992	1,159,009	10,258	111,338	1,239	373,080	21,855

(Continued)

107

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	GEF3		GVGF2	GVGFS	GBF	CAF	GVGH2	GVGHS	GVGH6
0.65%	$	-	-	-	111	-	-	-	-
0.75%		-	-	-	1,373	-	-	-	-
0.80%		468	-	302	3,175	6,052	-	123	-
0.85%		-	-	-	1,519	-	-	-	3
0.95%		-	276	-	13,677	-	302	-	911
1.05%		-	24	-	10,033	-	-	-	1,384
1.10%		-	-	-	67,018	-	68	-	682
1.15%		-	2,585	-	896,737	-	2,885	-	36,556
1.20%		-	552	-	5,726	-	-	-	51
1.25%		-	1,784	-	89,763	-	5,273	-	5,584
1.30%		44,650	-	26,227	1,447,849	451,641	-	54,176	61
1.35%		-	32	-	206,652	-	-	-	8,682
1.40%		18,460	279	8,713	795,852	153,060	177	21,139	1,756
1.45%		-	777	-	197,767	-	804	-	12,125
1.50%		-	259	-	157,121	-	1,278	-	8,476
1.55%		-	1,511	-	760,926	-	3,614	-	42,900
1.60%		-	473	-	36,116	-	240	-	5,010
1.65%		-	504	-	290,250	-	1,339	-	24,883
1.70%		-	145	-	107,392	-	1,446	-	9,688
1.75%		-	269	-	1,672,980	-	520	-	23,159
1.80%		-	4,993	-	286,711	-	4,656	-	25,827
1.85%		-	87	-	88,019	-	1,885	-	6,089
1.90%		-	-	-	24,996	-	231	-	1,830
1.95%		-	62	-	211,165	-	69	-	6,344
2.00%		-	30	-	652,406	-	-	-	9,239
2.05%		-	-	-	86,473	-	323	-	2,154
2.10%		-	112	-	130,393	-	211	-	9,291
2.15%		-	9	-	416,722	-	8	-	1,646
2.20%		-	-	-	204,715	-	182	-	4,296
2.25%		-	-	-	226,940	-	-	-	263
2.30%		-	-	-	35,160	-	-	-	1,276
2.35%		-	-	-	1,465,440	-	-	-	218
2.40%		-	-	-	127,337	-	46	-	1,944
2.45%		-	-	-	74,995	-	-	-	288
2.50%		-	-	-	4,848	-	-	-	40
2.55%		-	-	-	106,459	-	-	-	-
2.60%		-	-	-	72,255	-	-	-	141
2.65%		-	-	-	4,967	-	-	-	-
2.70%		-	-	-	26,122	-	-	-	-
2.75%		-	-	-	20,926	-	-	-	-
2.80%		-	-	-	3,853	-	-	-	-
2.85%		-	-	-	805	-	-	-	-
2.90%		-	-	-	7,529	-	-	-	-
2.95%		-	-	-	957	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	580	-	-	-	-
3.10%		-	-	-	746	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	64	-	-	-	-
3.25%		-	-	-	451	-	-	-	-
Totals	$	63,578	14,763	35,242	11,044,071	610,753	25,557	75,438	252,797

(Continued)

108

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	GVIX8		GVIDA	GVIDC	GVIDM	GVDMA	GVDMC	BF	NVLCP2
0.65%	$	-	-	262	312	321	80	-	-
0.75%		-	-	-	396	123	445	-	-
0.80%		117	4,015	131	4,821	5,072	3,722	60	-
0.85%		1	331	-	182	263	1	-	-
0.95%		964	1,246	1,517	10,582	8,733	3,287	-	-
1.05%		1,692	2,211	1,264	6,041	12,136	1,624	-	-
1.10%		305	4,216	18,320	125,701	89,368	23,711	-	130
1.15%		12,685	256,867	315,477	2,552,291	2,271,651	781,630	-	1,459
1.20%		24	3,986	3,338	24,779	40,329	1,582	-	-
1.25%		537	50,140	42,911	339,273	232,616	139,209	-	7
1.30%		15,707	175,117	96,629	534,470	451,165	144,553	32,016	494
1.35%		5,368	72,140	49,046	676,440	519,219	207,452	-	75
1.40%		8,502	92,812	121,347	646,326	463,768	187,517	8,230	25
1.45%		12,507	54,819	88,443	369,970	286,319	219,084	-	10
1.50%		3,853	84,924	38,790	387,563	263,072	138,830	-	-
1.55%		13,628	219,908	341,609	2,051,023	1,954,898	601,183	-	2,395
1.60%		2,098	30,669	23,837	209,594	105,237	49,638	-	-
1.65%		2,926	688,736	195,086	1,690,831	1,679,863	310,606	-	216
1.70%		1,535	84,766	26,518	365,957	247,596	67,083	-	72
1.75%		12,556	1,072,076	343,554	6,048,262	6,001,122	1,151,324	-	2,089
1.80%		8,644	91,446	265,997	785,449	594,323	381,104	-	263
1.85%		739	188,372	53,073	417,461	474,606	125,673	-	15
1.90%		20	340,912	56,725	362,436	421,363	138,954	-	157
1.95%		7,441	359,539	50,868	1,053,430	1,263,521	183,311	-	783
2.00%		13,527	599,645	251,924	4,253,819	1,356,527	693,695	-	504
2.05%		1,822	487,483	36,885	730,759	775,020	163,539	-	93
2.10%		7,659	262,003	68,048	468,137	630,996	83,541	-	28
2.15%		5,582	561,960	49,406	2,184,173	1,943,866	387,811	-	116
2.20%		949	100,668	77,611	799,686	338,769	106,534	-	262
2.25%		593	1,055,007	44,814	1,080,996	875,716	566,999	-	193
2.30%		303	233,098	20,156	183,918	320,785	30,304	-	57
2.35%		3,252	1,130,362	122,641	6,584,483	1,913,395	1,727,903	-	1,547
2.40%		331	86,358	22,670	407,453	338,011	103,739	-	49
2.45%		-	280,191	24,021	247,694	194,988	70,921	-	-
2.50%		250	46,182	9,062	186,847	123,646	36,662	-	73
2.55%		-	262,521	13,081	702,886	281,753	102,812	-	-
2.60%		245	174,060	15,721	265,581	134,264	30,300	-	-
2.65%		-	41,333	252	17,251	45,520	74	-	-
2.70%		-	80,632	3,713	221,344	87,855	69,749	-	961
2.75%		21	9,337	224	21,625	25,804	2,570	-	-
2.80%		-	45,841	-	24,943	34,225	11,882	-	-
2.85%		-	3,607	-	13,103	3,414	965	-	-
2.90%		-	25,909	3,276	54,702	47,131	8,426	-	-
2.95%		-	2,404	-	12,208	6,584	6,587	-	-
3.00%		-	13,215	-	401	33,725	1,314	-	-
3.05%		-	9,368	-	2,491	13,806	26	-	-
3.10%		-	8,053	-	12,576	11,495	-	-	-
3.15%		-	-	-	-	1,181	-	-	-
3.20%		-	-	-	-	-	153	-	-
3.25%		-	-	-	10,278	1,034	-	-	-
Totals	$	146,383	9,398,485	2,898,247	37,150,944	26,926,194	9,068,109	40,306	12,073

(Continued)

109

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	SGRF		SGRF2	MCIF	SAM	NVMIG3	NVMIG6	GVDIV2	GVDIV3
0.65%	$	-	-	-	11	-	64	-	-
0.75%		-	-	-	350	-	574	-	-
0.80%		228	-	2,960	31,143	1	-	-	814
0.85%		-	-	-	124	-	381	-	-
0.95%		-	2,997	1,336	11,443	-	-	754	-
1.05%		-	2,319	2,543	5,503	-	-	74	-
1.10%		-	21,604	2,364	29,391	-	19,394	-	-
1.15%		-	239,768	113,106	670,633	-	197,602	4,906	-
1.20%		-	1,790	1,589	840	-	1,410	-	-
1.25%		-	21,820	33,502	121,950	-	9,225	1,058	-
1.30%		94,300	2,349	521,868	2,955,573	10,073	2,449	-	156,727
1.35%		-	62,102	34,307	191,800	-	44,236	-	-
1.40%		28,531	24,650	181,374	1,638,254	1,554	21,292	661	70,846
1.45%		-	39,675	34,655	313,850	-	30,798	856	-
1.50%		-	40,373	15,218	287,750	-	28,542	1,132	-
1.55%		-	231,432	109,935	811,307	-	185,546	8,233	-
1.60%		-	8,157	17,329	46,131	-	5,469	285	-
1.65%		-	85,182	61,639	311,890	-	55,865	1,322	-
1.70%		-	35,185	16,696	95,093	-	26,751	167	-
1.75%		-	569,945	59,956	635,949	-	513,520	167	-
1.80%		-	67,985	51,241	568,056	-	52,104	2,068	-
1.85%		-	26,974	15,202	112,573	-	17,915	1,384	-
1.90%		-	9,219	5,990	49,787	-	5,167	567	-
1.95%		-	79,749	23,554	142,006	-	67,851	240	-
2.00%		-	166,523	46,969	440,373	-	158,885	-	-
2.05%		-	26,625	39,000	105,619	-	18,340	2,158	-
2.10%		-	40,990	13,080	145,872	-	31,897	856	-
2.15%		-	153,072	17,858	161,547	-	134,997	135	-
2.20%		-	36,628	7,440	174,560	-	32,267	50	-
2.25%		-	49,713	8,485	94,395	-	43,179	-	-
2.30%		-	10,835	7,428	48,722	-	5,566	7	-
2.35%		-	306,203	12,976	234,684	-	327,911	-	-
2.40%		-	39,733	2,731	40,065	-	35,127	-	-
2.45%		-	18,899	981	81,417	-	16,795	-	-
2.50%		-	4,025	1,030	10,027	-	1,326	-	-
2.55%		-	24,655	2,453	66,686	-	26,023	-	-
2.60%		-	13,948	427	17,372	-	14,823	-	-
2.65%		-	860	679	5,648	-	746	-	-
2.70%		-	6,604	648	6,344	-	6,453	-	-
2.75%		-	2,473	80	14,593	-	2,387	-	-
2.80%		-	675	4,703	9,105	-	704	-	-
2.85%		-	214	-	186	-	241	-	-
2.90%		-	2,109	-	1,607	-	2,157	-	-
2.95%		-	313	163	136	-	344	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	198	288	310	-	225	-	-
3.10%		-	445	-	-	-	437	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	39	-	-	-	38	-	-
3.25%		-	57	-	69	-	111	-	-
Totals	$	123,059	2,479,111	1,473,783	10,690,744	11,628	2,147,134	27,080	228,387

(Continued)

110

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	GVDIV6		NVMLG1	NVMLG2	NVMLV2	NVMMG1	NVMMG2	NVMMV2	SCGF
0.65%	$	28	-	-	-	-	26	56	-
0.75%		252	-	-	-	-	222	457	-
0.80%		-	16	-	13	-	-	-	235
0.85%		162	-	-	-	-	172	310	-
0.95%		6,287	-	-	-	-	-	-	-
1.05%		4,415	-	-	-	-	-	-	-
1.10%		24,477	-	1	29	-	8,143	16,518	-
1.15%		295,061	-	461	1,914	-	78,203	164,440	-
1.20%		2,497	-	-	-	-	621	1,212	-
1.25%		22,112	-	9	2	-	3,808	7,775	-
1.30%		3,636	57	18	161	3,850	1,035	10,006	80,407
1.35%		66,391	-	177	76	-	17,326	36,765	-
1.40%		33,861	2	-	119	559	8,732	18,937	19,600
1.45%		51,779	-	-	1	-	12,362	25,558	-
1.50%		53,991	-	-	68	-	11,672	23,994	-
1.55%		288,245	-	395	628	-	71,855	153,769	-
1.60%		14,021	-	124	213	-	2,250	4,562	-
1.65%		88,407	-	50	721	-	23,301	46,923	-
1.70%		42,407	-	8	30	-	11,340	22,847	-
1.75%		608,788	-	571	7,743	-	204,889	434,001	-
1.80%		88,100	-	71	360	-	20,647	43,381	-
1.85%		27,060	-	25	451	-	7,734	15,160	-
1.90%		10,849	-	47	59	-	2,086	4,399	-
1.95%		82,988	-	-	7	-	26,552	57,087	-
2.00%		194,360	-	35	1,045	-	70,249	135,720	-
2.05%		34,715	-	38	97	-	7,874	16,034	-
2.10%		45,386	-	52	132	-	11,651	26,370	-
2.15%		142,569	-	-	-	-	54,055	115,675	-
2.20%		38,807	-	-	256	-	14,252	27,659	-
2.25%		53,386	-	16	206	-	23,179	41,343	-
2.30%		12,768	-	68	13	-	2,171	4,665	-
2.35%		373,715	-	145	335	-	162,833	294,417	-
2.40%		36,692	-	1	-	-	14,709	30,067	-
2.45%		22,297	-	-	-	-	7,970	15,285	-
2.50%		1,700	-	58	211	-	551	1,120	-
2.55%		80,917	-	-	17	-	12,374	22,901	-
2.60%		18,294	-	27	-	-	7,579	13,472	-
2.65%		1,342	-	-	-	-	318	623	-
2.70%		7,174	-	-	18	-	2,903	5,662	-
2.75%		2,743	-	-	3	-	1,044	1,912	-
2.80%		2,414	-	-	-	-	342	637	-
2.85%		233	-	-	-	-	113	207	-
2.90%		3,173	-	-	-	-	918	1,873	-
2.95%		299	-	-	-	-	124	281	-
3.00%		-	-	-	-	-	-	-	-
3.05%		201	-	-	-	-	90	198	-
3.10%		393	-	-	-	-	130	357	-
3.15%		-	-	-	-	-	-	-	-
3.20%		34	-	-	-	-	11	31	-
3.25%		101	-	-	-	-	61	107	-
Totals	$	2,889,527	75	2,397	14,928	4,409	908,477	1,844,773	100,242

(Continued)

111

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	SCGF2		SCVF	SCVF2	SCF	SCF2	TRF	TRF2	GVUSL
0.65%	$	-	-	-	-	5	-	94	-
0.75%		-	-	-	-	16	-	661	-
0.80%		-	4,037	-	8,246	-	27,628	-	874
0.85%		-	-	32	-	50	-	490	-
0.95%		222	-	1,124	-	4,808	-	111	-
1.05%		-	-	1,038	-	2,352	-	161	-
1.10%		867	-	804	-	10,182	-	59,058	-
1.15%		39,720	-	62,113	-	192,344	-	617,314	-
1.20%		-	-	211	-	1,435	-	4,642	-
1.25%		7,409	-	26,019	-	46,198	-	35,027	-
1.30%		55	521,526	-	1,059,623	3,165	2,118,341	7,969	54,482
1.35%		6,606	-	20,634	-	71,865	-	140,126	-
1.40%		2,079	199,924	4,972	510,742	13,571	828,336	67,381	12,877
1.45%		10,745	-	19,606	-	53,913	-	96,379	-
1.50%		8,840	-	9,412	-	39,271	-	97,872	-
1.55%		56,412	-	65,892	-	144,359	-	576,734	-
1.60%		2,188	-	6,415	-	12,350	-	22,542	-
1.65%		12,396	-	20,142	-	62,263	-	177,596	-
1.70%		9,687	-	5,561	-	41,484	-	84,014	-
1.75%		26,556	-	32,234	-	229,705	-	1,568,039	-
1.80%		31,323	-	22,221	-	55,919	-	164,941	-
1.85%		6,470	-	9,376	-	17,561	-	60,178	-
1.90%		4,900	-	4,598	-	12,595	-	20,351	-
1.95%		6,681	-	10,275	-	36,689	-	206,536	-
2.00%		23,441	-	12,947	-	79,888	-	515,520	-
2.05%		3,052	-	5,386	-	15,591	-	59,970	-
2.10%		3,191	-	6,437	-	15,593	-	95,615	-
2.15%		3,746	-	3,165	-	48,427	-	416,075	-
2.20%		2,652	-	2,028	-	20,259	-	103,432	-
2.25%		2,445	-	2,637	-	6,538	-	146,649	-
2.30%		782	-	3,312	-	6,140	-	19,984	-
2.35%		4,141	-	825	-	125,775	-	1,131,312	-
2.40%		599	-	346	-	11,644	-	110,437	-
2.45%		45	-	881	-	3,428	-	54,270	-
2.50%		37	-	60	-	550	-	3,891	-
2.55%		286	-	6	-	13,875	-	89,004	-
2.60%		152	-	195	-	5,573	-	53,145	-
2.65%		181	-	-	-	632	-	2,399	-
2.70%		-	-	75	-	2,370	-	22,184	-
2.75%		-	-	-	-	496	-	7,357	-
2.80%		10,736	-	-	-	1,972	-	2,309	-
2.85%		-	-	-	-	156	-	820	-
2.90%		-	-	2	-	1,033	-	6,846	-
2.95%		-	-	-	-	28	-	1,012	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	23	-	608	-
3.10%		-	-	-	-	-	-	1,098	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	95	-
3.25%		-	-	-	-	23	-	316	-
Totals	$	288,642	725,487	360,981	1,578,611	1,412,114	2,974,305	6,852,564	68,233

(Continued)

112

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	NVNMO1		NVNMO2	NVNSR1	NVNSR2	NVSTB2	GGTC	GGTC2	GGTC3
0.65%	$	-	-	-	84	-	-	-	-
0.75%		-	-	-	675	-	-	-	-
0.80%		-	-	-	-	-	14	-	429
0.85%		-	-	-	524	-	-	-	-
0.95%		-	94	-	-	-	-	43	-
1.05%		-	-	-	-	-	-	-	-
1.10%		-	15	-	19,430	529	-	-	-
1.15%		-	189	-	184,217	7,235	-	3,214	-
1.20%		-	-	-	1,472	-	-	-	-
1.25%		-	-	-	8,987	512	-	2,703	-
1.30%		267	16	8,674	2,449	4,125	2,485	-	41,960
1.35%		-	116	-	40,640	821	-	-	-
1.40%		46	35	1,239	20,894	1,175	398	284	11,726
1.45%		-	144	-	28,757	1,744	-	455	-
1.50%		-	91	-	27,720	794	-	598	-
1.55%		-	1,652	-	168,657	5,979	-	1,483	-
1.60%		-	-	-	7,472	496	-	172	-
1.65%		-	567	-	53,127	2,426	-	805	-
1.70%		-	161	-	26,113	1,361	-	328	-
1.75%		-	1,311	-	483,932	7,647	-	297	-
1.80%		-	57	-	48,819	632	-	756	-
1.85%		-	86	-	17,278	1,858	-	463	-
1.90%		-	76	-	4,530	673	-	1,087	-
1.95%		-	141	-	62,864	2,470	-	771	-
2.00%		-	73	-	165,539	5,823	-	54	-
2.05%		-	17	-	18,327	5,576	-	71	-
2.10%		-	436	-	27,550	1,653	-	97	-
2.15%		-	37	-	127,117	1,691	-	464	-
2.20%		-	101	-	32,945	1,531	-	-	-
2.25%		-	57	-	52,144	1,664	-	-	-
2.30%		-	-	-	5,371	889	-	-	-
2.35%		-	437	-	380,018	4,909	-	-	-
2.40%		-	33	-	34,082	1,300	-	-	-
2.45%		-	103	-	18,322	2,761	-	418	-
2.50%		-	33	-	1,176	2,737	-	-	-
2.55%		-	47	-	29,073	266	-	-	-
2.60%		-	-	-	17,693	202	-	-	-
2.65%		-	67	-	791	284	-	-	-
2.70%		-	-	-	6,864	817	-	-	-
2.75%		-	3	-	2,117	208	-	-	-
2.80%		-	-	-	789	48	-	-	-
2.85%		-	-	-	271	3	-	-	-
2.90%		-	-	-	2,194	7	-	-	-
2.95%		-	-	-	304	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	211	-	-	-	-
3.10%		-	-	-	322	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	28	-	-	-	-
3.25%		-	-	-	142	-	-	-	-
Totals	$	313	6,195	9,913	2,132,031	72,846	2,897	14,563	54,115

(Continued)

113

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	GGTC6		GVUG2	GVUGL	EIF2	MSBF	NVRE1	NVRE2	AMTG
0.65%	$	-	-	-	9	-	-	-	-
0.75%		-	-	-	130	-	-	-	-
0.80%		-	-	71	178	584	3	-	2,686
0.85%		-	-	-	75	-	-	-	-
0.95%		213	155	-	421	6,299	-	186	-
1.05%		512	-	-	488	5,875	-	-	-
1.10%		566	609	-	23,162	3,378	-	24	-
1.15%		22,334	34,518	-	287,998	92,322	-	2,738	-
1.20%		49	-	-	1,675	108	-	-	-
1.25%		3,753	6,286	-	30,543	26,277	-	290	-
1.30%		7	-	46,595	73,213	143,764	2,830	-	1,167,962
1.35%		3,397	13,808	-	60,710	26,930	-	490	-
1.40%		1,428	3,674	24,799	47,604	88,778	1,610	72	225,789
1.45%		4,182	9,478	-	49,614	44,178	-	469	-
1.50%		4,223	12,119	-	92,223	13,235	-	946	-
1.55%		25,379	52,833	-	291,041	82,490	-	2,174	-
1.60%		1,754	4,901	-	18,878	8,131	-	135	-
1.65%		5,274	21,501	-	92,790	39,554	-	215	-
1.70%		2,773	3,010	-	64,425	14,071	-	207	-
1.75%		12,837	42,699	-	645,966	84,264	-	1,844	-
1.80%		9,562	27,444	-	97,049	44,709	-	436	-
1.85%		945	5,620	-	37,896	14,888	-	221	-
1.90%		1,843	4,577	-	18,855	6,184	-	-	-
1.95%		11,267	7,075	-	94,431	19,384	-	36	-
2.00%		6,532	8,568	-	208,215	25,036	-	351	-
2.05%		746	8,801	-	33,437	10,625	-	91	-
2.10%		6,206	4,575	-	59,093	7,008	-	628	-
2.15%		6,958	7,732	-	161,916	11,057	-	27	-
2.20%		4,888	8,465	-	52,083	3,272	-	203	-
2.25%		414	2,278	-	44,567	15,821	-	-	-
2.30%		673	1,805	-	20,825	2,027	-	-	-
2.35%		677	2,993	-	337,446	44,102	-	578	-
2.40%		2,163	2,855	-	38,140	2,277	-	37	-
2.45%		2,311	2,959	-	18,155	5,440	-	63	-
2.50%		383	5,256	-	5,416	1,503	-	91	-
2.55%		1,100	3,560	-	29,813	476	-	-	-
2.60%		-	463	-	15,309	4,624	-	-	-
2.65%		358	-	-	2,838	-	-	-	-
2.70%		277	323	-	6,820	680	-	-	-
2.75%		873	3	-	4,437	109	-	-	-
2.80%		180	232	-	3,691	539	-	99	-
2.85%		-	-	-	228	7	-	-	-
2.90%		-	2	-	2,375	-	-	-	-
2.95%		-	159	-	489	37	-	-	-
3.00%		-	-	-	148	-	-	-	-
3.05%		-	-	-	185	-	-	-	-
3.10%		-	-	-	471	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	40	-	-	-	-
3.25%		-	-	-	61	-	-	-	-
Totals	$	147,037	311,336	71,465	3,075,572	900,043	4,443	12,651	1,396,437

(Continued)

114

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	AMGP		AMINS	AMMCGS	AMTP	AMRS	AMFAS	AMSRS	OVMS
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	-	-	15	-
0.80%		567	53	-	4,018	128	72	83	2,046
0.85%		-	-	-	-	-	-	21	-
0.95%		-	394	1,378	-	-	380	8,999	-
1.05%		-	226	2,289	-	-	152	7,422	-
1.10%		-	23,659	202	-	5,288	597	45,829	-
1.15%		-	255,076	18,532	-	25,439	6,507	461,080	-
1.20%		-	1,580	-	-	33	48	3,036	-
1.25%		-	15,362	9,216	-	4,156	3,093	28,650	-
1.30%		109,525	30,152	77	1,136,034	13,228	3,063	87,618	819,306
1.35%		-	58,671	-	-	13,779	1,978	106,409	-
1.40%		49,966	38,831	1,355	706,185	6,369	3,528	68,299	412,958
1.45%		-	45,272	14,474	-	7,847	4,436	83,422	-
1.50%		-	40,513	2,533	-	3,498	2,913	80,769	-
1.55%		-	260,250	19,743	-	31,777	10,997	423,529	-
1.60%		-	9,651	2,624	-	1,806	2,876	16,956	-
1.65%		-	72,455	9,193	-	10,359	6,561	151,259	-
1.70%		-	32,533	3,660	-	2,740	2,424	59,369	-
1.75%		-	651,204	4,969	-	27,977	10,267	1,137,184	-
1.80%		-	73,416	10,132	-	7,296	2,739	125,720	-
1.85%		-	24,395	4,529	-	2,838	1,499	45,548	-
1.90%		-	6,561	2,183	-	538	1,769	19,061	-
1.95%		-	88,956	2,238	-	6,864	5,748	145,093	-
2.00%		-	206,704	861	-	6,723	3,786	374,015	-
2.05%		-	22,294	2,616	-	2,915	2,505	50,751	-
2.10%		-	43,815	532	-	834	1,379	69,908	-
2.15%		-	165,648	1,016	-	11,277	2,115	287,210	-
2.20%		-	42,970	2,321	-	1,408	1,701	82,381	-
2.25%		-	48,189	746	-	1,891	274	109,855	-
2.30%		-	10,131	966	-	1,358	740	19,882	-
2.35%		-	391,193	41	-	6,521	1,655	806,438	-
2.40%		-	42,966	116	-	948	355	83,644	-
2.45%		-	19,122	348	-	1,400	24	39,205	-
2.50%		-	1,654	171	-	313	131	5,004	-
2.55%		-	30,638	-	-	633	45	64,535	-
2.60%		-	18,298	-	-	300	-	39,453	-
2.65%		-	1,002	-	-	-	-	1,939	-
2.70%		-	8,081	-	-	1	-	15,921	-
2.75%		-	3,213	-	-	-	-	4,988	-
2.80%		-	767	54	-	-	28	1,761	-
2.85%		-	249	-	-	-	-	515	-
2.90%		-	2,701	-	-	-	-	4,855	-
2.95%		-	397	-	-	24	-	662	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	230	-	-	-	-	387	-
3.10%		-	558	-	-	-	-	746	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	49	-	-	-	-	65	-
3.25%		-	78	-	-	-	-	189	-
Totals	$	160,058	2,790,157	119,115	1,846,237	208,506	86,385	5,169,680	1,234,310

(Continued)

115

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	OVCAFS		OVGR	OVB	OVGS3	OVGS4	OVGS	OVGSS	OVHI3
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	-	-	-	-
0.80%		-	1,672	1,598	1,175	-	1,605	-	80
0.85%		-	-	-	-	-	-	-	-
0.95%		917	-	-	-	9,637	-	7	-
1.05%		934	-	-	-	7,693	-	224	-
1.10%		2,660	-	-	-	7,627	-	516	-
1.15%		125,403	-	-	-	235,897	-	34,323	-
1.20%		1,710	-	-	-	1,702	-	769	-
1.25%		39,753	-	-	-	51,608	-	37,264	-
1.30%		755	670,204	681,987	919,698	1,434	1,567,890	2,878	3,684
1.35%		25,371	-	-	-	104,796	-	-	-
1.40%		9,476	218,027	436,266	213,237	23,227	891,447	3,975	4,884
1.45%		49,955	-	-	-	79,487	-	14,919	-
1.50%		29,545	-	-	-	42,169	-	9,394	-
1.55%		117,742	-	-	-	168,345	-	34,690	-
1.60%		12,023	-	-	-	14,453	-	2,415	-
1.65%		59,218	-	-	-	88,994	-	18,955	-
1.70%		13,294	-	-	-	12,964	-	4,234	-
1.75%		82,835	-	-	-	112,977	-	7,366	-
1.80%		66,097	-	-	-	62,805	-	25,015	-
1.85%		21,648	-	-	-	23,715	-	7,568	-
1.90%		8,029	-	-	-	4,993	-	3,462	-
1.95%		17,757	-	-	-	20,361	-	1,618	-
2.00%		33,541	-	-	-	34,006	-	1,051	-
2.05%		32,062	-	-	-	7,152	-	2,958	-
2.10%		14,983	-	-	-	21,002	-	4,350	-
2.15%		24,990	-	-	-	11,329	-	1,526	-
2.20%		13,568	-	-	-	20,941	-	-	-
2.25%		14,826	-	-	-	2,351	-	152	-
2.30%		4,599	-	-	-	4,301	-	259	-
2.35%		16,694	-	-	-	2,198	-	-	-
2.40%		6,633	-	-	-	3,254	-	-	-
2.45%		3,597	-	-	-	170	-	-	-
2.50%		4,017	-	-	-	199	-	-	-
2.55%		1,826	-	-	-	-	-	-	-
2.60%		1,188	-	-	-	20	-	-	-
2.65%		40	-	-	-	352	-	-	-
2.70%		129	-	-	-	137	-	-	-
2.75%		-	-	-	-	-	-	-	-
2.80%		14	-	-	-	-	-	-	-
2.85%		-	-	-	-	-	-	-	-
2.90%		232	-	-	-	-	-	-	-
2.95%		48	-	-	-	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	858,109	889,903	1,119,851	1,134,110	1,182,296	2,460,942	219,888	8,648

(Continued)

116

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	OVHI4		OVHI	OVHIS	OVSC	OVSCS	OVGI	OVGIS	OVAG
0.65%	$	-	-	-	-	27	-	78	-
0.75%		-	-	-	-	188	-	578	-
0.80%		-	58	-	168	-	189	-	569
0.85%		-	-	-	-	125	-	477	-
0.95%		361	-	2,289	-	1,598	-	1,207	-
1.05%		499	-	2,068	-	2,644	-	1,171	-
1.10%		97	-	770	-	24,592	-	54,419	-
1.15%		22,020	-	33,697	-	280,820	-	586,872	-
1.20%		-	-	871	-	1,773	-	4,459	-
1.25%		4,036	-	12,393	-	24,853	-	55,076	-
1.30%		-	3,448	-	40,263	2,878	210,145	7,214	135,480
1.35%		7,169	-	10,465	-	78,206	-	139,556	-
1.40%		9,427	829	8,020	10,846	29,830	56,073	67,888	26,305
1.45%		13,816	-	14,192	-	60,221	-	113,304	-
1.50%		4,727	-	6,175	-	52,939	-	115,432	-
1.55%		32,840	-	49,536	-	294,354	-	587,805	-
1.60%		1,248	-	4,018	-	17,313	-	27,125	-
1.65%		10,034	-	17,512	-	86,229	-	199,310	-
1.70%		637	-	6,463	-	38,984	-	96,511	-
1.75%		24,099	-	16,093	-	621,359	-	1,431,036	-
1.80%		11,018	-	31,685	-	102,670	-	208,148	-
1.85%		2,567	-	6,738	-	26,391	-	67,832	-
1.90%		1,590	-	2,560	-	9,840	-	22,209	-
1.95%		954	-	1,585	-	84,827	-	190,506	-
2.00%		8,212	-	12,375	-	188,808	-	486,403	-
2.05%		385	-	3,386	-	22,851	-	71,350	-
2.10%		762	-	7,168	-	55,920	-	94,499	-
2.15%		987	-	1,325	-	161,275	-	383,616	-
2.20%		1,428	-	5,686	-	39,596	-	98,871	-
2.25%		385	-	807	-	40,837	-	143,969	-
2.30%		141	-	111	-	9,124	-	20,829	-
2.35%		189	-	532	-	363,559	-	1,022,501	-
2.40%		944	-	-	-	39,568	-	99,891	-
2.45%		470	-	756	-	17,505	-	52,738	-
2.50%		-	-	-	-	1,798	-	4,940	-
2.55%		526	-	-	-	30,476	-	79,792	-
2.60%		-	-	-	-	16,551	-	51,760	-
2.65%		500	-	-	-	1,174	-	2,523	-
2.70%		285	-	123	-	7,545	-	21,533	-
2.75%		1,990	-	-	-	2,220	-	6,752	-
2.80%		2,263	-	-	-	1,008	-	2,529	-
2.85%		-	-	-	-	291	-	1,392	-
2.90%		-	-	-	-	2,373	-	5,963	-
2.95%		-	-	-	-	308	-	822	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	215	-	514	-
3.10%		-	-	-	-	455	-	899	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	39	-	78	-
3.25%		-	-	-	-	89	-	281	-
Totals	$	166,606	4,335	259,399	51,277	2,846,246	266,407	6,632,658	162,354

(Continued)

117

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	PISVP1		PVGIB	PVTIGB	PVTVB	TRBCG2	TREI2	TRLT2	DSRG
0.65%	$	-	-	-	-	41	-	-	-
0.75%		-	-	-	-	381	-	-	-
0.80%		-	-	-	-	301	460	296	2,234
0.85%		-	-	-	-	211	-	-	-
0.95%		4,909	-	-	-	538	950	348	-
1.05%		4,481	138	-	-	434	1,760	1,343	-
1.10%		-	481	-	-	26,981	7,919	5,584	-
1.15%		-	11,291	2,482	3,021	316,943	118,816	76,273	-
1.20%		-	-	-	-	1,825	982	588	-
1.25%		-	2,647	1,041	3,254	16,962	12,323	6,874	-
1.30%		-	-	-	-	57,300	94,660	36,133	576,367
1.35%		-	1,759	-	427	70,288	47,284	12,705	-
1.40%		-	323	1,236	86	58,362	46,512	18,282	172,045
1.45%		-	2,245	876	1,050	63,348	51,742	30,729	-
1.50%		-	2,587	1,865	852	53,544	31,193	15,227	-
1.55%		-	13,398	2,563	3,645	326,738	159,462	47,362	-
1.60%		-	1,398	60	220	13,631	9,485	5,059	-
1.65%		-	13,013	1,478	3,166	82,680	45,159	24,615	-
1.70%		-	1,422	902	527	48,358	16,099	13,955	-
1.75%		-	4,813	742	1,010	719,542	205,360	102,529	-
1.80%		-	4,131	1,951	1,022	89,980	45,516	17,010	-
1.85%		-	2,063	626	1,013	35,899	19,796	18,682	-
1.90%		-	712	-	191	8,833	2,297	3,298	-
1.95%		-	1,016	-	260	95,740	23,234	10,807	-
2.00%		-	2,922	185	1,741	224,244	31,668	27,374	-
2.05%		-	4,333	642	2,659	28,367	7,283	120,803	-
2.10%		-	2,361	89	123	52,703	27,172	19,063	-
2.15%		-	3,180	-	319	205,937	37,028	19,421	-
2.20%		-	387	-	198	52,935	23,573	17,193	-
2.25%		-	3,144	-	1,251	60,074	16,335	20,687	-
2.30%		-	447	-	755	12,311	4,513	1,706	-
2.35%		-	893	-	782	416,090	29,271	37,215	-
2.40%		-	359	419	43	54,088	1,982	4,439	-
2.45%		-	243	-	288	23,221	2,625	3,778	-
2.50%		-	578	-	429	2,970	1,577	236	-
2.55%		-	-	-	41	34,338	527	1,339	-
2.60%		-	391	-	407	19,049	2,612	7,127	-
2.65%		-	-	-	-	1,163	752	85	-
2.70%		-	-	-	201	9,416	893	244	-
2.75%		-	-	-	-	3,193	-	2,495	-
2.80%		-	96	-	66	1,236	2,512	659	-
2.85%		-	-	-	-	383	-	-	-
2.90%		-	-	-	-	2,831	5	1,503	-
2.95%		-	-	-	-	440	81	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	282	-	-	-
3.10%		-	-	-	-	583	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	50	-	-	-
3.25%		-	-	-	-	105	-	-	-
Totals	$	9,390	82,771	17,157	29,047	3,294,869	1,131,418	733,066	750,646

(Continued)

118

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	VWBFR		VWBF	VWEMR	VWEM	VWHAR	VWHA	MSVFI	MSVF2
0.65%	$	-	-	-	-	-	-	-	59
0.75%		-	-	-	-	-	-	-	459
0.80%		329	65	1,502	1,318	2,647	3,703	1	-
0.85%		-	-	-	-	-	-	-	414
0.95%		-	-	-	-	-	-	-	4,289
1.05%		-	-	-	-	-	-	-	3,259
1.10%		-	-	-	-	-	-	-	39,583
1.15%		-	-	-	-	-	-	-	364,805
1.20%		-	-	-	-	-	-	-	3,282
1.25%		-	-	-	-	-	-	-	30,108
1.30%		78,348	161,893	213,639	262,962	411,715	476,257	34,898	5,353
1.35%		-	-	-	-	-	-	-	85,146
1.40%		43,863	70,042	61,107	115,881	149,770	171,095	11,769	45,062
1.45%		-	-	-	-	-	-	-	73,081
1.50%		-	-	-	-	-	-	-	90,548
1.55%		-	-	-	-	-	-	-	337,446
1.60%		-	-	-	-	-	-	-	13,997
1.65%		-	-	-	-	-	-	-	119,519
1.70%		-	-	-	-	-	-	-	72,991
1.75%		-	-	-	-	-	-	-	944,013
1.80%		-	-	-	-	-	-	-	112,103
1.85%		-	-	-	-	-	-	-	42,614
1.90%		-	-	-	-	-	-	-	12,688
1.95%		-	-	-	-	-	-	-	122,180
2.00%		-	-	-	-	-	-	-	378,368
2.05%		-	-	-	-	-	-	-	46,187
2.10%		-	-	-	-	-	-	-	48,834
2.15%		-	-	-	-	-	-	-	247,557
2.20%		-	-	-	-	-	-	-	80,473
2.25%		-	-	-	-	-	-	-	148,867
2.30%		-	-	-	-	-	-	-	16,097
2.35%		-	-	-	-	-	-	-	948,184
2.40%		-	-	-	-	-	-	-	73,535
2.45%		-	-	-	-	-	-	-	45,648
2.50%		-	-	-	-	-	-	-	2,411
2.55%		-	-	-	-	-	-	-	69,241
2.60%		-	-	-	-	-	-	-	46,976
2.65%		-	-	-	-	-	-	-	1,573
2.70%		-	-	-	-	-	-	-	15,559
2.75%		-	-	-	-	-	-	-	6,780
2.80%		-	-	-	-	-	-	-	1,929
2.85%		-	-	-	-	-	-	-	670
2.90%		-	-	-	-	-	-	-	4,482
2.95%		-	-	-	-	-	-	-	445
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	-	-	949
3.10%		-	-	-	-	-	-	-	229
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	20
3.25%		-	-	-	-	-	-	-	297
Totals	$	122,540	232,000	276,248	380,161	564,132	651,055	46,668	4,708,310

(Continued)

119

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	MSEM		MSEMB	MSVRE	MSVREB	VYDS	SVDF	WFVLCG	WFVMM
0.65%	$	-	-	-	-	-	-	-	-
0.75%		-	-	-	-	-	-	-	-
0.80%		26	-	6,303	-	-	524	-	-
0.85%		-	-	-	-	-	-	-	-
0.95%		-	-	-	7,188	-	-	-	-
1.05%		-	-	-	1,961	-	-	-	-
1.10%		-	337	-	5,001	-	-	-	-
1.15%		-	4,361	-	201,407	1,228	-	-	71
1.20%		-	-	-	670	-	-	-	-
1.25%		-	2,766	-	37,339	4,381	-	-	-
1.30%		54,719	-	880,894	1,008	-	519,064	-	-
1.35%		-	-	-	54,004	1,422	-	-	-
1.40%		22,532	249	431,943	15,601	-	193,976	-	807
1.45%		-	2,556	-	53,430	-	-	-	-
1.50%		-	4,572	-	35,173	1,168	-	-	-
1.55%		-	3,036	-	209,199	52	-	-	-
1.60%		-	243	-	12,918	531	-	-	-
1.65%		-	612	-	65,373	318	-	-	-
1.70%		-	352	-	21,228	151	-	-	-
1.75%		-	712	-	94,027	47	-	82	-
1.80%		-	1,689	-	90,079	718	-	-	-
1.85%		-	424	-	23,913	347	-	-	-
1.90%		-	430	-	10,254	-	-	287	-
1.95%		-	159	-	19,403	493	-	-	-
2.00%		-	1	-	35,245	-	-	204	-
2.05%		-	540	-	13,101	-	-	-	-
2.10%		-	1,217	-	23,839	889	-	582	-
2.15%		-	592	-	9,680	-	-	-	-
2.20%		-	-	-	19,819	-	-	1,115	-
2.25%		-	-	-	2,677	-	-	-	-
2.30%		-	-	-	4,053	-	-	-	-
2.35%		-	-	-	850	-	-	-	-
2.40%		-	-	-	1,935	-	-	-	-
2.45%		-	-	-	7,169	-	-	-	-
2.50%		-	-	-	259	-	-	-	-
2.55%		-	-	-	1,254	-	-	-	-
2.60%		-	-	-	-	-	-	-	-
2.65%		-	-	-	271	-	-	-	-
2.70%		-	-	-	124	-	-	-	-
2.75%		-	-	-	121	-	-	-	-
2.80%		-	-	-	5,050	-	-	-	-
2.85%		-	-	-	-	-	-	-	-
2.90%		-	-	-	-	-	-	-	-
2.95%		-	-	-	-	-	-	-	-
3.00%		-	-	-	-	-	-	-	-
3.05%		-	-	-	-	-	-	-	-
3.10%		-	-	-	-	-	-	-	-
3.15%		-	-	-	-	-	-	-	-
3.20%		-	-	-	-	-	-	-	-
3.25%		-	-	-	-	-	-	-	-
Totals	$	77,277	24,848	1,319,140	1,084,623	11,745	713,564	2,270	878

(Continued)

120

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	SVOF		WFVSMV	WFVTRB
0.65%	$	-	-	-
0.75%		-	-	-
0.80%		3,380	-	-
0.85%		-	-	-
0.95%		-	-	-
1.05%		-	-	-
1.10%		-	85	-
1.15%		-	-	266
1.20%		-	-	-
1.25%		-	2	-
1.30%		2,315,684	-	-
1.35%		-	-	-
1.40%		754,255	-	-
1.45%		-	-	-
1.50%		-	-	-
1.55%		-	-	-
1.60%		-	-	-
1.65%		-	-	-
1.70%		-	-	-
1.75%		-	-	-
1.80%		-	-	-
1.85%		-	-	-
1.90%		-	-	-
1.95%		-	-	-
2.00%		-	-	-
2.05%		-	-	-
2.10%		-	-	-
2.15%		-	-	-
2.20%		-	-	-
2.25%		-	-	-
2.30%		-	-	-
2.35%		-	-	-
2.40%		-	-	-
2.45%		-	-	-
2.50%		-	-	-
2.55%		-	-	-
2.60%		-	-	-
2.65%		-	-	-
2.70%		-	-	-
2.75%		-	-	-
2.80%		-	-	-
2.85%		-	-	-
2.90%		-	-	-
2.95%		-	-	-
3.00%		-	-	-
3.05%		-	-	-
3.10%		-	-	-
3.15%		-	-	-
3.20%		-	-	-
3.25%		-	-	-
Totals	$	3,073,319	87	266

(Continued)

121

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

(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, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company. Contract owners may, with certain restrictions, transfer their assets between the Account and a fixed dollar contract (fixed account) maintained in the accounts of the Company. The fixed account assets are not reflected in the accompanying financial statements. In addition, the Account portion of contract owner loans is transferred to the accounts of the Company for administration and collection. Loan repayments are transferred to the Account at the direction of the contract owner. For the years ended December 31, 2008 and 2007, total transfers to the Account from the fixed account were $311,309,289 and $276,423,047, respectively, and total transfers from the Account to the fixed account were $314,743,184 and $100,675,280, respectively. Transfers from the Account to the fixed account are included in redemptions, and transfers to the Account from the fixed account are included in purchase payments received from contract owners, as applicable, on the accompanying Statements of Changes in Contract Owners’ Equity.

For contracts with the Extra Value option, the Company contributed $15,745,223 and $27,519,597 to the Account in the form of bonus credits to the contract owner accounts for the years ended December 31, 2008 and 2007, respectively. These amounts are included in purchase payments received from contract owners and are credited at the time the related purchase payment from the contract owner is received.

For guaranteed minimum death benefits, the Company contributed $36,092,569 and $1,508,866 to the Account in the form of additional premium to contract owner accounts for the years ended December 31, 2008 and 2007, respectively. These amounts are included in purchase payments received from contract owners and are credited at time of annuitant death.

For Purchase Payment Credits made to All American Gold, Achiever, Future Venue, Elite Venue and Choice Venue II contracts, the Company contributed $3,684,202 and $5,763,519 to the Account in the form of additional credit to the contract owner accounts for the years ended December 31, 2008 and 2007, respectively. These amounts are included in purchase payments received from contract owners and, as applicable, are applied to a contract when cumulative purchase payments reach certain aggregate levels.

(4) Fair Value Measurement

SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Account generally uses the market approach as the valuation technique due to the nature of the mutual fund investments offered in the Account. This technique maximizes the use of observable inputs and minimizes the use of unobservable inputs.

In accordance with SFAS 157, the Account categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

The Company categorizes financial assets recorded at fair value as follows:

• Level 1 – Unadjusted quoted prices accessible in active markets for identical assets at the measurement date. The assets utilizing Level 1 valuations represent investments in publicly-traded registered mutual funds with quoted market prices.  

• Level 2 – Unadjusted quoted prices for similar assets in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. The assets utilizing Level 2 valuations represent investments in privately-traded registered mutual funds only offered through insurance products.  

(Continued)

122

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

• Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The Account invests only in funds with fair value measurements in the first two levels of the fair value hierarchy.  

The following table summarizes assets measured at fair value on a recurring basis as of December 31, 2008:

	Level 1	Level 2		Level 3	Total
Separate Account Investments	0	$	16,006,555,754	0	$	16,006,555,754

Accounts Payable of $74,681 are measured at settlement value which approximates the fair value due to the short-term nature of such assets.

The Account did not have any assets or liabilities reported at fair value on a nonrecurring basis required to be disclosed under SFAS 157.

(Continued)

123

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

(5) Financial Highlights

The Company offers several variable annuity products through the Account that have unique combinations of features and fees that are assessed to the contract owner. Differences in fee structures result in a variety of contract expense rates, unit fair values and total returns. The following tabular presentation is a summary of units, unit fair values and contract owners’ equity outstanding for variable annuity contracts as of the end of the periods indicated, and contract expense rate, investment income ratio and total return for each period in the five-year period ended December 31, 2008. The information is presented as a range of minimum to maximum values based upon product grouping. The range is determined by identifying the lowest and the highest contract expense rate for contracts with units outstanding as of the balance sheet date. The unit fair values and total returns related to these identified contract expense rates are also disclosed as a range below. Accordingly, some individual contract amounts may not be within the ranges presented.

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
AIM VIF - Basic Value Fund - Series II (AVBV2)
2008	0.80 to	2.95	2,569,381	$	5.12 to	7.08	$	21,201,989	0.47	%	-52.29% to	-53.33	%
2007	0.80 to	2.95	2,902,901		10.74 to	15.16		50,651,888	0.35	%	0.55% to	-1.64	%
2006	0.95 to	2.95	3,021,464		14.14 to	15.42		52,769,013	0.12	%	11.87% to	9.62	%
2005	0.95 to	2.95	3,126,816		12.64 to	14.06		49,174,442	0.00	%	4.43% to	2.33	%
2004	0.95 to	2.80	2,372,812		12.11 to	13.78		35,865,728	0.00	%	9.79% to	7.74	%
AIM VIF - Capital Appreciation Fund - Series II (AVCA2)
2008	0.80 to	2.95	804,764		6.25 to	8.20		7,651,910	0.00	%	-43.09% to	-44.32	%
2007	0.80 to	2.95	1,044,738		10.99 to	14.72		17,629,535	0.00	%	10.83% to	8.42	%
2006	0.80 to	2.95	936,992		9.91 to	13.58		14,402,186	0.00	%	-0.88% to	2.94	%(a)
2005	0.95 to	2.95	783,186		12.18 to	13.19		11,580,313	0.00	%	7.55% to	5.38	%
2004	0.95 to	2.85	995,122		11.33 to	12.54		13,783,771	0.00	%	5.32% to	3.30	%
AIM VIF - Capital Development Fund - Series II (AVCD2)
2008	0.80 to	3.00	1,176,724		5.82 to	9.35		12,813,434	0.00	%	-47.55% to	-48.72	%
2007	0.80 to	3.00	1,288,902		11.09 to	18.24		27,002,291	0.00	%	9.66% to	7.21	%
2006	0.80 to	3.00	1,088,041		10.12 to	17.01		20,992,339	0.00	%	1.15% to	12.78	%(a)
2005	0.95 to	3.00	938,234		13.62 to	15.09		15,894,114	0.00	%	8.23% to	6.00	%
2004	0.95 to	2.70	681,736		12.59 to	15.48		10,765,387	0.00	%	14.17% to	12.16	%
Alger American Balanced Portfolio - Class S (ALBS)
2008	0.95 to	1.45	18,716		9.29 to	9.04		173,104	0.00	%	-32.55% to	-32.89	%
2007	0.95 to	1.45	23,143		13.77 to	13.47		317,270	0.00	%	13.39% to	12.82	%
2006	0.95 to	1.45	19,445		12.14 to	11.94		235,534	0.81	%	3.47% to	2.95	%
2005	0.95 to	1.45	37,454		11.73 to	11.60		439,160	1.78	%	7.13% to	6.59	%
2004	0.95 to	1.45	11,877		10.95 to	10.88		129,991	1.97	%	3.28% to	2.76	%
Alger American Mid Cap Growth Portfolio - Class S (ALMCS)
2008	0.95 to	1.45	35,463		7.60 to	7.40		267,952	0.00	%	-58.87% to	-59.08	%
2007	0.95 to	1.80	52,160		18.48 to	17.80		958,371	0.00	%	30.02% to	28.90	%
2006	0.95 to	1.80	42,969		14.21 to	13.81		608,077	0.00	%	8.84% to	7.91	%
2005	0.95 to	1.80	31,739		13.06 to	12.80		413,029	0.00	%	8.50% to	7.57	%
2004	0.95 to	1.45	17,910		12.03 to	11.95		215,064	0.00	%	11.69% to	11.13	%
AllianceBernstein VPS - Growth and Income Portfolio - Class B (ALVGIB)
2008	0.95 to	2.80	891,778		8.92 to	8.95		9,367,499	1.77	%	-41.26% to	-42.36	%
2007	0.95 to	2.90	1,095,470		15.18 to	15.45		19,731,218	1.22	%	3.86% to	1.80	%
2006	0.95 to	2.90	1,318,088		14.62 to	15.18		23,041,761	1.14	%	15.88% to	13.60	%
2005	0.95 to	2.90	1,458,592		12.61 to	13.36		22,196,589	1.24	%	3.60% to	1.57	%
2004	0.95 to	2.90	1,632,039		12.17 to	13.15		24,059,143	0.88	%	10.17% to	8.00	%
AllianceBernstein VPS - Small-Mid Cap Value Portfolio - Class B (ALVSVB)
2008	0.80 to	2.80	934,857		6.22 to	11.08		11,843,636	0.28	%	-37.79% to	-37.55	%(a)
2007	0.95 to	2.40	394,975		16.31 to	19.59		7,812,720	0.80	%	0.56% to	-0.92	%
2006	0.95 to	2.40	436,802		16.22 to	19.77		8,743,128	0.23	%	13.12% to	11.47	%
2005	0.95 to	2.40	472,597		14.34 to	17.73		8,416,951	0.55	%	5.62% to	4.08	%
2004	0.95 to	2.70	497,373		13.58 to	16.94		8,511,826	0.09	%	17.94% to	15.86	%
American Century VP - Balanced Fund - Class I (ACVB)
2008	0.80 to	1.40	2,314,333		16.32 to	17.59		43,388,355	2.68	%	-20.97% to	-21.45	%
2007	0.80 to	1.40	2,885,081		20.65 to	22.39		68,694,053	2.18	%	4.09% to	3.46	%
2006	0.80 to	1.40	3,544,356		19.84 to	21.64		81,354,666	1.99	%	8.74% to	8.09	%
2005	0.80 to	1.40	4,467,709		18.24 to	20.02		94,404,446	1.89	%	4.10% to	3.47	%
2004	0.80 to	1.40	5,476,571		17.53 to	19.35		111,421,119	1.68	%	8.90% to	8.24	%
American Century VP - Capital Appreciation Fund - Class I (ACVCA)
2008	0.80 to	1.40	2,882,462		11.93 to	14.27		70,456,060	0.00	%	-46.62% to	-46.94	%
2007	0.80 to	1.40	3,530,839		22.34 to	26.89		159,958,937	0.00	%	44.63% to	43.75	%
2006	0.80 to	1.40	3,982,752		15.45 to	18.71		124,686,439	0.00	%	16.28% to	15.58	%
2005	0.80 to	1.40	4,837,975		13.28 to	16.19		129,211,185	0.00	%	21.09% to	20.36	%
2004	0.80 to	1.40	5,652,516		10.97 to	13.45		124,449,595	0.00	%	6.72% to	6.08	%

(Continued)

124

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
American Century VP - Income & Growth Fund - Class I (ACVIG)
2008	0.80 to	1.40	1,902,498	$	9.15 to	8.57	$	16,446,480	2.09	%	-35.11% to	-35.50	%
2007	0.80 to	1.40	2,391,422		14.09 to	13.29		32,022,315	1.98	%	-0.87% to	-1.47	%
2006	0.80 to	1.40	2,937,946		14.22 to	13.49		39,889,470	1.85	%	16.15% to	15.45	%
2005	0.80 to	1.40	3,657,933		12.24 to	11.69		42,972,046	2.07	%	3.80% to	3.17	%
2004	0.80 to	1.40	4,654,910		11.79 to	11.33		52,942,168	1.40	%	12.09% to	11.41	%
American Century VP - Income & Growth Fund - Class II (ACVIG2)
2008	0.95 to	2.85	602,251		9.57 to	7.88		6,525,719	1.80	%	-35.35% to	-36.67	%
2007	0.95 to	2.85	727,674		14.80 to	12.45		12,216,196	1.71	%	-1.38% to	-3.23	%
2006	0.95 to	2.85	861,606		15.01 to	12.86		14,784,058	1.57	%	15.71% to	13.54	%
2005	0.95 to	2.85	974,803		12.97 to	11.33		14,596,589	1.77	%	3.53% to	1.59	%
2004	0.95 to	2.85	964,870		12.53 to	11.15		14,094,019	1.13	%	11.50% to	9.46	%
American Century VP - Inflation Protection Fund - Class II (ACVIP2)
2008	0.75 to	3.05	10,709,237		10.07 to	10.32		120,944,215	4.72	%	-2.33% to	-4.59	%
2007	0.80 to	3.05	6,820,642		11.89 to	10.81		79,613,998	4.31	%	8.61% to	6.14	%
2006	0.80 to	3.00	6,878,406		10.94 to	10.21		74,548,587	3.41	%	0.78% to	-1.45	%
2005	0.80 to	3.00	7,317,685		10.86 to	10.36		79,291,554	4.66	%	0.75% to	-1.48	%
2004	0.80 to	3.00	5,306,858		10.78 to	10.51		57,508,773	3.39	%	4.96% to	2.64	%
American Century VP - International Fund - Class I (ACVI)
2008	0.80 to	1.40	1,852,745		15.27 to	14.16		26,470,256	0.84	%	-45.27% to	-45.60	%
2007	0.80 to	1.40	2,292,787		27.90 to	26.02		60,157,680	0.72	%	17.11% to	16.40	%
2006	0.80 to	1.40	2,905,577		23.82 to	22.36		65,448,602	1.67	%	24.03% to	23.28	%
2005	0.80 to	1.40	3,664,642		19.21 to	18.13		66,905,080	1.18	%	12.35% to	11.67	%
2004	0.80 to	1.40	4,655,031		17.10 to	16.24		76,046,364	0.57	%	14.00% to	13.32	%
American Century VP - International Fund - Class II (ACVI2)
2008	0.95 to	2.15	128,519		11.38 to	12.17		1,624,402	0.67	%	-45.42% to	-46.09	%
2007	0.95 to	2.15	152,551		20.85 to	22.58		3,551,239	0.56	%	16.79% to	15.37	%
2006	0.95 to	2.15	167,745		17.86 to	19.57		3,361,447	1.45	%	23.56% to	22.07	%
2005	0.95 to	2.15	187,627		14.45 to	16.03		3,059,229	1.01	%	12.03% to	10.68	%
2004	0.95 to	2.15	218,350		12.90 to	14.48		3,195,978	0.49	%	13.68% to	12.31	%
American Century VP - International Fund - Class III (ACVI3)
2008	0.80 to	1.40	1,568,771		10.15 to	9.75		15,380,530	0.83	%	-45.27% to	-45.60	%
2007	0.80 to	1.40	1,893,113		18.55 to	17.92		34,085,680	0.70	%	17.11% to	16.40	%
2006	0.80 to	1.40	2,121,586		15.84 to	15.40		32,787,298	1.62	%	24.03% to	23.28	%
2005	0.80 to	1.40	2,307,236		12.77 to	12.49		28,896,626	1.13	%	12.20% to	11.52	%
2004	0.80 to	1.40	2,469,324		11.38 to	11.20		27,706,844	0.54	%	14.16% to	13.47	%
American Century VP - International Fund - Class IV (ACVI4)
2008	0.95 to	2.80	943,918		9.95 to	9.11		9,133,453	0.68	%	-45.47% to	-46.50	%
2007	0.95 to	2.80	1,081,252		18.24 to	17.03		19,305,697	0.42	%	16.77% to	14.58	%
2006	0.95 to	2.65	741,894		15.62 to	14.92		11,421,722	1.45	%	23.68% to	21.57	%
2005	0.95 to	2.65	771,337		12.63 to	12.27		9,654,221	0.89	%	11.90% to	9.99	%
2004	0.95 to	2.30	493,520		11.29 to	11.19		5,550,929	0.00	%	12.89% to	11.87	%(a) (b)
American Century VP - Mid Cap Value Fund - Class I (ACVMV1)
2008	0.80 to	1.40	566,200		8.07 to	7.94		4,504,507	0.09	%	-24.95% to	-25.41	%
2007	0.80 to	1.40	544,568		10.75 to	10.64		5,803,553	0.95	%	-3.09% to	-3.68	%
2006	0.80 to	1.40	299,448		11.09 to	11.05		3,310,661	1.20	%	10.94% to	10.50	%(a) (b)
American Century VP - Mid Cap Value Fund - Class II (ACVMV2)
2008	0.75 to	2.90	2,949,866		7.51 to	8.99		27,697,339	0.09	%	-25.08% to	-26.70	%
2007	1.10 to	2.90	2,191,006		12.88 to	12.26		27,830,212	0.66	%	-3.50% to	-5.27	%
2006	1.10 to	2.90	1,253,439		13.35 to	12.95		16,593,330	0.67	%	18.91% to	16.75	%
2005	1.15 to	2.90	483,218		11.22 to	11.09		5,404,126	1.28	%	12.21% to	10.89	%(a) (b)
American Century VP - Ultra(R) Fund - Class I (ACVU1)
2008	0.80 to	1.40	259,464		7.37 to	7.08		1,847,004	0.00	%	-41.95% to	-42.30	%
2007	0.80 to	1.40	371,822		12.70 to	12.27		4,581,136	0.00	%	20.04% to	19.31	%
2006	0.80 to	1.40	423,522		10.58 to	10.28		4,369,846	0.00	%	-4.05% to	-4.63	%
2005	0.80 to	1.40	704,273		11.02 to	10.78		7,610,398	0.00	%	1.35% to	0.74	%
2004	0.80 to	1.40	671,844		10.88 to	10.70		7,201,616	0.00	%	9.79% to	9.13	%
American Century VP - Ultra(R) Fund - Class II (ACVU2)
2008	0.95 to	2.90	868,516		7.82 to	7.74		7,868,731	0.00	%	-42.20% to	-43.34	%
2007	0.95 to	2.90	1,079,627		13.53 to	13.65		17,056,680	0.00	%	19.69% to	17.32	%
2006	0.95 to	2.90	1,132,582		11.31 to	11.64		15,069,024	0.00	%	-4.30% to	-6.18	%
2005	0.95 to	2.90	1,111,532		11.82 to	12.40		15,585,166	0.00	%	1.01% to	-0.97	%
2004	0.95 to	2.85	833,172		11.70 to	12.54		11,612,690	0.00	%	9.54% to	7.44	%

(Continued)

125

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
American Century VP - Value Fund - Class I (ACVV)
2008	0.80 to	1.40	3,763,741	$	17.94 to	16.68	$	63,351,622	2.53	%	-27.36% to	-27.80	%
2007	0.80 to	1.40	4,831,480		24.70 to	23.10		112,542,386	1.78	%	-5.90% to	-6.47	%
2006	0.80 to	1.40	6,165,160		26.25 to	24.70		153,403,265	1.35	%	17.71% to	17.00	%
2005	0.80 to	1.40	7,260,905		22.30 to	21.11		154,247,554	0.93	%	4.20% to	3.57	%
2004	0.80 to	1.40	8,834,706		21.40 to	20.39		181,034,811	1.06	%	13.42% to	12.73	%
American Century VP - Value Fund - Class II (ACVV2)
2008	0.75 to	2.95	5,916,904		7.31 to	10.41		72,299,440	2.22	%	-27.35% to	-28.97	%
2007	0.95 to	2.95	5,881,576		14.49 to	14.65		99,951,941	1.51	%	-6.21% to	-8.12	%
2006	0.95 to	2.95	5,699,037		15.45 to	15.95		104,054,486	1.05	%	17.34% to	14.98	%
2005	0.95 to	2.95	4,664,738		13.16 to	13.87		73,014,202	0.59	%	3.86% to	1.77	%
2004	0.95 to	2.80	2,735,693		12.67 to	13.66		41,571,673	0.53	%	13.09% to	10.98	%
American Century VP - Vista(SM) Fund - Class I (ACVVS1)
2008	0.80 to	1.40	560,487		6.77 to	6.66		3,740,623	0.00	%	-49.04% to	-49.34	%
2007	0.80 to	1.40	951,361		13.28 to	13.14		12,519,496	0.00	%	38.65% to	37.81	%
2006	1.30 to	1.40	15,762		9.54 to	9.54		150,403	0.00	%	-4.56% to	-4.63	%(a) (b)
American Century VP - Vista(SM) Fund - Class II (ACVVS2)
2008	0.95 to	2.80	1,499,857		6.31 to	8.04		12,523,097	0.00	%	-49.20% to	-50.15	%
2007	0.95 to	2.80	2,291,468		12.42 to	16.13		37,937,432	0.00	%	24.25% to	35.61	%(a)
2006	1.10 to	2.90	242,388		12.25 to	11.88		2,936,912	0.00	%	7.68% to	5.73	%
2005	1.10 to	2.90	106,490		11.37 to	11.23		1,205,764	0.00	%	13.72% to	12.35	%(a) (b)
American Funds IS - Growth Fund - Class 1 (AFGF)
2008	1.30		185,887		47.67			8,860,655	1.05	%	-44.56%
2007	1.30		204,499		85.98			17,582,665	0.98	%	11.17%
2006	1.30		243,531		77.34			18,835,011	0.92	%	9.05%
2005	1.30		304,890		70.93			21,624,645	0.86	%	14.99%
2004	1.30		328,214		61.68			20,244,087	0.35	%	11.28%
American Funds IS - High Income Bond Fund - Class 1 (AFHY)
2008	1.30		42,363		30.60			1,296,441	5.45	%	-24.74%
2007	1.30		35,586		40.66			1,446,977	10.75	%	0.29%
2006	1.30		35,506		40.54			1,439,550	4.68	%	9.45%
2005	1.30		51,290		37.04			1,899,949	5.71	%	1.13%
2004	1.30		56,446		36.63			2,067,573	5.70	%	8.40%
American Funds IS - U.S. Government/AAA-Rated Securities Fund - Class 1 (AFGC)
2008	1.30		48,345		31.42			1,519,125	3.08	%	6.44%
2007	1.30		49,215		29.52			1,452,853	7.14	%	5.43%
2006	1.30		62,699		28.00			1,755,517	3.68	%	2.60%
2005	1.30		88,729		27.29			2,421,277	3.90	%	1.37%
2004	1.30		91,982		26.92			2,476,082	4.87	%	2.24%
Charles Schwab Money Market Portfolio (CHSMM)
2008	0.75 to	1.85	2,367,841		10.18 to	10.52		25,748,263	2.08	%	1.35% to	0.23	%
2007	0.95 to	1.85	2,030,093		10.92 to	10.50		22,118,985	4.51	%	3.74% to	2.79	%
2006	0.95 to	1.85	1,650,023		10.53 to	10.21		17,343,382	4.15	%	3.61% to	2.67	%
2005	0.95 to	1.90	1,114,003		10.16 to	9.94		11,301,111	3.00	%	1.77% to	0.80	%
2004	0.95 to	1.85	438,727		9.98 to	9.86		4,373,727	0.96	%	-0.06% to	-0.96	%
Credit Suisse Trust - Global Small Cap Portfolio (WVCP)
2008	0.80 to	1.40	184,626		8.13 to	7.56		1,407,276	1.73	%	-47.18% to	-47.50	%
2007	0.80 to	1.40	219,613		15.39 to	14.39		3,186,083	0.00	%	-4.73% to	-5.31	%
2006	0.80 to	1.40	285,608		16.15 to	15.20		4,372,655	0.00	%	12.30% to	11.62	%
2005	0.80 to	1.40	377,164		14.38 to	13.62		5,168,448	0.00	%	15.22% to	14.52	%
2004	0.80 to	1.40	509,005		12.48 to	11.89		6,084,949	0.00	%	17.05% to	16.34	%
Credit Suisse Trust - International Focus Portfolio (WIEP)
2008	0.80 to	1.40	1,761,884		10.95 to	10.40		18,463,105	1.68	%	-41.51% to	-41.86	%
2007	0.80 to	1.40	2,123,568		18.72 to	17.89		38,252,943	1.05	%	15.66% to	14.96	%
2006	0.80 to	1.40	2,629,775		16.18 to	15.57		41,181,190	0.99	%	17.71% to	17.00	%
2005	0.80 to	1.40	3,268,498		13.75 to	13.30		43,719,660	0.84	%	16.50% to	15.80	%
2004	0.80 to	1.40	4,168,927		11.80 to	11.49		48,123,003	0.93	%	13.82% to	13.14	%
Credit Suisse Trust - Small Cap Core I Portfolio (WSCP)
2008	0.80 to	1.40	2,973,366		10.80 to	11.11		33,357,355	0.08	%	-35.12% to	-35.52	%
2007	0.80 to	1.40	3,619,869		16.65 to	17.24		62,919,860	0.00	%	-1.63% to	-2.23	%
2006	0.80 to	1.40	4,550,318		16.92 to	17.63		80,816,137	0.00	%	3.93% to	3.30	%
2005	0.80 to	1.40	5,728,799		16.28 to	17.07		98,399,267	0.00	%	-3.46% to	-4.04	%
2004	0.80 to	1.40	7,254,068		16.86 to	17.78		129,733,218	0.00	%	9.98% to	9.32	%

(Continued)

126

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Dreyfus IP - Small Cap S tock Index Portfolio - Service Class (DVSCS)
2008	0.80 to	2.80	2,849,922	$	10.29 to	11.82	$	34,819,726	0.81	%	-31.47% to	-32.85	%
2007	0.80 to	2.70	2,789,752		15.01 to	19.17		49,316,620	0.40	%	-1.45% to	-3.35	%
2006	0.80 to	2.50	3,003,653		15.23 to	20.00		53,124,303	0.42	%	13.50% to	11.56	%
2005	0.80 to	2.50	3,454,461		13.42 to	17.92		52,798,571	0.00	%	6.38% to	4.56	%
2004	0.80 to	2.70	3,662,793		12.62 to	17.08		50,846,240	0.46	%	20.91% to	18.60	%
Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)
2008	0.80 to	1.40	11,829,308		16.87 to	19.97		239,007,065	2.04	%	-37.64% to	-38.02	%
2007	0.80 to	1.40	14,260,866		27.05 to	32.22		464,467,374	1.71	%	4.41% to	3.77	%
2006	0.80 to	1.40	17,471,027		25.91 to	31.05		547,761,774	1.59	%	14.58% to	13.89	%
2005	0.80 to	1.40	21,479,216		22.61 to	27.26		590,648,682	1.54	%	3.86% to	3.23	%
2004	0.80 to	1.40	27,047,637		21.77 to	26.41		719,718,796	1.71	%	9.76% to	9.09	%
Dreyfus Stock Index Fund, Inc. - Service Class (DSIFS)
2008	0.95 to	2.85	6,903,789		9.20 to	9.08		73,597,957	1.77	%	-37.92% to	-39.11	%
2007	0.95 to	2.90	7,232,672		14.82 to	14.87		124,891,794	1.53	%	3.99% to	1.93	%
2006	0.95 to	2.90	7,034,417		14.25 to	14.59		117,546,992	1.41	%	14.11% to	11.87	%
2005	0.95 to	3.00	6,341,787		12.49 to	13.00		93,210,382	1.41	%	3.44% to	1.31	%
2004	0.95 to	3.00	5,049,202		12.07 to	12.84		72,127,749	1.74	%	9.30% to	7.04	%
Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)
2008	0.80 to	1.40	2,251,894		11.90 to	11.10		25,206,414	2.03	%	-30.12% to	-30.54	%
2007	0.80 to	1.40	2,667,862		17.02 to	15.98		42,947,989	1.61	%	6.27% to	5.62	%
2006	0.80 to	1.40	3,227,567		16.02 to	15.12		49,149,665	1.58	%	15.55% to	14.85	%
2005	0.80 to	1.40	4,029,605		13.86 to	13.17		53,378,443	0.02	%	3.55% to	2.92	%
2004	0.80 to	1.40	4,990,800		13.39 to	12.79		64,177,831	1.53	%	4.21% to	3.58	%
Dreyfus VIF - Appreciation Portfolio - Service Class (DCAPS)
2008	0.75 to	3.00	1,678,407		7.12 to	9.45		18,482,018	1.65	%	-30.25% to	-31.83	%
2007	0.95 to	3.00	1,388,567		14.34 to	13.87		22,154,594	1.41	%	5.83% to	3.63	%
2006	0.95 to	3.00	1,641,093		13.55 to	13.38		24,926,948	1.35	%	15.11% to	12.73	%
2005	0.95 to	3.00	1,814,647		11.77 to	11.87		24,136,811	0.00	%	3.13% to	1.00	%
2004	0.95 to	2.85	1,357,385		11.42 to	11.78		17,648,287	2.09	%	3.80% to	1.81	%
Dreyfus VIF - Developing Leaders Portfolio - Service Class (DVDLS)
2008	0.95 to	2.40	145,489		6.85 to	8.11		1,231,064	0.56	%	-38.36% to	-39.27	%
2007	0.95 to	2.40	189,656		11.12 to	13.35		2,613,330	0.53	%	-12.13% to	-13.42	%
2006	0.95 to	2.40	278,075		12.65 to	15.42		4,374,516	0.17	%	2.54% to	1.04	%
2005	0.95 to	2.40	339,465		12.34 to	15.26		5,241,910	0.00	%	4.56% to	3.03	%
2004	0.95 to	2.40	327,297		11.80 to	14.81		4,907,676	0.00	%	9.99% to	8.38	%
Dreyfus VIF - Growth and Income Portfolio - Initial Class (DGI)
2008	0.80 to	1.40	1,549,201		9.69 to	9.01		14,086,099	0.63	%	-40.89% to	-41.25	%
2007	0.80 to	1.40	1,896,207		16.40 to	15.34		29,317,204	0.75	%	7.57% to	6.92	%
2006	0.80 to	1.40	2,372,008		15.25 to	14.35		34,268,064	0.76	%	13.60% to	12.91	%
2005	0.80 to	1.40	2,832,165		13.42 to	12.71		36,194,164	1.29	%	2.53% to	1.91	%
2004	0.80 to	1.40	3,540,729		13.09 to	12.47		44,355,941	1.18	%	6.61% to	5.96	%
Federated IS - American Leaders Fund II - Service Class (FALFS)
2008	0.95 to	2.75	95,239		8.54 to	8.54		900,294	1.53	%	-34.59% to	-35.78	%
2007	0.95 to	2.75	123,768		13.06 to	13.30		1,796,271	1.29	%	-10.72% to	-12.36	%
2006	0.95 to	2.75	147,270		14.63 to	15.17		2,411,405	1.22	%	15.38% to	13.29	%
2005	0.95 to	2.75	177,529		12.68 to	13.39		2,536,537	1.27	%	3.78% to	1.90	%
2004	1.15 to	2.75	191,712		14.45 to	13.14		2,665,097	1.22	%	8.24% to	6.49	%
Federated IS - Capital Appreciation Fund II - Service Class (FCA2S)
2008	0.95 to	2.55	173,986		10.15 to	10.97		1,971,709	0.02	%	-30.34% to	-31.46	%
2007	0.95 to	3.15	192,944		14.57 to	14.35		3,164,519	0.55	%	8.59% to	6.17	%
2006	0.95 to	3.15	212,094		13.42 to	13.52		3,225,966	0.53	%	14.69% to	12.15	%
2005	1.05 to	3.15	236,710		11.67 to	12.06		3,170,136	0.84	%	0.63% to	-1.50	%
2004	1.05 to	3.15	262,174		11.60 to	12.24		3,512,976	0.53	%	5.99% to	3.74	%
Federated IS - Market Opportunity Fund II - Service Class (FVMOS)
2008	0.80 to	2.80	918,459		9.94 to	9.41		8,951,034	1.07	%	-1.66% to	-3.64	%
2007	0.80 to	2.35	295,662		10.10 to	9.84		2,944,941	1.37	%	-2.28% to	-3.81	%
2006	1.15 to	2.30	326,855		10.32 to	10.24		3,358,443	0.00	%	3.16% to	2.37	%(a) (b)
Federated IS - Quality Bond Fund II - Primary Class (FQB)
2008	0.80 to	1.40	1,061,286		11.42 to	10.97		11,701,500	5.61	%	-8.03% to	-8.59	%
2007	0.80 to	1.40	1,330,368		12.42 to	12.00		16,034,879	4.53	%	4.54% to	3.90	%
2006	0.80 to	1.40	1,361,037		11.88 to	11.55		15,768,662	4.34	%	3.32% to	2.70	%
2005	0.80 to	1.40	1,866,157		11.50 to	11.25		21,031,569	3.80	%	0.49% to	-0.12	%
2004	0.80 to	1.40	2,208,926		11.44 to	11.26		24,906,332	4.23	%	2.79% to	2.17	%

(Continued)

127

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Federated IS - Quality Bond Fund II - Service Class (FQBS)
2008	0.95 to	2.95	4,844,381	$	10.31 to	9.04	$	48,257,499	4.88	%	-8.43% to	-10.28	%
2007	0.95 to	2.95	5,168,222		11.26 to	10.07		56,663,144	4.31	%	4.14% to	2.02	%
2006	0.95 to	2.95	4,875,943		10.81 to	9.88		51,727,060	3.80	%	2.94% to	0.86	%
2005	0.95 to	2.95	4,648,453		10.51 to	9.79		48,245,065	3.29	%	0.03% to	-1.98	%
2004	0.95 to	2.85	3,548,586		10.50 to	10.78		37,072,244	3.23	%	2.34% to	0.39	%
Fidelity(R) VIP - Equity-Income Portfolio - Initial Class (FEIP)
2008	0.80 to	1.40	13,248,157		15.48 to	19.11		363,508,408	2.28	%	-43.11% to	-43.46	%
2007	0.80 to	1.40	16,421,321		27.21 to	33.80		788,830,764	1.74	%	0.71% to	0.10	%
2006	0.80 to	1.40	19,837,866		27.02 to	33.76		941,295,561	3.26	%	19.23% to	18.52	%
2005	0.80 to	1.40	24,111,620		22.66 to	28.49		951,276,572	1.68	%	5.02% to	4.39	%
2004	0.80 to	1.40	29,628,395		21.58 to	27.29		1,103,365,925	1.58	%	10.64% to	9.97	%
Fidelity(R) VIP - Equity-Income Portfolio - Service Class 2 (FEI2)
2008	0.95 to	2.95	9,142,932		5.37 to	8.75		93,902,730	2.22	%	-43.36% to	-44.50	%
2007	0.95 to	2.95	9,650,205		9.48 to	15.76		176,168,699	1.71	%	-5.21% to	-1.73	%(a)
2006	1.10 to	2.95	9,285,688		18.74 to	16.04		170,040,794	2.92	%	18.61% to	16.40	%
2005	1.10 to	2.95	8,101,371		15.80 to	13.78		125,643,989	1.28	%	4.41% to	2.47	%
2004	1.10 to	2.95	6,134,314		15.13 to	13.45		91,285,573	0.82	%	10.01% to	7.95	%
Fidelity(R) VIP - Growth Portfolio - Initial Class (FGP)
2008	0.80 to	1.40	10,315,116		12.59 to	16.23		326,253,847	0.76	%	-47.59% to	-47.91	%
2007	0.80 to	1.40	12,473,199		24.02 to	31.16		745,751,636	0.84	%	25.94% to	25.18	%
2006	0.80 to	1.40	15,379,782		19.07 to	24.89		723,221,795	0.41	%	6.00% to	5.36	%
2005	0.80 to	1.40	19,493,494		17.99 to	23.63		851,535,193	0.51	%	4.95% to	4.32	%
2004	0.80 to	1.40	24,907,685		17.14 to	22.65		1,021,303,176	0.28	%	2.55% to	1.93	%
Fidelity(R) VIP - Growth Portfolio - Service Class 2 (FG2)
2008	0.85 to	3.00	3,750,535		5.40 to	8.19		36,441,386	0.53	%	-47.76% to	-48.89	%
2007	0.95 to	3.00	4,763,730		11.90 to	16.02		89,331,698	0.32	%	19.02% to	22.84	%(a)
2006	1.10 to	3.00	3,396,781		15.59 to	13.04		51,229,656	0.16	%	5.40% to	3.38	%
2005	1.10 to	3.00	3,421,593		14.79 to	12.61		49,127,180	0.25	%	4.35% to	2.35	%
2004	1.10 to	2.85	3,015,154		14.17 to	12.36		41,622,162	0.09	%	1.99% to	0.18	%
Fidelity(R) VIP - High Income Portfolio - Initial Class (FHIP)
2008	0.80 to	1.40	3,333,874		11.05 to	11.77		56,114,072	7.80	%	-25.59% to	-26.04	%
2007	0.80 to	1.40	4,420,785		14.84 to	15.91		100,020,943	6.64	%	1.96% to	1.34	%
2006	0.80 to	1.40	7,076,863		14.56 to	15.70		153,544,649	7.13	%	10.35% to	9.68	%
2005	0.80 to	1.40	8,818,397		13.19 to	14.31		171,137,153	14.50	%	1.88% to	1.27	%
2004	0.80 to	1.40	12,101,014		12.95 to	14.13		228,193,033	8.17	%	8.72% to	8.06	%
Fidelity(R) VIP - High Income Portfolio - Initial Class R (FHIPR)
2008	0.80 to	1.40	1,960,090		7.33 to	7.26		14,240,462	8.85	%	-25.48% to	-25.94	%
2007	0.80 to	1.40	1,244,598		9.84 to	9.80		12,199,909	16.76	%	-1.62% to	-2.02	%(a) (b)
Fidelity(R) VIP - Overseas Portfolio - Initial Class (FOP)
2008	0.80 to	1.40	3,742,007		14.72 to	14.79		68,743,113	2.41	%	-44.26% to	-44.59	%
2007	0.80 to	1.40	4,559,645		26.41 to	26.69		150,451,052	3.32	%	16.37% to	15.66	%
2006	0.80 to	1.40	5,556,872		22.70 to	23.07		158,028,879	0.90	%	17.14% to	16.43	%
2005	0.80 to	1.40	6,764,235		19.38 to	19.82		164,441,055	0.66	%	18.10% to	17.38	%
2004	0.80 to	1.40	8,332,810		16.41 to	16.88		172,049,779	1.18	%	12.73% to	12.05	%
Fidelity(R) VIP - Overseas Portfolio - Initial Class R (FOPR)
2008	0.80 to	1.40	3,203,770		11.16 to	10.72		34,538,550	2.39	%	-44.26% to	-44.60	%
2007	0.80 to	1.40	3,885,215		20.03 to	19.35		75,531,894	3.35	%	16.41% to	15.70	%
2006	0.80 to	1.40	4,321,249		17.20 to	16.72		72,538,615	0.89	%	17.08% to	16.37	%
2005	0.80 to	1.40	4,309,892		14.69 to	14.37		62,111,628	0.64	%	18.16% to	17.45	%
2004	0.80 to	1.40	4,483,379		12.44 to	12.24		54,961,518	1.04	%	12.68% to	12.00	%
Fidelity(R) VIP - Overseas Portfolio - Service Class 2 (FO2)
2008	1.10 to	2.30	286,835		14.61 to	13.60		4,029,619	2.20	%	-44.58% to	-45.25	%
2007	1.10 to	2.30	341,789		26.35 to	24.83		8,701,501	2.94	%	15.76% to	14.35	%
2006	1.10 to	2.30	395,811		22.77 to	21.72		8,723,911	0.71	%	16.48% to	15.07	%
2005	1.10 to	2.30	445,790		19.55 to	18.87		8,474,142	0.53	%	17.48% to	16.06	%
2004	1.10 to	2.35	579,313		16.64 to	16.25		9,439,417	1.00	%	12.07% to	10.65	%
Fidelity(R) VIP - Overseas Portfolio - Service Class 2 R (FO2R)
2008	0.95 to	2.85	3,739,265		5.90 to	8.93		35,540,446	2.29	%	-44.48% to	-45.55	%
2007	0.95 to	2.80	4,158,503		10.63 to	16.43		71,506,434	3.02	%	6.30% to	13.77	%(a)
2006	1.10 to	2.65	3,262,947		15.12 to	14.50		48,966,115	0.68	%	16.52% to	14.70	%
2005	1.10 to	2.75	2,671,311		12.98 to	12.62		34,592,870	0.39	%	17.44% to	15.49	%
2004	1.10 to	2.75	1,455,683		11.05 to	10.93		16,113,454	0.00	%	10.51% to	9.29	%(a) (b)

(Continued)

128

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Fidelity(R) VIP II - Asset Manager Portfolio - Initial Class (FAMP)
2008	0.80 to	1.40	6,966,315	$	16.13 to	15.62	$	160,712,631	2.43	%	-29.29% to	-29.72	%
2007	0.80 to	1.40	8,375,163		22.81 to	22.23		272,815,879	6.05	%	14.58% to	13.88	%
2006	0.80 to	1.40	10,118,900		19.91 to	19.52		286,791,929	2.82	%	6.46% to	5.82	%
2005	0.80 to	1.40	12,409,816		18.70 to	18.45		329,413,384	2.78	%	3.21% to	2.59	%
2004	0.80 to	1.40	15,144,673		18.12 to	17.98		387,934,534	2.80	%	4.63% to	3.99	%
Fidelity(R) VIP II - Contrafund(R) Portfolio - Initial Class (FCP)
2008	0.80 to	1.40	15,111,468		21.76 to	21.80		332,663,039	0.91	%	-42.97% to	-43.32	%
2007	0.80 to	1.40	18,212,023		38.16 to	38.47		706,656,295	0.90	%	16.65% to	15.94	%
2006	0.80 to	1.40	21,578,263		32.72 to	33.18		721,451,899	1.27	%	10.83% to	10.16	%
2005	0.80 to	1.40	24,802,463		29.52 to	30.12		752,002,828	0.29	%	16.00% to	15.31	%
2004	0.80 to	1.40	27,634,632		25.45 to	26.12		725,941,419	0.34	%	14.55% to	13.86	%
Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class 2 (FC2)
2008	0.95 to	3.10	16,338,369		6.29 to	10.54		201,905,123	0.73	%	-43.24% to	-44.47	%
2007	0.95 to	3.10	18,440,700		11.09 to	18.97		404,049,775	0.79	%	10.88% to	13.65	%(a)
2006	1.10 to	3.10	16,826,492		19.42 to	16.70		319,679,085	1.04	%	10.21% to	7.99	%
2005	1.10 to	3.10	13,262,039		17.62 to	15.46		229,643,763	0.09	%	15.37% to	13.04	%
2004	1.10 to	3.10	7,550,491		15.28 to	13.68		113,908,694	0.10	%	13.89% to	11.59	%
Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class (FIGBS)
2008	0.80 to	1.40	1,760,865		10.92 to	10.55		18,661,455	4.21	%	-4.12% to	-4.70	%
2007	0.80 to	1.40	1,827,483		11.39 to	11.07		20,308,029	3.93	%	3.37% to	2.74	%
2006	0.80 to	1.40	1,663,367		11.02 to	10.78		17,973,250	3.75	%	3.47% to	2.84	%
2005	0.80 to	1.40	1,541,808		10.65 to	10.48		16,185,460	3.17	%	1.27% to	0.65	%
2004	0.80 to	1.40	1,079,916		10.52 to	10.41		11,254,188	2.96	%	3.48% to	2.86	%
Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class 2 (FIGBP2)
2008	0.65 to	3.25	38,795,425		9.64 to	9.40		405,358,697	3.91	%	-4.09% to	-6.60	%
2007	0.95 to	3.25	39,988,032		10.15 to	10.06		440,398,413	2.72	%	1.47% to	0.68	%(a)
2006	1.10 to	3.25	17,350,200		11.06 to	10.00		187,123,591	2.12	%	2.99% to	0.76	%
2005	1.10 to	2.90	6,089,737		10.74 to	10.02		64,530,741	2.84	%	0.78% to	-1.05	%
2004	1.10 to	2.85	3,702,374		10.65 to	10.52		39,157,892	2.31	%	3.04% to	1.24	%
Fidelity(R) VIP III - Growth Opportunities Portfolio - Initial Class (FGOP)
2008	0.80 to	1.40	1,893,306		6.40 to	5.97		11,404,425	0.37	%	-55.38% to	-55.65	%
2007	0.80 to	1.40	2,355,583		14.35 to	13.47		31,965,894	0.00	%	22.19% to	21.45	%
2006	0.80 to	1.40	2,712,499		11.75 to	11.09		30,268,618	0.72	%	4.61% to	3.98	%
2005	0.80 to	1.40	3,577,040		11.23 to	10.67		38,352,113	0.93	%	8.02% to	7.37	%
2004	0.80 to	1.40	4,326,389		10.39 to	9.93		43,162,018	0.56	%	6.33% to	5.69	%
Fidelity(R) VIP III - Mid Cap Portfolio - Service Class (FMCS)
2008	0.80 to	1.40	2,030,889		6.80 to	6.69		13,616,500	0.35	%	-39.99% to	-40.36	%
2007	0.80 to	1.40	1,880,661		11.33 to	11.22		21,120,448	0.77	%	14.56% to	13.86	%
2006	0.80 to	1.40	1,041,179		9.89 to	9.85		10,260,773	0.00	%	-1.10% to	-1.50	%(a) (b)
Fidelity(R) VIP III - Mid Cap Portfolio - Service Class 2 (FMC2)
2008	0.75 to	3.10	8,779,121		6.19 to	13.55		132,721,800	0.24	%	-40.06% to	-41.48	%
2007	0.95 to	3.10	8,968,155		10.66 to	23.16		228,696,376	0.50	%	6.62% to	11.74	%(a)
2006	1.10 to	3.10	8,219,016		23.02 to	20.73		184,744,089	0.17	%	11.17% to	8.93	%
2005	1.10 to	3.10	7,193,078		20.70 to	19.03		146,085,937	0.00	%	16.72% to	14.37	%
2004	1.10 to	3.10	3,994,345		17.74 to	16.64		69,828,007	0.00	%	23.29% to	20.79	%
Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)
2008	0.80 to	1.40	634,932		7.87 to	7.55		4,824,772	0.60	%	-51.57% to	-51.86	%
2007	0.80 to	1.40	841,048		16.24 to	15.69		13,262,544	0.93	%	4.75% to	4.11	%
2006	0.80 to	1.40	959,780		15.50 to	15.07		14,522,707	0.54	%	15.27% to	14.58	%
2005	0.80 to	1.40	1,313,761		13.45 to	13.15		17,327,837	0.00	%	1.74% to	1.12	%
2004	0.80 to	1.40	1,973,235		13.22 to	13.01		25,716,534	0.00	%	13.08% to	12.39	%
Fidelity(R) VIP III - Value Strategies Portfolio - Service Class 2 (FVSS2)
2008	1.10 to	3.10	844,676		10.98 to	8.68		8,862,131	0.49	%	-51.82% to	-52.80	%
2007	1.10 to	3.10	1,045,050		22.79 to	18.38		22,900,224	0.63	%	4.28% to	2.15	%
2006	1.10 to	3.10	1,184,531		21.85 to	18.00		25,032,411	0.35	%	14.74% to	12.42	%
2005	1.10 to	3.10	1,244,308		19.04 to	16.01		23,050,709	0.00	%	1.30% to	-0.74	%
2004	1.10 to	3.10	1,160,567		18.80 to	16.13		21,344,299	0.00	%	12.59% to	10.31	%
Fidelity(R) VIP IV - Energy Portfolio - Service Class 2 (FNRS2)
2008	0.75 to	2.80	5,594,487		5.08 to	9.43		54,788,140	0.00	%	-54.75% to	-55.69	%
2007	0.80 to	2.80	5,413,172		13.59 to	21.28		118,510,583	0.13	%	44.47% to	41.54	%
2006	0.80 to	2.80	2,923,524		9.41 to	15.03		44,870,467	0.90	%	-5.92% to	13.36	%(a)
2005	1.10 to	2.75	1,080,443		13.42 to	13.27		14,439,718	0.70	%	34.16% to	32.67	%(a) (b)
Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class (FF10S)
2008	0.80 to	1.40	534,668		8.45 to	8.31		4,453,816	2.86	%	-25.68% to	-26.13	%
2007	0.80 to	1.40	450,333		11.37 to	11.25		5,074,439	3.44	%	7.77% to	7.12	%
2006	1.30 to	1.40	162,866		10.51 to	10.51		1,711,515	3.28	%	5.13% to	5.05	%(a) (b)

(Continued)

129

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class 2 (FF10S2)
2008	1.10 to	2.70	4,645,289	$	9.22 to	8.68	$	41,630,317	2.85	%	-25.99% to	-27.19	%
2007	1.10 to	2.70	3,748,220		12.45 to	11.92		45,656,435	2.62	%	7.22% to	5.48	%
2006	1.10 to	2.70	2,744,382		11.62 to	11.30		31,383,195	2.38	%	8.38% to	6.63	%
2005	1.15 to	2.70	851,649		10.71 to	10.60		9,071,545	0.85	%	7.14% to	6.02	%(a) (b)
Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class (FF20S)
2008	0.80 to	1.40	715,854		7.71 to	7.58		5,443,001	2.80	%	-33.25% to	-33.65	%
2007	0.80 to	1.40	521,510		11.55 to	11.43		5,970,926	3.23	%	9.28% to	8.62	%
2006	1.30 to	1.40	138,522		10.53 to	10.53		1,458,810	2.86	%	5.33% to	5.25	%(a) (b)
Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class 2 (FF20S2)
2008	1.10 to	2.90	6,972,856		8.80 to	8.23		60,026,433	2.68	%	-33.54% to	-34.75	%
2007	1.10 to	2.90	5,452,403		13.25 to	12.61		70,902,100	2.44	%	8.75% to	6.76	%
2006	1.10 to	2.90	3,209,353		12.18 to	11.81		38,598,876	1.89	%	10.48% to	8.47	%
2005	1.15 to	2.90	1,450,199		11.02 to	10.89		15,908,277	1.01	%	10.21% to	8.91	%(a) (b)
Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class (FF30S)
2008	0.80 to	1.40	481,061		7.17 to	7.06		3,404,900	2.59	%	-38.57% to	-38.94	%
2007	0.80 to	1.40	307,780		11.68 to	11.56		3,564,229	3.24	%	10.31% to	9.64	%
2006	0.80 to	1.40	85,450		10.59 to	10.55		901,603	2.10	%	5.88% to	5.46	%(a) (b)
Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class 2 (FF30S2)
2008	1.10 to	2.70	1,631,753		8.43 to	7.94		13,382,199	2.19	%	-38.85% to	-39.84	%
2007	1.10 to	2.70	1,398,391		13.78 to	13.20		18,889,628	2.17	%	9.85% to	8.07	%
2006	1.10 to	2.90	1,094,121		12.55 to	12.17		13,545,883	1.72	%	11.69% to	9.66	%
2005	1.15 to	2.90	626,404		11.23 to	11.10		6,999,070	0.99	%	12.29% to	10.97	%(a) (b)
Financial Investors VIT - First Horizon Core Equity Portfolio (FHGIP)
2005	1.55 to	2.35	56,260		10.89 to	10.68		604,067	1.26	%	-4.24% to	-5.02	%
2004	1.55 to	2.35	63,802		11.37 to	11.25		720,213	1.40	%	3.84% to	3.00	%
First Horizon Capital Appreciation Portfolio (FHCAP)
2005	1.55 to	2.30	4,666		11.89 to	11.69		55,110	0.00	%	1.46% to	0.69	%
2004	1.55 to	2.30	4,651		11.72 to	11.60		54,300	0.00	%	9.52% to	8.69	%
Franklin Templeton VIP - Developing Markets Securities Fund - Class 3 (FTVDM3)
2008	0.80 to	2.80	2,181,313		6.42 to	9.01		20,523,237	2.72	%	-53.05% to	-54.00	%
2007	0.80 to	2.80	2,877,413		13.67 to	19.58		57,939,683	1.81	%	27.66% to	25.08	%
2006	0.80 to	2.80	1,703,817		10.71 to	15.66		27,220,949	1.21	%	7.06% to	24.59	%(a)
2005	1.10 to	2.75	588,613		12.71 to	12.57		7,454,753	0.17	%	27.11% to	25.70	%(a) (b)
Franklin Templeton VIP - Foreign Securities Fund - Class 2 (TIF2)
2008	0.95 to	2.25	358,613		11.85 to	13.32		4,967,042	2.39	%	-40.95% to	-41.72	%
2007	0.95 to	2.25	462,809		20.06 to	22.86		10,928,425	1.98	%	14.35% to	12.85	%
2006	0.95 to	2.25	531,179		17.54 to	20.25		11,028,499	1.19	%	20.29% to	18.72	%
2005	0.95 to	2.25	634,836		14.58 to	17.06		11,022,531	1.12	%	9.13% to	7.70	%
2004	0.95 to	2.25	759,444		13.36 to	15.84		12,142,293	1.42	%	17.40% to	15.86	%
Franklin Templeton VIP - Foreign Securities Fund - Class 3 (TIF3)
2008	0.65 to	3.25	25,106,259		6.17 to	9.17		247,362,383	2.54	%	-40.78% to	-42.33	%
2007	0.80 to	3.25	16,511,364		12.48 to	15.91		278,332,427	1.98	%	14.52% to	11.67	%
2006	0.80 to	3.25	8,716,921		10.89 to	14.24		129,480,230	1.07	%	8.94% to	17.53	%(a)
2005	0.95 to	2.90	3,144,611		12.60 to	12.19		39,198,071	1.15	%	9.09% to	6.95	%
2004	0.95 to	2.70	1,223,594		11.55 to	11.42		14,077,001	0.45	%	15.52% to	14.17	%(a) (b)
Franklin Templeton VIP - Founding Funds Allocation Fund - Class 2 (FTVFA2)
2008	0.80 to	2.65	456,888		6.62 to	6.54		3,010,257	3.50	%	-33.79% to	-34.62	%(a) (b)
Franklin Templeton VIP - Global Income Securities Fund - Class 3 (FTVGI3)
2008	0.80 to	2.80	5,797,396		12.17 to	11.85		72,143,518	3.87	%	5.36% to	3.23	%
2007	0.80 to	2.80	4,159,217		11.55 to	11.48		49,473,961	2.64	%	10.14% to	7.91	%
2006	1.10 to	2.65	1,905,578		10.95 to	10.66		20,725,398	2.53	%	11.61% to	9.86	%
2005	1.15 to	2.65	501,187		9.81 to	9.71		4,902,407	0.88	%	-1.94% to	-2.93	%(a) (b)
Franklin Templeton VIP - Income Securities Fund - Class 2 (FTVIS2)
2008	0.80 to	2.95	10,666,736		8.01 to	7.56		83,813,696	5.45	%	-30.22% to	-31.73	%
2007	0.80 to	2.95	10,613,089		11.48 to	11.07		120,358,043	3.75	%	2.92% to	0.68	%
2006	0.80 to	2.80	4,753,427		11.16 to	11.01		52,751,296	0.46	%	11.57% to	10.07	%(a) (b)
Franklin Templeton VIP - Rising Dividends Securities Fund - Class 2 (FTVRD2)
2008	0.95 to	3.00	6,005,955		9.98 to	9.86		69,210,732	1.80	%	-27.79% to	-29.29	%
2007	0.95 to	3.00	7,191,142		13.82 to	13.94		115,583,625	2.42	%	-3.62% to	-5.62	%
2006	0.95 to	3.00	8,485,936		14.33 to	14.78		142,480,300	1.10	%	16.01% to	13.62	%
2005	0.95 to	3.00	8,398,809		12.36 to	13.00		122,425,253	0.91	%	2.45% to	0.33	%
2004	0.95 to	2.95	5,740,207		12.06 to	12.97		82,208,252	0.58	%	9.94% to	7.72	%

(Continued)

130

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Franklin Templeton VIP - Small Cap Value Securities Fund - Class 2 (FTVSV2)
2008	0.75 to	3.05	3,847,456	$	6.89 to	11.52	$	51,984,101	1.08	%	-33.52% to	-35.06	%
2007	0.80 to	3.05	3,336,527		9.87 to	17.74		68,664,008	0.72	%	-3.16% to	-5.37	%
2006	0.80 to	2.80	3,184,805		10.19 to	18.93		68,147,428	0.58	%	1.91% to	13.71	%(a)
2005	0.95 to	2.65	2,432,175		15.07 to	18.19		45,353,134	0.81	%	7.74% to	5.89	%
2004	0.95 to	2.75	1,537,632		13.98 to	15.75		26,753,540	0.14	%	22.57% to	20.35	%
Janus Aspen Series - Balanced Portfolio - Service Class (JABS)
2008	0.95 to	2.55	848,549		12.08 to	11.96		10,629,343	2.43	%	-16.86% to	-18.20	%
2007	0.95 to	2.55	908,896		14.53 to	14.63		13,784,481	2.33	%	9.23% to	7.46	%
2006	0.95 to	2.55	946,961		13.30 to	13.61		13,298,761	2.03	%	9.37% to	7.61	%
2005	0.95 to	2.55	889,457		12.16 to	12.65		11,543,065	1.93	%	6.64% to	4.92	%
2004	0.95 to	2.55	965,605		11.40 to	12.06		11,838,785	2.75	%	7.26% to	5.53	%
Janus Aspen Series - Forty Portfolio - Service Class (JACAS)
2008	0.80 to	2.85	6,759,021		6.45 to	11.01		62,774,776	0.01	%	-44.76% to	-45.90	%
2007	0.80 to	2.85	4,763,489		11.67 to	20.36		70,732,848	0.18	%	35.54% to	32.72	%
2006	0.80 to	2.80	3,715,916		8.61 to	15.37		36,031,995	0.13	%	8.25% to	6.07	%
2005	0.80 to	2.80	4,486,139		7.95 to	14.49		39,249,662	0.01	%	11.66% to	9.41	%
2004	0.80 to	2.80	5,056,803		7.12 to	13.24		38,894,723	0.02	%	17.02% to	14.67	%
Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)
2008	0.80 to	1.40	628,439		2.83 to	2.68		1,696,007	0.09	%	-44.42% to	-44.76	%
2007	0.80 to	1.40	733,774		5.09 to	4.86		3,581,793	0.31	%	20.72% to	19.99	%
2006	0.80 to	1.40	957,855		4.22 to	4.05		3,893,993	0.00	%	6.97% to	6.32	%
2005	0.80 to	1.40	1,331,430		3.94 to	3.81		5,087,677	0.00	%	10.66% to	9.99	%
2004	0.80 to	1.40	1,940,791		3.56 to	3.46		6,737,842	0.00	%	-0.24% to	-0.84	%
Janus Aspen Series - Global Technology Portfolio - Service II Class (JAGTS2)
2008	0.80 to	1.40	342,194		8.26 to	7.93		2,732,234	0.09	%	-44.35% to	-44.68	%
2007	0.80 to	1.40	394,297		14.84 to	14.34		5,684,417	0.33	%	20.78% to	20.04	%
2006	0.80 to	1.40	411,359		12.29 to	11.94		4,935,597	0.00	%	7.08% to	6.43	%
2005	0.80 to	1.40	465,574		11.48 to	11.22		5,242,415	0.00	%	10.44% to	9.77	%
2004	0.80 to	1.40	608,518		10.39 to	10.22		6,234,982	0.00	%	0.03% to	-0.58	%
Janus Aspen Series - INTECH Risk Managed Core Portfolio - Service Class (JARLCS)
2008	0.80 to	2.60	333,684		6.32 to	10.35		3,604,801	0.69	%	-36.75% to	-37.90	%
2007	0.80 to	2.60	321,741		10.00 to	16.66		5,521,409	0.50	%	-0.03% to	3.36	%(a)
2006	0.95 to	2.50	237,661		15.64 to	16.18		3,888,158	0.15	%	9.72% to	8.01	%
2005	0.95 to	2.50	177,552		14.26 to	14.98		2,697,907	1.32	%	9.86% to	8.15	%
2004	0.95 to	2.70	141,265		12.98 to	13.81		1,972,978	2.26	%	16.35% to	14.29	%
Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)
2008	0.80 to	2.15	711,183		7.97 to	18.03		6,402,172	2.65	%	-52.61% to	-53.26	%
2007	0.80 to	2.15	879,729		16.81 to	38.58		16,732,189	0.44	%	26.99% to	25.25	%
2006	0.80 to	2.15	1,090,672		13.24 to	30.80		16,201,270	1.82	%	45.46% to	43.49	%
2005	0.80 to	2.45	1,379,274		9.10 to	21.28		14,034,749	0.98	%	30.89% to	28.72	%
2004	0.80 to	2.45	1,822,897		6.95 to	16.53		14,029,437	0.77	%	17.74% to	15.78	%
Janus Aspen Series - International Growth Portfolio - Service II Class (JAIGS2)
2008	0.65 to	3.25	8,802,005		4.85 to	11.68		113,283,262	2.77	%	-52.52% to	-53.77	%
2007	0.80 to	3.25	7,719,861		29.56 to	25.27		212,963,970	0.45	%	27.04% to	23.89	%
2006	0.80 to	3.25	6,010,855		23.27 to	20.40		131,707,793	1.95	%	45.53% to	41.94	%
2005	0.80 to	2.20	1,666,749		15.99 to	14.63		25,822,972	1.10	%	30.96% to	29.12	%
2004	0.80 to	2.20	995,810		12.21 to	11.33		11,887,853	0.91	%	17.76% to	13.29	%(b)
JPMorgan Series Trust II - Mid Cap Value Portfolio (JPMCVP)
2008	0.80 to	1.40	654,300		9.66 to	9.39		6,164,916	1.13	%	-33.74% to	-34.14	%
2007	0.80 to	1.40	934,069		14.58 to	14.26		13,355,230	0.93	%	1.63% to	1.01	%
2006	0.80 to	1.40	1,328,877		14.35 to	14.12		18,795,204	0.59	%	15.91% to	15.21	%
2005	0.80 to	1.40	2,326,240		12.38 to	12.25		28,535,450	0.22	%	8.34% to	7.69	%
2004	0.80 to	1.40	837,806		11.42 to	11.38		9,536,123	0.00	%	14.23% to	13.78	%(a) (b)
Lehman Brothers AMT - Short Duration Bond Portfolio - I Class (AMTB)
2008	0.65 to	3.25	38,156,662		8.59 to	8.09		355,647,246	4.55	%	-13.99% to	-16.24	%
2007	0.80 to	3.25	38,220,042		15.25 to	9.66		424,912,124	3.23	%	3.93% to	1.35	%
2006	0.80 to	3.25	19,400,879		14.68 to	9.53		224,892,310	3.51	%	3.37% to	0.82	%
2005	0.80 to	2.75	8,471,408		14.20 to	9.59		116,762,312	2.78	%	0.63% to	-1.34	%
2004	0.80 to	2.75	8,511,968		14.11 to	9.72		125,688,679	3.65	%	-0.03% to	-1.99	%
MFS(R) VIT - Investors Growth Stock Series - Service Class (MIGSC)
2008	0.95 to	2.80	1,184,843		8.47 to	8.41		11,622,597	0.30	%	-37.58% to	-38.75	%
2007	0.95 to	3.15	1,427,758		13.57 to	13.50		22,610,416	0.09	%	9.96% to	7.51	%
2006	0.95 to	3.15	1,642,788		12.34 to	12.55		23,833,223	0.00	%	6.29% to	3.93	%
2005	0.95 to	3.15	1,866,912		11.61 to	12.08		25,659,631	0.14	%	3.24% to	0.95	%
2004	1.10 to	3.15	1,330,865		13.65 to	11.97		17,804,034	0.00	%	7.79% to	5.55	%

(Continued)

131

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		Total Return***
MFS(R) VIT - Value Series - Service Class (MVFSC)
2008	0.80 to	3.05	5,622,918	$	7.91 to	11.04	$	71,657,666	1.02	%	-33.28% to	-34.80	%
2007	0.80 to	3.15	4,556,477		11.85 to	16.86		87,844,770	0.73	%	6.73% to	4.19	%
2006	0.80 to	3.15	3,466,377		11.10 to	16.18		63,110,866	0.70	%	11.02% to	16.72	%(a)
2005	1.10 to	3.15	1,732,243		15.74 to	13.86		26,565,220	0.77	%	5.30% to	3.12	%
2004	1.10 to	3.15	871,754		14.94 to	13.44		12,731,984	0.38	%	13.56% to	11.21	%
MTB Large Cap Growth Fund II (VFLG2)
2008	1.15 to	2.35	85,778		7.46 to	7.05		641,766	0.42	%	-39.76% to	-40.49	%
2007	1.15 to	2.35	90,603		12.39 to	11.85		1,130,341	0.38	%	7.89% to	6.58	%
2006	1.15 to	2.35	91,381		11.48 to	11.12		1,057,960	0.54	%	9.08% to	7.76	%
2005	1.15 to	2.35	87,319		10.53 to	10.32		928,731	0.45	%	0.85% to	-0.37	%
2004	1.15 to	2.35	58,138		10.44 to	10.36		611,643	0.75	%	4.37% to	3.58	%(a) (b)
MTB Large Cap Value Fund II (VFLV2)
2008	1.15 to	2.40	105,574		8.62 to	8.13		912,662	1.27	%	-40.10% to	-40.86	%
2007	1.15 to	2.35	111,241		14.39 to	13.77		1,613,063	1.08	%	0.39% to	-0.83	%
2006	1.15 to	2.35	100,046		14.34 to	13.89		1,450,895	1.01	%	16.26% to	14.85	%
2005	1.15 to	2.35	82,930		12.33 to	12.09		1,038,567	0.97	%	9.02% to	7.70	%
2004	1.15 to	2.35	50,546		11.31 to	11.23		579,510	1.08	%	13.12% to	12.26	%(a) (b)
MTB Managed Allocation Fund - Aggressive Growth II (MBVAG2)
2008	1.15 to	1.85	22,130		7.61 to	7.42		166,461	0.45	%	-41.31% to	-41.73	%
2007	1.15 to	1.85	33,329		12.97 to	12.73		429,215	1.38	%	6.46% to	5.70	%
2006	1.15 to	1.85	27,147		12.19 to	12.04		329,302	3.32	%	13.51% to	12.71	%
2005	1.35 to	1.75	11,254		10.72 to	10.69		120,559	1.08	%	7.21% to	6.92	%(a) (b)
MTB Managed Allocation Fund - Conservative Growth II (MBVCG2)
2008	1.15 to	1.75	22,506		8.94 to	8.74		198,924	2.65	%	-20.62% to	-21.10	%
2007	1.15 to	1.75	8,194		11.26 to	11.08		92,000	2.66	%	3.94% to	3.30	%
2006	1.15 to	1.75	8,142		10.83 to	10.72		88,038	3.85	%	5.73% to	5.09	%
2005	1.25 to	1.75	3,652		10.24 to	10.20		37,354	3.18	%	2.39% to	2.04	%(a) (b)
MTB Managed Allocation Fund - Moderate Growth II (VFMG2)
2008	1.15 to	2.60	567,913		8.95 to	8.36		5,101,299	1.30	%	-29.89% to	-30.92	%
2007	1.15 to	2.60	651,956		12.76 to	12.10		8,384,121	2.05	%	5.65% to	4.10	%
2006	1.15 to	2.60	703,592		12.08 to	11.62		8,580,243	2.61	%	9.15% to	7.56	%
2005	1.15 to	2.60	659,109		11.07 to	10.81		7,392,704	1.78	%	2.80% to	1.30	%
2004	1.15 to	2.35	396,790		10.77 to	10.68		4,342,283	1.60	%	7.65% to	6.84	%(a) (b)
Nationwide VIT - American Funds Asset Allocation Fund - Class II (GVAAA2)
2008	0.80 to	3.10	81,161,084		7.70 to	7.23		609,557,811	3.17	%	-30.34% to	-31.96	%
2007	0.80 to	2.95	42,263,897		11.06 to	10.66		460,727,179	2.72	%	5.29% to	2.99	%
2006	0.80 to	2.70	12,975,664		10.50 to	10.37		135,528,888	3.29	%	5.01% to	3.67	%(a) (b)
Nationwide VIT - American Funds Bond Fund - Class II (GVABD2)
2008	0.80 to	3.10	33,032,987		9.57 to	8.99		306,925,600	7.38	%	-10.59% to	-12.67	%
2007	0.80 to	2.95	12,421,457		10.71 to	10.32		130,936,805	8.10	%	2.15% to	-0.07	%
2006	1.05 to	2.70	1,749,769		10.47 to	10.35		18,258,647	0.44	%	4.65% to	3.49	%(a) (b)
Nationwide VIT - American Funds Global Growth Fund - Class II (GVAGG2)
2008	0.75 to	3.05	6,969,825		6.22 to	7.00		50,870,236	2.90	%	-39.10% to	-40.51	%
2007	0.80 to	3.05	5,365,947		12.23 to	11.78		64,844,710	2.79	%	13.44% to	10.86	%
2006	0.80 to	2.50	2,159,481		10.78 to	10.66		23,167,616	0.10	%	7.85% to	6.62	%(a) (b)
Nationwide VIT - American Funds Growth Fund - Class II (GVAGR2)
2008	0.65 to	3.25	15,955,035		5.63 to	5.92		98,887,216	2.18	%	-44.58% to	-46.03	%
2007	0.80 to	3.25	11,269,769		11.44 to	10.98		127,268,601	0.71	%	11.00% to	8.24	%
2006	0.80 to	3.10	4,677,116		10.31 to	10.15		47,960,489	1.16	%	3.09% to	1.50	%(a) (b)
Nationwide VIT - American Funds Growth-Income Fund - Class II (GVAGI2)
2008	0.80 to	3.10	38,038,535		6.05 to	5.81		225,395,652	3.41	%	-38.56% to	-39.99	%
2007	0.80 to	2.95	8,176,408		9.84 to	9.70		79,871,976	2.28	%	-1.61% to	-3.04	%(a) (b)
Nationwide VIT - Cardinal Aggressive Fund - Class II (NVCRA2)
2008	0.80 to	2.60	688,094		6.38 to	6.30		4,366,517	1.64	%	-36.21% to	-36.99	%(a) (b)
Nationwide VIT - Cardinal Balanced Fund - Class II (NVCRB2)
2008	1.10 to	3.10	17,964,614		7.93 to	7.82		141,470,743	1.93	%	-20.70% to	-21.77	%(a) (b)
Nationwide VIT - Cardinal Capital Appreciation Fund - Class II (NVCCA2)
2008	0.80 to	2.95	15,353,953		7.22 to	7.12		110,154,375	1.75	%	-27.78% to	-28.8	%(a) (b)
Nationwide VIT - Cardinal Conservative Fund - Class II (NVCCN2)
2008	1.10 to	2.95	5,226,256		9.08 to	8.97		47,264,496	2.21	%	-9.18% to	-10.32	%(a) (b)
Nationwide VIT - Cardinal Moderate Fund - Class II (NVCMD2)
2008	0.80 to	2.95	13,903,119		7.58 to	7.47		104,822,308	1.77	%	-24.19% to	-25.29	%(a) (b)
Nationwide VIT - Cardinal Moderately Aggressive Fund - Class II (NVCMA2)
2008	1.10 to	2.70	14,026,096		6.84 to	6.77		95,660,793	1.72	%	-31.56% to	-32.31	%(a) (b)
Nationwide VIT - Cardinal Moderately Conservative Fund - Class II (NVCMC2)
2008	1.10 to	2.95	4,777,489		8.31 to	8.21		39,524,433	1.94	%	-16.89% to	-17.93	%(a) (b)

(Continued)

132

NATIONWIDE VARIABLE ACCOUNT-II (NOTES to FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**		total Return***
Nationwide VIT - Core Bond Fund - Class I (NVCBD1)
2008	1.30 to	1.40	42,991	$	9.86 to	9.85	$	423,815	3.07	%	-1.41% to	-1.48	%(a) (b)
Nationwide VIT - Core Bond Fund - Class II (NVCBD2)
2008	1.05 to	2.70	279,918		9.85 to	9.74		2,747,847	3.51	%	-1.46% to	-2.56	%(a) (b)
Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)
2008	0.95 to	2.35	833,712		9.45 to	9.73		8,523,732	8.79	%	-28.67% to	-29.68	%
2007	0.95 to	2.35	1,099,805		13.25 to	13.84		15,862,330	7.26	%	2.15% to	0.70	%
2006	0.95 to	2.35	1,370,433		12.98 to	13.75		19,466,090	6.92	%	9.56% to	8.01	%
2005	0.95 to	2.35	1,835,081		11.84 to	12.73		23,862,058	7.21	%	1.41% to	-0.02	%
2004	0.95 to	2.75	2,793,276		11.68 to	11.69		36,076,240	7.36	%	9.05% to	7.07	%
Nationwide VIT - Federated High Income Bond Fund - Class III (HIBF3)
2008	0.80 to	2.75	3,688,239		7.78 to	7.81		30,220,484	8.86	%	-28.67% to	-30.08	%
2007	0.80 to	2.80	3,534,655		10.90 to	11.15		40,885,129	8.09	%	2.34% to	0.26	%
2006	0.80 to	2.45	2,697,783		10.65 to	11.19		30,684,739	7.38	%	6.54% to	7.90	%(a)
2005	0.95 to	2.35	1,650,804		10.47 to	10.38		17,226,530	8.47	%	4.74% to	3.76	%(a) (b)
Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)
2008	0.80 to	1.40	33,579		14.58 to	13.87		468,183	1.15	%	-58.10% to	-58.36	%
2007	0.80 to	1.40	40,673		34.80 to	33.31		1,361,399	0.67	%	44.41% to	43.53	%
2006	0.80 to	1.40	52,896		24.10 to	23.21		1,232,735	0.66	%	35.63% to	34.81	%
2005	0.80 to	1.40	71,734		17.77 to	17.21		1,239,682	0.59	%	31.58% to	30.79	%
2004	0.80 to	1.40	91,659		13.51 to	13.16		1,210,001	0.79	%	19.78% to	19.05	%
Nationwide VIT - Gartmore Emerging Markets Fund - Class II (GEM2)
2008	1.10 to	2.45	88,202		21.04 to	19.41		1,800,059	0.82	%	-58.39% to	-58.96	%
2007	1.10 to	2.45	134,775		50.56 to	47.29		6,651,015	0.42	%	43.59% to	41.62	%
2006	1.10 to	2.45	171,105		35.22 to	33.39		5,894,605	0.52	%	34.82% to	32.99	%
2005	1.10 to	2.45	229,328		26.12 to	25.11		5,880,895	0.39	%	30.88% to	29.10	%
2004	1.10 to	2.45	308,910		19.96 to	19.45		6,083,130	0.89	%	19.11% to	17.49	%
Nationwide VIT - Gartmore Emerging Markets Fund - Class III (GEM3)
2008	0.80 to	1.40	1,827,343		15.93 to	15.30		28,122,168	1.09	%	-58.17% to	-58.42	%
2007	0.80 to	1.40	2,599,261		38.08 to	36.80		96,119,470	0.68	%	44.38% to	43.50	%
2006	0.80 to	1.40	2,337,802		26.38 to	25.64		60,183,472	0.78	%	35.55% to	34.74	%
2005	0.80 to	1.40	2,370,880		19.46 to	19.03		45,251,879	0.50	%	31.60% to	30.80	%
2004	0.80 to	1.40	1,392,714		14.79 to	14.55		20,303,030	1.15	%	19.79% to	19.07	%
Nationwide VIT - Gartmore Emerging Markets Fund - Class VI (GEM6)
2008	0.75 to	2.80	2,681,445		4.27 to	11.52		32,388,303	0.99	%	-58.18% to	-59.05	%
2007	0.95 to	2.80	3,749,821		13.46 to	28.12		109,631,081	0.59	%	34.62% to	41.36	%(a)
2006	1.10 to	2.80	2,839,512		20.83 to	19.89		58,358,811	0.62	%	35.06% to	32.74	%
2005	1.10 to	2.75	1,795,459		15.42 to	15.00		27,469,297	0.51	%	31.03% to	28.86	%
2004	1.10 to	2.75	690,336		11.77 to	11.64		8,096,434	1.65	%	17.71% to	16.41	%(a) (b)
Nationwide VIT - Gartmore Global Utilities Fund - Class II (GVGU2)
2008	1.15 to	2.10	23,118		17.85 to	16.87		404,326	2.63	%	-33.94% to	-34.57	%
2007	0.95 to	2.10	35,923		25.25 to	25.78		952,362	2.10	%	18.91% to	17.53	%
2006	0.95 to	2.10	46,958		21.23 to	21.94		1,053,325	2.21	%	36.03% to	34.45	%
2005	0.95 to	2.10	54,377		15.61 to	16.32		902,655	1.71	%	5.18% to	3.96	%
2004	0.95 to	2.10	67,201		14.84 to	15.70		1,066,556	1.00	%	28.33% to	26.84	%
Nationwide VIT - Gartmore Global Utilities Fund - Class III (GVGU)
2008	0.80 to	1.40	340,376		15.73 to	15.10		5,166,421	2.86	%	-33.44% to	-33.84	%
2007	0.80 to	1.40	549,810		23.63 to	22.83		12,602,303	2.41	%	19.42% to	18.70	%
2006	0.80 to	1.40	703,436		19.78 to	19.23		13,573,005	2.45	%	36.49% to	35.67	%
2005	0.80 to	1.40	442,364		14.49 to	14.18		6,284,975	2.27	%	5.63% to	4.99	%
2004	0.80 to	1.40	578,802		13.72 to	13.50		7,825,622	1.25	%	28.91% to	28.13	%
Nationwide VIT - Gartmore International Equity Fund - Class I (GIG)
2008	0.80 to	1.40	7,437		8.62 to	8.20		61,400	1.38	%	-46.49% to	-46.81	%
2007	0.80 to	1.40	7,935		16.11 to	15.42		123,047	0.38	%	26.12% to	25.36	%
2006	0.80 to	1.40	10,735		12.77 to	12.30		133,086	1.00	%	31.90% to	31.11	%
2005	0.80 to	1.40	15,486		9.68 to	9.38		146,183	0.96	%	29.17% to	28.39	%
2004	0.80 to	1.40	15,800		7.50 to	7.31		116,027	0.73	%	13.28% to	12.60	%
Nationwide VIT - Gartmore International Equity Fund - Class III (GIG3)
2008	0.80 to	1.40	1,123,906		13.65 to	13.11		14,805,125	1.25	%	-46.47% to	-46.80	%
2007	0.80 to	1.40	1,528,618		25.50 to	24.63		37,816,487	0.44	%	26.13% to	25.36	%
2006	0.80 to	1.40	1,396,070		20.21 to	19.65		27,532,803	1.27	%	31.89% to	31.10	%
2005	0.80 to	1.40	847,716		15.33 to	14.99		12,738,956	0.74	%	29.14% to	28.36	%
2004	0.80 to	1.40	348,335		11.87 to	11.68		4,073,360	1.00	%	13.44% to	12.75	%
Nationwide VIT - Gartmore International Equity Fund - Class VI (NVIE6)
2008	1.10 to	2.60	510,631		5.47 to	5.41		2,781,264	1.52	%	-45.33% to	-45.88	%(a) (b)

(Continued)

133

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
Nationwide VIT - Gartmore Worldwide Leaders Fund - Class III (GEF3)
2008	0.80 to	1.40	249,753	$11.28 to	10.96	$2,748,870	0.67	%	-44.77% to	-45.11	%
2007	0.80 to	1.40	376,901	20.42 to	19.97	7,550,213	0.49	%	18.98% to	18.25	%
2006	0.80 to	1.40	384,266	17.17 to	16.89	6,502,021	0.82	%	24.81% to	24.06	%
2005	0.80 to	1.40	219,580	13.75 to	13.62	2,992,804	0.44	%	18.39% to	17.67	%
2004	1.30 to	1.40	19,645	11.58 to	11.57	227,435	0.00	%	15.79% to	15.71	%(a) (b)
Nationwide VIT - Global Financial Services Fund - Class II (GVGF2)
2008	0.95 to	2.15	55,720	9.49 to	10.80	623,060	1.65	%	-46.85% to	-47.50	%
2007	0.95 to	2.15	65,660	17.86 to	20.57	1,389,160	2.84	%	-2.35% to	-3.54	%
2006	0.95 to	2.30	85,448	18.29 to	21.20	1,862,421	1.63	%	18.95% to	17.33	%
2005	0.95 to	2.30	91,491	15.38 to	18.07	1,683,814	1.68	%	9.74% to	8.25	%
2004	0.95 to	2.30	111,302	14.02 to	16.69	1,878,091	1.63	%	19.62% to	17.99	%
Nationwide VIT - Global Financial Services Fund - Class III (GVGFS)
2008	0.80 to	1.40	212,769	10.01 to	9.61	2,057,788	2.14	%	-46.64% to	-46.97	%
2007	0.80 to	1.40	168,520	18.76 to	18.13	3,068,547	3.09	%	-1.92% to	-2.51	%
2006	0.80 to	1.40	230,182	19.13 to	18.59	4,294,613	2.27	%	19.38% to	18.66	%
2005	0.80 to	1.40	235,707	16.02 to	15.67	3,701,998	1.28	%	10.28% to	9.62	%
2004	0.80 to	1.40	401,465	14.53 to	14.29	5,747,991	2.12	%	20.16% to	19.43	%
Nationwide VIT - Government Bond Fund - Class I (GBF)
2008	0.65 to	3.25	51,150,296	10.78 to	10.61	710,154,637	4.30	%	7.02% to	4.22	%
2007	0.80 to	3.25	42,800,012	18.15 to	10.18	579,531,623	4.58	%	6.30% to	3.66	%
2006	0.80 to	3.25	21,636,655	17.07 to	9.82	251,897,848	4.10	%	2.52% to	-0.01	%
2005	0.80 to	2.95	11,094,727	16.65 to	9.90	145,003,624	3.61	%	2.44% to	0.23	%
2004	0.80 to	2.80	9,699,069	16.26 to	9.90	136,685,517	5.37	%	2.44% to	0.37	%
Tax qualified
2006	1.30		1,626,743	46.68		75,942,558	4.10	%		2.00	%
2005	1.30		1,939,292	45.77		88,757,078	3.61	%		1.92	%
2004	1.30		2,272,676	44.90		102,051,082	5.37	%		1.92	%
Non-tax qualified
2006	1.30		779,383	46.56		36,288,472	4.10	%		2.00	%
2005	1.30		967,697	45.65		44,172,372	3.61	%		1.92	%
2004	1.30		1,096,169	44.78		49,091,808	5.37	%		1.92	%
Nationwide VIT - Growth Fund - Class I (CAF)
2008	0.80 to	1.40	2,568,010	9.98 to	10.98	31,041,966	0.27	%	-39.20% to	-39.57	%
2007	0.80 to	1.40	3,094,521	16.41 to	18.16	61,757,970	0.17	%	18.58% to	17.86	%
2006	0.80 to	1.40	3,637,231	13.84 to	15.41	61,410,149	0.05	%	5.32% to	4.69	%
2005	0.80 to	1.40	4,490,233	13.14 to	14.72	72,042,518	0.08	%	5.65% to	5.01	%
2004	0.80 to	1.40	5,607,355	12.44 to	14.02	85,306,314	0.30	%	7.29% to	6.64	%
Nationwide VIT - Health Sciences Fund - Class II (GVGH2)
2008	0.95 to	2.40	104,433	10.33 to	12.22	1,341,247	0.10	%	-26.11% to	-27.19	%
2007	0.95 to	2.40	124,698	13.98 to	16.78	2,178,340	0.01	%	11.85% to	10.20	%
2006	0.95 to	2.40	146,024	12.50 to	15.23	2,295,803	0.00	%	1.46% to	-0.02	%
2005	0.95 to	2.40	164,699	12.32 to	15.23	2,566,533	0.00	%	7.16% to	5.60	%
2004	0.95 to	2.40	219,080	11.50 to	14.42	3,205,101	0.00	%	6.54% to	4.98	%
Nationwide VIT - Health Sciences Fund - Class III (GVGHS)
2008	0.80 to	1.40	425,425	11.01 to	10.57	4,518,907	0.27	%	-25.83% to	-26.28	%
2007	0.80 to	1.40	476,539	14.84 to	14.34	6,861,700	0.07	%	12.32% to	11.63	%
2006	0.80 to	1.40	539,659	13.21 to	12.84	6,954,737	0.00	%	1.88% to	1.27	%
2005	0.80 to	1.40	681,589	12.97 to	12.68	8,666,245	0.00	%	7.56% to	6.91	%
2004	0.80 to	1.40	753,248	12.06 to	11.86	8,950,781	0.00	%	6.98% to	6.33	%
Nationwide VIT - Health Sciences Fund - Class VI (GVGH6)
2008	0.95 to	2.60	1,764,395	8.88 to	8.21	15,216,848	0.03	%	-26.15% to	-27.38	%
2007	0.95 to	2.60	1,289,936	12.03 to	11.31	15,179,536	0.06	%	11.90% to	10.02	%
2006	0.95 to	2.50	1,150,570	10.75 to	10.31	12,177,962	0.00	%	1.45% to	-0.14	%
2005	0.95 to	2.75	981,490	10.59 to	10.28	10,290,290	0.00	%	7.21% to	5.27	%
2004	0.95 to	2.65	506,914	9.88 to	9.77	4,990,392	0.00	%	-1.18% to	-2.31	%(a) (b)
Nationwide VIT - International Index Fund - Class VIII (GVIX8)
2008	0.80 to	2.75	996,023	6.68 to	6.33	6,515,309	1.84	%	-43.55% to	-44.66	%
2007	0.80 to	2.60	994,418	11.83 to	11.48	11,613,924	1.36	%	8.51% to	6.53	%
2006	0.80 to	2.50	344,723	10.90 to	10.78	3,735,515	1.44	%	9.05% to	7.80	%(a) (b)
Nationwide VIT - Investor Destinations Aggressive Fund - Class II (GVIDA)
2008	0.80 to	3.10	28,976,150	10.00 to	10.31	340,600,981	2.05	%	-37.35% to	-38.81	%
2007	0.80 to	3.10	31,376,425	15.96 to	16.85	595,372,007	1.99	%	5.11% to	2.66	%
2006	0.80 to	3.15	31,476,825	15.19 to	16.39	574,617,190	2.05	%	15.94% to	13.20	%
2005	0.80 to	3.15	28,651,809	13.10 to	14.48	456,283,327	2.09	%	7.07% to	4.54	%
2004	0.80 to	3.15	15,370,206	12.24 to	13.85	229,534,791	2.08	%	13.11% to	10.44	%

(Continued)

134

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
Nationwide VIT - Investor Destinations Conservative Fund - Class II (GVIDC)
2008	0.65 to	2.90	17,322,335	$9.43 to	10.21	$194,173,796	3.48	%	-6.63% to	-8.75	%
2007	0.80 to	2.90	12,824,884	12.51 to	11.19	155,324,013	3.57	%	4.53% to	2.31	%
2006	0.80 to	2.90	11,627,252	11.96 to	10.94	135,903,498	3.06	%	5.32% to	3.09	%
2005	0.80 to	2.90	10,630,963	11.36 to	10.61	119,046,011	2.93	%	2.48% to	0.32	%
2004	0.80 to	2.85	8,879,736	11.09 to	10.58	97,796,092	2.75	%	3.82% to	1.67	%
Nationwide VIT - Investor Destinations Moderate Fund - Class II (GVIDM)
2008	0.65 to	3.25	149,844,350	7.75 to	10.12	1,725,868,410	2.83	%	-23.70% to	-25.69	%
2007	0.75 to	3.25	145,018,915	10.15 to	13.62	2,213,097,547	2.80	%	1.55% to	2.21	%(a)
2006	0.80 to	3.25	119,084,540	13.55 to	13.32	1,748,946,215	2.59	%	10.46% to	7.74	%
2005	0.80 to	3.25	68,034,438	12.27 to	12.36	912,007,522	2.38	%	4.50% to	1.93	%
2004	0.80 to	3.10	39,171,967	11.74 to	12.16	503,658,002	2.41	%	8.66% to	6.14	%
Nationwide VIT - Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)
2008	0.65 to	3.25	102,697,193	6.95 to	10.24	1,214,743,220	2.48	%	-31.84% to	-33.62	%
2007	0.80 to	3.25	100,235,949	15.31 to	15.43	1,754,174,386	2.38	%	5.30% to	2.68	%
2006	0.80 to	3.25	84,334,918	14.54 to	15.03	1,411,443,294	2.32	%	13.63% to	10.83	%
2005	0.80 to	3.25	54,186,761	12.79 to	13.56	803,417,643	2.25	%	6.22% to	3.60	%
2004	0.80 to	3.25	28,932,284	12.05 to	13.09	404,519,632	2.13	%	11.20% to	8.45	%
Nationwide VIT - Investor Destinations Moderately Conservative Fund - Class II (GVDMC)
2008	0.65 to	3.20	42,212,488	8.55 to	10.11	478,690,281	3.20	%	-15.60% to	-17.76	%
2007	0.80 to	3.00	37,093,457	13.43 to	12.41	505,146,597	3.22	%	5.01% to	2.67	%
2006	0.80 to	3.00	26,410,052	12.79 to	12.09	346,803,038	2.80	%	7.56% to	5.18	%
2005	0.80 to	3.00	21,337,805	11.89 to	11.49	262,262,110	2.75	%	3.65% to	1.36	%
2004	0.80 to	3.00	14,377,462	11.47 to	11.34	171,579,370	2.61	%	6.30% to	3.94	%
Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)
2008	0.80 to	1.40	243,504	9.34 to	9.08	2,218,666	2.75	%	-26.14% to	-26.59	%
2007	0.80 to	1.40	265,247	12.64 to	12.36	3,289,279	2.30	%	3.78% to	3.15	%
2006	0.80 to	1.40	285,299	12.18 to	11.99	3,426,244	2.46	%	11.35% to	10.68	%
2005	0.80 to	1.40	230,571	10.94 to	10.83	2,499,509	2.31	%	1.72% to	1.11	%
2004	1.30 to	1.40	82,004	10.72 to	10.71	878,643	1.67	%	7.17% to	7.10	%(a) (b)
Nationwide VIT - Lehman Brothers Core Plus Bond Fund - Class II (NVLCP2)
2008	0.80 to	2.70	224,113	9.88 to	9.75	2,199,217	2.74	%	-1.24% to	-2.50	%(a) (b)
Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)
2008	0.80 to	1.40	1,380,783	3.82 to	3.63	5,042,610	0.00	%	-46.54% to	-46.87	%
2007	0.80 to	1.40	2,013,233	7.15 to	6.82	13,821,540	0.00	%	8.14% to	7.48	%
2006	0.80 to	1.40	2,500,190	6.61 to	6.35	15,951,881	0.00	%	9.03% to	8.37	%
2005	0.80 to	1.40	2,707,801	6.06 to	5.86	15,930,090	0.00	%	8.87% to	8.21	%
2004	0.80 to	1.40	2,756,609	5.57 to	5.41	14,976,290	0.00	%	14.42% to	13.72	%
Nationwide VIT - Mid Cap Growth Fund - Class II (SGRF2)
2008	0.95 to	3.20	2,006,297	8.26 to	8.54	18,751,282	0.00	%	-46.79% to	-48.01	%
2007	0.95 to	3.25	16,359,805	15.52 to	16.39	287,785,579	0.00	%	7.69% to	5.18	%
2006	0.95 to	3.25	7,591,461	14.41 to	15.58	124,920,647	0.00	%	8.61% to	6.09	%
2005	0.95 to	2.90	1,755,225	13.27 to	14.83	26,824,934	0.00	%	8.56% to	6.43	%
2004	0.95 to	2.80	1,007,022	12.22 to	13.96	14,330,559	0.00	%	14.12% to	11.99	%
Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)
2008	0.80 to	3.05	5,965,468	10.76 to	10.79	67,891,140	1.25	%	-36.97% to	-38.41	%
2007	0.80 to	3.05	6,776,727	17.07 to	17.51	121,741,631	1.44	%	6.69% to	4.26	%
2006	0.80 to	2.95	7,922,124	16.00 to	16.86	132,450,412	1.14	%	9.01% to	6.66	%
2005	0.80 to	3.00	9,202,373	14.67 to	15.79	140,639,610	1.01	%	11.20% to	8.75	%
2004	0.80 to	3.00	9,133,807	13.20 to	14.52	124,396,672	0.54	%	14.81% to	12.26	%
Nationwide VIT - Money Market Fund - Class I (SAM)
2008	0.65 to	3.25	58,886,454	10.20 to	9.57	801,127,428	1.98	%	1.39% to	-1.26	%
2007	0.80 to	3.25	46,091,872	14.17 to	9.69	640,751,455	4.69	%	3.95% to	1.37	%
2006	0.80 to	3.25	30,582,760	13.64 to	9.56	454,065,260	4.85	%	3.70% to	1.14	%
2005	0.80 to	2.90	25,994,392	13.15 to	9.55	403,550,772	2.81	%	1.85% to	-0.30	%
2004	0.80 to	2.85	24,692,825	12.91 to	9.59	402,897,044	0.83	%	0.00% to	-2.06	%
Nationwide VIT - Multi-Manager International Growth Fund - Class III (NVMIG3)
2008	0.80 to	1.40	236,983	6.11 to	6.08	1,442,366	0.11	%	-38.93% to	-39.17	%(a) (b)
Nationwide VIT - Multi-Manager International Growth Fund - Class VI (NVMIG6)
2008	0.65 to	3.25	33,672,563	6.10 to	5.99	203,779,302	0.00	%	-39.02% to	-40.09	%(a) (b)
Nationwide VIT - Multi-Manager International Value Fund - Class II (GVDIV2)
2008	0.95 to	2.20	93,231	10.09 to	11.08	1,064,102	1.54	%	-46.99% to	-47.74	%
2007	0.95 to	2.30	114,548	19.03 to	21.03	2,483,741	1.68	%	1.73% to	0.33	%
2006	0.95 to	2.30	138,583	18.71 to	20.96	2,966,966	1.79	%	21.24% to	19.60	%
2005	0.95 to	2.30	159,058	15.43 to	17.53	2,822,637	1.12	%	10.73% to	9.22	%
2004	0.95 to	2.70	207,842	13.93 to	15.94	3,356,473	3.40	%	18.86% to	16.76	%

(Continued)

135

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
Nationwide VIT - Multi-Manager International Value Fund - Class III (GVDIV3)
2008	0.80 to	1.40	801,982	$12.15 to	11.74	$9,450,119	1.71	%	-46.76% to	-47.09	%
2007	0.80 to	1.40	1,163,407	22.81 to	22.18	25,890,831	2.19	%	2.10% to	1.48	%
2006	0.80 to	1.40	1,414,407	22.34 to	21.85	30,988,347	2.04	%	21.77% to	21.03	%
2005	0.80 to	1.40	1,317,124	18.35 to	18.06	23,825,534	1.54	%	11.16% to	10.49	%
2004	0.80 to	1.40	1,098,371	16.51 to	16.34	17,968,143	2.34	%	19.30% to	18.58	%
Nationwide VIT - Multi-Manager International Value Fund - Class VI (GVDIV6)
2008	0.65 to	3.25	14,917,379	5.44 to	7.48	119,779,486	1.55	%	-46.80% to	-48.20	%
2007	0.95 to	3.25	17,958,586	15.73 to	14.43	274,210,858	2.13	%	1.72% to	-0.66	%
2006	0.95 to	3.25	8,623,100	15.46 to	14.53	130,577,252	1.68	%	21.25% to	18.44	%
2005	0.95 to	2.90	2,983,147	12.75 to	12.34	37,643,603	1.41	%	10.74% to	8.57	%
2004	0.95 to	2.65	975,961	11.51 to	11.38	11,193,338	0.88	%	15.15% to	13.84	%(a) (b)
Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
2008	0.80 to	1.40	4,988	6.33 to	6.30	31,488	0.49	%	-36.70% to	-36.95	%(a) (b)
Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class II (NVMLG2)
2008	1.10 to	2.60	100,379	6.31 to	6.25	631,180	0.35	%	-36.86% to	-37.51	%(a) (b)
Nationwide VIT - Multi-Manager Large Cap Value Fund - Class II (NVMLV2)
2008	0.80 to	2.75	538,618	6.31 to	6.23	3,379,434	0.97	%	-36.85% to	-37.69	%(a) (b)
Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
2008	0.80 to	1.40	82,831	6.25 to	6.22	515,576	0.00	%	-37.54% to	-37.79	%(a) (b)
Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class II (NVMMG2)
2008	0.65 to	3.25	13,384,980	6.24 to	6.13	82,917,533	0.00	%	-37.57% to	-38.67	%(a) (b)
Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
2008	0.65 to	3.25	25,339,928	6.73 to	6.61	169,207,097	1.07	%	-32.72% to	-33.90	%(a) (b)
Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)
2008	0.80 to	1.40	1,159,659	4.50 to	4.27	4,987,989	0.00	%	-46.85% to	-47.17	%
2007	0.80 to	1.40	1,333,156	8.47 to	8.08	10,842,638	0.00	%	8.87% to	8.21	%
2006	0.80 to	1.40	1,582,686	7.78 to	7.47	11,881,738	0.00	%	2.38% to	1.77	%
2005	0.80 to	1.40	2,005,492	7.60 to	7.34	14,778,743	0.00	%	7.23% to	6.58	%
2004	0.80 to	1.40	2,492,775	7.08 to	6.89	17,218,219	0.00	%	12.51% to	11.83	%
Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class II (SCGF2)
2008	0.95 to	2.65	968,639	5.59 to	8.75	9,006,487	0.00	%	-47.04% to	-47.96	%
2007	0.95 to	2.80	1,534,096	10.55 to	15.18	26,997,038	0.00	%	5.55% to	6.42	%(a)
2006	1.10 to	2.50	874,697	16.77 to	15.87	14,347,686	0.00	%	1.86% to	0.42	%
2005	1.10 to	2.50	833,849	16.47 to	15.81	13,450,257	0.00	%	6.55% to	5.05	%
2004	1.10 to	2.50	638,942	15.45 to	15.05	9,662,816	0.00	%	11.92% to	10.34	%
Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)
2008	0.80 to	1.40	2,629,323	14.74 to	13.81	36,629,666	1.08	%	-32.70% to	-33.10	%
2007	0.80 to	1.40	3,462,637	21.90 to	20.65	72,051,759	1.12	%	-7.64% to	-8.21	%
2006	0.80 to	1.40	4,662,412	23.71 to	22.50	105,594,388	0.43	%	16.36% to	15.66	%
2005	0.80 to	1.40	5,997,704	20.38 to	19.45	117,326,190	0.06	%	2.25% to	1.63	%
2004	0.80 to	1.40	7,841,197	19.93 to	19.14	150,777,246	0.00	%	16.36% to	15.66	%
Nationwide VIT - Multi-Manager Small Cap Value Fund - Class II (SCVF2)
2008	0.85 to	2.90	1,254,598	6.75 to	11.18	17,069,075	0.90	%	-32.88% to	-34.27	%
2007	0.95 to	2.70	1,429,150	14.60 to	19.38	29,121,568	0.90	%	-8.12% to	-9.75	%
2006	0.95 to	2.70	1,931,451	15.89 to	21.48	43,101,602	0.22	%	15.99% to	13.94	%
2005	0.95 to	2.50	1,711,970	13.70 to	18.96	33,130,471	0.00	%	1.81% to	0.22	%
2004	0.95 to	2.70	1,569,325	13.45 to	18.85	30,077,570	0.00	%	15.89% to	13.84	%
Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)
2008	0.80 to	1.40	3,418,854	24.14 to	22.30	76,995,047	0.79	%	-38.68% to	-39.06	%
2007	0.80 to	1.40	4,226,617	39.37 to	36.59	156,048,695	0.09	%	1.31% to	0.69	%
2006	0.80 to	1.40	5,162,695	38.86 to	36.34	189,121,006	0.10	%	11.14% to	10.47	%
2005	0.80 to	1.40	6,249,268	34.96 to	32.89	206,998,058	0.00	%	11.42% to	10.75	%
2004	0.80 to	1.40	7,419,392	31.38 to	29.70	221,665,394	0.00	%	18.07% to	17.36	%
Nationwide VIT - Multi-Manager Small Company Fund - Class II (SCF2)
2008	0.65 to	3.25	4,915,642	6.21 to	10.48	61,690,354	0.61	%	-38.76% to	-40.36	%
2007	0.95 to	3.25	4,806,056	16.16 to	17.57	99,556,181	0.00	%	0.92% to	-1.44	%
2006	0.95 to	3.25	4,583,575	16.02 to	17.83	94,540,917	0.06	%	10.69% to	8.13	%
2005	0.95 to	2.90	3,282,029	14.47 to	16.65	61,689,901	0.00	%	10.95% to	8.77	%
2004	0.95 to	2.65	2,079,601	13.04 to	16.79	35,465,182	0.00	%	17.66% to	15.64	%

(Continued)

136

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
Nationwide VIT - Nationwide Fund - Class I (TRF)
2008	0.80 to	1.40	3,836,090	$14.51 to	16.35	$139,622,623	1.38	%	-42.02% to	-42.37	%
2007	0.80 to	1.40	4,753,992	25.03 to	28.38	292,472,857	1.05	%	7.31% to	6.66	%
2006	0.80 to	1.40	3,758,145	23.33 to	26.61	99,304,252	1.04	%	12.72% to	12.04	%
2005	0.80 to	1.40	4,977,888	20.70 to	23.75	117,501,938	0.87	%	6.58% to	5.94	%
2004	0.80 to	1.40	6,455,251	19.42 to	22.41	143,936,000	1.22	%	8.87% to	8.22	%
Tax qualified
2006	1.30		1,402,652	109.59		153,719,563	1.04	%	12.15%
2005	1.30		1,654,420	97.71		161,661,582	0.87	%	6.05%
2004	1.30		1,922,412	92.14		177,133,737	1.22	%	8.32%
Non-tax qualified
2006	1.30		720,281	106.77		76,904,383	1.04	%	12.15%
2005	1.30		839,281	95.20		79,898,458	0.87	%	6.05%
2004	1.30		986,311	89.77		88,539,823	1.22	%	8.32%
Nationwide VIT - Nationwide Fund - Class II (TRF2)
2008	0.65 to	3.25	28,046,162	5.97 to	8.44	280,666,419	1.23	%	-41.99% to	-43.51	%
2007	0.95 to	3.25	23,169,599	10.10 to	14.95	404,959,033	0.93	%	1.03% to	4.37	%(a)
2006	1.10 to	3.25	11,257,455	16.96 to	14.32	185,406,908	0.96	%	12.16% to	9.73	%
2005	1.10 to	2.95	1,503,114	15.12 to	13.16	22,317,067	0.68	%	5.87% to	3.89	%
2004	1.10 to	2.95	618,825	14.29 to	12.67	8,749,904	1.25	%	8.33% to	6.30	%
Nationwide VIT - Nationwide Leaders Fund - Class III (GVUSL)
2008	0.80 to	1.40	344,880	8.54 to	8.20	2,847,343	0.77	%	-50.34% to	-50.64	%
2007	0.80 to	1.40	397,523	17.20 to	16.62	6,641,009	1.16	%	10.66% to	9.99	%
2006	0.80 to	1.40	416,108	15.55 to	15.11	6,311,879	0.74	%	15.20% to	14.50	%
2005	0.80 to	1.40	335,241	13.49 to	13.20	4,438,380	1.75	%	9.42% to	8.76	%
2004	0.80 to	1.40	109,158	12.33 to	12.13	1,327,655	0.41	%	17.82% to	17.11	%
Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class I (NVNMO1)
2008	1.30 to	1.40	12,714	5.14 to	5.13	65,309	0.00	%	-48.63% to	-48.66	%(a) (b)
Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class II (NVNMO2)
2008	1.10 to	2.75	165,613	5.12 to	5.06	843,322	0.00	%	-48.84% to	-49.41	%(a) (b)
Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class I (NVNSR1)
2008	0.80 to	1.40	255,949	6.15 to	6.12	1,567,453	0.43	%	-38.55% to	-38.80	%(a) (b)
Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class II (NVNSR2)
2008	0.65 to	3.25	41,560,970	6.15 to	6.04	253,618,648	0.39	%	-38.50% to	-39.59	%(a) (b)
Nationwide VIT - Short Term Bond Fund - Class II (NVSTB2)
2008	0.80 to	2.90	1,618,282	9.89 to	9.75	15,898,860	2.47	%	-1.10% to	-2.50	%(a) (b)
Nationwide VIT - Technology and Communications Fund - Class I (GGTC)
2008	0.80 to	1.40	69,320	2.04 to	1.94	135,605	0.00	%	-48.98% to	-49.29	%
2007	0.80 to	1.40	89,808	4.00 to	3.83	346,234	0.00	%	19.13% to	18.40	%
2006	0.80 to	1.40	134,349	3.36 to	3.23	437,058	0.00	%	10.28% to	9.62	%
2005	0.80 to	1.40	206,846	3.05 to	2.95	613,233	0.00	%	-1.31% to	-1.91	%
2004	0.80 to	1.40	275,982	3.09 to	3.01	833,304	0.00	%	3.48% to	2.85	%
Nationwide VIT - Technology and Communications Fund - Class II (GGTC2)
2008	1.15 to	2.45	59,489	10.17 to	9.41	593,313	0.00	%	-49.38% to	-50.05	%
2007	0.95 to	2.45	77,916	13.74 to	18.83	1,535,827	0.00	%	18.85% to	17.04	%
2006	0.95 to	2.45	86,480	11.56 to	16.09	1,441,736	0.00	%	9.63% to	7.97	%
2005	0.95 to	2.45	103,102	10.55 to	14.90	1,576,432	0.00	%	-1.72% to	-3.20	%
2004	0.95 to	2.45	153,937	10.73 to	15.39	2,408,354	0.00	%	3.04% to	1.48	%
Nationwide VIT - Technology and Communications Fund - Class III (GGTC3)
2008	0.80 to	1.40	328,516	7.53 to	7.23	2,390,551	0.00	%	-49.00% to	-49.31	%
2007	0.80 to	1.40	430,126	14.77 to	14.27	6,165,718	0.00	%	19.22% to	18.49	%
2006	0.80 to	1.40	503,432	12.38 to	12.04	6,083,287	0.00	%	10.20% to	9.53	%
2005	0.80 to	1.40	399,751	11.24 to	10.99	4,406,502	0.00	%	-1.31% to	-1.90	%
2004	0.80 to	1.40	575,407	11.39 to	11.20	6,459,815	0.00	%	3.44% to	2.82	%
Nationwide VIT - Technology and Communications Fund - Class VI (GGTC6)
2008	0.95 to	2.80	677,283	7.10 to	6.50	4,669,470	0.00	%	-49.29% to	-50.25	%
2007	0.95 to	2.80	1,169,229	14.01 to	13.07	15,963,363	0.00	%	18.76% to	16.53	%
2006	0.95 to	2.45	606,445	11.79 to	11.33	7,020,073	0.00	%	10.14% to	8.48	%
2005	0.95 to	2.50	335,200	10.71 to	10.43	3,556,148	0.00	%	-1.72% to	-3.25	%
2004	0.95 to	2.40	250,218	10.89 to	10.79	2,713,673	0.00	%	8.94% to	7.89	%(a) (b)
Nationwide VIT - U.S. Growth Leaders Fund - Class II (GVUG2)
2008	0.95 to	2.95	1,047,552	6.51 to	10.06	12,820,073	0.00	%	-42.03% to	-43.20	%
2007	0.95 to	2.95	1,094,930	11.22 to	17.70	23,231,890	0.00	%	12.24% to	18.50	%(a)
2006	1.10 to	2.95	1,117,672	18.07 to	14.94	19,776,812	0.17	%	-1.60% to	-3.43	%
2005	1.10 to	2.95	1,053,974	18.36 to	15.47	19,056,867	0.00	%	10.47% to	8.41	%
2004	1.10 to	2.95	643,867	16.62 to	14.27	10,597,692	0.00	%	10.87% to	8.79	%

(Continued)

137

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
Nationwide VIT - U.S. Growth Leaders Fund - Class III (GVUGL)
2008	0.80 to	1.40	270,231	$10.76 to	10.33	$2,805,775	0.00	%	-41.73% to	-42.08	%
2007	0.80 to	1.40	329,074	18.46 to	17.84	5,894,162	0.00	%	21.45% to	20.71	%
2006	0.80 to	1.40	454,175	15.20 to	14.78	6,733,083	0.25	%	-1.08% to	-1.68	%
2005	0.80 to	1.40	651,383	15.37 to	15.03	9,813,069	0.00	%	11.10% to	10.43	%
2004	0.80 to	1.40	652,165	13.83 to	13.61	8,890,581	0.00	%	11.55% to	10.87	%
Nationwide VIT - Van Kampen Comstock Value Fund - Class II (EIF2)
2008	0.65 to	3.25	8,010,536	6.21 to	9.03	85,951,615	1.57	%	-37.63% to	-39.26	%
2007	0.80 to	3.25	18,188,564	12.93 to	14.86	315,762,751	1.56	%	-3.39% to	-5.79	%
2006	0.80 to	3.25	11,215,121	13.38 to	15.77	203,267,045	1.51	%	14.64% to	11.81	%
2005	0.80 to	3.00	3,772,570	11.67 to	14.20	60,363,959	1.31	%	3.12% to	0.84	%
2004	0.80 to	3.00	2,181,509	11.32 to	14.09	34,193,585	1.18	%	13.17% to	13.57	%(a)
Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)
2008	0.80 to	2.95	4,888,835	12.10 to	8.86	50,278,472	7.18	%	-17.95% to	-19.73	%
2007	0.80 to	2.95	5,127,598	14.75 to	11.04	65,624,015	3.96	%	3.78% to	1.52	%
2006	0.80 to	2.70	4,491,128	14.21 to	11.36	56,418,087	4.15	%	4.00% to	2.02	%
2005	0.80 to	2.35	4,431,813	13.67 to	11.25	54,176,221	4.11	%	1.36% to	-0.21	%
2004	0.80 to	2.35	3,294,635	13.48 to	11.28	40,671,999	5.14	%	5.68% to	4.03	%
Nationwide VIT - Van Kampen Real Estate Fund - Class I (NVRE1)
2008	0.80 to	1.40	146,484	5.62 to	5.59	819,751	4.56	%	-43.84% to	-44.06	%(a) (b)
Nationwide VIT - Van Kampen Real Estate Fund - Class II (NVRE2)
2008	0.95 to	2.80	319,169	5.60 to	5.53	1,779,763	3.53	%	-44.02% to	-44.73	%(a) (b)
Neuberger Berman AMT - Growth Portfolio - Class I (AMTG)
2008	0.80 to	1.40	2,411,370	12.76 to	14.52	67,084,772	0.00	%	-44.13% to	-44.47	%
2007	0.80 to	1.40	2,896,657	22.83 to	26.15	143,154,846	0.00	%	21.71% to	20.97	%
2006	0.80 to	1.40	3,507,840	18.76 to	21.62	141,328,488	0.00	%	13.16% to	12.48	%
2005	0.80 to	1.40	4,407,773	16.58 to	19.22	155,259,354	0.00	%	12.59% to	11.91	%
2004	0.80 to	1.40	5,418,656	14.72 to	17.18	167,323,055	0.00	%	15.67% to	14.97	%
Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)
2008	0.80 to	1.40	928,163	9.15 to	8.57	8,023,491	0.53	%	-37.75% to	-38.13	%
2007	0.80 to	1.40	1,105,261	14.69 to	13.86	15,420,332	0.26	%	6.52% to	5.88	%
2006	0.80 to	1.40	1,399,614	13.79 to	13.09	18,425,578	0.61	%	12.47% to	11.79	%
2005	0.80 to	1.40	1,777,747	12.26 to	11.71	20,912,861	0.14	%	7.53% to	6.88	%
2004	0.80 to	1.40	2,342,770	11.40 to	10.95	25,763,450	0.11	%	14.89% to	14.19	%
Neuberger Berman AMT - International Portfolio - Class S (AMINS)
2008	0.80 to	3.25	1,025,292	5.65 to	7.10	7,732,508	0.00	%	-46.87% to	-48.18	%
2007	0.80 to	3.25	20,563,376	10.64 to	13.71	293,656,493	2.14	%	2.38% to	-0.16	%
2006	0.80 to	3.25	10,936,799	10.39 to	13.73	153,950,501	0.34	%	3.93% to	19.45	%(a)
2005	1.10 to	2.90	816,611	11.66 to	11.52	9,478,809	0.19	%	16.64% to	15.23	%(a) (b)
Neuberger Berman AMT - Mid Cap Growth Portfolio - Class S (AMMCGS)
2008	0.95 to	2.45	400,219	10.54 to	11.44	4,818,061	0.00	%	-44.05% to	-44.90	%
2007	0.95 to	2.80	507,184	18.83 to	20.39	10,958,939	0.00	%	21.03% to	18.76	%
2006	0.95 to	2.80	502,810	15.56 to	17.17	9,020,221	0.00	%	13.39% to	11.27	%
2005	0.95 to	2.80	497,419	13.72 to	15.43	7,966,901	0.00	%	12.35% to	10.26	%
2004	0.95 to	2.80	543,076	12.22 to	13.99	7,797,293	0.00	%	14.93% to	12.79	%
Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)
2008	0.80 to	1.40	4,031,046	14.91 to	17.56	71,403,179	0.49	%	-52.77% to	-53.06	%
2007	0.80 to	1.40	4,821,251	31.57 to	37.41	181,803,724	0.61	%	8.46% to	7.80	%
2006	0.80 to	1.40	5,867,088	29.10 to	34.71	205,069,108	0.68	%	11.35% to	10.67	%
2005	0.80 to	1.40	7,134,701	26.14 to	31.36	225,087,003	0.95	%	17.10% to	16.40	%
2004	0.80 to	1.40	7,656,207	22.32 to	26.94	207,292,280	0.01	%	18.02% to	17.31	%
Neuberger Berman AMT - Regency Portfolio - Class S (AMRS)
2008	0.80 to	2.95	1,216,019	5.60 to	6.46	8,275,433	0.93	%	-46.38% to	-47.55	%
2007	0.80 to	2.95	1,309,013	10.44 to	12.31	16,737,536	0.38	%	2.22% to	0.00	%
2006	0.80 to	2.55	1,440,361	10.21 to	12.39	18,134,505	0.33	%	2.14% to	8.11	%(a)
2005	1.10 to	2.70	345,932	11.58 to	11.45	3,990,761	0.00	%	15.77% to	14.53	%(a) (b)
Neuberger Berman AMT - Small Cap Growth Portfolio - Class S (AMFAS)
2008	0.80 to	2.80	406,370	5.85 to	7.91	3,706,928	0.00	%	-39.96% to	-41.17	%
2007	0.80 to	2.80	392,938	9.74 to	13.45	6,032,559	0.00	%	-0.29% to	-2.32	%
2006	0.80 to	2.50	399,331	9.77 to	15.09	6,218,632	0.00	%	-2.34% to	2.63	%(a)
2005	0.95 to	2.50	361,496	12.43 to	14.71	5,431,443	0.00	%	1.92% to	0.33	%
2004	1.05 to	2.50	257,470	12.18 to	14.66	3,819,533	0.00	%	10.70% to	9.08	%
Neuberger Berman AMT - Socially Responsive Portfolio - Class I (AMSRS)
2008	0.80 to	3.05	2,392,040	8.68 to	9.31	24,246,445	0.27	%	-39.93% to	-41.29	%
2007	0.80 to	3.25	29,683,131	14.45 to	15.71	500,470,234	0.10	%	6.75% to	4.10	%
2006	0.80 to	3.25	14,567,602	13.54 to	15.09	232,049,667	0.09	%	12.80% to	10.02	%
2005	0.80 to	3.00	2,318,131	12.00 to	13.81	33,095,968	0.00	%	6.00% to	3.66	%
2004	0.95 to	3.00	851,027	12.45 to	13.32	11,561,669	0.00	%	12.20% to	9.88	%

(Continued)

138

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
Oppenheimer VAF - Balanced Fund - Non-Service Class (OVMS)
2008	0.80 to	1.40	2,972,160	$13.61 to	14.36	$52,339,138	2.98	%	-43.92% to	-44.26	%
2007	0.80 to	1.40	3,793,326	24.27 to	25.77	119,039,885	2.68	%	2.95% to	2.33	%
2006	0.80 to	1.40	4,523,880	23.58 to	25.18	137,769,586	2.17	%	10.26% to	9.59	%
2005	0.80 to	1.40	5,647,775	21.38 to	22.98	155,150,510	1.80	%	3.06% to	2.44	%
2004	0.80 to	1.40	6,601,220	20.75 to	22.43	175,416,139	1.04	%	9.22% to	8.56	%
Oppenheimer VAF - Capital Appreciation Fund - Service Class (OVCAFS)
2008	0.95 to	2.95	3,576,621	7.76 to	7.81	33,310,024	0.00	%	-46.18% to	-47.27	%
2007	0.95 to	2.95	3,981,882	14.42 to	14.82	69,363,812	0.01	%	12.77% to	10.48	%
2006	0.95 to	2.95	4,129,863	12.79 to	13.41	64,078,686	0.19	%	6.66% to	4.51	%
2005	0.95 to	2.90	4,173,108	11.99 to	12.85	61,055,416	0.66	%	3.87% to	1.83	%
2004	0.95 to	2.75	3,161,586	11.54 to	12.65	44,803,436	0.18	%	5.60% to	3.68	%
Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)
2008	0.80 to	1.40	3,977,449	10.59 to	9.88	39,665,920	0.15	%	-45.95% to	-46.28	%
2007	0.80 to	1.40	4,805,480	19.60 to	18.39	89,129,237	0.24	%	13.23% to	12.54	%
2006	0.80 to	1.40	6,037,158	17.31 to	16.34	99,391,010	0.39	%	7.09% to	6.44	%
2005	0.80 to	1.40	7,865,933	16.16 to	15.36	121,515,526	0.95	%	4.26% to	3.63	%
2004	0.80 to	1.40	10,200,109	15.50 to	14.82	151,901,981	0.31	%	6.08% to	5.44	%
Oppenheimer VAF - Core Bond Fund - Non-Service Class (OVB)
2008	0.80 to	1.40	3,473,316	10.78 to	10.87	48,106,805	4.82	%	-39.54% to	-39.90	%
2007	0.80 to	1.40	4,466,808	17.82 to	18.09	102,125,225	5.26	%	3.55% to	2.92	%
2006	0.80 to	1.40	5,265,751	17.21 to	17.57	115,936,276	5.40	%	4.44% to	3.81	%
2005	0.80 to	1.40	6,433,177	16.48 to	16.93	135,323,164	5.43	%	1.77% to	1.15	%
2004	0.80 to	1.40	8,037,160	16.19 to	16.74	165,175,386	4.84	%	4.65% to	4.02	%
Oppenheimer VAF - Global Securities Fund - Class 3 (OVGS3)
2008	0.80 to	1.40	4,134,462	13.99 to	13.52	56,156,335	1.57	%	-40.67% to	-41.03	%
2007	0.80 to	1.40	4,898,499	23.58 to	22.92	112,720,550	1.39	%	5.48% to	4.84	%
2006	0.80 to	1.40	5,524,646	22.35 to	21.86	121,147,673	0.98	%	16.75% to	16.05	%
2005	0.80 to	1.40	5,308,749	19.15 to	18.84	100,226,186	0.96	%	13.43% to	12.74	%
2004	0.80 to	1.40	4,802,654	16.88 to	16.71	80,353,321	1.07	%	18.24% to	17.53	%
Oppenheimer VAF - Global Securities Fund - Class 4 (OVGS4)
2008	0.95 to	2.70	5,863,169	9.43 to	8.68	53,981,607	1.24	%	-40.91% to	-41.96	%
2007	0.95 to	2.70	6,661,852	15.96 to	14.96	104,330,390	1.12	%	5.05% to	3.18	%
2006	0.95 to	2.70	6,304,392	15.20 to	14.50	94,470,011	0.85	%	16.29% to	14.24	%
2005	0.95 to	2.50	5,674,152	13.07 to	12.73	73,470,008	0.64	%	12.97% to	11.20	%
2004	0.95 to	2.70	2,505,064	11.57 to	11.43	28,879,946	0.00	%	15.69% to	14.33	%(a) (b)
Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)
2008	0.80 to	1.40	4,605,983	24.87 to	23.88	117,211,377	1.61	%	-40.67% to	-41.03	%
2007	0.80 to	1.40	5,756,123	41.92 to	40.49	248,042,653	1.41	%	5.46% to	4.82	%
2006	0.80 to	1.40	7,165,665	39.75 to	38.62	294,029,956	1.05	%	16.75% to	16.05	%
2005	0.80 to	1.40	8,956,758	34.04 to	33.28	315,862,240	1.04	%	13.40% to	12.71	%
2004	0.80 to	1.40	11,400,256	30.02 to	29.53	355,783,572	1.28	%	18.21% to	17.50	%
Oppenheimer VAF - Global Securities Fund - Service Class (OVGSS)
2008	0.95 to	2.30	675,950	11.35 to	13.48	9,467,392	1.32	%	-40.90% to	-41.71	%
2007	0.95 to	2.30	862,593	19.20 to	23.12	20,585,407	1.22	%	5.07% to	3.63	%
2006	0.95 to	2.30	967,988	18.27 to	22.31	22,124,575	0.88	%	16.25% to	14.67	%
2005	0.95 to	2.30	1,118,144	15.72 to	19.46	22,094,897	0.85	%	12.98% to	11.44	%
2004	0.95 to	2.30	1,316,404	13.91 to	17.46	23,100,094	1.49	%	17.75% to	16.15	%
Oppenheimer VAF - High Income Fund - Class 3 (OVHI3)
2008	0.80 to	1.40	126,679	2.01 to	1.99	252,740	4.88	%	-79.06% to	-79.19	%
2007	0.80 to	1.40	48,923	9.61 to	9.57	468,403	0.00	%	-3.91% to	-4.30	%(a) (b)
Oppenheimer VAF - High Income Fund - Class 4 (OVHI4)
2008	0.95 to	2.80	2,070,239	2.03 to	1.97	4,158,939	5.83	%	-78.83% to	-79.23	%
2007	0.95 to	2.75	991,751	9.59 to	9.47	9,472,520	0.00	%	-4.12% to	-5.29	%(a) (b)
Oppenheimer VAF - High Income Fund - Non-Service Class (OVHI)
2008	0.80 to	1.40	23,524	2.21 to	2.18	51,336	8.75	%	-78.84% to	-78.97	%
2007	0.80 to	1.40	49,246	10.46 to	10.35	510,531	7.99	%	-0.91% to	-1.51	%
2006	1.30 to	1.40	87,967	10.52 to	10.51	924,954	0.00	%	5.16% to	5.09	%(a) (b)
Oppenheimer VAF - High Income Fund - Service Class (OVHIS)
2008	0.95 to	2.70	1,274,342	2.64 to	2.70	3,677,309	7.68	%	-78.78% to	-79.15	%
2007	0.95 to	2.70	1,877,575	12.44 to	12.94	25,692,805	8.06	%	-1.42% to	-3.17	%
2006	0.95 to	2.75	3,180,409	12.62 to	12.22	44,449,263	7.17	%	8.19% to	6.23	%
2005	0.95 to	2.45	3,038,153	11.66 to	12.67	39,502,363	5.82	%	1.04% to	-0.49	%
2004	0.95 to	2.35	2,601,130	11.54 to	13.18	33,693,872	4.57	%	7.70% to	6.24	%
Oppenheimer VAF - Main Street Small Cap Fund(R) - Non-Service Class (OVSC)
2008	0.80 to	1.40	440,857	6.07 to	5.97	2,638,595	0.51	%	-38.33% to	-38.70	%
2007	0.80 to	1.40	418,752	9.84 to	9.74	4,084,325	0.29	%	-2.00% to	-2.60	%
2006	0.80 to	1.40	227,665	10.04 to	10.00	2,277,965	0.00	%	0.41% to	0.01	% (a) (b)

(Continued)

139

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
Oppenheimer VAF - Main Street Small Cap Fund(R) - Service Class (OVSCS)
2008	0.65 to	3.25	8,337,343	$6.27 to	10.52	$105,311,346	0.29	%	-38.41% to	-40.02	%
2007	0.95 to	3.25	6,050,092	16.03 to	17.54	125,648,459	0.13	%	-2.33% to	-4.61	%
2006	0.95 to	3.25	3,305,000	16.41 to	18.39	70,852,158	0.01	%	13.57% to	10.94	%
2005	0.95 to	2.90	1,105,896	14.45 to	16.74	21,104,247	0.00	%	8.68% to	6.54	%
2004	0.95 to	2.70	731,026	13.29 to	17.34	12,914,027	0.00	%	18.05% to	15.96	%
Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)
2008	0.80 to	1.40	2,022,607	6.69 to	6.35	12,938,096	1.56	%	-38.96% to	-39.33	%
2007	0.80 to	1.40	2,487,109	10.97 to	10.47	26,194,088	1.03	%	3.58% to	2.95	%
2006	0.80 to	1.40	2,841,846	10.59 to	10.17	29,040,677	1.13	%	14.11% to	13.42	%
2005	0.80 to	1.40	3,231,392	9.28 to	8.96	29,087,134	1.38	%	5.13% to	4.50	%
2004	0.80 to	1.40	3,830,214	8.83 to	8.58	32,960,291	0.87	%	8.58% to	7.93	%
Oppenheimer VAF - Main Street(R) - Service Class (OVGIS)
2008	0.65 to	3.25	27,005,578	6.26 to	8.57	272,771,613	1.22	%	-39.02% to	-40.62	%
2007	0.95 to	3.25	24,014,369	14.72 to	14.44	402,804,694	0.63	%	3.16% to	0.75	%
2006	0.95 to	3.25	14,409,505	14.27 to	14.33	236,003,634	0.48	%	13.67% to	11.04	%
2005	0.95 to	2.95	3,831,295	12.56 to	13.01	55,729,762	0.95	%	4.74% to	2.63	%
2004	0.95 to	2.85	2,371,195	11.99 to	12.70	33,173,754	0.49	%	8.11% to	6.04	%
Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)
2008	0.80 to	1.40	2,176,324	3.41 to	3.24	7,101,334	0.00	%	-49.48% to	-49.78	%
2007	0.80 to	1.40	2,576,050	6.75 to	6.45	16,720,309	0.00	%	5.48% to	4.84	%
2006	0.80 to	1.40	3,147,364	6.40 to	6.15	19,465,941	0.00	%	2.13% to	1.52	%
2005	0.80 to	1.40	4,765,383	6.27 to	6.06	28,985,432	0.00	%	11.43% to	10.76	%
2004	0.80 to	1.40	5,103,889	5.63 to	5.47	28,008,620	0.00	%	18.82% to	18.10	%
Pioneer Small Cap Value II VCT Portfolio - Class I (SFRSCV)
2005	0.95 to	1.05	80,124	15.46 to	15.43	1,237,644	0.48	%	13.86% to	13.74	%
2004	0.95 to	1.05	38,238	13.58 to	13.56	519,026	0.00	%	21.15% to	21.02	%
Pioneer VCT - Pioneer Small Cap Value Portfolio - Class I (PISVP1)
2008	0.95 to	1.05	105,733	6.12 to	6.10	646,042	0.60	%	-38.59% to	-38.65	%
2007	0.95 to	1.05	117,897	9.96 to	9.95	1,173,591	0.73	%	-7.85% to	-7.94	%
2006	0.95 to	1.05	124,148	10.81 to	10.80	1,341,708	0.26	%	8.10% to	8.04	%(a) (b)
Putnam VT - Growth and Income Fund - Class IB (PVGIB)
2008	1.05 to	2.80	387,088	8.31 to	8.26	3,423,016	2.18	%	-39.34% to	-40.42	%
2007	1.05 to	2.80	468,881	13.69 to	13.86	6,876,101	1.36	%	-7.03% to	-8.68	%
2006	1.05 to	2.80	551,603	14.73 to	15.18	8,748,454	1.52	%	14.70% to	12.67	%
2005	0.95 to	2.80	644,011	12.87 to	13.47	8,937,063	1.64	%	4.23% to	2.29	%
2004	1.05 to	2.80	491,760	12.33 to	13.17	6,602,053	0.90	%	9.94% to	8.00	%
Putnam VT - International Equity Fund - Class IB (PVTIGB)
2008	1.15 to	2.40	61,180	12.12 to	11.28	724,632	2.19	%	-44.60% to	-45.30	%
2007	1.15 to	2.40	71,037	21.88 to	20.62	1,525,012	2.96	%	7.11% to	5.75	%
2006	1.15 to	2.40	87,538	20.43 to	19.50	1,761,143	0.61	%	26.25% to	24.66	%
2005	1.15 to	2.65	92,906	16.18 to	15.53	1,485,977	1.49	%	10.91% to	9.23	%
2004	1.15 to	2.65	126,817	14.59 to	14.22	1,836,698	2.11	%	14.86% to	13.12	%
Putnam VT - Voyager Fund - Class IB (PVTVB)
2008	1.15 to	2.80	142,184	8.63 to	7.85	1,187,340	0.00	%	-37.76% to	-38.80	%
2007	1.15 to	2.80	168,443	13.87 to	12.82	2,271,117	0.00	%	4.30% to	2.55	%
2006	0.95 to	2.80	213,216	12.21 to	12.50	2,766,251	0.10	%	4.44% to	2.49	%
2005	0.95 to	2.80	276,236	11.69 to	12.20	3,456,648	0.71	%	4.69% to	2.74	%
2004	1.10 to	2.80	261,001	12.22 to	11.87	3,144,631	0.17	%	3.88% to	2.09	%
T. Rowe Price Blue Chip Growth Portfolio - II (TRBCG2)
2008	0.65 to	3.25	19,673,406	5.86 to	7.07	147,156,139	0.12	%	-43.02% to	-44.52	%
2007	0.80 to	3.25	10,055,319	11.81 to	12.74	133,588,581	0.14	%	11.58% to	8.81	%
2006	0.80 to	2.90	1,860,568	10.59 to	11.78	22,408,234	0.29	%	5.86% to	6.17	%(a)
2005	1.10 to	2.90	596,546	11.23 to	11.10	6,676,122	0.19	%	12.32% to	10.96	%(a) (b)
T. Rowe Price Equity Income Portfolio - II (TREI2)
2008	0.80 to	2.95	7,723,076	7.13 to	7.43	60,261,084	2.21	%	-36.78% to	-38.15	%
2007	0.80 to	2.95	6,128,523	11.28 to	12.01	76,349,143	1.66	%	2.20% to	-0.03	%
2006	0.80 to	2.95	4,412,317	11.04 to	12.01	54,220,730	1.32	%	10.35% to	15.16	%(a)
2005	1.10 to	2.80	1,288,795	10.56 to	10.44	13,568,484	1.31	%	5.59% to	4.39	%(a) (b)
T. Rowe Price Limited Term Bond Portfolio - Class II (TRLT2)
2008	0.80 to	2.90	4,360,949	10.79 to	10.08	46,053,950	3.75	%	0.50% to	-1.63	%
2007	0.80 to	2.90	2,984,605	10.74 to	10.25	31,585,239	3.11	%	4.38% to	2.16	%
2006	1.10 to	2.80	897,335	10.34 to	10.05	9,206,800	3.73	%	2.88% to	1.12	%
2005	1.10 to	2.70	297,273	10.05 to	9.95	2,977,178	2.51	%	0.54% to	-0.54	%(a) (b)

(Continued)

140

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
2008	0.80 to	1.40	2,380,596	$12.77 to	15.38	$38,616,074	0.77	%	-34.95% to	-35.34	%
2007	0.80 to	1.40	2,887,153	19.64 to	23.79	72,290,938	0.55	%	6.92% to	6.27	%
2006	0.80 to	1.40	3,504,269	18.37 to	22.39	82,432,140	0.11	%	8.33% to	7.68	%
2005	0.80 to	1.40	4,359,987	16.95 to	20.79	95,023,542	0.00	%	2.79% to	2.17	%
2004	0.80 to	1.40	5,445,879	16.49 to	20.35	115,826,541	0.36	%	5.36% to	4.72	%
Van Eck Worldwide Insurance Trust - Bond Fund - Class R1 (VWBFR)
2008	0.80 to	1.40	642,414	12.77 to	12.42	8,003,418	8.12	%	2.87% to	2.25	%
2007	0.80 to	1.40	731,903	12.42 to	12.15	8,910,518	5.57	%	8.94% to	8.27	%
2006	0.80 to	1.40	690,934	11.40 to	11.22	7,763,189	7.87	%	5.55% to	4.91	%
2005	0.80 to	1.40	653,908	10.80 to	10.69	6,998,382	6.56	%	-3.89% to	-4.47	%
2004	0.80 to	1.40	494,491	11.24 to	11.19	5,536,020	0.00	%	12.37% to	11.92	%(a) (b)
Van Eck Worldwide Insurance Trust - Bond Fund - Initial Class (VWBF)
2008	0.80 to	1.40	703,225	17.70 to	18.55	15,375,868	9.07	%	2.78% to	2.16	%
2007	0.80 to	1.40	889,847	17.22 to	18.16	19,097,162	6.47	%	8.83% to	8.17	%
2006	0.80 to	1.40	1,107,173	15.82 to	16.79	21,961,040	8.79	%	5.63% to	4.99	%
2005	0.80 to	1.40	1,440,459	14.98 to	15.99	26,984,368	7.64	%	-3.81% to	-4.39	%
2004	0.80 to	1.40	1,831,299	15.57 to	16.72	35,793,497	9.55	%	8.28% to	7.62	%
Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Class R1 (VWEMR)
2008	0.80 to	1.40	763,916	10.94 to	10.63	8,156,428	0.00	%	-65.03% to	-65.25	%
2007	0.80 to	1.40	1,152,258	31.28 to	30.60	35,362,793	0.40	%	36.46% to	35.63	%
2006	0.80 to	1.40	1,106,434	22.92 to	22.56	25,013,200	0.53	%	38.42% to	37.59	%
2005	0.80 to	1.40	877,819	16.56 to	16.40	14,412,087	0.59	%	30.81% to	30.02	%
2004	0.80 to	1.40	513,201	12.66 to	12.61	6,474,361	0.00	%	26.61% to	26.10	%(a) (b)
Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)
2008	0.80 to	1.40	1,264,058	10.25 to	9.53	12,153,665	0.00	%	-65.06% to	-65.27	%
2007	0.80 to	1.40	1,599,935	29.33 to	27.43	44,248,455	0.46	%	36.51% to	35.68	%
2006	0.80 to	1.40	2,079,717	21.49 to	20.22	42,350,828	0.63	%	38.38% to	37.55	%
2005	0.80 to	1.40	2,663,102	15.53 to	14.70	39,392,769	0.84	%	30.94% to	30.15	%
2004	0.80 to	1.40	3,491,296	11.86 to	11.29	39,648,217	0.64	%	24.88% to	24.13	%
Van Eck Worldwide Insurance Trust - Hard Assets Fund - Class R1 (VWHAR)
2008	0.80 to	1.40	1,219,284	17.93 to	17.43	21,333,920	0.35	%	-46.53% to	-46.85	%
2007	0.80 to	1.40	1,400,348	33.53 to	32.79	46,055,901	0.11	%	44.16% to	43.28	%
2006	0.80 to	1.40	1,470,219	23.26 to	22.89	33,718,368	0.07	%	23.54% to	22.80	%
2005	0.80 to	1.40	1,551,985	18.83 to	18.64	28,960,958	0.19	%	50.41% to	49.50	%
2004	0.80 to	1.40	746,021	12.52 to	12.47	9,304,789	0.00	%	25.17% to	24.67	%(a) (b)
Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)
2008	0.80 to	1.40	892,365	24.91 to	23.83	24,758,601	0.31	%	-46.56% to	-46.88	%
2007	0.80 to	1.40	1,118,247	46.61 to	44.87	58,352,118	0.12	%	44.19% to	43.31	%
2006	0.80 to	1.40	1,340,984	32.32 to	31.31	48,678,714	0.07	%	23.50% to	22.75	%
2005	0.80 to	1.40	1,699,058	26.17 to	25.51	49,998,755	0.35	%	50.46% to	49.56	%
2004	0.80 to	1.40	2,157,026	17.39 to	17.05	42,204,825	0.43	%	23.24% to	22.49	%
Van Kampen UIF - Core Plus Fixed Income Portfolio - Class I (MSVFI)
2008	0.80 to	1.40	312,617	9.73 to	9.58	2,999,638	4.42	%	-10.92% to	-11.46	%
2007	1.30 to	1.40	328,510	10.83 to	10.82	3,557,887	4.01	%	4.08% to	3.97	%
2006	0.80 to	1.40	136,094	10.44 to	10.40	1,416,424	1.17	%	4.45% to	4.03	%(a) (b)
Van Kampen UIF - Core Plus Fixed Income Portfolio - Class II (MSVF2)
2008	0.65 to	3.25	22,132,369	8.92 to	8.94	214,874,888	4.27	%	-11.04% to	-13.37	%
2007	0.95 to	3.25	25,887,057	11.60 to	10.32	286,272,488	3.60	%	4.21% to	1.78	%
2006	0.95 to	3.25	10,572,601	11.13 to	10.14	113,144,737	3.36	%	2.58% to	0.20	%
2005	0.95 to	2.90	1,959,026	10.85 to	10.22	20,680,370	2.78	%	2.95% to	0.93	%
2004	1.10 to	2.85	797,097	10.44 to	10.13	8,251,586	3.48	%	2.93% to	1.12	%
Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)
2008	0.80 to	1.40	256,891	17.71 to	16.52	4,280,827	7.11	%	-15.66% to	-16.17	%
2007	0.80 to	1.40	351,451	21.00 to	19.71	6,980,725	7.33	%	5.68% to	5.03	%
2006	0.80 to	1.40	498,158	19.88 to	18.77	9,413,461	8.31	%	9.92% to	9.26	%
2005	0.80 to	1.40	725,492	18.08 to	17.18	12,534,982	7.55	%	11.36% to	10.68	%
2004	0.80 to	1.40	992,232	16.24 to	15.52	15,474,285	6.82	%	9.18% to	8.52	%
Van Kampen UIF - Emerging Markets Debt Portfolio - Class II (MSEMB)
2008	1.10 to	2.15	91,031	14.79 to	13.87	1,317,461	7.10	%	-15.92% to	-16.81	%
2007	1.10 to	2.15	113,859	17.59 to	16.68	1,965,340	7.38	%	5.22% to	4.10	%
2006	1.10 to	2.15	145,536	16.72 to	16.02	2,396,495	8.35	%	9.59% to	8.43	%
2005	1.10 to	2.45	171,015	15.26 to	14.64	2,577,975	7.16	%	10.91% to	9.40	%
2004	0.95 to	2.45	246,266	11.80 to	13.38	3,341,560	8.89	%	9.03% to	7.38	%

(Continued)

141

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity	Investment Income Ratio**		Total Return***
Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)
2008	0.80 to	1.40	2,056,027	$30.32 to	28.44	$59,067,311	3.36	%	-38.39% to	-38.77	%
2007	0.80 to	1.40	2,592,043	49.21 to	46.45	121,497,196	1.18	%	-17.74% to	-18.24	%
2006	0.80 to	1.40	3,810,701	59.82 to	56.82	218,265,572	1.07	%	36.94% to	36.12	%
2005	0.80 to	1.40	4,368,496	43.68 to	41.74	183,618,271	1.20	%	16.12% to	15.42	%
2004	0.80 to	1.40	5,160,818	37.62 to	36.16	187,725,450	1.47	%	35.30% to	34.49	%
Van Kampen UIF - U.S. Real Estate Portfolio - Class II (MSVREB)
2008	0.95 to	2.80	3,061,013	11.91 to	12.96	42,791,166	2.76	%	-38.64% to	-39.80	%
2007	0.95 to	2.70	3,568,905	19.41 to	21.64	81,882,876	1.04	%	-18.06% to	-19.52	%
2006	0.95 to	2.80	4,145,461	23.69 to	26.78	116,700,717	0.94	%	36.36% to	33.83	%
2005	0.95 to	2.70	3,310,194	17.37 to	20.07	68,799,980	1.14	%	15.65% to	13.61	%
2004	0.95 to	2.75	2,479,086	15.02 to	17.65	44,807,033	1.33	%	34.78% to	32.33	%
Victory VIF - Diversified Stock Fund - Class A (VYDS)
2008	1.15 to	2.10	57,375	9.98 to	9.47	564,917	0.75	%	-38.58% to	-39.17	%
2007	1.15 to	2.10	66,078	16.25 to	15.57	1,063,078	0.66	%	8.68% to	7.63	%
2006	1.15 to	2.10	65,321	14.95 to	14.47	969,737	0.30	%	12.38% to	11.30	%
2005	1.15 to	2.10	64,852	13.30 to	13.00	859,735	0.07	%	7.50% to	6.47	%
2004	1.15 to	2.00	40,476	12.37 to	12.23	502,687	0.97	%	8.40% to	7.47	%
Wells Fargo AVT - Discovery Fund(SM) (SVDF)
2008	0.80 to	1.40	1,508,012	15.55 to	18.44	32,197,505	0.00	%	-44.80% to	-45.14	%
2007	0.80 to	1.40	1,793,964	28.18 to	33.62	69,679,934	0.00	%	21.34% to	20.60	%
2006	0.80 to	1.40	2,138,630	23.22 to	27.88	68,607,503	0.00	%	13.73% to	13.04	%
2005	0.80 to	1.40	2,486,339	20.42 to	24.66	70,294,123	0.00	%	7.41% to	6.76	%
2004	0.80 to	1.40	3,008,430	19.01 to	23.10	79,265,637	0.00	%	14.79% to	14.10	%
Wells Fargo AVT - Large Company Growth Fund (WFVLCG)
2008	1.75 to	2.20	11,776	6.66 to	6.54	77,336	0.27	%	-40.06% to	-40.34	%
2007	1.75 to	2.20	12,402	11.12 to	10.96	136,370	0.00	%	5.72% to	5.23	%
2006	1.40 to	2.20	13,143	10.60 to	10.41	137,213	0.00	%	0.92% to	0.10	%
2005	1.40 to	2.20	13,234	10.50 to	10.40	137,863	0.18	%	4.22% to	3.38	%
2004	2.10		2,297	10.06		23,117	0.00	%	0.64%		(a) (b)
Wells Fargo AVT - Money Market Fund (WFVMM)
2008	1.15 to	1.40	20,154	10.95 to	10.84	218,444	1.76	%	1.10% to	0.84	%
2007	1.15 to	1.40	1,632	10.83 to	10.74	17,585	4.60	%	3.47% to	3.20	%
2006	1.15 to	1.40	1,635	10.47 to	10.41	17,055	26.87	%	3.22% to	2.96	%
2005	1.40		1,058	10.11		10,698	34.36	%	1.11%
Wells Fargo AVT - Opportunity Fund(SM) (SVOF)
2008	0.80 to	1.40	4,815,928	20.38 to	23.63	144,228,895	1.88	%	-40.58% to	-40.94	%
2007	0.80 to	1.40	5,757,665	34.29 to	40.01	291,024,130	0.62	%	5.78% to	5.13	%
2006	0.80 to	1.40	7,005,669	32.42 to	38.06	334,888,686	0.00	%	11.32% to	10.65	%
2005	0.80 to	1.40	8,710,393	29.12 to	34.39	373,720,329	0.00	%	7.02% to	6.38	%
2004	0.80 to	1.40	10,844,850	27.21 to	32.33	434,154,524	0.00	%	17.27% to	16.57	%
Wells Fargo AVT - Small-Mid Cap Value Fund (WFVSMV)
2008	1.10 to	1.25	1,260	5.18 to	5.17	6,526	0.00	%	-45.16% to	-45.24	%
2007	1.25		39	9.43		368	0.00	%	-5.65%		(a) (b)
Wells Fargo AVT - Total Return Bond Fund (WFVTRB)
2008	1.15		2,116	11.04		23,352	4.80	%	1.21%
2007	1.15		2,116	10.90		23,072	4.56	%	4.96%
2006	1.15		2,116	10.39		21,981	4.32	%	2.63%
2005	1.15		2,116	10.12		21,419	0.49	%	0.73%

2008	Reserves for annuity contracts in payout phase:		7,453,205
2008	Contract owners’ equity	$	16,006,481,073
2007	Reserves for annuity contracts in payout phase:		12,121,909
2007	Contract owners’ equity	$	22,175,260,947
2006	Reserves for annuity contracts in payout phase:		11,157,956
2006	Contract owners’ equity	$	17,880,717,436
2005	Reserves for annuity contracts in payout phase:		9,694,221
2005	Contract owners’ equity	$	13,950,161,968
2004	Reserves for annuity contracts in payout phase:		9,554,595
2004	Contract owners’ equity	$	12,749,242,735

(Continued)

142

NATIONWIDE VARIABLE ACCOUNT-II (NOTES TO FINANCIAL STATEMENTS, Continued)

* This represents the range of annual contract expense rates of the variable account for the period indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the underlying mutual funds and charges made directly to contract owner accounts through the redemption of units.

** This represents the dividends for the period indicated, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by average net assets. The ratios exclude those expenses, such as mortality and expense charges or contract maintenance charges, that result in direct reductions to the contractholder accounts through reductions in unit values or redemption of units. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

*** This represents the range of minimum and maximum total returns for the period indicated, including changes in the value of the underlying mutual fund, which reflects the reduction of the value for expenses assessed. It does not include any expenses assessed through the redemption of units, the inclusion of which would result in a reduction of the total return presented. Total return is not annualized if the underlying mutual fund option is initially offered, funded, or both, during the period presented.

(a) & (b) Denote the minimum and maximum of the total return ranges, respectively, for underlying mutual fund options that were added and funded during the reporting period. These returns were not annualized. Minimum and maximum ranges are not shown for underlying mutual fund options for which a single contract expense rate (product option) is representative of all units issued and outstanding at period end. Such options that were added during the reporting period are designated using both symbols.

143

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholder

Nationwide Life Insurance Company:

We have audited the accompanying consolidated balance sheets of Nationwide Life Insurance Company and subsidiaries (the Company) as of December 31, 2008 and 2007, and the related consolidated statements of (loss) income, changes in shareholder’s equity and cash flows for each of the years in the three-year period ended December 31, 2008. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedules as listed in the accompanying index. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Nationwide Life Insurance Company and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 3 to the consolidated financial statements, the Company adopted the American Institute of Certified Public Accountants’ Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts, in 2007.

/s/ KPMG LLP

Columbus, Ohio

March 2, 2009

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of (Loss) Income

(in millions)

	Years ended December 31,
	2008			2007			2006
Revenues:
Policy charges	$	1,168.0		$	1,208.3		$	1,132.6
Premiums		283.5			291.7			308.3
Net investment income		1,687.0			1,975.8			2,058.5
Net realized investment (losses) gains		(1,439.3	)		(166.2	)		7.1
Other income		6.4			7.5			0.2
Total revenues		1,705.6			3,317.1			3,506.7
Benefits and expenses:
Interest credited to policyholder accounts		1,130.6			1,262.6			1,330.1
Benefits and claims		660.3			479.3			450.3
Policyholder dividends		26.4			24.5			25.6
Amortization of deferred policy acquisition costs		674.5			368.5			450.3
Interest expense, primarily with Nationwide Financial Services, Inc. (NFS)		61.8			70.0			65.5
Other operating expenses		516.1			529.5			536.8
Total benefits and expenses		3,069.7			2,734.4			2,858.6
(Loss) income from continuing operations before federal income tax (benefit) expense		(1,364.1	)		582.7			648.1
Federal income tax (benefit) expense		(534.3	)		128.5			28.7
(Loss) income from continuing operations		(829.8	)		454.2			619.4
Cumulative effect of adoption of accounting principle, net of taxes		—			(6.0	)		—
Net (loss) income	$	(829.8	)	$	448.2		$	619.4

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Balance Sheets

(in millions, except per share amounts)

	December 31,
	2008			2007
Assets
Investments:
Securities available-for-sale, at fair value:
Fixed maturity securities (amortized cost $21,820.9 and $24,021.2)	$	19,247.2		$	23,933.4
Equity securities (amortized cost $30.9 and $69.6)		26.5			72.9
Mortgage loans on real estate, net		7,189.9			7,615.4
Short-term investments, including amounts managed by a related party		2,780.9			959.1
Other investments		1,305.5			1,330.8
Total investments		30,550.0			33,911.6
Cash		36.7			1.3
Accrued investment income		300.9			314.3
Deferred policy acquisition costs		4,423.9			3,997.4
Other assets		2,564.0			1,638.9
Separate account assets		46,936.9			69,676.5
Total assets	$	84,812.4		$	109,540.0
Liabilities and Shareholder’s Equity
Liabilities:
Future policy benefits and claims	$	32,536.3		$	31,998.4
Short-term debt		249.7			285.3
Long-term debt, payable to NFS		700.0			700.0
Other liabilities		2,110.5			2,642.6
Separate account liabilities		46,936.9			69,676.5
Total liabilities		82,533.4			105,302.8
Shareholder’s equity:
Common stock ($1 par value; authorized - 5.0 shares; issued and outstanding - 3.8 shares)		3.8			3.8
Additional paid-in capital		613.2			274.4
Retained earnings		2,973.2			4,049.5
Accumulated other comprehensive loss		(1,311.2	)		(90.5	)
Total shareholder’s equity		2,279.0			4,237.2
Total liabilities and shareholder’s equity	$	84,812.4		$	109,540.0

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Changes in Shareholder’s Equity

(in millions)

	Capital shares		Additional paid-in capital		Retained earnings			Accumlated other comprehensive income (loss)			Total shareholder’s equity
Balance as of December 31, 2005		3.8		274.4		3,894.4			93.6			4,266.2
Dividends to NFS		—		—		(375.0	)		—			(375.0	)
Comprehensive income:
Net income		—		—		619.4			—			619.4
Other comprehensive loss, net of taxes		—		—		—			(64.9	)		(64.9	)
Total comprehensive income												554.5
Balance as of December 31, 2006		3.8		274.4		4,138.8			28.7			4,445.7
Dividends to NFS		—		—		(537.5	)		—			(537.5	)
Comprehensive income:
Net income		—		—		448.2			—			448.2
Other comprehensive loss, net of taxes		—		—		—			(119.2	)		(119.2	)
Total comprehensive income												329.0
Balance as of December 31, 2007	$	3.8	$	274.4	$	4,049.5		$	(90.5	)	$	4,237.2
Dividends to NFS						(246.5	)					(246.5	)
Capital contributed by NFS				338.8								338.8
Comprehensive income:
Net loss						(829.8	)					(829.8	)
Other comprehensive loss, net of taxes									(1,220.7	)		(1,220.7	)
Total comprehensive loss												(2,050.5	)
Balance as of December 31, 2008	$	3.8	$	613.2	$	2,973.2		$	(1,311.2	)	$	2,279.0

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Cash Flows

(in millions)

	Years ended December 31,
	2008			2007			2006
Cash flows from operating activities:
Net (loss) income	$	(829.8	)	$	448.2		$	619.4
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net realized investment losses (gains)		1,439.3			166.2			(7.1	)
Interest credited to policyholder accounts		1,130.6			1,262.6			1,330.1
Capitalization of deferred policy acquisition costs		(572.2	)		(612.6	)		(569.6	)
Amortization of deferred policy acquisition costs		674.5			368.5			450.3
Amortization and depreciation		6.7			22.3			46.6
Decrease (increase) in other assets		64.5			557.4			(336.2	)
(Decrease) increase in policy and other liabilities		(226.1	)		(331.8	)		54.1
(Increase) decrease in derivative assets		(1,030.7	)		(146.9	)		38.2
Increase in derivative liabilities		153.9			101.5			174.7
Other, net		3.7			8.5			0.1
Net cash provided by operating activities		814.4			1,843.9			1,800.6
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale		3,935.6			4,379.8			5,128.6
Proceeds from sale of securities available-for-sale		4,185.2			4,657.5			2,267.3
Proceeds from repayments or sales of mortgage loans on real estate		763.1			2,467.7			2,430.8
Cost of securities available-for-sale acquired		(6,831.8	)		(8,008.3	)		(5,658.9	)
Cost of mortgage loans on real estate originated or acquired		(358.7	)		(1,887.0	)		(2,180.4	)
Net decrease (increase) in short-term investments		(1,827.0	)		762.9			(125.4	)
Collateral received (paid), net		603.4			(175.6	)		(332.6	)
Other, net		(34.0	)		(68.6	)		52.1
Net cash provided by investing activities		435.8			2,128.4			1,581.5
Cash flows from financing activities:
Net increase (decrease) in short-term debt		(35.6	)		210.1			(167.1	)
Capital contributed by NFS		153.4			—			—
Cash dividends paid to NFS		(181.8	)		(537.5	)		(375.0	)
Investment and universal life insurance product deposits and other additions		3,511.1			3,586.1			3,400.8
Investment and universal life insurance product withdrawals and other deductions		(4,795.9	)		(7,230.2	)		(6,241.2	)
Other, net		134.0			—			—
Net cash used in financing activities		(1,214.8	)		(3,971.5	)		(3,382.5	)
Net increase (decrease) in cash		35.4			0.8			(0.4	)
Cash, beginning of period		1.3			0.5			0.9
Cash, end of period	$	36.7		$	1.3		$	0.5
Supplemental Non-cash Disclosure:
Dividends paid to NFS	$	(64.6	)	$	—		$	—
Capital contributed by NFS		185.4			—			—

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements

December 31, 2008, 2007 and 2006

(1) Nature of Operations  

Nationwide Life Insurance Company (NLIC, or collectively with its subsidiaries, the Company) was incorporated in 1929 and is an Ohio stock legal reserve life insurance company. The Company is a member of the Nationwide group of companies (Nationwide), which is comprised of Nationwide Mutual Insurance Company (NMIC) and all of its subsidiaries and affiliates.

All of the outstanding shares of NLIC’s common stock are owned by NFS, a holding company formed by Nationwide Corporation (Nationwide Corp.), a majority-owned subsidiary of NMIC.

On August 6, 2008, NFS entered into a definitive agreement for NMIC, and Nationwide Corporation (Nationwide Corp.)., to acquire all of the outstanding publicly held Class A common shares of NFS for $52.25 per share in cash. The transaction closed on January 1, 2009 and NFS became a privately held subsidiary of Nationwide Corp.

Wholly-owned subsidiaries of NLIC as of December 31, 2008 include Nationwide Life and Annuity Insurance Company (NLAIC) and Nationwide Investment Services Corporation (NISC). NLAIC offers universal life insurance, variable universal life insurance, corporate-owned life insurance (COLI) and individual annuity contracts on a non-participating basis. NISC is a registered broker/dealer.

The Company is a leading provider of long-term savings and retirement products in the United States of America (U.S.). The Company develops and sells a diverse range of products including individual annuities, private and public sector group retirement plans, other investment products sold to institutions, life insurance and advisory services.

The Company sells its products through a diverse distribution network. Unaffiliated entities that sell the Company’s products to their own customer bases include independent broker/dealers, financial institutions, wirehouse and regional firms, pension plan administrators, and life insurance specialists. Representatives of affiliates who market products directly to a customer base include Nationwide Retirement Solutions, Inc. (NRS), and Nationwide Financial Network (NFN) producers. The Company also distributes products through the agency distribution force of its ultimate parent company, NMIC.

As of December 31, 2008 and 2007, the Company did not have a significant concentration of financial instruments in a single investee, industry or geographic region of the U.S. Also, the Company did not have a concentration of business transactions with a particular customer, lender, distribution source, market or geographic region of the U.S. in which business is conducted that makes it overly vulnerable to a single event which could cause a severe impact to the Company’s financial position.

(2) Summary of Significant Accounting Policies  

The Company’s significant accounting policies that materially affect financial reporting are summarized below. The accompanying consolidated financial statements were prepared in accordance with United States generally accepted accounting principles (GAAP).

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ significantly from those estimates.

The Company’s most significant estimates include those used to determine the following: the balance, recoverability and amortization of deferred policy acquisition costs (DAC); whether an available-for-sale security is other-than-temporarily impaired, valuation allowances for mortgage loans on real estate; valuation of derivatives; the liability for future policy benefits and claims, including the valuation of embedded derivative resulting from living benefit contracts; and federal income tax provision. Although some variability is inherent in these estimates, recorded amounts reflect management’s best estimates based on facts and circumstances as of the balance sheet date. Management believes the amounts provided are appropriate.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company determined that certain cash flows related to future policy benefits and claims totaling $111.9 million for the three months ended March 31, 2008, which were included as cash flows provided by operating activities on the condensed consolidated statements of cash flows in the applicable Quarterly Report on Form 10-Q, should have been presented as financing activities. The net cash provided by operating activities for the three months ended March 31, 2008 as originally filed and revised was $351.1 million and $239.2 million, respectively. The net cash used in financing activities for the three months ended March 31, 2008 as originally filed and revised was $368.9 million and $257.0 million, respectively. They will be presented in that manner on a comparative basis in the 2009 filings. The consolidated statement of cash flows for 2008 included in this filing reflects the revised presentation described above.

Certain items in the 2007 and 2006 consolidated financial statements and related notes have been reclassified to conform to the current presentation.

(a) Consolidation Policy

The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling financial interest. Minority interest expense is included in other operating expenses in the consolidated statements of (loss) income, and the minority interest liability is included in other liabilities on the consolidated balance sheets. All significant intercompany balances and transactions were eliminated in consolidation.

(b) Valuation of Investments, Investment Income and Related Gains and Losses

The Company is required to classify its fixed maturity securities and marketable equity securities as held-to-maturity, available-for-sale or trading. All fixed maturity and marketable equity securities are classified as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses, net of adjustments to DAC, future policy benefits and claims, and deferred federal income taxes reported as a separate component of accumulated other comprehensive (loss) income (AOCI) in shareholder’s equity. The adjustment to DAC represents the changes in amortization of DAC that would have been required as a charge or credit to operations had such unrealized amounts been realized and allocated to the product lines. The adjustment to future policy benefits and claims represents the increase in policy reserves from using a discount rate that would have been required had such unrealized amounts been realized and the proceeds reinvested at then current market interest rates, which were lower than the then current effective portfolio rate.

For fixed maturity and marketable equity securities for which market quotations generally are available, the Company generally uses independent pricing services to assist in determining the fair value measurement. For certain fixed maturity securities not priced by independent services (generally private placement securities without quoted market prices), an internally developed pricing model or “corporate pricing matrix” is most often used. The corporate pricing matrix is developed by obtaining private spreads versus the U.S. Treasury yield for corporate securities with varying weighted average lives and bond ratings. The weighted average life and bond rating of a particular fixed maturity security to be priced using the corporate matrix are important inputs into the model and are used to determine a corresponding spread that is added to the U.S. Treasury yield to create an estimated market yield for that bond. The estimated market yield and other relevant factors are then used to estimate the fair value of the particular fixed maturity security. The Company also utilized broker quotes in pricing securities or to validate modeled prices.

For mortgage-backed securities (MBSs), the Company recognizes income using a constant effective yield method based on prepayment assumptions and the estimated economic life of the securities. When estimated prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. Any resulting adjustment is included in net investment income. All other investment income is recorded using the interest method without anticipating the impact of prepayments.

Management regularly reviews each investment in its fixed maturity and equity securities portfolios to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

For debt securities not subject to Emerging Issues Task Force Issue (EITF) No. 99-20, Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets, as amended by Financial Accounting Standards Board (FASB) Staff Position (FSP) EITF 99-20-1 (EITF 99-20), as well as debt securities subject to EITF 99-20, an other-than-temporary impairment charge is taken when the Company does not have the ability and intent to hold the security until the forecasted recovery or if it is probable that the Company will not recover all contractual amounts when due. Furthermore, equity securities may experience other-than-temporary impairments based on prospects of recovery in a reasonable period of time. Many criteria are considered during this process including, but not limited to, specific credit issues and financial prospects related to the issuer, the quality of the underlying collateral, management’s intent and ability to hold the security until recovery, current economic conditions that could affect the creditworthiness of the issuer in the future, the current fair value as compared to the amortized cost of the security, the extent and duration of the unrealized loss, and the rating of the affected security. Other-than-temporary impairment losses result in a permanent reduction to the cost basis of the underlying investment.

In addition to the above, for certain beneficial interests in securitized financial assets with contractual cash flows, including asset-backed securities (ABSs), EITF 99-20 also requires the Company to periodically update its best estimate of cash flows over the life of the security. If the fair value of a securitized financial asset is not greater than or equal to its carrying value based on current information and events, and if there has been , or if it is probable that, an adverse change in estimated cash flows since the last revised estimate (considering both timing and amount), then the Company recognizes an other-than-temporary impairment and writes down the investment to fair value.

The Company provides valuation allowances for impairments of mortgage loans on real estate based on a review by portfolio managers. Mortgage loans on real estate are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When management determines that a loan is impaired, a provision for loss is established equal to either the difference between the carrying value and the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. In addition to the valuation allowance on specific loans, the Company maintains an allowance not yet specifically identified by loan for probable losses inherent in the loan portfolio as of the balance sheet date. The valuation allowance account for mortgage loans on real estate reflects management’s best estimate of probable credit losses, including losses incurred at the balance sheet date but not yet identified by specific loan. Management’s periodic evaluation of the adequacy of the allowance for losses is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Changes in the valuation allowance are recorded in net realized investment gains and losses. Loans in foreclosure are placed on non-accrual status. Interest received on non-accrual status mortgage loans on real estate is included in net investment income in the period received.

Real estate to be held and used is carried at cost less accumulated depreciation. Real estate designated as held for disposal is not depreciated and is carried at the lower of the carrying value at the time of such designation or fair value less cost to sell. Other long-term investments are carried on the equity method of accounting.

Impairment losses are recorded on investments in long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts.

Realized gains and losses on the sale of investments are determined on the basis of specific security identification. Changes in the Company’s mortgage loan valuation allowance and recognition of impairment losses for other-than-temporary declines in the fair values of applicable investments are included in net realized investment gains and losses.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(c) Derivative Instruments

Derivatives are carried at fair value. On the date the derivative contract is entered into, the Company designates the derivative as a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge); a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); a foreign currency fair value or cash flow hedge (foreign currency hedge); or a non-hedge transaction. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for entering into various hedge transactions. This process includes linking all derivatives that are designated as fair value, cash flow or foreign currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used for hedging transactions are expected to be and, for ongoing hedging relationships, have been highly effective in offsetting changes in fair values or cash flows of hedged items. When it is determined that a derivative is not, or is not expected to be, highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively.

The Company enters into interest rate swaps, cross-currency swaps or Euro futures to hedge the fair value of existing fixed rate assets and liabilities. In addition, the Company uses short U.S. Treasury future positions to hedge the fair value of bond and mortgage loan commitments. Typically, the Company is hedging the risk of changes in fair value attributable to changes in benchmark interest rates. Derivative instruments classified as fair value hedges are carried at fair value, with changes in fair value recorded in net realized investment gains and losses. Changes in the fair value of the hedged item that are attributable to the risk being hedged are also recorded in net realized investment gains and losses.

The Company enters into interest rate swaps to hedge the variability in cash flows and investment income due to changes in the benchmark interest rates on variable rate assets and liabilities. The Company also enters into cross-currency interest rate swaps to eliminate the currency risk on variable rate and fixed rate foreign denominated assets. Derivative instruments classified as cash flow hedges are carried at fair value, with the effective portion of changes in fair value recorded in other comprehensive income and the ineffective portion recorded in net realized investment gains and losses.

Accrued interest receivable or payable under interest rate and foreign currency swaps are recognized as an adjustment to net investment income or interest credited to policyholder accounts consistent with the nature of the hedged item, except for interest rate swaps hedging the anticipated sale of investments where amounts receivable or payable under the swaps are recorded as net realized investment gains and losses, and except for interest rate swaps hedging the anticipated purchase of investments where amounts receivable or payable under the swaps are initially recorded in AOCI to the extent the hedging relationship is effective.

The Company periodically may enter into a derivative transaction that will not qualify for hedge accounting. The Company does not enter into speculative positions. Although these transactions do not qualify for hedge accounting, or have not been designated in hedging relationships by the Company, they are part of its overall risk management strategy. For example, the Company may sell credit default protection through a credit default swap. Although the credit default swap is not effective in hedging specific investments, the income stream allows the Company to manage overall investment yields while exposing the Company to acceptable credit risk. The Company may enter into a cross-currency basis swap (pay a variable U.S. rate and receive a variable foreign-denominated rate) to eliminate the foreign currency exposure of a variable rate foreign-denominated liability. Although basis swaps may qualify for hedge accounting, the Company has chosen not to designate these derivatives as hedging instruments due to the difficulty in assessing and monitoring effectiveness for both sides of the basis swap. Derivative instruments that do not qualify for hedge accounting or are not designated as hedging instruments are carried at fair value, with changes in fair value recorded in net realized investment gains and losses.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(d) Revenues and Benefits

Investment and Universal Life Insurance Products: Investment products consist primarily of individual and group variable and fixed deferred annuities. Universal life insurance products include universal life insurance, variable universal life insurance, corporate-owned life insurance (COLI), bank-owned life insurance (BOLI) and other interest-sensitive life insurance policies. Revenues for investment products and universal life insurance products consist of net investment income, asset fees, cost of insurance charges, administrative fees and surrender charges that have been earned and assessed against policy account balances during the period. The timing of revenue recognition as it relates to fees assessed on investment contracts and universal life contracts is determined based on the nature of such fees. Asset fees, cost of insurance charges and administrative fees are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. Certain amounts assessed that represent compensation for services to be provided in future periods are reported as unearned revenue and recognized in income over the periods benefited. Surrender charges are recognized upon surrender of a contract in accordance with contractual terms. Policy benefits and claims that are charged to expense include interest credited to policyholder accounts and benefits and claims incurred in the period in excess of related policyholder accounts.

Traditional Life Insurance Products: Traditional life insurance products include those products with fixed and guaranteed premiums and benefits, and primarily consist of whole life insurance, limited-payment life insurance, term life insurance and certain annuities with life contingencies. Premiums for traditional life insurance products are recognized as revenue when due. Benefits and expenses are associated with earned premiums so that profits are recognized over the life of the contract. This association is accomplished through the provision for future policy benefits and the deferral and amortization of policy acquisition costs.

(e) Cash and Cash Equivalents

Cash and cash equivalents consist of short-term highly liquid investments with original maturities of less than three months at the time of purchase. The Company carries cash and cash equivalents at cost, which approximates fair value.

(f) Deferred Policy Acquisition Costs

Investment and universal life insurance products. The Company has deferred certain costs of acquiring investment and universal life insurance products business, principally commissions, certain expenses of the policy issue and underwriting department, and certain variable sales expenses that relate to and vary with the production of new and renewal business. In addition, the Company defers sales inducements, such as interest credit bonuses and jumbo deposit bonuses. Investment products primarily consist of individual and group variable and fixed deferred annuities in the Individual Investments and Retirement Plans segments. Universal life insurance products include universal life insurance, variable universal life insurance, COLI, BOLI and other interest-sensitive life insurance policies in the Individual Protection segment. DAC is subject to recoverability testing in the year of policy issuance and loss recognition testing at the end of each reporting period.

For investment and universal life insurance products, the Company amortizes DAC with interest over the lives of the policies in relation to the present value of estimated gross profits from projected interest margins, asset fees, cost of insurance charges, administrative fees, surrender charges, and net realized investment gains and losses less policy benefits and policy maintenance expenses. The Company adjusts the DAC asset related to investment and universal life insurance products to reflect the impact of unrealized gains and losses on fixed maturity securities available-for-sale, as described in Note 2(b).

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The assumptions used in the estimation of future gross profits are based on the Company’s current best estimates of future events and are reviewed as part of an annual process during the second quarter. During the annual process, the Company performs a comprehensive study of assumptions, including mortality and persistency studies, maintenance expense studies, and an evaluation of projected general and separate account investment returns. The most significant assumptions that are involved in the estimation of future gross profits include future net separate account investment performance, surrender/lapse rates, interest margins and mortality. Currently, the Company’s long-term assumption for net separate account investment performance is approximately 7% growth per year and varies by product. The Company reviews this assumption, like others, as part of its annual process. If this assumption were unlocked, the date of the unlocking could become the anchor date used in the reversion to the mean process (defined below). Variances from the long-term assumption are expected since the majority of the investments in the underlying separate accounts are in equity securities, which strongly correlate in the aggregate with the Standard & Poor’s (S&P) 500 Index. The Company bases its reversion to the mean process on actual net separate account investment performance from the anchor date to the valuation date. The Company then assumes different performance levels over the next three years such that the separate account mean return measured from the anchor date to the end of the life of the product equals the long-term assumption. The assumed net separate account investment performance used in the DAC models is intended to reflect what is anticipated. However, based on historical returns of the S&P 500 Index, and as part of its pre-set parameters, the Company’s reversion to the mean process generally limits net separate account investment performance to 0-15% during the three-year reversion period. See below for a discussion of 2008 and 2007 assumption changes that impacted DAC amortization and related balances.

Changes in assumptions can have a significant impact on the amount of DAC reported for investment and universal life insurance products and their related amortization patterns. In the event actual experience differs from assumptions or future assumptions are revised, the Company is required to record an increase or decrease in DAC amortization expense, which could be significant. In general, increases in the estimated long-term general and separate account returns result in increased expected future profitability and may lower the rate of DAC amortization, while increases in long-term lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization.

In addition to the comprehensive annual study of assumptions, management evaluates the appropriateness of the individual variable annuity DAC balance quarterly within pre-set parameters. These parameters are designed to appropriately reflect the Company’s long-term expectations with respect to individual variable annuity contracts while also evaluating the potential impact of short-term experience on the Company’s recorded individual variable annuity DAC balance. If the recorded balance of individual variable annuity DAC falls outside of these parameters for a prescribed period, or if the recorded balance falls outside of these parameters and management determines it is not reasonably possible to get back within the parameters during a given period, assumptions are required to be unlocked, and DAC is recalculated using revised best estimate assumptions. When DAC assumptions are unlocked and revised, the Company continues to use the reversion to the mean process. See below for a discussion of 2008 and 2007 assumption changes that impacted DAC amortization and related balances.

During the second quarter of 2007, the Company conducted its annual comprehensive review of model assumptions used to project DAC and other related balances, including sales inducement assets, unearned revenue reserves, and guaranteed minimum death and income benefit reserves. This review included all assumptions, including expected separate account investment returns during the three-year reversion period, lapse rates, mortality and expenses. The Company determined as part of this annual review that the overall separate account returns were expected to exceed previous estimates due to favorable financial market trends. Additionally, while the Company estimated that the overall profitability of its variable products had improved, it expected the long-term net growth in separate account investment performance to moderate.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Accordingly, the second quarter 2007 unlocking process included changes in several assumptions, including assumptions affecting net separate account investment performance. This unlocking resulted in a net increase in DAC and a benefit to DAC amortization and other related balances totaling $221.6 million pre-tax, which was reported in the following segments in the pre-tax amounts indicated: Individual Investments - $196.4 million; Retirement Plans - $10.5 million; and Individual Protection - $14.7 million. First, the Company reset the anchor date for its reversion to the mean calculations, which increased the annual net separate account growth rate to 7% during the first three years of the projection period from 0% (which was the rate of return for the three-year reversion period required from the previous anchor date). Second, as a result of its current analysis, including its evaluation of ongoing trends and expectations regarding financial market performance, the Company unlocked and reset its long-term assumption for net separate account growth rates to 7% from 8%. This decreased the net separate account growth rate by 1% to 7% for all years subsequent to the three-year reversion period. The combination of resetting these two factors resulted in a $167.0 million increase in DAC and benefit to DAC amortization and other related balances. The impact of changing the annual net separate account growth rate from 0% to 7% during the three-year reversion period had a much larger effect on the DAC balance when compared to the 1% incremental change in the long-term assumption for net separate account investment performance. The remainder of the increase in DAC and benefit to DAC amortization and other related balances resulting from the DAC unlocking process primarily was related to the recorded balance of individual variable annuity DAC falling outside the Company’s preset parameters for the prescribed period, which was driven by favorable market performance in excess of the assumed net separate account returns. Accordingly, the Company recalculated DAC using revised best estimate assumptions, which resulted in a $78.8 million increase in DAC and benefit to DAC amortization and other related balances. This was partially offset by a $24.2 million decrease in DAC and increase in DAC amortization and other related balances due to increasing estimated lapse rates for fixed annuity and BOLI products.

During the second quarter of 2007, the Company added a new feature to its existing guaranteed minimum withdrawal benefit rider, Lifetime Income (L.inc). This new feature resulted in a substantial change in the existing contracts and, therefore, an extinguishment of the DAC associated with those contracts pursuant to the American Institute of Certified Public Accountants’ (AICPA) Statement of Position (SOP) 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts (SOP 05-1). As a result, the Company eliminated existing DAC and other related balances resulting in a $135.0 million pre-tax charge.

At the end of the second quarter of 2008, the Company determined as part of its comprehensive annual study of assumptions that certain assumptions should be unlocked. The unlocked assumptions primarily related to lapse and spread assumptions in the Individual Investments segment, the assumed growth rate on deposits per contract in the Retirement Plans segment, and mortality and lapse assumptions in the Individual Protection segment. Therefore, in the second quarter of 2008, the Company recorded the following pre-tax adjustments: 1) a decrease in DAC and additional DAC amortization of $13.4 million; 2) a decrease in other assets and additional benefits and claims of $0.6 million; and 3) a decrease in unearned revenue liability and additional administrative fees of $3.1 million. The net impact of this activity was a $10.9 million unfavorable pre-tax adjustment to net income in the second quarter of 2008, which was reported in the following segments in the pre-tax amounts indicated: Individual Investments - $9.4 million unfavorable; Retirement Plans - $2.3 million unfavorable; and Individual Protection - $0.8 million favorable.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

During the third quarter of 2008, the Company’s recorded balance of individual variable annuity DAC fell outside the Company’s preset parameters for the prescribed period, which primarily was driven by unfavorable market performance compared to the assumed net separate account returns. Accordingly, the Company recalculated DAC using revised best estimate assumptions, which resulted in a decrease in DAC and an increase in DAC amortization and other related balances totaling $177.2 million pre-tax in the Individual Investments segment. During the fourth quarter of 2008, the Company’s recorded balance of individual variable annuity DAC fell outside the Company’s preset parameters, which primarily was driven by continued unfavorable market performance compared to assumed net separate account returns. Management made a determination that it was not reasonably possible to get back within the preset parameters during the remaining prescribed period. Accordingly, the Company recalculated DAC using revised best estimate assumptions, which resulted in a decrease in DAC and an increase in DAC amortization and other related balances of $243.1 million pre-tax in the Individual Investments segment. The Company continues to use the reversion to the mean process with the anchor date that was reset during the second quarter 2007 unlocking as described above. The Company evaluated the assumed separate account performance level over the next three years and determined that the assumptions inherent in the reversion period were reasonable. The annual net separate account growth rate for the mean reversion period is 15%, the maximum rate under the Company’s parameters. Accordingly, future periods may incur additional amortization of DAC if the Company’s actual returns are less than assumed.

Traditional life insurance products. Generally, DAC related to traditional life insurance products is amortized with interest over the premium-paying period of the related policies in proportion to the ratio of actual annual premium revenue to the anticipated total premium revenue. Such anticipated premium revenue is estimated using the same assumptions as those used for computing liabilities for future policy benefits at issuance. Under existing accounting guidance, the concept of DAC unlocking does not apply to traditional life insurance products, although evaluations of DAC for recoverability at the time of policy issuance and loss recognition testing at each reporting period are required.

(g) Separate Accounts

Separate account assets and liabilities represent contractholders’ funds that have been legally segregated into accounts with specific investment objectives. Separate account assets are recorded at fair value primarily based on market quotations of the underlying securities. Investment income and realized investment gains or losses of these accounts accrue directly to the contractholders. The activity of the separate accounts is not reflected in the consolidated statements of (loss) income except for (1) the fees the Company receives, which are assessed on a daily or monthly basis and recognized as revenue when assessed and earned, and (2) the activity related to contract guarantees, which are riders to existing variable annuity contracts.

(h) Future Policy Benefits and Claims

The process of calculating reserve amounts for a life insurance organization involves the use of a number of assumptions, including those related to persistency (how long a contract stays with a company), mortality (the relative incidence of death in a given time), morbidity (the relative incidence of disability resulting from disease or physical impairment) and interest rates (the rates expected to be paid or received on financial instruments, including insurance or investment contracts).

The Company calculates its liability for future policy benefits and claims for investment products in the accumulation phase and universal life and variable universal life insurance policies as the policy account balance, which represents participants’ net premiums and deposits plus investment performance and interest credited less applicable contract charges.

The Company’s liability for funding agreements to an unrelated third party trust related to the Company’s medium-term note (MTN) program equals the balance that accrues to the benefit of the contractholder, including interest credited. The funding agreements constitute insurance obligations and are considered annuity contracts under Ohio insurance laws.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The liability for future policy benefits and claims for traditional life insurance policies was determined using the net level premium method using interest rates varying from 2.0% to 10.5% and estimates of mortality, morbidity, investment yields and withdrawals that were used or being experienced at the time the policies were issued.

The liability for future policy benefits for payout annuities was calculated using the present value of future benefits and maintenance costs discounted using interest rates varying generally from 3.0% to 13.0%.

(i) Participating Business

Participating business, which refers to policies that participate in profits through policyholder dividends, represented approximately 5% of the Company’s life insurance in force in 2008 (6% in 2007 and 8% in 2006), 44% of the number of life insurance policies in force in 2008 (48% in 2007 and 50% in 2006) and 7% of life insurance statutory premiums in 2008 (7% in 2007 and 5% in 2006). The provision for policyholder dividends was based on the current dividend scales and has been included in future policy benefits and claims in the consolidated balance sheets.

(j) Federal Income Taxes

The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to significantly change the provision for federal income taxes recorded in the consolidated financial statements. Any such change could significantly affect the amounts reported in the consolidated statements of (loss) income. Management has established reserves in accordance with FIN 48 based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Management evaluates the appropriateness of such reserves quarterly based on any new developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums and other rulings issued by the Internal Revenue Service (IRS) or the tax courts.

The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under this method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when it is determined that it is more likely than not that the deferred tax asset will not be fully realized.

(k) Reinsurance Ceded

Reinsurance premiums ceded and reinsurance recoveries on benefits and claims incurred are deducted from the respective income and expense accounts. Assets and liabilities related to reinsurance ceded generally are reported in the consolidated balance sheets on a gross basis, separately from the related future policy benefits and claims of the Company. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder.

(l) Change in Accounting Principle

Historically, the Company accrued for legal costs associated with litigation defense and regulatory investigations by estimating the ultimate costs of such activity. Beginning April 1, 2007, the Company’s accrual for such legal expenses includes only the amount for services that have been provided but not yet paid. The Company believes the newly adopted accounting principle is preferable because it more accurately reflects expenses in the periods in which they are incurred. The Company continues to estimate and accrue the ultimate amounts expected to be paid for litigation and regulatory investigation loss contingencies. The Company has presented its consolidated financial statements and accompanying notes as applicable for all periods presented to retroactively apply the adoption of this change in accounting principle.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes the impact of the change in accounting principle described above for the years ended December 31:

(in millions)	2007			2006
Other operating expenses	$	2.8		$	5.0
Net income		(1.9	)		(3.1	)

The cumulative effect of the change on retained earnings as of January 1, 2006 was an $11.0 million increase.

(3) Recently Issued Accounting Standards  

In January 2009, the FASB issued FSP EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20 (FSP EITF 99-20-1). FSP EITF 99-20-1 amends the impairment guidance in EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets, to achieve more consistent determination of whether an other-than-temporary impairment has occurred. FSP EITF 99-20-1 is effective for interim and annual reporting periods ending after December 15, 2008, and will be applied prospectively. Retrospective application to a prior interim or annual reporting period is not permitted. The Company will adopt FSP EITF 99-20-1 effective December 31, 2008 and will apply the standard prospectively, as is required.

In December 2008, the FASB issued FSP FAS 132R-1, Employers’ Disclosures about Postretirement Benefit Plan Assets (FSP FAS 132R-1). FSP FAS 132R-1 amends FASB Statement No. 132 revised 2003, Employers’ Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. The portion of FSP FAS 132R-1 related to the disclosures about plan assets is effective for fiscal years ending after December 15, 2009. FSP FAS 132R-1 will have no impact on the Company’s disclosures.

In December 2008, the FASB issued FSP FAS 140-4 and FIN 46R-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities, (FSP FAS 140-4 and FIN 46R-8). FSP FAS 140-4 and FIN 46R-8 amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, to require public entities to provide additional disclosures about transfers of financial assets. It also amends FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, to require public enterprises, including sponsors that have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with variable interest entities. This FSP will be effective for the first reporting period (interim or annual) ending after December 15, 2008. The Company adopted FSP FAS 140-4 and FIN 46R-8 effective December 31, 2008. See Note 17 for the required disclosures.

In November 2008, the FASB Board ratified the Emerging Issues Task Force’s consensus EITF 08-7, Accounting for Defensive Intangible Assets (EITF 08-7). EITF 08-7 requires defensive intangible assets acquired in a business combination or asset acquisition to be accounted for as a separate unit of accounting. In doing so, the asset should not be included as part of the cost of an entity’s existing intangible asset(s) because the defensive intangible asset is separately identifiable. EITF 08-7 is effective for intangible assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. EITF 08-7 is not expected to have a material impact on the Company’s financial position or results of operations upon adoption. The Company will adopt EITF 08-7 effective January 1, 2009 and will apply it prospectively for intangible assets acquired on or after that date.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In November 2008, the FASB Board ratified the Emerging Issues Task Force’s consensus EITF 08-6, Equity Method Investment Accounting Considerations (EITF 08-6). EITF 08-6 clarifies how to account for certain transactions and impairment considerations involving equity method investments. Specifically, EITF 08-6 notes: 1) an entity shall measure its equity method investment initially at cost 2) an equity method investor is required to recognize other-than-temporary impairments of an equity method investment in accordance with paragraph 19(h) of Opinion 18 and an equity method investor shall not separately test an investee’s underlying indefinite-lived intangible asset(s) for impairment 3) an equity method investor shall account for a share issuance by an investee as if the investor had sold a proportionate share of its investment and any gain or loss to the investor resulting from an investee’s share issuance shall be recognized in earnings. This Issue shall be is effective on a prospective basis in fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The Company will adopt EITF 08-6 effective January 1, 2009 and will apply the standard prospectively, as is required.

In October 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (FSP FAS 157-3). FSP FAS 157-3 clarifies the application of SFAS No. 157, Fair Value Measurements (SFAS 157), in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP FAS 157-3 was effective upon issuance and was adopted by the Company effective September 30, 2008. The adoption of FSP FAS 157-3 did not have a material impact on the Company’s financial position or results of operations.

In September 2008, the FASB issued FSP FAS 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 (FSP FAS 133-1 and FIN 45-4). FSP FAS 133-1 and FIN 45-4 requires additional disclosure about credit derivatives including their nature, potential amount of future payments, fair value, recourse provisions and current status of the payment/performance risk. FSP FAS 133-1 and FIN 45-4 also requires the disclosure of the current status of the payment/performance risk of a guarantee subject to FASB Interpretation (FIN) No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others – an interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34. FSP FAS 133-1 and FIN 45-4 is effective for reporting periods ending after November 15, 2008. The Company adopted FSP FAS 133-1 and FIN 45-4 effective for the December 31, 2008 reporting period. See Note 5 for the required disclosures

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS 162). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with U.S. GAAP (the GAAP hierarchy). SFAS 162 will be effective 60 days following the approval by the United States Securities and Exchange Commission (SEC) of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The adoption of SFAS 162 did not the C result in a change in its current practices.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 amends and expands the disclosure requirements of SFAS 133 with the intent to provide users of financial statements with an enhanced understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations, and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about derivative instrument fair values and related gains and losses, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company currently is evaluating the new disclosures required under SFAS 161 and will adopt it March 31, 2009.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In February 2008, the FASB issued FSP FAS 157-2, Effective Date of FASB Statement No. 157 (FSP FAS 157-2). This FSP delays the effective date of SFAS 157 for nonfinancial assets and liabilities until fiscal years and interim periods beginning after November 15, 2008. FSP FAS 157-2 applies to nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the Company’s financial statements on a recurring basis (at least annually), and is effective upon issuance. The Company has not yet applied the provisions of SFAS 157 to the nonfinancial assets and liabilities within the scope of FSP FAS 157-2. However, the Company does not expect such application to have a material impact on its financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS 141R), which replaces SFAS No. 141, Business Combinations (SFAS 141). The objective of SFAS 141R is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. Accordingly, SFAS 141R establishes principles and requirements for how the acquirer: 1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; 2) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and 3) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R applies to all transactions or other events in which an entity obtains control of one or more businesses and retains the fundamental requirements in SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R is applicable prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Earlier application is prohibited. The Company will adopt SFAS 141R effective January 1, 2009 and will apply it to any business combination on or after that date.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51 (SFAS 160). The objective of SFAS 160 is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 also amends certain consolidation procedures prescribed by Accounting Research Bulletin No. 51, Consolidated Financial Statements, for consistency with the requirements of SFAS 141R. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The Company will adopt SFAS 160 effective January 1, 2009 and will apply it to any acquisitions or dispositions of noncontrolling interests on or after that date.

In June 2007, the Accounting Standards Executive Committee (AcSEC) of the AICPA issued SOP 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies (SOP 07-1). SOP 07-1 provides guidance for determining whether an entity is within the scope of the AICPA Audit and Accounting Guide Investment Companies (the Guide). For those entities that are investment companies under SOP 07-1, this SOP also addresses whether the specialized industry accounting principles of the Guide (i.e., fair value accounting) should be retained by a parent company in consolidation or by an investor that has the ability to exercise significant influence over the investment company and applies the equity method of accounting to its investment in the entity (referred to as an equity method investor). In addition, SOP 07-1 includes certain disclosure requirements for parent companies and equity method investors in investment companies that retain investment company accounting in the parent company’s consolidated financial statements or the financial statements of an equity method investor. The provisions of SOP 07-1 were to be effective for fiscal years beginning on or after December 15, 2007. On February 14, 2008, the FASB issued FSP SOP 07-1-1, which delays indefinitely the effective date of SOP 07-1. The Company will monitor the FASB and AICPA deliberations regarding this standard.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In April 2007, the FASB issued FSP FIN 39-1, An Amendment of FASB Interpretation No. 39 (FSP FIN 39-1). FSP FIN 39-1 addresses whether a reporting entity that is party to a master netting arrangement can offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments that have been offset under the same master netting arrangement in accordance with paragraph 10 of Interpretation 39. FSP FIN 39-1 is effective for fiscal years beginning after November 15, 2007, with early application permitted. The Company adopted FSP FIN 39-1 effective January 1, 2008. The Company elected to present the fair value of cash collateral received separate from the obligation to return the collateral. The adoption of FSP FIN 39-1 did not impact the Company’s financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, Including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS 159 is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value. In addition, SFAS 159 does not establish requirements for recognizing and measuring dividend income, interest income or interest expense, nor does it eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS No. 157, Fair Value Measurements (SFAS 157), and SFAS No. 107, Disclosures about Fair Value of Financial Instruments. SFAS 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. The Company adopted SFAS 159 for commercial mortgage loans held for sale effective January 1, 2008, which did not have a material impact on the Company’s financial position or results of operations. The Company will assess the fair value election for new financial assets or liabilities on a prospective basis. See Note 4 for disclosures required by SFAS 159.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158). SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability on its balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS 158 also requires an employer to measure the funded status of a plan as of the date of its year-end balance sheet, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end balance sheet is effective for fiscal years ending after December 15, 2008. The Company adopted SFAS 158 effective December 31, 2006. The adoption of SFAS 158 did not have a material impact on the Company’s financial position or results of operations.

In September 2006, the FASB issued SFAS 157. SFAS 157 provides enhanced guidance for using fair value to measure assets and liabilities and requires new disclosures about fair value measurements. SFAS 157 also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. For assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition, the reporting entity shall disclose information that enables financial statement users to assess the inputs used to develop those measurements. For recurring fair value measurements using significant unobservable inputs, the reporting entity shall disclose the effect of the measurements on earnings for the period. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. The Company adopted SFAS 157 effective January 1, 2008. The adoption of SFAS 157 did not have a material impact on the Company’s financial position or results of operations. See Note 4 for disclosures required by SFAS 157.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In September 2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108 (SAB 108). SAB 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current-year financial statements. SAB 108 requires registrants to quantify misstatements using both the balance sheet and income-statement approaches and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. SAB 108 does not change the SEC’s previous guidance in SAB No. 99 on evaluating the materiality of misstatements. The Company adopted SAB 108 effective December 31, 2006. SAB 108 did not have a material impact on the Company’s financial position or results of operations upon adoption.

In June 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109, Accounting for Income Taxes (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted FIN 48 effective January 1, 2007. FIN 48 did not have a material impact on the Company’s financial position or results of operations upon adoption.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets (SFAS 156).SFAS 156 amends SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (SFAS 140). SFAS 156 requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. SFAS 156 permits, but does not require, the subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value. An entity that uses derivative instruments to mitigate the risks inherent in servicing assets and servicing liabilities is required to account for those derivative instruments at fair value. Under SFAS 156, an entity can elect subsequent fair value measurement to account for its separately recognized servicing assets and servicing liabilities. By electing that option, an entity may simplify its accounting because SFAS 156 permits income statement recognition of the potential offsetting changes in fair value of those servicing assets and servicing liabilities and derivative instruments in the same accounting period. SFAS 156 is effective for fiscal years beginning after September 15, 2006. The Company adopted SFAS 156 effective January 1, 2007. SFAS 156 did not have a material impact on the Company’s financial position or results of operations upon adoption.

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments (SFAS 155). SFAS 155 amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133), and SFAS 140. SFAS 155 also resolves issues addressed in SFAS 133 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interests in Securitized Financial Assets. In summary, SFAS 155: (1) permits an entity to make an irrevocable election to measure any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation at fair value in its entirety, with changes in fair value recognized in earnings; (2) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133; (3) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (4) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (5) amends SFAS 140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. Provisions of SFAS 155 may be applied to instruments that an entity holds at the date of adoption on an instrument-by-instrument basis. The Company adopted SFAS 155 effective January 1, 2006. On the date of adoption, there was no impact to the Company’s financial position or results of operations.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In September 2005, AcSEC issued SOP 05-1. SOP 05-1 provides guidance on accounting by insurance enterprises for deferred acquisition costs on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments, issued by the FASB. SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights or coverages that occurs as a result of the exchange of a contract for a new contract, or by amendment, endorsement or rider to a contract, or by the election of a new feature or coverage within a contract. SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. Retrospective application of SOP 05-1 to previously issued financial statements is not permitted. Initial application of SOP 05-1 is required as of the beginning of an entity’s fiscal year. The Company adopted SOP 05-1 effective January 1, 2007, which resulted in a $6.0 million charge, net of taxes, as the cumulative effect of adoption of this accounting principle.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (SFAS 154), which replaces Accounting Principles Board Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. SFAS 154 applies to all voluntary changes in accounting principle as well as to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005, with earlier adoption permitted. The Company adopted SFAS 154 effective January 1, 2006. SFAS 154 did not have any impact on the Company’s financial position or results of operations upon adoption.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(4) Fair Value Measurements  

Fair Value Option

As described in Note 3, the Company adopted SFAS 159 effective January 1, 2008 and elected SFAS 159 fair value treatment for commercial mortgage loans held for sale. Accordingly, the Company now records in earnings all market fluctuations associated with this portfolio. The Company previously recorded such loans at the lower of cost or market value. Balances for these loans will be measured at fair value prospectively with unrealized gains and losses included as a component of net realized investment gains and losses. The Company will assess the fair value option election for new financial assets or liabilities on a prospective basis.

Fair Value Hierarchy

As described in Note 3, the Company adopted SFAS 157 effective January 1, 2008. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

In accordance with SFAS 157, the Company categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

The Company categorizes financial assets and liabilities recorded at fair value in the consolidated balance sheets as follows:

• Level 1 – Unadjusted quoted prices accessible in active markets for identical assets or liabilities at the measurement date. The types of assets and liabilities utilizing Level 1 valuations include U.S. Treasury and agency securities, equity securities listed in active markets, investments in publicly traded mutual funds with quoted market prices, and listed derivatives.  

• Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. The types of assets and liabilities utilizing Level 2 valuations generally include U.S. Government securities not backed by the full faith of the government, municipal bonds, structured notes and certain MBSs and ABSs, certain corporate debt, certain private placement investments, and certain derivatives, including basis swaps and commodity total return swaps.  

• Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate about the assumptions market participants would use at the measurement date in pricing the asset or liability. Consideration is given to the risk inherent in both the method of valuation and the valuation inputs. Generally, the types of assets and liabilities utilizing Level 3 valuations are certain MBSs and ABSs, certain corporate debt, certain private placement investments, certain mutual fund holdings, and certain derivatives, including embedded derivatives associated with living benefit contracts.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes assets and liabilities measured at fair value on a recurring basis as of December 31, 2008:

(in millions)	Level 1			Level 2			Level 3			Total
Assets
Investments:
Securities available-for-sale:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	561.3		$	10.0		$	—		$	571.3
Obligations of states and political subdivisions		—			217.1			—			217.1
Debt securities issued by foreign governments		—			38.9			—			38.9
Corporate securities		—			10,135.7			1,220.8			11,356.5
Mortgage-backed securities		520.8			1,936.4			2,219.6			4,676.8
Asset-backed securities		—			1,218.4			1,168.2			2,386.6
Total fixed maturity securities		1,082.1			13,556.5			4,608.6			19,247.2
Equity securities		1.4			15.2			9.9			26.5
Total securities available-for-sale		1,083.5			13,571.7			4,618.5			19,273.7
Mortgage loans held for sale1		—			—			124.5			124.5
Short-term investments		36.2			2,744.7			—			2,780.9
Total investments		1,119.7			16,316.4			4,743.0			22,179.1
Cash		36.7			—			—			36.7
Derivative assets2		—			708.5			597.6			1,306.1
Separate account assets3.5		9,530.3			35,270.0			2,136.6			46,936.9
Total assets	$	10,686.7		$	52,294.9		$	7,477.2		$	70,458.8
Liabilities
Future policy benefits and claims4	$	—		$	—		$	(1,739.7	)	$	(1,739.7	)
Derivative liabilities2		(6.0	)		(385.9	)		(4.2	)		(396.1	)
Total liabilities	$	(6.0	)	$	(385.9	)	$	(1,743.9	)	$	(2,135.8	)

1   Carried at fair value as elected under SFAS 159.  

2   Comprised of interest rate swaps, cross-currency interest rate swaps, credit default swaps, other non-hedging instruments, equity option contracts and interest rate futures contracts.  

3   Comprised of public, privately registered and non-registered mutual funds and investments in securities.  

4   Related to embedded derivatives associated with living benefit contracts. The Company’s guaranteed minimum accumulation benefits (GMABs), guaranteed lifetime withdrawal benefits (GLWBs) and hybrid GMABs/GLWBs are considered embedded derivatives under current accounting guidance, resulting in the related liabilities being separated from the host insurance product and recognized at fair value, with changes in fair value reported in earnings. This balance also includes embedded derivatives associated with fixed equity-indexed annuities (EIA) that provide for interest earnings that are linked to the performance of specified equity market indices.  

5   The value of separate account liabilities is set to equal the fair value of separate account assets  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes financial instruments for which the Company used significant unobservable inputs (Level 3) to determine fair value measurements for the year ended December 31, 2008:

				Net investment gains (losses)																	Change in unrealized gains (losses) in earnings due to assets still held
(in millions)	Balance as of December 31, 2007			In earnings (realized and unrealized)1			In OCI (unrealized)2			Purchases, issuances, sales and settlements			Transfers in to Level 3		Transfers out of Level 3			Balance as of December 31, 2008
Assets
Investments:
Securities available-for-sale3 :
Fixed maturity securities
Corporate securities	$	1,429.5		$	(179.4	)	$	(230.7	)	$	(360.3	)	$	816.6	$	(254.9	)	$	1,220.8		$	—
Mortgage-backed securities		176.6			(283.4	)		(556.9	)		(139.8	)		3,029.4		(6.3	)		2,219.6			—
Asset-backed securities		754.4			(382.4	)		(539.0	)		11.3			1,469.8		(145.9	)		1,168.2			—
Total fixed maturity securities		2,360.5			(845.2	)		(1,326.6	)		(488.8	)		5,315.8		(407.1	)		4,608.6			—
Equity securities		1.4			(54.9	)		(5.7	)		28.7			40.4		—			9.9			—
Total securities available-for-sale		2,361.9			(900.1	)		(1,332.3	)		(460.1	)		5,356.2		(407.1	)		4,618.5			—
Mortgage loans held for sale		86.1			(49.3	)		—			87.7			—		—			124.5			(49.3	)
Short-term investments		371.9			—			—			—			—		(371.9	)		—			—
Total investments		2,819.9			(949.4	)		(1,332.3	)		(372.4	)		5,356.2		(779.0	)		4,743.0			(49.3	)
Derivative assets		166.6			405.4			4.4			21.2			—		—			597.6			394.0
Separate account assets4.6		2,258.3			310.1			—			509.4			16.8		(958.0	)		2,136.6			333.9
Total assets	$	5,244.8		$	(233.9	)	$	(1,327.9	)	$	158.2		$	5,373.0	$	(1,737.0	)	$	7,477.2		$	678.6
Liabilities
Future policy benefits and claims5	$	(128.9	)	$	(1,602.1	)	$	—		$	(8.7	)	$	—	$	—		$	(1,739.7	)	$	1,602.1
Derivative liabilities		(16.3	)		3.9			—			8.2			—		—			(4.2	)		(12.0	)
Total liabilities	$	(145.2	)	$	(1,598.2	)	$	—		$	(0.5	)	$	—	$	—		$	(1,743.9	)	$	1,590.1

1   Includes gains and losses on sales of financial instruments, changes in market value of certain instruments and other-than-temporary impairments.  

2   Includes changes in market value of certain instruments.  

3   Includes non-investment grade collateralized mortgage obligations, MBSs and ABSs, ABS trust preferred notes, certain counterparty or internally priced securities, and securities that are at or near default based on designations assigned by the National Association of Insurance Commissioners (NAIC) (see Note 5 for a discussion of NAIC Designations). Equity securities represent holdings in non-registered mutual funds with significant unobservable inputs.  

4   Comprised of non-registered mutual funds with significant unobservable and/or liquidity restrictions. The net unrealized investment loss on these non-registered mutual funds is attributable to contractholders and, therefore, is not included in the Company’s earnings.  

5   Relates to GMAB, GMWB and EIA embedded derivatives associated with contracts with living benefit riders. Related derivatives are internally valued. The valuation of guaranteed minimum benefit embedded derivatives is based on capital market and actuarial risk assumptions, including risk margin considerations reflecting policyholder behavior. The Company uses observable inputs, such as published swap rates, in its capital market assumptions. Actuarial assumptions, including lapse behavior and mortality rates, are based on actual experience.  

6   The value of separate account liabilities is set to equal the fair value of separate account assets  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Transfers

The Company will review its fair value hierarchy classifications quarterly. Changes in observability of significant valuation inputs identified during these reviews may trigger reclassification of fair value hierarchy levels of financial assets and liabilities. These reclassifications will be reported as transfers in/out of Level 3 in the beginning of the period in which the change occurs. During 2008, certain of the Company’s investments in corporate securities, MBSs and ABSs were considered to be in inactive markets, due to concerns in the securities markets and resulting lack of liquidity. As a result, there have been significant changes in certain inputs which led to transfers into Level 3. During 2008, additional observable inputs were obtained on assets previously considered Level 3, which led to transfers out of that category.

Fair Value on a Nonrecurring Basis

The Company did not have any material assets or liabilities reported at fair value on a nonrecurring basis required to be disclosed under SFAS 157.

Financial Instruments Not Carried at Fair Value

SFAS No. 107, Disclosures about Fair Value of Financial Instruments (SFAS 107) requires additional disclosures of fair value information of financial instruments. The following include disclosures for the other financial instruments not carried at fair value and not included in the above SFAS 157 disclosure.

In estimating fair value for its SFAS 107 disclosures, the Company used the following methods and assumptions:

Mortgage loans on real estate, net: The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses based on interest rates currently being offered for similar loans to borrowers with similar credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. Estimated fair value is based on the present value of expected future cash flows discounted at the loan’s effective market interest rate. In the current year, mortgage loans held for sale are included in the above SFAS 157 disclosure, as the Company elected to carry these assets at fair value under SFAS 159 (effective January 1, 2008).

Policy loans: The carrying amount reported in the consolidated balance sheets approximates fair value.

Investment contracts: The fair values of the Company’s liabilities under investment type contracts are based on one of two methods. For investment contracts without defined maturities, fair value is the amount payable on demand, net of certain surrender charges. For investment contracts with known or determined maturities, fair value is estimated using discounted cash flow analysis. Interest rates used in this analysis are similar to currently offered contracts with maturities consistent with those remaining for the contracts being valued.

Short-term debt: The carrying amount reported in the consolidated balance sheets approximates fair value.

Long-term debt: The fair values for senior notes are based on quoted market prices. The fair values of the junior subordinated debentures issued to a related party are based on quoted market prices of the capital securities of Nationwide Financial Services Capital Trust I (Trust I), which approximate the fair value of this obligation.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes the carrying values and estimated fair values of financial instruments subject to disclosure requirements as of December 31:

	2008						2007
(in millions)	Carrying value			Estimated fair value			Carrying value			Estimated fair value
Assets
Investments:
Mortgage loans on real estate, net	$	7,065.4		$	6,335.3		$	7,615.4		$	7,659.9
Policy loans		767.4			767.4			687.9			687.9
Liabilities
Investment contracts		(24,978.2	)		(18,905.4	)		(24,671.0	)		(23,084.7	)
Short-term debt		(249.7	)		(249.7	)		(285.3	)		(285.3	)
Long-term debt, payable to NFS		(700.0	)		(568.7	)		(700.0	)		(751.3	)

(5) Derivative Financial Instruments  

Qualitative Disclosure

Interest Rate Risk Management

The Company periodically purchases fixed rate investments to back variable rate liabilities. As a result, the Company can be exposed to interest rate risk due to the mismatch between variable rate liabilities and fixed rate assets. In an effort to mitigate the risk from this mismatch, the Company enters into various types of derivative instruments, with fluctuations in the fair values of the derivatives offsetting changes in the fair values of the investments resulting from changes in interest rates. The Company principally uses pay fixed/receive variable interest rate swaps to manage this risk.

Under these interest rate swaps, the Company receives variable interest rate payments and makes fixed rate payments. The fixed interest paid on the swap offsets the fixed interest received on the investment, resulting in the Company receiving the variable interest payments on the swap, generally 3-month U.S. London Interbank Offered Rate (LIBOR), and the credit spread on the investment. The net receipt of a variable rate will then more closely match the variable rate paid on the liability.

As a result of entering into fixed rate commercial mortgage loan and private placement commitments, the Company is exposed to changes in the fair value of such commitments due to changes in interest rates during the commitment period prior to funding of the loans. In an effort to manage this risk, the Company enters into short U.S. Treasury futures and/or pay fixed interest rate swaps during the commitment period. With short U.S. Treasury futures or pay fixed interest rate swaps, if interest rates rise/fall, the gains/losses on the futures will offset the change in fair value of the commitment attributable to the change in interest rates.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company periodically purchases variable rate investments such as commercial mortgage loans and corporate bonds. As a result, the Company can be exposed to variability in cash flows and investment income due to changes in interest rates. Such variability poses risks to the Company when the assets are funded with fixed rate liabilities. In an effort to manage this risk, the Company may enter into receive fixed/pay variable interest rate swaps. In using these interest rate swaps, the Company receives fixed interest rate payments and makes variable rate payments. The variable interest paid on the swap offsets the variable interest received on the investment, resulting in the Company receiving the fixed interest payments on the swap and the credit spread on the investment. The net receipt of a fixed rate will then more closely match the fixed rate paid on the liability.

The Company manages interest rate risk at the segment level. Different segments may simultaneously hedge interest rate risks associated with owning fixed and variable rate investments considering the risk relevant to a particular segment.

Foreign Currency Risk Management

In conjunction with the Company’s MTN program, the Company periodically issues both fixed and variable rate liabilities denominated in foreign currencies. As a result, the Company is exposed to changes in the fair value of liabilities due to changes in foreign currency exchange rates and related interest rates. In an effort to manage these risks, the Company enters into cross-currency interest rate swaps.

The Company is exposed to changes in the fair value of fixed rate investments denominated in a foreign currency due to changes in foreign currency exchange rates and related interest rates. In an effort to manage this risk, the Company uses cross-currency interest rate hedges to swap these asset characteristics to variable U.S. dollar rate instruments. Cross-currency interest rate swaps on assets are structured to pay a fixed rate, in a foreign currency, and receive a variable U.S. dollar rate, generally 3-month U.S. LIBOR. These derivative instruments are designated as a fair value hedge of a fixed rate foreign denominated asset.

Cross-currency interest rate swaps on variable rate investments are structured to pay a variable rate, in a foreign currency, and receive a fixed U.S. dollar rate. The terms of the foreign currency paid on the swap will exactly match the terms of the foreign currency received on the asset, thus eliminating currency risk. These derivative instruments are designated as a cash flow hedge.

Equity Market Risk Management

Asset fees calculated as a percentage of separate account assets are a significant source of revenue to the Company. As of December 31, 2008, approximately 71% of separate account assets were invested in equity mutual funds (approximately 82% as of December 31, 2007). Gains and losses in the equity markets result in corresponding increases and decreases in the Company’s separate account assets and asset fee revenue. In addition, a decrease in separate account assets may decrease the Company’s expectations of future profit margins due to a decrease in asset fee revenue and/or an increase in guaranteed contract claims, which also may require the Company to accelerate amortization of DAC.

The Company’s long-term assumption for net separate account returns is 7% annual growth. If equity markets were unchanged throughout a given year, the Company estimates that its net earnings per diluted share, calculated using current weighted average diluted shares outstanding, would be approximately $0.05 to $0.10 less than if the Company’s long-term assumption for net separate account returns were realized. This analysis assumes no other factors change and that an unlocking of DAC assumptions would not be required. However, as it does each quarter, the Company would evaluate its DAC balance and underlying assumptions to determine the need for unlocking. The Company can provide no assurance that the experience of flat equity market returns would not result in changes to other factors affecting profitability, including the possibility of unlocking of DAC assumptions.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Many of the Company’s individual variable annuity contracts offer GMDB features. A GMDB generally provides a benefit if the annuitant dies and the contract value is less than a specified amount, which may be based on premiums paid less amounts withdrawn or contract value on a specified anniversary date. A decline in the stock market causing the contract value to fall below this specified amount, which varies from contract to contract based on the date the contract was entered into as well as the GMDB feature elected, will increase the net amount at risk, which is the GMDB in excess of the contract value. This could result in additional GMDB claims.

In an effort to mitigate this risk, the Company implemented a GMDB economic hedging program for certain new and existing business. Prior to implementation of the GMDB hedging program in 2000, the Company managed this risk primarily by entering into reinsurance arrangements. The GMDB economic hedging program is designed to offset changes in the economic value of the designated GMDB obligation. Currently the program shorts S&P 500 Index futures, which provides an offset to changes in the value of the designated obligation. The futures are not designated as hedges and, therefore, hedge accounting is not applied. The Company’s economic and accounting hedges are not perfectly offset. Therefore, the economic hedging activity is likely to lead to earnings volatility. As of December 31, 2008 and 2007, the Company’s net amount at risk was $8,718.7 million and $519.9 million before reinsurance, respectively, and $7,329.9 million and $317.2 million net of reinsurance, respectively. As of December 31, 2008 and 2007, the Company’s reserve for GMDB claims was $247.9 million and $38.9 million, respectively.

The Company also offers certain variable annuity products with guaranteed minimum accumulation benefit (GMAB), guaranteed lifetime withdrawal benefit (GLWB) and hybrid GMAB/GLWB riders (collectively referred to as living benefits). A GMAB provides the contractholder with a guaranteed return of premium, adjusted proportionately for withdrawals, after a specified time period (5, 7 or 10 years) selected by the contractholder at the time of issuance of a variable annuity contract. In some cases, the contractholder also has the option, after a specified time, to drop the rider and continue the variable annuity contract without the GMAB. The design of the GMAB rider limits the risk to the Company in a variety of ways including asset allocation requirements, which serve to reduce the Company’s potential exposure to underlying fund performance risks. Specifically, the terms in the GMAB rider limit policyholder asset allocation by either (1) requiring partial allocation of assets to a guaranteed term option (a fixed rate investment option) and excluding certain funds that are highly volatile or difficult to hedge or (2) requiring all assets be allocated to one of the approved asset allocation funds or models defined by the Company.

Beginning in March 2005, the Company began offering a hybrid GMAB/GLWB through its Capital Preservation Plus Lifetime Income (CPPLI) contract rider. This living benefit combines a GMAB feature in its first 5-10 years with a lifetime withdrawal benefit election at the end of the GMAB feature. Upon maturity of the GMAB, the contractholder can elect the lifetime withdrawal benefit, which would continue for the duration of the insured’s life; elect a new CPPLI rider; or drop the rider completely and continue the variable annuity contract without any rider. If the lifetime withdrawal benefit is elected and the insured’s contract value is exhausted through such withdrawals and market conditions, the Company will continue to fund future withdrawals at a pre-defined level until the insured’s death. In some cases, the contractholder has the right to drop the GLWB portion of this rider or periodically reset the guaranteed withdrawal basis to a higher level. This benefit requires a minimum allocation to guaranteed term options or adherence to limitations required by an approved asset allocation strategy as previously described above.

In March 2006, the Company added Lifetime Income (L.inc), a stand-alone GLWB, to complement CPPLI in its product offerings. This rider is very similar to the hybrid benefit discussed above in that L.inc and CPPLI both have guaranteed withdrawal rates that increase based on the age at which the contractholder begins taking income. The withdrawal rates are applied to a benefit base to determine the guaranteed lifetime income amount available to a contractholder. The benefit base is equal to the variable annuity premium at contract issuance and may increase as a result of a ratchet feature that is driven by account performance and a roll-up feature that is driven by policy duration. Generally, the longer the contractholder waits before commencing withdrawals, the greater the guaranteed lifetime income. One key difference between L.inc and CPPLI is that the charge associated with L.inc is assessed against the benefit base. This is a risk mitigation feature as it alleviates much of the uncertainty around account performance and customer withdrawal patterns, both of which can lead to lower than expected revenue streams if the charge were assessed on account value. In June 2007, the Company added a feature to L.inc to allow for a lump settlement in lieu of lifetime withdrawals in certain situations.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company’s living benefit riders represent an embedded derivative in a variable annuity contract that is required to be separated from, and valued apart from, the host variable annuity contract. The embedded derivatives are carried at fair value. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of net realized investment gains and losses. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions. Projections of cash flows inherent in the valuation of the embedded derivative incorporate numerous assumptions including, but not limited to, expectations of contractholder persistency, contractholder withdrawal patterns, risk neutral market returns, correlations of market returns and market return volatility. As of December 31, 2008 and 2007, the net balance of the embedded derivatives for living benefits was a liability of $1.70 billion and $91.9 million, respectively. The Company does not expect any meaningful level of claims under the living benefit features for several years and believes any such claims would be mitigated by its economic hedging program.

Similar to the Company’s economic hedging for GMDBs, the living benefits features are also being economically hedged. The primary risks being hedged are the exposures associated with declining equity market returns and downward interest rate movements. The Company employs a variety of instruments to mitigate this exposure including S&P 500 Index futures, U.S. Treasury futures, interest rate swaps and long-dated over-the-counter put options. The positions used in the economic hedging program are not designated as hedges and, therefore, hedge accounting is not applied. The living benefits hedging program is designed to offset changes in the economic value of the living benefits obligation to contractholders. Changes in the fair value of the embedded derivatives are likely to create volatility in earnings. The hedging activity associated with changes in the economic value of the living benefits obligations will likely mitigate a portion of this earnings volatility.

Other Non-Hedging Derivatives

The Company periodically enters into basis swaps (receive one variable rate, pay another variable rate) to better match the cash flows received from the specific variable-rate investments with the variable rate paid on a group of liabilities. While the pay-side terms of the basis swap will be consistent with the terms of the asset, the Company is not able to match the receive-side terms of the derivative to a specific liability. Therefore, basis swaps do not receive hedge accounting treatment.

The Company sells credit default protection on selected debt instruments and combines the credit default swap with selected assets the Company owns to replicate a higher yielding bond. These selected assets may have sufficient duration for the related liability, but do not earn a sufficient credit spread. The combined credit default swap and investments provide cash flows with the duration and credit spread targeted by the Company. The credit default swaps do not qualify for hedge accounting treatment.

The Company also has purchased credit default protection on selected debt instruments exposed to short-term credit concerns, or because the combination of the corporate bond and purchased default protection provides sufficient spread and duration targeted by the Company. The purchased credit default protection is not designated for hedge accounting treatment.

Quantitative Disclosure

Fair Value Hedges

During the years ended December 31, 2008, 2007 and 2006, a net gain of $8.3 million, a net loss of $2.4 million and a net gain of $2.9 million, respectively, were recognized in net realized investment gains and losses related to the ineffective portion of fair value hedging relationships. There were no gains or losses attributable to the portion of the derivative instruments’ changes in fair value excluded from the assessment of hedge effectiveness. There were also no gains or losses recognized in earnings as a result of hedged firm commitments no longer qualifying as fair value hedges.

Cash Flow Hedges

For the years ended December 31, 2008, 2007 and 2006, the ineffective portion of cash flow hedges was a net gain of $3.1 million, a net loss of $1.4 million and a net loss of $1.5 million, respectively. There were no net gains or losses attributable to the portion of the derivative instruments’ changes in fair value excluded from the assessment of hedge effectiveness.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In general, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows associated with forecasted transactions, other than those relating to variable interest on existing financial instruments, is twelve months or less. However, in 2003 the Company entered into a hedge of a forecasted purchase of shares of a mutual fund tied to the S&P 500 Index where delivery of the shares will occur in 2033.

During 2008, the Company did not discontinue any cash flow hedges because the original forecasted transaction was no longer probable. Additionally, no amounts were reclassified from AOCI into earnings due to the probability that a forecasted transaction would not occur.

Other Derivative Instruments, Including Embedded Derivatives

Net realized investment gains and losses for the years ended December 31, 2008, 2007 and 2006 included a net gain of $58.2 million, a net loss of $12.4 million and a net loss of $0.5 million, respectively, related to other derivative instruments, including embedded derivatives, not designated in hedging relationships. In addition, variable annuity contracts resulted in net losses of $442.5 million, $51.8 million, $11.4 million for the years ended December 31, 2008, 2007, and 2006, respectively, related to other derivative instruments, including embedded derivatives, not designated in hedging relationships.

For the years ended December 31, 2008, 2007 and 2006, net losses of $3.6 million, $0.5 million and $10.6 million, respectively, were recorded in net realized investment gains and losses reflecting the change in fair value of cross-currency interest rate swaps hedging variable rate MTNs denominated in foreign currencies. No additional net gains were recorded to reflect the change in spot rates of foreign currency denominated obligations during the year ended December 31, 2008 compared to none for the year ended December 31, 2007, and a net gain of $14.1 million for the year ended December 31, 2006.

The following table summarizes the notional amount of derivative financial instruments outstanding as of December 31:

(in millions)	2008		2007
Interest rate swaps:
Pay fixed/receive variable rate swaps hedging investments	$	1,218.4	$	1,692.9
Pay variable/receive fixed rate swaps hedging investments		924.5		21.0
Pay variable/receive variable rate swaps hedging liabilities		200.0		—
Pay fixed/receive variable rate swaps hedging liabilities		1,993.7		1,120.7
Pay variable/receive fixed rate swaps hedging liabilities		3,856.3		343.1
Cross-currency interest rate swaps:
Hedging foreign currency denominated investments		343.7		375.5
Hedging foreign currency denominated liabilities		463.4		1,144.1
Credit default swaps		271.2		300.3
Other non-hedging instruments		431.0		518.1
Equity option/futures contracts		3,675.3		2,361.8
Interest rate futures contracts		281.1		371.3
Total	$	13,658.6	$	8,248.8

The notional value is the amount upon which exchanges of interest are based. Exposure to a counterparty arises if the net expected cash flows are positive, as calculated based on forward interest rate curves and notional contract values.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Credit Derivatives

The Company enters into two distinct types of credit derivative contracts (or credit default swaps) which allows the Company to either sell or buy credit protection on a specific creditor or credit index. When the Company sells credit protection against a specific creditor or credit index to a counterparty, it receives periodic premium payments similar to the risk premium received on an equivalent maturity bond from the same creditor. In return, the Company agrees to provide for losses if a credit event occurs during the lifetime of the contract, by buying a pre-determined cash bond from the counterparty at face value. In such a contract, a credit event will be defined in the trade settlement documentation and may include, but not be limited to, creditor bankruptcy or restructuring. There are no recourse provisions associated with these contracts.

The Company had exposure to credit protection contracts for the years ended December 31, 2008, 2007 and 2006 and experienced losses of $18.8 million in 2008 and no losses in 2007 or 2006, on such contracts. The following table presents the Company’s outstanding exposure to credit protection contracts, all of which are related to corporate debt instruments, as of December 31, 2008 by contract maturity and industry exposure:

	Less than or equal to one year				One to three years					Three to five years					Total
(in millions)	Maximum potential risk		Estimated fair value		Maximum potential risk		Estimated fair value			Maximum potential risk		Estimated fair value			Maximum potential risk		Estimated fair value
Single sector exposure:
Consumer goods	$	—	$	—	$	6.0	$	(0.8	)	$	—	$	—		$	6.0	$	(0.8	)
Financial		—		—		35.0		(5.8	)		13.0		(0.5	)		48.0		(6.3	)
Oil & gas pipelines		10.0		—		15.0		(0.8	)		—		—			25.0		(0.8	)
Services		—		—		—		—			35.0		(3.0	)		35.0		(3.0	)
Utilities		4.5		—		—		—			—		—			4.5		—
Total single sector exposure		14.5		—		56.0		(7.4	)		48.0		(3.5	)		118.5		(10.9	)
Index exposure:
Corporate bonds		—		—		—		—			110.9		(0.3	)		110.9		(0.3	)
Total index exposure		—		—		—		—			110.9		(0.3	)		110.9		(0.3	)
Total	$	14.5	$	—	$	56.0	$	(7.4	)	$	158.9	$	(3.8	)	$	229.4	$	(11.2	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(6) Investments  

The following table summarizes the amortized cost, gross unrealized gains and losses, and estimated fair values of securities available-for-sale as of the dates indicated:

(in millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
December 31, 2008:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	77.3	$	20.1	$	—	$	97.4
U. S. Government agencies1		384.6		89.3		—		473.9
Obligations of states and political subdivisions		223.0		1.5		7.4		217.1
Debt securities issued by foreign governments		33.9		5.0		—		38.9
Corporate securities
Public		8,042.9		85.4		1,040.3		7,088.0
Private		4,589.0		49.5		370.0		4,268.5
Mortgage-backed securities		5,248.2		68.2		639.6		4,676.8
Asset-backed securities		3,222.0		19.7		855.1		2,386.6
Total fixed maturity securities		21,820.9		338.7		2,912.4		19,247.2
Equity securities		30.9		0.7		5.1		26.5
Total securities available-for-sale	$	21,851.8	$	339.4	$	2,917.5	$	19,273.7
December 31, 2007:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	110.8	$	14.3	$	0.4	$	124.7
U. S. Government agencies		406.1		61.2		—		467.3
Obligations of states and political subdivisions		245.3		1.6		2.7		244.2
Debt securities issued by foreign governments		40.0		2.5		0.1		42.4
Corporate securities
Public		8,253.8		133.4		161.6		8,225.6
Private		5,474.2		131.7		57.6		5,548.3
Mortgage-backed securities		5,855.9		31.3		98.4		5,788.8
Asset-backed securities		3,635.1		31.2		174.2		3,492.1
Total fixed maturity securities		24,021.2		407.2		495.0		23,933.4
Equity securities		69.6		4.8		1.5		72.9
Total securities available-for-sale	$	24,090.8	$	412.0	$	496.5	$	24,006.3

1   Includes $134.7 million of securities explicitly backed by the full faith and credit of the U.S. Government.  

The market value of the Company’s general account investments may fluctuate significantly in response to changes in interest rates, investment quality ratings and credit spreads. While the Company has the ability and intent to hold available-for-sale debt securities in unrealized loss positions that are not other-than-temporarily impaired until recovery, it may experience realized investment losses to the extent its liquidity needs require the disposition of general account fixed maturity securities in unfavorable interest rate, liquidity or credit spread environments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Debt securities accounted for under EITF 99-20 may experience other-than-temporary impairment in future periods in the event an adverse change in cash flows is anticipated or probable. Furthermore, equity securities may experience other-than-temporary impairment in the future based on the prospects for recovery in value in a reasonable period. In addition, debt securities may experience other-than-temporary impairment in the future based on the probability that that Company may not be able to receive all contractual payments when due.

The Company held securities issued by institutions in the financial sector with equity-type features, classified as fixed maturity, with estimated fair values of $634.2 million and $674.4 million, and gross unrealized losses of $366.6 million and $28.3 million, as of December 31, 2008 and December 31, 2007, respectively. Of these securities in an unrealized loss position as of December 31, 2008, $104.7 million, or 18%, were in an unrealized loss position for more than one year compared to $149.3 million, or 39%, as of December 31, 2007. As of December 31, 2008, the Company evaluates such securities for other-than-temporary impairment using the criteria of either a debt or an equity security depending on the facts and circumstances of the individual issuer.

The table below summarizes the amortized cost and estimated fair value of fixed maturity securities available-for-sale, by maturity, as of December 31, 2008. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(in millions)	Amortized cost		Estimated fair value
Fixed maturity securities available-for-sale:
Due in one year or less	$	1,086.7	$	1,081.9
Due after one year through five years		6,697.6		6,173.1
Due after five years through ten years		2,704.5		2,537.5
Due after ten years		2,861.9		2,391.4
Subtotal		13,350.7		12,183.9
Mortgage-backed securities		5,248.2		4,676.7
Asset-backed securities		3,222.0		2,386.6
Total	$	21,820.9	$	19,247.2

The following table presents the components of net unrealized losses on securities available-for-sale as of December 31:

(in millions)	2008			2007
Net unrealized losses, before adjustments and taxes	$	(2,578.1	)	$	(84.5	)
Change in fair value attributable to fixed maturity securities designated in fair value hedging relationships		(57.8	)		—
Total net unrealized losses, before adjustments and taxes		(2,635.9	)		(84.5	)
Adjustment to deferred policy acquisition costs		615.9			87.1
Adjustment to future policy benefits and claims		43.8			(77.7	)
Deferred federal income tax benefit		691.7			26.1
Net unrealized losses	$	(1,284.5	)	$	(49.0	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table presents an analysis of the net increase in net unrealized (losses) gains on securities available-for-sale before adjustments and taxes for the years ended December 31:

(in millions)	2008			2007			2006
Fixed maturity securities	$	(2,485.9	)	$	(166.0	)	$	(161.0	)
Equity securities		(7.7	)		(2.6	)		(1.1	)
Net increase	$	(2,493.6	)	$	(168.6	)	$	(162.1	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

For securities available-for-sale as of the dates indicated, the following table summarizes the Company’s gross unrealized losses based on the amount of time each type of security has been in an unrealized loss position:

	Less than or equal to one year				More than one year				Total
(in millions)	Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses
December 31, 2008:
Fixed maturity securities:
Obligations of states and political subdivisions	$	94.9	$	3.5	$	29.3	$	3.9	$	124.2	$	7.4
Corporate securities
Public		3,678.8		700.8		1,233.6		339.5		4,912.4		1,040.3
Private		2,108.1		262.1		838.6		107.9		2,946.7		370.0
Mortgage-backed securities		592.1		149.1		1,694.3		490.6		2,286.4		639.7
Asset-backed securities		1,026.9		248.6		1,171.4		606.4		2,198.3		855.0
Total fixed maturity securities		7,500.8		1,364.1		4,967.2		1,548.3		12,468.0		2,912.4
Equity securities		11.2		4.9		3.4		0.2		14.6		5.1
Total	$	7,512.0	$	1,369.0	$	4,970.6	$	1,548.5	$	12,482.6	$	2,917.5
% of total gross unrealized losses				47%				53%
December 31, 2007:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	16.4	$	0.4	$	2.6	$	—	$	19.0	$	0.4
U.S. Government agencies		—		—		13.9		—		13.9		—
Obligations of states and political subdivisions		15.4		0.1		149.6		2.6		165.0		2.7
Debt securities issued by foreign governments		11.5		0.1		—		—		11.5		0.1
Corporate securities
Public		2,354.0		95.2		1,966.8		66.4		4,320.8		161.6
Private		680.6		17.1		1,814.7		40.5		2,495.3		57.6
Mortgage-backed securities		1,227.8		23.7		2,466.4		74.7		3,694.2		98.4
Asset-backed securities		1,453.8		127.1		1,078.1		47.1		2,531.9		174.2
Total fixed maturity securities		5,759.5		263.7		7,492.1		231.3		13,251.6		495.0
Equity securities		17.1		1.5		0.1		—		17.2		1.5
Total	$	5,776.6	$	265.2	$	7,492.2	$	231.3	$	13,268.8	$	496.5
% of total gross unrealized losses				53%				47%

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company has fixed maturity securities that have been in an unrealized loss position for more than one year that are not other-than-temporarily impaired. The Company reviews assets in unrealized loss positions and evaluates whether or not the losses are other-than-temporary. Many criteria are considered during this process including, but not limited to, specific credit issues and financial prospects related to the issuer, the quality of the underlying collateral, management’s intent and ability to hold the security until recovery, current economic conditions that could affect the creditworthiness of the issuer in the future, the current fair value as compared to the amortized cost of the security, the extent and duration of the unrealized loss, and the rating of the affected security.

As of December 31, 2008, fixed maturity securities that have been in an unrealized loss position for more than one year totaled $1.55 billion, or 53% of the Company’s total unrealized losses on fixed maturity securities. Of this total, $1.31 billion, or 85%, were classified as investment grade securities, as defined by the National Association of Insurance Commissioners (NAIC).

As of December 31, 2008, 1,913, or 65%, of the Company’s investments in fixed maturity securities were in an unrealized loss position, in comparison to 1,725, or 53%, as of December 31, 2007.

The majority of the increases in the Company’s unrealized losses from December 31, 2007 to 2008 were attributable to corporate securities, MBSs and ABSs. These increased unrealized loss positions primarily were driven by the combined impact of volatility in investment quality ratings and credit spreads, illiquid markets, and interest rate movements. In particular, exposure to the financial sector, including through structured securities such as trust preferred, collateralized loan obligations and collateralized debt obligations, have been significantly affected by negative circumstances in those sectors. It is reasonably possible that further declines in estimated fair values of such investments, or changes in assumptions or estimates of anticipated recoveries and/or cash flows, may cause further other-than-temporary impairments in the near term, which could be significant.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

For fixed maturity securities available-for-sale, the following tables summarize as of the dates indicated the Company’s gross unrealized loss position categorized as investment grade vs. non-investment grade, as defined by the NAIC, for the period of time indicated, and based on the ratio of estimated fair value to amortized cost (in millions):

	Period of time for which unrealized loss has existed as of December 31, 2008
	Investment Grade						Non-Investment Grade						Total
Ratio of estimated fair value to amortized cost	Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total
Corporate securities - public and private
99.9% - 95.0%	$	50.0	$	16.4	$	66.4	$	1.7	$	0.1	$	1.8	$	51.7	$	16.5	$	68.2
94.9% - 90.0%		94.0		28.3		122.3		5.2		6.2		11.4		99.2		34.5		133.7
89.9% - 85.0%		82.8		32.2		115.0		7.9		7.3		15.2		90.7		39.5		130.2
84.9% - 80.0%		94.1		27.2		121.3		14.5		7.1		21.6		108.6		34.3		142.9
Below 80.0%		453.1		150.5		603.6		159.6		172.1		331.7		612.7		322.6		935.3
Total		774.0		254.6		1,028.6		188.9		192.8		381.7		962.9		447.4		1,410.3
Mortgage-backed securities
99.9% - 95.0%		1.1		2.9		4.0		—		—		—		1.1		2.9		4.0
94.9% - 90.0%		5.7		14.4		20.1		0.1		—		0.1		5.8		14.4		20.2
89.9% - 85.0%		13.8		23.9		37.7		5.7		—		5.7		19.5		23.9		43.4
84.9% - 80.0%		14.0		40.0		54.0		17.1		10.0		27.1		31.1		50.0		81.1
Below 80.0%		91.5		377.4		468.9		—		22.0		22.0		91.5		399.4		490.9
Total		126.1		458.6		584.7		22.9		32.0		54.9		149.0		490.6		639.6
Asset-backed securities
99.9% - 95.0%		4.9		2.0		6.9		0.4		—		0.4		5.3		2.0		7.3
94.9% - 90.0%		15.5		18.6		34.1		1.0		—		1.0		16.5		18.6		35.1
89.9% - 85.0%		23.3		27.5		50.8		0.3		0.8		1.1		23.6		28.3		51.9
84.9% - 80.0%		15.3		33.7		49.0		0.1		1.0		1.1		15.4		34.7		50.1
Below 80.0%		171.0		513.0		684.0		16.9		9.8		26.7		187.9		522.8		710.7
Total		230.0		594.8		824.8		18.7		11.6		30.3		248.7		606.4		855.1
Other fixed maturity securities1
99.9% - 95.0%		1.3		—		1.3		—		—		—		1.3		—		1.3
94.9% - 90.0%		2.2		—		2.2		—		—		—		2.2		—		2.2
89.9% - 85.0%		—		3.9		3.9		—		—		—		—		3.9		3.9
84.9% - 80.0%		—		—		—		—		—		—		—		—		—
Below 80.0%		—		—		—		—		—		—		—		—		—
Total		3.5		3.9		7.4		—		—		—		3.5		3.9		7.4
Total fixed maturity securities available-for-sale
99.9% - 95.0%		57.3		21.3		78.6		2.1		0.1		2.2		59.4		21.4		80.8
94.9% - 90.0%		117.4		61.3		178.7		6.3		6.2		12.5		123.7		67.5		191.2
89.9% - 85.0%		119.9		87.5		207.4		13.9		8.1		22.0		133.8		95.6		229.4
84.9% - 80.0%		123.4		100.9		224.3		31.7		18.1		49.8		155.1		119.0		274.1
Below 80.0%		715.6		1,040.9		1,756.5		176.5		203.9		380.4		892.1		1,244.8		2,136.9
Total	$	1,133.6	$	1,311.9	$	2,445.5	$	230.5	$	236.4	$	466.9	$	1,364.1	$	1,548.3	$	2,912.4
1        Includes U.S. Treasury securities, obligations of U.S. Government corporations, U.S. Government agency securities, obligations of state and political subdivisions, and debt issued by foreign governments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

	Period of time for which unrealized loss has existed as of December 31, 2007
	Investment Grade						Non-Investment Grade						Total
Ratio of estimated fair value to amortized cost	Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total
Corporate securities - public and private
99.9% - 95.0%	$	21.2	$	43.6	$	64.8	$	12.9	$	5.2	$	18.1	$	34.1	$	48.8	$	82.9
94.9% - 90.0%		18.0		30.3		48.3		13.3		4.5		17.8		31.3		34.8		66.1
89.9% - 85.0%		16.5		10.7		27.2		3.1		6.3		9.4		19.6		17.0		36.6
84.9% - 80.0%		2.1		0.4		2.5		3.0		0.2		3.2		5.1		0.6		5.7
Below 80.0%		7.5		—		7.5		14.7		5.7		20.4		22.2		5.7		27.9
Total		65.3		85.0		150.3		47.0		21.9		68.9		112.3		106.9		219.2
Mortgage-backed securities
99.9% - 95.0%		18.6		35.3		53.9		—		—		—		18.6		35.3		53.9
94.9% - 90.0%		5.1		39.4		44.5		—		—		—		5.1		39.4		44.5
89.9% - 85.0%		—		—		—		—		—		—		—		—		—
84.9% - 80.0%		—		—		—		—		—		—		—		—		—
Below 80.0%		—		—		—		—		—		—		—		—		—
Total		23.7		74.7		98.4		—		—		—		23.7		74.7		98.4
Asset-backed securities
99.9% - 95.0%		14.7		13.2		27.9		0.2		—		0.2		14.9		13.2		28.1
94.9% - 90.0%		26.9		13.7		40.6		—		—		—		26.9		13.7		40.6
89.9% - 85.0%		18.0		8.6		26.6		—		—		—		18.0		8.6		26.6
84.9% - 80.0%		14.2		5.8		20.0		—		—		—		14.2		5.8		20.0
Below 80.0%		53.0		5.8		58.8		0.1		—		0.1		53.1		5.8		58.9
Total		126.8		47.1		173.9		0.3		—		0.3		127.1		47.1		174.2
Other fixed maturity securities1
99.9% - 95.0%		0.6		1.4		2.0		—		—		—		0.6		1.4		2.0
94.9% - 90.0%		—		1.2		1.2		—		—		—		—		1.2		1.2
89.9% - 85.0%		—		—		—		—		—		—		—		—		—
84.9% - 80.0%		—		—		—		—		—		—		—		—		—
Below 80.0%		—		—		—		—		—		—		—		—		—
Total		0.6		2.6		3.2		—		—		—		0.6		2.6		3.2
Total fixed maturity securities available-for-sale
99.9% - 95.0%		55.1		93.5		148.6		13.1		5.2		18.3		68.2		98.7		166.9
94.9% - 90.0%		50.0		84.6		134.6		13.3		4.5		17.8		63.3		89.1		152.4
89.9% - 85.0%		34.5		19.3		53.8		3.1		6.3		9.4		37.6		25.6		63.2
84.9% - 80.0%		16.3		6.2		22.5		3.0		0.2		3.2		19.3		6.4		25.7
Below 80.0%		60.5		5.8		66.3		14.8		5.7		20.5		75.3		11.5		86.8
Total	$	216.4	$	209.4	$	425.8	$	47.3	$	21.9	$	69.2	$	263.7	$	231.3	$	495.0
1        Includes U.S. Treasury securities, obligations of U.S. Government corporations, U.S. Government agency securities, obligations of state and political subdivisions, and debt issued by foreign governments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

As of December 31, 2008, 27% of the Company’s investments in an unrealized loss position had ratios of estimated fair value to amortized cost of at least 80%. In addition, 84% of the Company’s investments in an unrealized loss position were classified as investment grade, as defined by the NAIC. Of the Company’s investments in unrealized loss positions classified as non-investment grade, 49% have been in an unrealized loss position for less than one year.

The NAIC assigns securities quality ratings and uniform valuations (called NAIC Designations), which are used by insurers when preparing their annual statements. For most securities, NAIC ratings are derived from ratings received from nationally recognized rating agencies. The NAIC also assigns ratings to securities that do not receive public ratings. The designations assigned by the NAIC range from class 1 (highest quality) to class 6 (lowest quality). Of the Company’s general account fixed maturity securities, 92% and 94% were in the two highest NAIC Designations as of December 31, 2008 and 2007, respectively.

The following table shows the equivalent ratings between the NAIC and nationally recognized rating agencies and summarizes the credit quality, as determined by NAIC Designation, of the Company’s general account fixed maturity securities portfolio as of December 31:

(in millions)		2008				2007
NAIC designation1	Rating agency equivalent designation2	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
1	Aaa/Aa/A	$	13,870.1	$	12,497.7	$	16,765.5	$	16,662.7
2	Baa		5,961.0		5,210.2		5,730.3		5,784.3
3	Ba		1,192.9		953.8		1,101.6		1,078.3
4	B		529.7		366.5		325.0		316.8
5	Caa and lower		166.9		128.9		60.2		52.7
6	In or near default		100.3		90.1		38.6		38.6
	Total	$	21,820.9	$	19,247.2	$	24,021.2	$	23,933.4
1        NAIC Designations are assigned at least annually. Some designations for securities shown have been assigned to securities not yet assigned an NAIC Designation in a manner approximating equivalent public rating categories. 2        Comparisons between NAIC and Moody’s designations are published by the NAIC. If no Moody’s rating is available, the Company assigns internal ratings corresponding to public ratings.

Recent conditions in the securities markets, including changes in investment quality ratings, liquidity, credit spreads and interest rates, have resulted in declines in the values of investment securities, including corporate debt securities, MBSs and ABSs. When evaluating whether these securities are other-than-temporarily impaired, the Company considers characteristics of the underlying collateral, such as delinquency and default rates, the quality of the underlying borrower, the type of collateral in the pool, the vintage year of the collateral, subordination levels within the structure of the collateral pool, expected future cash flows, and the Company’s ability and intent to hold the security to recovery. These and other factors also affect the estimated fair value of these securities.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company’s investments in MBSs and ABSs include securities that are supported by Alt-A and Sub-prime collateral. The Company considers Alt-A collateral to be mortgages whose underwriting standards do not qualify the mortgage for regular conforming or jumbo loan programs. Typical underwriting characteristics that cause a mortgage to fall into the Alt-A classification may include, but are not limited to, inadequate loan documentation of a borrower’s financial information, debt-to-income ratios above normal lending limits, loan-to-value ratios above normal lending limits that do not have primary mortgage insurance, a borrower who is a temporary resident, and loans securing non-conforming types of real estate. Alt-A mortgages are generally issued to borrowers having higher Fair Isaac Credit Organization (FICO) scores, and the lender typically issues a slightly higher interest rate for such mortgages. The Company considers Sub-prime collateral to be mortgages that are first-lien mortgage loans issued to Sub-prime borrowers, as demonstrated by recent delinquent rent or housing payments or substandard FICO scores. Second-lien mortgage loans are also considered Sub-prime. The amortized cost and estimated fair value of the Company’s investments in securities containing Alt-A collateral totaled $1,718.7 million and $1,335.8 million, respectively, and the amortized cost and estimated fair value of the Company’s investments in securities containing Sub-prime collateral totaled $612.7 million and $480.2 million, respectively. As of December 31, 2008, 75% and 84% of securities containing Alt-A and Sub-prime collateral, respectively, were rated AA or better. In addition, 68% and 76% of Alt-A and Sub-prime collateral, respectively, was originated in 2005 or earlier.

In addition, recent market activity has negatively impacted the Company’s investments in commercial mortgage-backed securities (CMBS). These investments in CMBS are generally characterized by securities that are collateralized by static, heterogeneous pools of mortgages on commercial real estate properties. Deals are generally diversified across property types, geography, borrowers, tenants, loan size, coupon and vintages. As of December 31, 2008, the amortized cost and estimated fair value of the Company’s investments in CMBS totaled $1.26 billion and $853.0 million, respectively, while the December 31, 2007 amortized cost was $1.10 billion and estimated fair value was $1.08 billion.

Proceeds from the sale of securities available-for-sale during 2008, 2007 and 2006 were $4.19 billion, $4.65 billion and $2.27 billion, respectively. During 2008, gross gains of $32.9 million ($70.0 million and $61.6 million in 2007 and 2006, respectively) and gross losses of $23.9 million ($70.2 million and $64.1 million in 2007 and 2006, respectively) were realized on those sales.

Real estate held for use was $9.8 million and $17.8 million as of December 31, 2008 and 2007, respectively. These assets are carried at cost less accumulated depreciation, which was $2.1 million and $3.6 million as of December 31, 2008 and 2007, respectively. The carrying value of real estate held for sale was $6.8 million as of December 31, 2008 (compared to no real estate held for sale as of December 31, 2007.)

The Company grants mainly commercial mortgage loans on real estate to customers throughout the U.S. As of December 31, 2008, the Company’s largest exposure to any single borrower, region and property type was 2%, 23% and 34%, respectively, of the Company’s general account mortgage loan portfolio, compared to 2%, 24% and 33%, respectively, as of December 31, 2007.

As of December 31, 2008 and 2007, the carrying value of commercial mortgage loans on real estate considered specifically impaired was $35.4 million and $7.4 million, respectively, for which a $13.6 million and $3.0 million valuation allowance had been established, respectively. No valuation allowance exists for collateral dependent commercial mortgage loans for which the fair value of the collateral is estimated to be greater than the carrying value.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes activity in the valuation allowance account for mortgage loans on real estate for the years ended December 31:

(in millions)	2008		2007			2006
Allowance, beginning of period	$	23.1	$	34.3		$	31.1
Net change in allowance		16.4		(11.2	)		3.2
Allowance, end of period	$	39.5	$	23.1		$	34.3

The Company has securitized commercial mortgage loans on real estate to third parties. The Company, as the transferor, has continuing involvement in these loans which consists of receiving servicing fees on loans which the Company has transferred.

The Company did not participate in any securitization arrangements during 2008. During 2008, the Company received $0.6 million in servicing fees related to financial assets where there is a continuing involvement from the securitization of commercial mortgage loans on real estate. During 2007, the Company received proceeds of $928.0 million from the securitization of commercial mortgage loans on real estate to third parties, experienced realized losses of $7.3 million on these loans, and received $0.7 million in servicing fees related to loans securitized in 2007 and before. During 2006, the Company received proceeds of $545.0 million from the securitization of commercial mortgage loans on real estate to third parties, experienced realized gains of $5.3 million on these loans, and received $0.4 million in servicing fees related to loans securitized in 2006 and before.

The Company provides a representations and warranties letter to the transferee for each securitization arrangement. If it is found that the Company has made a misrepresentation, it could be required to provide financial support to the transferee or its beneficial interest holders. In 2008 and 2007, the Company was not required to provide any financial or other support that it was not previously contractually required to provide to the transferee or its beneficial interest holders.

The following table summarizes net realized investment (losses) gains from continuing operations by source for the years ended December 31:

(in millions)	2008			2007			2006
Total realized gains on sales, net of hedging losses	$	1.9		$	65.4		$	88.8
Total realized losses on sales, net of hedging gains		(93.1	)		(79.9	)		(64.8	)
Total other-than-temporary and other investment impairments		(1,051.4	)		(116.4	)		(17.1	)
Credit default swaps		(9.8	)		(7.5	)		(1.1	)
Derivatives and embedded derivatives associated with living benefit contracts		(500.7	)		(26.7	)		—
Derivatives associated with death benefits contracts		109.4			—			—
Other derivatives		104.4			(1.1	)		1.3
Net realized investment (losses) gains	$	(1,439.3	)	$	(166.2	)	$	7.1

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes other-than-temporary and other investment impairments by asset type for the years ended December 31:

(in millions)	2008		2007		2006
Fixed maturity securities:
Corporate securities
Public	$	191.1	$	10.5	$	4.6
Private		77.0		62.7		0.5
Mortgage-backed securities		313.5		—		—
Asset-backed securities		392.4		35.1		2.1
Total fixed maturity securities		974.0		108.3		7.2
Equity securities		60.2		—		—
Other		17.2		8.1		9.9
Total other-than-temporary and other investment impairments	$	1,051.4	$	116.4	$	17.1

The following table summarizes net investment income from continuing operations by investment type for the years ended December 31:

(in millions)	2008			2007		2006
Securities available-for-sale:
Fixed maturity securities	$	1,334.5		$	1,370.5	$	1,419.2
Equity securities		4.9			4.0		2.6
Mortgage loans on real estate		459.3			512.6		535.4
Short-term investments		16.1			28.7		47.3
Other		(74.3	)		124.3		120.9
Gross investment income		1,740.5			2,040.1		2,125.4
Less investment expenses		53.5			64.3		66.9
Net investment income	$	1,687.0		$	1,975.8	$	2,058.5

Fixed maturity securities with an amortized cost of $15.0 million and $8.3 million as of December 31, 2008 and 2007, respectively, were on deposit with various regulatory agencies as required by law.

The Company, through an agent, lends certain portfolio holdings and in turn receives cash collateral with the objective of increasing the yield on its investments. The cash collateral is invested in high-quality, short-term and long-term investments. The Company’s policy requires the maintenance of collateral of a minimum of 102% of the fair value of the securities loaned. Net returns on the investments, after payment of a rebate to the borrower, are shared between the Company and its agent. Both the borrower and the Company can request or return the loaned securities at any time. The Company maintains ownership of the loaned securities at all times and is entitled to receive from the borrower any payments for interest or dividends received on such securities during the loan term. In 2008, the Company recognized loaned securities as part of its investments available-for-sale. The Company also recognizes the short-term and other long-term investments acquired with the cash collateral and its obligation to return such collateral to the borrower in short-term and other long-term investments and other liabilities, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

As of December 31, 2008 and 2007, the Company had received $378.3 million and $551.9 million, respectively, of cash collateral on securities lending. The Company had not received any non-cash collateral on securities lending as of December 31, 2008 and 2007. As of December 31, 2008 and 2007, the Company had loaned securities with a fair value of $367.2 million and $541.2 million, respectively.

As of December 31, 2008 and 2007, the Company had received $1,022.5 million and $245.4 million, respectively, of cash for derivative collateral, which is in turn invested in short-term investments. The Company also held $35.4 million and $18.5 million of securities as off-balance sheet collateral on derivative transactions as of December 31, 2008 and 2007, respectively. As of December 31, 2008, the Company had pledged fixed maturity securities with a fair value of $24.5 million as collateral to various derivative counterparties compared to $18.8 million as of December 31, 2007.

(7) Deferred Policy Acquisition Costs  

The following table presents a reconciliation of DAC for the years ended December 31:

(in millions)	2008			2007
Balance at beginning of period	$	3,997.4		$	3,758.0
Capitalization of DAC		572.2			612.5
Amortization of DAC		(674.5	)		(368.5	)
Adjustments to unrealized gains and losses on securities available-for-sale and other		528.8			4.4
Cumulative effect of adoption of accounting principle		—			(9.0	)
Balance at end of period	$	4,423.9		$	3,997.4

See Note 2(f) for information on the Company’s DAC policies.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(8) Variable Annuity Contracts  

The Company issues traditional variable annuity contracts through its separate accounts, for which investment income and gains and losses on investments accrue directly to, and investment risk is borne by, the contractholder. The Company also issues non-traditional variable annuity contracts in which the Company provides various forms of guarantees to benefit the related contractholders. The Company provides five primary guarantee types under non-traditional variable annuity contracts: (1) GMDB; (2) GMAB; (3) guaranteed minimum income benefits (GMIB); (4) GLWB; and (5) a hybrid guarantee with GMAB and GLWB.

The GMDB provides a specified minimum return upon death. Many of these death benefits are spousal, whereby a death benefit will be paid upon death of the first spouse. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract and a second death benefit paid upon the survivor’s death. The Company has offered six primary GMDB types:

• Return of premium – provides the greater of account value or total deposits made to the contract less any partial withdrawals and assessments, which is referred to as “net premiums.” There are two variations of this benefit. In general, there is no lock in age for this benefit. However, for some contracts the GMDB reverts to the account value at a specified age, typically age 75.  

• Reset – provides the greater of a return of premium death benefit or the most recent five-year anniversary (prior to lock-in age) account value adjusted for withdrawals. For most contracts, this GMDB locks in at age 86 or 90, and for others the GMDB reverts to the account value at age 75, 85, 86 or 90.  

• Ratchet – provides the greater of a return of premium death benefit or the highest specified “anniversary” account value (prior to age 86) adjusted for withdrawals. Currently, there are three versions of ratchet, with the difference based on the definition of anniversary: monthaversary – evaluated monthly; annual – evaluated annually; and five-year – evaluated every fifth year.  

• Rollup – provides the greater of a return of premium death benefit or premiums adjusted for withdrawals accumulated at generally 5% simple interest up to the earlier of age 86 or 200% of adjusted premiums. There are two variations of this benefit. For certain contracts, this GMDB locks in at age 86, and for others the GMDB reverts to the account value at age 75.  

• Combo – provides the greater of annual ratchet death benefit or rollup death benefit. This benefit locks in at either age 81 or 86.  

• Earnings enhancement – provides an enhancement to the death benefit that is a specified percentage of the adjusted earnings accumulated on the contract at the date of death. There are two versions of this benefit: (1) the benefit expires at age 86, and a credit of 4% of account value is deposited into the contract; and (2) the benefit does not have an end age, but has a cap on the payout and is paid upon the first death in a spousal situation. Both benefits have age limitations. This benefit is paid in addition to any other death benefits paid under the contract.  

The GMAB, offered in the Company’s Capital Preservation Plus contract rider, is a living benefit that provides the contractholder with a guaranteed return of premium, adjusted proportionately for withdrawals, after a specified time period (5, 7 or 10 years) selected by the contractholder at the issuance of the variable annuity contract. In some cases, the contractholder also has the option, after a specified time period, to drop the rider and continue the variable annuity contract without the GMAB. In general, the GMAB requires a minimum allocation to guaranteed term options or adherence to limitations required by an approved asset allocation strategy.

The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMIB types are:

• Ratchet – provides an annuitization value equal to the greater of account value, net premiums or the highest one-year anniversary account value (prior to age 86) adjusted for withdrawals.  

• Rollup – provides an annuitization value equal to the greater of account value and premiums adjusted for withdrawals accumulated at 5% compound interest up to the earlier of age 86 or 200% of adjusted premiums.  

• Combo – provides an annuitization value equal to the greater of account value, ratchet GMIB benefit or rollup GMIB benefit.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

See Note 5 for a complete description of the Company’s hybrid GMAB/GLWB offered through its CPPLI contract rider. All GMAB contracts with the hybrid GMAB/GLWB rider are included with GMAB contracts in the following tables.

The following table summarizes the account values and net amount at risk, net of reinsurance, for variable annuity contracts with guarantees invested in both general and separate accounts as of December 31:

	2008					2007
(in millions)	Account value		Net amount at risk1		Wtd. avg. attained age	Account value		Net amount at risk1		Wtd. avg. attained age
GMDB:
Return of premium	$	5,991.9	$	440.6	60	$	9,082.6	$	18.7	59
Reset		12,468.7		2,468.0	64		17,915.0		61.1	63
Ratchet		12,352.3		3,767.2	67		15,789.2		132.2	66
Rollup		277.1		25.7	72		467.0		8.4	71
Combo		1,704.1		621.2	69		2,555.5		47.0	68
Subtotal		32,794.1		7,322.7	65		45,809.3		267.4	64
Earnings enhancement		333.5		7.2	63		519.2		49.8	62
Total - GMDB	$	33,127.6	$	7,329.9	65	$	46,328.5	$	317.2	64
GMAB2 :
5 Year	$	2,867.6	$	499.0	N/A	$	2,985.6	$	4.6	N/A
7 Year		2,265.9		482.9	N/A		2,644.1		6.2	N/A
10 Year		677.9		132.2	N/A		927.3		1.3	N/A
Total - GMAB	$	5,811.4	$	1,114.1	N/A	$	6,557.0	$	12.1	N/A
GMIB3 :
Ratchet	$	244.7	$	5.6	N/A	$	425.2	$	—	N/A
Rollup		659.5		1.3	N/A		1,119.9		—	N/A
Combo		0.1		—	N/A		0.3		—	N/A
Total - GMIB	$	904.3	$	6.9	N/A	$	1,545.4	$	—	N/A
GLWB:
L.inc	$	3,320.8	$	571.5	N/A	$	2,865.8	$	—	N/A

1   Net amount at risk is calculated on a seriatum basis and equals the respective guaranteed benefit less the account value (or zero if the account value exceeds the guaranteed benefit). As it relates to GMIB, net amount at risk is calculated as if all policies were eligible to annuitize immediately, although all GMIB options have a waiting period of at least 7 years from issuance.  

2   GMAB contracts with the hybrid GMAB/GLWB rider had account values of $4.59 billion and $4.77 billion as of December 31, 2008 and 2007, respectively.  

3   The weighted average period remaining until expected annuitization is not meaningful and has not been presented because there is currently no material GMIB exposure.  

Net amount at risk is highly sensitive to changes in financial market movements. The increase in net amount at risk during 2008 is primarily due to declines in the financial markets. See Note 5 – Equity Market Risk Management for a discussion of the Company’s risk management practices with respect to declining financial market exposure and related reserve balances.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes account balances of variable annuity contracts that were invested in separate accounts as of December 31:

(in millions)	2008		2007
Mutual funds:
Bond	$	4,350.2	$	5,143.6
Domestic equity		18,572.8		31,217.7
International equity		2,412.7		3,987.3
Total mutual funds		25,335.7		40,348.6
Money market funds		2,132.6		1,728.2
Total	$	27,468.3	$	42,076.8

The Company’s GMDB claim reserves are determined by estimating the expected value of death benefits on contracts that trigger a policy benefit and recognizing the excess ratably over the accumulation period based on total expected assessments. GMIB claim reserves are determined each period by estimating the expected value of annuitization benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total assessments. The Company regularly evaluates its GMDB and GMIB claim reserve estimates and adjusts the additional liability balances as appropriate, with a related charge or credit to other benefits and claims in the period of evaluation if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in calculating GMIB claim reserves are consistent with those used for calculating GMDB claim reserves. In addition, the calculation of GMIB claim reserves assumes benefit utilization ranges from a low of 3% when the contractholder’s annuitization value is at least 10% in the money to 100% utilization when the contractholder is 90% or more in the money.

The Company’s living benefit riders represent an embedded derivative in a variable annuity contract that is required to be separated from, and valued apart from, the host variable annuity contract. The embedded derivatives are carried at fair value. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of net realized investment gains and losses. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions.

The following assumptions and methodology were used to determine the GMDB claim reserves as of December 31, 2008 and 2007:

• Data used was based on a combination of historical numbers and future projections generally involving 50 probabilistically generated economic scenarios  

• Mean gross equity performance – 8.1%  

• Equity volatility – 18.7%  

• Mortality – 100% of Annuity 2000 table  

• Asset fees – equivalent to mutual fund and product loads  

• Discount rate – approximately 7.0%  

Lapse rate assumptions vary by duration as shown below:

Duration (years)	1	2	3	4	5	6	7	8	9	10+
Minimum	1.00%	2.00%	2.00%	3.00%	4.50%	6.00%	7.00%	7.00%	11.50%	11.50%
Maximum	1.50%	2.50%	4.00%	4.50%	40.00%	41.50%	21.50%	35.00%	35.00%	18.50%

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(9) Short-Term Debt  

The following table summarizes short-term debt as of December 31:

(in millions)	2008		2007
$800.0 million commercial paper program	$	149.9	$	199.7
$350.0 million securities lending program facility		99.8		85.6
Total short-term debt	$	249.7	$	285.3

The Company has available as a source of funds a $1.00 billion revolving variable rate credit facility entered into by NFS, NLIC and NMIC with a group of national financial institutions. The facility provides for several and not joint liability with respect to any amount drawn by any party. The facility provides covenants, including, but not limited to, requirements that the Company’s debt not exceed 40% of tangible net worth, as defined, and that NLIC maintain statutory surplus, as defined, in excess of $1.67 billion. As of December 31, 2008, the Company and NLIC were in compliance with all covenants. NLIC and NMIC had no amounts outstanding under this agreement as of December 31, 2008 and 2007. NLIC also has an $800.0 million commercial paper program and is required to maintain an available credit facility equal to 50% of any amounts outstanding under the commercial paper program. Therefore, borrowing capacity under the aggregate $1.00 billion revolving credit facility is reduced by 50% of any amounts outstanding under the commercial paper program. NLIC had $149.9 million of commercial paper outstanding at December 31, 2008 at a weighted average interest rate of 2.07% and $199.7 million at a weighted average interest rate of 4.39% at December 31, 2007.

NLIC has entered into an agreement with its custodial bank to borrow against the cash collateral that is posted in connection with its securities lending program. This is an uncommitted facility contingent on the liquidity of the securities lending program. The borrowing facility was established to fund commercial mortgage loans that were originated with the intent of sale through securitization. The maximum amount available under the agreement is $350.0 million. The borrowing rate on this program is equal to one-month U.S. LIBOR (0.44% and 4.60% as of December 31, 2008 and 2007, respectively). NLIC had $99.8 million and $85.6 million outstanding under this agreement as of December 31, 2008 and 2007, respectively. As of December 31, 2008, the Company had not provided any guarantees on such borrowings, either directly or indirectly.

The Company paid interest on short-term debt totaling $8.3 million, $15.0 million and $11.7 million in 2008, 2007 and 2006, respectively.

(10) Long-Term Debt  

The following table summarizes surplus notes payable to NFS as of December 31:

(in millions)	2008		2007
8.15% surplus note, due June 27, 2032	$	300.0	$	300.0
7.50% surplus note, due December 17, 2031		300.0		300.0
6.75% surplus note, due December 23, 2033		100.0		100.0
Total long-term debt	$	700.0	$	700.0

The Company made interest payments to NFS on surplus notes totaling $53.7 million in 2008, 2007 and 2006. Payments of interest and principal under the notes require the prior approval of the Ohio Department of Insurance (ODI).

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(11) Federal Income Taxes  

In 2008, NFS will file a life/non-life federal income tax return with all of its eligible downstream subsidiaries. Effective January 1, 2009, pursuant to the merger agreement dated August 6, 2008 whereby NMIC and its affiliates purchased all of the NFS common stock they did not already own, Nationwide Corp. will own more than 80% of the value of NFS, meeting the requirements for NFS to join the NMIC consolidated federal income tax return. However, the life insurance company subsidiaries will not be eligible to join the NMIC consolidated federal income tax return until 2014. The members of the NFS consolidated federal income tax return group participate in a tax sharing arrangement, which uses a consolidated approach in allocating the amount of current and deferred expense to the separate financial statements of a subsidiary. This approach provides for a current tax benefit to the subsidary for losses that are utilized in the consoldiated tax return.

The following table summarizes the tax effects of temporary differences that give rise to significant components of the net deferred tax (asset) liability as of December 31:

(in millions)	2008			2007
Deferred tax assets:
Future policy benefits and claims	$	881.0		$	622.0
Securities available-for-sale		737.4			83.8
Derivatives		229.7			—
Other		238.3			129.4
Gross deferred tax assets		2,086.4			835.2
Less valuation allowance		(7.0	)		(7.0	)
Deferred tax assets, net of valuation allowance		2,079.4			828.2
Deferred tax liabilities:
Deferred policy acquisition costs		1,249.4			1,112.6
Derivatives		—			15.6
Other		188.4			115.2
Gross deferred tax liabilities		1,437.8			1,243.4
Net deferred tax (asset) liability	$	(641.6	)	$	415.2

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the total gross deferred tax assets will not be realized. Future taxable amounts or recovery of federal income taxes paid within the statutory carryback period can offset nearly all future deductible amounts. The valuation allowance was unchanged during 2008, 2007 and 2006. No additional valuation allowances are required to be recognized as the Company has prudent and feasible tax planning strategies that would, if necessary, be implemented to utilize deferred tax assets.

The Company’s current federal income tax asset was $127.2 million and $12.7 million as of December 31, 2008 and 2007, respectively.

Total federal income taxes (refunded) paid were $(46.1) million, $99.1 million and $(4.3) million during the years ended December 31, 2008, 2007 and 2006, respectively.

As of December 31, 2008, the Company has $38.9 million of capital loss carryforwards that can carry forward for five tax years and are expected to be fully utilized. In addition, the Company has $41.9 million in low income housing credit carryforwards which can be carried forward for twenty years. The Company expects that they will be fully utilized. The Company has $56.5 million in Alternative Minimum Tax (AMT) credit carryforwards, which can be carried forward until utilized. The Company expects to fully realize the AMT credits in the future.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

During the third quarter of 2008, the Company refined its separate account dividends received deduction (DRD) calculation and estimation process. As a result, the Company reduced its third quarter separate account DRD projection from a federal income tax benefit of $14.3 million to a $4.4 million benefit. This reduction in estimate primarily was driven by the assumptions used in the estimation process regarding future dividend income within the separate accounts. The assumptions used in the separate account DRD calculation are based on the Company’s best estimate of future events.

In addition, during 2008, the Company recorded $12.7 million of net federal income tax expense adjustments primarily related to differences between the 2007 estimated tax liability and the amounts expected to be reported on the Company’s 2007 tax returns when filed. These changes in estimates primarily were driven by the Company’s separate account DRD.

During the second quarter of 2007, the Company recorded $6.8 million of net federal income tax expense adjustments primarily related to differences between the 2006 estimated tax liability and the amounts the Company reported on its 2006 tax returns. The Company recorded an additional $1.5 million and $0.2 million of such adjustments during the third and fourth quarters of 2007, respectively.

Through June 2006, the Company’s federal income tax returns for tax years 2000-2002 were under IRS examination pursuant to a routine audit. In accordance with its regular practice, management established tax reserves based on the current facts and circumstances regarding each tax exposure item for which the ultimate deductibility is open to interpretation. These reserves are reviewed regularly and are adjusted as events occur that management believes impacts the Company’s liability for additional taxes, such as lapsing of applicable statutes of limitations; conclusion of tax audits or substantial agreement on the deductibility/non-deductibility of uncertain items; additional exposure based on current calculations; identification of new issues; release of administrative guidance; or rendering of a court decision affecting a particular tax issue. A significant component of the Company’s tax reserve as of December 31, 2005 was related to the separate account dividends received deduction (DRD). See “Tax Matters” in Note 15 for more information regarding DRD.

In July 2006, the Company reached substantial agreement with the IRS on all open issues for tax years 2000-2002, including issues related to the DRD. Accordingly, the Company revised its estimate of amounts that may be due in connection with certain tax positions, including the DRD, for all open tax years. As a result of the revised estimate, $110.9 million of tax reserves were released into earnings during the second quarter of 2006.

During the third quarter of 2006, the Company recorded $7.8 million of net federal income tax expense adjustments primarily related to differences between the 2005 estimated tax liability and the amounts reported on the Company’s 2005 tax returns.

The following table summarizes federal income tax (benefit) expense attributable to (loss) income from continuing operations for the years ended December 31:

(in millions)	2008			2007		2006
Current	$	(135.5	)	$	106.5	$	(61.8	)
Deferred		(398.8	)		22.0		90.5
Federal income tax (benefit) expense	$	(534.3	)	$	128.5	$	28.7

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Total federal income tax (benefit) expense differs from the amount computed by applying the U.S. federal income tax rate to (loss) income from continuing operations before federal income tax (benefit) expense as follows for the years ended December 31:

	2008				2007					2006
(dollars in millions)	Amount			%	Amount			%		Amount			%
Computed tax (benefit) expense	$	(477.4	)	35.0	$	204.0		35.0		$	226.8		35.0
DRD		(36.7	)	2.7		(61.0	)	(10.5	)		(67.5	)	(10.4	)
Reserve release		—		—		—		—			(110.9	)	(17.1	)
Other, net		(20.2	)	1.5		(14.5	)	(2.4	)		(19.7	)	(3.1	)
Total	$	(534.3	)	39.2	$	128.5		22.1		$	28.7		4.4

As noted previously, the Company adopted the provisions of FIN 48 on January 1, 2007. There was no impact to the Company’s retained earnings on adoption of FIN 48. A rollforward of the beginning and ending uncertain tax positions, including permanent and temporary differences, but excluding interest and penalties, is as follows:

(in millions)	2008			2007
Balance at beginning of period	$	8.6		$	4.6
Additions for current year tax positions		37.4			4.0
Additions for prior years tax positions		0.3			—
Reductions for prior years tax positions		(2.6	)		—
Balance at end of period	$	43.7		$	8.6

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate on December 31, 2008, is $37.4 million.

The Company has included tax on permanent uncertain tax positions and interest and penalties on all uncertain tax positions in determining the potential impact on the effective tax rate above. An uncertain tax timing position may result in the acceleration of cash payments to the IRS, but will not impact the effective tax rate.

During the years ended December 31, 2008, and 2007, the Company incurred $1.0 million and $0.8 million in interest and penalties, respectively. The Company accrued $2.2 million and $1.2 million for the payment of interest and penalties at December 31, 2008 and 2007, respectively. Interest expense and any associated penalties are shown as income tax expense.

Management is not aware of any reasonable possibility of a significant increase or decrease to the total of the uncertain tax positions within the next 12 months.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years through 2002. The IRS commenced an examination of the Company’s U.S. income tax returns for 2003 through 2005 in the first quarter of 2007. As of December 31, 2008, the IRS has proposed adjustments which would not result in a material change to the Company’s financial position.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(12) Shareholders’ Equity, Regulatory Risk-Based Capital, Statutory Results and Dividend Restrictions  

Regulatory Risk-Based Capital

The State of Ohio, where NLIC and NLAIC are domiciled, imposes minimum risk-based capital requirements that were developed by the NAIC. The formulas for determining the amount of risk-based capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital, as defined by the NAIC, to authorized control level risk-based capital, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. NLIC and NLAIC each exceeded the minimum risk-based capital requirements for all periods presented herein.

Statutory Results

The Company and its subsidiary are required to prepare statutory financial statements in conformity with the NAIC’s Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable state department of insurance. Statutory accounting practices focus on insurer solvency and differ from GAAP materially. The principal differences include charging policy acquisition and certain sales inducement costs to expense as incurred, establishing future policy benefits and claims reserves using different actuarial assumptions, excluding certain assets from statutory admitted assets, and valuing investments and establishing deferred taxes on a different basis. The following tables summarize the statutory net (loss) income and statutory capital and surplus for the Company and its insurance subsidiary for the years ended December 31:

(in millions)	20081			2007			2006
Statutory net (loss) income
NLIC	$	(898.3	)	$	309.0		$	537.5
NLAIC		(87.9	)		(13.4	)		(45.6	)
Statutory capital and surplus
NLIC	$	2,261.5		$	2,501.1		$	2,682.3
NLAIC		81.7			173.3			158.6

1   Unaudited as of the date of this report.  

The Company has received approval from the Ohio Department of Insurance (ODI) regarding the use of a permitted practice related to the statutory accounting provision for the admissibility of deferred tax assets as of December 31, 2008. The permitted practice modifies the practice prescribed by the NAIC by increasing the threshold for admissibility of deferred tax assets from 10% to 15% of statutory capital and surplus. The permitted practice resulted in an increase of the Company’s estimated statutory surplus of $68.9 million (unaudited) as of December 31, 2008. The permitted practice had no impact on the Company’s statutory net income. The benefits of this permitted practice may not be considered by the Company when determining capital and surplus available for dividends. NLAIC did not qualify for the permitted practice.

Dividend Restrictions

The payment of dividends by NLIC is subject to restrictions set forth in the insurance laws and regulations of the State of Ohio, its domiciliary state. The State of Ohio insurance laws require Ohio-domiciled life insurance companies to seek prior regulatory approval to pay a dividend or distribution of cash or other property if the fair market value thereof, together with that of other dividends or distributions made in the preceding 12 months, exceeds the greater of (1) 10% of statutory-basis policyholders’ surplus as of the prior December 31 or (2) the statutory-basis net income of the insurer for the prior year. During the year ended December 31, 2008, NLIC paid dividends of $246.5 million to NFS after providing prior notice to the ODI. The dividend included $181.9 million in cash and $64.6 million in securities. As of January 1, 2009, NLIC could not pay dividends to NFS without obtaining prior approval.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The State of Ohio insurance laws also require insurers to seek prior regulatory approval for any dividend paid from other than earned surplus. Earned surplus is defined under the State of Ohio insurance laws as the amount equal to the Company’s unassigned funds as set forth in its most recent statutory financial statements, including net unrealized capital gains and losses or revaluation of assets. Additionally, following any dividend, an insurer’s policyholder surplus must be reasonable in relation to the insurer’s outstanding liabilities and adequate for its financial needs. The payment of dividends by NLIC may also be subject to restrictions set forth in the insurance laws of the State of New York that limit the amount of statutory profits on NLIC’s participating policies (measured before dividends to policyholders) available for the benefit of the Company and its shareholder.

The Company currently does not expect such regulatory requirements to impair its ability to pay future operating expenses, interest and shareholder dividends.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Comprehensive Loss

The Company’s comprehensive loss includes net income and certain items that are reported directly within separate components of shareholder’s equity that are not recorded in net income (other comprehensive income or loss).

The following table summarizes the Company’s other comprehensive loss, before and after federal income tax benefit, for the years ended December 31:

(in millions)	2008			2007			2006
Net unrealized losses on securities available-for-sale arising during the period:
Net unrealized losses before adjustments	$	(3,576.6	)	$	(276.3	)	$	(171.3	)
Net adjustment to deferred policy acquisition costs		528.8			3.8			40.9
Net adjustment to future policy benefits and claims		121.5			5.4			21.5
Related federal income tax benefit		1,024.4			93.3			38.1
Net unrealized losses		(1,901.9	)		(173.8	)		(70.8	)
Reclassification adjustment for net realized losses on securities available-for-sale realized during the period:
Net unrealized losses		1,025.2			107.7			9.2
Related federal income tax benefit		(358.8	)		(37.7	)		(3.2	)
Net reclassification adjustment		666.4			70.0			6.0
Other comprehensive loss on securities available-for-sale		(1,235.5	)		(103.8	)		(64.8	)
Accumulated net holding gains (losses) on cash flow hedges:
Unrealized holding gains (losses)		16.5			(17.2	)		(0.2	)
Related federal income tax (expense) benefit		(5.8	)		6.0			0.1
Other comprehensive income (loss) on cash flow hedges		10.7			(11.2	)		(0.1	)
Other unrealized gains (losses):
Net unrealized gains (losses)		6.4			(6.4	)		—
Related federal income tax (expense) benefit		(2.3	)		2.2			—
Other net unrealized gains (losses)		4.1			(4.2	)		—
Total other comprehensive loss	$	(1,220.7	)	$	(119.2	)	$	(64.9	)

Adjustments for net realized gains and losses on the ineffective portion of cash flow hedges were immaterial during the years ended December 31, 2008, 2007 and 2006.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(13) Employee Benefit Plans  

Defined Benefit Plans

The Company and certain affiliated companies participate in a qualified defined benefit pension plan sponsored by NMIC. This plan covers all employees of participating companies who have completed at least one year of service. Plan contributions are invested in a group annuity contract issued by NLIC, and a trust with Bank of New York as the custodian and trustee. All participants are eligible for benefits based on an account balance feature. Participants last hired before 2002 are eligible for benefits based on the highest average annual salary of a specified number of consecutive years of the last ten years of service, if such benefits are of greater value than the account balance feature. The Company funds pension costs accrued for direct employees plus an allocation of pension costs accrued for employees of affiliates whose work benefits the Company. A separate non-qualified defined benefit pension plan sponsored by NMIC covers certain executives with at least one year of service. The Company’s portion of expense relating to these plans was $12.0 million, $13.5 million and $19.9 million for the years ended December 31, 2008, 2007 and 2006, respectively.

In addition to the NMIC pension plan, the Company and certain affiliated companies participate in life and health care defined benefit plans sponsored by NMIC for qualifying retirees. Postretirement life and health care benefits are contributory. The level of contribution required by a qualified retiree depends on the retiree’s years of service and date of hire. In general, postretirement benefits are available to full-time employees who are credited with 120 months of retiree life and health service. Postretirement health care benefit contributions are adjusted annually and contain cost-sharing features such as deductibles and coinsurance. In addition, there are caps on the Company’s portion of the per-participant cost of the postretirement health care benefits. The Company’s policy is to fund the cost of health care benefits in amounts determined at the discretion of management. Plan assets are invested primarily in a group annuity contract issued by NLIC, and a trust with Bank of New York as the custodian and trustee. All participants are eligible for benefits based on an account balance feature. The Company’s portion of expense relating to these plans was immaterial for the years ended December 31, 2008, 2007 and 2006.

Defined Contribution Plans

NMIC sponsors a defined contribution retirement savings plan covering substantially all employees of the Company. Employees may make salary deferral contributions of up to 80%. Salary deferrals of up to 6% are subject to a 50% Company match. The Company’s expense for contributions to these plans was $5.6 million, $7.3 million and $6.6 million for the years ended December 31, 2008, 2007 and 2006, respectively.

(14) Related Party Transactions  

The Company has entered into significant, recurring transactions and agreements with NMIC, other affiliates and subsidiaries as a part of its ongoing operations. These include annuity and life insurance contracts, office space leases, and agreements related to reinsurance, cost sharing, administrative services, marketing, intercompany loans, intercompany repurchases, cash management services and software licensing. Measures used to allocate expenses among companies include individual employee estimates of time spent, special cost studies, the number of full-time employees, commission expense and other methods agreed to by the participating companies.

In addition, Nationwide Services Company, LLC (NSC), a subsidiary of NMIC, provides data processing, systems development, hardware and software support, telephone, mail and other services to the Company, based on specified rates for units of service consumed.. For the years ended December 31, 2008, 2007 and 2006, the Company made payments to NMIC and NSC totaling $280.8 million, $285.6 million and $261.7 million, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company has issued group annuity and life insurance contracts and performs administrative services for various employee benefit plans sponsored by NMIC or its affiliates. Total account values of these contracts were $2.85 billion and $2.90 billion as of December 31, 2008 and 2007, respectively. Total revenues from these contracts were $137.7 million, $130.8 million and $133.4 million for the years ended December 31, 2008, 2007 and 2006, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances was $115.4 million, $109.7 million and $110.7 million for the years ended December 31, 2008, 2007 and 2006, respectively. The terms of these contracts are consistent in all material respects with what the Company offers to unaffiliated parties.

The Company leases office space from NMIC. For the years ended December 31, 2008, 2007 and 2006, the Company made lease payments to NMIC of $22.9 million, $23.0 million and $19.3 million, respectively.

NLIC has a reinsurance agreement with NMIC whereby all of NLIC’s accident and health business not ceded to unaffiliated reinsurers is ceded to NMIC on a modified coinsurance basis. Either party may terminate the agreement on January 1 of any year with prior notice. Under a modified coinsurance agreement, the ceding company retains invested assets, and investment earnings are paid to the reinsurer. Under the terms of NLIC’s agreements, the investment risk associated with changes in interest rates is borne by the reinsurer. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder. The Company believes that the terms of the modified coinsurance agreements are consistent in all material respects with what the Company could have obtained with unaffiliated parties. Revenues ceded to NMIC for the years ended December 31, 2008, 2007 and 2006 were $202.3 million, $317.6 million and $430.8 million, respectively, while benefits, claims and expenses ceded during these years were $218.9 million, $348.1 million and $470.4 million, respectively.

Funds of Nationwide Funds Group (NFG), an affiliate, are offered to the Company’s customers as investment options in certain of the Company’s products. As of December 31, 2008 and 2007, customer allocations to NFG funds totaled $17.48 billion and $21.41 billion, respectively. For the years ended December 31, 2008, 2007 and 2006, NFG paid the Company $74.4 million, $76.9 million and $64.4 million, respectively, for the distribution and servicing of these funds.

Under a marketing agreement with NMIC, NLIC makes payments to cover a portion of the agent marketing allowance that is paid to Nationwide agents. These costs cover product development and promotion, sales literature, rent and similar items. Payments under this agreement totaled $8.3 million, $20.1 million and $28.3 million for the years ended December 31, 2008, 2007 and 2006, respectively. The last payment under this agreement was made in 2008.

The Company also participates in intercompany repurchase agreements with affiliates whereby the seller transfers securities to the buyer at a stated value. Upon demand or after a stated period, the seller repurchases the securities at the original sales price plus interest. As of December 31, 2008 and 2007, the Company had no outstanding borrowings from affiliated entities under such agreements. During 2008, 2007 and 2006, the most the Company had outstanding at any given time was $151.6 million, $178.2 million and $191.5 million, respectively, and the amounts the Company incurred for interest expense on intercompany repurchase agreements during these years were immaterial.

The Company and various affiliates have agreements with Nationwide Cash Management Company (NCMC), an affiliate, under which NCMC acts as a common agent in handling the purchase and sale of short-term securities for the respective accounts of the participants. Amounts on deposit with NCMC for the benefit of the Company were $2.57 billion and $368.2 million as of December 31, 2008 and 2007, respectively, and are included in short-term investments on the consolidated balance sheets.

Certain annuity products are sold through affiliated companies, which are also subsidiaries of NFS. Total commissions and fees paid to these affiliates for the years ended December 31, 2008, 2007 and 2006 were $52.7 million, $59.5 million and $58.1 million, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

An affiliate of the Company is currently developing a browser-based policy administration and online brokerage software application for defined benefit plans. In connection with the development of this application, the Company made net payments, which were expensed, to that affiliate related to development totaling $11.0 million, $9.4 million and $6.9 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company entered into a note purchase agreement with an affiliate on November 17, 2006 to purchase $25.0 million of the affiliate’s 5.6% senior notes due November 16, 2016. The notes are secured by certain pledged mortgage servicing rights. The note is payable in seven equal principal installments of $3.8 million, which begin November 6, 2010. Interest is payable semi-annually on each May 16 and November 16.

Through September 30, 2002, the Company filed a consolidated federal income tax return with NMIC, as discussed in more detail in Note 11. Effective October 1, 2002, NLIC began filing a consolidated federal income tax return with NLAIC. Total payments from NMIC were $22.5 million and $15.3 million during the years ended December 31, 2008 and 2006, respectively. These payments related to tax years prior to deconsolidation. There were no payments during 2007.

During 2008, NLIC received a $338.8 million capital contribution from NFS. The capital contribution included $157.1 million in securities, $153.4 million in cash and $28.3 million in mortgage loans.

In 2008, 2007 and 2006, NLIC paid dividends to NFS totaling $246.5 million, $537.5 million and $375.0 million, respectively.

(15) Contingencies  

Legal Matters

The Company is a party to litigation and arbitration proceedings in the ordinary course of its business. It is often not possible to determine the ultimate outcome of the pending investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs’ claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. The Company does not believe, based on information currently known by management, that the outcomes of such pending investigations and legal proceedings are likely to have a material adverse effect on the Company’s consolidated financial position. However, given the large and/or indeterminate amounts sought in certain of these matters and inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could have a material adverse effect on the Company’s consolidated financial results in a particular quarterly or annual period.

In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits relating to life insurance and annuity pricing and sales practices. A number of these lawsuits have resulted in substantial jury awards or settlements against life insurers other than the Company.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The financial services industry, including mutual fund, variable annuity, retirement plan, life insurance and distribution companies, has also been the subject of increasing scrutiny by regulators, legislators and the media over the past few years. Numerous regulatory agencies, including the SEC, the Financial Industry Regulatory Authority and the New York State Attorney General, have commenced industry-wide investigations regarding late trading and market timing in connection with mutual funds and variable insurance contracts, and have commenced enforcement actions against some mutual fund and life insurance companies on those issues. The Company has been contacted by or received subpoenas from the SEC and the New York State Attorney General, who are investigating market timing in certain mutual funds offered in insurance products sponsored by the Company. The Company has cooperated with these investigations. Information requests from the New York State Attorney General and the SEC with respect to investigations into late trading and market timing were last responded to by the Company and its affiliates in December 2003 and June 2005, respectively, and no further information requests have been received with respect to these matters.

In addition, state and federal regulators and other governmental bodies have commenced investigations, proceedings or inquiries relating to compensation and bidding arrangements and possible anti-competitive activities between insurance producers and brokers and issuers of insurance products, and unsuitable sales and replacements by producers on behalf of the issuer. Also under investigation are compensation and revenue sharing arrangements between the issuers of variable insurance contracts and mutual funds or their affiliates, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, funding agreements issued to back MTN programs, recordkeeping and retention compliance by broker/dealers, and supervision of former registered representatives. Related investigations, proceedings or inquiries may be commenced in the future. The Company and/or its affiliates have been contacted by or received subpoenas from state and federal regulatory agencies and other governmental bodies, state securities law regulators and state attorneys general for information relating to certain of these investigations, including those relating to compensation, revenue sharing and bidding arrangements, anti-competitive activities, unsuitable sales or replacement practices, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, and funding agreements backing the NLIC MTN program. The Company is cooperating with regulators in connection with these inquiries and will cooperate with NMIC in responding to these inquiries to the extent that any inquiries encompass NMIC’s operations.

A promotional and marketing arrangement associated with the Company’s offering of a retirement plan product and related services in Alabama is under investigation by the Alabama Securities Commission. The Company currently expects that any damages paid to settle this matter will not have a material adverse impact on its consolidated financial position. It is not possible to predict what effect, if any, the outcome of this investigation may have on the Company’s retirement plan operations with respect to promotional and marketing arrangements in general in the future.

These proceedings are expected to continue in the future and could result in legal precedents and new industry-wide legislation, rules and regulations that could significantly affect the financial services industry, including mutual fund, retirement plan, life insurance and annuity companies. These proceedings also could affect the outcome of one or more of the Company’s litigation matters. There can be no assurance that any litigation or regulatory actions will not have a material adverse effect on the Company in the future.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

On November 20, 2007, NRS and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On December 2, 2008, the plaintiffs filed an amended complaint. The plaintiffs claim to represent a class of all participants in the Alabama State Employees Association (ASEA) Plan, excluding members of the Deferred Compensation Committee, members of the Board of Control, ASEA’s directors, officers and board members, and PEBCO’s directors, officers and board members. The class period is from November 20, 2001, to the date of trial. In the amended class action complaint, the plaintiffs allege breach of fiduciary duty, wantonness and breach of contract. The amended class action complaint seeks a declaratory judgment, an injunction, an appointment of an independent fiduciary to protect Plan participants, disgorgement of amounts paid, reformation of Plan documents, compensatory damages and punitive damages, plus interest, attorneys’ fees and costs and such other equitable and legal relief to which plaintiffs and class members may be entitled. Also, on December 2, 2008, the plaintiffs filed a motion for preliminary injunction seeking an order requiring periodic payments made by NRS and/or NLIC to ASEA or PEBCO to be held in a trust account for the benefit of Plan participants. On December 4, 2008, the Alabama State Personnel Board and the State of Alabama by, and through the State Personnel Board, filed a motion to intervene and a complaint in intervention. On December 16, 2008, the Companies filed their Answer. On February 4, 2009, the court provisionally agreed to add the State of Alabama, by and through the State Personnel Board as a party. NRS and NLIC continue to defend this case vigorously.

On July 11, 2007, NLIC was named in a lawsuit filed in the United States District Court for the Western District of Washington at Tacoma entitled Jerre Daniels-Hall and David Hamblen, Individually and on behalf of All Others Similarly Situated v. National Education Association, NEA Member Benefits Corporation, Nationwide Life Insurance Company, Security Benefit Life Insurance Company, Security Benefit Group, Inc., Security Distributors, Inc., et. al. The plaintiffs seek to represent a class of all current or former National Education Association (NEA) members who participated in the NEA Valuebuilder 403(b) program at any time between January 1, 1991 and the present (and their heirs and/or beneficiaries). The plaintiffs allege that the defendants violated the Employee Retirement Income Security Act of 1974, as amended (ERISA) by failing to prudently and loyally manage plan assets, by failing to provide complete and accurate information, by engaging in prohibited transactions, and by breaching their fiduciary duties when they failed to prevent other fiduciaries from breaching their fiduciary duties. The complaint seeks to have the defendants restore all losses to the plan, restoration of plan assets and profits to participants, disgorgement of endorsement fees, disgorgement of service fee payments, disgorgement of excessive fees charged to plan participants, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. On May 23, 2008, the Court granted the defendants’ motion to dismiss. On June 19, 2008, the plaintiffs filed a notice of appeal. On October 17, 2008, the plaintiffs filed their opening brief. On December 19, 2008, the defendants filed their briefs. On January 26, 2009, the plaintiffs filed Appellants’ Reply Brief. NLIC continues to defend this lawsuit vigorously.

On November 15, 2006, NFS, NLIC and NRS were named in a lawsuit filed in the United States District Court for the Southern District of Ohio entitled Kevin Beary, Sheriff of Orange County, Florida, In His Official Capacity, Individually and On Behalf of All Others Similarly Situated v. Nationwide Life Insurance Co., Nationwide Retirement Solutions, Inc. and Nationwide Financial Services, Inc. The plaintiff seeks to represent a class of all sponsors of 457(b) deferred compensation plans in the United States that had variable annuity contracts with the defendants at any time during the class period, or in the alternative, all sponsors of 457(b) deferred compensation plans in Florida that had variable annuity contracts with the defendants during the class period. The class period is from January 1, 1996 until the class notice is provided. The plaintiff alleges that the defendants breached their fiduciary duties by arranging for and retaining service payments from certain mutual funds. The complaint seeks an accounting, a declaratory judgment, a permanent injunction and disgorgement or restitution of the service fee payments allegedly received by the defendants, including interest. On January 25, 2007, NFS, NLIC and NRS filed a motion to dismiss. On September 17, 2007, the Court granted the motion to dismiss. On October 1, 2007, the plaintiff filed a motion to vacate judgment and for leave to file an amended complaint. On September 15, 2008, the Court denied the plaintiffs’ motion to vacate judgment and for leave to file an amended complaint. On October 15, 2008, the plaintiffs filed a notice of appeal. NFS, NLIC and NRS continue to defend this lawsuit vigorously.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

On February 11, 2005, NLIC was named in a class action lawsuit filed in Common Pleas Court, Franklin County, Ohio entitled Michael Carr v. Nationwide Life Insurance Company. The complaint seeks recovery for breach of contract, fraud by omission, violation of the Ohio Deceptive Trade Practices Act and unjust enrichment. The complaint also seeks unspecified compensatory damages, disgorgement of all amounts in excess of the guaranteed maximum premium and attorneys’ fees. On February 2, 2006, the court granted the plaintiff’s motion for class certification on the breach of contract and unjust enrichment claims. The court certified a class consisting of all residents of the United States and the Virgin Islands who, during the class period, paid premiums on a modal basis to NLIC for term life insurance policies issued by NLIC during the class period that provide for guaranteed maximum premiums, excluding certain specified products. Excluded from the class are NLIC; any parent, subsidiary or affiliate of NLIC; all employees, officers and directors of NLIC; and any justice, judge or magistrate judge of the State of Ohio who may hear the case. The class period is from February 10, 1990 through February 2, 2006, the date the class was certified. On January 26, 2007, the plaintiff filed a motion for summary judgment. On April 30, 2007, NLIC filed a motion for summary judgment. On February 4, 2008, the Court granted the class’s motion for summary judgment on the breach of contract claims arising from the term policies in 43 of 51 jurisdictions. The Court granted NLIC’s motion for summary judgment on the breach of contract claims on all decreasing term policies. On November 7, 2008, the case was settled.

On April 13, 2004, NLIC was named in a class action lawsuit filed in Circuit Court, Third Judicial Circuit, Madison County, Illinois, entitled Woodbury v. Nationwide Life Insurance Company. NLIC removed this case to the United States District Court for the Southern District of Illinois on June 1, 2004. On December 27, 2004, the case was transferred to the United States District Court for the District of Maryland and included in the multi-district proceeding entitled In Re Mutual Funds Investment Litigation. In response, on May 13, 2005, the plaintiff filed the first amended complaint purporting to represent, with certain exceptions, a class of all persons who held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing or stale price trading activity. The first amended complaint purports to disclaim, with respect to market timing or stale price trading in NLIC’s annuities sub-accounts, any allegation based on NLIC’s untrue statement, failure to disclose any material fact, or usage of any manipulative or deceptive device or contrivance in connection with any class member’s purchases or sales of NLIC annuities or units in annuities sub-accounts. The plaintiff claims, in the alternative, that if NLIC is found with respect to market timing or stale price trading in its annuities sub-accounts, to have made any untrue statement, to have failed to disclose any material fact or to have used or employed any manipulative or deceptive device or contrivance, then the plaintiff purports to represent a class, with certain exceptions, of all persons who, prior to NLIC’s untrue statement, omission of material fact, use or employment of any manipulative or deceptive device or contrivance, held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing activity. The first amended complaint alleges common law negligence and seeks to recover damages not to exceed $75,000 per plaintiff or class member, including all compensatory damages and costs. On June 1, 2006, the District Court granted NLIC’s motion to dismiss the plaintiff’s complaint. On January 30, 2009, the United States Court of Appeals for the Fourth Circuit affirmed that dismissal. NLIC continues to defend this lawsuit vigorously.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. Currently, the plaintiffs’ fifth amended complaint, filed March 21, 2006, purports to represent a class of qualified retirement plans under ERISA that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NFS and NLIC, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. To date, the District Court has rejected the plaintiffs’ request for certification of the alleged class. On September 25, 2007, NFS’ and NLIC’s motion to dismiss the plaintiffs’ fifth amended complaint was denied. On October 12, 2007, NFS and NLIC filed their answer to the plaintiffs’ fifth amended complaint and amended counterclaims. On November 1, 2007, the plaintiffs filed a motion to dismiss NFS’ and NLIC’s amended counterclaims. On November 15, 2007, the plaintiffs filed a motion for class certification. On February 8, 2008, the Court denied the plaintiffs’ motion to dismiss the amended counterclaim, with the exception that it was tentatively granting the plaintiffs’ motion to dismiss with respect to NFS’ and NLIC’s claim that it could recover any “disgorgement remedy” from plan sponsors. On April 25, 2008, NFS and NLIC filed their opposition to the plaintiffs’ motion for class certification. On September 29, 2008, the plaintiffs filed their reply to NFS’ and NLIC’s opposition to class certification. The Court has set a hearing on the class certification motion for February 27, 2009. NFS and NLIC continue to defend this lawsuit vigorously.

Tax Matters

Management has established tax reserves in accordance with current accounting guidance, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These reserves are reviewed regularly and are adjusted as events occur that management believes impact its liability for additional taxes, such as lapsing of applicable statutes of limitations; conclusion of tax audits or substantial agreement on the deductibility/nondeductibility of uncertain items; additional exposure based on current calculations; identification of new issues; release of administrative guidance; or rendering of a court decision affecting a particular tax issue. Management believes its tax reserves reasonably provide for potential assessments that may result from IRS examinations and other tax-related matters for all open tax years.

The separate account DRD is a significant component of the Company’s federal income tax provision. On August 16, 2007, the IRS issued Revenue Ruling 2007-54. This ruling took a position with respect to the DRD that could have significantly reduced the Company’s DRD. The Company believes that the position taken by the IRS in the ruling was contrary to existing law and the relevant legislative history.

In Revenue Ruling 2007-61, released September 25, 2007, the IRS and the U.S. Department of the Treasury suspended Revenue Ruling 2007-54 and informed taxpayers of their intention to address certain issues in connection with the DRD in future tax regulations. Final tax regulations could impact the Company’s DRD in periods subsequent to their effective date.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(16) Guarantees  

Since 2002, the Company has sold $677.4 million of credit enhanced equity interests in Low-Income-Housing Tax Credit Funds (LIHTC Funds) to unrelated third parties. The Company has guaranteed cumulative after-tax yields to the third party investors ranging from 3.75% to 5.25% over periods ending between 2002 and 2022. As of December 31, 2008 and 2007, the Company held guarantee reserves totaling $5.1 million and $6.0 million, respectively, on these transactions. These guarantees are in effect for periods of approximately 15 years each. The LIHTC Funds provide a stream of tax benefits to the investors that will generate a yield and return of capital. If the tax benefits are not sufficient to provide these cumulative after-tax yields, then the Company must fund any shortfall, which is mitigated by stabilization collateral set aside by the Company at the inception of the transactions. The maximum amount of undiscounted future payments that the Company could be required to pay the investors under the terms of the guarantees is $1.10 billion. The Company does not anticipate making any material payments related to these guarantees.

As of December 31, 2008, the Company held stabilization reserves of $0.8 million as collateral for certain properties owned by the LIHTC Funds that had not met all of the criteria necessary to generate tax credits. Such criteria include completion of construction and the leasing of each unit to a qualified tenant, among others. Properties meeting the necessary criteria are considered to have “stabilized.” The properties are evaluated regularly, and the collateral is released when stabilized. In 2008, $0.8 million of the stabilization reserve was released into income. In 2007, the stabilization reserve was increased by $2.4 million and $3.1 million was released into income.

To the extent there are cash deficits in any specific property owned by the LIHTC Funds, property reserves, property operating guarantees and reserves held by the LIHTC Funds are exhausted before the Company is required to perform under its guarantees. To the extent the Company is ever required to perform under its guarantees, it may recover any such funding out of the cash flow distributed from the sale of the underlying properties of the LIHTC Funds. This cash flow distribution would be paid to the Company prior to any cash flow distributions to unrelated third party investors.

(17) Variable Interest Entities  

In the normal course of business, the Company has relationships with variable interest entities (VIEs). The Company’s VIEs are conduits that assist the Company in structured products transactions involving the sale of low-income-housing tax credit funds (LIHTC Funds) to third party investors, other structured product issuances, and private equity investments.

The Company considers many factors when determining whether it is (or is not) the primary beneficiary of a VIE. There is a review of the entity’s contract and other deal related information, such as 1) the entity’s equity investment at risk, decision-making abilities, obligations to absorb economic risks and right to receive economic rewards of the entity, 2) whether the contractual or ownership interest in the entity changes with the change in fair value of the entity, and 3) through the variable interest, if the Company shares in the entity’s expected losses and residual returns.

The Company was not required to provide financial or other support outside previous contractual requirements to any VIE.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

LIHTC Funds

The Company provides guarantees to limited partners related to the amount of tax credits that will be generated by the funds (see Note 16). The results of operations and financial position of each VIE of which the Company is the primary beneficiary are consolidated along with corresponding minority interest liabilities in the accompanying consolidated financial statements.

The Company had relationships with 19 LIHTC Funds that are considered VIEs as of December 31, 2008 and December 31, 2007, where the company was the primary beneficiary. Net assets of these consolidated VIEs were $416.1 million and $465.7 million as of December 31, 2008 and December 31, 2007, respectively. The following table summarizes the components of net assets as of December 31:

(in millions)	2008			2007
Other long-term investments	$	371.1		$	434.1
Short-term investments		20.9			31.9
Other assets		41.6			38.1
Other liabilities		(17.5	)		(38.4	)

The Company’s total loss exposure from consolidated VIEs was immaterial as of December 31, 2008 and December 31, 2007 (except for the impact of guarantees disclosed in Note 16). Creditors (or beneficial interest holders) of the consolidated VIEs have no recourse to the general credit of the Company.

These LIHTC Funds are financed through the sale of these funds into the secondary market. The proceeds from these sales are used to participate in low-income housing projects that provide tax benefits to the investors.

In addition to the consolidated VIEs described above, the Company holds variable interests, in the form of LIHTC Funds that qualify as VIEs but of which the Company is not the primary beneficiary. The carrying amount on these unconsolidated VIEs was $78.9 million and $79.3 million as of December 31, 2008 and December 31, 2007, respectively. The total exposure to loss on these unconsolidated VIEs was $93.4 million and $108.5 million as of December 31, 2008 and December 31, 2007, respectively. The total exposure to loss is determined by adding any unfunded commitments to the carrying amount of the VIEs.

Structured Products

The Company had relationships with one structured product investment that is considered a VIE as of December 31, 2008 and December 31, 2007, where the Company was the primary beneficiary. Net assets of this consolidated VIE were $8.9 million and $20.1 million as of December 31, 2008 and December 31, 2007, respectively. Creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the Company. There are no arrangements that would require the Company to provide financial support to the VIE.

As of both December 31, 2008 and December 31, 2007, the Company was invested in 11 structured product investments that are considered VIEs but that the Company is not the primary beneficiary. These structured products are in the form of synthetic collateralized debt obligations and collateralized lease obligations. The carrying amount on these unconsolidated VIEs was $13.7 million and $84.0 million as of December 31, 2008 and December 31, 2007, respectively. The total exposure to loss on these unconsolidated VIEs is determined to be the carrying amount of the VIEs.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Private Equity Investments

The Company had relationships with one private equity investment that is considered a VIE as of December 31, 2008 and December 31, 2007, where the Company was the primary beneficiary. Net assets of this consolidated VIE were $18.6 million and $5.0 million as of December 31, 2008 and December 31, 2007, respectively. Creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the Company. There are no arrangements that would require the Company to provide financial support to the VIE.

As of December 31, 2008 and December 31, 2007, the Company does not have any private equity investments considered to be a VIE where the Company is not the primary beneficiary.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(18) Segment Information  

Management views the Company’s business primarily based on its underlying products and uses this basis to define its four reportable segments: Individual Investments, Retirement Plans, Individual Protection, and Corporate and Other.

The primary segment profitability measure that management uses is pre-tax operating earnings, which is calculated by adjusting income from continuing operations before federal income taxes to exclude (1) net realized investment gains and losses, except for periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, net realized gains and losses related to hedges on GMDB contracts and net realized gains and losses related to securitizations and (2) the adjustment to amortization of DAC related to net realized investment gains and losses.

Individual Investments

The Individual Investments segment consists of individual The BEST of AMERICA® and private label deferred variable annuity products, deferred fixed annuity products, income products and advisory services. Individual deferred annuity contracts provide the customer with tax-deferred accumulation of savings and flexible payout options including lump sum, systematic withdrawal or a stream of payments for life. In addition, individual variable annuity contracts provide the customer with access to a wide range of investment options and asset protection features, while individual fixed annuity contracts generate a return for the customer at a specified interest rate fixed for prescribed periods.

Retirement Plans

The Retirement Plans segment is comprised of the Company’s private and public sector retirement plans business. The private sector primarily includes IRC Section 401 business, and the public sector primarily includes IRC Section 457 and Section 401(a) business, both in the form of full-service arrangements that provide plan administration and fixed and variable group annuities as well as administration-only business.

Individual Protection

The Individual Protection segment consists of investment life insurance products, including individual variable, COLI and BOLI products; traditional life insurance products; and universal life insurance products. Life insurance products provide a death benefit and generally allow the customer to build cash value on a tax-advantaged basis.

Corporate and Other

The Corporate and Other segment includes the MTN program; structured products business; non-operating realized gains and losses, including mark-to-market adjustments on embedded derivatives, net of economic hedges, related to products with living benefits included in the Individual Investments segment; and other revenues and expenses not allocated to other segments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following tables summarize the Company’s business segment operating results for the years ended December 31:

(in millions)	Individual Investments			Retirement Plans		Individual Protection		Corporate and Other			Total
2008
Revenues:
Policy charges	$	599.0		$	115.6	$	453.4	$	—		$	1,168.0
Premiums		119.5			—		164.0		—			283.5
Net investment income		506.3			638.2		343.9		198.6			1,687.0
Non-operating net realized investment losses1		—			—		—		(1,478.2	)		(1,478.2	)
Other income		109.5			0.9		—		(65.1	)		45.3
Total revenues		1,334.3			754.7		961.3		(1,344.7	)		1,705.6
Benefits and expenses:
Interest credited to policyholder accounts		361.8			425.9		181.5		161.4			1,130.6
Benefits and claims		377.0			—		295.0		(11.7	)		660.3
Policyholder dividends		—			—		26.4		—			26.4
Amortization of DAC		647.7			39.7		113.5		(126.4	)		674.5
Interest expense		—			—		—		61.8			61.8
Other operating expenses		188.1			147.0		138.0		43.0			516.1
Total benefits and expenses		1,574.6			612.6		754.4		128.1			3,069.7
Income (loss) from continuing operations before federal income tax expense		(240.3	)		142.1		206.9		(1,472.8	)	$	(1,364.1	)
Less: non-operating net realized investment losses1		—			—		—		1,478.2
Less: adjustment to amortization related to net realized investment gains and losses		—			—		—		(138.5	)
Pre-tax operating (loss) earnings	$	(240.3	)	$	142.1	$	206.9	$	(133.1	)
Assets as of year end	$	41,902.1		$	21,671.1	$	16,563.2	$	4,676.0		$	84,812.4

1   Excluding periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment and net realized gains and losses related to hedges on GMDB contracts and securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(in millions)	Individual Investments		Retirement Plans		Individual Protection		Corporate and Other			Total
2007
Revenues:
Policy charges	$	656.9	$	139.5	$	411.9	$	—		$	1,208.3
Premiums		133.1		—		158.6		—			291.7
Net investment income		609.1		639.4		330.2		397.1			1,975.8
Non-operating net realized investment losses1		—		—		—		(156.0	)		(156.0	)
Other income		3.1		—		—		(5.8	)		(2.7	)
Total revenues		1,402.2		778.9		900.7		235.3			3,317.1
Benefits and expenses:
Interest credited to policyholder accounts		419.7		433.7		178.0		231.2			1,262.6
Benefits and claims		234.2		—		245.1		—			479.3
Policyholder dividends		—		—		24.5		—			24.5
Amortization of DAC		287.1		26.7		80.2		(25.5	)		368.5
Interest expense		—		—		—		70.0			70.0
Other operating expenses		191.6		173.6		147.1		17.2			529.5
Total benefits and expenses		1,132.6		634.0		674.9		292.9			2,734.4
Income (loss) from continuing operations before federal income tax expense		269.6		144.9		225.8		(57.6	)	$	582.7
Less: non-operating net realized investment losses1		—		—		—		156.0
Less: adjustment to amortization related to net realized investment gains and losses		—		—		—		(25.5	)
Pre-tax operating earnings	$	269.6	$	144.9	$	225.8	$	72.9
Assets as of year end	$	55,692.9	$	26,912.6	$	18,251.1	$	8,683.4		$	109,540.0

1   Excluding periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment and net realized gains and losses related to securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(in millions)	Individual Investments		Retirement Plans		Individual Protection		Corporate and Other			Total
2006
Revenues:
Policy charges	$	581.7	$	160.2	$	390.7	$	—		$	1,132.6
Premiums		142.5		—		165.8		—			308.3
Net investment income		739.5		636.0		328.2		354.8			2,058.5
Non-operating net realized investment gains 1		—		—		—		1.0			1.0
Other income		2.6		—		0.3		3.4			6.3
Total revenues		1,466.3		796.2		885.0		359.2			3,506.7
Benefits and expenses:
Interest credited to policyholder accounts		501.7		440.5		179.2		208.7			1,330.1
Benefits and claims		202.8		—		247.5		—			450.3
Policyholder dividends		—		—		25.6		—			25.6
Amortization of DAC		352.7		37.9		69.6		(9.9	)		450.3
Interest expense		—		—		—		65.5			65.5
Other operating expenses		206.3		179.1		142.4		9.0			536.8
Total benefits and expenses		1,263.5		657.5		664.3		273.3			2,858.6
Income from continuing operations before federal income tax expense		202.8		138.7		220.7		85.9		$	648.1
Less: non-operating net realized investment gains 1		—		—		—		(1.0	)
Less: adjustment to amortization related to net realized investment gains and losses		—		—		—		(9.9	)
Pre-tax operating earnings	$	202.8	$	138.7	$	220.7	$	75.0
Assets as of year end	$	55,404.6	$	28,817.2	$	16,948.8	$	8,791.8		$	109,962.4

1   Excluding periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment and net realized gains and losses related to securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule I         Consolidated Summary of Investments – Other Than Investments in Related Parties

As of December 31, 2008 (in millions)

Column A	Column B		Column C		Column D
Type of investment	Cost		Market value		Amount at which shown in the consolidated balance sheet
Fixed maturity securities available-for-sale:
Bonds:
U.S. Treasury securities and obligations of U.S. Government corporations	$	77.3	$	97.4	$	97.4
Agencies not backed by the full faith and credit of the U.S. Government		384.6		473.9		473.9
Obligations of states and political subdivisions		223.0		217.1		217.1
Foreign governments		33.9		38.9		38.9
Public utilities		1,667.7		1,578.5		1,578.5
All other corporate		19,434.4		16,841.4		16,841.4
Total fixed maturity securities available-for-sale		21,820.9		19,247.2		19,247.2
Equity securities available-for-sale:
Common stocks:
Banks, trusts and insurance companies		14.3		9.5		9.5
Industrial, miscellaneous and all other		—		0.1		0.1
Nonredeemable preferred stocks		16.6		16.9		16.9
Total equity securities available-for-sale		30.9		26.5		26.5
Mortgage loans on real estate, net		7,249.7				7,189.9	1
Real estate, net:
Investment properties		11.0				8.5	2
Acquired in satisfaction of debt		9.8				8.0	2
Total real estate, net		20.8				16.5
Policy loans		767.4				767.4
Other long-term investments		521.6				521.6
Short-term investments, including amounts managed by a related party		2,780.9				2,780.9
Total investments	$	33,192.2			$	30,550.0

1   Difference from Column B primarily is attributable to valuation allowances due to impairments on mortgage loans on real estate (see Note 6 to the audited consolidated financial statements), hedges and commitment hedges on mortgage loans on real estate.  

2   Difference from Column B primarily results from adjustments for accumulated depreciation.  

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule III        Supplementary Insurance Information

As of December 31, 2008, 2007 and 2006 and for each of the years then ended (in millions)

Column A	Column B		Column C		Column D			Column E		Column F
Year: Segment	Deferred policy acquisition costs		Future policy benefits, losses, claims and loss expenses		Unearned premiums 1			Other policy claims and benefits payable1		Premium revenue
2008
Individual Investments	$	1,883.0	$	12,026.3						$	119.5
Retirement Plans		284.3		11,244.8							—
Individual Protection		1,640.7		5,941.2							164.0
Corporate and Other		615.9		3,324.0							—
Total	$	4,423.9	$	32,536.3						$	283.5
2007
Individual Investments	$	2,078.1	$	10,748.6						$	133.1
Retirement Plans		289.7		10,693.7							—
Individual Protection		1,542.5		5,635.9							158.6
Corporate and Other		87.1		4,920.2							—
Total	$	3,997.4	$	31,998.4						$	291.7
2006
Individual Investments	$	1,945.0	$	13,004.4						$	142.5
Retirement Plans		288.6		10,839.0							—
Individual Protection		1,441.0		5,574.1							165.8
Corporate and Other		83.4		4,991.9							—
Total	$	3,758.0	$	34,409.4						$	308.3
Column A	Column G		Column H		Column I			Column J		ColumnK
Year: Segment	Net investment income2		Benefits, claims, losses and settlement expenses		Amortization of deferred policy acquisition costs			Other operating expenses 2		Premiums written
2008
Individual Investments	$	506.3	$	738.8	$	647.7		$	188.1
Retirement Plans		638.2		425.9		39.7			147.0
Individual Protection		343.9		502.9		113.5			138.0
Corporate and Other		198.6		149.7		(126.4	)		104.8
Total	$	1,687.0	$	1,817.3	$	674.5		$	577.9
2007
Individual Investments	$	609.1	$	653.9	$	287.1		$	191.6
Retirement Plans		639.4		433.7		26.7			173.6
Individual Protection		330.2		447.6		80.2			147.1
Corporate and Other		397.1		231.2		(25.5	)		87.1
Total	$	1,975.8	$	1,766.4	$	368.5		$	599.4
2006
Individual Investments	$	739.5	$	704.5	$	352.7		$	206.3
Retirement Plans		636.0		440.5		37.9			179.1
Individual Protection		328.2		452.3		69.6			142.4
Corporate and Other		354.8		208.7		(9.9	)		74.5
Total	$	2,058.5	$	1,806.0	$	450.3		$	602.3

1   Unearned premiums and other policy claims and benefits payable are included in Column C amounts.  

2   Allocations of net investment income and certain operating expenses are based on numerous assumptions and estimates, and reported segment operating results would change if different methods were applied.  

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule IV        Reinsurance

As of December 31, 2008, 2007 and 2006 and for each of the years then ended (dollars in millions)

Column A	Column B		Column C		Column D		Column E		Column F
	Gross amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount assumed to net
2008
Life insurance in force	$	167,715.4	$	58,850.8	$	3.8	$	108,868.4	0.0%
Premiums:
Life insurance1	$	348.2	$	64.8	$	0.1	$	283.5	0.0%
Accident and health insurance		182.9		209.3		26.4		—	NM
Total	$	531.1	$	274.1	$	26.5	$	283.5	9.3%
2007
Life insurance in force	$	156,899.3	$	58,529.0	$	4.4	$	98,374.7	0.0%
Premiums:
Life insurance1	$	364.2	$	72.7	$	0.2	$	291.7	0.0%
Accident and health insurance		289.2		316.8		27.6		—	NM
Total	$	653.4	$	389.5	$	27.8	$	291.7	9.5%
2006
Life insurance in force	$	151,109.9	$	58,189.8	$	7.9	$	92,928.0	0.0%
Premiums:
Life insurance1	$	336.4	$	28.4	$	0.3	$	308.3	0.1%
Accident and health insurance		388.9		417.4		28.5		—	NM
Total	$	725.3	$	445.8	$	28.8	$	308.3	9.3%

1   Primarily represents premiums from traditional life insurance and life-contingent immediate annuities and excludes deposits on investment and universal life insurance products.  

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule V        Valuation and Qualifying Accounts

Years ended December 31, 2008, 2007 and 2006 (in millions)

Column A	Column B		Column C				Column D		Column E
Description	Balance at beginning of period		Charged (credited) to costs and expenses		Charged to other accounts		Deductions1		Balance at end of period
2008
Valuation allowances - mortgage loans on real estate	$	23.1	$	19.6	$	—	$	3.2	$	39.5
2007
Valuation allowances - mortgage loans on real estate	$	34.3	$	1.1	$	—	$	12.3	$	23.1
2006
Valuation allowances - mortgage loans on real estate	$	31.1	$	6.0	$	—	$	2.8	$	34.3

1   Amounts represent transfers to real estate owned and recoveries.  

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

PART C. OTHER INFORMATION

Item 24.                 Financial Statements and Exhibits

(a)         Financial Statements:

Nationwide Variable Account-II:

Report of Independent Registered Public Accounting Firm.

Statement of Assets, Liabilities and Contract

Owners’ Equity as of December 31, 2008 .

Statements of Operations for the year ended December 31, 2008 .

Statements of Changes in Contract Owners’ Equity for the years

ended December 31, 2008 and 2007 .

Notes to Financial Statements.

Nationwide Life Insurance Company and subsidiaries:

Report of Independent Registered Public Accounting Firm

Consolidated Statements of (Loss) Income for the

years ended December 31, 2008 , 2007 and

2006 .

Consolidated Balance Sheets as of December

31, 2008 and 2007 .

Consolidated Statements of Changes in Shareholder's

Equity as of December 31, 2008 ,

2007 and 2006 .

Consolidated Statements of Cash Flows for

the years ended December 31, 2008 , 2007

and 2006 .

Notes to Consolidated Financial Statements.

Financial Statement Schedules.

Item 24.                 (b) Exhibits

(1) Resolution of the Depositor’s Board of Directors authorizing the establishment of the Registrant – Filed with Post-Effective Amendment No. 16 on April 30, 2007 (File No. 333-103093) as Exhibit -1 and hereby incorporated by reference.

(2) Not Applicable

(3) Underwriting or Distribution of Contracts between the Depositor and NISC as Principal Underwriter – Filed with Post-Effective Amendment No. 16 on April 30, 2007 (File No. 333-103093) as Exhibit -3 and hereby incorporated by reference.

(4) The form of the variable annuity Contract – Filed with Pre-Effective Amendment No. 1 on March 25, 2008 (File No. 333-147273) as Exhibit 4 and hereby incorporated by reference.

(5) Variable Annuity Application – Filed with Pre-Effective Amendment No. 1 on March 25, 2008 (File No. 333-147273) as Exhibit 4 and hereby incorporated by reference.

(6) Articles of Incorporation of Depositor – Filed with Post-Effective Amendment No. 16 on April 30, 2007 (File No. 333-103093) as Exhibit 6 and hereby incorporated by reference.

(7) Not Applicable

(8) Fund Participation Agreements.  The following fund participation agreements were filed previously on July 17, 2007, with Pre-Effective Amendment No. 1 (File No. 333-140608) as exhibit 26(h) and hereby incorporated by reference:

1) Fund Participation Agreement with AIM Variable Insurance Funds, AIM Advisors, Inc., and AIM Distributors dated January 6, 2003.

2) Amended and Restated Fund Participation and Shareholder Services Agreement with American Century Investment Services, Inc. dated September 15, 2004, as amended.

3) Restated and Amended Fund Participation Agreement with The Dreyfus Corporation dated January 27, 2000, as amended.

4) Fund Participation Agreement with Fidelity Variable Insurance Products Fund dated May 1, 1988, as amended, including Fidelity Variable Insurance Products Fund IV and Fidelity Variable Insurance Products Fund V.

5) Fund Participation Agreement with Fidelity Variable Insurance Products Fund II dated July 15, 1989, as amended, including Fidelity Variable Insurance Products Fund IV and Fidelity Variable Insurance Products Fund V.

6) Fund Participation Agreement with Fidelity Variable Insurance Products Fund III dated November 22, 1994, as amended, including Fidelity Variable Insurance Products Fund IV and Fidelity Variable Insurance Products Fund V.

7) Amended and Restated Fund Participation Agreement with Franklin Templeton Variable Insurance Products Trust and Franklin/Templeton Distributors, Inc. dated May 1, 2003; as amended.

8)(a) Fund Participation Agreement, Service and Institutional Shares, with Janus Aspen Series, dated December 31, 1999.

8)(b) Fund Participation Agreement, Service II Shares, with Janus Aspen Series, dated May 5, 2002.

9) Fund Participation Agreement with Neuberger Berman Advisers Management Trust / Lehman Brothers Advisers Management Trust (formerly, Neuberger Berman Advisers Management Trust) dated January 1, 2006.

10) Amended and Restated Fund Participation Agreement with MFSÒ Variable Insurance Trust and Massachusetts Financial Services Company dated February 1, 2003 as amended.

11)(a) Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust) dated May 2, 2005, as amended.

11)(b) Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust), American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2006.

12) Fund Participation Agreement with Oppenheimer Variable Account Funds and Oppenheimer Funds, Inc. dated April 13, 2007.

13) Fund Participation Agreement with T. Rowe Price Equity Series, Inc., T. Rowe Price International Series, Inc., T. Rowe Price Fixed Income Series, Inc., and T. Rowe Price Investment Services, Inc. dated October 1, 2002, as amended.

14) Fund Participation Agreement with The Universal Institutional Funds, Inc., Morgan Stanley Distribution, Inc., and Morgan Stanley Investment Management, Inc. dated February 1, 2002, as amended.

The following fund participation agreement was filed previously on September 27, 2007, with Pre-Effective Amendment No. 3 (File No. 333-137202) as exhibit 26(h) and is hereby incorporated by reference:

1) Fund Participation Agreement (Amended and Restated) with Alliance Capital Management L.P. and AllianceBernstein Investment Research and Management, Inc. dated June 1, 2003.

The following fund participation agreement was filed previously on April 18, 2008, with Post-Effective Amendment No. 10 (File No. 333-105992) as exhibit 26(h) and is hereby incorporated by reference:

1) Fund Participation Agreement with Schwab Annuity Portfolios, Charles Schwab Investment Management, Inc., and Charles Schwab & Co., Inc. dated September 1, 2003.

(9) Opinion of Counsel – Filed with Pre-Effective Amendment No. 1 on March 25, 2008 (File No. 333-147273) as Exhibit 4 and is hereby incorporated by reference.

(10) Consent of Independent Registered Public Accounting Firm – Attached hereto.

(11) Not Applicable

(12) Not Applicable

(99) Power of Attorney – Attached hereto.

Item 25.                      Directors and Officers of the Depositor

President, Chief Operating Officer and Director	Mark R. Thresher
Executive Vice President and Chief Legal and Governance Officer	Patricia R. Hatler
Executive Vice President-Chief Administrative Officer	Terri L. Hill
Executive Vice President-Chief Information Officer	Michael C. Keller
Executive Vice President-Chief Marketing Officer	James R. Lyski
Executive Vice President-Finance and Director	Lawrence A. Hilsheimer
Senior Vice President and Treasurer	Harry H. Hallowell
Senior Vice President-Associate Services	Robert J. Puccio
Senior Vice President-Chief Compliance Officer	Carol Baldwin Moody
Senior Vice President-Chief Financial Officer and Director	Timothy G. Frommeyer
Senior Vice President-Chief Investment Officer	Gail G. Snyder
Senior Vice President-Chief Litigation Counsel	Randolph C. Wiseman
Senior Vice President-Chief Risk Officer	Michael W. Mahaffey
Senior Vice President-CIO NSC	Robert J. Dickson
Senior Vice President-CIO Strategic Investments	Gary I. Siroko
Senior Vice President-Customer Insight/Analytic	Paul D. Ballew
Senior Vice President-Customer Relationships	David R. Jahn
Senior Vice President-Division General Counsel	Roger A. Craig
Senior Vice President-Division General Counsel	Thomas W. Dietrich
Senior Vice President-Division General Counsel	Sandra L. Neely
Senior Vice President-Government Relations	Jeffrey D. Rouch
Senior Vice President-Head of Taxation	Pamela A. Biesecker
Senior Vice President-Health and Productivity	Holly R. Snyder
Senior Vice President-Human Resources	Kim R. Geyer
Senior Vice President-Individual Investments Business Head	Eric S. Henderson
Senior Vice President-Individual Protection Business Head and Director	Peter A. Golato
Senior Vice President-PCIO Information Technology	Srinivas Koushik
Senior Vice President-NF Marketing	Gordon E. Hecker
Senior Vice President-NF Systems	Susan Gueli
Senior Vice President-NFN Retail Distribution	Michael A. Hamilton
Senior Vice President-Non-Affiliated Sales	John L. Carter
Senior Vice President-NW Retirement Plans	William S. Jackson
Senior Vice President-President – Nationwide Bank	Anne L. Arvia
Senior Vice President-President-Nationwide Funds Group	Michael S. Spangler
Senior Vice President-Property and Casualty Commercial/Farm Product Pricing	W. Kim Austen
Senior Vice President-PCIO Human Resources	Gale V. King
Senior Vice President-Property and Casualty Personal Lines Product Pricing	J. Lynn Greenstein
Senior Vice President	Kai V. Monahan
Associate Vice President – NF Human Resources	Lydia P. Migitz
Associate Vice President-Assistant Secretary	Kathy R. Richards
Director	Stephen S. Rasmussen

 

The business address of the Directors and Officers of the Depositor is:

One Nationwide Plaza, Columbus, Ohio 43215

Item 26.                   Persons Controlled by or Under Common Control with the Depositor or Registrant.

*	Subsidiaries for which separate financial statements are filed
**	Subsidiaries included in the respective consolidated financial statements
***	Subsidiaries included in the respective group financial statements filed for unconsolidated subsidiaries
****	Other subsidiaries

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
1492 Capital, LLC	Ohio		The company acts as an investment holding company.
1717 Brokerage Services, Inc.	Pennsylvania		The company is a multi-state licensed insurance agency.
AGMC Reinsurance, Ltd.	Turks & Caicos Islands		The company is in the business of reinsurance of mortgage guaranty risks.
ALLIED General Agency Company	Iowa		The company acts as a managing general agent and surplus lines broker for property and casualty insurance products.
ALLIED Group, Inc.	Iowa		The company is a property and casualty insurance holding company.
ALLIED Property and Casualty Insurance Company	Iowa		The company underwrites general property and casualty insurance.
ALLIED Texas Agency, Inc.	Texas		The company acts as a managing general agent to place personal and commercial automobile insurance with Colonial County Mutual Insurance Company for the independent agency companies.
AMCO Insurance Company	Iowa		The company underwrites general property and casualty insurance.
American Marine Underwriters, Inc.	Florida		The company is an underwriting manager for ocean cargo and hull insurance.
Atlantic Floridian Insurance Company	Ohio		The company writes personal lines residential property insurance in the State of Florida.
Atlantic Insurance Company	Texas		The company operates as a multi-line insurance company.
Audenstar Limited	England		The company is an investment holding company.
Champions of the Community, Inc.	Ohio		The company raises money to enable it to make gifts and grants to charitable organizations.
Colonial County Mutual Insurance Company*	Texas		The company underwrites non-standard automobile and motorcycle insurance and various other commercial liability coverages in Texas.
Crestbrook Insurance Company*	Ohio		The company is an Ohio-based multi-line insurance corporation that is authorized to write personal, automobile, homeowners and commercial insurance.
Depositors Insurance Company	Iowa		The company underwrites general property and casualty insurance.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
DVM Insurance Agency, Inc.	California		The company places pet insurance business not written by Veterinary Pet Insurance Company outside of California with National Casualty Company.
Farmland Mutual Insurance Company	Iowa		The company provides property and casualty insurance primarily to agricultural businesses.
Nationwide Better Health, Inc.  (fka Future Health Holding Company)	Maryland		The company provides population health management.
Gates, McDonald & Company*	Ohio		The company provides services to employers for managing workers’ and unemployment compensation matters and employee leave administration.
Gates, McDonald & Company of New York, Inc.	New York		The company provides workers’ compensation and self-insured claims administration services to employers with exposure in New York.
GatesMcDonald Health Plus Inc.	Ohio		The company provides medical management and cost containment services to employers.
Insurance Intermediaries, Inc.	Ohio		The company is an insurance agency and provides commercial property and casualty brokerage services.
Life REO Holdings, LLC	Ohio		The company is an investment company.
Lone Star General Agency, Inc.	Texas		The company acts as general agent to market nonstandard automobile and motorcycle insurance for Colonial County Mutual Insurance Company.
National Casualty Company	Wisconsin		The company underwrites various property and casualty coverage, as well as some individual and group accident and health insurance.
National Casualty Company of America, Ltd.	England		This is a limited liability company organized for the purpose of carrying on the business of insurance, reinsurance, indemnity, and guarantee of various kinds.  The company is currently inactive.
Nationwide Advantage Mortgage Company*	Iowa		The company makes residential mortgage loans.
Nationwide Affinity Insurance Company of America*	Ohio		The company is a property and casualty insurer that writes personal lines business.
Nationwide Agribusiness Insurance Company	Iowa		The company provides property and casualty insurance primarily to agricultural businesses.
Nationwide Arena, LLC*	Ohio		The purpose of the company is to develop Nationwide Arena and to engage in related development activity.
Nationwide Asset Management Holdings	England and Wales		The company operates as an investment holding company.
Nationwide Asset Management, LLC	Ohio		The company provides investment advisory services as a registered investment advisor to affiliated and non-affiliated clients.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Assurance Company	Wisconsin		The company underwrites non-standard automobile and motorcycle insurance.
Nationwide Bank*	United States		This is a federal savings bank chartered by the Office of Thrift Supervision in the United States Department of Treasury to exercise deposit, lending, agency, custody and fiduciary powers and to engage in activities permissible for federal savings banks under the Home Owners’ Loan Act of 1933.
Nationwide Better Health Holding Company (fka Nationwide Better Health, Inc.)	Ohio		The company provides health management services.
Nationwide Cash Management Company	Ohio		The company buys and sells investment securities of a short-term nature as the agent for other corporations, foundations and insurance company separate accounts.
Nationwide Community Development Corporation, LLC	Ohio		The company holds investments in low-income housing funds.
Nationwide Corporation	Ohio		The company acts primarily as a holding company for entities affiliated with Nationwide Mutual Insurance.
Nationwide Document Solutions, Inc.	Iowa		The company provides general printing services to its affiliated companies as well as to certain unaffiliated companies.
Nationwide Emerging Managers, LLC	Delaware		The company acquires and holds interests in registered investment advisors and provides investment management services.
Nationwide Exclusive Agent Risk Purchasing Group, LLC	Ohio		The company’s purpose is to provide a mechanism for the purchase of group liability insurance for insurance agents operating nationwide.
Nationwide Financial Assignment Company	Ohio		The company is an administrator of structured settlements.
Nationwide Financial Institution Distributors Agency, Inc.	Delaware		The company is an insurance agency.
Nationwide Financial Services Capital Trust	Delaware		The trust’s sole purpose is to issue and sell certain securities representing individual beneficial interests in the assets of the trust.
Nationwide Financial Services, Inc.*	Delaware		The company acts primarily as a holding company for companies within the Nationwide organization that offer or distribute long-term savings and retirement products.
Nationwide Financial Structured Products, LLC	Ohio		The company captures and reports the results of the structured products business unit.
Nationwide Foundation*	Ohio		The company contributes to non-profit activities and projects.
Nationwide Fund Advisors (fka Gartmore Mutual Fund Capital Trust)	Delaware		The trust acts as a registered investment advisor.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Fund Distributors LLC (successor to Gartmore Distribution Services, Inc.)	Delaware		The company is a limited purpose broker-dealer.
Nationwide Fund Management LLC (successor to Gartmore Investors Services, Inc.)	Delaware		The company provides administration, transfer and dividend disbursing agent services to various mutual fund entities.
Nationwide General Insurance Company	Ohio		The company transacts a general insurance business, except life insurance, and primarily provides automobile and fire insurance to select customers.
Nationwide Global Funds	Luxembourg		The exclusive purpose of the Company is to invest the funds available to it in transferable securities and other assets permitted by law with the aim of spreading investment risks and affording its shareholders the results of the management of its assets.
Nationwide Global Holdings, Inc.	Ohio		The company is a holding company for the international operations of Nationwide.
Nationwide Global Ventures, Inc.	Delaware		The company acts as a holding company.
Nationwide Indemnity Company*	Ohio		The company is involved in the reinsurance business by assuming business from Nationwide Mutual Insurance Company and other insurers within the Nationwide insurance organization.
Nationwide Insurance Company of America	Wisconsin		The company is an independent agency personal lines underwriter of property and casualty insurance.
Nationwide Insurance Company of Florida*	Ohio		The company transacts general insurance business, except life insurance.
Nationwide International Underwriters	California		The company is a special risks, excess and surplus lines under­writing manager.
Nationwide Investment Advisors, LLC	Ohio		The company provides investment advisory services.
Nationwide Investment Services Corporation**	Oklahoma		This is a limited purpose broker-dealer and distributor of variable annuities and variable life products for Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company. The company also provides educational services to retirement plan sponsors and its participants.
Nationwide Life and Annuity Company of America**	Delaware		The company provides individual variable and traditional life insurance and other investment products. The company also maintains blocks of individual variable and fixed annuities products.
Nationwide Life and Annuity Insurance Company**	Ohio		The company engages in underwriting life insurance and granting, purchasing and disposing of annuities.
Nationwide Life Insurance Company*	Ohio		The company pro­vides individual life insurance, group life and health insurance, fixed and variable annuity products and other life insurance products.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Life Insurance Company of America*	Pennsylvania		The company is a financial services provider that sells individual traditional and variable life insurance products, group annuity products and other investment products. The Company also maintains blocks of individual variable and fixed annuities and a block of direct response-marketed life and health insurance products.
Nationwide Lloyds	Texas		The company markets commercial and property insurance in Texas.
Nationwide Mutual Capital, LLC	Ohio		The company acts as a private equity fund investing in companies for investment purposes and to create strategic opportunities for Nationwide.
Nationwide Mutual Capital I, LLC*	Delaware		The business of the company is to achieve long term capital appreciation through a portfolio of primarily domestic equity investments in financial service and related companies.
Nationwide Mutual Fire Insurance Company	Ohio		The company engages in a general insurance and reinsurance business, except life insurance.
Nationwide Mutual Insurance Company*	Ohio		The company engages in a general insurance and reinsurance business, except life insurance.
Nationwide Private Equity Fund, LLC	Ohio		The company invests in private equity funds.
Nationwide Property and Casualty Insurance Company	Ohio		The company engages in a general insurance business, except life insurance.
Nationwide Property Protection Services, LLC	Ohio		The company provides alarm systems and security guard services.
Nationwide Provident Holding Company*	Pennsylvania		The company is a holding company for non-insurance subsidiaries.
Nationwide Realty Investors, Ltd.*	Ohio		The company is engaged in the business of developing, owning and operating real estate and real estate investment.
Nationwide Retirement Solutions, Inc.*	Delaware		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Arizona	Arizona		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Ohio	Ohio		The company provides retirement products, marketing , education and administration to public employees.
Nationwide Retirement Solutions, Inc. of Texas	Texas		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Insurance Agency, Inc.	Massachusetts		The company markets and administers deferred compensation plans for public employees.
Nationwide SA Capital Trust	Delaware		The trust acts as a registered investment advisor.
Nationwide Sales Solutions, Inc.	Iowa		The company engages in the direct marketing of property and casualty insurance products.
Nationwide Securities, LLC	Delaware		The company is a registered broker-dealer and provides investment management and administrative services.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Separate Accounts, LLC	Delaware		The company has deregistered as an investment advisor and acts as a holding company.
Nationwide Services Company, LLC	Ohio		The company performs shared services functions for the Nationwide organization.
Nationwide Services For You, LLC	Ohio		The company provides consumer services that are related to the business of insurance, including services that help consumers prevent losses and mitigate risks.
Newhouse Capital Partners, LLC	Delaware		The company is an investment holding company.
Newhouse Capital Partners II, LLC	Delaware		The company is an investment holding company.
Newhouse Special Situations Fund I, LLC	Delaware		The company is currently inactive.
NF Reinsurance Ltd.*	Bermuda		The company serves as a captive reinsurer for Nationwide Life Insurance Company’s universal life, term life and annuity business.
NFS Distributors, Inc.	Delaware		The company acts primarily as a holding company for Nationwide Financial Services, Inc.’s distribution companies.
NMC CPC WT Investment, LLC	Delaware		The business of the company is to hold and exercise rights in a specific private equity investment.
NWD Asset Management Holdings, Inc.	Delaware		The company is an investment holding company.
NWD Investment Management, Inc.	Delaware		The company acts as a holding company and provides other business services for the NWD Investments group of companies.
NWD Management & Research Trust	Delaware		The company acts as a holding company for the NWD Investments group of companies and as a registered investment advisor.
NWD MGT, LLC	Delaware		The company is a passive investment holder in Newhouse Special Situations Fund I, LLC for the purpose of allocation of earnings to the NWD Investments management team as it relates to the ownership and management of Newhouse Special Situations Fund I, LLC.
NWM Merger, Sub Inc.	Delaware		This company was merged with and into Nationwide Financial Services, Inc. on January 1, 2009 as part of the acquisition of the publicly held shares of Nationwide Financial Services, Inc.
Pension Associates, Inc.	Wisconsin		The company provides pension plan administration and record keeping services, and pension plan and compensation consulting.
Premier Agency, Inc.	Iowa		The company is an insurance agency.
Privilege Underwriters, Inc.	Florida		The company acts as a holding company for the PURE Group of insurance companies.
Privilege Underwriters, Reciprocal Exchange	Florida		The company acts as a reciprocal insurance company.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Pure Insurance Company	Florida		The company acts as a captive reinsurance company.
Pure Risk Management, LLC	Florida		The company acts as an attorney-in-fact for Privilege Underwriters Reciprocal Exchange.
Registered Investment Advisors Services, Inc.	Texas		The company is a technology company that facilitates third-party money management services for registered investment advisors.
Retention Alternatives, Ltd.*	Bermuda		The company is a captive insurer and writes first dollar insurance policies in workers’ compensation, general liability and automobile liability for its affiliates in the United States.
Riverview International Group, Inc.	Delaware		The company is an insurance company.
RP&C International, Inc.	Ohio		The company is an investment-banking firm that provides specialist advisory services and innovative financial solutions to public and private companies internationally.
Scottsdale Indemnity Company	Ohio		The company is engaged in a general insurance business, except life insurance.
Scottsdale Insurance Company	Ohio		The company primarily provides excess and surplus lines of property and casualty insurance.
Scottsdale Surplus Lines Insurance Company	Arizona		The company provides excess and surplus lines coverage on a non-admitted basis.
TBG Danco Insurance Services Corporation	California		The corporation provides life insurance and individual executive estate planning.
THI Holdings (Delaware), Inc.*	Delaware		The company acts as a holding company for subsidiaries of the Nationwide group of companies.
Titan Auto Insurance of New Mexico, Inc.	New Mexico		The company is an insurance agency that operates employee agent storefronts.
Titan Indemnity Company	Texas		The company is a multi-line insurance company and is operating primarily as a property and casualty insurance company.
Titan Insurance Company	Michigan		The company is a property and casualty insurance company.
Titan Insurance Services, Inc.	Texas		The company is a Texas grandfathered managing general agency.
Veterinary Pet Insurance Company*	California		The company provides pet insurance.
Victoria Automobile Insurance Company	Indiana		The company is a property and casualty insurance company.
Victoria Fire & Casualty Company	Ohio		The company is a property and casualty insurance company.
Victoria National Insurance Company	Ohio		The company is a property and casualty insurance company.
Victoria Select Insurance Company	Ohio		The company is a property and casualty insurance company.
Victoria Specialty Insurance Company	Ohio		The company is a property and casualty insurance company.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
VPI Services, Inc.	California		The company operates as a nationwide pet registry service for holders of Veterinary Pet Insurance Company policies, including pet indemnification and a lost pet recovery program.
Washington Square Administrative Services, Inc.	Pennsylvania		The company provides administrative services to Nationwide Life and Annuity Company of America.
Western Heritage Insurance Company	Arizona		The company underwrites excess and surplus lines of property and casualty insurance.
Whitehall Holdings, Inc.	Texas		The company acts as a holding company for the Titan group of agencies.
W.I. of Florida (d.b.a. Titan Auto Insurance)	Florida		The company is an insurance agency and operates as an employee agent storefront for Titan Indemnity Company in Florida.

	COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart  unless otherwise indicated)	PRINCIPAL BUSINESS
*	MFS Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide Multi-Flex Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-A	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-B	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-C	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-D	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-II	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-3	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-4	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-5	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-6	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-7	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-8	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-9	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-10	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-11	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-12	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-13	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-14	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-15	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-16	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-17	Ohio		Issuer of Annuity Contracts
*	Nationwide Provident VA Separate Account 1	Pennsylvania		Issuer of Annuity Contracts
*	Nationwide Provident VA Separate Account A	Delaware		Issuer of Annuity Contracts
	Nationwide VL Separate Account-A	Ohio		Issuer of Life Insurance Policies
	Nationwide VL Separate Account-B	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-C	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-D	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-G	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-2	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-3	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-4	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-5	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-6	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-7	Ohio		Issuer of Life Insurance Policies
*	Nationwide Provident VLI Separate Account 1	Pennsylvania		Issuer of Life Insurance Policies
*	Nationwide Provident VLI Separate Account A	Delaware		Issuer of Life Insurance Policies

Item 27.                 Number of Contract Owners

The number of Contract Owners of Qualified and Non-Qualified Contracts as of February 1, 2009 was 28 and 80 respectively.

Item 28.                 Indemnification

Provision is made in Nationwide’s Amended and Restated Code of Regulations and expressly authorized by the General Corporation Law of the State of Ohio, for indemnification by Nationwide of any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that such person is or was a director, officer or employee of Nationwide, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, to the extent and under the circumstances permitted by the General Corporation Law of the State of Ohio.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 ("Act") may be permitted to directors, officers or persons controlling Nationwide pursuant to the foregoing provisions, Nationwide has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 29.                 Principal Underwriter

(a) Nationwide Investment Services Corporation ("NISC") serves as principal underwriter and general distributor for the following separate investment accounts of Nationwide or its affiliates:

MFS Variable Account	Nationwide VLI Separate Account
Multi-Flex Variable Account	Nationwide VLI Separate Account-2
Nationwide Variable Account	Nationwide VLI Separate Account-3
Nationwide Variable Account-II	Nationwide VLI Separate Account-4
Nationwide Variable Account-3	Nationwide VLI Separate Account-5
Nationwide Variable Account-4	Nationwide VLI Separate Account-6
Nationwide Variable Account-5	Nationwide VLI Separate Account-7
Nationwide Variable Account-6	Nationwide VL Separate Account-C
Nationwide Variable Account-7	Nationwide VL Separate Account-D
Nationwide Variable Account-8	Nationwide VL Separate Account-G
Nationwide Variable Account-9	Nationwide Provident VA Separate Account 1
Nationwide Variable Account-10	Nationwide Provident VA Separate Account A
Nationwide Variable Account-11	Nationwide Provident VLI Separate Account 1
Nationwide Variable Account-12	Nationwide Provident VLI Separate Account A
Nationwide Variable Account-13
Nationwide Variable Account-14
Nationwide VA Separate Account-A
Nationwide VA Separate Account-B
Nationwide VA Separate Account-C
Nationwide VA Separate Account-D

(b) Directors and Officers of NISC:

President	Robert O. Cline
Senior Vice President, Treasurer and Director	James D. Benson
Vice President	Karen R. Colvin
Vice President	Charles E. Riley
Vice President-Chief Compliance Officer	James J. Rabenstine
Associate Vice President and Secretary	Kathy R. Richards
Associate Vice President-Financial Systems & Treasury Services and Assistant Treasurer	Terry C. Smetzer
Associate Vice President	John J. Humphries, Jr.
Assistant Secretary	Mark E. Hartman
Director	John L. Carter
Director	Eric S. Henderson

The business address of the Directors and Officers of Nationwide Investment Services Corporation is:

One Nationwide Plaza, Columbus, Ohio 43215

(c)

Name of Principal Underwriter	Net Underwriting Discounts and Commissions	Compensation on Redemption or Annuitization	Brokerage Commissions	Compensation
Nationwide Investment Services Corporation	N/A	N/A	N/A	N/A

Item 30.                 Location of Accounts and Records

Timothy G. Frommeyer

Nationwide Life Insurance Company

One Nationwide Plaza

Columbus, OH  43215

Item 31.                 Management Services

Not Applicable

Item 32.                 Undertakings

The Registrant hereby undertakes to:

(a) file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old for so long as payments under the variable annuity Contracts may be accepted;

(b) include either (1) as part of any application to purchase a Contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information; and

(c) deliver any Statement of Additional Information and any financial statements required to be made available under this form promptly upon written or oral request.

Nationwide Life Insurance Company represents that the fees and charges deducted under the Contract in the aggregate are reasonable in relation to the services rendered, the expenses expected to be incurred and risks assumed by Nationwide Life Insurance Company .

SIGNATURES

As required by the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, NATIONWIDE VARIABLE ACCOUNT-II certifies that it meets the requirements of the Securities Act Rule 485(b) for effectiveness of the Registration Statement and has caused this Registration Statement to be signed on its behalf in the City of Columbus, and State of Ohio, on this 15 th day of April, 2009 .

NATIONWIDE VARIABLE ACCOUNT-II

(Registrant)

NATIONWIDE LIFE INSURANCE COMPANY

(Depositor)

By /s/ W. MICHAEL STOBART

W. Michael Stobart

As required by the Securities Act of 1933, this Post-Effective Amendment has been signed by the following persons in the capacities indicated on the 15 th day of April, 2009 .

MARK R. THRESHER
Mark R. Thresher, President, Chief Operating Officer and Director
LAWRENCE A. HILSHEIMER
Lawrence A. Hilsheimer, Executive Vice President-Finance and Director
TIMOTHY G. FROMMEYER
Timothy G. Frommeyer, Senior Vice President-Chief Financial Officer and Director
PETER A. GOLATO
Peter A. Golato, Senior Vice President-Individual Protection Business Head and Director
STEPHEN S. RASMUSSEN
Stephen S. Rasmussen, Director
	By /s/ W. MICHAEL STOBART
	W. Michael Stobart
	Attorney-in-Fact