-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AR94zgMQ9a8/8a1plkHm8XAtiK7Dgn9HwJr4cwXc2RNN16vQY8UdZI6idfzYxKmM 4zl4ZoOsK0ptoVCJErgPOQ== 0000950152-02-004493.txt : 20020522 0000950152-02-004493.hdr.sgml : 20020522 20020522152559 ACCESSION NUMBER: 0000950152-02-004493 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20020522 EFFECTIVENESS DATE: 20020522 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONWIDE VLI SEPARATE ACCOUNT 4 CENTRAL INDEX KEY: 0001041357 IRS NUMBER: 314156830 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 333-53728 FILM NUMBER: 02659846 BUSINESS ADDRESS: STREET 1: C/O NATIONWIDE LIFE INSURANCE CO STREET 2: ONE NATIONWIDE PLAZA CITY: COLUMBUS STATE: OH ZIP: 43216 BUSINESS PHONE: 8008603946 MAIL ADDRESS: STREET 1: C/O NATIONWIDE LIFE INSURANCE CO STREET 2: ONE NATIONWIDE PLAZA CITY: COLUMBUS STATE: OH ZIP: 43216 485BPOS 1 l94574ae485bpos.txt NATIONWIDE VLI SEPARATE ACCOUNT - 4 485BPOS Registration No. 333-53728 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 3 TO FORM S-6 FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 ---------- NATIONWIDE VLI SEPARATE ACCOUNT-4 (EXACT NAME OF TRUST) ---------- NATIONWIDE LIFE INSURANCE COMPANY ONE NATIONWIDE PLAZA COLUMBUS, OHIO 43215 (EXACT NAME AND ADDRESS OF DEPOSITOR AND REGISTRANT) PATRICIA R. HATLER SECRETARY ONE NATIONWIDE PLAZA COLUMBUS, OHIO 43215 (NAME AND ADDRESS OF AGENT FOR SERVICE) This Post-Effective Amendment amends the Registration Statement with respect to the Prospectus, Financial Statements, and Part II. It is proposed that this filing will become effective (check appropriate box): | | immediately upon filing pursuant to paragraph (b) of Rule 485 |X| on May 22, 2002 pursuant to paragraph (b) of Rule 485 | | 60 days after filing pursuant to paragraph (a)(1) of Rule 485 | | on (date) pursuant to paragraph (a)(1) of Rule 485 If appropriate check the following box: | | This post-effective amendment designates a new effective date for a previously filed post-effective amendment Title of Securities being registered: Flexible Premium Variable Universal Life Insurance Policies Approximate date of proposed offering: Continuously on and after May 22, 2002 | | Check box if it is proposed that this filing will become effective on (date) at (time) pursuant to Rule 487. SUPPLEMENT DATED MAY 22, 2002 TO PROSPECTUS DATED MAY 1, 2002 FOR FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICIES ISSUED BY NATIONWIDE LIFE INSURANCE COMPANY THROUGH ITS NATIONWIDE VLI SEPARATE ACCOUNT - 4 THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN YOUR PROSPECTUS. PLEASE READ IT AND KEEP IT WITH YOUR PROSPECTUS FOR FUTURE REFERENCE. 1. EFFECTIVE MAY 22, 2002, THE LIST OF UNDERLYING MUTUAL FUNDS AT THE BEGINNING OF YOUR PROSPECTUS IS MODIFIED AS FOLLOWS: The following underlying mutual fund is not available for policies issued on or after January 25, 2002: DREYFUS - - Dreyfus Investment Portfolios - European Equity Portfolio: Initial Shares 2. "Appendix A: Objectives for Underlying Mutual Funds" is amended as follows: DREYFUS INVESTMENT PORTFOLIOS Dreyfus Investment Portfolios (the "Fund") is an open-end, management investment company known as a mutual fund. Shares are offered only to variable annuity and variable life insurance separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies and to qualified pension and retirement plans. Individuals may not purchase shares directly from the Fund. The Dreyfus Corporation serves as the Fund's investment adviser. EUROPEAN EQUITY PORTFOLIO: INITIAL SHARES (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER JANUARY 25, 2002) INVESTMENT OBJECTIVE: Long-term capital growth. To pursue this goal, the Portfolio generally invests at least 80% of its total assets in stocks included within the universe of the 300 largest European companies. The Portfolio may invest up to 10% of its total assets in the stocks of non-European companies. The Portfolio's stock investments may include common stocks, preferred stocks and convertible securities. CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-8B-2
N-8B-2 ITEM CAPTION IN PROSPECTUS 1 ..................... Nationwide Life Insurance Company The Variable Account 2 ..................... Nationwide Life Insurance Company 3 ..................... Custodian of Assets 4 ..................... Distribution of the Policies 5 ..................... The Variable Account 6 ..................... Not Applicable 7 ..................... Not Applicable 8 ..................... Not Applicable 9 ..................... Legal Proceedings 10 ..................... Information About the Policies; How the Cash Value Varies; Right to Exchange for a Fixed Benefit Policy; Reinstatement; Other Policy Provisions 11 ..................... Investments of the Variable Account 12 ..................... The Variable Account 13 ..................... Policy Charges Reinstatement 14 ..................... Underwriting and Issuance - Premium Payments, Minimum Requirements for Issuance of a Policy 15 ..................... Investments of the Variable Account; Premium Payments 16 ..................... Underwriting and Issuance - Allocation of Cash Value 17 ..................... Surrendering the Policy for Cash 18 ..................... Reinvestment 19 ..................... Not Applicable 20 ..................... Not Applicable 21 ..................... Policy Loans 22 ..................... Not Applicable 23 ..................... Not Applicable 24 ..................... Not Applicable 25 ..................... Nationwide Life Insurance Company 26 ..................... Not Applicable 27 ..................... Nationwide Life Insurance Company 28 ..................... Company Management 29 ..................... Company Management 30 ..................... Not Applicable 31 ..................... Not Applicable 32 ..................... Not Applicable 33 ..................... Not Applicable 34 ..................... Not Applicable 35 ..................... Nationwide Life Insurance Company 36 ..................... Not Applicable 37 ..................... Not Applicable
N-8B-2 ITEM CAPTION IN PROSPECTUS 38 ..................... Distribution of the Policies 39 ..................... Distribution of the Policies 40 ..................... Not Applicable 41(a) .................. Distribution of the Policies 42 ..................... Not Applicable 43 ..................... Not Applicable 44 ..................... How the Cash Value Varies 45 ..................... Not Applicable 46 ..................... How the Cash Value Varies 47 ..................... Not Applicable 48 ..................... Custodian of Assets 49 ..................... Not Applicable 50 ..................... Not Applicable 51 ..................... Summary of the Policies; Information About the Policies 52 ..................... Substitution of Securities 53 ..................... Taxation of the Company 54 ..................... Not Applicable 55 ..................... Not Applicable 56 ..................... Not Applicable 57 ..................... Not Applicable 58 ..................... Not Applicable 59 ..................... Financial Statements
NATIONWIDE LIFE INSURANCE COMPANY Flexible Premium Variable Universal Life Insurance Policies Issued by Nationwide Life Insurance Company through its Nationwide VLI Separate Account-4 The date of this prospectus is May 1, 2002. THIS PROSPECTUS CONTAINS BASIC INFORMATION YOU SHOULD UNDERSTAND ABOUT THE POLICIES BEFORE INVESTING - THE INSURANCE POLICY IS THE LEGALLY BINDING INSTRUMENT GOVERNING THE RELATIONSHIP BETWEEN YOU AND NATIONWIDE SHOULD YOU CHOOSE TO INVEST. PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. NOT ALL BENEFITS, PROGRAMS, FEATURES AND INVESTMENT OPTIONS DESCRIBED IN THIS PROSPECTUS ARE AVAILABLE OR APPROVED FOR USE IN EVERY STATE. The following underlying mutual funds are available under the policies: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF THE AMERICAN CENTURY(SM) FAMILY OF INVESTMENTS - American Century VP Income & Growth Fund: Class I - American Century VP International Fund: Class I - American Century VP Ultra Fund: Class I - American Century VP Value Fund: Class I DREYFUS - Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares - The Dreyfus Socially Responsible Growth Fund, Inc.: Initial Shares - Dreyfus Stock Index Fund, Inc.: Initial Shares - Dreyfus Variable Investment Fund - Appreciation Portfolio: Initial Shares (formerly, Dreyfus Variable Investment Fund - Capital Appreciation Portfolio) FEDERATED INSURANCE SERIES - Federated Quality Bond Fund II: Primary Shares FIDELITY VARIABLE INSURANCE PRODUCTS FUND - VIP Equity-Income Portfolio: Service Class - VIP Growth Portfolio: Service Class - VIP High Income Portfolio: Service Class* - VIP Overseas Portfolio: Service Class FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - VIP II Contrafund(R) Portfolio: Service Class FIDELITY VARIABLE INSURANCE PRODUCTS FUND III - VIP III Value Strategies Portfolio: Service Class GARTMORE VARIABLE INSURANCE TRUST ("GVIT") (FORMERLY, NATIONWIDE SEPARATE ACCOUNT TRUST) - Comstock GVIT Value Fund: Class I (formerly, Federated GVIT Equity Income Fund) (subadviser: Van Kampen Asset Management Inc.) - Dreyfus GVIT Mid Cap Index Fund: Class I (formerly, Dreyfus NSAT Mid Cap Index Fund) - Federated GVIT High Income Bond Fund: Class I* (formerly, Federated NSAT High Income Bond Fund) - Gartmore GVIT Emerging Markets Fund: Class I (formerly, Gartmore NSAT Emerging Markets Fund) - Gartmore GVIT Global Financial Services Fund: Class I - Gartmore GVIT Global Health Sciences Fund: Class I - Gartmore GVIT Global Technology and Communications Fund: Class I (formerly, Gartmore NSAT Global Technology and Communications Fund) - Gartmore GVIT Global Utilities Fund: Class I - Gartmore GVIT Government Bond Fund: Class I (formerly, Government Bond Fund) - Gartmore GVIT Growth Fund: Class I (formerly, Capital Appreciation Fund) - Gartmore GVIT International Growth Fund: Class I (formerly, Gartmore NSAT International Growth Fund) - Gartmore GVIT Investor Destinations Funds - Gartmore GVIT Investor Destinations Conservative Fund - Gartmore GVIT Investor Destinations Moderately Conservative Fund - Gartmore GVIT Investor Destinations Moderate Fund - Gartmore GVIT Investor Destinations Moderately Aggressive Fund - Gartmore GVIT Investor Destinations Aggressive Fund - Gartmore GVIT Money Market Fund: Class I (formerly, Money Market Fund) - Gartmore GVIT Nationwide Leaders Fund: Class I - Gartmore GVIT Total Return Fund: Class I (formerly, Total Return Fund) - Gartmore GVIT U.S. Growth Leaders Fund: Class I 1 - Gartmore GVIT Worldwide Leaders Fund: Class I (formerly, Nationwide(R) Global 50 Fund) (subadviser: J.P. Morgan Investment Management Inc.) - GVIT Small Cap Growth Fund: Class I (formerly, Nationwide(R) Small Cap Growth Fund) (subadvisers: Neuberger Berman, LLC and Waddell & Reed Investment Management Company) - GVIT Small Cap Value Fund: Class I (formerly, Nationwide(R) Small Cap Value Fund) (subadviser: The Dreyfus Corporation) - GVIT Small Company Fund: Class I (formerly, Nationwide(R) Small Company Fund) (subadvisers: The Dreyfus Corporation, Neuberger Berman, LLC, Strong Capital Management, Inc., Waddell & Reed Investment Management Company and Gartmore Global Partners) - J.P. Morgan GVIT Balanced Fund: Class I (formerly, J.P. Morgan NSAT Balanced Fund) - MAS GVIT Multi Sector Bond Fund: Class I* (formerly, MAS NSAT Multi Sector Bond Fund) - Strong GVIT Mid Cap Growth Fund: Class I (formerly, Strong NSAT Mid Cap Growth Fund) JANUS ASPEN SERIES - Capital Appreciation Portfolio: Service Shares - Global Technology Portfolio: Service Shares - International Growth Portfolio: Service Shares NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST - AMT Guardian Portfolio - AMT Mid-Cap Growth Portfolio - AMT Partners Portfolio OPPENHEIMER VARIABLE ACCOUNT FUNDS - Oppenheimer Aggressive Growth Fund/VA: Initial Class (formerly, Oppenheimer Capital Appreciation Fund) - Oppenheimer Capital Appreciation Fund/VA: Initial Class (formerly, Oppenheimer Growth Fund) - Oppenheimer Global Securities Fund/VA: Initial Class - Oppenheimer Main Street Growth & Income Fund/VA: Initial Class (formerly, Oppenheimer Growth & Income Fund) STRONG OPPORTUNITY FUND II, INC. VAN KAMPEN THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (FORMERLY, MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS, INC.) - Emerging Markets Debt Portfolio - U.S. Real Estate Portfolio THE FOLLOWING UNDERLYING MUTUAL FUND IS NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER JANUARY 25, 2002: GARTMORE VARIABLE INSURANCE TRUST (FORMERLY, NATIONWIDE SEPARATE ACCOUNT TRUST) - Turner GVIT Growth Focus Fund: Class I (formerly, Turner NSAT Growth Focus Fund) THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002: FIDELITY VARIABLE INSURANCE PRODUCTS FUND III - VIP III Growth Opportunities Portfolio: Service Class VAN ECK WORLDWIDE INSURANCE TRUST - Worldwide Emerging Markets Fund - Worldwide Hard Assets Fund VAN KAMPEN THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (FORMERLY, MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS, INC.) - Mid Cap Growth Portfolio EFFECTIVE MAY 1, 2002, THE FOLLOWING UNDERLYING MUTUAL FUND IS NO LONGER AVAILABLE TO RECEIVE TRANSFERS OR NEW PREMIUM PAYMENTS: DREYFUS - Dreyfus Investment Portfolios - European Equity Portfolio: Initial Shares *These underlying mutual funds invest in lower quality debt securities commonly referred to as junk bonds. For general information or to obtain FREE copies of the: - prospectus, annual report or semi-annual report for any underlying mutual fund; - any required Nationwide forms; or - Nationwide's privacy statement, call: 1-800-547-7548 TDD 1-800-238-3035 or write: NATIONWIDE LIFE INSURANCE COMPANY ONE NATIONWIDE PLAZA, RR1-04-D4 COLUMBUS, OHIO 43215 Material incorporated by reference in this prospectus can be found on the SEC website at: WWW.SEC.GOV Information about this and other Best of America products can be found on the world-wide web at: WWW.BESTOFAMERICA.COM 2 THIS POLICY: - - IS NOT A BANK DEPOSIT - - IS NOT FDIC INSURED - - IS NOT INSURED OR ENDORSED BY A BANK OR ANY FEDERAL GOVERNMENT AGENCY - - IS NOT AVAILABLE IN EVERY STATE - - MAY GO DOWN IN VALUE The life insurance policies offered by this prospectus are flexible premium variable universal life insurance policies (flexible premium variable adjustable life insurance policies in Puerto Rico). They provide flexibility to vary the amount and frequency of premium payments. A cash surrender value may be offered if the policy is terminated during the lifetime of the insured. The purpose of this policy is to provide life insurance protection for the beneficiary named in the policy. No claim is made that the policy is in any way similar or comparable to a systematic investment plan of a mutual fund. The death benefit and cash value of this policy may vary to reflect the experience of the Nationwide VLI Separate Account-4 (the "variable account") or the fixed account, depending on how premium payments are invested. DECLINING VALUES OR NEGATIVE INVESTMENT RESULTS MAY RESULT IN REDUCTIONS IN DEATH BENEFITS, CASH VALUES, AND THE LOSS OF INSURANCE COVERAGE IF ADDITIONAL PREMIUMS ARE NOT PAID. Investors assume certain risks when investing in the policies, including the risk of losing money. Nationwide guarantees the death benefit for as long as the policy is in force. The cash surrender value is not guaranteed. The policy will lapse if the cash surrender value is insufficient to cover policy charges. Nationwide guarantees to keep the policy in force so long as minimum premium requirements have been met. Benefits described in this prospectus may not be available in every jurisdiction - - refer to your policy for specific benefit information. THIS PROSPECTUS IS NOT AN OFFERING IN ANY JURISDICTION WHERE SUCH OFFERING MAY NOT LAWFULLY BE MADE. 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. 3 GLOSSARY OF SPECIAL TERMS ATTAINED AGE- The insured's age on the policy date, plus the number of full years since the policy date. ACCUMULATION UNIT- An accounting unit of measure used to calculate the cash value of the variable account. CASH VALUE- The sum of the value of the assets in the sub-accounts, the fixed account and any amount in the policy loan account. FIXED ACCOUNT- An investment option which is funded by the general account of Nationwide. 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. IRS GUIDELINE LEVEL PREMIUM- The amount of level annual premiums required to provide the requested amount of insurance coverage, calculated in accordance with the Internal Revenue Code. MATURITY DATE- The policy anniversary on or next following the insured's 100th birthday. MINIMUM REQUIRED DEATH BENEFIT- The lowest death benefit which will qualify the policy as life insurance under Section 7702 of the Internal Revenue Code. MONTHLY ANNIVERSARY DATE- The monthly anniversary of the date the policy was issued. NATIONWIDE- Nationwide Life Insurance Company. NET AMOUNT AT RISK- The death benefit minus the cash value. On a monthly anniversary day, the net amount at risk is the death benefit minus the cash value prior to subtraction of the base policy cost of insurance charge. NET INVESTMENT FACTOR- For each sub-account, the net investment factor shows the investment performance of the underlying mutual fund in which that sub-account invests for a valuation period. SPECIFIED AMOUNT- The dollar amount used to determine the policy's death benefit. SUB-ACCOUNTS- Divisions of the variable account to which underlying mutual fund shares are allocated and for which accumulation units are separately maintained. VALUATION PERIOD- Each day the New York Stock Exchange is open. VARIABLE ACCOUNT- Nationwide VLI Separate Account-4, 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. 4 TABLE OF CONTENTS GLOSSARY OF SPECIAL TERMS................................................. SUMMARY OF POLICY EXPENSES................................................ UNDERLYING MUTUAL FUND ANNUAL EXPENSES.................................... SYNOPSIS OF THE POLICIES.................................................. NATIONWIDE LIFE INSURANCE COMPANY......................................... NATIONWIDE INVESTMENT SERVICES CORPORATION................................ INVESTING IN THE POLICY................................................... The Variable Account and Underlying Mutual Funds The Fixed Account INFORMATION ABOUT THE POLICIES............................................ Minimum Requirements for Policy Issuance Premium Payments Pricing POLICY CHARGES............................................................ Cost of Insurance Charge Mortality and Expense Risk Charge Other Expenses Charge Surrender Charge Partial Surrender Processing Fee Income Tax SURRENDERING THE POLICY FOR CASH.......................................... Surrender (Redemption) Cash Surrender Value Partial Surrenders Income Tax Withholding VARIATION IN CASH VALUE................................................... POLICY PROVISIONS......................................................... Policy Owner Beneficiary Changes in Existing Insurance Coverage OPERATION OF THE POLICY................................................... Allocation of Premiums and Cash Value Transfers How the Investment Experience is Determined Net Investment Factor Determining the Cash Value RIGHT TO REVOKE........................................................... POLICY LOANS.............................................................. Taking a Policy Loan Effect on Investment Performance Interest Effect on Death Benefit and Cash Value Repayment ASSIGNMENT................................................................ POLICY OWNER SERVICES..................................................... Dollar Cost Averaging DEATH BENEFIT INFORMATION................................................. Calculation of the Death Benefit Changes in the Death Benefit Option Proceeds Payable on Death Incontestability Error in Age or Sex Suicide Maturity Proceeds EXCHANGE RIGHTS........................................................... GRACE PERIOD.............................................................. Reinstatement TAX MATTERS............................................................... Policy Proceeds Withholding Estate and Generation-Skipping Transfer Taxes Non-Resident Aliens Taxation of Nationwide Tax Changes LEGAL CONSIDERATIONS...................................................... STATE REGULATION.......................................................... REPORTS TO POLICY OWNERS.................................................. ADVERTISING............................................................... LEGAL PROCEEDINGS......................................................... INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.................................. REGISTRATION STATEMENT.................................................... DISTRIBUTION OF THE POLICIES.............................................. ADDITIONAL INFORMATION ABOUT NATIONWIDE................................... Company Management APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS........................ APPENDIX B: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES, AND DEATH BENEFITS ..................................................... APPENDIX C: PERFORMANCE SUMMARY INFORMATION...............................
5 SUMMARY OF POLICY EXPENSES MONTHLY CHARGES MORTALITY AND EXPENSE RISK CHARGE ............... an annualized rate of 0.60% of the policy's variable account assets on each monthly anniversary date OTHER EXPENSES CHARGE ........................... an annualized rate of 0.60% of the policy's fixed and variable account assets on each monthly anniversary date COST OF INSURANCE CHARGE ........................ varies based on insurability For each policy, the sum of the Mortality and Expense Risk Charge and Other Expenses Charge will be at least $20 per month but will not exceed an annualized rate of 0.60% of the policy's fixed account assets on each monthly anniversary date and an annualized rate of 1.20% of the policy's variable account assets on each monthly anniversary date. OTHER CHARGES MAXIMUM SURRENDER CHARGE ........................ 30% of first year premiums up to the IRS guideline level premium PARTIAL SURRENDER PROCESSING FEE (PER PARTIAL SURRENDER) ......................... lesser of $25 or 2% of the amount surrendered INTEREST ASSESSED ON LOANED AMOUNTS ............. 3.9%
For more information about any policy charge, see "Policy Charges" in this prospectus. 6 UNDERLYING MUTUAL FUND ANNUAL EXPENSES (as a percentage of underlying mutual fund net assets, after expense reimbursement)
Management Other 12b-1 Total Underlying Fees Expenses Fees Mutual Fund Expenses American Century Variable Portfolios, Inc. - American Century VP 0.70% 0.00% 0.00% 0.70% Income & Growth Fund: Class I American Century Variable Portfolios, Inc. - American Century VP 1.26% 0.00% 0.00% 1.26% International Fund: Class I American Century Variable Portfolios, Inc. - American Century VP Ultra 1.00% 0.00% 0.00% 1.00% Fund: Class I American Century Variable Portfolios, Inc. - American Century VP Value 0.97% 0.00% 0.00% 0.97% Fund: Class I Dreyfus Investment Portfolios - European Equity Portfolio: Initial Shares 0.81% 0.44% 0.00% 1.25% Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service 0.35% 0.00% 0.25% 0.60% Shares The Dreyfus Socially Responsible Growth Fund, Inc.: Initial Shares 0.75% 0.03% 0.00% 0.78% Dreyfus Stock Index Fund, Inc.: Initial Shares 0.25% 0.01% 0.00% 0.26% Dreyfus Variable Investment Fund - Appreciation Portfolio: Initial Shares 0.75% 0.03% 0.00% 0.78% Federated Insurance Series - Federated Quality Bond Fund II: Primary 0.55% 0.15% 0.00% 0.70% Shares Fidelity VIP Equity-Income Portfolio: Service Class* 0.48% 0.10% 0.10% 0.68% Fidelity VIP Growth Portfolio: Service Class* 0.58% 0.10% 0.10% 0.78% Fidelity VIP High Income Portfolio: Service Class 0.58% 0.13% 0.10% 0.81% Fidelity VIP Overseas Portfolio: Service Class* 0.73% 0.20% 0.10% 1.03% Fidelity VIP II Contrafund(R)Portfolio: Service Class* 0.58% 0.10% 0.10% 0.78% Fidelity VIP III Growth Opportunities Portfolio: Service Class* 0.58% 0.11% 0.10% 0.79% Fidelity VIP III Value Strategies Portfolio: Service Class 0.58% 0.26% 0.10% 0.94% GVIT Comstock GVIT Value Fund: Class I 0.79% 0.28% 0.00% 1.07% GVIT Dreyfus GVIT Mid Cap Index Fund: Class I 0.50% 0.26% 0.00% 0.76% GVIT Federated GVIT High Income Bond Fund: Class I 0.75% 0.28% 0.00% 1.03% GVIT Gartmore GVIT Emerging Markets Fund: Class I 1.15% 0.21% 0.00% 1.36% GVIT Gartmore GVIT Global Financial Services Fund: Class I 1.00% 0.26% 0.00% 1.26% GVIT Gartmore GVIT Global Health Sciences Fund: Class I 1.00% 0.32% 0.00% 1.32% GVIT Gartmore GVIT Global Technology and Communications Fund: 0.98% 0.26% 0.00% 1.24% Class I GVIT Gartmore GVIT Global Utilities Fund: Class I 0.80% 0.28% 0.00% 1.08% GVIT Gartmore GVIT Government Bond Fund: Class I 0.50% 0.25% 0.00% 0.75% GVIT Gartmore GVIT Growth Fund: Class I 0.59% 0.25% 0.00% 0.84% GVIT Gartmore GVIT International Growth Fund: Class I 1.00% 0.33% 0.00% 1.33% GVIT Gartmore GVIT Investor Destinations Conservative Fund 0.00% 0.36% 0.25% 0.61% GVIT Gartmore GVIT Investor Destinations Moderately Conservative 0.00% 0.36% 0.25% 0.61% Fund GVIT Gartmore GVIT Investor Destinations Moderate Fund 0.13% 0.20% 0.25% 0.58% GVIT Gartmore GVIT Investor Destinations Moderately Aggressive Fund 0.10% 0.26% 0.25% 0.61% GVIT Gartmore GVIT Investor Destinations Aggressive Fund 0.07% 0.29% 0.25% 0.61% GVIT Gartmore GVIT Money Market Fund: Class I 0.38% 0.25% 0.00% 0.63% GVIT Gartmore GVIT Nationwide Leaders Fund: Class I 0.84% 0.41% 0.00% 1.25% GVIT Gartmore GVIT Total Return Fund: Class I 0.59% 0.25% 0.00% 0.84% GVIT Gartmore GVIT U.S. Growth Leaders Fund: Class I 0.90% 0.22% 0.00% 1.12% GVIT Gartmore GVIT Worldwide Leaders Fund: Class I 0.99% 0.26% 0.00% 1.25% GVIT GVIT Small Cap Growth Fund: Class I 1.10% 0.28% 0.00% 1.38% GVIT GVIT Small Cap Value Fund: Class I 0.86% 0.22% 0.00% 1.08% GVIT GVIT Small Company Fund: Class I 0.93% 0.26% 0.00% 1.19% GVIT J.P. Morgan GVIT Balanced Fund: Class I 0.74% 0.27% 0.00% 1.01% GVIT MAS GVIT Multi Sector Bond Fund: Class I 0.75% 0.27% 0.00% 1.02% GVIT Strong GVIT Mid Cap Growth Fund: Class I 0.90% 0.27% 0.00% 1.17%
7
Management Other 12b-1 Total Underlying Fees Expenses Fees Mutual Fund Expenses GVIT Turner GVIT Growth Focus Fund: Class I 0.85% 0.43% 0.00% 1.28% Janus Aspen Series - Capital Appreciation Portfolio: Service Shares 0.65% 0.01% 0.25% 0.91% Janus Aspen Series - Global Technology Portfolio: Service Shares 0.65% 0.05% 0.25% 0.95% Janus Aspen Series - International Growth Portfolio: Service Shares 0.65% 0.06% 0.25% 0.96% Neuberger Berman AMT Guardian Portfolio 0.85% 0.14% 0.00% 0.99% Neuberger Berman AMT Mid-Cap Growth Portfolio 0.84% 0.07% 0.00% 0.91% Neuberger Berman AMT Partners Portfolio 0.82% 0.05% 0.00% 0.87% Oppenheimer Variable Account Funds - Oppenheimer Aggressive Growth 0.64% 0.04% 0.00% 0.68% Fund/VA: Initial Class Oppenheimer Variable Account Funds - Oppenheimer Capital 0.64% 0.04% 0.00% 0.68% Appreciation Fund/VA: Initial Class Oppenheimer Variable Account Funds - Oppenheimer Global Securities 0.64% 0.06% 0.00% 0.70% Fund/VA: Initial Class Oppenheimer Variable Account Funds - Oppenheimer Main Street 0.68% 0.05% 0.00% 0.73% Growth & Income Fund/VA: Initial Class Strong Opportunity Fund II, Inc. 0.75% 0.35% 0.00% 1.10% The Universal Institutional Funds, Inc. - Emerging Markets Debt Portfolio 0.80% 0.37% 0.00% 1.17% The Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio 0.41% 0.64% 0.00% 1.05% The Universal Institutional Funds, Inc. - U.S. Real Estate Portfolio 0.75% 0.35% 0.00% 1.10% Van Eck Worldwide Insurance Trust - Worldwide Emerging Markets Fund 1.00% 0.28% 0.00% 1.28% Van Eck Worldwide Insurance Trust - Worldwide Hard Assets Fund 1.00% 0.15% 0.00% 1.15%
* Actual annual class operating expenses were lower because a portion of the brokerage commissions that the fund paid was used to reduce the fund's expenses. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances are used to reduce a portion of the fund's custodian expenses. These offsets may be discontinued at any time. The expenses shown above are deducted by the underlying mutual fund before it provides Nationwide with the daily net asset value. Nationwide then calculates the unit value of the corresponding sub-account. The management fees and other expenses are more fully described in the prospectus for each underlying mutual fund. Information relating to the underlying mutual funds was provided by the underlying mutual funds and not independently verified by Nationwide. Some underlying mutual funds are subject to fee waivers, expense reimbursements and/or custodial credits. The following chart shows what the expenses would have been for such funds without fee waivers, expense reimbursements or custodial credits. UNDERLYING MUTUAL FUND ANNUAL EXPENSES (as a percentage of underlying mutual fund net assets, before expense reimbursement)
Management Other 12b-1 Total Underlying Fees Expenses Fees Mutual Fund Expenses Federated Insurance Series - Federated Quality Bond Fund II: Primary 0.60% 0.40% 0.25% 1.25% Shares GVIT Gartmore GVIT Investor Destinations Conservative Fund 0.13% 0.43% 0.25% 0.81% GVIT Gartmore GVIT Investor Destinations Moderately Conservative Fund 0.13% 0.42% 0.25% 0.80% GVIT Gartmore GVIT Investor Destinations Moderately Aggressive Fund 0.13% 0.26% 0.25% 0.64% GVIT Gartmore GVIT Investor Destinations Aggressive Fund 0.13% 0.29% 0.25% 0.67% GVIT Gartmore GVIT Nationwide Leaders Fund: Class I 0.90% 0.41% 0.00% 1.31% Strong Opportunity Fund II, Inc. 0.75% 0.65% 0.00% 1.40% The Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio 0.75% 0.64% 0.00% 1.39% The Universal Institutional Funds, Inc. - U.S. Real Estate Portfolio 0.80% 0.35% 0.00% 1.15% Van Eck Worldwide Insurance Trust - Worldwide Emerging Markets 1.00% 0.30% 0.00% 1.30% Fund Van Eck Worldwide Insurance Trust - Worldwide Hard Assets Fund 1.00% 0.18% 0.00% 1.18%
8 SYNOPSIS OF THE POLICIES The policy offered by this prospectus provides for life insurance coverage on the insured. The death benefit and cash value of the policy may increase or decrease to reflect the performance of the investment options chosen by the policy owner (see "Death Benefit Information"). CASH SURRENDER VALUE If the policy is terminated during the insured's lifetime, a cash surrender value may be payable under the policy. However, there is no guaranteed cash surrender value (see "Variation in Cash Value "). The policy will lapse without value if the cash surrender value falls below what is needed to cover policy charges. PREMIUMS The initial premium is shown on the policy data page. Each premium payment must be at least $50. Additional premium payments may be made at any time while the policy is in force, subject to certain restrictions (see "Premium Payments"). TAXATION The policies described in this prospectus meet the definition of "life insurance" under Section 7702 of the Internal Revenue Code. Nationwide will monitor compliance with the tests provided by Section 7702 to insure the policies continue to receive this favored tax treatment (see "Tax Matters"). NONPARTICIPATING POLICIES The policies are nonparticipating policies on which no dividends are payable. The policies do not share in the profits or surplus earnings of Nationwide. POLICY CANCELLATION Policy owners may return the policy for any reason within certain time periods and Nationwide will refund the policy's cash value or the amount required by law. In New York, Nationwide will refund any premiums paid (see "Right to Revoke"). NATIONWIDE LIFE INSURANCE COMPANY Nationwide is a stock life insurance company organized under the laws of the State of Ohio 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. CUSTODIAN OF ASSETS Nationwide serves as the custodian of the assets of the variable account. OTHER CONTRACTS ISSUED BY NATIONWIDE Nationwide offers a wide array of investment products, including variable annuity and variable life insurance products. Each of these products has different charges, benefit features and underlying investment options. Investors are encouraged to compare and contrast the costs and benefits of the policies against those of other investment products, especially other variable annuity and variable life insurance products offered by Nationwide and its affiliates. This process of comparison and analysis should aid in determining whether the purchase of the policy described in this prospectus is consistent with the investor's particular investment objectives, risk tolerance, investment time horizon, marital status, tax situation and other personal characteristics and needs. NATIONWIDE INVESTMENT SERVICES CORPORATION The policies are distributed by Nationwide Investment Services Corporation ("NISC" or "Nationwide Investment Svcs. Corporation" for policies issued in the State of Michigan), Two Nationwide Plaza, Columbus, Ohio 43215. NISC is a wholly owned subsidiary of Nationwide. INVESTING IN THE POLICY THE VARIABLE ACCOUNT AND UNDERLYING MUTUAL FUNDS Nationwide VLI Separate Account-4 is a separate account that invests in the underlying mutual funds listed in Appendix A. Nationwide established the separate account on December 3, 1987 pursuant to Ohio law. Although the separate 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 in general are not chargeable with liabilities incurred in any other business of Nationwide. Nationwide is obligated to pay all amounts promised to policy owners under the policies. 9 The variable account is divided into sub-accounts. Policy owners elect to have premiums allocated among the sub-accounts and the fixed account at the time of application. Nationwide uses the assets of each sub-account to buy shares of the underlying mutual funds based on policy owner instructions. A policy's investment performance depends upon the performance of the underlying mutual funds chosen by the policy owner. 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. 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 objectives. However the underlying mutual funds are NOT directly related to any publicly traded mutual fund. Policy 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. Changes of Investment Policy Nationwide may materially change the investment policy of the variable account. Nationwide must inform policy owners and obtain all necessary regulatory approvals. Any change must be submitted to the various state insurance departments which may disapprove it if deemed detrimental to the interests of the policy owners or if it renders Nationwide's operations hazardous to the public. If a policy owner objects, the policy owner has an unconditional right to transfer all of the cash value in the variable account to the fixed account. The policy owner has the later of 60 days (6 months in Pennsylvania) from the date of the investment policy change or 60 days (6 months in Pennsylvania) from being informed of the change to make the transfer. Nationwide will not require evidence of insurability for this transfer. Voting Rights Policy owners who have allocated assets to the underlying mutual funds are entitled to certain voting rights. Nationwide will vote policy owner shares at special shareholder meetings based on policy owner instructions. However, if the law changes allowing Nationwide to vote in its own right, it may elect to do so. Policy owners with voting interests in an underlying mutual fund will be notified of issues requiring the shareholder's vote as soon as possible prior to the shareholder meeting. Notification will contain proxy materials and a form to return to Nationwide with voting instructions. Nationwide will vote shares for which no instructions are received in the same proportion as those that are received. The number of shares which a policy 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. 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 policy owners and 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 and/or combine shares of another underlying mutual fund for shares already purchased or to be purchased in the future if either of the following occur: 1) shares of a current underlying mutual fund option are no longer available for investment; or 2) further investment in an underlying mutual fund option is inappropriate. No substitution, elimination, and/or combination of shares may take place without the prior approval of the SEC. THE FIXED ACCOUNT The fixed account is an investment option that is funded by assets of Nationwide's general account. The general account contains all of Nationwide's assets other than those in this and other Nationwide separate accounts. 10 The general account is used to support Nationwide's annuity and insurance obligations and may contain compensation for mortality and expense risks. Under exemptive and exclusionary provisions, Nationwide's general account has not been registered under the Securities Act of 1933 and has not been registered as an investment company under the Investment Company Act of 1940. Accordingly, neither the general account nor any interest therein is subject to the provisions of these Acts. Nationwide has been advised that the staff of the SEC has not reviewed the disclosures in this prospectus relating to the fixed account. Disclosures regarding the general account may, however, be subject to certain generally applicable provisions of the federal securities laws concerning the accuracy and completeness of statements made in prospectuses. Premium payments will be allocated to the fixed account by election of the policy owner. The investment income earned by the fixed account will be allocated to the policies at varying rate(s) set by Nationwide. The guaranteed rate for any premium payment will be effective for not less than twelve months. Nationwide guarantees that the rate will not be less than 3.0% per year. Any interest in excess of 3.0% will be credited to fixed account allocations at Nationwide's sole discretion. The policy owner assumes the risk that interest credited to fixed account allocations may not exceed the minimum guarantee of 3.0% for any given year. New premium payments deposited to the policy which are allocated to the fixed account may receive a different rate of interest than amounts transferred from the sub-accounts to the fixed account and amounts maturing in the fixed account. INFORMATION ABOUT THE POLICIES MINIMUM REQUIREMENTS FOR POLICY ISSUANCE This policy provides life insurance coverage with the flexibility to vary the amount and frequency of premium payments. Minimum requirements for policy issuance include: - the insured must be 80 or younger; - Nationwide may require satisfactory evidence of insurability (including a medical exam); and - a minimum specified amount of $100,000. PREMIUM PAYMENTS Each premium payment must be at least $50. The initial premium is payable in full at Nationwide's home office or to an authorized agent of Nationwide. Initial premiums allocated to a sub-account on the application are allocated to the GVIT Gartmore GVIT Money Market Fund: Class I during the period in which the policy owner may cancel the policy, unless a specific state requires premiums to be allocated to the fixed account. (In New York, premiums are allocated to either the GVIT Gartmore GVIT Money Market Fund: Class I or the fixed account based on the policy owner's election. If the policy owner makes no election, premiums are allocated to the GVIT Gartmore GVIT Money Market Fund: Class I.) At the expiration of this period, the premiums are used to purchase shares of the underlying mutual funds specified by the policy owner at net asset value for the respective sub-account(s). Upon payment of the initial premium, temporary insurance may be provided. Issuance of continuing insurance coverage is dependent upon completion of all underwriting requirements, payment of the initial premium, and delivery of the policy while the insured is still living. Additional premium payments may be made at any time while the policy is in force, subject to the following conditions: - Nationwide may require satisfactory evidence of insurability before accepting any additional premium payment which results in an increase in the net amount at risk; - premium payments in excess of the premium limit established by the IRS to qualify the policy as a contract for life insurance will be refunded; and - Nationwide may require policy indebtedness be repaid prior to accepting any additional premium payments. Additional premium payments or other changes to the policy may jeopardize the policy's non-modified endowment status. Nationwide will monitor premiums paid and other policy transactions and will notify the policy owner when non-modified endowment contract status is in jeopardy. Nationwide will send scheduled premium payment reminder notices to policy owners according to the premium mode shown on the policy data page. PRICING Premiums will not be used to purchase accumulation units 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 11 Nationwide will not use premiums to purchase accumulation units 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. If Nationwide is closed on days when the New York Stock Exchange is open, a policy's cash value may be affected since the policy owner would not have access to their account. POLICY CHARGES COST OF INSURANCE CHARGE Nationwide deducts a Cost of Insurance Charge from the cash value on a monthly basis. This charge is determined by multiplying the monthly cost of insurance rate by the net amount at risk (the death benefit minus the policy's cash value). This deduction is charged proportionately to the cash value in each sub-account and the fixed account. If the policy owner elects to increase the specified amount (the amount used to calculate the death benefit), the net amount at risk will also increase. In order for Nationwide to support this increased risk, Nationwide will assess an additional Cost of Insurance Charge to the increase. Because underwriting criteria, such as age and health, may be different at the time of the specified amount increase than at the time of application, the monthly cost of insurance rate used to calculate the Cost of Insurance Charge for the increase may be different than the rate used to calculate the Cost of Insurance Charge associated with the initial specified amount. More specifically, the cost of insurance rates used to calculate Cost of Insurance Charges for the initial specified amount and increases in specified amount will not necessarily be the same. Monthly cost of insurance rates will not exceed those guaranteed in the policy. Guaranteed cost of insurance rates are based on the 1980 Commissioners' Standard Ordinary Mortality Table, Age Last Birthday (1980 CSO). These mortality tables are sex distinct. In addition, separate mortality tables will be used for tobacco and non-tobacco. MORTALITY AND EXPENSE RISK CHARGE Nationwide assumes certain risks for guaranteeing the mortality and expense charges. The mortality risk assumed under the policies is that the insured may not live as long as expected. The expense risk assumed is that the actual expenses incurred in issuing and administering the policies may be greater than expected. In addition, Nationwide assumes risks associated with the non-recovery of policy issue, underwriting and other administrative expenses due to policies that lapse or are surrendered in the early policy years. In exchange for assuming the risks described above, Nationwide deducts a Mortality and Expense Risk Charge from the variable account on a monthly basis. For each policy, this charge is equal to an annualized rate of 0.60% of the policy's variable account assets on each monthly anniversary date. Mortality and Expense Risk Charge deductions will be charged proportionally to the cash value in each sub-account in which the policy owner invests. Nationwide may realize a profit from this charge. OTHER EXPENSES CHARGE Nationwide deducts an Other Expenses Charge from the cash value on a monthly basis. For each policy, this charge is equal to an annualized rate of 0.60% of the policy's variable account and fixed account assets on each monthly anniversary date. The Other Expenses Charge compensates Nationwide for taxes, actual administrative expenses and sales expenses. Tax expenses include premium or other taxes imposed by various state and local jurisdictions, as well as federal taxes imposed under Section 848 of the Internal Revenue Code. The amount charged may be more or less than the amount actually assessed by the state in which a particular policy owner lives. Administrative expenses include actual expenses related to the maintenance of the policies including account and record keeping, and periodic reporting to policy owners. Sales expenses include actual expenses paid to the broker or agent who is servicing the policy owner. Nationwide does not expect to make a profit from this charge. For each policy, the sum of the Mortality and Expense Risk Charge and Other Expenses Charge will be at least $20 per month but will not exceed an annualized rate of 0.60% of the policy's fixed account assets on each monthly anniversary date and an annualized rate of 1.20% of the policy's variable account assets on each monthly anniversary date. 12 SURRENDER CHARGE A policy owner may surrender the policy and receive the policy's cash surrender value, which is the policy's cash value, less indebtedness or other deductions. If the policy owner elects to surrender the entire policy during the first 20 policy years, Nationwide deducts a surrender charge from the policy's cash value. The charge is deducted proportionally from the cash value in each sub-account and the fixed account. The maximum initial surrender charge varies by issue age, sex, specified amount and underwriting classification. The maximum initial surrender charge will not exceed the lesser of: 1. 30% of premiums paid during the first year; or 2. 30% of the IRS guideline level premium. Surrender charges for years 2 through 20 are a percentage of the initial surrender charge as shown in the following chart:
POLICY SURRENDER YEAR CHARGE 1 100% of initial surrender charge 2 95% of initial surrender charge 3 90% of initial surrender charge 4 85% of initial surrender charge 5 80% of initial surrender charge 6 75% of initial surrender charge 7 70% of initial surrender charge 8 65% of initial surrender charge 9 60% of initial surrender charge 10 55% of initial surrender charge 11 50% of initial surrender charge 12 45% of initial surrender charge 13 40% of initial surrender charge 14 35% of initial surrender charge 15 30% of initial surrender charge 16 25% of initial surrender charge 17 20% of initial surrender charge 18 15% of initial surrender charge 19 10% of initial surrender charge 20 5% of initial surrender charge 21 and 0% of initial later surrender charge
The surrender charge schedule will be fixed at the end of the first policy year and will remain the same for the life of the policy. The surrender charge schedule will not vary due to changes in specified amount or cash value. Surrender charges reimburse Nationwide for certain expenses related to the sale of the policies, including commissions, costs of sales literature, and other promotional activity. The surrender charges may be insufficient to recover certain expenses related to the sale of the policies. Unrecovered expenses are borne by Nationwide's general assets which may include profits, if any, from Mortality and Expense Risk Charges. Additional premiums and/or income earned on assets in the variable account have no effect on these charges. If, at any time, the policy's cash surrender value is less than the surrender charge, the grace period will begin. Policy owners will be notified that the policy has negative cash surrender value and will be given the opportunity pay premiums to bring the policy out of the grace period (see "Grace Period"). PARTIAL SURRENDER PROCESSING FEE Currently, Nationwide does not assess a fee for processing partial surrenders. However, Nationwide reserves the right to assess a Partial Surrender Processing Fee equal to the lesser of $25 or 2% of the amount surrendered for each partial surrender. INCOME TAX No charge is assessed to policy owners for income taxes incurred by Nationwide as a result of the operations of the sub-accounts. However, Nationwide reserves the right to assess a charge for income taxes against the variable account if income taxes are incurred. SURRENDERING THE POLICY FOR CASH SURRENDER (REDEMPTION) A policy owner may surrender a policy for the cash surrender value any time while the insured is living. The cancellation will be effective as of the date Nationwide receives the policy accompanied by a signed, written request for cancellation. In some cases, Nationwide may require additional documentation of a customary nature. Nationwide is required by state law to reserve the right to postpone payment of assets in the fixed account for a period of up to 6 months from the date of surrender request. CASH SURRENDER VALUE The cash surrender value equals the policy's cash value, next computed after the date Nationwide receives a proper written request for surrender and the policy, minus any charges, indebtedness or other deductions due on that date, which may also include a surrender charge. The cash surrender value increases or decreases daily to reflect the investment experience of the variable account and the daily crediting of interest in the fixed account and the policy loan account. If, at any time, the policy's cash surrender value falls below zero, the grace period will begin. Policy owners will be notified that the policy has negative cash surrender value and will be given the opportunity pay premiums to bring the policy out of the grace period (see "Grace Period"). 13 PARTIAL SURRENDERS After the policy has been in force for one year, the policy owner may request a partial surrender. Partial surrenders will be deducted proportionately from the assets in each sub-account. Amounts will be deducted from the fixed account only to the extent that there are insufficient assets in the variable account. When a policy owner takes a partial surrender, Nationwide reduces the policy's cash value by the amount of the partial surrender. Additionally, if death benefit Option 1 is in effect, Nationwide will reduce the specified amount (the amount used to determine the death benefit) in order to keep the net amount at risk (the death benefit minus the policy's cash value) constant. In order to preserve the amount of coverage originally purchased, Nationwide will not process a partial surrender that would cause the total specified amount to fall below the specified amount indicated on the original application. Partial surrenders are permitted if they satisfy the following: 1) the minimum partial surrender is $200; 2) during the first 10 policy years, the sum of all partial surrenders in a given year may not exceed 10% of the policy's cash surrender value as of the beginning of that policy year; 3) after the 10th policy year, the maximum partial surrender is limited to the cash surrender value less the greater of $500 or 3 month's policy charges; 4) in order to preserve the amount of coverage initially purchased, a partial surrender may not cause the total specified amount to be reduced below the specified amount indicated on the initial application; and 5) after the partial surrender, the policy continues to qualify as life insurance. Nationwide reserves the right to limit the number of partial surrenders to one in each policy year. Certain partial surrenders may result in currently taxable income and tax penalties. Nationwide reserves the right to assess a Partial Surrender Processing Fee equal to the lesser of $25 or 2% of the amount surrendered for each partial surrender. Reduction of the Specified Amount If death benefit Option 1 is in effect and a policy owner takes a partial surrender, in addition to reducing the cash value by the amount of the partial surrender, Nationwide will also reduce the specified amount. The reduction to the specified amount will be made as follows: 1) against the most recent increase in the specified amount; 2) against the next most recent increases in the specified amount in succession; and 3) against the specified amount under the original application. INCOME TAX WITHHOLDING Federal law requires Nationwide to withhold income tax from any portion of surrender proceeds subject to tax. Nationwide will withhold income tax unless the policy owner advises Nationwide, in writing, of his or her request not to withhold. If a policy owner requests that taxes not be withheld, or if the taxes withheld are insufficient, the policy owner may be liable for payment of an estimated tax. Policy owners should consult a tax adviser. In certain employer-sponsored life insurance arrangements, participants may be required to report for income tax purposes, one or more of the following: 1) the value each year of the life insurance protection provided; 2) an amount equal to any employer-paid premiums; or 3) some or all of the amount by which the current value exceeds the employer's interest in the policy. Participants should consult with the sponsor or the administrator of the plan, and/or with their personal tax or legal adviser, to determine the tax consequences, if any, of their employer-sponsored life insurance arrangements. VARIATION IN CASH VALUE On any date during the policy year, the cash value equals; 1) the cash value on the preceding valuation date, plus 2) any net premium applied since the previous valuation date, minus 3) any partial surrenders, plus or minus 4) any investment results, minus 5) any surrender charge, minus 6) any policy charges. There is no guaranteed cash value. The cash value will vary with the investment experience of the variable account and/or the daily crediting of interest in the fixed account and policy loan account depending on the allocation of cash value by the policy owner. 14 POLICY PROVISIONS POLICY OWNER While the insured is living, all rights in this policy are vested in the policy owner named in the application or as subsequently changed, subject to assignment, if any. The policy owner may name a contingent policy owner or a new policy owner while the insured is living. Any change must be in a written form satisfactory to Nationwide and received at Nationwide's home office. Once received, the change will be effective when signed. The change will not affect any payment made or action taken by Nationwide before it was received. Nationwide may require that the policy be submitted for endorsement before making a change. If the policy owner is other than the insured, names no contingent policy owner, and dies before the insured, the policy owner's rights in this policy belong to the policy owner's estate. BENEFICIARY The beneficiary(ies) will be as named in the application or as subsequently changed, subject to assignment, if any. The policy owner may name a new beneficiary while the insured is living. Any change must be in a written form satisfactory to Nationwide and received at Nationwide's home office. Once received, the change will be effective when signed. The change will not affect any payment made or action taken by Nationwide before it was received. If any beneficiary predeceases the insured, that beneficiary's interest passes to any surviving beneficiary(ies), unless otherwise provided. Multiple beneficiaries will be paid in equal shares, unless otherwise provided. If no named beneficiary survives the insured, the death proceeds will be paid to the policy owner or the policy owner's estate. CHANGES IN EXISTING INSURANCE COVERAGE The policy owner may request certain changes in the insurance coverage under the policy. Requests must be in writing and received by Nationwide. No change in specified amount will take effect unless the cash surrender value after the change is sufficient to keep the policy in force for at least 3 months. Specified Amount Increases After the first policy year, the policy owner may request an increase to the specified amount. Any increase will be subject to the following conditions: 1) the request must be applied for in writing; 2) satisfactory evidence of insurability must be provided; 3) the increase must be for a minimum of $10,000; 4) the cash surrender value is sufficient to keep the policy in force for at least 3 months; and 5) the age at the time of increase must satisfy the same age requirements as new issues. Any approved increase will have an effective date of the monthly anniversary date on or next following the date Nationwide approves the supplemental application. Nationwide reserves the right to limit the number of specified amount increases to one each policy year. Specified Amount Decreases After the first policy year, the policy owner may request a decrease to the specified amount. Any approved decrease will be effective on the monthly anniversary date on or next following the date Nationwide receives the request. Any such decrease shall reduce the insurance in the following order: 1) against insurance provided by the most recent increase; 2) against the next most recent increases successively; and 3) against insurance provided under the original application. Nationwide reserves the right to limit the number of specified amount decreases to one each policy year. Nationwide will refuse a request for a decrease which would: 1) reduce the specified amount below the specified amount indicated on the initial application; or 2) disqualify the policy as a contract for life insurance. OPERATION OF THE POLICY ALLOCATION OF PREMIUMS AND CASH VALUE Nationwide allocates premium payments to sub-accounts and/or the fixed account, as instructed by policy owners. All percentage allocations must be in whole numbers, and must be at least 1%. The sum of allocations must equal 100%. Future premium allocations may be changed by giving written notice to Nationwide. Premiums allocated to a sub-account on the application are allocated to the GVIT Gartmore GVIT Money Market Fund: Class I during the period the policy owner may cancel the policy, unless a specific state requires premiums to be allocated to the fixed account. (In New York, premiums are allocated to either the GVIT Gartmore GVIT Money Market Fund: Class I or the fixed account based on the policy owner's election. If the policy owner makes no election, premiums are allocated to the GVIT Gartmore GVIT Money Market 15 Fund: Class I.) At the expiration of this period, the premiums are used to purchase shares of the underlying mutual funds specified by the policy owner at net asset value for the respective sub-account(s). The policy owner may change the allocation of premiums or may transfer cash value from one sub-account to another. Cash value transferred to the variable account from the fixed account, or between sub-accounts, will receive the accumulation unit value next determined after the transfer request is received. Allocation changes and transfers are subject to the terms and conditions imposed by each underlying mutual fund and those found in this prospectus. Premiums allocated to the fixed account at the time of application may not be transferred from the fixed account prior to the first policy anniversary. TRANSFERS Policy owners can transfer allocations without penalty or adjustment subject to the following conditions: - Nationwide reserves the right to restrict transfers between the fixed account and the sub-accounts to one per policy year; - transfers made to the fixed account may not be made in the first policy year or within 12 months of a prior transfer; - Nationwide reserves the right to restrict the amount transferred from the fixed account to 20% of that portion of the cash value attributable to the fixed account as of the end of the previous policy year (subject to state restrictions). Policy owners who have entered into Dollar Cost Averaging agreements with Nationwide may transfer under the terms of that agreement; - Nationwide reserves the right to restrict the amount transferred to the fixed account to 20% of that portion of cash value attributable to the sub-accounts as of the close of business of the prior valuation period; and - Nationwide reserves the right to refuse a transfer to the fixed account if the fixed account value is greater than or equal to 30% of the policy's cash value. Transfer Requests Nationwide will accept transfer requests in writing, over the telephone or via the internet. See the following table for specific contact information.
Form of Request Contact Information Written request Nationwide Life Insurance Company One Nationwide Plaza, RR1-04-D4 Columbus, OH 43215 Telephone request 1-800-547-7548 TDD 1-800-238-3035 Internet request www.bestofamerica.com
Transfer requests may be submitted at any time. Requests received by Nationwide after the close of business of a valuation period will be processed the next valuation period. Nationwide will use reasonable procedures to confirm that instructions received are genuine and will not be liable for following instructions it reasonably determined to be genuine. Nationwide may withdraw the telephone and/or internet exchange privilege upon 30 days written notice to policy owners. Market-Timing Firms Nationwide reserves the right to refuse or limit transfer requests (or take any other action it deems necessary) in order to protect policy owners and beneficiaries from the negative investment results that may result from short-term trading or other harmful investment practices that are employed by some policy owners (or third parties acting on their behalf). If Nationwide determines that a policy owner (or a third party acting on the policy owner's behalf) is engaging in harmful short-term trading, Nationwide reserves the right to take actions to protect investors, including exercising its right to terminate the ability of specified policy owners to submit transfer requests via telephone, facsimile, or over the internet. If Nationwide exercises this right, affected policy owners would be limited to submitting transfer requests via U.S. mail. Any action taken by Nationwide pursuant to this provision will be preceded by a 30 day written notice to the affected policy owner. HOW THE INVESTMENT EXPERIENCE IS DETERMINED The accumulation unit value for a valuation period is determined by multiplying the accumulation 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. 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. NET INVESTMENT FACTOR 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- 16 account, the net investment factor shows the investment performance of the underlying mutual fund in which a particular sub-account invests, including the underlying mutual fund charges assessed against that sub-account for a valuation period. The net investment factor for any valuation period is determined by dividing (a) by (b) where: a) is the sum of: 1) the net asset value per share of the underlying mutual fund held in the sub-account 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 per share of the underlying mutual fund determined as of the end of the immediately preceding valuation period. The net investment factor may be greater or less than one; therefore, the value of an accumulation unit may increase or decrease. Currently, Nationwide does not maintain a tax reserve with respect to the policies since income with respect to the underlying mutual funds is not taxable to Nationwide or the variable account. Nationwide reserves the right to adjust the calculation of the net investment factor to reflect a tax reserve should such income or other items become taxable to Nationwide. It should be noted that changes in the net investment factor may not be directly proportional to changes in the net asset value of underlying mutual fund shares because of the deduction for Mortality and Expense Risk Charge, and any charge or credit for tax reserves. DETERMINING THE CASH VALUE The cash value is the sum of the value of all variable account accumulation units attributable to the policy plus amounts credited to the fixed account and the policy loan account. Nationwide will determine the value of the assets in a variable account at the end of each valuation day. The cash value will be determined at least monthly. The number of accumulation units credited to each sub-account is determined by dividing the net amount allocated to the sub-account by the accumulation unit value for the sub-account for the valuation period during which the premium is received by Nationwide. In the event part or all of the cash value is surrendered, Nationwide will deduct an appropriate number of accumulation units from the variable account sub-accounts in the same proportion that the policy owner's interest in the variable account sub-accounts are allocated. Deductions will be taken from the fixed account only to the extent that there are insufficient assets in the sub-accounts. The cash value in the fixed account and the policy loan account is credited with interest daily at an effective annual rate which Nationwide periodically declares. The annual effective rate will never be less than 3%. (For a description of the annual effective credited rates, see "The Fixed Account" and "Policy Loans.") Upon request, Nationwide will inform the policy owner of the then applicable rates for each account. RIGHT TO REVOKE A policy owner may cancel the policy by returning it by the latest of: - - 10 days after receiving the policy; - - 45 days after signing the application; or - - 10 days after Nationwide delivers a Notice of Right of Withdrawal. The policy can be mailed to the registered representative who sold it, or returned directly to Nationwide. The cancellation will be effective as of the date the request to cancel is postmarked, or if returned directly to Nationwide, the date Nationwide receives the returned policy and request to cancel. Returned policies are deemed void from the beginning. Nationwide will refund the amount prescribed by the state in which the policy was issued within 7 days after it receives the policy. (In New York, Nationwide will refund any premiums paid.) The refunded amount will reflect the policy's investment experience from the time of issuance to the time of termination, as well as the deduction of any policy charges, unless a certain state requires another amount to be refunded. POLICY LOANS TAKING A POLICY LOAN The policy owner may request a policy loan at any time using the policy as security. Policy loans are subject to the following: - - Nationwide will not grant a loan for an amount less than $200. - - Each policy loan is limited to 60% of the policy's cash value as of the date the loan request is processed, minus the first year's surrender charge. - - A subsequent loan will not be permitted if such loan would cause the total aggregate policy indebtedness (the total of all outstanding loans, plus accrued interest) to exceed a total of 90% of the policy's cash 17 value as of the date the subsequent loan request is processed, minus the surrender charge. - - If, at any time, the policy's cash surrender value (cash value less policy indebtedness and other charges) falls below zero, the grace period will begin. Policy owners will be notified that the policy has negative cash surrender value and will be given the opportunity pay premiums to bring the policy out of the grace period (see "Grace Period"). Policy indebtedness will be deducted from the death benefit, cash surrender value upon surrender, or the maturity proceeds. Any request for a policy loan must be in written form. The request must be signed. Certain policy loans may result in currently taxable income and tax penalties. A policy owner considering the use of policy loans in connection with his or her retirement income plan should consult his or her personal tax adviser regarding potential tax consequences that may arise if necessary payments are not made to keep the policy from lapsing. The amount of the payments necessary to prevent the policy from lapsing will increase with age. EFFECT ON INVESTMENT PERFORMANCE When a loan is made, an amount equal to the amount of the loan is transferred from the variable account to the policy loan account. If the assets relating to a policy are held in more than one sub-account, withdrawals from the sub-accounts will be made in proportion to the assets in each sub-account at the time of the loan. Policy loans will be transferred from the fixed account only when sufficient amounts are not available in the sub-accounts. The amount taken out of the variable account will not be affected by the variable account's investment experience while the loan is outstanding. INTEREST The annual effective loan interest rate charged on policy loans is 3.9%. On a current basis, the cash value in the policy loan account is credited with an annual effective rate of 3% during policy years 1 through 10 and an annual effective rate of 3.9% during the 11th and subsequent policy years. Nationwide may change the current interest crediting rate on the policy loans at any time at its sole discretion. However, the crediting rate is guaranteed never to be lower than 3% during policy years 1 through 10 and 3.65% during the 11th and subsequent policy years. If it is determined that such loans will be treated, as a result of the differential between the interest crediting rate and the loan interest rate, as taxable distributions under any applicable ruling, regulation, or court decision, Nationwide retains the right to increase the net cost (by decreasing the interest crediting rate) on all subsequent policy loans to an amount that would result in the transaction being treated as a loan under federal tax law. If this amount is not prescribed by such ruling, regulation, or court decision, the amount will be that which Nationwide considers to be more likely to result in the transaction being treated as a loan under federal tax law. Amounts transferred to the policy loan account will earn interest daily from the date of transfer. The earned interest is transferred from the policy loan account to the variable account or the fixed account on each policy anniversary, at the time a new loan is requested, or at the time of loan repayment. It will be allocated according to the fund allocation factors in effect at the time of the transfer. Interest is charged daily and is payable at the end of each policy year or at the time of loan repayment. Unpaid interest will be added to the existing policy indebtedness as of the due date and will be charged interest at the same rate as the rest of the indebtedness. Whenever the total policy indebtedness exceeds the cash value less any surrender charges, Nationwide will send a notice to the policy owner and the assignee, if any. The policy will terminate without value 61 days after the mailing of the notice unless a sufficient repayment is made during that period. A repayment is sufficient if it is large enough to reduce the total policy indebtedness to an amount equal to the total cash value less any surrender charge plus an amount sufficient to continue the policy in force for 3 months. EFFECT ON DEATH BENEFIT AND CASH VALUE A policy loan, whether or not repaid, will have a permanent effect on the death benefit and cash value because the investment results of the variable account or the fixed account will apply only to the non-loaned portion of the cash value. The longer the loan is outstanding, the greater the effect is likely to be. Depending on the investment results of the variable account or the fixed account while the loan is outstanding, the effect could be favorable or unfavorable. REPAYMENT All or part of the indebtedness may be repaid at any time while the policy is in force during the insured's lifetime. Any payment intended as a loan repayment, rather than a premium payment, must be identified as such. Loan repayments will be credited to the sub-accounts and the fixed account in proportion to the policy owner's underlying mutual fund allocation factors in effect at the time of the repayment. Each repayment must be at least $50. Nationwide reserves the right to require that any loan repayments resulting from policy loans transferred 18 from the fixed account must be first allocated to the fixed account. ASSIGNMENT While the insured is living, the policy owner may assign his or her rights in the policy. The assignment must be in writing, signed by the policy owner and received at Nationwide's home office. Assignments will not affect any payments made or actions taken by Nationwide prior to Nationwide's receipt of the assignment request. Nationwide is not responsible for any assignment not submitted, nor is Nationwide responsible for the sufficiency of any assignment. Assignments are subject to any indebtedness owed to Nationwide before being recorded. POLICY OWNER SERVICES 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 the fixed account and/or certain sub-accounts into other sub-accounts. This program is not available in the State of New York. Nationwide does not guarantee that this program will result in profit or protect policy owners from loss. Policy owners direct Nationwide to automatically transfer specified amounts from the fixed account, Federated Insurance Series - Federated Quality Bond Fund II: Primary Shares, Fidelity VIP High Income Portfolio: Service Class, GVIT Gartmore GVIT Government Bond Fund: Class I, GVIT Federated GVIT High Income Bond Fund: Class I, and the GVIT Gartmore GVIT Money Market Fund: Class I. Transfers occur monthly or on another frequency if permitted by Nationwide. Nationwide will process transfers until either the value in the originating investment option is exhausted, or the policy owner instructs Nationwide in writing to stop the transfers. Transfers from the fixed account must be equal to or less than 1/30th of the fixed account value at the time the program is requested. No charge is assessed for using a Dollar Cost Averaging program. Nationwide reserves the right to stop establishing new Dollar Cost Averaging programs. DEATH BENEFIT INFORMATION CALCULATION OF THE DEATH BENEFIT The policy qualifies as life insurance using the guideline premium/cash value corridor test of Section 7702 of the Internal Revenue Code. While the policy is in force, the death benefit will never be less than the specified amount. The death benefit may vary with the cash value of the policy, which depends on investment performance. The policy owner may choose one of two death benefit options. Option 1. The death benefit will be the greater of the specified amount or minimum required death benefit. Under Option 1, the amount of the death benefit will ordinarily not change for several years to reflect the investment performance and may not change at all. If investment performance is favorable, the amount of the death benefit may increase. To see how and when investment performance will begin to affect death benefits, see the illustrations in Appendix B. Option 2. The death benefit will be the greater of the specified amount plus the cash value as of the date of death, or the minimum required death benefit and will vary directly with the investment performance. The calculation of the minimum required death benefit is shown on the policy data page. The minimum required death benefit is the lowest death benefit which will qualify the policy as life insurance under the guideline premium/cash value corridor test of Section 7702 of the Internal Revenue Code. CHANGES IN THE DEATH BENEFIT OPTION After the first policy year, the policy owner may elect to change the death benefit option under the policy. Only one change of death benefit option is permitted per policy year. The effective date of a change will be the monthly anniversary date following the date the change is approved by Nationwide. In order for any change in the death benefit option to become effective, the cash surrender value, after the change, must be sufficient to keep the policy in force for at least 3 months. Nationwide will adjust the specified amount so that the net amount at risk remains constant before and after the death benefit option change. A change in death benefit option will not be permitted if it results in the total premiums paid exceeding the then current maximum premium limitations under the guideline premium/cash value corridor test of Section 7702 of the Internal Revenue Code. PROCEEDS PAYABLE ON DEATH The actual death proceeds payable on the insured's death will be the death benefit as described above, less any policy indebtedness, and less any unpaid policy charges. Under certain circumstances, the death proceeds may be adjusted (see "Incontestability," "Error in Age or Sex," and "Suicide"). 19 INCONTESTABILITY Nationwide will not contest payment of the death proceeds based on the initial specified amount after the policy has been in force during the insured's lifetime for 2 years from the policy date. Nationwide will not contest payment of the death proceeds based on an increase in specified amount requiring evidence of insurability after it has been in force during the insured's lifetime for 2 years from its effective date. ERROR IN AGE OR SEX If the age or sex of the insured has been misstated, the death benefit and cash value will be adjusted. The cash value will be adjusted to reflect the cost of insurance charges on the correct age and sex from the policy date. SUICIDE If the insured dies by suicide, while sane or insane, within 2 years from the policy date, Nationwide will pay no more than the sum of the premiums paid, less any indebtedness and less any partial surrenders. If the insured dies by suicide, while sane or insane, within 2 years from the date Nationwide accepts an application for an increase in the specified amount, Nationwide will pay no more than the death benefit associated with the initial specified amount, plus the Cost of Insurance Charges associated with the increase in specified amount. MATURITY PROCEEDS The maturity date is the policy anniversary on or next following the insured's 100th birthday. If the policy is still in force, maturity proceeds are payable to the policy owner on the maturity date. Maturity proceeds are equal to the amount of the policy's cash value, less any indebtedness. EXCHANGE RIGHTS The policy owner may, at any time during the first 24 months after a policy is issued, submit a written request to Nationwide for an irrevocable one-time election to transfer all sub-account cash value to the fixed account. This right of conversion is subject to state availability. GRACE PERIOD If the cash surrender value on a monthly anniversary date is not sufficient to cover that month's policy charges, a grace period will be allowed for the payment of a premium. Such premium must equal or exceed 4 times the estimated monthly charges. Nationwide will send the policy owner a notice at the start of the grace period, at the address on the application or another address specified by the policy owner, stating the amount of premium required. The grace period will end 61 days after the date the notice is mailed. If sufficient premium is not received by Nationwide by the end of the grace period, the policy will lapse without value. If death proceeds become payable during the grace period, Nationwide will pay the death proceeds. REINSTATEMENT If the grace period ends and the policy owner has neither paid the required premium nor surrendered the policy for its cash surrender value, the policy owner may reinstate the policy by: 1) submitting a written request at any time within 3 years after the end of the grace period and prior to the maturity date; 2) providing evidence of insurability satisfactory to Nationwide; 3) paying sufficient premium to cover all policy charges that were due and unpaid during the grace period; 4) paying sufficient premium to keep the policy in force for 3 months from the date of reinstatement; and 5) paying or reinstating any indebtedness against the policy which existed at the end of the grace period. The effective date of a reinstated policy will be the monthly anniversary date on or next following the date the application for reinstatement is approved by Nationwide. If the policy is reinstated, the cash value on the date of reinstatement, but prior to applying any premiums or loan repayments, will be set equal to the lesser of: 1) the cash value at the end of the grace period; or 2) the surrender charge for the policy year in which the policy is reinstated. Unless otherwise specified, all amounts will be invested according to the investment instructions in effect at the start of the grace period. TAX MATTERS POLICY PROCEEDS Section 7702 of the Internal Revenue Code provides that if certain tests are met, a policy will be treated as a life insurance policy for federal tax purposes. Nationwide will monitor compliance with these tests. The policy should thus receive the same federal income tax treatment as fixed benefit life insurance. As a result, the death proceeds payable under a policy are generally excludable from gross income of the beneficiary under Section 101 of the Internal Revenue Code. However, if the policy is transferred for valuable consideration, then 20 a portion of the death proceeds may be includable in the beneficiary's gross income. Section 7702A of the Internal Revenue Code defines modified endowment contracts as those life insurance policies issued or materially changed on or after June 21, 1988 on which the total premiums paid during the first seven years exceed the amount that would have been paid if the policy provided for paid up benefits after seven level annual premiums (see "Information about the Policies"). As a general rule, distributions from a life insurance policy (other than a modified endowment contract) during the life of the insured are treated as the non-taxable return of premium, to the extent of premiums previously paid. For this purpose, dividends that are used to purchase riders are treated as distributions; dividends that are used to purchase paid-up additions or to reduce premiums are not treated as distributions. Aggregate amounts distributed in excess of aggregate premiums paid are generally treated as taxable ordinary income. A loan from a life insurance policy that is not a modified endowment contract generally is not treated as a taxable distribution. However, if the total loan is not repaid and is forgiven (such as if the life insurance policy lapses or is surrendered), then the amount of the outstanding loan balance is treated as a distribution to the policy owner and may be treated as ordinary income in whole or in part. The Internal Revenue Code provides special rules for the taxation of surrenders, partial surrenders, loans, collateral assignments and other pre-death distributions from modified endowment contracts (other than certain distributions to terminally ill individuals). Under these special rules, such transactions are taxable to the extent the cash value of the policy exceeds, at the time of distribution, the premiums paid into the policy. In addition, a 10% tax penalty generally applies to the taxable portion of such distributions unless the policy owner is over age 59 1/2, disabled, or the distribution is part of a series of substantially equal periodic payments as defined in the Internal Revenue Code. Under certain circumstances, certain distributions made under a policy on the life of a "terminally ill individual," as that term is defined in the Internal Revenue Code, are treated as death proceeds and are subject to the death benefit rules of Section 101 of the Internal Revenue Code described above. The policies offered by this prospectus may or may not be issued as modified endowment contracts. If the policy is not issued as a modified endowment contract, Nationwide will monitor premiums paid and will notify the policy owner when the policy is in jeopardy of becoming a modified endowment contract. If a policy is not a modified endowment contract, a cash distribution during the first 15 years after a policy is issued which causes a reduction in death benefits may still become fully or partially taxable to the policy owner pursuant to Section 7702(f)(7) of the Internal Revenue Code. The policy owner should carefully consider this potential effect and seek further information before initiating any changes in the terms of the policy. Under certain conditions, a policy may become a modified endowment contract, or may become subject to a new 7 year testing period as a result of a material change or a reduction in benefits as defined by Section 7702A(c) of the Internal Revenue Code. In addition to meeting the tests required under Section 7702, Section 817(h) of the Internal Revenue Code requires that the investments of separate accounts, such as the variable account, be adequately diversified. Regulations under 817(h) provide that a variable life policy that fails to satisfy the diversification standards will not be treated as life insurance unless such failure was inadvertent, is corrected, and the policy owner or the issuer pays an amount to the IRS. The amount will be based on the tax that would have been paid by the policy owner if the income, for the period the policy was not diversified, had been received by the policy owner. If the failure to diversify is not corrected in this manner, the policy owner will be deemed to be the owner of the underlying securities and taxed on the earnings of his or her account. Representatives of the IRS have 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. No formal guidance has been issued in this area. 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 policy would no longer qualify as life insurance under Section 7702 of the Internal Revenue Code, Nationwide will take whatever steps are available to remain in compliance. Nationwide will monitor compliance with these regulations and, to the extent necessary, will change the objectives or assets of the sub-account investments to remain in compliance. A total surrender or cancellation of the policy by lapse or the maturity of the policy on its maturity date may have adverse tax consequences. If the amount received by the policy owner plus total policy indebtedness exceeds the premiums paid into the policy, then the excess generally will be treated as taxable income, regardless of whether or not the policy is a modified endowment contract. 21 WITHHOLDING Distributions of income from a life insurance policy (including a modified endowment contract) are subject to federal income tax withholding; however, the recipient may elect not to have the withholding taken from the distribution. A distribution of income from a contract may be subject to mandatory back-up withholding (which cannot be waived). The mandatory back-up withholding rate is established by Section 3406 of the Internal Revenue Code and is applied against the income that is distributed. The mandatory backup withholding may arise if no taxpayer identification number is provided to Nationwide, or if the IRS notifies Nationwide that back-up withholding is required. ESTATE AND GENERATION-SKIPPING TRANSFER TAXES State and local estate, inheritance, income and other tax consequences of ownership or receipt of policy proceeds depend on the circumstances of each policy owner or beneficiary. The federal estate tax is integrated with the federal gift tax under a unified tax rate schedule. In general, in 2002, an estate of less than $1,000,000 (inclusive of certain pre-death gifts) will not incur a federal estate tax liability. In addition, an unlimited marital deduction may be available for federal estate tax purposes for certain amounts that pass to the surviving spouse. When the insured dies, the death benefit will generally be included in such insured's federal gross estate if: (1) the proceeds were payable to or for the benefit of the insured's estate; or (2) the insured held any "incident of ownership" in the policy at death or at any time within three years of death. An incident of ownership is, in general, any right that may be exercised by the policy owner, such as the right to borrow on the policy, or the right to name a new beneficiary. If the policy owner (whether or not he or she is the insured) transfers ownership of the policy to another person, such transfer may be subject to a federal gift tax. In addition, if such policy owner transfers the policy to someone two or more generations younger than the policy owner, the transfer may be subject to the federal generation-skipping transfer tax ("GSTT"), the taxable amount being the value of the policy. Similarly, if the beneficiary is two or more generations younger than the insured, the payment of the death proceeds at the death of the insured may be subject to the GSTT. Pursuant to regulations recently promulgated by the U.S. Secretary of the Treasury, Nationwide may be required to withhold a portion of the death proceeds and pay them directly to the IRS as the GSTT liability. The GSTT provisions generally apply to the same transfers that are subject to estate or gift taxes. The tax rate is a flat rate equal to the maximum estate tax rate (currently 55%), and there is a provision for an aggregate $1 million exemption. Due to the complexity of these rules, the policy owner should consult with counsel and other competent advisers regarding these taxes. NON-RESIDENT ALIENS Pre-death distributions from modified endowment contracts to nonresident aliens ("NRAs") are generally subject to federal income tax and tax withholding, at a statutory rate of 30% of the amount of income that is distributed. Nationwide is required to withhold such amount from the distribution and remit it to the IRS. Distributions to certain NRAs may be subject to lower, or in certain instances zero, tax and withholding rates, if the United States has entered into an applicable treaty. However, in order to obtain the benefits of such treaty provisions, the NRA must give to Nationwide sufficient proof of his or her residency and citizenship in the form and manner prescribed by the IRS. In addition, the NRA must obtain an individual taxpayer identification number from the IRS, and furnish that number to Nationwide prior to the distribution. If Nationwide does not have the proper proof of citizenship or residency and a proper individual taxpayer identification number prior to any distribution, Nationwide will be required to withhold 30% of the income, regardless of any treaty provision. A pre-death distribution may not be subject to withholding where the recipient sufficiently establishes to Nationwide that such payment is effectively connected to the recipient's conduct of a trade or business in the United States and that such payment is includable in the recipient's gross income for United States federal income tax purposes, any such distributions may be subject to back-up withholding at the statutory rate if no taxpayer identification number, or an incorrect taxpayer identification number, is provided. TAXATION OF NATIONWIDE Nationwide is taxed as a life insurance company under the Internal Revenue Code. Since the variable account is not a separate entity from Nationwide and its operations form a part of Nationwide, it will not be taxed separately as a "regulated investment company" under Sub-chapter M of the Internal Revenue Code. Investment income and realized capital gains on the assets of the variable account are reinvested and taken into account in determining the value of accumulation units. As a result, such investment income and realized capital gains are automatically applied to increase reserves under the policies. Nationwide does not initially expect to incur any federal income tax liability that would be chargeable to the variable account. Based upon these expectations, no charge is currently being made against the variable account for federal income taxes. If, however, Nationwide determines that on a separate company basis 22 such taxes may be incurred, it reserves the right to assess a charge for such taxes against the variable account. Nationwide may also incur state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not significant. If they increase, however, charges for such taxes may be made. TAX CHANGES The foregoing discussion, which is based on Nationwide's understanding of federal tax laws as they are currently interpreted by the IRS, is general and is not intended as tax advice. The Internal Revenue Code has been subjected to numerous amendments and changes, and it is reasonable to believe that it will continue to be revised. The United States Congress has, in the past, considered numerous legislative proposals that, if enacted, could change the tax treatment of the policies. It is reasonable to believe that such proposals, and future proposals, may be enacted into law. The U.S. Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing law that may be at variance with its current positions on these matters. In addition, current state law (which is not discussed herein), and future amendments to state law, may affect the tax consequences of the policy. If the policy owner, insured, or beneficiary or other person receiving any benefit or interest in or from the policy is not both a resident and citizen of the United States, there may be a tax imposed by a foreign country, in addition to any tax imposed by the United States. The foreign law (including regulations, rulings, and case law) may change and impose additional taxes on the policy, the death proceeds, or other distributions and/or ownership of the policy, or a treaty may be amended and all or part of the favorable treatment may be eliminated. Any or all of the foregoing may change from time to time without any notice, and the tax consequences arising out of a policy may be changed retroactively. There is no way of predicting if, when, or to what extent any such change may take place. No representation is made as to the likelihood of the continuation of these current laws, interpretations, and policies. The foregoing is a general explanation as to certain tax matters pertaining to insurance policies. It is not intended to be legal or tax advice, you should consult your independent legal, tax and/or financial adviser. LEGAL CONSIDERATIONS On July 6, 1983, the U.S. Supreme Court held in Arizona Governing Committee v. Norris that certain annuity benefits provided by employers' retirement and fringe benefit programs may not vary between men and women on the basis of sex. This decision applies only to benefits derived from premiums made on or after August 1, 1983. The policies offered by this prospectus are based upon actuarial tables which distinguish between men and women. Thus the policies provide different benefits to men and women of the same age. Accordingly, employers and employee organizations should consider, in consultation with legal counsel, the impact of Norris on any employment related insurance or benefit program before purchasing this policy. STATE REGULATION Nationwide is subject to the laws of Ohio governing insurance companies and to regulation by the Ohio Insurance Department. An annual statement in a prescribed form is filed with the Insurance Department each year covering the operation of Nationwide for the preceding year and its financial condition as of the end of such year. Regulation by the Insurance Department includes periodic examination to determine Nationwide's contract liabilities and reserves so that the Insurance Department may certify the items are correct. Nationwide's books and accounts are subject to review by the Insurance Department at all times and a full examination of its operations is conducted periodically by the National Association of Insurance Commissioners. Such regulation does not, however, involve any supervision of management or investment practices or policies. In addition, Nationwide is subject to regulation under the insurance laws of other jurisdictions in which it may operate. REPORTS TO POLICY OWNERS Nationwide will mail to the policy owner at the last known address of record: - an annual statement containing: the amount of the current death benefit, cash value, cash surrender value, premiums paid, monthly charges deducted, amounts invested in the fixed account and the sub-accounts, and policy indebtedness; - annual and semi-annual reports containing all applicable information and financial statements or their equivalent, which must be sent to the underlying mutual fund beneficial shareholders as required by the rules under the Investment Company Act of 1940 for the variable account; and - statements of significant transactions, such as changes in specified amount, changes in death benefit options, changes in future premium allocations, transfers among sub-accounts, premium payments, loans, loan repayments, reinstatement and termination. 23 ADVERTISING Nationwide is ranked and rated by independent financial rating services, including Moody's, Standard & Poor's and A.M. Best Company. The purpose of these ratings is to reflect the financial strength or claims-paying ability of Nationwide. The ratings are not intended to reflect the investment experience or financial strength of the variable account. Nationwide may advertise these ratings from time to time. In addition, Nationwide may include in certain advertisements, endorsements in the form of a list of organizations, individuals or other parties which recommend Nationwide or the policies. Furthermore, Nationwide may occasionally include in advertisements comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets, or discussions of alternative investment vehicles and general economic conditions. LEGAL PROCEEDINGS Nationwide is a party to litigation and arbitration proceedings in the ordinary course of its business, none of which is expected to have a material adverse effect on Nationwide. 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. On October 29, 1998, Nationwide was named in a lawsuit filed in Ohio state court related to the sale of deferred annuity products for use as investments in tax-deferred contributory retirement plans (Mercedes Castillo v. Nationwide Financial Services, Inc., Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company). On May 3, 1999, the complaint was amended to, among other things, add Marcus Shore as a second plaintiff. The amended complaint is brought as a class action on behalf of all persons who purchased individual deferred annuity contracts or participated in group annuity contracts sold by Nationwide and the other named Nationwide affiliates which were used to fund certain tax-deferred retirement plans. The amended complaint seeks unspecified compensatory and punitive damages. On June 11, 1999, Nationwide and the other named defendants filed a motion to dismiss the amended complaint. On March 8, 2000, the court denied the motion to dismiss the amended complaint filed by Nationwide and the other named defendants. On January 25, 2002, the plaintiffs filed a motion for leave to amend their complaint to add three new named plaintiffs. On February 9, 2002, the plaintiffs filed a motion for class certification. The class has not been certified. Nationwide intends to defend this lawsuit vigorously. On August 15, 2001, Nationwide was named in a lawsuit filed in Connecticut federal court titled 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. On September 5, 2001, the plaintiffs amended their complaint to include class action allegations. The plaintiffs seek to represent a class of plan trustees who purchased variable annuities to fund qualified ERISA retirement plans. The amended complaint alleges that the retirement plans purchased variable annuity contracts from Nationwide which invested in mutual funds that were offered by separate mutual fund companies; that Nationwide was a fiduciary under ERISA and that Nationwide breached its fiduciary duty when it accepted certain fees from the mutual fund companies that purportedly were never disclosed by Nationwide; and that Nationwide violated ERISA by replacing many of the mutual funds originally included in the plaintiffs' annuities with "inferior" funds because the new funds purportedly paid more in revenue sharing. The amended complaint seeks disgourgement of fees by Nationwide and other unspecified compensatory damages. On November 15, 2001, Nationwide filed a motion to dismiss the amended complaint, which has not been decided. On December 3, 2001, the plaintiffs filed a motion for class certification. On January 15, 2002, the plaintiffs filed a response to Nationwide's motion to dismiss the amended complaint. On February 22, 2002, Nationwide filed a reply in support of its motion to dismiss. The class has not been certified. Nationwide intends to defend this lawsuit vigorously. There can be no assurance that any such litigation will not have a material adverse effect on Nationwide in the future. The general distributor, NISC, is not engaged in any litigation of any material nature. INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The financial statements of Nationwide VLI Separate Account-4 and Nationwide Life Insurance Company for the periods indicated have been included herein in reliance upon the reports of KPMG LLP, independent certified public accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. REGISTRATION STATEMENT Nationwide has filed a registration statement with the SEC under the Securities Act of 1933, as amended, for 24 the policies discussed in this prospectus. However, the prospectus does not contain all the information included in the registration statement. The registration statement may also contain amendments and exhibits that are not included in the prospectus. The prospectus is meant to be a summary and explanation of the policy, which is the legal binding instrument for the policies. Please refer to the policy for additional information. DISTRIBUTION OF THE POLICIES The policies will be sold by licensed insurance agents in those states where the policies may lawfully be sold. Agents are registered representatives of broker dealers registered under the Securities Exchange Act of 1934 who are member firms of the National Association of Securities Dealers, Inc. ("NASD"). The policies will be distributed by the general distributor, NISC. NISC was organized as an Oklahoma corporation on March 19, 1974. NISC is a wholly owned subsidiary of Nationwide and a member of the NASD. NISC acts as general distributor for the following separate accounts, all of which are separate investment accounts of Nationwide or its affiliates: - Nationwide VLI Separate Account-2; - Nationwide VLI Separate Account-3; - Nationwide VLI Separate Account-4; - Nationwide VLI Separate Account-5; - Nationwide Multi-Flex Variable Account; - Nationwide Variable Account; - Nationwide Variable Account-II; - Nationwide Variable Account-4; - Nationwide Variable Account-5; - Nationwide Variable Account-6; - Nationwide Variable Account-7; - Nationwide Variable Account-8; - Nationwide Variable Account-9; - Nationwide Variable Account-10; - Nationwide VA Separate Account-A; - Nationwide VA Separate Account-B; - Nationwide VA Separate Account-C; - Nationwide VL Separate Account-C; and - Nationwide VL Separate Account-D. Gross first year commissions paid by Nationwide on the sale of these policies plus fees for marketing services are not more than 20% of the premiums paid up to commission target premium, 5% of premium in excess of commission target premium. Commission target premium is equal to the IRS guideline level premium. No underwriting commissions have been paid by Nationwide to NISC. NATIONWIDE INVESTMENT SERVICES CORPORATION DIRECTORS AND OFFICERS The following is a list of Directors and Officers of NISC. Joseph J. Gasper, Director and Chairman of the Board Richard A. Karas, Director and Vice Chairman Mark A. Thresher, Director and Senior Vice President and Treasurer Duane C. Meek, President Robert A. Oakley, Executive Vice President-Chief Financial Officer Robert J. Woodward, Jr., Executive Vice President-Chief Investment Officer Barbara J. Shane, Vice President-Compliance Officer Alan A. Todryk, Vice President-Taxation Carol L. Dove, Associate Vice President-Treasury Services and Assistant Treasurer Glenn W. Soden, Associate Vice President and Secretary John F. Delaloye, Assistant Secretary E. Gary Berndt, Assistant Treasurer Terry C. Smetzer, Assistant Treasurer The business address of the Directors and Officers listed above is One Nationwide Plaza, Columbus, Ohio 43215. ADDITIONAL INFORMATION ABOUT NATIONWIDE The life insurance business, including annuities, is the only business in which Nationwide is engaged. Nationwide markets its policies through independent insurance brokers, general agents, and registered representatives of registered NASD broker/dealer firms. Nationwide serves as depositor for the following separate investment accounts, each of which is a registered investment company: - Nationwide Variable Account; - Nationwide Variable Account-II; - Nationwide Variable Account-3; - Nationwide Variable Account-4; - Nationwide Variable Account-5; - Nationwide Variable Account-6; - Nationwide Variable Account-7; - Nationwide Variable Account-8; - Nationwide Variable Account-9; - Nationwide Variable Account-10; - Nationwide Variable Account-11; - MFS Variable Account; - Nationwide Multi-Flex Variable Account; - Nationwide VLI Separate Account; - Nationwide VLI Separate Account-2; - Nationwide VLI Separate Account-3; - Nationwide VLI Separate Account-4; and - Nationwide VLI Separate Account-5. Nationwide, in common with other insurance companies, is subject to regulation and supervision by the regulatory authorities of the states in which it is licensed to do business. A license from the state insurance department 25 is a prerequisite to the transaction of insurance business in that state. In general, all states have statutory administrative powers. Such regulation relates, among other things, to licensing of insurers and their agents, the approval of policy forms, the methods of computing reserves, the form and content of statutory financial statements, the amount of policyholders' and stockholders' dividends, and the type of distribution of investments permitted. Nationwide operates in the highly competitive field of life insurance. There are approximately 2,300 stock, mutual and other types of insurers in the life insurance business in the United States, and a large number of them compete with the registrant in the sale of insurance policies. As is customary in insurance company groups, employees are shared with the other insurance companies in the group. In addition to its direct salaried employees, Nationwide shares employees with Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company. Nationwide does not presently own or lease any materially important physical properties when its property holdings are viewed in relation to its total assets. Nationwide shares its home office, other facilities and equipment with Nationwide Mutual Insurance Company. COMPANY MANAGEMENT Nationwide and Nationwide Life and Annuity Insurance Company, together with Nationwide Mutual Insurance Company, Nationwide Mutual Fire Insurance Company, Nationwide Property and Casualty Insurance Company and Nationwide General Insurance Company and their affiliated companies comprise the Nationwide group of companies. The companies listed above have substantially common boards of directors and officers. Nationwide Financial Services, Inc. ("NFS") is the sole shareholder of Nationwide. NFS serves as a holding company for other financial institutions. Nationwide is the sole owner of Nationwide Life and Annuity Insurance Company. Each of the directors and officers listed below is a director or officer respectively of at least one or more of the other major insurance affiliates of the Nationwide group of companies. The business address of the directors and officers listed below is One Nationwide Plaza, Columbus, Ohio 43215. W. G. JURGENSEN has been Chief Executive Officer of Nationwide since August 2000, Chief Executive Officer-Elect from May to August 2000 and a Director of Nationwide since May 2000. Previously, he was Executive Vice President of Bank One Corporation from 1998 to 2000. Mr. Jurgensen was Executive Vice President of First Chicago NBD Corporation and Chairman of FCC National Bank from 1996 to 1998. Mr. Jurgensen has been with Nationwide for 2 years. JOSEPH J. GASPER has been President and Chief Operating Officer and a Director of Nationwide since April 1996. Previously, he was Executive Vice President-Property and Casualty Operations of Nationwide from April 1995 to April 1996. He was Senior Vice President-Property and Casualty Operations of Nationwide from September 1993 to April 1995. Prior to that time, Mr. Gasper held various management positions with the Nationwide companies. Mr. Gasper has been with Nationwide for 35 years. GALEN R. BARNES has been a Director of Nationwide since May 2001. He served as President of Nationwide Insurance Enterprise from April 1996 to April 1999. He was Director and Vice Chairman of the Wausau Insurance Companies, a Nationwide affiliate, from September 1996 to December 1998; and Director, President and Chief Operating Officer from May 1993 to September 1996. Mr. Barnes was Senior Vice President of Nationwide from May 1993 to April 1996. Prior to that time, Mr. Barnes held several positions within Nationwide. Mr. Barnes has been with Nationwide for 25 years. RICHARD D. HEADLEY has been Executive Vice President of Nationwide since July 2000. Previously, he was Executive Vice President-Chief Information Technology Officer of Nationwide from August 1999 to August 2000, and Senior Vice President-Chief Information Technology Officer of Nationwide from October 1997 to May 1999. Prior to that time, Mr. Headley was Chairman and Chief Executive Officer of Banc One Services Corporation from 1992 to October 1997. Mr. Headley has been with Nationwide for 4 years. MICHAEL S. HELFER has been Executive Vice President-Corporate Strategy of Nationwide since August 2000. He has been a Director of Nationwide since May 2001. Prior to that time, Mr. Helfer was a partner with Wilmer, Cutler and Pickering from 1978 to October 2000. Mr. Helfer has been with Nationwide for 2 years. DONNA A. JAMES has been Executive Vice President-Chief Administrative Officer of Nationwide since July 2000 and a Director of Nationwide since May 2001. Ms. James was Senior Vice President-Chief Human Resources Officer from May 1999 to July 2000 and Senior Vice President-Human Resources of Nationwide from December 1997 to May 1999. Previously, she was Vice President-Human Resources of Nationwide from July 1996 to December 1997. Previously, Ms. James was Vice President-Assistant to the CEO of Nationwide from March 1996 to July 1996 and Associate Vice President-Assistant to the CEO from May 1994 to March 1996. Prior to that time, Ms. James held several positions within 26 Nationwide. Ms. James has been with Nationwide for 20 years. MICHAEL C. KELLER has been Executive Vice President-Chief Information Officer of Nationwide since June 2001. Prior to that time, Mr. Keller was Senior Vice President of Bank One from January 1998 to June 2001, and held various management positions with IBM from July 1982 to December 1997. Mr. Keller has been with Nationwide for 1 year. ROBERT A. OAKLEY has been Executive Vice President-Chief Financial Officer of Nationwide since April 1995 and a Director of Nationwide since May 2001. Previously, he was Senior Vice President-Chief Financial Officer of Nationwide from October 1993 to April 1995. Prior to that time, Mr. Oakley held several positions within Nationwide. Mr. Oakley has been with Nationwide for 26 years. ROBERT J. WOODWARD, JR. has been Executive Vice President-Chief Investment Officer of Nationwide since August 1995 and a Director of Nationwide since May 2001. Previously, he was Senior Vice President-Fixed Income Investments of Nationwide from March 1991 to August 1995. Prior to that time, Mr. Woodward held several positions within Nationwide. Mr. Woodward has been with Nationwide for 37 years. JOHN R. COOK, JR. has been Senior Vice President-Chief Communications Officer of Nationwide since May 1997. Previously, Mr. Cook was Senior Vice President-Chief Communications Officer of USAA from July 1989 to May 1997. Mr. Cook has been with Nationwide for 5 years. DAVID A. DIAMOND has been Senior Vice President-Corporate Strategy since December 2000. Previously, he was Senior Vice President-Corporate Controller of Nationwide from August 1999 to December 2000. He was Vice President-Controller of Nationwide from October 1993 to August 1996. Prior to that time, Mr. Diamond held several positions within Nationwide. Mr. Diamond has been with Nationwide for 13 years. PHILIP C. GATH has been Senior Vice President-Chief Actuary-Nationwide Financial since May 1998. Previously, Mr. Gath was Vice President-Product Manager-Individual Variable Annuity from July 1997 to May 1998, and Vice President-Individual Life Actuary from August 1989 to July 1997. Prior to that time, Mr. Gath held several positions within Nationwide. Mr. Gath has been with Nationwide for 33 years. PATRICIA R. HATLER has been Senior Vice President, General Counsel and Secretary of Nationwide since April 2000, and was Senior Vice President and General Counsel from July 1999 to April 2000. Prior to that time, she was General Counsel and Corporate Secretary of Independence Blue Cross from 1983 to July 1999. Ms. Hatler has been with Nationwide for 3 years. DAVID K. HOLLINGSWORTH has been Senior Vice President-President Nationwide Insurance Sales since August 2001. Mr. Hollingsworth has been with Nationwide for 12 years. DAVID R. JAHN has been Senior Vice President-Product Management since November 2000. Mr. Jahn has been with Nationwide for 30 years. RICHARD A. KARAS has been Senior Vice President-Sales-Financial Services of Nationwide since March 1993. Previously, he was Vice President-Sales-Financial Services of Nationwide from February 1989 to March 1993. Prior to that time, Mr. Karas held several positions within Nationwide. Mr. Karas has been with Nationwide for 37 years. GREGORY S. LASHUTKA has been Senior Vice President-Corporate Relations of Nationwide since January 2000. Prior to that time, he was Mayor of the City of Columbus (Ohio) from January 1992 to December 1999. Mr. Lashutka has been with Nationwide for 2 years. EDWIN P. MCCAUSLAND, JR. has been Senior Vice President-Fixed Income Securities since April 1998. Prior to joining Nationwide, he was Vice President-Managing Director of Massachusetts Life Insurance Company. Mr. McCausland has been with Nationwide for 5 years. ROBERT H. MCNAGHTEN has been Senior Vice President-Real Estate Investments since November 2001. Prior to joining Nationwide in 1987 he was Executive Vice President with Buckeye Federal Savings & Loan. Mr. McNaghten has been with Nationwide for 15 years. MICHAEL D. MILLER has been Senior Vice President-NI Finance since May 2001. Prior to joining Nationwide in 1985 he was P/C Accounting Manager with Celina Group. Mr. Miller has been with Nationwide for 17 years. BRIAN W. NOCCO has been Senior Vice President and Treasurer of Nationwide since April 2001. Prior to that time, he was Executive Vice President of Imperial Bank and subsidiaries from May 1998 to June 2001. He was Senior Vice President-Chief Compliance Officer with The Chubb Corporation from 1994 to 1998 and Treasurer and Vice President-Finance of Continental Bank Corporation from 1986 to 1994. From 1974 to 1986 he held management positions in several companies. Mr. Nocco has been with Nationwide for 1 year. MARK D. PHELAN has been Senior Vice President-Technology and Operations of Nationwide since December 2000. Prior to that time, he was Executive Vice President of Check Free Corporation from October 27 1992 to November 1997, Sales Vice President of AT&T Corporation from February 1982 to November 1992, and Operations Manager with IBM Corporation from April 1977 to February 1982. Mr. Phelan has been with Nationwide for 2 years. DOUGLAS C. ROBINETTE has been Senior Vice President-Claims since November 2000. Prior to joining Nationwide, he was a CPA with KPMG LLP. Mr. Robinette has been with Nationwide for 15 years. JOHN S. SKUBIK has been Senior Vice President-Strategic Initiatives since November 2001. Prior to joining Nationwide in 2001, Mr. Skubik was an Executive Vice President with Bank One. MARK R. THRESHER has been Senior Vice President-Finance-Nationwide Financial since May 1999. Previously, he was Vice President-Controller of Nationwide from August 1996 to May 1999. He was Vice President and Treasurer of Nationwide from June 1996 to August 1996. Prior to that time, Mr. Thresher served as a partner with KPMG LLP from July 1988 to May 1996. Mr. Thresher has been with Nationwide for 6 years. RICHARD M. WAGGONER has been Senior Vice President-Operations since August 1999. Mr. Waggoner has been with Nationwide for 18 years. SUSAN A. WOLKEN has been Senior Vice President-Product Management and Nationwide Financial Marketing since May 1999. Previously, she was Senior Vice President-Life Company Operations of Nationwide from June 1997 to May 1999. She was Senior Vice President-Enterprise Administration of Nationwide from July 1996 to June 1997. Prior to that time, she was Senior Vice President-Human Resources of Nationwide from April 1995 to July 1996, Vice President-Human Resources of Nationwide from September 1993 to April 1995, and Vice President-Individual Life and Health Operations from September 1993 to April 1995. Ms. Wolken has been with Nationwide for 27 years. 28 APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS The underlying mutual funds listed below are designed primarily as investment vehicles for variable annuity contracts and variable life insurance policies issued by insurance companies. There is no guarantee that the investment objectives will be met. AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF THE AMERICAN CENTURY(SM) FAMILY OF INVESTMENTS. American Century Variable Portfolios, Inc. was organized as a Maryland corporation in 1987. It is a diversified, open-end investment management company which offers its shares only as investment vehicles for variable annuity and variable life insurance products of insurance companies. American Century Variable Portfolios, Inc. is managed by American Century Investment Management, Inc. AMERICAN CENTURY VP INCOME & GROWTH FUND: CLASS I Investment Objective: Capital growth. The Fund seeks to achieve its investment objective by investing in common stocks. Income is a secondary objective. The investment manager constructs the portfolio to match the risk characteristics of the S&P 500 Stock Index and then optimizes each portfolio to achieve the desired balance of risk and return potential. This includes targeting a dividend yield that exceeds that of the S&P 500. The Fund may not invest more than 25% of its total assets in companies whose principal business activities are in the same industry. AMERICAN CENTURY VP INTERNATIONAL FUND: CLASS I Investment Objective: Capital growth. The Fund will seek to achieve its investment objective by investing primarily in securities of foreign companies that meet certain fundamental and technical standards of selection and, in the opinion of the investment manager, have potential for appreciation. Under normal conditions, the Fund managers intend to keep the Fund essentially fully invested regardless of the movement of the market generally. AMERICAN CENTURY VP ULTRA FUND: CLASS I Investment Objective: Capital growth by investing in common stocks of growing companies. The basis of the strategy used by the Fund is that, over the long term, stocks of companies with earnings and revenue growth have a greater than average chance to increase in value over time. This strategy looks for stocks of large companies with earnings and revenues that are not only growing, but growing at a successively faster or accelerating pace. Although most of the Fund's assets will be invested in U.S. companies, there is no limit on the amount of assets the Fund can invest in foreign companies. Most of the Fund's foreign investments are in companies located and doing business in developed countries. AMERICAN CENTURY VP VALUE FUND: CLASS I Investment Objective: Long-term capital growth; income is a secondary objective. The managers look for companies whose stock prices are less than they believe the company is worth. The managers attempt to purchase the stock of these undervalued companies and hold them until their stock price has increased to, or is higher than, a level the managers believe more accurately reflects the fair value of the company. Under normal market conditions, the Fund expects to invest at least 80% of the value of its total assets in stocks regardless of the movement of stock prices generally. When the managers believe it is prudent, the Fund may invest a portion of its assets in equity securities, including common and preferred stock, convertible preferred stock and convertible debt securities. DREYFUS INVESTMENT PORTFOLIOS Dreyfus Investment Portfolios (the "Fund") is an open-end, management investment company known as a mutual fund. Shares are offered only to variable annuity and variable life insurance separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies and to qualified pension and retirement plans. Individuals may not purchase shares directly from the Fund. The Dreyfus Corporation serves as the Fund's investment adviser. EUROPEAN EQUITY PORTFOLIO: INITIAL SHARES (NOT AVAILABLE TO RECEIVE TRANSFERS OR PREMIUM PAYMENTS AS OF MAY 1, 2002) Investment Objective: Long-term capital growth. To pursue this goal, the Portfolio generally invests at least 80% of its total assets in stocks included within the universe of the 300 largest European companies. The Portfolio's stock investments may include common stocks, preferred stocks and convertible securities. SMALL CAP STOCK INDEX PORTFOLIO: SERVICE SHARES Investment Objective: Seeks to match the performance of the Standard & Poor's SmallCap 600 Index. To pursue this goal, the Portfolio invests in a representative sample of stocks included in the S&P SmallCap 600 Index, and in futures whose performance is related to the Index, rather than attempt to replicate the Index. The Portfolio attempts to have a correlation between its 29 performance and that of the Index of at least .95, before expenses. The Portfolio's investments are selected by a "sampling" process based on market capitalization, industry representation and other means. By using a this sampling process, the Portfolio typically will not invest in all 600 stocks in the S&P SmallCap 600 Index. THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.: INITIAL SHARES The Dreyfus Socially Responsible Growth Fund, Inc. is an open-end, diversified, management investment company incorporated under Maryland law on July 20, 1992 and commenced operations on October 7, 1993. The Fund offers its share only as investment vehicles for variable annuity and variable life insurance products of insurance companies. The Dreyfus Corporation serves as the Fund's investment adviser. NCM Capital Management Group, Inc. serves as the Fund's sub-investment adviser and provides day-to-day management of the Fund's portfolio. Investment Objective: Capital growth through equity investment in companies that, in the opinion of the Fund's advisers, not only meet traditional investment standards, but which also show evidence that they conduct their business in a manner that contributes to the enhancement of the quality of life in America. Current income is secondary to the primary goal. DREYFUS STOCK INDEX FUND, INC.: INITIAL SHARES The Dreyfus Stock Index Fund, Inc. ("Fund") is an open-end, non-diversified, management investment company incorporated under Maryland law on January 24, 1989 and commenced operations on September 29, 1989. The Fund offers its shares only as investment vehicles for variable annuity and variable life insurance products of insurance companies. The Dreyfus Corporation ("Dreyfus") serves as the Fund's manager, while Mellon Equity Associates, an affiliate of Dreyfus, serves as the Fund's index manager. Dreyfus is a wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation. Investment Objective: To provide investment results that correspond to the price and yield performance of publicly traded common stocks in the aggregate, as represented by the Standard & Poor's 500 Composite Stock Price Index. The Fund is neither sponsored by nor affiliated with Standard & Poor's Corporation. DREYFUS VARIABLE INVESTMENT FUND Dreyfus Variable Investment Fund ("Fund") is an open-end, management investment company. It was organized as an unincorporated business trust under the laws of the Commonwealth of Massachusetts on October 29, 1986 and commenced operations on August 31, 1990. The Fund offers its shares only as investment vehicles for variable annuity and variable life insurance products of insurance companies. The Dreyfus Corporation serves as the Fund's manager. Fayez Sarofim & Company serves as the sub-adviser and provides day-to-day management of the portfolio. APPRECIATION PORTFOLIO: INITIAL SHARES Investment Objective: Primarily long-term capital growth consistent with the preservation of capital; current income is a secondary investment objective. This Portfolio invests primarily in the common stocks of domestic and foreign issuers. FEDERATED INSURANCE SERIES Federated Insurance Series (the "Trust"), an open-end management investment company, was established as a Massachusetts business trust, under a Declaration of Trust dated September 15, 1993. The Trust offers its shares only as investment vehicles for variable annuity and variable life insurance products of insurance companies. Federated Investment Management Company serves as the investment adviser. FEDERATED QUALITY BOND FUND II: PRIMARY SHARES Investment Objective: Current income by investing in investment grade fixed income securities. FIDELITY VARIABLE INSURANCE PRODUCTS FUND The Fidelity Variable Insurance Products Fund ("VIP") is an open-end, diversified, management investment company organized as a Massachusetts business trust on November 13, 1981. Shares of VIP are purchased by insurance companies to fund benefits under variable life insurance policies and variable annuity contracts. Fidelity Management & Research Company ("FMR") is the manager for VIP and its portfolios. VIP EQUITY-INCOME PORTFOLIO: SERVICE CLASS Investment Objective: Reasonable income. Also considers the potential for capital appreciation. Seeks to achieve a yield which exceeds the composite yield on the securities comprising the Standard & Poor's 500 Composite Stock Price Index. Normally invests at least 65% of total assets in income-producing equity securities, which tends to lead to investments in large cap "value" stocks. VIP GROWTH PORTFOLIO: SERVICE CLASS Investment Objective: Capital appreciation. Normally invests primarily in common stocks of companies the investment adviser believes have above-average growth potential (often called "growth" stocks). VIP HIGH INCOME PORTFOLIO: SERVICE CLASS Investment Objective: A high level of current income while also considering growth of capital. Normally invests at least 65% of total assets in income-producing debt securities, preferred stocks and convertible securities, with an emphasis on lower-quality debt securities. 30 VIP OVERSEAS PORTFOLIO: SERVICE CLASS Investment Objective: Long-term capital growth. Normally invests at least 65% of total assets in foreign securities, primarily in common stocks. FIDELITY VARIABLE INSURANCE PRODUCTS FUND II The Fidelity Variable Insurance Products Fund II ("VIP II") is an open-end, diversified, management investment company organized as a Massachusetts business trust on March 21, 1988. VIP II's shares are purchased by insurance companies to fund benefits under variable life insurance policies and variable annuity contracts. Fidelity Management & Research Company ("FMR") is the manager of VIP II and its portfolios. VIP II CONTRAFUND(R) PORTFOLIO: SERVICE CLASS Investment Objective: Long-term capital appreciation. Normally invests primarily in common stocks of companies whose value the Portfolio's investment adviser believes is not fully recognized by the public. FIDELITY VARIABLE INSURANCE PRODUCTS FUND III The Fidelity Variable Insurance Products Fund III ("VIP III") is an open-end, diversified, management investment company organized as a Massachusetts business trust on July 14, 1994. VIP III's shares are purchased by insurance companies to fund benefits under variable life insurance policies and variable annuity contracts. Fidelity Management & Research Company ("FMR") is the manager of VIP III and it's portfolios. VIP III GROWTH OPPORTUNITIES PORTFOLIO: SERVICE CLASS (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002) Investment Objective: Capital growth. Normally invests primarily in common stocks, investing in both domestic and foreign issuers. Invests in either "growth" stocks or "value" stocks or both. VIP III VALUE STRATEGIES PORTFOLIO: SERVICE CLASS Investment Objective: Capital appreciation. The Portfolio pursues its objective by investing primarily in common stocks. GARTMORE VARIABLE INSURANCE TRUST Gartmore Variable Insurance Trust (formerly, Nationwide Separate Account Trust) ("GVIT") is an open-end management investment company created under the laws of Massachusetts. GVIT offers shares in the mutual funds listed below, each with its own investment objectives. Shares of GVIT will be sold primarily to separate accounts to fund the benefits under variable life insurance policies and variable annuity contracts issued by life insurance companies. Gartmore Global Asset Management Trust, an indirect subsidiary of Nationwide Mutual Insurance Company, manages the assets of the Gartmore GVIT Emerging Markets Fund and Gartmore GVIT International Growth Fund. The remaining assets of GVIT are managed by Gartmore Mutual Fund Capital Trust ("GMF"), an indirect subsidiary of Nationwide Financial Services, Inc. COMSTOCK GVIT VALUE FUND: CLASS I Subadviser: Van Kampen Asset Management Inc. Investment Objective: Capital growth and income through investments in equity securities, including common stocks, preferred stocks and securities convertible into common and preferred stocks. Under normal market conditions, Van Kampen Asset Management Inc. seeks to achieve the Fund's investment objective by investing in a portfolio of equity securities, consisting principally of common stocks. DREYFUS GVIT MID CAP INDEX FUND: CLASS I Subadviser: The Dreyfus Corporation Investment Objective: Capital appreciation. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities of companies included in the Standard & Poor's MidCap 400 Index and in derivative instruments linked to the S&P 400. The Fund is neither sponsored by nor affiliated with Standard & Poor's Corporation. FEDERATED GVIT HIGH INCOME BOND FUND: CLASS I Subadviser: Federated Investment Counseling Investment Objective: To provide high current income. Under normal conditions, the Fund invests at least 80% of the Fund's net assets in corporate bonds that are rated BBB or lower by a rating agency or that are unrated but of comparable quality. Such funds are commonly referred to as "junk bonds." GARTMORE GVIT EMERGING MARKETS FUND: CLASS I Subadviser: Gartmore Global Partners Investment Objective: Long term capital growth. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities of companies located in emerging market or developing countries or that derive a significant portion of their earnings or revenue from emerging market countries. GARTMORE GVIT GLOBAL FINANCIAL SERVICES FUND: CLASS I Subadviser: Gartmore Global Partners Investment Objective: Long-term capital growth. To achieve its objective, the Fund normally invests at least 80% of its net assets in equity securities issued by U.S. and foreign companies with business operations in the financial services sector. These companies will be economically tied to a number of countries throughout the world, including the United States. 31 GARTMORE GVIT GLOBAL HEALTH SCIENCES FUND: CLASS I Investment Objective: Long-term capital appreciation. To achieve its objective, the Fund normally invests at least 80% of its assets in equity securities issued by U.S. and foreign companies engaged in the development, production, or distribution of products and services that have a health sciences orientation (those that focus on maintaining or improving one's quality of life). These companies will be economically tied to a number of countries throughout the world, including the United States. GARTMORE GVIT GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND: CLASS I Investment Objective: Long term capital appreciation by investing under normal conditions at least 80% of its net assets in equity securities issued by companies with business operations in technology and communications and/or technology and communication related industries. These companies will be tied economically to a number of countries throughout the world, including the United States. GARTMORE GVIT GLOBAL UTILITIES FUND: CLASS I Subadviser: Gartmore Global Partners Investment Objective: Long-term capital growth. To achieve its objective, the Fund normally invests at least 80% of its net assets in equity securities issued by U.S. and foreign companies with business operations in the utilities sector. These companies will be economically tied to a number of countries throughout the world, including the United States. GARTMORE GVIT GOVERNMENT BOND FUND: CLASS I Investment Objective: Seeks as high a level of income as is consistent with the preservation of capital. Under normal conditions, the Fund invests at least 80% of its net assets in U.S. government and agency bonds, bills and notes. The duration of the Fund will typically be four to six years. GARTMORE GVIT GROWTH FUND: CLASS I Investment Objective: Long-term capital appreciation. The Fund invests primarily in large capitalization companies. The Fund looks for companies whose earnings are expected to grow faster than other companies in the market. GARTMORE GVIT INTERNATIONAL GROWTH FUND: CLASS I Subadviser: Gartmore Global Partners Investment Objective: Long term capital growth by investing primarily in equity securities of companies in Europe, Australia, the Far East and other regions, including developing countries. GARTMORE GVIT INVESTOR DESTINATIONS FUNDS GARTMORE GVIT INVESTOR DESTINATIONS CONSERVATIVE FUND Investment Objective: To maximize total investment return by seeking income and, secondarily, long term growth of capital. The Fund invests in a target allocation mix of 10% large cap U.S. stocks, 5% mid cap U.S. stocks, 5% international stocks, 35% bonds, and 45% short-term investments. GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY CONSERVATIVE FUND Investment Objective: To maximize total investment return by seeking income and, secondarily, growth of capital. The Fund invests in a target allocation mix of 20% large cap U.S. stocks, 10% mid cap U.S. stocks, 10% international stocks, 35% bonds, and 25% short-term investments. GARTMORE GVIT INVESTOR DESTINATIONS MODERATE FUND Investment Objective: To maximize total investment return by seeking growth of capital and income. The Fund invests in a target allocation mix of 30% large cap U.S. stocks, 10% mid cap U.S. stocks, 5% small cap U.S. stocks, 15% international stocks, 25% bonds, and 15% short-term investments. GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY AGGRESSIVE FUND Investment Objective: To maximize total investment return primarily by seeking growth of capital, but also income. The Fund invests in a target allocation mix of 35% large cap U.S. stocks, 15% mid cap U.S. stocks, 5% small cap U.S. stocks, 25% international stocks, 15% bonds, and 5% short-term investments. GARTMORE GVIT INVESTOR DESTINATIONS AGGRESSIVE FUND Investment Objective: To maximize total investment return primarily by seeking growth of capital. The Fund invests in a target allocation mix of 40% large cap U.S. stocks, 15% mid cap U.S. stocks, 10% small cap U.S. stocks, 30% international funds, and 5% bonds. GARTMORE GVIT MONEY MARKET FUND: CLASS I Investment Objective: As high a level of current income as is consistent with the preservation of capital and maintenance of liquidity. The Fund invests in high-quality money market obligations maturing in 397 days or less. 32 GARTMORE GVIT NATIONWIDE LEADERS FUND: CLASS I Investment Objective: High total return from a concentrated portfolio of U.S. securities. To achieve its objective, the Fund typically invests at least 80% of its net assets in equity securities, primarily in common stocks and convertible securities of U.S. leaders. A U.S. leader is a company with a strong and improving franchise that is well positioned to take advantage of opportunities in the marketplace. The Fund typically invests in a core group of 20 to 30 common stocks of large capitalization companies. GARTMORE GVIT TOTAL RETURN FUND: CLASS I Investment Objective: Seeks total return through a flexible combination of capital appreciation and current income. The Fund invests primarily in common stocks and convertible securities. GARTMORE GVIT U.S. GROWTH LEADERS FUND: CLASS I Investment Objective: Long-term capital growth. To achieve its objective, the Fund normally invests at least 80% of its net assets in equity securities of U.S. growth leaders. The Fund will invest in companies whose earnings are expected to grow faster than other companies in the market. The Fund typically invests in a core group of 20 to 30 common stocks of large capitalization companies. GARTMORE GVIT WORLDWIDE LEADERS FUND: CLASS I Subadviser: Gartmore Global Partners Investment Objective: Long-term capital growth. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities of companies located throughout the world considered to be leaders. GVIT SMALL CAP GROWTH FUND: CLASS I Subadvisers: Neuberger Berman, LLC and Waddell & Reed Investment Management Company Investment Objective: Seeks capital growth by investing in a broadly diversified portfolio of equity securities issued by U.S. and foreign companies with market capitalizations in the range of companies represented by the Russell 2000, known as small cap companies. Under normal conditions, the Fund will invest at least 80% of its net assets in the equity securities of small cap companies. GVIT SMALL CAP VALUE FUND: CLASS I Subadviser: The Dreyfus Corporation Investment Objective: Capital appreciation. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities of small capitalization companies. These are companies whose equity market capitalizations at the time of investment are similar to the market capitalizations of companies in the Russell 2000 Index. The Fund will invest in stocks of U.S. and foreign companies which the portfolio managers believe qualify as "value" companies. GVIT SMALL COMPANY FUND: CLASS I Subadvisers: The Dreyfus Corporation, Neuberger Berman, LLC, Gartmore Global Partners, Strong Capital Management, Inc. and Waddell & Reed Investment Management Company Investment Objective: Long-term growth of capital. Under normal conditions, the Fund will invest at least 80% of its net assets in equity securities issued by small capitalization companies. These are companies whose equity market capitalizations at the time of investment are similar to the market capitalizations of companies in the Russell 2000 Index. J.P. MORGAN GVIT BALANCED FUND: CLASS I Subadviser: J.P. Morgan Investment Management, Inc. Investment Objective: A high total return from a diversified portfolio of equity and fixed income securities. Under normal conditions, the Fund invests approximately 50% of its net assets in equity securities and 30% of its net assets in fixed income securities (including U.S. government corporate, mortgage-backed and asset-backed securities). The equity securities held by the Fund generally are common stocks of large and medium sized companies included in the Standard & Poor's 500 Index. MAS GVIT MULTI SECTOR BOND FUND: CLASS I Subadviser: Miller, Anderson & Sherrerd, LLP Investment Objective: Primarily seeks above average total return over a market cycle of three to five years. The Fund invests in a diversified portfolio of U.S. and foreign fixed income securities, including high yield securities (commonly referred to as "junk bonds") and emerging markets securities. STRONG GVIT MID CAP GROWTH FUND: CLASS I Subadviser: Strong Capital Management Inc. Investment Objective: Capital growth by focusing on common stocks of U.S. and foreign companies that the subadviser believes are reasonably priced and have above-average growth potential. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities issued by mid capitalization companies. TURNER GVIT GROWTH FOCUS FUND: CLASS I (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER JANUARY 25, 2002) Subadviser: Turner Investment Partners, Inc. Investment Objective: Long term capital appreciation by investing primarily in U.S. common stocks, 33 ADRs and foreign companies that demonstrate strong earnings growth potential. The Fund is non-diversified and typically focuses its investments in a core group of 15 to 30 common stocks. JANUS ASPEN SERIES The Janus Aspen Series is an open-end management investment company whose shares are offered in connection with investment in and payments under variable annuity contracts and variable life insurance policies, as well as certain qualified retirement plans. Janus Capital Corporation serves as investment adviser to each Portfolio. CAPITAL APPRECIATION PORTFOLIO: SERVICE SHARES Investment Objective: Long-term growth of capital by investing primarily in common stocks selected for their growth potential. The Portfolio may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies. GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES Investment Objective: Long-term growth of capital. Under normal circumstances, the portfolio invests at least 80% of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES Investment Objective: Long-term growth of capital by investing, under normal circumstances, at least 80% of its net assets in securities of issuers from at least five different countries, excluding the United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may invest in U.S. issuers and it may at times invest all of its assets in fewer than five countries, or even a single country. NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST ("AMT") Neuberger Berman AMT is an open-end, diversified management investment company that offers its portfolios in connection with variable annuity contracts and variable life insurance policies, and certain qualified plans. Prior to May 1, 2000, the portfolios invested through a two-tier master/feeder structure, whereby each portfolio invested its assets in another fund that served as a corresponding "master series;" the master series invested in securities. Effective May 1, 2000, the portfolios converted to a conventional one-tier structure, whereby each portfolio holds its securities directly. Neuberger Berman Management Inc. is the investment adviser. AMT GUARDIAN PORTFOLIO Investment Objective: Long-term capital growth, with current income as a secondary objective. The Portfolio pursues these goals by investing mainly in common stocks of large-capitalization companies. AMT MID-CAP GROWTH PORTFOLIO Investment Objective: Capital growth. The Portfolio pursues this goal by investing mainly in common stocks of mid-capitalization companies. The managers look for fast-growing companies that are in new or rapidly evolving industries and seek to reduce risk by diversifying among many companies, industries and sectors. AMT PARTNERS PORTFOLIO Investment Objective: Capital growth. The Portfolio pursues its goal by investing mainly in common stocks of mid- to large-capitalization companies. OPPENHEIMER VARIABLE ACCOUNT FUNDS The Oppenheimer Variable Account Funds are an open-end, diversified management investment company organized as a Massachusetts business trust in 1984. Shares of the Funds are sold to provide benefits under variable life insurance policies and variable annuity contracts. OppenheimerFunds, Inc. is the investment adviser. OPPENHEIMER AGGRESSIVE GROWTH FUND/VA: INITIAL CLASS Investment Objective: Capital appreciation by investing in "growth type" companies. Such companies are believed to have relatively favorable long-term prospects for increasing demand for their goods or services, or to be developing new products, services or markets and normally retain a relatively larger portion of their earnings for research, development and investment in capital assets. The Fund may also invest in cyclical industries in "special situations" that OppenheimerFunds, Inc. believes present opportunities for capital growth. OPPENHEIMER CAPITAL APPRECIATION FUND/VA: INITIAL CLASS Investment Objective: Capital appreciation by investing in securities of well-known established companies. Such securities generally have a history of earnings and dividends and are issued by seasoned companies (companies which have an operating history of at least five years including predecessors). Current income is a secondary consideration in the selection of the Fund's portfolio securities. OPPENHEIMER GLOBAL SECURITIES FUND/VA: INITIAL CLASS Investment Objective: Long-term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" 34 companies, cyclical industries and special appreciation possibilities. These securities may be considered speculative. OPPENHEIMER MAIN STREET GROWTH & INCOME FUND/VA: INITIAL CLASS Investment Objective: High total return, which stocks, preferred stocks, convertible securities and warrants. Debt investments will include bonds, participation includes growth in the value of its shares as well as current income from quality and debt securities. In seeking its investment objectives, the Fund may invest in equity and debt securities. Equity investments will include common interests, asset-backed securities, private-label mortgage-backed securities and CMOs, zero coupon securities and U.S. debt obligations, and cash and cash equivalents. From time to time, the Fund may focus on small to medium capitalization issuers, the securities of which may be subject to greater price volatility than those of larger capitalized issuers. STRONG OPPORTUNITY FUND II, INC. The Strong Opportunity Fund II, Inc. is a diversified, open-end management company commonly called a mutual fund. The Strong Opportunity Fund II, Inc. was incorporated in Wisconsin and may only be purchased by the separate accounts of insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Strong Capital Management, Inc. is the investment adviser for the Fund. Investment Objective: Capital appreciation through investments in a diversified portfolio of equity securities. THE UNIVERSAL INSTITUTIONAL FUNDS, INC. The Universal Institutional Funds, Inc. is a mutual fund designed to provide investment vehicles for variable annuity contracts and variable life insurance policies and for certain tax-qualified investors. EMERGING MARKETS DEBT PORTFOLIO Investment Objective: High total return by investing primarily in fixed income securities of government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries. Morgan Stanley Investment Management Inc., which does business in certain instances using the name Van Kampen, is the Portfolio's investment adviser. MID CAP GROWTH PORTFOLIO (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002) Investment Objective: Long-term capital growth by investing primarily in common stocks and other equity securities of U.S. mid cap companies and, to a limited extent, foreign companies. The adviser selects issues from a universe comprised of mid-cap companies, most with market capitalizations of generally less than $35 billion Morgan Stanley Investment Management Inc., which does business in certain instances using the name Van Kampen, is the Portfolio's investment adviser. U. S. REAL ESTATE PORTFOLIO Investment Objective: Above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts. Morgan Stanley Investment Management Inc., which does business in certain instances using the name Van Kampen, is the Portfolio's investment adviser. VAN ECK WORLDWIDE INSURANCE TRUST Van Eck Worldwide Insurance Trust ("Van Eck Trust") is an open-end management investment company organized as a business trust under the laws of the Commonwealth of Massachusetts on January 7, 1987. Shares of Van Eck Trust are offered only to separate accounts of insurance companies to fund the benefits of variable life insurance policies and variable annuity contracts. The investment advisor and manager is Van Eck Associates Corporation. WORLDWIDE EMERGING MARKETS FUND (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002) Investment Objective: Long-term capital appreciation by investing primarily in equity securities in emerging markets around the world. The Fund emphasizes investment in countries that, compared to the world's major economies, exhibit relatively low gross national product per capita, as well as the potential for rapid economic growth. WORLDWIDE HARD ASSETS FUND (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002) Investment Objective: Long-term capital appreciation by investing primarily in "Hard Asset Securities." For the Fund's purpose, "Hard Assets" are real estate, energy, timber, and industrial and precious metals. Income is a secondary consideration. 35 APPENDIX B: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES, AND DEATH BENEFITS The illustrations in this prospectus have been prepared to help show how values under the policies change with investment performance. The illustrations illustrate how cash values, cash surrender values and death benefits under a policy would vary over time if the hypothetical gross investment rates of return were a uniform annual effective rate of either 0%, 6% or 12%. If the hypothetical gross investment rate of return averages 0%, 6% or 12% over a period of years, but fluctuates above or below those averages for individual years, the cash values, cash surrender values and death benefits may be different. For hypothetical returns of 0% and 6%, the illustrations also illustrate when the policies would go into default, at which time additional premium payments would be required to continue the policy in force. The illustrations also assume there is no policy indebtedness, no additional premium payments are made, no cash values are allocated to the fixed account, and there are no changes in the specified amount or death benefit option. The amounts shown for the cash value, cash surrender value and death benefit as of each policy anniversary reflect the fact that the net investment return on the assets held in the sub-accounts is lower than the gross return. This is due to the deduction of underlying mutual fund investment advisory fees and other expenses, which are equivalent to an annual effective rate of 0.70%. This effective rate is based on the average of the fund expenses, after expense reimbursement, for the preceding year for all underlying mutual fund options available under the policy as of December 31, 2001. Some underlying mutual funds are subject to expense reimbursements and fee waivers. Absent expense reimbursement and fees waivers, the annual effective rate would have been 0.94%. Nationwide anticipates that the expense reimbursement and fee waiver arrangements will continue past the current year. Should there be an increase or decrease in the expense reimbursements or fee waivers of these underlying mutual funds, such change will be reflected in the net asset value of the corresponding underlying mutual fund. Taking into account the underlying mutual fund expenses, gross annual rates of return of 0%, 6% and 12% correspond to net investment experience at constant annual rates of -0.94%, 5.06% and 11.06%. The illustrations also reflect the fact that Nationwide makes monthly charges for providing insurance protection, recovering taxes, providing for administrative expenses, and assuming mortality and expense risks. Current values reflect current cost of insurance charges and guaranteed values reflect the maximum cost of insurance charges guaranteed in the policy. The values shown are for policies which are issued as standard. Policies issued on a substandard basis would result in lower cash values and death benefits than those illustrated. The cash surrender values shown in the illustrations reflect the fact that Nationwide will deduct a surrender charge from the policy's cash value for any policy surrendered in full during the first 20 policy years. The illustrations also reflect the fact that no charges for federal or state income taxes are currently made against the variable account. If such a charge is made in the future, it will require a higher gross investment return than illustrated in order to produce the net after-tax returns shown in the illustrations. Upon request, Nationwide will furnish a comparable illustration based on the proposed insured's age, sex, smoking classification, rating classification and premium payment requested. 36 DEATH BENEFIT OPTION 1 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,575 968 518 100,000 1,040 590 100,000 1,113 663 100,000 2 3,229 1,913 1,485 100,000 2,119 1,692 100,000 2,335 1,907 100,000 3 4,965 2,836 2,431 100,000 3,239 2,834 100,000 3,677 3,272 100,000 4 6,788 3,735 3,353 100,000 4,400 4,017 100,000 5,152 4,770 100,000 5 8,703 4,611 4,251 100,000 5,605 5,245 100,000 6,775 6,415 100,000 6 10,713 5,461 5,124 100,000 6,853 6,516 100,000 8,562 8,224 100,000 7 12,824 6,284 5,969 100,000 8,147 7,832 100,000 10,529 10,214 100,000 8 15,040 7,078 6,786 100,000 9,486 9,194 100,000 12,695 12,402 100,000 9 17,367 7,841 7,571 100,000 10,871 10,601 100,000 15,082 14,812 100,000 10 19,810 8,571 8,323 100,000 12,303 12,055 100,000 17,714 17,466 100,000 11 22,376 9,256 9,031 100,000 13,773 13,548 100,000 20,609 20,384 100,000 12 25,069 9,902 9,699 100,000 15,290 15,087 100,000 23,771 23,568 100,000 13 27,898 10,499 10,319 100,000 16,847 16,667 100,000 27,217 27,037 100,000 14 30,868 11,044 10,886 100,000 18,444 18,286 100,000 30,977 30,820 100,000 15 33,986 11,531 11,396 100,000 20,080 19,945 100,000 35,083 34,948 100,000 16 37,261 11,955 11,842 100,000 21,735 21,622 100,000 39,572 39,459 100,000 17 40,699 12,309 12,219 100,000 23,403 23,313 100,000 44,486 44,396 100,000 18 44,309 12,589 12,521 100,000 25,084 25,016 100,000 49,875 49,807 100,000 19 48,099 12,759 12,714 100,000 26,749 26,704 100,000 55,779 55,734 100,000 20 52,079 12,865 12,843 100,000 28,443 28,421 100,000 62,293 62,271 100,000 21 56,258 12,861 12,861 100,000 30,129 30,129 100,000 69,475 69,475 100,000 22 60,646 12,734 12,734 100,000 31,802 31,802 100,000 77,414 77,414 100,000 23 65,253 12,469 12,469 100,000 33,456 33,456 100,000 86,215 86,215 101,734 24 70,091 12,050 12,050 100,000 35,082 35,082 100,000 95,878 95,878 112,177 25 75,170 11,457 11,457 100,000 36,673 36,673 100,000 106,427 106,427 123,455 26 80,504 10,674 10,674 100,000 38,225 38,225 100,000 117,942 117,942 135,634 27 86,104 9,676 9,676 100,000 39,728 39,728 100,000 130,545 130,545 147,516 28 91,984 8,417 8,417 100,000 41,162 41,162 100,000 144,346 144,346 160,224 29 98,158 6,778 6,778 100,000 42,459 42,459 100,000 159,463 159,463 173,815 30 104,641 4,950 4,950 100,000 43,752 43,752 100,000 176,080 176,080 188,405
(1) no policy loans and no partial withdrawals have been made. (2) current values reflect current cost of insurance charges and an asset charge as described in the prospectus. (3) net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 37 DEATH BENEFIT OPTION 1 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,575 908 458 100,000 978 528 100,000 1,049 599 100,000 2 3,229 1,782 1,355 100,000 1,981 1,553 100,000 2,188 1,761 100,000 3 4,965 2,623 2,218 100,000 3,008 2,603 100,000 3,426 3,021 100,000 4 6,788 3,428 3,045 100,000 4,058 3,675 100,000 4,772 4,390 100,000 5 8,703 4,194 3,834 100,000 5,130 4,770 100,000 6,236 5,876 100,000 6 10,713 4,918 4,580 100,000 6,222 5,884 100,000 7,827 7,490 100,000 7 12,824 5,594 5,279 100,000 7,329 7,014 100,000 9,557 9,242 100,000 8 15,040 6,217 5,925 100,000 8,448 8,155 100,000 11,436 11,143 100,000 9 17,367 6,781 6,511 100,000 9,571 9,301 100,000 13,476 13,206 100,000 10 19,810 7,279 7,032 100,000 10,696 10,448 100,000 15,693 15,445 100,000 11 22,376 7,706 7,481 100,000 11,815 11,590 100,000 18,103 17,878 100,000 12 25,069 8,054 7,852 100,000 12,924 12,722 100,000 20,725 20,523 100,000 13 27,898 8,321 8,141 100,000 14,020 13,840 100,000 23,555 23,375 100,000 14 30,868 8,498 8,340 100,000 15,096 14,938 100,000 26,611 26,454 100,000 15 33,986 8,572 8,437 100,000 16,140 16,005 100,000 29,914 29,779 100,000 16 37,261 8,534 8,421 100,000 17,144 17,031 100,000 33,490 33,377 100,000 17 40,699 8,368 8,278 100,000 18,094 18,004 100,000 37,368 37,278 100,000 18 44,309 8,054 7,987 100,000 18,972 18,904 100,000 41,581 41,513 100,000 19 48,099 7,571 7,526 100,000 19,757 19,712 100,000 46,168 46,123 100,000 20 52,079 6,895 6,873 100,000 20,421 20,398 100,000 51,180 51,158 100,000 21 56,258 6,005 6,005 100,000 20,943 20,943 100,000 56,680 56,680 100,000 22 60,646 4,874 4,874 100,000 21,302 21,302 100,000 62,743 62,743 100,000 23 65,253 3,477 3,477 100,000 21,475 21,475 100,000 69,466 69,466 100,000 24 70,091 1,779 1,779 100,000 21,432 21,432 100,000 76,962 76,962 100,000 25 75,170 (*) (*) (*) 21,131 21,131 100,000 85,372 85,372 100,000 26 80,504 (*) (*) (*) 20,518 20,518 100,000 94,717 94,717 108,925 27 86,104 (*) (*) (*) 19,521 19,521 100,000 104,930 104,930 118,571 28 91,984 (*) (*) (*) 18,039 18,039 100,000 116,102 116,102 128,874 29 98,158 (*) (*) (*) 15,948 15,948 100,000 128,346 128,346 139,897 30 104,641 (*) (*) (*) 13,107 13,107 100,000 141,794 141,794 151,719
(1) no policy loans and no partial withdrawals have been made. (2) guaranteed values reflect guaranteed cost of insurance charges and an asset charge as described in the prospectus. (3) net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) unless additional premium is paid, the policy will lapse without value. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 38 DEATH BENEFIT OPTION 1 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2,625 1,716 966 100,000 1,840 1,090 100,000 1,965 1,215 100,000 2 5,381 3,385 2,672 100,000 3,742 3,029 100,000 4,115 3,403 100,000 3 8,275 4,999 4,324 100,000 5,700 5,025 100,000 6,463 5,788 100,000 4 11,314 6,555 5,917 100,000 7,715 7,078 100,000 9,029 8,391 100,000 5 14,505 8,048 7,448 100,000 9,787 9,187 100,000 11,835 11,235 100,000 6 17,855 9,475 8,912 100,000 11,914 11,351 100,000 14,909 14,346 100,000 7 21,373 10,829 10,304 100,000 14,095 13,570 100,000 18,277 17,752 100,000 8 25,066 12,109 11,621 100,000 16,333 15,846 100,000 21,961 21,474 100,000 9 28,945 13,280 12,830 100,000 18,600 18,150 100,000 25,940 25,490 100,000 10 33,017 14,390 13,978 100,000 20,936 20,524 100,000 30,297 29,884 100,000 11 37,293 15,396 15,021 100,000 23,287 22,912 100,000 35,040 34,665 100,000 12 41,782 16,287 15,950 100,000 25,651 25,314 100,000 40,217 39,880 100,000 13 46,497 17,054 16,754 100,000 28,024 27,724 100,000 45,883 45,583 100,000 14 51,446 17,682 17,420 100,000 30,399 30,137 100,000 52,103 51,841 100,000 15 56,644 18,159 17,934 100,000 32,776 32,551 100,000 58,957 58,732 100,000 16 62,101 18,473 18,285 100,000 35,152 34,965 100,000 66,542 66,355 100,000 17 67,831 18,604 18,454 100,000 37,524 37,374 100,000 74,973 74,823 100,000 18 73,848 18,518 18,406 100,000 39,879 39,766 100,000 84,387 84,275 100,000 19 80,165 18,117 18,042 100,000 42,156 42,081 100,000 94,935 94,860 103,479 20 86,798 17,576 17,538 100,000 44,499 44,462 100,000 106,585 106,548 114,046 21 93,763 16,766 16,766 100,000 46,839 46,839 100,000 119,389 119,389 125,358 22 101,076 15,605 15,605 100,000 49,146 49,146 100,000 133,375 133,375 140,044 23 108,755 14,029 14,029 100,000 51,410 51,410 100,000 148,647 148,647 156,079 24 116,818 11,965 11,965 100,000 53,626 53,626 100,000 165,312 165,312 173,578 25 125,284 9,338 9,338 100,000 55,792 55,792 100,000 183,490 183,490 192,665 26 134,173 6,039 6,039 100,000 57,905 57,905 100,000 203,306 203,306 213,472 27 143,506 1,937 1,937 100,000 59,959 59,959 100,000 224,894 224,894 236,138 28 153,307 (*) (*) (*) 61,960 61,960 100,000 248,396 248,396 260,816 29 163,597 (*) (*) (*) 63,903 63,903 100,000 273,964 273,964 287,662 30 174,402 (*) (*) (*) 65,782 65,782 100,000 301,754 301,754 316,842
(1) no policy loans and no partial withdrawals have been made. (2) current values reflect current cost of insurance charges and an asset charge as described in the prospectus. (3) net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) unless additional premium is paid, the policy will lapse without value. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 39 DEATH BENEFIT OPTION 1 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2,625 1,433 683 100,000 1,549 799 100,000 1,665 915 100,000 2 5,381 2,783 2,071 100,000 3,105 2,392 100,000 3,441 2,729 100,000 3 8,275 4,047 3,372 100,000 4,666 3,991 100,000 5,340 4,665 100,000 4 11,314 5,219 4,581 100,000 6,225 5,588 100,000 7,370 6,733 100,000 5 14,505 6,287 5,687 100,000 7,775 7,175 100,000 9,539 8,939 100,000 6 17,855 7,243 6,681 100,000 9,305 8,743 100,000 11,858 11,296 100,000 7 21,373 8,076 7,551 100,000 10,805 10,280 100,000 14,338 13,813 100,000 8 25,066 8,767 8,280 100,000 12,259 11,772 100,000 16,988 16,501 100,000 9 28,945 9,299 8,849 100,000 13,649 13,199 100,000 19,820 19,370 100,000 10 33,017 9,653 9,241 100,000 14,957 14,544 100,000 22,821 22,408 100,000 11 37,293 9,812 9,437 100,000 16,166 15,791 100,000 26,001 25,626 100,000 12 41,782 9,756 9,419 100,000 17,258 16,921 100,000 29,384 29,047 100,000 13 46,497 9,467 9,167 100,000 18,216 17,916 100,000 32,999 32,699 100,000 14 51,446 8,917 8,654 100,000 19,012 18,749 100,000 36,880 36,618 100,000 15 56,644 8,068 7,843 100,000 19,607 19,382 100,000 41,064 40,839 100,000 16 62,101 6,870 6,683 100,000 19,954 19,766 100,000 45,596 45,408 100,000 17 67,831 5,255 5,105 100,000 19,992 19,842 100,000 50,528 50,378 100,000 18 73,848 3,134 3,021 100,000 19,645 19,532 100,000 55,930 55,817 100,000 19 80,165 403 328 100,000 18,819 18,744 100,000 61,897 61,822 100,000 20 86,798 (*) (*) (*) 17,407 17,370 100,000 68,565 68,528 100,000 21 93,763 (*) (*) (*) 15,287 15,287 100,000 76,121 76,121 100,000 22 101,076 (*) (*) (*) 12,304 12,304 100,000 84,809 84,809 100,000 23 108,755 (*) (*) (*) 8,275 8,275 100,000 94,954 94,954 100,000 24 116,818 (*) (*) (*) 2,957 2,957 100,000 106,395 106,395 111,715 25 125,284 (*) (*) (*) (*) (*) (*) 118,836 118,836 124,778 26 134,173 (*) (*) (*) (*) (*) (*) 132,353 132,353 138,970 27 143,506 (*) (*) (*) (*) (*) (*) 147,020 147,020 154,371 28 153,307 (*) (*) (*) (*) (*) (*) 162,915 162,915 171,061 29 163,597 (*) (*) (*) (*) (*) (*) 180,115 180,115 189,121 30 174,402 (*) (*) (*) (*) (*) (*) 198,699 198,699 208,634
(1) no policy loans and no partial withdrawals have been made. (2) guaranteed values reflect guaranteed cost of insurance charges and an asset charge as described in the prospectus. (3) net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) unless additional premium is paid, the policy will lapse without value. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 40 DEATH BENEFIT OPTION 2 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,575 964 514 100,964 1,037 587 101,037 1,109 659 101,109 2 3,229 1,903 1,475 101,903 2,108 1,681 102,108 2,322 1,895 102,322 3 4,965 2,816 2,411 102,816 3,216 2,811 103,216 3,651 3,246 103,651 4 6,788 3,702 3,320 103,702 4,360 3,978 104,360 5,105 4,722 105,105 5 8,703 4,561 4,201 104,561 5,542 5,182 105,542 6,698 6,338 106,698 6 10,713 5,389 5,052 105,389 6,760 6,423 106,760 8,442 8,104 108,442 7 12,824 6,187 5,872 106,187 8,015 7,700 108,015 10,352 10,037 110,352 8 15,040 6,950 6,658 106,950 9,306 9,013 109,306 12,443 12,151 112,443 9 17,367 7,676 7,406 107,676 10,630 10,360 110,630 14,732 14,462 114,732 10 19,810 8,364 8,116 108,364 11,988 11,740 111,988 17,237 16,989 117,237 11 22,376 9,000 8,775 109,000 13,367 13,142 113,367 19,968 19,743 119,968 12 25,069 9,588 9,386 109,588 14,772 14,570 114,772 22,930 22,727 122,930 13 27,898 10,120 9,940 110,120 16,195 16,015 116,195 26,122 25,942 126,122 14 30,868 10,589 10,431 110,589 17,630 17,472 117,630 29,561 29,404 129,561 15 33,986 10,990 10,855 110,990 19,071 18,936 119,071 33,265 33,130 133,265 16 37,261 11,317 11,204 111,317 20,506 20,393 120,506 37,251 37,138 137,251 17 40,699 11,561 11,471 111,561 21,913 21,823 121,913 41,537 41,447 141,537 18 44,309 11,717 11,650 111,717 23,286 23,218 123,286 46,146 46,078 146,146 19 48,099 11,746 11,701 111,746 24,581 24,536 124,581 51,066 51,021 151,066 20 52,079 11,702 11,679 111,702 25,849 25,827 125,849 56,382 56,360 156,382 21 56,258 11,529 11,529 111,529 27,034 27,034 127,034 62,076 62,076 162,076 22 60,646 11,217 11,217 111,217 28,118 28,118 128,118 68,169 68,169 168,169 23 65,253 10,751 10,751 110,751 29,082 29,082 129,082 74,683 74,683 174,683 24 70,091 10,114 10,114 110,114 29,903 29,903 129,903 81,640 81,640 181,640 25 75,170 9,291 9,291 109,291 30,557 30,557 130,557 89,065 89,065 189,065 26 80,504 8,269 8,269 108,269 31,024 31,024 131,024 96,986 96,986 196,986 27 86,104 7,027 7,027 107,027 31,273 31,273 131,273 105,429 105,429 205,429 28 91,984 5,528 5,528 105,528 31,256 31,256 131,256 114,401 114,401 214,401 29 98,158 3,656 3,656 103,656 30,841 30,841 130,841 123,829 123,829 223,829 30 104,641 1,639 1,639 101,639 30,243 30,243 130,243 133,994 133,994 233,994
(1) no policy loans and no partial withdrawals have been made. (2) current values reflect current cost of insurance charges and an asset charge as described in the prospectus. (3) net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 41 DEATH BENEFIT OPTION 2 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,575 903 453 100,903 974 524 100,974 1,045 595 101,045 2 3,229 1,770 1,343 101,770 1,968 1,540 101,968 2,174 1,746 102,174 3 4,965 2,599 2,194 102,599 2,980 2,575 102,980 3,395 2,990 103,395 4 6,788 3,388 3,005 103,388 4,010 3,627 104,010 4,715 4,333 104,715 5 8,703 4,133 3,773 104,133 5,054 4,694 105,054 6,141 5,781 106,141 6 10,713 4,830 4,492 104,830 6,108 5,770 106,108 7,680 7,343 107,680 7 12,824 5,474 5,159 105,474 7,166 6,851 107,166 9,338 9,023 109,338 8 15,040 6,057 5,765 106,057 8,222 7,929 108,222 11,120 10,827 111,120 9 17,367 6,573 6,303 106,573 9,266 8,996 109,266 13,031 12,761 113,031 10 19,810 7,016 6,768 107,016 10,292 10,044 110,292 15,078 14,830 115,078 11 22,376 7,376 7,151 107,376 11,289 11,064 111,289 17,267 17,042 117,267 12 25,069 7,650 7,447 107,650 12,249 12,047 112,249 19,606 19,403 119,606 13 27,898 7,831 7,651 107,831 13,165 12,985 113,165 22,089 21,909 122,089 14 30,868 7,912 7,754 107,912 14,025 13,867 114,025 24,705 24,548 124,705 15 33,986 7,880 7,745 107,880 14,812 14,677 114,812 27,456 27,321 127,456 16 37,261 7,723 7,611 107,723 15,510 15,398 115,510 30,340 30,228 130,340 17 40,699 7,429 7,339 107,429 16,100 16,010 116,100 33,355 33,265 133,355 18 44,309 6,977 6,909 106,977 16,553 16,486 116,553 36,491 36,423 136,491 19 48,099 6,347 6,302 106,347 16,841 16,796 116,841 39,736 39,691 139,736 20 52,079 5,521 5,498 105,521 16,935 16,913 116,935 43,081 43,058 143,081 21 56,258 4,480 4,480 104,480 16,804 16,804 116,804 46,512 46,512 146,512 22 60,646 3,208 3,208 103,208 16,418 16,418 116,418 50,020 50,020 150,020 23 65,253 1,689 1,689 101,689 15,745 15,745 115,745 53,591 53,591 153,591 24 70,091 (*) (*) (*) 14,748 14,748 114,748 57,209 57,209 157,209 25 75,170 (*) (*) (*) 13,376 13,376 113,376 60,844 60,844 160,844 26 80,504 (*) (*) (*) 11,570 11,570 111,570 64,453 64,453 164,453 27 86,104 (*) (*) (*) 9,252 9,252 109,252 67,979 67,979 167,979 28 91,984 (*) (*) (*) 6,330 6,330 106,330 71,346 71,346 171,346 29 98,158 (*) (*) (*) 2,708 2,708 102,708 74,469 74,469 174,469 30 104,641 (*) (*) (*) (*) (*) (*) 77,266 77,266 177,266
(1) no policy loans and no partial withdrawals have been made. (2) guaranteed values reflect guaranteed cost of insurance charges and an asset charge as described in the prospectus. (3) net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) unless additional premium is paid, the policy will lapse without value. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 42 DEATH BENEFIT OPTION 2 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2,625 1,704 954 101,704 1,828 1,078 101,828 1,952 1,202 101,952 2 5,381 3,352 2,639 103,352 3,705 2,993 103,705 4,075 3,362 104,075 3 8,275 4,932 4,257 104,932 5,623 4,948 105,623 6,375 5,700 106,375 4 11,314 6,440 5,803 106,440 7,578 6,941 107,578 8,866 8,228 108,866 5 14,505 7,871 7,271 107,871 9,565 8,965 109,565 11,562 10,962 111,562 6 17,855 9,217 8,654 109,217 11,579 11,017 111,579 14,478 13,916 114,478 7 21,373 10,471 9,946 110,471 13,612 13,087 113,612 17,629 17,104 117,629 8 25,066 11,629 11,141 111,629 15,659 15,171 115,659 21,030 20,543 121,030 9 28,945 12,649 12,199 112,649 17,678 17,228 117,678 24,625 24,175 124,625 10 33,017 13,587 13,174 113,587 19,722 19,309 119,722 28,489 28,077 128,489 11 37,293 14,387 14,012 114,387 21,714 21,339 121,714 32,590 32,215 132,590 12 41,782 15,039 14,702 115,039 23,635 23,298 123,635 36,937 36,599 136,937 13 46,497 15,528 15,228 115,528 25,468 25,168 125,468 41,536 41,236 141,536 14 51,446 15,838 15,575 115,838 27,190 26,928 127,190 46,394 46,132 146,394 15 56,644 15,952 15,727 115,952 28,780 28,555 128,780 51,518 51,293 151,518 16 62,101 15,859 15,671 115,859 30,218 30,030 130,218 56,916 56,728 156,916 17 67,831 15,537 15,387 115,537 31,474 31,324 131,474 62,592 62,442 162,592 18 73,848 14,949 14,837 114,949 32,502 32,389 132,502 68,531 68,419 168,531 19 80,165 13,980 13,905 113,980 33,171 33,096 133,171 74,634 74,559 174,634 20 86,798 12,858 12,820 112,858 33,699 33,662 133,699 81,153 81,115 181,153 21 93,763 11,435 11,435 111,435 33,928 33,928 133,928 87,971 87,971 187,971 22 101,076 9,633 9,633 109,633 33,762 33,762 133,762 95,032 95,032 195,032 23 108,755 7,402 7,402 107,402 33,133 33,133 133,133 102,301 102,301 202,301 24 116,818 4,697 4,697 104,697 31,971 31,971 131,971 109,748 109,748 209,748 25 125,284 1,481 1,481 101,481 30,217 30,217 130,217 117,346 117,346 217,346 26 134,173 (*) (*) (*) 27,790 27,790 127,790 125,052 125,052 225,052 27 143,506 (*) (*) (*) 24,604 24,604 124,604 132,813 132,813 232,813 28 153,307 (*) (*) (*) 20,585 20,585 120,585 140,587 140,587 240,587 29 163,597 (*) (*) (*) 15,615 15,615 115,615 148,301 148,301 248,301 30 174,402 (*) (*) (*) 9,528 9,528 109,528 155,859 155,859 255,859
(1) no policy loans and no partial withdrawals have been made. (2) current values reflect current cost of insurance charges and an asset charge as described in the prospectus. (3) net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) unless additional premium is paid, the policy will lapse without value. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 43 DEATH BENEFIT OPTION 2 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2,625 1,417 667 101,417 1,531 781 101,531 1,647 897 101,647 2 5,381 2,737 2,024 102,737 3,053 2,340 103,053 3,384 2,671 103,384 3 8,275 3,954 3,279 103,954 4,558 3,883 104,558 5,217 4,542 105,217 4 11,314 5,062 4,424 105,062 6,036 5,399 106,036 7,144 6,507 107,144 5 14,505 6,047 5,447 106,047 7,473 6,873 107,473 9,165 8,565 109,165 6 17,855 6,898 6,335 106,898 8,854 8,291 108,854 11,274 10,711 111,274 7 21,373 7,602 7,077 107,602 10,160 9,635 110,160 13,466 12,941 113,466 8 25,066 8,139 7,652 108,139 11,365 10,878 111,365 15,727 15,239 115,727 9 28,945 8,489 8,039 108,489 12,444 11,994 112,444 18,043 17,593 118,043 10 33,017 8,634 8,221 108,634 13,367 12,955 113,367 20,392 19,979 120,392 11 37,293 8,555 8,180 108,555 14,107 13,732 114,107 22,732 22,357 122,732 12 41,782 8,235 7,898 108,235 14,636 14,299 114,636 25,044 24,706 125,044 13 46,497 7,660 7,360 107,660 14,924 14,624 114,924 27,304 27,004 127,304 14 51,446 6,808 6,545 106,808 14,935 14,673 114,935 29,484 29,222 129,484 15 56,644 5,650 5,425 105,650 14,624 14,399 114,624 31,543 31,318 131,543 16 62,101 4,148 3,961 104,148 13,930 13,742 113,930 33,424 33,236 133,424 17 67,831 2,253 2,103 102,253 12,780 12,630 112,780 35,055 34,905 135,055 18 73,848 (*) (*) (*) 11,085 10,973 111,085 36,344 36,231 136,344 19 80,165 (*) (*) (*) 8,752 8,677 108,752 37,189 37,114 137,189 20 86,798 (*) (*) (*) 5,689 5,652 105,689 37,488 37,451 137,488 21 93,763 (*) (*) (*) 1,815 1,815 101,815 37,142 37,142 137,142 22 101,076 (*) (*) (*) (*) (*) (*) 36,047 36,047 136,047 23 108,755 (*) (*) (*) (*) (*) (*) 34,091 34,091 134,091 24 116,818 (*) (*) (*) (*) (*) (*) 31,151 31,151 131,151 25 125,284 (*) (*) (*) (*) (*) (*) 27,063 27,063 127,063 26 134,173 (*) (*) (*) (*) (*) (*) 21,618 21,618 121,618 27 143,506 (*) (*) (*) (*) (*) (*) 14,542 14,542 114,542 28 153,307 (*) (*) (*) (*) (*) (*) 5,456 5,456 105,456 29 163,597 (*) (*) (*) (*) (*) (*) (*) (*) (*) 30 174,402 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) no policy loans and no partial withdrawals have been made. (2) guaranteed values reflect guaranteed cost of insurance charges and an asset charge as described in the prospectus. (3) net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) unless additional premium is paid, the policy will lapse without value. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 44 APPENDIX C: PERFORMANCE SUMMARY INFORMATION The following performance tables display historical investments results of the underlying mutual fund sub-accounts. This information may be useful in helping potential investors in deciding which underlying mutual fund sub-accounts to choose and in assessing the competence of the underlying mutual funds' investment advisers. The performance figures shown be considered in light of the investment objectives and policies, characteristics and quality of the underlying portfolios of the underlying mutual funds, and the market conditions during the periods of time quoted. The performance figures should not be considered as estimates or predictions of future performance. Investment return and the principal value of the underlying mutual fund sub-accounts are not guaranteed and will fluctuate so that a policy owner's units, when redeemed, may be worth more or less than their original cost. CASH VALUES
1 YEAR TO 12/31/01 2 YEARS TO 12/31/01 3 YEARS TO 12/31/01 FUND CASH CASH CASH UNDERLYING MUTUAL FUND INCEPTION ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. OPTIONS DATE** VALUE VALUE VALUE VALUE VALUE VALUE American Century VP 05/01/94 $ 5,651 $2,651 $10,463 $ 7,613 $18,572 $15,872 International Fund: Class I American Century VP Income & 10/30/97 $ 7,576 $4,576 $14,329 $11,479 $22,371 $19,671 Growth Fund: Class I American Century VP Value 05/01/96 $ 9,527 $6,527 $20,635 $17,785 $31,518 $28,818 Fund: Class I Dreyfus Investment Portfolios- 04/30/99 $ 5,752 $2,752 $11,606 $ 8,756 NA NA European Equity Portfolio: Initial Shares Dreyfus Socially Responsible 10/06/93 $ 6,259 $3,259 $11,970 $ 9,120 $19,482 $16,782 Growth Fund, Inc.: Initial Shares Dreyfus Stock Index Fund, Inc.: 09/29/89 $ 7,217 $4,217 $13,809 $10,959 $21,833 $19,133 Initial Shares Dreyfus Variable Investment 04/05/93 $ 7,489 $4,489 $14,994 $12,144 $23,326 $20,626 Fund-Appreciation Portfolio: Initial Shares Federated Insurance Series- 04/22/99 $ 9,138 $6,138 $19,147 $16,297 NA NA Federated Quality Bond Fund II: Primary Shares Fidelity VIP Equity-Income 10/09/86 $ 7,892 $4,892 $16,444 $13,594 $25,503 $22,803 Portfolio: Service Class Fidelity VIP Growth Portfolio: 10/09/86 $ 6,681 $3,681 $12,770 $ 9,920 $21,217 $18,517 Service Class Fidelity VIP High Income 09/19/85 $ 7,316 $4,316 $12,884 $10,034 $19,006 $16,306 Portfolio: Service Class Fidelity VIP II Contrafund 01/03/95 $ 7,176 $4,176 $13,949 $11,099 $22,426 $19,726 Portfolio: Service Class Fidelity VIP III Growth 01/03/95 $ 6,986 $3,986 $12,793 $ 9,943 $18,883 $16,183 Opportunities Portfolio: Service Class Fidelity VIP Overseas Portfolio: 01/28/87 $ 6,404 $3,404 $11,596 $ 8,746 $19,199 $16,499 Service Class GVIT Comstock GVIT Value 10/31/97 $ 7,223 $4,223 $13,754 $10,904 $21,504 $18,804 Fund: Class I GVIT Dreyfus GVIT Mid Cap 10/31/97 $ 8,196 $5,196 $17,828 $14,978 $29,227 $26,527 Index Fund: Class I GVIT Federated GVIT High 10/31/97 $ 8,798 $5,798 $16,709 $13,859 $24,838 $22,138 Income Bond Fund: Class I GVIT Gartmore GVIT Emerging 08/30/00 $ 7,860 $4,860 NA NA NA NA Markets Fund: Class I GVIT Gartmore GVIT Global 06/30/00 $ 4,291 $1,291 NA NA NA NA Technology and Communications Fund: Class I GVIT Gartmore GVIT 11/08/82 $ 9,062 $6,062 $19,207 $16,357 $28,837 $26,137 Government Bond Fund: Class I GVIT Gartmore GVIT Growth 04/15/92 $ 5,661 $2,661 $ 9,978 $ 7,128 $14,524 $11,824 Fund: Class I GVIT Gartmore GVIT 08/30/00 $ 5,712 $2,712 NA NA NA NA International Growth Fund: Class I GVIT Gartmore GVIT Money 11/10/81 $ 8,720 $5,720 $17,924 $15,074 $27,416 $24,716 Market Fund: Class I GVIT Gartmore GVIT Total 11/08/82 $ 7,236 $4,236 $14,423 $11,573 $22,077 $19,377 Return Fund: Class I GVIT GVIT Small Cap Growth 05/03/99 $ 7,287 $4,287 $13,495 $10,645 NA NA Fund: Class I GVIT GVIT Small Cap Value 10/31/97 $11,087 $8,087 $23,136 $20,286 $38,369 $35,669 Fund: Class I GVIT GVIT Small Company 10/23/95 $ 7,703 $4,703 $16,271 $13,421 $28,418 $25,718 Fund: Class I GVIT J.P. Morgan GVIT 10/31/97 $ 8,027 $5,027 $16,037 $13,187 $24,020 $21,320 Balanced: Class I GVIT MAS GVIT Multi Sector 10/31/97 $ 8,773 $5,773 $17,975 $15,125 $27,139 $24,439 Bond Fund: Class I GVIT Strong GVIT Mid Cap 10/31/97 $ 5,534 $2,534 $10,449 $ 7,599 $19,737 $17,037 Growth Fund: Class I GVIT Turner GVIT Growth 06/30/00 $ 4,667 $1,667 NA NA NA NA Focus Fund: Class I
5 YEARS TO 12/31/01 10 YEARS TO 12/31/01 INCEPTION TO 12/31/01 CASH CASH CASH UNDERLYING MUTUAL FUND ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. OPTIONS VALUE VALUE VALUE VALUE VALUE VALUE American Century VP $39,150 $36,750 NA NA $ 76,131 $ 74,181 International Fund: Class I American Century VP Income & NA NA NA NA $ 46,270 $ 43,870 Growth Fund: Class I American Century VP Value $56,937 $54,537 NA NA $ 71,075 $ 68,825 Fund: Class I Dreyfus Investment Portfolios- NA NA NA NA $ 20,383 $ 17,683 European Equity Portfolio: Initial Shares Dreyfus Socially Responsible $41,188 $38,788 NA NA $109,296 $107,496 Growth Fund, Inc.: Initial Shares Dreyfus Stock Index Fund, Inc.: $45,404 $43,004 $152,581 $150,931 $236,708 $235,508 Initial Shares Dreyfus Variable Investment $47,843 $45,443 NA NA $131,223 $129,423 Fund-Appreciation Portfolio: Initial Shares Federated Insurance Series- NA NA NA NA $ 28,686 $ 25,986 Federated Quality Bond Fund II: Primary Shares Fidelity VIP Equity-Income $48,133 $45,733 $152,295 $150,645 $342,712 $341,962 Portfolio: Service Class Fidelity VIP Growth Portfolio: $46,886 $44,486 $156,136 $154,486 $397,679 $396,929 Service Class Fidelity VIP High Income $31,296 $28,896 $ 79,073 $ 77,423 $191,985 $191,385 Portfolio: Service Class Fidelity VIP II Contrafund $46,565 $44,165 NA NA $ 84,829 $ 82,729 Portfolio: Service Class Fidelity VIP III Growth $36,125 $33,725 NA NA $ 62,275 $ 60,175 Opportunities Portfolio: Service Class Fidelity VIP Overseas Portfolio: $36,767 $34,367 $ 97,314 $ 95,664 $175,635 $174,735 Service Class GVIT Comstock GVIT Value NA NA NA NA $ 41,252 $ 38,852 Fund: Class I GVIT Dreyfus GVIT Mid Cap NA NA NA NA $ 55,154 $ 52,754 Index Fund: Class I GVIT Federated GVIT High NA NA NA NA $ 43,906 $ 41,506 Income Bond Fund: Class I GVIT Gartmore GVIT Emerging NA NA NA NA $ 15,689 $ 12,839 Markets Fund: Class I GVIT Gartmore GVIT Global NA NA NA NA $ 10,576 $ 7,726 Technology and Communications Fund: Class I GVIT Gartmore GVIT $50,539 $48,139 $116,309 $114,659 $349,064 $348,914 Government Bond Fund: Class I GVIT Gartmore GVIT Growth $28,292 $25,892 NA NA $ 90,426 $ 88,776 Fund: Class I GVIT Gartmore GVIT NA NA NA NA $ 13,941 $ 11,091 International Growth Fund: Class I GVIT Gartmore GVIT Money $47,411 $45,011 $102,458 $100,808 $275,096 $275,096 Market Fund: Class I GVIT Gartmore GVIT Total $42,510 $40,110 $130,471 $128,821 $528,695 $528,545 Return Fund: Class I GVIT GVIT Small Cap Growth NA NA NA NA $ 28,252 $ 25,552 Fund: Class I GVIT GVIT Small Cap Value NA NA NA NA $ 67,294 $ 64,894 Fund: Class I GVIT GVIT Small Company $54,340 $51,940 NA NA $ 89,960 $ 87,860 Fund: Class I GVIT J.P. Morgan GVIT NA NA NA NA $ 42,699 $ 40,299 Balanced: Class I GVIT MAS GVIT Multi Sector NA NA NA NA $ 46,864 $ 44,464 Bond Fund: Class I GVIT Strong GVIT Mid Cap NA NA NA NA $ 43,690 $ 41,290 Growth Fund: Class I GVIT Turner GVIT Growth NA NA NA NA $ 10,204 $ 7,354 Focus Fund: Class I
45 CASH VALUES (CONTINUED)
1 YEAR TO 12/31/01 2 YEARS TO 12/31/01 3 YEARS TO 12/31/01 FUND CASH CASH CASH UNDERLYING MUTUAL FUND INCEPTION ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. OPTIONS DATE** VALUE VALUE VALUE VALUE VALUE VALUE Janus Aspen Series-Capital 05/01/97 $ 6,312 $3,312 $11,495 $ 8,645 $20,465 $17,765 Appreciation Portfolio: Service Shares Janus Aspen Series-Global 01/18/00 $ 4,821 $1,821 NA NA NA NA Technology Portfolio: Service Shares Janus Aspen Series-International 05/02/94 $ 6,155 $3,155 $11,422 $ 8,572 $21,182 $18,482 Growth Portfolio: Service Shares Neuberger Berman AMT Mid- 11/03/97 $ 6,015 $3,015 $11,892 $ 9,042 $20,800 $18,100 Cap Growth Portfolio Neuberger Berman AMT 11/03/97 $ 8,242 $5,242 $16,578 $13,728 $26,114 $23,414 Guardian Portfolio Neuberger Berman AMT Partners 03/22/94 $ 8,081 $5,081 $16,211 $13,361 $24,915 $22,215 Portfolio Oppenheimer Variable Account 08/15/86 $ 5,388 $2,388 $10,566 $ 7,716 $20,079 $17,379 Funds-Oppenheimer Aggressive Growth Fund/VA: Initial Class Oppenheimer Variable Account 04/03/85 $ 7,191 $4,191 $14,532 $11,682 $24,891 $22,191 Funds-Oppenheimer Capital Appreciation Fund/VA: Initial Class Oppenheimer Variable Account 06/30/95 $ 7,195 $4,195 $14,990 $12,140 $27,286 $24,586 Funds-Oppenheimer Global Securities Fund/VA: Initial Class Oppenheimer Variable Account 07/05/95 $ 7,411 $4,411 $14,209 $11,359 $22,556 $19,856 Funds-Oppenheimer Main Street Growth & Income Fund/VA: Initial Class Strong Opportunity Fund II, Inc. 06/30/95 $ 8,024 $5,024 $16,638 $13,788 $28,280 $25,580 The Universal Institutional 06/16/97 $ 9,281 $6,281 $19,623 $16,773 $32,875 $30,175 Funds, Inc.-Emerging Markets Debt Portfolio The Universal Institutional 10/18/99 $ 5,599 $2,599 $11,080 $ 8,230 NA NA Funds, Inc.-Mid Cap Growth Portfolio The Universal Institutional 07/03/95 $ 9,268 $6,268 $21,235 $18,385 $32,384 $29,684 Funds, Inc.-U.S. Real Estate Portfolio Van Eck Worldwide Insurance 12/21/95 $ 8,151 $5,151 $12,695 $ 9,845 $22,487 $19,787 Trust-Worldwide Emerging Markets Fund Van Eck Worldwide Insurance 09/01/89 $ 7,410 $4,410 $15,754 $12,904 $25,866 $23,166 Trust-Worldwide Hard Assets Fund
5 YEARS TO 12/31/01 10 YEARS TO 12/31/01 INCEPTION TO 12/31/01 CASH CASH CASH UNDERLYING MUTUAL FUND ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. OPTIONS VALUE VALUE VALUE VALUE VALUE VALUE Janus Aspen Series-Capital NA NA NA NA $ 48,428 $ 46,028 Appreciation Portfolio: Service Shares Janus Aspen Series-Global NA NA NA NA $ 8,179 $ 5,329 Technology Portfolio: Service Shares Janus Aspen Series-International $45,542 $43,142 NA NA $100,499 $ 98,549 Growth Portfolio: Service Shares Neuberger Berman AMT Mid- NA NA NA NA $ 50,399 $ 47,999 Cap Growth Portfolio Neuberger Berman AMT NA NA NA NA $ 50,935 $ 48,535 Guardian Portfolio Neuberger Berman AMT Partners $45,489 $43,089 NA NA $ 97,980 $ 96,030 Portfolio Oppenheimer Variable Account $41,594 $39,194 $131,754 $130,104 $337,745 $336,995 Funds-Oppenheimer Aggressive Growth Fund/VA: Initial Class Oppenheimer Variable Account $53,351 $50,951 $184,244 $182,594 $503,977 $503,377 Funds-Oppenheimer Capital Appreciation Fund/VA: Initial Class Oppenheimer Variable Account $57,694 $55,294 $172,691 $171,041 $218,157 $216,807 Funds-Oppenheimer Global Securities Fund/VA: Initial Class Oppenheimer Variable Account $42,282 $39,882 NA NA $ 71,126 $ 69,026 Funds-Oppenheimer Main Street Growth & Income Fund/VA: Initial Class Strong Opportunity Fund II, Inc. $57,194 $54,794 NA NA $177,464 $175,814 The Universal Institutional NA NA NA NA $ 49,328 $ 46,928 Funds, Inc.-Emerging Markets Debt Portfolio The Universal Institutional NA NA NA NA $ 23,749 $ 21,049 Funds, Inc.-Mid Cap Growth Portfolio The Universal Institutional $53,618 $51,218 NA NA $ 84,188 $ 82,088 Funds, Inc.-U.S. Real Estate Portfolio Van Eck Worldwide Insurance $33,414 $31,014 NA NA $ 51,868 $ 49,768 Trust-Worldwide Emerging Markets Fund Van Eck Worldwide Insurance $38,688 $36,288 $ 87,124 $ 85,474 $116,781 $115,581 Trust-Worldwide Hard Assets Fund
**The underlying mutual fund Inception Date is the date the underlying mutual fund first became effective, which is not necessarily the same date the underlying mutual fund was first made available through the variable account. For those underlying mutual funds which have not been offered as sub-accounts through the variable account for one of the quoted periods, the total return figures will show the investment performance that the underlying mutual funds would have achieved (reduced by the current asset charge and fund investment advisory fees and expenses) had they been offered as sub-accounts through the variable account for the period quoted. Certain underlying mutual funds are not as old as some of the periods quoted, therefore, total return figures may not be available for all of the periods shown. The preceding table displays three types of total return. Simply stated, total return shows the percent change in unit values, with dividends and capital gains reinvested, after the deduction of the current asset charge (and the deduction of applicable investment advisory fees and other expenses of the underlying mutual funds). The total return figures shown in the Annual Percentage Change and Annualized Percentage Change columns represent annualized figures, i.e., they show the rate of growth that would have produced the corresponding cumulative return had performance been constant over the entire period quoted. The Non-Annualized Percentage Change total return figures are not annual return figures but instead represent the total percentage change in unit value over the stated periods without annualization. THE TOTAL RETURN FIGURES DO NOT TAKE INTO ACCOUNT THE SEVERAL OTHER POLICY CHARGES WHICH ARE DESCRIBED IN THE "POLICY CHARGES" SECTION. THESE OTHER CHARGES INCLUDE COST OF INSURANCE CHARGES AND SURRENDER CHARGES. The GVIT Gartmore GVIT Investor Destinations Conservative Fund, GVIT Gartmore GVIT Investor Destinations Moderately Conservative Fund, GVIT Gartmore GVIT Investor Destinations Moderate Fund, GVIT Gartmore GVIT Investor Destinations Moderately Aggressive Fund, and GVIT Gartmore GVIT Investor Destinations Aggressive Fund were added to the variable account on January 25, 2002. Therefore, no performance information is available. The American Century Variable Portfolios, Inc. - American Century VP Ultra Fund: Class I, Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares, Fidelity VIP III Value Strategies Portfolio: Service Class, GVIT Gartmore GVIT Global Financial Services Fund: Class I, GVIT Gartmore GVIT Global Health Sciences Fund: Class I, GVIT Gartmore GVIT Global Utilities Fund: Class I, GVIT Gartmore GVIT Nationwide Leaders Fund: Class I, and GVIT Gartmore GVIT U.S. Growth Leaders Fund: Class I were added to the variable account on May 1, 2002. Therefore, no performance information is available. 46 TOTAL RETURN
Annual Percentage Non Annualized Change Percentage Change - -------------------------------------------------------------------------- -------------------------------------------- Fund Unit 1 mo 1 Yr 2 Yrs 3 Yrs. 5 yrs. Inception UNDERLYING INVESTMENT Inception Values 1999 2000 2001 To to to to to to OPTIONS Date** 12/31/01 12/31/01 12/31/01 12/31/01 12/31/01 12/31/01 12/31/01 - ----------------------------------------------------------------------------------------------------------------------- American Century VP 05/01/94 11.48 64.04 -16.83 -29.17 1.38 -29.17 -41.09 -3.36 36.15 66.04 International Fund: Class I American Century VP 10/30/97 12.27 18.02 -10.62 -8.35 2.05 -8.35 -18.08 -3.32 NA 32.22 Income & Growth Fund: Class I American Century VP Value 05/01/96 13.85 -0.85 18.14 12.82 3.77 12.82 33.29 32.16 74.64 96.10 Fund: Class I Dreyfus Investment 04/30/99 9.11 NA -2.00 -28.13 1.65 -28.13 -29.56 NA NA -9.00 Portfolios-European Equity Portfolio: Initial Shares Dreyfus Socially 10/06/93 11.59 30.08 -11.03 -22.57 -0.35 -22.57 -31.12 -10.40 48.89 164.64 Responsible Growth Fund, Inc.: Initial Shares Dreyfus Stock Index Fund, 09/29/89 12.32 20.60 -9.28 -12.18 0.83 -12.18 -20.33 -3.92 63.79 315.20 Inc.: Initial Shares Dreyfus Variable 04/05/93 13.08 11.46 -0.65 -9.31 0.04 -9.31 -9.90 0.42 67.44 208.73 Investment Fund-Appreciation Portfolio: Initial Shares Federated Insurance 04/22/99 11.77 NA 10.45 8.01 -0.62 8.01 19.30 NA NA 16.91 Series- Federated Quality Bond Fund II: Primary Shares Fidelity VIP 10/09/86 12.18 6.25 8.30 -5.09 2.16 -5.09 2.79 9.22 56.01 466.39 Equity-Income Portfolio: Service Class Fidelity VIP Growth 10/09/86 14.00 37.29 -11.07 -17.73 0.63 -17.73 -26.83 0.45 72.83 610.75 Portfolio: Service Class Fidelity VIP High Income 09/19/85 7.04 8.07 -22.61 -11.90 -0.31 -11.90 -31.82 -26.31 -17.19 199.17 Portfolio: Service Class Fidelity VIP II 01/03/95 13.19 24.15 -6.71 -12.36 2.35 -12.36 -18.25 1.49 63.64 177.15 Contrafund Portfolio: Service Class Fidelity VIP III Growth 01/03/95 9.19 4.18 -17.18 -14.44 1.07 -14.44 -29.13 -26.17 19.45 87.22 Opportunities Portfolio: Service Class Fidelity VIP Overseas 01/28/87 10.21 42.46 -19.15 -21.27 -0.07 -21.27 -36.35 -9.32 13.94 142.16 Portfolio: Service Class GVIT Comstock GVIT Value 10/31/97 10.71 18.49 -10.62 -12.15 0.98 -12.15 -21.48 -6.97 NA 9.01 Fund: Class I GVIT Dreyfus GVIT Mid Cap 10/31/97 15.24 20.92 15.21 -1.30 5.13 -1.30 13.70 37.49 NA 51.81 Index Fund: Class I GVIT Federated GVIT High 10/31/97 10.44 3.19 -8.28 4.22 -0.30 4.22 -4.41 -1.36 NA 6.74 Income Bond Fund: Class I GVIT Gartmore GVIT 08/30/00 8.26 NA NA -5.18 7.48 -5.18 NA NA NA -28.73 Emerging Markets Fund: Class I GVIT Gartmore GVIT Global 06/30/00 3.45 NA NA -42.72 0.72 -42.72 NA NA NA -57.02 Technology and Communications Fund: Class I GVIT Gartmore GVIT 11/08/82 12.84 -2.35 12.54 7.25 -0.81 7.25 20.70 17.87 40.78 399.06 Government Bond Fund: Class I GVIT Gartmore GVIT Growth 04/15/92 7.16 4.28 -26.53 -28.13 1.25 -28.13 -47.20 -44.94 -3.77 80.42 Fund: Class I GVIT Gartmore GVIT 08/30/00 6.60 NA NA -28.65 0.82 -28.65 NA NA NA -38.42 International Growth Fund: Class I GVIT Gartmore GVIT Money 11/10/81 12.12 4.85 6.03 3.60 0.13 3.60 9.85 15.17 27.63 264.31 Market Fund: Class I GVIT Gartmore GVIT Total 11/08/82 10.90 6.94 -2.12 -11.82 1.53 -11.82 -13.69 -7.70 41.06 963.83 Return Fund: Class I GVIT GVIT Small Cap 05/03/99 15.32 NA -16.17 -10.84 4.70 -10.84 -25.25 NA NA 53.24 Growth Fund: Class I GVIT GVIT Small Cap Value 10/31/97 17.68 27.84 11.20 28.28 7.05 28.28 42.64 82.35 NA 73.91 Fund: Class I GVIT GVIT Small Company 10/23/95 14.78 44.02 8.90 -6.70 4.31 -6.70 1.60 46.32 73.44 143.66 Fund: Class I GVIT J.P. Morgan GVIT 10/31/97 10.46 0.87 -0.35 -3.67 0.22 -3.67 -4.01 -3.18 NA 6.16 Balanced: Class I GVIT MAS GVIT Multi 10/31/97 11.47 1.56 5.65 4.19 -0.29 4.19 10.08 11.79 NA 15.89 Sector Bond Fund: Class I GVIT Strong GVIT Mid Cap 10/31/97 12.49 84.75 -15.38 -30.31 1.76 -30.31 -41.02 8.96 NA 27.60 Growth Fund: Class I GVIT Turner GVIT Growth 06/30/00 3.87 NA NA -39.03 -0.27 -39.03 NA NA NA -63.60 Focus Fund: Class I Janus Aspen 05/01/97 6.44 66.95 -19.35 -21.83 1.33 -21.83 -36.96 5.25 NA 110.68 Series-Capital Appreciation Portfolio: Service Shares Janus Aspen Series-Global 01/18/00 4.13 NA NA -37.31 1.49 -37.31 NA NA NA -58.70 Technology Portfolio: Service Shares Janus Aspen 05/02/94 6.34 82.31 -16.97 -23.43 3.80 -23.43 -36.42 15.91 61.07 159.56 Series-International Growth Portfolio: Service Shares Neuberger Berman AMT 11/03/97 14.95 53.89 -7.46 -24.64 2.29 -24.64 -30.27 7.31 NA 75.18 Mid-Cap Growth Portfolio Neuberger Berman AMT 11/03/97 15.07 14.93 1.13 -1.51 1.17 -1.51 -0.39 14.48 NA 58.57 Guardian Portfolio Neuberger Berman AMT 03/22/94 10.95 7.37 0.70 -2.83 2.65 -2.83 -2.14 5.07 43.70 148.26 Partners Portfolio Oppenheimer Variable 08/15/86 12.59 83.60 -11.24 -31.27 2.44 -31.27 -38.99 12.01 40.55 536.72 Account Funds-Oppenheimer Aggressive Growth Fund/VA: Initial Class Oppenheimer Variable 04/03/85 15.32 41.66 -0.23 -12.58 1.67 -12.58 -12.78 23.56 94.10 855.21 Account Funds-Oppenheimer Capital Appreciation Fund/VA: Initial Class Oppenheimer Variable 06/30/95 8.44 58.48 5.09 -12.04 2.38 -12.04 -7.56 46.50 104.65 281.62 Account Funds-Oppenheimer Global Securities Fund/VA: Initial Class
Annualized Percentage Change - -------------------------------------------------------- 3 Yrs. 5 yrs. Inception UNDERLYING INVESTMENT to to To OPTIONS 12/31/01 12/31/01 12/31/01 - --------------------------------------------------------- American Century VP -1.13 6.37 6.84 International Fund: Class I American Century VP -1.12 NA 6.93 Income & Growth Fund: Class I American Century VP Value 9.74 11.80 12.63 Fund: Class I Dreyfus Investment NA NA -3.47 Portfolios-European Equity Portfolio: Initial Shares Dreyfus Socially -3.59 8.29 12.55 Responsible Growth Fund, Inc.: Initial Shares Dreyfus Stock Index Fund, -1.32 10.37 12.32 Inc.: Initial Shares Dreyfus Variable 0.14 10.86 13.77 Investment Fund-Appreciation Portfolio: Initial Shares Federated Insurance NA NA 5.98 Series- Federated Quality Bond Fund II: Primary Shares Fidelity VIP 2.98 9.30 12.06 Equity-Income Portfolio: Service Class Fidelity VIP Growth 0.15 11.56 13.75 Portfolio: Service Class Fidelity VIP High Income -9.68 -3.70 6.96 Portfolio: Service Class Fidelity VIP II 0.50 10.35 15.70 Contrafund Portfolio: Service Class Fidelity VIP III Growth -9.62 3.62 9.38 Opportunities Portfolio: Service Class Fidelity VIP Overseas -3.21 2.64 6.11 Portfolio: Service Class GVIT Comstock GVIT Value -2.38 NA 2.09 Fund: Class I GVIT Dreyfus GVIT Mid Cap 11.20 NA 10.54 Index Fund: Class I GVIT Federated GVIT High -0.46 NA 1.58 Income Bond Fund: Class I GVIT Gartmore GVIT NA NA -22.39 Emerging Markets Fund: Class I GVIT Gartmore GVIT Global NA NA -43.05 Technology and Communications Fund: Class I GVIT Gartmore GVIT 5.63 7.08 8.76 Government Bond Fund: Class I GVIT Gartmore GVIT Growth -18.04 -0.76 6.27 Fund: Class I GVIT Gartmore GVIT NA NA -30.44 International Growth Fund: Class I GVIT Gartmore GVIT Money 4.82 5.00 6.63 Market Fund: Class I GVIT Gartmore GVIT Total -2.63 7.12 13.15 Return Fund: Class I GVIT GVIT Small Cap NA NA 17.41 Growth Fund: Class I GVIT GVIT Small Cap Value 22.17 NA 14.20 Fund: Class I GVIT GVIT Small Company 13.53 11.64 15.48 Fund: Class I GVIT J.P. Morgan GVIT -1.07 NA 1.45 Balanced: Class I GVIT MAS GVIT Multi 3.79 NA 3.60 Sector Bond Fund: Class I GVIT Strong GVIT Mid Cap 2.90 NA 6.02 Growth Fund: Class I GVIT Turner GVIT Growth NA NA -49.02 Focus Fund: Class I Janus Aspen 1.72 NA 17.32 Series-Capital Appreciation Portfolio: Service Shares Janus Aspen Series-Global NA NA -36.43 Technology Portfolio: Service Shares Janus Aspen 5.05 10.00 13.26 Series-International Growth Portfolio: Service Shares Neuberger Berman AMT 2.38 NA 14.43 Mid-Cap Growth Portfolio Neuberger Berman AMT 4.61 NA 11.72 Guardian Portfolio Neuberger Berman AMT 1.66 7.52 12.41 Partners Portfolio Oppenheimer Variable 3.85 7.05 12.79 Account Funds-Oppenheimer Aggressive Growth Fund/VA: Initial Class Oppenheimer Variable 7.31 14.18 14.43 Account Funds-Oppenheimer Capital Appreciation Fund/VA: Initial Class Oppenheimer Variable 13.57 15.40 12.78 Account Funds-Oppenheimer Global Securities Fund/VA: Initial Class
47 TOTAL RETURN (CONTINUED)
Annual Percentage Non Annualized Change Percentage Change - -------------------------------------------------------------------------- -------------------------------------------- Fund Unit 1 mo 1 Yr 2 Yrs 3 Yrs. 5 yrs. Inception UNDERLYING INVESTMENT Inception Values 1999 2000 2001 To to to to to to OPTIONS Date** 12/31/01 12/31/01 12/31/01 12/31/01 12/31/01 12/31/01 12/31/01 - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Variable 07/05/95 10.44 21.71 -8.78 -10.16 1.71 -10.16 -18.04 -0.25 38.36 129.64 Account Funds-Oppenheimer Main Street Growth & Income Fund/VA: Initial Class Strong Opportunity Fund 06/30/95 9.51 34.91 6.35 -3.48 4.08 -3.48 2.65 38.48 97.26 341.72 II, Inc. The Universal 06/16/97 11.36 29.37 11.39 10.10 2.53 10.10 22.64 58.66 NA 14.52 Institutional Funds, Inc.-Emerging Markets Debt Portfolio The Universal 10/18/99 6.14 NA -7.33 -29.31 2.46 -29.31 -34.49 NA NA -9.34 Institutional Funds, Inc.-Mid Cap Growth Portfolio The Universal 07/03/95 12.01 -3.37 28.06 9.84 2.71 9.84 40.66 35.92 45.92 122.17 Institutional Funds, Inc.-U.S. Real Estate Portfolio Van Eck Worldwide 12/21/95 7.53 100.28 -41.87 -1.81 6.54 -1.81 -42.92 14.33 -33.43 -16.42 Insurance Trust-Worldwide Emerging Markets Fund Van Eck Worldwide 09/01/89 8.33 21.00 11.40 -10.44 4.09 -10.44 -0.23 20.72 -18.06 46.53 Insurance Trust-Worldwide Hard Assets Fund
Annualized Percentage Change - -------------------------------------------------------- 3 Yrs. 5 yrs. Inception UNDERLYING INVESTMENT to to To OPTIONS 12/31/01 12/31/01 12/31/01 - --------------------------------------------------------- Oppenheimer Variable -0.08 6.71 13.67 Account Funds-Oppenheimer Main Street Growth & Income Fund/VA: Initial Class Strong Opportunity Fund 11.46 14.55 16.65 II, Inc. The Universal 16.63 NA 3.03 Institutional Funds, Inc.-Emerging Markets Debt Portfolio The Universal NA NA -4.36 Institutional Funds, Inc.-Mid Cap Growth Portfolio The Universal 10.77 7.85 13.08 Institutional Funds, Inc.-U.S. Real Estate Portfolio Van Eck Worldwide 4.56 -7.82 -2.93 Insurance Trust-Worldwide Emerging Markets Fund Van Eck Worldwide 6.48 -3.91 3.15 Insurance Trust-Worldwide Hard Assets Fund
**The underlying mutual fund Inception Date is the date the underlying mutual fund first became effective, which is not necessarily the same date the underlying mutual fund was first made available through the variable account. For those underlying mutual funds which have not been offered as sub-accounts through the variable account for one of the quoted periods, the total return figures will show the investment performance that the underlying mutual funds would have achieved (reduced by the current asset charge and fund investment advisory fees and expenses) had they been offered as sub-accounts through the variable account for the period quoted. Certain underlying mutual funds are not as old as some of the periods quoted, therefore, total return figures may not be available for all of the periods shown. The preceding table displays three types of total return. Simply stated, total return shows the percent change in unit values, with dividends and capital gains reinvested, after the deduction of the current asset charge (and the deduction of applicable investment advisory fees and other expenses of the underlying mutual funds). The total return figures shown in the Annual Percentage Change and Annualized Percentage Change columns represent annualized figures, i.e., they show the rate of growth that would have produced the corresponding cumulative return had performance been constant over the entire period quoted. The Non-Annualized Percentage Change total return figures are not annual return figures but instead represent the total percentage change in unit value over the stated periods without annualization. THE TOTAL RETURN FIGURES DO NOT TAKE INTO ACCOUNT THE SEVERAL OTHER POLICY CHARGES WHICH ARE DESCRIBED IN THE "POLICY CHARGES" SECTION. THESE OTHER CHARGES INCLUDE COST OF INSURANCE CHARGES AND SURRENDER CHARGES. The GVIT Gartmore GVIT Investor Destinations Conservative Fund, GVIT Gartmore GVIT Investor Destinations Moderately Conservative Fund, GVIT Gartmore GVIT Investor Destinations Moderate Fund, GVIT Gartmore GVIT Investor Destinations Moderately Aggressive Fund, and GVIT Gartmore GVIT Investor Destinations Aggressive Fund were added to the variable account on January 25, 2002. Therefore, no performance information is available. The American Century Variable Portfolios, Inc. - American Century VP Ultra Fund: Class I, Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares, Fidelity VIP III Value Strategies Portfolio: Service Class, GVIT Gartmore GVIT Global Financial Services Fund: Class I, GVIT Gartmore GVIT Global Health Sciences Fund: Class I, GVIT Gartmore GVIT Global Utilities Fund: Class I, GVIT Gartmore GVIT Nationwide Leaders Fund: Class I, and GVIT Gartmore GVIT U.S. Growth Leaders Fund: Class I were added to the variable account on May 1, 2002. Therefore, no performance information is available. 48 INDEPENDENT AUDITORS' REPORT ---------------------------- The Board of Directors of Nationwide Life Insurance Company and Contract Owners of Nationwide VLI Separate Account-4: We have audited the accompanying statement of assets, liabilities and contract owners' equity of Nationwide VLI Separate Account-4 (comprised of the sub-accounts listed in note 1(b)) (collectively, "the Account") as of December 31, 2001, 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 Account's 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit 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, 2001, 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 Account as of December 31, 2001, and the results of its 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. KPMG LLP Columbus, Ohio February 20, 2002 - ------------------------------------------------------------------------------- NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY DECEMBER 31,2001
ASSETS: Investments at fair value: American Century VP - American Century VP Income & Growth (ACVPIncGr) 6,019,361 shares (cost $41,013,581) ........................................... $ 38,885,069 American Century VP - American Century VP International (ACVPInt) 6,805,057 shares (cost $44,006,191) ........................................... 44,845,327 American Century VP - American Century VP Value (ACVPValue) 3,922,895 shares (cost $26,934,993) ........................................... 29,186,338 Credit Suisse Trust - Global Post-Venture Capital Portfolio (CSWPGPV) 91,909 shares (cost $1,300,175) ............................................... 893,355 Credit Suisse Trust - International Equity Portfolio (CSWPIntEq) 223,049 shares (cost $1,806,237) .............................................. 1,860,227 Credit Suisse Trust - Large Cap Value Portfolio (CSWPVal) 271,145 shares (cost $3,448,495) .............................................. 3,473,366 Dreyfus IP - European Equity Portfolio (DryEuroEq) 148,478 shares (cost $1,570,175) .............................................. 1,587,234 The Dreyfus Socially Responsible Growth Fund, Inc.(DrySRGro) 778,608 shares (cost $25,446,585) ............................................. 20,765,487 Dreyfus Stock Index Fund (DryStkIx) 8,031,408 shares (cost $274,000,223) .......................................... 235,802,147 Dreyfus VIF - Appreciation Portfolio (DryAp) 995,164 shares (cost $36,796,939) ............................................. 34,810,845 Federated IS - Federated Quality Bond Fund II (FISFedQual) 4,200,689 shares (cost $45,819,629) ........................................... 47,341,767 Fidelity(R) VIP - Equity-Income Portfolio: Service Class (FidVIPEIS) 2,400,172 shares (cost $55,785,694) ........................................... 54,411,896 Fidelity(R) VIP - Growth Portfolio: Service Class (FidVIPGrS) 3,002,680 shares (cost $124,251,820) .......................................... 100,529,730 Fidelity(R) VIP - High Income Portfolio: Service Class (FidVIPHIS) 2,459,845 shares (cost $18,732,820) ........................................... 15,693,808 Fidelity(R) VIP - Overseas Portfolio: Service Class (FidVIPOvS) 1,485,490 shares (cost $19,915,465) ........................................... 20,544,330 Fidelity(R) VIP II - Contrafund Portfolio: Service Class (FidVIPConS) 2,666,503 shares (cost $59,775,589) ........................................... 53,490,043 Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class (FidVIPGrOpS) 985,936 shares (cost $18,118,012) ............................................. 14,897,492
(Continued)
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, Continued Janus AS - Capital Appreciation Portfolio - Service Shares (JanCapAp) 1,489,066 shares (cost $34,202,465) .................................... 30,630,085 Janus AS - Global Technology Portfolio - Service Shares (JanGlTech) 3,895,201 shares (cost $21,253,021) .................................... 15,892,419 Janus AS - International Growth Portfolio - Service Shares (JanIntGro) 1,451,957 shares (cost $31,733,139) .................................... 33,830,605 Nationwide(R) SAT - Capital Appreciation Fund Class I (NSATCapAp) 1,451,136 shares (cost $24,564,122) .................................... 15,309,484 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I (NSATMidCapIx) 1,324,053 shares (cost $17,091,876) .................................... 17,437,774 Nationwide(R) SAT - Federated Equity Income Fund Class I (NSATEqInc) 500,985 shares (cost $5,777,436) ....................................... 5,200,219 Nationwide(R) SAT - Federated High Income Bond Fund Class I (NSATHIncBd) 1,300,267 shares (cost $10,157,385) .................................... 9,673,987 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I (NSATEmMkt) 145,792 shares (cost $1,000,613) ....................................... 1,032,207 Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I (NSATGlobTC) 281,202 shares (cost $1,271,647) ....................................... 1,183,859 Nationwide(R) SAT - Gartmore International Growth Fund Class I (NSATIntGr) 46,072 shares (cost $280,602) .......................................... 282,882 Nationwide(R) SAT - Global 50 Fund Class I (NSATGlob50) 3,424,779 shares (cost $39,892,579) .................................... 31,781,950 Nationwide(R) SAT - Government Bond Fund Class I (NSATGvtBd) 10,211,017 shares (cost $117,595,200) .................................. 119,060,458 Nationwide(R) SAT - J.P.Morgan Balanced Fund Class I (NSATBal) 1,287,476 shares (cost $12,638,595) .................................... 12,102,271 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I (NSATMSecBd) 4,290,554 shares (cost $39,930,027) .................................... 39,215,662 Nationwide(R) SAT - Money Market Fund Class I (NSATMyMkt) 496,491,234 shares (cost $496,491,234) ................................. 496,491,234 Nationwide(R) SAT - Small Cap Growth Fund Class I (NSATSmCapG) 718,578 shares (cost $9,953,609) ....................................... 10,405,008 Nationwide(R) SAT - Small Cap Value Fund Class I (NSATSmCapV) 4,059,886 shares (cost $41,811,120) .................................... 42,060,416 Nationwide(R) SAT - Small Company Fund Class I (NSATSmCo) 2,344,807 shares (cost $45,513,546) .................................... 43,707,201 Nationwide(R) SAT - Strategic Value Fund Class I (NSATStrVal) 212,735 shares (cost $2,082,135) ....................................... 2,052,897 Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I (NSATStMCap) 2,139,881 shares (cost $29,777,251) .................................... 24,801,221
Nationwide(R) SAT - Total Return Fund Class I (NSATTotRe) 12,188,233 shares (cost $139,575,550) ........................ 120,541,627 Nationwide(R) SAT - Turner Growth Focus Fund Class I (NSATGrFoc) 125,478 shares (cost $440,627) ............................... 456,740 Neuberger Berman AMT - Guardian Portfolio (NBAMTGuard) 839,404 shares (cost $12,777,254) ............................ 12,288,868 Neuberger Berman AMT - Mid-Cap Growth Portfolio (NBAMTMCGr) 2,433,523 shares (cost $43,009,370) .......................... 41,223,871 Neuberger Berman AMT - Partners Portfolio (NBAMTPart) 805,791 shares (cost $12,522,554) ............................ 12,167,440 Oppenheimer Aggressive Growth Fund/VA (OppAggGro) 1,506,812 shares (cost $92,078,378) .......................... 61,357,378 Oppenheimer Capital Appreciation Fund/VA (OppCapAp) 2,157,373 shares (cost $90,369,136) .......................... 78,916,713 Oppenheimer Global Securities Fund/VA (OppGlSec) 675,714 shares (cost $15,038,394) ............................ 15,433,306 Oppenheimer Main Street Growth & Income Fund/VA (OppMSGrInc) 1,376,400 shares (cost $29,065,392) .......................... 26,137,837 Strong Opportunity Fund II, Inc.(StOpp2) 1,052,045 shares (cost $23,560,303) .......................... 20,462,273 UIF - Emerging Markets Debt Portfolio (UIFEmMkt) 344,802 shares (cost $2,449,208) ............................. 2,392,923 UIF - Mid Cap Growth Portfolio (UIFMidCapG) 286,837 shares (cost $2,658,350) ............................. 2,504,089 UIF - U.S. Real Estate Portfolio (UIFUSRE) 1,250,028 shares (cost $14,797,165) .......................... 15,100,340 Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt) 638,057 shares (cost $5,076,677).............................. 5,193,783 Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs) 150,153 shares (cost $1,711,796) ............................. 1,605,137 --------------- Total investments ......................................... 2,086,952,625 Accounts receivable ............................................... 82,789 --------------- Total assets .............................................. 2,087,035,414 Accounts payable .................................................... - --------------- Contract owners' equity (note 7) .................................... $ 2,087,035,414 ===============
See accompanying notes to financial statements. NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
Total --------------------------------------------------------- 2001 2000 1999 --------------------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 32,760,122 21,039,631 6,784,764 Mortality and expense risk charges (note 3) ... (2,988,525) (1,473,980) (382,102) ------------------ --------------- -------------- Net investment income ........................ 29,771,597 19,565,651 6,402,662 ------------------ --------------- -------------- Proceeds from mutual funds shares sold ........ 1,282,903,811 537,305,272 201,999,339 Cost of mutual fund shares sold ............... (1,463,574,291) (520,733,854) (195,191,587) ------------------ --------------- -------------- Realized gain (loss) on investments .......... (180,670,480) 16,571,418 6,807,752 Change in unrealized gain (loss) on investments ............................... (49,709,311) (178,984,942) 42,568,531 ------------------ --------------- -------------- Net gain (loss) on investments ............... (230,379,791) (162,413,524) 49,376,283 ------------------ --------------- -------------- Reinvested capital gains ...................... 40,368,917 50,385,356 6,941,880 ------------------ --------------- -------------- Net increase (decrease) in contract owners' equity resulting from operations .......... $ (160,239,277) (92,462,517) 62,720,825 ================== =============== ==============
ACVPIncGr ------------------------------------------------------ 2001 2000 1999 ------------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends .......................... 269,901 89,434 345 Mortality and expense risk charges (note 3) ... (79,846) (33,218) (4,870) -------------- --------------- ------------- Net investment income ........................ 190,055 56,216 (4,525) -------------- --------------- ------------- Proceeds from mutual funds shares sold ........ 13,539,777 4,190,922 4,238,041 Cost of mutual fund shares sold ............... (15,377,999) (4,127,013) (3,971,748) -------------- --------------- ------------- Realized gain (loss) on investments .......... (1,838,222) 63,909 266,293 Change in unrealized gain (loss) on investments ............................... (668,796) (2,277,235) 692,513 -------------- --------------- ------------- Net gain (loss) on investments ............... (2,507,018) (2,213,326) 958,806 -------------- --------------- ------------- Reinvested capital gains ...................... - - - -------------- --------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations .......... (2,316,963) (2,157,110) 954,281 ============== =============== =============
ACVPInt ----------------------------------------------------- 2001 2000 1999 ----------------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 36,851 29,817 - Mortality and expense risk charges (note 3) ... (77,946) (43,822) (3,029) -------------- ------------ ------------ Net investment income ........................ (41,095) (14,005) (3,029) -------------- ------------ ------------ Proceeds from mutual funds shares sold ........ 103,850,931 11,287,808 2,517,615 Cost of mutual fund shares sold ............... (129,326,130) (8,439,891) (1,889,551) -------------- ------------ ------------ Realized gain (loss) on investments .......... (25,475,199) 2,847,917 628,064 Change in unrealized gain (loss) on investments ............................... 6,676,950 (10,029,310) 4,031,727 -------------- ------------ ------------ Net gain (loss) on investments ............... (18,798,249) (7,181,393) 4,659,791 -------------- ------------ ------------ Reinvested capital gains ...................... 4,068,852 445,800 - -------------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .......... (14,770,492) (6,749,598) 4,656,762 ============== ============ ============
ACVPValue -------------------------------------------------------- 2001 2000 1999 -------------------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... $ 109,166 29,260 9,053 Mortality and expense risk charges (note 3) .. (14,532) (2,491) (698) ------------------ --------------- -------------- Net investment income ....................... 94,634 26,769 8,355 ------------------ --------------- -------------- Proceeds from mutual funds shares sold ....... 5,217,831 5,835,158 1,027,473 Cost of mutual fund shares sold .............. (4,432,838) (5,829,916) (1,065,502) ------------------ --------------- -------------- Realized gain (loss) on investments ......... 784,993 5,242 (38,029) Change in unrealized gain (loss) on investments .............................. 1,499,813 865,295 (142,040) ------------------ --------------- -------------- Net gain (loss) on investments .............. 2,284,806 870,537 (180,069) ------------------ --------------- -------------- Reinvested capital gains ..................... - 74,870 85,768 ------------------ --------------- -------------- Net increase (decrease) in contract owners' equity resulting from operations ......... $ 2,379,440 972,176 (85,946) ================== =============== ==============
CSWPGPV ------------------------------------------------------ 2001 2000 1999 ------------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends ......................... - - - Mortality and expense risk charges (note 3) .. (688) (1,199) (154) -------------- --------------- ------------- Net investment income ....................... (688) (1,199) (154) -------------- --------------- ------------- Proceeds from mutual funds shares sold ....... 459,173 1,772,806 364,939 Cost of mutual fund shares sold .............. (850,055) (1,546,982) (278,265) -------------- --------------- ------------- Realized gain (loss) on investments ......... (390,882) 225,824 86,674 Change in unrealized gain (loss) on investments .............................. 71,425 (716,480) 208,276 -------------- --------------- ------------- Net gain (loss) on investments .............. (319,457) (490,656) 294,950 -------------- --------------- ------------- Reinvested capital gains ..................... - 141,743 - -------------- --------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ......... (320,145) (350,112) 294,796 ============== =============== =============
CSWPIntEq ------------------------------------------------------ 2001 2000 1999 ------------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends ......................... - 12,900 19,282 Mortality and expense risk charges (note 3) .. (824) (1,340) (81) -------------- ------------ ------------ Net investment income ....................... (824) 11,560 19,201 -------------- ------------ ------------ Proceeds from mutual funds shares sold ....... 9,179,200 992,359 785,974 Cost of mutual fund shares sold .............. (10,334,146) (749,434) (670,363) -------------- ------------ ------------ Realized gain (loss) on investments ......... (1,154,946) 242,925 115,611 Change in unrealized gain (loss) on investments .............................. 737,104 (1,294,832) 581,395 -------------- ------------ ------------ Net gain (loss) on investments .............. (417,842) (1,051,907) 697,006 -------------- ------------ ------------ Reinvested capital gains ..................... - 310,165 - -------------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ......... (418,666) (730,182) 716,207 ============== ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
CSWPVal ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends .............................. $ - 25,366 10,150 Mortality and expense risk charges (note 3) . ..... (5,391) (2,889) (1,209) ------------ ------------ ------------ Net investment income ............................ (5,391) 22,477 8,941 ------------ ------------ ------------ Proceeds from mutual funds shares sold ............ 1,877,869 1,991,744 372,724 Cost of mutual fund shares sold ................... (1,844,033) (1,898,600) (375,164) ------------ ------------ ------------ Realized gain (loss) on investments .............. 33,836 93,144 (2,440) Change in unrealized gain (loss) on investments ................................... (66,654) 87,894 (2,238) ------------ ------------ ------------ Net gain (loss) on investments ................... (32,818) 181,038 (4,678) ------------ ------------ ------------ Reinvested capital gains .......................... - 23,283 18,278 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .............. $ (38,209) 226,798 22,541 ============ ============ ============
DryEuroEq ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends .............................. 12,084 3,040 266 Mortality and expense risk charges (note 3) . ..... (2,772) (647) - ------------- ------------ ----------- Net investment income ............................ 9,312 2,393 266 ------------- ------------ ----------- Proceeds from mutual funds shares sold ............ 18,652,837 4,915,237 9,724 Cost of mutual fund shares sold ................... (19,177,687) (4,976,743) (9,364) ------------- ------------ ----------- Realized gain (loss) on investments .............. (524,850) (61,506) 360 Change in unrealized gain (loss) on investments ................................... (19,212) 26,273 9,997 ------------- ------------ ----------- Net gain (loss) on investments ................... (544,062) (35,233) 10,357 ------------- ------------ ----------- Reinvested capital gains .......................... - 39,799 1,251 ------------- ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations .............. (534,750) 6,959 11,874 ============= ============ ===========
DrySRGro ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends .............................. 14,422 133,052 1,039 Mortality and expense risk charges (note 3) . ..... (18,091) (5,466) (849) ------------ ------------ ------------ Net investment income ............................ (3,669) 127,586 190 ------------ ------------ ------------ Proceeds from mutual funds shares sold ............ 7,127,375 1,524,094 620,665 Cost of mutual fund shares sold ................... (8,449,681) (1,237,290) (483,300) ------------ ------------ ------------ Realized gain (loss) on investments .............. (1,322,306) 286,804 137,365 Change in unrealized gain (loss) on investments ................................... (3,298,528) (2,392,732) 901,808 ------------ ------------ ------------ Net gain (loss) on investments ................... (4,620,834) (2,105,928) 1,039,173 ------------ ------------ ------------ Reinvested capital gains .......................... - - 279,678 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .............. (4,624,503) (1,978,342) 1,319,041 ============ ============ ============
DryStkIx ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends .............................. $ 2,670,054 1,776,028 694,199 Mortality and expense risk charges (note 3) . ..... (444,162) (301,447) (80,224) ------------ ------------ ------------- Net investment income ............................ 2,225,892 1,474,581 613,975 ------------ ------------ ------------- Proceeds from mutual funds shares sold ............ 74,111,925 17,394,755 3,651,059 Cost of mutual fund shares sold ................... (87,964,956) (13,809,069) (3,038,322) ------------ ------------ ------------- Realized gain (loss) on investments .............. (13,853,031) 3,585,686 612,737 Change in unrealized gain (loss) on investments ................................... (22,871,757) (27,898,576) 11,117,238 ------------ ------------ ------------- Net gain (loss) on investments ................... (36,724,788) (24,312,890) 11,729,975 ------------ ------------ ------------- Reinvested capital gains .......................... 1,239,287 3,654,055 672,634 ------------ ------------ ------------- Net increase (decrease) in contract owners' equity resulting from operations .............. $(33,259,609) (19,184,254) 13,016,584 ============ ============ =============
DryAp ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends .............................. 302,158 209,082 102,225 Mortality and expense risk charges (note 3) . ..... (80,404) (61,134) (19,902) ------------- ------------ ----------- Net investment income ............................ 221,754 147,948 82,323 ------------- ------------ ----------- Proceeds from mutual funds shares sold ............ 21,053,709 5,802,885 6,596,135 Cost of mutual fund shares sold ................... (22,138,496) (5,449,137) (6,226,765) ------------- ------------ ----------- Realized gain (loss) on investments .............. (1,084,787) 353,748 369,370 Change in unrealized gain (loss) on investments ................................... (1,683,766) (1,102,409) 649,339 ------------- ------------ ----------- Net gain (loss) on investments ................... (2,768,553) (748,661) 1,018,709 ------------- ------------ ----------- Reinvested capital gains .......................... - 355,671 68,742 ------------- ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations .............. (2,546,799) (245,042) 1,169,774 ============= ============ ===========
FISFedQual ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends .............................. 1,455,876 284,124 - Mortality and expense risk charges (note 3) . ..... (96,143) (36,034) (3,162) ------------ ----------- ---------- Net investment income ............................ 1,359,733 248,090 (3,162) ------------ ----------- ---------- Proceeds from mutual funds shares sold ............ 43,893,435 5,070,565 193,269 Cost of mutual fund shares sold ................... (38,794,865) (4,943,810) (195,176) ------------ ----------- ---------- Realized gain (loss) on investments .............. 5,098,570 126,755 (1,907) Change in unrealized gain (loss) on investments ................................... (1,493,674) 2,975,611 40,201 ------------ ----------- ---------- Net gain (loss) on investments ................... 3,604,896 3,102,366 38,294 ------------ ----------- ---------- Reinvested capital gains .......................... 147,643 - - ------------ ----------- ---------- Net increase (decrease) in contract owners' equity resulting from operations .............. 5,112,272 3,350,456 35,132 ============ =========== ==========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FidVIPEIS ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... $ 468,833 275,597 97,065 Mortality and expense risk charges (note 3) .. (57,716) (12,713) (3,265) --------------- ------------ ------------ Net investment income ....................... 411,117 262,884 93,800 --------------- ------------ ------------ Proceeds from mutual funds shares sold ....... 5,903,884 8,769,366 2,794,623 Cost of mutual fund shares sold .............. (6,605,102) (9,316,337) (2,491,032) --------------- ------------ ------------ Realized gain (loss) on investments ......... (701,218) (546,971) 303,591 Change in unrealized gain (loss) on investments .............................. (3,016,312) 1,470,791 (277,459) --------------- ------------ ------------ Net gain (loss) on investments .............. (3,717,530) 923,820 26,132 --------------- ------------ ------------ Reinvested capital gains ..................... 1,383,058 1,063,019 214,564 --------------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ......... $ (1,923,355) 2,249,723 334,496 =============== ============ ============
FidVIPGrS --------------------------------------------- 2001 2000 1999 --------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... - 46,538 8,639 Mortality and expense risk charges (note 3) .. (138,980) (106,544) (12,917) ------------ ------------ ------------ Net investment income ....................... (138,980) (60,006) (4,278) ------------ ------------ ------------ Proceeds from mutual funds shares sold ....... 36,018,307 8,193,032 1,070,026 Cost of mutual fund shares sold .............. (49,372,696) (6,947,939) (923,816) ------------ ------------ ------------ Realized gain (loss) on investments ......... (13,354,389) 1,245,093 146,210 Change in unrealized gain (loss) on investments .............................. (10,987,478) (19,309,179) 6,093,883 ------------ ------------ ------------ Net gain (loss) on investments .............. (24,341,867) (18,064,086) 6,240,093 ------------ ------------ ------------ Reinvested capital gains ..................... 6,737,804 5,556,689 543,154 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ......... (17,743,043) (12,567,403) 6,778,969 ============ ============ ============
FidVIPHIS --------------------------------------------- 2001 2000 1999 --------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... 1,975,681 711,532 364,862 Mortality and expense risk charges (note 3) .. (29,997) (21,719) (1,521) ------------ ----------- ----------- Net investment income ....................... 1,945,684 689,813 363,341 ------------ ----------- ----------- Proceeds from mutual funds shares sold ....... 10,535,993 5,669,988 926,716 Cost of mutual fund shares sold .............. (15,624,401) (6,842,047) (1,041,180) ------------ ----------- ----------- Realized gain (loss) on investments ......... (5,088,408) (1,172,059) (114,464) Change in unrealized gain (loss) on investments .............................. 462,487 (3,641,858) 103,063 ------------ ----------- ----------- Net gain (loss) on investments .............. (4,625,921) (4,813,917) (11,401) ------------ ----------- ----------- Reinvested capital gains ..................... - - 13,640 ------------ ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ......... (2,680,237) (4,124,104) 365,580 ============ =========== ===========
FidVIPOvS ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends ........................ $ 1,225,302 217,766 21,110 Mortality and expense risk charges (note 3) . (64,867) (49,878) (9,859) --------------- ----------- ----------- Net investment income ...................... 1,160,435 167,888 11,251 --------------- ----------- ----------- Proceeds from mutual funds shares sold ...... 50,020,650 23,478,026 7,592,272 --------------- ----------- ----------- Cost of mutual fund shares sold ............. (62,510,788) (25,243,216) (6,861,807) --------------- ----------- ----------- Realized gain (loss) on investments ........ (12,490,138) (1,765,190) 730,465 Change in unrealized gain (loss) on investments ............................. 3,190,822 (4,479,931) 1,849,661 --------------- ----------- ----------- Net gain (loss) on investments ............. (9,299,316) (6,245,121) 2,580,126 --------------- ----------- ----------- Reinvested capital gains 1,957,820 1,409,432 34,048 --------------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (6,181,061) (4,667,801) 2,625,425 =============== =========== ===========
FidVIPConS ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 307,645 93,712 26,713 Mortality and expense risk charges (note 3) . (50,209) (27,798) (4,360) Net investment income ...................... 257,436 65,914 22,353 --------------- ----------- ----------- Proceeds from mutual funds shares sold ...... 19,451,508 2,681,172 1,218,202 Cost of mutual fund shares sold ............. (24,545,303) (2,152,820) (1,003,352) --------------- ----------- ----------- Realized gain (loss) on investments ........ (5,093,795) 528,352 214,850 Change in unrealized gain (loss) on investments ............................. (3,013,382) (6,926,956) 3,006,379 --------------- ----------- ----------- Net gain (loss) on investments ............. (8,107,177) (6,398,604) 3,221,229 --------------- ----------- ----------- Reinvested capital gains .................... 1,230,579 3,401,735 195,897 --------------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ (6,619,162) (2,930,955) 3,439,479 =============== =========== ===========
FidVIPGrOpS -------------------------------------------- 2001 2000 1999 -------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 33,972 125,878 28,246 Mortality and expense risk charges (note 3) . (16,898) (11,570) (3,130) --------------- ----------- ----------- Net investment income ...................... 17,074 114,308 25,116 --------------- ----------- ----------- Proceeds from mutual funds shares sold ...... 3,974,293 2,790,417 613,535 Cost of mutual fund shares sold ............. (5,770,316) (2,995,674) (559,981) --------------- ----------- ----------- Realized gain (loss) on investments ........ (1,796,023) (205,257) 53,554 Change in unrealized gain (loss) on investments ............................. (394,636) (3,225,818) 137,134 --------------- ----------- ----------- Net gain (loss) on investments ............. (2,190,659) (3,431,075) 190,688 --------------- ----------- ----------- Reinvested capital gains .................... - 662,022 55,207 --------------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ (2,173,585) (2,654,745) 271,011 =============== =========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
JanCapAp ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends ........................ $ 265,376 135,185 - Mortality and expense risk charges (note 3) . (34,678) (5,130) - ----------------- ------------- ---------- Net investment income ...................... 230,698 130,055 - ----------------- ------------- ---------- Proceeds from mutual funds shares sold ...... 17,087,559 2,667,595 - Cost of mutual fund shares sold ............. (23,842,315) (3,199,056) - ----------------- ------------- ---------- Realized gain (loss) on investments ........ (6,754,756) (531,461) - Change in unrealized gain (loss) on investments ............................. (170,898) (3,401,482) - ----------------- ------------- ---------- Net gain (loss) on investments ............. (6,925,654) (3,932,943) - ----------------- ------------- ---------- Reinvested capital gains .................... - - - ----------------- ------------- ---------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (6,694,956) (3,802,888) - ================= ============= ==========
JanGlTech ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 98,928 94,337 - Mortality and expense risk charges (note 3) . (10,714) (5,864) - ------------- ------------ -------- Net investment income ...................... 88,214 88,473 - ------------- ------------ -------- Proceeds from mutual funds shares sold ...... 7,370,887 6,627,712 - Cost of mutual fund shares sold ............. (14,709,397) (8,282,161) - ------------- ------------ -------- Realized gain (loss) on investments ........ (7,338,510) (1,654,449) - Change in unrealized gain (loss) on investments ............................. 249,355 (5,609,957) - ------------- ------------ -------- Net gain (loss) on investments ............. (7,089,155) (7,264,406) - ------------- ------------ -------- Reinvested capital gains .................... - - - ------------- ------------ -------- Net increase (decrease) in contract owners' equity resulting from operations ........ (7,000,941) (7,175,933) - ============= ============ ========
JanIntGro ------------------------------------------- 2001 2000 1999 ------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 211,816 482,954 - Mortality and expense risk charges (note 3) . (42,191) (5,407) - ------------- ------------ --------- Net investment income ...................... 169,625 477,547 - ------------- ------------ --------- Proceeds from mutual funds shares sold ...... 55,876,994 8,802,259 - Cost of mutual fund shares sold ............. (67,241,963) (10,182,763) - ------------- ------------ --------- Realized gain (loss) on investments ........ (11,364,969) (1,380,504) - Change in unrealized gain (loss) on investments ............................. 4,906,857 (2,809,392) - ------------- ------------ --------- Net gain (loss) on investments ............. (6,458,112) (4,189,896) - ------------- ------------ --------- Reinvested capital gains .................... - - - ------------- ------------ --------- Net increase (decrease) in contract owners' equity resulting from operations ........ (6,288,487) (3,712,349) - ============= ============ =========
NSATCapAp ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ $ - 41,174 96,180 Mortality and expense risk charges (note 3) . (7,359) (10,414) (2,498) --------------- ------------ ------------ Net investment income ...................... (7,359) 30,760 93,682 --------------- ------------ ------------ Proceeds from mutual funds shares sold ...... 6,642,651 6,534,873 4,176,681 Cost of mutual fund shares sold ............. (15,692,474) (7,187,743) (3,638,494) --------------- ------------ ------------ Realized gain (loss) on investments ........ (9,049,823) (652,870) 538,187 Change in unrealized gain (loss) on investments ............................. 3,255,014 (11,341,220) (1,637,699) --------------- ------------ ------------ Net gain (loss) on investments ............. (5,794,809) (11,994,090) (1,099,512) --------------- ------------ ------------ Reinvested capital gains .................... - 4,845,304 1,352,393 --------------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ $ (5,802,168) (7,118,026) 346,563 =============== ============ ============
NSATMidCapIx -------------------------------------------- 2001 2000 1999 -------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 66,823 24,820 1,219 Mortality and expense risk charges (note 3) . (12,715) (1,304) (9) ------------ ------------ ------------ Net investment income ...................... 54,108 23,516 1,210 ------------ ------------ ------------ Proceeds from mutual funds shares sold ...... 8,117,826 3,068,344 104,264 Cost of mutual fund shares sold ............. (8,732,201) (2,777,066) (89,446) ------------ ------------ ------------ Realized gain (loss) on investments ........ (614,375) 291,278 14,818 Change in unrealized gain (loss) on investments ............................. 601,633 (336,854) 51,305 ------------ ------------ ------------ Net gain (loss) on investments ............. (12,742) (45,576) 66,123 ------------ ------------ ------------ Reinvested capital gains .................... 145,893 238,697 47,431 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 187,259 216,637 114,764 ============ ============ ============
NSATEqInc -------------------------------------------- 2001 2000 1999 -------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 59,949 15,802 1,722 Mortality and expense risk charges (note 3) . (4,625) (1,543) (71) ---------- ----------- ------------ Net investment income ...................... 55,324 14,259 1,651 ---------- ----------- ------------ Proceeds from mutual funds shares sold ...... 450,083 1,130,737 116,995 Cost of mutual fund shares sold ............. (567,535) (1,084,332) (100,117) ---------- ----------- ------------ Realized gain (loss) on investments ........ (117,452) 46,405 16,878 Change in unrealized gain (loss) on investments ............................. (341,379) (334,972) 84,114 ---------- ----------- ------------ Net gain (loss) on investments ............. (458,831) (288,567) 100,992 ---------- ----------- ------------ Reinvested capital gains .................... - - 202 ---------- ----------- ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (403,507) (274,308) 102,845 ========== =========== ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATHIncBd --------------------------------------------- 2001 2000 1999 --------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ $ 1,415,406 1,119,466 308,481 Mortality and expense risk charges (note 3) . (18,755) (9,331) (3,120) ---------------- ------------ ----------- Net investment income ...................... 1,396,651 1,110,135 305,361 ---------------- ------------ ----------- Proceeds from mutual funds shares sold ...... 14,094,572 3,240,993 689,933 Cost of mutual fund shares sold ............. (16,691,580) (3,550,410) (687,767) ---------------- ------------ ----------- Realized gain (loss) on investments ........ (2,597,008) (309,417) 2,166 Change in unrealized gain (loss) on investments ............................. 1,237,276 (1,573,020) (155,595) ---------------- ------------ ----------- Net gain (loss) on investments ............. (1,359,732) (1,882,437) (153,429) ---------------- ------------ ----------- Reinvested capital gains .................... - - 645 ---------------- ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ 36,919 (772,302) 152,577 ================ ============ ===========
NSATEmMkt --------------------------------------------- 2001 2000 1999 --------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 1,263 - - Mortality and expense risk charges (note 3) . (51) - - ----------- --------- --------- Net investment income ...................... 1,212 - - ----------- --------- --------- Proceeds from mutual funds shares sold ...... 5,129,526 641,425 - Cost of mutual fund shares sold ............. (5,089,410) (644,443) - ----------- --------- --------- Realized gain (loss) on investments ........ 40,116 (3,018) - Change in unrealized gain (loss) on investments ............................. 31,257 336 - ----------- --------- --------- Net gain (loss) on investments ............. 71,373 (2,682) - ----------- --------- --------- Reinvested capital gains .................... - - - ----------- --------- --------- Net increase (decrease) in contract owners' equity resulting from operations ........ 72,585 (2,682) - =========== ========= =========
NSATGlobTC --------------------------------------------- 2001 2000 1999 --------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ - - - Mortality and expense risk charges (note 3) . (251) - - ------------ -------- ---------- Net investment income ...................... (251) - - ------------ -------- ---------- Proceeds from mutual funds shares sold ...... 597,256 9,643 - Cost of mutual fund shares sold ............. (1,083,964) (14,069) - ------------ -------- ---------- Realized gain (loss) on investments ........ (486,708) (4,426) - Change in unrealized gain (loss) on investments ............................. 108,169 (195,957) - ------------ -------- ---------- Net gain (loss) on investments ............. (378,539) (200,383) - ------------ -------- ---------- Reinvested capital gains .................... - 10,013 - ------------ -------- ---------- Net increase (decrease) in contract owners' equity resulting from operations ........ (378,790) (190,370) - ============ ======== ==========
NSATIntGr ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ $ 403 - - Mortality and expense risk charges (note 3) . (286) - - --------------- ----------- ----------- Net investment income ...................... 117 - - --------------- ----------- ----------- Proceeds from mutual funds shares sold ...... 2,456,617 355,202 - Cost of mutual fund shares sold ............. (2,488,071) (354,541) - --------------- ----------- ----------- Realized gain (loss) on investments ........ (31,454) 661 - Change in unrealized gain (loss) on investments ............................. 2,021 260 - --------------- ----------- ----------- Net gain (loss) on investments ............. (29,433) 921 - --------------- ----------- ----------- Reinvested capital gains .................... - - - --------------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (29,316) 921 - =============== =========== ===========
NSATGlob50 ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 540,155 199,386 8,364 Mortality and expense risk charges (note 3) . (48,323) (37,311) (10,207) ----------- ------------ ------------ Net investment income ...................... 491,832 162,075 (1,843) ----------- ------------ ------------ Proceeds from mutual funds shares sold ...... 4,347,440 5,122,679 1,039,009 Cost of mutual fund shares sold ............. (5,571,209) (5,037,852) (930,501) ----------- ------------ ------------ Realized gain (loss) on investments ........ (1,233,769) 84,827 108,508 Change in unrealized gain (loss) on investments ............................. (4,809,630) (4,336,580) 997,392 ----------- ------------ ------------ Net gain (loss) on investments ............. (6,033,399) (4,251,753) 1,105,900 ----------- ------------ ------------ Reinvested capital gains .................... - 945,098 456,545 ----------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (5,541,567) (3,144,580) 1,560,602 =========== ============ ============
NSATGvtBd --------------------------------------------- 2001 2000 1999 --------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 4,739,421 2,182,498 798,788 Mortality and expense risk charges (note 3) . (270,208) (99,138) (37,827) ------------ ------------ ------------ Net investment income ...................... 4,469,213 2,083,360 760,961 ------------ ------------ ------------ Proceeds from mutual funds shares sold ...... 12,755,207 5,456,678 10,418,680 Cost of mutual fund shares sold ............. (11,810,551) (5,620,925) (11,072,171) ------------ ------------ ------------ Realized gain (loss) on investments ........ 944,656 (164,247) (653,491) Change in unrealized gain (loss) on investments ............................. (196,849) 2,189,054 (442,511) ------------ ------------ ------------ Net gain (loss) on investments ............. 747,807 2,024,807 (1,096,002) ------------ ------------ ------------ Reinvested capital gains .................... 158,118 - 35,939 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 5,375,138 4,108,167 (299,102) ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATBal ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... $ 239,763 172,981 80,095 Mortality and expense risk charges (note 3) . (13,565) (5,434) (1,605) ------------- ------------ ------------ Net investment income ....................... 226,198 167,547 78,490 ------------- ------------ ------------ Proceeds from mutual funds shares sold ....... 2,503,497 5,501,271 2,788,299 Cost of mutual fund shares sold .............. (2,793,523) (5,437,733) (2,830,503) ------------- ------------ ------------ Realized gain (loss) on investments ......... (290,026) 63,538 (42,204) Change in unrealized gain (loss) on investments .............................. (284,440) (241,628) (33,063) ------------- ------------ ------------ Net gain (loss) on investments .............. (574,466) (178,090) (75,267) ------------- ------------ ------------ Reinvested capital gains ..................... - - 495 ------------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ......... $ (348,268) (10,543) 3,718 ============= ============ ============
NSATMSecBd ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends ......................... 1,968,676 1,380,209 405,079 Mortality and expense risk charges (note 3) . (67,681) (35,618) (8,904) ------------ ------------ ----------- Net investment income ....................... 1,900,995 1,344,591 396,175 ------------ ------------ ----------- Proceeds from mutual funds shares sold ....... 3,807,817 1,457,359 824,473 Cost of mutual fund shares sold .............. (3,896,507) (1,524,119) (850,875) ------------ ------------ ----------- Realized gain (loss) on investments ......... (88,690) (66,760) (26,402) Change in unrealized gain (loss) on investments .............................. (477,943) (112,147) (125,056) ------------ ------------ ----------- Net gain (loss) on investments .............. (566,633) (178,907) (151,458) ------------ ------------ ----------- Reinvested capital gains ..................... - - - ------------ ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ......... 1,334,362 1,165,684 244,717 ============ ============ ===========
NSATMyMkt ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends ......................... 11,577,805 10,355,160 3,376,535 Mortality and expense risk charges (note 3) . (673,043) (307,209) (139,891) ------------ ------------- ------------- Net investment income ....................... 10,904,762 10,047,951 3,236,644 ------------ ------------- ------------- Proceeds from mutual funds shares sold ....... 445,900,253 263,535,916 104,229,444 Cost of mutual fund shares sold .............. (445,900,253) (263,535,916) (104,229,444) ------------ ------------- ------------- Realized gain (loss) on investments ......... - - - Change in unrealized gain (loss) on investments .............................. - - - ------------ ------------- ------------- Net gain (loss) on investments .............. - - - ------------ ------------- ------------- Reinvested capital gains ..................... - - - ------------ ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ......... 10,904,762 10,047,951 3,236,644 ============ ============= =============
NSATSmCapG -------------------------------------------------- 2001 2000 1999 -------------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... $ - - - Mortality and expense risk charges (note 3) . (8,378) (1,793) (31) --------------- ------------ ------------- Net investment income ....................... (8,378) (1,793) (31) --------------- ------------ ------------- Proceeds from mutual funds shares sold ....... 58,857,290 4,671,162 11,249,953 Cost of mutual fund shares sold .............. (60,814,273) (4,701,490) (11,295,118) --------------- ------------ ------------- Realized gain (loss) on investments ......... (1,956,983) (30,328) (45,165) Change in unrealized gain (loss) on investments .............................. 709,961 (1,279,267) 1,020,705 --------------- ------------ ------------- Net gain (loss) on investments .............. (1,247,022) (1,309,595) 975,540 --------------- ------------ ------------- Reinvested capital gains ..................... - 72,445 101,886 --------------- ------------ ------------- Net increase (decrease) in contract owners' equity resulting from operations ......... $ (1,255,400) (1,238,943) 1,077,395 =============== ============ =============
NSATSmCapV ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends ......................... 11,215 - - Mortality and expense risk charges (note 3) . (25,199) (6,507) (609) ------------- ------------ ------------ Net investment income ....................... (13,984) (6,507) (609) ------------- ------------ ------------ Proceeds from mutual funds shares sold ....... 11,334,811 5,713,553 1,400,366 Cost of mutual fund shares sold .............. (11,528,873) (5,334,666) (1,184,849) ------------- ------------ ------------ Realized gain (loss) on investments ......... (194,062) 378,887 215,517 Change in unrealized gain (loss) on investments .............................. 2,708,437 (2,383,146) (194,598) ------------- ------------ ------------ Net gain (loss) on investments .............. 2,514,375 (2,004,259) 20,919 ------------- ------------ ------------ Reinvested capital gains ..................... 2,816,706 2,830,882 651,318 ------------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ......... 5,317,097 820,116 671,628 ============= ============ ============
NSATSmCo ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... 56,462 6,404 - Mortality and expense risk charges (note 3) . (76,347) (24,879) (4,091) ------------ ------------ ------------ Net investment income ....................... (19,885) (18,475) (4,091) ------------ ------------ ------------ Proceeds from mutual funds shares sold ....... 23,504,984 5,986,277 1,854,552 Cost of mutual fund shares sold .............. (30,795,484) (4,024,143) (1,415,009) ------------ ------------ ------------ Realized gain (loss) on investments ......... (7,290,500) 1,962,134 439,543 Change in unrealized gain (loss) on investments .............................. 2,058,463 (6,709,330) 2,711,547 ------------ ------------ ------------ Net gain (loss) on investments .............. (5,232,037) (4,747,196) 3,151,090 ------------ ------------ ------------ Reinvested capital gains ..................... - 6,779,344 500,536 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ......... (5,251,922) 2,013,673 3,647,535 ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATStrVal ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... $ 8,736 12,032 5,676 Mortality and expense risk charges (note 3) . (1,839) (439) (137) --------------- ------------ ----------- Net investment income ....................... 6,897 11,593 5,539 --------------- ------------ ----------- Proceeds from mutual funds shares sold ....... 1,397,767 6,700,644 173,459 Cost of mutual fund shares sold .............. (1,474,340) (6,640,337) (155,571) --------------- ------------ ----------- Realized gain (loss) on investments ......... (76,573) 60,307 17,888 Change in unrealized gain (loss) on investments .............................. (36,458) 33,455 (70,115) --------------- ------------ ----------- Net gain (loss) on investments .............. (113,031) 93,762 (52,227) --------------- ------------ ----------- Reinvested capital gains ..................... 2,958 - 22,264 --------------- ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ......... $ (103,176) 105,355 (24,424) =============== ============ ===========
NSATStMCap --------------------------------------------- 2001 2000 1999 --------------------------------------------- Investment activity: Reinvested dividends ......................... - - - Mortality and expense risk charges (note 3) . (50,333) (36,857) (2,128) ------------ ------------ ------------ Net investment income ....................... (50,333) (36,857) (2,128) ------------ ------------ ------------ Proceeds from mutual funds shares sold ....... 18,357,137 10,455,471 2,132,323 Cost of mutual fund shares sold .............. (28,308,562) (9,038,986) (1,804,973) ------------ ------------ ------------ Realized gain (loss) on investments ......... (9,951,425) 1,416,485 327,350 Change in unrealized gain (loss) on investments .............................. 1,610,021 (7,958,483) 1,323,586 ------------ ------------ ------------ Net gain (loss) on investments .............. (8,341,404) (6,541,998) 1,650,936 ------------ ------------ ------------ Reinvested capital gains ..................... - 922,208 515,885 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ......... (8,391,737) (5,656,647) 2,164,693 ============ ============ ============
NSATTotRe -------------------------------------------- 2001 2000 1999 -------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... 673,924 193,418 96,396 Mortality and expense risk charges (note 3) . (52,470) (5,805) (606) ------------ ------------ --------- Net investment income ....................... 621,454 187,613 95,790 ------------ ------------ --------- Proceeds from mutual funds shares sold ....... 4,083,131 3,055,349 806,876 Cost of mutual fund shares sold .............. (7,355,865) (2,710,595) (784,668) ------------ ------------ --------- Realized gain (loss) on investments ......... (3,272,734) 344,754 22,208 Change in unrealized gain (loss) on investments .............................. (5,934,402) (13,348,541) (33,899) ------------ ------------ --------- Net gain (loss) on investments .............. (9,207,136) (13,003,787) (11,691) ------------ ------------ --------- Reinvested capital gains ..................... 2,562,793 11,991,779 809,302 ------------ ------------ --------- Net increase (decrease) in contract owners' equity resulting from operations ......... (6,022,889) (824,395) 893,401 ============ ============ =========
NSATGrFoc ------------------------------------------ 2001 2000 1999 ------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends ........................ $ - - - Mortality and expense risk charges (note 3) . (25) - - ----------- -------- --------- Net investment income ...................... (25) - - ------------ --------- -------- Proceeds from mutual funds shares sold ...... 829,073 290,188 - Cost of mutual fund shares sold ............. (958,233) (317,405) - ----------- -------- ------- Realized gain (loss) on investments ........ (129,160) (27,217) - Change in unrealized gain (loss) on investments ............................. 20,323 (4,210) - ----------- -------- ------- Net gain (loss) on investments ............. (108,837) (31,427) - ----------- -------- ------- Reinvested capital gains .................... - - - ----------- -------- ------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (108,862) (31,427) - =========== ======== =========
NBAMTGuard --------------------------------------------- 2001 2000 1999 --------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ 26,063 16,882 3,977 Mortality and expense risk charges (note 3) . (9,498) (1,965) (679) ------------ ------------ ------------ Net investment income ...................... 16,565 14,917 3,298 Proceeds from mutual funds shares sold ...... 2,893,136 1,626,130 807,995 Cost of mutual fund shares sold ............. (2,977,733) (1,517,104) (670,629) ------------ ------------ ------------ Realized gain (loss) on investments ........ (84,597) 109,026 137,366 Change in unrealized gain (loss) on investments ............................. (462,414) (185,904) 77,047 ------------ ------------ ------------ Net gain (loss) on investments ............. (547,011) (76,878) 214,413 ------------ ------------ ------------ Reinvested capital gains .................... 372,331 - - ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (158,115) (61,961) 217,711 ============ ============ ============
NBAMTMCGr --------------------------------------------- 2001 2000 1999 --------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................ - - - Mortality and expense risk charges (note 3) . (68,411) (41,606) (7,463) ------------ ------------ ----------- Net investment income ...................... (68,411) (41,606) (7,463) Proceeds from mutual funds shares sold ...... 33,835,251 13,583,260 7,840,757 Cost of mutual fund shares sold ............. (48,950,389) (9,016,924) (6,652,007) ------------ ------------ ----------- Realized gain (loss) on investments ........ (15,115,138) 4,566,336 1,188,750 Change in unrealized gain (loss) on investments ............................. 5,289,162 (10,290,829) 3,039,884 ------------ ------------ ----------- Net gain (loss) on investments ............. (9,825,976) (5,724,493) 4,228,634 ------------ ------------ ----------- Reinvested capital gains .................... - 6,497 37,807 ------------ ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ (9,894,387) (5,759,602) 4,258,978 ============ ============ ===========
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NBAMTPart ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... $ 36,401 55,679 56,853 Mortality and expense risk charges (note 3) . (10,945) (5,009) (2,109) --------------- ------------ ----------- Net investment income ....................... 25,456 50,670 54,744 --------------- ------------ ----------- Proceeds from mutual funds shares sold ....... 2,341,117 3,401,374 787,143 Cost of mutual fund shares sold .............. (2,988,462) (3,678,166) (785,895) --------------- ------------ ----------- Realized gain (loss) on investments ......... (647,345) (276,792) 1,248 Change in unrealized gain (loss) on investments .............................. 81,935 (888,222) 196,040 --------------- ------------ ----------- Net gain (loss) on investments .............. (565,410) (1,165,014) 197,288 --------------- ------------ ----------- Reinvested capital gains ..................... 345,807 1,184,100 98,874 --------------- ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ......... $ (194,147) 69,756 350,906 =============== ============ ===========
OppAggGro ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... 510,407 - - Mortality and expense risk charges (note 3) . (95,553) (52,493) (2,942) ------------ ------------- ------------ Net investment income ....................... 414,854 (52,493) (2,942) ------------ ------------- ------------ Proceeds from mutual funds shares sold ....... 16,362,515 13,833,125 1,971,772 Cost of mutual fund shares sold .............. (31,783,204) (9,344,555) (1,353,384) ------------ ------------- ------------ Realized gain (loss) on investments ......... (15,420,689) 4,488,570 618,388 Change in unrealized gain (loss) on investments .............................. (14,061,702) (19,721,439) 2,906,737 ------------ ------------- ------------ Net gain (loss) on investments .............. (29,482,391) (15,232,869) 3,525,125 ------------ ------------- ------------ Reinvested capital gains ..................... 7,963,996 950,033 - ------------ ------------- ------------ Net increase (decrease) in contract owners' equity resulting from operations ......... (21,103,541) (14,335,329) 3,522,183 ============ ============= ============
OppCapAp -------------------------------------------- 2001 2000 1999 -------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... 362,712 26,876 10,044 Mortality and expense risk charges (note 3) . (114,610) (35,238) (4,168) ------------ ------------ ----------- Net investment income ....................... 248,102 (8,362) 5,876 ------------ ------------ ----------- Proceeds from mutual funds shares sold ....... 17,693,448 6,304,788 993,762 Cost of mutual fund shares sold .............. (22,343,388) (4,511,928) (802,267) ------------ ------------ ----------- Realized gain (loss) on investments ......... (4,649,940) 1,792,860 191,495 Change in unrealized gain (loss) on investments .............................. (8,865,390) (5,403,446) 2,561,317 ------------ ------------ ----------- Net gain (loss) on investments .............. (13,515,330) (3,610,586) 2,752,812 ------------ ------------ ----------- Reinvested capital gains ..................... 5,442,934 1,434,225 110,334 ------------ ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ......... (7,824,294) (2,184,723) 2,869,022 ============ ============ ===========
OppGlSec ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... $ 37,643 - - Mortality and expense risk charges (note 3) . (21,579) (1,051) - --------------- ----------- ----------- Net investment income ....................... 16,064 (1,051) - --------------- ----------- ----------- Proceeds from mutual funds shares sold ....... 19,935,590 3,569,728 - Cost of mutual fund shares sold .............. (21,363,947) (3,708,378) - --------------- ----------- ----------- Realized gain (loss) on investments ......... (1,428,357) (138,650) - Change in unrealized gain (loss) on investments .............................. 324,428 70,484 - --------------- ----------- ----------- Net gain (loss) on investments .............. (1,103,929) (68,166) - --------------- ----------- ----------- Reinvested capital gains ..................... 697,893 - - --------------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ......... $ (389,972) (69,217) - =============== =========== ===========
OppMSGrInc ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... 118,156 38,554 10,187 Mortality and expense risk charges (note 3) . (18,967) (10,265) (2,014) ----------- ------------ ----------- Net investment income ....................... 99,189 28,289 8,173 ----------- ------------ ----------- Proceeds from mutual funds shares sold ....... 7,977,562 1,958,100 570,677 Cost of mutual fund shares sold .............. (9,264,928) (1,608,534) (582,947) ----------- ------------ ----------- Realized gain (loss) on investments ......... (1,287,366) 349,566 (12,270) Change in unrealized gain (loss) on investments .............................. (953,747) (2,767,885) 713,752 ----------- ------------ ----------- Net gain (loss) on investments .............. (2,241,113) (2,418,319) 701,482 ----------- ------------ ----------- Reinvested capital gains ..................... - 509,013 17,163 ----------- ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ......... (2,141,924) (1,881,017) 726,818 =========== ============ ===========
StOpp(2) -------------------------------------------- 2001 2000 1999 -------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ......................... 82,454 - - Mortality and expense risk charges (note 3) . (27,488) (1,449) - ------------ ----------- ----------- Net investment income ....................... 54,966 (1,449) - ------------ ----------- ----------- Proceeds from mutual funds shares sold ....... 3,937,637 2,262,742 - Cost of mutual fund shares sold .............. (4,710,220) (2,255,273) - ------------ ----------- ----------- Realized gain (loss) on investments ......... (772,583) 7,469 - Change in unrealized gain (loss) on investments .............................. (2,619,628) (478,402) - ------------ ----------- ----------- Net gain (loss) on investments .............. (3,392,211) (470,933) - ------------ ----------- ----------- Reinvested capital gains ..................... 2,995,244 501,505 - ------------ ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ......... (342,001) 29,123 - ============ =========== ===========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
UIFEmMkt ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 209,318 151,314 85,097 Mortality and expense risk charges (note 3) . .. (3,684) (963) (166) ------------ ------------ ----------- Net investment income ......................... 205,634 150,351 84,931 ------------ ------------ ----------- Proceeds from mutual funds shares sold ......... 9,970,308 1,344,335 218,023 Cost of mutual fund shares sold ................ (9,895,932) (1,256,230) (200,881) ------------ ------------ ----------- Realized gain (loss) on investments ........... 74,376 88,105 17,142 Change in unrealized gain (loss) on investments ................................ 49,773 (119,691) 20,955 ------------ ------------ ----------- Net gain (loss) on investments ................ 124,149 (31,586) 38,097 ------------ ------------ ----------- Reinvested capital gains ....................... - - - ------------ ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $ 329,783 118,765 123,028 ============ ============ ===========
UIFMidCapG ----------------------------------------------- 2001 2000 1999 ----------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................... - - - Mortality and expense risk charges (note 3)..... (2,178) (162) - Net investment income ......................... (2,178) (162) - ------------ ------------ ----------- Proceeds from mutual funds shares sold ......... 1,223,717 769,277 - Cost of mutual fund shares sold ................ (1,632,353) (782,583) - ------------ ------------ ----------- Realized gain (loss) on investments ........... (408,636) (13,306) - Change in unrealized gain (loss) on investments ................................ (55,910) (98,350) - ------------ ------------ ----------- Net gain (loss) on investments ................ (464,546) (111,656) - ------------ ------------ ----------- Reinvested capital gains ....................... - 800 - ------------ ------------ ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (466,724) (111,018) - ============ ============ ===========
UIFUSRE ------------------------------------------------- 2001 2000 1999 ------------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 543,680 265,214 54,408 Mortality and expense risk charges (note 3)..... (14,079) (2,123) (1,163) ---------------- ------------- ------------- Net investment income ......................... 529,601 263,091 53,245 ---------------- ------------- ------------- Proceeds from mutual funds shares sold ......... 6,510,365 10,682,231 10,399,298 Cost of mutual fund shares sold ................ (6,210,052) (10,383,636) (10,439,502) ---------------- ------------- ------------- Realized gain (loss) on investments ........... 300,313 298,595 (40,204) Change in unrealized gain (loss) on investments ................................ 250,079 155,839 (130,048) ---------------- ------------- ------------- Net gain (loss) on investments ................ 550,392 454,434 (170,252) ---------------- ------------- ------------- Reinvested capital gains ....................... 99,201 25,130 - ---------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........... 1,179,194 742,655 (117,007) ================ ============= =============
VEWrldEMkt ---------------------------------------------- 2001 2000 1999 ---------------------------------------------- INVESTMENT ACTIVITY: Reinvested dividends......................... $ - - - Mortality and expense risk charges (note 3).. (2,447) (1,640) (139) ------------- ------------ ------------ Net investment income....................... (2,447) (1,640) (139) ------------- ------------ ------------ Proceeds from mutual funds shares sold....... 28,686,132 8,541,759 1,092,848 Cost of mutual fund shares sold.............. (29,763,363) (8,950,297) (857,511) ------------- ------------ ------------ Realized gain (loss) on investments......... (1,077,231) (408,538) 235,337 Change in unrealized gain (loss) on investments.............................. 1,090,597 (1,655,251) 663,413 ------------- ------------ ------------ Net gain (loss) on investments.............. 13,366 (2,063,789) 898,750 ------------- ------------ ------------ Reinvested capital gains..................... - - - ------------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations......... $ 10,919 (2,065,429) 898,611 ============= ============ ============
VEWrldHAs ------------------------------------------------ 2001 2000 1999 ------------------------------------------------ INVESTMENT ACTIVITY: Reinvested dividends............................ 15,222 6,160 2,469 Mortality and expense risk charges (note 3)..... (584) (124) (295) ------------- ------------ ---------- Net investment income.......................... 14,638 6,036 2,174 ------------- ------------ ---------- Proceeds from mutual funds shares sold.......... 1,165,958 6,042,759 718,765 Cost of mutual fund shares sold................. (1,224,245) (6,013,577) (692,370) ------------- ------------ ---------- Realized gain (loss) on investments............ (58,287) 29,182 26,395 Change in unrealized gain (loss) on investments................................. (147,688) 20,687 22,444 ------------- ------------ ---------- Net gain (loss) on investments................. (205,975) 49,869 48,839 ------------- ------------ ---------- Reinvested capital gains........................ - - - ------------- ------------ ---------- Net increase (decrease) in contract owners' equity resulting from operations............ (191,337) 55,905 51,013 ============= ============ ==========
See accompanying notes to financial statements. NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
Total --------------------------------------------------------- 2001 2000 1999 --------------------------------------------------------- INVESTMENT ACTIVITY: Net investment income ..................... $ 29,771,597 19,565,651 6,402,662 Realized gain (loss) on investments ....... (180,670,480) 16,571,418 6,807,752 Change in unrealized gain (loss) on investments ......................... (49,709,311) (178,984,942) 42,568,531 Reinvested capital gains .................. 40,368,917 50,385,356 6,941,880 ---------------- --------------- ---------------- Net increase (decrease) in contract owners' equity resulting from operations ..... (160,239,277) (92,462,517) 62,720,825 ---------------- --------------- ---------------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................ 1,010,149,638 947,537,536 515,112,072 Transfers between funds ................... - - - Surrenders ................................ (51,375,627) (10,694,705) (2,953,250) Death benefits ............................ (3,332,989) (65,736) (165,946) Policy loans (net of repayments) (note 5) . (9,466,546) (9,821,909) (4,792,558) Deductions for surrender charges (note 2d). (3,772,586) (1,692,311) (378,228) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ...................... (106,308,018) (63,687,230) (28,207,228) Asset charges (note 3): FPVUL & VEL contracts .................. (2,763,063) (1,989,545) (882,295) MSP contracts .......................... (198,693) (359,299) (49,709) SL contracts ........................... (549,866) (165,436) (99,794) ---------------- --------------- ---------------- Net equity transactions .............. 832,382,250 859,061,365 477,583,064 ---------------- --------------- ---------------- NET CHANGE IN CONTRACT OWNERS' EQUITY ....... 672,142,973 766,598,848 540,303,889 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ................................. 1,414,892,441 648,293,593 107,989,704 ---------------- --------------- ---------------- CONTRACT OWNERS' EQUITY END OF PERIOD ....... $ 2,087,035,414 1,414,892,441 648,293,593 ================ =============== ================ CHANGES IN UNITS: Beginning units ........................... 116,096,849 50,045,344 9,506,248 ---------------- --------------- ---------------- Units purchased ........................... 136,381,319 109,550,329 66,964,330 Units redeemed ............................ (61,304,886) (43,498,824) (26,425,234) ---------------- --------------- ---------------- Ending units .............................. 191,173,282 116,096,849 50,045,344 ================ =============== ================
ACVPIncGr -------------------------------------------------- 2001 2000 1999 -------------------------------------------------- INVESTMENT ACTIVITY: Net investment income ..................... 190,055 56,216 (4,525) Realized gain (loss) on investments ....... (1,838,222) 63,909 266,293 Change in unrealized gain (loss) on investments ......................... (668,796) (2,277,235) 692,513 Reinvested capital gains .................. - - - -------------- ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ..... (2,316,963) (2,157,110) 954,281 -------------- ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................ 16,904,735 9,141,279 4,843,884 Transfers between funds ................... 8,194,621 7,485,967 5,659,068 Surrenders ................................ (6,353,743) (307,329) (25,955) Death benefits ............................ (25,257) (1,577) (1,531) Policy loans (net of repayments) (note 5) . (56,773) (57,111) (99,683) Deductions for surrender charges (note 2d). (480,766) (48,631) (3,324) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ...................... (1,951,663) (1,117,246) (410,626) Asset charges (note 3): FPVUL & VEL contracts .................. (46,275) (32,044) (13,701) MSP contracts .......................... (4,657) (6,176) (1,582) SL contracts ........................... (8,572) (4,637) (1,422) -------------- ------------ ------------ Net equity transactions .............. 16,171,650 15,052,495 9,945,128 -------------- ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ....... 13,854,687 12,895,385 10,899,409 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ................................. 25,030,230 12,134,845 1,235,436 -------------- ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ....... 38,884,917 25,030,230 12,134,845 ============== ============ ============ CHANGES IN UNITS: Beginning units ........................... 2,108,572 874,749 97,382 -------------- ------------ ------------ Units purchased ........................... 2,012,075 1,358,922 990,326 Units redeemed ............................ (537,943) (125,099) (212,959) -------------- ------------ ------------ Ending units .............................. 3,582,704 2,108,572 874,749 ============== ============ ============
ACVPInt ------------------------------------------------------------- 2001 2000 1999 ------------------------------------------------------------- INVESTMENT ACTIVITY: Net investment income ..................... (41,095) (14,005) (3,029) Realized gain (loss) on investments ....... (25,475,199) 2,847,917 628,064 Change in unrealized gain (loss) on investments ......................... 6,676,950 (10,029,310) 4,031,727 Reinvested capital gains .................. 4,068,852 445,800 - -------------- -------------- ------------ Net increase (decrease) in contract owners' equity resulting from operations ..... (14,770,492) (6,749,598) 4,656,762 -------------- -------------- ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................ 15,964,755 17,266,035 3,440,338 Transfers between funds ................... 3,600,743 20,394,660 5,542,573 Surrenders ................................ (1,245,708) (174,891) (6,193) Death benefits ............................ (52,127) (5,691) (3,352) Policy loans (net of repayments) (note 5) . (242,467) (199,083) (114,731) Deductions for surrender charges (note 2d). (94,258) (27,674) (793) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ...................... (2,510,290) (1,602,834) (514,310) Asset charges (note 3): FPVUL & VEL contracts .................. (68,490) (60,820) (21,791) MSP contracts .......................... (7,374) (7,381) (570) SL contracts ........................... (9,576) (7,846) (1,478) -------------- -------------- ------------ Net equity transactions .............. 15,335,208 35,574,475 8,319,693 -------------- -------------- ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ....... 564,716 28,824,877 12,976,455 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ................................. 44,280,105 15,455,228 2,478,773 -------------- -------------- ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ....... 44,844,821 44,280,105 15,455,228 ============== ============== ============ CHANGES IN UNITS: Beginning units ........................... 3,063,338 830,394 209,297 -------------- -------------- ------------ Units purchased ........................... 1,803,688 2,368,251 682,334 Units redeemed ............................ (407,148) (135,307) (61,237) -------------- -------------- ------------ Ending units .............................. 4,459,878 3,063,338 830,394 ============== ============== ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
ACVPValue CSWPGPV ---------------------------------------------- ------------------------------- 2001 2000 1999 2001 2000 ---------------------------------------------- ------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ 94,634 26,769 8,355 (688) (1,199) Realized gain (loss) on investments .......... 784,993 5,242 (38,029) (390,882) 225,824 Change in unrealized gain (loss) on investments ............................ 1,499,813 865,295 (142,040) 71,425 (716,480) Reinvested capital gains ..................... -- 74,870 85,768 -- 141,743 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 2,379,440 972,176 (85,946) (320,145) (350,112) ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 4,837,359 2,380,936 698,376 250,521 381,654 Transfers between funds ...................... 16,354,241 2,477,656 905,970 (26,438) 297,999 Surrenders ................................... (440,086) (104,084) (7,715) (21,815) (12,588) Death benefits ............................... (62,019) -- -- (101) -- Policy loans (net of repayments) (note 5) .... (77,901) (8,731) (15,452) (34,453) (6,839) Deductions for surrender charges (note 2d) ... (33,300) (16,470) (988) (1,651) (1,992) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (1,132,828) (264,459) (132,120) (57,060) (83,921) Asset charges (note 3): FPVUL & VEL contracts ..................... (39,218) (10,699) (5,363) (2,815) (4,492) MSP contracts ............................. (2,191) (992) (203) (703) (481) SL contracts .............................. (5,079) (751) (147) (357) (736) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. 19,398,978 4,452,406 1,442,358 105,128 568,604 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 21,778,418 5,424,582 1,356,412 (215,017) 218,492 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 7,407,954 1,983,372 626,960 1,108,379 889,887 ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 29,186,372 7,407,954 1,983,372 893,362 1,108,379 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 617,384 193,386 59,864 80,230 51,860 ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 1,682,878 464,887 171,328 28,628 43,425 Units redeemed ............................... (139,085) (40,889) (37,806) (16,202) (15,055) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 2,161,177 617,384 193,386 92,656 80,230 ============ ============ ============ ============ ============
CSWPGPV CSWPIntEq -------------- -------------------------------------------- 1999 2001 2000 1999 -------------- -------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ (154) (824) 11,560 19,201 Realized gain (loss) on investments .......... 86,674 (1,154,946) 242,925 115,611 Change in unrealized gain (loss) on investments ............................ 208,276 737,104 (1,294,832) 581,395 Reinvested capital gains ..................... -- -- 310,165 -- ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 294,796 (418,666) (730,182) 716,207 ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 170,257 361,952 467,135 386,407 Transfers between funds ...................... 306,681 (278,163) 625,009 716,698 Surrenders ................................... (1,792) (67,204) (33,371) (6,378) Death benefits ............................... -- (114) -- -- Policy loans (net of repayments) (note 5) .... (2,901) (26,312) (16,955) (4,356) Deductions for surrender charges (note 2d) ... (229) (5,085) (5,281) (817) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (61,093) (122,795) (157,048) (114,080) Asset charges (note 3): FPVUL & VEL contracts ..................... (1,843) (6,614) (8,846) (5,328) MSP contracts ............................. (24) (507) (866) (367) SL contracts .............................. (63) (734) (834) (328) ------------ ------------ ------------ ------------ Net equity transactions ................. 408,993 (145,576) 868,943 971,451 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 703,789 (564,242) 138,761 1,687,658 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 186,098 2,424,442 2,285,681 598,023 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 889,887 1,860,200 2,424,442 2,285,681 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 17,619 210,354 141,958 56,767 ------------ ------------ ------------ ------------ Units purchased .............................. 38,599 37,812 84,215 98,872 Units redeemed ............................... (4,358) (41,750) (15,819) (13,681) ------------ ------------ ------------ ------------ Ending units ................................. 51,860 206,416 210,354 141,958 ============ ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
CSWPVal DryEuroEq ------------------------------------------- ------------------------------ 2001 2000 1999 2001 2000 ------------------------------------------- ------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ $ (5,391) 22,477 8,941 9,312 2,393 Realized gain (loss) on investments .......... 33,836 93,144 (2,440) (524,850) (61,506) Change in unrealized gain (loss) on investments ............................ (66,654) 87,894 (2,238) (19,212) 26,273 Reinvested capital gains ..................... -- 23,283 18,278 -- 39,799 ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ (38,209) 226,798 22,541 (534,750) 6,959 ----------- ----------- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 479,149 576,937 486,214 1,122,135 298,004 Transfers between funds ...................... 819,215 628,024 (106) (279,014) 1,063,297 Surrenders ................................... (30,177) (4,490) (2,612) (37,778) (23) Death benefits ............................... -- -- -- (1,076) -- Policy loans (net of repayments) (note 5) .... (11,554) (20,705) (3,476) (528) (310) Deductions for surrender charges (note 2d) ... (2,283) (710) (334) (2,858) (4) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (170,041) (131,580) (53,820) (135,716) (41,463) Asset charges (note 3): FPVUL & VEL contracts ..................... (5,847) (4,272) (2,591) (3,369) (1,518) MSP contracts ............................. (626) (428) (46) (341) (296) SL contracts .............................. (781) (681) (57) (655) (300) ----------- ----------- ----------- ----------- ----------- Net equity transactions ................. 1,077,055 1,042,095 423,172 660,800 1,317,387 ----------- ----------- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 1,038,846 1,268,893 445,713 126,050 1,324,346 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 2,434,534 1,165,641 719,928 1,459,019 134,673 ----------- ----------- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 3,473,380 2,434,534 1,165,641 1,585,069 1,459,019 =========== =========== =========== =========== =========== CHANGES IN UNITS: Beginning units .............................. 200,517 102,845 66,036 115,223 10,415 ----------- ----------- ----------- ----------- ----------- Units purchased .............................. 104,429 114,059 67,676 113,434 110,285 Units redeemed ............................... (19,562) (16,387) (30,867) (54,260) (5,477) ----------- ----------- ----------- ----------- ----------- Ending units ................................. 285,384 200,517 102,845 174,397 115,223 =========== =========== =========== =========== ===========
DryEuroEq DrySRGro ------------- ------------------------------------------ 1999 2001 2000 1999 ------------- ------------------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ 266 (3,669) 127,586 190 Realized gain (loss) on investments .......... 360 (1,322,306) 286,804 137,365 Change in unrealized gain (loss) on investments ............................ 9,997 (3,298,528) (2,392,732) 901,808 Reinvested capital gains ..................... 1,251 -- -- 279,678 ----------- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ 11,874 (4,624,503) (1,978,342) 1,319,041 ----------- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 8,625 10,416,978 5,340,142 2,335,241 Transfers between funds ...................... 114,306 1,388,663 6,492,229 4,065,765 Surrenders ................................... -- (464,880) (161,374) (13,484) Death benefits ............................... -- (77,433) 17,714 (18,063) Policy loans (net of repayments) (note 5) .... -- (183,269) (253,461) (33,299) Deductions for surrender charges (note 2d) ... -- (35,176) (25,536) (1,727) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (92) (2,070,697) (1,388,349) (506,680) Asset charges (note 3): FPVUL & VEL contracts ..................... (32) (60,803) (49,907) (17,385) MSP contracts ............................. (8) (3,920) (4,193) (332) SL contracts .............................. -- (5,979) (2,607) (913) ----------- ----------- ----------- ----------- Net equity transactions ................. 122,799 8,903,484 9,964,658 5,809,123 ----------- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 134,673 4,278,981 7,986,316 7,128,164 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... -- 16,486,408 8,500,092 1,371,928 ----------- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... 134,673 20,765,389 16,486,408 8,500,092 =========== =========== =========== =========== CHANGES IN UNITS: Beginning units .............................. -- 1,132,559 509,172 106,093 ----------- ----------- ----------- ----------- Units purchased .............................. 10,455 1,120,486 741,714 445,091 Units redeemed ............................... (40) (348,304) (118,327) (42,012) ----------- ----------- ----------- ----------- Ending units ................................. 10,415 1,904,741 1,132,559 509,172 =========== =========== =========== ===========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
DryStkIx DryAp ----------------------------------------------- ------------------------------ 2001 2000 1999 2001 2000 ----------------------------------------------- ------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ $ 2,225,892 1,474,581 613,975 221,754 147,948 Realized gain (loss) on investments .......... (13,853,031) 3,585,686 612,737 (1,084,787) 353,748 Change in unrealized gain (loss) on investments ............................ (22,871,757) (27,898,576) 11,117,238 (1,683,766) (1,102,409) Reinvested capital gains ..................... 1,239,287 3,654,055 672,634 -- 355,671 ------------- ------------- ------------- ------------- ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (33,259,609) (19,184,254) 13,016,584 (2,546,799) (245,042) ------------- ------------- ------------- ------------- ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 78,670,945 68,654,997 41,330,848 9,000,607 13,754,528 Transfers between funds ...................... (16,553,579) 72,727,790 57,817,925 (1,111,989) 1,480,475 Surrenders ................................... (9,057,375) (1,341,027) (626,906) (763,458) (176,111 Death benefits ............................... (767,254) 2,224 (24,555) (96,423) -- Policy loans (net of repayments) (note 5) .... (1,107,133) (792,260) (192,790) (105,753) (114,896) Deductions for surrender charges (note 2d) ... (685,340) (212,202) (80,289) (57,768) (27,867) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (12,949,074) (8,955,356) (4,045,059) (1,733,024) (1,277,668) Asset charges (note 3): FPVUL & VEL contracts ..................... (346,249) (279,995) (134,875) (43,557) (33,727) MSP contracts ............................. (32,180) (49,600) (4,126) (1,513) (5,950) SL contracts .............................. (71,257) (28,362) (11,443) (7,972) (1,121) ------------- ------------- ------------- ------------- ------------ Net equity transactions ................. 37,101,504 129,726,209 94,028,730 5,079,150 13,597,663 ------------- ------------- ------------- ------------- ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 3,841,895 110,541,955 107,045,314 2,532,351 13,352,621 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 231,961,839 121,419,884 14,374,570 32,278,418 18,925,797 ------------- ------------- ------------- ------------- ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 235,803,734 231,961,839 121,419,884 34,810,769 32,278,418 ============= ============= ============= ============= ============ CHANGES IN UNITS: Beginning units .............................. 18,907,653 8,707,267 1,136,754 2,588,042 1,466,981 ------------- ------------- ------------- ------------- ------------ Units purchased .............................. 8,863,550 11,088,744 7,959,543 1,042,009 1,345,193 Units redeemed ............................... (6,481,810) (888,358) (389,030) (605,411) (224,132) ------------- ------------- ------------- ------------- ------------ Ending units ................................. 21,289,393 18,907,653 8,707,267 3,024,640 2,588,042 ============= ============= ============= ============= ============
DryAp FISFedQual ------------- ----------------------------------------------- 1999 2001 2000 1999 ------------ ----------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ 82,323 1,359,733 248,090 (3,162) Realized gain (loss) on investments .......... 369,370 5,098,570 126,755 (1,907) Change in unrealized gain (loss) on investments ............................ 649,339 (1,493,674) 2,975,611 40,201 Reinvested capital gains ..................... 68,742 147,643 -- -- ------------- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 1,169,774 5,112,272 3,350,456 35,132 ------------- ------------- ------------- ------------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 12,955,621 10,012,591 18,965,217 3,119,190 Transfers between funds ...................... 4,076,889 (18,061,162) 19,532,260 8,049,110 Surrenders ................................... (56,786) (161,111) -- -- Death benefits ............................... (6,440) (55,447) (5,851) -- Policy loans (net of repayments) (note 5) .... (32,681) (30,969) (6,815) -- Deductions for surrender charges (note 2d) ... (7,273) (12,191) -- -- Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (701,318) (1,846,772) (606,106) (20,060) Asset charges (note 3): FPVUL & VEL contracts ..................... (17,976) (21,564) (2,155) (31) MSP contracts ............................. (683) (1,043) (611) (21) SL contracts .............................. (1,755) (2,164) (235) -- ------------- ------------- ------------- ------------- Net equity transactions ................. 16,207,598 (10,179,832) 37,875,704 11,148,188 ------------- ------------- ------------- ------------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 17,377,372 (5,067,560) 41,226,160 11,183,320 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 1,548,425 52,409,480 11,183,320 -- ------------- ------------- ------------- ------------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... 18,925,797 47,341,920 52,409,480 11,183,320 ============= ============= ============= ============= CHANGES IN UNITS: Beginning units .............................. 120,461 4,818,737 1,133,916 -- ------------- ------------- ------------- ------------- Units purchased .............................. 1,811,470 2,378,798 3,748,621 1,141,400 Units redeemed ............................... (464,950) (3,155,724) (63,800) (7,484) ------------- ------------- ------------- ------------- Ending units ................................. 1,466,981 4,041,811 4,818,737 1,133,916 ============= ============= ============= =============
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FidVIPEIS FidVIPGrS -------------------------------------------- ----------------------------- 2001 2000 1999 2001 2000 -------------------------------------------- ----------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ 411,117 262,884 93,800 (138,980) (60,006) Realized gain (loss) on investments .......... (701,218) (546,971) 303,591 (13,354,389) 1,245,093 Change in unrealized gain (loss) on investments ............................ (3,016,312) 1,470,791 (277,459) (10,987,478) (19,309,179) Reinvested capital gains ..................... 1,383,058 1,063,019 214,564 6,737,804 5,556,689 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (1,923,355) 2,249,723 334,496 (17,743,043) (12,567,403) ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 13,788,407 7,850,333 4,448,956 40,138,736 37,211,019 Transfers between funds ...................... 18,394,027 4,967,158 6,896,656 (7,406,015) 39,402,444 Surrenders ................................... (792,454) (341,944) (80,452) (5,421,805) (572,831) Death benefits ............................... (202,403) (6,617) (1,391) (85,131) (17,086) Policy loans (net of repayments) (note 5) .... (163,750) (315,976) (144,802) (455,745) (799,676) Deductions for surrender charges (note 2d) ... (59,962) (54,109) (10,304) (410,249) (90,644) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (3,127,024) (1,698,463) (1,124,439) (7,373,061) (5,241,119) Asset charges (note 3): FPVUL & VEL contracts ..................... (99,874) (68,189) (43,634) (212,959) (178,345) MSP contracts ............................. (7,057) (4,739) (1,965) (13,536) (24,381) SL contracts .............................. (11,473) (5,991) (1,316) (27,391) (12,861) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. 27,718,437 10,321,463 9,937,309 18,732,844 69,676,520 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 25,795,082 12,571,186 10,271,805 989,801 57,109,117 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 28,612,353 16,041,167 5,769,362 99,536,403 42,427,286 ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 54,407,435 28,612,353 16,041,167 100,526,204 99,536,403 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 2,297,584 1,374,484 517,910 6,561,226 2,322,709 ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 2,813,226 1,252,718 975,907 3,919,641 4,664,500 Units redeemed ............................... (372,658) (329,618) (119,333) (2,359,294) (425,983) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 4,738,152 2,297,584 1,374,484 8,121,573 6,561,226 ============ ============ ============ ============ ============
FidVIPGrS FidVIPHIS ------------- ---------------------------------------------- 1999 2001 2000 1999 ------------- ---------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ (4,278) 1,945,684 689,813 363,341 Realized gain (loss) on investments .......... 146,210 (5,088,408) (1,172,059) (114,464) Change in unrealized gain (loss) on investments ............................ 6,093,883 462,487 (3,641,858) 103,063 Reinvested capital gains ..................... 543,154 -- -- 13,640 ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 6,778,969 (2,680,237) (4,124,104) 365,580 ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 13,666,314 5,988,955 7,533,788 2,442,012 Transfers between funds ...................... 20,406,545 1,708,086 3,220,351 3,417,897 Surrenders ................................... (63,057) (2,262,302) (716,896) (30,819) Death benefits ............................... (10,491) (23,795) -- (1,204) Policy loans (net of repayments) (note 5) .... (177,397) (66,288) (1,732) (134,160) Deductions for surrender charges (note 2d) ... (8,076) (171,180) (113,440) (3,947) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (1,671,275) (963,420) (677,508) (455,068) Asset charges (note 3): FPVUL & VEL contracts ..................... (55,807) (24,816) (22,619) (18,072) MSP contracts ............................. (2,486) (2,294) (3,871) (1,135) SL contracts .............................. (3,848) (4,741) (2,510) (1,596) ------------ ------------ ------------ ------------ Net equity transactions ................. 32,080,422 4,178,205 9,215,563 5,213,908 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 38,859,391 1,497,968 5,091,459 5,579,488 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 3,567,895 14,195,423 9,103,964 3,524,476 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 42,427,286 15,693,391 14,195,423 9,103,964 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 256,014 1,807,889 895,631 368,766 ------------ ------------ ------------ ------------ Units purchased .............................. 2,192,613 1,016,232 1,222,377 623,361 Units redeemed ............................... (125,918) (547,634) (310,119) (96,496) ------------ ------------ ------------ ------------ Ending units ................................. 2,322,709 2,276,487 1,807,889 895,631 ============ ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FidVIPOvS FidVIPConS -------------------------------------------- ----------------------------- 2001 2000 1999 2001 2000 -------------------------------------------- ----------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ 1,160,435 167,888 11,251 257,436 65,914 Realized gain (loss) on investments .......... (12,490,138) (1,765,190) 730,465 (5,093,795) 528,352 Change in unrealized gain (loss) on investments ............................ 3,190,822 (4,479,931) 1,849,661 (3,013,382) (6,926,956) Reinvested capital gains ..................... 1,957,820 1,409,432 34,048 1,230,579 3,401,735 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (6,181,061) (4,667,801) 2,625,425 (6,619,162) (2,930,955) ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 10,190,419 8,505,042 1,371,398 15,319,963 13,331,258 Transfers between funds ...................... (546,602) 8,652,600 8,415,589 3,681,440 16,551,717 Surrenders ................................... (5,250,024) (105,541) (26,372) (995,784) (475,190) Death benefits ............................... (56,878) (10,322) (308) (90,406) (21,261) Policy loans (net of repayments) (note 5) .... (64,044) (59,458) (21,644) (394,100) (383,633) Deductions for surrender charges (note 2d) ... (397,251) (16,701) (3,377) (75,347) (75,193) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (1,432,362) (1,042,254) (318,257) (4,535,549) (3,087,387) Asset charges (note 3): FPVUL & VEL contracts ..................... (33,180) (27,681) (10,339) (150,018) (119,105) MSP contracts ............................. (1,604) (7,325) (724) (5,104) (13,801) SL contracts .............................. (6,274) (2,147) (955) (18,408) (4,789) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. 2,402,200 15,886,213 9,405,011 12,736,687 25,702,616 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... (3,778,861) 11,218,412 12,030,436 6,117,525 22,771,661 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 24,323,563 13,105,151 1,074,715 47,371,947 24,600,286 ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 20,544,702 24,323,563 13,105,151 53,489,472 47,371,947 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 2,097,033 897,019 95,893 3,295,764 1,555,137 ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 1,124,267 1,314,737 863,392 1,623,710 2,019,106 Units redeemed ............................... (992,359) (114,723) (62,266) (655,508) (278,479) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 2,228,941 2,097,033 897,019 4,263,966 3,295,764 ============ ============ ============ ============ ============
FidVIPConS FidVIPGrOpS ------------ --------------------------------------------- 1999 2001 2000 1999 ------------ --------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ 22,353 17,074 114,308 25,116 Realized gain (loss) on investments .......... 214,850 (1,796,023) (205,257) 53,554 Change in unrealized gain (loss) on investments ............................ 3,006,379 (394,636) (3,225,818) 137,134 Reinvested capital gains ..................... 195,897 -- 662,022 55,207 ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 3,439,479 (2,173,585) (2,654,745) 271,011 ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 6,884,353 4,061,107 4,026,349 3,045,388 Transfers between funds ...................... 11,647,164 600,250 4,007,402 5,377,081 Surrenders ................................... (454,009) (236,679) (106,913) (191,409) Death benefits ............................... (4,599) (18,957) (14,827) (1,216) Policy loans (net of repayments) (note 5) .... (155,019) (102,112) (182,797) (42,620) Deductions for surrender charges (note 2d) ... (58,146) (17,909) (16,918) (24,514) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (1,389,362) (1,325,485) (1,045,761) (632,760) Asset charges (note 3): FPVUL & VEL contracts ..................... (50,526) (41,292) (39,737) (23,008) MSP contracts ............................. (1,103) (2,602) (3,764) (1,943) SL contracts .............................. (2,492) (4,804) (3,068) (1,552) ------------ ------------ ------------ ------------ Net equity transactions ................. 16,416,261 2,911,517 6,619,966 7,503,447 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 19,855,740 737,932 3,965,221 7,774,458 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 4,744,546 14,159,293 10,194,072 2,419,614 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 24,600,286 14,897,225 14,159,293 10,194,072 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 365,486 1,359,801 798,468 194,457 ------------ ------------ ------------ ------------ Units purchased .............................. 1,338,819 601,865 797,422 679,802 Units redeemed ............................... (149,168) (278,588) (236,089) (75,791) ------------ ------------ ------------ ------------ Ending units ................................. 1,555,137 1,683,078 1,359,801 798,468 ============ ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
JanCapAp JanGlTech ----------------------------------- ---------------------------------- 2001 2000 1999 2001 2000 1999 ----------------------------------- ---------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ 230,698 130,055 - 88,214 88,473 - Realized gain (loss) on investments .......... (6,754,756) (531,461) - (7,338,510) (1,654,449) - Change in unrealized gain (loss) on investments ............................ (170,898) (3,401,482) - 249,355 (5,609,957) - Reinvested capital gains ..................... -- -- - -- -- - ------------ ------------ --- ----------- ----------- --- Net increase (decrease) in contract owners' equity resulting from operations ........ (6,694,956) (3,802,888) - (7,000,941) (7,175,933) - ------------ ------------ --- ----------- ----------- --- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 10,087,668 4,655,897 - 7,602,918 5,576,181 - Transfers between funds ...................... 8,106,584 22,374,018 - 1,847,915 18,371,062 - Surrenders ................................... (301,372) (74,366) - (488,064) (65,589) - Death benefits ............................... (70,562) -- - (8,194) (282) - Policy loans (net of repayments) (note 5) .... (120,940) (27,728) - (43,323) (67,411) - Deductions for surrender charges (note 2d) ... (22,804) (11,767) - (36,930) (10,379) - Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (2,452,006) (892,334) - (1,585,925) (930,882) - Asset charges (note 3): FPVUL & VEL contracts ..................... (70,990) (33,096) - (45,749) (32,832) - MSP contracts ............................. (2,884) (4,072) - (1,223) (5,353) - SL contracts .............................. (9,847) (1,406) - (5,981) (670) - ------------ ------------ --- ----------- ----------- --- Net equity transactions ................. 15,142,847 25,985,146 - 7,235,444 22,833,845 - ------------ ------------ --- ----------- ----------- --- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 8,447,891 22,182,258 - 234,503 15,657,912 - CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 22,182,258 -- - 15,657,912 -- - ------------ ------------ --- ----------- ----------- --- CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 30,630,149 22,182,258 - 15,892,415 15,657,912 - ============ ============ === =========== =========== === CHANGES IN UNITS: Beginning units .............................. 2,695,290 -- - 2,380,162 -- - ------------ ------------ --- ----------- ----------- --- Units purchased .............................. 2,555,765 2,815,308 - 2,389,863 2,513,806 - Units redeemed ............................... (481,485) (120,018) - (912,397) (133,644) - ------------ ------------ --- ----------- ----------- --- Ending units ................................. 4,769,570 2,695,290 - 3,857,628 2,380,162 - ============ ============ === =========== =========== ===
JanIntGro ----------------------------------- 2001 2000 1999 ------------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ 169,625 477,547 -- Realized gain (loss) on investments .......... (11,364,969) (1,380,504) -- Change in unrealized gain (loss) on investments ............................ 4,906,857 (2,809,392) -- Reinvested capital gains ..................... -- -- -- ----------- ----------- --- Net increase (decrease) in contract owners' equity resulting from operations ........ (6,288,487) (3,712,349) -- ----------- ----------- --- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 13,346,220 3,860,854 -- Transfers between funds ...................... 10,737,224 19,317,238 -- Surrenders ................................... (254,359) (64,857) -- Death benefits ............................... (51,142) (1,321) -- Policy loans (net of repayments) (note 5) .... (111,482) (44,077) -- Deductions for surrender charges (note 2d) ... (19,246) (10,263) -- Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (2,088,452) (688,560) -- Asset charges (note 3): FPVUL & VEL contracts ..................... (57,868) (25,778) -- MSP contracts ............................. (2,238) (2,921) -- SL contracts .............................. (6,975) (733) -- ----------- ----------- --- Net equity transactions ................. 21,491,682 22,339,582 -- ----------- ----------- --- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 15,203,195 18,627,233 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 18,627,233 -- -- ----------- ----------- --- CONTRACT OWNERS' EQUITY END OF PERIOD .......... 33,830,428 18,627,233 -- =========== =========== === CHANGES IN UNITS: Beginning units .............................. 2,253,062 -- -- ----------- ----------- --- Units purchased .............................. 3,505,685 2,353,803 -- Units redeemed ............................... (400,617) (100,741) -- ----------- ----------- --- Ending units ................................. 5,358,130 2,253,062 -- =========== =========== ===
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATCapAp NSATMidCapIx --------------------------------------------- ----------------------------- 2001 2000 1999 2001 2000 --------------------------------------------- ----------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ (7,359) 30,760 93,682 54,108 23,516 Realized gain (loss) on investments .......... (9,049,823) (652,870) 538,187 (614,375) 291,278 Change in unrealized gain (loss) on investments ............................ 3,255,014 (11,341,220) (1,637,699) 601,633 (336,854) Reinvested capital gains ..................... -- 4,845,304 1,352,393 145,893 238,697 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (5,802,168) (7,118,026) 346,563 187,259 216,637 ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 5,717,712 8,485,213 9,062,429 4,313,632 1,349,384 Transfers between funds ...................... (3,464,155) 1,967,580 7,693,905 7,424,370 4,514,754 Surrenders ................................... (662,031) (306,983) (206,070) (158,510) (1,416) Death benefits ............................... (35,835) 10,787 (17,696) (19,824) -- Policy loans (net of repayments) (note 5) .... (121,485) (245,557) (72,988) (45,778) (1,227) Deductions for surrender charges (note 2d) ... (50,094) (48,576) (26,392) (11,994) (224) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (1,928,000) (2,322,085) (1,637,150) (922,352) (182,757) Asset charges (note 3): FPVUL & VEL contracts ..................... (59,480) (83,996) (57,366) (26,787) (7,127) MSP contracts ............................. (3,712) (5,475) (1,785) (1,036) (2,018) SL contracts .............................. (5,083) (4,898) (1,205) (7,302) (272) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. (612,163) 7,446,010 14,735,682 10,544,419 5,669,097 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... (6,414,331) 327,984 15,082,245 10,731,678 5,885,734 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 21,723,803 21,395,819 6,313,574 6,706,080 820,346 ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 15,309,472 21,723,803 21,395,819 17,437,758 6,706,080 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 2,348,405 1,644,036 485,911 447,279 61,224 ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 868,642 1,198,867 1,379,462 842,197 399,626 Units redeemed ............................... (990,546) (494,498) (221,337) (90,317) (13,571) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 2,226,501 2,348,405 1,644,036 1,199,159 447,279 ============ ============ ============ ============ ============
NSATMidCapIx NSATEqInc ------------- ----------------------------------------------- 1999 2001 2000 1999 ------------- ----------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ 1,210 55,324 14,259 1,651 Realized gain (loss) on investments .......... 14,818 (117,452) 46,405 16,878 Change in unrealized gain (loss) on investments ............................ 51,305 (341,379) (334,972) 84,114 Reinvested capital gains ..................... 47,431 -- -- 202 ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 114,764 (403,507) (274,308) 102,845 ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 29,706 1,335,353 473,028 100,722 Transfers between funds ...................... 418,208 2,490,417 1,253,216 527,196 Surrenders ................................... (445) (74,711) (6,869) (207) Death benefits ............................... -- (6,873) -- -- Policy loans (net of repayments) (note 5) .... (3,245) 756 (32,403) (1,768) Deductions for surrender charges (note 2d) ... (57) (5,653) (1,087) (26) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (35,179) (295,375) (157,503) (48,952) Asset charges (note 3): FPVUL & VEL contracts ..................... (2,054) (8,213) (5,044) (1,993) MSP contracts ............................. (35) (850) (589) (80) SL contracts .............................. (34) (743) (503) (77) ------------ ------------ ------------ ------------ Net equity transactions ................. 406,865 3,434,108 1,522,246 574,815 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 521,629 3,030,601 1,247,938 677,660 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 298,717 2,169,612 921,674 244,014 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 820,346 5,200,213 2,169,612 921,674 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 26,958 180,572 67,642 21,211 ------------ ------------ ------------ ------------ Units purchased .............................. 37,816 386,266 135,367 51,440 Units redeemed ............................... (3,550) (38,446) (22,437) (5,009) ------------ ------------ ------------ ------------ Ending units ................................. 61,224 528,392 180,572 67,642 ============ ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATHIncBd NSATEmMkt --------------------------------------------- ------------------------------ 2001 2000 1999 2001 2000 --------------------------------------------- ------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ $ 1,396,651 1,110,135 305,361 1,212 -- Realized gain (loss) on investments .......... (2,597,008) (309,417) 2,166 40,116 (3,018) Change in unrealized gain (loss) on investments ............................ 1,237,276 (1,573,020) (155,595) 31,257 336 Reinvested capital gains ..................... -- -- 645 -- -- ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 36,919 (772,302) 152,577 72,585 (2,682) ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 1,942,949 5,531,190 4,145,976 86,450 430 Transfers between funds ...................... (6,906,064) 2,945,536 3,041,733 886,606 23,571 Surrenders ................................... (202,910) (202,047) (1,402) (24) -- Death benefits ............................... (30,268) (243) -- (173) -- Policy loans (net of repayments) (note 5) .... (23,836) 27,348 (1,976) (3,481) -- Deductions for surrender charges (note 2d) ... (15,354) (31,972) (180) (2) -- Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (477,273) (295,849) (134,672) (29,062) (398) Asset charges (note 3): FPVUL & VEL contracts ..................... (10,073) (5,820) (4,222) (892) (17) MSP contracts ............................. (800) (873) (16) (431) -- SL contracts .............................. (2,394) (176) (549) (201) (73) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. (5,726,023) 7,967,094 7,044,692 938,790 23,513 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... (5,689,104) 7,194,792 7,197,269 1,011,375 20,831 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 15,363,078 8,168,286 971,017 20,831 -- CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 9,673,974 15,363,078 8,168,286 1,032,206 20,831 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 1,660,401 805,022 92,454 2,391 -- ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 435,364 918,997 756,587 126,952 2,438 Units redeemed ............................... (1,123,090) (63,618) (44,019) (4,375) (47) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 972,675 1,660,401 805,022 124,968 2,391 ============ ============ ============ ============ ============
NSATEmMkt NSATGlobTC --------- ------------------------------------ 1999 2001 2000 1999 ------ ------------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ - (251) -- -- Realized gain (loss) on investments .......... - (486,708) (4,426) -- Change in unrealized gain (loss) on investments ............................ - 108,169 (195,957) -- Reinvested capital gains ..................... - -- 10,013 -- --- ------------ ------------ --- Net increase (decrease) in contract owners' equity resulting from operations ........ - (378,790) (190,370) -- --- ------------ ------------ --- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... - 308,149 36,330 -- Transfers between funds ...................... - 822,431 719,894 -- Surrenders ................................... - (6,202) -- -- Death benefits ............................... - (158) -- -- Policy loans (net of repayments) (note 5) .... - (6,402) (22) -- Deductions for surrender charges (note 2d) ... - (469) -- -- Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... - (101,924) (14,760) -- Asset charges (note 3): FPVUL & VEL contracts ..................... - (3,053) (358) -- MSP contracts ............................. - (190) (4) -- SL contracts .............................. - (128) (108) -- --- ------------ ------------ --- Net equity transactions ................. - 1,012,054 740,972 -- --- ------------ ------------ --- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... - 633,264 550,602 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... - 550,602 -- -- CONTRACT OWNERS' EQUITY END OF PERIOD .......... - 1,183,866 550,602 -- === ============ ============ === CHANGES IN UNITS: Beginning units .............................. --- 91,498 -- -- - ------------ ------------ --- Units purchased .............................. - 293,293 92,911 -- Units redeemed ............................... - (41,146) (1,413) -- - ------------ ------------ --- Ending units ................................. - 343,645 91,498 -- === ============ ============ ===
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATIntGr NSATGlob50 ------------------------------------------- ------------------------------ 2001 2000 1999 2001 2000 ------------------------------------------- ------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ $ 117 -- -- 491,832 162,075 Realized gain (loss) on investments .......... (31,454) 661 -- (1,223,769) 84,827 Change in unrealized gain (loss) on investments ............................ 2,021 260 -- (4,809,630) (4,336,580) Reinvested capital gains ..................... -- -- -- -- 945,098 ------------ ------------ ------------ ---------- ---------- Net increase (decrease) in contract owners' equity resulting from operations ........ (29,316) 921 -- (5,541,567) (3,144,580) ------------ ------------ ------------ ---------- ---------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 102,832 1,248 -- 12,723,229 12,463,148 Transfers between funds ...................... 198,272 23,447 -- (640,442) 2,956,853 Surrenders ................................... (772) -- -- (907,039) (17,060) Death benefits ............................... -- -- -- (29,301) -- Policy loans (net of repayments) (note 5) .... (243) -- -- (44,008) (18,038) Deductions for surrender charges (note 2d) ... (58) -- -- (68,633) (2,700) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (12,270) (576) -- (608,881) (486,956) Asset charges (note 3): FPVUL & VEL contracts ..................... (369) (20) -- (11,299) (10,018) MSP contracts ............................. (110) -- -- (575) (54,582) SL contracts .............................. (28) (73) -- (75,060) (649) ------------ ------------ ------------ ---------- ---------- Net equity transactions ................. 287,254 24,026 -- 10,337,991 14,829,998 ------------ ------------ ------------ ---------- ---------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 257,938 24,947 -- 4,796,424 11,685,418 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 24,947 -- -- 26,985,394 15,299,976 ------------ ------------ ------------ ---------- ---------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 282,885 24,947 -- 31,781,818 26,985,394 ============ ============ ============ ========== ========== CHANGES IN UNITS: Beginning units .............................. 2,697 -- -- 2,256,557 1,116,697 ------------ ------------ ------------ ---------- ---------- Units purchased .............................. 42,203 2,770 -- 1,327,934 1,201,157 Units redeemed ............................... (1,979) (73) -- (313,278) (61,297) ------------ ------------ ------------ ---------- ---------- Ending units ................................. 42,921 2,697 -- 3,271,213 2,256,557 ============ ============ ============ ========== ==========
NSATGlob50 NSATGvtBd -------------- ----------------------------------------------- 1999 2001 2000 1999 -------------- ----------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ (1,843) 4,469,213 2,083,360 760,961 Realized gain (loss) on investments .......... 108,508 944,656 (164,247) (653,491) Change in unrealized gain (loss) on investments ............................ 997,392 (196,849) 2,189,054 (442,511) Reinvested capital gains ..................... 456,545 158,118 -- 35,939 ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 1,560,602 5,375,138 4,108,167 (299,102) ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 1,045,536 30,655,820 17,668,928 5,188,264 Transfers between funds ...................... 12,602,010 37,359,271 9,887,594 10,824,196 Surrenders ................................... (149,120) (323,902) (72,334) (7,882) Death benefits ............................... (783) (241,226) (652) (779) Policy loans (net of repayments) (note 5) .... (3,556) (304,285) (103,358) (10,210) Deductions for surrender charges (note 2d) ... (19,098) (24,509) (11,446) (1,010) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (215,865) (3,143,662) (1,298,442) (747,310) Asset charges (note 3): FPVUL & VEL contracts ..................... (4,771) (46,681) (21,054) (13,896) MSP contracts ............................. (78) (11,073) (3,139) (3,046) SL contracts .............................. (8,899) (6,758) (7,679) (1,057) ------------ ------------ ------------ ------------ Net equity transactions ................. 13,245,376 63,912,995 26,038,418 15,227,270 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 14,805,978 69,288,133 30,146,585 14,928,168 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 493,998 49,772,661 19,626,076 4,697,908 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 15,299,976 119,060,794 49,772,661 19,626,076 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 41,464 4,270,820 1,882,004 436,992 ------------ ------------ ------------ ------------ Units purchased .............................. 1,104,898 5,632,298 2,670,982 1,601,216 Units redeemed ............................... (29,665) (334,435) (282,166) (156,204) ------------ ------------ ------------ ------------ Ending units ................................. 1,116,697 9,568,683 4,270,820 1,882,004 ============ ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATBal NSATMSecBd --------------------------------------------- -------------------------------- 2001 2000 1999 2001 2000 --------------------------------------------- -------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ 226,198 167,547 78,490 1,900,995 1,344,591 Realized gain (loss) on investments .......... (290,026) 63,538 (42,204) (88,690) (66,760) Change in unrealized gain (loss) on investments ............................ (284,440) (214,628) (33,063) (477,943) (112,147) Reinvested capital gains ..................... -- -- 495 -- -- ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (348,268) (10,543) 3,718 1,334,362 1,165,684 ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 3,262,506 1,988,633 1,611,897 12,132,219 9,346,749 Transfers between funds ...................... 3,546,264 1,908,503 1,487,269 1,601,401 3,298,958 Surrenders ................................... (291,289) (157,913) (107,959) (1,045,750) (62,839) Death benefits ............................... (4,798) (11,305) -- (19,778) -- Policy loans (net of repayments) (note 5) .... (104,338) (49,949) (10,080) (58,777) (10,119) Deductions for surrender charges (note 2d) ... (22,041) (24,988) (13,826) (79,128) (9,943) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (708,814) (312,300) (211,528) (885,477) (538,746) Asset charges (note 3): FPVUL & VEL contracts ..................... (19,653) (10,757) (6,440) (12,804) (8,327) MSP contracts ............................. (2,465) (2,649) (439) (1,291) (37,227) SL contracts .............................. (4,164) (1,847) (638) (65,836) (891) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. 5,651,208 3,325,428 2,748,256 11,564,779 11,977,615 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 5,302,940 3,314,885 2,751,974 12,899,141 13,143,299 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 6,798,298 3,483,413 731,439 26,316,626 13,173,327 ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 12,101,238 6,798,298 3,483,413 39,215,767 26,316,626 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 648,063 327,982 67,709 2,433,129 1,283,724 ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 698,378 449,447 353,956 1,279,025 1,242,287 Units redeemed ............................... (150,242) (129,366) (93,683) (220,960) (92,882) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 1,196,199 648,063 327,982 3,491,194 2,433,129 ============ ============ ============ ============ ============
NSATMSecBd NSATMyMkt ------------- ---------------------------------------------- 1999 2001 2000 1999 ------------- ---------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ 396,175 10,904,762 10,047,951 3,236,644 Realized gain (loss) on investments .......... (26,402) -- -- -- Change in unrealized gain (loss) on investments ............................ (125,056) -- -- -- Reinvested capital gains ..................... -- -- -- -- ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 244,717 10,904,762 10,047,951 3,236,644 ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 3,583,938 535,199,396 551,344,398 352,373,390 Transfers between funds ...................... 8,648,087 (253,501,490) (450,193,315) (230,478,324) Surrenders ................................... (4,080) (5,384,696) (1,793,468) (235,503) Death benefits ............................... 21 (581,176) -- (27,182) Policy loans (net of repayments) (note 5) .... (7,035) (2,986,273) (3,989,346) (2,684,887) Deductions for surrender charges (note 2d) ... (523) (407,441) (283,795) (30,161) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (202,496) (19,115,629) (11,953,409) (7,099,744) Asset charges (note 3): FPVUL & VEL contracts ..................... (5,111) (375,913) (251,927) (155,882) MSP contracts ............................. (340) (32,277) (45,487) (18,983) SL contracts .............................. (6,384) (75,622) (26,948) (43,454) ------------ ------------ ------------ ------------ Net equity transactions ................. 12,006,077 252,738,879 82,806,703 111,599,270 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 12,250,794 263,643,641 92,854,654 114,835,914 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 922,533 232,825,649 139,970,995 25,135,081 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 13,173,327 496,469,290 232,825,649 139,970,995 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 90,322 20,561,523 13,058,280 2,395,406 ------------ ------------ ------------ ------------ Units purchased .............................. 1,252,855 55,397,839 44,348,389 33,458,797 Units redeemed ............................... (59,453) (33,566,573) (36,845,146) (22,795,923) ------------ ------------ ------------ ------------ Ending units ................................. 1,283,724 42,392,789 20,561,523 13,058,280 ============ ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATSmCapG NSATSmCapV ---------------------------------------------- ------------------------------ 2001 2000 1999 2001 2000 ---------------------------------------------- ------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ $ (8,378) (1,793) (31) (13,984) (6,507) Realized gain (loss) on investments .......... (1,956,983) (30,328) (45,165) (194,062) 378,887 Change in unrealized gain (loss) on investments ............................ 709,961 (1,279,267) 1,020,705 2,708,437 (2,383,146) Reinvested capital gains ..................... -- 72,445 101,886 2,816,706 2,830,882 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (1,255,400) (1,238,943) 1,077,395 5,317,097 820,116 ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 3,598,455 1,154,557 1,120,048 9,016,474 4,858,757 Transfers between funds ...................... 3,410,637 4,644,251 516,673 15,412,364 6,033,116 Surrenders ................................... (1,642,218) (1,187) -- (446,243) (80,683) Death benefits ............................... (10,089) -- -- (64,080) -- Policy loans (net of repayments) (note 5) .... (33,956) (11,214) -- (282,493) (42,449) Deductions for surrender charges (note 2d) ... (9,433) (188) -- (33,766) (12,767) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (661,890) (216,886) (3,049) (2,011,182) (687,469) Asset charges (note 3): FPVUL & VEL contracts ..................... (19,997) (7,874) (190) (69,206) (26,379) MSP contracts ............................. (739) (1,016) (16) (3,299) (2,432) SL contracts .............................. (2,320) (401) (68) (8,441) (1,182) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. 4,628,450 5,560,042 1,633,398 21,510,128 10,038,512 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 3,373,050 4,321,099 2,710,793 26,827,225 10,858,628 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 7,031,892 2,710,793 -- 15,234,367 4,375,739 ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 10,404,942 7,031,892 2,710,793 42,061,592 15,234,367 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 409,600 132,226 -- 1,106,081 354,123 ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 442,794 290,611 132,396 1,533,024 821,558 Units redeemed ............................... (171,562) (13,237) (170) (206,769) (69,600) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 680,832 409,600 132,226 2,432,336 1,106,081 ============ ============ ============ ============ ============
NSATSmCapV NSATSmCo --------------- ---------------------------------------------- 1999 2001 2000 1999 --------------- ---------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ (609) (19,885) (18,475) (4,091) Realized gain (loss) on investments .......... 215,517 (7,290,500) 1,962,134 439,543 Change in unrealized gain (loss) on investments ............................ (194,598) 2,058,463 (6,709,330) 2,711,547 Reinvested capital gains ..................... 651,318 -- 6,779,344 500,536 ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 671,628 (5,251,922) 2,013,673 3,647,535 ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 837,148 12,159,420 13,832,839 2,908,526 Transfers between funds ...................... 2,112,202 (2,921,935) 15,651,034 5,337,212 Surrenders ................................... (7,439) (460,130) (181,834) (6,177) Death benefits ............................... 222 (66,716) (2,655) (1,172) Policy loans (net of repayments) (note 5) .... (13,801) (211,792) (173,061) (23,244) Deductions for surrender charges (note 2d) ... (953) (34,816) (28,773) (791) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (244,824) (2,446,502) (1,154,682) (349,442) Asset charges (note 3): FPVUL & VEL contracts ..................... (10,039) (64,103) (39,974) (13,385) MSP contracts ............................. (356) (2,960) (4,563) (382) SL contracts .............................. (386) (9,607) (2,226) (788) ------------ ------------ ------------ ------------ Net equity transactions ................. 2,671,774 5,940,859 27,896,105 7,850,357 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 3,343,402 688,937 29,909,778 11,497,892 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 1,032,337 43,018,119 13,108,341 1,610,449 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 4,375,739 43,707,056 43,018,119 13,108,341 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 106,497 2,746,658 900,802 159,462 ------------ ------------ ------------ ------------ Units purchased .............................. 273,364 1,637,808 1,953,863 777,178 Units redeemed ............................... (25,738) (1,259,520) (108,007) (35,838) ------------ ------------ ------------ ------------ Ending units ................................. 354,123 3,124,946 2,746,658 900,802 ============ ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATStrVal NSATStMCap --------------------------------------------- ------------------------------ 2001 2000 1999 2001 2000 --------------------------------------------- ------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ $ 6,897 11,593 5,539 (50,333) (36,857) Realized gain (loss) on investments .......... (76,573) 60,307 17,888 (9,951,425) 1,416,485 Change in unrealized gain (loss) on investments ............................ (36,458) 33,455 (70,115) 1,610,021 (7,958,483) Reinvested capital gains ..................... 2,958 -- 22,264 -- 922,208 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (103,176) 105,355 (24,424) (8,391,737) (5,656,647) ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 240,722 217,062 113,739 5,523,999 11,164,429 Transfers between funds ...................... 813,847 36,281 555,257 1,955,797 12,673,990 Surrenders ................................... (16,502) (2,555) (534) (333,832) (176,519) Death benefits ............................... (849) -- -- (81,747) (276) Policy loans (net of repayments) (note 5) .... (10,094) 5,717 (6,758) (34,689) (111,058) Deductions for surrender charges (note 2d) ... (1,249) (404) (68) (25,260) (27,932) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (93,260) (70,189) (38,618) (1,480,360) (1,032,843) Asset charges (note 3): FPVUL & VEL contracts ..................... (4,305) (3,692) (2,342) (36,320) (33,805) MSP contracts ............................. (547) (245) (47) (1,630) (2,152) SL contracts .............................. (441) (704) (54) (3,653) (1,262) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. 927,322 181,271 620,575 5,482,305 22,452,572 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 824,146 286,626 596,151 (2,909,432) 16,795,925 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 1,228,751 942,125 345,974 27,712,803 10,916,878 ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 2,052,897 1,228,751 942,125 24,803,371 27,712,803 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 117,590 96,897 34,463 1,716,211 580,219 ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 102,821 45,789 67,374 766,979 1,233,405 Units redeemed ............................... (14,466) (25,096) (4,940) (303,491) (97,413) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 205,945 117,590 96,897 2,179,699 1,716,211 ============ ============ ============ ============ ============
NSATStMCap NSATTotRe ------------- -------------------------------------------- 1999 2001 2000 1999 ------------- -------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ (2,128) 621,454 187,613 95,790 Realized gain (loss) on investments .......... 327,350 (3,272,734) 344,754 22,208 Change in unrealized gain (loss) on investments ............................ 1,323,586 (5,934,402) (13,348,541) (33,899) Reinvested capital gains ..................... 515,885 2,562,793 11,991,779 809,302 ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 2,164,693 (6,022,889) (824,395) 893,401 ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 2,422,960 10,122,071 10,272,164 7,871,786 Transfers between funds ...................... 6,109,550 89,693,120 4,280,493 9,589,090 Surrenders ................................... (8,289) (959,850) (358,609) (153,144) Death benefits ............................... (1,613) (59,593) 16,036 (25,003) Policy loans (net of repayments) (note 5) .... (24,425) (350,619) (580,464) (318,100) Deductions for surrender charges (note 2d) ... (1,062) (72,628) (56,746) (19,613) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (166,998) (4,742,267) (3,360,137) (2,208,818) Asset charges (note 3): FPVUL & VEL contracts ..................... (5,799) (137,419) (122,772) (73,719) MSP contracts ............................. (79) (12,489) (6,483) (3,448) SL contracts .............................. (147) (8,780) (10,831) (2,037) ------------ ------------ ------------ ------------ Net equity transactions ................. 8,324,098 93,471,546 10,072,651 14,656,994 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 10,488,791 87,448,657 9,248,256 15,550,395 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 428,087 33,092,473 23,844,217 8,293,822 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 10,916,878 120,541,130 33,092,473 23,844,217 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 37,396 2,716,400 1,894,394 702,435 ------------ ------------ ------------ ------------ Units purchased .............................. 556,514 10,688,339 1,307,532 1,426,646 Units redeemed ............................... (13,691) (682,021) (485,526) (234,687) ------------ ------------ ------------ ------------ Ending units ................................. 580,219 12,722,718 2,716,400 1,894,394 ============ ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATGrFoc NBAMTGuard --------------------------------- ------------------------------------------ 2001 2000 1999 2001 2000 1999 --------------------------------- ------------------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ $ (25) -- - 16,565 14,917 3,298 Realized gain (loss) on investments .......... (129,160) (27,217) - (84,597) 109,026 137,366 Change in unrealized gain (loss) on investments ............................ 20,323 (4,210) - (462,414) (185,904) 77,047 Reinvested capital gains ..................... -- -- - 372,331 -- -- ----------- ----------- --- ---------- ---------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ (108,862) (31,427) - (158,115) (61,961) 217,711 ----------- ----------- --- ---------- ---------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 81,780 8,564 - 2,897,841 791,413 436,993 Transfers between funds ...................... 435,327 102,537 - 4,877,663 2,086,291 1,360,544 Surrenders ................................... (35) -- - (136,020) (37,547) (62,331) Death benefits ............................... (113) -- - (10,284) -- -- Policy loans (net of repayments) (note 5) .... (597) -- - (34,127) (16,305) (3,869) Deductions for surrender charges (note 2d) ... (3) -- - (10,292) (5,941) (7,983) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (28,113) (1,091) - (543,447) (259,871) (169,963) Asset charges (note 3): FPVUL & VEL contracts ..................... (989) (35) - (20,511) (12,978) (8,142) MSP contracts ............................. (88) (4) - (1,230) (543) (127) SL contracts .............................. (100) (8) - (2,148) (579) (100) ----------- ----------- --- ---------- ---------- ----------- Net equity transactions ................. 487,069 109,963 - 7,017,445 2,543,940 1,545,022 ----------- ----------- --- ---------- ---------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 378,207 78,536 - 6,859,330 2,481,979 1,762,733 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 78,536 -- - 5,440,586 2,958,607 1,195,874 ----------- ----------- --- ---------- ---------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 456,743 78,536 - 12,299,916 5,440,586 2,958,607 =========== =========== = =========== =========== =========== CHANGES IN UNITS: Beginning units .............................. 12,379 -- - 396,791 202,892 56,533 ----------- ----------- --- ---------- ----------- ----------- Units purchased .............................. 114,014 12,533 - 602,101 252,130 167,370 Units redeemed ............................... (8,290) (154) - (64,018) (58,231) (21,011) ----------- ----------- --- ---------- ----------- ----------- Ending units ................................. 118,103 12,379 - 934,874 396,791 202,892 =========== =========== === ========== =========== ===========
NBAMTMCGr -------------------------------------------- 2001 2000 1999 -------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ (68,411) (41,606) (7,463) Realized gain (loss) on investments .......... (15,115,138) 4,566,336 1,188,750 Change in unrealized gain (loss) on investments ............................ 5,289,162 (10,290,829) 3,039,884 Reinvested capital gains ..................... -- 6,497 37,807 ---------- ---------- ---------- Net increase (decrease) in contract owners' equity resulting from operations ........ (9,894,387) (5,759,602) 4,258,978 ---------- ---------- ---------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 13,330,709 15,764,083 9,784,832 Transfers between funds ...................... 4,624,300 16,272,282 (2,147,643) Surrenders ................................... (489,496) (82,297) (16,427) Death benefits ............................... (37,866) (5,370) (4,321) Policy loans (net of repayments) (note 5) .... (450,986) (106,262) (67,280) Deductions for surrender charges (note 2d) ... (37,038) (13,023) (2,104) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (2,553,992) (1,383,172) (350,946) Asset charges (note 3): FPVUL & VEL contracts ..................... (69,061) (48,371) (11,378) MSP contracts ............................. (3,080) (5,311) (459) SL contracts .............................. (9,276) (2,701) (716) ---------- ---------- ---------- Net equity transactions ................. 14,304,214 30,389,858 7,183,558 ---------- ---------- ---------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 4,409,827 24,630,256 11,442,536 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 36,813,938 12,183,682 741,146 ---------- ---------- ---------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... 41,223,765 36,813,938 12,183,682 =========== =========== =========== CHANGES IN UNITS: Beginning units .............................. 2,122,060 640,951 85,872 ---------- ---------- ----------- Units purchased .............................. 1,551,954 1,560,513 995,573 Units redeemed ............................... (510,409) (79,404) (440,494) ---------- ---------- ----------- Ending units ................................. 3,163,605 2,122,060 640,951 ========== ========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NBAMTPart OppAggGro --------------------------------------------- ------------------------------ 2001 2000 1999 2001 2000 --------------------------------------------- ------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ $ 25,456 50,670 54,744 414,854 (52,493) Realized gain (loss) on investments .......... (647,345) (276,792) 1,248 (15,420,689) 4,488,570 Change in unrealized gain (loss) on investments ............................ 81,935 (888,222) 196,040 (14,061,702) (19,721,439) Reinvested capital gains ..................... 345,807 1,184,100 98,874 7,963,996 950,033 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (194,147) 69,756 350,906 (21,103,541) (14,335,329) ------------ ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 2,484,274 2,034,154 2,049,277 27,928,131 24,690,515 Transfers between funds ...................... 1,241,216 1,022,755 1,699,822 3,064,936 38,617,778 Surrenders ................................... (266,358) (165,342) (78,561) (729,545) (184,820) Death benefits ............................... (2,175) (502) (2,713) (121,224) (6,793) Policy loans (net of repayments) (note 5) .... (62,396) (95,808) (216,206) (308,647) (384,286) Deductions for surrender charges (note 2d) ... (20,154) (26,163) (10,061) (55,202) (29,245) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (703,703) (540,817) (464,515) (4,174,920) (2,643,790) Asset charges (note 3): FPVUL & VEL contracts ..................... (29,615) (25,778) (22,616) (96,929) (84,929) MSP contracts ............................. (1,994) (3,445) (622) (7,267) (14,660) SL contracts .............................. (6,346) (1,681) (1,766) (12,686) (7,197) ------------ ------------ ------------ ------------ ------------ Net equity transactions ................. 2,632,749 2,197,373 2,952,039 25,486,647 59,952,573 ------------ ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 2,438,602 2,267,129 3,302,945 4,383,106 45,617,244 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 9,728,389 7,461,260 4,158,315 56,970,661 11,353,417 ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 12,166,991 9,728,389 7,461,260 61,353,767 56,970,661 ============ ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 890,267 676,989 401,819 3,428,074 570,019 ------------ ------------ ------------ ------------ ------------ Units purchased .............................. 391,897 383,557 382,626 2,759,109 3,007,222 Units redeemed ............................... (132,957) (170,279) (107,456) (714,092) (149,167) ------------ ------------ ------------ ------------ ------------ Ending units ................................. 1,149,207 890,267 676,989 5,473,091 3,428,074 ============ ============ ============ ============ ============
OppAggGro OppCapAp ------------- -------------------------------------------- 1999 2001 2000 1999 ------------- -------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ (2,942) 248,102 (8,362) 5,876 Realized gain (loss) on investments .......... 618,388 (4,649,940) 1,792,860 191,495 Change in unrealized gain (loss) on investments ............................ 2,906,737 (8,865,390) (5,403,446) 2,561,317 Reinvested capital gains ..................... -- 5,442,934 1,434,225 110,334 ------------ ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ 3,522,183 (7,824,294) (2,184,723) 2,869,022 ------------ ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 2,894,019 22,484,374 12,133,627 2,754,479 Transfers between funds ...................... 4,290,831 25,215,921 25,912,373 7,064,837 Surrenders ................................... (25,306) (1,230,637) (1,774,425) (254,161) Death benefits ............................... 295 (42,386) (7,097) (300) Policy loans (net of repayments) (note 5) .... (37,694) (262,756) (290,219) (72,268) Deductions for surrender charges (note 2d) ... (3,241) (93,118) (280,781) (32,551) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (416,901) (4,183,259) (2,024,385) (655,772) Asset charges (note 3): FPVUL & VEL contracts ..................... (13,629) (117,473) (73,662) (23,800) MSP contracts ............................. (182) (5,580) (8,607) (983) SL contracts .............................. (488) (14,207) (4,224) (390) ------------ ------------ ------------ ------------ Net equity transactions ................. 6,687,704 41,750,879 33,582,600 8,779,091 ------------ ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 10,209,887 33,926,585 31,397,877 11,648,113 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 1,143,530 45,091,481 13,693,604 2,045,491 ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... 11,353,417 79,018,066 45,091,481 13,693,604 ============ ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 101,944 2,839,064 806,675 165,067 ------------ ------------ ------------ ------------ Units purchased .............................. 544,229 3,394,012 2,290,226 715,374 Units redeemed ............................... (76,154) (422,210) (257,837) (73,766) ------------ ------------ ------------ ------------ Ending units ................................. 570,019 5,810,866 2,839,064 806,675 ============ ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
OppGlSec OppMSGrInc ------------------------------------ ------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------------------------ ------------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ 16,064 (1,051) - 99,189 28,289 8,173 Realized gain (loss) on investments .......... (1,428,357) (138,650) - (1,287,366) 349,566 (12,270) Change in unrealized gain (loss) on investments ............................ 324,428 70,484 - (953,747) (2,767,885) 713,752 Reinvested capital gains ..................... 697,893 -- - -- 509,013 17,163 ------------ ------------ --- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........ (389,972) (69,217) - (2,141,924) (1,881,017) 726,818 ------------ ------------ --- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 4,040,697 756,191 - 7,159,154 6,051,658 1,687,758 Transfers between funds ...................... 8,510,314 3,400,619 - 3,192,858 11,215,475 3,276,499 Surrenders ................................... (94,452) (1,589) - (512,683) (108,972) (24,107) Death benefits ............................... (7,316) -- - (53,197) 7,734 (9,603) Policy loans (net of repayments) (note 5) .... (33,018) (2,407) - (139,092) (207,915) (23,549) Deductions for surrender charges (note 2d) ... (7,147) (252) - (38,793) (17,244) (3,088) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (578,185) (70,452) - (2,123,587) (1,065,069) (314,964) Asset charges (note 3): FPVUL & VEL contracts ..................... (13,992) (1,673) - (66,208) (39,206) (12,409) MSP contracts ............................. (1,000) (1,076) - (4,577) (6,649) (626) SL contracts .............................. (2,627) (94) - (8,974) (3,480) (620) ------------ ------------ --- ------------ ------------ ------------ Net equity transactions ................. 11,813,274 4,079,267 - 7,404,901 15,826,332 4,575,291 ------------ ------------ --- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 11,423,302 4,010,050 - 5,262,977 13,945,315 5,302,109 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 4,010,050 -- - 20,875,006 6,929,691 1,627,582 ------------ ------------ --- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 15,433,352 4,010,050 - 26,137,983 20,875,006 6,929,691 ============ ============ === ============ ============ ============ CHANGES IN UNITS: Beginning units .............................. 418,007 -- - 1,862,664 558,424 158,153 ------------ ------------ --- ------------ ------------ ------------ Units purchased .............................. 1,535,801 426,089 - 1,274,868 1,423,961 436,576 Units redeemed ............................... (120,026) (8,082) - (533,269) (119,721) (36,305) ------------ ------------ --- ------------ ------------ ------------ Ending units ................................. 1,833,782 418,007 - 2,604,263 1,862,664 558,424 ============ ============ === ============ ============ ============
StOpp2 ------------------------------------- 2001 2000 1999 ------------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ 54,966 (1,449) -- Realized gain (loss) on investments .......... (772,583) 7,469 -- Change in unrealized gain (loss) on investments ............................ (2,619,628) (478,402) -- Reinvested capital gains ..................... 2,995,244 501,505 -- ------------ ------------ --- Net increase (decrease) in contract owners' equity resulting from operations ........ (342,001) 29,123 -- ------------ ------------ --- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 6,298,359 1,381,833 -- Transfers between funds ...................... 10,335,015 3,738,013 -- Surrenders ................................... (65,790) (11,246) -- Death benefits ............................... (9,812) -- -- Policy loans (net of repayments) (note 5) .... (61,294) (10,320) -- Deductions for surrender charges (note 2d) ... (4,978) (1,779) -- Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (726,268) (61,655) -- Asset charges (note 3): FPVUL & VEL contracts ..................... (15,103) (1,167) -- MSP contracts ............................. (667) (206) -- SL contracts .............................. (3,161) (147) -- ------------ ------------ --- Net equity transactions ................. 15,746,301 5,033,326 -- ------------ ------------ --- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 15,404,300 5,062,449 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 5,062,449 -- -- ------------ ------------ --- CONTRACT OWNERS' EQUITY END OF PERIOD .......... 20,466,749 5,062,449 -- ============ ============ === CHANGES IN UNITS: Beginning units .............................. 514,109 -- -- ------------ ------------ --- Units purchased .............................. 1,835,688 523,047 -- Units redeemed ............................... (190,510) (8,938) -- ------------ ------------ --- Ending units ................................. 2,159,287 514,109 -- ============ ============ ===
NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
UIFEmMkt UIFMidCapG ------------------------------------------ ---------------------------------- 2001 2000 1999 2001 2000 1999 ------------------------------------------ ---------------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ 205,634 150,351 84,931 (2,178) (162) - Realized gain (loss) on investments .......... 74,376 88,105 17,142 (408,636) (13,306) - Change in unrealized gain (loss) on investments ............................ 49,773 (119,691) 20,955 (55,910) (98,350) - Reinvested capital gains ..................... -- -- -- -- 800 - ----------- ----------- ----------- ----------- ----------- --- Net increase (decrease) in contract owners' equity resulting from operations ........ 329,783 118,765 123,028 (466,724) (111,018) - ----------- ----------- ----------- ----------- ----------- --- - EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 641,906 423,869 176,047 738,460 88,544 - Transfers between funds ...................... 152,417 353,545 265,717 1,543,608 877,199 - Surrenders ................................... (25,095) (956) (137) (22,224) (650) - Death benefits ............................... (13,792) -- -- (1,499) -- - Policy loans (net of repayments) (note 5) .... 2,673 (6,273) (792) (7,517) (83) - Deductions for surrender charges (note 2d) ... (1,899) (151) (17) (1,682) (103) - Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (183,169) (78,727) (30,191) (115,928) (12,506) - Asset charges (note 3): FPVUL & VEL contracts ..................... (5,656) (3,151) (1,369) (2,912) (300) - MSP contracts ............................. (280) (105) (2) (89) (74) - SL contracts .............................. (310) (173) (2) (418) (2) - ----------- ----------- ----------- ----------- ----------- --- Net equity transactions ................. 566,795 687,878 409,254 2,129,799 952,025 - ----------- ----------- ----------- ----------- ----------- --- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 896,578 806,643 532,282 1,663,075 841,007 - CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 1,496,435 689,792 157,510 841,007 -- - ----------- ----------- ----------- ----------- ----------- --- CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 2,393,013 1,496,435 689,792 2,504,082 841,007 - =========== =========== =========== =========== =========== === CHANGES IN UNITS: Beginning units .............................. 146,421 75,186 21,992 96,842 -- - ----------- ----------- ----------- ----------- ----------- --- Units purchased .............................. 122,473 90,977 57,926 335,953 98,221 - Units redeemed ............................... (52,996) (19,742) (4,732) (24,125) (1,379) - ----------- ----------- ----------- ----------- ----------- --- Ending units ................................. 215,898 146,421 75,186 408,670 96,842 - =========== =========== =========== =========== =========== ===
UIFUSRE ------------------------------------------ 2001 2000 1999 ------------------------------------------ INVESTMENT ACTIVITY: Net investment income ........................ 529,601 263,091 53,245 Realized gain (loss) on investments .......... 300,313 298,595 (40,204) Change in unrealized gain (loss) on investments ............................ 250,079 155,839 (130,048) Reinvested capital gains ..................... 99,201 25,130 -- ---------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ 1,179,194 742,655 (117,007) ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 3,267,141 1,587,036 754,790 Transfers between funds ...................... 6,526,951 1,297,880 440,087 Surrenders ................................... (155,221) (14,855) (8,017) Death benefits ............................... (34,548) (503) (1,020) Policy loans (net of repayments) (note 5) .... (53,870) 8,244 (8,547) Deductions for surrender charges (note 2d) ... (11,745) (2,351) (1,027) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (631,660) (156,453) (188,335) Asset charges (note 3): FPVUL & VEL contracts ..................... (18,091) (7,652) (4,322) MSP contracts ............................. (1,627) (893) (107) SL contracts .............................. (1,966) (715) (227) ---------- ----------- ----------- Net equity transactions ................. 8,885,364 2,709,738 983,275 ---------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 10,064,558 3,452,393 866,268 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 5,035,778 1,583,385 717,117 ---------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... 15,100,336 5,035,778 1,583,385 ========== =========== =========== CHANGES IN UNITS: Beginning units .............................. 455,844 185,170 81,141 ---------- ----------- ----------- Units purchased .............................. 837,832 321,028 119,546 Units redeemed ............................... (83,108) (50,354) (15,517) ---------- ----------- ----------- Ending units ................................. 1,210,568 455,844 185,170 ========== =========== ===========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
VEWrldEMkt VEWrldHAs ------------------------------------------ --------------------------- 2001 2000 1999 2001 2000 ------------------------------------------ --------------------------- INVESTMENT ACTIVITY: Net investment income ........................ $ (2,447) (1,640) (139) 14,638 6,036 Realized gain (loss) on investments .......... (1,077,231) (408,538) 235,337 (58,287) 29,182 Change in unrealized gain (loss) on investments ............................ 1,090,597 (1,655,251) 663,413 (147,688) 20,687 Reinvested capital gains ..................... -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ 10,919 (2,065,429) 898,611 (191,337) 55,905 ----------- ----------- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 1,593,119 1,719,241 322,588 216,185 140,736 Transfers between funds ...................... 523,069 1,679,789 1,279,757 405,647 728,352 Surrenders ................................... (60,125) (45,027) (1,334) (25,157) (5,248) Death benefits ............................... (1,006) -- (1,149) (568) -- Policy loans (net of repayments) (note 5) .... (28,101) (19,011) (5,485) (6,129) 3,590 Deductions for surrender charges (note 2d) ... (4,549) (7,125) (171) (1,904) (831) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (430,840) (324,544) (90,731) (103,523) (48,413) Asset charges (note 3): FPVUL & VEL contracts ..................... (14,761) (13,663) (4,040) (3,648) (2,162) MSP contracts ............................. (969) (1,248) (151) (174) (343) SL contracts .............................. (1,581) (1,292) (184) (485) (135) ----------- ----------- ----------- ----------- ----------- Net equity transactions ................. 1,574,256 2,987,120 1,499,100 480,244 815,546 ----------- ----------- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 1,585,175 921,691 2,397,711 288,907 871,451 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 3,608,597 2,686,906 289,195 1,316,349 444,898 ----------- ----------- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 5,193,772 3,608,597 2,686,906 1,605,256 1,316,349 =========== =========== =========== =========== =========== CHANGES IN UNITS: Beginning units .............................. 466,520 204,110 43,904 141,512 53,265 ----------- ----------- ----------- ----------- ----------- Units purchased .............................. 319,865 316,404 171,741 65,555 106,332 Units redeemed ............................... (111,521) (53,994) (11,535) (16,400) (18,085) ----------- ----------- ----------- ----------- ----------- Ending units ................................. 674,864 466,520 204,110 190,667 141,512 =========== =========== =========== =========== ===========
VEWrldHAs ------------- 1999 ------------- INVESTMENT ACTIVITY: Net investment income ........................ 2,174 Realized gain (loss) on investments .......... 26,395 Change in unrealized gain (loss) on investments ............................ 22,444 Reinvested capital gains ..................... -- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........ 51,013 ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners ........................... 201,802 Transfers between funds ...................... 69,474 Surrenders ................................... (679) Death benefits ............................... -- Policy loans (net of repayments) (note 5) .... 216 Deductions for surrender charges (note 2d) ... (87) Redemptions to pay cost of insurance charges and administrative charges (notes 2b and 2c) ......................... (29,846) Asset charges (note 3): FPVUL & VEL contracts ..................... (1,079) MSP contracts ............................. (2) SL contracts .............................. (159) ----------- Net equity transactions ................. 239,640 ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 290,653 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .................................... 154,245 ----------- CONTRACT OWNERS' EQUITY END OF PERIOD .......... 444,898 =========== CHANGES IN UNITS: Beginning units .............................. 22,344 ----------- Units purchased .............................. 51,882 Units redeemed ............................... (20,961) ----------- Ending units ................................. 53,265 ===========
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001, 2000 AND 1999 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Organization and Nature of Operations The Nationwide VLI Separate Account-4 (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on December 3, 1997. The Account is registered as a unit investment trust under the Investment Company Act of 1940. On May 3, 1999, the Company (Depositor) transferred to the Account 100,000 shares of the Nationwide SAT - Small Cap Growth Fund for which the Account was credited with 100,000 units of the Nationwide SAT - Small Cap Growth Fund. The value of the units purchased by the Company on May 3, 1999 was $1,000,000. The Company offers Flexible Premium, Modified Single Premium, Variable Executive Life and Survivorship Life Variable Life Insurance Policies through the Account. (b) The Contracts Only contracts with 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 policy charges and note 3 for asset charges. Contract owners may invest in the following: Portfolios of the American Century Variable Portfolios, Inc. (American Century VP); American Century VP - American Century VP Income & Growth (ACVPIncGr) American Century VP - American Century VP International (ACVPInt) American Century VP - American Century VP Value (ACVPValue) Portfolios of the Credit Suisse Trust; Credit Suisse Trust - Global Post-Venture Capital Portfolio (CSWPGPV) Credit Suisse Trust - International Equity Portfolio (CSWPIntEq) Credit Suisse Trust - Large Cap Value Portfolio (CSWPVal) Dreyfus IP - European Equity Portfolio (DryEuroEq) The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro) Dreyfus Stock Index Fund (DryStkIx) Portfolio of the Dreyfus Variable Investment Fund (Dreyfus VIF); Dreyfus VIF - Appreciation Portfolio (DryAp) Federated Insurance Series (Federated IS) - Federated Quality Bond Fund II (FISFedQual) Portfolios of the Fidelity(R) Variable Insurance Products Fund (Fidelity(R) VIP); Fidelity(R) VIP - Equity-Income Portfolio: Service Class (FidVIPEIS) Fidelity(R) VIP - Growth Portfolio: Service Class (FidVIPGrS) Fidelity(R) VIP - High Income Portfolio: Service Class (FidVIPHIS) Fidelity(R) VIP - Overseas Portfolio: Service Class (FidVIPOvS) Portfolio of the Fidelity(R) Variable Insurance Products Fund II (Fidelity(R) VIP-II); Fidelity(R) VIP-II - Contrafund Portfolio:Service Class (FidVIPConS) (Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED Portfolio of the Fidelity(R) Variable Insurance Products Fund III (Fidelity(R) VIP-III); Fidelity(R) VIP-III - Growth Opportunities Portfolio: Service Class (FidVIPGrOpS) Portfolios of Janus Aspen Series (Janus AS); Janus AS - Capital Appreciation Portfolio - Service Shares (JanCapAp) Janus AS - Global Technology Portfolio - Service Shares (JanGlTech) Janus AS - International Growth Portfolio - Service Shares (JanIntGro) Funds of the Nationwide(R) Separate Account Trust (Nationwide SAT); Nationwide(R) SAT - Capital Appreciation Fund Class I (NSATCapAp) Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I (NSATMidCapIx) Nationwide(R) SAT - Federated Equity Income Fund Class I (NSATEqInc) Nationwide(R) SAT - Federated High Income Bond Fund Class I (NSATHIncBd) Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I (NSATEmMkt) Nationwide(R) SAT - Gartmore Global Technology & Communication Fund Class I (NSATGlobTC) Nationwide(R) SAT - Gartmore International Growth Fund Class I (NSATIntGr) Nationwide(R) SAT - Global 50 Fund Class I (NSATGlob50) Nationwide(R) SAT - Government Bond Fund Class I (NSATGvtBd) Nationwide(R) SAT - J.P. Morgan Balanced Fund Class I (NSATBal) Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I (NSATMSecBd) Nationwide(R) SAT - Money Market Fund Class I (NSATMyMkt) Nationwide(R) SAT - Small Cap Growth Fund Class I (NSATSmCapG) Nationwide(R) SAT - Small Cap Value Fund Class I (NSATSmCapV) Nationwide(R) SAT - Small Company Fund Class I (NSATSmCo) Nationwide(R) SAT - Strategic Value Fund Class I (NSATStrVal) Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I (NSATStMCap) Nationwide(R) SAT - Total Return Fund Class I (NSATTotRe) Nationwide(R) SAT - Turner Growth Focus Fund Class I (NSATGrFoc) Portfolios of the Neuberger Berman Advisers Management Trust (Neuberger Berman AMT); Neuberger Berman AMT - Guardian Portfolio (NBAMTGuard) Neuberger Berman AMT - Mid-Cap Growth Portfolio (NBAMTMCGr) Neuberger Berman AMT - Partners Portfolio (NBAMTPart) Funds of the Oppenheimer Variable Account Funds; Oppenheimer Aggressive Growth Fund/VA (OppAggGro) Oppenheimer Capital Appreciation Fund/VA (OppCapAp) Oppenheimer Global Securities Fund/VA (OppGlSec) Oppenheimer Main Street Growth & Income Fund/VA (OppMSGrInc) Strong Opportunity Fund II, Inc. (StOpp2) Portfolios of The Universal Institutional Funds, Inc. (UIF); UIF - Emerging Markets Debt Portfolio (UIFEmMkt) (formerly Morgan Stanley - Emerging Markets Debt Portfolio) UIF - Mid Cap Growth Portfolio (UIFMidCapG) (formerly Morgan Stanley - Mid Cap Growth Portfolio) UIF - U.S. Real Estate Portfolio (UIFUSRE) (formerly Van Kampen Morgan Stanley - U.S. Real Estate Portfolio) Funds of the Van Eck Worldwide Insurance Trust (Van Eck WIT); Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt) Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs) At December 31, 2001, contract owners have invested in all of the above funds. The contract owners' equity is affected by the investment results of each fund, equity transactions by contract owners and certain contract expenses (see notes 2 and 3). The accompanying financial statements include only contract owners' purchase payments pertaining to the variable portions of their contracts and exclude any purchasepaymentsfor fixed dollar benefits, the latter being included in the accounts of the Company. A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans. Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially. (c) Security Valuation, Transactions and Related Investment Income The fair value of the underlying mutual funds is based on the closing net asset value per share at December 31, 2001. The cost of investments sold is determined on the specific identification basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date. (d) Federal Income Taxes Operations of the Account form a part of, and are taxed with, operations of the Company which is taxed as a life insurance company under the Internal Revenue Code. The Company does not provide for income taxes within the Account. Taxes are the responsibility of the contract owner upon termination or withdrawal. (e) Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (2) POLICY CHARGES (a) Deductions from Premium On flexible premium, modified single premium and survivorship life variable life insurance contracts, the Company deducts a charge for state premium taxes not to exceed 2.5% of all premiums received to cover the payment of these premium taxes. Additionally, the Company deducts a front-end sales load of up to 3.5% from each premium payment received. The Company may at its sole discretion reduce this sales loading. (b) Cost of Insurance A cost of insurance charge is assessed monthly against each contract. The amount of the charge is based upon age, sex, rate class and net amount at risk (death benefit less total contract value). This charge is assessed against each contract by liquidating units. (Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED (c) Administrative Charges For flexible premium, modified single premium and survivorship life variable life insurance contracts, the Company currently deducts a monthly administrative charge of $10 during the first policy year to recover policy maintenance, accounting, record keeping and other administrative expenses. For all subsequent years, a monthly administrative charge is deducted (currently $5 per month not to exceed $7.50). This charge is assessed against each contract by liquidating units. (d) Surrender Charges Policy surrenders result in a redemption of the contract value from the Account and payment of the surrender proceeds to the contract owner or designee. The surrender proceeds consist of the contract value, less any outstanding policy loans, and less a surrender charge, if applicable. The amount of the charge is based upon a specified percentage of the initial surrender charge which varies by issue age, sex and rate class. For flexible premium and modified single premium life contracts, the charge is 100% of the initial surrender charge in the first year, declining to 30% of the initial surrender charge in the eighth year. For survivorship life contracts, the charge is 100% of the initial surrender charge in the first year, declining to 0% in tenth year. No surrender charge is assessed on any contract surrendered after the eighth year. The Company may waive the surrender charge for certain contracts in which the sales expenses normally associated with the distribution of a contract are not incurred. No charges were deducted from the initial funding by the Depositor, or from earnings thereon. (3) ASSET CHARGES For flexible premium variable universal life (FPVUL) and variable executive life (VEL) contracts, the Company deducts a charge equal to an annual effective rate multiplied by the Cash Value attributable to the Variable Account. The annual effective rate is 0.60% for the first $25,000 of Cash Value attributable to the Variable Account, 0.30% for the next $225,000 of Cash Value attributable to the Variable Account and 0.10% for all Cash Value attributable to the Variable Account in excess of $250,000. This charge is assessed monthly against each contract by liquidating units. For modified single premium contracts (MSP), the Company deducts an annual rate of .70% charged against the cash value of the contracts. This charge is assessed monthly against each contract by liquidating units. For surivorship life contracts (SL), the Company deducts an annual rate of .55% in policy years one through ten. In policy years eleven and greater, the Company deducts an annual rate of .55% if the cash value of the contract is less than $25,000. If the cash value is greater than $25,000 but less than $100,000, the Company reduces the annual rate to .35%. If the cash value is greater than $100,000, the company reduces the annual rate to .20%. This charge is assessed monthly against each contract by liquidating units. For Corporate Variable Universal Life Series, the Company deducts on a daily basis from the assets of the Variable Account, a charge to provide for mortality and expense risks. This charge is guaranteed not to exceed an annual effective rate of 0.75% of the daily net assets of the Variable Account. Currently, this rate is 0.40% during the first through fourth Policy Years, 0.25% during the fifth through twentieth policy years, and 0.10% thereafter. This charge is assessed through the daily unit value calculation. Nationwide may reduce or eliminate certain charges where the size or nature of the group results in savings in sales, underwriting, administrative or other costs to Nationwide. These charges may be reduced in certain group sponsored arrangements or special exchange programs made available by Nationwide. (4) DEATH BENEFITS Death benefit proceeds result in a redemption of the contract value from the Account and payment of those proceeds, less any outstanding policy loans (and policy charges), to the legal beneficiary. For last survivor flexible premium contracts, the proceeds are payable on the death of the last surviving insured. In the event that the guaranteed death benefit exceeds the contract value on the date of death, the excess is paid by the Company's general account. (5) POLICY LOANS (NET OF REPAYMENTS) Contract provisions allow contract owners to borrow 90% of a policy's cash surrender value. Interest is charged on the outstanding loan and is due and payable in advance on the policy anniversary. At the time the loan is granted, the amount of the loan is transferred from the Account to the Company's general account as collateral for the outstanding loan. Collateral amounts in the general account are credited with the stated rate of interest in effect at the time the loan is made, subject to a guaranteed minimum rate. Interest credited is paid by the Company's general account to the Account. Loan repayments result in a transfer of collateral including interest back to the Account. (6) 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, share- holder communications, preparation, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company. (Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED (7) FINANCIAL HIGHLIGHTS The following is a summary of units, unit fair values and contract owners' equity outstanding for variable life and annuity contracts as of the end of the period indicated, and the contract expense rates and total return for each year in the three year period ended December 31, 2001 and the period February 18, 1998 (commencement of operations) through December 31, 1998.
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- The BEST of AMERICA(R) America's FUTURE Life Series(SM): American Century VP - American Century VP Income & Growth 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,161,596 $ 12.265301 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 804,658 13.383115 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 463,779 14.972547 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 97,382 12.686493 American Century VP - American Century VP International 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,473,365 11.476396 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,252,780 16.203538 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 625,339 19.481449 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 206,063 11.875895 American Century VP - American Century VP Value 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,382,368 13.851627 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 380,941 12.277397 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 169,333 10.392110 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 59,424 10.481205 Credit Suisse Trust - Global Post-Venture Capital Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 67,655 10.074042 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 69,236 14.116099 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 46,879 17.414110 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 16,634 10.651002 Credit Suisse Trust - International Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 166,542 9.309878 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 161,421 11.977804 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 138,513 16.163464 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 56,767 10.534701 Credit Suisse Trust - Large Cap Value Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 118,843 13.096944 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 93,621 12.974256 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 60,100 11.912913 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 49,891 11.212895 Dreyfus IP - European Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 103,773 9.107778 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 70,183 12.672265 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 10,415 12.930654 The Dreyfus Socially Responsible Growth Fund, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,235,879 11.592909 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 953,352 14.972899 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 480,241 16.829763 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 105,696 12.938078
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- --------- The BEST of AMERICA(R) America's FUTURE Life Series(SM): American Century VP - American Century VP Income & Growth 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,247,325 -8.35% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,768,831 -10.62% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,943,953 18.02% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,235,436 26.86% American Century VP - American Century VP International 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,908,920 -29.17% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,299,468 -16.83% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,182,510 64.04% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,447,183 18.76% American Century VP - American Century VP Value 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,148,046 12.82% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,676,964 18.14% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,759,727 -0.85% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622,835 4.81% Credit Suisse Trust - Global Post-Venture Capital Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681,559 -28.63% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 977,342 8.91% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816,356 63.50% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,169 6.51% Credit Suisse Trust - International Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,550,486 -22.27% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,933,469 -25.90% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,238,850 53.43% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 598,023 5.35% Credit Suisse Trust - Large Cap Value Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,556,480 0.95% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,214,663 -18.94% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715,966 6.24% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559,423 12.13% Dreyfus IP - European Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945,141 -28.13% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 889,378 -2.00% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,673 29.31% 9/27/99 The Dreyfus Socially Responsible Growth Fund, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,327,433 -22.57% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,274,443 -11.03% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,082,342 30.08% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,367,503 29.38%
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Dreyfus Stock Index Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 8,587,826 12.319059 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 6,631,938 14.027609 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 3,757,311 15.462782 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,025,141 12.821142 Dreyfus VIF - Appreciation Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 978,777 13.076512 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 721,134 14.418721 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 505,299 14.513370 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 110,355 13.021619 Federated IS - Federated Quality Bond Fund II 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,119,384 11.773915 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 184,168 10.900349 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 3,972 9.869090 Fidelity(R) VIP - Equity-Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,522,098 12.182836 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,731,014 12.835974 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,196,502 11.851816 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 511,915 11.154137 Fidelity(R) VIP - Growth Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 3,993,015 14.000586 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 3,245,205 17.016859 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,564,447 19.134456 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 255,829 13.937692 Fidelity(R) VIP - High Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,007,961 7.042763 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 775,357 7.993621 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 664,736 10.329299 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 368,689 9.557602 Fidelity(R) VIP - Overseas Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 903,417 10.213884 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 709,131 12.973519 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 392,522 16.046561 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 92,817 11.263759 Fidelity(R) VIP II - Contrafund Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,969,205 13.187991 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,414,828 15.048072 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,324,909 16.131283 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 362,774 12.993755 Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,134,917 9.192068 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 959,519 10.743116 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 673,044 12.971233 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 193,229 12.450522 Janus AS - Capital Appreciation Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 3,009,852 6.438372 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,083,464 8.236248
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- -------- Dreyfus Stock Index Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,793,935 -12.18% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,030,233 -9.28% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,098,481 20.60% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,143,478 28.21% Dreyfus VIF - Appreciation Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,798,989 -9.31% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,397,830 -6.50% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,333,591 11.46% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,437,001 30.22% Federated IS - Federated Quality Bond Fund II 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,179,532 8.01% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,007,495 10.45% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,200 -1.31% 5/3/99 Fidelity(R) VIP - Equity-Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,726,306 -5.09% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,219,251 8.30% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,180,722 6.25% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,709,970 11.54% Fidelity(R) VIP - Growth Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,904,550 -17.73% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,223,196 -11.07% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,934,842 37.29% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,565,666 39.38% Fidelity(R) VIP - High Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,098,830 -11.90% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,197,910 -22.61% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,866,257 8.07% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,523,783 -4.42% Fidelity(R) VIP - Overseas Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,227,396 -21.27% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,199,925 -19.15% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,298,628 42.46% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,045,468 12.64% Fidelity(R) VIP II - Contrafund Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,157,849 -12.36% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,338,506 -6.71% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,372,482 24.15% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,713,796 29.94% Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,432,234 -14.44% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,308,224 -17.18% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,730,211 4.18% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,405,802 24.51% Janus AS - Capital Appreciation Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,378,547 -21.83% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,159,926 -17.64% 1/27/00
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Janus AS - Global Technology Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,757,839 4.126190 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,878,974 6.582411 Janus AS - International Growth Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,646,977 6.335104 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,639,208 8.273482 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,791,588 7.155414 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,582,653 9.956531 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,343,877 13.552350 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 485,064 12.996420 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 707,320 15.235372 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 312,214 15.436663 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 61,224 13.399089 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 26,958 11.080816 Nationwide(R) SAT - Federated Equity Income Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 208,187 10.711409 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 150,717 12.193117 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 66,677 13.642236 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 21,000 11.513398 Nationwide(R) SAT - Federated High Income Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 335,319 10.435872 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 167,390 10.013612 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 130,767 10.917180 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 79,031 10.579676 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 118,171 8.260926 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,391 8.712299 Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 287,368 3.446837 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 91,498 6.017639 Nationwide(R) SAT - Gartmore International Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 26,572 6.599732 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,697 9.249730 Nationwide(R) SAT - Global 50 Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,687,489 10.425406 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,172,113 12.840541 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 595,841 14.645021 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 41,464 11.913908 Nationwide(R) SAT - Government Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,748,673 12.836894 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 796,198 11.968657 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 509,816 10.635188 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 166,631 10.890820
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- --------- Janus AS - Global Technology Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,379,368 -37.31% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,368,179 -34.18% 1/27/00 Janus AS - International Growth Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,768,875 -23.43% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,561,958 -17.27% 1/27/00 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,819,554 -28.13% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,757,734 -26.53% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,212,691 4.28% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,304,095 29.96% Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,776,283 -1.30% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,819,542 15.21% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 820,346 20.92% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298,717 10.81% Nationwide(R) SAT - Federated Equity Income Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,229,976 -12.15% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,837,710 -10.62% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 909,623 18.49% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241,781 15.13% Nationwide(R) SAT - Federated High Income Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,499,346 4.22% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,676,179 -8.28% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,427,607 3.19% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 836,122 5.80% Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 976,202 -5.18% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,831 -12.88% 10/2/00 Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 990,511 -42.72% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550,602 -39.82% 10/2/00 Nationwide(R) SAT - Gartmore International Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,368 -28.65% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,947 -7.5% 10/2/00 Nationwide(R) SAT - Global 50 Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,592,758 -18.81% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,050,565 -12.32% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,726,104 22.92% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493,998 19.14% Nationwide(R) SAT - Government Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,447,530 7.25% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,529,421 12.54% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,421,989 -2.35% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,814,748 8.91%
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Nationwide(R) SAT - J.P.Morgan Balanced Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 730,655 10.463220 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 382,020 10.862308 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 224,583 10.900657 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 67,360 10.806799 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,505,377 11.469927 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,105,931 11.008804 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 590,762 10.419701 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 74,773 10.260092 Nationwide(R) SAT - Money Market Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 11,115,360 12.124461 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 6,735,623 11.702768 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 4,602,015 11.037591 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,000,515 10.527225 Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 479,685 15.323736 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 220,651 17.186287 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 32,108 20.501257 Nationwide(R) SAT - Small Cap Growth Fund Class I - Intial Funding By Depositor 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 100,000 17.186295 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 100,000 20.501257 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,567,879 17.676405 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 731,305 13.779795 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 345,575 12.391945 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 106,497 9.693575 Nationwide(R) SAT - Small Company Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,244,437 14.779740 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 922,404 15.841678 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 393,286 14.547287 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 159,205 10.100944 Nationwide(R) SAT - Strategic Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 124,500 10.130359 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 114,604 10.471261 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 96,106 9.730781 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 34,463 10.038994 Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 781,507 12.485925 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 569,923 17.915535 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 211,257 21.171385 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 36,919 11.459357 Nationwide(R) SAT - Total Return Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 3,002,565 10.898647 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,459,963 12.359389 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,852,310 12.627200 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 702,365 11.807411
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- --------- Nationwide(R) SAT - J.P.Morgan Balanced Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,645,004 -3.67% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,149,619 -0.35% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,448,102 0.87% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727,946 8.07% Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,266,564 4.19% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,174,978 5.65% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,155,563 1.56% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767,178 2.60% Nationwide(R) SAT - Money Market Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,767,749 3.60% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,825,433 6.03% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,795,159 4.85% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,059,872 5.27% Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,350,566 -10.84% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,792,171 -16.17% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 658,254 105.01% 5/3/99 Nationwide(R) SAT - Small Cap Growth Fund Class I - Intial Funding By Depositor 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,718,630 -16.17% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,050,126 157.84% 5/3/99 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,714,464 28.28% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,077,233 11.20% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,282,346 27.84% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,032,337 -3.06% Nationwide(R) SAT - Small Company Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,392,455 -6.70% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,612,427 8.90% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,721,244 44.02% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,608,121 1.01% Nationwide(R) SAT - Strategic Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,261,230 -3.26% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,048 7.61% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935,186 -3.07% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345,974 0.39% Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,757,838 -30.31% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,210,475 -15.38% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,472,603 84.75% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423,068 14.59% Nationwide(R) SAT - Total Return Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,723,896 -11.82% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,403,640 -2.12% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,389,489 6.94% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,293,112 18.07%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Nationwide(R) SAT - Turner Growth Focus Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 105,096 3.868223 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 12,379 6.344311 Neuberger Berman AMT - Guardian Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 527,509 15.073287 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 253,627 15.303939 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 177,738 15.132896 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 55,695 13.166703 Neuberger Berman AMT - Mid-Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,320,243 14.947072 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 903,690 19.835316 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 280,847 21.434231 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 85,802 13.928381 Neuberger Berman AMT - Partners Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 811,919 10.948898 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 648,616 11.267369 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 582,704 11.188893 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 375,069 10.420882 Oppenheimer Aggressive Growth Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,900,037 12.586003 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,531,755 18.311377 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 431,151 20.629873 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 100,709 11.236019 Oppenheimer Capital Appreciation Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 2,119,767 15.320868 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,394,931 17.524709 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 618,285 17.565274 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 164,300 12.399968 Oppenheimer Global Securities Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 784,596 8.442846 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 228,958 9.598100 Oppenheimer Main Street Growth & Income Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,858,823 10.443747 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 1,325,991 11.624742 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 460,733 12.743006 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 139,668 10.470163 Strong Opportunity Fund II, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 833,759 9.511087 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 156,475 9.854316 UIF - Emerging Markets Debt Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 135,438 11.363553 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 116,206 10.321107 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 62,633 9.266040 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 21,992 7.162164
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Nationwide(R) SAT - Turner Growth Focus Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406,535 -39.03% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,536 -36.56% 10/2/00 Neuberger Berman AMT - Guardian Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,951,295 -1.51% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,881,492 1.13% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,689,691 14.93% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733,320 31.67% Neuberger Berman AMT - Mid-Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,733,767 -24.64% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,924,977 -7.46% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,019,739 53.89% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,195,083 39.28% Neuberger Berman AMT - Partners Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,889,618 -2.83% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,308,196 0.70% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,519,813 7.37% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,908,550 4.21% Oppenheimer Aggressive Growth Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,913,871 -31.27% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,048,543 -11.24% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,894,590 83.60% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,131,568 12.36% Oppenheimer Capital Appreciation Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,476,670 -12.58% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,445,760 -0.23% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,860,345 41.66% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,037,315 24.00% Oppenheimer Global Securities Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,624,223 -12.04% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,197,562 -4.02% 5/1/00 Oppenheimer Main Street Growth & Income Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,413,077 -10.16% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,414,303 -8.78% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,871,123 21.71% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,462,347 4.70% Strong Opportunity Fund II, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,929,954 -3.70% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,541,954 -1.23% 5/1/00 UIF - Emerging Markets Debt Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,539,057 10.10% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,199,375 11.39% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580,360 29.37% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,510 -28.38%
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- UIF - Mid Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 197,987 6.142256 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 38,928 8.689212 UIF - U.S.Real Estate Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 636,426 12.012213 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 320,762 10.935907 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 146,473 8.539870 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 81,141 8.837916 Van Eck WIT - Worldwide Emerging Markets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 527,543 7.530636 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 408,641 7.669407 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 194,066 13.192491 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 43,904 6.586990 Van Eck WIT - Worldwide Hard Assets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 171,698 8.333503 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 138,471 9.305371 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 53,013 8.353043 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00% 22,344 6.903203 The BEST of AMERICA(R) Corporate Variable Universal Life Series(SM): Reduced Fee Tier: American Century VP - American Century VP Income & Growth 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 559,907 9.417116 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 540,359 10.285709 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 55,124 11.518727 American Century VP - American Century VP International 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,067,581 9.402604 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 619,313 13.288939 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 218 15.993145 American Century VP - American Century VP Value 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 350,055 13.683342 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 124,532 12.140456 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 946 10.286399 Credit Suisse Trust - Large Cap Value Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 25,873 11.709370 Dreyfus IP - European Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 40,585 9.087189 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 36,592 12.656379 The Dreyfus Socially Responsible Growth Fund, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 112,446 8.428546 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 42,696 10.896922 Dreyfus Stock Index Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 2,163,531 9.086757 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 4,975,884 10.357445 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,242,820 11.428481
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- -------- UIF - Mid Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,216,087 -29.31% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,254 -13.11% 5/1/00 UIF - U.S.Real Estate Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,644,885 9.84% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,507,823 4.31% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250,860 -3.37% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717,117 -11.62% Van Eck WIT - Worldwide Emerging Markets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,972,734 -1.81% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,134,034 -41.87% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,560,214 100.28% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289,195 -34.13% Van Eck WIT - Worldwide Hard Assets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,430,846 -10.44% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,288,524 11.40% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442,820 21.00% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,245 -30.97% The BEST of AMERICA(R) Corporate Variable Universal Life Series(SM): Reduced Fee Tier: American Century VP - American Century VP Income & Growth 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,272,709 -8.44% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,557,975 -10.70% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634,958 15.19% 4/1/99 American Century VP - American Century VP International 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,038,041 -29.24% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,230,013 -16.91% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,487 59.93% 4/1/99 American Century VP - American Century VP Value 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,789,922 12.71% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,511,875 18.02% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,731 2.86% 4/1/99 Credit Suisse Trust - Large Cap Value Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302,957 0.84% Dreyfus IP - European Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368,804 -28.20% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463,122 -2.10% The Dreyfus Socially Responsible Growth Fund, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 947,756 -22.65% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465,255 -11.12% Dreyfus Stock Index Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,659,480 -12.27% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,537,445 -9.37% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,203,545 14.28% 4/1/99
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS,CONTINUED
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Dreyfus VIF - Appreciation Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 285,642 9.645425 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 498,451 10.646157 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 117,874 10.726699 Federated IS - Federated Quality Bond Fund II 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,268,418 11.742610 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 4,027,297 10.882300 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,129,926 9.862542 Fidelity(R) VIP - Equity-Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 358,181 10.658123 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 215,028 11.240819 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 59,030 10.389282 Fidelity(R) VIP - Growth Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,700,271 9.164946 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,184,884 11.150661 Fidelity(R) VIP - High Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 630,396 6.998020 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 591,491 7.950841 Fidelity(R) VIP - Overseas Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 108,597 8.751211 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 171,286 11.126859 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 490 13.776193 Fidelity(R) VIP II - Contrafund Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 215,109 9.555012 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 209,278 10.913660 Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 43,809 7.460705 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 3,187 8.728402 Janus AS - Capital Appreciation Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 242,326 6.425959 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 75,935 8.228654 Janus AS - Global Technology Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 422,625 4.118218 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 157,837 6.576328 Janus AS - International Growth Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 498,186 6.322889 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 230,451 8.265856 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 242,722 5.437881 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 587,392 7.574275 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 234,561 10.320007 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 170,502 13.923857 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 97,058 14.122042
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Dreyfus VIF - Appreciation Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,755,138 -9.40% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,306,588 -2.10% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,264,399 7.27% 4/1/99 Federated IS - Federated Quality Bond Fund II 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,894,538 7.91% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,826,254 10.34% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,143,943 -1.37% 5/3/99 Fidelity(R) VIP - Equity-Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,817,537 -5.18% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,417,091 8.20% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613,279 3.89% 4/1/99 Fidelity(R) VIP - Growth Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,582,892 -17.81% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,212,240 -11.16% Fidelity(R) VIP - High Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,411,524 -11.98% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,702,851 -22.69% Fidelity(R) VIP - Overseas Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950,355 -21.35% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,905,875 -19.23% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,750 37.76% 4/1/99 Fidelity(R) VIP II - Contrafund Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,055,369 -12.45% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,283,989 -6.81% Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326,846 -14.52% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,817 -17.26% Janus AS - Capital Appreciation Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,557,177 -21.91% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624,843 -17.71% 1/27/00 Janus AS - Global Technology Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,740,462 -37.38% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,037,988 -34.24% 1/27/00 Janus AS - International Growth Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,149,975 -23.51% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,904,875 -17.34% 1/27/00 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,319,893 -28.21% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,449,069 -26.61% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,420,671 3.2% 4/1/99 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,374,045 -1.40% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,370,657 15.09%
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Nationwide(R) SAT - Federated Equity Income Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 205,053 9.022847 Nationwide(R) SAT - Federated High Income Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 226,888 9.494719 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,268,447 9.119705 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 594,118 9.952512 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 4,374 8.250608 Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 26,875 3.442527 Nationwide(R) SAT - Gartmore International Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 6,321 6.591491 Nationwide(R) SAT - Global 50 Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 33,960 8.454886 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 141,948 10.424035 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 52,708 11.900760 Nationwide(R) SAT - Government Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,008,673 11.914756 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 304,223 11.120055 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 59,316 9.890955 Nationwide(R) SAT - J.P.Morgan Balanced Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 113,898 9.561159 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 148,185 9.935839 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 59,518 9.980828 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 246,281 11.171361 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 271,955 10.733031 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 232,330 10.168791 Nationwide(R) SAT - Money Market Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 14,433,921 11.355131 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 8,179,266 10.971228 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 4,669,469 10.357933 Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 38,878 15.282975 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 29,192 17.157856 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 270,154 19.095903 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 222,101 14.901350 Nationwide(R) SAT - Small Company Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 358,315 15.023475 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,331,219 16.119172 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 434,818 14.816849 Nationwide(R) SAT - Strategic Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 43,765 10.289042 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 505 10.645991
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Nationwide(R) SAT - Federated Equity Income Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,850,162 -12.24% Nationwide(R) SAT - Federated High Income Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,154,238 4.11% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,567,862 -8.37% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,912,967 -0.47% 4/1/99 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,088 -5.28% Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,518 -42.78% Nationwide(R) SAT - Gartmore International Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,665 -28.72% Nationwide(R) SAT - Global 50 Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287,128 -18.89% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,479,671 -12.41% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627,265 19.01% 4/1/99 Nationwide(R) SAT - Government Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,018,093 7.15% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,382,976 12.43% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 586,692 -1.09% 4/1/99 Nationwide(R) SAT - J.P.Morgan Balanced Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,088,997 -3.77% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,472,342 -0.45% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 594,039 -0.19% 4/1/99 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,751,294 4.08% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,918,901 5.55% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,362,515 1.69% 4/1/99 Nationwide(R) SAT - Money Market Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163,899,064 3.50% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,736,592 5.92% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,366,047 3.58% 3/31/99 Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 594,172 -10.93% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,872 -16.25% Nationwide(R) SAT - Small Cap Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,158,835 28.15% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,309,605 11.09% Nationwide(R) SAT - Small Company Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,383,136 -6.80% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,458,148 8.79% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,442,633 48.17% 4/1/99 Nationwide(R) SAT - Strategic Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450,300 -3.35% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,376 7.50%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 481,759 9.682440 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 499,194 13.906958 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 240,293 16.450708 Nationwide(R) SAT - Total Return Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 9,361,607 9.026234 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 43,448 10.246333 Nationwide(R) SAT - Turner Growth Focus Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 10,063 3.863379 Neuberger Berman AMT - Guardian Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 136,520 10.895640 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 57,098 11.073505 Neuberger Berman AMT - Mid-Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 570,922 10.944879 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 391,150 14.538915 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 44,838 15.726546 Neuberger Berman AMT - Partners Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 14,582 10.243656 Oppenheimer Aggressive Growth Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,417,226 10.110661 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 827,728 14.724854 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 850 16.605768 Oppenheimer Capital Appreciation Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 997,036 11.517595 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 533,112 13.187632 Oppenheimer Global Securities Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 235,861 8.428773 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 145,609 9.591764 Oppenheimer Main Street Growth & Income Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 200,772 9.595068 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 209,160 10.690852 Strong Opportunity Fund II, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 282,804 9.495237 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 285,161 9.847803 UIF - Emerging Markets Debt Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 147 14.803302 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 1,276 13.458822 UIF - Mid Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 83,050 6.132002 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 49,713 8.683462 UIF - U.S. Real Estate Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 255,847 14.222851 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 23,692 12.961511
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,664,603 -30.38% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,942,270 -15.46% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,952,990 64.51% 4/1/99 Nationwide(R) SAT - Total Return Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,500,055 -11.91% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445,183 -2.22% Nationwide(R) SAT - Turner Growth Focus Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,877 -39.09% Neuberger Berman AMT - Guardian Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,487,473 -1.61% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 632,275 1.03% Neuberger Berman AMT - Mid-Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,248,672 -24.72% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,686,897 -7.55% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705,147 57.27% 4/1/99 Neuberger Berman AMT - Partners Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,373 -2.92% Oppenheimer Aggressive Growth Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,329,092 -31.34% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,188,174 -11.33% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,115 66.06% 4/1/99 Oppenheimer Capital Appreciation Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,483,457 -12.66% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,030,485 -0.33% Oppenheimer Global Securities Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,988,019 -12.12% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,396,647 -4.08% 5/1/00 Oppenheimer Main Street Growth & Income Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,926,421 -10.25% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,236,099 -8.87% Strong Opportunity Fund II, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,685,291 -3.80% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,808,209 -1.3% 5/1/00 UIF - Emerging Markets Debt Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,176 9.99% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,173 11.28% UIF - Mid Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509,263 -29.38% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431,681 -13.17% 5/1/00 UIF - U.S. Real Estate Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,638,874 9.73% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307,084 4.28% 9/21/00
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Van Eck WIT - Worldwide Emerging Markets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 53,871 10.275468 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 16,342 10.475365 Van Eck WIT - Worldwide Hard Assets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 5,578 11.674866 The BEST of AMERICA(R) Corporate Variable Universal Life Series(SM): American Century VP - American Century VP Income & Growth 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,861,201 10.404509 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 763,555 11.398555 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 355,846 12.803106 American Century VP - American Century VP International 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,918,932 9.326990 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,191,245 13.221985 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 204,837 15.960157 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 3,234 9.768200 American Century VP - American Century VP Value 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 428,754 12.241061 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 111,911 10.893612 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 23,107 9.257533 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 440 9.374321 Credit Suisse Trust - Global Post-Venture Capital Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 25,001 8.471776 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 106,896 11.411760 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 4,981 14.762349 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 985 9.065227 Credit Suisse Trust - International Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 39,874 7.767318 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 48,933 10.033586 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 3,445 13.593893 Credit Suisse Trust - Large Cap Value Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 140,668 11.473418 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 10,994 11.918959 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 42,745 10.519954 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 16,145 9.941469 Dreyfus IP - European Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 30,039 9.025727 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 8,448 12.608842 The Dreyfus Socially Responsible Growth Fund, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 556,416 9.867078 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 136,511 12.795380 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 28,931 14.439525 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 397 11.144998
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Van Eck WIT - Worldwide Emerging Markets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553,550 -1.91% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171,188 -41.92% Van Eck WIT - Worldwide Hard Assets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,122 -10.53% The BEST of AMERICA(R) Corporate Variable Universal Life Series(SM): American Century VP - American Century VP Income & Growth 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,364,883 -8.72% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,703,424 -10.97% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,555,934 17.55% American Century VP - American Century VP International 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,897,860 -29.46% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,750,624 -17.16% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,269,231 63.39% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,590 -2.32% 5/1/98 American Century VP - American Century VP Value 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,248,404 12.37% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,219,115 17.67% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213,914 -1.25% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,125 -6.26% 5/1/98 Credit Suisse Trust - Global Post-Venture Capital Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211,803 -28.92% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,219,871 -19.26% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,531 62.85% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,929 -9.35% 5/1/98 Credit Suisse Trust - International Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309,714 -22.59% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490,973 -26.19% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,831 52.82% Credit Suisse Trust - Large Cap Value Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,613,943 0.54% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,037 8.48% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449,675 5.82% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,505 -0.59% 5/1/98 Dreyfus IP - European Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271,124 -28.42% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,519 -2.39% The Dreyfus Socially Responsible Growth Fund, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,490,200 -22.89% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,746,710 -11.39% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417,750 29.56% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,425 11.45% 5/1/98
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Dreyfus Stock Index Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 10,538,036 10.471621 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 7,299,831 11.972080 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 3,707,136 13.249543 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 111,613 11.030001 Dreyfus VIF - Appreciation Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,760,221 10.939900 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,368,457 12.111451 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 843,808 12.239522 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 10,106 11.025485 Federated IS - Federated Quality Bond Fund II 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,654,009 11.649181 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 607,272 10.828312 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 18 9.842943 Fidelity(R) VIP - Equity-Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,857,873 10.691577 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 351,542 11.310203 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 118,952 10.484615 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 5,995 9.906965 Fidelity(R) VIP - Growth Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,428,287 11.958538 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,131,137 14.593603 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 758,262 16.475102 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 185 12.048634 Fidelity(R) VIP - High Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 638,130 6.555148 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 441,041 7.470194 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 230,895 9.691447 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 77 9.003329 Fidelity(R) VIP - Overseas Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,216,927 8.518959 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,216,616 10.864367 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 504,007 13.491426 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 3,076 9.508092 Fidelity(R) VIP II - Contrafund Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,079,652 11.370566 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 671,658 13.026647 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 230,228 14.020034 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,712 11.338370 Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 504,352 8.204875 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 397,095 9.628054 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 125,424 11.671298 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,228 11.247664
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Dreyfus Stock Index Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,350,319 -12.53% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,394,161 -9.64% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,117,858 20.12% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,231,092 10.3% 5/1/98 Dreyfus VIF - Appreciation Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,256,642 -9.67% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,574,000 -1.05% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,327,807 11.01% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,424 10.25% 5/1/98 Federated IS - Federated Quality Bond Fund II 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,267,850 7.58% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,575,731 10.01% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 -1.57% 5/3/99 Fidelity(R) VIP - Equity-Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,863,592 -5.47% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,976,011 7.87% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,247,166 5.83% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,392 -0.93% 5/1/98 Fidelity(R) VIP - Growth Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,038,762 -18.06% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,100,967 -11.42% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,492,444 36.74% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,229 20.49% 5/1/98 Fidelity(R) VIP - High Income Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,183,037 -12.25% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,294,662 -22.92% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,237,707 7.64% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693 -9.97% 5/1/98 Fidelity(R) VIP - Overseas Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,366,951 -21.59% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,217,763 -19.47% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,799,773 41.89% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,247 -4.92% 5/1/98 Fidelity(R) VIP II - Contrafund Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,276,254 -12.71% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,749,452 -7.09% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,227,804 23.65% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,750 13.38% 5/1/98 Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,138,145 -14.78% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,823,252 -17.51% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,463,861 3.77% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,812 12.48% 5/1/98
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Janus AS - Capital Appreciation Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,517,392 6.388873 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 535,891 8.205940 Janus AS - Global Technology Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 677,164 4.094407 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 343,351 6.558143 Janus AS - International Growth Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,212,967 6.286392 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 383,403 8.243024 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 192,191 6.087822 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 178,360 8.505270 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 65,598 11.623180 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 847 11.191056 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 321,337 13.342471 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 38,007 13.573326 Nationwide(R) SAT - Federated Equity Income Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 115,152 9.726929 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 29,855 11.117142 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 965 12.487973 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 211 10.581467 Nationwide(R) SAT - Federated High Income Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 410,468 9.794650 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 224,564 9.436226 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 80,137 10.328712 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 13,423 10.049520 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,423 8.219735 Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 29,402 3.429593 Nationwide(R) SAT - Gartmore International Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 10,028 6.566849 Nationwide(R) SAT - Global 50 Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,549,764 8.970354 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 942,496 11.093053 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 468,148 12.702408 Nationwide(R) SAT - Government Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 6,811,337 12.419760 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 3,170,399 11.626380 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,312,872 10.372218 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 270,361 10.664112
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Janus AS - Capital Appreciation Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,694,425 -22.14% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,397,489 -17.94% 1/27/00 Janus AS - Global Technology Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,772,585 -37.57% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,251,745 -34.42% 1/27/00 Janus AS - International Growth Portfolio - Service Shares 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,911,578 -23.74% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,160,400 -17.57% 1/27/00 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,170,025 -28.42% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,517,000 -26.82% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 762,457 3.86% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,479 11.91% 5/1/98 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,287,430 -1.70% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515,881 14.75% Nationwide(R) SAT - Federated Equity Income Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,120,075 -12.51% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331,902 -10.98% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,051 18.02% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,233 5.81% 5/1/98 Nationwide(R) SAT - Federated High Income Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,020,390 3.80% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,119,037 -8.64% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827,712 2.78% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,895 0.5% 5/1/98 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,916 -5.56% Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,837 -42.95% Nationwide(R) SAT - Gartmore International Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,852 -28.94% Nationwide(R) SAT - Global 50 Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,901,932 -19.14% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,455,158 -12.67% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,946,607 22.43% Nationwide(R) SAT - Government Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,595,171 6.82% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,860,264 12.09% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,617,395 -2.74% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,883,160 6.64% 5/1/98
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Nationwide(R) SAT - J.P.Morgan Balanced Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 351,646 9.575644 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 117,858 9.980967 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 43,881 10.056111 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 349 10.009481 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,739,536 11.036224 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,055,243 10.635225 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 460,632 10.106222 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 15,549 9.991296 Nationwide(R) SAT - Money Market Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 16,843,508 11.743544 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 5,646,634 11.380873 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 3,786,796 10.776865 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 394,891 10.319833 Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 162,269 15.161271 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 59,757 17.072794 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 118 20.447188 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 594,303 15.460620 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 152,675 12.101060 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 8,548 10.925665 Nationwide(R) SAT - Small Company Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,522,194 13.093906 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 493,035 14.091380 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 72,698 12.991606 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 257 9.056852 Nationwide(R) SAT - Strategic Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 37,680 9.059635 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,481 9.402302 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 791 8.772237 Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 916,433 11.327538 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 647,094 16.319202 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 128,669 19.361969 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 477 10.521882 Nationwide(R) SAT - Total Return Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 358,546 9.251754 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 212,989 10.534111 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 42,084 10.805244 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 70 10.144232 Nationwide(R) SAT - Turner Growth Focus Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,944 3.848878
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Nationwide(R) SAT - J.P.Morgan Balanced Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,367,237 -4.06% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,176,337 -0.75% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,272 0.47% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,493 0.09% 5/1/98 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,197,909 3.77% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,222,747 5.23% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,655,249 1.15% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155,355 -0.09% 5/1/98 Nationwide(R) SAT - Money Market Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197,802,477 3.19% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,263,624 5.60% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,809,789 4.43% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,075,209 3.2% 4/30/98 Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,460,204 -11.20% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,020,219 -16.50% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,413 104.47% 5/3/99 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,188,293 27.76% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,847,529 10.76% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,393 27.33% Nationwide(R) SAT - Small Company Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,931,465 -7.08% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,947,544 8.47% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 944,464 43.45% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,328 -9.43% 5/1/98 Nationwide(R) SAT - Strategic Value Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341,367 -3.64% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,327 7.18% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,939 -3.46% Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,380,930 -30.59% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,560,058 -15.72% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,491,285 84.02% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,019 5.22% 5/1/98 Nationwide(R) SAT - Total Return Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,317,179 -12.17% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,243,650 -2.51% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,728 6.52% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710 1.44% 5/1/98 Nationwide(R) SAT - Turner Growth Focus Fund Class I 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,331 -39.27%
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Neuberger Berman AMT - Guardian Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 270,845 10.563782 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 86,066 10.768698 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 25,154 10.690765 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 838 9.338993 Neuberger Berman AMT - Mid-Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,272,440 11.978031 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 827,220 15.959556 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 315,266 17.314889 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 70 11.296584 Neuberger Berman AMT - Partners Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 322,706 9.693032 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 241,651 10.015242 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 94,285 9.985118 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 26,750 9.337008 Oppenheimer Aggressive Growth Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,155,828 10.720152 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,068,591 15.659821 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 138,018 17.712996 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,235 9.685930 Oppenheimer Capital Appreciation Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 2,694,063 13.013036 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 911,021 14.945030 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 188,390 15.039330 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 767 10.659314 Oppenheimer Global Securities Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 813,325 8.386697 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 43,440 9.572769 Oppenheimer Main Street Growth & Income Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 544,668 8.809927 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 327,513 9.845729 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 97,691 10.835877 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 18,485 8.938847 Strong Opportunity Fund II, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 1,042,724 9.447854 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 72,473 9.828296 UIF - Emerging Markets Debt Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 80,313 10.605749 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 28,939 9.671636 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 12,553 8.717559 UIF - Mid Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 127,633 6.101338 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 8,201 8.666239 UIF - U.S. Real Estate Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 318,295 11.990690 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 111,390 10.960329 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 38,697 8.593033
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Neuberger Berman AMT - Guardian Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,861,148 -1.90% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 926,819 0.73% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268,916 14.47% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,826 -6.61% 5/1/98 Neuberger Berman AMT - Mid-Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,241,326 -24.95% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,202,064 -7.83% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,458,796 53.28% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 791 12.97% 5/1/98 Neuberger Berman AMT - Partners Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,128,000 -3.22% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,420,193 0.03% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 941,447 6.94% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249,765 -6.63% 5/1/98 Oppenheimer Aggressive Growth Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,110,804 -31.54% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,733,944 -11.59% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,444,712 82.87% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,962 -3.14% 5/1/98 Oppenheimer Capital Appreciation Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,057,939 -12.93% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,615,236 -0.63% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,833,259 41.09% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,176 6.59% 5/1/98 Oppenheimer Global Securities Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,821,110 -12.39% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415,841 -4.27% 5/1/00 Oppenheimer Main Street Growth & Income Fund/VA 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,798,485 -10.52% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,224,604 -9.14% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,058,568 21.22% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,235 -10.61% 5/1/98 Strong Opportunity Fund II, Inc. 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,851,504 -4.09% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712,286 -1.49% 5/1/00 UIF - Emerging Markets Debt Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851,780 9.66% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279,887 10.94% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,432 28.86% UIF - Mid Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 778,732 -29.60% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,072 -13.34% 5/1/00 UIF - U.S. Real Estate Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,816,577 9.40% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,220,871 4.19% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332,525 -3.76%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT EXPENSE RATE* UNITS FAIR VALUE --------------- ----- ---------- Van Eck WIT - Worldwide Emerging Markets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 93,450 7.142729 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 41,537 7.303734 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 10,044 12.613718 Van Eck WIT - Worldwide Hard Assets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 13,391 8.161281 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 3,041 9.149843 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 252 8.246159 Contract Owners' Equity Total by Year 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CONTRACT TOTAL OWNERS' EQUITY RETURN** -------------- ---------- Van Eck WIT - Worldwide Emerging Markets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 667,488 -2.20% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303,375 -42.10% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,692 99.48% Van Eck WIT - Worldwide Hard Assets Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,288 -10.80% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,825 10.96% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,078 20.52% --------------- Contract Owners' Equity Total by Year 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,087,035,414 =============== 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,414,892,441 =============== 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 648,293,593 =============== 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 107,989,704 ===============
* This represents the annualized contract expense rate 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 fund portfolios and charges made directly to contract owner accounts through the redemption of units. ** This represents the total return for the period indicated and includes a deduction only for expenses assessed through the daily unit value calculation. The total return does not include any expenses assessed through the redemption of units;inclusion of these expenses in the calculation would result in a reduction of the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Account. The total return is calculated for the period indicated or from the effective date through the end of the period. - ------------------------------------------------------------------------------- INDEPENDENT AUDITORS' REPORT The Board of Directors Nationwide Life Insurance Company: We have audited the consolidated balance sheets of Nationwide Life Insurance Company and subsidiaries (collectively the "Company"), a wholly owned subsidiary of Nationwide Financial Services, Inc., as of December 31, 2001 and 2000, and the related consolidated statements of income, shareholder's equity and cash flows for each of the years in the three-year period ended December 31, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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, 2001 and 2000, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. As discussed in note 2 to the consolidated financial statements, the Company changed its methods of accounting for derivative instruments and hedging activities, and for purchased or retained interests in securitized financial assets in 2001. KPMG LLP Columbus, Ohio January 29, 2002 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, ------------------------------ 2001 2000 ========= ========= ASSETS Investments: Securities available-for-sale, at fair value: Fixed maturity securities (cost $17,961.6 in 2001; $15,245.8 in 2000) $18,370.8 $15,443.0 Equity securities (cost $83.0 in 2001; $103.5 in 2000) 94.0 109.0 Mortgage loans on real estate, net 7,113.1 6,168.3 Real estate, net 172.0 310.7 Policy loans 591.1 562.6 Other long-term investments 125.0 101.8 Short-term investments, including amounts managed by a related party 1,011.3 442.6 --------- --------- 27,477.3 23,138.0 --------- --------- Cash 22.6 18.4 Accrued investment income 306.7 251.4 Deferred policy acquisition costs 3,189.0 2,865.6 Other assets 646.0 396.7 Assets held in separate accounts 59,513.0 65,897.2 --------- --------- $91,154.6 $92,567.3 ========= ========= LIABILITIES AND SHAREHOLDER'S EQUITY Future policy benefits and claims $25,216.0 $22,183.6 Short-term debt 100.0 118.7 Long-term debt, payable to NFS 300.0 -- Other liabilities 2,307.9 1,164.9 Liabilities related to separate accounts 59,513.0 65,897.2 --------- --------- 87,436.9 89,364.4 --------- --------- Commitments and contingencies (notes 10 and 15) Shareholder's equity: Common stock, $1 par value. Authorized 5.0 million shares; 3.8 million shares issued and outstanding 3.8 3.8 Additional paid-in capital 646.1 646.1 Retained earnings 2,863.1 2,436.3 Accumulated other comprehensive income 204.7 116.7 --------- --------- 3,717.7 3,202.9 --------- --------- $91,154.6 $92,567.3 ========= =========
See accompanying notes to consolidated financial statements, including note 13 which describes related party transactions. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Consolidated Statements of Income (in millions)
Years ended December 31, ------------------------------------------ 2001 2000 1999 ======== ======== ======== Revenues: Policy charges $1,017.3 $1,091.4 $ 895.5 Life insurance premiums 251.1 240.0 220.8 Net investment income 1,725.0 1,654.9 1,520.8 Net realized (losses) gains on investments, hedging instruments and hedged items: Unrelated parties (62.7) (19.4) (11.6) Related party 44.4 -- -- Other 14.1 17.0 66.1 -------- -------- -------- 2,989.2 2,983.9 2,691.6 -------- -------- -------- Benefits and expenses: Interest credited to policyholder account balances 1,238.7 1,182.4 1,096.3 Other benefits and claims 280.3 241.6 210.4 Policyholder dividends on participating policies 41.7 44.5 42.4 Amortization of deferred policy acquisition costs 347.9 352.1 272.6 Interest expense on debt 6.2 1.3 -- Other operating expenses 444.1 479.0 463.4 -------- -------- -------- 2,358.9 2,300.9 2,085.1 -------- -------- -------- Income before federal income tax expense and cumulative effect of adoption of accounting principles 630.3 683.0 606.5 Federal income tax expense 161.4 207.7 201.4 -------- -------- -------- Income before cumulative effect of adoption of accounting principles 468.9 475.3 405.1 Cumulative effect of adoption of accounting principles, net of tax (7.1) -- -- -------- -------- -------- Net income $ 461.8 $ 475.3 $ 405.1 ======== ======== ========
See accompanying notes to consolidated financial statements, including note 13 which describes related party transactions. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Consolidated Statements of Shareholder's Equity Years ended December 31, 2001, 2000 and 1999 (in millions)
Accumulated Additional other Total Common paid-in Retained comprehensive shareholder's stock capital earnings income (loss) equity ======== ========== ======== ============= ============= Balance as of December 31, 1998 3.8 914.7 1,579.0 275.6 2,773.1 Comprehensive income: Net income -- -- 405.1 -- 405.1 Net unrealized losses on securities available-for-sale arising during the year, net of tax -- -- -- (315.0) (315.0) -------- Total comprehensive income 90.1 -------- Capital contribution -- 26.4 87.9 23.5 137.8 Return of capital to shareholder -- (175.0) -- -- (175.0) Dividends to shareholder -- -- (61.0) -- (61.0) -------- -------- -------- -------- -------- Balance as of December 31, 1999 3.8 766.1 2,011.0 (15.9) 2,765.0 ======== ======== ======== ======== ======== Comprehensive income: Net income -- -- 475.3 -- 475.3 Net unrealized gains on securities available-for-sale arising during the year, net of tax -- -- -- 132.6 132.6 -------- Total comprehensive income 607.9 -------- Return of capital to shareholder -- (120.0) -- -- (120.0) Dividends to shareholder -- -- (50.0) -- (50.0) -------- -------- -------- -------- -------- Balance as of December 31, 2000 $ 3.8 $ 646.1 $2,436.3 $ 116.7 $3,202.9 ======== ======== ======== ======== ======== Comprehensive income: Net income -- -- 461.8 -- 461.8 Net unrealized gains on securities available-for-sale arising during the year, net of tax -- -- -- 98.2 98.2 Cumulative effect of adoption of accounting principles, net of tax -- -- -- (1.4) (1.4) Accumulated net losses on cash flow hedges, net of tax -- -- -- (8.8) (8.8) -------- Total comprehensive income 549.8 -------- Dividends to shareholder -- -- (35.0) -- (35.0) -------- -------- -------- -------- -------- Balance as of December 31, 2001 $ 3.8 $ 646.1 $2,863.1 $ 204.7 $3,717.7 ======== ======== ======== ======== ========
See accompanying notes to consolidated financial statements, including note 13 which describes related party transactions. 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, ------------------------------------------ 2001 2000 1999 ======== ======== ======== Cash flows from operating activities: Net income $ 461.8 $ 475.3 $ 405.1 Adjustments to reconcile net income to net cash provided by operating activities: Interest credited to policyholder account balances 1,238.7 1,182.4 1,096.3 Capitalization of deferred policy acquisition costs (743.0) (778.9) (637.0) Amortization of deferred policy acquisition costs 347.9 352.1 272.6 Amortization and depreciation (31.5) (12.7) 2.4 Realized losses (gains) on investments, hedging instruments and hedged items: Unrelated parties 62.7 19.4 11.6 Related parties (44.4) -- -- Cumulative effect of adoption of accounting principles 10.9 -- -- Increase in accrued investment income (55.3) (12.8) (7.9) (Increase) decrease in other assets (272.5) (92.0) 122.9 Increase (decrease) in policy liabilities 33.0 (0.3) (20.9) Increase in other liabilities 304.0 229.3 149.7 Other, net 8.3 22.3 (8.6) -------- -------- -------- Net cash provided by operating activities 1,320.6 1,384.1 1,386.2 -------- -------- -------- Cash flows from investing activities: Proceeds from maturity of securities available-for-sale 3,933.9 2,988.7 2,307.9 Proceeds from sale of securities available-for-sale 497.8 602.0 513.1 Proceeds from repayments of mortgage loans on real estate 1,204.4 911.7 696.7 Proceeds from sale of real estate 29.1 18.7 5.7 Proceeds from sale of limited partnership to related party 158.9 -- -- Proceeds from repayments of policy loans and sale of other invested assets 68.9 79.3 40.9 Cost of securities available-for-sale acquired (7,123.6) (3,475.5) (3,724.9) Cost of mortgage loans on real estate acquired (2,123.1) (1,318.0) (971.4) Cost of real estate acquired (0.4) (7.1) (14.2) Short-term investments, net (568.7) (26.6) (27.5) Collateral received - securities lending, net 791.6 -- -- Other, net (192.2) (182.3) (110.9) -------- -------- -------- Net cash used in investing activities (3,323.4) (409.1) (1,284.6) -------- -------- -------- Cash flows from financing activities: Net proceeds from issuance of long-term debt to NFS 300.0 -- -- Capital returned to shareholder -- (120.0) (175.0) Net change in short-term debt (18.7) 118.7 -- Cash dividends paid (35.0) (100.0) (13.5) Increase in investment and universal life insurance product account balances 5,976.7 4,517.0 3,799.4 Decrease in investment and universal life insurance product account balances (4,216.0) (5,377.1) (3,711.1) -------- -------- -------- Net cash provided by (used in) financing activities 2,007.0 (961.4) (100.2) -------- -------- -------- Net increase in cash 4.2 13.6 1.4 Cash, beginning of year 18.4 4.8 3.4 -------- -------- -------- Cash, end of year $ 22.6 $ 18.4 $ 4.8 ======== ======== ========
See accompanying notes to consolidated financial statements, including note 13 which describes related party transactions. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements December 31, 2001, 2000 and 1999 (1) Organization and Description of Business Nationwide Life Insurance Company (NLIC, or collectively with its subsidiaries, the Company) is a leading provider of long-term savings and retirement products in the United States of America and is a wholly owned subsidiary of Nationwide Financial Services, Inc. (NFS). The Company develops and sells a diverse range of products including individual annuities, private and public sector pension plans and other investment products sold to institutions and life insurance. NLIC sells its products through a diverse network of distribution channels, including independent broker/dealers, brokerage firms, financial institutions, pension plan administrators, life insurance specialists, Nationwide Retirement Solutions and Nationwide agents. Wholly owned subsidiaries of NLIC include Nationwide Life and Annuity Insurance Company (NLAIC), Nationwide Securities, Inc., and Nationwide Investment Services Corporation. (2) Summary of Significant Accounting Policies The significant accounting policies followed by the Company that materially affect financial reporting are summarized below. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) which differ from statutory accounting practices. The statutory financial statements of NLIC and NLAIC are presented on the basis of accounting practices prescribed or permitted by the Ohio Department of Insurance (the Department). The State of Ohio has adopted the National Association of Insurance Commissioners (NAIC) statutory accounting practices (NAIC SAP) as the basis of its statutory accounting practices. NLIC and NLAIC have no statutory accounting practices that differ from NAIC SAP. See also note 12. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs for investment products and universal life insurance products, valuation allowances for mortgage loans on real estate, impairment losses on other investments and federal income taxes. Although some variability is inherent in these estimates, management believes the amounts provided are appropriate. (a) Consolidation Policy The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling interest. All significant intercompany balances and transactions have been eliminated. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (b) Valuation of Investments, Investment Income and Related Gains and Losses The Company is required to classify its fixed maturity securities and equity securities as either held-to-maturity, available-for-sale or trading. The Company classifies fixed maturity and equity securities as available-for-sale. Available-for-sale securities are stated at fair value, with the unrealized gains and losses, net of adjustments to deferred policy acquisition costs and deferred federal income tax, reported as a separate component of accumulated other comprehensive income (AOCI) in shareholders' equity. The adjustment to deferred policy acquisition costs represents the change in amortization of deferred policy acquisition costs that would have been required as a charge or credit to operations had such unrealized amounts been realized. Management regularly reviews its fixed maturity and equity securities portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments. A number of criteria are considered during this process including, but not limited to, the current fair value as compared to amortized cost or cost, as appropriate, of the security, the length of time the security's fair value has been below amortized cost/cost, and by how much, and specific credit issues related to the issuer. Impairment losses result in a reduction of the cost basis of the underlying investment. For mortgage-backed securities, 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, and any resulting adjustment is included in net investment income. All other investment income is recorded on the accrual basis. Mortgage loans on real estate are carried at the unpaid principal balance less valuation allowances. 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 the Company determines that a loan is impaired, a provision for loss is established equal to the difference between the carrying value and the estimated value of the mortgage loan. Estimated value is based on 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. Loans in foreclosure and loans considered impaired 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. The valuation allowance account for mortgage loans on real estate is maintained at a level believed adequate by the Company to absorb estimated probable credit losses. The Company'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. Real estate is carried at cost less accumulated depreciation. Real estate designated as held for disposal 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 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 amount. Realized gains and losses on the sale of investments are determined on the basis of specific security identification. Changes in valuation allowances and impairment losses for other-than-temporary declines in fair values are included in realized gains and losses on investments, hedging instruments and hedged items. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (c) Derivative Instruments Derivatives are carried at fair value. On the date the derivative contract is entered into, the Company designates the derivative as either 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), or 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 highly effective in offsetting changes in fair values or cash flows of hedged items. When it is determined that a derivative is not 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 Eurodollar Futures to hedge the fair value of existing fixed rate assets and liabilities. In addition, the Company uses short 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 realized gains and losses on investments, hedging instruments and hedged items. Changes in the fair value of the hedged item, attributable to the risk being hedged, are also recorded in realized gains and losses on investments, hedging instruments and hedged items. The adjustment of the carrying amount of hedged assets using Eurodollar Futures and firm commitments using Treasury Futures are accounted for in the same manner as other components of the carrying amount of that asset. The adjustment of the carrying amount is amortized to investment income over the life of the asset. The Company may enter into receive fixed/pay variable interest rate swaps to hedge existing floating rate assets or to hedge cash flows from the anticipated purchase of investments. These derivative instruments are classified as cash flow hedges and are carried at fair value, with the offset recorded in AOCI to the extent the hedging relationship is effective. The ineffective portion of the hedging relationship is recorded in realized gains and losses on investments, hedging instruments and hedged items. Gains and losses on cash flow derivative instruments are reclassified out of AOCI and recognized in earnings over the same period(s) that the hedged item affects earnings. Amounts receivable or payable under interest rate and foreign currency swaps are recognized as an adjustment to net investment income or interest credited to policyholder account balances consistent with the nature of the hedged item. From time to time, the Company may enter into a derivative transaction that will not qualify for hedge accounting. These include basis swaps (receive one variable rate, pay another variable rate) to hedge variable rate assets or foreign-denominated liabilities. These instruments are carried at fair value, with changes in fair value recorded in realized gains and losses on investments, hedging instruments and hedged items. The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative expires, or is sold, terminated or exercised, the derivative is dedesignated as a hedging instrument, because it is unlikely that a forecasted transaction will occur, a hedged firm commitment no longer meets the definition of a firm commitment, or management determines that designation of the derivative as a hedging instrument is no longer appropriate. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair value hedge, the Company continues to carry the derivative on the consolidated balance sheet at its fair value, and no longer adjusts the hedged item for changes in fair value. The adjustment of the carrying amount of the hedged item is accounted for in the same manner as other components of the carrying amount of that item. When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, the Company continues to carry the derivative on the consolidated balance sheet at its fair value, removes any asset or liability that was recorded pursuant to recognition of the firm commitment from the consolidated balance sheet and recognizes any gain or loss in net realized gains and losses on investments, hedging instruments and hedged items. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the Company continues to carry the derivative on the consolidated balance sheet at fair value and gains and losses that were accumulated in AOCI are recognized immediately in realized gains and losses on investments, hedging instruments and hedged items. In all other situations in which hedge accounting is discontinued, the Company continues to carry the derivative at its fair value on the consolidated balance sheet, and recognizes any changes in fair value in net realized gains and losses on investments, hedging instruments and hedged items. Prior to the adoption of SFAS 133, defined in note 2 (k), provided they met specific criteria, interest rate and foreign currency swaps and futures were considered hedges and accounted for under the accrual and deferral method, respectively. Amounts receivable or payable under interest rate and foreign currency swaps were recognized as an adjustment to net investment income or interest credited to policyholder account balances consistent with the nature of the hedged item. Changes in the fair value of interest rate swaps were not recognized on the consolidated balance sheet, except for interest rate swaps designated as hedges of fixed maturity securities available-for-sale, for which changes in fair values were reported in AOCI. Gains and losses on foreign currency swaps were recorded in earnings based on the related spot foreign exchange rate at the end of the reporting period. Gains and losses on these contracts offset those recorded as a result of translating the hedged foreign currency denominated liabilities and investments to U.S. dollars. (d) Revenues and Benefits Investment Products 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 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, policy administration 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 and policy administration charges 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 policy account balances and benefits and claims incurred in the period in excess of related policy account balances. Traditional Life Insurance Products: Traditional life insurance products include those products with fixed and guaranteed premiums and benefits and consist primarily 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 as to result in recognition of profits over the life of the contract. This association is accomplished by the provision for future policy benefits and the deferral and amortization of policy acquisition costs. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (e) Deferred Policy Acquisition Costs The costs of acquiring new 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 or renewal business have been deferred. Deferred policy acquisition costs are subject to recoverability testing at the time of policy issuance and loss recognition testing at the end of each accounting period. For investment products and universal life insurance products, deferred policy acquisition costs are being amortized with interest over the lives of the policies in relation to the present value of estimated future gross profits from projected interest margins, asset fees, cost of insurance, policy administration and surrender charges. For years in which gross profits are negative, deferred policy acquisition costs are amortized based on the present value of gross revenues. The Company regularly reviews the estimated future gross profits and revises such estimates when appropriate. The cumulative change in amortization as a result of changes in estimates to reflect current best estimates is recorded as a charge or credit to amortization expense. The most significant assumptions that are involved in the estimation of future gross profits include future market performance and surrender/lapse rates. In the event actual expense differs significantly from assumptions or assumptions are significantly revised, the Company may be required to record a significant charge or credit to amortization expense. Deferred policy acquisition costs are adjusted to reflect the impact of unrealized gains and losses on fixed maturity securities available-for-sale as described in note 2(b). For traditional life insurance products, these deferred policy acquisition costs are predominantly being 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 was estimated using the same assumptions as were used for computing liabilities for future policy benefits. (f) Separate Accounts Separate account assets and liabilities represent contractholders' funds which have been segregated into accounts with specific investment objectives. Separate account assets are recorded at market value except for separate account contracts with guaranteed investment returns. For all but $1.39 billion and $1.12 billion of separate account assets as of December 31, 2001 and 2000, respectively, the investment income and 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 income and cash flows except for the fees the Company receives. Such fees are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. (g) Future Policy Benefits Future policy benefits for investment products in the accumulation phase, universal life insurance and variable universal life insurance policies have been calculated based on participants' contributions plus interest credited less applicable contract charges. Future policy benefits for traditional life insurance policies have been calculated by the net level premium method using interest rates varying from 6.0% to 10.5% and estimates of mortality, morbidity, investment yields and withdrawals which were used or which were being experienced at the time the policies were issued. (h) Participating Business Participating business represented approximately 17% in 2001 (21% in 2000 and 29% in 1999) of the Company's life insurance in force, 63% in 2001 (66% in 2000 and 69% in 1999) of the number of life insurance policies in force, and 9% in 2001 (8% in 2000 and 13% in 1999) of life insurance statutory premiums. The provision for policyholder dividends was based on then current dividend scales and has been included in "Future policy benefits and claims" in the accompanying consolidated balance sheets. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (i) Federal Income Tax The Company files a consolidated federal income tax return with Nationwide Mutual Insurance Company (NMIC), the ultimate majority shareholder of NFS. The members of the consolidated tax return group have a tax sharing arrangement which provides, in effect, for each member to bear essentially the same federal income tax liability as if separate tax returns were filed. The Company provides for federal income taxes based on amounts the Company believes it will ultimately owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain expenses and the realization of certain tax credits. In the event the ultimate deductibility of certain expenses or the realization of certain tax credits differ from estimates, the Company may be required to significantly change the provision for federal income taxes recorded in the consolidated financial statements. The Company utilizes the asset and liability method of accounting for income tax. 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 necessary to reduce the deferred tax assets to the amounts expected to be realized. (j) 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 are reported on a gross basis. (k) Recently Issued Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). SFAS 133, as amended by SFAS 137, Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133, and SFAS 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, was adopted by the Company effective January 1, 2001. Upon adoption, the provisions of SFAS 133 were applied prospectively. SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities. It requires an entity to recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. As of January 1, 2001, the Company had $755.4 million notional amount of freestanding derivatives with a market value of ($7.0) million. All other derivatives qualified for hedge accounting under SFAS 133. The adoption of SFAS 133 resulted in the Company recording a net transition adjustment loss of $4.8 million (net of related income tax of $2.6 million) in net income. In addition, a net transition adjustment loss of $3.6 million (net of related income tax of $2.0 million) was recorded in AOCI at January 1, 2001. The adoption of SFAS 133 resulted in the Company derecognizing $17.0 million of deferred assets related to hedges, recognizing $10.9 million of additional derivative instrument liabilities and $1.3 million of additional firm commitment assets, while also decreasing hedged future policy benefits by $3.0 million and increasing the carrying amount of hedged investments by $10.6 million. Further, the adoption of SFAS 133 resulted in the Company reporting total derivative instrument assets and liabilities of $44.8 million and $107.1 million, respectively, as of January 1, 2001. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The adoption of SFAS 133 may increase the volatility of reported earnings and other comprehensive income. The amount of volatility will vary with the level of derivative and hedging activities and fluctuations in market interest rates and foreign currency exchange rates during any period. In November 1999, the Emerging Issues Task Force (EITF) issued EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets (EITF 99-20). The Company adopted EITF 99-20 on April 1, 2001. EITF 99-20 establishes the method of recognizing interest income and impairment on asset-backed investment securities. EITF 99-20 requires the Company to update the estimate of cash flows over the life of certain retained beneficial interests in securitization transactions and purchased beneficial interests in securitized financial assets. Pursuant to EITF 99-20, based on current information and events, if the Company estimates that the fair value of its beneficial interests is not greater than or equal to its carrying value and if there has been a decrease in the estimated cash flows since the last revised estimate, considering both timing and amount, then an other-than-temporary impairment should be recognized. The cumulative effect, net of tax, upon adoption of EITF 99-20 on April 1, 2001 decreased net income by $2.3 million with a corresponding increase to AOCI. In July 2001, the FASB issued Statement of Financial Accounting Standards No. 141, Business Combinations (SFAS 141) and Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 and the use of the pooling-of-interests method has been eliminated. SFAS 142 applies to all acquired intangible assets whether acquired singularly, as part of a group, or in a business combination. SFAS 142 supersedes APB Opinion No. 17, Intangible Assets, and will carry forward provisions in Opinion 17 related to internally developed intangible assets. SFAS 142 changes the accounting for goodwill and intangible assets with indefinite lives from an amortization method to an impairment-only approach. The amortization of goodwill from past business combinations ceased upon adoption of this statement, which was January 1, 2002 for the Company. Companies are required to evaluate all existing goodwill and intangible assets with indefinite lives for impairment within six months of adoption. Any transitional impairment losses will be recognized in the first interim period in the year of adoption and will be recognized as the cumulative effect of a change in accounting principle. The Company does not expect any material impact of adopting SFAS 141 and SFAS 142 on the results of operations and financial position. In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, and APB Opinion No. 30, Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. SFAS 144 is effective for fiscal years beginning after December 15, 2001 (January 1, 2002 for the Company) and will carry forward many of the provisions of SFAS 121 and Opinion 30 for recognition and measurement of the impairment of long-lived assets to be held and used, and measurement of long-lived assets to be disposed of by sale. Under SFAS 144, if a long-lived asset is part of a group that includes other assets and liabilities, then the provisions of SFAS 144 apply to the entire group. In addition, SFAS 144 does not apply to goodwill and other intangible assets that are not amortized. Management does not expect the adoption of SFAS 144 to have a material impact on the results of operations or financial position of the Company. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued In 2001, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 01-5, Amendments to Specific AICPA Pronouncements for Changes Related to the NAIC Codification (SOP 01-5). In doing so, AICPA SOP 94-5, Disclosures of Certain Matters in the Financial Statements of Insurance Enterprises, was amended to reflect the results of the completion of the NAIC codification of statutory accounting practices for certain insurance enterprises (Codification). The adoption of SOP 01-5 did not have an impact on the results of operations or financial position of the Company. (l) Reclassification Certain items in the 2000 and 1999 consolidated financial statements and related footnotes have been reclassified to conform to the 2001 presentation. (3) Investments The amortized cost, gross unrealized gains and losses and estimated fair value of securities available-for-sale as of December 31, 2001 and 2000 were:
Gross Gross Amortized unrealized unrealized Estimated (in millions) cost gains losses fair value ========= ========== ========== ========== December 31, 2001 Fixed maturity securities: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 263.2 $ 23.1 $ 0.5 $ 285.8 Obligations of states and political subdivisions 7.6 0.3 -- 7.9 Debt securities issued by foreign governments 41.8 2.6 -- 44.4 Corporate securities 11,769.8 470.6 176.5 12,063.9 Mortgage-backed securities - U.S. Government backed 2,012.3 67.8 3.7 2,076.4 Asset-backed securities 3,866.9 76.7 51.2 3,892.4 --------- --------- --------- --------- Total fixed maturity securities 17,961.6 641.1 231.9 18,370.8 Equity securities 83.0 11.0 -- 94.0 --------- --------- --------- --------- $18,044.6 $ 652.1 $ 231.9 $18,464.8 ========= ========= ========= ========= December 31, 2000 Fixed maturity securities: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 277.5 $ 33.4 $ 0.1 $ 310.8 Obligations of states and political subdivisions 8.6 0.2 -- 8.8 Debt securities issued by foreign governments 94.1 1.5 0.1 95.5 Corporate securities 9,758.3 235.0 135.1 9,858.2 Mortgage-backed securities - U.S. Government backed 2,719.1 46.1 3.8 2,761.4 Asset-backed securities 2,388.2 36.3 16.2 2,408.3 --------- --------- --------- --------- Total fixed maturity securities 15,245.8 352.5 155.3 15,443.0 Equity securities 103.5 9.5 4.0 109.0 --------- --------- --------- --------- $15,349.3 $ 362.0 $ 159.3 $15,552.0 ========= ========= ========= =========
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The amortized cost and estimated fair value of fixed maturity securities available-for-sale as of December 31, 2001, by expected maturity, are shown below. 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.
Amortized Estimated (in millions) cost fair value ========= ========== Fixed maturity securities available for sale: Due in one year or less $ 1,125.4 $ 1,141.7 Due after one year through five years 5,154.4 5,295.6 Due after five years through ten years 4,073.6 4,188.8 Due after ten years 1,729.0 1,775.9 --------- --------- 12,082.4 12,402.0 Mortgage-backed securities - U.S. Government backed 2,012.3 2,076.4 Asset-backed securities 3,866.9 3,892.4 --------- --------- $17,961.6 $18,370.8 ========= =========
The components of unrealized gains on securities available-for-sale, net, were as follows as of December 31:
(in millions) 2001 2000 ========= ========= Gross unrealized gains $ 420.2 $ 202.7 Adjustment to deferred policy acquisition costs (94.9) (23.2) Deferred federal income tax (113.9) (62.8) --------- --------- $ 211.4 $ 116.7 ========= =========
An analysis of the change in gross unrealized gains (losses) on securities available-for-sale for the years ended December 31:
(in millions) 2001 2000 1999 ====== ====== ======= Securities available-for-sale: Fixed maturity securities $212.0 $280.5 $(607.1) Equity securities 5.5 (2.5) (8.8) ------ ------ ------- $217.5 $278.0 $(615.9) ====== ====== =======
Proceeds from the sale of securities available-for-sale during 2001, 2000 and 1999 were $497.8 million, $602.0 million and $513.1 million, respectively. During 2001, gross gains of $31.3 million ($12.1 million and $10.4 million in 2000 and 1999, respectively) and gross losses of $10.1 million ($15.1 million and $35.5 million in 2000 and 1999, respectively) were realized on those sales. The Company had $25.2 million and $13.0 million of real estate investments as of December 31, 2001 and 2000, respectively, that were non-income producing the preceding twelve months. Real estate is presented at cost less accumulated depreciation of $22.0 million as of December 31, 2001 ($25.7 million as of December 31, 2000). The carrying value of real estate held for disposal totaled $33.4 million and $8.5 million as of December 31, 2001 and 2000, respectively. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The recorded investment of mortgage loans on real estate considered to be impaired was $29.9 million as of December 31, 2001 ($9.8 million as of December 31, 2000), which includes $5.3 million ($5.3 million as of December 31, 2000) of impaired mortgage loans on real estate for which the related valuation allowance was $1.0 million ($1.6 million as of December 31, 2000) and $24.6 million ($4.5 million as of December 31, 2000) of impaired mortgage loans on real estate for which there was no valuation allowance. Impaired mortgage loans with no valuation allowance are a result of collateral dependent loans where the fair value of the collateral is greater than the recorded investment of the loan. During 2001, the average recorded investment in impaired mortgage loans on real estate was $7.9 million ($7.7 million in 2000) and interest income recognized on those loans totaled $0.4 million in 2001 ($0.4 million in 2000) which is equal to interest income recognized using a cash-basis method of income recognition. Activity in the valuation allowance account for mortgage loans on real estate for the years ended December 31 was as follows:
(in millions) 2001 2000 1999 ======== ======== ======== Allowance, beginning of year $ 45.3 $ 44.4 $ 42.4 Additions (reductions) charged (credited) to operations (1.2) 4.1 0.7 Direct write-downs charged against the allowance (1.2) (3.2) -- Allowance on acquired mortgage loans -- -- 1.3 -------- -------- -------- Allowance, end of year $ 42.9 $ 45.3 $ 44.4 ======== ======== ========
An analysis of investment income (loss) by investment type follows for the years ended December 31:
(in millions) 2001 2000 1999 ======== ======== ======== Gross investment income: Securities available-for-sale: Fixed maturity securities $1,181.1 $1,095.5 $1,031.3 Equity securities 1.8 2.6 2.5 Mortgage loans on real estate 527.9 494.5 460.4 Real estate 33.1 32.2 28.8 Short-term investments 28.3 27.0 18.6 Derivatives (19.7) 3.9 (1.0) Other 20.9 49.3 27.5 -------- -------- -------- Total investment income 1,773.4 1,705.0 1,568.1 Less investment expenses 48.4 50.1 47.3 -------- -------- -------- Net investment income $1,725.0 $1,654.9 $1,520.8 ======== ======== ========
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued An analysis of net realized (losses) gains on investments, hedging instruments and hedged items, by investment type follows for the years ended December 31:
(in millions) 2001 2000 1999 ====== ====== ====== Unrelated parties: Realized gains (losses) on sale of securities available-for-sale: Fixed maturity securities $ 20.8 $ (7.7) $(32.5) Equity securities 0.4 4.7 7.4 Other-than-temporary impairments of securities available-for-sale: Fixed maturity securities (66.1) (10.5) 7.5 Equity securities (13.8) -- -- Real estate 1.9 (0.5) 0.9 Mortgage loans on real estate(1) 0.6 (4.2) (0.6) Derivatives -- (2.7) (1.6) Other (6.5) 1.5 7.3 ------ ------ ------ (62.7) (19.4) (11.6) Related party - gain on sale of limited partnership 44.4 -- -- ------ ------ ------ Net realized losses on investments, hedging instruments and hedged items $(18.3) $(19.4) $(11.6) ====== ====== ======
- ---------- (1) The 2001 amount is comprised of $9.9 million of net realized gains on the sale of mortgage loans on real estate, including those related to a securitization transaction, and $9.3 million of realized losses on derivatives hedging the sale of mortgage loans on real estate. Fixed maturity securities with an amortized cost of $6.6 million as of December 31, 2001 and $6.5 million as of December 31, 2000 were on deposit with various regulatory agencies as required by law. In addition, fixed maturity securities with an amortized cost of $6.3 million as of December 31, 2000 were placed in escrow under a contractual obligation and none as of December 31, 2001. As of December 31, 2001 the Company had pledged fixed maturity securities with a fair value of $112.3 million as collateral to various derivative counterparties. As of December 31, 2001 the Company held collateral of $18.0 million on derivative transactions. This amount is included in short-term investments with a corresponding liability recorded in other liabilities. As of December 31, 2001, the Company had loaned securities with a fair value of $775.5 million. As of December 31, 2001 the Company held collateral of $791.6 million. This amount is included in short-term investments with a corresponding liability recorded in other liabilities. (4) Short-term Debt NLIC has established a $300 million commercial paper program under which, borrowings are unsecured and are issued for terms of 364 days or less. As of December 31, 2001 and 2000 the Company had $100.0 million and $118.7 million, respectively, of commercial paper outstanding at an average effective rate of 1.90% and 6.53%, respectively. See also note 14. (5) Long-term Debt, payable to NFS On December 19, 2001 the Company sold a 7.50%, $300.0 million surplus note to NFS, maturing on December 17, 2031. The fair value of the surplus note as of December 31, 2001 was $300.0 million. Principal and interest payments are subject to prior approval by the superintendent of insurance of the State of Ohio. The Company is scheduled to pay interest semi-annually on June 17 and December 17 of each year commencing June 17, 2002. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (6) Derivative Financial Instruments QUALITATIVE DISCLOSURE Interest Rate Risk Management The Company is exposed to changes in the fair value of fixed rate investments (commercial mortgage loans and corporate bonds) due to changes in interest rates. To manage this risk, the Company enters into various types of derivative instruments to minimize fluctuations in fair values resulting from changes in interest rates. The Company principally uses interest rate swaps and short Eurodollar futures to manage this risk. Under interest rate swaps, the Company receives variable interest rate payments and makes fixed rate payments, thereby creating floating rate investments. Short Eurodollar futures change the fixed rate cash flow exposure to variable rate cash flows. With short Eurodollar futures, if interest rates rise (fall), the gains (losses) on the futures adjust the fixed rate income on the investments, thereby creating floating rate investments. As a result of entering into commercial mortgage loan and private placement commitments, the Company is exposed to changes in the fair value of the commitment due to changes in interest rates during the commitment period. To manage this risk, the Company enters into short Treasury futures. With short Treasury futures, if interest rates rise (fall), the gains (losses) on the futures will offset the change in fair value of the commitment. Floating rate investments (commercial mortgage loans and corporate bonds) expose the Company to fluctuations in cash flow and investment income due to changes in interest rates. To manage this risk, the Company enters into receive fixed, pay variable over-the-counter interest rate swaps or long Eurodollar futures strips to convert the variable rate investments to a fixed rate. In using interest rate swaps, the Company receives fixed interest rate payments and makes variable rate payments; thereby creating fixed rate assets. The long Eurodollar futures change the variable rate cash flow exposure to fixed rate cash flows. With long Eurodollar futures, if interest rates rise (fall), the losses (gains) on the futures are used to reduce the variable rate income on the investments, thereby creating fixed rate investments. Foreign Currency Risk Management In conjunction with the Company's medium-term note program, from time to time, the Company issues both fixed and variable rate liabilities denominated in foreign currencies. As a result, the Company is exposed to changes in fair value of the liabilities due to changes in foreign currency exchange rates and interest rates. To manage these risks, the Company enters into cross-currency interest rate swaps to convert these liabilities to a variable U.S. dollar rate. For a fixed rate liability, the cross-currency interest rate swap is structured to receive a fixed rate, in the foreign currency, and pay a variable U.S. dollar rate, generally 3-month libor. For a variable rate foreign liability, the cross-currency interest rate swap is structured to receive a variable rate, in the foreign currency, and pay a variable U.S. dollar rate, generally 3-month libor. The Company is exposed to changes in fair value of fixed rate investments denominated in a foreign currency due to changes in foreign currency exchange rates and interest rates. To manage this risk, the Company uses cross-currency interest rate swaps to convert these assets to variable U.S. dollar rate instruments. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Cross-currency interest rate swaps on assets are structured to pay a fixed rate, in the foreign currency, and receive a variable U.S. dollar rate, generally 3-month libor. Non-Hedging Derivatives From time-to-time, the Company enters into over-the-counter basis swaps (receive one variable rate, pay another variable rate) to change the rate characteristics of a specific investment to better match the variable rate paid on a liability. While the pay-side terms of the basis swap will line up 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. QUANTITATIVE DISCLOSURE Fair Value Hedges During the year ended December 31, 2001, gains of $2.1 million were recognized in net realized losses on investments, hedging instruments and hedged items. This represents the ineffective portion of the fair value hedging relationships. There were no gains or losses attributable to the portion of the derivative instruments' change 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 year ended December 31, 2001, the ineffective portion of cash flow hedges was immaterial. There were no gains or losses attributable to the portion of the derivative instruments' change in fair value excluded from the assessment of hedge effectiveness. The Company anticipates reclassifying less than $0.1 million in losses out of AOCI over the next 12-month period. As of December 31, 2001, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows associated with forecasted transactions is twelve months. The Company did not discontinue any cash flow hedges because the original forecasted transaction was no longer probable. Other Derivative Instruments, Including Embedded Derivatives Net realized gains and losses on investments, hedging instruments and hedged items for the year ended December 31, 2001 include a loss of $1.6 million related to other derivative instruments, including embedded derivatives. For the year ended December 31, 2001 a $27.7 million loss was recorded in net realized losses on investments, hedging instruments and hedged items reflecting the change in fair value of cross-currency interest rate swaps hedging variable rate medium-term notes denominated in foreign currencies. An offsetting gain of $26.3 million was recorded in net realized losses on investments, hedging instruments and hedged items to reflect the change in spot rates of these foreign currency denominated obligations during the year ended December 31, 2001. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The notional amount of derivative financial instruments outstanding as of December 31, 2001 and 2000 were as follows:
(in millions ) 2001 2000 ======== ======== Interest rate swaps Pay fixed/receive variable rate swaps hedging investments $1,952.3 $ 934.8 Pay variable/receive fixed rate swaps hedging investments 698.4 98.8 Pay variable/receive variable rate swaps hedging investments 197.8 184.0 Other contracts hedging investments 523.0 20.4 Cross currency interest rate swaps Hedging foreign currency denominated investments 56.1 30.5 Hedging foreign currency denominated liabilities 2,500.4 1,512.2 Interest rate futures contracts 6,019.4 5,659.8 -------- --------
(7) Federal Income Tax The tax effects of temporary differences that give rise to significant components of the net deferred tax liability as of December 31, 2001 and 2000 were as follows:
(in millions) 2001 2000 ======== ======== Deferred tax assets: Equity securities $ 6.5 $ -- Future policy benefits 8.2 34.7 Liabilities in separate accounts 482.5 462.7 Mortgage loans on real estate and real estate 7.5 18.8 Derivatives 93.0 -- Other assets and other liabilities 81.8 40.3 -------- -------- Total gross deferred tax assets 679.5 556.5 Less valuation allowance (7.0) (7.0) -------- -------- Net deferred tax assets 672.5 549.5 -------- -------- Deferred tax liabilities: Deferred policy acquisition costs 861.3 783.7 Derivatives 91.5 -- Fixed maturity securities 173.0 98.8 Deferred tax on realized investment gains 26.1 29.0 Equity securities and other long-term investments 31.7 6.4 Other 68.8 38.1 -------- -------- Total gross deferred tax liabilities 1,252.4 956.0 -------- -------- Net deferred tax liability $ 579.9 $ 406.5 ======== ========
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 tax paid within the statutory carryback period can offset nearly all future deductible amounts. The valuation allowance was unchanged for the years ended December 31, 2001, 2000 and 1999. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The Company's current federal income tax liability was $186.2 million and $108.9 million as of December 31, 2001 and 2000, respectively. Federal income tax expense attributable to income before cumulative effect of adoption of accounting principles for the years ended December 31 was as follows:
(in millions) 2001 2000 1999 ====== ====== ====== Currently payable $ 32.5 $ 78.0 $ 53.6 Deferred tax expense 128.9 129.7 147.8 ------ ------ ------ $161.4 $207.7 $201.4 ====== ====== ======
Total federal income tax expense for the years ended December 31, 2001, 2000 and 1999 differs from the amount computed by applying the U.S. federal income tax rate to income before federal income tax expense and cumulative effect of adoption of accounting principles as follows:
2001 2000 1999 ------------------- ------------------- ------------------- (in millions) Amount % Amount % Amount % ====== ====== ====== ====== ====== ====== Computed (expected) tax expense $220.6 35.0 $239.1 35.0 $212.3 35.0 Tax exempt interest and dividends received deduction (48.8) (7.7) (24.7) (3.6) (7.3) (1.2) Income tax credits (11.5) (1.8) (8.0) (1.2) (4.3) (0.7) Other, net 1.1 0.1 1.3 0.2 0.7 0.1 ------ ------ ------ ------ ------ ------ Total (effective rate of each year) $161.4 25.6 $207.7 30.4 $201.4 33.2 ====== ====== ====== ====== ====== ======
Total federal income tax (refunded) paid was $(45.4) million, $74.6 million and $29.8 million during the years ended December 31, 2001, 2000 and 1999, respectively. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (8) Comprehensive Income (Loss) Comprehensive income (loss) includes net income as well as certain items that are reported directly within separate components of shareholder's equity that bypass net income. Other comprehensive income (loss) is comprised of unrealized gains (losses) on securities available-for-sale and accumulated net losses on cash flow hedges. The related before and after federal income tax amounts for the years ended December 31, 2001, 2000 and 1999 were as follows:
(in millions) 2001 2000 1999 ====== ====== ======= Unrealized gains (losses) on securities available-for-sale arising during the period: Gross $164.0 $264.5 $(665.3) Adjustment to deferred policy acquisition costs (71.7) (74.0) 167.5 Related federal income tax (expense) benefit (32.3) (66.7) 171.4 ------ ------ ------- Net 60.0 123.8 (326.4) ------ ------ ------- Reclassification adjustment for net losses on securities available-for-sale realized during the period: Gross 58.7 13.5 17.6 Related federal income tax benefit (20.5) (4.7) (6.2) ------ ------ ------- Net 38.2 8.8 11.4 ------ ------ ------- Other comprehensive income (loss) on securities available-for-sale 98.2 132.6 (315.0) ------ ------ ------- Accumulated net loss on cash flow hedges: Gross (13.5) -- -- Related federal income tax benefit 4.7 -- -- ------ ------ ------- Other comprehensive loss on cash flow hedges (8.8) -- -- ------ ------ ------- Accumulated net loss on transition adjustments: Transition adjustment - SFAS 133 (5.6) -- -- Transition adjustment - EITF 99-20 3.5 -- -- Related federal income tax benefit 0.7 -- -- ------ ------ ------- Other comprehensive loss on transition adjustments (1.4) -- -- ------ ------ ------- Total other comprehensive income (loss) $ 88.0 $132.6 $(315.0) ====== ====== =======
Reclassification adjustments for net realized gains and losses on the ineffective portion of cash flow hedges were immaterial during 2001 and, therefore, are not reflected in the table above. (9) Fair Value of Financial Instruments The following disclosures summarize the carrying amount and estimated fair value of the Company's financial instruments. Certain assets and liabilities are specifically excluded from the disclosure requirements of financial instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The fair value of a financial instrument is defined as the amount at which the financial instrument could be exchanged in a current transaction between willing parties. In cases where quoted market prices are not available, fair value is to be based on estimates using present value or other valuation techniques. Many of the Company's assets and liabilities subject to the disclosure requirements are not actively traded, requiring fair values to be estimated by management using present value or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Although fair value estimates are calculated using assumptions that management believes are appropriate, changes in assumptions could cause these estimates to vary materially. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in the immediate settlement of the instruments. Although insurance contracts, other than policies such as annuities that are classified as investment contracts, are specifically exempted from the disclosure requirements, estimated fair value of policy reserves on life insurance contracts is provided to make the fair value disclosures more meaningful. The tax ramifications of the related unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. In estimating its fair value disclosures, the Company used the following methods and assumptions: Fixed maturity and equity securities: The fair value for fixed maturity securities is based on quoted market prices, where available. For fixed maturity securities not actively traded, fair value is estimated using values obtained from independent pricing services or, in the case of private placements, is estimated by discounting expected future cash flows using a current market rate applicable to the yield, credit quality and maturity of the investments. The fair value for equity securities is based on quoted market prices. The carrying amount and fair value for fixed maturity and equity securities exclude the fair value of derivatives contracts designated as hedges of fixed maturity and equity securities. Mortgage loans on real estate, net: The fair value for mortgage loans on real estate is estimated using discounted cash flow analyses, using 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. Fair value for impaired mortgage loans is the estimated fair value of the underlying collateral. Policy loans, short-term investments and cash: The carrying amount reported in the consolidated balance sheets for these instruments approximates their fair value. Separate account assets and liabilities: The fair value of assets held in separate accounts is based on quoted market prices. The fair value of liabilities related to separate accounts is the amount payable on demand, which is net of certain surrender charges. Investment contracts: The fair value for the Company's liabilities under investment type contracts is based on one of two methods. For investment contracts without defined maturities, fair value is the amount payable on demand. For investment contracts with known or determined maturities, fair value is estimated using discounted cash flow analysis. Interest rates used are similar to currently offered contracts with maturities consistent with those remaining for the contracts being valued. Policy reserves on life insurance contracts: Included are disclosures for individual and corporate-owned life insurance, universal life insurance and supplementary contracts with life contingencies for which the estimated fair value is the amount payable on demand. Also included are disclosures for the Company's limited payment policies, which the Company has used discounted cash flow analyses similar to those used for investment contracts with known maturities to estimate fair value. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Collateral received - securities lending and derivatives: The carrying amount reported in the consolidated balance sheets for these instruments approximates their fair value. Short-term debt: The carrying amount reported in the consolidated balance sheets for these instruments approximates their fair value. Long-term debt, payable to NFS: The fair value for long-term debt is based on quoted market prices. Commitments to extend credit: Commitments to extend credit have nominal fair value because of the short-term nature of such commitments. See note 10. Futures contracts: The fair value for futures contracts is based on quoted market prices. Interest rate and foreign currency swaps: The fair value for interest rate and foreign currency swaps are calculated with pricing models using current rate assumptions. Carrying amount and estimated fair value of financial instruments subject to disclosure requirements and policy reserves on life insurance contracts were as follows as of December 31:
2001 2000 --------------------------- ---------------------------- Carrying Estimated Carrying Estimated (in millions) amount fair value amount fair value ========== ========== ========== ========== Assets: Investments: Securities available-for-sale: Fixed maturity securities $ 18,370.8 $ 18,370.8 $ 15,451.3 $ 15,451.3 Equity securities 94.0 94.0 109.0 109.0 Mortgage loans on real estate, net 7,113.1 7,293.3 6,168.3 6,327.8 Policy loans 591.1 591.1 562.6 562.6 Short-term investments 1,011.3 1,011.3 442.6 442.6 Cash 22.6 22.6 18.4 18.4 Assets held in separate accounts 59,513.0 59,513.0 65,897.2 65,897.2 Liabilities: Investment contracts (19,549.5) (18,421.0) (16,815.3) (15,979.8) Policy reserves on life insurance contracts (5,666.5) (5,524.4) (5,368.4) (5,128.5) Collateral received - securities lending and derivatives (809.6) (809.6) -- -- Short-term debt (100.0) (100.0) (118.7) (118.7) Long-term debt, payable to NFS (300.0) (300.0) -- -- Liabilities related to separate accounts (59,513.0) (58,387.3) (65,897.2) (64,237.6) Derivative financial instruments: Interest rate swaps hedging assets (5.6) (5.6) (8.3) (8.3) Cross currency interest rate swaps (66.0) (66.0) (24.3) (24.3) Futures contracts (33.0) (33.0) (16.0) (16.0) ---------- ---------- ---------- ----------
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (10) Risk Disclosures The following is a description of the most significant risks facing life insurers and how the Company mitigates those risks: Credit Risk: The risk that issuers of securities owned by the Company or mortgagors on mortgage loans on real estate owned by the Company will default or that other parties, including reinsurers, which owe the Company money, will not pay. The Company minimizes this risk by adhering to a conservative investment strategy, by maintaining reinsurance and credit and collection policies and by providing for any amounts deemed uncollectible. Interest Rate Risk: The risk that interest rates will change and cause a decrease in the value of an insurer's investments. This change in rates may cause certain interest-sensitive products to become uncompetitive or may cause disintermediation. The Company mitigates this risk by charging fees for non-conformance with certain policy provisions, by offering products that transfer this risk to the purchaser and/or by attempting to match the maturity schedule of its assets with the expected payouts of its liabilities. To the extent that liabilities come due more quickly than assets mature, an insurer could potentially have to borrow funds or sell assets prior to maturity and potentially recognize a gain or loss. Legal/Regulatory Risk: The risk that changes in the legal or regulatory environment in which an insurer operates will result in increased competition, reduced demand for a company's products, or create additional expenses not anticipated by the insurer in pricing its products. The Company mitigates this risk by offering a wide range of products and by operating throughout the U. S., thus reducing its exposure to any single product or jurisdiction and also by employing underwriting practices which identify and minimize the adverse impact of this risk. Financial Instruments with Off-Balance-Sheet Risk: The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business through management of its investment portfolio. These financial instruments include commitments to extend credit in the form of loans and derivative financial instruments. These instruments involve, to varying degrees, elements of credit risk in excess of amounts recognized on the consolidated balance sheets. Commitments to fund fixed rate mortgage loans on real estate are agreements to lend to a borrower and are subject to conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a deposit. Commitments extended by the Company are based on management's case-by-case credit evaluation of the borrower and the borrower's loan collateral. The underlying mortgage property represents the collateral if the commitment is funded. The Company's policy for new mortgage loans on real estate is to generally lend no more than 80% of collateral value. Should the commitment be funded, the Company's exposure to credit loss in the event of nonperformance by the borrower is represented by the contractual amounts of these commitments less the net realizable value of the collateral. The contractual amounts also represent the cash requirements for all unfunded commitments. Commitments on mortgage loans on real estate of $344.0 million extending into 2002 were outstanding as of December 31, 2001. The Company also had $81.5 million of commitments to purchase fixed maturity securities outstanding as of December 31, 2001. Notional amounts of derivative financial instruments, primarily interest rate swaps, interest rate futures contracts and foreign currency swaps, significantly exceed the credit risk associated with these instruments and represent contractual balances on which calculations of amounts to be exchanged are based. Credit exposure is limited to the sum of the aggregate fair value of positions that have become favorable to NLIC, including accrued interest receivable due from counterparties. Potential credit losses are minimized through careful evaluation of counterparty credit standing, selection of counterparties from a limited group of high quality institutions, collateral agreements and other contract provisions. As of December 31, 2001, NLIC's credit risk from these derivative financial instruments was $1.5 million net of $18.0 million of cash colleteral. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Equity Market Risk: Asset fees calculated as a percentage of the separate account assets are a significant source of revenue to the Company. As of December 31, 2001, 82% of separate account assets were invested in equity mutual funds. Gains and losses in the equity markets will result in corresponding increases and decreases in the Company's separate account assets and the reported asset fee revenue. In addition, a decrease in separate account assets may decrease the Company's expectations of future profit margins, which may require the Company to accelerate the amortization of deferred policy acquisition costs. Significant Concentrations of Credit Risk: The Company grants mainly commercial mortgage loans on real estate to customers throughout the U. S. The Company has a diversified portfolio with no more than 20% (22% in 2000) in any geographic area and no more than 2% (1% in 2000) with any one borrower as of December 31, 2001. As of December 31, 2001, 34% (36% in 2000) of the carrying value of the Company's commercial mortgage loan portfolio financed retail properties. Significant Business Concentrations: As of December 31, 2001, the Company did not have a material concentration of financial instruments in a single investee, industry or geographic location. Also, the Company did not have a concentration of business transactions with a particular customer, lender or distribution source, a market or geographic area in which business is conducted that makes it vulnerable to an event which could cause a severe impact to the Company's financial position. Reinsurance: The Company has entered into reinsurance contracts to cede a portion of its general account individual annuity business. Total recoveries due from these contracts were $161.2 million and $143.1 million as of December 31, 2001 and 2000, respectively. The contracts are immaterial to the Company's results of operations. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder. Under the terms of the contracts, trusts have been established as collateral for the recoveries. The trust assets are invested in investment grade securities, the fair value of which must at all times be greater than or equal to 100% or 102% of the reinsured reserves, as outlined in the underlying contract. Collateral - Derivatives: The Company enters into agreements with various counterparties to execute over-the-counter derivative transactions. The Company's policy is to include a Credit Support Annex with each agreement to protect the Company for any exposure above the approved credit threshold. This also protects the counterparty against exposure to the Company. The Company generally posts securities as collateral and receives cash as collateral from counterparties. The Company maintains ownership of the securities at all times and is entitled to receive from the borrower any payments for interest or dividends received during the loan term. Collateral - Securities Lending: The Company, through its agent, lends certain portfolio holdings and in turn receives cash collateral. The cash collateral is invested in high-quality short-term investments. The Company's policy requires a minimum of 102% of the fair value of the securities loaned be maintained as collateral. 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 securities at all times and is entitled to receive from the borrower any payments for interest or dividends received during the loan term. (11) Pension Plan, Postretirement Benefits Other than Pensions and Retirement Savings Plan The Company is a participant, together with other affiliated companies, in a pension plan covering all employees who have completed at least one year of service and who have met certain age requirements. Plan contributions are invested in a group annuity contract of NLIC. Benefits are based upon the highest average annual salary of a specified number of consecutive years of the last ten years of service. The Company funds pension costs accrued for direct employees plus an allocation of pension costs accrued for employees of affiliates whose work efforts benefit the Company. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Pension costs (benefits) charged to operations by the Company during the years ended December 31, 2001, 2000 and 1999 were $5.0 million, $1.9 million and $(8.3) million, respectively. The Company has recorded a prepaid pension asset of $9.4 million and $13.6 million as of December 31, 2001 and 2000, respectively. In addition to the defined benefit pension plan, the Company, together with other affiliated companies, participates in life and health care defined benefit plans for qualifying retirees. Postretirement life and health care benefits are contributory and generally available to full time employees who have attained age 55 and have accumulated 15 years of service with the Company after reaching age 40. 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. These caps can increase annually, but not more than three percent. 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 group annuity contracts of NLIC. The Company elected to immediately recognize its estimated accumulated postretirement benefit obligation (APBO), however, certain affiliated companies elected to amortize their initial transition obligation over periods ranging from 10 to 20 years. The Company's accrued postretirement benefit expense as of December 31, 2001 and 2000 was $53.8 million and $51.0 million, respectively and the net periodic postretirement benefit cost (NPPBC) for 2001, 2000 and 1999 was $2.9 million, $3.8 million and $4.9 million, respectively. Information regarding the funded status of the pension plan as a whole and the postretirement life and health care benefit plan as a whole as of December 31, 2001 and 2000 follows:
Pension Benefits Postretirement Benefits ------------------------- ----------------------- (in millions) 2001 2000 2001 2000 ======== ======== ======== ======== Change in benefit obligation Benefit obligation at beginning of year $1,981.7 $1,811.4 $ 276.4 $ 239.8 Service cost 89.3 81.4 12.6 12.2 Interest cost 129.1 125.3 21.4 18.7 Participant contributions -- -- 3.3 2.9 Plan amendment 27.7 -- 0.2 -- Actuarial (gain) loss (5.8) 34.8 20.2 16.1 Benefits paid (89.8) (71.2) (20.1) (13.3) -------- -------- -------- -------- Benefit obligation at end of year 2,132.2 1,981.7 314.0 276.4 ======== ======== ======== ======== Change in plan assets Fair value of plan assets at beginning of year 2,337.1 2,247.6 119.4 91.3 Actual return (loss) on plan assets (46.6) 140.9 (0.2) 12.2 Employer contribution -- -- 17.3 26.3 Participant contributions -- -- 3.3 2.9 Plan curtailment -- 19.8 -- -- Benefits paid (89.8) (71.2) (20.1) (13.3) -------- -------- -------- -------- Fair value of plan assets at end of year 2,200.7 2,337.1 119.7 119.4 -------- -------- -------- -------- Funded status 68.5 355.4 (194.3) (157.0) Unrecognized prior service cost 49.5 25.0 0.2 -- Unrecognized net gains (79.3) (311.7) (4.0) (34.1) Unrecognized net (asset) obligation at transition (5.1) (6.4) 0.8 1.0 -------- -------- -------- -------- Prepaid (accrued) benefit cost $ 33.6 $ 62.3 $ (197.3) $ (190.1) ======== ======== ======== ========
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Assumptions used in calculating the funded status of the pension plan and postretirement life and health care benefit plan were as follows:
Pension Benefits Postretirement Benefits ----------------------- ------------------------ 2001 2000 2001 2000 ======================= ======================== Weighted average discount rate 6.50% 6.75% 7.25% 7.50% Rate of increase in future compensation levels 4.75% 5.00% -- -- Assumed health care cost trend rate: Initial rate -- -- 11.00% 11.00% Ultimate rate -- -- 5.50% 5.50% Declining period -- -- 4 Years 4 Years ----- ----- ----- -----
The components of net periodic pension cost for the pension plan as a whole for the years ended December 31, 2001, 2000 and 1999 were as follows:
(in millions) 2001 2000 1999 ======================================================================================================================= Service cost (benefits earned during the period) $ 89.3 $ 81.4 $ 80.0 Interest cost on projected benefit obligation 129.1 125.3 109.9 Expected return on plan assets (183.8) (184.5) (160.3) Recognized gains (7.8) (11.8) (9.1) Amortization of prior service cost 3.2 3.2 3.2 Amortization of unrecognized transition asset (1.3) (1.3) (1.4) ------ ------ ------ $ 28.7 $ 12.3 $ 22.3 ====== ====== ======
Effective December 31, 1998, Wausau Service Corporation (WSC) ended its affiliation with Nationwide and employees of WSC ended participation in the pension plan resulting in a curtailment gain of $67.1 million. During 1999, the pension plan transferred assets to settle its obligation related to WSC employees, resulting in a gain of $32.9 million. The spin-off of liabilities and assets was completed in the year 2000, resulting in an adjustment to the curtailment gain of $19.8 million. Assumptions used in calculating the net periodic pension cost for the pension plan were as follows:
2001 2000 1999 ==== ==== ==== Weighted average discount rate 6.75% 7.00% 6.08% Rate of increase in future compensation levels 5.00% 5.25% 4.33% Expected long-term rate of return on plan assets 8.00% 8.25% 7.33% ---- ---- ----
The components of NPPBC for the postretirement benefit plan as a whole for the years ended December 31, 2001, 2000 and 1999 were as follows:
(in millions) 2001 2000 1999 ===== ===== ===== Service cost (benefits attributed to employee service during the year) $12.6 $12.2 $14.2 Interest cost on accumulated postretirement benefit obligation 21.4 18.7 17.6 Expected return on plan assets (9.6) (7.9) (4.8) Amortization of unrecognized transition obligation of affiliates 0.6 0.6 0.6 Net amortization and deferral (0.4) (1.3) (0.5) ----- ----- ----- $24.6 $22.3 $27.1 ===== ===== =====
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Actuarial assumptions used for the measurement of the NPPBC for the postretirement benefit plan for 2001, 2000 and 1999 were as follows:
2001 2000 1999 ======= ======= ======= Discount rate 7.50% 7.80% 6.65% Long-term rate of return on plan assets, net of tax in 1999 8.00% 8.30% 7.15% Assumed health care cost trend rate: Initial rate 11.00% 13.00% 15.00% Ultimate rate 5.50% 5.50% 5.50% Declining period 4 Years 5 Years 6 Years ------- ------- -------
Because current plan costs are very close to the employer dollar caps, the health care cost trend has an immaterial effect on plan obligations for the postretirement benefit plan as a whole. For this reason, the effect of a one percentage point increase or decrease in the assumed health care cost trend rate on the APBO as of December 31, 2001 and on the NPPBC for the year ended December 31, 2001 was not calculated. The Company, together with other affiliated companies, sponsors a defined contribution retirement savings plan covering substantially all employees of the Company. Employees may make salary deferral contributions of up to 22%. Salary deferrals of up to 6% are subject to a 50% Company match. The Company match is funded on a bi-weekly basis and the expense of such contributions are allocated to the Company based on employee contributions. The Company's expense for contributions to this plan totaled $5.6 million, $4.4 million and $3.3 million for 2001, 2000 and 1999, respectively. Individuals are subject to a dollar limit on salary deferrals per Internal Revenue Service (IRS) Section 402(g) and other limits also apply. The Company has no legal obligation for benefits under this plan. (12) Shareholder's Equity, Regulatory Risk-Based Capital, Retained Earnings and Dividend Restrictions 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 the Company's insurance regulatory total adjusted capital, as defined by the NAIC, to its 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 exceed the minimum risk-based capital requirements for all periods presented herein. The statutory capital and surplus of NLIC as of December 31, 2001, 2000 and 1999 was $1.76 billion, $1.28 billion and $1.35 billion, respectively. The statutory net income of NLIC for the years ended December 31, 2001, 2000 and 1999 was $83.1 million, $158.7 million and $276.2 million, respectively. The NAIC completed a project to codify statutory accounting principles (Codification), which became effective January 1, 2001 for NLIC and NLAIC. The resulting change to NLIC's January 1, 2001 surplus was an increase of approximately $80.0 million. The significant change for NLIC, as a result of Codification, was the recording of deferred taxes, which were not recorded prior to the adoption of Codification. The Company is limited in the amount of shareholder dividends it may pay without prior approval by the Department. As of December 31, 2001 $141.0 million in dividends could be paid by NLIC without prior approval. In addition, 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) that can inure to the benefit of the Company and its shareholders. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The Company currently does not expect such regulatory requirements to impair its ability to pay operating expenses, interest and shareholder dividends in the future. (13) Related Party Transactions During 2001, the Company entered into a transaction with NMIC, whereby it sold 78% of its interest in a limited partnership (representing 49% of the limited partnership) to NMIC for $158.9 million. As a result of this sale, the Company recorded a realized gain of $44.4 million, and related tax expense of $15.5 million. The sale price, which was paid in cash, represented the fair value of the limited partnership interest and was based on a valuation of the limited partnership and its underlying investments. The valuation was completed by qualified management of the limited partnership and utilized a combination of internal and independent valuations of the underlying investments of the limited partnership. Additionally, senior financial officers and the Boards of Directors of the Company and NMIC separately reviewed and approved the valuation prior to the execution of this transaction. The Company continues to hold an economic and voting interest in the limited partnership of approximately 14%, with NMIC holding the remaining interests. NLIC 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 $4.68 billion and $4.80 billion as of December 31, 2001 and 2000, respectively. Total revenues from these contracts were $150.7 million, $156.8 million, and $149.7 million for the years ended December 31, 2001, 2000, and 1999, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances were $118.4 million, $131.9 million, and $112.0 million for the years ended December 31, 2001, 2000, and 1999, respectively. The terms of these contracts are consistent in all material respects with what the Company offers to unaffiliated parties. The Company files a consolidated federal tax return with NMIC, as described in Note 2(i). Total payments (from) to NMIC were $(45.4) million, $74.6 million, and $29.8 million for the years ended December 31, 2001, 2000, and 1999, respectively. During second quarter 1999, the Company entered into a modified coinsurance arrangement to reinsure the 1999 operating results of an affiliated company, Employers Life Insurance Company of Wausau (ELOW) retroactive to January 1, 1999. In September 1999, NFS acquired ELOW for $120.8 million and immediately merged ELOW into NLIC terminating the modified coinsurance arrangement. Because ELOW was an affiliate, the Company accounted for the merger similar to poolings-of-interests; however, prior period financial statements were not restated due to immateriality. The reinsurance and merger combined contributed $1.46 million to net income in 1999. The Company has a reinsurance agreement with NMIC whereby all of the Company's accident and health business is ceded to NMIC on a modified coinsurance basis. The agreement covers individual accident and health business for all periods presented and group and franchise accident and health business since July 1, 1999. Either party may terminate the agreement on January 1 of any year with prior notice. Prior to July 1, 1999 group and franchise accident and health business and a block of group life insurance policies were ceded to ELOW under a modified coinsurance agreement. Under a modified coinsurance agreement, invested assets are retained by the ceding company and investment earnings are paid to the reinsurer. Under the terms of the Company's agreements, the investment risk associated with changes in interest rates is borne by the reinsurer. Risk of asset default is retained by the Company, although a fee is paid to the Company for the retention of such risk. 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 and ELOW for the years ended December 31, 2001, 2000 and 1999 were $200.7 million, $170.1 million, and $193.0 million, respectively, while benefits, claims and expenses ceded were $208.5 million, $168.0 million and $197.3 million, respectively. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Pursuant to a cost sharing agreement among NMIC and certain of its direct and indirect subsidiaries, including the Company, NMIC provides certain operational and administrative services, such as investment management, advertising, personnel and general management services, to those subsidiaries. Expenses covered by such agreement are subject to allocation among NMIC and such subsidiaries. Measures used to allocate expenses among companies include individual employee estimates of time spent, special cost studies, salary expense, commission expense and other methods agreed to by the participating companies that are within industry guidelines and practices. In addition, Nationwide Services Company, a subsidiary of NMIC, provides computer, telephone, mail, employee benefits administration, and other services to NMIC and certain of its direct and indirect subsidiaries, including the Company, based on specified rates for units of service consumed. For the years ended December 31, 2001, 2000 and 1999, the Company made payments to NMIC and Nationwide Services Company totaling $139.8 million, $150.3 million, and $124.1 million, respectively. The Company does not believe that expenses recognized under these agreements are materially different than expenses that would have been recognized had the Company operated on a stand-alone basis. 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 $26.4 million, $31.4 million and $34.5 million for the years ended December 31, 2001, 2000 and 1999, respectively. The Company leases office space from NMIC and certain of its subsidiaries. For the years ended December 31, 2001, 2000 and 1999, the Company made lease payments to NMIC and its subsidiaries of $18.7 million, $14.1 million and $9.9 million, respectively. The Company also participates in intercompany repurchase agreements with affiliates whereby the seller will transfer securities to the buyer at a stated value. Upon demand or after a stated period, the seller will repurchase the securities at the original sales price plus a price differential. During 2001, the most the Company had outstanding at any given time was $368.5 million and the Company incurred interest expense on intercompany repurchase agreements of $0.2 million for 2001. Transactions under the agreements during 2000 and 1999 were not material. The Company believes that the terms of the repurchase agreements are materially consistent with what the Company could have obtained with unaffiliated parties. The Company and various affiliates entered into 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 were $54.8 million and $321.1 million as of December 31, 2001 and 2000, respectively, and are included in short-term investments on the accompanying 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 three years ended December 31, 2001 were $52.9 million, $65.0 million and $79.7 million, respectively. On December 19, 2001 the Company sold a 7.50%, $300.0 million surplus note to NFS, maturing on December 17, 2031. The fair value of the surplus note as of December 31, 2001 was $300.0 million. Principal and interest payments are subject to prior approval by the superintendent of insurance of the State of Ohio. The Company is scheduled to pay interest semi-annually on June 17 and December 17 of each year commencing June 17, 2002. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (14) Bank Lines of Credit The Company has available as a source of funds a $1 billion revolving credit facility entered into by NFS, NLIC and NMIC. The facility is comprised of a five year $700 million agreement and a 364 day $300 million agreement 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 maintain consolidated tangible net worth, as defined, in excess of $1.69 billion and NLIC maintain statutory surplus in excess of $935 million. The Company had no amounts outstanding under this agreement as of December 31, 2001. Of the total facility, $300 million is designated to back NLIC's commercial paper program. Therefore, borrowing capacity under this facility is reduced by any amounts outstanding under the commercial paper program, which totaled $100.0 million as of December 31, 2001. (15) Contingencies On October 29, 1998, the Company was named in a lawsuit filed in Ohio state court related to the sale of deferred annuity products for use as investments in tax-deferred contributory retirement plans (Mercedes Castillo v. Nationwide Financial Services, Inc., Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company). On May 3, 1999, the complaint was amended to, among other things, add Marcus Shore as a second plaintiff. The amended complaint is brought as a class action on behalf of all persons who purchased individual deferred annuity contracts or participated in group annuity contracts sold by the Company and the other named Company affiliates which were used to fund certain tax-deferred retirement plans. The amended complaint seeks unspecified compensatory and punitive damages. On June 11, 1999, the Company and the other named defendants filed a motion to dismiss the amended complaint. On March 8, 2000, the court denied the motion to dismiss the amended complaint filed by the Company and the other named defendants. On January 25, 2002, the plaintiffs filed a motion for leave to amend their complaint to add three new named plaintiffs. On February 9, 2002, the plaintiffs filed a motion for class certification. The class has not been certified. The Company intends to defend this lawsuit vigorously. On August 15, 2001, the Company was named in a lawsuit filed in Connecticut federal court titled 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. On September 5, 2001, the plaintiffs amended their complaint to include class action allegations. The plaintiffs seek to represent a class of plan trustees who purchased variable annuities to fund qualified ERISA retirement plans. The amended complaint alleges that the retirement plans purchased variable annuity contracts from the Company which invested in mutual funds that were offered by separate mutual fund companies; that the Company was a fiduciary under ERISA and that the Company breached its fiduciary duty when it accepted certain fees from the mutual fund companies that purportedly were never disclosed by the Company; and that the Company violated ERISA by replacing many of the mutual funds originally included in the plaintiffs' annuities with "inferior" funds because the new funds purportedly paid more in revenue sharing. The amended complaint seeks disgourgement of fees by the Company and other unspecified compensatory damages. On November 15, 2001, the Company filed a motion to dismiss the amended complaint, which has not been decided. On December 3, 2001, the plaintiffs filed a motion for class certification. On January 15, 2002, the plaintiffs filed a response to the Company's motion to dismiss the amended complaint. On February 22, 2002, the Company filed a reply in support of its motion to dismiss. The class has not been certified. The Company intends to defend this lawsuit vigorously. There can be no assurance that any such litigation will not have a material adverse effect on the Company in the future. (16) Segment Information The Company uses differences in products as the basis for defining its reportable segments. The Company reports three product segments: Individual Annuity, Institutional Products and Life Insurance. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The Individual Annuity segment consists of individual The BEST of AMERICA and private label deferred variable annuity products, deferred fixed annuity products and income products. 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, variable annuity contracts provide the customer with access to a wide range of investment options and asset protection in the event of an untimely death, while fixed annuity contracts generate a return for the customer at a specified interest rate fixed for prescribed periods. The Institutional Products segment is comprised of the Company's private and public sector group retirement plans and medium-term note program. The private sector includes the 401(k) business generated through fixed and variable annuities. The public sector includes the IRC Section 457 business in the form of fixed and variable annuities. The Life Insurance segment consists of investment life products, including both individual variable life and COLI products, traditional life insurance products and universal life insurance. Life insurance products provide a death benefit and generally also allow the customer to build cash value on a tax-advantaged basis. In addition to the product segments, the Company reports a Corporate segment. The Corporate segment includes net investment income not allocated to the three product segments, certain revenues and expenses of the Company's broker/dealer subsidiary, unallocated expenses and interest expense on debt. In addition to these operating revenues and expenses, the Company also reports net realized gains and losses on investments, hedging instruments and hedged items in the Corporate segment. The following tables summarize the financial results of the Company's business segments for the years ended December 31, 2001, 2000 and 1999.
Individual Institutional Life (in millions) Annuity Products Insurance Corporate Total ========== ============ ========== ========= ========= 2001: Net investment income $ 534.7 $ 847.5 $ 323.3 $ 19.5 $ 1,725.0 Other operating revenue 556.0 205.9 506.5 16.0 1,284.4 --------- --------- --------- --------- --------- Total operating revenue (1) 1,090.7 1,053.4 829.8 35.5 3,009.4 --------- --------- --------- --------- --------- Interest credited to policyholder account balances 433.2 627.8 177.7 -- 1,238.7 Amortization of deferred policy acquisition costs 220.0 47.6 80.3 -- 347.9 Interest expense on debt -- -- -- 6.2 6.2 Other benefits and expenses 206.1 170.2 387.1 2.7 766.1 --------- --------- --------- --------- --------- Total benefits and expenses 859.3 845.6 645.1 8.9 2,358.9 --------- --------- --------- --------- --------- Operating income before federal income tax expense (1) 231.4 207.8 184.7 26.6 650.5 Net realized losses on investments, hedging instruments and hedged items (2) -- -- -- (20.2) (20.2) --------- --------- --------- --------- --------- Income before federal income tax expense and cumulative effect of adoption of accounting principles $ 231.4 $ 207.8 $ 184.7 $ 6.4 $ 630.3 ========= ========= ========= ========= ========= Assets as of year end $43,885.4 $34,130.1 $ 9,129.0 $ 4,010.1 $91,154.6 ========= ========= ========= ========= =========
- ---------- (1) Excludes net realized gains and losses on investments, hedging instruments and hedged items. (2) Realized gains related to securitization transactions are included in operating income. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued
Individual Institutional Life (in millions) Annuity Products Insurance Corporate Total ========= ============ ========= ========= ========= 2000: Net investment income $ 483.2 $ 827.4 $ 289.2 $ 55.1 $ 1,654.9 Other operating revenue 625.9 251.6 453.9 17.0 1,348.4 --------- --------- --------- --------- --------- Total operating revenue(1) 1,109.1 1,079.0 743.1 72.1 3,003.3 --------- --------- --------- --------- --------- Interest credited to policyholder account balances 396.4 628.8 157.2 -- 1,182.4 Amortization of deferred policy acquisition costs 238.7 49.2 64.2 -- 352.1 Interest expense on debt -- -- -- 1.3 1.3 Other benefits and expenses 192.3 170.3 368.8 33.7 765.1 --------- --------- --------- --------- --------- Total benefits and expenses 827.4 848.3 590.2 35.0 2,300.9 --------- --------- --------- --------- --------- Operating income before federal income tax expense(1) 281.7 230.7 152.9 37.1 702.4 Net realized losses on investments, hedging instruments and hedged items -- -- -- (19.4) (19.4) --------- --------- --------- --------- --------- Income before federal income tax expense and cumulative effect of adoption of accounting principles $ 281.7 $ 230.7 $ 152.9 $ 17.7 $ 683.0 ========= ========= ========= ========= ========= Assets as of year end $45,422.5 $37,217.3 $ 8,103.3 $ 1,824.2 $92,567.3 ========= ========= ========= ========= ========= 1999: Net investment income $ 458.9 $ 771.2 $ 253.1 $ 37.6 $ 1,520.8 Other operating revenue 511.4 211.9 393.0 66.1 1,182.4 --------- --------- --------- --------- --------- Total operating revenue (1) 970.3 983.1 646.1 103.7 2,703.2 --------- --------- --------- --------- --------- Interest credited to policyholder account balances 384.9 580.9 130.5 -- 1,096.3 Amortization of deferred policy acquisition costs 170.9 41.6 60.1 -- 272.6 Other benefits and expenses 155.3 142.8 334.7 83.4 716.2 --------- --------- --------- --------- --------- Total benefits and expenses 711.1 765.3 525.3 83.4 2,085.1 --------- --------- --------- --------- --------- Operating income before federal income tax expense (1) 259.2 217.8 120.8 20.3 618.1 Net realized losses on investments, hedging instruments and hedged items -- -- -- (11.6) (11.6) --------- --------- --------- --------- --------- Income before federal income tax expense and cumulative effect of adoption of accounting principles $ 259.2 $ 217.8 $ 120.8 $ 8.7 $ 606.5 ========= ========= ========= ========= ========= Assets as of year end $45,667.8 $39,045.1 $ 6,616.7 $ 1,346.3 $92,675.9 ========= ========= ========= ========= =========
- ---------- (1) Excludes net realized gains and losses on investments, hedging instruments and hedged items. The Company has no significant revenue from customers located outside of the United States nor does the Company have any significant long-lived assets located outside the United States. PART II - OTHER INFORMATION CONTENTS OF REGISTRATION STATEMENT This Form S-6 Registration Statement comprises the following papers and documents: - The facing sheet. - Cross-reference to items required by Form N-8B-2. - The prospectus consisting of 126 pages. - Representations and Undertakings. - Independent Auditors' Consent. - Signatures. The following exhibits required by Forms N-8B-2 and S-6: 1. Power of Attorney dated April 1, 2002. Attached hereto. 2. Resolution of the Depositor's Board of Filed previously in connection with Securities and Exchange Directors authorizing the establishment Commission File No. 333-31725 and is hereby incorporated by of the Registrant, adopted reference. 3. Distribution Contracts Filed previously in connection with Securities and Exchange Commission File No. 333-27133 and is hereby incorporated by reference. 4. Form of Security Filed previously in connection with Securities and Exchange Commission File No. 333-53728 (Pre-Effective Amendment No. 1) and hereby incorporated by reference. 5. Articles of Incorporation of Depositor Filed previously in connection with Securities and Exchange Commission File No. 333-27133 and is hereby incorporated by reference. 6. Application form of Security Filed previously in connection with Securities and Exchange Commission File No. 333-53728 (Pre-Effective Amendment No. 1) and hereby incorporated by reference. 7. Opinion of Counsel Filed previously in connection with Securities and Exchange Commission File No. 333-53728 (Pre-Effective Amendment No. 1) and hereby incorporated by reference.
REPRESENTATIONS AND UNDERTAKINGS The Registrant and Nationwide hereby make the following representations and undertakings: (a) This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment Company Act of 1940 (the "Act"). The Registrant and Nationwide elect to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the Act with respect to the policies described in the prospectus. The policies have been designed in a way as to qualify for the exemptive relief from various provisions of the Act afforded by Rule 6e-3(T). (b) Paragraph (b)(13)(iii)(F) of Rule 6e-3(T) is being relied on for the deduction of the mortality and expense risk charges ("risk charges") assumed by Nationwide under the policies. Nationwide represents that the risk charges are within the range of industry practice for comparable policies and reasonable in relation to all of the risks assumed by the issuer under the policies. Actuarial memoranda demonstrating the reasonableness of these charges are maintained by Nationwide, and will be made available to the Securities and Exchange Commission (the "SEC") on request. (c) Nationwide has concluded that there is a reasonable likelihood that the distribution financing arrangement of the separate account will benefit the separate account and the contractholders and will keep and make available to the SEC on request a memorandum setting forth the basis for this representation. (d) Nationwide represents that the separate account will invest only in management investment companies which have undertaken to have a board of directors, a majority of whom are not interested persons of Nationwide, formulate and approve any plan under Rule 12b-1 to finance distribution expenses. (e) Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the Registrant hereby undertakes to file with the SEC such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the SEC heretofore or hereafter duly adopted pursuant to authority conferred in that section. (f) The fees and charges deducted under the policy in the aggregate are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Nationwide. INDEPENDENT AUDITORS' CONSENT The Board of Directors of Nationwide Life Insurance Company and Contract Owners of Nationwide VLI Separate Account-4: We consent to use of our reports for Nationwide VLI Separate Account-4 dated February 20, 2002 and for Nationwide Life Insurance Company dated January 29, 2002 included herein, and to the reference to our firm under the heading "Independent Certified Public Accountants" in the Prospectus (File No. 333-53728). KPMG LLP Columbus, Ohio April 22, 2002 SIGNATURES As required by the Securities Act of 1933, the Registrant, Nationwide VLI Separate Account-4 has caused this Post-Effective Amendment No. 3 to the Registration Statement to be signed on its behalf in the City of Columbus, and the State of Ohio, on this 22nd day of May, 2002. NATIONWIDE VLI SEPARATE ACCOUNT-4 ---------------------------------------- (Registrant) (Seal) NATIONWIDE LIFE INSURANCE COMPANY Attest: ---------------------------------------- (Depositor) By: /s/ GLENN W. SODEN By: /s/ STEVEN SAVINI - -------------------------------- ---------------------------------------- Glenn W. Soden Steven Savini Assistant Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on the 22nd day of May, 2002.
SIGNATURE TITLE W. G. JURGENSEN Director and Chief Executive Officer - -------------------------------- W. G. Jurgensen JOSEPH J. GASPER Director and President and - -------------------------------- Chief Operating Officer Joseph J. Gasper MICHAEL S. HELFER Director and Executive - -------------------------------- Vice President-Corporate Strategy Michael S. Helfer DONNA A. JAMES Director and Executive Vice - -------------------------------- President-Chief Administrative Officer Donna A. James ROBERT A. OAKLEY Director and Executive Vice - -------------------------------- President-Chief Financial Officer Robert A. Oakley ROBERT A. WOODWARD, JR Director and Executive Vice - -------------------------------- President-Chief Investment Officer Robert A. Woodward, Jr. GALEN R. BARNES Director - -------------------------------- Galen R. Barnes
By /s/ STEVEN SAVINI ---------------------------------------- Steven Savini Attorney-in-Fact EX-1 3 l94574aex1.txt EX-1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENT, that each of the undersigned as directors and/or officers of NATIONWIDE LIFE INSURANCE COMPANY and NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY, both Ohio corporations, which have filed or will file with the U.S. Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, and if applicable, the Securities Exchange Act of 1934, various registration statements and amendments thereto for the registration of current, as well as any future, separate accounts established by said corporation for the purpose of registering under said Act(s) immediate or deferred variable annuity contracts, fixed interest rate options subject to a market value adjustment, group flexible fund retirement annuity contracts and variable life insurance policies in connection with the separate accounts listed on Exhibit A. As such, the undersigned hereby constitute and appoint W.G. Jurgensen, Joseph J. Gasper, Robert J. Woodward, Jr., Philip C. Gath, Richard A. Karas, Edwin P. McCausland, Jr., Susan A. Wolken, Steven R. Savini and Mark R. Thresher, and each of them with power to act without the others, his/her attorney, with full power of substitution for and in his/her name, place and stead, in any and all capacities, to approve, and sign such Applications and Registration Statements, and any and all amendments thereto, with power to affix the corporate seal of said corporation thereto and to attest said seal and to file the same, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, hereby granting unto said attorneys, and each of them, full power and authority to do and perform all and every act and thing requisite to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming that which said attorneys, or any of them, may lawfully do or cause to be done by virtue hereof. This instrument may be executed in one or more counterparts. IN WITNESS WHEREOF, the undersigned have herewith set their names and seals as of this 1st day of April, 2002. - ------------------------------------ ------------------------------------------- W. G. JURGENSEN, Director and Chief JOSEPH J. GASPER, Director and President Executive Officer and Chief Operating Officer - ------------------------------------ ------------------------------------------- MICHAEL S. HELFER, Director and DONNA A. JAMES, Director and Executive Executive Vice President-Corporate Vice President-Chief Administrative Officer Strategy - ------------------------------------ ------------------------------------------- ROBERT A. OAKLEY, Director and ROBERT J. WOODWARD, JR., Director and Executive Vice President-Chief Executive Vice President-Chief Investment Financial Officer Officer - ------------------------------------ GALEN R. BARNES, Director EXHIBIT A - - MFS Variable Account; - - Multi-Flex Variable Account; - - Nationwide Variable Account; - - Nationwide Variable Account-II; - - Nationwide Variable Account-3; - - Nationwide Variable Account-4; - - Nationwide Variable Account-5; - - Nationwide Variable Account-6; - - Nationwide Variable Account-7; - - Nationwide Variable Account-8; - - Nationwide Variable Account-9; - - Nationwide Variable Account-10; - - Nationwide Variable Account-11; - - Nationwide Variable Account-12; - - Nationwide Variable Account-13; - - Nationwide VA Separate Account-A; - - Nationwide VA Separate Account-B; - - Nationwide VA Separate Account-C; - - Nationwide VA Separate Account-D; - - Nationwide Multiple Maturity Separate Account; - - Nationwide Multiple Maturity Separate Account-2; - - Nationwide Multiple Maturity Separate Account-A; - - Nationwide DC Variable Account; - - NACo Variable Account; - - Nationwide VLI Separate Account; - - Nationwide VLI Separate Account-2; - - Nationwide VLI Separate Account-3; - - Nationwide VLI Separate Account-4; - - Nationwide VLI Separate Account-5; - - Nationwide VLI Separate Account-6; - - Nationwide VL Separate Account-A; - - Nationwide VL Separate Account-B; - - Nationwide VL Separate Account-C; and - - Nationwide VL Separate Account-D. -----END PRIVACY-ENHANCED MESSAGE-----