-----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, RNebshyOl354riHzGkiH9t6WNtHv4JyFHARWXK/CrHM5jBHen05ef7rKcw9dtDZC 79MDRb7R0VU1LMfW0UlynA== 0000950152-02-003626.txt : 20020501 0000950152-02-003626.hdr.sgml : 20020501 ACCESSION NUMBER: 0000950152-02-003626 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONWIDE VL SEPARATE ACCOUNT C CENTRAL INDEX KEY: 0001044822 IRS NUMBER: 311000740 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 333-43639 FILM NUMBER: 02629274 BUSINESS ADDRESS: STREET 1: NATIONWIDE LIFE & ANNUTIY INSURANCE CO STREET 2: PO BOX 182008 CITY: COLUMBUS STATE: OH ZIP: 43218-2008 BUSINESS PHONE: 8008603946 MAIL ADDRESS: STREET 1: NATIONWIDE LIFE & ANNUITY INSURANCE CO STREET 2: PO BOX 182008 CITY: COLUMBUS STATE: OH ZIP: 43218-2008 497 1 l94155ae497.txt NATIONWIDE VL SEP ACCT C FORM 497 NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY Corporate Flexible Premium Variable Universal Life Insurance Policies Issued by Nationwide Life and Annuity Insurance Company through its Nationwide VL Separate Account-C 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 (not all underlying mutual funds are available in every state): AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF THE AMERICAN CENTURY(SM) FAMILY OF INVESTMENTS - - American Century VP Balanced Fund: Class I - - 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 CREDIT SUISSE TRUST (FORMERLY, CREDIT SUISSE WARBURG PINCUS TRUST) - - Small Company Growth Portfolio DREYFUS - - Dreyfus Investment Portfolio - 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) - - Dreyfus Variable Investment Funds - Growth & Income Portfolio: Initial Shares FEDERATED INSURANCE SERIES - - Federated Quality Bond Fund II: Primary Shares FIDELITY VARIABLE INSURANCE PRODUCTS FUND - - VIP Equity-Income Portfolio: Initial Class - - VIP Growth Portfolio: Initial Class - - VIP High Income Portfolio: Initial Class* - - VIP Overseas Portfolio: Initial Class FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - - VIP II Asset Manager Portfolio: Initial Class - - VIP II Contrafund(R) Portfolio: Initial Class FIDELITY VARIABLE INSURANCE PRODUCT 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: Class I) - - 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 1 - - 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 - - Gartmore GVIT Worldwide Leaders Fund: Class I (formerly, Nationwide Global 50(R) 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, Gartmore Global Partners, Strong Capital Management, Inc. and Waddell & Reed Investment Management Company) - - 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 Growth Portfolio - - AMT Guardian Portfolio - - AMT Limited Maturity Bond 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 Bond Fund/VA: Initial Class - - 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) - - Oppenheimer Multiple Strategies Fund/VA: Initial Class 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 *These underlying mutual funds invest in lower quality debt securities commonly referred to as junk bonds THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. A MEMBER OF THE AMERICAN CENTURY FAMILY OF INVESTMENTS - - American Century VP Capital Appreciation Fund: Class I CREDIT SUISSE TRUST (FORMERLY, CREDIT SUISSE WARBURG PINCUS TRUST) - - Global Post-Venture Capital Portfolio (formerly, Post-Venture Capital Portfolio) - - International Focus Portfolio (formerly, International Equity Portfolio) STRONG VARIABLE INSURANCE FUNDS, INC. - - International Stock Funds, Inc. - - Strong Discovery Fund, Inc. THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2000: GARTMORE VARIABLE INSURANCE TRUST ("GVIT") (FORMERLY, NATIONWIDE SEPARATE ACCOUNT TRUST) - - Nationwide(R) GVIT Strategic Value Fund: Class I (formerly, Nationwide(R) Strategic Value Fund) (subadviser: Strong Capital Management, Inc.) THE FOLLOWING UNDERLYING MUTUAL FUND IS NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER JANUARY 25, 2002: GARTMORE VARIABLE INSURANCE TRUST ("GVIT") (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 2 VAN ECK WORLDWIDE INSURANCE TRUST - - Worldwide Bond Fund - - 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 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 AND ANNUITY INSURANCE COMPANY ONE NATIONWIDE PLAZA, RR1-04-D4 COLUMBUS, OHIO 43215 Material incorporated by reference to 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 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 corporate flexible premium variable universal life insurance policies. They are designed for use by corporations and employers, to 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. 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. The death benefit and cash value of this policy may vary to reflect the experience of the Nationwide VL Separate Account-C (the "variable account") or the fixed account, depending on how premium payments are invested. Investors assume certain risks when investing in the policies, including the risk of losing money. Nationwide Life and Annuity Insurance Company ("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. Benefits described in this prospectus may not be available in every jurisdiction - - refer to your policy for specific benefit information. In the future, additional underlying mutual funds managed by certain financial institutions, brokerage firms or their affiliates may be added to the variable account. These additional underlying mutual funds may be offered exclusively to purchasing customers of the particular financial institution or brokerage firm. 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. 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. GUIDELINE LEVEL PREMIUM- The level annual premiums required to mature the policy under guaranteed mortality and current expense charges with an annual effective interest rate of 4%. MATURITY DATE- The policy anniversary on or next following the insured's 100th birthday. NATIONWIDE- Nationwide Life and Annuity Insurance Company. NET AMOUNT AT RISK- Net amount at risk is the death benefit minus the cash value. On the monthly anniversary date, 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 PREMIUMS- Net premiums are equal to the actual premiums minus the percent of premium charges. The percent of premium charges are shown on the policy data page. SUB-ACCOUNTS- Divisions of the variable account to which underlying mutual fund shares are allocated and for which accumulation units are separately maintained. TARGET PREMIUM- The level annual premium at which the sales load is reduced on a current basis. VALUATION PERIOD- Each day the New York Stock Exchange is open for business. VARIABLE ACCOUNT- Nationwide VL Separate Account-C, 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................................... 4 SUMMARY OF POLICY EXPENSES.................................. 6 UNDERLYING MUTUAL FUND ANNUAL EXPENSES...................... 7 SYNOPSIS OF THE POLICIES.................................... 10 NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY................................................ 10 NATIONWIDE INVESTMENT SERVICES CORPORATION............................................ 10 INVESTING IN THE POLICY..................................... 10 The Variable Account and Underlying Mutual Funds The Fixed Account INFORMATION ABOUT THE POLICIES.............................. 12 Minimum Requirements for Policy Issuance Premium Payments Pricing POLICY CHARGES.............................................. 13 Sales Load Tax Load Monthly Cost of Insurance Monthly Administrative Charge Mortality and Expense Risk Charge Income Tax Reduction of Charges SURRENDERING THE POLICY FOR CASH............................ 14 Surrender (Redemption) Cash Surrender Value Partial Surrenders Income Tax Withholding VARIATION IN CASH VALUE..................................... 15 POLICY PROVISIONS........................................... 16 Policy Owner Beneficiary Changes in Existing Insurance Coverage OPERATION OF THE POLICY..................................... 16 Allocation of Net Premium and Cash Value How the Investment Experience is Determined Net Investment Factor Determining the Cash Value Transfers RIGHT TO REVOKE............................................. 18 POLICY LOANS................................................ 18 Taking a Policy Loan Effect on Investment Performance Loan Interest Effect on Death Benefit and Cash Value Repayment ASSIGNMENT.................................................. 19 POLICY OWNER SERVICES....................................... 19 Dollar Cost Averaging DEATH BENEFIT INFORMATION................................... 20 Calculation of the Death Benefit Changes in the Death Benefit Option Maximum Death Benefit Proceeds Payable on Death Incontestability Error in Age Suicide Maturity Proceeds RIGHT OF CONVERSION......................................... 24 GRACE PERIOD................................................ 24 Reinstatement TAX MATTERS................................................. 24 Policy Proceeds Withholding Estate and Generation-Skipping Transfers Taxes Non-Resident Aliens Special Considerations for Corporations Taxation of Nationwide Tax Changes STATE REGULATION............................................ 27 REPORTS TO POLICY OWNERS.................................... 28 ADVERTISING................................................. 28 LEGAL PROCEEDINGS........................................... 28 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.................... 29 REGISTRATION STATEMENT...................................... 29 DISTRIBUTION OF THE POLICIES................................ 29 ADDITIONAL INFORMATION ABOUT NATIONWIDE............................................. 30 APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS.......... 33 APPENDIX B: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES, AND DEATH BENEFITS................... 43 APPENDIX C: PERFORMANCE SUMMARY INFORMATION............................................ 53
5 SUMMARY OF POLICY EXPENSES Nationwide deducts certain charges from the policy. Charges are made for administrative, tax and sales loads, providing life insurance protection, and assuming the mortality and expense risks. Nationwide deducts a sales load and a tax load from premium payments. The sales load is guaranteed never to exceed 5.5% of each premium payment during the first 7 policy years and 2.0% thereafter. On a current basis, the sales load is 3.0% of the premium payment plus 2.5% of premiums up to the target premium during the first 7 policy years, and 0% on all premiums thereafter (see "Sales Load"). The tax load is 3.5% of premiums for all states (see "Tax Load"). The mortality and expense risk charge is guaranteed not to exceed an annualized rate of 0.75% of the daily net assets of the variable account. Currently, the annualized rate will be 0.40% in policy years 1 through 4, 0.25% in policy years 5 through 20, and 0.10% thereafter. Nationwide deducts the following charges from the cash value of the policy: - - monthly cost of insurance; - - monthly cost of any additional benefits provided by riders to the policy; and - - monthly administrative expense charge. Currently, the administrative expense charge is $5 per month. The administrative expense charge is guaranteed not to exceed $10 per month. Nationwide does not deduct a surrender charge from the polices. 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)
Total Underlying Management Other 12b-1 Mutual Fund Fees Expenses Fees Expenses ---- -------- ---- -------- American Century Variable Portfolios, Inc. - American Century VP Balanced Fund: Class I 0.90% 0.00% 0.00% 0.90% American Century Variable Portfolios, Inc. - American Century VP Capital Appreciation Fund: Class I 1.00% 0.00% 0.00% 1.00% American Century Variable Portfolios, Inc. - American Century VP Income & Growth Fund: Class I 0.70% 0.00% 0.00% 0.70% American Century Variable Portfolios, Inc. - American Century VP International Fund: Class I 1.26% 0.00% 0.00% 1.26% American Century Variable Portfolios, Inc. - American Century VP Ultra Fund: Class I 1.00% 0.00% 0.00% 1.00% American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class I 0.97% 0.00% 0.00% 0.97% Credit Suisse Trust - Global Post-Venture Capital Portfolio 1.04% 0.36% 0.00% 1.40% Credit Suisse Trust - International Focus Portfolio 1.00% 0.30% 0.00% 1.30% Credit Suisse Trust - Small Company Growth Portfolio 0.90% 0.22% 0.00% 1.12% Dreyfus Investment Portfolios - Small Cap Stock Index Fund: Service Shares 0.35% 0.00% 0.25% 0.60% 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% Dreyfus Variable Investment Fund - Growth & Income Portfolio: Initial Shares 0.75% 0.05% 0.00% 0.80% Federated Insurance Series - Federated Quality Bond Fund II: Primary Shares 0.55% 0.15% 0.00% 0.70% Fidelity VIP Equity-Income Portfolio: Initial Class 0.48% 0.10% 0.00% 0.58% Fidelity VIP Growth Portfolio: Initial Class 0.58% 0.10% 0.00% 0.68% Fidelity VIP High Income Portfolio: Initial Class 0.58% 0.13% 0.00% 0.71% Fidelity VIP Overseas Portfolio: Initial Class 0.73% 0.19% 0.00% 0.92% Fidelity VIP II Asset Manager Portfolio: Initial Class 0.53% 0.11% 0.00% 0.64% Fidelity VIP II Contrafund(R) Portfolio: Initial Class 0.58% 0.10% 0.00% 0.68% Fidelity VIP III Growth Opportunities Portfolio: Initial Class 0.58% 0.11% 0.00% 0.69% 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: Class I 0.98% 0.26% 0.00% 1.24% GVIT Gartmore GVIT Global Utilities Fund: Class I 0.80% 0.28% 0.00% 1.08%
Total Underlying Management Other 12b-1 Mutual Fund Fees Expenses Fees Expenses ---- -------- ---- -------- 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 Fund 0.00% 0.36% 0.25% 0.61% GVIT Gartmore GVIT Investor Destinations Moderate Fund 0.13% 0.20% 0.25% 0.58%
7 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 Nationwide(R) GVIT Strategic Value Fund: Class I 0.66% 0.34% 0.00% 1.00% GVIT Strong GVIT Mid Cap Growth Fund: Class I 0.90% 0.27% 0.00% 1.17% 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 Growth Portfolio 0.84% 0.05% 0.00% 0.89% Neuberger Berman AMT Guardian Portfolio 0.85% 0.14% 0.00% 0.99% Neuberger Berman AMT Limited Maturity Bond Portfolio 0.65% 0.08% 0.00% 0.73% 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 Fund/VA: Initial Class 0.64% 0.04% 0.00% 0.68% Oppenheimer Variable Account Funds - Oppenheimer Bond Fund/VA: Initial Class 0.72% 0.05% 0.00% 0.77% Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: Initial Class 0.64% 0.04% 0.00% 0.68% Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Initial Class 0.64% 0.06% 0.00% 0.70% Oppenheimer Variable Account Funds - Oppenheimer Main Street Growth & Income Fund/VA: Initial Class 0.68% 0.05% 0.00% 0.73% Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund/VA: Initial Class 0.72% 0.04% 0.00% 0.76% Strong Opportunity Fund II, Inc. 0.75% 0.35% 0.00% 1.10% Strong Variable Insurance Funds, Inc. - International Stock Fund II 1.00% 0.03% 0.00% 1.03% Strong Variable Insurance Funds, Inc. - Strong Discovery Fund II, Inc. 1.00% 0.20% 0.00% 1.20% 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 Bond Fund 1.00% 0.19% 0.00% 1.19% 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%
The expenses shown above are deducted by the underlying mutual fund before it provides Nationwide with the daily net asset value. Nationwide then deducts applicable variable account charges from the net asset value in calculating 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. 8 Some underlying mutual funds are subject to fee waivers and expense reimbursements. The following chart shows what the expenses would have been for such funds without fee waivers and expense reimbursements. UNDERLYING MUTUAL FUND ANNUAL EXPENSES (as a percentage of underlying mutual fund net assets, before expense reimbursement)
Total Underlying Management Other 12b-1 Mutual Fund Fees Expenses Fees Expenses ---- -------- ---- -------- Credit Suisse Trust - Global Post-Venture Capital Portfolio 1.25% 0.36% 0.00% 1.61% Credit Suisse Trust - Large Cap Value Portfolio 0.75% 0.49% 0.00% 1.24% Federated Insurance Series - Federated Quality Bond Fund II: Primary Series 0.60% 0.40% 0.25% 1.25% 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 Nationwide GVIT Strategic Value Fund: Class I 0.90% 0.34% 0.00% 1.24% 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 Bond Fund 1.00% 0.24% 0.00% 1.24% Van Eck Worldwide Insurance Trust - Worldwide Emerging Markets Fund 1.00% 0.30% 0.00% 1.30% Van Eck Worldwide Insurance Trust - Worldwide Hard Assets Fund 1.00% 0.18% 0.00% 1.18%
9 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 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 minimum initial premium for which a policy may be issued is equal to three times the initial minimum monthly premium. 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 (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. RIDERS Riders may be added to the policy (availability varies by state). Riders currently include: - - Additional Protection Rider; - - Change of Insured Rider; and - - Maturity Extension Rider. POLICY CANCELLATION Policy owners may return the policy for any reason within certain time periods in accordance with applicable law and Nationwide will refund the policy value or the amount required by law (see "Right to Revoke"). NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY Nationwide is a stock life insurance company organized under Ohio law in February, 1981, with its home office at One Nationwide Plaza, Columbus, Ohio 43215. Nationwide is a provider of life insurance, annuities and retirement products. 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"), Two Nationwide Plaza, Columbus, Ohio 43215. (For policies issued in the State of Michigan, all references to NISC will mean Nationwide Investment Svcs. Corporation.) NISC is a wholly owned subsidiary of Nationwide Life Insurance Company. INVESTING IN THE POLICY THE VARIABLE ACCOUNT AND UNDERLYING MUTUAL FUNDS Nationwide VL Separate Account-C is a separate account that invests in the underlying mutual fund options listed in Appendix A. Nationwide established the separate account on July 22,1997, 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. 10 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. The variable account is divided into sub-accounts. Policy owners elect to have net 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 fund options chosen. 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 investment 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 may elect to transfer all sub-account cash value to the fixed account. No transfer charges will be assessed. 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. 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 contract owners and variable annuity payees, including withdrawal of the variable account from participation in the underlying mutual fund(s) involved in the conflict. Substitution of Securities Nationwide may substitute, eliminate 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: 11 (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. The general account is used to support Nationwide's annuity and insurance obligations and may contain compensation for mortality and expense risks. Premium payments will be allocated to the fixed account by election of the policy owner. The general account is not subject to the same laws as the variable account and the SEC has not reviewed the disclosures in this prospectus relating to the fixed account. However, information relating to the fixed account is subject to federal securities laws relating to the accuracy and completeness of statements made by prospectus disclosure. The investment income earned by the fixed account will be allocated to the policies at varying rate(s) set by Nationwide. It is the current practice to set crediting rates at the beginning of each calendar quarter. Nationwide guarantees that the rate will not be less than an annual effective rate of 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 an annual effective rate of 3.0% for any given year. New premium payments deposited to the contract 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. The fixed account is not available for policies issued in the State of Texas. 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 $50,000. 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. Upon payment of the initial premium, temporary insurance may be provided. Issuance of the continuing insurance coverage is dependent upon completion of all underwriting requirements, payment of 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. PRICING Premiums payments will not be priced, when the New York Stock Exchange is closed or on the following nationally recognized holidays: - - New Year's Day - - Independence Day - - Martin Luther King, Jr. - - Labor Day Day - - Presidents' Day - - Thanksgiving - - Good Friday - - Christmas - - Memorial Day Nationwide also will not price premium payments if: (1) trading on the New York Stock Exchange is restricted; 12 (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, policy value may be affected since the policy owner would not have access to their account. POLICY CHARGES SALES LOAD Nationwide deducts a sales load from each premium payment received. The sales load is guaranteed never to exceed 5.5% of each premium payment during the first 7 policy years and 2.0% thereafter. Currently, the sales load is 3.0% of the premium payment plus 2.5% of premiums up to the target premium during the first 7 policy years, and 0% of all premiums thereafter. The target premium is a premium based upon the specified amount. It is the level annual premium amount at which the sales load is reduced on a current basis. TAX LOAD Nationwide deducts a tax load equal to 3.5% from all premium payments. This charge is associated with the premium taxes imposed by various state and local jurisdictions and by the federal government under Section 848 of the Internal Revenue Code. The tax load may be more or less than the amount actually assessed in the state in which a particular policy owner resides. MONTHLY COST OF INSURANCE The monthly cost of insurance charge for each policy month is determined by multiplying the monthly cost of insurance rate by the net amount at risk. This deduction is charged proportionately to the cash value in each sub-account and the fixed account, unless the Policy Owner directs that deductions be assessed to particular sub-accounts. 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 Male Mortality Table, Age Last Birthday, aggregate as to tobacco status (except unisex in Indiana, Maryland and North Dakota). Guaranteed cost of insurance rates for policies issued on a substandard basis are based on appropriate percentage multiples of the 1980 CSO. The current cost of insurance rates vary by attained age, duration of coverage, and tobacco-use status. The current cost of insurance rates also vary according to the type of underwriting that applies to the insured lives and the rate class of an insured. Nationwide currently places insureds into both standard rate classes and substandard rate classes that involve a higher mortality risk. In an otherwise identical policy, an insured in the standard rate class will have a lower rate than an insured in a rate class with higher mortality risks. The rating class is determined using questionnaires, medical records, and physical exams, depending on the amount of insurance and the attributes of the insured. On groups, Nationwide may underwrite using short-form questionnaires or abbreviated medical evaluations. If there is an increase in the specified amount, the cost of insurance charges for the increased amount will reflect the duration since the increase, rather than the duration since the certificate was originally issued. If death benefit Option 1 is in effect and there have been increases in the specified amount, then the cash value will first be considered a part of the initial specified amount. If the cash value exceeds the initial specified amount, it will then be considered a part of the additional increase in specified amount resulting from the increase, in the order of the increase. 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. Nationwide deducts the mortality and expense risk charge from the variable account on a daily basis. Mortality and expense risk deductions may vary from policy to policy because they are charged proportionally to the cash value in each sub-account. The mortality and expense risk charge compensates Nationwide for assuming risks associated with mortality and administrative costs. This charge is guaranteed not to exceed an annualized rate of 0.75% of the daily net assets of the variable account. Currently, this rate will be equal to an annualized rate of 0.40% during policy 13 years 1 through 4, 0.25% during policy years 5 through 20, and 0.10% thereafter. To the extent that future levels of mortality and expenses are less than or equal to those expected, Nationwide may realize a profit from this charge. Unrecovered expenses are borne by Nationwide's general assets which may include profits, if any, from mortality and expense risk charges. 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. REDUCTION OF CHARGES The policy is available for purchase by individuals, corporations and other groups. Nationwide may reduce or eliminate certain charges (sales load, monthly administrative charge, monthly cost of insurance charge, or other charges), and Nationwide may modify the cash surrender value enhancement, 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 or sponsored arrangements made available by Nationwide, including employees of Nationwide and their families. Eligibility for reduction in charges and the amount of any reduction is determined by a number of factors, including: - - the number of insureds; - - the total premium expected to be paid; - - total assets under management for the policy owner; - - the nature of the relationship among individual insureds; - - the purpose for which the policies are being purchased; - - the expected persistency of individual policies; and - - any other circumstances which are rationally related to the expected reduction in expenses. The extent and nature of reductions may change from time to time. The charge structure may vary. Variations are determined in a manner not unfairly discriminatory to policy owners which reflects differences in costs of services. SURRENDERING THE POLICY FOR CASH SURRENDER (REDEMPTION) Policies may be surrendered 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. Nationwide may require the policy owner's signature to be guaranteed by a member firm of the New York, American, Boston, Midwest, Philadelphia or Pacific Stock Exchanges, or by a commercial bank or a savings and loan, which is a member of the Federal Deposit Insurance Corporation. 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 the surrender request. CASH SURRENDER VALUE The cash surrender value increases or decreases daily to reflect the investment experience of the variable account, the daily crediting of interest in the fixed account, and activity in the policy loan account. The cash surrender value equals the policy's cash value, next computed after the date Nationwide receives a proper written request for surrender of the policy, minus any indebtedness or other deductions due on that date, plus any applicable temporary enhancement. Other Amounts Paid at Surrender For policies purchased by corporations and other groups, an amount may be paid by Nationwide in addition to the policy's cash value if, during a limited, specified time period, the policy is completely surrendered and the proceeds are paid directly to the entity that was the policy owner on the date of issue. These payments will not be made from the policy, but are a separate obligation of Nationwide. This additional surrender payment may not apply to partial surrenders, or to complete surrenders for which the policy owner instructs that proceeds be paid to a party other than the policy owner as of the date of issue. An enhancement may be available for certain individually owned, corporate sponsored plans. The amount, duration, and availability of additional surrender payments made by Nationwide may vary based on a number of factors, including: - - the number of insureds; 14 - - the nature of the relationship among individual insureds; - - the purpose for which the policies are being purchased; - - the expected persistency of the policies; and - - any other circumstances which are rationally related to an expected reduction in acquisition or administrative costs. Nationwide will pay surrender payments that are in addition to the policy's cash value from its general account. CORPORATE PURCHASERS ARE URGED TO CONSULT THEIR TAX ADVISER ABOUT THE TAX TREATMENT OF ADDITIONAL SURRENDER PAYMENTS. The criteria for additional surrender payments may change from time to time. Additional surrender payments will be determined in a manner not unfairly discriminatory to policy owners. PARTIAL SURRENDERS After the policy has been in force for one year, the policy owner may request a partial surrender. Partial surrenders are permitted if they satisfy the following requirements: (1) the minimum partial surrender is $500; (2) 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; (3) after the partial surrender, the cash surrender value is greater than $500 or an amount equal to three times the current monthly deduction, if higher; and (4) after the partial surrender, the policy continues to qualify as life insurance. When a partial surrender is made, the cash value will be reduced by the amount of the partial surrender. Further, the specified amount will be reduced by the amount necessary to prevent any increase to the net amount at risk, unless the partial surrender is treated as a preferred partial surrender. Preferred Partial Surrenders A partial surrender is considered a preferred partial surrender if the following conditions are met: (1) the surrender occurs before the 15th policy anniversary; and (2) the surrender amount plus the amount of any previous preferred policy surrenders in that same policy year does not exceed 10% of the cash surrender value as of the beginning of the policy year. Reduction of the Specified Amount When a partial surrender is made, in addition to the cash value being reduced by the amount of the partial surrender, the specified amount may also be reduced, (except in the case of a preferred partial surrender). The reduction to the specified amount will be made in the following order: (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 advisor. In certain employer-sponsored life insurance arrangements, including equity split dollar 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 advisor, 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 the cash value on the preceding valuation period, 15 plus any net premium applied since the previous valuation period, minus any partial surrenders, plus or minus any investment results, and less 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. 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 recorded at Nationwide's home office. Once recorded, the change will be effective when signed. The change will not affect any payment made or action taken by Nationwide before the change was recorded. 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 recorded at Nationwide's home office. Once recorded, the change will be effective when signed. The change will not affect any payment made or action taken by Nationwide before the change was recorded. 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 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 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 continue the policy in force for at least 3 months; and (5) age limits are the same as for a new issue. 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 also 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 will reduce 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 to less than $50,000; or (2) disqualify the policy as a contract for life insurance. OPERATION OF THE POLICY ALLOCATION OF NET PREMIUM AND CASH VALUE Nationwide allocates premium payments to sub-accounts or the fixed account, as instructed by policy 16 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 may be allocated to the sub-accounts during the period in which the policy owner can cancel the policy, unless a specific state requires premiums to be allocated to the GVIT Gartmore GVIT Money Market Fund: Class I or the fixed account. At the expiration of this period, these premiums are used to purchase units of the sub-accounts which correspond to shares of the underlying mutual funds specified by the policy owner. Shares of the underlying mutual funds are purchased at net asset value then converted into unit values for purposes of determining the policy owner's interest in the respective sub-account(s). The policy owner may change the allocation of net premiums or may transfer cash value from one sub-account to another. Changes are subject to the terms and conditions imposed by each underlying mutual fund and those found in this prospectus. HOW THE INVESTMENT EXPERIENCE IS DETERMINED The accumulation unit value for a valuation period is determined by multiplying the accumulation unit value of each sub-account for the immediately preceding valuation period by the net investment factor of the sub-account for the subsequent valuation period. The number of accumulation units will not change as a result of investment experience. NET INVESTMENT FACTOR The net investment factor for any valuation period is determined by dividing (a) by (b) and subtracting (c) from the result 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; and (c) is a factor representing the daily mortality and expense risk charge deducted from the variable account. Such factor is guaranteed not to exceed an annualized rate of 0.75% of the daily net assets of the variable account. On a current basis, this annualized rate will be 0.40% during policy years 1 through 4, 0.25% during policy years 5 through 20, and 0.10% thereafter. Based on the net investment factor, the value of an accumulation unit may increase or decrease. Changes in the net investment factor may not be directly proportional to changes in the net asset value of underlying mutual fund shares because of the deduction for mortality and expense risk charge. Though the number of accumulation units will not change as a result of investment experience, the value of an accumulation unit may increase or decrease from valuation period to valuation period. DETERMINING THE 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. 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 or charges or deductions are made against the cash value, an appropriate number of accumulation units from the variable account and an appropriate amount from the fixed account will be deducted in the same proportion that the policy owner's interest in the variable account and the fixed account bears to the total cash value. 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. TRANSFERS The policy owner may transfer amounts between the fixed account and the variable account without penalty or adjustment, subject to the following requirements: - - Nationwide reserves the right to limit such transfers to one per policy year; - - transfers from the fixed account must be made within 45 days after the end of an interest rate 17 guarantee period (the period of time for which the current interest rate is guaranteed by Nationwide); - - Nationwide reserves the right to restrict the amount transferred from the fixed account to 20% of the portion of the cash value attributable to the fixed account as of the end of the prior policy year. However, if the policy owner elects in writing to Nationwide to transfer all of the cash value attributable to the fixed account, the restriction for five successive policy years shall be 20%, 25%, 33%, 50% and 100%, respectively; - - transfers to the fixed account may not be made prior to the first policy anniversary or within 12 months subsequent to a prior transfer; - - Nationwide reserves the right to restrict the amount transferred to the fixed account to 20% of that portion of the cash value attributable to the variable account 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 cash value attributable to the fixed account is greater than or equal to 30% of the cash value. Transfer Requests Nationwide will accept transfer requests in writing, over the telephone or via the internet. Nationwide will use reasonable procedures to confirm that instructions are genuine and will not be liable for following instructions 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. 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 to Withdrawal. The policy can be mailed to the registered representative who sold it, or directly to Nationwide. 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. The refunded policy value will reflect the deduction of any policy charges, unless otherwise required by law. This right varies by state. POLICY LOANS TAKING A POLICY LOAN The policy owner may take a policy loan at any time using the policy as security. Maximum policy indebtedness is limited to 90% of the cash value of the sub-accounts, plus 100% of the cash value in the fixed account, plus 100% of the cash value in the policy loan account. Nationwide will not grant a loan for an amount less than $500 (unless otherwise required by state law). 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 and, where permitted, the signature guaranteed by a member firm of the New York, American, Boston, Midwest, Philadelphia or Pacific Stock Exchanges, or by a commercial bank or a savings and loan which is a member of the Federal Deposit Insurance Corporation. Certain policy loans may result in current 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. 18 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. LOAN INTEREST The annual effective loan interest rate is guaranteed not to exceed 3.75%. On a current basis, the loan interest rate is 3.4% in policy years 1-4, 3.25% in policy years 5-20, and 3.10% thereafter. On a current and guaranteed basis, the cash value in the policy loan account is credited with an annual effective rate of 3% in all policy years. Nationwide may change the current interest crediting rate on the policy loans at any time at its sole discretion. 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 it is determined that such loans will be treated, as a result of the difference between the interest crediting rate and the loan interest rate, as taxable distributions under any applicable ruling, regulation, or court decision. If this amount is not prescribed by such ruling, regulation, or court decision, the amount will be that which Nationwide considers the more likely to result 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 a 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. The earned interest 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, 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 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 premium payment, rather than a loan repayment, 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 may not be less than $50. Nationwide reserves the right to require that any loan repayments resulting from policy loans transferred 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 recorded at Nationwide's home office. Prior to being recorded, assignments will not affect any payments made or actions taken by Nationwide. Nationwide is not responsible for any assignment not submitted for recording, nor is Nationwide responsible for the sufficiency or validity 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- 19 accounts into other sub-accounts. 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, Fidelity VIP High Income Portfolio: Initial Class, GVIT Gartmore GVIT Government Bond Fund: Class I, GVIT Federated GVIT High Income Bond Fund: Class I, GVIT Gartmore GVIT Money Market Fund: Class I, and the Neuberger Berman AMT Limited Maturity Bond Portfolio. 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. Nationwide reserves the right to stop establishing new Dollar Cost Averaging programs. Nationwide reserves the right to assess a processing fee for this service. DEATH BENEFIT INFORMATION CALCULATION OF THE DEATH BENEFIT At issue, the policy owner selects the specified amount and the death benefit option. At issue, the policy owner also irrevocably elects either of the following tests qualifying the policy as life insurance under Section 7702 of the Internal Revenue Code: (1) guideline premium/cash value corridor test; or (2) the cash value accumulation test. 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 three death benefit options. OPTION 1. The death benefit will be the greater of the specified amount or the applicable percentage of cash value. 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 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 applicable percentage of cash value and will vary directly with the investment performance. OPTION 3. The death benefit is the greater of: (i) the applicable percentage of the cash value as of the date of death; or (ii) the sum of the specified amount and the lesser of: (a) the maximum increase amount shown on the policy, or (b) the amount of all premium payments and interest accrued at the Option 3 interest rate as shown in the policy, accumulated up to the date of death, less any partial surrenders and applicable interest accrued at the Option 3 interest rate as shown in the policy. Once elected, Option 3 is irrevocable. 20 APPLICABLE PERCENTAGE OF CASH VALUE GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST
ATTAINED PERCENTAGE ATTAINED PERCENTAGE ATTAINED PERCENTAGE AGE OF CASH VALUE AGE OF CASH VALUE AGE OF CASH VALUE --- ------------- --- ------------- --- ------------- 0-40 250% 60 130% 80 105% 41 243% 61 128% 81 105% 42 236% 62 126% 82 105% 43 229% 63 124% 83 105% 44 222% 64 122% 84 105% 45 215% 65 120% 85 105% 46 209% 66 119% 86 105% 47 203% 67 118% 87 105% 48 197% 68 117% 88 105% 49 191% 69 116% 89 105% 50 185% 70 115% 90 105% 51 178% 71 113% 91 104% 52 171% 72 111% 92 103% 53 164% 73 109% 93 102% 54 157% 74 107% 94 101% 55 150% 75 105% 95 101% 56 146% 76 105% 96 101% 57 142% 77 105% 97 101% 58 138% 78 105% 98 101% 59 134% 79 105% 99 101%
In the event the policy owner has a substandard rating, the above percentages will differ. 21 APPLICABLE PERCENTAGE OF CASH VALUE CASH VALUE ACCUMULATION TEST
ATTAINED PERCENTAGE ATTAINED PERCENTAGE ATTAINED PERCENTAGE AGE OF CASH VALUE AGE OF CASH VALUE AGE OF CASH VALUE 16 708.43% 44 292.29% 72 141.69% 17 687.69% 45 283.37% 73 139.10% 18 667.85% 46 274.79% 74 136.66% 19 648.73% 47 266.55% 75 134.38% 20 630.14% 48 258.61% 76 133.56% 21 611.94% 49 250.98% 77 132.83% 22 594.06% 50 243.65% 78 132.18% 23 576.45% 51 236.59% 79 131.58% 24 559.07% 52 229.82% 80 131.04% 25 541.95% 53 223.34% 81 130.55% 26 525.08% 54 217.13% 82 130.12% 27 508.52% 55 211.19% 83 127.37% 28 492.32% 56 205.51% 84 124.75% 29 476.49% 57 200.06% 85 122.27% 30 461.08% 58 194.84% 86 119.90% 31 446.10% 59 189.84% 87 117.63% 32 431.57% 60 185.03% 88 115.44% 33 417.50% 61 180.43% 89 113.31% 34 403.89% 62 176.02% 90 112.35% 35 390.73% 63 171.81% 91 111.38% 36 378.03% 64 167.80% 92 110.38% 37 365.79% 65 163.98% 93 109.32% 38 354.01% 66 160.34% 94 108.18% 39 342.67% 67 156.86% 95 106.94% 40 331.77% 68 153.54% 96 105.62% 41 321.30% 69 150.37% 97 104.27% 42 311.24% 70 147.33% 98 102.99% 43 301.57% 71 144.44% 99 100.00%
In the event the policy owner has a substandard rating, the above percentages will differ. 22 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 from either Option 1 to Option 2, or from Option 2 to Option 1. Initial elections to Option 3 are irrevocable and may not be changed. 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 a change must be sufficient to keep the policy in force for at least three months. Nationwide will adjust the specified amount so that the net amount at risk remains constant before and after the death benefit option changes. A change in death benefit option will not be permitted if it results in the specified amount being reduced to an amount in which the total premiums paid exceed the premium limit required by state law to qualify the policy as a contract for life insurance. MAXIMUM DEATH BENEFIT For polices issued after the later of May 1, 2002 or the date Nationwide is authorized to issue policies with a Maximum Death Benefit within the policy owner's state, Nationwide reserves the right to limit the amount of insurance under any certificate to the Maximum Death Benefit. Currently, the Maximum Death Benefit is equal to the sum of the cash value and $8,000,000. The Maximum Death Benefit may be increased at Nationwide's sole discretion. The death benefit will be calculated on the monthly anniversary and upon the death of the insured. If the calculation exceeds the Maximum Death Benefit, Nationwide reserves the right to pay to the policy owner a pre-death distribution to reduce the Cash Value so that the death benefit will not exceed $7,200,000 plus the cash value. If death benefit Option 3 is applicable and the accumulated premium account is greater than the Cash Value, Nationwide reserves the right to reduce the amount previously credited to the accumulated premium account to an amount equal to 90% of the Cash Value immediately before the distribution. The accumulated premium account will not become less that zero because of a pre-death distribution. The Maximum Death Benefit may, under certain circumstances, curtail the flexibility that the policy affords policy owners. For example, the policy's cash value may increase at a rate that outpaces the ratio of cash value to life insurance permitted under the Internal Revenue Code (see "Tax Matters"). In some instances, Nationwide and the policy owner may address this situation by increasing the specified amount of insurance so that the policy's ratio of cash value to life insurance is readjusted to comply with the tax code definition. If, however, an increase in the specified amount would cause the death benefit to exceed the Maximum Death Benefit, then this method of achieving compliance with the tax code definition of life insurance may not be available. Nationwide will notify the policy owner that a pre-death distribution and/or a reduction in the accumulated premium account has been generated. Such notice shall be sent no later than thirty days after the event. Taxes arising from the pre-death distribution, if any, are the responsibility of the policy owner. Policy Owners are urged to confer with their tax advisers regarding tax implications of receiving a pre-death distribution prior to the purchase of this policy. 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," and "Suicide"). Also, policies to which an additional surrender payment applies at the time the death proceeds become payable may receive death proceeds in excess of the amount calculated under the Death Benefits section. The amount of additional death proceeds, if any, will be based on the amount of the additional surrender payment in effect at the time that death proceeds become payable (See "Cash Surrender Value - Other Amounts Payable at Surrender"). 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. For any increase in specified amount requiring evidence of insurability, Nationwide will not contest payment of the death proceeds based on such an increase after it has been in force during the insured's lifetime for 2 years from its effective date. ERROR IN AGE If the age of the insured has been misstated, the affected benefits will be adjusted. The amount of the death benefit will be (1) multiplied by (2) and then the result added to or subtracted form (3), where: 23 (1) is the amount of the death benefit at the time of the insured's death reduced by the amount of the cash value at the time of the insured's death; (2) is the ratio of the monthly cost of insurance applied in the policy month of death and the monthly cost of insurance that should have been applied at the true age in the policy month of death; and (3) is the cash value at the time of the insured's death. 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 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. RIGHT OF CONVERSION The policy owner may at any time, upon written request to Nationwide within 24 months of the policy date, make an irrevocable, one-time election to transfer all sub-account cash value to the fixed account. The 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 the current policy charges, a grace period of 61 days from the monthly anniversary date will be allowed for the payment of a premium of at least three times the current monthly deduction. Nationwide will send the policy owner a notice at the start of the grace period, at the address in the application or another address specified by the policy owner, stating the amount of premium required. 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 received, will be set equal to the cash value at the end of the grace period. Amounts will be allocated based on the fund allocation factors in effect at the start of the grace period, unless the policy owner provides otherwise. 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 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 24 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, 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. 25 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. SPECIAL CONSIDERATIONS FOR CORPORATIONS Section 264 of the Internal Revenue Code imposes numerous limitations on the interest and other business deductions that may otherwise be available to businesses that own life insurance policies. In addition, the premium paid by a business for a life insurance policy is not deductible as a business expense or otherwise if the business is directly or indirectly a beneficiary of the policy. For purposes of the alternative minimum tax ("AMT") that may be imposed on corporations, the death benefit from a life insurance policy, even though excluded from gross income for normal tax purposes, is included in "adjusted current earnings" for AMT purposes. In 26 addition, although increases to the cash surrender value of a life insurance policy are generally excluded from gross income for normal income tax purposes, such increases are included in adjusted current earnings for income tax purposes. DUE TO THE COMPLEXITY OF THESE RULES, AND BECAUSE THEY ARE AFFECTED BY THE FACTS AND CIRCUMSTANCES OF THE INSURED, THE INSURED SHOULD CONSULT WITH LEGAL AND TAX COUNSEL AND OTHER COMPETENT ADVISERS REGARDING THESE MATTERS. Federal appellate and trial courts have examined the economic substance of transactions involving life insurance policies owned by corporations. These cases involved relatively large loans against the policy's cash value as well as tax deductions for the interest paid on the policy loans by the corporate policy owner to the insurance company. Under the particular factual circumstances in these cases, the courts determined that the corporate policy owners should not have taken tax deductions for the interest paid. Accordingly, the court determined that the corporations should have paid taxes on the amounts deducted. These cases are in various stages of the appellate process. Corporations should consider, in consultation with tax professionals familiar with these matters, the impact of these decisions on the corporation's intended use of the policy. (For examples see, Winn-Dixie Stores, Inc. v. Commissioner of Internal Revenue (11th Cir., 2001); American Elec. Power, Inc. v. United States (S.D. Ohio 2001); and IRS v. CM Holdings, Inc. (D. Del. 2000)). 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 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. 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 27 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. 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's parent company, Nationwide Life Insurance Company ("Nationwide Life"), 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 28 variable annuity contracts from Nationwide Life which invested in mutual funds that were offered by separate mutual fund companies; that Nationwide Life was a fiduciary under ERISA and that Nationwide Life breached its fiduciary duty when it accepted certain fees from the mutual fund companies that purportedly were never disclosed by Nationwide Life; and that Nationwide Life 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 Life and other unspecified compensatory damages. On November 15, 2001, Nationwide Life 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 Life's motion to dismiss the amended complaint. On February 22, 2002, Nationwide Life filed a reply in support of its motion to dismiss. The class has not been certified. Nationwide Life 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 VL Separate Account - C and Nationwide Life and Annuity 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 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 Life Insurance Company 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 Multi-Flex Variable Account; - - Nationwide Variable Account; - - Nationwide Variable Account-II; - - Nationwide Variable Account-5; - - Nationwide Variable Account-4; - - Nationwide Variable Account-6; - - Nationwide Variable Account-7; - - Nationwide Variable Account-8; - - Nationwide Variable Account-9; - - Nationwide Variable Account-10; - - Nationwide VLI Separate Account-2; - - Nationwide VLI Separate Account-3 - - Nationwide VLI Separate Account-4; - - Nationwide VLI Separate Account-5; - - Nationwide VA Separate Account-A; - - Nationwide VA Separate Account-B; - - Nationwide VA Separate Account-C; - - Nationwide VL Separate Account-B; - - Nationwide VL Separate Account-C; and - - Nationwide VL Separate Account-D. First year commission payments made by Nationwide on the sale of these policies distributed by NISC will not exceed 55% of target premium plus 8% of any excess premium payments in year one and 25% of target premium plus 5% on the excess premium in years two through four. Gross renewal commissions paid at the beginning of policy year five and beyond by Nationwide will not exceed greater of 5% of target premium plus 5% on the excess premium or an annual effective rate of 0.20%, paid quarterly, of the cash value as of the end of the prior quarter. For single premium modified endowment contracts issued on or after May 1, 1999, gross renewal commissions paid at the beginning of policy year two and beyond will not exceed an annual rate of 0.20%, paid quarterly, of the cash value as of the 29 end of the prior quarter. Expense allowances may be available. 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 VL Separate Account-B; - - Nationwide VL Separate Account-C; - - Nationwide VL Separate Account-D; - - Nationwide VA Separate Account-A; - - Nationwide VA Separate Account-B; - - Nationwide VA Separate Account-C; and - - Nationwide VA Separate Account-D. 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 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 Life Insurance Company 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. 30 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 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 31 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 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. 32 APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS The underlying mutual funds listed below are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies. There is no guarantee that the investment objectives will be met. 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 BALANCED Investment Objective: Capital growth and current income. The Fund will seek to achieve its objective by maintaining approximately 60% of the assets of the Fund in common stocks (including securities convertible into common stocks and other equity equivalents) that are considered by management to have better-than-average prospects for appreciation and the remainder in fixed income securities. The Fund may invest in cash and cash equivalents temporarily or when it is unable to find common stocks meeting its criteria of selection. It may purchase securities only of companies that have a record of at least three years continuous operation. AMERICAN CENTURY VP CAPITAL APPRECIATION (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999) Investment Objective: Capital growth. The Fund will seek to achieve its objective by investing in common stocks (including securities convertible into common stocks and other equity equivalents) that meet certain fundamental and technical standards of selection and have, in the opinion of the Fund's investment manager, better than average potential for appreciation. The Fund tries to stay fully invested in such securities, regardless of the movement of stock prices generally. The Fund may invest in cash and cash equivalents temporarily or when it is unable to find common stocks meeting its criteria of selection. It may purchase securities only of companies that have a record of at least three years continuous operation. There can be no assurance that the Fund will achieve its investment objective. AMERICAN CENTURY VP INCOME & GROWTH 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 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 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 33 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. CREDIT SUISSE TRUST The Credit Suisse Trust is an open-end management investment company organized in March 1995 as a business trust under the laws of The Commonwealth of Massachusetts. The Trust offers its shares to insurance companies for allocation to separate accounts for the purpose of funding variable annuity and variable life contracts. The Portfolios are managed by Credit Suisse Asset Management, LLC ("Credit Suisse"). GLOBAL POST-VENTURE CAPITAL PORTFOLIO (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999) Investment Objective: Long-term growth of capital by investing primarily in equity securities of U.S. and foreign companies considered to be in their post-venture capital stage of development. Under normal market conditions, the Portfolio will invest at least 65% of its total assets in equity securities of "post-venture capital companies." A post-venture capital company is one that has received venture capital financing either: (a) during the early stages of the company's existence or the early stages of the development of a new product or service; or (b) as part of a restructuring or recapitalization of the company. The Portfolio will invest in at least three countries including the Unites States. INTERNATIONAL FOCUS PORTFOLIO (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999) Investment Objective: Long-term capital appreciation by investing primarily in a broadly diversified portfolio of equity securities of companies, wherever organized, that in the judgment of Credit Suisse have their principal business activities and interests outside the United States. The Portfolio will ordinarily invest substantially all of its assets, but no less than 65% of its total assets, in common stocks, warrants and securities convertible into or exchangeable for common stocks. The Portfolio intends to invest principally in the securities of financially strong companies with opportunities for growth within growing international economies and markets through increased earning power and improved utilization or recognition of assets. SMALL COMPANY GROWTH PORTFOLIO Investment Objective: Capital growth by investing in a portfolio of equity securities of small-sized domestic companies. The Portfolio ordinarily will invest at least 65% of its total assets in common stocks or warrants of small-sized companies (i.e., companies having stock market capitalizations of between $25 million and $1 billion at the time of purchase) that represent attractive opportunities for capital growth. The Portfolio intends to invest primarily in companies whose securities are traded on domestic stock exchanges or in the over-the-counter market. The Portfolio's investments will be made on the basis of their equity characteristics and securities ratings generally will not be a factor in the selection process. 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. 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 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 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. Dreyfus serves as the Fund's investment adviser. NCM Capital Management Group, 34 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. Dreyfus 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 to provide 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. GROWTH & INCOME PORTFOLIO: INITIAL SHARES Investment Objective: To provide long-term capital growth, current income and growth of income, consistent with reasonable investment risk. The Portfolio invests in equity securities, debt securities and money market instruments of domestic and foreign issuers. The proportion of the Portfolio's assets invested in each type of security will vary from time to time in accordance with Dreyfus' assessment of economic conditions and investment opportunities. In purchasing equity securities, Dreyfus will invest in common stocks, preferred stocks and securities convertible into common stocks, particularly those which offer opportunities for capital appreciation and growth of earnings, while paying current dividends. The Portfolio will generally invest in investment-grade debt obligations, except that it may invest up to 35% of the value of its net assets in convertible debt securities rated not lower than Caa by Moody's Investor Service, Inc. or CCC by Standard & Poor's Ratings Group, Fitch Investors Service, L.P. or Duff & Phelps Credit Rating Co., or if unrated, deemed to be of comparable quality by Dreyfus. These securities are considered to have predominantly speculative characteristics with respect to capacity to pay interest and repay principal and are considered to be of poor standing. See "Investment Considerations and Risks-Lower Rated Securities" in the Portfolio's prospectuses. 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. 35 VIP EQUITY-INCOME PORTFOLIO: INITIAL 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: INITIAL 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: INITIAL 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. VIP OVERSEAS PORTFOLIO: INITIAL 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. FMR is the manager of VIP II and its portfolios. VIP II ASSET MANAGER PORTFOLIO: INITIAL CLASS Investment Objective: High total return with reduced risk over the long term by allocating its assets among stocks, bonds and short-term instruments. Assets are allocated among stocks, bonds, and short-term money market instruments, maintaining a neutral mix over time of 50% of assets in stock, 40% of assets in bonds, and 10% of assets in short-term and money market instruments. VIP II CONTRAFUND(R) PORTFOLIO: INITIAL 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. FMR is the manager of VIP III and its portfolios. VIP III GROWTH OPPORTUNITIES PORTFOLIO: INITIAL CLASS 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 the 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. 36 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 III 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. GARTMORE GVIT GLOBAL HEALTH SCIENCES FUND: CLASS III 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 III 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. 37 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. 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 III 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: Miller Anderson & Sherrerd, LLP, 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 38 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. NATIONWIDE GVIT STRATEGIC VALUE FUND: CLASS I (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2000) Subadviser: Strong Capital Management Inc. Investment Objective: Primarily long-term capital appreciation. The Fund invests primarily in common stocks of medium and large-size companies. The subadviser selects stocks of companies that have attractive growth prospects, but are believed to be underpriced. To a limited extent, the Fund may also invest in foreign 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, 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 39 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 GROWTH PORTFOLIO Investment Objective: Capital growth. The Portfolio pursues this goal by investing mainly in the 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 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 LIMITED MATURITY BOND PORTFOLIO Investment Objective: To provide the high level of current income, consistent with low risk to principal and liquidity. As a secondary objective, it also seeks to enhance its total return through capital appreciation when market factors, such as falling interest rates and rising bond prices, indicate that capital appreciation may be available without significant risk to principal. It seeks to achieve its objectives through investments in a diversified portfolio of limited maturity debt securities. The Portfolio invests in securities which are at least investment grade and does not invest in junk bonds. 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 BOND FUND/VA: INITIAL CLASS Investment Objective: Primarily seeks a high level of current income by investing at least 65% of its total assets in investment grade debt securities, U.S. government securities and money market instruments. Investment grade debt securities would include those rated in one of the four highest ranking categories by any nationally recognized rating organization or if unrated or split-rated (rated investment grade and below investment grade by different rating organizations), determined by OppenheimerFunds, Inc. to be of comparable quality. The Fund may invest up to 35% of its total assets in debt securities rated less than investment grade when consistent with the Fund's investment objectives. The Fund seeks capital growth as a 40 secondary objective when consistent with its primary objective. 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" 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. OPPENHEIMER MULTIPLE STRATEGIES FUND/VA: INITIAL CLASS Investment Objective: Total investment return (which includes current income and capital appreciation in the value of its shares) from investments in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. STRONG VARIABLE INSURANCE FUNDS, INC. Strong Variable Insurance Funds, Inc. ("Corporation") is an open-end management investment company commonly referred to as a mutual fund. Incorporated in the State of Wisconsin, the Corporation has been authorized to issue shares of common stock and series and classes of series of common stock. The International Stock Fund II and The Strong Discovery Fund II, Inc. ("Funds") are offered by the Corporation to insurance company separate accounts for the purpose of funding variable life insurance policies and variable annuity contracts. Strong Capital Management, Inc. is the investment advisor to the Funds. INTERNATIONAL STOCK FUND II (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999) Investment Objective: Capital growth by investing primarily in the equity securities of issuers located outside the United States. STRONG DISCOVERY FUND II, INC. (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999) Investment Objective: Maximum capital appreciation through investments in a diversified portfolio of securities. The Fund normally emphasizes investment in equity securities and may invest up to 100% of its total assets in equity securities including common stocks, preferred stocks and securities convertible into common or preferred stocks. Although the Fund normally emphasizes investment in equity securities, the Fund has the flexibility to invest in any type of security that the Advisor believes has the potential for capital appreciation including up to 100% of its total assets in debt obligations, including intermediate to long-term corporate or U.S. government debt securities. 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. Its Emerging Markets Debt Portfolio is managed by Morgan Stanley Dean Witter Investment Management, Inc. 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 41 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 BOND FUND Investment Objective: High total return through a flexible policy of investing globally, primarily in debt securities. 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. 42 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. 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 daily charges made against the assets of the sub-accounts for assuming mortality and expense risks. The guaranteed mortality and expense risk charges for policy years one through four are equivalent to an annual effective rate of 0.75% of the daily net assets value of the variable account. The current mortality and expense risk charges for policy years one through four are equivalent to an annual effective rate of 0.40% of the daily net assets of the variable account. The current mortality and expense risk charges for policy years five through twenty are equivalent to an annual effective rate of 0.25% of the daily net assets of the variable account. The current mortality and expense risk charges for policy years twenty-one and beyond are equivalent to an annual effective rate of 0.10% of the daily net assets of the variable account. In addition, the net investment returns also reflect the deduction of underlying mutual fund investment advisory fees and other expenses which are equivalent to an annual effective rate of 0.95% of the daily net assets of the variable account. This effective rate is based on the average of the fund expenses, after expense reimbursement, for all underlying mutual fund options available under the policy as of December 31, 2001. Some underlying mutual funds are subject to fee waivers and expense reimbursements. Absent fee waivers and expense reimbursements, the annual effective rate would have been 0.97%. 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 and fee waivers of these underlying mutual funds, such change will be reflected in the net asset value of the corresponding underlying mutual fund. Considering current charges for mortality and expense risks and underlying mutual fund expenses, gross annual rates of return of 0%, 6% and 12% correspond to net investment experience at constant annual rates of -1.35%, 4.65% and 10.65% for policy years one through four, and rates of -1.20%, 4.80% and 10.80%, for policy years five through twenty, and rates of -1.05%, 4.95% and 10.95%, for policy years twenty-one and beyond. Considering guaranteed charges for mortality and expense risks and underlying mutual fund expenses, gross annual rates of return of 0%, 6% and 12% correspond to net investment experience at constant annual rates of -1.70%, 4.30% and 10.30%, for all policy years. The illustrations also reflect the fact that Nationwide makes monthly charges for providing insurance protection. 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 43 basis would result in lower cash values and death benefits than those illustrated. The illustrations also reflect the fact that Nationwide deducts a sales load from each premium payment received guaranteed not to exceed 5.5% of each premium payment for the first seven policy years and 2% thereafter. On a current basis, the sales load is 3.0% of premium payments plus 2.5% of premiums up to the target premium during the first seven policy years, and 0% of all premiums thereafter. Nationwide also deducts a tax expense charge of 3.5%, both current and guaranteed, from all premium payments. The illustrations also reflect the fact that Nationwide deducts a charge for state premium taxes at a rate of 2.25% and for federal tax at a rate of 1.25% (imposed under Section 848 of the Internal Revenue Code) of all premium payments. In addition, the illustrations reflect the fact that Nationwide deducts a monthly administrative charge at the beginning of each policy month. This monthly administrative expense charge is currently $5 per month and guaranteed not to exceed $10. 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, smoking classification, rating classification and premium payment requested. 44 $100,000 ANNUAL PREMIUM FOR FIRST 7 YEARS $1,703,050 SPECIFIED AMOUNT CASH VALUE ACCUMULATION TEST UNISEX: REGULAR ISSUE/NONTOBACCO PREFERRED, AGE 45 DEATH BENEFIT OPTION 1 CURRENT VALUES
0% HYPOTHETICAL GROSS INVESTMENT 6% HYPOTHETICAL GROSS INVESTMENT 12% HYPOTHETICAL GROSS INVESTMENT RETURN RETURN RETURN ---------------------------------- ---------------------------------- ---------------------------------- PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT -- --------- ------- ------- --------- --------- --------- --------- --------- --------- --------- 1 105,000 87,920 87,920 1,703,050 93,355 93,355 1,703,050 98,792 98,792 1,703,050 2 215,250 174,384 174,384 1,703,050 190,775 190,775 1,703,050 207,822 207,822 1,703,050 3 331,013 259,748 259,748 1,703,050 292,810 292,810 1,703,050 328,568 328,568 1,703,050 4 452,563 343,978 343,978 1,703,050 399,647 399,647 1,703,050 462,273 462,273 1,703,050 5 580,191 427,666 427,666 1,703,050 512,234 512,234 1,703,050 611,221 611,221 1,703,050 6 714,201 510,299 510,299 1,703,050 630,284 630,284 1,703,050 776,144 776,144 1,891,000 7 854,911 591,944 591,944 1,703,050 754,005 754,005 1,783,876 957,885 957,885 2,266,226 8 897,656 580,592 580,592 1,703,050 786,173 786,173 1,806,779 1,055,825 1,055,825 2,426,493 9 942,539 568,981 568,981 1,703,050 819,600 819,600 1,830,432 1,163,623 1,163,623 2,598,747 10 989,666 557,063 557,063 1,703,050 854,316 854,316 1,854,922 1,282,231 1,282,231 2,784,027 11 1,039,150 544,826 544,826 1,703,050 890,389 890,389 1,880,358 1,412,750 1,412,750 2,983,501 12 1,091,107 532,224 532,224 1,703,050 927,858 927,858 1,906,751 1,556,345 1,556,345 3,198,293 13 1,145,662 519,240 519,240 1,703,050 966,794 966,794 1,934,139 1,714,341 1,714,341 3,429,659 14 1,202,945 505,826 505,826 1,703,050 1,007,248 1,007,248 1,962,507 1,888,161 1,888,161 3,678,865 15 1,263,093 491,795 491,795 1,703,050 1,049,165 1,049,165 1,991,644 2,079,151 2,079,151 3,946,882 16 1,326,247 477,047 477,047 1,703,050 1,092,570 1,092,570 2,021,547 2,288,924 2,288,924 4,235,123 17 1,392,560 461,464 461,464 1,703,050 1,137,480 1,137,480 2,052,255 2,519,219 2,519,219 4,545,206 18 1,462,188 444,876 444,876 1,703,050 1,183,884 1,183,884 2,083,809 2,771,862 2,771,862 4,878,881 19 1,535,297 427,100 427,100 1,703,050 1,231,776 1,231,776 2,116,267 3,048,836 3,048,836 5,238,088 20 1,612,062 407,962 407,962 1,703,050 1,281,163 1,281,163 2,149,713 3,352,332 3,352,332 5,625,006 21 1,692,665 389,441 389,441 1,703,050 1,335,081 1,335,081 2,189,169 3,693,066 3,693,066 6,055,624 22 1,777,298 370,913 370,913 1,703,050 1,391,825 1,391,825 2,231,541 4,070,062 4,070,062 6,525,613 23 1,866,163 351,248 351,248 1,703,050 1,450,839 1,450,839 2,275,769 4,485,104 4,485,104 7,035,281 24 1,959,471 329,925 329,925 1,703,050 1,511,978 1,511,978 2,321,478 4,941,232 4,941,232 7,586,725 25 2,057,445 306,733 306,733 1,703,050 1,575,304 1,575,304 2,368,673 5,442,400 5,442,400 8,183,352 26 2,160,317 281,415 281,415 1,703,050 1,640,872 1,640,872 2,417,446 5,992,898 5,992,898 8,829,153 27 2,268,333 253,721 253,721 1,703,050 1,708,764 1,708,764 2,468,013 6,597,514 6,597,514 9,528,965 28 2,381,750 223,334 223,334 1,703,050 1,779,047 1,779,047 2,520,645 7,261,415 7,261,415 10,288,348 29 2,500,837 189,855 189,855 1,703,050 1,851,767 1,851,767 2,575,649 7,990,165 7,990,165 11,113,631 30 2,625,879 152,810 152,810 1,703,050 1,926,964 1,926,964 2,633,305 8,789,781 8,789,781 12,011,734
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND A MONTHLY $5 ADMINISTRATIVE EXPENSE CHARGE ALL THE TIME. CURRENT VALUES REFLECT A PREMIUM CHARGE OF 9% OF TARGET PREMIUM AND 6.5% OF EXCESS-OF-TARGET PREMIUM FOR THE FIRST 7 YEARS AND 3.5% OF ALL PREMIUM FROM EIGHTH YEAR AND ON. (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 45 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. 46 $100,000 ANNUAL PREMIUM FOR FIRST 7 YEARS $1,703,050 SPECIFIED AMOUNT CASH VALUE ACCUMULATION TEST UNISEX: NONTOBACCO, AGE 45 DEATH BENEFIT OPTION 1 GUARANTEED VALUES
0% HYPOTHETICAL GROSS INVESTMENT 6% HYPOTHETICAL GROSS INVESTMENT 12% HYPOTHETICAL GROSS INVESTMENT RETURN RETURN RETURN ---------------------------------- ---------------------------------- ---------------------------------- PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT -- --------- ------ ------- --------- --------- --------- --------- --------- --------- --------- 1 105,000 81,753 81,753 1,703,050 86,938 86,938 1,703,050 92,127 92,127 1,703,050 2 215,250 161,911 161,911 1,703,050 177,406 177,406 1,703,050 193,533 193,533 1,703,050 3 331,013 240,524 240,524 1,703,050 271,617 271,617 1,703,050 305,273 305,273 1,703,050 4 452,563 317,635 317,635 1,703,050 369,792 369,792 1,703,050 428,525 428,525 1,703,050 5 580,191 393,261 393,261 1,703,050 472,148 472,148 1,703,050 564,595 564,595 1,703,050 6 714,201 467,431 467,431 1,703,050 578,938 578,938 1,703,050 714,949 714,949 1,741,903 7 854,911 540,136 540,136 1,703,050 690,406 690,406 1,703,050 879,024 879,024 2,079,654 8 897,656 521,190 521,190 1,703,050 711,186 711,186 1,703,050 958,356 958,356 2,202,491 9 942,539 501,452 501,452 1,703,050 732,222 732,222 1,703,050 1,044,387 1,044,387 2,332,454 10 989,666 480,800 480,800 1,703,050 753,481 753,481 1,703,050 1,137,615 1,137,615 2,470,030 11 1,039,150 459,114 459,114 1,703,050 774,946 774,946 1,703,050 1,238,595 1,238,595 2,615,713 12 1,091,107 436,283 436,283 1,703,050 796,612 796,612 1,703,050 1,347,941 1,347,941 2,770,023 13 1,145,662 412,188 412,188 1,703,050 818,477 818,477 1,703,050 1,466,323 1,466,323 2,933,482 14 1,202,945 386,688 386,688 1,703,050 840,538 840,538 1,703,050 1,594,458 1,594,458 3,106,619 15 1,263,093 359,593 359,593 1,703,050 862,768 862,768 1,703,050 1,733,082 1,733,082 3,289,934 16 1,326,247 330,642 330,642 1,703,050 885,112 885,112 1,703,050 1,882,930 1,882,930 3,483,925 17 1,392,560 299,499 299,499 1,703,050 907,487 907,487 1,703,050 2,044,730 2,044,730 3,689,129 18 1,462,188 265,769 265,769 1,703,050 929,801 929,801 1,703,050 2,219,232 2,219,232 3,906,171 19 1,535,297 229,008 229,008 1,703,050 951,961 951,961 1,703,050 2,407,219 2,407,219 4,135,751 20 1,612,062 188,725 188,725 1,703,050 973,883 973,883 1,703,050 2,609,535 2,609,535 4,378,638 21 1,692,665 144,439 144,439 1,703,050 995,516 995,516 1,703,050 2,827,161 2,827,161 4,635,775 22 1,777,298 95,628 95,628 1,703,050 1,016,826 1,016,826 1,703,050 3,061,190 3,061,190 4,908,068 23 1,866,163 41,720 41,720 1,703,050 1,037,791 1,037,791 1,703,050 3,312,842 3,312,842 5,196,484 24 1,959,471 (*) (*) (*) 1,058,357 1,058,357 1,703,050 3,583,366 3,583,366 5,501,869 25 2,057,445 (*) (*) (*) 1,078,408 1,078,408 1,703,050 3,873,943 3,873,943 5,824,975 26 2,160,317 (*) (*) (*) 1,097,764 1,097,764 1,703,050 4,185,661 4,185,661 6,166,606 27 2,268,333 (*) (*) (*) 1,116,181 1,116,181 1,703,050 4,519,491 4,519,491 6,527,620 28 2,381,750 (*) (*) (*) 1,133,350 1,133,350 1,703,050 4,876,278 4,876,278 6,908,963 29 2,500,837 (*) (*) (*) 1,148,933 1,148,933 1,703,050 5,256,863 5,256,863 7,311,844 30 2,625,879 (*) (*) (*) 1,162,626 1,162,626 1,703,050 5,662,353 5,662,353 7,737,927
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $10.00 ADMINISTRATIVE EXPENSE CHARGE ALL THE TIME. GUARANTEED VALUES REFLECT A PREMIUM CHARGE OF 9% OF PREMIUM FOR THE FIRST 7 YEARS AND 5.5% OF PREMIUM FROM EIGHTH YEAR AND ON. (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 NOT STAY IN FORCE. 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 47 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. 48 $100,000 ANNUAL PREMIUM FOR FIRST 7 YEARS $1,703,050 SPECIFIED AMOUNT CASH VALUE ACCUMULATION TEST UNISEX: REGULAR ISSUE/NONTOBACCO PREFERRED, AGE 45 DEATH BENEFIT OPTION 2 CURRENT VALUES
0% HYPOTHETICAL GROSS INVESTMENT 6% HYPOTHETICAL GROSS INVESTMENT 12% HYPOTHETICAL GROSS INVESTMENT RETURN RETURN RETURN ---------------------------------- ---------------------------------- ---------------------------------- PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT -- --------- ------- ------- --------- --------- --------- --------- --------- --------- --------- 1 105,000 87,720 87,720 1,790,770 93,143 93,143 1,796,193 98,568 98,568 1,801,618 2 215,250 173,741 173,741 1,876,790 190,065 190,065 1,893,114 207,043 207,043 1,910,092 3 331,013 258,423 258,423 1,961,472 291,290 291,290 1,994,339 326,834 326,834 2,029,884 4 452,563 341,704 341,704 2,044,754 396,934 396,934 2,099,984 459,059 459,059 2,162,108 5 580,191 424,122 424,122 2,127,171 507,839 507,839 2,210,889 605,810 605,810 2,308,859 6 714,201 505,120 505,120 2,208,170 623,609 623,609 2,326,658 767,913 767,913 2,470,962 7 854,911 584,739 584,739 2,287,788 744,499 744,499 2,447,549 947,047 947,047 2,650,096 8 897,656 571,261 571,261 2,274,311 773,467 773,467 2,476,517 1,042,202 1,042,202 2,745,251 9 942,539 557,416 557,416 2,260,466 803,276 803,276 2,506,325 1,147,047 1,147,047 2,850,096 10 989,666 543,141 543,141 2,246,191 833,897 833,897 2,536,946 1,262,555 1,262,555 2,965,605 11 1,039,150 528,434 528,434 2,231,483 865,361 865,361 2,568,411 1,389,868 1,389,868 3,092,917 12 1,091,107 513,241 513,241 2,216,290 897,650 897,650 2,600,699 1,530,195 1,530,195 3,233,244 13 1,145,662 497,553 497,553 2,200,603 930,786 930,786 2,633,836 1,684,923 1,684,923 3,387,972 14 1,202,945 481,322 481,322 2,184,372 964,755 964,755 2,667,804 1,855,501 1,855,501 3,615,231 15 1,263,093 464,301 464,301 2,167,350 999,333 999,333 2,702,382 2,043,146 2,043,146 3,878,532 16 1,326,247 446,377 446,377 2,149,427 1,034,425 1,034,425 2,737,475 2,249,284 2,249,284 4,161,780 17 1,392,560 427,423 427,423 2,130,472 1,069,912 1,069,912 2,772,961 2,475,590 2,475,590 4,466,490 18 1,462,188 407,244 407,244 2,110,294 1,105,601 1,105,601 2,808,650 2,723,857 2,723,857 4,794,384 19 1,535,297 385,647 385,647 2,088,697 1,141,284 1,141,284 2,844,334 2,996,033 2,996,033 5,147,369 20 1,612,062 362,458 362,458 2,065,508 1,176,766 1,176,766 2,879,816 3,294,271 3,294,271 5,527,583 21 1,692,665 340,069 340,069 2,043,118 1,215,772 1,215,772 2,918,822 3,629,103 3,629,103 5,950,742 22 1,777,298 317,914 317,914 2,020,964 1,256,708 1,256,708 2,959,757 3,999,568 3,999,568 6,412,589 23 1,866,163 294,566 294,566 1,997,615 1,298,195 1,298,195 3,001,244 4,407,420 4,407,420 6,913,428 24 1,959,471 269,430 269,430 1,972,479 1,339,635 1,339,635 3,042,684 4,855,648 4,855,648 7,455,319 25 2,057,445 242,334 242,334 1,945,383 1,380,828 1,380,828 3,083,878 5,348,134 5,348,134 8,041,611 26 2,160,317 213,070 213,070 1,916,120 1,421,528 1,421,528 3,124,578 5,889,096 5,889,096 8,676,224 27 2,268,333 181,470 181,470 1,884,519 1,461,511 1,461,511 3,164,560 6,483,238 6,483,238 9,363,913 28 2,381,750 147,307 147,307 1,850,357 1,500,483 1,500,483 3,203,533 7,135,638 7,135,638 10,110,142 29 2,500,837 110,303 110,303 1,813,352 1,538,079 1,538,079 3,241,128 7,851,764 7,851,764 10,921,128 30 2,625,879 70,138 70,138 1,773,188 1,573,870 1,573,870 3,276,920 8,637,529 8,637,529 11,803,673
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND A MONTHLY $5 ADMINISTRATIVE EXPENSE CHARGE ALL THE TIME. CURRENT VALUES REFLECT A PREMIUM CHARGE OF 9% OF TARGET PREMIUM AND 6.5% OF EXCESS-OF-TARGET PREMIUM FOR THE FIRST 7 YEARS AND 3.5% OF ALL PREMIUM FROM EIGHTH YEAR AND ON. (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 49 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. 50 $100,000 ANNUAL PREMIUM FOR FIRST 7 YEARS $1,703,050 SPECIFIED AMOUNT CASH VALUE ACCUMULATION TEST UNISEX: NONTOBACCO, AGE 45 DEATH BENEFIT OPTION 2 GUARANTEED VALUES
0% HYPOTHETICAL GROSS INVESTMENT 6% HYPOTHETICAL GROSS INVESTMENT 12% HYPOTHETICAL GROSS INVESTMENT RETURN RETURN RETURN ---------------------------------- --------------------------------- ---------------------------------- PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT -- --------- ------- ------- --------- ------- ------- --------- --------- --------- --------- 1 105,000 81,346 81,346 1,784,395 86,505 86,505 1,789,555 91,669 91,669 1,794,719 2 215,250 160,657 160,657 1,863,707 176,022 176,022 1,879,072 192,012 192,012 1,895,062 3 331,013 237,934 237,934 1,940,983 268,644 268,644 1,971,694 301,881 301,881 2,004,930 4 452,563 313,160 313,160 2,016,209 364,451 364,451 2,067,501 422,194 422,194 2,125,244 5 580,191 386,284 386,284 2,089,333 463,491 463,491 2,166,541 553,930 553,930 2,256,980 6 714,201 457,256 457,256 2,160,306 565,815 565,815 2,268,864 698,168 698,168 2,401,217 7 854,911 525,960 525,960 2,229,010 671,403 671,403 2,374,452 856,021 856,021 2,559,070 8 897,656 502,851 502,851 2,205,901 685,385 685,385 2,388,435 928,447 928,447 2,631,496 9 942,539 478,771 478,771 2,181,820 698,560 698,560 2,401,610 1,006,834 1,006,834 2,709,883 10 989,666 453,599 453,599 2,156,649 710,751 710,751 2,413,800 1,091,645 1,091,645 2,794,694 11 1,039,150 427,234 427,234 2,130,284 721,791 721,791 2,424,841 1,183,409 1,183,409 2,886,459 12 1,091,107 399,592 399,592 2,102,641 731,525 731,525 2,434,574 1,282,728 1,282,728 2,985,778 13 1,145,662 370,589 370,589 2,073,639 739,788 739,788 2,442,838 1,390,263 1,390,263 3,093,313 14 1,202,945 340,129 340,129 2,043,178 746,393 746,393 2,449,442 1,506,726 1,506,726 3,209,775 15 1,263,093 308,061 308,061 2,011,111 751,090 751,090 2,454,140 1,632,845 1,632,845 3,335,895 16 1,326,247 274,171 274,171 1,977,221 753,547 753,547 2,456,597 1,769,350 1,769,350 3,472,400 17 1,392,560 238,178 238,178 1,941,228 753,347 753,347 2,456,397 1,916,972 1,916,972 3,620,022 18 1,462,188 199,770 199,770 1,902,819 750,017 750,017 2,453,067 2,076,478 2,076,478 3,779,528 19 1,535,297 158,619 158,619 1,861,669 743,045 743,045 2,446,095 2,248,693 2,248,693 3,951,743 20 1,612,062 114,406 114,406 1,817,455 731,895 731,895 2,434,944 2,434,526 2,434,526 4,137,575 21 1,692,665 66,878 66,878 1,769,928 716,076 716,076 2,419,126 2,635,048 2,635,048 4,338,097 22 1,777,298 15,806 15,806 1,718,856 695,094 695,094 2,398,144 2,851,441 2,851,441 4,571,774 23 1,866,163 (*) (*) (*) 668,449 668,449 2,371,498 3,084,828 3,084,828 4,838,825 24 1,959,471 (*) (*) (*) 635,526 635,526 2,338,575 3,336,255 3,336,255 5,122,458 25 2,057,445 (*) (*) (*) 595,502 595,502 2,298,552 3,606,662 3,606,662 5,423,083 26 2,160,317 (*) (*) (*) 547,333 547,333 2,250,383 3,896,864 3,896,864 5,741,130 27 2,268,333 (*) (*) (*) 489,740 489,740 2,192,790 4,207,652 4,207,652 6,077,224 28 2,381,750 (*) (*) (*) 421,214 421,214 2,124,264 4,539,813 4,539,813 6,432,243 29 2,500,837 (*) (*) (*) 340,132 340,132 2,043,181 4,894,129 4,894,129 6,807,312 30 2,625,879 (*) (*) (*) 244,984 244,984 1,948,034 5,271,631 5,271,631 7,203,982
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $10.00 ADMINISTRATIVE EXPENSE CHARGE ALL THE TIME. GUARANTEED VALUES REFLECT A PREMIUM CHARGE OF 9% OF PREMIUM FOR THE FIRST 7 YEARS AND 5.5% OF PREMIUM FROM EIGHTH YEAR AND ON. (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 NOT STAY IN FORCE. 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. 51 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. 52 APPENDIX C: PERFORMANCE SUMMARY INFORMATION The following performance tables display historical investment 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 should 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. 53 PERFORMANCE TABLES TOTAL RETURN
Annual Percentage Change ------------------------- Fund Unit Inception Values UNDERLYING INVESTMENT OPTIONS Date** 12/31/01 1999 2000 2001 - --------------------------- --------- --------- ----- ------ ------ American Century Variable 01-May-91 9.768970 9.40 -3.23 -3.94 Portfolios, Inc. - American Century VP Balanced Fund: Class I American Century Variable 20-Nov-87 10.990234 63.58 8.38 -28.37 Portfolios, Inc. - American Century VP Capital Appreciation Fund: Class I American Century Variable 30-Oct-97 10.404509 17.32 -11.15 -8.74 Portfolios, Inc. - American Century VP Income & Growth Fund: Class I American Century Variable 02-May-94 9.326990 63.10 -17.33 -29.47 Portfolios, Inc. - American Century VP International Fund: Class I American Century Variable 01-May-96 12.241061 -1.44 17.44 12.35 Portfolios, Inc. - American Century VP Value Fund: Class I Credit Suisse Trust - Global 30-Sep-96 8.471776 62.56 -19.43 -28.93 Post-Venture Capital Portfolio Credit Suisse Trust - 30-Jun-95 7.767318 52.54 -26.35 -22.60 International Focus Portfolio Credit Suisse Trust - Small 30-Jun-95 8.996921 68.10 -18.61 -16.36 Company Growth Portfolio Dreyfus Investment Portfolios 30-Apr-99 9.025727 0.00 -2.59 -28.43 - - European Equity Portfolio: Initial Shares Dreyfus Stock Index Fund, 29-Sep-89 10.471621 19.89 -9.83 -12.55 Inc.: Initial Shares Dreyfus Variable Investment 05-Apr-93 10.939900 10.79 -1.24 -9.69 Fund - Appreciation Portfolio: Initial Shares Dreyfus Variable Investment 02-May-94 9.577914 16.19 -4.36 -6.24 Fund - Growth & Income Portfolio: Initial Shares Federated Insurance Series - 03-May-99 11.649181 0.00 9.80 7.58 Federated Quality Bond Fund II: Primary Shares Fidelity VIP Equity-Income 09-Oct-86 9.579298 5.70 7.78 -5.35 Portfolio: Initial Class Fidelity VIP Growth 09-Oct-86 8.555147 36.64 -11.52 -17.99 Portfolio: Initial Class Fidelity VIP High Income 19-Sep-85 8.802536 8.15 -22.47 -12.10 Portfolio: Initial Class Fidelity VIP II Asset Manager 01-Sep-89 9.716913 10.43 -4.50 -4.49 Portfolio: Initial Class Fidelity VIP II Contrafund 03-Jan-95 9.029797 23.53 -7.19 -12.61 Portfolio: Initial Class Fidelity VIP III Growth 03-Jan-95 8.842970 3.65 -17.57 -14.78 Opportunities Portfolio: Initial Class Fidelity VIP Overseas 28-Jan-87 7.887510 41.80 -19.60 -21.50 Portfolio: Initial Class GVIT Comstock GVIT Value 31-Oct-97 9.726929 18.04 -10.96 -12.62 Fund: Class I GVIT Dreyfus GVIT Mid Cap 31-Oct-97 13.342471 20.21 14.52 -1.72 Index Fund: Class I GVIT Federated GVIT High 31-Oct-97 9.794650 2.80 -8.62 3.62 Income Bond Fund: Class I GVIT Gartmore GVIT Emerging 30-Aug-00 8.219735 0.00 0.00 -5.58 Markets Fund: Class I GVIT Gartmore GVIT Global 30-Jun-00 3.429593 0.00 0.00 -42.96 Technology and Communications Fund: Class I GVIT Gartmore GVIT Government 08-Nov-82 12.419760 -2.93 11.87 6.81 Bond Fund: Class I GVIT Gartmore GVIT Growth 15-Apr-92 6.087822 3.65 -26.98 -28.43 Fund: Class I GVIT Gartmore GVIT 30-Aug-00 6.566849 0.00 0.00 -28.95 International Growth Fund: Class I GVIT Gartmore GVIT Money 10-Nov-81 11.743544 4.22 5.39 3.17 Market Fund: Class I GVIT Gartmore GVIT Total 08-Nov-82 9.251754 6.30 -2.70 -12.19 Return Fund: Class I GVIT Gartmore GVIT Worldwide 31-Oct-97 8.970354 22.46 -12.66 -19.24 Leaders Fund: Class I GVIT GVIT Small Cap Growth 03-May-99 15.161271 0.00 -16.68 -11.21 Fund: Class I GVIT GVIT Small Cap Value 31-Oct-97 15.460620 27.08 10.54 27.74 Fund: Class I GVIT GVIT Small Company Fund: 23-Oct-95 13.093906 43.18 8.25 -7.09 Class I GVIT J.P. Morgan GVIT 31-Oct-97 9.575644 0.49 -0.73 -4.22 Balanced Fund: Class I GVIT MAS GVIT Multi Sector 31-Oct-97 11.036224 0.95 5.03 3.75 Bond Fund: Class I* GVIT Strong GVIT Mid Cap 31-Oct-97 11.327538 83.70 -15.89 -30.60 Growth Fund: Class I GVIT Turner GVIT Growth Focus 30-Jun-00 3.848878 0.00 0.00 -39.28 Fund: Class I Janus Aspen Series - Capital 01-May-97 6.388873 65.98 -19.82 -22.16 Appreciation Portfolio: Service Shares Janus Aspen Series - Global 18-Jan-00 4.094407 0.00 0.00 -37.58 Technology Portfolio: Service Shares Janus Aspen Series - 02-May-94 6.286392 81.27 -17.45 -23.75 International Growth Portfolio: Service Shares Neuberger Berman AMT Growth 10-Sep-84 7.603675 49.53 -12.19 -30.65 Portfolio Neuberger Berman AMT Guardian 03-Nov-97 10.563782 14.25 0.53 -1.92 Portfolio Neuberger Berman AMT Limited 10-Sep-84 10.785897 0.87 6.15 8.33 Maturity Bond Portfolio Neuberger Berman AMT Mid-Cap 03-Nov-97 11.978031 53.00 -8.02 -24.95 Growth Portfolio Neuberger Berman AMT Partners 22-Mar-94 9.693032 6.73 0.10 -3.23 Portfolio Oppenheimer Variable Account 15-Aug-86 10.720152 82.56 -11.78 -31.56 Funds - Oppenheimer Aggressive Growth Fund/VA: Initial Class Oppenheimer Variable Account 03-Apr-85 10.650688 -2.11 5.47 7.34 Funds - Oppenheimer Bond Fund/VA: Initial Class
Non-annualized Percentage Change Annualized Percentage Change ---------------------------------------------------------------- ------------------------------ 1 mo 1 Yr 2 Yrs 3 Yrs 5 Yrs Inception 3 Yrs 5 Yrs Inception To to to to to to to to To UNDERLYING INVESTMENT OPTIONS 2/31/01 12/31/01 12/31/01 12/31/01 12/31/01 12/31/01 2/31/01 12/31/01 12/31/01 - ----------------------------- ------- -------- -------- -------- -------- --------- ------- -------- -------- American Century Variable 0.42 -3.94 -7.05 1.69 34.73 130.66 0.56 6.14 8.15 Portfolios, Inc. - American Century VP Balanced Fund: Class I American Century Variable 2.70 -28.37 -22.36 27.00 18.77 186.76 8.29 3.50 7.75 Portfolios, Inc. - American Century VP Capital Appreciation Fund: Class I American Century Variable 2.02 -8.74 -18.92 -4.87 0.00 29.20 -1.65 0.00 6.34 Portfolios, Inc. - American Century VP Income & Growth Fund: Class I American Century Variable 1.35 -29.47 -41.69 -4.90 32.40 60.98 -1.66 5.77 6.41 Portfolios, Inc. - American Century VP International Fund: Class I American Century Variable 3.73 12.35 31.94 30.04 69.79 89.91 9.15 11.17 11.99 Portfolios, Inc. - American Century VP Value Fund: Class I Credit Suisse Trust - Global 3.92 -28.93 -42.74 -6.93 12.86 8.38 -2.36 2.45 1.54 Post-Venture Capital Portfolio Credit Suisse Trust - 1.80 -22.60 -42.99 -13.04 -11.53 3.47 -4.55 -2.42 0.53 International Focus Portfolio Credit Suisse Trust - Small 7.82 -16.36 -31.93 14.43 27.03 79.42 4.60 4.90 9.41 Company Growth Portfolio Dreyfus Investment Portfolios 1.61 -28.43 -30.28 0.00 0.00 -10.27 0.00 0.00 -3.98 - - European Equity Portfolio: Initial Shares Dreyfus Stock Index Fund, 0.79 -12.55 -21.14 -5.45 59.28 283.24 -1.85 9.76 11.59 Inc.: Initial Shares Dreyfus Variable Investment 0.00 -9.69 -10.81 -1.19 62.81 193.61 -0.40 10.24 13.12 Fund - Appreciation Portfolio: Initial Shares Dreyfus Variable Investment 1.65 -6.24 -10.32 4.20 33.79 157.76 1.38 6.00 13.16 Fund - Growth & Income Portfolio: Initial Shares Federated Insurance Series - -0.65 7.58 18.12 0.00 0.00 16.49 0.00 0.00 5.91 Federated Quality Bond Fund II: Primary Shares Fidelity VIP Equity-Income 2.17 -5.35 2.01 7.82 52.37 420.52 2.54 8.79 11.44 Portfolio: Initial Class Fidelity VIP Growth 0.59 -17.99 -27.44 -0.85 68.77 571.86 -0.29 11.03 13.33 Portfolio: Initial Class Fidelity VIP High Income -0.19 -12.10 -31.85 -26.30 -17.03 180.14 -9.67 -3.67 6.53 Portfolio: Initial Class Fidelity VIP II Asset Manager 1.08 -4.49 -8.79 0.72 38.16 204.11 0.24 6.68 9.44 Portfolio: Initial Class Fidelity VIP II Contrafund 2.36 -12.61 -18.89 0.19 59.77 170.67 0.06 9.82 15.31 Portfolio: Initial Class Fidelity VIP III Growth 1.03 -14.78 -29.75 -27.19 16.53 82.69 -10.04 3.11 9.00 Opportunities Portfolio: Initial Class Fidelity VIP Overseas -0.11 -21.50 -36.88 -10.50 11.23 129.11 -3.63 2.15 5.71 Portfolio: Initial Class GVIT Comstock GVIT Value 0.95 -12.62 -22.20 -8.16 0.00 7.05 -2.80 0.00 1.65 Fund: Class I GVIT Dreyfus GVIT Mid Cap 5.10 -1.72 12.56 35.30 0.00 47.99 10.60 0.00 9.86 Index Fund: Class I GVIT Federated GVIT High -0.33 3.62 -5.31 -2.66 0.00 4.78 -0.90 0.00 1.13 Income Bond Fund: Class I GVIT Gartmore GVIT Emerging 7.45 -5.58 0.00 0.00 0.00 -29.17 0.00 0.00 -22.76 Markets Fund: Class I GVIT Gartmore GVIT Global 0.68 -42.96 0.00 0.00 0.00 -57.33 0.00 0.00 -43.33 Technology and Communications Fund: Class I GVIT Gartmore GVIT Government -0.84 6.81 19.49 15.98 36.89 358.23 5.07 6.48 8.28 Bond Fund: Class I GVIT Gartmore GVIT Growth 1.21 -28.43 -47.75 -45.84 -6.43 70.59 -18.49 -1.32 5.66 Fund: Class I GVIT Gartmore GVIT 0.79 -28.95 0.00 0.00 0.00 -38.81 0.00 0.00 -30.76 International Growth Fund: Class I GVIT Gartmore GVIT Money 0.10 3.17 8.73 13.32 24.08 223.44 4.26 4.41 6.00 Market Fund: Class I GVIT Gartmore GVIT Total 1.49 -12.19 -14.56 -9.18 37.14 850.24 -3.16 6.52 12.48 Return Fund: Class I GVIT Gartmore GVIT Worldwide 2.17 -19.24 -29.46 -13.62 0.00 3.57 -4.76 0.00 0.85 Leaders Fund: Class I GVIT GVIT Small Cap Growth 4.66 -11.21 -26.02 0.00 0.00 51.11 0.00 0.00 16.80 Fund: Class I GVIT GVIT Small Cap Value 7.01 27.74 41.21 79.45 0.00 69.94 21.52 0.00 13.57 Fund: Class I GVIT GVIT Small Company Fund: 4.27 -7.09 0.57 44.00 68.66 135.30 12.92 11.02 14.83 Class I GVIT J.P. Morgan GVIT 0.18 -4.22 -4.92 -4.45 0.00 4.30 -1.51 0.00 1.02 Balanced Fund: Class I GVIT MAS GVIT Multi Sector -0.33 3.75 8.97 10.00 0.00 13.24 3.23 0.00 3.03 Bond Fund: Class I* GVIT Strong GVIT Mid Cap 1.72 -30.60 -41.63 7.22 0.00 24.70 2.35 0.00 5.44 Growth Fund: Class I GVIT Turner GVIT Growth Focus -0.31 -39.28 0.00 0.00 0.00 -63.87 0.00 0.00 -49.27 Fund: Class I Janus Aspen Series - Capital 1.29 -22.16 -37.58 3.60 0.00 105.41 1.19 0.00 16.69 Appreciation Portfolio: Service Shares Janus Aspen Series - Global 1.46 -37.58 0.00 0.00 0.00 -59.11 0.00 0.00 -36.76 Technology Portfolio: Service Shares Janus Aspen Series - 3.76 -23.75 -37.06 14.10 56.64 148.60 4.49 9.39 12.62 International Growth Portfolio: Service Shares Neuberger Berman AMT Growth 2.18 -30.65 -39.11 -8.95 34.10 468.71 -3.08 6.04 10.57 Portfolio Neuberger Berman AMT Guardian 1.14 -1.92 -1.40 12.65 0.00 54.98 4.05 0.00 11.11 Portfolio Neuberger Berman AMT Limited -0.11 8.33 14.99 15.99 27.71 227.37 5.07 5.01 7.09 Maturity Bond Portfolio Neuberger Berman AMT Mid-Cap 2.26 -24.95 -30.97 5.62 0.00 71.27 1.84 0.00 13.81 Growth Portfolio Neuberger Berman AMT Partners 2.62 -3.23 -3.14 3.38 39.71 137.37 1.11 6.92 11.76 Portfolio Oppenheimer Variable Account 2.41 -31.56 -39.62 10.24 36.70 482.37 3.30 6.45 12.14 Funds - Oppenheimer Aggressive Growth Fund/VA: Initial Class Oppenheimer Variable Account -1.01 7.34 13.21 10.82 27.78 274.57 3.48 5.02 8.21 Funds - Oppenheimer Bond Fund/VA: Initial Class
54
Annual Percentage Change -------------------------- Fund Unit Inception Values Underlying Investment Options Date** 12/31/01 1999 2000 2001 - ----------------------------- --------- --------- ----- ------ ------ Oppenheimer Variable Account 03-Apr-85 13.013036 40.81 -0.82 -12.94 Funds - Oppenheimer Capital Appreciation Fund/VA: Initial Class Oppenheimer Variable Account 12-Nov-90 8.386697 57.57 4.46 -12.40 Funds - Oppenheimer Global Securities Fund/VA: Initial Class Oppenheimer Variable Account 05-Jul-95 8.809927 20.99 -9.32 -10.53 Funds - Oppenheimer Main Street Growth & Income Fund/VA: Initial Class Oppenheimer Variable Account 09-Feb-87 10.255584 11.13 5.81 1.79 Funds - Oppenheimer Multiple Strategies Fund/VA: Initial Class Strong Opportunity Fund II, 08-May-92 9.447854 34.12 5.96 -4.11 Inc. Strong Variable Insurance 08-May-92 11.539004 4.46 3.77 3.65 Funds, Inc. - International Stock Fund II Strong Variable Insurance 20-Oct-95 7.139083 86.13 -39.90 -22.46 Funds, Inc. - Strong Discovery Fund II, Inc. The Dreyfus Socially 06-Oct-93 9.867078 29.32 -11.57 -22.90 Responsible Growth Fund, Inc.: Initial Shares The Universal Institutional 16-Jun-97 10.605749 28.62 10.71 9.66 Funds, Inc. - Emerging Markets Debt Portfolio The Universal Institutional 18-Oct-99 6.101338 0.00 -7.68 -29.71 Funds, Inc. - Mid Cap Growth Portfolio The Universal Institutional 03-Jul-95 11.990690 -3.95 27.30 9.38 Funds, Inc. - U.S. Real Estate Portfolio Van Eck Worldwide Insurance 01-Sep-89 9.353593 -8.38 1.26 -5.49 Trust - Worldwide Bond Fund Van Eck Worldwide Insurance 21-Dec-95 7.142729 99.15 -42.23 -2.22 Trust - Worldwide Emerging Markets Fund Van Eck Worldwide Insurance 01-Sep-89 8.161281 20.29 10.74 -10.82 Trust - Worldwide Hard Assets Fund
Non-annualized Percentage Change ------------------------------------------------------------------------ 1 mo 1 Yr 2 Yrs 3 Yrs 5 Yrs Inception To to to to to to Underlying Investment Options 12/31/01 12/31/01 12/31/01 12/31/01 12/31/01 012/31/01 - ----------------------------- -------- -------- -------- -------- -------- --------- Oppenheimer Variable Account 1.63 -12.94 -13.66 21.57 88.73 766.10 Funds - Oppenheimer Capital Appreciation Fund/VA: Initial Class Oppenheimer Variable Account 2.34 -12.40 -8.49 44.18 99.04 257.89 Funds - Oppenheimer Global Securities Fund/VA: Initial Class Oppenheimer Variable Account 1.68 -10.53 -18.88 -1.85 34.55 121.37 Funds - Oppenheimer Main Street Growth & Income Fund/VA: Initial Class Oppenheimer Variable Account 1.15 1.79 7.70 19.69 47.87 321.75 Funds - Oppenheimer Multiple Strategies Fund/VA: Initial Class Strong Opportunity Fund II, 4.04 -4.11 1.61 36.28 91.84 317.64 Inc. Strong Variable Insurance 4.31 3.65 7.56 12.36 32.65 120.84 Funds, Inc. - International Stock Fund II Strong Variable Insurance 2.02 -22.46 -53.40 -13.26 -29.43 -20.64 Funds, Inc. - Strong Discovery Fund II, Inc. The Dreyfus Socially -0.39 -22.90 -31.82 -11.83 44.79 152.46 Responsible Growth Fund, Inc.: Initial Shares The Universal Institutional 2.50 9.66 21.40 56.14 0.00 11.63 Funds, Inc. - Emerging Markets Debt Portfolio The Universal Institutional 2.43 -29.71 -35.11 0.00 0.00 -10.25 Funds, Inc. - Mid Cap Growth Portfolio The Universal Institutional 2.67 9.38 39.24 33.74 41.86 114.10 Funds, Inc. - U.S. Real Estate Portfolio Van Eck Worldwide Insurance -3.42 -5.49 -4.30 -12.32 0.03 57.43 Trust - Worldwide Bond Fund Van Eck Worldwide Insurance 6.51 -2.22 -43.51 12.50 -35.25 -19.26 Trust - Worldwide Emerging Markets Fund Van Eck Worldwide Insurance 4.05 -10.82 -1.24 18.80 -20.34 36.35 Trust - Worldwide Hard Assets Fund
Annualized Percentage Change ------------------------------------- 3 Yrs 5 Yrs Inception to to To Underlying Investment Options 12/31/01 12/31/01 12/31/01 - ----------------------------- -------- -------- -------- Oppenheimer Variable Account 6.73 13.54 13.76 Funds - Oppenheimer Capital Appreciation Fund/VA: Initial Class Oppenheimer Variable Account 12.97 14.76 12.13 Funds - Oppenheimer Global Securities Fund/VA: Initial Class Oppenheimer Variable Account -0.62 6.11 13.03 Funds - Oppenheimer Main Street Growth & Income Fund/VA: Initial Class Oppenheimer Variable Account 6.18 8.14 10.15 Funds - Oppenheimer Multiple Strategies Fund/VA: Initial Class Strong Opportunity Fund II, 10.87 13.92 15.98 Inc. Strong Variable Insurance 3.96 5.81 8.56 Funds, Inc. - International Stock Fund II Strong Variable Insurance -4.63 -6.73 -3.66 Funds, Inc. - Strong Discovery Fund II, Inc. The Dreyfus Socially -4.11 7.68 11.90 Responsible Growth Fund, Inc.: Initial Shares The Universal Institutional 16.01 0.00 2.45 Funds, Inc. - Emerging Markets Debt Portfolio The Universal Institutional 0.00 0.00 -4.79 Funds, Inc. - Mid Cap Growth Portfolio The Universal Institutional 10.18 7.24 12.44 Funds, Inc. - U.S. Real Estate Portfolio Van Eck Worldwide Insurance -4.29 0.01 3.75 Trust - Worldwide Bond Fund Van Eck Worldwide Insurance 4.00 -8.33 -3.49 Trust - Worldwide Emerging Markets Fund Van Eck Worldwide Insurance 5.91 -4.45 2.55 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 such underlying mutual funds would have achieved (reduced by the 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 a 0.40% 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 DEDUCTIONS FROM PREMIUMS, COST OF INSURANCE CHARGES AND A MONTHLY ADMINISTRATIVE CHARGE. 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. 55 Independent Auditors' Report The Board of Directors of Nationwide Life and Annuity Insurance Company and Contract Owners of Nationwide VL Separate Account-C: We have audited the accompanying statement of assets, liabilities and contract owners' equity of Nationwide VL Separate Account-C (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. /s/ KPMG LLP Columbus, Ohio February 20, 2002 NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY DECEMBER 31, 2001 ASSETS: Investments at fair value: American Century VP - American Century VP Balanced (ACVPBal) 89,850 shares (cost $584,771) .................................................... $ 592,113 American Century VP - American Century VP Capital Appreciation (ACVPCapAp) 105,176 shares (cost $865,992) ................................................... 788,822 American Century VP - American Century VP Income & Growth (ACVPIncGr) 1,073,658 shares (cost $7,314,373) ............................................... 6,935,832 American Century VP - American Century VP International (ACVPInt) 3,130,509 shares (cost $25,315,459) .............................................. 20,630,055 American Century VP - American Century VP Value (ACVPValue) 992,117 shares (cost $6,702,980) ................................................. 7,381,349 Credit Suisse Trust - Global Post-Venture Capital Portfolio (CSWPGPV) 52,632 shares (cost $545,907) .................................................... 511,587 Credit Suisse Trust - International Equity Portfolio (CSWPIntEq) 21,757 shares (cost $178,914) .................................................... 181,453 Credit Suisse Trust - Large Cap Value Portfolio (CSWPVal) 8,174 shares (cost $102,883) ..................................................... 104,707 Credit Suisse Trust - Small Cap Growth Portfolio (CSWPSmCoGr) 400,723 shares (cost $5,690,244) ................................................. 5,614,132 Dreyfus IP - European Equity Portfolio (DryEuroEq) 311 shares (cost $3,515) ......................................................... 3,321 The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro) 18,265 shares (cost $530,626) .................................................... 487,122 Dreyfus Stock Index Fund (DryStkIx) 1,664,636 shares (cost $55,686,021) .............................................. 48,873,713 Dreyfus VIF - Appreciation Portfolio (DryAp) 420,638 shares (cost $15,709,621) ................................................ 14,713,933 Dreyfus VIF - Growth and Income Portfolio (DryGrInc) 29,681 shares (cost $629,304) .................................................... 642,585 Federated IS - Federated Quality Bond Fund II (FISFedQual) 90,670 shares (cost $1,001,561) .................................................. 1,021,851 Fidelity(R) VIP - Equity-Income Portfolio: Initial Class (FidVIPEI) 21,269 shares (cost $468,196) .................................................... 483,873 Fidelity(R) VIP - Equity-Income Portfolio: Service Class (FidVIPEIS) 164,298 shares (cost $3,449,650) ................................................. 3,724,624 Fidelity(R) VIP - Growth Portfolio: Initial Class (FidVIPGr) 199,099 shares (cost $7,011,907) ................................................. 6,691,734
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, CONTINUED Fidelity(R) VIP - Growth Portfolio: Service Class (FidVIPGrS) 487,825 shares (cost $20,784,650) ................................................ 16,332,394 Fidelity(R) VIP - High Income Portfolio: Initial Class (FidVIPHI) 341,427 shares (cost $2,406,578) ................................................. 2,188,549 Fidelity(R) VIP - High Income Portfolio: Service Class (FidVIPHIS) 170,135 shares (cost $1,189,558) ................................................. 1,085,463 Fidelity(R) VIP - Overseas Portfolio: Initial Class (FidVIPOv) 187,005 shares (cost $2,992,179) ................................................. 2,595,623 Fidelity(R) VIP - Overseas Portfolio: Service Class (FidVIPOvS) 244,058 shares (cost $3,903,813) ................................................. 3,375,317 Fidelity(R) VIP II - Asset Manager Portfolio: Initial Class (FidVIPAM) 623,062 shares (cost $9,056,360) ................................................. 9,040,629 Fidelity(R) VIP II - Contrafund Portfolio: Initial Class (FidVIPCon) 63,647 shares (cost $1,295,180) .................................................. 1,281,219 Fidelity(R) VIP II - Contrafund Portfolio: Service Class (FidVIPConS) 275,589 shares (cost $6,390,657) ................................................. 5,528,315 Fidelity(R) VIP III - Growth Opportunities Portfolio: Initial Class (FidVIPGrOp) 60,550 shares (cost $950,746) .................................................... 916,127 Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class (FidVIPGrOpS) 134,733 shares (cost $2,221,716) ................................................. 2,035,811 Janus AS - Capital Appreciation Portfolio - Service Shares (JanCapAp) 130,285 shares (cost $2,672,254) ................................................. 2,679,959 Janus AS - Global Technology Portfolio - Service Shares (JanGlTech) 148,036 shares (cost $621,101) ................................................... 603,988 Janus AS - International Growth Portfolio - Service Shares (JanIntGro) 52,009 shares (cost $1,246,088) .................................................. 1,211,814 Nationwide(R) SAT - Capital Appreciation Fund Class I (NSATCapAp) 224,042 shares (cost $3,049,689) ................................................. 2,363,646 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I (NSATMidCapIx) 95,178 shares (cost $1,229,207) .................................................. 1,253,495 Nationwide(R) SAT - Federated Equity Income Fund Class I (NSATEqInc) 32,270 shares (cost $354,056) .................................................... 334,967 Nationwide(R) SAT - Federated High Income Bond Fund Class I (NSATHIncBd) 266,177 shares (cost $2,084,777) ................................................. 1,980,359 Nationwide(R) SAT - Global 50 Fund Class I (NSATGlob50) 127,737 shares (cost $1,497,618) ................................................. 1,185,398 Nationwide(R) SAT - Government Bond Fund Class I (NSATGvtBd) 5,410,230 shares (cost $63,509,444) .............................................. 63,083,287 Nationwide(R) SAT - J.P. Morgan Balanced Fund Class I (NSATBal) 275,892 shares (cost $2,663,838) ................................................. 2,593,381 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I (NSATMSecBd) 159,364 shares (cost $1,473,424) ................................................. 1,456,587
Nationwide(R) SAT - Money Market Fund Class I (NSATMyMkt) 90,557,381 shares (cost $90,557,381) ............................................. 90,557,381 Nationwide(R) SAT - Small Cap Growth Fund Class I (NSATSmCapG) 16,054 shares (cost $221,949) .................................................... 232,469 Nationwide(R) SAT - Small Cap Value Fund Class I (NSATSmCapV) 749,585 shares (cost $7,701,752) ................................................. 7,765,701 Nationwide(R) SAT - Small Company Fund Class I (NSATSmCo) 523,409 shares (cost $9,864,604) ................................................. 9,756,346 Nationwide(R) SAT - Strategic Value Fund Class I (NSATStrVal) 82,435 shares (cost $798,164) .................................................... 795,496 Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I (NSATStMCap) 75,481 shares (cost $984,008) .................................................... 874,830 Nationwide(R) SAT - Total Return Fund Class I (NSATTotRe) 193,855 shares (cost $1,905,849) ................................................. 1,917,226 Neuberger Berman AMT - Growth Portfolio (NBAMTGro) 81,992 shares (cost $1,029,205) .................................................. 944,553 Neuberger Berman AMT - Guardian Portfolio (NBAMTGuard) 160,899 shares (cost $2,377,166) ................................................. 2,355,560 Neuberger Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat) 480,259 shares (cost $6,399,914) ................................................. 6,469,083 Neuberger Berman AMT - Mid-Cap Growth Portfolio (NBAMTMCGr) 57,062 shares (cost $1,040,746) .................................................. 966,625 Neuberger Berman AMT - Partners Portfolio (NBAMTPart) 438,296 shares (cost $6,943,614) ................................................. 6,618,273 Oppenheimer Aggressive Growth Fund/VA (OppAggGro) 201,294 shares (cost $9,717,783) ................................................. 8,196,692 Oppenheimer Bond Fund/VA (OppBdFd) 183,585 shares (cost $2,064,637) ................................................. 2,057,989 Oppenheimer Capital Appreciation Fund/VA (OppCapAp) 324,510 shares (cost $13,735,615) ................................................ 11,870,562 Oppenheimer Global Securities Fund/VA (OppGlSec) 94,857 shares (cost $2,320,594) .................................................. 2,166,529 Oppenheimer Main Street Growth & Income Fund/VA (OppMSGrInc) 26,772 shares (cost $488,754) .................................................... 508,402 Oppenheimer Multiple Strategies Fund/VA (OppMult) 61,906 shares (cost $925,162) .................................................... 953,360 Strong Opportunity Fund II, Inc. (StOpp2) 425,303 shares (cost $9,422,904) ................................................. 8,272,140 Strong VIF - Strong Discovery Fund II (StDisc2) 1,469 shares (cost $14,289) ...................................................... 15,156 Strong VIF - Strong International Stock Fund II (StIntStk2) 37,269 shares (cost $265,618) .................................................... 277,278 UIF - Emerging Markets Debt Portfolio (UIFEmMkt) 9,559 shares (cost $68,472) ...................................................... 66,337
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, CONTINUED UIF - Mid Cap Growth Portfolio (UIFMidCapG) 19,523 shares (cost $158,909) .................................................... 170,440 UIF - U.S. Real Estate Portfolio (UIFUSRE) 151,802 shares (cost $1,821,337) ................................................. 1,833,770 Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt) 49,330 shares (cost $397,286) .................................................... 401,547 Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs) 13,933 shares (cost $160,444) .................................................... 148,948 ------------ Total investments .............................................................. 408,701,827 Accounts receivable .................................................................. 61,878 ------------ Total assets ................................................................... 408,763,705 ACCOUNTS PAYABLE ....................................................................... -- ------------ CONTRACT OWNERS' EQUITY (NOTE 6) ....................................................... $408,763,705 ============
See accompanying notes to financial statements. NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
TOTAL ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 7,957,377 4,753,450 1,347,823 Mortality and expense risk charges (note 3) ... (1,374,166) (673,704) (268,225) ------------- ------------- ------------- Net investment income ....................... 6,583,211 4,079,746 1,079,598 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 239,668,602 108,103,622 103,737,887 Cost of mutual fund shares sold ............... (272,170,311) (102,906,446) (99,106,410) ------------- ------------- ------------- Realized gain (loss) on investments ......... (32,501,709) 5,197,176 4,631,477 Change in unrealized gain (loss) on investments .............................. (10,364,207) (26,383,622) 8,306,165 ------------- ------------- ------------- Net gain (loss) on investments .............. (42,865,916) (21,186,446) 12,937,642 ------------- ------------- ------------- Reinvested capital gains ...................... 10,672,065 5,705,693 1,145,941 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (25,610,640) (11,401,007) 15,163,181 ============= ============= =============
ACVPBAL ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 14,224 -- -- Mortality and expense risk charges (note 3) ... (1,840) -- -- ------------- ------------- ------------- Net investment income ....................... 12,384 -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 482,803 -- -- Cost of mutual fund shares sold ............... (514,588) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (31,785) -- -- Change in unrealized gain (loss) on investments .............................. 7,343 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (24,442) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... 16,886 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 4,828 -- -- ============= ============= =============
ACVPCAPAP ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (2,959) -- -- ------------- ------------- ------------- Net investment income ....................... (2,959) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 721,375 -- -- Cost of mutual fund shares sold ............... (1,192,811) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (471,436) -- -- Change in unrealized gain (loss) on investments .............................. (77,171) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (548,607) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... 357,574 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (193,992) -- -- ============= ============= =============
ACVPINCGR ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 54,204 32,482 165 Mortality and expense risk charges (note 3) ... (20,744) (19,811) (8,955) ------------- ------------- ------------- Net investment income ....................... 33,460 12,671 (8,790) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 4,813,547 4,964,907 1,354,371 Cost of mutual fund shares sold ............... (5,636,106) (4,730,136) (1,249,864) ------------- ------------- ------------- Realized gain (loss) on investments ......... (822,559) 234,771 104,507 Change in unrealized gain (loss) on investments .............................. 248,115 (1,155,812) 474,730 ------------- ------------- ------------- Net gain (loss) on investments .............. (574,444) (921,041) 579,237 ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (540,984) (908,370) 570,447 ============= ============= =============
ACVPINT ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 11,243 4,738 -- Mortality and expense risk charges (note 3) ... (54,641) (18,343) (6,057) ------------- ------------- ------------- Net investment income ....................... (43,398) (13,605) (6,057) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,495,361 1,901,393 1,371,292 Cost of mutual fund shares sold ............... (4,083,035) (1,260,492) (1,113,862) ------------- ------------- ------------- Realized gain (loss) on investments ......... (1,587,674) 640,901 257,430 Change in unrealized gain (loss) on investments .............................. (3,938,827) (1,710,454) 933,102 ------------- ------------- ------------- Net gain (loss) on investments .............. (5,526,501) (1,069,553) 1,190,532 ------------- ------------- ------------- Reinvested capital gains ...................... 1,241,326 70,841 -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (4,328,573) (1,012,317) 1,184,475 ============= ============= =============
ACVPVALUE ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 87,367 599 1,471 Mortality and expense risk charges (note 3) ... (24,151) (2,733) (979) ------------- ------------- ------------- Net investment income ....................... 63,216 (2,134) 492 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 3,917,776 1,002,500 531,207 Cost of mutual fund shares sold ............... (3,681,333) (958,894) (559,656) ------------- ------------- ------------- Realized gain (loss) on investments ......... 236,443 43,606 (28,449) Change in unrealized gain (loss) on investments .............................. 519,108 155,813 (1,755) ------------- ------------- ------------- Net gain (loss) on investments .............. 755,551 199,419 (30,204) ------------- ------------- ------------- Reinvested capital gains ...................... -- 1,532 13,940 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 818,767 198,817 (15,772) ============= ============= =============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
CSWPGPV ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ -- -- -- Mortality and expense risk charges (note 3) ... (3,169) (3,804) (1,176) ------------- ------------- ------------- Net investment income ....................... (3,169) (3,804) (1,176) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,110,146 393,851 386,218 Cost of mutual fund shares sold ............... (1,797,567) (249,898) (313,701) ------------- ------------- ------------- Realized gain (loss) on investments ......... (687,421) 143,953 72,517 Change in unrealized gain (loss) on investments .............................. 334,138 (515,432) 110,736 ------------- ------------- ------------- Net gain (loss) on investments .............. (353,283) (371,479) 183,253 ------------- ------------- ------------- Reinvested capital gains ...................... -- 139,296 -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (356,452) (235,987) 182,077 ============= ============= =============
CSWPINTEQ ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- 1,599 3,563 Mortality and expense risk charges (note 3) ... (1,150) (1,529) (1,380) ------------- ------------- ------------- Net investment income ....................... (1,150) 70 2,183 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 580,950 990,096 404,610 Cost of mutual fund shares sold ............... (755,568) (962,437) (342,261) ------------- ------------- ------------- Realized gain (loss) on investments ......... (174,618) 27,659 62,349 Change in unrealized gain (loss) on investments .............................. 88,134 (201,518) 100,275 ------------- ------------- ------------- Net gain (loss) on investments .............. (86,484) (173,859) 162,624 ------------- ------------- ------------- Reinvested capital gains ...................... -- 38,448 -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (87,634) (135,341) 164,807 ============= ============= =============
CSWPVAL ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- 2,560 3,241 Mortality and expense risk charges (note 3) ... (1,099) (1,098) (1,366) ------------- ------------- ------------- Net investment income ....................... (1,099) 1,462 1,875 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 833,258 692,426 1,052,934 Cost of mutual fund shares sold ............... (839,679) (752,247) (971,396) ------------- ------------- ------------- Realized gain (loss) on investments ......... (6,421) (59,821) 81,538 Change in unrealized gain (loss) on investments .............................. (24,223) 46,205 (55,089) ------------- ------------- ------------- Net gain (loss) on investments .............. (30,644) (13,616) 26,449 ------------- ------------- ------------- Reinvested capital gains ...................... -- 2,349 5,836 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (31,743) (9,805) 34,160 ============= ============= =============
CSWPSMCOGR ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ -- -- -- Mortality and expense risk charges (note 3) ... (16,398) -- -- ------------- ------------- ------------- Net investment income ....................... (16,398) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 604,066 -- -- Cost of mutual fund shares sold ............... (683,860) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (79,794) -- -- Change in unrealized gain (loss) on investments .............................. (76,112) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (155,906) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (172,304) -- -- ============= ============= =============
DRYEUROEQ ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 20 2 602 Mortality and expense risk charges (note 3) ... (221) (614) (35) ------------- ------------- ------------- Net investment income ....................... (201) (612) 567 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 590,523 1,304,301 18 Cost of mutual fund shares sold ............... (664,570) (1,307,369) (18) ------------- ------------- ------------- Realized gain (loss) on investments ......... (74,047) (3,068) -- Change in unrealized gain (loss) on investments .............................. (209) (6,581) 6,597 ------------- ------------- ------------- Net gain (loss) on investments .............. (74,256) (9,649) 6,597 ------------- ------------- ------------- Reinvested capital gains ...................... -- 146 2,828 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (74,457) (10,115) 9,992 ============= ============= =============
DRYSRGRO ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 308 2,483 13 Mortality and expense risk charges (note 3) ... (1,427) (1,579) (448) ------------- ------------- ------------- Net investment income ....................... (1,119) 904 (435) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 626,778 1,121,290 224,745 Cost of mutual fund shares sold ............... (707,467) (1,101,514) (218,557) ------------- ------------- ------------- Realized gain (loss) on investments ......... (80,689) 19,776 6,188 Change in unrealized gain (loss) on investments .............................. (4,629) (49,091) 9,379 ------------- ------------- ------------- Net gain (loss) on investments .............. (85,318) (29,315) 15,567 ------------- ------------- ------------- Reinvested capital gains ...................... -- -- 3,622 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (86,437) (28,411) 18,754 ============= ============= =============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
DRYSTKIX ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 550,381 400,189 258,829 Mortality and expense risk charges (note 3) ... (185,664) (154,372) (81,140) ------------- ------------- ------------- Net investment income ....................... 364,717 245,817 177,689 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 27,882,996 12,382,303 3,342,223 Cost of mutual fund shares sold ............... (31,803,791) (10,633,170) (2,441,535) ------------- ------------- ------------- Realized gain (loss) on investments ......... (3,920,795) 1,749,133 900,688 Change in unrealized gain (loss) on investments .............................. (2,548,204) (7,755,974) 2,590,489 ------------- ------------- ------------- Net gain (loss) on investments .............. (6,468,999) (6,006,841) 3,491,177 ------------- ------------- ------------- Reinvested capital gains ...................... 257,859 746,066 210,845 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (5,846,423) (5,014,958) 3,879,711 ============= ============= =============
DRYAP ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 125,953 20,534 7,948 Mortality and expense risk charges (note 3) ... (49,033) (9,305) (4,651) ------------- ------------- ------------- Net investment income ....................... 76,920 11,229 3,297 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,972,705 1,181,872 1,453,876 Cost of mutual fund shares sold ............... (2,114,117) (1,115,235) (1,373,176) ------------- ------------- ------------- Realized gain (loss) on investments ......... (141,412) 66,637 80,700 Change in unrealized gain (loss) on investments .............................. (931,436) (116,656) 28,294 ------------- ------------- ------------- Net gain (loss) on investments .............. (1,072,848) (50,019) 108,994 ------------- ------------- ------------- Reinvested capital gains ...................... -- 34,968 5,329 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (995,928) (3,822) 117,620 ============= ============= =============
DRYGRINC ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 3,573 -- -- Mortality and expense risk charges (note 3) ... (2,439) -- -- ------------- ------------- ------------- Net investment income ....................... 1,134 -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 681,540 -- -- Cost of mutual fund shares sold ............... (728,057) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (46,517) -- -- Change in unrealized gain (loss) on investments .............................. 13,282 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (33,235) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... 11,527 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (20,574) -- -- ============= ============= =============
FISFEDQUAL ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 6,788 189 -- Mortality and expense risk charges (note 3) ... (1,370) (677) -- ------------- ------------- ------------- Net investment income ....................... 5,418 (488) -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 143,385 507,420 -- Cost of mutual fund shares sold ............... (133,354) (487,427) -- ------------- ------------- ------------- Realized gain (loss) on investments ......... 10,031 19,993 -- Change in unrealized gain (loss) on investments .............................. 11,973 8,318 -- ------------- ------------- ------------- Net gain (loss) on investments .............. 22,004 28,311 -- ------------- ------------- ------------- Reinvested capital gains ...................... 688 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ 28,110 27,823 -- ============= ============= =============
FIDVIPEI ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (6,973) -- -- ------------- ------------- ------------- Net investment income ....................... (6,973) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 4,237,085 -- -- Cost of mutual fund shares sold ............... (4,211,143) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... 25,942 -- -- Change in unrealized gain (loss) on investments .............................. 15,677 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. 41,619 -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 34,646 -- -- ============= ============= =============
FIDVIPEIS ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 57,416 10,995 148 Mortality and expense risk charges (note 3) ... (14,312) (8,586) (1,161) ------------- ------------- ------------- Net investment income ....................... 43,104 2,409 (1,013) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 3,738,353 3,303,921 599,706 Cost of mutual fund shares sold ............... (4,025,257) (3,328,230) (623,654) ------------- ------------- ------------- Realized gain (loss) on investments ......... (286,904) (24,309) (23,948) Change in unrealized gain (loss) on investments .............................. 121,115 109,215 43,792 ------------- ------------- ------------- Net gain (loss) on investments .............. (165,789) 84,906 19,844 ------------- ------------- ------------- Reinvested capital gains ...................... 169,378 42,410 327 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 46,693 129,725 19,158 ============= ============= =============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPGR ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ -- -- -- Mortality and expense risk charges (note 3) ... (21,206) -- -- ------------- ------------- ------------- Net investment income ....................... (21,206) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,437,474 -- -- Cost of mutual fund shares sold ............... (2,481,947) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (44,473) -- -- Change in unrealized gain (loss) on investments .............................. (320,173) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (364,646) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (385,852) -- -- ============= ============= =============
FIDVIPGRS ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- 9,556 2,889 Mortality and expense risk charges (note 3) ... (58,225) (57,953) (19,541) ------------- ------------- ------------- Net investment income ....................... (58,225) (48,397) (16,652) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 11,019,806 2,796,185 2,813,504 Cost of mutual fund shares sold ............... (15,511,418) (2,437,771) (2,273,564) ------------- ------------- ------------- Realized gain (loss) on investments ......... (4,491,612) 358,414 539,940 Change in unrealized gain (loss) on investments .............................. (1,407,400) (4,688,043) 1,464,627 ------------- ------------- ------------- Net gain (loss) on investments .............. (5,899,012) (4,329,629) 2,004,567 ------------- ------------- ------------- Reinvested capital gains ...................... 1,482,587 1,140,977 181,621 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (4,474,650) (3,237,049) 2,169,536 ============= ============= =============
FIDVIPHI ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (5,885) -- -- ------------- ------------- ------------- Net investment income ....................... (5,885) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 391,590 -- -- Cost of mutual fund shares sold ............... (453,949) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (62,359) -- -- Change in unrealized gain (loss) on investments .............................. (218,029) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (280,388) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (286,273) -- -- ============= ============= =============
FIDVIPHIS ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 482,621 129,079 96,332 Mortality and expense risk charges (note 3) ... (8,084) (8,535) (8,494) ------------- ------------- ------------- Net investment income ....................... 474,537 120,544 87,838 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 3,995,215 1,454,852 5,782,461 Cost of mutual fund shares sold ............... (5,082,725) (1,637,244) (5,756,236) ------------- ------------- ------------- Realized gain (loss) on investments ......... (1,087,510) (182,392) 26,225 Change in unrealized gain (loss) on investments .............................. 363,540 (504,686) (19,736) ------------- ------------- ------------- Net gain (loss) on investments .............. (723,970) (687,078) 6,489 ------------- ------------- ------------- Reinvested capital gains ...................... -- -- 3,601 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (249,433) (566,534) 97,928 ============= ============= =============
FIDVIPOV ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (9,332) -- -- ------------- ------------- ------------- Net investment income ....................... (9,332) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 713,677 -- -- Cost of mutual fund shares sold ............... (816,502) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (102,825) -- -- Change in unrealized gain (loss) on investments .............................. (396,556) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (499,381) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (508,713) -- -- ============= ============= =============
FIDVIPOVS ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 165,804 22,282 10,719 Mortality and expense risk charges (note 3) ... (15,840) (12,896) (3,409) ------------- ------------- ------------- Net investment income ....................... 149,964 9,386 7,310 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,898,251 2,412,124 1,042,748 Cost of mutual fund shares sold ............... (4,411,734) (2,569,391) (902,237) ------------- ------------- ------------- Realized gain (loss) on investments ......... (1,513,483) (157,267) 140,511 Change in unrealized gain (loss) on investments .............................. (27,002) (744,961) 194,669 ------------- ------------- ------------- Net gain (loss) on investments .............. (1,540,485) (902,228) 335,180 ------------- ------------- ------------- Reinvested capital gains ...................... 264,927 144,214 17,288 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (1,125,594) (748,628) 359,778 ============= ============= =============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPAM ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ -- -- -- Mortality and expense risk charges (note 3) ... (30,956) -- -- ------------- ------------- ------------- Net investment income ....................... (30,956) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 4,046,800 -- -- Cost of mutual fund shares sold ............... (4,178,708) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (131,908) -- -- Change in unrealized gain (loss) on investments .............................. (15,731) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (147,639) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (178,595) -- -- ============= ============= =============
FIDVIPCON ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (3,878) -- -- ------------- ------------- ------------- Net investment income ....................... (3,878) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 993,590 -- -- Cost of mutual fund shares sold ............... (1,014,551) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (20,961) -- -- Change in unrealized gain (loss) on investments .............................. (13,960) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (34,921) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (38,799) -- -- ============= ============= =============
FIDVIPCONS ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 35,716 13,786 6,774 Mortality and expense risk charges (note 3) ... (22,257) (20,842) (10,620) ------------- ------------- ------------- Net investment income ....................... 13,459 (7,056) (3,846) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,693,815 2,649,583 2,968,067 Cost of mutual fund shares sold ............... (2,329,913) (2,551,141) (2,563,227) ------------- ------------- ------------- Realized gain (loss) on investments ......... (636,098) 98,442 404,840 Change in unrealized gain (loss) on investments .............................. (259,155) (1,030,099) 221,798 ------------- ------------- ------------- Net gain (loss) on investments .............. (895,253) (931,657) 626,638 ------------- ------------- ------------- Reinvested capital gains ...................... 142,864 500,421 49,679 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (738,930) (438,292) 672,471 ============= ============= =============
FIDVIPGROP ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ -- -- -- Mortality and expense risk charges (note 3) ... (3,302) -- -- ------------- ------------- ------------- Net investment income ....................... (3,302) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,793,548 -- -- Cost of mutual fund shares sold ............... (2,920,732) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (127,184) -- -- Change in unrealized gain (loss) on investments .............................. (34,618) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (161,802) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (165,104) -- -- ============= ============= =============
FIDVIPGROPS ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 7,463 31,207 3,879 Mortality and expense risk charges (note 3) ... (10,113) (9,383) (5,343) ------------- ------------- ------------- Net investment income ....................... (2,650) 21,824 (1,464) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,031,491 2,118,365 2,065,595 Cost of mutual fund shares sold ............... (2,657,527) (2,342,712) (2,005,010) ------------- ------------- ------------- Realized gain (loss) on investments ......... (626,036) (224,347) 60,585 Change in unrealized gain (loss) on investments .............................. 158,300 (404,871) 18,884 ------------- ------------- ------------- Net gain (loss) on investments .............. (467,736) (629,218) 79,469 ------------- ------------- ------------- Reinvested capital gains ...................... -- 164,127 7,581 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (470,386) (443,267) 85,586 ============= ============= =============
JANCAPAP ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 7,266 -- -- Mortality and expense risk charges (note 3) ... (1,900) -- -- ------------- ------------- ------------- Net investment income ....................... 5,366 -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 372,276 -- -- Cost of mutual fund shares sold ............... (410,289) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (38,013) -- -- Change in unrealized gain (loss) on investments .............................. 7,705 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (30,308) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (24,942) -- -- ============= ============= =============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
JANGLTECH ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 6,978 7,425 -- Mortality and expense risk charges (note 3) ... (4,250) (1,136) -- ------------- ------------- ------------- Net investment income ....................... 2,728 6,289 -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,033,394 29,242 -- Cost of mutual fund shares sold ............... (2,761,437) (36,949) -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (728,043) (7,707) -- Change in unrealized gain (loss) on investments .............................. 201,710 (218,823) -- ------------- ------------- ------------- Net gain (loss) on investments .............. (526,333) (226,530) -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (523,605) (220,241) -- ============= ============= =============
JANINTGRO ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 5,685 11,274 -- Mortality and expense risk charges (note 3) ... (2,713) (393) -- ------------- ------------- ------------- Net investment income ....................... 2,972 10,881 -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 389,517 4,660 -- Cost of mutual fund shares sold ............... (576,832) (5,251) -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (187,315) (591) -- Change in unrealized gain (loss) on investments .............................. 27,365 (61,639) -- ------------- ------------- ------------- Net gain (loss) on investments .............. (159,950) (62,230) -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (156,978) (51,349) -- ============= ============= =============
NSATCAPAP ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- 4,216 11,330 Mortality and expense risk charges (note 3) ... (9,221) (9,916) (5,775) ------------- ------------- ------------- Net investment income ....................... (9,221) (5,700) 5,555 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,057,329 1,603,809 1,154,145 Cost of mutual fund shares sold ............... (2,258,485) (1,821,336) (1,109,478) ------------- ------------- ------------- Realized gain (loss) on investments ......... (1,201,156) (217,527) 44,667 Change in unrealized gain (loss) on investments .............................. 462,412 (1,010,651) (170,272) ------------- ------------- ------------- Net gain (loss) on investments .............. (738,744) (1,228,178) (125,605) ------------- ------------- ------------- Reinvested capital gains ...................... -- 475,343 154,726 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (747,965) (758,535) 34,676 ============= ============= =============
NSATMIDCAPIX ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 9,708 6,984 316 Mortality and expense risk charges (note 3) . (7,340) (3,987) (117) ------------- ------------- ------------- Net investment income ....................... 2,368 2,997 199 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,931,749 745,622 5,855 Cost of mutual fund shares sold ............... (1,990,836) (666,585) (5,621) ------------- ------------- ------------- Realized gain (loss) on investments ......... (59,087) 79,037 234 Change in unrealized gain (loss) on investments .............................. 17,444 13,660 (7,207) ------------- ------------- ------------- Net gain (loss) on investments .............. (41,643) 92,697 (6,973) ------------- ------------- ------------- Reinvested capital gains ...................... 20,120 44,858 36,162 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (19,155) 140,552 29,388 ============= ============= =============
NSATEQINC ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 39,024 2,217 373 Mortality and expense risk charges (note 3) ... (7,185) (914) (518) ------------- ------------- ------------- Net investment income ....................... 31,839 1,303 (145) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 13,232,605 189,607 212,638 Cost of mutual fund shares sold ............... (13,673,963) (185,952) (204,435) ------------- ------------- ------------- Realized gain (loss) on investments ......... (441,358) 3,655 8,203 Change in unrealized gain (loss) on investments .............................. 11,840 (35,292) 4,363 ------------- ------------- ------------- Net gain (loss) on investments .............. (429,518) (31,637) 12,566 ------------- ------------- ------------- Reinvested capital gains ...................... -- -- 44 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (397,679) (30,334) 12,465 ============= ============= =============
NSATHINCBD ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 206,106 137,254 21,764 Mortality and expense risk charges (note 3) . (8,534) (5,062) (1,034) ------------- ------------- ------------- Net investment income ....................... 197,572 132,192 20,730 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,486,441 308,027 932,935 Cost of mutual fund shares sold ............... (1,748,994) (325,244) (944,309) ------------- ------------- ------------- Realized gain (loss) on investments ......... (262,553) (17,217) (11,374) Change in unrealized gain (loss) on investments .............................. 118,075 (218,826) (6,600) ------------- ------------- ------------- Net gain (loss) on investments .............. (144,478) (236,043) (17,974) ------------- ------------- ------------- Reinvested capital gains ...................... -- -- 114 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 53,094 (103,851) 2,870 ------------- ------------- -------------
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATGLOB50 ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 18,894 6,900 757 Mortality and expense risk charges (note 3) ... (3,584) (3,974) (1,632) ------------- ------------- ------------- Net investment income ....................... 15,310 2,926 (875) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 139,222 829,525 111,896 Cost of mutual fund shares sold ............... (189,011) (787,449) (112,521) ------------- ------------- ------------- Realized gain (loss) on investments ......... (49,789) 42,076 (625) Change in unrealized gain (loss) on investments .............................. (156,810) (228,343) 72,567 ------------- ------------- ------------- Net gain (loss) on investments .............. (206,599) (186,267) 71,942 ------------- ------------- ------------- Reinvested capital gains ...................... -- 34,720 34,111 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (191,289) (148,621) 105,178 ============= ============= =============
NSATGVTBD ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 2,211,164 974,327 313,001 Mortality and expense risk charges (note 3) ... (139,992) (44,858) (17,310) ------------- ------------- ------------- Net investment income ....................... 2,071,172 929,469 295,691 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 13,588,757 11,320,575 5,092,894 Cost of mutual fund shares sold ............... (12,445,549) (11,335,847) (5,283,703) ------------- ------------- ------------- Realized gain (loss) on investments ......... 1,143,208 (15,272) (190,809) Change in unrealized gain (loss) on investments .............................. (1,179,115) 992,971 (231,270) ------------- ------------- ------------- Net gain (loss) on investments .............. (35,907) 977,699 (422,079) ------------- ------------- ------------- Reinvested capital gains ...................... 84,887 -- 14,887 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 2,120,152 1,907,168 (111,501) ============= ============= =============
NSATBAL ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 52,034 29,332 23,069 Mortality and expense risk charges (note 3) ... (8,420) (3,937) (2,415) ------------- ------------- ------------- Net investment income ....................... 43,614 25,395 20,654 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 851,886 472,739 547,597 Cost of mutual fund shares sold ............... (922,039) (507,916) (547,511) ------------- ------------- ------------- Realized gain (loss) on investments ......... (70,153) (35,177) 86 Change in unrealized gain (loss) on investments .............................. (26,964) (6,347) (38,013) ------------- ------------- ------------- Net gain (loss) on investments .............. (97,117) (41,524) (37,927) ------------- ------------- ------------- Reinvested capital gains ...................... -- -- 106 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (53,503) (16,129) (17,167) ============= ============= =============
NSATMSECBD ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 87,280 183,261 24,983 Mortality and expense risk charges (note 3) ... (7,489) (10,453) (1,562) ------------- ------------- ------------- Net investment income ....................... 79,791 172,808 23,421 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 3,454,197 958,146 841,356 Cost of mutual fund shares sold ............... (3,434,798) (955,921) (855,987) ------------- ------------- ------------- Realized gain (loss) on investments ......... 19,399 2,225 (14,631) Change in unrealized gain (loss) on investments .............................. 5,798 (19,870) (3,411) ------------- ------------- ------------- Net gain (loss) on investments .............. 25,197 (17,645) (18,042) ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ 104,988 155,163 5,379 ============= ============= =============
NSATMYMKT ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 3,070,603 2,581,453 521,656 Mortality and expense risk charges (note 3) ... (340,004) (164,329) (43,048) ------------- ------------- ------------- Net investment income ....................... 2,730,599 2,417,124 478,608 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 66,643,944 30,511,788 50,454,233 Cost of mutual fund shares sold ............... (66,643,944) (30,511,788) (50,454,233) ------------- ------------- ------------- 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 ........ 2,730,599 2,417,124 478,608 ============= ============= =============
NSATSMCAPG ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (4,099) (3,530) (71) ------------- ------------- ------------- Net investment income ....................... (4,099) (3,530) (71) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 3,753,112 1,243,244 15,367 Cost of mutual fund shares sold ............... (3,482,130) (1,377,339) (14,874) ------------- ------------- ------------- Realized gain (loss) on investments ......... 270,982 (134,095) 493 Change in unrealized gain (loss) on investments .............................. (501,956) (490,390) 1,002,866 ------------- ------------- ------------- Net gain (loss) on investments .............. (230,974) (624,485) 1,003,359 ------------- ------------- ------------- Reinvested capital gains ...................... -- 49,089 100,381 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (235,073) (578,926) 1,103,669 ============= ============= =============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATSMCAPV ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 2,240 -- -- Mortality and expense risk charges (note 3) ... (25,716) (5,039) (4,239) ------------- ------------- ------------- Net investment income ....................... (23,476) (5,039) (4,239) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 5,029,581 952,195 2,760,638 Cost of mutual fund shares sold ............... (4,972,288) (880,184) (2,545,807) ------------- ------------- ------------- Realized gain (loss) on investments ......... 57,293 72,011 214,831 Change in unrealized gain (loss) on investments .............................. 470,568 (403,496) (51,260) ------------- ------------- ------------- Net gain (loss) on investments .............. 527,861 (331,485) 163,571 ------------- ------------- ------------- Reinvested capital gains ...................... 525,879 429,516 85,300 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ 1,030,264 92,992 244,632 ============= ============= =============
NSATSMCO ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 11,384 1,182 -- Mortality and expense risk charges (note 3) ... (39,517) (19,710) (4,937) ------------- ------------- ------------- Net investment income ....................... (28,133) (18,528) (4,937) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 4,454,144 3,259,336 1,138,531 Cost of mutual fund shares sold ............... (5,852,349) (2,551,244) (1,004,382) ------------- ------------- ------------- Realized gain (loss) on investments ......... (1,398,205) 708,092 134,149 Change in unrealized gain (loss) on investments .............................. 656,917 (1,265,645) 455,234 ------------- ------------- ------------- Net gain (loss) on investments .............. (741,288) (557,553) 589,383 ------------- ------------- ------------- Reinvested capital gains ...................... -- 966,316 101,040 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (769,421) 390,235 685,486 ============= ============= =============
NSATSTRVAL ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 3,087 927 2,521 Mortality and expense risk charges (note 3) ... (2,409) (860) (791) ------------- ------------- ------------- Net investment income ....................... 678 67 1,730 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 666,178 1,720,575 649,774 Cost of mutual fund shares sold ............... (698,831) (1,722,605) (613,244) ------------- ------------- ------------- Realized gain (loss) on investments ......... (32,653) (2,030) 36,530 Change in unrealized gain (loss) on investments .............................. (2,672) (14,011) (27,585) ------------- ------------- ------------- Net gain (loss) on investments .............. (35,325) (16,041) 8,945 ------------- ------------- ------------- Reinvested capital gains ...................... 783 -- 14,264 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (33,864) (15,974) 24,939 ============= ============= =============
NSATSTMCAP ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ -- -- -- Mortality and expense risk charges (note 3) ... (4,373) (4,706) (609) ------------- ------------- ------------- Net investment income ....................... (4,373) (4,706) (609) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,273,700 883,876 200,383 Cost of mutual fund shares sold ............... (1,864,772) (777,237) (164,475) ------------- ------------- ------------- Realized gain (loss) on investments ......... (591,072) 106,639 35,908 Change in unrealized gain (loss) on investments .............................. 188,527 (405,858) 108,153 ------------- ------------- ------------- Net gain (loss) on investments .............. (402,545) (299,219) 144,061 ------------- ------------- ------------- Reinvested capital gains ...................... -- 43,306 47,618 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (406,918) (260,619) 191,070 ============= ============= =============
NSATTOTRE ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 5,167 1,507 254 Mortality and expense risk charges (note 3) ... (1,739) (904) (440) ------------- ------------- ------------- Net investment income ....................... 3,428 603 (186) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 168,765 686,319 474,916 Cost of mutual fund shares sold ............... (269,593) (682,819) (456,195) ------------- ------------- ------------- Realized gain (loss) on investments ......... (100,828) 3,500 18,721 Change in unrealized gain (loss) on investments .............................. 88,629 (74,582) (8,571) ------------- ------------- ------------- Net gain (loss) on investments .............. (12,199) (71,082) 10,150 ------------- ------------- ------------- Reinvested capital gains ...................... 9,429 70,683 5,178 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 658 204 15,142 ============= ============= =============
NBAMTGRO ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (8,148) -- -- ------------- ------------- ------------- Net investment income ....................... (8,148) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 3,180,263 -- -- Cost of mutual fund shares sold ............... (6,164,839) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (2,984,576) -- -- Change in unrealized gain (loss) on investments .............................. (84,652) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (3,069,228) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... 1,683,860 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (1,393,516) -- -- ============= ============= =============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NBAMTGUARD ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 5,896 4,952 6,081 Mortality and expense risk charges (note 3) ... (5,701) (2,856) (5,563) ------------- ------------- ------------- Net investment income ....................... 195 2,096 518 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,392,088 463,813 2,794,209 Cost of mutual fund shares sold ............... (1,432,082) (439,048) (2,473,838) ------------- ------------- ------------- Realized gain (loss) on investments ......... (39,994) 24,765 320,371 Change in unrealized gain (loss) on investments .............................. (26,856) (34,217) (123,751) ------------- ------------- ------------- Net gain (loss) on investments .............. (66,850) (9,452) 196,620 ------------- ------------- ------------- Reinvested capital gains ...................... 84,223 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ 17,568 (7,356) 197,138 ============= ============= =============
NBAMTLMAT ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 245,355 -- -- Mortality and expense risk charges (note 3) ... (17,489) -- -- ------------- ------------- ------------- Net investment income ....................... 227,866 -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 432,218 -- -- Cost of mutual fund shares sold ............... (448,803) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (16,585) -- -- Change in unrealized gain (loss) on investments .............................. 69,170 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. 52,585 -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 280,451 -- -- ============= ============= =============
NBAMTMCGR ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (5,296) (6,306) (6,075) ------------- ------------- ------------- Net investment income ....................... (5,296) (6,306) (6,075) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,403,313 1,275,884 3,339,559 Cost of mutual fund shares sold ............... (2,166,502) (939,051) (2,733,204) ------------- ------------- ------------- Realized gain (loss) on investments ......... (763,189) 336,833 606,355 Change in unrealized gain (loss) on investments .............................. 267,241 (533,085) (40,284) ------------- ------------- ------------- Net gain (loss) on investments .............. (495,948) (196,252) 566,071 ------------- ------------- ------------- Reinvested capital gains ...................... -- 442 33,171 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (501,244) (202,116) 593,167 ============= ============= =============
NBAMTPART ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 28,260 6,994 4,324 Mortality and expense risk charges (note 3) ... (24,402) (5,865) (3,280) ------------- ------------- ------------- Net investment income ....................... 3,858 1,129 1,044 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,328,603 681,651 1,151,119 Cost of mutual fund shares sold ............... (2,596,290) (765,395) (1,133,731) ------------- ------------- ------------- Realized gain (loss) on investments.......... (267,687) (83,744) 17,388 Change in unrealized gain (loss) on investments .............................. (288,262) (47,112) (10,091) ------------- ------------- ------------- Net gain (loss) on investments .............. (555,949) (130,856) 7,297 ------------- ------------- ------------- Reinvested capital gains ...................... 268,466 148,730 7,690 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (283,625) 19,003 16,031 ============= ============= =============
OPPAGGGRO ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 88,470 -- -- Mortality and expense risk charges (note 3) ... (31,349) (19,795) (4,564) ------------- ------------- ------------- Net investment income ....................... 57,121 (19,795) (4,564) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 5,828,322 4,151,313 1,169,499 Cost of mutual fund shares sold ............... (12,096,128) (3,011,156) (805,309) ------------- ------------- ------------- Realized gain (loss) on investments (6,267,806) 1,140,157 364,190 Change in unrealized gain (loss) on investments .............................. 319,133 (2,573,172) 635,010 ------------- ------------- ------------- Net gain (loss) on investments .............. (5,948,673) (1,433,015) 999,200 ------------- ------------- ------------- Reinvested capital gains ...................... 1,380,419 176,333 -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (4,511,133) (1,276,477) 994,636 ============= ============= =============
OPPBDFD ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 22,657 -- -- Mortality and expense risk charges (note 3) ... (3,393) -- -- ------------- ------------- ------------- Net investment income ....................... 19,264 -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 577,105 -- -- Cost of mutual fund shares sold ............... (577,351) -- -- ------------- ------------- ------------- Realized gain (loss) on investments (246) -- -- Change in unrealized gain (loss) on investments .............................. (6,648) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (6,894) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 12,370 -- -- ============= ============= =============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
OPPCAPAP ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 53,051 4,074 122 Mortality and expense risk charges (note 3) ... (31,428) (13,319) (2,821) ------------- ------------- ------------- Net investment income ....................... 21,623 (9,245) (2,699) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,653,134 1,423,436 882,266 Cost of mutual fund shares sold ............... (1,982,349) (1,141,602) (781,544) ------------- ------------- ------------- Realized gain (loss) on investments ......... (329,215) 281,834 100,722 Change in unrealized gain (loss) on investments .............................. (1,641,125) (708,289) 463,855 ------------- ------------- ------------- Net gain (loss) on investments .............. (1,970,340) (426,455) 564,577 ------------- ------------- ------------- Reinvested capital gains ...................... 796,090 217,412 1,339 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ (1,152,627) (218,288) 563,217 ============= ============= =============
OPPGLSEC ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 29,567 -- -- Mortality and expense risk charges (note 3) ... (7,388) (10) -- ------------- ------------- ------------- Net investment income ....................... 22,179 (10) -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,810,069 54,893 -- Cost of mutual fund shares sold ............... (3,562,999) (53,442) -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (752,930) 1,451 -- Change in unrealized gain (loss) on investments .............................. (154,066) -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (906,996) 1,451 -- ------------- ------------- ------------- Reinvested capital gains ...................... 548,160 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (336,657) 1,441 -- ============= ============= =============
OPPMSGRINC ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 2,748 1,596 4,341 Mortality and expense risk charges (note 3) ... (2,969) (1,944) (3,022) ------------- ------------- ------------- Net investment income ....................... (221) (348) 1,319 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 3,040,934 1,107,292 1,763,439 Cost of mutual fund shares sold ............... (3,098,360) (1,096,656) (1,623,537) ------------- ------------- ------------- Realized gain (loss) on investments ......... (57,426) 10,636 139,902 Change in unrealized gain (loss) on investments .............................. 60,694 (71,433) 4,768 ------------- ------------- ------------- Net gain (loss) on investments .............. 3,268 (60,797) 144,670 ------------- ------------- ------------- Reinvested capital gains ...................... -- 21,075 7,313 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 3,047 (40,070) 153,302 ============= ============= =============
OPPMULT ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 31,645 -- -- Mortality and expense risk charges (note 3) ... (3,486) -- -- ------------- ------------- ------------- Net investment income ....................... 28,159 -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 703,962 -- -- Cost of mutual fund shares sold ............... (771,833) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (67,871) -- -- Change in unrealized gain (loss) on investments .............................. 28,198 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. (39,673) -- -- ------------- ------------- ------------- Reinvested capital gains ...................... 42,267 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ 30,753 -- -- ============= ============= =============
STOPP2 ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 30,933 -- -- Mortality and expense risk charges (note 3) ... (24,139) (116) -- ------------- ------------- ------------- Net investment income ....................... 6,794 (116) -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 2,011,226 16,007 -- Cost of mutual fund shares sold ............... (2,065,620) (15,716) -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (54,394) 291 -- Change in unrealized gain (loss) on investments .............................. (1,170,606) 19,842 -- ------------- ------------- ------------- Net gain (loss) on investments .............. (1,225,000) 20,133 -- ------------- ------------- ------------- Reinvested capital gains ...................... 1,267,648 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 49,442 20,017 -- ============= ============= =============
STDISC2 ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (33) -- -- ------------- ------------- ------------- Net investment income ....................... (33) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 71,400 -- -- Cost of mutual fund shares sold ............... (68,958) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... 2,442 -- -- Change in unrealized gain (loss) on investments .............................. 866 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. 3,308 -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 3,275 -- -- ============= ============= =============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
STINTSTK2 ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ -- -- -- Mortality and expense risk charges (note 3) ... (1,039) -- -- ------------- ------------- ------------- Net investment income ....................... (1,039) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 879,854 -- -- Cost of mutual fund shares sold ............... (885,427) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (5,573) -- -- Change in unrealized gain (loss) on investments .............................. 11,660 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. 6,087 -- -- ------------- ------------- ------------- Reinvested capital gains ...................... 396 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ 5,444 -- -- ============= ============= =============
UIFEMMKT ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 5,807 63,959 7,684 Mortality and expense risk charges (note 3) ... (1,781) (1,726) (556) ------------- ------------- ------------- Net investment income ....................... 4,026 62,233 7,128 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 816,361 161,478 740,841 Cost of mutual fund shares sold ............... (795,673) (161,836) (711,991) ------------- ------------- ------------- Realized gain (loss) on investments ......... 20,688 (358) 28,850 Change in unrealized gain (loss) on investments .............................. 9,695 (8,140) 2,243 ------------- ------------- ------------- Net gain (loss) on investments .............. 30,383 (8,498) 31,093 ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 34,409 53,735 38,221 ============= ============= =============
UIFMIDCAPG ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (282) -- -- ------------- ------------- ------------- Net investment income ....................... (282) -- -- ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 224,398 -- -- Cost of mutual fund shares sold ............... (234,069) -- -- ------------- ------------- ------------- Realized gain (loss) on investments ......... (9,671) -- -- Change in unrealized gain (loss) on investments .............................. 11,531 -- -- ------------- ------------- ------------- Net gain (loss) on investments .............. 1,860 -- -- ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ 1,578 -- -- ============= ============= =============
UIFUSRE ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... $ 66,813 37,722 7,347 Mortality and expense risk charges (note 3) ... (6,887) (1,543) (997) ------------- ------------- ------------- Net investment income ....................... 59,926 36,179 6,350 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,421,905 1,179,509 1,051,015 Cost of mutual fund shares sold ............... (1,329,486) (1,132,388) (1,068,159) ------------- ------------- ------------- Realized gain (loss) on investments ......... 92,419 47,121 (17,144) Change in unrealized gain (loss) on investments .............................. 4,224 3,466 4,238 ------------- ------------- ------------- Net gain (loss) on investments .............. 96,643 50,587 (12,906) ------------- ------------- ------------- Reinvested capital gains ...................... 13,822 2,075 -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ $ 170,391 88,841 (6,556) ============= ============= =============
VEWRLDEMKT ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... -- -- -- Mortality and expense risk charges (note 3) ... (2,360) (2,671) (1,393) ------------- ------------- ------------- Net investment income ....................... (2,360) (2,671) (1,393) ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 1,310,239 457,872 502,179 Cost of mutual fund shares sold ............... (1,692,520) (378,925) (416,510) ------------- ------------- ------------- Realized gain (loss) on investments ......... (382,281) 78,947 85,669 Change in unrealized gain (loss) on investments .............................. 314,598 (460,323) 134,693 ------------- ------------- ------------- Net gain (loss) on investments .............. (67,683) (381,376) 220,362 ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (70,043) (384,047) 218,969 ============= ============= =============
VEWRLDHAS ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends .......................... 6,474 3,614 1,327 Mortality and expense risk charges (note 3) ... (1,443) (1,785) (701) ------------- ------------- ------------- Net investment income ....................... 5,031 1,829 626 ------------- ------------- ------------- Proceeds from mutual funds shares sold ........ 608,507 233,800 357,028 Cost of mutual fund shares sold ............... (572,873) (214,257) (333,858) ------------- ------------- ------------- Realized gain (loss) on investments ......... 35,634 19,543 23,170 Change in unrealized gain (loss) on investments .............................. (65,765) 40,610 15,698 ------------- ------------- ------------- Net gain (loss) on investments .............. (30,131) 60,153 38,868 ------------- ------------- ------------- Reinvested capital gains ...................... -- -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........ (25,100) 61,982 39,494 ============= ============= =============
See accompanying notes to financial statements. NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
TOTAL -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 6,583,211 4,079,746 1,079,598 Realized gain (loss) on investments ..... (32,501,709) 5,197,176 4,631,477 Change in unrealized gain (loss) on investments ........................ (10,364,207) (26,383,622) 8,306,165 Reinvested capital gains ................ 10,672,065 5,705,693 1,145,941 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (25,610,640) (11,401,007) 15,163,181 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 95,820,876 132,241,166 87,966,089 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 116,421,610 -- -- Transfers between funds ................. -- -- -- Surrenders .............................. (7,227,103) (1,238,449) (5,053,930) Death benefits .......................... (210,583) -- -- Policy loans (net of repayments) (note 4) 1,130,130 (20,405) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (8,937,501) (4,386,200) (2,792,788) ------------ ------------ ------------ Net equity transactions ............. 196,997,429 126,596,112 80,119,371 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 171,386,789 115,195,105 95,282,552 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 237,376,916 122,181,811 26,899,259 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $408,763,705 237,376,916 122,181,811 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 20,181,570 9,922,749 2,606,238 ------------ ------------ ------------ Units purchased ......................... 28,569,903 14,039,366 11,915,557 Units redeemed .......................... (10,663,239) (3,780,545) (4,599,046) ------------ ------------ ------------ Ending units ............................ 38,088,234 20,181,570 9,922,749 ============ ============ ============
ACVPBAL -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 12,384 -- -- Realized gain (loss) on investments ..... (31,785) -- -- Change in unrealized gain (loss) on investments ........................ 7,343 -- -- Reinvested capital gains ................ 16,886 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 4,828 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 202,228 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 343,713 -- -- Transfers between funds ................. 52,239 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (10,901) -- -- ------------ ------------ ------------ Net equity transactions ............. 587,279 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 592,107 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 592,107 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 87,889 -- -- Units redeemed .......................... (27,278) -- -- ------------ ------------ ------------ Ending units ............................ 60,611 -- -- ============ ============ ============
ACVPCAPAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (2,959) -- -- Realized gain (loss) on investments ..... (471,436) -- -- Change in unrealized gain (loss) on investments ........................ (77,171) -- -- Reinvested capital gains ................ 357,574 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (193,992) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 472,281 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 494,188 -- -- Transfers between funds ................. 34,377 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (18,030) -- -- ------------ ------------ ------------ Net equity transactions ............. 982,816 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 788,824 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 788,824 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 74,609 -- -- Units redeemed .......................... (2,834) -- -- ------------ ------------ ------------ Ending units ............................ 71,775 -- -- ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
ACVPINCGR -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 33,460 12,671 (8,790) Realized gain (loss) on investments ..... (822,559) 234,771 104,507 Change in unrealized gain (loss) on investments ........................ 248,115 (1,155,812) 474,730 Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (540,984) (908,370) 570,447 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 3,953,951 4,140,185 3,408,223 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 856,675 -- -- Transfers between funds ................. (3,794,046) (2,198,926) 1,403,101 Surrenders .............................. (65,786) -- -- Death benefits .......................... (2,077) -- -- Policy loans (net of repayments) (note 4) (4) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (161,688) (124,278) (59,929) ------------ ------------ ------------ Net equity transactions ............. 787,025 1,816,981 4,751,395 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 246,041 908,611 5,321,842 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 6,689,757 5,781,146 459,304 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 6,935,798 6,689,757 5,781,146 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 609,285 475,870 42,170 ------------ ------------ ------------ Units purchased ......................... 457,373 386,817 438,644 Units redeemed .......................... (376,401) (253,402) (4,944) ------------ ------------ ------------ Ending units ............................ 690,257 609,285 475,870 ============ ============ ============
ACVPINT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (43,398) (13,605) (6,057) Realized gain (loss) on investments ..... (1,587,674) 640,901 257,430 Change in unrealized gain (loss) on investments ........................ (3,938,827) (1,710,454) 933,102 Reinvested capital gains ................ 1,241,326 70,841 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (4,328,573) (1,012,317) 1,184,475 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 1,893,966 2,810,291 1,786,884 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 3,778,678 -- -- Transfers between funds ................. 10,354,279 4,428,082 31,974 Surrenders .............................. (55,095) (9,258) -- Death benefits .......................... (7,969) -- -- Policy loans (net of repayments) (note 4) 202 (198) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (317,057) (138,446) (76,149) ------------ ------------ ------------ Net equity transactions ............. 15,647,004 7,090,471 1,742,709 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 11,318,431 6,078,154 2,927,184 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 9,311,473 3,233,319 306,135 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 20,629,904 9,311,473 3,233,319 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 703,839 202,543 31,340 ------------ ------------ ------------ Units purchased ......................... 1,546,319 511,100 182,583 Units redeemed .......................... (39,601) (9,804) (11,380) ------------ ------------ ------------ Ending units ............................ 2,210,557 703,839 202,543 ============ ============ ============
ACVPVALUE -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 63,216 (2,134) 492 Realized gain (loss) on investments ..... 236,443 43,606 (28,449) Change in unrealized gain (loss) on investments ........................ 519,108 155,813 (1,755) Reinvested capital gains ................ -- 1,532 13,940 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 818,767 198,817 (15,772) ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 382,420 303,885 135,463 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 2,205,842 -- -- Transfers between funds ................. 3,033,687 313,895 108,543 Surrenders .............................. -- -- -- Death benefits .......................... (6,765) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (155,173) (29,767) (8,529) ------------ ------------ ------------ Net equity transactions ............. 5,460,011 588,013 235,477 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 6,278,778 786,830 219,705 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,102,641 315,811 96,106 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 7,381,419 1,102,641 315,811 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 101,219 34,114 10,252 ------------ ------------ ------------ Units purchased ......................... 515,782 70,871 24,748 Units redeemed .......................... (14,337) (3,766) (886) ------------ ------------ ------------ Ending units ............................ 602,664 101,219 34,114 ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
CSWPGPV -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ (3,169) (3,804) (1,176) Realized gain (loss) on investments ..... (687,421) 143,953 72,517 Change in unrealized gain (loss) on investments ........................ 334,138 (515,432) 110,736 Reinvested capital gains ................ -- 139,296 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (356,452) (235,987) 182,077 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 195,660 409,565 237,003 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 213,808 -- -- Transfers between funds ................. (612,762) 320,914 25,075 Surrenders .............................. -- (27,660) -- Death benefits .......................... (98) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (20,102) (25,127) (14,132) ------------ ------------ ------------ Net equity transactions ............. (223,494) 677,692 247,946 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (579,946) 441,705 430,023 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,091,514 649,809 219,786 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 511,568 1,091,514 649,809 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 91,578 44,018 24,245 ------------ ------------ ------------ Units purchased ......................... 39,361 51,306 23,555 Units redeemed .......................... (70,554) (3,746) (3,782) ------------ ------------ ------------ Ending units ............................ 60,385 91,578 44,018 ============ ============ ============
CSWPINTEQ -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (1,150) 70 2,183 Realized gain (loss) on investments ..... (174,618) 27,659 62,349 Change in unrealized gain (loss) on investments ........................ 88,134 (201,518) 100,275 Reinvested capital gains ................ -- 38,448 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (87,634) (135,341) 164,807 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 119,662 233,964 289,591 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 164,306 -- -- Transfers between funds ................. (147,711) (184,082) (230,513) Surrenders .............................. (67,369) (37,054) -- Death benefits .......................... (826) -- -- Policy loans (net of repayments) (note 4) (87,288) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (12,903) (9,815) (15,580) ------------ ------------ ------------ Net equity transactions ............. (32,129) 3,013 43,498 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (119,763) (132,328) 208,305 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 301,208 433,536 225,231 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 181,445 301,208 433,536 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 30,020 31,892 25,320 ------------ ------------ ------------ Units purchased ......................... 32,324 19,349 29,543 Units redeemed .......................... (38,984) (21,221) (22,971) ------------ ------------ ------------ Ending units ............................ 23,360 30,020 31,892 ============ ============ ============
CSWPVAL -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (1,099) 1,462 1,875 Realized gain (loss) on investments ..... (6,421) (59,821) 81,538 Change in unrealized gain (loss) on investments ........................ (24,223) 46,205 (55,089) Reinvested capital gains ................ -- 2,349 5,836 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (31,743) (9,805) 34,160 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 34,245 266,873 394,540 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (155,610) (348,214) (481,400) Surrenders .............................. (14,457) -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (8,241) (12,667) (21,207) ------------ ------------ ------------ Net equity transactions ............. (144,063) (94,008) (108,067) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (175,806) (103,813) (73,907) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 280,512 384,325 458,232 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 104,706 280,512 384,325 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 24,581 36,533 46,093 ------------ ------------ ------------ Units purchased ......................... 2,988 26,233 40,717 Units redeemed .......................... (18,443) (38,185) (50,277) ------------ ------------ ------------ Ending units ............................ 9,126 24,581 36,533 ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
CSWPSMCOGR -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ (16,398) -- -- Realized gain (loss) on investments ..... (79,794) -- -- Change in unrealized gain (loss) on investments ........................ (76,112) -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (172,304) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 326,252 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 3,919,803 -- -- Transfers between funds ................. 1,647,406 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (107,285) -- -- ------------ ------------ ------------ Net equity transactions ............. 5,786,176 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 5,613,872 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 5,613,872 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 681,322 -- -- Units redeemed .......................... (57,345) -- -- ------------ ------------ ------------ Ending units ............................ 623,977 -- -- ============ ============ ============
DRYEUROEQ -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (201) (612) 567 Realized gain (loss) on investments ..... (74,047) (3,068) -- Change in unrealized gain (loss) on investments ........................ (209) (6,581) 6,597 Reinvested capital gains ................ -- 146 2,828 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (74,457) (10,115) 9,992 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 162,131 284,003 13,600 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (84,339) (563,980) 271,115 Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (846) (3,783) -- ------------ ------------ ------------ Net equity transactions ............. 76,946 (283,760) 284,715 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 2,489 (293,875) 294,707 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 832 294,707 -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 3,321 832 294,707 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 66 22,815 -- ------------ ------------ ------------ Units purchased ......................... 14,944 21,388 22,815 Units redeemed .......................... (14,642) (44,137) -- ------------ ------------ ------------ Ending units ............................ 368 66 22,815 ============ ============ ============
DRYSRGRO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (1,119) 904 (435) Realized gain (loss) on investments ..... (80,689) 19,776 6,188 Change in unrealized gain (loss) on investments ........................ (4,629) (49,091) 9,379 Reinvested capital gains ................ -- -- 3,622 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (86,437) (28,411) 18,754 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 376,791 718,829 243,046 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 211,705 -- -- Transfers between funds ................. (303,365) (476,991) (154,045) Surrenders .............................. -- (8,289) -- Death benefits .......................... (1,291) -- -- Policy loans (net of repayments) (note 4) (8) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (10,226) (14,034) (7,180) ------------ ------------ ------------ Net equity transactions ............. 273,606 219,515 81,821 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 187,169 191,104 100,575 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 299,949 108,845 8,270 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 487,118 299,949 108,845 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 23,442 7,538 742 ------------ ------------ ------------ Units purchased ......................... 54,969 51,288 20,333 Units redeemed .......................... (29,043) (35,384) (13,537) ------------ ------------ ------------ Ending units ............................ 49,368 23,442 7,538 ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
DRYSTKIX -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 364,717 245,817 177,689 Realized gain (loss) on investments ..... (3,920,795) 1,749,133 900,688 Change in unrealized gain (loss) on investments ........................ (2,548,204) (7,755,974) 2,590,489 Reinvested capital gains ................ 257,859 746,066 210,845 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (5,846,423) (5,014,958) 3,879,711 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 13,232,101 19,661,716 12,869,361 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 15,017,570 -- -- Transfers between funds ................. (18,598,359) 1,901,094 9,841,358 Surrenders .............................. (421,068) (262,906) -- Death benefits .......................... (41,483) -- -- Policy loans (net of repayments) (note 4) (291,850) (8,459) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (1,338,952) (1,029,884) (718,132) ------------ ------------ ------------ Net equity transactions ............. 7,557,959 20,261,561 21,992,587 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 1,711,536 15,246,603 25,872,298 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 47,161,588 31,914,985 6,042,687 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 48,873,124 47,161,588 31,914,985 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 3,995,395 2,442,329 547,841 ------------ ------------ ------------ Units purchased ......................... 2,789,095 1,881,991 1,996,124 Units redeemed .......................... (2,074,599) (328,925) (101,636) ------------ ------------ ------------ Ending units ............................ 4,709,891 3,995,395 2,442,329 ============ ============ ============
DRYAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 76,920 11,229 3,297 Realized gain (loss) on investments ..... (141,412) 66,637 80,700 Change in unrealized gain (loss) on investments ........................ (931,436) (116,656) 28,294 Reinvested capital gains ................ -- 34,968 5,329 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (995,928) (3,822) 117,620 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 1,103,111 1,736,640 968,279 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 10,751,709 -- -- Transfers between funds ................. 1,049,910 88,850 146,912 Surrenders .............................. (40,685) (71,779) -- Death benefits .......................... (955) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (298,327) (72,732) (65,802) ------------ ------------ ------------ Net equity transactions ............. 12,564,763 1,680,979 1,049,389 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 11,568,835 1,677,157 1,167,009 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 3,144,908 1,467,751 300,742 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 14,713,743 3,144,908 1,467,751 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 259,664 119,919 27,277 ------------ ------------ ------------ Units purchased ......................... 1,230,783 151,588 101,540 Units redeemed .......................... (145,937) (11,843) (8,898) ------------ ------------ ------------ Ending units ............................ 1,344,510 259,664 119,919 ============ ============ ============
DRYGRINC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 1,134 -- -- Realized gain (loss) on investments ..... (46,517) -- -- Change in unrealized gain (loss) on investments ........................ 13,282 -- -- Reinvested capital gains ................ 11,527 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (20,574) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 140,099 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 875,283 -- -- Transfers between funds ................. (13,452) -- -- Surrenders .............................. (139,333) -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) (171,256) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (28,185) -- -- ------------ ------------ ------------ Net equity transactions ............. 663,156 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 642,582 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 642,582 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 101,682 -- -- Units redeemed .......................... (34,592) -- -- ------------ ------------ ------------ Ending units ............................ 67,090 -- -- ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FISFEDQUAL -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 5,418 (488) -- Realized gain (loss) on investments ..... 10,031 19,993 -- Change in unrealized gain (loss) on investments ........................ 11,973 8,318 -- Reinvested capital gains ................ 688 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 28,110 27,823 -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 50,762 75,601 -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. 707,816 156,882 -- Surrenders .............................. -- -- -- Death benefits .......................... (778) -- -- Policy loans (net of repayments) (note 4) 601 (694) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (18,719) (5,526) -- ------------ ------------ ------------ Net equity transactions ............. 739,682 226,263 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 767,792 254,086 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 254,086 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 1,021,878 254,086 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 23,465 -- -- ------------ ------------ ------------ Units purchased ......................... 65,971 24,109 -- Units redeemed .......................... (1,715) (644) -- ------------ ------------ ------------ Ending units ............................ 87,721 23,465 -- ============ ============ ============
FIDVIPEI -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (6,973) -- -- Realized gain (loss) on investments ..... 25,942 -- -- Change in unrealized gain (loss) on investments ........................ 15,677 -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 34,646 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... -- -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 2,324,957 -- -- Transfers between funds ................. (1,363,138) -- -- Surrenders .............................. (196,492) -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) (240,716) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (75,407) -- -- ------------ ------------ ------------ Net equity transactions ............. 449,204 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 483,850 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 483,850 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 245,299 -- -- Units redeemed .......................... (194,789) -- -- ------------ ------------ ------------ Ending units ............................ 50,510 -- -- ============ ============ ============
FIDVIPEIS -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 43,104 2,409 (1,013) Realized gain (loss) on investments ..... (286,904) (24,309) (23,948) Change in unrealized gain (loss) on investments ........................ 121,115 109,215 43,792 Reinvested capital gains ................ 169,378 42,410 327 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 46,693 129,725 19,158 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 1,168,811 1,133,004 44,304 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. 66,701 (426,185) 1,641,238 Surrenders .............................. -- -- -- Death benefits .......................... (610) -- -- Policy loans (net of repayments) (note 4) 1,640 (1,779) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (92,084) (1,801) (10,618) ------------ ------------ ------------ Net equity transactions ............. 1,144,458 703,239 1,674,924 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 1,191,151 832,964 1,694,082 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 2,536,200 1,703,236 9,154 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 3,727,351 2,536,200 1,703,236 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 224,240 162,451 924 ------------ ------------ ------------ Units purchased ......................... 132,997 104,651 165,058 Units redeemed .......................... (8,612) (42,862) (3,531) ------------ ------------ ------------ Ending units ............................ 348,625 224,240 162,451 ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPGR -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ (21,206) -- -- Realized gain (loss) on investments ..... (44,473) -- -- Change in unrealized gain (loss) on investments ........................ (320,173) -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (385,852) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 161,294 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 2,990,597 -- -- Transfers between funds ................. 4,054,865 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (129,265) -- -- ------------ ------------ ------------ Net equity transactions ............. 7,077,491 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 6,691,639 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 6,691,639 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 943,977 -- -- Units redeemed .......................... (161,800) -- -- ------------ ------------ ------------ Ending units ............................ 782,177 -- -- ============ ============ ============
FIDVIPGRS -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (58,225) (48,397) (16,652) Realized gain (loss) on investments ..... (4,491,612) 358,414 539,940 Change in unrealized gain (loss) on investments ........................ (1,407,400) (4,688,043) 1,464,627 Reinvested capital gains ................ 1,482,587 1,140,977 181,621 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (4,474,650) (3,237,049) 2,169,536 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 5,250,151 6,442,323 4,819,460 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (7,939,499) 11,075,631 1,504,855 Surrenders .............................. -- (9,065) -- Death benefits .......................... (3,184) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (391,443) (323,569) (127,696) ------------ ------------ ------------ Net equity transactions ............. (3,083,975) 17,185,320 6,196,619 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (7,558,625) 13,948,271 8,366,155 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 23,891,303 9,943,032 1,576,877 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 16,332,678 23,891,303 9,943,032 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 1,796,938 653,283 130,876 ------------ ------------ ------------ Units purchased ......................... 451,102 1,165,397 532,003 Units redeemed .......................... (702,516) (21,742) (9,596) ------------ ------------ ------------ Ending units ............................ 1,545,524 1,796,938 653,283 ============ ============ ============
FIDVIPHI -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (5,885) -- -- Realized gain (loss) on investments ..... (62,359) -- -- Change in unrealized gain (loss) on investments ........................ (218,029) -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (286,273) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 9,168 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 1,301,973 -- -- Transfers between funds ................. 1,195,650 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (31,983) -- -- ------------ ------------ ------------ Net equity transactions ............. 2,474,808 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 2,188,535 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 2,188,535 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 259,183 -- -- Units redeemed .......................... (10,583) -- -- ------------ ------------ ------------ Ending units ............................ 248,600 -- -- ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPHIS -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 474,537 120,544 87,838 Realized gain (loss) on investments ..... (1,087,510) (182,392) 26,225 Change in unrealized gain (loss) on investments ........................ 363,540 (504,686) (19,736) Reinvested capital gains ................ -- -- 3,601 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (249,433) (566,534) 97,928 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 814,189 1,202,268 2,599,667 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (1,335,208) 198,051 (2,163,505) Surrenders .............................. (59,607) (104,157) -- Death benefits .......................... (891) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (76,151) (71,853) (156,897) ------------ ------------ ------------ Net equity transactions ............. (657,668) 1,224,309 279,265 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (907,101) 657,775 377,193 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,992,607 1,334,832 957,639 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 1,085,506 1,992,607 1,334,832 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 266,741 137,733 106,365 ------------ ------------ ------------ Units purchased ......................... 112,586 150,826 276,504 Units redeemed .......................... (213,731) (21,818) (245,136) ------------ ------------ ------------ Ending units ............................ 165,596 266,741 137,733 ============ ============ ============
FIDVIPOV -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (9,332) -- -- Realized gain (loss) on investments ..... (102,825) -- -- Change in unrealized gain (loss) on investments ........................ (396,556) -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (508,713) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 92,553 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 2,867,080 -- -- Transfers between funds ................. 338,393 -- -- Surrenders .............................. (57,969) -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) (71,279) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (64,506) -- -- ------------ ------------ ------------ Net equity transactions ............. 3,104,272 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 2,595,559 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 2,595,559 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 398,916 -- -- Units redeemed .......................... (69,844) -- -- ------------ ------------ ------------ Ending units ............................ 329,072 -- -- ============ ============ ============
FIDVIPOVS -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 149,964 9,386 7,310 Realized gain (loss) on investments ..... (1,513,483) (157,267) 140,511 Change in unrealized gain (loss) on investments ........................ (27,002) (744,961) 194,669 Reinvested capital gains ................ 264,927 144,214 17,288 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (1,125,594) (748,628) 359,778 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 1,649,492 2,032,035 359,166 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (365,953) 758,545 586,388 Surrenders .............................. (36,473) (99,050) (346,670) Death benefits .......................... (6,028) -- -- Policy loans (net of repayments) (note 4) 202 (195) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (155,082) (120,738) (34,454) ------------ ------------ ------------ Net equity transactions ............. 1,086,158 2,570,597 564,430 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (39,436) 1,821,969 924,208 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 3,414,605 1,592,636 668,428 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 3,375,169 3,414,605 1,592,636 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 314,294 118,048 70,301 ------------ ------------ ------------ Units purchased ......................... 170,719 214,654 82,848 Units redeemed .......................... (88,818) (18,408) (35,101) ------------ ------------ ------------ Ending units ............................ 396,195 314,294 118,048 ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPAM -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ (30,956) -- -- Realized gain (loss) on investments ..... (131,908) -- -- Change in unrealized gain (loss) on investments ........................ (15,731) -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (178,595) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 405,990 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 7,508,670 -- -- Transfers between funds ................. 1,480,175 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (175,750) -- -- ------------ ------------ ------------ Net equity transactions ............. 9,219,085 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 9,040,490 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 9,040,490 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 950,697 -- -- Units redeemed .......................... (20,310) -- -- ------------ ------------ ------------ Ending units ............................ 930,387 -- -- ============ ============ ============
FIDVIPCON -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (3,878) -- -- Realized gain (loss) on investments ..... (20,961) -- -- Change in unrealized gain (loss) on investments ........................ (13,960) -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (38,799) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 145,149 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 1,343,784 -- -- Transfers between funds ................. (132,446) -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (36,495) -- -- ------------ ------------ ------------ Net equity transactions ............. 1,319,992 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 1,281,193 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 1,281,193 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 157,160 -- -- Units redeemed .......................... (15,275) -- -- ------------ ------------ ------------ Ending units ............................ 141,885 -- -- ============ ============ ============
FIDVIPCONS -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 13,459 (7,056) (3,846) Realized gain (loss) on investments ..... (636,098) 98,442 404,840 Change in unrealized gain (loss) on investments ........................ (259,155) (1,030,099) 221,798 Reinvested capital gains ................ 142,864 500,421 49,679 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (738,930) (438,292) 672,471 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 1,981,769 2,944,364 1,834,169 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (968,767) 71,174 (277,061) Surrenders .............................. (185,002) (46,229) -- Death benefits .......................... (6,373) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (247,718) (203,190) (134,004) ------------ ------------ ------------ Net equity transactions ............. 573,909 2,766,119 1,423,104 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (165,021) 2,327,827 2,095,575 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 5,693,504 3,365,677 1,270,102 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 5,528,483 5,693,504 3,365,677 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 437,066 240,062 112,018 ------------ ------------ ------------ Units purchased ......................... 171,757 233,325 153,790 Units redeemed .......................... (122,613) (36,321) (25,746) ------------ ------------ ------------ Ending units ............................ 486,210 437,066 240,062 ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPGROP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ (3,302) -- -- Realized gain (loss) on investments ..... (127,184) -- -- Change in unrealized gain (loss) on investments ........................ (34,618) -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (165,104) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 63,071 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 480,327 -- -- Transfers between funds ................. 960,556 -- -- Surrenders .............................. (174,839) -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) (218,509) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (29,468) -- -- ------------ ------------ ------------ Net equity transactions ............. 1,081,138 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 916,034 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 916,034 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 149,754 -- -- Units redeemed .......................... (46,165) -- -- ------------ ------------ ------------ Ending units ............................ 103,589 -- -- ============ ============ ============
FIDVIPGROPS -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (2,650) 21,824 (1,464) Realized gain (loss) on investments ..... (626,036) (224,347) 60,585 Change in unrealized gain (loss) on investments ........................ 158,300 (404,871) 18,884 Reinvested capital gains ................ -- 164,127 7,581 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (470,386) (443,267) 85,586 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 720,861 1,645,711 1,137,493 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (341,106) (1,294,120) 1,413,659 Surrenders .............................. -- (82,502) (480,497) Death benefits .......................... (24,776) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (79,677) (73,146) (71,145) ------------ ------------ ------------ Net equity transactions ............. 275,302 195,943 1,999,510 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (195,084) (247,324) 2,085,096 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 2,230,878 2,478,202 393,106 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 2,035,794 2,230,878 2,478,202 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 231,706 212,333 34,950 ------------ ------------ ------------ Units purchased ......................... 85,852 147,935 224,133 Units redeemed .......................... (69,438) (128,562) (46,750) ------------ ------------ ------------ Ending units ............................ 248,120 231,706 212,333 ============ ============ ============
JANCAPAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 5,366 -- -- Realized gain (loss) on investments ..... (38,013) -- -- Change in unrealized gain (loss) on investments ........................ 7,705 -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (24,942) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 209,706 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 27,837 -- -- Transfers between funds ................. 2,483,554 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (16,195) -- -- ------------ ------------ ------------ Net equity transactions ............. 2,704,902 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 2,679,960 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 2,679,960 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 422,029 -- -- Units redeemed .......................... (2,556) -- -- ------------ ------------ ------------ Ending units ............................ 419,473 -- -- ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
JANGLTECH -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 2,728 6,289 -- Realized gain (loss) on investments ..... (728,043) (7,707) -- Change in unrealized gain (loss) on investments ........................ 201,710 (218,823) -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (523,605) (220,241) -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 664,239 246,971 -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 134,095 -- -- Transfers between funds ................. (847,096) 1,204,252 -- Surrenders .............................. (19,130) -- -- Death benefits .......................... (177) -- -- Policy loans (net of repayments) (note 4) (7) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (27,003) (8,328) -- ------------ ------------ ------------ Net equity transactions ............. (95,079) 1,442,895 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (618,684) 1,222,654 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,222,654 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 603,970 1,222,654 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 186,433 -- -- ------------ ------------ ------------ Units purchased ......................... 151,175 187,322 -- Units redeemed .......................... (190,097) (889) -- ------------ ------------ ------------ Ending units ............................ 147,511 186,433 -- ============ ============ ============
JANINTGRO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 2,972 10,881 -- Realized gain (loss) on investments ..... (187,315) (591) -- Change in unrealized gain (loss) on investments ........................ 27,365 (61,639) -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (156,978) (51,349) -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 463,895 2,091 -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 21,704 -- -- Transfers between funds ................. 468,098 501,185 -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (29,862) (6,979) -- ------------ ------------ ------------ Net equity transactions ............. 923,835 496,297 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 766,857 444,948 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 444,948 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 1,211,805 444,948 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 53,925 -- -- ------------ ------------ ------------ Units purchased ......................... 143,271 54,388 -- Units redeemed .......................... (4,542) (463) -- ------------ ------------ ------------ Ending units ............................ 192,654 53,925 -- ============ ============ ============
NSATCAPAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (9,221) (5,700) 5,555 Realized gain (loss) on investments ..... (1,201,156) (217,527) 44,667 Change in unrealized gain (loss) on investments ........................ 462,412 (1,010,651) (170,272) Reinvested capital gains ................ -- 475,343 154,726 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (747,965) (758,535) 34,676 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 1,115,129 1,268,494 1,295,042 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 493,585 -- -- Transfers between funds ................. (486,078) (387,326) 388,125 Surrenders .............................. (69,524) (9,300) -- Death benefits .......................... (936) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (83,646) (79,184) (79,717) ------------ ------------ ------------ Net equity transactions ............. 968,530 792,684 1,603,450 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 220,565 34,149 1,638,126 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 2,144,000 2,109,851 471,725 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 2,364,565 2,144,000 2,109,851 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 252,079 181,521 42,152 ------------ ------------ ------------ Units purchased ......................... 226,417 113,742 149,909 Units redeemed .......................... (90,087) (43,184) (10,540) ------------ ------------ ------------ Ending units ............................ 388,409 252,079 181,521 ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATMIDCAPIX -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 2,368 2,997 199 Realized gain (loss) on investments ..... (59,087) 79,037 234 Change in unrealized gain (loss) on investments ........................ 17,444 13,660 (7,207) Reinvested capital gains ................ 20,120 44,858 36,162 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (19,155) 140,552 29,388 ============ ============ ============ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 603,025 887,762 22,145 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 539,155 -- -- Transfers between funds ................. (1,001,002) (427,273) 534,281 Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (40,731) (17,193) -- ------------ ------------ ------------ Net equity transactions ............. 100,447 443,296 556,426 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 81,292 583,848 585,814 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,172,206 588,358 2,544 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 1,253,498 1,172,206 588,358 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 86,361 49,740 259 ------------ ------------ ------------ Units purchased ......................... 85,540 68,704 49,491 Units redeemed .......................... (77,953) (32,083) (10) ------------ ------------ ------------ Ending units ............................ 93,948 86,361 49,740 ============ ============ ============
NSATEQINC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 31,839 1,303 (145) Realized gain (loss) on investments ..... (441,358) 3,655 8,203 Change in unrealized gain (loss) on investments ........................ 11,840 (35,292) 4,363 Reinvested capital gains ................ -- -- 44 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (397,679) (30,334) 12,465 ============ ============ ============ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 383,026 112,115 45,293 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. 109,167 124,438 2,148 Surrenders .............................. -- -- -- Death benefits .......................... (866) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (10,927) (7,891) (6,008) ------------ ------------ ------------ Net equity transactions ............. 480,400 228,662 41,433 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 82,721 198,328 53,898 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 252,226 53,898 -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 334,947 252,226 53,898 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 22,688 4,316 -- ------------ ------------ ------------ Units purchased ......................... 16,777 19,001 4,836 Units redeemed .......................... (5,030) (629) (520) ------------ ------------ ------------ Ending units ............................ 34,435 22,688 4,316 ============ ============ ============
NSATHINCBD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 197,572 132,192 20,730 Realized gain (loss) on investments ..... (262,553) (17,217) (11,374) Change in unrealized gain (loss) on investments ........................ 118,075 (218,826) (6,600) Reinvested capital gains ................ -- -- 114 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 53,094 (103,851) 2,870 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 230,416 160,356 192,247 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. 396,173 1,251,681 (153,800) Surrenders .............................. (15,042) (796) -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (104,282) (59,557) (14,343) ------------ ------------ ------------ Net equity transactions ............. 507,265 1,351,684 24,104 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 560,359 1,247,833 26,974 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,419,982 172,149 145,175 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 1,980,341 1,419,982 172,149 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 150,482 16,667 14,446 ------------ ------------ ------------ Units purchased ......................... 63,985 139,868 23,188 Units redeemed .......................... (12,281) (6,053) (20,967) ------------ ------------ ------------ Ending units ............................ 202,186 150,482 16,667 ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATGLOB50 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 15,310 2,926 (875) Realized gain (loss) on investments ..... (49,789) 42,076 (625) Change in unrealized gain (loss) on investments ........................ (156,810) (228,343) 72,567 Reinvested capital gains ................ -- 34,720 34,111 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (191,289) (148,621) 105,178 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 447,066 548,485 394,087 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (75,776) (418,332) 626,801 Surrenders .............................. -- (37,880) -- Death benefits .......................... (127) -- -- Policy loans (net of repayments) (note 4) 407 (396) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (22,710) (26,405) (17,581) ------------ ------------ ------------ Net equity transactions ............. 348,860 65,472 1,003,307 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 157,571 (83,149) 1,108,485 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,027,816 1,110,965 2,480 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 1,185,387 1,027,816 1,110,965 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 92,654 87,461 239 ------------ ------------ ------------ Units purchased ......................... 49,546 39,050 88,633 Units redeemed .......................... (10,055) (33,857) (1,411) ------------ ------------ ------------ Ending units ............................ 132,145 92,654 87,461 ============ ============ ============
NSATGVTBD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 2,071,172 929,469 295,691 Realized gain (loss) on investments ..... 1,143,208 (15,272) (190,809) Change in unrealized gain (loss) on investments ........................ (1,179,115) 992,971 (231,270) Reinvested capital gains ................ 84,887 -- 14,887 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 2,120,152 1,907,168 (111,501) ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 4,114,602 3,666,367 4,044,848 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 4,230,129 -- -- Transfers between funds ................. 38,315,114 (4,706,578) 10,618,629 Surrenders .............................. (20,209) -- (90,452) Death benefits .......................... (49,141) -- -- Policy loans (net of repayments) (note 4) 1,219 (1,400) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (997,186) (305,778) (157,585) ------------ ------------ ------------ Net equity transactions ............. 45,594,528 (1,347,389) 14,415,440 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 47,714,680 559,779 14,303,939 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 15,368,546 14,808,767 504,828 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 63,083,226 15,368,546 14,808,767 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 1,340,109 1,460,462 47,339 ------------ ------------ ------------ Units purchased ......................... 3,854,836 352,376 1,438,603 Units redeemed .......................... (87,773) (472,729) (25,480) ------------ ------------ ------------ Ending units ............................ 5,107,172 1,340,109 1,460,462 ============ ============ ============
NSATBAL -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 43,614 25,395 20,654 Realized gain (loss) on investments ..... (70,153) (35,177) 86 Change in unrealized gain (loss) on investments ........................ (26,964) (6,347) (38,013) Reinvested capital gains ................ -- -- 106 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (53,503) (16,129) (17,167) ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 540,926 450,475 440,636 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. 857,113 184,616 372,074 Surrenders .............................. (20,346) -- (92,593) Death benefits .......................... (1,176) -- -- Policy loans (net of repayments) (note 4) 2,892 (2,947) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (62,378) (36,186) (33,872) ------------ ------------ ------------ Net equity transactions ............. 1,317,031 595,958 686,245 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 1,263,528 579,829 669,078 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,329,834 750,005 80,927 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 2,593,362 1,329,834 750,005 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 133,237 74,582 8,085 ------------ ------------ ------------ Units purchased ......................... 146,106 62,518 79,258 Units redeemed .......................... (8,514) (3,863) (12,761) ------------ ------------ ------------ Ending units ............................ 270,829 133,237 74,582 ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATMSECBD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 79,791 172,808 23,421 Realized gain (loss) on investments ..... 19,399 2,225 (14,631) Change in unrealized gain (loss) on investments ........................ 5,798 (19,870) (3,411) Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 104,988 155,163 5,379 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 175,452 1,256,963 357,691 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (2,104,545) 1,599,789 (234,720) Surrenders .............................. -- (798) -- Death benefits .......................... (782) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (60,176) (104,018) (19,579) ------------ ------------ ------------ Net equity transactions ............. (1,990,051) 2,751,936 103,392 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (1,885,063) 2,907,099 108,771 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 3,341,656 434,557 325,786 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 1,456,593 3,341,656 434,557 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 314,131 42,991 32,607 ------------ ------------ ------------ Units purchased ......................... 28,173 281,350 42,937 Units redeemed .......................... (210,405) (10,210) (32,553) ------------ ------------ ------------ Ending units ............................ 131,899 314,131 42,991 ============ ============ ============
NSATMYMKT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 2,730,599 2,417,124 478,608 Realized gain (loss) on investments ..... -- -- -- Change in unrealized gain (loss) on investments ........................ -- -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 2,730,599 2,417,124 478,608 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 38,508,862 66,179,905 42,289,121 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 21,745,483 -- -- Transfers between funds ................. (37,474,089) (19,387,312) (30,435,129) Surrenders .............................. (3,218,996) (135,050) (229,248) Death benefits .......................... (8,884) -- -- Policy loans (net of repayments) (note 4) 2,857,013 (898) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (1,550,212) (786,574) (526,025) ------------ ------------ ------------ Net equity transactions ............. 20,859,177 45,870,071 11,098,719 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 23,589,776 48,287,195 11,577,327 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 67,044,763 18,757,568 7,180,241 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 90,634,539 67,044,763 18,757,568 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 5,904,882 1,748,236 695,771 ------------ ------------ ------------ Units purchased ......................... 5,341,826 6,001,646 4,379,848 Units redeemed .......................... (3,507,373) (1,845,000) (3,327,383) ------------ ------------ ------------ Ending units ............................ 7,739,335 5,904,882 1,748,236 ============ ============ ============
NSATSMCAPG -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (4,099) (3,530) (71) Realized gain (loss) on investments ..... 270,982 (134,095) 493 Change in unrealized gain (loss) on investments ........................ (501,956) (490,390) 1,002,866 Reinvested capital gains ................ -- 49,089 100,381 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (235,073) (578,926) 1,103,669 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 43,044 264,598 1,027,328 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (388,050) 37,403 518,641 Surrenders .............................. (1,517,558) -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (22,265) (20,358) -- ------------ ------------ ------------ Net equity transactions ............. (1,884,829) 281,643 1,545,969 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (2,119,902) (297,283) 2,649,638 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 2,352,355 2,649,638 -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 232,453 2,352,355 2,649,638 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 137,119 129,320 -- ------------ ------------ ------------ Units purchased ......................... 7,259 8,836 129,320 Units redeemed .......................... (129,046) (1,037) -- ------------ ------------ ------------ Ending units ............................ 15,332 137,119 129,320 ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATSMCAPV -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ (23,476) (5,039) (4,239) Realized gain (loss) on investments ..... 57,293 72,011 214,831 Change in unrealized gain (loss) on investments ........................ 470,568 (403,496) (51,260) Reinvested capital gains ................ 525,879 429,516 85,300 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 1,030,264 92,992 244,632 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 853,037 989,194 228,233 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 4,217,017 -- -- Transfers between funds ................. (554,439) 1,251,889 334,145 Surrenders .............................. (55,941) -- (1,189,906) Death benefits .......................... (6,301) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (178,376) (51,374) (27,322) ------------ ------------ ------------ Net equity transactions ............. 4,274,997 2,189,709 (654,850) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 5,305,261 2,282,701 (410,218) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 2,460,363 177,662 587,880 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 7,765,624 2,460,363 177,662 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 203,318 16,261 68,511 ------------ ------------ ------------ Units purchased ......................... 339,817 191,312 70,894 Units redeemed .......................... (41,214) (4,255) (123,144) ------------ ------------ ------------ Ending units ............................ 501,921 203,318 16,261 ============ ============ ============
NSATSMCO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (28,133) (18,528) (4,937) Realized gain (loss) on investments ..... (1,398,205) 708,092 134,149 Change in unrealized gain (loss) on investments ........................ 656,917 (1,265,645) 455,234 Reinvested capital gains ................ -- 966,316 101,040 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (769,421) 390,235 685,486 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 1,750,825 1,446,895 1,277,119 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 1,864,063 -- -- Transfers between funds ................. 1,465,195 1,571,807 295,719 Surrenders .............................. (74,076) (22,298) -- Death benefits .......................... (17,438) -- -- Policy loans (net of repayments) (note 4) 1,207 (1,261) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (320,001) (162,982) (82,718) ------------ ------------ ------------ Net equity transactions ............. 4,669,775 2,832,161 1,490,120 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 3,900,354 3,222,396 2,175,606 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 5,855,898 2,633,502 457,896 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 9,756,252 5,855,898 2,633,502 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 415,566 202,708 50,558 ------------ ------------ ------------ Units purchased ......................... 602,791 226,654 168,502 Units redeemed .......................... (273,432) (13,796) (16,352) ------------ ------------ ------------ Ending units ............................ 744,925 415,566 202,708 ============ ============ ============
NSATSTRVAL -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 678 67 1,730 Realized gain (loss) on investments ..... (32,653) (2,030) 36,530 Change in unrealized gain (loss) on investments ........................ (2,672) (14,011) (27,585) Reinvested capital gains ................ 783 -- 14,264 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (33,864) (15,974) 24,939 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 114,266 252,470 155,038 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. 728,388 (830,111) 246,688 Surrenders .............................. -- (96,589) -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (13,573) (10,223) (9,632) ------------ ------------ ------------ Net equity transactions ............. 829,081 (684,453) 392,094 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 795,217 (700,427) 417,033 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 273 700,700 283,667 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 795,490 273 700,700 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 29 79,877 31,219 ------------ ------------ ------------ Units purchased ......................... 89,305 29,153 49,737 Units redeemed .......................... (1,528) (109,001) (1,079) ------------ ------------ ------------ Ending units ............................ 87,806 29 79,877 ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATSTMCAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ (4,373) (4,706) (609) Realized gain (loss) on investments ..... (591,072) 106,639 35,908 Change in unrealized gain (loss) on investments ........................ 188,527 (405,858) 108,153 Reinvested capital gains ................ -- 43,306 47,618 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (406,918) (260,619) 191,070 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 145,604 755,202 100,649 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. 17,455 (229,525) 647,351 Surrenders .............................. -- -- -- Death benefits .......................... (958) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (39,865) (38,015) (6,617) ------------ ------------ ------------ Net equity transactions ............. 122,236 487,662 741,383 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (284,682) 227,043 932,453 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,159,496 932,453 -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 874,814 1,159,496 932,453 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 71,051 48,159 -- ------------ ------------ ------------ Units purchased ......................... 32,041 37,312 48,604 Units redeemed .......................... (25,863) (14,420) (445) ------------ ------------ ------------ Ending units ............................ 77,229 71,051 48,159 ============ ============ ============
NSATTOTRE -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 3,428 603 (186) Realized gain (loss) on investments ..... (100,828) 3,500 18,721 Change in unrealized gain (loss) on investments ........................ 88,629 (74,582) (8,571) Reinvested capital gains ................ 9,429 70,683 5,178 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 658 204 15,142 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 44,486 275,094 116,583 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 14,525 -- -- Transfers between funds ................. 1,674,384 (215,050) (87,234) Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (23,709) (9,158) (5,554) ------------ ------------ ------------ Net equity transactions ............. 1,709,686 50,886 23,795 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 1,710,344 51,090 38,937 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 193,417 142,327 103,390 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 1,903,761 193,417 142,327 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 18,361 13,172 10,192 ------------ ------------ ------------ Units purchased ......................... 188,503 25,978 10,962 Units redeemed .......................... (1,091) (20,789) (7,982) ------------ ------------ ------------ Ending units ............................ 205,773 18,361 13,172 ============ ============ ============
NBAMTGRO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (8,148) -- -- Realized gain (loss) on investments ..... (2,984,576) -- -- Change in unrealized gain (loss) on investments ........................ (84,652) -- -- Reinvested capital gains ................ 1,683,860 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (1,393,516) -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 495,179 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 3,453,400 -- -- Transfers between funds ................. (1,560,417) -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (50,254) -- -- ------------ ------------ ------------ Net equity transactions ............. 2,337,908 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 944,392 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 944,392 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 421,919 -- -- Units redeemed .......................... (297,717) -- -- ------------ ------------ ------------ Ending units ............................ 124,202 -- -- ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NBAMTGUARD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 195 2,096 518 Realized gain (loss) on investments ..... (39,994) 24,765 320,371 Change in unrealized gain (loss) on investments ........................ (26,856) (34,217) (123,751) Reinvested capital gains ................ 84,223 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 17,568 (7,356) 197,138 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 406,165 561,910 892,142 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 1,335 -- -- Transfers between funds ................. 762,369 (126,276) (1,082,753) Surrenders .............................. (30,225) -- (329,847) Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (35,955) (18,247) (50,939) ------------ ------------ ------------ Net equity transactions ............. 1,103,689 417,387 (571,397) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 1,121,257 410,031 (374,259) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,234,432 824,401 1,198,660 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 2,355,689 1,234,432 824,401 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 113,427 76,442 128,350 ------------ ------------ ------------ Units purchased ......................... 113,278 68,206 107,495 Units redeemed .......................... (6,388) (31,221) (159,403) ------------ ------------ ------------ Ending units ............................ 220,317 113,427 76,442 ============ ============ ============
NBAMTLMAT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 227,866 -- -- Realized gain (loss) on investments ..... (16,585) -- -- Change in unrealized gain (loss) on investments ........................ 69,170 -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 280,451 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 417,576 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 3,631,299 -- -- Transfers between funds ................. 2,245,223 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (107,918) -- -- ------------ ------------ ------------ Net equity transactions ............. 6,186,180 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 6,466,631 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 6,466,631 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 609,595 -- -- Units redeemed .......................... (10,050) -- -- ------------ ------------ ------------ Ending units ............................ 599,545 -- -- ============ ============ ============
NBAMTMCGR -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (5,296) (6,306) (6,075) Realized gain (loss) on investments ..... (763,189) 336,833 606,355 Change in unrealized gain (loss) on investments ........................ 267,241 (533,085) (40,284) Reinvested capital gains ................ -- 442 33,171 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (501,244) (202,116) 593,167 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 495,607 932,931 744,249 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (661,100) 330,845 (501,434) Surrenders .............................. (84,842) -- (1,114,722) Death benefits .......................... (2,696) -- -- Policy loans (net of repayments) (note 4) 1,822 (1,517) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (41,522) (48,953) (53,045) ------------ ------------ ------------ Net equity transactions ............. (292,731) 1,213,306 (924,952) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (793,975) 1,011,190 (331,785) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 1,760,578 749,388 1,081,173 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 966,603 1,760,578 749,388 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 110,315 43,280 95,708 ------------ ------------ ------------ Units purchased ......................... 37,855 69,724 62,434 Units redeemed .......................... (67,472) (2,689) (114,862) ------------ ------------ ------------ Ending units ............................ 80,698 110,315 43,280 ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NBAMTPART -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 3,858 1,129 1,044 Realized gain (loss) on investments ..... (267,687) (83,744) 17,388 Change in unrealized gain (loss) on investments ........................ (288,262) (47,112) (10,091) Reinvested capital gains ................ 268,466 148,730 7,690 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (283,625) 19,003 16,031 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 888,633 744,591 775,015 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 4,056,255 -- -- Transfers between funds ................. 96,707 249,200 45,388 Surrenders .............................. (7,757) -- -- Death benefits .......................... (865) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (137,246) (45,832) (39,833) ------------ ------------ ------------ Net equity transactions ............. 4,895,727 947,959 780,570 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 4,612,102 966,962 796,601 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 2,006,073 1,039,111 242,510 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 6,618,175 2,006,073 1,039,111 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 200,302 104,066 25,973 ------------ ------------ ------------ Units purchased ......................... 592,003 100,878 83,251 Units redeemed .......................... (109,873) (4,642) (5,158) ------------ ------------ ------------ Ending units ............................ 682,432 200,302 104,066 ============ ============ ============
OPPAGGGRO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 57,121 (19,795) (4,564) Realized gain (loss) on investments ..... (6,267,806) 1,140,157 364,190 Change in unrealized gain (loss) on investments ........................ 319,133 (2,573,172) 635,010 Reinvested capital gains ................ 1,380,419 176,333 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (4,511,133) (1,276,477) 994,636 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 2,217,562 2,353,009 746,374 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 3 -- -- Transfers between funds ................. 3,917,781 2,147,166 2,078,986 Surrenders .............................. (44,190) (132,025) (397,205) Death benefits .......................... (4,105) -- -- Policy loans (net of repayments) (note 4) (4) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (231,552) (131,084) (46,574) ------------ ------------ ------------ Net equity transactions ............. 5,855,495 4,237,066 2,381,581 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 1,344,362 2,960,589 3,376,217 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 6,852,272 3,891,683 515,466 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 8,196,634 6,852,272 3,891,683 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 445,302 222,462 53,218 ------------ ------------ ------------ Units purchased ......................... 667,153 236,557 204,680 Units redeemed .......................... (329,870) (13,717) (35,436) ------------ ------------ ------------ Ending units ............................ 782,585 445,302 222,462 ============ ============ ============
OPPBDFD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 19,264 -- -- Realized gain (loss) on investments ..... (246) -- -- Change in unrealized gain (loss) on investments ........................ (6,648) -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 12,370 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 144,424 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 556,785 -- -- Transfers between funds ................. 1,652,166 -- -- Surrenders .............................. (123,934) -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) (148,802) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (34,902) -- -- ------------ ------------ ------------ Net equity transactions ............. 2,045,737 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 2,058,107 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 2,058,107 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 223,576 -- -- Units redeemed .......................... (30,339) -- -- ------------ ------------ ------------ Ending units ............................ 193,237 -- -- ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
OPPCAPAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 21,623 (9,245) (2,699) Realized gain (loss) on investments ..... (329,215) 281,834 100,722 Change in unrealized gain (loss) on investments ........................ (1,641,125) (708,289) 463,855 Reinvested capital gains ................ 796,090 217,412 1,339 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (1,152,627) (218,288) 563,217 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 2,544,827 1,642,904 723,294 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 3,177,029 -- -- Transfers between funds ................. 1,704,214 1,670,957 1,439,574 Surrenders .............................. -- (8,754) -- Death benefits .......................... (2,290) -- -- Policy loans (net of repayments) (note 4) (4) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (236,081) (77,100) (25,735) ------------ ------------ ------------ Net equity transactions ............. 7,187,695 3,228,007 2,137,133 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 6,035,068 3,009,719 2,700,350 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 5,835,252 2,825,533 125,183 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 11,870,320 5,835,252 2,825,533 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 407,726 196,059 11,744 ------------ ------------ ------------ Units purchased ......................... 548,416 218,275 186,549 Units redeemed .......................... (17,989) (6,608) (2,234) ------------ ------------ ------------ Ending units ............................ 938,153 407,726 196,059 ============ ============ ============
OPPGLSEC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 22,179 (10) -- Realized gain (loss) on investments ..... (752,930) 1,451 -- Change in unrealized gain (loss) on investments ........................ (154,066) -- -- Reinvested capital gains ................ 548,160 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (336,657) 1,441 -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 404,388 58,456 -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 1,831,578 -- -- Transfers between funds ................. 316,211 (59,702) -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (49,026) (195) -- ------------ ------------ ------------ Net equity transactions ............. 2,503,151 (1,441) -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 2,166,494 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 2,166,494 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 264,136 6,011 -- Units redeemed .......................... (5,811) (6,011) -- ------------ ------------ ------------ Ending units ............................ 258,325 -- -- ============ ============ ============
OPPMSGRINC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (221) (348) 1,319 Realized gain (loss) on investments ..... (57,426) 10,636 139,902 Change in unrealized gain (loss) on investments ........................ 60,694 (71,433) 4,768 Reinvested capital gains ................ -- 21,075 7,313 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 3,047 (40,070) 153,302 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 225,012 353,526 171,347 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (241,558) (278,364) 733,953 Surrenders .............................. -- -- (782,790) Death benefits .......................... (1,053) -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (21,937) (18,817) (24,094) ------------ ------------ ------------ Net equity transactions ............. (39,536) 56,345 98,416 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (36,489) 16,275 251,718 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 544,892 528,617 276,899 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 508,403 544,892 528,617 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 55,343 48,784 30,977 ------------ ------------ ------------ Units purchased ......................... 23,935 33,660 97,563 Units redeemed .......................... (21,570) (27,101) (79,756) ------------ ------------ ------------ Ending units ............................ 57,708 55,343 48,784 ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
OPPMULT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 28,159 -- -- Realized gain (loss) on investments ..... (67,871) -- -- Change in unrealized gain (loss) on investments ........................ 28,198 -- -- Reinvested capital gains ................ 42,267 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 30,753 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 318,716 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 765,121 -- -- Transfers between funds ................. (139,875) -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (21,376) -- -- ------------ ------------ ------------ Net equity transactions ............. 922,586 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 953,339 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 953,339 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 103,924 -- -- Units redeemed .......................... (10,966) -- -- ------------ ------------ ------------ Ending units ............................ 92,958 -- -- ============ ============ ============
STOPP2 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 6,794 (116) -- Realized gain (loss) on investments ..... (54,394) 291 -- Change in unrealized gain (loss) on investments ........................ (1,170,606) 19,842 -- Reinvested capital gains ................ 1,267,648 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 49,442 20,017 -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 1,279,559 463 -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 7,044,683 -- -- Transfers between funds ................. 335,088 459,336 -- Surrenders .............................. (340,475) -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) (422,752) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (153,742) 1 -- ------------ ------------ ------------ Net equity transactions ............. 7,742,361 459,800 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 7,791,803 479,817 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 479,817 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 8,271,620 479,817 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 48,820 -- -- ------------ ------------ ------------ Units purchased ......................... 962,927 48,820 -- Units redeemed .......................... (136,492) -- -- ------------ ------------ ------------ Ending units ............................ 875,255 48,820 -- ============ ============ ============
STDISC2 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (33) -- -- Realized gain (loss) on investments ..... 2,442 -- -- Change in unrealized gain (loss) on investments ........................ 866 -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 3,275 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... -- -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 64,554 -- -- Transfers between funds ................. (52,509) -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (169) -- -- ------------ ------------ ------------ Net equity transactions ............. 11,876 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 15,151 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 15,151 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 5,896 -- -- Units redeemed .......................... (4,583) -- -- ------------ ------------ ------------ Ending units ............................ 1,313 -- -- ============ ============ ============
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
STINTSTK2 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ (1,039) -- -- Realized gain (loss) on investments ..... (5,573) -- -- Change in unrealized gain (loss) on investments ........................ 11,660 -- -- Reinvested capital gains ................ 396 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 5,444 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... -- -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 177,910 -- -- Transfers between funds ................. 116,684 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (22,770) -- -- ------------ ------------ ------------ Net equity transactions ............. 271,824 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 277,268 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 277,268 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 40,335 -- -- Units redeemed .......................... (1,497) -- -- ------------ ------------ ------------ Ending units ............................ 38,838 -- -- ============ ============ ============
UIFEMMKT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 4,026 62,233 7,128 Realized gain (loss) on investments ..... 20,688 (358) 28,850 Change in unrealized gain (loss) on investments ........................ 9,695 (8,140) 2,243 Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 34,409 53,735 38,221 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 4,446 38,054 116,046 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. (581,726) 492,561 (176,939) Surrenders .............................. -- (9,397) -- Death benefits .......................... (940) -- -- Policy loans (net of repayments) (note 4) 620 (661) -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (11,225) (15,493) (6,107) ------------ ------------ ------------ Net equity transactions ............. (588,825) 505,064 (67,000) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (554,416) 558,799 (28,779) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 620,755 61,956 90,735 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 66,339 620,755 61,956 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 64,183 7,107 13,412 ------------ ------------ ------------ Units purchased ......................... 887 59,277 16,179 Units redeemed .......................... (58,815) (2,201) (22,484) ------------ ------------ ------------ Ending units ............................ 6,255 64,183 7,107 ============ ============ ============
UIFMIDCAPG -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (282) -- -- Realized gain (loss) on investments ..... (9,671) -- -- Change in unrealized gain (loss) on investments ........................ 11,531 -- -- Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 1,578 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 4,900 -- -- Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... -- -- -- Transfers between funds ................. 165,341 -- -- Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (1,378) -- -- ------------ ------------ ------------ Net equity transactions ............. 168,863 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 170,441 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 170,441 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... -- -- -- ------------ ------------ ------------ Units purchased ......................... 28,170 -- -- Units redeemed .......................... (235) -- -- ------------ ------------ ------------ Ending units ............................ 27,935 -- -- ============ ============ ============
NATIONWIDE VL SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
UIFUSRE -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... $ 59,926 36,179 6,350 Realized gain (loss) on investments ..... 92,419 47,121 (17,144) Change in unrealized gain (loss) on investments ........................ 4,224 3,466 4,238 Reinvested capital gains ................ 13,822 2,075 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 170,391 88,841 (6,556) ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 188,142 336,645 365,673 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 414,346 -- -- Transfers between funds ................. 859,569 (424,841) 82,451 Surrenders .............................. (70,683) -- -- Death benefits .......................... (7,744) -- -- Policy loans (net of repayments) (note 4) (85,216) -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (63,079) (12,251) (16,453) ------------ ------------ ------------ Net equity transactions ............. 1,235,335 (100,447) 431,671 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... 1,405,726 (11,606) 425,115 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 427,902 439,508 14,393 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... $ 1,833,628 427,902 439,508 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 39,041 51,147 1,612 ------------ ------------ ------------ Units purchased ......................... 134,807 34,558 50,673 Units redeemed .......................... (20,927) (46,664) (1,138) ------------ ------------ ------------ Ending units ............................ 152,921 39,041 51,147 ============ ============ ============
VEWRLDEMKT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... (2,360) (2,671) (1,393) Realized gain (loss) on investments ..... (382,281) 78,947 85,669 Change in unrealized gain (loss) on investments ........................ 314,598 (460,323) 134,693 Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (70,043) (384,047) 218,969 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 236,359 373,318 242,033 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 256,847 -- -- Transfers between funds ................. (918,728) 486,123 (96,346) Surrenders .............................. -- (27,613) -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (15,252) (17,968) (15,612) ------------ ------------ ------------ Net equity transactions ............. (440,774) 813,860 130,075 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (510,817) 429,813 349,044 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 912,010 482,197 133,153 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 401,193 912,010 482,197 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 124,869 38,228 21,058 ------------ ------------ ------------ Units purchased ......................... 66,616 92,126 30,112 Units redeemed .......................... (135,317) (5,485) (12,942) ------------ ------------ ------------ Ending units ............................ 56,168 124,869 38,228 ============ ============ ============
VEWRLDHAS -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income ................... 5,031 1,829 626 Realized gain (loss) on investments ..... 35,634 19,543 23,170 Change in unrealized gain (loss) on investments ........................ (65,765) 40,610 15,698 Reinvested capital gains ................ -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (25,100) 61,982 39,494 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners ....................... 33,617 40,665 63,607 Transfer from Nationwide Variable Life Separate Account-A (note 1) ........... 52,204 -- -- Transfers between funds ................. (419,299) 106,822 135,707 Surrenders .............................. -- -- -- Death benefits .......................... -- -- -- Policy loans (net of repayments) (note 4) -- -- -- Deductions for surrender charges ........ -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ..................... (7,356) (9,702) (6,389) ------------ ------------ ------------ Net equity transactions ............. (340,834) 137,785 192,925 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ..... (365,934) 199,767 232,419 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............................... 514,935 315,168 82,749 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ..... 149,001 514,935 315,168 ============ ============ ============ CHANGES IN UNITS: Beginning units ......................... 56,278 38,220 12,094 ------------ ------------ ------------ Units purchased ......................... 9,668 19,236 26,961 Units redeemed .......................... (47,689) (1,178) (835) ------------ ------------ ------------ Ending units ............................ 18,257 56,278 38,220 ============ ============ ============
See accompanying notes to financial statements. NATIONWIDE VL SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001, 2000 AND 1999 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Organization and Nature of Operations The Nationwide VL Separate Account-C (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life and Annuity 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(R) SAT - Small Cap Growth Fund Class I for which the Account was credited with 100,000 units of the Nationwide(R) SAT - Small Cap Growth Fund Class I. The value of the units purchased by the Company on May 3, 1999 was $1,000,000. In February 2001, the Best of America(R) Corporate Variable Universal Life product assets totaling $116,421,610 in Nationwide VL Separate Account-A (Account A), were transferred to the Best of America(R) - America's Future Series(SM) in the Account. Both prior to and after the transfer the annuity unit values for each fund of Account A were exactly equivalent to the accumulation unit value for the corresponding fund values in the Account. Also, expenses deducted from the contract holder accounts in the Account are the same as or more favorable to the contract holders compared to the expenses previously incurred in Account A. The Company offers Corporate Flexible Premium Variable Life Insurance Policies through the Account. (b) The Contracts Only contracts with a front-end 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 Balanced (ACVPBal) American Century VP - American Century VP Capital Appreciation (ACVPCapAp) 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) Credit Suisse Trust - Small Cap Growth Portfolio (CSWPSmCoGr) 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) Dreyfus VIF - Growth and Income Portfolio (DryGrInc) 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: Initial Class (FidVIPEI) Fidelity(R) VIP - Equity-Income Portfolio: Service Class (FidVIPEIS) Fidelity(R) VIP - Growth Portfolio: Initial Class (FidVIPGr) Fidelity(R) VIP - Growth Portfolio: Service Class (FidVIPGrS) Fidelity(R) VIP - High Income Portfolio: Initial Class (FidVIPHI) Fidelity(R) VIP - High Income Portfolio: Service Class (FidVIPHIS) Fidelity(R) VIP - Overseas Portfolio: Initial Class (FidVIPOv) 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 - Asset Manager Portfolio: Initial Class (FidVIPAM) Fidelity(R) VIP-II - Contrafund Portfolio: Initial Class (FidVIPCon) Fidelity(R) VIP-II - Contrafund Portfolio: Service Class (FidVIPConS) Portfolio of the Fidelity(R) Variable Insurance Products Fund III (Fidelity(R) VIP-III); Fidelity(R) VIP-III - Growth Opportunities Portfolio: Initial Class (FidVIPGrOp) Fidelity(R) VIP-III - Growth Opportunities Portfolio: Service Class (FidVIPGrOpS) Portfolios of Janus Aspen Fund Series (Janus AS); Janus AS - Capital Appreciation Portfolio - Service Class (JanCapAp) Janus AS - Global Technology Portfolio - Service Class (JanGlTech) Janus AS - International Growth Portfolio - Service Class (JanIntGro) Funds of the Nationwide(R) Separate Account Trust (Nationwide(R) 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 and Communications 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 - Growth Portfolio (NBAMTGro) Neuberger Berman AMT - Guardian Portfolio (NBAMTGuard) Neuberger Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat) 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 - Bond Fund/VA (OppBdFd) Oppenheimer - Capital Appreciation Fund/VA (OppCapAp) Oppenheimer - Global Securities Fund/VA (OppGlSec) Oppenheimer - Main Street Growth & Income Fund/VA (OppMSGrInc) Oppenheimer - Multiple Strategies Fund/VA (OppMult) (Continued) NATIONWIDE VL SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS, CONTINUED Strong Opportunity Fund II, Inc. (StOpp2) Strong Variable Insurance Funds, Inc. (Strong VIF) - Strong Discovery Fund II (StDisc2) Strong Variable Insurance Funds, Inc. (Strong VIF) - Strong International Stock Fund II (StIntStk2) Portfolios of the Universal Institutional Funds (UIF), Inc.; UIF - Emerging Markets Debt Portfolio (UIFEmMkt) (formerly Morgan Stanley - Emerging Markets Debt Portfolio) UIF - Mid Cap Growth Portfolio (UIFMidCapG) UIF - U.S. Real Estate Portfolio (UIFUSRE) (formerly Van Kampen LIT - Morgan Stanley - Real Estate Securities Portfolio) Funds of the Van Eck Worldwide Insurance Trust (Van Eck WIT); *Van Eck WIT - Worldwide Bond Fund (VEWrldBd) 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 except for those indicated with an asterisk (*). 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 purchase payments for 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 The Company deducts a charge for state premium taxes of 3.5% on all premiums received to cover the payment of premium taxes. Additionally, the Company deducts a front-end sales load not to exceed 5.5% 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 by liquidating units. The amount of the charge is based upon age, sex, rate class and net amount at risk (death benefit less total contract value). (c) Administrative Charges The Company deducts a monthly administrative expense charge to recover policy maintenance, accounting, record keeping and other administrative expenses and it is assessed against each contract by liquidating units. Currently, this charge is $5.00 per month in all policy years (not to exceed $10.00 per month). (3) ASSET CHARGES For corporate flexible premium contracts, the Company deducts a charge from the contract to cover mortality and expense risk charges related to operations. This charge is guaranteed not to exceed an annual rate of .75%. Currently, this rate is .40% during the first through fourth policy years, .25% during the fifth through twentieth policy years, and .10% thereafter. For the reduced fee tier, the current rate for corporate flexible premium contracts is either .10% or .25% for all policy years. 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) 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. (5) RELATED PARTY TRANSACTIONS The Company performs various services on behalf of the Mutual Fund Companies in which the Account invests and may receive fees for the services performed. These services include, among other things, shareholder communications, 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 VL SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS, CONTINUED (6) 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 rate and total return for each year in the three year period ended December 31, 2001 and the period May 1, 1998 (commencement of operations) through December 31, 1998.
CONTRACT UNIT CONTRACT TOTAL EXPENSE RATE* UNITS FAIR VALUE OWNERS' EQUITY RETURN** ------------- ------- ---------- -------------- ---------- The BEST of AMERICA(R) America's FUTURE Life Series(SM) Reduced Fee Tier - (0.10%) American Century VP - American Century VP Income & Growth 2001 ............................................. 0.10% 249,128 $ 9.417116 $2,346,067 -8.44% 2000 ............................................. 0.10% 229,332 10.285709 2,358,842 -10.70% 1999 ............................................. 0.10% 242,505 11.518727 2,793,349 15.19% 4/1/99 American Century VP - American Century VP International 2001 ............................................. 0.10% 91,670 9.402604 861,937 -29.24% 2000 ............................................. 0.10% 79,522 13.288939 1,056,763 -16.91% 1999 ............................................. 0.10% 21,260 15.993145 340,014 59.93% 4/1/99 Dreyfus Stock Index Fund 2001 ............................................. 0.10% 322,825 9.086757 2,933,432 -12.27% 2000 ............................................. 0.10% 415,946 10.357445 4,308,138 -9.37% 1999 ............................................. 0.10% 244,230 11.428481 2,791,178 14.28% 4/1/99 Fidelity(R) VIP - Growth Portfolio: Service Class 2001 ............................................. 0.10% 769,450 9.164946 7,051,968 -17.81% 2000 ............................................. 0.10% 677,472 11.150661 7,554,261 -11.16% 1999 ............................................. 0.10% 208,919 12.550748 2,622,090 25.51% 4/1/99 Janus AS - International Growth Portfolio - Service Shares 2001 ............................................. 0.10% 19,353 6.322889 122,367 -23.51% 2000 ............................................. 0.10% 19,437 8.265856 160,663 -17.34% 1/27/00 Nationwide(R) SAT - Government Bond Fund Class I 2001 ............................................. 0.10% 701,232 11.914756 8,355,008 7.15% 2000 ............................................. 0.10% 418,843 11.120055 4,657,557 12.43% 1999 ............................................. 0.10% 705,360 9.890955 6,976,684 -1.09% 4/1/99 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 ............................................. 0.10% 6,853 11.171361 76,557 4.08% 2000 ............................................. 0.10% 8,206 10.733031 88,075 5.55% 1999 ............................................. 0.10% 1,287 10.168791 13,087 1.69% 4/1/99 Nationwide(R) SAT - Money Market Fund Class I 2001 ............................................. 0.10% 650,549 11.355131 7,387,069 3.50% 2000 ............................................. 0.10% 385,575 10.971228 4,230,231 5.92% 1999 ............................................. 0.10% 197,969 10.357933 2,050,550 3.58% 3/31/99 Neuberger Berman AMT - Guardian Portfolio 2001 ............................................. 0.10% 85,302 10.895640 929,420 -1.61% 2000 ............................................. 0.10% 42,555 11.073505 471,233 1.03% 1999 ............................................. 0.10% 26,597 10.960631 291,520 9.61% 4/1/99 Oppenheimer Aggressive Growth Fund/VA 2001 ............................................. 0.10% 316,324 10.110661 3,198,245 -31.34% 2000 ............................................. 0.10% 129,500 14.724854 1,906,869 -11.33% 1999 ............................................. 0.10% 44,061 16.605768 731,667 63.57% 8/9/99
CONTRACT UNIT CONTRACT TOTAL EXPENSE RATE* UNITS FAIR VALUE OWNERS' EQUITY RETURN** ------------- ------- ---------- -------------- ---------- Oppenheimer Capital Appreciation Fund/VA 0.10% 228,318 11.517595 2,629,674 -12.66% 2001 ........................................... 0.10% 146,936 13.187632 1,937,738 -0.33% 2000 ........................................... 0.10% 68,065 13.231306 900,589 32.31% 4/1/99 1999 ........................................... The BEST of AMERICA(R) America's FUTURE Life Series(SM) Reduced Fee Tier - (0.25%) American Century VP - American Century VP International 2001 ........................................... 0.25% 99,643 9.378457 934,498 -29.35% American Century VP - American Century VP Value 2001 ........................................... 0.25% 61,779 12.308603 760,413 12.54% Dreyfus VIF - Appreciation Portfolio 2001 ........................................... 0.25% 81,810 11.000259 899,931 -9.54% Fidelity(R) VIP - High Income Portfolio: Initial Class 2001 ........................................... 0.25% 17,011 8.815683 149,964 -11.84% 1/2/01 Nationwide(R) SAT - Government Bond Fund Class I 2001 ........................................... 0.25% 109,436 12.488292 1,366,669 6.99% Nationwide(R) SAT - Small Cap Value Fund Class I 2001 ........................................... 0.25% 65,785 15.545961 1,022,691 27.96% Nationwide(R) SAT - Small Company Fund Class I 2001 ........................................... 0.25% 31,468 13.166162 414,313 -6.94% Neuberger Berman AMT - Partners Portfolio 2001 ........................................... 0.25% 62,408 9.746550 608,263 -3.07% Oppenheimer Capital Appreciation Fund/VA 2001 ........................................... 0.25% 49,259 13.084853 644,547 -12.80% Strong Opportunity Fund II, Inc. 2001 ........................................... 0.25% 98,866 9.471507 936,410 -3.94% The BEST of AMERICA(R) America's FUTURE Life Series(SM) American Century VP - American Century VP Balanced 2001 ........................................... 0.40% 60,611 9.768970 $ 592,107 -2.31% 1/2/01 American Century VP - American Century VP Capital Appreciation 2001 ........................................... 0.40% 71,775 10.990234 788,824 -22.88% 1/2/01 American Century VP - American Century VP Income & Growth 2001 ........................................... 0.40% 441,129 10.404509 4,589,731 -8.72% 2000 ........................................... 0.40% 379,953 11.398555 4,330,915 -10.97% 1999 ........................................... 0.40% 233,365 12.803106 2,987,797 17.55% 1998 ........................................... 0.40% 42,170 10.891732 459,304 8.92% 5/1/98 American Century VP - American Century VP International 2001 ........................................... 0.40% 2,019,244 9.326990 18,833,469 -29.46% 2000 ........................................... 0.40% 624,317 13.221985 8,254,710 -17.16% 1999 ........................................... 0.40% 181,283 15.960157 2,893,305 63.39% 1998 ........................................... 0.40% 31,340 9.768200 306,135 -2.32% 5/1/98 American Century VP - American Century VP Value 2001 ........................................... 0.40% 540,885 12.241061 6,621,006 12.37% 2000 ........................................... 0.40% 101,219 10.893612 1,102,641 17.67% 1999 ........................................... 0.40% 34,114 9.257533 315,811 -1.25% 1998 ........................................... 0.40% 10,252 9.374321 96,106 -6.26% 5/1/98 Credit Suisse Trust - Global Post- Venture Capital Portfolio 2001 ........................................... 0.40% 60,385 8.471776 511,568 -28.92% 2000 ........................................... 0.40% 91,578 11.918959 1,091,514 -19.26% 1999 ........................................... 0.40% 44,018 14.762349 649,809 62.85% 1998 ........................................... 0.40% 24,245 9.065227 219,786 -9.35% 5/1/98
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT CONTRACT TOTAL EXPENSE RATE* UNITS FAIR VALUE OWNERS' EQUITY RETURN** ------------- ------- ---------- -------------- ---------- Credit Suisse Trust - International Equity Portfolio 2001 ........................................... 0.40% 23,360 7.767318 181,445 -22.59% 2000 ........................................... 0.40% 30,020 10.033586 301,208 -26.19% 1999 ........................................... 0.40% 31,892 13.593893 433,536 5.82% 1998 ........................................... 0.40% 25,320 8.895388 225,231 -11.05% 5/1/98 Credit Suisse Trust - Large Cap Value Portfolio 2001 ........................................... 0.40% 9,126 11.473418 104,706 0.54% 2000 ........................................... 0.40% 24,581 11.411760 280,512 8.48% 1999 ........................................... 0.40% 36,533 10.519954 384,325 52.82% 1998 ........................................... 0.40% 46,093 9.941469 458,232 - 0.59% 5/1/98 Credit Suisse Trust - Small Cap Growth Portfolio 2001 ........................................... 0.40% 623,977 8.996921 5,613,872 -10.03% 1/2/01 Dreyfus IP - European Equity Portfolio 2001 ........................................... 0.40% 368 9.025727 3,321 -28.42% 2000 ........................................... 0.40% 66 12.608842 832 -1.05% 1999 ........................................... 0.40% 22,815 12.917253 294,707 11.01% The Dreyfus Socially Responsible Growth Fund, Inc. 2001 ........................................... 0.40% 49,368 9.867078 487,118 -22.89% 2000 ........................................... 0.40% 23,442 12.795380 299,949 -11.39% 1999 ........................................... 0.40% 7,538 14.439525 108,845 29.56% 1998 ........................................... 0.40% 742 11.144998 8,270 11.45% 5/1/98 Dreyfus Stock Index Fund 2001 ........................................... 0.40% 4,387,066 10.471621 45,939,692 -12.53% 2000 ........................................... 0.40% 3,579,449 11.972080 42,853,450 -9.64% 1999 ........................................... 0.40% 2,198,099 13.249543 29,123,807 20.12% 1998 ........................................... 0.40% 547,841 11.030001 6,042,687 10.30% 5/1/98 Dreyfus VIF - Appreciation Portfolio 2001 ........................................... 0.40% 1,262,700 10.939900 13,813,812 -9.67% 2000 ........................................... 0.40% 259,664 12.111451 3,144,908 -2.39% 1999 ........................................... 0.40% 119,919 12.239522 1,467,751 11.01% 1998 ........................................... 0.40% 27,277 11.025485 300,742 10.25% 5/1/98 Dreyfus VIF - Growth and Income Portfolio 2001 ........................................... 0.40% 67,090 9.577914 642,582 -4.22% 1/2/01 Federated IS - Federated Quality Bond Fund II 2001 ........................................... 0.40% 87,721 11.649181 1,021,878 7.58% 2000 ........................................... 0.40% 23,465 10.828312 254,086 10.01% Fidelity(R) VIP - Equity-Income Portfolio: Initial Class 2001 ........................................... 0.40% 50,510 9.579298 483,850 -4.21% 1/2/01 Fidelity(R) VIP - Equity-Income Portfolio: Service Class 2001 ........................................... 0.40% 348,625 10.691577 3,727,351 -5.47% 2000 ........................................... 0.40% 224,240 11.310203 2,536,200 7.87% 1999 ........................................... 0.40% 162,451 10.484615 1,703,236 5.83% 1998 ........................................... 0.40% 924 9.906965 9,154 -0.93% 5/1/98 Fidelity(R) VIP - Growth Portfolio: Initial Class 2001 ........................................... 0.40% 782,177 8.555147 6,691,639 -14.45% 1/2/01 Fidelity(R) VIP - Growth Portfolio: Service Class 2001 ........................................... 0.40% 776,074 11.958538 9,280,710 -18.06% 2000 ........................................... 0.40% 1,119,466 14.593603 16,337,042 -11.42% 1999 ........................................... 0.40% 444,364 16.475102 7,320,942 36.74% 1998 ........................................... 0.40% 130,876 12.048634 1,576,877 20.49% 5/1/98
(Continued)
CONTRACT UNIT CONTRACT TOTAL EXPENSE RATE* UNITS FAIR VALUE OWNERS' EQUITY RETURN** ------------- ------- ---------- -------------- ---------- Fidelity(R) VIP - High Income Portfolio: Initial Class 2001 ........................................... 0.40% 231,589 8.802536 2,038,571 -11.97% 1/2/01 Fidelity(R) VIP - High Income Portfolio: Service Class 2001 ........................................... 0.40% 165,596 6.555148 1,085,506 -12.25% 2000 ........................................... 0.40% 266,741 7.470194 1,992,607 -22.92% 1999 ........................................... 0.40% 137,733 9.691447 1,334,832 7.64% 1998 ........................................... 0.40% 106,365 9.003329 957,639 -9.97% 5/1/98 Fidelity(R) VIP - Overseas Portfolio: Initial Class 2001 ........................................... 0.40% 329,072 7.887510 2,595,559 -21.12% 1/2/01 Fidelity(R) VIP - Overseas Portfolio: Service Class 2001 ........................................... 0.40% 396,195 8.518959 3,375,169 -21.59% 2000 ........................................... 0.40% 314,294 10.864367 3,414,605 -19.47% 1999 ........................................... 0.40% 118,048 13.491426 1,592,636 41.89% 1998 ........................................... 0.40% 70,301 9.508092 668,428 -4.92% 5/1/98 Fidelity(R) VIP II - Asset Manager Portfolio: Initial Class 2001 ........................................... 0.40% 930,387 9.716913 9,040,490 -2.83% 1/2/01 Fidelity(R) VIP II - Contrafund Portfolio: Initial Class 2001 ........................................... 0.40% 141,885 9.029797 1,281,193 -9.70% 1/2/01 Fidelity(R) VIP II - Contrafund Portfolio: Service Class 2001 ........................................... 0.40% 486,210 11.370566 5,528,483 -12.71% 2000 ........................................... 0.40% 437,066 13.026647 5,693,504 -7.09% 1999 ........................................... 0.40% 240,062 14.020034 3,365,677 23.65% 1998 ........................................... 0.40% 112,018 11.338370 1,270,102 13.38% 5/1/98 Fidelity(R) VIP III - Growth Opportunities Portfolio: Initial Class 2001 ........................................... 0.40% 103,589 8.842970 916,034 -11.57% 1/2/01 Fidelity(R) VIP III - Growth Opportunities Portfolio: Service Class 2001 ........................................... 0.40% 248,120 8.204875 2,035,794 -14.78% 2000 ........................................... 0.40% 231,706 9.628054 2,230,878 -17.51% 1999 ........................................... 0.40% 212,333 11.671298 2,478,202 3.77% 1998 ........................................... 0.40% 34,950 11.247664 393,106 12.48% 5/1/98 Janus AS - Capital Appreciation Portfolio - Service Shares 2001 ........................................... 0.40% 419,473 6.388873 2,679,960 -22.14% Janus AS - Global Technology Portfolio - Service Shares 2001 ........................................... 0.40% 147,511 4.094407 603,970 -37.57% 2000 ........................................... 0.40% 186,433 6.558143 1,222,654 -34.42% 1/27/00 Janus AS - International Growth Portfolio - Service Shares 2001 ........................................... 0.40% 173,301 6.286392 1,089,438 -23.74% 2000 ........................................... 0.40% 34,488 8.243024 284,285 -17.57% 1/27/00 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 ........................................... 0.40% 388,409 6.087822 2,364,565 -28.42% 2000 ........................................... 0.40% 252,079 8.505270 2,144,000 -26.82% 1999 ........................................... 0.40% 181,521 11.623180 2,109,851 3.86% 1998 ........................................... 0.40% 42,152 11.191056 471,725 11.91% 5/1/98 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 ........................................... 0.40% 93,948 13.342471 1,253,498 -1.70% 2000 ........................................... 0.40% 86,361 13.573326 1,172,206 14.75% 1999 ........................................... 0.40% 49,740 11.828670 588,358 20.44% 1998 ........................................... 0.40% 259 9.821278 2,544 -1.79% 5/1/98 Nationwide(R) SAT - Federated Equity Income Fund Class I 2001 ........................................... 0.40% 34,435 9.726929 334,947 -12.51% 2000 ........................................... 0.40% 22,688 11.117142 252,226 -10.98% 1999 ........................................... 0.40% 4,316 12.487973 53,898 18.02%
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT CONTRACT TOTAL EXPENSE RATE* UNITS FAIR VALUE OWNERS' EQUITY RETURN** ------------- ------- ---------- -------------- ---------- Nationwide(R) SAT - Federated High Income Bond Fund Class I 2001 ........................................... 0.40% 202,186 9.794650 1,980,341 3.80% 2000 ........................................... 0.40% 150,482 9.436226 1,419,982 -8.64% 1999 ........................................... 0.40% 16,667 10.328712 172,149 2.78% 1998 ........................................... 0.40% 14,446 10.049520 145,175 0.50% 5/1/98 Nationwide(R) SAT - Global 50 Fund Class I 2001 ........................................... 0.40% 132,145 8.970354 1,185,387 -19.14% 2000 ........................................... 0.40% 92,654 11.093053 1,027,816 -12.67% 1999 ........................................... 0.40% 87,461 12.702408 1,110,965 22.43% 1998 ........................................... 0.40% 239 10.374941 2,480 3.75% 5/1/98 Nationwide(R) SAT - Government Bond Fund Class I 2001 ........................................... 0.40% 4,296,504 12.419760 53,361,549 6.82% 2000 ........................................... 0.40% 921,266 11.626380 10,710,989 12.09% 1999 ........................................... 0.40% 755,102 10.372218 7,832,083 -2.74% 1998 ........................................... 0.40% 47,339 10.664112 504,828 6.64% 5/1/98 Nationwide(R) SAT - J.P. Morgan Balanced Fund Class I 2001 ........................................... 0.40% 270,829 9.575644 2,593,362 -4.06% 2000 ........................................... 0.40% 133,237 9.980967 1,329,834 -0.75% 1999 ........................................... 0.40% 74,582 10.056111 750,005 0.47% 1998 ........................................... 0.40% 8,085 10.009481 80,927 0.09% 5/1/98 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 ........................................... 0.40% 125,046 11.036224 1,380,036 3.77% 2000 ........................................... 0.40% 305,925 10.635225 3,253,581 5.23% 1999 ........................................... 0.40% 41,704 10.106222 421,470 1.15% 1998 ........................................... 0.40% 32,607 9.991296 325,786 -0.09% 5/1/98 Nationwide(R) SAT - Money Market Fund Class I 2001 ........................................... 0.40% 7,088,786 11.743544 83,247,470 3.19% 2000 ........................................... 0.40% 5,519,307 11.380873 62,814,532 5.60% 1999 ........................................... 0.40% 1,550,267 10.776865 16,707,018 4.43% 1998 ........................................... 0.40% 695,771 10.319833 7,180,241 3.20% 4/30/98 Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 ........................................... 0.40% 15,332 15.161271 232,453 -11.20% 2000 ........................................... 0.40% 37,119 17.072794 633,725 -16.50% 1999 ........................................... 0.40% 29,320 20.447188 599,512 104.47% 5/3/99 Nationwide(R) SAT - Small Cap Growth Fund Class I - Intial Funding By Depositor 2000 ........................................... 0.00% 100,000 17.186295 1,718,630 -16.17% 1999 ........................................... 0.00% 100,000 20.501257 2,050,126 105.01% 5/3/99 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 ........................................... 0.40% 436,136 15.460620 6,742,933 27.76% 2000 ........................................... 0.40% 203,318 12.101060 2,460,363 10.76% 1999 ........................................... 0.40% 16,261 10.925665 177,662 27.33% 1998 ........................................... 0.40% 68,511 8.580808 587,880 -14.19% 5/1/98 Nationwide(R) SAT - Small Company Fund Class I 2001 ........................................... 0.40% 713,457 13.093906 9,341,939 -7.08% 2000 ........................................... 0.40% 415,566 14.091380 5,855,898 8.47% 1999 ........................................... 0.40% 202,708 12.991606 2,633,502 43.45% 1998 ........................................... 0.40% 50,558 9.056852 457,896 -9.43% 5/1/98 Nationwide(R) SAT - Strategic Value Fund Class I 2001 ........................................... 0.40% 87,806 9.059635 795,490 -3.64% 2000 ........................................... 0.40% 29 9.402302 273 7.18% 1999 ........................................... 0.40% 79,877 8.772237 700,700 -3.46% 1998 ........................................... 0.40% 31,219 9.086371 283,667 -9.14% 5/1/98
CONTRACT UNIT CONTRACT TOTAL EXPENSE RATE* UNITS FAIR VALUE OWNERS' EQUITY RETURN** ------------- ------- ---------- -------------- ---------- Nationwide(R)SAT - Strong Mid Cap Growth Fund Class I 2001 ........................................... 0.40% 77,229 11.327538 874,814 -30.59% 2000 ........................................... 0.40% 71,051 16.319202 1,159,496 -15.72% 1999 ........................................... 0.40% 48,159 19.361969 932,453 84.02% Nationwide(R)SAT - Total Return Fund Class I 2001 ........................................... 0.40% 205,773 9.251754 1,903,761 -12.17% 2000 ........................................... 0.40% 18,361 10.534111 193,417 -2.51% 1999 ........................................... 0.40% 13,172 10.805244 142,327 6.52% 1998 ........................................... 0.40% 10,192 10.144232 103,390 1.44% 5/1/98 Neuberger Berman AMT - Growth Portfolio 2001 ........................................... 0.40% 124,202 7.603675 944,392 -23.96% 1/2/01 Neuberger Berman AMT - Guardian Portfolio 2001 ........................................... 0.40% 135,015 10.563782 1,426,269 -1.90% 2000 ........................................... 0.40% 70,872 10.768698 763,199 0.73% 1999 ........................................... 0.40% 49,845 10.690765 532,881 14.47% 1998 ........................................... 0.40% 128,350 9.338993 1,198,660 -9.85% 5/1/98 Neuberger Berman AMT - Limited Maturity Bond Portfolio 2001 ........................................... 0.40% 599,545 10.785897 6,466,631 7.86% 1/2/01 Neuberger Berman AMT - Mid-Cap Growth Portfolio 2001 ........................................... 0.40% 80,698 11.978031 966,603 -24.95% 2000 ........................................... 0.40% 110,315 15.959556 1,760,578 -7.83% 1999 ........................................... 0.40% 43,280 17.314889 749,388 53.28% 1998 ........................................... 0.40% 95,708 11.296584 1,081,173 12.97% 5/1/98 Neuberger Berman AMT - Partners Portfolio 2001 ........................................... 0.40% 620,024 9.693032 6,009,912 -3.22% 2000 ........................................... 0.40% 200,302 10.015242 2,006,073 0.30% 1999 ........................................... 0.40% 104,066 9.985118 1,039,111 6.94% 1998 ........................................... 0.40% 25,973 9.337008 242,510 -6.63% 5/1/98 Oppenheimer Aggressive Growth Fund/VA 2001 ........................................... 0.40% 466,261 10.720152 4,998,389 -31.54% 2000 ........................................... 0.40% 315,802 15.659821 4,945,403 -11.59% 1999 ........................................... 0.40% 178,401 17.712996 3,160,016 82.87% 1998 ........................................... 0.40% 53,218 9.685930 515,466 -3.14% 5/1/98 Oppenheimer Bond Fund/VA 2001 ........................................... 0.40% 193,237 10.650688 2,058,107 6.51% 1/2/01 Oppenheimer Capital Appreciation Fund/VA 2001 ........................................... 0.40% 660,576 13.013036 8,596,099 -12.93% 2000 ........................................... 0.40% 260,790 14.945030 3,897,514 -0.63% 1999 ........................................... 0.40% 127,994 15.039330 1,924,944 41.09% 1998 ........................................... 0.40% 11,744 10.659314 125,183 6.59% 5/1/98 Oppenheimer Global Securities Fund/VA 2001 ........................................... 0.40% 258,325 8.386697 2,166,494 -12.39% Oppenheimer Main Street Growth & Income Fund/VA 2001 ........................................... 0.40% 57,708 8.809927 508,403 -10.52% 2000 ........................................... 0.40% 55,343 9.845729 544,892 -9.14% 1999 ........................................... 0.40% 48,784 10.835877 528,617 21.22% 1998 ........................................... 0.40% 30,977 8.938847 276,899 -10.61% 5/1/98 Oppenheimer Multiple Strategies Fund/VA 2001 ........................................... 0.40% 92,958 10.255584 953,339 2.56% 1/2/01 Strong Opportunity Fund II, Inc. ................. 2001 ........................................... 0.40% 776,389 9.447854 7,335,210 -4.09% 2000 ........................................... 0.40% 48,820 9.828296 479,817 -1.49% 5/1/00
(Continued) NATIONWIDE VL SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT UNIT CONTRACT TOTAL EXPENSE RATE* UNITS FAIR VALUE OWNERS' EQUITY RETURN** ------------- ------- ---------- -------------- ---------- Strong VIF - Strong Discovery Fund II 2001 ........................................... 0.40% 1,313 11.539004 15,151 6.82% 1/2/01 Strong VIF - Strong International Stock Fund II 2001 ........................................... 0.40% 38,838 7.139083 277,268 -21.09% 1/2/01 UIF - Emerging Markets Debt Portfolio 2001 ........................................... 0.40% 6,255 10.605749 66,339 9.66% 2000 ........................................... 0.40% 64,183 9.671636 620,755 10.94% 1999 ........................................... 0.40% 7,107 8.717559 61,956 28.86% 1998 ........................................... 0.40% 13,412 6.765184 90,735 -32.35% 5/1/98 UIF - Mid Cap Growth Portfolio 2001 ........................................... 0.40% 27,935 6.101338 170,441 -29.60% UIF - U.S. Real Estate Portfolio 2001 ........................................... 0.40% 152,921 11.990690 1,833,628 9.40% 2000 ........................................... 0.40% 39,041 10.960329 427,902 15.00% 1999 ........................................... 0.40% 51,147 8.593033 439,508 -3.76% 1998 ........................................... 0.40% 1,612 8.928571 14,393 -15.97% 9/21/00 Van Eck WIT - Worldwide Emerging Markets Fund 2001 ........................................... 0.40% 56,168 7.142729 401,193 -2.20% 2000 ........................................... 0.40% 124,869 7.303734 912,010 -42.10% 1999 ........................................... 0.40% 38,228 12.613718 482,197 99.48% 1998 ........................................... 0.40% 21,058 6.323175 133,153 -36.77% 5/1/98 Van Eck WIT - Worldwide Hard Assets Fund 2001 ........................................... 0.40% 18,257 8.161281 149,001 -10.80% 2000 ........................................... 0.40% 56,278 9.149843 514,935 10.96% 1999 ........................................... 0.40% 38,220 8.246159 315,168 20.52% 1998 ........................................... 0.40% 12,094 6.842178 82,749 -31.58% 5/1/98 ------------ Total Contract Owners' Equity 2001 ................................................................................ $408,763,705 ============ 2000 ................................................................................ $237,376,916 ============ 1999 ................................................................................ $122,181,811 ============ 1998 ................................................................................ $ 26,899,259 ============
* 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 and Annuity Insurance Company: We have audited the accompanying balance sheets of Nationwide Life and Annuity Insurance Company (the "Company"), a wholly owned subsidiary of Nationwide Life Insurance Company, as of December 31, 2001 and 2000, and the related statements of income, shareholder's equity and cash flows for each of the years in the three-year period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these 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 financial statements referred to above present fairly, in all material respects, the financial position of Nationwide Life and Annuity Insurance Company as of December 31, 2001 and 2000, and the results of its operations and its 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 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 January 29, 2002 See accompanying notes to financial statements, including note 11 which describes related party transactions. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Balance Sheets ($000's omitted, except per share amounts)
December 31, ----------------------------- 2001 2000 ==================================================================================================================================== ASSETS Investments: Securities available-for-sale, at fair value: Fixed maturity securities (cost $2,464,658 in 2001; $1,184,078 in 2000) $2,501,627 $1,192,444 Equity securities (no cost in 2001; $979 in 2000) -- 1,828 Mortgage loans on real estate, net 663,458 380,685 Real estate, net 1,223 1,822 Policy loans 486 1,517 Other long-term investments -- 8 Short-term investments, including amounts managed by a related party 75,462 61,194 - ------------------------------------------------------------------------------------------------------------------------------------ 3,242,256 1,639,498 - ------------------------------------------------------------------------------------------------------------------------------------ Cash 1,842 -- Accrued investment income 34,241 16,925 Deferred policy acquisition costs 129,924 108,982 Reinsurance receivable from a related party 102,472 96,892 Other assets 121,043 69,459 Assets held in separate accounts 2,312,919 2,242,478 - ------------------------------------------------------------------------------------------------------------------------------------ $5,944,697 $4,174,234 ==================================================================================================================================== LIABILITIES AND SHAREHOLDER'S EQUITY Future policy benefits and claims $3,271,309 $1,765,451 Other liabilities 103,305 10,493 Liabilities related to separate accounts 2,312,919 2,242,478 - ------------------------------------------------------------------------------------------------------------------------------------ 5,687,533 4,018,422 - ------------------------------------------------------------------------------------------------------------------------------------ Commitments and contingencies (notes 8 and 12) Shareholder's equity: Common stock, $40 par value. Authorized, issued and outstanding 66,000 shares 2,640 2,640 Additional paid-in capital 152,960 77,960 Retained earnings 90,026 72,063 Accumulated other comprehensive income 11,538 3,149 - ------------------------------------------------------------------------------------------------------------------------------------ 257,164 155,812 - ------------------------------------------------------------------------------------------------------------------------------------ $5,944,697 $4,174,234 ====================================================================================================================================
See accompanying notes to financial statements, including note 11 which describes related party transactions. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Statements of Income ($000's omitted)
Years ended December 31, ----------------------------------------- 2001 2000 1999 ==================================================================================================================================== Revenues: Policy charges $ 51,286 $ 55,992 $ 44,793 Life insurance premiums 1,380 1,297 292 Net investment income 16,880 14,732 13,959 Net realized (losses) gains on investments, hedging instruments and hedged items (244) 842 5,208 Other 816 929 1,059 - ------------------------------------------------------------------------------------------------------------------------------------ 70,118 73,792 65,311 - ------------------------------------------------------------------------------------------------------------------------------------ Benefits and expenses: Interest credited to policyholder account balances 5,114 11,097 8,548 Other benefits and claims 4,549 5,581 5,210 Amortization of deferred policy acquisition costs 11,257 9,893 13,592 Other operating expenses 22,730 29,982 24,185 - ------------------------------------------------------------------------------------------------------------------------------------ 43,650 56,553 51,535 - ------------------------------------------------------------------------------------------------------------------------------------ Income before federal income tax expense and cumulative effect of adoption of accounting principles 26,468 17,239 13,776 Federal income tax expense 8,175 4,712 4,571 - ------------------------------------------------------------------------------------------------------------------------------------ Income before cumulative effect of adoption of accounting principles 18,293 12,527 9,205 Cumulative effect of adoption of accounting principles, net of tax (330) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net income $ 17,963 $ 12,527 $ 9,205 ====================================================================================================================================
See accompanying notes to financial statements, including note 11 which describes related party transactions. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Statements of Shareholder's Equity Years ended December 31, 2001, 2000 and 1999 ($000's omitted)
Accumulated Additional other Total Common paid-in Retained comprehensive shareholder's stock capital earnings income (loss) equity ==================================================================================================================================== Balance as of December 31, 1998 $ 2,640 $ 52,960 $ 50,331 $ 10,055 $ 115,986 Comprehensive income: Net income -- -- 9,205 -- 9,205 Net unrealized losses on securities available-for-sale arising during the year, net of tax -- -- -- (11,923) (11,923) --------- Total comprehensive loss (2,718) - --------------------------------------------------------------------------------------------------------------------------------- Balance as of December 31, 1999 2,640 52,960 59,536 (1,868) 113,268 ================================================================================================================================= Comprehensive income: Net income -- -- 12,527 -- 12,527 Net unrealized gains on securities available-for-sale arising during the year, net of tax -- -- -- 5,017 5,017 --------- Total comprehensive income 17,544 --------- Capital contribution -- 25,000 -- -- 25,000 - --------------------------------------------------------------------------------------------------------------------------------- Balance as of December 31, 2000 2,640 77,960 72,063 3,149 155,812 ================================================================================================================================= Comprehensive income: Net income -- -- 17,963 -- 17,963 Net unrealized gains on securities available-for-sale arising during the year, net of tax -- -- -- 8,015 8,015 Cumulative effect of adoption of accounting principles, net of tax -- -- -- 452 452 Accumulated net losses on cash flow hedges, net of tax -- -- -- (78) (78) --------- Total comprehensive income 26,352 --------- Capital contributions -- 75,000 -- -- 75,000 - --------------------------------------------------------------------------------------------------------------------------------- Balance as of December 31, 2001 $ 2,640 $ 152,960 $ 90,026 $ 11,538 $ 257,164 =================================================================================================================================
See accompanying notes to financial statements, including note 11 which describes related party transactions. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Statements of Cash Flows ($000's omitted)
Years ended December 31, --------------------------------------------- 2001 2000 1999 =================================================================================================================================== Cash flows from operating activities: Net income $ 17,963 $ 12,527 $ 9,205 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Interest credited to policyholder account balances 5,114 11,097 8,548 Capitalization of deferred policy acquisition costs (47,193) (38,932) (33,965) Amortization of deferred policy acquisition costs 11,257 9,893 13,592 Amortization and depreciation 1,125 625 1,351 Realized losses (gains) on investments, hedging instruments and hedged items 244 (842) (5,208) Cumulative effect of adoption of accounting principles 508 -- -- Increase in accrued investment income (17,316) (3,019) (2,261) Increase in other assets (58,114) (31,833) (1,309) Increase (decrease) in other liabilities 23,384 (33,516) 21,795 - ----------------------------------------------------------------------------------------------------------------------------------- Net cash (used in ) provided by operating activities (63,028) (74,000) 11,748 - ----------------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Proceeds from maturity of securities available-for-sale 288,962 190,173 137,210 Proceeds from sale of securities available-for-sale 110,574 47,537 73,864 Proceeds from repayments of mortgage loans on real estate 77,513 30,896 32,397 Proceeds from sale of real estate 1,188 1,269 -- Proceeds from repayments of policy loans and sale of other invested assets 3,224 267 109 Cost of securities available-for-sale acquired (1,680,536) (354,904) (375,642) Cost of mortgage loans on real estate acquired (360,971) (82,250) (93,500) Cost of real estate acquired (2) -- -- Short-term investments, net (14,268) (60,488) 1,571 Collateral received - securities lending, net 64,935 -- -- Other, net (1,493) (1,327) (242) - ----------------------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (1,510,874) (228,827) (224,233) - ----------------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Capital contributions received 75,000 25,000 -- Increase in investment and universal life insurance product account balances 1,748,753 469,596 353,139 Decrease in investment and universal life insurance product account balances (248,009) (196,049) (136,376) - ----------------------------------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 1,575,744 298,547 216,763 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash 1,842 (4,280) 4,278 Cash, beginning of year -- 4,280 2 - ----------------------------------------------------------------------------------------------------------------------------------- Cash, end of year $ 1,842 $ -- $ 4,280 ===================================================================================================================================
See accompanying notes to financial statements, including note 11 which describes related party transactions. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements December 31, 2001, 2000 and 1999 ($000's omitted) (1) ORGANIZATION AND DESCRIPTION OF BUSINESS Nationwide Life and Annuity Insurance Company (the Company) is a wholly owned subsidiary of Nationwide Life Insurance Company (NLIC). The Company provides long-term savings and retirement products in the United States of America, including individual annuities and life insurance. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies followed by the Company that materially affect financial reporting are summarized below. The accompanying 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 the Company 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. The Company has no statutory accounting practices that differ from NAIC SAP. See also note 10. In preparing the 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 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) 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 shareholder's 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued 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. (b) 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued 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. 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 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 balance sheet at its fair value, removes any asset or liability that was recorded pursuant to recognition of the firm commitment from the 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 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 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 (i), 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 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued (c) REVENUES AND BENEFITS INVESTMENT PRODUCTS AND UNIVERSAL LIFE INSURANCE PRODUCTS: Investment products consist primarily of individual variable and fixed deferred annuities. Universal life insurance products include universal life insurance, variable universal life insurance, corporate-owned life insurance (COLI) 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 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. (d) 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 experience 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(a). (e) 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 funds. 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 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. (f) 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued (g) FEDERAL INCOME TAX The Company files a consolidated federal income tax return with Nationwide Mutual Insurance Company (NMIC). The members of the consolidated tax return group have a tax sharing agreement, 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 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. (h) REINSURANCE CEDED Reinsurance revenues ceded and reinsurance recoveries on benefits and expenses incurred are deducted from the respective income and expense accounts. Assets and liabilities related to reinsurance ceded are reported on a gross basis. (i) 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, all derivatives qualified for hedge accounting under SFAS 133. The adoption of SFAS 133 resulted in the Company derecognizing $350 of deferred assets related to hedges, while recognizing $350 of additional derivative instrument liabilities and $288 of additional firm commitment assets. The adoption of SFAS 133 also resulted in the Company recording a net transition adjustment gain of $102 (net of related income tax of $55) in net income. In addition, a net translation adjustment gain of $20 (net of related income tax of $11) was recorded in AOCI as of January 1, 2001. Further, the adoption of SFAS 133 resulted in the Company reporting total derivative instrument assets and liabilities of $32 and $170, respectively. 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued 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 $432 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. 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. (j) RECLASSIFICATION Certain items in the 2000 and 1999 financial statements and related footnotes have been reclassified to conform to the 2001 presentation. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued (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 cost gains losses fair value ==================================================================================================================== December 31, 2001 Fixed maturity securities: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 56,381 $ 1,469 $ 243 $ 57,607 Obligations of states and political subdivisions 2,046 1 -- 2,047 Debt securities issued by foreign governments 549 86 -- 635 Corporate securities 1,500,190 38,031 12,527 1,525,694 Mortgage-backed securities - U.S. Government backed 318,148 6,791 979 323,960 Asset-backed securities 587,344 10,454 6,114 591,684 ------------------------------------------------------------------------------------------------------------------- Total fixed maturity securities 2,464,658 56,832 19,863 2,501,627 Equity securities -- -- -- -- ------------------------------------------------------------------------------------------------------------------- $2,464,658 $ 56,832 $ 19,863 $2,501,627 =================================================================================================================== December 31, 2000 Fixed maturity securities: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 40,694 $ 769 $ 133 $ 41,330 Obligations of states and political subdivisions 3,129 -- 37 3,092 Debt securities issued by foreign governments 1,253 12 13 1,252 Corporate securities 662,849 11,717 7,859 666,707 Mortgage-backed securities - U.S. Government backed 236,368 2,190 413 238,145 Asset-backed securities 239,785 3,342 1,209 241,918 ------------------------------------------------------------------------------------------------------------------- Total fixed maturity securities 1,184,078 18,030 9,664 1,192,444 Equity securities 979 849 -- 1,828 ------------------------------------------------------------------------------------------------------------------- $1,185,057 $ 18,879 $ 9,664 $1,194,272 ===================================================================================================================
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 cost fair value ==================================================================================================================== Fixed maturity securities available-for-sale: Due in one year or less $ 92,255 $ 93,634 Due after one year through five years 643,605 660,158 Due after five years through ten years 669,210 676,749 Due after ten years 154,096 155,442 ------------------------------------------------------------------------------------------------------------------- 1,559,166 1,585,983 Mortgage-backed securities - U.S. Government backed 318,148 323,960 Asset-backed securities 587,344 591,684 ------------------------------------------------------------------------------------------------------------------- $2,464,658 $2,501,627 ===================================================================================================================
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued The components of unrealized gains on securities available-for-sale, net, were as follows as of each December 31:
2001 2000 ================================================================================================================== Gross unrealized gains $ 36,969 $ 9,215 Adjustment to deferred policy acquisition costs (19,363) (4,369) Deferred federal income tax (6,152) (1,697) ----------------------------------------------------------------------------------------------------------------- $ 11,454 $ 3,149 ==================================================================================================================
An analysis of the change in gross unrealized gains (losses) on securities available-for-sale follows for the years ended December 31:
2001 2000 1999 ================================================================================================================== Securities available-for-sale: Fixed maturity securities $ 28,603 $ 22,622 $(35,128) Equity securities (849) (2,820) (1,861) ----------------------------------------------------------------------------------------------------------------- $ 27,754 $ 19,802 $(36,989) ==================================================================================================================
Proceeds from the sale of securities available-for-sale during 2001, 2000 and 1999 were $110,574, $47,537 and $73,864, respectively. During 2001, gross gains of $3,266 ($376 and $297 in 2000 and 1999, respectively) and gross losses of $207 ($778 and $37 in 2000 and 1999, respectively) were realized on those sales. The Company had no investments that were non-income producing for the twelve month periods preceding December 31, 2001 and 2000. Real estate is presented at cost less accumulated depreciation of $165 as of December 31, 2001 ($138 as of December 31, 2000). The carrying value of real estate held for disposal totaled $727 as of December 31, 2001, none as of December 31, 2000. The recorded investment of mortgage loans on real estate considered to be impaired was $898 as of December 31, 2001 (none as of December 31, 2000), which includes $411 (none as of December 31, 2000) of impaired mortgage loans on real estate for which the related valuation allowance was $77 (none as of December 31, 2000) and $487 (none 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 approximately $180 ($527 in 2000) and interest income recognized on those loans totaled $9 in 2001 (none in 2000) which is equal to interest income recognized using a cash-basis method of income recognition. The valuation allowance account for mortgage loans on real estate was $750 for the year ended December 31, 2001, which was unchanged from the previous two years. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued An analysis of investment income by investment type follows for the years ended December 31:
2001 2000 1999 ==================================================================================================================== Gross investment income: Fixed maturity securities available-for-sale $121,017 $ 75,426 $ 66,160 Mortgage loans on real estate 37,633 27,821 23,475 Real estate 332 461 413 Short-term investments 3,405 1,352 1,580 Derivatives 626 -- -- Other 245 431 334 ----------------------------------------------------------------------------------------------------------------- Total investment income 163,258 105,491 91,962 Less: Investment expenses 2,243 1,988 2,040 Net investment income ceded (note 11) 144,135 88,771 75,963 ----------------------------------------------------------------------------------------------------------------- Net investment income $ 16,880 $ 14,732 $ 13,959 =================================================================================================================
An analysis of net realized (losses) gains on investments, hedging instruments and hedged items, by investment type follows for the years ended December 31:
2001 2000 1999 ================================================================================================================= Realized gains (losses) on sale of fixed maturity securities available-for-sale $ 3,059 $ (401) $ 260 Other-than-temporary impairments of fixed maturity securities available-for-sale (2,658) (636) -- Real estate 79 373 -- Mortgage loans on real estate 383 (261) 7 Derivatives (1,513) -- (2) Other 406 1,767 4,943 ----------------------------------------------------------------------------------------------------------------- Net realized (losses) gains on investments, hedging instruments and hedged items $ (244) $ 842 $ 5,208 =================================================================================================================
Fixed maturity securities with an amortized cost of $3,435 and $3,420 were on deposit with various regulatory agencies as required by law as of December 31, 2001 and 2000, respectively. As of December 31, 2001, the Company had loaned securities with a fair value of $64,047. As of December 31, 2001 the Company held collateral of $64,935. This amount is included in short-term investments with a corresponding liability recorded in other liabilities. (4) 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued 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 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. 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, losses of $1,400 were recognized in net realized losses on investments, hedging instruments and hedged items representing 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 does not anticipate reclassifying any 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued Other Derivative Instruments Net realized gains and losses on investments, hedging instruments and hedged items for the year ended December 31, 2001 include a gain of $74 related to other derivative instruments. The notional amount of derivative financial instruments outstanding as of December 31, 2001 and 2000 were as follows:
2001 2000 ======================================================================================================================= Interest rate swaps Pay fixed/receive variable rate swaps hedging investments $ 10,500 $ 6,000 Pay variable/receive fixed rate swaps hedging investments 12,400 5,000 Other 55,700 1,600 Cross currency interest rate swaps Hedging foreign currency denominated investments $ 2,000 $ 1,420 Interest rate futures contracts $ 81,900 $ 18,700 =====================================================================================================================
(5) 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:
2001 2000 ===================================================================================================================== Deferred tax assets: Equity securities $ 128 $ -- Future policy benefits 10,338 9,874 Collateral receivable 22,727 -- Liabilities in separate accounts 21,368 18,505 Mortgage loans on real estate and real estate 476 267 ------------------------------------------------------------------------------------------------------------------- Total gross deferred tax assets 55,037 28,646 ------------------------------------------------------------------------------------------------------------------- Deferred tax liabilities: Deferred policy acquisition costs 13,161 14,963 Derivatives 978 -- Fixed maturity securities 28,313 4,188 Equity securities -- 297 Other 25,946 11,525 ------------------------------------------------------------------------------------------------------------------- Total gross deferred tax liabilities 68,398 30,973 ------------------------------------------------------------------------------------------------------------------- Net deferred tax liability $ 13,361 $ 2,327 ===================================================================================================================
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 all future deductible amounts. The Company has determined that valuation allowances are not necessary as of December 31, 2001, 2000 and 1999 based on its analysis of future deductible amounts. The Company's current federal income tax liability (asset) was $10,476 and $(3,544) as of December 31, 2001 and 2000, respectively. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued Federal income tax expense attributable to income before cumulative effect of adoption of accounting principles for the years ended December 31 was as follows:
2001 2000 1999 ------------------------------------------------------------------------------------------------------------------ Currently payable $ 1,464 $ (1,434) $ 4,391 Deferred tax expense 6,711 6,146 180 ------------------------------------------------------------------------------------------------------------------ $ 8,175 $ 4,712 $ 4,571 ==================================================================================================================
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 -------------------- ---------------------- --------------------- Amount % Amount % Amount % ============================================================================================================================ Computed (expected) tax expense $ 9,264 35.0 $ 6,034 35.0 $ 4,822 35.0 Tax exempt interest and dividends received deduction (1,158) (4.4) (1,324) (7.7) (255) (1.8) Other, net 69 0.3 2 -- 4 -- ---------------------------------------------------------------------------------------------------------------------------- Total (effective rate of each year) $ 8,175 30.9 $ 4,712 27.3 $ 4,571 33.2 ============================================================================================================================
Total federal income tax (refunded) paid was $(12,556), $3,970 and $4,053 during the years ended December 31, 2001, 2000 and 1999, respectively. See also note 11. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued (6) COMPREHENSIVE INCOME (LOSS) Comprehensive income (loss) includes net income as well as certain items that are reported directly within a separate component 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:
2001 2000 1999 ================================================================================================================== Unrealized gains (losses) on securities available-for-sale arising during the period: Gross $ 27,726 $ 18,765 $(36,729) Adjustment to deferred policy acquisition costs (14,994) (12,083) 18,645 Related federal income tax (expense) benefit (4,456) (2,339) 6,330 ------------------------------------------------------------------------------------------------------------------- Net 8,276 4,343 (11,754) ------------------------------------------------------------------------------------------------------------------- Reclassification adjustment for net (gains) losses on securities available-for-sale realized during the period: Gross (401) 1,037 (260) Related federal income tax expense (benefit) 140 (363) 91 ------------------------------------------------------------------------------------------------------------------- Net (261) 674 (169) ------------------------------------------------------------------------------------------------------------------- Other comprehensive income (loss) on securities available-for-sale 8,015 5,017 (11,923) ------------------------------------------------------------------------------------------------------------------- Accumulated net loss on cash flow hedges: Gross (120) -- -- Related federal income tax benefit 42 -- -- ------------------------------------------------------------------------------------------------------------------- Other comprehensive loss on cash flow hedges (78) -- -- ------------------------------------------------------------------------------------------------------------------- Accumulated net gain on transition adjustments: Transition adjustment - SFAS 133 31 -- -- Transition adjustment - EITF 99-20 665 -- -- Related federal income tax expense (244) -- -- ------------------------------------------------------------------------------------------------------------------- Other comprehensive gain on transition adjustments 452 -- -- ------------------------------------------------------------------------------------------------------------------- Total other comprehensive income (loss) $ 8,389 $ 5,017 $(11,923) ==================================================================================================================
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. (7) 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. 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued 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 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: 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. COLLATERAL RECEIVED - SECURITIES LENDING: The carrying amount reported in the balance sheets for these instruments approximates their fair value. COMMITMENTS TO EXTEND CREDIT: Commitments to extend credit have nominal fair value because of the short-term nature of such commitments. See note 8. 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. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued 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 amount fair value amount fair value ================================================================================================================= Assets: Investments: Securities available-for-sale: Fixed maturity securities $ 2,501,627 $ 2,501,627 $ 1,191,741 $ 1,191,741 Equity securities -- -- 1,828 1,828 Mortgage loans on real estate, net 663,458 671,530 380,685 388,396 Policy loans 486 486 1,517 1,517 Short-term investments 75,462 75,462 61,194 61,194 Cash 1,842 1,842 -- -- Assets held in separate accounts 2,312,919 2,312,919 2,242,478 2,242,478 Liabilities: Investment contracts (3,112,910) (3,019,705) (1,616,017) (1,562,224) Policy reserves on life insurance contracts (158,399) (156,981) (149,434) (149,783) Collateral received - securities lending (64,935) (64,935) -- -- Liabilities related to separate accounts (2,312,919) (2,251,782) (2,242,478) (2,189,633) Derivative financial instruments: Interest rate swaps hedging assets 809 809 703 703 Cross currency interest rate swaps (60) (60) 128 128 Futures contracts (390) (390) (151) (151)
(8) 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 operating throughout the U. S., thus reducing its exposure to any single 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 balance sheets. NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued 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 $73,032 extending into 2002 were outstanding as of December 31, 2001. The Company also had $15,000 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 NLAIC, 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, NLAIC's credit risk from these derivative financial instruments was $1,182. 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, 77% 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 24% (29% 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 29% (27% in 2000) of the carrying value of the Company's commercial mortgage loan portfolio financed office building 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. 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. (9) PENSION PLAN AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 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. Pension costs charged to operations by the Company during the years ended December 31, 2001, 2000 and 1999 were $237, $77 and $127, respectively. 16 NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued 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 $1,185 and $1,090, respectively, and the net periodic postretirement benefit cost (NPPBC) for 2001, 2000 and 1999 was $143, $132 and $177, 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 --------------------------- --------------------------- 2001 2000 2001 2000 =================================================================================================================== Change in benefit obligation: Benefit obligation at beginning of year $ 1,981,700 $ 1,811,400 $ 276,400 $ 239,800 Service cost 89,300 81,400 12,600 12,200 Interest cost 129,100 125,300 21,400 18,700 Participant contributions -- -- 3,300 2,900 Plan amendment 27,700 -- 200 -- Actuarial (gain) loss (5,800) 34,800 20,200 16,100 Benefits paid (89,800) (71,200) (20,100) (13,300) ------------------------------------------------------------------------------------------------------------------ Benefit obligation at end of year 2,132,200 1,981,700 314,000 276,400 ------------------------------------------------------------------------------------------------------------------ Change in plan assets: Fair value of plan assets at beginning of year 2,337,100 2,247,600 119,400 91,300 Actual return (loss) on plan assets (46,600) 140,900 (200) 12,200 Employer contribution -- -- 17,300 26,300 Participant contributions -- -- 3,300 2,900 Plan curtailment -- 19,800 -- -- Benefits paid (89,800) (71,200) (20,100) (13,300) ------------------------------------------------------------------------------------------------------------------ Fair value of plan assets at end of year 2,200,700 2,337,100 119,700 119,400 ------------------------------------------------------------------------------------------------------------------ Funded status 68,500 355,400 (194,300) (157,000) Unrecognized prior service cost 49,500 25,000 200 -- Unrecognized net gains (79,300) (311,700) (4,000) (34,100) Unrecognized net (asset) obligation at transition (5,100) (6,400) 800 1,000 ------------------------------------------------------------------------------------------------------------------ Prepaid (accrued) benefit cost $ 33,600 $ 62,300 $ (197,300) $ (190,100) ===================================================================================================================
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to 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:
2001 2000 1999 ====================================================================================================================== Service cost (benefits earned during the period) $ 89,300 $ 81,400 $ 80,000 Interest cost on projected benefit obligation 129,100 125,300 109,900 Expected return on plan assets (183,800) (184,500) (160,300) Recognized gains (7,800) (11,800) (9,100) Amortization of prior service cost 3,200 3,200 3,200 Amortization of unrecognized transition asset (1,300) (1,300) (1,400) ---------------------------------------------------------------------------------------------------------------------- $ 28,700 $ 12,300 $ 22,300 ======================================================================================================================
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 $67,100. During 1999, the pension plan transferred assets to settle its obligation related to WSC employees, resulting in a gain of $32,900. The spin-off of liabilities and assets was completed in the year 2000, resulting in an adjustment to the curtailment gain of $19,800. 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:
2001 2000 1999 ======================================================================================================================= Service cost (benefits attributed to employee service during the year) $ 12,600 $ 12,200 $ 14,200 Interest cost on accumulated postretirement benefit obligation 21,400 18,700 17,600 Expected return on plan assets (9,600) (7,900) (4,800) Amortization of unrecognized transition obligation of affiliates 600 600 600 Net amortization and deferral (400) (1,300) (500) ----------------------------------------------------------------------------------------------------------------------- $ 24,600 $ 22,300 $ 27,100 =======================================================================================================================
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to 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. (10) SHAREHOLDER'S EQUITY, REGULATORY RISK-BASED CAPITAL, RETAINED EARNINGS AND DIVIDEND RESTRICTIONS The State of Ohio, where the Company is 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. The Company exceeds the minimum risk-based capital requirements for all periods presented herein. The statutory capital and surplus of the Company as reported to regulatory authorities as of December 31, 2001, 2000 and 1999 was $122,926, $67,769 and $63,275, respectively. The statutory net loss of the Company as reported to regulatory authorities for the years ended December 31, 2001, 2000 and 1999 was $(19,201), $(6,150) and $(305), respectively. The NAIC completed a project to codify statutory accounting principles (Codification), which became effective January 1, 2001 for NLAIC. The resulting change to the Company's January 1, 2001 surplus was an increase of approximately $3,674. The significant change for NLAIC, 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, the maximum amount available for dividend payment from the Company to its shareholder without prior approval of the Department was $12,293. The Company currently does not expect such regulatory requirements to impair its ability to pay operating expenses, interest and shareholder dividends in the future. (11) RELATED PARTY TRANSACTIONS The Company received capital contributions from NLIC in the amount of $75,000 and $25,000 during 2001 and 2000, respectively. The Company files a consolidated federal tax return with NMIC, as described in note 2(g). Total payments (from) to NMIC were $(12,556), $3,970, and $4,053 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 $625, $441 and $660, respectively. 19 NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to 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 $4,662, $4,704 and $5,150, respectively. In addition, 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. The Company is a party to an intercompany reinsurance agreement with NLIC whereby certain fixed individual deferred annuity contracts are ceded on a modified coinsurance basis. Under modified coinsurance agreements, invested assets and liabilities for future policy benefits are retained by the ceding company and net investment earnings on the invested assets are paid to the assuming company. Under terms of the Company's agreement, the investment risk associated with changes in interest rates is borne by NLIC. Risk of asset default is retained by the Company, although a fee is paid by NLIC to the Company for the Company's retention of such risk. The agreement will remain in-force until all contract obligations are settled. Amounts ceded to NLIC in 2001 are included in NLIC's results of operations for 2001 and include premiums of $1,594,098 ($432,803 and $258,468 in 2000 and 1999, respectively), net investment income of $144,135 ($88,771 and $75,963 in 2000 and 1999, respectively) and benefits, claims and other expenses of $1,766,874 ($524,715 and $319,240 in 2000 and 1999, respectively). During 1999, the Company entered into an intercompany reinsurance agreement with NLIC whereby a certain life insurance contract was ceded on a 100% coinsurance basis. Amounts ceded to NLIC include premiums of $87,696 in 1999 (none in 2000 and 2001) and expenses of $195, $185 and $3,150 during 2001, 2000 and 1999, respectively. Policy reserves ceded and amounts receivable from NLIC under this agreement totaled $102,472 and $96,892 as of December 31, 2001 and 2000, respectively. The ceding of risk does not discharge the original insurer from its primary obligation to the contractholder. The Company believes that the terms of the reinsurance agreements with affiliates are consistent in all material respects with what the Company could have obtained with unaffiliated parties. 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 $26,700 and the Company incurred interest expense on intercompany repurchase agreements of $18 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 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 $2,080 and $56,332 as of December 31, 2001 and 2000, respectively, and are included in short-term investments on the accompanying balance sheets. 20 NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued (12) 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. There can be no assurance that any such litigation will not have a material adverse effect on the Company in the future. (13) SEGMENT INFORMATION The Company uses differences in products as the basis for defining its reportable segments. The Company reports two product segments: Individual Annuity and Life Insurance. The Individual Annuity segment consists of individual The BEST of AMERICA(R) 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 Life Insurance segment consists of investment life products, including both individual variable life and COLI 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 two product segments and unallocated expenses. 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. 21 NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued The following table summarizes the financial results of the Company's business segments for the years ended December 31, 2001, 2000 and 1999.
Individual Life Annuity Insurance Corporate Total ================================================================================================================== 2001: Net investment income $ 11,864 $ 4,310 $ 706 $ 16,880 Other operating revenue 33,064 20,418 -- 53,482 ------------------------------------------------------------------------------------------------------------------ Total operating revenue(1) 44,928 24,728 706 70,362 ------------------------------------------------------------------------------------------------------------------ Interest credited to policyholder account balances 2,027 3,087 -- 5,114 Amortization of deferred policy acquisition costs 9,833 1,424 -- 11,257 Other benefits and expenses 14,436 12,286 557 27,279 ------------------------------------------------------------------------------------------------------------------ Total benefits and expenses 26,296 16,797 557 43,650 ------------------------------------------------------------------------------------------------------------------ Operating income before federal income tax expense(1) 18,632 7,931 149 26,712 Net realized losses on investments, hedging instruments and hedged items -- -- (244) (244) ------------------------------------------------------------------------------------------------------------------ Income (loss) before federal income tax expense and cumulative effect of adoption of accounting principles $ 18,632 $ 7,931 $ (95) $ 26,468 ================================================================================================================== Assets as of year end $ 5,103,294 $ 631,201 $ 210,202 $ 5,944,697 ==================================================================================================================
----------------- (1) Excludes net realized gains and losses on investments, hedging instruments and hedged items. 22 NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY (a wholly owned subsidiary of Nationwide Life Insurance Company) Notes to Financial Statements, Continued
Individual Life Annuity Insurance Corporate Total =================================================================================================================== 2000: Net investment income $ 5,349 $ 2,831 $ 6,552 $ 14,732 Other operating revenue 35,650 22,568 -- 58,218 ------------------------------------------------------------------------------------------------------------------- Total operating revenue(1) 40,999 25,399 6,552 72,950 ------------------------------------------------------------------------------------------------------------------- Interest credited to policyholder account balances 8,078 3,019 -- 11,097 Amortization of deferred policy acquisition costs 9,189 704 -- 9,893 Other benefits and expenses 22,098 13,465 -- 35,563 ------------------------------------------------------------------------------------------------------------------- Total benefits and expenses 39,365 17,188 -- 56,553 ------------------------------------------------------------------------------------------------------------------- Operating income before federal income tax expense(1) 1,634 8,211 6,552 16,397 Net realized gains on investments, hedging instruments and hedged items -- -- 842 842 ------------------------------------------------------------------------------------------------------------------- Income before federal income tax expense and cumulative effect of adoption of accounting principles $ 1,634 $ 8,211 $ 7,394 $ 17,239 =================================================================================================================== Assets as of year end $ 3,573,040 $ 548,240 $ 52,954 $ 4,174,234 =================================================================================================================== 1999: Net investment income $ 6,246 $ 1,596 $ 6,117 $ 13,959 Other operating revenue 29,497 16,647 -- 46,144 ------------------------------------------------------------------------------------------------------------------- Total operating revenue(1) 35,743 18,243 6,117 60,103 ------------------------------------------------------------------------------------------------------------------- Interest credited to policyholder account balances 6,561 1,987 -- 8,548 Amortization of deferred policy acquisition costs 8,649 4,943 -- 13,592 Other benefits and expenses 20,971 8,424 -- 29,395 ------------------------------------------------------------------------------------------------------------------- Total benefits and expenses 36,181 15,354 -- 51,535 ------------------------------------------------------------------------------------------------------------------- Operating (loss) income before federal income tax expense(1) (438) 2,889 6,117 8,568 Net realized gains on investments, hedging instruments and hedged items -- -- 5,208 5,208 ------------------------------------------------------------------------------------------------------------------- (Loss) income before federal income tax expense and cumulative effect of adoption of accounting principles $ (438) $ 2,889 $ 11,325 $ 13,776 =================================================================================================================== Assets as of year end $ 3,309,810 $ 382,388 $ 70,265 $ 3,762,463 ===================================================================================================================
- ------------------ (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. 23 -----END PRIVACY-ENHANCED MESSAGE-----