-----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, AqpGL87orha8hLvd3mNqjF0ymgg9tU5Uik2ANW/gExAzpMOdILXKtci0ILxYywQe 9z3RnrILQNFoBMDcnIV0NQ== 0000950152-99-001748.txt : 19990310 0000950152-99-001748.hdr.sgml : 19990310 ACCESSION NUMBER: 0000950152-99-001748 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONWIDE VLI SEPARATE ACCOUNT 2 CENTRAL INDEX KEY: 0000820914 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 314156830 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05311 FILM NUMBER: 99560522 BUSINESS ADDRESS: STREET 1: ONE NATIONWIDE PLZ STREET 2: C/O NATIONWIDE LIFE INSURANCE CO CITY: COLUMBUS STATE: OH ZIP: 43216 BUSINESS PHONE: 614-249-7111 MAIL ADDRESS: STREET 1: NATIONWIDE LIFE INSURANCE CO STREET 2: ONE NATIONWIDE PLAZA CITY: COLUMBUS STATE: OH ZIP: 43216 N-30D 1 NATIONWIDE VLI SEPARATE ACCOUNT 2 1 Nationwide(R) VLI Separate Account-2 December 31, 1998 The Best of America(R) [GRAPHIC] Life Planning Series(R)[GRAPHIC] '98 ANNUAL REPORT [Logo] Nationwide Life Insurance Company Home Office: Columbus, Ohio 2 [Logo] NATIONWIDE LIFE INSURANCE COMPANY ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215 - 2220 [Photo of Joseph J. Gasper] PRESIDENT'S MESSAGE We at Nationwide Life Insurance Company are pleased to bring you the 1998 annual report of the Nationwide VLI Separate Account-2. Equity markets again defied the odds in 1998 to tally a fourth straight year of double-digit gains, as measured by the major indices. This surprise came following the breathtaking correction during the third quarter that gave us a broad double-digit retreat. Fixed income investments also provided respectable returns in 1998, supported by the continued low inflationary environment and favorable Federal Reserve actions. The performance of the American economy continues strong into 1999. However, we believe the persisting slump in Asia and recent difficulties in Latin America will inevitably take their toll and dampen growth in the United States. This moderation, we think, will be healthy for our economy and get us back to a more sustainable growth level. We look for interest rates to continue within the range of the recent past, and we expect inflation to remain subdued. Moreover, we remain optimistic about long-term prospects for U.S. business activity; holders of financial assets should continue to profit from the anticipated favorable investment climate. We are pleased you have chosen our Company to provide the investment products and services to help you meet your retirement savings and financial planning goals. /s/ Joseph J. Gasper -------------------- Joseph J. Gasper, President February 16, 1999 3 3 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY DECEMBER 31, 1998
ASSETS: Investments at market value: American Century VP - American Century VP Balanced (ACVPBal) 667,058 shares (cost $5,343,930) ...................................... $ 5,563,263 American Century VP - American Century VP Capital Appreciation (ACVPCapAp) 1,285,611 shares (cost $13,112,689) ................................... 11,596,209 American Century VP - American Century VP Income & Growth (ACVPIncGr) 227,927 shares (cost $1,413,839) ...................................... 1,545,347 American Century VP - American Century VP International (ACVPInt) 1,806,789 shares (cost $13,291,133) ................................... 13,767,730 American Century VP - American Century VP Value (ACVPValue) 403,199 shares (cost $2,677,987) ...................................... 2,713,527 The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro) 388,872 shares (cost $11,240,402) ..................................... 12,086,156 Dreyfus Stock Index Fund (DryStkIx) 2,430,963 shares (cost $68,540,273) ................................... 79,054,923 Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp) 129,312 shares (cost $4,499,999) ...................................... 4,669,456 Dreyfus VIF - Growth and Income Portfolio (DryGrInc) 97,841 shares (cost $2,176,879) ....................................... 2,214,133 Fidelity VIP - Equity-Income Portfolio (FidVIPEI) 3,288,235 shares (cost $68,688,982) ................................... 83,586,925 Fidelity VIP - Growth Portfolio (FidVIPGr) 2,610,901 shares (cost $98,245,877) ................................... 117,151,133 Fidelity VIP - High Income Portfolio (FidVIPHI) 2,372,894 shares (cost $29,208,547) ................................... 27,359,471 Fidelity VIP - Overseas Portfolio (FidVIPOv) 1,108,508 shares (cost $21,869,861) ................................... 22,225,589 Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM) 1,776,182 shares (cost $27,388,181) ................................... 32,255,471 Fidelity VIP-II - Contrafund Portfolio (FidVIPCon) 2,039,961 shares (cost $38,346,102) ................................... 49,856,648 Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp) 257,373 shares (cost $5,282,575) ...................................... 5,888,693 Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt) 55,772 shares (cost $371,601) ......................................... 340,210 Nationwide SAT - Capital Appreciation Fund (NSATCapAp) 1,553,137 shares (cost $38,080,554) ................................... 41,297,903 Nationwide SAT - Government Bond Fund (NSATGvtBd) 1,202,610 shares (cost $14,267,240) ................................... 14,058,510 Nationwide SAT - Money Market Fund (NSATMyMkt) 44,571,880 shares (cost $44,571,880) .................................. 44,571,880 Nationwide SAT - Small Cap Value Fund (NSATSmCapV) 88,617 shares (cost $809,334) ......................................... 840,976
4 4 Nationwide SAT - Small Company Fund (NSATSmCo) 1,093,214 shares (cost $17,223,078) ............................ 17,502,348 Nationwide SAT - Total Return Fund (NSATTotRe) 5,388,073 shares (cost $83,326,583) ............................ 99,140,546 Neuberger &Berman AMT - Growth Portfolio (NBAMTGro) 932,473 shares (cost $22,947,521) .............................. 24,514,709 Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard) 62,015 shares (cost $804,621) .................................. 858,282 Neuberger &Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat) 363,249 shares (cost $5,022,473) ............................... 5,020,101 Neuberger &Berman AMT - Partners Portfolio (NBAMTPart) 1,847,861 shares (cost $36,287,150) ............................ 34,980,006 Oppenheimer VAF - Bond Fund (OppBdFd) 1,003,501 shares (cost $12,261,046) ............................ 12,363,132 Oppenheimer VAF - Global Securities Fund (OppGlSec) 957,560 shares (cost $18,773,976) .............................. 21,133,338 Oppenheimer VAF - Growth Fund (OppGro) 164,365 shares (cost $5,914,563) ............................... 6,027,268 Oppenheimer VAF - Multiple Strategies Fund (OppMult) 833,758 shares (cost $13,141,814) .............................. 14,215,574 Strong Opportunity Fund II, Inc. (StOpp2) 1,429,116 shares (cost $27,438,063) ............................ 31,040,403 Strong VIF - Strong Discovery Fund II (StDisc2) 656,556 shares (cost $8,140,634) ............................... 8,351,399 Strong VIF - Strong International Stock Fund II (StIntStk2) 226,407 shares (cost $2,171,645) ............................... 1,987,856 Van Eck WIT - Worldwide Bond Fund (VEWrldBd) 288,886 shares (cost $3,540,727) ............................... 3,547,526 Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt) 260,082 shares (cost $1,743,623) ............................... 1,851,783 Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs) 448,922 shares (cost $4,172,279) ............................... 4,130,087 Van Kampen American Capital LIT - Morgan Stanley Real Estate Securities Portfolio (VKMSRESec) 475,308 shares (cost $7,366,326) ............................... 6,540,232 Warburg Pincus Trust - International Equity Portfolio (WPIntEq) 845,293 shares (cost $9,714,262) ............................... 9,289,767 Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap) 93,442 shares (cost $1,035,844) ................................ 1,100,743 Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr) 948,154 shares (cost $15,361,244) .............................. 15,179,948 ------------ Total investments ........................................... 891,419,201 Accounts receivable .................................................. 2,737,278 ------------ Total assets ................................................ 894,156,479 ACCOUNTS PAYABLE ........................................................ - ------------ CONTRACT OWNERS' EQUITY (NOTE 7) ........................................ $894,156,479 ============
See accompanying notes to financial statements. 5 5 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
Total ACVPBal -------------------------------------- --------------------- 1998 1997 1996 1998 1997 ---- ---- ---- ---- ---- Investment activity: Reinvested dividends ........... $ 11,649,564 9,547,366 6,387,808 73,602 32,123 Mortality and expense charges (note 3) ..................... (6,238,523) (4,642,993) (2,983,466) (38,972) (27,654) ------------- ------------ ------------ ---------- --------- Net investment activity ........ 5,411,041 4,904,373 3,404,342 34,630 4,469 ------------- ------------ ------------ ---------- --------- Proceeds from mutual fund shares sold .................. 760,513,313 443,749,426 275,979,207 1,247,480 2,604,070 Cost of mutual funds sold ...... (729,684,314) (409,583,997) (266,008,543) (1,152,261) (2,212,633) ------------- ------------ ------------ ---------- --------- Realized gain (loss) on investments ................ 30,828,999 34,165,429 9,970,664 95,219 391,437 Change in unrealized gain (loss) on investments ............... 26,818,372 31,280,650 12,175,328 37,264 (79,247) ------------- ------------ ------------ ---------- --------- Net gain (loss) on investments . 57,647,371 65,446,079 22,145,992 132,483 312,190 ------------- ------------ ------------ ---------- --------- Reinvested capital gains ....... 43,742,310 19,594,720 10,584,883 456,397 126,772 ------------- ------------ ------------ ---------- --------- Net change in contract owners' equity resulting from operations .......... 106,800,722 89,945,172 36,135,217 623,510 443,431 ------------- ------------ ------------ ---------- --------- Equity transactions: Purchase payments received from contract owners ......... 213,764,519 218,381,791 174,104,282 617,960 560,697 Transfers between funds ........ -- -- -- 1,045,491 402,250 Surrenders ..................... (20,881,099) (11,960,967) (6,124,049) (139,847) (201,818) Death benefits (note 4) ........ (1,636,729) (664,672) (730,700) (12,665) (18,479) Policy loans (net of repayments) (note 5) ..................... (15,272,227) (9,898,715) (6,468,023) (97,880) (62,819) Deductions for surrender charges (note 2d) .................... (2,374,941) (1,603,674) (721,263) (16,788) (27,058) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............ (44,274,845) (34,553,252) (24,075,896) (164,907) (31,708) Deductions for asset charges (note 3) .................... (556,243) (227,535) (20,037) (3,475) (1,282) ------------- ------------ ------------ ---------- --------- Net equity transactions .... 128,768,435 159,472,976 135,964,314 1,227,889 619,783 ------------- ------------ ------------ ---------- --------- Net change in contract owners' equity ............... 235,569,157 249,418,148 172,099,531 1,851,399 1,063,214 Contract owners' equity beginning of period .......... 658,587,322 409,169,174 237,069,643 3,711,460 2,648,246 ------------- ------------ ------------ ---------- --------- Contract owners' equity end of period ................ $ 894,156,479 658,587,322 409,169,174 5,562,859 3,711,460 ============= =========== =========== ========= =========
ACVPBal ACVPCapAp ----------- ----------------------------------------- 1996 1998 1997 1996 ---- ---- ---- ---- Investment activity: Reinvested dividends ........... 37,120 -- -- -- Mortality and expense charges (note 3) ..................... (19,284) (82,384) (104,781) (103,669) ----------- ----------- ----------- ----------- Net investment activity ........ 17,836 (82,384) (104,781) (103,669) Proceeds from mutual fund shares sold .................. 308,084 5,476,348 32,724,781 29,396,492 Cost of mutual funds sold ...... (253,217) (6,203,432) (32,719,977) (28,812,207) Realized gain (loss) on investments ................ 54,867 (727,084) 4,804 584,285 Change in unrealized gain (loss) on investments ............... 104,799 (95,403) (649,578) (2,360,038) ----------- ----------- ----------- ----------- Net gain (loss) on investments . 159,666 (822,487) (644,774) (1,775,753) ----------- ----------- ----------- ----------- Reinvested capital gains ....... 48,770 626,545 235,181 1,326,118 ----------- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations .......... 226,272 (278,326) (514,374) (553,304) ----------- ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ......... 293,943 2,567,119 2,396,050 1,943,037 Transfers between funds ........ 705,211 (1,460,314) (731,351) 854,921 Surrenders ..................... (50,854) (537,440) (294,647) (333,226) Death benefits (note 4) ........ (142) (1,791) (279) (6,887) Policy loans (net of repayments) (note 5) ..................... (33,101) (208,014) (317,723) (76,974) Deductions for surrender charges (note 2d) .................... (5,989) (63,643) (39,505) (39,246) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............ (15,745) (533,669) (354,495) (285,952) Deductions for asset charges (note 3) .................... (130) (7,346) (4,187) (587) ----------- ----------- ----------- ----------- Net equity transactions .... 893,193 (245,098) 653,863 2,055,086 ----------- ----------- ----------- ----------- Net change in contract owners' equity ............... 1,119,465 (523,424) 139,489 1,501,782 Contract owners' equity beginning of period .......... 1,528,781 12,118,077 11,978,588 10,476,806 ----------- ----------- ----------- ----------- Contract owners' equity end of period ................ 2,648,246 11,594,653 12,118,077 11,978,588 =========== =========== =========== ===========
6 6 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
ACVPIncGr ACVPInt ------------------------------------------ -------------------------- 1998 1997 1996 1998 1997 ---- ---- ---- ---- ---- Investment activity: Reinvested dividends ........... $ 7,293 -- -- 48,574 39,611 Mortality and expense charges (note 3) ..................... (7,590) -- -- (100,304) (43,589) ---------- ------------ ------------ ----------- ----------- Net investment activity ........ (297) -- -- (51,730) (3,978) ---------- ------------ ------------ ----------- ----------- Proceeds from mutual fund shares sold .................. 579,403 -- -- 26,953,998 12,528,472 Cost of mutual funds sold ...... (585,659) -- -- (26,717,868) (11,671,277) ---------- ------------ ------------ ----------- ----------- Realized gain (loss) on investments ................ (6,256) -- -- 236,130 857,195 Change in unrealized gain (loss) on investments ............... 131,508 -- -- 538,699 (221,309) ---------- ------------ ------------ ----------- ----------- Net gain (loss) on investments . 125,252 -- -- 774,829 635,886 ---------- ------------ ------------ ----------- ----------- Reinvested capital gains ....... -- -- -- 498,647 76,392 ---------- ------------ ------------ ----------- ----------- Net change in contract owners' equity resulting from operations .......... 124,955 -- -- 1,221,746 708,300 ---------- ------------ ------------ ----------- ----------- Equity transactions: Purchase payments received from contract owners ......... 115,227 -- -- 1,075,296 827,281 Transfers between funds ........ 1,333,797 -- -- 5,394,451 1,897,413 Surrenders ..................... (9,343) -- -- (91,333) (37,650) Death benefits (note 4) ........ (1) -- -- (11,988) -- Policy loans (net of repayments) (note 5) ..................... (3,122) -- -- (25,253) (123,364) Deductions for surrender charges (note 2d) .................... (970) -- -- (7,357) (5,048) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............ (14,226) -- -- (371,602) (116,507) Deductions for asset charges (note 3) .................... (677) -- -- (8,943) (2,276) ---------- ------------ ------------ ----------- ----------- Net equity transactions .... 1,420,685 -- -- 5,953,271 2,439,849 ---------- ------------ ------------ ----------- ----------- Net change in contract owners' equity ............... 1,545,640 -- -- 7,175,017 3,148,149 Contract owners' equity beginning of period .......... -- -- -- 6,586,196 3,438,047 ---------- ------------ ------------ ----------- ----------- Contract owners' equity end of period ................ $1,545,640 -- -- 13,761,213 6,586,196 ========== ============ ============ =========== ===========
ACVPInt ACVPValue ----------- -------------------------------------- 1996 1998 1997 1996 ---- ---- ---- ---- Investment activity: Reinvested dividends ............... 27,668 14,238 1,245 -- Mortality and expense charges (note 3) ......................... (20,991) (19,998) (7,498) (42) ---------- ---------- ---------- ---------- Net investment activity ............ 6,677 (5,760) (6,253) (42) ---------- ---------- ---------- --------- Proceeds from mutual fund shares sold ...................... 2,744,824 3,978,821 2,118,031 -- Cost of mutual funds sold .......... (2,625,412) (4,072,379) (1,966,550) -- ---------- ---------- ---------- --------- Realized gain (loss) on investments .................... 119,412 (93,558) 151,481 -- Change in unrealized gain (loss) on investments ................... 131,744 7,367 28,166 (54) ---------- ---------- ---------- ---------- Net gain (loss) on investments ..... 251,156 (86,191) 179,647 (54) ---------- ---------- ---------- ---------- Reinvested capital gains ........... 9,222 169,984 2,540 -- ---------- ---------- ---------- ---------- Net change in contract owners' equity resulting from operations .............. 267,055 78,033 175,934 (96) ---------- ---------- ---------- ---------- Equity transactions: Purchase payments received from contract owners ............. 440,016 402,104 111,600 64 Transfers between funds ............ 1,731,900 705,143 1,429,037 9,189 Surrenders ......................... (30,514) (64,948) (4,196) (19) Death benefits (note 4) ............ -- (2) -- -- Policy loans (net of repayments) (note 5) ......................... (14,420) (39,222) (2,706) -- Deductions for surrender charges (note 2d) ........................ (3,594) (5,005) (563) (2) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ................ (60,957) (76,187) (2,525) (7) Deductions for asset charges (note 3) ........................ (168) (1,783) (593) -- ---------- ---------- ---------- ---------- Net equity transactions ........ 2,062,263 920,100 1,530,054 9,225 ---------- ---------- ---------- ---------- Net change in contract owners' equity ................... 2,329,318 998,133 1,705,988 9,129 Contract owners' equity beginning of period .............. 1,108,729 1,715,117 9,129 -- ---------- ---------- ---------- ---------- Contract owners' equity end of period .................... 3,438,047 2,713,250 1,715,117 9,129 ========== ========== ========== ==========
7 7 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
DrySRGro DryStkix ----------------------------------------- ---------------------------------------- 1998 1997 1996 1998 1997 1996 ---- ---- ---- ---- ---- ---- Investment activity: Reinvested dividends ........... $ 18,491 24,764 6,374 840,788 488,743 212,732 Mortality and expense charges (note 3) ..................... (76,955) (44,201) (18,622) (508,329) (258,618) (93,077) ------------ ----------- ----------- ----------- ----------- ----------- Net investment activity ........ (58,464) (19,437) (12,248) 332,459 230,125 119,655 ------------ ----------- ----------- ----------- ----------- ----------- Proceeds from mutual fund shares sold .................. 30,530,607 6,036,906 3,195,875 34,044,658 12,995,115 4,656,338 Cost of mutual funds sold ...... (29,068,944) (5,411,329) (2,863,782) (26,882,152) (10,012,154) (3,763,242) ------------ ----------- ----------- ----------- ----------- ----------- Realized gain (loss) on investments ................ 1,461,663 625,577 332,093 7,162,506 2,982,961 893,096 Change in unrealized gain (loss) on investments ............... 619,023 301,151 (119,764) 6,892,116 2,734,985 553,288 ------------ ----------- ----------- ----------- ----------- ----------- Net gain (loss) on investments . 2,080,686 926,728 212,329 14,054,622 5,717,946 1,446,384 ------------ ----------- ----------- ----------- ----------- ----------- Reinvested capital gains ....... 429,304 192,785 114,244 156,109 1,196,951 240,306 ------------ ----------- ----------- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations .......... 2,451,526 1,100,076 314,325 14,543,190 7,145,022 1,806,345 ------------ ----------- ----------- ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ......... 2,646,682 1,226,366 387,401 8,792,308 6,007,824 2,423,394 Transfers between funds ........ 1,547,337 2,303,963 1,261,823 15,454,943 16,661,441 7,060,289 Surrenders ..................... (808,738) (145,994) (23,790) (489,388) (380,643) (115,515) Death benefits (note 4) ........ (3,645) (6,412) (126) (395,851) (33,328) (2,844) Policy loans (net of repayments) (note 5) ..................... (431,011) (107,480) (35,903) (500,204) (210,457) (108,558) Deductions for surrender charges (note 2d) .................... (101,807) (19,574) (2,802) (44,357) (51,035) (13,605) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............ (448,348) (82,935) (34,935) (2,263,707) (618,664) (240,014) Deductions for asset charges (note 3) .................... (6,861) (2,493) (144) (45,324) (15,198) (758) ------------ ----------- ----------- ----------- ----------- ----------- Net equity transactions .... 2,393,609 3,165,441 1,551,524 20,508,420 21,359,940 9,002,389 ------------ ----------- ----------- ----------- ----------- ----------- Net change in contract owners' equity ............... 4,845,135 4,265,517 1,865,849 35,051,610 28,504,962 10,808,734 Contract owners' equity beginning of period .......... 7,215,240 2,949,723 1,083,874 43,989,896 15,484,934 4,676,200 ------------ ----------- ----------- ----------- ----------- ----------- Contract owners' equity end of period ................ $ 12,060,375 7,215,240 2,949,723 79,041,506 43,989,896 15,484,934 ============ ========= ========= ========== ========== ==========
DryCapAp ------------------------------------ 1998 1997 1996 ---- ---- ---- Investment activity: Reinvested dividends ........... 24,846 4,780 -- Mortality and expense charges (note 3) ..................... (27,124) (1,877) -- ----------- ----------- ----- Net investment activity ........ (2,278) 2,903 -- ----------- ----------- ----- Proceeds from mutual fund shares sold .................. 20,319,146 3,153,711 -- Cost of mutual funds sold ...... (19,666,415) (3,172,025) -- ----------- ----------- ----- Realized gain (loss) on investments ................ 652,731 (18,314) -- Change in unrealized gain (loss) on investments ............... 173,020 (3,579) -- ----------- ----------- ----- Net gain (loss) on investments . 825,751 (21,893) -- ----------- ----------- ----- Reinvested capital gains ....... 1,151 400 -- ----------- ----------- ----- Net change in contract owners' equity resulting from operations .......... 824,624 (18,590) -- ----------- ----------- ----- Equity transactions: Purchase payments received from contract owners ......... 502,552 26,933 -- Transfers between funds ........ 3,058,005 425,397 -- Surrenders ..................... (44,456) (1,058) -- Death benefits (note 4) ........ (4) -- -- Policy loans (net of repayments) (note 5) ..................... (18,317) (33) -- Deductions for surrender charges (note 2d) .................... (5,020) (142) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............ (77,478) (762) -- Deductions for asset charges (note 3) .................... (2,418) (149) -- ----------- ----------- ----- Net equity transactions .... 3,412,864 450,186 -- ----------- ----------- ----- Net change in contract owners' equity ............... 4,237,488 431,596 -- Contract owners' equity beginning of period .......... 431,596 -- -- ----------- ----------- ----- Contract owners' equity end of period ................ 4,669,084 431,596 -- ========= ======= =====
8 8 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
DryGrinc FidVIPEI ------------------------------------------- ------------------------------------------- 1998 1997 1996 1998 1997 1996 ---- ---- ---- ---- ---- ---- Investment activity: Reinvested dividends ........... $ 17,968 8,082 -- 997,915 783,723 46,329 Mortality and expense charges (note 3) ..................... (15,042) (5,230) -- (614,949) (498,094) (338,519) ----------- ------------ ------------ ------------ ------------ ------------ Net investment activity ........ 2,926 2,852 -- 382,966 285,629 (292,190) ----------- ------------ ------------ ------------ ------------ ------------ Proceeds from mutual fund shares sold .................. 2,469,056 2,254,831 -- 6,996,930 6,293,311 6,728,246 Cost of mutual funds sold ...... (2,437,658) (2,197,145) -- (4,750,633) (4,356,281) (5,352,183) ----------- ------------ ------------ ------------ ------------ ------------ Realized gain (loss) on investments ................ 31,398 57,686 -- 2,246,297 1,937,030 1,376,063 Change in unrealized gain (loss) on investments ............... 115,375 (78,166) -- 1,497,328 7,168,421 2,155,544 ----------- ------------ ------------ ------------ ------------ ------------ Net gain (loss) on investments . 146,773 (20,480) -- 3,743,625 9,105,451 3,531,607 ----------- ------------ ------------ ------------ ------------ ------------ Reinvested capital gains ....... 29,897 70,270 -- 3,551,403 3,940,387 1,328,108 ----------- ------------ ------------ ------------ ------------ ------------ Net change in contract owners' equity resulting from operations .......... 179,596 52,642 -- 7,677,994 13,331,467 4,567,525 ----------- ------------ ------------ ------------ ------------ ------------ Equity transactions: Purchase payments received from contract owners ......... 1,960,370 186,196 -- 10,207,531 11,073,470 8,100,500 Transfers between funds ........ 533,213 972,727 -- 2,383,113 7,046,924 8,008,996 Surrenders ..................... (701,730) (2,948) -- (904,020) (1,110,322) (532,338) Death benefits (note 4) ........ (2) -- -- (80,375) (73,247) (146,188) Policy loans (net of repayments) (note 5) ..................... (801,908) (3,749) -- (597,978) (781,383) (504,548) Deductions for surrender charges (note 2d) .................... (90,325) (395) -- (83,892) (148,867) (62,696) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............ (66,760) (1,204) -- (4,711,838) (4,404,162) (3,117,070) Deductions for asset charges (note 3) .................... (1,341) (416) -- (54,830) (24,090) (2,195) ----------- ------------ ------------ ------------ ------------ ------------ Net equity transactions .... 831,517 1,150,211 -- 6,157,711 11,578,323 11,744,461 ----------- ------------ ------------ ------------ ------------ ------------ Net change in contract owners' equity ............... 1,011,113 1,202,853 -- 13,835,705 24,909,790 16,311,986 Contract owners' equity beginning of period .......... 1,202,853 -- -- 69,728,573 44,818,783 28,506,797 ----------- ------------ ------------ ------------ ------------ ------------ Contract owners' equity end of period ................ $ 2,213,966 1,202,853 -- 83,564,278 69,728,573 44,818,783 =========== ============ ============ =========== ========== ===========
FidVIPGr --------------------------------------------- 1998 1997 1996 ---- ---- ---- Investment activity: Reinvested dividends ........... 398,089 370,457 95,668 Mortality and expense charges (note 3) ..................... (759,610) (560,322) (401,774) ------------ ------------ ------------ Net investment activity ........ (361,521) (189,865) (306,106) ------------ ------------ ------------ Proceeds from mutual fund shares sold .................. 85,473,779 46,683,280 40,156,823 Cost of mutual funds sold ...... (75,903,979) (40,913,295) (40,192,712) ------------ ------------ ------------ Realized gain (loss) on investments ................ 9,569,800 5,769,985 (35,889) Change in unrealized gain (loss) on investments ............... 10,952,975 5,352,235 2,985,844 ------------ ------------ ------------ Net gain (loss) on investments . 20,522,775 11,122,220 2,949,955 ------------ ------------ ------------ Reinvested capital gains ....... 10,413,177 1,658,235 2,415,616 ------------ ------------ ------------ Net change in contract owners' equity resulting from operations .......... 30,574,431 12,590,590 5,059,465 ------------ ------------ ------------ Equity transactions: Purchase payments received from contract owners ......... 11,800,595 12,214,633 9,003,984 Transfers between funds ........ 6,611,922 1,631,518 10,555,655 Surrenders ..................... (1,541,170) (1,311,193) (794,363) Death benefits (note 4) ........ (54,733) (86,298) (141,589) Policy loans (net of repayments) (note 5) ..................... (593,726) (970,109) (722,540) Deductions for surrender charges (note 2d) .................... (161,482) (175,799) (93,557) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............ (4,387,847) (2,800,521) (2,100,258) Deductions for asset charges (note 3) .................... (67,729) (25,899) (2,639) ------------ ------------ ------------ Net equity transactions .... 11,605,830 8,476,332 15,704,693 ------------ ------------ ------------ Net change in contract owners' equity ............... 42,180,261 21,066,922 20,764,158 Contract owners' equity beginning of period .......... 74,962,498 53,895,576 33,131,418 ------------ ------------ ------------ Contract owners' equity end of period ................ 117,142,759 74,962,498 53,895,576 =========== ========== ============
(Continued) 9 9 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
FidVIPHI FidVIPOv --------------------------- ---------------------------------------- 1998 1997 1996 1998 1997 ---- ---- ---- ---- ---- Investment activity: Reinvested dividends ......................... $ 1,930,736 1,246,428 778,006 372,727 285,975 Mortality and expense charges (note 3) ................................... (211,621) (183,573) (124,686) (167,806) (153,477) ------------ ----------- ----------- ----------- ----------- Net investment activity ...................... 1,719,115 1,062,855 653,320 204,921 132,498 ------------ ----------- ----------- ----------- ----------- Proceeds from mutual fund shares sold ................................ 16,168,581 10,300,446 8,573,109 23,614,905 13,404,627 Cost of mutual funds sold .................... $(16,734,695) (9,520,272) (8,171,739) (22,518,443) (11,354,404) ------------ ----------- ----------- ----------- ----------- Realized gain (loss) on investments .............................. (566,114) 780,174 401,370 1,096,462 2,050,223 Change in unrealized gain (loss) on investments ............................. (3,958,695) 1,203,652 323,859 2,343 (1,243,832) ------------ ----------- ----------- ----------- ----------- Net gain (loss) on investments ............... (4,524,809) 1,983,826 725,229 1,098,805 806,391 ------------ ----------- ----------- ----------- ----------- Reinvested capital gains ..................... 1,226,822 154,053 152,219 1,098,564 1,135,234 ------------ ----------- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ........................ (1,578,872) 3,200,734 1,530,768 2,402,290 2,074,123 ------------ ----------- ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ....................... 5,333,328 6,155,268 3,975,355 3,170,855 3,466,918 Transfers between funds ...................... 1,830,834 2,316,320 3,971,432 (323,986) (393,971) Surrenders ................................... (481,342) (255,542) (197,286) (367,369) (496,949) Death benefits (note 4) ...................... (9,509) (22,399) (47,017) (33,198) (56,932) Policy loans (net of repayments) (note 5) ................................... (379,699) (282,232) (141,523) (393,533) (309,770) Deductions for surrender charges (note 2d) .................................. (54,547) (34,262) (23,236) (41,687) (66,629) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .......................... (2,449,174) (2,961,119) (1,967,104) (1,268,155) (1,319,172) Deductions for asset charges (note 3) .................................. (18,869) (8,693) (835) (14,962) (6,596) ------------ ----------- ----------- ----------- ----------- Net equity transactions .................. 3,771,022 4,907,341 5,569,786 727,965 816,899 ------------ ----------- ----------- ----------- ----------- Net change in contract owners' equity ............................. 2,192,150 8,108,075 7,100,554 3,130,255 2,891,022 Contract owners' equity beginning of period ........................ 25,162,314 17,054,239 9,953,685 19,093,154 16,202,132 ------------ ----------- ----------- ----------- ----------- Contract owners' equity end of period .............................. $ 27,354,464 25,162,314 17,054,239 22,223,409 19,093,154 ============ =========== =========== =========== ===========
FidVIPOv FidVIPAM ----------- ----------------------------------------- 1996 1998 1997 1996 ---- ---- ---- ---- Investment activity: Reinvested dividends ........... 145,650 894,977 787,310 678,218 Mortality and expense charges (note 3) ..................... (127,996) (239,207) (219,940) (188,497) ----------- ----------- ----------- ----------- Net investment activity ........ 17,654 655,770 567,370 489,721 ----------- ----------- ----------- ----------- Proceeds from mutual fund shares sold .................. 5,292,727 3,554,904 2,514,749 2,233,648 Cost of mutual funds sold ...... (4,778,968) (2,948,897) (2,201,452) (2,187,742) ----------- ----------- ----------- ----------- Realized gain (loss) on investments ................ 513,759 606,007 313,297 45,906 Change in unrealized gain (loss) on investments ............... 921,192 28,492 1,651,903 1,506,448 ----------- ----------- ----------- ----------- Net gain (loss) on investments . 1,434,951 634,499 1,965,200 1,552,354 ----------- ----------- ----------- ----------- Reinvested capital gains ....... 160,215 2,684,931 1,974,948 559,232 ----------- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations .......... 1,612,820 3,975,200 4,507,518 2,601,307 ----------- ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ......... 3,165,767 2,483,246 2,672,468 2,754,552 Transfers between funds ........ 1,580,583 115,769 284,292 (571,349) Surrenders ..................... (251,317) (1,327,378) (659,510) (268,409) Death benefits (note 4) ........ (4,564) (17,947) (43,658) (13,007) Policy loans (net of repayments) (note 5) ..................... (278,183) (195,419) (323,969) (349,545) Deductions for surrender charges (note 2d) .................... (29,599) (149,118) (88,424) (31,612) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............ (1,115,155) (874,287) (389,701) (319,982) Deductions for asset charges (note 3) .................... (793) (21,328) (9,765) (1,093) ----------- ----------- ----------- ----------- Net equity transactions .... 3,066,739 13,538 1,441,733 1,199,555 ----------- ----------- ----------- ----------- Net change in contract owners' equity ............... 4,679,559 3,988,738 5,949,251 3,800,862 Contract owners' equity beginning of period .......... 11,522,573 28,264,549 22,315,298 18,514,436 ----------- ----------- ----------- ----------- Contract owners' equity end of period ................ 16,202,132 32,253,287 28,264,549 22,315,298 =========== =========== =========== ===========
10 10 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
FidVIPCon FidVIPGrOp ------------------------------------------------ --------------------------------------- 1998 1997 1996 1998 1997 1996 ------------ ------------ ------------ ------------ ------------ ------- Investment activity: Reinvested dividends ............. $ 208,958 131,312 -- 20,203 -- -- Mortality and expense charges (note 3) ....................... (316,241) (184,659) (75,488) (35,749) (4,822) -- ------------ ------------ ------------ ------------ ------------ ------- Net investment activity ........ (107,283) (53,347) (75,488) (15,546) (4,822) -- ------------ ------------ ------------ ------------ ------------ ------- Proceeds from mutual fund shares sold .................... 5,270,262 2,972,056 1,863,525 6,596,939 1,418,908 -- Cost of mutual funds sold ........ (3,518,595) (2,266,444) (1,717,849) (6,370,749) (1,383,237) -- ------------ ------------ ------------ ------------ ------------ ------- Realized gain (loss) on investments .................. 1,751,667 705,612 145,676 226,190 35,671 -- Change in unrealized gain (loss) on investments ................. 6,821,820 3,432,249 1,232,338 577,416 28,661 -- ------------ ------------ ------------ ------------ ------------ ------- Net gain (loss) on investments . 8,573,487 4,137,861 1,378,014 803,606 64,332 -- ------------ ------------ ------------ ------------ ------------ ------- Reinvested capital gains ......... 1,537,336 347,039 28,665 70,230 -- -- ------------ ------------ ------------ ------------ ------------ ------- Net change in contract owners' equity resulting from operations ............ 10,003,540 4,431,553 1,331,191 858,290 59,510 -- ------------ ------------ ------------ ------------ ------------ ------- Equity transactions: Purchase payments received from contract owners ........... 7,814,633 4,330,090 2,045,437 3,299,608 43,645 -- Transfers between funds .......... 7,442,220 7,341,211 7,865,892 3,732,648 1,013,974 -- Surrenders ....................... (1,418,496) (274,806) (71,750) (1,598,688) (2,852) -- Death benefits (note 4) .......... (122,001) (39,015) (2,305) (9,225) -- -- Policy loans (net of repayments) (note 5) ......................... (1,095,851) (292,640) (45,090) (1,157,827) (2,231) -- Deductions for surrender charges (note 2d) ...................... (175,050) (36,845) (8,450) (205,666) (382) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (1,378,370) (300,404) (148,335) (136,692) (2,262) -- Deductions for asset charges (note 3) ......................... (28,197) (9,953) (669) (3,187) (383) -- ------------ ------------ ------------ ------------ ------------ ------- Net equity transactions ...... 11,038,888 10,717,638 9,634,730 3,920,971 1,049,509 -- ------------ ------------ ------------ ------------ ------------ ------- Net change in contract owners' equity ................. 21,042,428 15,149,191 10,965,921 4,779,261 1,109,019 -- Contract owners' equity beginning of period ............ 28,807,807 13,658,616 2,692,695 1,109,019 -- -- ------------ ------------ ------------ ------------ ------------ ------- Contract owners' equity end of period .................. $ 49,850,235 28,807,807 13,658,616 5,888,280 1,109,019 -- ============ ============ ============ ============ ============ =======
MSEmMkt ----------------------------------------------- 1998 1997 1996 ------------ ------------ ------------ Investment activity: Reinvested dividends ............. 37,885 11,378 -- Mortality and expense charges (note 3) ....................... (2,400) (1,095) -- ------------ ------------ ------------ Net investment activity ........ 35,485 10,283 -- ------------ ------------ ------------ Proceeds from mutual fund shares sold .................... 2,208,004 1,348,011 -- Cost of mutual funds sold ........ (2,302,818) (1,367,276) -- ------------ ------------ ------------ Realized gain (loss) on investments .................. (94,814) (19,265) -- Change in unrealized gain (loss) on investments ................. (33,784) 2,383 -- ------------ ------------ ------------ Net gain (loss) on investments . (128,598) (16,882) -- ------------ ------------ ------------ Reinvested capital gains ......... -- 4,938 -- ------------ ------------ ------------ Net change in contract owners' equity resulting from operations ............ (93,113) (1,661) -- ------------ ------------ ------------ Equity transactions: Purchase payments received from contract owners ........... 398,199 10,188 -- Transfers between funds .......... 133,381 247,359 -- Surrenders ....................... (214,691) (617) -- Death benefits (note 4) .......... (9) -- -- Policy loans (net of repayments) (note 5) ......................... (92,787) (2,742) -- Deductions for surrender charges (note 2d) ...................... (27,689) (83) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (14,797) (471) -- Deductions for asset charges (note 3) ......................... (214) (87) -- ------------ ------------ ------------ Net equity transactions ...... 181,393 253,547 -- ------------ ------------ ------------ Net change in contract owners' equity ................. 88,280 251,886 -- Contract owners' equity beginning of period ............ 251,886 -- -- ------------ ------------ ------------ Contract owners' equity end of period .................. 340,166 251,886 -- ============ ============ ============
(continued) 11 11 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
NSATCapAp NSATGvtBd ------------------------------------------ -------------------------------------------- 1998 1997 1996 1998 1997 1996 Investment activity: Reinvested dividends ................ $ 246,198 157,773 73,189 635,908 492,781 350,275 Mortality and expense charges (note 3) .......................... (258,178) (130,365) (51,198) (111,282) (68,282) (55,348) ------------ ------------ ------------ ------------ ------------ ------------ Net investment activity ........... (11,980) 27,408 21,991 524,626 424,499 294,927 ------------ ------------ ------------ ------------ ------------ ------------ Proceeds from mutual fund shares sold ....................... 41,145,976 22,800,149 4,082,806 43,945,372 10,818,170 1,915,031 Cost of mutual funds sold ........... (37,562,739) (19,539,881) (3,277,635) (43,540,184) (10,417,945) (1,819,552) ------------ ------------ ------------ ------------ ------------ ------------ Realized gain (loss) on investments ..................... 3,583,237 3,260,268 805,171 405,188 400,225 95,479 Change in unrealized gain (loss) on investments .................... 2,897,785 41,944 (2,277) (159,490) (140,391) (232,150) ------------ ------------ ------------ ------------ ------------ ------------ Net gain (loss) on investments .... 6,481,022 3,302,212 802,894 245,698 259,834 (136,671) ------------ ------------ ------------ ------------ ------------ ------------ Reinvested capital gains ............ 1,139,693 463,551 234,567 67,018 -- -- ------------ ------------ ------------ ------------ ------------ ------------ Net change in contract owners' equity resulting from operations ............... 7,608,735 3,793,171 1,059,452 837,342 684,333 158,256 ------------ ------------ ------------ ------------ ------------ ------------ Equity transactions: Purchase payments received from contract owners .............. 4,921,929 2,643,340 912,101 1,866,413 1,870,588 1,418,942 Transfers between funds ............. 9,212,515 8,096,052 3,597,889 3,757,206 1,527,412 960,557 Surrenders .......................... (339,981) (225,077) (86,470) (140,551) (132,876) (70,278) Death benefits (note 4) ............. (12,217) (5,534) (4,969) (50,211) (6,196) (173) Policy loans (net of repayments) (note 5) ............................ (247,383) (353,707) (21,622) (220,482) (245,452) (210,723) Deductions for surrender charges (note 2d) ......................... (30,979) (30,177) (10,184) (15,200) (17,815) (8,277) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ................. (1,558,711) (385,883) (80,008) (989,812) (1,333,897) (876,800) Deductions for asset charges (note 3) (23,020) (7,515) (403) (9,922) (3,117) (327) ------------ ------------ ------------ ------------ ------------ ------------ Net equity transactions ......... 11,922,153 9,731,499 4,306,334 4,197,441 1,658,647 1,212,921 ------------ ------------ ------------ ------------ ------------ ------------ Net change in contract owners' equity .................... 19,530,888 13,524,670 5,365,786 5,034,783 2,342,980 1,371,177 Contract owners' equity beginning of period ............... 21,752,456 8,227,786 2,862,000 9,022,990 6,680,010 5,308,833 ------------ ------------ ------------ ------------ ------------ ------------ Contract owners' equity end of period ..................... $ 41,283,344 21,752,456 8,227,786 14,057,773 9,022,990 6,680,010 ============ ============ ============ ============ ============ ============
NSATMyMkt -------------------------------------------- 1998 1997 1996 Investment activity: Reinvested dividends ................ 2,517,296 2,001,810 1,504,594 Mortality and expense charges (note 3) .......................... (414,977) (359,665) (292,093) ------------ ------------ ------------ Net investment activity ........... 2,102,319 1,642,145 1,212,501 ------------ ------------ ------------ Proceeds from mutual fund shares sold ....................... 213,040,345 122,915,553 94,947,088 Cost of mutual funds sold ........... (213,040,345) (122,915,553) (94,947,088) ------------ ------------ ------------ Realized gain (loss) on investments ..................... -- -- -- Change in unrealized gain (loss) on investments .................... -- -- -- ------------ ------------ ------------ Net gain (loss) on investments .... -- -- -- ------------ ------------ ------------ Reinvested capital gains ............ -- -- -- ------------ ------------ ------------ Net change in contract owners' equity resulting from operations ............... 2,102,319 1,642,145 1,212,501 ------------ ------------ ------------ Equity transactions: Purchase payments received from contract owners .............. 87,844,599 117,478,803 109,975,355 Transfers between funds ............. (81,357,019) (103,571,498) (89,998,126) Surrenders .......................... (1,151,432) (2,413,548) (1,011,391) Death benefits (note 4) ............. (5,841) (37,820) (89,256) Policy loans (net of repayments) (note 5) ............................ (233,125) (1,758,491) (2,054,004) Deductions for surrender charges (note 2d) ......................... (117,086) (323,598) (119,117) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ................. (3,968,229) (4,837,509) (4,633,914) Deductions for asset charges (note 3) (37,000) (15,353) (1,874) ------------ ------------ ------------ Net equity transactions ......... 974,867 4,520,986 12,067,673 ------------ ------------ ------------ Net change in contract owners' equity .................... 3,077,186 6,163,131 13,280,174 Contract owners' equity beginning of period ............... 44,437,799 38,274,668 24,994,494 ------------ ------------ ------------ Contract owners' equity end of period ..................... 47,514,985 44,437,799 38,274,668 ============ ============ ============
12 12 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
NSATSmCapV NSATSmCo ---------------------------------- ----------------------------------------- 1998 1997 1996 1998 1997 1996 ----------- ---------- -------- ----------- ----------- ----------- Investment activity: Reinvested dividends ............. $ -- -- -- -- -- 13,336 Mortality and expense charges (note 3) ....................... (3,508) -- -- (115,584) (251,559) (205,531) ----------- ---------- -------- ----------- ----------- ----------- Net investment activity ........ (3,508) -- -- (115,584) (251,559) (192,195) ----------- ---------- -------- ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 1,549,129 -- -- 12,262,712 16,417,304 5,132,176 Cost of mutual funds sold ........ (1,489,413) -- -- (13,098,101) (14,437,205) (4,970,227) ----------- ---------- -------- ----------- ----------- ----------- Realized gain (loss) on investments .................. 59,716 -- -- (835,389) 1,980,099 161,949 Change in unrealized gain (loss) on investments ................. 31,642 -- -- 1,062,670 (943,075) 154,021 ----------- ---------- -------- ----------- ----------- ----------- Net gain (loss) on investments . 91,358 -- -- 227,281 1,037,024 315,970 ----------- ---------- -------- ----------- ----------- ----------- Reinvested capital gains ......... -- -- -- -- 371,914 32,269 ----------- ---------- -------- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ 87,850 -- -- 111,697 1,157,379 156,044 ----------- ---------- -------- ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 495,836 -- -- 2,534,601 2,031,832 885,089 Transfers between funds .......... 742,114 -- -- 2,008,259 5,027,832 4,719,727 Surrenders ....................... (342,834) -- -- (175,480) (161,763) (120,346) Death benefits (note 4) .......... (1) -- -- (24,329) (40,234) -- Policy loans (net of repayments) (note 5) ........................ (92,219) -- -- (112,094) (171,323) (16,070) Deductions for surrender charges (note 2d) ...................... (44,169) -- -- (19,078) (21,689) (14,174) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (5,642) -- -- (497,764) (47,754) (45,634) Deductions for asset charges (note 3) ...................... (313) -- -- (10,306) (4,726) (2,163) ----------- ---------- -------- ----------- ----------- ----------- Net equity transactions ...... 752,772 -- -- 3,703,809 6,612,175 5,406,429 ----------- ---------- -------- ----------- ----------- ----------- Net change in contract owners' equity ................. 840,622 -- -- 3,815,506 7,769,554 5,562,473 Contract owners' equity beginning of period ............ -- -- -- 13,679,771 5,910,217 347,744 ----------- ---------- -------- ----------- ----------- ----------- Contract owners' equity end of period .................. $ 840,622 -- -- 17,495,277 13,679,771 5,910,217 =========== ========== ======== =========== =========== ===========
NSATTotRe ----------------------------------------- 1998 1997 1996 ----------- ----------- ----------- Investment activity: Reinvested dividends ............. 923,892 906,286 619,079 Mortality and expense charges (note 3) ....................... (673,496) (342,466) (121,638) ----------- ----------- ----------- Net investment activity ........ 250,396 563,820 497,441 ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 17,758,523 7,806,204 3,735,825 Cost of mutual funds sold ........ (10,907,631) (5,268,505) (2,818,736) ----------- ----------- ----------- Realized gain (loss) on investments .................. 6,850,892 2,537,699 917,089 Change in unrealized gain (loss) on investments ................. 2,647,189 8,597,412 2,952,680 ----------- ----------- ----------- Net gain (loss) on investments . 9,498,081 11,135,111 3,869,769 ----------- ----------- ----------- Reinvested capital gains ......... 3,859,922 2,381,668 1,608,453 ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ 13,608,399 14,080,599 5,975,663 ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 18,994,728 21,089,542 12,792,421 Transfers between funds .......... 6,079,393 12,507,830 10,467,352 Surrenders ....................... (1,330,528) (993,966) (370,512) Death benefits (note 4) .......... (120,757) (73,080) (155,928) Policy loans (net of repayments) (note 5) ........................ (809,785) (1,397,247) (479,238) Deductions for surrender charges (note 2d) ...................... (122,860) (133,267) (43,637) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (11,763,303) (12,793,173) (8,037,584) Deductions for asset charges (note 3) ...................... (60,051) (25,787) (202) ----------- ----------- ----------- Net equity transactions ...... 10,866,837 18,180,852 14,172,672 ----------- ----------- ----------- Net change in contract owners' equity ................. 24,475,236 32,261,451 20,148,335 Contract owners' equity beginning of period ............ 74,640,126 42,378,675 22,230,340 ----------- ----------- ----------- Contract owners' equity end of period .................. 99,115,362 74,640,126 42,378,675 =========== =========== ===========
(Continued) 13 13 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
NBAMTGro NBAMTGuard -------------------------------------------- ------------------------------------- 1998 1997 1996 1998 1997 1996 ------------ ------------ ------------ ------------ -------- -------- Investment activity: Reinvested dividends ............. $ -- -- 3,554 -- -- -- Mortality and expense charges (note 3) ....................... (153,887) (131,622) (100,683) (4,780) -- -- ------------ ------------ ------------ ------------ -------- -------- Net investment activity ........ (153,887) (131,622) (97,129) (4,780) -- -- ------------ ------------ ------------ ------------ -------- -------- Proceeds from mutual fund shares sold .................... 28,296,554 11,391,328 9,167,114 1,186,919 -- -- Cost of mutual funds sold ........ (30,054,251) (10,218,717) (8,250,417) (1,243,303) -- -- ------------ ------------ ------------ ------------ -------- -------- Realized gain (loss) on investments .................. (1,757,697) 1,172,611 916,697 (56,384) -- -- Change in unrealized gain (loss) on investments ................. 273,491 1,144,227 (851,158) 53,662 -- -- ------------ ------------ ------------ ------------ -------- -------- Net gain (loss) on investments . (1,484,206) 2,316,838 65,539 (2,722) -- -- ------------ ------------ ------------ ------------ -------- -------- Reinvested capital gains ......... 4,778,935 1,172,597 831,750 -- -- -- ------------ ------------ ------------ ------------ -------- -------- Net change in contract owners' equity resulting from operations ............ 3,140,842 3,357,813 800,160 (7,502) -- -- ------------ ------------ ------------ ------------ -------- -------- Equity transactions: Purchase payments received from contract owners ........... 3,124,257 2,009,831 1,703,348 149,649 -- -- Transfers between funds .......... 3,739,437 498,211 1,821,036 831,617 -- -- Surrenders ....................... (1,015,843) (419,539) (351,632) (64,538) -- -- Death benefits (note 4)........... (13,565) (7,880) (88,967) (1) -- -- Policy loans (net of repayments) (note 5) ......................... (1,132,396) (305,567) (67,474) (25,325) -- -- Deductions for surrender charges (note 2d) ...................... (120,721) (56,250) (41,414) (8,207) -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (741,732) (249,631) (134,631) (17,066) -- -- Deductions for asset charges (note 3) ......................... (13,721) (6,062) (623) (426) -- -- ------------ ------------ ------------ ------------ -------- -------- Net equity transactions ...... 3,825,716 1,463,113 2,839,643 865,703 -- -- ------------ ------------ ------------ ------------ -------- -------- Net change in contract owners' equity ................. 6,966,558 4,820,926 3,639,803 858,201 -- -- Contract owners' equity beginning of period ............ 17,545,164 12,724,238 9,084,435 -- -- -- ------------ ------------ ------------ ------------ -------- -------- Contract owners' equity end of period .................. $ 24,511,722 17,545,164 12,724,238 858,201 -- -- ============ ============ ============ ============ ======== ========
NBAMTLMat ---------------------------------------------- 1998 1997 1996 ------------ ------------ ------------ Investment activity: Reinvested dividends ............. 365,591 166,562 269,872 Mortality and expense charges (note 3) ....................... (42,729) (37,669) (27,176) ------------ ------------ ------------ Net investment activity ........ 322,862 128,893 242,696 ------------ ------------ ------------ Proceeds from mutual fund shares sold .................... 3,525,682 1,060,839 1,636,406 Cost of mutual funds sold ........ (3,557,763) (1,087,427) (1,665,764) ------------ ------------ ------------ Realized gain (loss) on investments .................. (32,081) (26,588) (29,358) Change in unrealized gain (loss) on investments ................. (88,989) 99,993 (133,639) ------------ ------------ ------------ Net gain (loss) on investments . (121,070) 73,405 (162,997) ------------ ------------ ------------ Reinvested capital gains ......... -- -- -- ------------ ------------ ------------ Net change in contract owners' equity resulting from operations ............ 201,792 202,298 79,699 ------------ ------------ ------------ Equity transactions: Purchase payments received from contract owners ........... 1,227,568 568,335 346,310 Transfers between funds .......... (1,104,263) 2,560,467 (538,197) Surrenders ....................... (340,366) (49,744) (119,696) Death benefits (note 4)........... (168,478) (6,820) -- Policy loans (net of repayments) (note 5) ......................... (490,348) (50,416) (37,533) Deductions for surrender charges (note 2d) ...................... (43,208) (6,669) (14,097) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (151,014) (95,419) (59,859) Deductions for asset charges (note 3) ......................... (3,810) (2,035) (136) ------------ ------------ ------------ Net equity transactions ...... (1,073,919) 2,917,699 (423,208) ------------ ------------ ------------ Net change in contract owners' equity ................. (872,127) 3,119,997 (343,509) Contract owners' equity beginning of period ............ 5,891,455 2,771,458 3,114,967 ------------ ------------ ------------ Contract owners' equity end of period .................. 5,019,328 5,891,455 2,771,458 ============ ============ ============
14 14 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
NBAMTPart OppBdFd ------------------------------------------- -------------------------------------------- 1998 1997 1996 1998 1997 1996 ------------ ------------ ------------ ------------ ------------ ------------ Investment activity: Reinvested dividends ............. $ 123,869 38,636 10,660 177,251 444,589 303,136 Mortality and expense charges (note 3) ....................... (254,428) (171,233) (62,373) (91,564) (64,328) (46,310) ------------ ------------ ------------ ------------ ------------ ------------ Net investment activity ........ (130,559) (132,597) (51,713) 85,687 380,261 256,826 ------------ ------------ ------------ ------------ ------------ ------------ Proceeds from mutual fund shares sold .................... 16,262,946 14,044,895 3,866,535 25,959,216 6,493,858 965,110 Cost of mutual funds sold ........ (15,129,583) (11,426,520) (3,344,085) (25,616,936) (6,309,717) (925,841) ------------ ------------ ------------ ------------ ------------ ------------ Realized gain (loss) on investments .................. 1,133,363 2,618,375 522,450 342,280 184,141 39,269 Change in unrealized gain (loss) on investments ................. (3,917,798) 1,495,768 897,631 13,809 7,331 (111,019) ------------ ------------ ------------ ------------ ------------ ------------ Net gain (loss) on investments . (2,784,435) 4,114,143 1,420,081 356,089 191,472 (71,750) ------------ ------------ ------------ ------------ ------------ ------------ Reinvested capital gains ......... 3,901,869 594,994 133,254 160,413 20,983 2,481 ------------ ------------ ------------ ------------ ------------ ------------ Net change in contract owners' equity resulting from operations ............ 986,875 4,576,540 1,501,622 602,189 592,716 187,557 ------------ ------------ ------------ ------------ ------------ ------------ Equity transactions: Purchase payments received from contract owners ........... 5,722,483 3,058,953 1,291,043 1,446,313 1,185,778 736,203 Transfers between funds .......... 2,646,725 11,362,270 5,427,919 2,081,829 1,429,093 1,298,812 Surrenders ....................... (676,703) (291,383) (115,788) (168,318) (151,014) (117,770) Death benefits (note 4) .......... (11,051) -- (550) (24,489) (6,177) -- Policy loans (net of repayments) (note 5) ......................... (1,178,884) (215,128) (140,654) (23,153) (97,629) (148,996) Deductions for surrender charges (note 2d) ...................... (78,170) (39,067) (13,637) (19,765) (20,247) (13,870) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (1,174,585) (364,291) (159,092) (348,809) (74,240) (34,156) Deductions for asset charges (note 3) ...................... (22,686) (9,925) (522) (8,164) (3,049) (292) ------------ ------------ ------------ ------------ ------------ ------------ Net equity transactions ..... 5,227,129 13,501,429 6,288,719 2,935,444 2,262,515 1,719,931 ------------ ------------ ------------ ------------ ------------ ------------ Net change in contract owners' equity ................. 6,214,004 18,077,969 7,790,341 3,537,633 2,855,231 1,907,488 Contract owners' equity beginning of period ............ 28,728,327 10,650,358 2,860,017 8,824,474 5,969,243 4,061,755 ------------ ------------ ------------ ------------ ------------ ------------ Contract owners' equity end of period .................. $ 34,942,331 28,728,327 10,650,358 12,362,107 8,824,474 5,969,243 ============ ============ ============ ============ ============ ============
OppGlSec -------------------------------------------- 1998 1997 1996 ------------ ------------ ------------ Investment activity: Reinvested dividends ............. 389,267 139,580 -- Mortality and expense charges (note 3) ....................... (147,592) (115,087) (73,271) ------------ ------------ ------------ Net investment activity ........ 241,675 24,493 (73,271) ------------ ------------ ------------ Proceeds from mutual fund shares sold .................... 4,690,056 2,123,253 1,410,941 Cost of mutual funds sold ........ (3,335,880) (1,585,760) (1,363,666) ------------ ------------ ------------ Realized gain (loss) on investments .................. 1,354,176 537,493 47,275 Change in unrealized gain (loss) on investments ................. (702,629) 1,880,371 1,197,144 ------------ ------------ ------------ Net gain (loss) on investments . 651,547 2,417,864 1,244,419 ------------ ------------ ------------ Reinvested capital gains ......... 1,465,275 -- -- ------------ ------------ ------------ Net change in contract owners' equity resulting from operations ............ 2,358,497 2,442,357 1,171,148 ------------ ------------ ------------ Equity transactions: Purchase payments received from contract owners ........... 2,591,457 2,244,408 1,618,641 Transfers between funds .......... 1,052,407 2,806,084 1,527,191 Surrenders ....................... (390,303) (332,828) (109,366) Death benefits (note 4) .......... (12,688) (1,951) (4,893) Policy loans (net of repayments) (note 5) ......................... (265,465) (260,746) (101,645) Deductions for surrender charges (note 2d) ...................... (46,476) (44,624) (12,881) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (696,092) (209,063) (129,866) Deductions for asset charges (note 3) ...................... (13,160) (5,719) (486) ------------ ------------ ------------ Net equity transactions ..... 2,219,680 4,195,561 2,786,695 ------------ ------------ ------------ Net change in contract owners' equity ................. 4,578,177 6,637,918 3,957,843 Contract owners' equity beginning of period ............ 16,552,365 9,914,447 5,956,604 ------------ ------------ ------------ Contract owners' equity end of period .................. 21,130,542 16,552,365 9,914,447 ============ ============ ============
(Continued) 15 15 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
OppGro OppMult ------------------------------------- ------------------------------------------ 1998 1997 1996 1998 1997 1996 ----------- ----------- ------- ----------- ----------- ----------- Investment activity: Reinvested dividends ............. $ 9,433 -- -- 116,421 401,123 325,992 Mortality and expense charges (note 3) ....................... (26,246) (2,691) -- (104,971) (88,369) (60,231) ----------- ----------- ------- ----------- ----------- ----------- Net investment activity ........ (16,813) (2,691) -- 11,450 312,754 265,761 ----------- ----------- ------- ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 5,173,603 346,058 -- 1,906,489 1,256,650 669,520 Cost of mutual funds sold ........ (4,835,421) (340,426) -- (1,502,365) (1,026,967) (587,875) ----------- ----------- ------- ----------- ----------- ----------- Realized gain (loss) on investments .................. 338,182 5,632 -- 404,124 229,683 81,645 Change in unrealized gain (loss) on investments ................. 109,336 3,346 -- (366,305) 697,954 393,561 ----------- ----------- ------- ----------- ----------- ----------- Net gain (loss) on investments . 447,518 8,978 -- 37,819 927,637 475,206 ----------- ----------- ------- ----------- ----------- ----------- Reinvested capital gains ......... 113,813 -- -- 675,242 329,608 125,621 ----------- ----------- ------- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ 544,518 6,287 -- 724,511 1,569,999 866,588 ----------- ----------- ------- ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 1,452,830 32,403 -- 3,243,119 1,361,025 882,926 Transfers between funds .......... 4,492,087 586,430 -- 706,703 1,935,508 1,713,791 Surrenders ....................... (576,151) (2,135) -- (1,061,880) (189,727) (334,495) Death benefits (note 4) .......... (5) -- -- (182,084) (18,581) (5,755) Policy loans (net of repayments) (note 5) ......................... (312,911) (3,203) -- (1,005,743) (138,576) (127,191) Deductions for surrender charges (note 2d) ...................... (73,520) (286) -- (126,681) (25,438) (39,395) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (116,339) (433) -- (435,809) (102,354) (67,708) Deductions for asset charges (note 3) .................... (2,340) (214) -- (9,359) (4,269) (390) ----------- ----------- ------- ----------- ----------- ----------- Net equity transactions ........ 4,863,651 612,562 -- 1,128,266 2,817,588 2,021,783 ----------- ----------- ------- ----------- ----------- ----------- Net change in contract owners' equity ................. 5,408,169 618,849 -- 1,852,777 4,387,587 2,888,371 Contract owners' equity beginning of period ............ 618,849 -- -- 12,354,982 7,967,395 5,079,024 ----------- ----------- ------- ----------- ----------- ----------- Contract owners' equity end of period .................. $ 6,027,018 618,849 -- 14,207,759 12,354,982 7,967,395 =========== =========== ======= =========== =========== ===========
StOpp2 ----------------------------------------- 1998 1997 1996 ----------- ----------- ----------- Investment activity: Reinvested dividends ............. 71,635 79,875 104,072 Mortality and expense charges (note 3) ....................... (220,760) (185,205) (132,256) ----------- ----------- ----------- Net investment activity ........ (149,125) (105,330) (28,184) ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 3,215,306 3,417,734 2,078,877 Cost of mutual funds sold ........ (2,191,788) (2,305,866) (1,767,607) ----------- ----------- ----------- Realized gain (loss) on investments .................. 1,023,518 1,111,868 311,270 Change in unrealized gain (loss) on investments ................. (1,078,872) 1,866,652 1,442,512 ----------- ----------- ----------- Net gain (loss) on investments . (55,354) 2,978,520 1,753,782 ----------- ----------- ----------- Reinvested capital gains ......... 3,488,003 1,736,733 467,556 ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ 3,283,524 4,609,923 2,193,154 ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 5,452,015 3,291,881 2,757,995 Transfers between funds .......... 470,365 1,720,221 1,427,887 Surrenders ....................... (1,037,130) (584,361) (225,124) Death benefits (note 4) .......... (143,979) (46,618) (8,328) Policy loans (net of repayments) (note 5) ......................... (1,307,454) (446,793) (266,027) Deductions for surrender charges (note 2d) ...................... (121,009) (78,349) (26,514) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (946,709) (237,366) (127,661) Deductions for asset charges (note 3) .................... (19,684) (8,777) (842) ----------- ----------- ----------- Net equity transactions ........ 2,346,415 3,609,838 3,531,386 ----------- ----------- ----------- Net change in contract owners' equity ................. 5,629,939 8,219,761 5,724,540 Contract owners' equity beginning of period ............ 25,405,845 17,186,084 11,461,544 ----------- ----------- ----------- Contract owners' equity end of period .................. 31,035,784 25,405,845 17,186,084 =========== =========== ===========
16 16 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
StDisc2 StlntStk2 ------------------------------------------ ---------------------------------------- 1998 1997 1996 1998 1997 1996 ----------- ----------- ----------- ----------- ----------- ----------- Investment activity: Reinvested dividends ............. $ -- -- 523,958 22,725 35,008 5,657 Mortality and expense charges (note 3) ....................... (58,150) (62,162) (56,198) (15,028) (16,592) (8,901) ----------- ----------- ----------- ----------- ----------- ----------- Net investment activity ........ (58,150) (62,162) 467,760 7,697 18,416 (3,244) ----------- ----------- ----------- ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 4,234,899 6,947,379 1,458,502 4,328,033 1,180,714 1,503,391 Cost of mutual funds sold ........ (3,682,201) (7,014,226) (1,298,009) (4,573,810) (1,254,173) (1,466,992) ----------- ----------- ----------- ----------- ----------- ----------- Realized gain (loss) on investments .................. 552,698 (66,847) 160,493 (245,777) (73,459) 36,399 Change in unrealized gain (loss) on investments ................. (128,321) 897,855 (1,253,670) 138,162 (320,243) (2,354) ----------- ----------- ----------- ----------- ----------- ----------- Net gain (loss) on investments . 424,377 831,008 (1,093,177) (107,615) (393,702) 34,045 ----------- ----------- ----------- ----------- ----------- ----------- Reinvested capital gains ......... 120,028 -- 645,525 -- 54,007 -- ----------- ----------- ----------- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ 486,255 768,846 20,108 (99,918) (321,279) 30,801 ----------- ----------- ----------- ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 686,440 1,157,860 1,076,505 1,319,108 396,577 134,707 Transfers between funds .......... 154,482 (800,200) 485,660 (186,236) 159,418 1,618,370 Surrenders ....................... (128,257) (159,830) (123,465) (444,664) (39,345) (21,946) Death benefits (note 4) .......... (23,649) (17,470) (5,438) (5,993) -- -- Policy loans (net of repayments) (note 5) ......................... (104,497) (79,472) (84,412) (462,567) (28,189) (23,320) Deductions for surrender charges (note 2d) ...................... (15,109) (21,429) (14,541) (56,530) (5,275) (2,585) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (244,196) (50,118) (27,103) (61,036) (4,583) (4,827) Deductions for asset charges (note 3) ...................... (5,185) (2,607) (331) (1,340) (686) (90) ----------- ----------- ----------- ----------- ----------- ----------- Net equity transactions ....... 320,029 26,734 1,306,875 100,742 477,917 1,700,309 ----------- ----------- ----------- ----------- ----------- ----------- Net change in contract owners' equity ................. 806,284 795,580 1,326,983 824 156,638 1,731,110 Contract owners' equity beginning of period ............ 7,545,548 6,749,968 5,422,985 1,986,172 1,829,534 98,424 ----------- ----------- ----------- ----------- ----------- ----------- Contract owners' equity end of period .................. $ 8,351,832 7,545,548 6,749,968 1,986,996 1,986,172 1,829,534 =========== =========== =========== =========== =========== ===========
VEWrldBd ------------------------------------------ 1998 1997 1996 ----------- ----------- ----------- Investment activity: Reinvested dividends ............. 24,030 73,945 54,317 Mortality and expense charges (note 3) ....................... (26,599) (20,793) (19,810) ----------- ----------- ----------- Net investment activity ........ (2,569) 53,152 34,507 ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 7,510,962 1,289,613 851,361 Cost of mutual funds sold ........ (7,101,791) (1,326,687) (817,166) ----------- ----------- ----------- Realized gain (loss) on investments .................. 409,171 (37,074) 34,195 Change in unrealized gain (loss) on investments ................. (35,624) 23,130 (31,601) ----------- ----------- ----------- Net gain (loss) on investments . 373,547 (13,944) 2,594 ----------- ----------- ----------- Reinvested capital gains ......... -- -- -- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ 370,978 39,208 37,101 ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 173,889 303,361 291,664 Transfers between funds .......... 663,078 89,247 (8,294) Surrenders ....................... (47,678) (109,226) (58,485) Death benefits (note 4) .......... (35,715) -- -- Policy loans (net of repayments) (note 5) ......................... (21,466) (20,191) (33,856) Deductions for surrender charges (note 2d) ...................... (5,615) (14,645) (6,888) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (77,084) (10,312) (6,755) Deductions for asset charges (note 3) ...................... (2,372) (874) (110) ----------- ----------- ----------- Net equity transactions ....... 647,037 237,360 177,276 ----------- ----------- ----------- Net change in contract owners' equity ................. 1,018,015 276,568 214,377 Contract owners' equity beginning of period ............ 2,529,206 2,252,638 2,038,261 ----------- ----------- ----------- Contract owners' equity end of period .................. 3,547,221 2,529,206 2,252,638 =========== =========== ===========
(Continued) 17 17 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
VEWrldEMkt VEWrldHAs ----------------------------------------- ---------------------------------------- 1998 1997 1996 1998 1997 1996 Investment activity: Reinvested dividends ............. $ 20,182 1,791 -- 35,945 118,188 58,970 Mortality and expense charges (note 3) ....................... (14,186) (10,449) (15) (38,345) (54,934) (45,454) ----------- ----------- ----------- ----------- ----------- ----------- Net investment activity ........ 5,996 (8,658) (15) (2,400) 63,254 13,516 ----------- ----------- ----------- ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 4,758,410 3,744,118 -- 13,571,199 19,348,273 20,434,481 Cost of mutual funds sold ........ (6,579,731) (3,668,967) -- (17,132,731) (18,769,875) (19,926,482) ----------- ----------- ----------- ----------- ----------- ----------- Realized gain (loss) on investments .................. (1,821,321) 75,151 -- (3,561,532) 578,398 507,999 Change in unrealized gain (loss) on investments ................. 923,464 (815,392) -- 644,209 (898,401) 173,786 ----------- ----------- ----------- ----------- ----------- ----------- Net gain (loss) on investments . (897,857) (740,241) -- (2,917,323) (320,003) 681,785 ----------- ----------- ----------- ----------- ----------- ----------- Reinvested capital gains ......... 17,939 -- -- 882,647 160,126 57,828 ----------- ----------- ----------- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ (873,922) (748,899) (15) (2,037,076) (96,623) 753,129 ----------- ----------- ----------- ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 701,612 585,373 27 1,602,107 840,495 555,530 Transfers between funds .......... (173,962) 2,650,105 3,213 (1,198,538) (282,076) 1,779,241 Surrenders ....................... (41,678) (8,373) (7) (132,778) (171,081) (65,411) Death benefits (note 4) .......... (4,922) -- -- (3,026) (99) -- Policy loans (net of repayments) (note 5) ......................... (80,091) (71,376) -- (200,964) (124,185) (132,561) Deductions for surrender charges (note 2d) ...................... (5,094) (1,123) (1) (13,168) (22,938) (7,704) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (68,777) (8,419) (2) (199,756) (142,112) (93,537) Deductions for asset charges (note 3) ......................... (1,265) (829) -- (3,419) (2,182) (309) ----------- ----------- ----------- ----------- ----------- ----------- Net equity transactions ...... 325,823 3,145,358 3,230 (149,542) 95,822 2,035,249 ----------- ----------- ----------- ----------- ----------- ----------- Net change in contract owners' equity ................. (548,099) 2,396,459 3,215 (2,186,618) (801) 2,788,378 Contract owners' equity beginning of period ............ 2,399,674 3,215 -- 6,316,203 6,317,004 3,528,626 ----------- ----------- ----------- ----------- ----------- ----------- Contract owners' equity end of period .................. $ 1,851,575 2,399,674 3,215 4,129,585 6,316,203 6,317,004 =========== =========== =========== =========== =========== ===========
VKMSRESec ---------------------------------------- 1998 1997 1996 Investment activity: Reinvested dividends ............. 12,298 193,749 33,201 Mortality and expense charges (note 3) ....................... (52,029) (47,059) (16,174) ----------- ----------- ----------- Net investment activity ........ (39,731) 146,690 17,027 ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 4,635,925 8,117,619 2,711,361 Cost of mutual funds sold ........ (5,200,298) (7,257,679) (2,487,998) ----------- ----------- ----------- Realized gain (loss) on investments .................. (564,373) 859,940 223,363 Change in unrealized gain (loss) on investments ................. (513,939) (625,237) 303,132 ----------- ----------- ----------- Net gain (loss) on investments . (1,078,312) 234,703 526,495 ----------- ----------- ----------- Reinvested capital gains ......... 121,016 641,054 15,620 ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ (997,027) 1,022,447 559,142 ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 1,337,143 827,543 110,695 Transfers between funds .......... (908,402) 2,852,464 2,319,779 Surrenders ....................... (163,286) (100,507) (41,251) Death benefits (note 4) .......... (22,389) -- -- Policy loans (net of repayments) (note 5) ......................... (78,704) (85,370) (50,080) Deductions for surrender charges (note 2d) ...................... (19,126) (13,476) (4,858) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (232,710) (65,828) (9,078) Deductions for asset charges (note 3) ......................... (4,639) (2,636) (156) ----------- ----------- ----------- Net equity transactions ...... (92,113) 3,412,190 2,325,051 ----------- ----------- ----------- Net change in contract owners' equity ................. (1,089,140) 4,434,637 2,884,193 Contract owners' equity beginning of period ............ 7,628,431 3,193,794 309,601 ----------- ----------- ----------- Contract owners' equity end of period .................. 6,539,291 7,628,431 3,193,794 =========== =========== ===========
18 18 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY Years Ended December 31, 1998, 1997 and 1996
WPIntEq WPPVenCap ------------------------------------------ -------------------------------------------- 1998 1997 1996 1998 1997 1996 ----------- ----------- ----------- ----------- ----------- -------------- Investment activity: Reinvested dividends ............. $ 50,333 79,669 106,181 -- 70 -- Mortality and expense charges (note 3) ....................... (72,995) (79,873) (46,519) (6,193) (3,334) -- ----------- ----------- ----------- ----------- ----------- -------------- Net investment activity ........ (22,662) (204) 59,662 (6,193) (3,264) -- ----------- ----------- ----------- ----------- ----------- -------------- Proceeds from mutual fund shares sold .................... 9,538,799 7,769,039 6,857,480 4,879,898 1,898,871 -- Cost of mutual funds sold ........ (9,941,358) (7,238,368) (6,604,093) (4,873,755) (1,856,944) -- ----------- ----------- ----------- ----------- ----------- -------------- Realized gain (loss) on investments .................. (402,559) 530,671 253,387 6,143 41,927 -- Change in unrealized gain (loss) on investments ................. 929,287 (1,377,503) (5,493) 66,492 (1,622) -- ----------- ----------- ----------- ----------- ----------- -------------- Net gain (loss) on investments . 526,728 (846,832) 247,894 72,635 40,305 -- ----------- ----------- ----------- ----------- ----------- -------------- Reinvested capital gains ......... -- 551,360 47,244 -- -- -- ----------- ----------- ----------- ----------- ----------- -------------- Net change in contract owners' equity resulting from operations ............ 504,066 (295,676) 354,800 66,442 37,041 -- ----------- ----------- ----------- ----------- ----------- -------------- Equity transactions: Purchase payments received from contract owners ........... 1,111,024 1,506,986 1,046,656 105,973 70,984 -- Transfers between funds .......... (1,578,624) 674,324 5,515,236 180,265 668,066 -- Surrenders ....................... (168,491) (113,178) (47,964) (1,367) (2,034) -- Death benefits (note 4) .......... (7,848) (16,165) (1,774) (1) -- -- Policy loans (net of repayments) (note 5) ......................... (259,475) (84,201) (65,730) 4,787 (5,947) -- Deductions for surrender charges (note 2d) ...................... (18,111) (15,174) (5,649) (7) (273) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (265,303) (65,212) (91,320) (21,553) (897) -- Deductions for asset charges (note 3) ...................... (6,508) (3,447) (411) (552) (265) -- ----------- ----------- ----------- ----------- ----------- -------------- Net equity transactions ...... (1,193,336) 1,883,933 6,349,044 267,545 729,634 -- ----------- ----------- ----------- ----------- ----------- -------------- Net change in contract owners' equity ................. (689,270) 1,588,257 6,703,844 333,987 766,675 -- Contract owners' equity beginning of period ............ 9,978,378 8,390,121 1,686,277 766,675 -- -- ----------- ----------- ----------- ----------- ----------- -------------- Contract owners' equity end of period .................. $ 9,289,108 9,978,378 8,390,121 1,100,662 766,675 -- =========== =========== =========== =========== =========== ==============
WPSmCoGr ------------------------------------------ 1998 1997 1996 ----------- ----------- ----------- Investment activity: Reinvested dividends ............. -- -- -- Mortality and expense charges (note 3) ....................... (106,735) (99,826) (49,642) ----------- ----------- ----------- Net investment activity ........ (106,735) (99,826) (49,642) ----------- ----------- ----------- Proceeds from mutual fund shares sold .................... 11,652,539 13,210,500 7,405,511 Cost of mutual funds sold ........ (11,657,359) (11,590,838) (6,950,257) ----------- ----------- ----------- Realized gain (loss) on investments .................. (4,820) 1,619,662 455,254 Change in unrealized gain (loss) on investments ................. (287,723) 18,436 (150,978) ----------- ----------- ----------- Net gain (loss) on investments . (292,543) 1,638,098 304,276 ----------- ----------- ----------- Reinvested capital gains ......... -- -- -- ----------- ----------- ----------- Net change in contract owners' equity resulting from operations ............ (399,278) 1,538,272 254,634 ----------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ........... 2,471,813 2,516,266 1,034,674 Transfers between funds .......... (1,849,405) 4,654,236 2,826,415 Surrenders ....................... (200,485) (128,687) (63,271) Death benefits (note 4) .......... (10,544) -- -- Policy loans (net of repayments) (note 5) ......................... 19,268 (162,099) (96,502) Deductions for surrender charges (note 2d) ...................... (20,649) (17,254) (7,452) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) .............. (454,770) (88,146) (50,847) Deductions for asset charges (note 3) ...................... (9,517) (5,401) (359) ----------- ----------- ----------- Net equity transactions ...... (54,289) 6,768,915 3,642,658 ----------- ----------- ----------- Net change in contract owners' equity ................. (453,567) 8,307,187 3,897,292 Contract owners' equity beginning of period ............ 15,632,197 7,325,010 3,427,718 ----------- ----------- ----------- Contract owners' equity end of period .................. 15,178,630 15,632,197 7,325,010 =========== =========== ===========
See accompanying notes to financial statements. 19 19 NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998, 1997 AND 1996 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Organization and Nature of Operations The Nationwide VLI Separate Account-2 (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on May 7, 1987. The Account has been registered as a unit investment trust under the Investment Company Act of 1940. The Company offers Single Premium, Modified Single Premium, Flexible Premium and Last Survivor Flexible Premium Variable Life Insurance Policies through the Account. The primary distribution for the contracts is through the brokerage community; however, other distributors may be utilized. (b) The Contracts Prior to December 31, 1990, only contracts without a front-end sales charge, but with a contingent deferred sales charge and certain other fees, were offered for purchase. Beginning December 31, 1990, contracts with a front-end sales charge, a contingent deferred sales charge and certain other fees, are offered for purchase. See note 2 for a discussion of policy charges, and note 3 for asset charges. Contract owners may invest in the following: Portfolios of the American Century Variable Portfolios, Inc. (American Century VP) (formerly TCI Portfolios, Inc.); American Century VP - American Century VP Balanced (ACVPBal) (formerly TCI Portfolios - TCI Balanced) American Century VP - American Century VP Capital Appreciation (ACVPCapAp) (formerly TCI Portfolios - TCI Growth) American Century VP - American Century VP Income & Growth (ACVPIncGr) American Century VP - American Century VP International (ACVPInt) (formerly TCI Portfolios - TCI International) American Century VP - American Century VP Value (ACVPValue) (formerly TCI Portfolios - TCI Value) The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro) Dreyfus Stock Index Fund (DryStkIx) Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF); Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp) Dreyfus VIF - Growth and Income Portfolio (DryGrInc) Fidelity Advisor High Yield Fund - Class T (FAHiYld) Portfolios of the Fidelity Variable Insurance Products Fund (Fidelity VIP); Fidelity VIP - Equity-Income Portfolio (FidVIPEI) Fidelity VIP - Growth Portfolio (FidVIPGr) Fidelity VIP - High Income Portfolio (FidVIPHI) Fidelity VIP - Overseas Portfolio (FidVIPOv) Portfolios of the Fidelity Variable Insurance Products Fund II (Fidelity VIP-II); Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM) Fidelity VIP-II - Contrafund Portfolio (FidVIPCon) Portfolio of the Fidelity Variable Insurance Products Fund III (Fidelity VIP-III); Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp) 20 20 Portfolio of the Morgan Stanley Universal Funds, Inc. (Morgan Stanley); Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt) Funds of the Nationwide Separate Account Trust (Nationwide SAT) (managed for a fee by an affiliated investment advisor); Nationwide SAT - Capital Appreciation Fund (NSATCapAp) Nationwide SAT - Government Bond Fund (NSATGvtBd) Nationwide SAT - Money Market Fund (NSATMyMkt) Nationwide SAT - Small Cap Value Fund (NSATSmCapV) Nationwide SAT - Small Company Fund (NSATSmCo) Nationwide SAT - Total Return Fund (NSATTotRe) 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 - Partners Portfolio (NBAMTPart) Funds of the Oppenheimer Variable Account Funds (Oppenheimer VAF); Oppenheimer VAF - Aggressive Growth Fund (OppAggGro) (formerly Oppenheimer VAF - Capital Appreciation Fund) Oppenheimer VAF - Bond Fund (OppBdFd) Oppenheimer VAF - Global Securities Fund (OppGlSec) Oppenheimer VAF - Growth Fund (OppGro) Oppenheimer VAF - Multiple Strategies Fund (OppMult) Strong Opportunity Fund II, Inc. (StOpp2) (formerly Strong Special Fund II) Funds of the Strong Variable Insurance Funds, Inc. (Strong VIF); Strong VIF - Strong Discovery Fund II (StDisc2) Strong VIF - Strong International Stock Fund II (StIntStk2) 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) (formerly Van Eck WIT - Gold and Natural Resources Fund) Portfolio of the Van Kampen American Capital Life Investment Trust (Van Kampen American Capital LIT); Van Kampen American Capital LIT - Morgan Stanley Real Estate Securities Portfolio (VKMSRESec) (formerly Van Kampen American Capital LIT - Real Estate Securities Fund) Portfolios of the Warburg Pincus Trust; Warburg Pincus Trust - International Equity Portfolio (WPIntEq) Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap) Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr) At December 31, 1998, contract owners have invested in all of the above funds except for Fidelity Advisor High Yield Fund Class T and Oppenheimer VAF - Aggressive Growth Fund. 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. 21 21 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 market value of the underlying mutual funds is based on the closing net asset value per share at December 31, 1998. Fund purchases and sales are accounted for on the trade date (date the order to buy or sell is executed). The cost of investments sold is determined on a specific identification basis, and dividends (which include capital gain distributions) are accrued as of 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 provisions of the Internal Revenue Code. The Company does not provide for income taxes within the Account. Taxes are the responsibility of the contract owner upon termination or withdrawal. (e) Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (f) Reclassifications Certain 1997 and 1996 amounts have been reclassified to conform with the current period presentation. (2) POLICY CHARGES (a) Deductions from Premiums For single premium contracts, no deduction is made from any premium at the time of payment. On multiple payment contracts and flexible premium contracts, the Company deducts a charge for state premium taxes equal to 2.5% of all premiums received to cover the payment of these premium taxes. The Company also deducts a sales load from each premium payment received not to exceed 3.5% of each premium payment. On last survivor flexible premium contracts, the Company deducts a charge for state premium taxes equal to 3.5% of all premiums received to cover the payment of these premium taxes. The Company also deducts a sales load from each premium payment received not to exceed 5% of each premium payment during the first ten years and 1.5% of each premium payment thereafter. 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). For last survivor flexible premium contracts, the monthly cost of insurance is determined in a manner that reflects the anticipated mortality of the two insureds and the fact that the death benefit is not payable until the death of the second insured policyholder. (c) Administrative Charges An administrative charge is assessed against each contract to recover policy maintenance, accounting, record keeping and other administrative expenses and is assessed against each contract by liquidating units. 22 22 For single premium contracts, the Company deducts an annual administrative charge which is determined as follows: Contracts issued prior to April 16, 1990: Purchase payments totalling less than $25,000 - $10/month Purchase payments totalling $25,000 or more - none Contracts issued on or after April 16, 1990: Purchase payments totalling less than $25,000 - $90/year ($65/year in New York) Purchase payments totalling $25,000 or more - $50/year For multiple payment contracts, the Company currently deducts a monthly administrative charge of $5 (may deduct up to $7.50, maximum). For flexible premium contracts, the Company currently deducts a monthly administrative charge of $12.50 during the first policy year and $5 per month thereafter (may deduct up to $7.50, maximum). Additionally, the Company deducts an increase charge of $2.04 per year per $1,000 applied to any increase in the specified amount during the first 12 months after the increase becomes effective. For modified single premium contracts, the monthly charge is equal to an annual rate of .30% multiplied by the policy's cash value. For policy years 11 and later, this monthly charge is reduced to an annual rate of 0.15% of the policy's cash value. The monthly charge is subject to a $10 minimum. For last survivor flexible premium contracts, the Company deducts a monthly administrative charge equal to the sum of the policy charge and the basic coverage charge. For policy years one through ten the policy charge is $10. Additionally, there is a $0.04 per $1000 basic coverage charge (not less than $20 or more than $80 per policy). For policy years eleven and after, the policy charge is $5. Additionally, there is a $0.02 per $1000 basic coverage charge (not less than $10 or more than $40 per policy). Additionally, the Company deducts a monthly increase charge of $2.40 per $1000 applied to any increase in the specified amount during the first 12 months after the increase becomes effective. The charge may be raised to $3.60 per $1000 of increase per year at the Company's discretion. (d) Surrender Charges Policy surrenders result in a redemption of the contract value from the Account and payment of the surrender proceeds to the contract owner or designee. The surrender proceeds consist of the contract value, less any outstanding policy loans, and less a surrender charge, if applicable. The charge is determined according to contract type. For single premium contracts, the charge is determined based upon a specified percentage of the original purchase payment. For single premium contracts issued prior to April 16, 1990, the charge is 8% in the first year and declines to 0% after the ninth year. For single premium contracts issued on or after April 16, 1990, the charge is 8.5% in the first year, and declines to 0% after the ninth year. For multiple payment contracts and flexible premium contracts, the amount charged is based upon a specified percentage of the initial surrender charge, which varies by issue age, sex and rate class. The charge is 100% of the initial surrender charge in the first year, declining to 0% after the ninth year. For modified single premium contracts, the amount charged is based on the original purchase payment. The charge is 10% in the first year, declining to 0% in the ninth year. For last survivor flexible premium contracts, the charge is 100% of the initial surrender charge, declining to 0% in the fourteenth year if the average issue age is 74 or less. The charge is 100% of the initial surrender charge, declining to 0% in the ninth year if the average issue age is 75 or greater. For last survivor flexible payment contracts, the initial surrender charge is comprised of two components, an underwriting surrender charge and a sales surrender charge. The Company may waive the surrender charge for certain contracts in which the sales expenses normally associated with the distribution of a contract are not incurred. 23 23 (3) ASSET CHARGES For single premium contracts, the Company deducts a charge from the contract to cover mortality and expense risk charges related to operations, and to recover policy maintenance and premium tax charges. For contracts issued prior to April 16, 1990, the charge is equal to an annual rate of .95% during the first ten policy years, and .50% thereafter. A reduction of charges on these contracts is possible in policy years six through ten for those contracts achieving certain investment performance criteria. For single premium contracts issued on or after April 16, 1990, the charge is equal to an annual rate of 1.30% during the first ten policy years, and 1.00% thereafter. For multiple payment contracts and flexible premium contracts, the Company deducts a charge equal to an annual rate of .80%, with certain exceptions, to cover mortality and expense risk charges related to operations. The above charges are assessed through the daily unit value calculation. For modified single premium contracts, the Company deducts an annual rate of .90% charged against the cash value of the contracts. This charge is assessed monthly against each contract by liquidating units. For last survivor flexible premium contracts, the Company deducts an annual rate of .80% in policy years one through ten. This charge is assessed monthly by liquidating units. In policy years eleven and greater, the Company deducts an annual rate of .80% if the cash value of the contract is less than $100,000. If the cash value is greater than or equal to $100,000, the Company reduces the annual asset fee rate to .30%. The following table provides mortality and expense risk charges by contract type for the period ended December 31, 1998:
TOTAL ACVPBal ACVCapAp ACVPincGr ACVPint ------------ ------------ ------------ ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ 19,963 - 1,274 - - Single Premium contracts issued on or after April 16, 1990.... 1,519,080 10,112 21,146 2,536 34,065 Multiple Payment and Flexible Premium contracts............. 4,699,480 28,860 59,964 5,054 66,239 ------------ ------------ ------------ ------------ ------------ Total....................... $ 6,238,523 38,972 82,384 7,590 100,304 ============ ============ ============ ============ ============
ACVPValue DrySRGro DryStkix DryCapAp DryGrinc ------------ ------------ ------------ ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ - - 3,655 102 - Single Premium contracts issued on or after April 16, 1990.... 4,104 9,572 112,048 10,336 2,255 Multiple Payment and Flexible Premium contracts............. 15,894 67,383 392,626 16,686 12,787 ------------ ------------ ------------ ------------ ------------ Total....................... $ 19,998 76,955 508,329 27,124 15,042 ============ ============ ============ ============ ============
FidVIPEI FidVIPGr FidVIPHI FidVIPOv FidVIPAM ------------ ------------ ------------ ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ 2,438 2,343 842 1,068 296 Single Premium contracts issued on or after April 16, 1990.... 194,440 188,365 49,966 53,993 86,061 Multiple Payment and Flexible Premium contracts............. 418,071 568,902 160,813 112,745 152,850 ------------ ------------ ------------ ------------ ------------ Total....................... $ 614,949 759,610 211,621 167,806 239,207 ============ ============ ============ ============ ============
FidVIPCon FidVIPGrOp MSEmMkt NSATCapAp NSATGvtBd ------------ ------------ ------------ ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ 128 - - 654 305 Single Premium contracts issued on or after April 16, 1990.... 71,967 10,876 635 43,608 65,744 Multiple Payment and Flexible Premium contracts............. 244,146 24,873 1,765 213,916 45,233 ------------ ------------ ------------ ------------ ------------ Total....................... $ 316,241 35,749 2,400 258,178 111,282 ============ ============ ============ ============ ============
24 24
NSATMyMkt NSATSmCapV NSATSmCo NSATTotRe NBAMTGro ------------ ------------ ------------ ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ 1,358 - - 1,584 1,581 Single Premium contracts issued on or after April 16, 1990.... 137,439 3,094 13,672 58,566 43,543 Multiple Payment and Flexible Premium contracts............. 276,180 414 101,912 613,346 108,763 ------------ ------------ ------------ ------------ ------------ Total....................... $ 414,977 3,508 115,584 673,496 153,887 ============ ============ ============ ============ ============
NBAMTGuard NBAMTLMat NBAMTPart OppBdFd OppGlSec ------------ ------------ ------------ ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ - 930 - - - Single Premium contracts issued on or after April 16, 1990.... 553 14,562 50,988 20,073 20,102 Multiple Payment and Flexible Premium contracts............. 4,227 27,237 203,440 71,491 127,490 ------------ ------------ ------------ ------------ ------------ Total....................... $ 4,780 42,729 254,428 91,564 147,592 ============ ============ ============ ============ ============
OppGro OppMult StOpp2 StDisc2 StintStk2 ------------ ------------ ------------ ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ - - 120 - - Single Premium contracts issued on or after April 16, 1990.... 4,182 31,490 41,028 13,873 4,013 Multiple Payment and Flexible Premium contracts............. 22,064 73,481 179,612 44,277 11,015 ------------ ------------ ------------ ------------ ------------ Total....................... $ 26,246 104,971 220,760 58,150 15,028 ============ ============ ============ ============ ============
VEWrldBd VEWrldEMkt VEWrldHAs VKMSRESec WPintEq ------------ ------------ ------------ ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ 39 - 486 575 185 Single Premium contracts issued on or after April 16, 1990.... 11,374 1,792 17,613 13,117 13,450 Multiple Payment and Flexible Premium contracts............. 15,186 12,394 20,246 38,337 59,360 ------------ ------------ ------------ ------------ ------------ Total....................... $ 26,599 14,186 38,345 52,029 72,995 ============ ============ ============ ============ ============
WPPVenCap WPSMCoGr ------------ ------------ Single Premium contracts Issued prior to April 16, 1990....... $ - - Single Premium contracts issued on or after April 16, 1990.... 3,460 29,267 Multiple Payment and Flexible Premium contracts............. 2,733 77,468 ------------ ------------ Total....................... $ 6,193 106,735 ============ ============
(4) DEATH BENEFITS Death benefits result in a redemption of the contract value from the Account and payment of the death benefit proceeds, less any outstanding policy loans (and policy charges), to the legal beneficiary. For last survivor flexible premium contracts, the proceeds are payable on the death of the last surviving insured. The excess of the death benefit proceeds over the contract value on the date of death is paid by the Company's general account. 25 25 (5) POLICY LOANS (NET OF REPAYMENTS) Contract provisions allow contract owners to borrow up to 90% (50% during first year of single and modified single premium contracts) of a policy's cash surrender value. For single premium contracts issued prior to April 16, 1990, 6.5% interest is due and payable annually in advance. For single premium contracts issued on or after April 16, 1990, multiple payment, flexible premium, modified single and last survivor flexible premium contracts, 6% interest is due and payable in advance on the policy anniversary when there is a loan outstanding on the policy. 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. Loan repayments result in a transfer of collateral, including interest, back to the Account. (6) RELATED PARTY TRANSACTIONS The Company performs various services on behalf of the Mutual Fund Companies in which the Account invests and may receive fees for the services performed. These services include, among other things, 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. 26 26 (7) COMPONENTS OF CONTRACT OWNERS' EQUITY The following is a summary of contract owners' equity at December 31, 1998, for each product in the accumulation phase.
Contract owners' equity represented by: ANNUAL UNITS UNIT VALUE RETURN(b) ----- ---------- --------- Single Premium contracts issued prior to April 16, 1990: American Century VP - American Century VP Capital Appreciation ............................. 6,437 $22.339504 $143,799 (3)% Dreyfus Stock Index Fund ............................... 14,798 27.871347 412,440 27% Dreyfus VIF - Capital Appreciation Portfolio ...................... 876 13.168334 11,535 29% Fidelity VIP - Equity-Income Portfolio ................. 6,566 41.890019 275,050 11% Fidelity VIP - Growth Portfolio ........................ 4,551 58.102055 264,422 38% Fidelity VIP - High Income Portfolio ................... 3,510 27.054068 94,960 (5)% Fidelity VIP - Overseas Portfolio ...................... 4,966 24.255551 120,453 12% Fidelity VIP-II - Asset Manager Portfolio .............. 1,193 27.955691 33,351 14% Fidelity VIP-II - Contrafund Portfolio ................. 684 21.098746 14,432 29% Nationwide SAT - Capital Appreciation Fund ........................... 2,354 31.356408 73,813 29% Nationwide SAT - Government Bond Fund ................................ 1,481 23.252862 34,437 8% Nationwide SAT - Money Market Fund ..................... 9,477 16.171326 153,256 4% Nationwide SAT - Total Return Fund ..................... 4,462 40.062865 178,761 17% Neuberger &Berman AMT - Growth Portfolio .................................... 4,910 36.321304 178,338 14% Neuberger &Berman AMT - Limited Maturity Bond Portfolio ..................... 5,842 17.967444 104,966 3% Strong Opportunity Fund II, Inc. ....................... 452 29.946506 13,536 12% Van Eck WIT - Worldwide Bond Fund ...................... 264 16.631673 4,391 12% Van Eck WIT - Worldwide Hard Assets Fund .......................... 5,479 9.998900 54,784 (32)% Van Kampen American Capital LIT - Morgan Stanley Real Estate Securities Portfolio ................................ 4,103 15.812545 64,879 (12)% Warburg Pincus Trust - International Equity Portfolio ...................... 1,777 11.754581 20,888 4% Single Premium contracts issued on or after April 16, 1990: American Century VP - American Century VP Balanced ........................ 43,205 18.685028 807,287 14%
(Continued) 27 27 American Century VP - American Century VP Capital Appreciation .............. 113,249 14.906965 1,688,199 (3)% American Century VP - American Century VP Income & Growth ................... 18,703 10.826437 202,487 8%(a) American Century VP - American Century VP International .... 168,629 16.127264 2,719,524 17% American Century VP - American Century VP Value ............ 25,086 13.059452 327,609 3% The Dreyfus Socially Responsible Growth Fund, Inc. .................... 27,695 27.592332 764,170 28% Dreyfus Stock Index Fund ................ 326,895 27.364353 8,945,270 27% Dreyfus VIF - Capital Appreciation Portfolio ....... 62,982 13.101026 825,129 29% Dreyfus VIF - Growth and Income Portfolio .......... 14,240 12.644103 180,052 10% Fidelity VIP - Equity-Income Portfolio .. 456,214 34.025630 15,522,969 10% Fidelity VIP - Growth Portfolio ......... 376,885 39.900577 15,037,929 38% Fidelity VIP - High Income Portfolio .... 144,326 27.638937 3,989,017 (6)% Fidelity VIP - Overseas Portfolio ....... 248,471 17.348011 4,310,478 11% Fidelity VIP-II - Asset Manager Portfolio ............................. 253,412 27.112311 6,870,585 14% Fidelity VIP-II - Contrafund Portfolio .. 275,660 20.842351 5,745,402 28% Fidelity VIP-III - Growth Opportunities Portfolio ....... 64,568 13.447707 868,292 23% Morgan Stanley - Emerging Markets Debt Portfolio ...... 7,315 6.935753 50,735 (29)% Nationwide SAT - Capital Appreciation Fund ............ 113,664 30.628674 3,481,378 28% Nationwide SAT - Government Bond Fund ................. 274,184 19.142839 5,248,660 8% Nationwide SAT - Money Market Fund ...... 814,530 13.470763 10,972,341 4% Nationwide SAT - Small Cap Value Fund ... 28,961 8.529271 247,016 (15)%(a) Nationwide SAT - Small Company Fund ..... 68,318 15.976308 1,091,469 0% Nationwide SAT - Total Return Fund ...... 136,311 34.300994 4,675,603 17% Neuberger &Berman AMT - Growth Portfolio ..................... 136,629 25.442656 3,476,205 14% Neuberger & Berman AMT - Guardian Portfolio ................... 4,760 9.282948 44,187 (7)%(a) Neuberger &Berman AMT - Limited Maturity Bond Portfolio ...... 76,004 15.295923 1,162,551 3% Neuberger &Berman AMT - Partners Portfolio ................... 176,971 23.001381 4,070,577 3% Oppenheimer VAF - Bond Fund ............. 84,868 18.882225 1,602,497 5%
28 28 Oppenheimer VAF - Global Securities Fund ............ 88,848 18.062180 1,604,789 13% Oppenheimer VAF - Growth Fund ........ 26,155 12.764150 333,846 22% Oppenheimer VAF - Multiple Strategies Fund .......... 110,357 22.780548 2,513,993 5% Strong Opportunity Fund II, Inc. ..... 111,969 29.253391 3,275,473 12% Strong VIF - Strong Discovery Fund II ............................ 58,970 18.780910 1,107,510 6% Strong VIF - Strong International Stock Fund II ......................... 35,834 8.939643 320,343 (6)% Van Eck WIT - Worldwide Bond Fund .... 56,294 16.129801 908,011 11% Van Eck WIT - Worldwide Emerging Markets Fund ... 25,018 5.717162 143,032 (35)% Van Eck WIT - Worldwide Hard Assets Fund ........ 128,220 10.966233 1,406,090 (32)% Van Kampen American Capital LIT - Morgan Stanley Real Estate Securities Portfolio .............. 67,042 15.620311 1,047,217 (13)% Warburg Pincus Trust - International Equity Portfolio .... 92,476 11.611647 1,073,799 4% Warburg Pincus Trust - Post Venture Capital Portfolio .... 23,108 11.954408 276,242 5% Warburg Pincus Trust - Small Company Growth Portfolio .... 152,727 15.298780 2,336,537 (4)% Multiple Payment contracts and Flexible Premium contracts: American Century VP - American Century VP Balanced ...... 215,629 19.320541 4,166,069 15% American Century VP - American Century VP Capital Appreciation ........... 649,478 14.277913 9,273,190 (3)% American Century VP - American Century VP Income & Growth ................ 73,815 10.862660 801,827 9%(a) American Century VP - American Century VP International . 568,779 16.487231 9,377,591 18% American Century VP - American Century VP Value ......... 140,522 13.192098 1,853,780 4% The Dreyfus Socially Responsible Growth Fund, Inc. ................. 359,871 28.323603 10,192,843 28% Dreyfus Stock Index Fund ............. 2,166,290 28.091438 60,854,201 27% Dreyfus VIF - Capital Appreciation Portfolio .... 257,361 13.197284 3,396,466 29% Dreyfus VIF - Growth and Income Portfolio ....... 125,274 12.772496 1,600,062 11% Fidelity VIP - Equity-Income Portfolio 1,726,955 35.444796 61,211,568 11%
(Continued) 29 29 Fidelity VIP - Growth Portfolio ......... 2,346,630 40.998916 96,209,286 38% Fidelity VIP - High Income Portfolio .... 737,225 26.133234 19,266,073 (5)% Fidelity VIP - Overseas Portfolio ....... 871,214 18.969496 16,526,490 12% Fidelity VIP-II - Asset Manager Portfolio ............................. 961,754 24.821550 23,872,225 14% Fidelity VIP-II - Contrafund Portfolio .. 1,826,890 21.209617 38,747,637 29% Fidelity VIP-III - Growth Opportunities Portfolio ....... 315,036 13.546531 4,267,645 24% Morgan Stanley - Emerging Markets Debt Portfolio ...... 34,905 6.986851 243,876 (29)% Nationwide SAT - Capital Appreciation Fund ............ 1,058,148 31.669989 33,511,536 29% Nationwide SAT - Government Bond Fund ................. 414,068 18.081576 7,487,002 8% Nationwide SAT - Money Market Fund ...... 1,953,963 13.319323 26,025,464 4% Nationwide SAT - Small Cap Value Fund ... 50,840 8.557853 435,081 (14)%(a) Nationwide SAT - Small Company Fund ..... 879,309 16.233001 14,273,824 0% Nationwide SAT - Total Return Fund ...... 2,650,483 33.070880 87,653,805 17% Neuberger &Berman AMT - Growth Portfolio ..................... 767,489 25.347646 19,454,039 15% Neuberger & Berman AMT - Guardian Portfolio ................... 71,761 9.314041 668,385 (7)%(a) Neuberger &Berman AMT - Limited Maturity Bond Portfolio ...... 195,748 14.860392 2,908,892 4% Neuberger &Berman AMT - Partners Portfolio ................... 1,151,452 23.514569 27,075,898 3% Oppenheimer VAF - Bond Fund ............. 532,098 18.103341 9,632,752 6% Oppenheimer VAF - Global Securities Fund ............... 980,014 18.542353 18,171,766 13% Oppenheimer VAF - Growth Fund ........... 342,717 12.857977 4,406,647 23% Oppenheimer VAF - Multiple Strategies Fund ............. 460,679 22.696024 10,455,582 6% Strong Opportunity Fund II, Inc. ........ 874,006 30.245312 26,434,584 13% Strong VIF - Strong Discovery Fund II ... 360,468 19.418031 6,999,579 6% Strong VIF - Strong International Stock Fund II ... 149,776 9.083353 1,360,468 (6)% Van Eck WIT - Worldwide Bond Fund ....... 154,980 15.314274 2,373,406 12% Van Eck WIT - Worldwide Emerging Markets Fund ...... 253,188 5.775322 1,462,242 (35)% Van Eck WIT - Worldwide Hard Assets Fund ........... 206,325 12.213208 2,519,890 (32)%
30 30 Van Kampen American Capital LIT - Morgan Stanley Real Estate Securities Portfolio ................. 287,075 15.895654 4,563,245 (12)% Warburg Pincus Trust - International Equity Portfolio ....... 579,078 11.816371 6,842,600 5% Warburg Pincus Trust - Post Venture Capital Portfolio ....... 64,081 12.075838 773,832 6% Warburg Pincus Trust - Small Company Growth Portfolio ....... 731,702 15.568525 11,391,521 (4)% Modified Single Premium contracts and Last Survivor Flexible Premium contracts: American Century VP - American Century VP Balanced ......... 40,224 14.655512 589,503 16% American Century VP - American Century VP Capital Appreciation .............. 56,709 8.631172 489,465 (2)% American Century VP - American Century VP Income & Growth ................... 49,568 10.920877 541,326 9%(a) American Century VP - American Century VP International .... 109,633 15.178805 1,664,098 19% American Century VP - American Century VP Value ............ 39,670 13.407134 531,861 5% The Dreyfus Socially Responsible Growth Fund, Inc. .................... 59,391 18.577940 1,103,362 29% Dreyfus Stock Index Fund ................ 451,985 19.535151 8,829,595 28% Dreyfus VIF - Capital Appreciation Portfolio ....... 32,649 13.352746 435,954 30% Dreyfus VIF - Growth and Income Portfolio .......... 33,423 12.980656 433,852 12% Fidelity VIP - Equity-Income Portfolio .. 424,796 15.430209 6,554,691 12% Fidelity VIP - Growth Portfolio ......... 312,967 17.992701 5,631,122 39% Fidelity VIP - High Income Portfolio .... 328,441 12.192188 4,004,414 (4)% Fidelity VIP - Overseas Portfolio ....... 94,348 13.418281 1,265,988 13% Fidelity VIP-II - Asset Manager Portfolio ............................ 96,546 15.299714 1,477,126 15% Fidelity VIP-II - Contrafund Portfolio .. 294,323 18.152724 5,342,764 30% Fidelity VIP-III - Growth Opportunities Portfolio ....... 54,891 13.706120 752,343 25% Morgan Stanley - Emerging Markets Debt Portfolio ...... 6,444 7.069376 45,555 (28)% Nationwide SAT - Capital Appreciation Fund ............ 207,778 20.293858 4,216,617 30% Nationwide SAT - Government Bond Fund ................. 100,956 12.754801 1,287,674 9% Nationwide SAT - Money Market Fund ...... 904,630 11.456534 10,363,924 5%
(Continued) 31 31 Nationwide SAT - Small Cap Value Fund ............................... 18,425 8.603810 158,525 (14)%(a) Nationwide SAT - Small Company Fund .. 170,740 12.475012 2,129,984 1% Nationwide SAT - Total Return Fund ... 377,762 17.490359 6,607,193 18% Neuberger &Berman AMT - Growth Portfolio .................. 95,390 14.709510 1,403,140 16% Neuberger & Berman AMT - Guardian Portfolio ................ 15,552 9.364011 145,629 (6)%(a) Neuberger &Berman AMT - Limited Maturity Bond Portfolio ... 72,201 11.674617 842,919 4% Neuberger &Berman AMT - Partners Portfolio ................ 241,826 15.696640 3,795,856 4% Oppenheimer VAF - Bond Fund .......... 90,724 12.420731 1,126,858 7% Oppenheimer VAF - Global Securities Fund ............ 89,467 15.133929 1,353,987 14% Oppenheimer VAF - Growth Fund ........ 98,891 13.009524 1,286,525 24% Oppenheimer VAF - Multiple Strategies Fund .......... 90,548 13.674340 1,238,184 7% Strong Opportunity Fund II, Inc. ..... 85,559 15.336685 1,312,191 14% Strong VIF - Strong Discovery Fund II ............................ 20,724 11.809640 244,743 7% Strong VIF - Strong International Stock Fund II ......................... 36,980 8.279751 306,185 (5)% Van Eck WIT - Worldwide Bond Fund .... 21,531 12.141253 261,413 13% Van Eck WIT - Worldwide Emerging Markets Fund ... 41,962 5.869611 246,301 (34)% Van Eck WIT - Worldwide Hard Assets Fund ........ 21,804 6.825397 148,821 (31)% Van Kampen American Capital LIT - Morgan Stanley Real Estate Securities Portfolio .............. 58,853 14.679798 863,950 (12)% Warburg Pincus Trust - International Equity Portfolio .... 132,142 10.230064 1,351,821 5% Warburg Pincus Trust - Post Venture Capital Portfolio .... 4,122 12.272697 50,588 7% Warburg Pincus Trust - Small Company Growth Portfolio .... 131,376 11.041376 1,450,572 (3)% ======= ========= ========= == $894,156,479 =============
(a) This investment option was not being utilized for the entire period. Accordingly, the annual return was computed for such period as the investment option was utilized. (b) The annual return does not include contract charges satisfied by surrendering units. 32 32 Independent Auditors' Report The Board of Directors of Nationwide Life Insurance Company and Contract Owners of Nationwide VLI Separate Account-2: We have audited the accompanying statement of assets, liabilities and contract owners' equity of Nationwide VLI Separate Account-2 as of December 31, 1998, and the related statements of operations and changes in contract owners' equity for each of the years in the three year period then ended. 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 generally accepted auditing standards. 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. Our procedures include confirmation of securities owned as of December 31, 1998, 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 referred to above present fairly, in all material respects, the financial position of Nationwide VLI Separate Account-2 as of December 31, 1998, and the results of its operations and its changes in contract owners' equity for each of the years in the three year period then ended in conformity with generally accepted accounting principles. KPMG LLP Columbus, Ohio February 5, 1999 33 33 [THIS PAGE LEFT BLANK INTENTIONALLY] 34 34 [THIS PAGE LEFT BLANK INTENTIONALLY] 35 35 NATIONWIDE LIFE INSURANCE COMPANY HOME OFFICE: ONE NATIONWIDE PLAZA -- COLUMBUS, OHIO 43215-2220 Bulk Rate U.S. Postage PAID Columbus, Ohio Permit No. 521 Nationwide(R) is a registered federal service mark of Nationwide Mutual Insurance Company -----END PRIVACY-ENHANCED MESSAGE-----