485BPOS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-6

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933	File No. 033-42180
Pre-Effective Amendment No.	□
Post-Effective Amendment No. 42	☑

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940	File No. 811-05311
Amendment No. 67	☑

(Check appropriate box or boxes.)

Nationwide VLI Separate Account-2

(Exact Name of Registrant)

Nationwide Life Insurance Company

(Name of Depositor)

One Nationwide Plaza, Columbus, Ohio 43215

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

(614) 249-7111

Depositor's Telephone Number, including Area Code

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

(Name and Address of Agent for Service)

May 1, 2014

Approximate Date of Proposed Public Offering

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

□	immediately upon filing pursuant to paragraph (b)
☑	on May 1, 2014 pursuant to paragraph (b)
□	60 days after filing pursuant to paragraph (a)(1)
□	on (date) pursuant to paragraph (a)(1)

If appropriate, check the following box:

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

The Best of America® FPVUL

Individual Flexible Premium Variable Universal Life Insurance Policies

Issued by

Nationwide Life Insurance Company

through its

Nationwide VLI Separate Account-2

The date of this prospectus is May 1, 2014.

This prospectus contains basic information about the policies that should be understood before investing. Read this prospectus carefully and keep it for future reference.

Variable life insurance policies are complex products with unique benefits and advantages. There are costs and charges associated with these benefits and advantages - costs and charges that are different, or do not exist at all within other life insurance products. With help from financial consultants and advisors, purchasers are encouraged to compare and contrast the costs and benefits of the policy described in this prospectus against those of other life insurance products, especially other variable life insurance products offered by Nationwide and its affiliates. Nationwide offers a wide array of products, many with different charges, benefit features, and underlying investment options. This process of comparison and analysis should aid in determining whether the purchase of the policy described in this prospectus is consistent with the purchaser's life insurance objectives, risk tolerance, investment time horizon, marital status, tax situation, and other personal characteristics and needs.

To obtain additional information, including free copies of prospectuses for the underlying mutual funds or a copy of the Statement of Additional Information, or to make service or transaction requests, contact Nationwide using any of the methods described in Contacting the Service Center.

These securities have not been approved or disapproved by the SEC nor has the SEC passed upon the accuracy or adequacy of the prospectus. Any representation to the contrary is a criminal offense.

This prospectus is not an offering in any jurisdiction where such offering may not lawfully be made. Not all Riders, terms, conditions, benefits, programs, features, and investment options are available or approved for use in every state. Contact Nationwide to review a copy of the policy and any Riders or endorsements. This prospectus contains all material rights and features of the policy, including any material variations in the policy, such as availability of certain Riders.

The policy is NOT: insured by the Federal Deposit Insurance Corporation; a bank deposit; available in every state; or insured or endorsed by a bank or any federal government agency.

The policy may decrease in value to the point of being valueless because of poor Investment Experience.

The purpose of this policy is to provide life insurance protection for the beneficiary named by the policy owner. If the purchaser's primary need is not life insurance protection, then purchasing this policy may not be in the best interest of the purchaser. Nationwide makes no claim that the policy is in any way similar or comparable to a systematic investment plan of a mutual fund.

If this policy is being purchased to replace existing life insurance, the purchaser should carefully consider the benefits, features, and costs of this policy versus those of the policy being replaced.

Nationwide offers a variety of variable universal life policies. Despite offering substantially similar features and investment options, certain policies may have lower overall charges than others including the policy described herein. These differences in charges may be attributable to differences in sales and related expenses incurred in one distribution channel versus another.

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Table of Contents

	Page
In Summary: Policy Benefits	4
In Summary: Policy Risks	5
In Summary: Fee Tables	7
Policy Investment Options	10
Fixed Account	10
Variable Investment Options	11
Valuation of Accumulation Units	12
How Sub-Account Investment Experience is Determined	12
Transfers Among and Between the Policy Investment Options	13
Sub-Account Transfers	13
Fixed Account Transfers	15
Contacting the Service Center	15
The Policy	16
General Information	16
Policy Owner and Beneficiaries	16
To Purchase	17
Coverage	17
Coverage Effective Date	17
Temporary Insurance Coverage	18
Right To Cancel (Examination Right)	18
Allocation of Net Premium During Free Look Period	18
To Change Coverage	18
Premium Payments	19
Cash Value	19
To Exchange	20
To Terminate (Surrender)	20
To Assign	20
Reminders, Reports and Illustrations	20
Standard Policy Charges	21
Premium Load	21
Short-Term Trading Fees	22
Illustration Charge	22
Partial Surrender Fee	23
Surrender Charge	23
Cost of Insurance Charge	24
Mortality and Expense Risk Charge	25
Administrative Charge	25
Increase Charge	25
Mutual Fund Operating Expenses	25
Reduction of Charges	25
A Note on Charges	26
Information on Underlying Mutual Fund Payments	26
Policy Riders and Rider Charges	27
Accidental Death Benefit Rider	28
Base Insured Term Rider	28
Change of Insured Rider	28
Children's Term Insurance Rider	29
Guaranteed Minimum Death Benefit Rider	29
Spouse Life Insurance Rider	30
Waiver of Monthly Deductions Rider	30
Policy Owner Services	31
Dollar Cost Averaging	31
Automated Income Monitor	31
Policy Loans	33
Loan Amount	33
Collateral and the Policy Loan Account	33
Interest Charged	33

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Table of Contents (continued)

	Page
When Interest is Charged and Credited	34
Repayment	34
Lapse	34
Grace Period	34
Reinstatement	35
Surrenders	35
Full Surrender	35
Partial Surrender	35
Reduction of Base Policy Specified Amount on a Partial Surrender	36
The Death Benefit	36
Calculation of the Death Benefit	36
Death Benefit Options	37
The Minimum Required Death Benefit	37
Changes in the Death Benefit Option	38
Incontestability	38
Suicide	38
Proceeds Upon Maturity	39
Extending Coverage Beyond the Maturity Date	39
Treatment of Unclaimed Property	39
Taxes	39
Nationwide Life Insurance Company	46
Nationwide VLI Separate Account-2	46
Organization, Registration, and Operation	46
Addition, Deletion, or Substitution of Mutual Funds	47
Voting Rights	48
Material Conflicts	48
Legal Proceedings	48
Nationwide Life Insurance Company	48
Nationwide Investment Services Corporation	49
Financial Statements	50
Appendix A: Sub-Account Information	51
Appendix B: Definitions	65
Appendix C: Illustrations of Surrender Charges	67

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In Summary: Policy Benefits

Death Benefit

The primary benefit of this policy is life insurance coverage. Nationwide will pay the Death Benefit Proceeds upon the Insured's death if the Insured dies while the policy is In Force. The policy is In Force when: the policy has been issued; the Insured is living; the policy has not been surrendered for its Cash Surrender Value; and the policy has not Lapsed.

Death Benefit Options

Note: The Death Benefit will be the greater of the amount produced by the death benefit option in effect on the date of the Insured's death or the Minimum Required Death Benefit, see The Minimum Required Death Benefit.

Death Benefit Option 1: The Death Benefit will be the greater of the Total Specified Amount or the applicable percentage of Cash Value. The amount of the Death Benefit Proceeds will ordinarily not change for several years to reflect Investment Experience and may not change at all. If Investment Experience is favorable, the amount of the Death Benefit Proceeds may increase.

Death Benefit Option 2: The Death Benefit will be the greater of the Total Specified Amount plus the Cash Value as of the date of death or the applicable percentage of Cash Value, and will vary directly with Investment Experience.

Benefit Payout

Policy Proceeds will be paid out in a lump sum.

Coverage Flexibility

Subject to conditions, the policy owner may choose to:

• change the death benefit option;

• increase or decrease the Base Policy Specified Amount and/or Rider Specified Amount;

• change beneficiaries; and

• change ownership of the policy.

Access to Cash Value

Subject to conditions, the policy owner may:

• take a policy loan, see Policy Loans.

• take a partial surrender, see Partial Surrender.

• surrender the policy for its Cash Surrender Value at any time while the policy is In Force, see Full Surrender.

Premium Flexibility

The policy owner will select a Premium payment plan for the policy at the time of application. Within limits, the policy owner may vary the frequency and amount of Premium payments, see Premium Payments and Unfavorable Investment Experience.

Investment Options

Net Premium may be allocated among fixed and/or variable investment options available in the policy.

The policy currently offers a fixed investment option which will earn interest daily, see Fixed Account.

The variable investment options offered under the policy correspond to mutual funds designed to be the underlying investment options of variable insurance products. Nationwide VLI Separate Account-2 contains one Sub-Account for each of the underlying mutual funds offered in the policy.

Transfer Requests

Policy owners may request to transfer allocations between available investment options of the policy (i.e., the Fixed Account and Sub-Accounts). Requests to transfer allocations between policy investment options will be processed in the Valuation Period they are received at the Service Center as long as the request is in good order. Requests that are not in

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good order may be delayed or returned, see Contacting the Service Center. Transfer requests may be subject to policies and procedures intended to reduce the potentially detrimental impact that disruptive trading has on Sub-Account Investment Experience, see Transfers Among and Between Policy Investment Options.

Taxes

Earnings on the policy are generally not taxable to the policy owner, unless withdrawn from the policy. This is known as tax deferral. In addition, beneficiaries generally will not have to include Death Benefit Proceeds as taxable income, see Taxes.

Unlike other variable insurance products Nationwide offers, these Individual Flexible Premium Variable Universal Life Insurance Policies do not require distributions to be made before the Insured's death, see Taxes.

Assignment

Policy owners may assign the policy as collateral for a loan or another obligation while the policy is In Force, see Assigning the Policy.

Examination Right

For a limited time, the policy owner may cancel the policy and receive a refund, see Right To Cancel (Examination Right).

Riders

The policy owner may purchase one or more of the Riders listed below, subject to availability in the state where the policy is issued. There may be additional charges assessed for elected Riders and Rider charges may vary based upon the individual characteristics of the Insured. Operation and benefits of the Riders described in this prospectus may vary by the state where the policy is issued.

• Accidental Death Benefit Rider

• Base Insured Term Rider

• Change of Insured Rider

• Children's Insurance Rider

• Guaranteed Minimum Death Benefit Rider

• Spouse Life Insurance Rider

• Waiver of Monthly Deductions Rider

In Summary: Policy Risks

State Variations

Due to variations in state law, many features of the policy described in this prospectus may be different or may not be available at all depending on the state in which the policy is issued.

Possible variations include, but are not limited to, Rider terms and availability, availability of certain investment options, free look rights, policy exchange rights, policy Lapse and/or reinstatement requirements, and the duration of suicide and incontestability periods. Variations due to state law are subject to change without notice at any time. To review a copy of the policy and any Riders or endorsements for the state in which the policy will be issued, the policy owner can contact the Service Center, see Contacting the Service Center.

Risk of Increase in Current Fees and Charges

Nationwide may change policy and/or Rider charges and rates under the policy at any time. Changes in policy and/or Rider charges and rates will vary based upon changes in Nationwide's future expectations related to items such as company investment earnings, mortality experience, persistency experience, expenses, including reinsurance expenses, and taxes. Nationwide will provide advance notice of any increase in policy and/or Rider charges.

If a change in the charges or rates causes an increase to the policy and/or Rider charges, the policy's Cash Value could decrease. If a change in the charges or rates causes a decrease to the policy and/or Rider charges, the policy's Cash Value could increase. Policy and Rider charges will not exceed the maximum charges shown in the fee tables, see In Summary: Fee Tables and Standard Policy Charges.

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Improper Use

Variable universal life insurance is not suitable as an investment vehicle for short-term savings. It is designed for long-term financial planning. Policy owners accessing the Cash Value in the early policy years could incur potentially substantial surrender charges.

Unfavorable Investment Experience

The Sub-Accounts may generate unfavorable Investment Experience. Poor Investment Experience and the deduction of policy and Sub-Account charges may lower the policy's Cash Value potentially resulting in a Lapse of insurance coverage.

Note: The policy owner selects the Premium amount and frequency shown in the policy illustration to show Nationwide how much Premium the policy owner intends to pay and when. Illustrated Premium and hypothetical rates of return are not guaranteed. Investment Experience varies over time, is rarely the same year-over-year, and may be negative. Because the policy is a variable universal life insurance policy with the potential for unfavorable Investment Experience, including extended periods of significant stock market decline, additional Premium may be required to meet a policy owner's goals and/or to prevent the policy from Lapsing. Generally, variable universal life insurance is considered a long-term investment. Policy owners should weigh the investment risk and costs associated with the policy against their objectives, time horizon, risk tolerance, and ability to pay additional Premium if necessary.

Adverse Tax Consequences

Existing federal tax laws that benefit this policy may change at any time. These changes could alter the favorable federal income tax treatment the policy enjoys, such as the deferral of taxation on the gains in the policy's Cash Value and the exclusion of the Death Benefit Proceeds from the taxable income of the policy's beneficiary. Partial and full surrenders from the policy may be subject to taxes. The income tax treatment of the surrender of Cash Value is different in the event the policy is treated as a modified endowment contract under the Code. Generally, tax treatment of modified endowment contracts is less favorable when compared to a life insurance policy that is not a modified endowment contract. For example, distributions and loans from modified endowment contracts may currently be taxed as ordinary income and not a return of investment, see Taxes.

The proceeds of a life insurance policy are includible in the gross estate of the Insured for federal income tax purposes if either (a) the proceeds are payable to the executor of the estate of the Insured, or (b) the Insured, at any time within three years prior to his or her death, possessed any incident of ownership in the policy. For this purpose, the Treasury Regulations provide that the term "incident of ownership" is to be construed very broadly, and includes any right that the Insured may have with respect to the economic benefits in the policy. Consult a qualified tax advisor on all tax matters involving the policy described herein.

Fixed Account Transfer Restrictions and Limitations

In addition to the Sub-Accounts available under the policy, Net Premium can be allocated to the Fixed Account. Prior to the policy's Maturity Date, the policy owner may make transfers involving the Fixed Account subject to transfer restrictions, without penalty or adjustment. These transfers will be in dollars and Nationwide may limit the frequency and dollar amount of transfers involving the Fixed Account. See Fixed Account Transfers for details about restrictions that apply to transfers to and from the Fixed Account.

Sub-Account Limitations

Frequent trading among the Sub-Accounts may dilute the value of Accumulation Units, cause the Sub-Account to incur higher transaction costs, and interfere with the Sub-Accounts' ability to pursue their stated investment objectives. This could result in less favorable Investment Experience and a lower Cash Value. Some mutual funds held by the Sub-Accounts assess a short-term trading fee in order to minimize the potentially adverse effects of short-term trading on the mutual fund. Nationwide has instituted procedures to minimize disruptive transfers. While Nationwide expects these procedures to reduce the adverse effect of disruptive transfers, it cannot ensure that it has eliminated these risks.

Sub-Account Investment Risk

A comprehensive discussion of the risks of each underlying mutual fund may be found in the mutual fund's prospectus. Read each mutual fund's prospectus before investing. Free copies of each mutual fund's prospectus may be obtained by contacting the Service Center.

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Risk of Policy Lapse

Cash Value can be reduced by Investment Experience, policy loans, partial surrenders and the deduction of policy charges. Whenever Cash Value is insufficient to cover the policy's charges, the policy is at risk of Lapse; the policy could terminate without value and insurance coverage would cease.

Limitation of Access To Cash Value

A policy owner can access Cash Value through loans and partial surrenders, subject to limitations. Limitations include the amount and frequency of the loan or partial surrender, see Policy Loans and Surrenders. Once a loan or surrender is taken, Cash Value will be reduced by the amount of the policy loan and/or the partial surrender and any associated charges.

In Summary: Fee Tables

The following tables describe the fees and expenses assessed under the policy. The rates in these tables may be rounded up to the nearest one-hundredth decimal. These tables should be read in conjunction with the corresponding section of this prospectus that describes the fee or expense in more detail. All charges deducted from the policy's Cash Value are taken proportionally from the Sub-Accounts and the Fixed Account except where noted.

The first table describes the fees and expenses that a policy owner will pay at the time the policy owner buys the policy, surrenders the policy, or transfers Cash Value between investment options.

Transaction Fees
Charge	When Charge Is Deducted	Amount Deducted
Sales Load1	Upon making a Premium payment	Maximum $25 from each $1,000 of Premium		Current $25 from each $1,000 of Premium
Premium Taxes1	Upon making a Premium payment	$35 per $1,000 of Premium
Surrender Charges2 † Representative – An age 35 male; non-tobacco preferred; Base Policy Specified Amount and Total Specified Amount of $250,000; Death Benefit Option 1	Upon surrender or policy Lapse	Minimum $357	Maximum $19,298		Representative $1,704
		From the Policy's available Cash Value
Illustration Charge3	Upon requesting an illustration	Maximum $25		Current $0
Partial Surrender Fee	Upon a partial surrender	Maximum the lesser of $25 or 2% of the surrendered amount		Current $0
Short-Term Trading Fee4	Upon transfer of Sub-Account value out of a Sub-Account within 60 days after allocation to that Sub-Account	1% of the amount transferred from the Sub-Account within 60 days of allocation to that Sub-Account

†	This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1	The maximum Sales Load and the Premium Taxes charge (collectively "Premium Load") represent the maximums that may be charged in any policy year, see Premium Load. Currently, the sales load is reduced to $5 per $1,000 of Premium payment on any portion of the annual Premium in excess of the break point Premium, as shown on the Policy Data Page.
2	The charge calculations shown assume an aggregate first year Premium in excess of the surrender target premium. The surrender target premium is an assumed Premium payment amount used in calculating the surrender charge. The surrender charge is based on the lesser of the surrender target premium and the Premiums paid in the first year from the Policy Date. The surrender target premium varies by: the Insured's sex; age (when the policy was issued); underwriting class and the Base Policy Specified Amount

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	(and any increases). The maximum Surrender Charge calculation assumes: a female age 18; non-tobacco; Base Policy Specified Amount and Total Specified Amount $500,000; Death Benefit Option 1; and a full surrender occurring in the first year from the Policy Date. The minimum charge calculation assumes: a male age 75 or older; tobacco; Base Policy Specified Amount and Total Specified Amount $500,000; Death Benefit Option 1; and a full surrender occurring in the first year from the Policy Date.
3	The policy owner will be expected to pay the Illustration Charge at the time of the request. This charge will not be deducted from Cash Value.
4	Short-term trading fees are only assessed in connection with Sub-Accounts that correspond to underlying mutual funds that assess a short-term trading fee to the variable account, see Short-Term Trading Fees.

The next table describes the fees and expenses that a policy owner will pay periodically while the policy is In Force, not including mutual fund operating expenses.

Periodic Charges
Charge	When Charge Is Deducted	Amount Deducted From Cash Values
Cost Of Insurance Charge† Representative - An age 35 male; non-tobacco preferred; Bae Policy Specified Amount and Total Specified Amount of $250,000; Death Benefit Option 1	Monthly	Minimum $.05	Maximum $83.33		Representative $0.11
		Per $1,000 of Net Amount At Risk - From the Policy's available Cash Value
Flat Extra Charge1	Monthly	Maximum $2.08 per $1,000 of Net Amount At Risk for each Flat Extra assessed
Mortality And Expense Risk Charge2	Daily based on annualized rate	Maximum $8.00 per $1,000 of Cash Value allocated to Sub-Accounts
		Proportionately from the Sub-Accounts
Administrative Charge3	Monthly	Maximum $25		Current $12.50
		From the Policy's available Cash Value
Increase Charge4	Monthly	Maximum $0.17 per $1,000 of Base Policy Specified Amount increase
		From the Policy's available Cash Value
Policy Loan Interest5	Annually	Current and Maximum: $60 per $1,000 of outstanding policy loan

†	This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1	The Flat Extra Charge is only applicable if certain factors result in an Insured having a Substandard Rating. Under no circumstance will the assessment of a Flat Extra Charge result in the Cost of Insurance Charge exceeding the maximum Cost of Insurance Charge, see Cost of Insurance.
2	After the ninth policy year, the Mortality and Expense Risk Charge continues to be $8.00 per $1,000 of variable Cash Value on the first $25,000 of Cash Value, but only $5.00 per $1,000 on additional variable Cash Value. For policies issued in New York, the charge is reduced regardless of the Cash Value.
3	After the first policy year the monthly maximum Administrative Charge is $7.50, and the current amount deducted on a monthly basis is $5.
4	The increase charge will be deducted upon a request to increase the Base Policy Specified Amount and on a monthly basis for 12 months after the increase.

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⁵ Interest is charged on the amount of an outstanding loan, but interest is also credited on amounts in the policy loan account, see Policy Loans.During years two through 14 from the Policy Date, the current interest crediting rate is 5.1%. Thereafter, the current interest crediting rate is 6.0% per annum for all loans (guaranteed minimum of 4.0%).

The next table describes the fees and expenses associated with Riders that a policy owner will pay periodically while the policy is In Force, not including mutual fund operating expenses.

Periodic Charges For Riders
Charge	When Optional Charge Is Deducted	Amount Deducted From Cash Value
Accidental Death Benefit Rider† Representative - An age 35 male; non-tobacco preferred; Accidental Death Benefit of $100,000	Monthly	Minimum $0.05	Maximum $0.75	Representative $0.06
		Per $1,000 of Accidental Death Benefit - From the Policy's available Cash Value
Base Insured Term Rider† Representative - An age 35 male; non-tobacco preferred; Base Policy Specified Amount $250,000; and Additional Death Benefit $250,000	Monthly	Minimum $0.02	Maximum $83.33	Representative $0.03
		Per $1,000 of additional protection - From the Policy's available Cash Value
Children's Insurance Rider	Monthly	Maximum $0.43 Per $1,000 of Children's Insurance Rider Specified Amount
		From the Policy's available Cash Value
Guaranteed Minimum Death Benefit Rider1	Monthly	Maximum $0.01 Per $1,000 of Guaranteed Minimum Death Benefit Rider Specified Amount
		From the Policy's available Cash Value
Spouse Life Insurance Rider† Representative Spouse - An age 35 female; non-tobacco; Spouse Life Insurance Rider Specified Amount $100,000	Monthly	Minimum $0.10	Maximum $10.23	Representative $0.15
		Per $1,000 of Spouse Death Benefit - From the Policy's available Cash Value
Waiver of Monthly Deductions Rider† Representative - An age 35 male; non-tobacco preferred; Total Specified Amount $250,000; and Death Benefit Option 1	Monthly	Minimum $85	Maximum $855	Representative $85
		Per $1,000 of Deduction Waiver Benefit - From the Policy's available Cash Value

†	This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1	The charge for this Rider is not assessed during the first three policy years.

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The next table shows the minimum and maximum total operating expenses, as of December 31, 2013, charged by the underlying mutual funds that a policy owner may periodically pay while the policy is In Force. More detail concerning each mutual fund's fees and expenses is contained in the mutual fund's prospectus.

Total Annual Mutual Fund Operating Expenses
	Minimum	Maximum
Total Annual Mutual Fund Operating Expenses (expenses that are deducted from the mutual fund assets, including management fees, distribution (12b-1) fees, and other expenses)	0.29%	5.64%

Policy Investment Options

Policy owners designate how Net Premium payments are allocated among the Sub-Accounts and/or the Fixed Account. Allocation instructions must be in whole percentages and the sum of the allocations must equal 100%.

Fixed Account

Nationwide's obligations under the Fixed Account are backed by assets of its general account. The general account contains all of Nationwide's assets other than those in this and other Nationwide separate accounts and is used to support Nationwide's annuity and insurance obligations.

Subject to applicable law, Nationwide has sole discretion over the investment of assets of the general account and policy owners do not share in the investment experience of, or have any preferential claim on, those assets. Nationwide bears the full investment risk for all amounts allocated to the Fixed Account.

Because of exemptive and exclusionary provisions, interests in the Fixed Account have not been and will not be registered under the Securities Act of 1933 and the general account has not been registered as an investment company under the Investment Company Act of 1940. Accordingly, neither the general account nor any interests therein are subject to the provisions of these acts. Nationwide has been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to the Fixed Account. Disclosure regarding the Fixed Account, however, is subject to certain generally-applicable provisions of the federal securities laws relating to accuracy and completeness of statements made in prospectuses.

Minimum Guaranteed Interest Rate

Nationwide guarantees that Cash Value allocated to the Fixed Account will accrue interest daily at an effective annual rate that Nationwide determines without regard to the actual investment experience of the general account. Interest crediting rates are set at the beginning of each calendar quarter but are subject to change at any time. Nationwide will credit any interest in excess of the guaranteed interest crediting rate at its sole discretion. Nationwide may not credit any interest in excess of the guaranteed interest crediting rate and different rates may apply to different Premium allocations or exchanges.

Currently, the Fixed Account is the only fixed investment option available under the policy. In the future, Nationwide may offer one or more additional fixed accounts with characteristics that differ from those of the current option, but is under no obligation to do so. The effective annual rate Nationwide declares for the Fixed Account will never be less than 4%.

Interest Crediting Risks and Lapse

The policy owner assumes the risk that the actual credited interest rate may not exceed the guaranteed interest crediting rate. Premiums applied to the policy at different times may receive different interest crediting rates. The interest crediting rate may also vary for new Premium versus Sub-Account transfers. Interest credited to the Fixed Account may be insufficient to pay the policy's charges. Additional Premium payments may be required over the life of the policy to prevent it from Lapsing.

Nationwide Claims-Paying Ability

Guaranteed benefits or interest crediting associated with the Fixed Account is a general account obligation of Nationwide. Therefore, any guaranteed benefit, interest crediting, and the policy owner's right to receive payment, is subject to Nationwide's claims-paying ability and may be subordinate to other claims on the general account in the event Nationwide becomes insolvent.

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Restrictions on Transfers to and from the Fixed Account

Prior to the policy's Maturity Date, the policy owner may make transfers involving the Fixed Account. These transfers will be in dollars. Nationwide may impose limits on the dollar amount, percentage of Cash Value, number, and/or frequency of transfers involving the Fixed Account, see Fixed Account Transfers for details about restrictions that apply to transfers to and from the Fixed Account.

Variable Investment Options

The variable investment options available under the policy are Sub-Accounts that correspond to mutual funds that are registered with the SEC. The mutual funds' registration with the SEC does not involve the SEC's supervision of the management or investment practices or policies of the mutual funds. The mutual funds are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies.

Each Sub-Account's assets are held separately from the assets of the other Sub-Accounts. The result is that each Sub-Account operates independently of the other Sub-Accounts so the income or losses of one Sub-Account will not affect the Investment Experience of any other Sub-Account.

Underlying mutual funds in the separate account are NOT publicly traded mutual funds. They are only available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies, or in some cases, through participation in certain qualified pension or retirement plans.

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

The particular underlying mutual funds available under the policy may change from time to time. Specifically, underlying mutual funds or underlying mutual fund share classes that are currently available may be removed or closed off to future investment. New underlying mutual funds or new share classes of currently available underlying mutual funds may be added. In the case of new share class additions, future allocations may be limited to the new share classes. The policy owner will receive notice of any such changes that effect the policy. Not all underlying mutual funds may be available in every state.

Some underlying mutual funds may assess short-term trading fees. The separate account will collect the short-term trading fee at the time of the transfer by reducing the amount transferred. All short-term trading fees collected are remitted to the underlying mutual fund, see Short-Term Trading Fees and Appendix A: Sub-Account Information.

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

The Sub-Accounts available through this policy invest in underlying mutual funds of the companies listed below. For a complete list of the available Sub-Accounts, see Appendix A: Sub-Account Information. For more information on the underlying mutual funds, refer to the prospectus for the mutual fund. To obtain free copies of prospectuses for the underlying mutual funds, policy owners can contact Nationwide using any of the methods described in Contacting the Service Center.

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• AllianceBernstein Variable Products Series Fund, Inc.

• American Century Variable Portfolios II, Inc.

• American Century Variable Portfolios, Inc.

• BlackRock Variable Series Funds, Inc.

• Delaware VIP Trust

• Dreyfus

• Dreyfus Investment Portfolios

• Dreyfus Variable Investment Fund

• Federated Insurance Series

• Fidelity Variable Insurance Products Fund

• Franklin Templeton Variable Insurance Products Trust

• Goldman Sachs Variable Insurance Trust

• Guggenheim Variable Fund

• Invesco

• Ivy Funds Variable Insurance Portfolios

• Janus Aspen Series

• MFS® Variable Insurance Trust

• Nationwide Variable Insurance Trust

• Neuberger Berman Advisers Management Trust

• Northern Lights Variable Trust

• Oppenheimer Variable Account Funds

• PIMCO Variable Insurance Trust

• Putnam Variable Trust

• T. Rowe Price Equity Series, Inc.

• The Universal Institutional Funds, Inc.

• Van Eck VIP Trust

• Wells Fargo Advantage Variable Trust

Valuation of Accumulation Units

Nationwide accounts for the value of a policy owner's interest in the Sub-Accounts by using Accumulation Units. The value of each Accumulation Unit varies daily based on the Investment Experience of the underlying mutual fund in which the Sub-Account invests. Nationwide uses each underlying mutual fund's Net Asset Value (NAV) to calculate the daily Accumulation Unit value for the corresponding Sub-Account. Note, however, that the Accumulation Unit value will not equal the underlying mutual fund's NAV. This daily Accumulation Unit valuation process is referred to as "pricing" the Accumulation Units, see How Sub-Account Investment Experience is Determined.

Accumulation Units are priced as of the New York Stock Exchange's (NYSE) close of business, normally 4:00 p.m. EST, on each day that it is open. Nationwide will price Accumulation Units on each day that the NYSE is open for business. Any transactions received after the close of the NYSE will be priced as of the next Valuation Period. Nationwide will not price Accumulation Units on these recognized holidays:

• New Year's Day

• Martin Luther King, Jr. Day

• Presidents' Day

• Good Friday

• Memorial Day

• Independence Day

• Labor Day

• Thanksgiving

• Christmas

In addition, Nationwide will not price Accumulation Units if:

(1)	trading on the NYSE is restricted;
(2)	an emergency exists making disposal or valuation of securities held in the separate account impracticable; or
(3)	the SEC, by order, permits a suspension or postponement for the protection of security holders.

SEC rules and regulations govern when the conditions described in items (1) and (2) exist.

How Sub-Account Investment Experience is Determined

Sub-Account allocations are accounted for in Accumulation Units. A policy owner's interest in the Sub-Accounts is represented by the number of Accumulation Units owned by the policy owner. The number of Accumulation Units associated with a given Sub-Account allocation is determined by dividing the dollar amount allocated to the Sub-Account by the Accumulation Unit value for the Sub-Account. The number of Sub-Account Accumulation Units owned by a policy owner will not change except when Accumulation Units are redeemed to process a requested surrender, transfer, loan, or to take policy charges, or when additional Accumulation Units are purchased with Premium and loan repayments.

Initially, Nationwide sets the Accumulation Unit value at $10 for each Sub-Account. Thereafter, the daily value of Accumulation Units in a Sub-Account will vary depending on the Investment Experience of the underlying mutual fund in which the Sub-Account invests. Nationwide accounts for these performance fluctuations by using a "net investment factor," as described below, in the daily Sub-Account valuation calculations. Changes in the net investment factor may not be directly proportional to changes in the NAV of the mutual fund shares.

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Nationwide determines the net investment factor for each Sub-Account on each Valuation Period by dividing (a) by (b) and then subtracting (c) where:

(a) is the sum of:

• the NAV per share of the mutual fund held in the Sub-Account as of the end of the current Valuation Period; and

• the per share amount of any dividend or income distributions made by the mutual fund held in the Sub-Account (if the date of the dividend or income distribution occurs during the current Valuation Period); plus or minus

• a per share charge or credit for any taxes reserved for as a result of the Sub-Account's investment operations if changes to the law result in a modification to the tax treatment of the separate account; and

(b)	is the NAV per share of the mutual fund held in the Sub-Account determined as of the end of the immediately preceding Valuation Period; and
(c)	is a factor representing the daily mortality and expense risk charge.

Nationwide determines the Sub-Account's Accumulation Unit value at the end of each Valuation Period. The Accumulation Unit value for any Valuation Period is determined by multiplying the Accumulation Unit value as of the prior Valuation Period by the net investment factor for the Sub-Account for the current Valuation Period.

Transfers Among and Between the Policy Investment Options

Sub-Account Transfers

Policy owners may request transfers to or from the Sub-Accounts once per Valuation Period, subject to the terms and conditions described in this prospectus and the prospectuses of the underlying mutual funds. Transfers will be implemented by redeeming Accumulation Units from the Sub-Account(s) indicated by the policy owner and using the redemption proceeds to purchase Accumulation Units in another Sub-Account(s) as directed by the policy owner. The net result is that the policy owner's Cash Value will not change (except due to standard market fluctuations), but the number and allocation of Accumulation Units within the policy will change.

Neither the policies nor the mutual funds are designed to support active trading strategies that require frequent movement between or among Sub-Accounts (sometimes referred to as "market-timing" or "short-term trading"). A policy owner who intends to use an active trading strategy should consult his/her registered representative and request information on other Nationwide policies that offer mutual funds that are designed specifically to support active trading strategies.

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

• the dilution of the value of the investors' interests in the mutual fund;

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

• increased administrative costs due to frequent purchases and redemptions.

To protect investors in this policy from the negative impact of these practices, Nationwide has implemented, or reserves the right to implement, several processes and/or restrictions aimed at eliminating the negative impact of active trading strategies. Nationwide cannot guarantee that attempts to deter active trading strategies will be successful.

If Nationwide is unable to deter active trading strategies, the performance of the Sub-Accounts that are actively traded may be adversely impacted. Policy owners remaining in the affected Sub-Account will bear any resulting increased costs.

Short-Term Trading Fees

Some underlying mutual funds assess a short-term trading fee in connection with transfers from a Sub-Account that occur within 60 days after the date of the allocation to the Sub-Account. The fee is assessed against the amount transferred and is paid to the underlying mutual fund. These fees compensate the mutual fund for any negative impact on fund performance resulting from short-term trading. Some underlying mutual funds may refer to short-term trading fees as "redemption fees." See Appendix A: Sub-Account Information for a complete list of available underlying mutual funds, including those that assess short-term trading fees.

U.S. Mail Restrictions

Nationwide monitors transfer activity in order to identify those who may be engaged in harmful trading practices. Transaction reports are produced and examined. Generally, a policy may appear on these reports if the policy owner (or a third party acting on their behalf) engages in a certain number of "transfer events" in a given period. A "transfer event" is

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any transfer, or combination of transfers, occurring in a given Valuation Period. For example, if a policy owner executes multiple transfers involving 10 Sub-Accounts in one Valuation Period, this counts as one transfer event. A single transfer occurring in a given Valuation Period that involves only two Sub-Accounts (or one Sub-Account if the transfer is made to or from a fixed investment option) will also count as one transfer event.

As a result of this monitoring process, Nationwide may restrict the form in which transfer requests will be accepted. In general, Nationwide will adhere to the following guidelines:

Trading Behavior	Nationwide's Response
Six or more transfer events in one calendar quarter	Nationwide will mail a letter to the policy owner notifying them that:(1) they have been identified as engaging in harmful trading practices; and (2) if their transfer events exceed 11 in two consecutive calendar quarters or 20 in one calendar year, the policy owner will be limited to submitting transfer requests via U.S. mail.
More than 11 transfer events in two consecutive calendar quarters OR More than 20 transfer events in one calendar year	Nationwide will automatically limit the policy owner to submitting transfer requests via U.S. mail.

For purposes of Nationwide's transfer policy, U.S. mail includes standard U.S. mail, expedited U.S. mail, and expedited delivery via private carrier.

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

Managers of Multiple Policies

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

Other Restrictions

Nationwide reserves the right to refuse or limit transfer requests, or take any other action it deems necessary, in order to protect policy owners and beneficiaries from the negative investment results that may result from short-term trading or other harmful investment practices employed by some policy owners (or third parties acting on their behalf). In particular, trading strategies designed to avoid or take advantage of Nationwide's monitoring procedures (and other measures aimed at curbing harmful trading practices) that are nevertheless determined by Nationwide to constitute harmful trading practices, may be restricted.

Any restrictions that Nationwide implements will be applied consistently and uniformly. The policy owner will be notified if a transfer request is rejected. If a short-term trading fee is assessed, the policy owner will receive a confirmation notice.

Underlying Mutual Fund Restrictions and Prohibitions

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

(1)	request the taxpayer identification number, international taxpayer identification number, or other government issued identifier of any policy owner;
(2)	request the amounts and dates of any purchase, redemption, transfer, or exchange request ("transaction information"); and
(3)	instruct Nationwide to restrict or prohibit further purchases or exchanges by policy owners that violate policies established by the underlying mutual fund (whose policies may be more restrictive than Nationwide's policies).

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

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Fixed Account Transfers

Prior to the policy's Maturity Date, the policy owner may make transfers involving the Fixed Account. These transfers will be in dollars. Nationwide may impose limits on the dollar amount, percentage of Cash Value, number, and/or frequency of transfers involving the Fixed Account. Contact the Service Center for information regarding restrictions in effect for the Fixed Account at the time of a Premium payment or transfer request.

Transfers to and/or from the Fixed Account may be restricted as follows:

• Transfers to and/or from may be prohibited during the first policy year

• Only one transfer to and/or from may be permitted every 12 months

Transfers to the Fixed Account may be restricted as follows:

• Transfers to that exceed 25% of the value allocated to the Sub-Accounts (as of the end of the prior Valuation Period) may not be permitted

• Transfers to that would result in the Fixed Account value exceeding 30% of the total Cash Value may not be permitted.

Transfers from the Fixed Account may be restricted as follows:

• Transfers from, of more than 25% of the Fixed Account value in any policy year (as of the end of the previous policy year), may not be permitted.

Amounts transferred to the Fixed Account may be credited interest at different rates, see Fixed Account. Transfers from the Fixed Account will be on a last-in, first-out basis (LIFO). Any restrictions that Nationwide implements will be applied consistently and uniformly.

Contacting the Service Center

All inquiries, paperwork, information requests, service requests, and transaction requests should be made to the Service Center:

• by telephone at 1-800-848-6331 (TDD 1-800-238-3035)

• by mail to Nationwide Life Insurance Company, P.O. Box 182835, Columbus, Ohio 43218-2835

• by fax at 1-888-634-4472

• by Internet at www.nationwide.com.

Nationwide reserves the right to restrict or remove the ability to submit service requests via Internet, phone, or fax upon written notice.

Not all methods of communication are available for all types of requests. To determine which methods are permitted for a particular request, refer to the specific transaction provision in this prospectus, or call the Service Center. Requests submitted by means other than described in this prospectus could be returned or delayed.

Service and transaction requests will generally be processed in the Valuation Period they are received at the Service Center as long as the request is in good order, see Valuation of Accumulation Units. Good order generally means that all necessary information to process the request is complete and in a form acceptable to Nationwide. If a request is not in good order, Nationwide will take reasonable actions to obtain the information necessary to process the request. Requests that are not in good order may be delayed or returned. Nationwide reserves the right to process any transaction request sent to a location other than the Service Center in the Valuation Period it is received at the Service Center.  On any day the post office is closed, Nationwide is unable to retrieve service and transaction requests that are submitted by mail. This will result in a delay of the delivery of those requests to the Service Center.

Nationwide may be required to provide information about a specific policy to government regulators. If mandated under applicable law, Nationwide may be required to reject a Premium payment and to refuse to process transaction requests for transfers, surrenders, loans, and/or Death Benefit Proceeds until instructed otherwise by the appropriate regulator.

Nationwide will use reasonable procedures to confirm that instructions are genuine and Nationwide will not be liable for following instructions that it reasonably determined to be genuine. Nationwide may record telephone requests. Telephone and computer systems may not always be available. Any telephone system or computer can experience outages or slowdowns for a variety of reasons. The outages or slowdowns could prevent or delay processing. Although Nationwide has taken precautions to support heavy use, it is still possible to incur an outage or delay. To avoid technical difficulties, submit transaction requests by mail.

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The Policy

General Information

The policy is a legal contract. It will comprise and be evidenced by: a written contract; any Riders; any endorsements; the Policy Data Pages; and the application, including any supplemental application. The benefits described in the policy and this prospectus, including any optional Riders or modifications in coverage, may be subject to Nationwide's underwriting and approval. In addition to the terms and conditions of the policy, policy owner rights are governed by this prospectus and protected by federal securities laws and regulations. Nationwide will consider the statements made in the application as representations, and will rely on them as being true and complete. However, Nationwide will not void the policy or deny a claim unless a statement is a material misrepresentation. If a policy owner makes an error or misstatement on the application, Nationwide will adjust the Death Benefit and Cash Value accordingly.

To determine the adjusted Death Benefit, the Net Amount at Risk at the time of the Insured's death is multiplied by the ratio of the monthly cost of insurance applied at the true age in the policy month of death and the monthly cost of insurance that should have been applied at the true age in the policy month of death. This adjusted amount will be added to reflect the true age to the Cash Value of the policy at the Insured's death. The Cash Value will be adjusted to reflect the cost of insurance charges on the correct age from the Policy Date.

Due to state law variations, the terms, benefits, programs and Riders described in this prospectus may vary or may not be available depending on the state in which the policy is issued. Possible state law variations include, but are not limited to, Rider terms, availability of certain investment options, free look rights, policy exchange rights, policy Lapse and/or reinstatement requirements, and surrender charge, suicide, and incontestability durations. This prospectus describes all the material features of the policy. State variations are subject to change without notice at any time. To review a copy of the policy and any Riders or endorsements for the state in which the policy will be issued, contact the Service Center.

Any modification or waiver of Nationwide's rights or requirements under the policy must be in writing and signed by Nationwide's president or corporate secretary. No agent may bind Nationwide by making any promise not contained in the policy.

Nationwide may modify the policy, its operations, or the separate account's operations to meet the requirements of any law or regulation issued by a government agency to which the policy, Nationwide, or the separate account is subject. Nationwide may modify the policy to assure that it continues to qualify as a life insurance policy under federal tax laws. Nationwide will notify policy owners of all modifications and will make appropriate endorsements to the policy.

The policy is nonparticipating, meaning that Nationwide will not be contributing any operating profits or surplus earnings toward the policy Proceeds.

To the extent permitted by law, policy benefits are not subject to any legal process on the part of a third-party for the payment of any claim, and no right or benefit will be subject to the claims of creditors (except as may be provided by assignment).

It is important to remember that the portion of any amounts allocated to Nationwide's general account and any guaranteed benefits Nationwide may provide under the policy exceeding the value of amounts held in the separate account are subject to Nationwide's claims paying ability.

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

Policy Owner and Beneficiaries

Policy Owner

The policy belongs to the owner named in the application or as a result of a valid assignment. The policy owner may name a contingent owner who will become the policy owner if the policy owner dies before Proceeds become payable. Otherwise, ownership will pass to the policy owner's estate, if the policy owner is not the Insured.

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Policy Owner Rights

The policy owner may exercise all policy rights in accordance with policy terms while the policy is In Force, subject to Nationwide's approval. These rights include, but are not limited to, the following:

• changing the policy owner, contingent owner, and beneficiary;

• assigning, exchanging, and/or converting the policy;

• requesting transfers, policy loans, and partial surrenders or a complete surrender; and

• changing insurance coverage such as death benefit option changes, adding or removing Riders, and/or increasing or decreasing the Total Specified Amount.

These rights are explained in greater detail throughout this prospectus.

Subject to Nationwide's approval, the policy owner may name a different policy owner or contingent owner while the policy is In Force by submitting a written request to the Service Center. Any such change request will become effective as of the date signed, however, it will not affect any payment made or action taken before the change is received and recorded by Nationwide. There may be adverse tax consequences to changing parties of the policy.

Beneficiaries

The principal right of a beneficiary is to receive the Death Benefit Proceeds if the Insured dies while the policy is In Force. While the policy is In Force, a policy owner may name more than one beneficiary, designate primary and contingent beneficiaries, change or add beneficiaries, and/or direct Nationwide to distribute the Proceeds other than as described below.

If a primary beneficiary dies before the Insured, Nationwide will pay the Death Benefit Proceeds to the surviving primary beneficiaries. Unless specified otherwise by the policy owner, Nationwide will pay multiple primary beneficiaries in equal shares. A contingent beneficiary will become the primary beneficiary if all primary beneficiaries die before the Insured and before any Proceeds become payable. A policy owner may name more than one contingent beneficiary. Unless specified otherwise by the policy owner, Nationwide will also pay multiple contingent beneficiaries in equal shares. If no named beneficiary survives the Insured, the Proceeds will be paid to the policy owner or the policy owner's estate.

Requests to change or add beneficiaries must be submitted in writing to the Service Center. Nationwide may require that the policy owner send the policy for endorsement before the change is recorded. Any such change request will become effective as of the date signed, however, it will not affect any payment made or action taken before the change is received and recorded by Nationwide.

To Purchase

The policy is available for Insureds between the ages of 0 and 80. To purchase the policy, prospective purchasers must submit a completed application and the required initial Premium payment.

Nationwide must receive evidence of insurability that satisfies its underwriting standards (this may require a medical examination) before it will issue a policy. Nationwide can provide prospective purchasers with the details of its underwriting standards upon request. Nationwide reserves the right to reject any application for any reason permitted by law. Additionally, Nationwide reserves the right to modify its underwriting standards on a prospective basis for newly issued policies at any time.

The minimum initial Base Policy Specified Amount in most states is $50,000. Nationwide reserves the right to modify the minimum Base Policy Specified Amount on a prospective basis for newly issued policies at any time.

Coverage

Nationwide will issue the policy only if the underwriting process has been completed, the application is approved, and the proposed Insured is alive and in the same condition of health as described in the application. However, full insurance coverage will take effect only after the minimum initial Premium is paid. Monthly charges are deducted from the policy's Cash Value beginning on the Policy Date.

Coverage Effective Date

Insurance coverage will begin and be In Force on the Policy Date shown on the Policy Data Page. For a change in the Base Policy Specified Amount and/or Rider Specified Amount, the effective date will be on the next monthly anniversary from the Policy Date after Nationwide approves the request. It will end upon the Insured's death, once the Proceeds are paid or when the policy matures. Coverage will also end if the policy Lapses.

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Temporary Insurance Coverage

Temporary Insurance Coverage

Temporary insurance coverage (of an amount equal to the Total Specified Amount, up to $1,000,000) may be available for no charge before full insurance coverage takes effect. Prospective purchasers must submit a temporary insurance agreement and make an initial Premium payment. The amount of this initial Premium payment will depend on the initial Total Specified Amount, choice of death benefit option, and any Riders elected. Temporary insurance coverage will remain In Force for no more than 60 days from the date of the temporary insurance agreement. If full coverage is denied, the temporary insurance coverage will terminate five days from the date Nationwide mails a termination notice (accompanied by a refund equal to the Premium payment made). If full coverage is approved, the temporary insurance coverage will terminate on the date that full insurance coverage takes effect. Allocation of the initial Net Premium will be determined by the right to examine law of the state in which the policy is issued.

Right To Cancel (Examination Right)

Under state law a policy owner may, for a limited time, cancel the policy and receive a refund (commonly referred to as the "free look" period). The length of the free look period depends on state law and may vary depending on whether the policy was purchased to replace another policy. The minimum "free look" period is 10 days.

In order to cancel the policy during the free look period, a policy owner must submit a written cancellation request and return the policy either to the sales representative or to the Service Center. Nationwide will honor free look cancellation requests received by the last day of the free look period (if returned by US mail, the request must be post-marked by the last day of the free look period).

Free look cancellation requests received after the close of business on the date the free look period expires will not be canceled free of charge. If the policy is canceled, Nationwide will treat the policy as if it was never issued.

Within seven days of a free look cancellation request, Nationwide will refund the amount prescribed by state law. The amount Nationwide refunds will be Cash Value or, in certain states, the greater of the initial Premium payment or the policy's Cash Value.

Allocation of Net Premium During Free Look Period

Where state law requires the return of initial Premium for free look cancellations, Nationwide will allocate initial Net Premium to the Fixed Account as instructed. Nationwide will allocate initial Net Premium allocated to the Sub-Accounts to the available money market Sub-Account until the free look period expires. At the expiration of the free look period, Nationwide will transfer the amount held in the money market Sub-Account to the requested Sub-Accounts based on the allocation instructions in effect at the time of the transfer.

Where state law requires the return of Cash Value, Nationwide will allocate all of the initial Net Premium to the designated Sub-Accounts and Fixed Account based upon the allocation instructions in effect at the time, on the next Valuation Period.

To Change Coverage

After the first policy year, the policy owner may request to change the Total Specified Amount. To change the Total Specified Amount, the policy owner must submit a written request to the Service Center. Changes to the Total Specified Amount will become effective on the next monthly policy anniversary after Nationwide approves the request unless the policy owner requests and Nationwide approves a different date. However, no change will take effect unless the Cash Surrender Value would be sufficient to keep the policy In Force for at least three months. Nationwide may limit the number of Total Specified Amount changes to one increase and one decrease each policy year. Changes to the Total Specified Amount will typically alter the Death Benefit.

Increases

To increase the Total Specified Amount, the policy owner must provide satisfactory evidence of insurability. The Insured must be Attained Age 80 or younger at the time of the request. Any request to increase the Total Specified Amount must be at least $10,000. An increase in the Total Specified Amount may cause an increase in the Net Amount At Risk. Because the Cost of Insurance Charge is based on the Net Amount At Risk, and because there will be a separate cost of insurance rate for the increase, this will usually cause the policy's Cost of Insurance Charge to increase. An additional Surrender Charge schedule will also apply whenever the Base Policy Specified Amount is increased. An increase in the Base Policy Specified Amount and/or Rider Specified Amount may cause an increase to the amount of subsequent Premium payments needed to keep the policy from Lapsing, see Lapse.

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Decreases

The policy owner may request to decrease the Total Specified Amount. Nationwide applies Total Specified Amount decreases to the most recent Base Policy Specified Amount and/or Rider Specified Amount increase and continues applying the decrease backwards while still maintaining the original Total Specified Amount. Nationwide will deny any request to reduce the Base Policy Specified Amount below the minimum Base Policy Specified Amount shown on the Policy Data Page. Nationwide will also deny any request that would disqualify the policy as a contract for life insurance.

Premium Payments

The policy does not require a scheduled payment of Premium to keep it In Force. The policy will remain in effect as long as the conditions that cause the policy to Lapse do not exist, see Unfavorable Investment Experience. Upon request, we will furnish Premium receipts.

Subsequent Premium payments will be allocated according to the allocation instructions in effect at the time the Premium is received.

Initial Premium

The amount of initial Premium will depend on the initial Total Specified Amount of insurance, the death benefit option, and any Riders elected. Generally, the higher the required initial Total Specified Amount, the higher the initial Premium will be. Similarly, because Death Benefit Option 2 provides for a potentially greater Death Benefit than Death Benefit Option 1, Death Benefit Option 2 may require a higher amount of initial Premium. Also, the age, health, and activities of the Insured will affect Nationwide's determination of the risk of issuing the policy. In general, the greater this risk, the higher the initial Premium required.

Whether Nationwide will issue full insurance coverage depends on the Insured meeting all underwriting requirements, payment of the initial Premium, and delivery of the policy while the Insured is alive. Nationwide will not delay delivery of the policy to increase the likelihood that the Insured is not still living. Depending on the outcome of the underwriting process, more or less Premium may be necessary to issue the policy. If Nationwide does not issue the policy, the Premium payment will be returned within two business days.

The policy owner may pay the initial Premium to the Service Center or to an authorized representative. The initial Premium payment must be at least $50, equal to the minimum monthly Premium. The initial Premium payment will not be applied to the policy until the underwriting process is complete. Allocation of initial Net Premium will be determined by the right to examine law of the state or territory where the policy is issued, see Right to Cancel (Examination Right).

Subsequent Premiums

The policy owner may make additional Premium payments at any time while the policy is In Force, subject to the following:

• During the first three policy years, the total Premium payments, less any outstanding Indebtedness, less any partial surrender fee, must be greater than or equal to the minimum Premium requirement in order to guarantee that the policy will remain In Force.

• After the first three policy years, each Premium payment must be at least equal to the minimum monthly Premium.

• Nationwide may require satisfactory evidence of insurability before accepting any additional Premium payment that results in an increase in the policy's Net Amount At Risk.

• Nationwide will refund Premium payments that exceed the applicable premium limit established by the IRS to qualify the policy as a contract for life insurance.

• Nationwide may require that outstanding Indebtedness be repaid prior to accepting any additional Premium payments, see Lapse.

• Nationwide will send scheduled Premium payment reminder notices to you according to the Premium payment method shown on the Policy Data Page. Subsequent Premium payments must be sent to the Service Center, see Contacting the Service Center.

Cash Value

Nationwide will determine the Cash Value at least monthly. Cash Value will fluctuate daily and there is no guaranteed Cash Value. At the end of any given Valuation Period, the Cash Value is equal to the sum of:

• the value of the Accumulation Units allocated to the Sub-Accounts, see Valuation of Accumulation Units;

• amounts allocated to the Fixed Account, including credited interest; and

• amounts allocated to the policy loan account (only if a loan was taken), including credited interest, see Policy Loans.

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Surrenders and policy charges and deductions will reduce the Cash Value of the policy. If Cash Value is a factor in calculating a benefit associated with the policy, such as the Death Benefit or a benefit associated with an elected Rider, the value of that benefit will also fluctuate, including being reduced due to surrenders and policy charge deductions. If the policy is surrendered or Lapses, the Cash Value will be reduced by the amount of any Indebtedness.

On any date during the policy year, the Cash Value equals the Cash Value on the preceding Valuation Period, plus any Net Premium applied since the previous Valuation Period, minus any policy charges, plus or minus any investment results, and minus any partial surrenders.

To Exchange

The policy owner has an exchange right under the policy. At any time within the first 24 months of coverage from the Policy Date, the policy owner may surrender this policy and use the Cash Surrender Value to purchase a new policy on the Insured's life without evidence of insurability. After the first 24 months of coverage, a policy owner may still surrender the policy and use the Cash Surrender Value to purchase a new policy on the Insured's life. However, issuance of the new policy will depend on the Insured providing satisfactory evidence of insurability.

The new policy may be one of Nationwide's available fixed benefit life insurance policies. The death benefit on the new policy may not be greater than the Death Benefit on this policy immediately prior to the exchange date. The new policy will have the same Total Specified Amount, Policy Date, and issue age. Nationwide will base Premium payments on the rates in effect for the same sex, Attained Age, and underwriting class of the Insured on the exchange date, unless otherwise required by state law. A policy owner may transfer Indebtedness to the new policy.

Exchange requests must be made on Nationwide forms and submitted to the Service Center. The policy must be In Force and not in a Grace Period. The policy owner must pay a Surrender Charge if applicable and surrender the policy to Nationwide. The policy owner must pay any money due on the exchange (any amount needed to ensure that the Cash Surrender Value of the new policy is the same as the Cash Surrender Value of this policy). The policy owner may request that any excess of the Cash Surrender Value of this policy over the Cash Surrender Value of the new policy be paid to the policy owner. The exchange may have adverse tax consequences. The new policy will take effect on the exchange date only if the Insured is alive. This policy will terminate when the new policy takes effect.

To Terminate (Surrender)

There are several ways that the policy can terminate. The policy will automatically terminate when the Insured dies, the policy matures, or the Grace Period ends. The policy will also terminate if it is fully surrendered.

Terminating the policy may result in adverse tax consequences.

Generally, if the policy has a Cash Surrender Value in excess of the Premiums paid, upon surrender the excess will be included in the policy holder's income for federal tax purposes, see Taxes. The Cash Surrender Value will be reduced by outstanding Indebtedness, see Policy Loans.

To Assign

The policy owner may assign any or all rights under the policy while it is In Force, subject to Nationwide's approval. The beneficiary's interest will be subject to the person or entity to which the policy owner assigned rights. Assignments must be in writing on a form satisfactory to Nationwide. Assignments will become effective on the date signed, unless otherwise specified by the policy owner, and are subject to any payments or actions taken by Nationwide before it is received and recorded at the Service Center. Nationwide is not responsible for the sufficiency or validity of any assignment. Assignments will be subject to any Indebtedness, policy liens, garnishments, court orders, and any previous assignments.

Reminders, Reports and Illustrations

Nationwide will send scheduled Premium payment reminders and transaction confirmations to policy owners upon request. Nationwide will also send semi-annual and annual statements that show:

• the Total Specified Amount;

• minimum monthly Premiums;

• Premiums paid;

• all charges since the last report;

• the current Cash Value;

• the Cash Surrender Value; and

• Indebtedness.

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Confirmations of individual financial transactions, such as transfers, partial Surrenders, and loans are generated and mailed automatically. Copies may be obtained by contacting the Service Center. Alternatively, policy owners may receive information faster and reduce the amount of mail received by signing up for the eDelivery program. Go to www.nationwide.com/login to change document delivery preferences.

Nationwide will send these reminders and reports to the address provided on the application unless directed otherwise. At any time after the first policy year, policy owners may ask for an illustration of future benefits and values under the policy, see Illustration Charge.

IMPORTANT NOTICE REGARDING DELIVERY
OF SECURITY HOLDER DOCUMENTS

When multiple copies of the same disclosure document(s), such as prospectuses, supplements, proxy statements and semi-annual and annual reports are required to be mailed to multiple policy owners in the same household, Nationwide will mail only one copy of each document, unless notified otherwise by the policy owner(s). Household delivery will continue for the life of the policies. A policy owner can revoke their consent to household delivery and reinstitute individual delivery by contacting the Service Center. Individual delivery will resume within 30 days after receiving such notification.

Standard Policy Charges

Deductions for charges are taken from Premium payments and/or the Cash Value, as applicable, to compensate Nationwide for the services and benefits provided, the costs and expenses incurred, and the risks assumed. Certain expenses may be recovered utilizing more than one charge. Nationwide may generate a profit from any of the charges assessed under the policy.

Monthly charges are deducted from Cash Value beginning on the Policy Date. Charges are taken proportionally from the Sub-Accounts and the Fixed Account, except for the Mortality and Expense Risk Charge which is only deducted proportionally from the Sub-Accounts. Charges taken against allocations to the Sub-Accounts are assessed by redeeming Accumulation Units. The number of Accumulation Units redeemed is determined by dividing the dollar amount of the charge by the Accumulation Unit value for the Sub-Account. Nationwide does not deduct policy charges or Rider charges from the Cash Value attributable to the policy loan account. For a complete description of how interest is credited and charged, see Policy Loans.

Policy and Rider charges reflect costs and risks associated with issuing the policy and Rider(s). Certain charges will vary based upon the individual characteristics of the Insured. The Insured is assigned to an underwriting class based upon his/her age, sex (if not unisex classified), smoker status, type of evidence of insurability, and insurability status. The policy owner can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of their policy.

Nationwide may change policy and/or Rider charges and rates under the policy at any time. Changes in policy and/or Rider charges and rates will vary by changes in future expectations for factors including, but not limited to, Nationwide's investment earnings, mortality experience, persistency experience, expenses, including reinsurance expenses, and taxes. Changes to policy and/or Rider charges and rates will be on a uniform basis for Insured's of the same Issue Age, sex, rate class, rate type, any Substandard Rating, Base Policy Specified Amount  and Spouse Life Insurance Rider Specified Amount (if applicable) whose policies have been In Force for the same length of time. If a change in the charges or rates causes an increase to the policy and/or Rider charges, the policy's Cash Value could decrease. If a change in the charges or rates causes a decrease to the policy and/or Rider charges, the policy's Cash Value could increase. Any changes will be determined in accordance with state law. Policy and Rider charges will never exceed the maximum charges shown in the fee tables, see In Summary: Fee Tables.

Premium Load

Premium Load is comprised of the Sales Load and Premium Taxes. It will vary by policy based on the amount of Premium paid. It is deducted from each Premium payment to partially reimburse Nationwide for sales expenses and Premium taxes, and other expenses, including acquisition costs. The Premium Load also provides revenue to compensate Nationwide for assuming risks associated with the policy, and revenue that may be a profit.

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Sales Load

The sales load portion of the Premium Load Charge is guaranteed not to exceed $25 per $1,000 of Premium and covers sales expenses. Currently, this charge is equal to $25 per $1,000 of Premium up to the break point Premium, and $5 per $1,000 of Premium in excess of the break point Premium. The break point Premium is shown in the Policy Data Page. Sales load is assessed each time a Premium payment is submitted.

Premium Taxes

Premium Taxes (as part of the Premium Load) are deducted from each Premium payment to reimburse Nationwide for state and local premium taxes (at the estimated rate of 2.25%) and for federal premium taxes (at the estimated rate of 1.25%). The current (and guaranteed maximum) Premium Tax is $35 per $1,000 of Premium. This amount is not the actual amount of the tax liability Nationwide incurs. It is an estimated amount. If the actual tax liability is more or less, Nationwide will not adjust the charge retroactively.

Short-Term Trading Fees

Some mutual funds offered under the policy may assess (or reserve the right to assess) a short-term trading fee (sometimes called "redemption fee" by the mutual fund) in connection with transfers from a Sub-Account that occur within 60 days after the date of allocation to the Sub-Account.

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

Any Short-Term Trading Fee assessed by any mutual fund available in conjunction with the policy will equal 1% of the amount determined to be engaged in short-term trading. Short-Term Trading Fees will only apply to those Sub-Accounts corresponding to mutual funds that charge such fees (see the mutual fund's prospectus). Any Short-Term Trading Fees paid are retained by the mutual fund and are part of the mutual fund's assets. Policy owners are responsible for monitoring the length of time allocations are held in any particular Sub-Account. Nationwide will not provide advance notice of the assessment of any applicable Short-Term Trading Fee.

For a complete list of the Sub-Accounts that assess (or reserve the right to assess) a Short-Term Trading Fee, see Appendix A: Sub-Account Information.

If a Short-Term Trading Fee is assessed, the mutual fund will charge the separate account 1% of the amount determined to be engaged in short-term trading. The separate account will then pass the Short-Term Trading Fee on to the specific policy owner that engaged in short-term trading by deducting an amount equal to the Short-Term Trading Fee from that policy owner's Sub-Account value. All such fees will be remitted to the mutual fund; none of the fee proceeds will be retained by Nationwide or the separate account.

When multiple allocations are made to a Sub-Account that is subject to Short-Term Trading Fees, transfers out of that Sub-Account will be considered to be made on a first in/first out (FIFO) basis for purposes of determining Short-Term Trading Fees. In other words, Accumulation Units held the longest time will be treated as being transferred first, and Accumulation Units held for the shortest time will be treated as being transferred last.

Some transactions are not subject to Short-Term Trading Fees, including:

• scheduled and systematic transfers, such as those associated with dollar cost averaging programs and asset rebalancing programs (if available);

• policy loans;

• full or partial surrenders; or

• payment of the Proceeds.

New share classes of certain currently available mutual funds may be added as investment options under the policy. These new share classes may require the assessment of Short-Term Trading Fees. When these new share classes are added, new Premiums and transfers to the Sub-Accounts in question may be limited to the new share class.

Illustration Charge

Illustration Charges are not deducted from Premium payments or Cash Value; rather they are paid at the time of an illustration request. Nationwide currently waives the Illustration Charge. The charge is intended to compensate Nationwide for the administrative costs of generating illustrations. Nationwide may elect in the future to assess an Illustration Charge. It will not exceed $25 per illustration requested.

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Partial Surrender Fee

The policy owner may request a partial surrender after the first year from the Policy Date while the policy is In Force. The charge for a partial surrender compensates Nationwide for the administrative costs in calculating and generating the surrender amount. The maximum fee is the lesser of $25 or 2% of the dollar amount of the partial surrender. However, currently, there is no charge for a partial surrender. The Cash Value available for a partial surrender is subject to any Indebtedness.

Surrender Charge

A surrender charge will apply if the policy is surrendered during the first nine years from the Policy Date, Lapsed, or a decrease in the Base Policy Specified Amount is requested. Surrender charges compensate Nationwide for policy underwriting and sales expenses. The charge will be deducted the policy's Cash Value. The surrender charge is reduced by any partial surrender charge actually paid on previous decreases in the Base Policy Specified Amount.

The following tables illustrate the maximum initial surrender charge per $1,000 of initial Base Policy Specified Amount for policies which are issued on a standard basis, see Appendix C: Illustrations of Surrender Charges.

Initial Base Policy Specified Amount $50,000-$99,999

Issue Age	Male Non-Tobacco	Female Non-Tobacco	Male Standard	Female Standard
25	$ 7.776	$ 7.521	$ 8.369	$ 7.818
35	$ 8.817	$ 8.398	$ 9.811	$ 8.891
45	$12.191	$11.396	$13.887	$12.169
55	$15.636	$14.011	$18.415	$15.116
65	$22.295	$19.086	$26.577	$20.641

Initial Base Policy Specified Amount $100,000 or More

Issue Age	Male Non-Tobacco	Female Non-Tobacco	Male Standard	Female Standard
25	$ 5.776	$ 5.521	$ 6.369	$ 5.818
35	$ 6.817	$ 6.398	$ 7.811	$ 6.891
45	$ 9.691	$ 8.896	$11.387	$ 9.669
55	$13.136	$11.511	$15.915	$12.616
65	$21.295	$18.086	$25.577	$19.641

Special guaranteed maximum surrender charges apply in Pennsylvania, see Appendix C: Illustrations of Surrender Charges. Ask for an illustration or see the Policy Data Page for more information.

The surrender charge amount decreases over time and Nationwide will deduct the surrender charge based on the following schedule:

Policy year calculated from the Policy Date or effective date of Base Policy Specified Amount increase:	Surrender Charge as a Percentage of Initial Surrender Charge
0	100%
1	100%
2	90%
3	80%
4	70%
5	60%
6	50%
7	40%
8	30%
9 and After	0%

There are two components to the surrender charge: the underwriting component and the sales component. The underwriting component is based upon the Insured's age when the policy is issued and covers costs associated with underwriting. The sales expense component, which is based on and varies by the Insured's sex, age when the policy is

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issued, and underwriting class, covers sales expenses including processing applications, conducting medical exams, determining insurability (and the Insured's underwriting class), and establishing policy records. Additional information can be found in the Statement of Additional Information which can be requested, free of charge, by contacting the Service Center.

Nationwide will waive the surrender charge if the policy is surrendered in exchange for a plan of permanent fixed life insurance offered by Nationwide, subject to the following:

• the exchange and waiver may be subject to new, satisfactory evidence of insurability and Nationwide's underwriting approval; and

• the Waiver of Monthly Deductions Rider has not been invoked.

Nationwide may impose a new surrender charge on the policy received in the exchange.

Cost of Insurance Charge

A Cost of Insurance Charge is deducted proportionally from Sub-Account and Fixed Account allocations on the Policy Date and on each monthly anniversary of the Policy Date. The charge is intended to cover Nationwide's expenses associated with providing expected mortality benefits and assuming certain risks associated with the policy, and to cover other expenses, including acquisition costs, and state and federal taxes. Nationwide may also profit from this charge.

The Cost of Insurance Charge is the product of the Net Amount At Risk and the cost of insurance rate. The cost of insurance rate will vary by the Insured's sex; age; underwriting class, any Substandard Ratings, how long the policy has been In Force, and the Base Policy Specified Amount and Spouse Life Insurance Rider Specified Amount (if applicable). The cost of insurance rate is based on Nationwide's expectations as to future mortality and expense experience, investment earnings, persistency, and taxes.

There will be a separate cost of insurance rate for the initial Base Policy Specified Amount and any Base Policy Specified Amount increase. The cost of insurance rate(s) will never be greater than what is shown on the Policy Data Pages.

Flat Extras and Substandard Ratings

Nationwide may inquire about the occupation and activities of the Insured through the underwriting process. If the activities or occupation of the Insured cause an increased health or accident risk, it may result in the Insured receiving a Substandard Rating. If this is the case, Nationwide may add an additional component to the Cost of Insurance Charge called a "Flat Extra Charge." The Flat Extra Charge accounts for the increased risk of providing life insurance when one or more of these factors apply to the Insured. The Flat Extra Charge is a component of the total Cost of Insurance Charge, so if applied it will be deducted from Cash Value on the Policy Date and the monthly anniversary of the Policy Date. The monthly Flat Extra Charge is between $0.00 and $2.08 per $1,000 of the Net Amount At Risk. If a Flat Extra Charge is applied, it is shown in the Policy Data Pages. In no event will the Flat Extra Charge result in the Cost of Insurance Charge exceeding the maximum charge shown in In Summary: Fee Tables.

Nationwide will uniformly apply a change in any cost of insurance rate for Insureds of the same age, sex, underwriting class, Substandard Ratings, and Base Policy Specified Amount and Spouse Life Insurance Rider Specified Amount (if applicable), if the policies have been In Force for the same length of time. If a change in the cost of insurance rates causes an increase to a policy's Cost of Insurance Charge, the policy's Cash Value could decrease. If a change in the cost of insurance rates causes a decrease to the policy's Cost of Insurance Charge, the policy's Cash Value could increase.

There will be a separate cost of insurance rate for the initial Base Policy Specified Amount and any Base Policy Specified Amount increase. An increase in the Base Policy Specified Amount may cause an increase in the Net Amount At Risk. Because the Cost of Insurance Charge is based on the Net Amount At Risk, and because there will be a separate cost of insurance rate for the increase, this will usually cause the policy's Cost of Insurance Charge to increase. An increase in the Base Policy Specified Amount may require larger or additional Premium payments in order to avoid Lapsing the Policy.

The rate class of an Insured may affect the cost of insurance rate. Nationwide currently places Insureds into both standard rate classes and substandard rate classes that involve a higher mortality risk. In an otherwise identical policy, an Insured in the standard rate class will have a lower cost of insurance than an Insured in a rate class with higher mortality risks. Nationwide may also issue certain policies on a "non medical" basis to certain categories of individuals. Due to the underwriting criteria established for policies issued on a non medical basis, actual rates will be higher than the current cost of insurance rates being charged that are medically underwritten.

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Mortality and Expense Risk Charge

The charge will vary by policy based on the amount of Cash Value allocated to the Sub-Accounts and the length of time the policy has been In Force. The charge compensates Nationwide for assuming the risk associated with mortality and expense risk costs. The mortality risk is that the Insured will not live as long as expected. The expense risk is that the costs of issuing and administering the policy will be more than expected. This charge is in addition to any charges assessed by the mutual funds underlying the Sub-Accounts.

Though the maximum guaranteed mortality and expense risk charge is higher, currently, this charge is deducted on a daily basis according to the following schedule. During the first through ninth year from the Policy Date, the annualized charge is $8.00 per $1,000 of Cash Value. After the ninth year, this annualized charge is $8.00 per $1,000 on the first $25,000 of Cash Value and $5.00 per $1,000 of additional Cash Value.

Administrative Charge

An administrative charge is deducted proportionally from the policy's Sub-Account and Fixed Account allocations on the Policy Date and each monthly anniversary of the Policy Date. The charge reimburses Nationwide for the costs of maintaining the policy, including accounting and record-keeping. The charge is currently $12.50 per month through the first year from the Policy Date, and $5 per month after the first year from the Policy Date. The maximum guaranteed charge is $25 per month through the first year from the Policy Date, and $7.50 per month after the first year from the Policy Date.

Increase Charge

The increase charge is deducted from the Cash Value when the policy owner requests an increase in the Base Policy Specified Amount. It is used to cover the cost of underwriting the requested increase and processing and distribution expenses related to the increase.

The increase charge is comprised of two components: underwriting and administration; and sales. The underwriting and administration component is equal to $1.50 per year per $1,000 of increase. The sales component is equal to $0.54 per year per $1,000 of increase. Together, the maximum charge totals $2.04 per year ($0.17 per month).

Mutual Fund Operating Expenses

In addition to the policy charges, there are also charges associated with the mutual funds in which the Sub-Accounts invest. Policy owners do not pay these charges directly, but these charges do affect the value of the assets allocated to the Sub-Accounts because these charges are reflected in the underlying mutual fund prices that Nationwide subsequently uses to value Sub-Account units. The underlying mutual funds' prospectuses contain additional information about these charges. Policy owners may contact the Service Center to receive, free of charge, copies of the prospectuses for any of the underlying mutual funds available under the policy.

Reduction of Charges

The policy may be purchased by individuals, corporations, and other entities. Nationwide may reduce or eliminate certain charges (Sales Load, Surrender Charge, administrative charges, Cost of Insurance Charge, or other charges) where the size or nature of the group allows Nationwide to realize savings with respect to sales, underwriting, administrative, or other costs. Where prohibited by state law, Nationwide will not reduce charges associated with the policy.

Nationwide determines the eligibility and the amount of any reduction by examining a number of factors, including: the number of policies owned with different insureds; the total premium Nationwide expects to receive; the total cash value of commonly owned policies; the nature of the relationship among individual insureds; the purpose for which the policies are being purchased; the length of time Nationwide expects the individual policies to be in force; and any other circumstances which are rationally related to the expected reduction in expenses.

Nationwide may lower commissions to the selling broker-dealer and/or increase charge back of commissions paid for policies sold with reduced or eliminated charges. Policy owners should consult with a registered representative about reductions available and, where appropriate, obtain an illustration demonstrating the impact of any reduced charges on the policy.

Nationwide may change both the extent and the nature of the charge reductions. Any charge reductions will be applied in a way that is not unfairly discriminatory to policy owners and will reflect the differences in costs of services provided.

Entities considering purchasing the policy should note that in 1983, the U.S. Supreme Court held in Arizona Governing Committee v. Norris that certain annuity benefits provided by employers' retirement and fringe benefit programs may not vary between men and women on the basis of sex. The policies are based upon actuarial tables that distinguish between

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men and women unless the purchaser is an entity and requests non-sex distinct tables be used for underwriting. The policies generally provide different benefits to men and women of the same age. Accordingly, employers and employee organizations should consider, in consultation with legal counsel, the impact of Norris on any employment related insurance or benefit program before purchasing the policy.

A Note on Charges

During a policy's early years, the expenses Nationwide incurs in distributing and establishing the policy exceed the deductions. Nevertheless, Nationwide expects to make a profit over time because variable life insurance is intended to be a long-term financial investment. Accordingly, Nationwide has designed the policy with features and investment options that it believes support and encourage long-term ownership.

Nationwide makes many assumptions and accounts for many economic and financial factors when establishing the policy's fees and charges. The following is a discussion of some of the factors that are relevant to the policy's pricing structure.

Distribution, Promotional, and Sales Expenses

Distribution, promotional, and sales expenses include amounts paid to broker-dealer firms as commissions, expense allowances, and marketing allowances. Nationwide refers to these expenses collectively as "total compensation."

Nationwide has the ability to customize the total compensation package of its broker-dealer firms. Nationwide may vary the form of compensation paid or the amounts paid as commission, expense allowance, or marketing allowance; however, the total compensation will not exceed the maximum (99% of first year premium and no more than 4% of any excess and renewal premium). Commission may also be paid as an asset-based amount instead of a premium based amount. If an asset-based commission is paid, it will not exceed 0.25% of the non-loaned Cash Value per year.

The actual amount and/or forms of total compensation paid depend on factors such as the level of premiums Nationwide receives from respective broker-dealer firms and the scope of services the firms provide. Some broker-dealer firms may not receive maximum total compensation.

Individual registered representatives typically receive a portion of the commissions/total compensation paid, depending on their arrangement with their broker-dealer firm. Policy owners should consult the registered representative to know the exact compensation arrangement associated with this policy.

Information on Underlying Mutual Fund Payments

Nationwide's Relationship with the Underlying Mutual Funds

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

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

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

Types of Payments Nationwide Receives

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

Nationwide or its affiliates receive the following types of payments:

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

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

• Payments by an underlying mutual fund's advisor or subadvisor (or its affiliates). Such payments may be derived, in whole or in part, from the advisory fee, which is deducted from underlying mutual fund assets and is reflected in mutual fund charges.

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

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

Amount of Payments Nationwide Received

For the year ended December 31, 2013, the underlying mutual fund payments Nationwide and its affiliates received from the underlying mutual funds did not exceed 0.75% (as a percentage of the average daily net assets invested in the underlying mutual funds) offered through this policy or other variable policies that Nationwide and its affiliates issued. Payments from investment advisors or subadvisors to participate in educational and/or marketing activities have not been taken into account in this percentage.

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

Identification of Underlying Mutual Funds

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

There may be underlying mutual funds with lower fees, as well as other variable policies that offer underlying mutual funds with lower fees. Policy owners should consider all of the fees and charges of the policy in relation to its features. Higher policy and underlying mutual fund fees and charges have a direct effect on the policy's investment performance.

Policy Riders and Rider Charges

Policy owners may purchase one or more of the policy's Riders. There may be additional charges assessed for elected Riders, see In Summary: Fee Tables. The availability, operation, and benefits of the Riders may vary by the state where the policy is issued.

Rider charges are assessed starting on the Policy Date and each monthly anniversary of the Policy Date by taking deductions from the Cash Value. If a Rider is elected after the Policy Date, Rider charges will begin to be deducted on the first monthly anniversary after Nationwide approves the request unless the policy owner requests and Nationwide approves a different date.

Rider charges compensate Nationwide for the services and benefits provided, the costs and expenses incurred, and the risks assumed by Nationwide associated with offering the Riders. Nationwide may generate a profit from any of the Rider charges.

The maximum and minimum/current Rider charges are stated in the Fee Tables, see In Summary: Fee Tables.

Note: The charge and/or benefits received under certain Riders may be treated as a distribution from the policy for income tax purposes, see Periodic Withdrawals, Non-Periodic Withdrawals in Taxes, and Policy Loans.

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Accidental Death Benefit Rider

Subject to Nationwide's underwriting approval, this Rider may be elected at any time. The Rider pays a benefit, in addition to the Death Benefit, to the named beneficiary upon the Insured's accidental death. The benefit continues until the Insured reaches Attained Age 70. The policy owner will be charged for this Rider: so long as the policy remains In Force and the Rider's term has not expired; until the benefit has been paid or until the policy owner terminates the Rider in writing at the Service Center.

The charge for this benefit is deducted from the policy's Cash Value, therefore this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Otherwise, the benefit of this Rider and the Death Benefit are independent of one another.

Accidental Death Benefit Rider Charge

The charge for this Rider compensates Nationwide for providing coverage in the event of the Insured's accidental death, meaning the Insured's death as a result of bodily injury caused by external, violent and accidental means from a cause other than a risk not assumed. The charge is the product of the Accidental Death Benefit Rider Specified Amount and the accidental death benefit cost of insurance rate. The accidental death benefit cost of insurance rate is based on Nationwide's expectations as to the likelihood of the Insured's accidental death. The accidental death benefit cost of insurance rate will vary by the Insured's sex, Attained Age, underwriting class and any Substandard Ratings.

Base Insured Term Rider

Subject to Nationwide's underwriting approval, this Rider is available when the policy is In Force. The benefit is term life insurance on the Insured, in addition to the Death Benefit, payable to the beneficiary upon the Insured's death.

The benefit amount varies monthly and is based on the elected death benefit option. The policy owner may renew coverage annually until the Insured reaches Attained Age 95, when this Rider's term expires. Because the charge for this benefit is deducted from the policy's Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.

Before deciding whether to purchase the Rider it is important to know that when this Rider is purchased, the compensation received by the registered representative and his or her firm is less than when compared to purchasing insurance coverage under the base policy. As a result of this compensation reduction, the charges assessed for the cost of insurance under the Rider will be lower for a significant period of time. There are instances where the Rider may require lower Premium to maintain the total death benefit over the life of the policy or may require higher Premium when compared to not purchasing the Rider at all. When the Rider is purchased, the Maturity Date for coverage under the Rider may not be extended (resulting in a loss of coverage at maturity).

Base Insured Term Rider Charge

The charge for this Rider compensates Nationwide for providing term life insurance on the Insured. The charge is the product of the Rider Specified Amount and the additional protection cost of insurance rate. The additional protection cost of insurance rate is based on an expectation as to the Insured's mortality. The additional protection cost of insurance rate will vary by: the Insured's sex; Attained Age; underwriting class; any Substandard Ratings; and the Rider Specified Amount.

Change of Insured Rider

The Rider is only available in connection with policies issued to corporate entities or in other business contexts where the primary purpose is to provide protection or benefits to employees. The Rider is not available to individuals outside of these limited business purposes. The benefit associated with the Change of Insured Rider is that the policy owner may designate a new Insured at any time after the Policy Date, subject to insurability and the conditions below. If this Rider is invoked, the policy charges after the change will be based on the underwriting classification and characteristics of the new Insured.

The amount of insurance coverage after the change date will be the Total Specified Amount shown on the application to change the Insured provided that (1) the policy continues to qualify as life insurance under the Code, and (2) such Total Specified Amount equals or exceeds the minimum Total Specified Amount shown on the Policy Data Pages. Coverage of the new Insured will become effective on the change date. Coverage of the previous Insured will terminate on the day before the change date. The change date is the first monthly anniversary on or next following the date the change of Insured conditions are met. The Policy Date will not change.

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Change of Insured conditions:

1.	At the time of the change, the new Insured must have the same business relationship to the policy owner as did the previous Insured.
2.	The new Insured may be required to submit satisfactory evidence of insurability.
3.	The new Insured must satisfy Nationwide's underwriting requirements.
4.	The policy must be In Force and not be in a Grace Period at the time of the change.
5.	The new Insured must have been at least age 18 on the Policy Date.
6.	The policy owner must make written application to change the Insured to the Service Center.

Federal income tax consequences may result from a change in insured. For federal income tax purposes the substitution of a new insured is treated as an exchange of the policy for another life insurance policy. Because the new insured is not the same as the insured that was substituted, the tax free treatment for policy exchanges under Code Section 1035 may not be available because the requirement that the insured under the policy relate to the same individual would not be met; consequently, the excess Cash Surrender Value over the investment in the policy would be taxable as ordinary income. The foregoing is not comprehensive and cannot replace personalized advice provided by a competent tax professional. The policy owner should seek competent tax advice regarding the tax treatment of the policy when contemplating a change of insured.

Change of Insured Rider Charge

There is no charge associated with the Change of Insured Rider.

Children's Term Insurance Rider

Subject to underwriting approval, a policy owner may purchase term life insurance on the Insured's children at any time while the policy is In Force. If an insured child dies while the policy is In Force and before the Maturity Date, the policy pays a benefit to the named beneficiary. The insurance coverage for each insured child will continue (as long as the policy is In Force) until the earlier of: (1) the policy anniversary on or next following the date the Insured's child turns age 22; or (2) the policy anniversary on which the Insured would have reached Attained Age 65. Subject to certain conditions specified in the Rider, the Rider may be converted into a policy on the life of the insured child without evidence of insurability. The Rider will be effective until the Rider's term expires, until the benefit is paid, or until the Rider is terminated by written request to the Service Center.

Children's Term Insurance Rider Charge

A monthly Children's Term Insurance Rider Charge will be deducted if this Rider is elected. The Children's Term Insurance Rider Charge compensates Nationwide for providing term insurance on the lives of each Insured child. The Rider charge will be assessed as long as the policy is In Force and the Rider is in effect. The Rider charge will be the same, even if the number of children covered under the Rider changes. Nationwide may decline a request to add another child based on underwriting standards.

Guaranteed Minimum Death Benefit Rider

This Rider is only available at application and has no loan value or Cash Surrender Value. The purpose of this Rider is to keep the death benefit In Force and to prevent the policy from Lapsing. The benefit is a death benefit payable to the beneficiary, less any Indebtedness and any withdrawals.

Guaranteed Minimum Death Benefit Rider Charge

There is no charge for this Rider during the first three policy years. In the first month of the third Policy year, this charge will begin and after the third Policy year, this Rider ensures that the base policy will remain In Force even if the Cash Surrender Value is zero or less, as long as: 1) the Rider is In Force; 2) the Insured is alive; and 3) the annual Guaranteed Minimum Death Benefit Rider Minimum Premium requirement has been met. The annual Rider Minimum Premium is shown on the Policy Data Page and is based on the issue age, sex, Total Specified Amount, death benefit option and underwriting class of the Insured.

On each policy anniversary, Nationwide will determine if the Rider Minimum Premium requirement has been met. This requirement shall be met if the sum of all previous Premium payments under the policy, less any partial withdrawals and existing policy Indebtedness is greater than or equal to the sum of the annual Rider Minimum Premiums for the previous policy years. If this requirement is met, the policy is guaranteed to remain In Force during the next policy year, provided there are no new loans or partial withdrawals. If this requirement is not met, Nationwide will notify the policy owner of the Premium payments required in order to continue benefits under this Rider. A Grace Period of 61 days will be provided and

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if the required Premiums are not received during this Grace Period, the Rider will terminate without value. During this Grace Period, the Rider charge will still apply. During any policy year when benefits are being paid under the Waiver of Monthly Deduction Rider, the annual Rider Minimum Premium that policy year will be equal to zero.

Spouse Life Insurance Rider

The benefit associated with the Spouse Life Insurance Rider is a death benefit payable upon the death of the spouse named on the application ("Insured Spouse") to the designated beneficiary. If no beneficiary is designated, the benefit is payable to the Insured.

This Rider may be purchased at any time while the policy is In Force, subject to underwriting approval and the following age restrictions:

• the Insured must be between Attained Age 21 and 59 (this Rider is no longer available on or after the policy anniversary on which the Insured reaches Attained Age 59); and

• the Insured Spouse must be between Attained Age 18 and 69 at the time this Rider is elected.

This Rider will terminate on the earliest of: the policy anniversary on which the Insured Spouse reaches Attained Age 70, the date the Rider is converted to a new policy, the date the policy matures, or until the Rider or policy is terminated by written request to the Service Center.

This Rider has a conversion right. The Insured Spouse may exchange this Rider's benefit for a level premium, level benefit, permanent plan of whole life insurance, subject to limitations.

Spouse Life Insurance Rider Charge

A monthly Rider charge is deducted if this Rider is elected. The Spouse Life Insurance Rider Charge compensates Nationwide for providing term insurance on the life of the Insured Spouse. The Rider charge is the product of the Spouse Life Insurance Rider's Specified Amount and the Insured Spouse life insurance cost of insurance rate. The Insured Spouse life insurance cost of insurance rate is based on Nationwide's expectations as to the mortality of the Insured Spouse. The Insured Spouse life insurance cost of insurance rate will vary by the Insured Spouse's sex, Attained Age, underwriting class, any Substandard Ratings, and the Spouse Life Insurance Rider's Specified Amount.

The Spouse Life Insurance Rider Charge will be deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Spouse Life Insurance Rider Charge is deducted from Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Decreases in the Base Policy Specified Amount may result in a corresponding decrease in the Spouse Life Insurance Rider's Specified Amount.

Waiver of Monthly Deductions Rider

Subject to Nationwide's underwriting approval, this Rider can be elected at any time so long as the policy is In Force and it is before the Policy Date on or following the date the Insured reaches age 59.

Rider Benefit

The benefit associated with this Rider is a waiver of the policy's monthly deductions if the Insured becomes totally disabled, as defined in the Rider, for at least six consecutive months. No benefit is available if total disability results from a risk not assumed; risks not assumed may vary by state. Contact the Service Center to obtain a copy of the Waiver of Monthly Deductions Rider applicable to the policy.

Disability During the First Three Years from the Policy Date

If the Insured becomes totally disabled for six consecutive months within the first three years from the Policy Date, the benefit is a credit to the policy in an amount necessary to keep the policy In Force as opposed to a waiver of the monthly deductions. The Cash Value will increase by the amount in which the minimum monthly premium exceeds the monthly deductions, just as if the minimum monthly premium had been paid.

Disability Following the First Three Years from the Policy Date

If the Insured becomes totally disabled for six consecutive months any time after the first three years from the Policy Date, the benefit is a waiver of the policy's monthly deductions. For example, if the policy owner becomes totally disabled for six consecutive months two years and eight months from the Policy Date, for the first four months, the benefit would be a credit equal to the amount necessary to keep the policy In Force. After that, the Rider's benefit becomes a waiver of the policy's monthly charges.

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Following the third year from the Policy Date, the Rider's benefit alone may not be sufficient to keep the policy from Lapsing. The policy owner may need to make additional premium payments to prevent Lapse. However, while the Rider's benefit is being paid, it will cost less on a monthly basis to keep the policy In Force.

Benefit Duration

The benefit duration depends on the Insured's age when total disability begins. Before age 60, the benefit continues for as long as the Insured is totally disabled (even if that disability extends past when the Insured reaches age 65) . Between ages 60 and 63, the benefit continues until the Insured turns age 65. From age 63, the benefit lasts only for two years.

Waiver of Monthly Deductions Rider Charge

The charge for this Rider compensates Nationwide for the risks assumed in crediting and/or waiving policy charges during the Insured's total disability. The charge is the product of the amount of periodic charges deducted from the policy on a monthly basis (excluding the cost for this Rider) and the deduction waiver cost rate. The deduction waiver cost rate is based on Nationwide's expectations as to the likelihood of the Insured's total disability for six consecutive months. The deduction waiver cost rate varies by the Insured's sex, Attained Age, underwriting class, and any Substandard Ratings.

The charge for this Rider is deducted proportionately from the Sub-Account and Fixed Account allocations; therefore, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.

Policy Owner Services

Dollar Cost Averaging

Dollar cost averaging is an investment strategy designed to reduce the investment risks associated with market fluctuations and promote a more stable Cash Value and Death Benefit over time. A policy owner may elect to participate in the dollar cost averaging program at the time of application or at a later date by submitting an election form to the Service Center. An election to participate in the program that is submitted after application will be effective at the end of the Valuation Period coinciding with the date requested or, if that date has passed or no date is specified, at the end of the Valuation Period during which the request was received, or the end of the free look period, whichever is later.

There is no charge for dollar cost averaging and dollar cost averaging transfers do not count as transfer events. Dollar cost averaging transfers will continue to be processed until there is no more value left in the originating investment option(s) or until a policy owner instructs Nationwide to terminate the service. Policy owners may direct Nationwide to automatically transfer specific amounts from the Fixed Account and the:

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

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

• Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I

to any other Sub-Account. Certain Sub-Accounts may or may not be available depending on when the policy was purchased, see Appendix A: Sub-Account Information for details on Sub-Account availability. Transfers from the Fixed Account must be no more than 1/30th of the Fixed Account value at the time the program is elected.

Nationwide does not assure the success of these strategies and cannot guarantee that dollar cost averaging will result in a profit or protect against a loss. A policy owner should carefully consider his or her financial ability to continue these programs over a long enough period of time to purchase Accumulation Units when their value is low, as well as when their value is high. Nationwide may modify, suspend, or discontinue these programs at any time. Nationwide will notify policy owners in writing 30 days before doing so.

Automated Income Monitor

Automated Income Monitor is an optional systematic partial surrender and/or policy loan program that may be elected at any time, at no additional cost. This program is only available to policies that are not modified endowment contracts.

Automated Income Monitor programs are intended for policy owners who wish to take an income stream of scheduled payments from the Cash Value of the policy. The income stream is generated via partial surrenders until the policy cost basis is depleted, then through policy loans. Taking partial surrenders and/or policy loans may result in adverse tax consequences, will reduce policy values and therefore limit the ability to accumulate Cash Value, and may increase the likelihood the policy will Lapse. Before requesting the Automated Income Monitor program, policy owners should consult with financial and tax advisors.

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At the time of application for a program, Nationwide will provide policy owners with an illustration of the proposed income stream and impacts to the Cash Value, Cash Surrender Value, and Death Benefit. Policy owners must submit this illustration along with an application when electing an Automated Income Monitor program. Programs will commence at the beginning of the next monthly anniversary after Nationwide receives the election form and illustration. On each policy anniversary thereafter Nationwide will provide an updated In Force illustration to assist policy owners in determining whether to continue, modify, or discontinue an elected program. Policy owners may request modification or termination of a program at any time by written request to the Service Center.

A policy owner's program will be based on the policy's Cash Surrender Value at the time of election and each succeeding policy anniversary, and on the following elections:

1. Payment type:

a.	Fixed Amount: If a policy owner elected payments of a fixed amount, the amount received will not vary with policy Investment Experience; however, the length of time the elected payment amount can be sustained will vary based on the illustration assumptions below and the policy's Investment Experience; or
b.	Fixed Duration: If a policy owner elected payments for a fixed duration, the amount received during the first year will be based on the illustration assumptions below. After the first year, the amount will vary based on the illustration assumptions and policy Investment Experience to maintain the elected duration.

2. Illustration assumptions:

a.	an assumed variable rate of return specified by the policy owner from the available options stated in the election form;
b.	minimum Cash Surrender Value targeted by the policy owner to have remaining on the policy's Maturity Date, or other date specified by the policy owner. This dollar amount is used to calculate available income. It is not guaranteed to be the Cash Surrender Value on the specified date;
c.	a policy owner may also request a change of death benefit option, or a decrease in Base Policy Specified Amount to be effective in conjunction with commencing a program or to occur at a future date; and
d.	payment frequency: monthly; quarterly; semi-annually; or annually. Payments on a monthly basis are made by direct deposit (electronic funds transfer) only.

Generally, higher variable rate of return assumptions, a lower target Cash Surrender Value, and Death Benefit Option 1, will result in larger projected payments or longer projected durations. However, larger payments or longer duration may increase the likelihood the policy will Lapse.

Note: Policy owners are responsible for monitoring the policy to prevent Lapse. Nationwide will provide annual In Force illustrations based on current Cash Surrender Values and the elected illustration assumptions to assist policy owners with preventing Lapse. Policy owners may request modification or termination of a program at any time by written request to the Service Center.

Automated Income Monitor programs are subject to the following additional conditions:

1. To prevent adverse tax consequences, a policy owner can authorize Nationwide to make scheduled payments via policy loan when:

a.	the policy's cost basis is reduced to zero;
b.	a partial surrender within the first 15 policy years would be a taxable event;
c.	or to prevent the policy from becoming a MEC, see Taxes.
	Note: Partial surrenders and policy loans taken under the Automated Income Monitor program are subject to the same terms and conditions as other partial surrenders and policy loans, see Partial Surrender and Policy Loans.

2.	While a program is in effect, no Premium payment reminder notices will be sent; however, Premium payments will be accepted.
3.	Programs will terminate on the earliest of the following:

a.	Nationwide's receipt at the Service Center of a written request to terminate participation;
b.	at the time the policy enters a Grace Period or terminates for any reason;
c.	at the time of a requested partial surrender or policy loan outside the program;
d.	upon a change of policy owner;
e.	for income based on a fixed duration, the end of the period the policy owner specified at the time of election;

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f.	on any policy anniversary when the current Cash Surrender Value is less than or equal to the target Cash Surrender Value assumption the policy owner specified;
g.	at any time the scheduled partial surrender or policy loan would cause the policy to fail to qualify as life insurance under Section 7702 of the Code; or
h.	the policy's Maturity Date.

Nationwide will notify policy owners upon termination of an Automated Income Monitor program. In addition, Nationwide may modify, suspend, or discontinue Automated Income Monitor programs at any time. Nationwide will notify policy owners in writing 30 days before doing so.

Policy Loans

After the expiration of the free look period and while the policy is In Force, a policy owner may take a policy loan. A policy loan will be effective as of the date Nationwide receives the policy owner's written request at the Service Center. Nationwide reserves the right to require written requests to be submitted on current Nationwide forms. Notwithstanding anything to the contrary set forth in this prospectus, Nationwide currently accepts requests submitted via telephone, subject to dollar amount limitations and payment and other restrictions to prevent fraud.  Nationwide reserves the right to discontinue acceptance of telephonic requests at any time upon written notice.  Contact the Service Center for current limitations and restrictions.

Taking a policy loan may increase the risk of Lapse and may result in adverse tax consequences. Unpaid loan interest charges accrue daily at a compounded annual interest rate and can cause the policy's Indebtedness to grow significantly. The policy owner should request an illustration demonstrating the impact of a policy loan on the policy's Cash Value, Cash Surrender Value, and Death Benefit Proceeds.

Loan Amount

The minimum loan amount is $200. At the time of a loan request, policy Indebtedness cannot exceed 90% of the Cash Value less any Surrender Charge, less interest due on the next policy anniversary. Nationwide pays the policy loan to the policy owner with assets from its general account. Nationwide then uses the policy's Cash Value as collateral for the loan as described below.

Collateral and the Policy Loan Account

As collateral for the policy loan, Nationwide deducts an amount equal to the policy loan from the policy's Cash Value. Collateral amounts are transferred from the Cash Value to the policy loan account (which is part of Nationwide's general account). Because the policy loan account does not participate in the Investment Experience of the Sub-Accounts, policy loans can permanently affect the Death Benefit Proceeds and the Cash Value of the policy, even if repaid. The policy loan account may be subject to Nationwide's creditors in the event of insolvency.

Amounts transferred from the policy's Cash Value equal to the policy loan account are deducted from the Sub-Accounts in the same proportion as the Sub-Account allocations, unless the policy owner has instructed otherwise. Nationwide will only transfer amounts from the Fixed Account if the loan amount exceeds 90% of the Cash Value allocated to the Sub-Accounts.

The policy owner will earn interest on the collateral held in the policy loan account. Interest will accrue daily at no less than the guaranteed minimum rate stated on the Policy Data Pages. The interest earned on the policy loan account may be different than the rate earned on Cash Value allocated to the Fixed Account.

Interest Charged

Nationwide charges interest against policy Indebtedness. Indebtedness is the total amount of all outstanding policy loans, including principal and compounded interest due. The maximum interest rate Nationwide may charge against Indebtedness is 6.00% per annum, see In Summary: Fee Tables for current interest charged rates. Rates may change and may vary by policy year. Policy loan interest charges may provide revenue for risk charges and profit.

If policy loan interest is not paid when due, policy Indebtedness will continue to compound at the interest rate in effect, see When Interest is Charged and Credited below. If not paid when due, Nationwide will deduct an amount equal to the unpaid interest from the policy's Cash Value and add it to the policy loan account causing the original policy loan amount (now, "Indebtedness") to increase by the amount of the unpaid interest charged. Amounts deducted from the policy's Cash Value as unpaid interest charges will be deducted from the Sub-Accounts and the Fixed Account in the same manner as a new loan.

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Note: Over time, unpaid loan interest charges can cause the policy's Indebtedness to be significant. In some cases, policy Indebtedness may be significant enough to cause the policy to Lapse. In general, it is advantageous to repay Indebtedness and at a minimum, the interest charged on Indebtedness, at least annually.

Indebtedness is considered a part of the policy's Cash Value, therefore, upon a full surrender, Lapse, or maturity, the amount received in the original loan request(s), plus unpaid loan interest charged is considered "received" under the Code and may result in adverse tax consequences, see Surrendering the Policy; Maturity in Taxes.

When Interest is Charged and Credited

Interest charged against Indebtedness accrues daily. Interest earned on collateral also accrues daily. Nationwide will deduct interest charged on Indebtedness from the policy's Cash Value, and credit interest earned on collateral to the Cash Value:

• Annually, at the end of a policy year;

• At the time a new loan is requested;

• When a loan repayment is made;

• Upon the Insured's death;

• Upon policy Lapse and/or;

• Upon a full surrender of the policy.

In most cases, the interest earned on collateral and credited to the Cash Value will be less and in some cases, significantly less, than the interest charged against the Cash Value.

Repayment

The policy owner may repay all or part of policy Indebtedness at any time while the policy is In Force. The minimum loan repayment amount, if any, is stated in the policy. The policy owner should contact the Service Center to obtain loan pay-off amounts.

Note: Interest earned on collateral is not deducted from Indebtedness to calculate loan pay off amounts. If a loan repayment is made, the policy owner's Cash Value is credited with interest earned on collateral and the amount of the loan repayment is deducted from the policy's Indebtedness.

Nationwide will treat any payments made as Premium payments, unless the policy owner specifies that the payment should be applied against the policy's Indebtedness. It may be beneficial for the policy owner to repay Indebtedness before making additional Premium payments because Premium Load charges are deducted from Premium payments but not from loan repayments.

If the policy owner makes a loan repayment, it will be applied to the Sub-Accounts and the Fixed Account in accordance with the allocation instructions in effect at the time the payment is received, unless the policy owner indicates otherwise.

Repaying Indebtedness will cause the Death Benefit and net Cash Surrender Value to increase accordingly.

Lapse

The policy is at risk of Lapsing when the Cash Surrender Value is insufficient to cover the policy's monthly deductions, see Unfavorable Investment Experience. Before any policy Lapse, there is a Grace Period during which the policy owner can take action to prevent the Lapse. Subject to certain conditions, the policy owner may reinstate a policy that has Lapsed.

Grace Period

The policy owner will receive notice when the Grace Period begins. The notice will state an amount of Premium required to avoid Lapse that is equal to four times the current monthly deductions. If this Premium amount is not paid within 61 days, the policy and all Riders will Lapse. The Grace Period will not alter the operation of the policy or the payment of Proceeds.

The policies will not Lapse during the first three policy years provided that on each monthly anniversary date 1) is greater than or equal to 2), where:

1)	is the sum of all Premiums paid to date minus any Indebtedness, minus any partial surrenders; and
2)	is the sum of monthly Premiums required since the Policy Date, including the monthly minimum Premium for the current monthly anniversary date.

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If 1) is less than 2) and the Cash Surrender Value is less than zero, a Grace Period of 61 days from the monthly anniversary day will be allowed for the payment of sufficient Premium to satisfy the minimum Premium requirement. If sufficient Premium is not paid by the end of the Grace Period, the policy will Lapse without value. In any event, the policy will not Lapse as long as there is a positive Cash Surrender Value.

Beginning with the fourth policy year, if the Cash Surrender Value on a monthly anniversary day is not sufficient to cover the current policy charges, a Grace Period of 61 days from the monthly anniversary day will be allowed for the payment of sufficient Premium to cover the current policy charges due, plus an amount equal to three times the current monthly deduction.

Reinstatement

The policy owner may reinstate a Lapsed policy by:

• Submitting a written request at any time within three years after the end of the Grace Period and prior to the Maturity Date; and

• Providing further satisfactory evidence of insurability that Nationwide may require; and

❍	Paying an amount of Premium equal to the minimum monthly Premiums missed since the beginning of the Grace Period, if the policy terminated in the first three policy years; or
❍	Paying sufficient Premium to cover all policy charges that were due and unpaid during the Grace Period if the policy terminated in the fourth or later policy year; and

• Paying sufficient Premium to keep the policy In Force for three months from the date of reinstatement; and

• Paying or reinstating any Indebtedness against the policy which existed at the end of the Grace Period.

The policy owner may also reinstate coverage under certain Riders subject to satisfactory evidence of insurability.

The effective date of a reinstated policy, including any Riders, will be the monthly anniversary date on or next following the date the application for reinstatement is approved. If the policy is reinstated, the Cash Value on the date of reinstatement will be set equal to the lesser of:

• The Cash Value at the end of the Grace Period; or

• The surrender charge for the year from the Policy Date in which the policy was reinstated.

Nationwide will add any Premiums or loan repayments made to reinstate the policy. The allocations to the Sub-Accounts in effect at the start of the Grace Period will be reinstated, unless the policy owner instructs otherwise.

Surrenders

Full Surrender

The policy may be surrendered for the Cash Surrender Value at any time while it is In Force. A surrender will be effective as of the date Nationwide receives the policy owner's written surrender request at the Service Center. Nationwide reserves the right to require written requests to be submitted on current Nationwide forms. Notwithstanding anything to the contrary set forth in this prospectus, Nationwide currently accepts requests submitted via telephone, subject to dollar amount limitations and payment and other restrictions to prevent fraud.  Nationwide reserves the right to discontinue acceptance of telephonic requests at any time upon written notice.  Contact the Service Center for current limitations and restrictions. Nationwide may also require the policy owner to return the policy. Nationwide may postpone payment of that portion of the Cash Surrender Value attributable to the Fixed Account for up to six months.

Policy Restoration after a Full Surrender

Prior to the Insured's death, Nationwide will permit restoration of a surrendered policy pursuant to established procedures to meet the requirements of state insurance law regarding the replacement of life insurance (i.e., use of the Proceeds from a surrendered policy to purchase a new policy). Restored policies will be treated as if they were never surrendered for all purposes, including Investment Experience, interest, and deduction of charges, see Policy Restoration Procedure in the Statement of Additional Information.

Partial Surrender

The policy owner may request a partial surrender of the policy's Cash Surrender Value at any time after it has been In Force for one year from the Policy Date. Currently, there is no charge for partial surrenders. Partial surrenders are permitted if they satisfy the following requirements:

1) The minimum amount of any partial surrender is $500;

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2)	Partial surrenders may not reduce the Base Policy Specified Amount to less than $50,000;
3)	After a partial surrender, the Cash Surrender Value is greater than $500 or an amount equal to three times the current monthly deduction if higher;
4)	Maximum total partial surrenders in any policy year are limited to 10% of the total net Premium payments applied to the policy. Currently, this requirement is waived beginning in the 15th year if the Cash Surrender Value is $10,000 or more after the withdrawal; and
5)	After the partial surrender, the policy continues to qualify as life insurance under Section 7702 of the Code.

 Notwithstanding anything to the contrary set forth in this prospectus, Nationwide currently accepts requests submitted via telephone, subject to dollar amount limitations and payment and other restrictions to prevent fraud.  Nationwide reserves the right to discontinue acceptance of telephonic requests at any time upon written notice.  Contact the Service Center for current limitations and restrictions.

When a partial surrender is made, the Cash Value will be reduced by the amount of the partial surrender. Under Death Benefit Option 1, the Base Policy Specified Amount is reduced by the amount of the partial surrender, unless the Death Benefit is based on the applicable percentage of Cash Value. In that case, a partial surrender will decrease the Base Policy Specified Amount proportionally based on the applicable percentage of Cash Value by the amount the partial surrender exceeds the difference between the Death Benefit and Base Policy Specified Amount.

If a policy owner takes a partial surrender, Nationwide will surrender Accumulation Units proportionally from the Sub-Accounts equal to the amount of the partial surrender. If there is insufficient value in the Sub-Accounts, Nationwide will surrender amounts from the Fixed Account.

Partial surrenders may be subject to income tax penalties. They could also cause the policy to become a "modified endowment contract" under the Code, which could change the income tax treatment of any distribution from the policy, see Periodic Withdrawals, Non-Periodic Withdrawals, and Loans.

Reduction of Base Policy Specified Amount on a Partial Surrender

Nationwide will reduce the Cash Value of the policy by the amount of any partial surrender in the same proportion as how Cash Value is allocated among the Sub-Accounts. Nationwide will only reduce the Cash Value attributable to the Fixed Account when allocations in the Sub-Accounts are insufficient to cover the amount of the partial surrender.

Nationwide may reduce the Base Policy Specified Amount to ensure that the Net Amount At Risk does not increase due to a partial surrender. Because the policy's Net Amount At Risk is the same before and after the reduction, a partial surrender by itself does not alter the policy's cost of insurance. The policy's charges going forward will be based on a new Base Policy Specified Amount that will change the calculation of those charges. Depending on changes in variables such as the Cash Value, these charges may increase or decrease after the reduction in Base Policy Specified Amount.

Any reduction to the Base Policy Specified Amount will be made in the following order:

• against the most recent increase in the Base Policy Specified Amount;

• against the next most recent increases in the Base Policy Specified Amount in succession; and

• against the Base Policy Specified Amount under the original application.

The Death Benefit

Calculation of the Death Benefit

The Death Benefit will be calculated when Nationwide has received (at the Service Center) all information required to process the claim for Death Benefit Proceeds, including, but not limited to, proof that the Insured has died and any other information Nationwide may reasonably require. The Death Benefit may be subject to an adjustment if an error or misstatement was made upon application, or if the Insured dies by suicide.

While the policy is In Force, the Death Benefit will never be less than the Base Policy Specified Amount. The Death Benefit will depend on the death benefit option elected, certain Riders, and the tax test elected as discussed in greater detail below. The Death Benefit may vary with the Cash Value of the policy, which is affected by Investment Experience, Indebtedness, and any due and unpaid monthly deductions that accrued during a Grace Period.

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Death Benefit Options

Policy owners have a choice of one of two available death benefit options under the policy. If a death benefit option is not selected, Nationwide will issue the policy with Death Benefit Option 1. Not all death benefit options are available in all states.

Death Benefit Option 1: The Death Benefit will be the greater of the Total Specified Amount or the applicable percentage of Cash Value. The amount of the Death Benefit Proceeds will ordinarily not change for several years to reflect Investment Experience and may not change at all. If Investment Experience is favorable, the amount of the Death Benefit Proceeds may increase.

Death Benefit Option 2: The Death Benefit will be the greater of the Total Specified Amount plus the Cash Value as of the date of death or the applicable percentage of Cash Value, and will vary directly with Investment Experience.

In connection with both death benefit options, the term "applicable percentage" means:

1.	250% when the Insured is Attained Age 40 or less at the beginning of a policy year; and
2.	When the Insured is above Attained Age 40, the percentage shown in the "Applicable Percentage of Cash Value Table".

Applicable Percentage of Cash Value Table

Attained Age	Percentage of Cash Value
0-40	250%
41	243%
42	236%
43	229%
44	222%
45	215%
46	209%
47	203%
48	197%
49	191%
50	185%
51	178%
52	171%
53	164%
54	157%
55	150%
56	146%
57	142%
58	138%

Attained Age	Percentage of Cash Value
59	134%
60	130%
61	128%
62	126%
63	124%
64	122%
65	120%
66	119%
67	118%
68	117%
69	116%
70	115%
71	113%
72	111%
73	109%
74	107%
75	105%
76	105%
77	105%

Attained Age	Percentage of Cash Value
78	105%
79	105%
80	105%
81	105%
82	105%
83	105%
84	105%
85	105%
86	105%
87	105%
88	105%
89	105%
90	105%
91	104%
92	103%
93	102%
94	101%
95	101%

The Minimum Required Death Benefit

The policy has a Minimum Required Death Benefit. The Minimum Required Death Benefit is the lowest Death Benefit that will qualify the policy as life insurance under Section 7702 of the Code.

The tax tests for life insurance generally require that the policy have a significant element of life insurance and not be primarily an investment vehicle. At the time the policy is issued, the policy owner irrevocably elects one of the following tests to qualify the policy as life insurance under Section 7702 of the Code:

• the cash value accumulation test; or

• the guideline premium/cash value corridor test.

If a specific test is not elected, Nationwide will issue the policy with the guideline premium/cash value corridor test.

Cash Value Accumulation Test

The cash value accumulation test determines the Minimum Required Death Benefit by multiplying the Cash Value by a percentage set out in the Code. The percentages depend upon the Insured's age, sex, and underwriting classification. Under the cash value accumulation test, there is no limit to the amount that may be paid in Premiums as long as there is sufficient Death Benefit in relation to the Cash Value at all times.

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Guideline Premium/Cash Value Corridor Test

The guideline premium/cash value corridor test determines the Minimum Required Death Benefit by comparing the Death Benefit to an applicable percentage of the Cash Value. These percentages are set out in the Code, but the percentage varies only by the Attained Age of the Insured.

In deciding which test to elect for the policy, consider the following:

• The cash value accumulation test generally allows flexibility to pay more Premium, subject to Nationwide's approval of any increase in the policy's Net Amount At Risk that would result from higher Premium payments. Premium payments under the guideline premium/cash value corridor test are limited by Section 7702 of the Code.

• Generally, the guideline premium/cash value corridor test produces a higher Death Benefit in the early years of the policy while the cash value accumulation test produces a higher Death Benefit in the policy's later years.

• Monthly cost of insurance charges that vary with the amount of the Death Benefit may be greater during the years when the elected test produces a higher Death Benefit.

Regardless of which test is elected, Nationwide will monitor compliance to ensure that the policy meets the statutory definition of life insurance under the Code. As a result, the Proceeds payable under a policy should be excludable from gross income of the beneficiary for federal income tax purposes. Nationwide may refuse additional Premium payments or return Premium payments so that the policy continues to meet the Code's definition of life insurance. Consult a qualified tax advisor on all tax matters involving the policy.

Changes in the Death Benefit Option

After the first policy year, a policy owner may elect to change the death benefit option from either Death Benefit Option 1 to Death Benefit Option 2, or from Death Benefit Option 2 to Death Benefit Option 1. Nationwide will permit only one change of death benefit option per policy year. The effective date of a change will be the monthly anniversary of the Policy Date following the date Nationwide approves the change.

For any change in the death benefit option to become effective, the Cash Surrender Value after the change must be sufficient to keep the policy In Force for at least three months.

Upon effecting a death benefit option change, the Total Specified Amount may be changed (either increased or decreased) so that the Net Amount At Risk remains the same before and after the change on the date of the change. Because the policy's Net Amount At Risk remains the same before and after the change, changing the death benefit option and preserving the Net Amount At Risk by itself does not alter the policy charges. The policy charges going forward will be based on the adjusted Total Specified Amount. Depending on changes in factors such as fluctuations in the policy's Cash Value, these charges may increase or decrease after the death benefit option change.

The policy owner should request an illustration demonstrating the impact of a change in the policy's death benefit option.

Nationwide will refuse a death benefit option change that would reduce the Total Specified Amount to a level where the Premium already paid would exceed any premium limitations under the Code.

Where the policy owner has selected the guideline premium/cash value corridor test, a change in death benefit option will not be permitted if it results in the total Premium paid exceeding any premium limitations under Section 7702 of the Code.

Incontestability

Nationwide will not contest payment of the Death Benefit based on the initial Total Specified Amount after the policy has been In Force during the Insured's lifetime for two years from the Policy Date, and, in some states, within two years from a reinstatement date. For any change in Total Specified Amount requiring evidence of insurability, Nationwide will not contest payment of the Death Benefit based on such increase after it has been In Force during the Insured's lifetime for two years from its effective date, and, in some states, within two years from a subsequent reinstatement date. The incontestability period in some states may be less than two years.

Suicide

If the Insured dies by suicide within two years from the Policy Date, and, in some states, within two years of a reinstatement date, Nationwide will pay no more than the sum of the Premiums paid, less any Indebtedness, and less any partial surrenders. Similarly, if the Insured dies by suicide within two years from the date an application for an increase in the Total Specified Amount was accepted by Nationwide, and, in some states, within two years from a subsequent

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reinstatement date, Nationwide will pay no more than the Death Benefit Proceeds associated with insurance that has been In Force for at least two years from the Policy Date, plus the Cost of Insurance Charges associated with any increase in Total Specified Amount that has been In Force for a shorter period. The suicide period in some states may be less than two years.

Proceeds Upon Maturity

If the policy is In Force on the Maturity Date we will pay the Proceeds to the Policy Owner.

Normally, the Proceeds will be paid within seven days after receipt of the policy owner's written request for payment of Proceeds at the Service Center. Nationwide may postpone payment of the Proceeds on the days that it is unable to price Accumulation Units, see Valuation of Accumulation Units. The Proceeds will equal the policy's Cash Value minus any Indebtedness. The policy is terminated once the Proceeds are paid.

Extending Coverage Beyond the Maturity Date

Nationwide may offer to extend coverage beyond the Maturity Date to coincide with the Insured's death, after which Nationwide will pay the Proceeds to the beneficiary. During this time, the policy owner will still be able to request partial surrenders. The extension of coverage beyond the Maturity Date will be for the policy Cash Value. If the policy owner elects to extend coverage beyond the Maturity Date, the policy will be endorsed so that:

(1)	no changes to the Base Policy Specified Amount will be allowed;
(2)	no additional Premium payments will be allowed;
(3)	100% of the Cash Value will be transferred to the fixed account;
(4)	your policy's Death Benefit will become the Cash Value, irrespective of your previous death benefit option choice;
(5)	no additional monthly periodic charges will be deducted; and
(6)	loan interest will continue to be charged on Indebtedness.

The primary purpose of the coverage extension is to continue the life insurance coverage and avoid current income taxes on any earnings in excess of your cost basis if the maturity Proceeds are taken (see, "Surrendering the Policy; Maturity").

Assuming no Indebtedness on the Maturity Date and no partial surrenders or loans are taken after the Maturity Date, the Proceeds after the Maturity Date coverage extension will equal or exceed the Proceeds at maturity. However, because the loan interest rate charged may be greater than loan interest credited, if you have an outstanding loan on or after the Maturity Date, Proceeds after the Maturity Date may be less than the proceeds at maturity.

Coverage beyond the Maturity Date will not be extended when the policy would fail the definition of life insurance under the Code (see "The Death Benefit").

Treatment of Unclaimed Property

Every state has unclaimed property laws which generally declare life insurance policies to be abandoned after a period of inactivity of three to five years from the policy Maturity Date or the date Nationwide becomes informed that a Death Benefit is due and payable. For example, if the payment of a Death Benefit has been triggered, but, if after a thorough search, Nationwide is still unable to locate the beneficiary of the Death Benefit, or the beneficiary does not come forward to claim the Death Benefit in a timely manner, Nationwide will escheat the Death Benefit to the abandoned property division or unclaimed property office of the state in which the beneficiary or the policy owner last resided, as shown on Nationwide's books and records, or to Ohio, Nationwide's state of domicile. If a claim is subsequently made, the state is obligated to pay any such amount (without interest) to the designated recipient upon presentation of proper documentation.

To prevent escheatment, it is important to update beneficiary designations - including complete names, complete addresses, phone numbers, and social security numbers - as they change. Such updates should be sent to the Service Center.

Taxes

The tax treatment of life insurance policies under the Internal Revenue Code ("Code") is complex and the tax treatment of the policy will depend on the policy owner's particular circumstances. The policy owner should seek competent tax advice regarding the tax treatment of the policy given their situation. The following discussion provides a general overview of the

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Code's provisions relating to certain common life insurance policy transactions. Some of the items discussed below may not be applicable to the life insurance policy described herein. It is not and cannot be comprehensive, and it cannot replace personalized advice provided by a competent tax professional.

Types of Taxes

Federal Income Tax

Generally, the United States assesses a tax on income, which is broadly defined to include all items of income from whatever source, unless specifically excluded. Certain expenditures can reduce income for tax purposes and correspondingly the amount of tax payable. These expenditures are called deductions. While there are many more income tax concepts under the Code, the concepts of "income" and "deduction" are the most fundamental to the federal income tax treatment that pertains to this policy.

Federal Transfer Tax

In addition to the income tax, the United States also assesses a tax on some or all of the value of certain transfers of wealth made by gift while a person is living (the federal gift tax), and by bequest or otherwise at the time of a person's death (the federal estate tax).

The federal gift tax is imposed on the value of the property (including cash) transferred by gift. Each donor is allowed to exclude an amount per recipient from the value of present interest gifts. In addition, each donor is allowed a credit against the tax on five million dollars in lifetime gifts (calculated after taking into account the applicable exclusion amount). An unlimited marital deduction may be available for certain lifetime gifts made by the donor to the donor's spouse.

For 2011 and 2012, an estate of less than $5,000,000 (inclusive of certain pre-death gifts) will not incur a federal estate tax liability. Also, the American Taxpayer Relief Act ("ATRA") enacted on January 1, 2013, permanently provides for a maximum federal estate tax rate of 40% with an annually inflation adjusted $5 million exemption for estates of persons dying after December 31, 2012.

Under current law, an unlimited marital deduction is available for federal estate tax purposes for certain amounts that pass to the surviving spouse.

If the transfer is made to someone two or more generations younger than the transferor, the transfer may be subject to the federal generation-skipping transfer tax ("GSTT"). The GSTT provisions generally apply to the same transfers that are subject to estate or gift taxes. The GSTT is imposed at a flat rate equal to the maximum estate tax rate subject to any applicable exemptions. As with the estate tax, the GSTT tax has been repealed for 2010; however, ATRA permanently provides for a GSTT tax rate of 40% with an annually inflation adjusted $5 million exemption.

State and Local Taxes

State and local estate, inheritance, income and other tax consequences of ownership or receipt of policy proceeds depend on the circumstances of each policy owner or beneficiary. While these taxes may or may not be substantial in every policy owner's case, state by state differences of these taxes preclude a useful description of them in this prospectus.

Buying the Policy

Federal Income Tax

Generally, the Code treats life insurance premiums as a nondeductible expense for income tax purposes.

Federal Transfer Tax

Generally, the Code treats the payment of premiums on a life insurance policy as a gift when the premium payment benefits someone else (such as when premium payments are paid by someone other than the policy owner). Gifts are not generally included in the recipient's taxable income. If the policy owner (whether or not they are the insured) transfers ownership of the policy to another person, the transfer may be subject to a federal gift tax.

Investment Gain in the Policy

The income tax treatment of changes in the policy's cash value depends on whether the policy is "life insurance" under the Code. If the policy meets the definition of life insurance, then the increase in the policy's cash value is not included in the policy owner's taxable income for federal income tax purposes unless it is distributed to the policy owner before the death of the insured.

To qualify as life insurance, the policy must meet certain tests set out in Section 7702 of the Code. Nationwide will monitor the policy's compliance with Code Section 7702, and take whatever steps are necessary to stay in compliance.

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Diversification

In addition to meeting the tests required under Section 7702, Section 817(h) of the Code requires that the investments of the separate account be adequately diversified. Regulations under Code Section 817(h) provide that a variable life policy that fails to satisfy the diversification standards will not be treated as life insurance unless such failure was inadvertent, is corrected, and the policy owner or the issuer pays an amount to the IRS. If the failure to diversify is not corrected, the income and gain in the policy would be treated as taxable ordinary income for federal income tax purposes.

Nationwide will also monitor compliance with Code Section 817(h) and the regulations applicable to Section 817(h) and, to the extent necessary, take appropriate action to remain in compliance.

Representatives of the IRS have informally suggested, from time to time, that the number of underlying investment options available or the number of transfer opportunities available under a variable insurance product may be relevant in determining whether the product qualifies for the desired tax treatment. In 2003, the IRS issued formal guidance, in Revenue Ruling 2003-91, that indicates that if the number of underlying investment options available in a variable insurance product does not exceed 20, the number of underlying investment options alone would not cause the policy to not qualify for the desired tax treatment. The IRS has also indicated that exceeding 20 underlying investment options may be considered a factor, along with other factors including the number of transfer opportunities available under the policy, when determining whether the policy qualifies for the desired tax treatment. The revenue ruling did not indicate the number of underlying investment options, if any, that would cause the policy to not provide the desired tax treatment. Should the U.S. Secretary of the Treasury issue additional rules or regulations limiting: the number of underlying investment options, transfers between underlying investment options, exchanges of underlying investment options or changes in the investment objectives of underlying investment options such that the policy would no longer qualify as life insurance under Section 7702 of the Code, Nationwide will take whatever steps are available to remain in compliance.

Based on the above, the policy should be treated as life insurance for federal income tax purposes.

Periodic Withdrawals, Non-Periodic Withdrawals and Loans

The tax treatment described in this section applies to withdrawals and loans, premiums Nationwide accepts but then returns to meet the Code's definition of life insurance, and amounts used to pay the premium on any rider to the policy.

The income tax treatment of distributions of cash from the policy depends on whether the policy is also a "modified endowment contract" under the Code. Generally, the income tax consequences of owning a life insurance policy that is not a modified endowment contract are more advantageous than the tax consequences of owning a life insurance policy that is a modified endowment contract.

The policies offered by this prospectus may or may not be issued as modified endowment contracts. If a policy is issued as a modified endowment contract, it will always be a modified endowment contract; a policy that is not issued as a modified endowment contract can become a modified endowment contract due to subsequent transactions with respect to the policy, such as payment of additional premiums. If the policy is not issued as a modified endowment contract, Nationwide will monitor it and advise the policy owner if the payment of a premium, or other transaction, may cause the policy to become a modified endowment contract. It is only with the policy owner's written authorization that Nationwide will permit the policy to become a modified endowment policy. Otherwise, Nationwide will reject the requested action or refund any Premium paid in excess of the modified endowment limits.

Depending on the policy owner's circumstances, the use of the cash value of the policy to pay for the cost of any rider added to the base policy, could be treated as a distribution, and would be subject to the rules described below. Policy owners should seek competent tax advice regarding the tax treatment of the addition of any rider to the policy, based on the policy owner's individual facts and circumstances.

In general, interest the policy owner pays on a loan from a policy will not be deductable. Also, if a loan from a policy that is not a modified endowment contract is outstanding when the policy is canceled or lapses, the amount of the outstanding indebtedness will be added to the amount distributed and will be taxed accordingly. Before taking a policy loan, the policy owner should consult a tax advisor as to the tax consequences.

When the Policy is Life Insurance that is a Modified Endowment Contract

Section 7702A of the Code defines modified endowment contracts as those life insurance policies issued or materially changed on or after June 21, 1988 on which the total premiums paid during the first 7 years exceed the amount that would have been paid if the policy provided for paid up benefits after 7 level annual premiums. Under certain conditions, a policy may become a modified endowment contract, or may become subject to a new 7 year testing period as a result of a "material change" or a "reduction in benefits" as defined by Section 7702A(c) of the Code.

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All modified endowment contracts issued to the same owner by the same company during a single calendar year are required to be aggregated and treated as a single policy for purposes of determining the amount that is includible in income when a distribution occurs.

The Code provides special rules for the taxation of surrenders, partial surrenders, loans, collateral assignments, and other pre-death distributions from modified endowment contracts. Under these special rules, such transactions are taxable to the extent that at the time of the transaction the cash value of the policy exceeds the 'investment in the contract' (generally, the net Premiums paid for the policy). In addition, a 10% tax penalty generally applies to the taxable portion of such distributions unless the policy owner is over age 59½ or disabled, or the distribution is part of a series of substantially equal periodic payments as defined in the Code.

When the Policy is Life Insurance that is NOT a Modified Endowment Contract

If the policy is not issued as a modified endowment contract, Nationwide will monitor premiums paid and will notify the policy owner when the policy is in jeopardy of becoming a modified endowment contract.

Distributions from life insurance policies that are not modified endowment contracts generally are treated as being first from the investment in the contract, and then from the income in the policy. Because premium payments are generally nondeductible, distributions not in excess of investment in the contract are generally not includible in income; instead, they reduce the owner's investment in the contract.

However, if a policy is not a modified endowment contract, a cash distribution during the first 15 years after a policy is issued that causes a reduction in death benefits may still be fully or partially taxable to the policy owner pursuant to Section 7702(f)(7) of the Code. The policy owner should carefully consider this potential tax ramification and seek further information before requesting any changes in the terms of the policy.

In addition, a loan from a life insurance policy that is not a modified endowment contract is not taxable when made, although it can be treated as a distribution if it is forgiven during the owner's lifetime. Distributions from policies that are not modified endowment contracts are not subject to the 10% early distribution penalty tax.

Surrendering the Policy; Maturity

A full surrender, cancellation of the policy by lapse, or the maturity of the policy on its maturity date may have adverse income tax consequences. If the amount received (or are deemed received upon maturity) plus total policy indebtedness exceeds the investment in the contract, then the excess generally will be treated as taxable ordinary income, regardless of whether or not the policy is a modified endowment contract. In certain circumstances, for example when the policy indebtedness is very large, the amount of tax could exceed the amount distributed to the policy owner at surrender.

The purpose of the maturity date extension feature is to permit the policy to continue to be treated as life insurance for tax purposes. Although Nationwide believes that the extension provision will cause the policy to continue to be treated as life insurance after the initially scheduled maturity date, that result is not certain due to a lack of specificity in the guidance on the issue. The policy owner should consult with a qualified tax advisor regarding the possible adverse tax consequences that could result from an extension of the scheduled maturity date.

Additional Medicare Tax

Effective January 1, 2013, Section 1411 of the Code imposes a surtax of 3.8% on certain net investment income received by individuals and certain trusts and estates. The surtax is imposed on the lesser of (a) net investment income or (b) the excess of the modified adjusted gross income over a threshold amount. For individuals, the threshold amount is $250,000 (married filing jointly, or qualifying widow(er) with dependent child)); $125,000 (married filing separately); or $200,000 (single, or head of household (with qualifying person)). The threshold for an estate or trust that is subject to the surtax is generally equal to the dollar amount at which the highest tax bracket under section 1(e) begins for the taxable year; for 2014, that amount is $12,150.

Modified adjusted gross income is equal to gross income with several modifications; the policy owner should consult with a tax advisor regarding how to determine the policy owner's modified adjusted gross income for purposes of determining the applicability of the surtax.

Net investment income includes, but is not limited to, interest, dividends, capital gains, rent and royalty income, and income from nonqualified annuities; and may include taxable distributions from, and gain from the sale or surrenders of, life insurance policies.

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Net investment income does not include, among other things, distributions from certain qualified plans (such as IRAs, Roth IRAs, and plans described in Internal Revenue Code Sections 401(a), 401(k), 403(a), 403(b) or 457(b)); however, such distributions, to the extent that they are includible in income for federal income tax purposes are includible in modified adjusted gross income.

Sale of a Life Insurance Policy

If a life insurance policy is sold for a gain, all or a portion of the gain will be treated as ordinary income. In Revenue Ruling 2009-13, the IRS concluded that the amount of gain realized from the sale of a life insurance policy is equal to the amount received (which can include relief from, or assumption of debt) over the owner's basis in the policy. The portion of the gain that is equal to the excess of the cash surrender value over the investment in the contract would be treated as ordinary income; any additional gain would be short or long-term capital gain, depending on the holding period. The ruling also concluded that the amount of gain resulting from the sale of a life insurance policy is equal to the excess of the amount received over the owner's basis in the policy (the investment in the contract reduced by the cost of insurance previously paid out of the cash value). Consequently, a sale may result in more gain than a surrender for the same amount.

Exchanging the Policy for Another Life Insurance Policy

Generally, policy owners will be taxed on amounts received in excess of premium payments when the policy is surrendered in full. If, however, the policy is exchanged for another life insurance policy, modified endowment contract, or annuity contract, the transaction will not be taxed on the excess amount if the exchange meets the requirements of Code Section 1035. To meet Section 1035 requirements, the insured named in the policy must be the insured for the new policy. Generally, the new policy or contract will be treated as having the same issue date and tax basis as the old policy or contract.

If the policy or contract is subject to a policy indebtedness that is discharged as part of the exchange transaction, the discharge of the indebtedness may be taxable. Policy owners should consult with their personal tax or legal advisors in structuring any policy exchange transaction.

Taxation of Death Benefits

Federal Income Tax

The death benefit is generally excludable from the beneficiary's gross income under Section 101 of the Code. However, if the policy had been transferred to a new policy owner for valuable consideration (e.g., through a sale of the policy), a portion of the death benefit may be includible in the beneficiary's gross income when it is paid.

The payout option selected by the policy's beneficiary may affect how the payments received by the beneficiary are taxed. Under the various payout options, the amount payable to the beneficiary may include earnings on the death benefit, which will be taxable as ordinary income. For example, if the beneficiary elects to receive interest only, then the entire amount of the interest payment will be taxable to the beneficiary; if a periodic payment (whether for a fixed period or for life) is selected, then a portion of each payment will be taxable interest income, and a portion will be treated as the nontaxable payment of the death benefit. The policy's beneficiaries should consult with their tax advisors to determine the tax consequences of electing a payout option, based on their individual circumstances.

Special federal income tax considerations for life insurance policies owned by employers

Sections 101(j) and 6039I of the Code provide special rules regarding the tax treatment of death benefits that are payable under life insurance policies owned by the employer of the insured. These provisions are generally effective for life insurance policies issued after August 17, 2006. If a life insurance policy was issued on or before August 17, 2006, but materially modified after that date, it will be treated as having been issued after that date for purposes of Section 101(j). Policies issued after August 17, 2006 pursuant to a Section 1035 exchange generally are excluded from the operation of these provisions, provided that the policy received in the exchange does not have a material increase in death benefit or other material change with respect to the old policy.

Section 101(j) provides the general rule that, with respect to an employer-owned life insurance policy, the amount of death benefit payable directly or indirectly to the employer that may be excluded from income cannot exceed the sum of premiums and other payments paid by the policy owner for the policy. Consequently, under this general rule, the entire death benefit, less the cost to the policy owner, will be taxable. Although Section 101(j) is not clear, if lifetime distributions from the policy are made as a nontaxable return of premium, it appears that the reduction would apply for Section 101(j) purposes and reduce the amount of premiums for this purpose.

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There are two exceptions to this general rule of taxability, provided that statutory notice, consent, and information requirements are satisfied. First, if proper notice and consent are given and received, and if the insured was an employee at any time during the 12-month period before the insured's death, then Section 101(j) would not apply.

Second, if proper notice and consent are given and received and, at the time that the policy is issued, the insured is either a director, a "highly compensated employee" (within the meaning of Section 414(q) of the Code without regard to paragraph (1)(B)(ii) thereof), or a "highly compensated individual" (within the meaning of Section 105(h)(5), except "35%" is substituted for "25%" in paragraph (C) thereof), then Section 101(j) would not apply.

Code Section 6039I requires any policy owner of an employer-owned policy to file an annual return showing (a) the number of employees of the policy owner, (b) the number of such employees insured under employee-owned policies at the end of the year, (c) the total amount of insurance in force with respect to those policies at the end of the year, (d) the name, address, taxpayer identification number and type of business of the policy owner, and (e) that the policy owner has a valid consent for each insured (or, if all consents are not obtained, the number of insured employees for whom such consent was not obtained). Proper recordkeeping is also required by this section.

It is the employer's responsibility to (a) provide the proper notice to each insured, (b) obtain the proper consent from each insured, (c) inform each insured in writing that the employer-owner will be the beneficiary of any proceeds payable upon the death of the insured, and (d) file the annual return required by Section 6039I. If the employer-owner fails to provide the necessary notice and information, or fails to obtain the necessary consent, the death benefit will be taxable when received. If the employer-owner fails to file a properly completed return under Section 6039I, a penalty may apply.

Federal Transfer (Estate, Gift and Generation Skipping Transfer) Taxes

When the insured dies, the death benefit will generally be included in the insured's federal gross estate if: (1) the proceeds were payable to or for the benefit of the insured's estate; or (2) the insured held any "incident of ownership" in the policy at death or at any time within 3 years of death. An incident of ownership, in general, is any right in the policy that may be exercised by the policy owner, such as the right to borrow on the policy or the right to name a new beneficiary.

If the beneficiary is two or more generations younger than the insured, the death benefit may be subject to the GSTT. Pursuant to regulations issued by the U.S. Secretary of the Treasury, Nationwide may be required to withhold a portion of the proceeds and pay them directly to the IRS as the GSTT payment.

If the policy owner is not the insured or a beneficiary, payment of the death benefit to the beneficiary will be treated as a gift to the beneficiary from the policy owner.

Terminal Illness

Certain distributions made under a policy on the life of a "terminally ill individual" or a "chronically ill individual," as those terms are defined in the Code, are treated as death proceeds, see Taxation of Death Benefits.

Special Considerations for Corporations

Section 264 of the Code imposes a number of limitations on the interest and other business deductions that may otherwise be available to businesses that own life insurance policies. In addition, the premium paid by a business for a life insurance policy is not deductible as a business expense or otherwise if the business is directly or indirectly a beneficiary of the policy.

For purposes of the alternative minimum tax ("AMT") that may be imposed on corporations, the death benefit from a life insurance policy, even though excluded from gross income for normal tax purposes, is included in "adjusted current earnings" for AMT purposes. In addition, although increases to the cash surrender value of a life insurance policy are generally excluded from gross income for normal income tax purposes, such increases are included in adjusted current earnings for income tax purposes.

Due to the complexity of these rules, and because they are affected by the policy owner's facts and circumstances, the policy owner should consult with legal and tax counsel and other competent advisors regarding these matters.

Federal appellate and trial courts have examined the economic substance of transactions involving life insurance policies owned by corporations. These cases involved relatively large loans against the policy's cash value as well as tax deductions for the interest paid on the policy loans by the corporate policy owner to the insurance company. Under the particular factual circumstances in these cases, the courts determined that the corporate policy owners should not have taken tax deductions for the interest paid. Accordingly, the court determined that the corporations should have paid taxes on the amounts deducted. Corporations should consider, in consultation with tax advisors familiar with these matters, the impact of these decisions on the corporation's intended use of the policy.

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Business Uses of the Policy

The life insurance policy may be used in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans, and others. The tax consequences of these plans may vary depending on the particular facts and circumstances of each individual arrangement. Therefore, if the policy owner is contemplating using the policy in any arrangement the value of which depends in part on its tax consequences, the policy owner should be sure to consult a tax advisor as to tax attributes of the arrangement.

Non-Resident Aliens and Other Persons Who are Not Citizens of the United States

Special income tax laws and rules apply to non-resident aliens of the United States including certain withholding requirements with respect to pre-death distributions from the policy. In addition, foreign law may impose additional taxes on the policy, the death benefit, or other distributions and/or ownership of the policy.

In addition, special gift, estate and GSTT laws and rules may apply to non-resident aliens, and to transfers to persons who are not citizens of the United States, including limitations on the marital deduction if the surviving or donee spouse is not a citizen of the United States.

If the policy owner is a non-resident alien, or a resident alien, or if any of the policy's beneficiaries (including the policy owner's spouse) are not citizens of the United States, the policy owner should confer with a competent tax advisor with respect to the tax treatment of this policy.

If the policy owner, the insured, the beneficiary, or other person receiving any benefit or interest in or from the policy, are not both a resident and citizen of the United States, there may be a tax imposed by a foreign country that is in addition to any tax imposed by the United States. The foreign law (including regulations, rulings, treaties with the United States, and case law) may change and impose additional or increased taxes on the policy, payment of the death benefit, or other distributions and/or ownership of the policy.

Withholding and Tax Reporting

Distribution of taxable income from a life insurance policy, including a life insurance policy that is a modified endowment contract, is subject to federal income tax withholding. Generally, the recipient may elect not to have the withholding taken from the distribution. Nationwide will withhold income tax unless the policy owner advises Nationwide, in writing, of their request not to withhold. If the policy owner requests that taxes not be withheld, or if the taxes withheld are insufficient, the policy owner may be liable for payment of an estimated tax.

A policy owner is not permitted to waive withholding if the payee does not provide Nationwide with a taxpayer identification number; or if Nationwide receives notice from the Internal Revenue Service that the taxpayer identification number furnished by the payee is incorrect. In that instance, a distribution will be subject to withholding rates established by Section 3405 of the Code and will be applied against the amount of income that is distributed.

However, interest earned on a death benefit may be subject to mandatory back-up withholding. Mandatory backup withholding means that Nationwide is required to withhold taxes on income earned at the rate established by Section 3406 of the Code. Mandatory backup withholding may arise if Nationwide has not been provided a taxpayer identification number, or if the IRS notifies Nationwide that back-up withholding is required.

In certain employer-sponsored life insurance arrangements, participants may be required to report for income tax purposes, one or more of the following:

• the value each year of the life insurance protection provided;

• an amount equal to any employer-paid Premiums;

• some or all of the amount by which the current value exceeds the employer's interest in the policy; and/or

• interest that is deemed to have been forgiven on a loan that Nationwide deems to have been made by the employer.

Participants in an employer-sponsored plan relating to this policy should consult with the sponsor or the administrator of the plan, and/or with their personal tax or legal advisor to determine the tax consequences, if any, of their employer-sponsored life insurance arrangements.

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Taxes and the Value of the Policy

For federal income tax purposes, a separate account is not a separate entity from the company. Thus, the tax status of the separate account is not distinct from our status as a life insurance company. Investment income and realized capital gains on the assets of the separate account are reinvested and taken into account in determining the value of Accumulation Units. As a result, such investment income and realized capital gains are automatically applied to increase reserves under the policies.

At present, Nationwide does not expect to incur any federal income tax liability that would be chargeable to the Accumulation Units. Based upon these expectations, no charge is being made against the policy's Accumulation Units for federal income taxes. If, however, Nationwide determines that taxes may be incurred, Nationwide reserves the right to assess a charge for these taxes.

Nationwide may also incur state and local taxes (in addition to those described in the discussion of the Premium Taxes) in several states. At present, these taxes are not significant. If they increase, however, charges for such taxes may be made that would decrease the value of the policy's Accumulation Units.

Tax Changes

The foregoing is a general discussion of various tax matters pertaining to life insurance policies. It is based on our understanding of federal tax laws as currently interpreted by the IRS, is general and is not intended as tax advice. The policy owner should consult their independent legal, tax and/or financial advisor.

The Code has been subjected to numerous amendments and changes, and it is reasonable to believe that it will continue to be revised. The United States Congress has, in the past, considered numerous legislative proposals that, if enacted, could change the tax treatment of life insurance policies. For example the "FY 2013, Budget of the United States Government" includes a proposal which, if enacted, would affect the treatment of corporate owned life insurance policies by limiting the availability of certain interest deductions for companies that purchase those policies. No proposed statutory language has been released yet, so the specifics of the proposal cannot be addressed herein. Such a proposal, if enacted, could have an adverse tax impact on the ownership of life insurance by or for the benefit of business entities. It is reasonable to believe that such proposals, and future proposals, may be enacted into law. The U.S. Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing law that may differ from its current positions on these matters. In addition, current state law (which is not discussed herein) and future amendments to state law may affect the tax consequences of the policy.

Any or all of the foregoing may change from time to time without any notice, and the tax consequences arising out of a policy may be changed retroactively. There is no way of predicting if, when, or to what extent any such change may take place. Nationwide make no representation as to the likelihood of the continuation of these current laws, interpretations, and policies.

Nationwide Life Insurance Company

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

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

Nationwide VLI Separate Account-2

Organization, Registration, and Operation

Nationwide VLI Separate Account-2 is a separate account established under Ohio law. Nationwide owns the assets in this account and is obligated to pay all benefits under the policies. Nationwide may use the separate account to support other variable life insurance policies that it issues. The separate account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940 ("1940 Act") and qualifies as a "separate account" within the meaning of the federal securities laws. For purposes of federal securities laws, the separate account is, and will remain, fully funded at all times. This registration does not involve the SEC's supervision of the separate account's management or investment practices or policies.

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The separate account is divided into Sub-Accounts that invest in shares of the underlying mutual funds. Nationwide buys and sells the mutual fund shares at their respective NAV. Any dividends and distributions from a mutual fund are reinvested at NAV in shares of that mutual fund.

Income, gains, and losses, whether or not realized, from the assets in the separate account will be credited to, or charged against, the separate account without regard to Nationwide's other income, gains, or losses. Income, gains, and losses credited to, or charged against, a Sub-Account reflect the Sub-Account's own Investment Experience and not the investment experience of our other assets. The separate account's assets are held separately from Nationwide's other assets and are not part of Nationwide's general account. Nationwide may not use the separate account's assets to pay any of its liabilities other than those arising from the policies. Nationwide will hold assets in the separate account equal to its liabilities. The separate account may include other Sub-Accounts that are not available under the policies, and are not discussed in this prospectus.

Nationwide does not guarantee any money placed in this separate account. The value of each Sub-Account will increase or decrease, depending on the Investment Experience of the corresponding mutual fund. A policy owner could lose some or all of his or her money.

Addition, Deletion, or Substitution of Mutual Funds

Where permitted by applicable law, Nationwide reserves the right to:

• remove, close, combine, or add Sub-Accounts and make new Sub-Accounts available;

• substitute shares of another mutual fund, which may have different fees and expenses, for shares of an existing mutual fund;

• transfer assets supporting the policies from one Sub-Account to another, or from one separate account to another;

• combine the separate account with other separate accounts, and/or create new separate accounts;

• deregister the separate account under the 1940 Act, or operate the separate account or any Sub-Account as a management investment company under the 1940 Act or as any other form permitted by law; and

• modify the policy provisions to reflect changes in the Sub-Accounts and the separate account to comply with applicable law.

Nationwide reserves the right to make other structural and operational changes affecting this separate account.

Nationwide will provide notice of any of the changes above. Also, to the extent required by law, Nationwide will obtain the required orders, approvals, and/or regulatory clearance from the appropriate government agencies (such as the various insurance regulators or the SEC). Also, to the extent required by state law, Nationwide will accept an irrevocable election from the policy owner to transfer 100% of the policy's Cash Value to the Fixed Account if received within 60 days after the date the policy owner received notification of a material change in the investment policy of the separate account.

Substitution of Securities

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

(1)	shares of a current underlying mutual fund are no longer available for investment; or
(2)	further investment in an underlying mutual fund is inappropriate.

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

The substitute mutual fund may have different fees and expenses. Substitution may be made with respect to existing investments or the investment of future Premium, or both. Nationwide may close Sub-Accounts to allocations of Premiums or policy value, or both, at any time in its sole discretion. The mutual funds, which sell their shares to the Sub-Accounts pursuant to participation agreements, also may terminate these agreements and discontinue offering their shares to the Sub-Accounts.

Deregistration of the Separate Account

Nationwide may deregister Nationwide VLI Separate Account-2 under the 1940 Act in the event the separate account meets an exemption from registration under the 1940 Act, if there are no shareholders in the separate account or for any other purpose approved by the SEC.

All policy owners will be notified in the event Nationwide deregisters Nationwide VLI Separate Account-2.

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Voting Rights

Although the separate account owns the mutual fund shares, policy owners are the beneficial owner of those shares. When a matter involving a mutual fund is subject to shareholder vote, unless there is a change in existing law, Nationwide will vote the separate account's shares only as instructed by policy owners.

When a shareholder vote occurs, a policy owner will have the right to instruct Nationwide how to vote. The weight of each vote is based on the number of mutual fund shares that corresponds to the amount of Cash Value a policy has allocated to that mutual fund's Sub-Account (as of a date set by the mutual fund). Nationwide will vote shares for which no instructions are received in the same proportion as those that are received. What this means is that when only a small number of policy owners vote, each vote has a greater impact on, and may control the outcome of the vote.

Material Conflicts

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

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

Legal Proceedings

Nationwide Life Insurance Company

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

The Company is subject to legal and regulatory proceedings in the ordinary course of its business. The Company's legal and regulatory matters include proceedings specific to the Company and other proceedings generally applicable to business practices in the industries in which the Company operates. These matters are subject to many uncertainties, and given their complexity and scope, their outcomes cannot be predicted. Regulatory proceedings could also affect the outcome of one or more of the Company's litigation matters. Furthermore, it is often not possible to determine the ultimate outcomes of the pending regulatory investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs' claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. The Company believes, however, that based on currently known information, the ultimate outcome of all pending legal and regulatory matters is not likely to have a material adverse effect on the Company's condensed consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that such outcomes could materially affect the Company's condensed consolidated financial position or results of operations in a particular quarter or annual period.

The various businesses conducted by the Company are subject to oversight by numerous federal and state regulatory entities, including but not limited to the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Department of Labor, the Internal Revenue Service, and state insurance authorities. Such regulatory entities may, in the normal course, be engaged in general or targeted inquiries, examinations and investigations of the Company and/or its affiliates. The financial services industry has been the subject of increasing scrutiny in connection with a broad spectrum of regulatory issues; with respect to all such scrutiny directed at the Company and/or its affiliates, the Company is cooperating with regulators. The Company will cooperate with Nationwide Mutual Insurance Company (NMIC) insofar as any inquiry, examination or investigation encompasses NMIC's operations.

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On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. On November 18, 2009, the plaintiffs filed a sixth amended complaint amending the list of named plaintiffs and claiming to represent a class of qualified retirement plan trustees under the Employee Retirement Income Security Act of 1974 (ERISA) that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NFS and NLIC, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys' fees. On November 6, 2009, the Court granted the plaintiffs' motion for class certification. On October 21, 2010, the District Court dismissed NFS from the lawsuit. On February 6, 2012, the Second Circuit Court of Appeals vacated the November 6, 2009 order granting class certification and remanded the case back to the District Court for further consideration. On September 6, 2013, the District Court granted the plaintiffs' motion for class certification. The case is set for trial beginning February 9, 2015. NLIC continues to defend this lawsuit vigorously.

On November 20, 2007, Nationwide Retirement Solutions, Inc. (NRS) and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On March 12, 2010, NRS and NLIC were named in a Second Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Steven E. Coker, Sandra H. Turner, David N. Lichtenstein and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, Inc., PEBCO, Inc. and Fictitious Defendants A to Z claiming to represent a class of all participants in the Alabama State Employees Association, Inc. (ASEA) Plan, excluding members of the Deferred Compensation Committee, ASEA's directors, officers and board members, and PEBCO's directors, officers and board members. On October 22, 2010, the parties to this action executed a court approved stipulation of settlement that agreed to certify a class for settlement purposes only, that provided for payments to the settlement class, and that provided for releases, certain bar orders, and dismissal of the case. The settlement fund has been paid out. On December 6, 2011, the Court entered an Order that NRS owed indemnification to ASEA and PEBCO for only the Coker (Gwin) class action, and dismissed NLIC. The Company resolved the indemnification claims of ASEA. On February 15, 2013, the Court issued its Order determining the amount of fees due to PEBCO on its indemnification claim. On March 28, 2014, the Alabama Supreme Court reversed the trial Court decision awarding PEBCO its attorney fees and remanded the case back to the trial court to enter a judgment in favor of NRS. NRS continues to defend this case vigorously.

Lehman Brothers Holdings, Inc. (Debtors) and Giddens, James v NLIC and NMIC, et al.In 2012 the Plaintiff, Debtor in Possession Lehman Brothers Special Financing, Inc., filed a class action in the United States Bankruptcy Court for the Southern District of New York seeking the recovery of nearly $3.0 billion in assets from all the named defendants including NLIC and NMIC. This litigation arises from two collateralized debt obligation transactions, 801 Grand and Alta, which resulted in payments to NLIC and NMIC after the Plaintiff and its parent company, Lehman Brothers Holding, Inc. filed for bankruptcy in 2008. This triggered an early termination of the above transactions. The Plaintiff seeks to have sums returned to the bankruptcy estate in addition to prejudgment interest and costs. The case is currently stayed. In 2013, Plaintiff sent correspondence to all defendants inviting settlement discussions and has served NMIC and NLIC with a "SPV Derivatives ADR Notice," formally starting the Alternative Dispute Resolution process. NMIC and NLIC have responded, and are currently taking part in the ADR process. Mediation was scheduled for and proceeded on December 13, 2013, but the parties reached an impasse. The mediator is continuing to work with the parties and is expected to issue a final recommendation shortly. On January 10, 2014, Lehman filed another motion to extend the stay for a final four month period. After a hearing, the court extended the stay to the later of (a) May 20, 2014 or (b) 30 days after the court enters a scheduling order governing the Distributed Action. The parties have been negotiating the proposed scheduling order for the conduct of the Distributed Action litigation, and Lehman filed a revised proposed scheduling order on March 24, 2014. On April 14, 2014, Nationwide and 77 other defendants filed a joint response to the proposed scheduling order, and a hearing on the proposed scheduling order has been scheduled for May 14, 2014.

Nationwide Investment Services Corporation

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

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Financial Statements

The Statement of Additional Information ("SAI") contains the financial statements of Nationwide VLI Separate Account-2 and the consolidated financial statements of Nationwide Life Insurance Company and subsidiaries (the Company). Policy owners may obtain a copy of the SAI FREE OF CHARGE by contacting the Service Center. Please consider the consolidated financial statements of the Company only as bearing on Nationwide's ability to meet the obligations under the policy. Policy owners should not consider the consolidated financial statements of the Company as affecting the investment performance of the assets of the separate account.

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Appendix A: Sub-Account Information

Below is a list of the available Sub-Accounts and information about the corresponding underlying mutual funds in which they invest. The underlying mutual funds in which the Sub-Accounts invest are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies. There is no guarantee that the investment objectives will be met.

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

Designations Key:
STTF:	The underlying mutual fund corresponding to this Sub-Account assesses (or reserves the right to assess) a short-term trading fee, see Short-Term Trading Fees.
FF:	The underlying mutual fund corresponding to this Sub-Account primarily invests in other mutual funds. Therefore, a proportionate share of the fees and expenses of any acquired funds are indirectly borne by investors. As a result, investors in this Sub-Account may incur higher charges than if the assets were invested in an underlying mutual fund that does not invest in other mutual funds. Refer to the prospectus for this underlying mutual fund for more information.

AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Growth and Income Portfolio: Class A

This Sub-Account is only available in policies issued before May 1, 2004

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

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

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

AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein VPS Dynamic Asset Allocation Portfolio: Class A

This Sub-Account is only available in policies issued before May 1, 2014

Investment Advisor:	AllianceBernstein L.P.
Investment Objective:	To maximize total return consistent with the Adviser's determination of reasonable risk.

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

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

American Century Variable Portfolios, Inc. - American Century VP Balanced Fund: Class I

This Sub-Account is only available in policies issued before May 1, 2003

Investment Advisor:	American Century Investment Management, Inc.
Investment Objective:	Long-term capital growth and income.

American Century Variable Portfolios, Inc. - American Century VP Income & Growth Fund: Class I

This Sub-Account is only available in policies issued before May 1, 2004

Investment Advisor:	American Century Investment Management, Inc.
Investment Objective:	Capital growth by investing in common stocks. Income is a secondary objective.

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

This Sub-Account is only available in policies issued before May 1, 2013

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

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

Investment Advisor:	BlackRock Advisors, LLC
Sub-advisor:	BlackRock Investment Management, LLC; BlackRock International Limited
Investment Objective:	Seek high total investment return.

Delaware VIP Trust - Delaware VIP Small Cap Value Series: Service Class

Investment Advisor:	Delaware Management Company, Inc.
Investment Objective:	The fund seeks capital appreciation.

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

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	The Dreyfus Corporation
Investment Objective:	To match performance of the S&P SmallCap 600 Index®.

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Dreyfus Socially Responsible Growth Fund, Inc. (The): Initial Shares

This Sub-Account is only available in policies issued before May 1, 2003

Investment Advisor:	The Dreyfus Corporation
Investment Objective:	Capital growth with current income as a secondary goal.

Dreyfus Stock Index Fund, Inc.: Initial Shares

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	The Dreyfus Corporation
Investment Objective:	To match performance of the S&P 500.

Dreyfus Variable Investment Fund - Appreciation Portfolio: Initial Shares

Investment Advisor:	The Dreyfus Corporation
Sub-advisor:	Fayez Sarofim & Co.
Investment Objective:	Long-term capital growth consistent with the preservation of capital.

Dreyfus Variable Investment Fund - Growth and Income Portfolio: Initial Shares

This Sub-Account is only available in policies issued before May 1, 2003

Investment Advisor:	The Dreyfus Corporation
Investment Objective:	Long-term capital growth, current income and growth of income consistent with reasonable investment risk.

Dreyfus Variable Investment Fund - Opportunistic Small Cap Portfolio: Initial Shares

This Sub-Account is only available in policies issued before May 1, 2004

Investment Advisor:	The Dreyfus Corporation
Investment Objective:	Capital growth.

Federated Insurance Series - Federated Managed Tail Risk Fund II: Primary Shares

This Sub-Account is only available in policies issued before May 1, 2004

Investment Advisor:	Federated Global Investment Management Corp.
Investment Objective:	To create an allocation mix which will maximize return while capturing the benefits of asset class diversification in periods of market volatility.

Federated Insurance Series - Federated Quality Bond Fund II: Primary Shares

Investment Advisor:	Federated Investment Management Company
Investment Objective:	Current income.

Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2010 Portfolio: Service Class

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	Strategic Advisers Inc. Boston MA
Sub-advisor:	FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective:	High total return with a secondary objective of principal preservation as the fund approaches its target date and beyond.

Designation: FF

Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2020 Portfolio: Service Class

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	Strategic Advisers Inc. Boston MA
Sub-advisor:	FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective:	High total return with a secondary objective of principal preservation as the fund approaches its target date and beyond.

Designation: FF

Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2030 Portfolio: Service Class

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	Strategic Advisers Inc. Boston MA
Sub-advisor:	FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective:	High total return with a secondary objective of principal preservation as the fund approaches its target date and beyond.

Designation: FF

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Fidelity Variable Insurance Products Fund - VIP Asset Manager Portfolio: Initial Class

This Sub-Account is only available in policies issued before May 1, 2003

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity Investments Money Management, Inc., Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:	High total return.

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

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective:	Capital appreciation.

Designation: STTF

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

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:	Reasonable income.

Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Initial Class

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited, Fidelity Investments Japan Limited
Investment Objective:	Capital appreciation.

Fidelity Variable Insurance Products Fund - VIP High Income Portfolio: Initial Class

This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2007

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:	High level of current income while also considering growth of capital.

Fidelity Variable Insurance Products Fund - VIP High Income Portfolio: Initial Class R

This Sub-Account is only available in policies issued before May 1, 2003

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:	High level of current income while also considering growth of capital.

Designation: STTF

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

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	Fidelity Investments Money Management, Inc., Fidelity Research & Analysis Company, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:	High level of current income.

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

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:	Long-term growth of capital.

Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Initial Class

This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	Fidelity Research & Analysis Company
Investment Objective:	Long-term capital growth.

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

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited, Fidelity Investments Japan Limited
Investment Objective:	Long-term capital growth.

Designation: STTF

Fidelity Variable Insurance Products Fund - VIP Value Strategies Portfolio: Service Class

This Sub-Account is only available in policies issued before May 1, 2006

Investment Advisor:	Fidelity Management & Research Company
Sub-advisor:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:	Capital appreciation.

Franklin Templeton Variable Insurance Products Trust - Franklin Founding Funds Allocation VIP Fund: Class 2 (formerly, Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2)

This Sub-Account is only available in policies issued before May 1, 2013

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

Designation: FF

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

Investment Advisor:	Franklin Advisers, Inc.
Investment Objective:	Maximum income while maintaining prospects for capital appreciation.

Franklin Templeton Variable Insurance Products Trust - Franklin Rising Dividends VIP Fund: Class 1 (formerly, Franklin Templeton Variable Insurance Products Trust - Franklin Rising Dividends Securities Fund: Class 1)

This Sub-Account is only available in policies issued before May 1, 2006

Investment Advisor:	Franklin Advisory Services, LLC
Investment Objective:	Long-term capital appreciation.

Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value VIP Fund: Class 1 (formerly, Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 1)

This Sub-Account is only available in policies issued before May 1, 2013

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

Franklin Templeton Variable Insurance Products Trust - Templeton Developing Markets VIP Fund: Class 2 (formerly, Franklin Templeton Variable Insurance Products Trust - Templeton Developing Markets Securities Fund: Class 2)

This Sub-Account is only available in policies issued before April 30, 2014

Investment Advisor:	Templeton Asset Management, Ltd.
Investment Objective:	Long-term capital appreciation.

Franklin Templeton Variable Insurance Products Trust - Templeton Foreign VIP Fund: Class 1 (formerly, Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 1)

This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005

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

Franklin Templeton Variable Insurance Products Trust - Templeton Foreign VIP Fund: Class 2 (formerly, Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 2)

This Sub-Account is only available in policies issued before April 30, 2014

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

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

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

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Goldman Sachs Variable Insurance Trust - Goldman Sachs Global Markets Navigator Fund: Service Shares

This Sub-Account is only available in policies issued before May 1, 2014

Investment Advisor:	Goldman Sachs Asset Management, L.P.
Investment Objective:	Seeks to achieve investment results that approximate the performance of the GS Global Markets Navigator Index (the "Index").

Guggenheim Variable Fund - Multi-Hedge Strategies

Investment Advisor:	Guggenheim Investments
Investment Objective:	Capital appreciation consistent with the return and risk characteristics of the hedge fund universe and, secondarily, to achieve these returns with low correlation to and less volatility than equity indices.

Invesco - Invesco V.I. American Franchise Fund: Series I Shares

This Sub-Account is only available in policies issued before May 1, 2012

Investment Advisor:	Invesco Advisers, Inc.
Investment Objective:	seek capital growth.

Invesco - Invesco V.I. Balanced-Risk Allocation Fund: Series I Shares

Investment Advisor:	Invesco Advisers, Inc.
Investment Objective:	Total return with a low to moderate correlation to traditional financial market indices.

Invesco - Invesco V.I. Mid Cap Core Equity Fund: Series I Shares

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	Invesco Advisers, Inc.
Investment Objective:	Long-term growth of capital.

Invesco - Invesco V.I. Mid Cap Growth Fund: Series I Shares

This Sub-Account is only available in policies issued before May 1, 2012

Investment Advisor:	Invesco Advisers, Inc.
Investment Objective:	Capital growth.

Ivy Funds Variable Insurance Portfolios - Asset Strategy

Investment Advisor:	Waddell & Reed Investment Management Company
Investment Objective:	To seek to provide total return.

Ivy Funds Variable Insurance Portfolios - High Income

Investment Advisor:	Waddell & Reed Investment Management Company
Investment Objective:	To seek to provide total return through a combination of high current income and capital appreciation.

Ivy Funds Variable Insurance Portfolios - Mid Cap Growth

This Sub-Account is only available in policies issued before May 1, 2014

Investment Advisor:	Waddell & Reed Investment Management Company
Investment Objective:	To seek to provide growth of capital.

Janus Aspen Series - Balanced Portfolio: Service Shares

This Sub-Account is only available in policies issued before May 1, 2004

Investment Advisor:	Janus Capital Management LLC
Investment Objective:	Long-term capital growth, consistent with preservation of capital and balanced by current income.

Janus Aspen Series - Forty Portfolio: Service Shares

This Sub-Account is only available in policies issued before May 1, 2013

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

Janus Aspen Series - Global Technology Portfolio: Service Shares

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

Janus Aspen Series - Overseas Portfolio: Service Shares

This Sub-Account is only available in policies issued before May 1, 2013

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

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MFS® Variable Insurance Trust - MFS Investors Growth Stock Series: Initial Class

This Sub-Account is only available in policies issued before May 1, 2006

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

MFS® Variable Insurance Trust - MFS New Discovery Series: Initial Class

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

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

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

Nationwide Variable Insurance Trust - American Century NVIT Growth Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	American Century Investment Management, Inc.
Investment Objective:	The Fund seeks long-term capital appreciation.

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

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	American Century Investment Management, Inc.
Investment Objective:	The Fund seeks capital appreciation, and secondarily current income.

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

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

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

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	Capital Research and Management Company
Investment Objective:	The Fund seeks to maximize an investors level of current income and preserve the investor's capital.

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

Investment Advisor:	Capital Research and Management Company
Investment Objective:	The Fund is designed for investors seeking capital appreciation through stocks.

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

This Sub-Account is only available in policies issued before May 1, 2014

Investment Advisor:	Capital Research and Management Company
Investment Objective:	The Fund is designed for investors seeking capital appreciation principally through investment in stocks.

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

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	Capital Research and Management Company
Investment Objective:	The fund seeks returns from both capital gains as well as income generated by dividends paid by stock issuers.

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

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Federated Investment Management Company
Investment Objective:	The Fund seeks to provide high current income.

Nationwide Variable Insurance Trust - Invesco NVIT Comstock Value Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Invesco Advisers, Inc.
Investment Objective:	The Fund's investment objective is to seek capital growth and income through investments in equity securities, including common stocks, preferred stocks, and convertible securities.

Nationwide Variable Insurance Trust - Loring Ward NVIT Capital Appreciation Fund: Class P

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	LWI Financial Inc.
Investment Objective:	To provide growth of capital, and secondarily current income.

Designation: FF

56

Nationwide Variable Insurance Trust - Loring Ward NVIT Moderate Fund: Class P

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	LWI Financial Inc.
Investment Objective:	Seeks a high level of total return consistent with a moderate level of risk.

Designation: FF

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

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Neuberger Berman Management LLC
Investment Objective:	The fund seeks long-term capital growth.

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

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Neuberger Berman Management LLC
Investment Objective:	The Fund seeks long-term growth of capital by investing primarily in securities of companies that meet the fund's financial criteria and social policy.

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

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The Fund seeks to match the performance of the Barclays U.S. Aggregate Bond Index ("Aggregate Bond Index") as closely as possible before the deduction of Fund expenses.

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Aggressive Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The Aggressive Fund seeks maximum growth of capital consistent with a more aggressive level of risk as compared to other Cardinal Funds.

Designation: FF

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Balanced Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The Fund seeks a high level of total return through investment in both equity and fixed income securities.

Designation: FF

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Capital Appreciation Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The Fund seeks growth of capital, but also seeks income consistent with a less aggressive level of risk as compared to other Cardinal Funds.

Designation: FF

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Conservative Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The Fund seeks a high level of total return consistent with a conservative level of risk as compared to other Cardinal Funds.

Designation: FF

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Managed Growth & Income Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	Seeks a high level of total return through investment in both equity and fixed-income securities, consistent with preservation of capital

Designation: FF, VOL

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Managed Growth Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	Seeks growth primarily and investment income secondarily.

Designation: FF, VOL

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderate Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The Fund seeks a high level of total return consistent with a moderate level of risk as compared to other Cardinal Funds.

Designation: FF

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Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Aggressive Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The Fund seeks growth of capital, but also seeks income consistent with a moderately aggressive level of risk as compared to other Cardinal Funds.

Designation: FF

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Conservative Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The fund seeks a high level of total return consistent with a moderately conservative level of risk.

Designation: FF

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

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

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

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Neuberger Berman Fixed Income LLC
Investment Objective:	The fund seeks long-term total return consistent with reasonable risk.

Nationwide Variable Insurance Trust - NVIT Emerging Markets Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	The Boston Company Asset Management, LLC
Investment Objective:	The Fund seeks long-term capital growth by investing primarily in equity securities of companies located in emerging market countries.

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

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Nationwide Asset Management, LLC
Investment Objective:	The fund seeks as high level of income as is consistent with the preserving of capital.

Nationwide Variable Insurance Trust - NVIT International Equity Fund: Class I

This Sub-Account is only available in policies issued before April 26, 2014

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Lazard Asset Management LLC
Investment Objective:	The Fund seeks long-term capital growth by investing primarily in equity securities of companies in Europe, Australasia, the Far East and other regions, including developing countries.

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

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

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

This Sub-Account is only available in policies issued before April 26, 2014

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

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

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Aggressive Fund seeks maximum growth of capital consistent with a more aggressive level of risk as compared to other Investor Destinations Funds.

Designation: FF

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

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Balanced Fund seeks a high level of total return through investment in both equity and fixed-income securities.

Designation: FF

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

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Capital Appreciation Fund seeks growth of capital, but also seeks income consistent with a less aggressive level of risk as compared to other NVIT Investor Destinations Funds.

Designation: FF

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

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Conservative Fund seeks a high level of total return consistent with a conservative level of risk as compared to other Investor Destinations Funds.

Designation: FF

Nationwide Variable Insurance Trust - NVIT Investor Destinations Managed Growth & Income Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	Seeks a high level of total return through investment in both equity and fixed-income securities, consistent with preservation of capital.

Designation: FF, VOL

Nationwide Variable Insurance Trust - NVIT Investor Destinations Managed Growth Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	Seeks growth primarily and investment income secondarily.

Designation: FF, VOL

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

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Moderate Fund seeks a high level of total return consistent with a moderate level of risk as compared to other Investor Destinations Funds.

Designation: FF

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

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Moderately Aggressive Fund seeks growth of capital, but also seeks income consistent with a moderately aggressive level of risk as compared to other Investor Destinations Funds.

Designation: FF

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

Investment Advisor:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Moderately Conservative Fund seeks a high level of total return consistent with a moderately conservative level of risk.

Designation: FF

Nationwide Variable Insurance Trust - NVIT Large Cap Growth Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	The Boston Company Asset Management, LLC
Investment Objective:	The Fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	BlackRock Investment Management, LLC
Investment Objective:	The Fund seeks capital appreciation.

Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Federated Investment Management Company
Investment Objective:	The Fund seeks as high a level of current income as is consistent with preserving capital and maintaining liquidity.

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Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Logan Circle Partners, L.P.
Investment Objective:	The Fund seeks to provide above average total return over a market cycle of three to five years.

Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Invesco Advisers, Inc. and American Century Investment Management, Inc.
Investment Objective:	The Fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class I

This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	AllianceBernstein L.P.; JPMorgan Investment Management, Inc.
Investment Objective:	The Fund seeks long-term capital appreciation.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Winslow Capital Management, Inc.; Neuberger Berman Management Inc. and Wells Capital Management, Inc.;
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Goldman Sachs Asset Management, L.P.; Wellington Management Company, LLP; The Boston Company Asset Management, LLC
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Neuberger Berman Management LLC; Wells Capital Management, Inc.
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	American Century Investment Management, Inc.; Thompson, Siegel & Walmsley LLC; WEDGE Capital Management L.L.P.
Investment Objective:	The fund seeks long-term capital appreciation.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	OppenheimerFunds, Inc.; Wellington Management Company, LLP
Investment Objective:	The Fund seeks capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Aberdeen Asset Management, Inc.; Epoch Investment Partners, Inc.; J.P. Morgan Investment Management Inc.
Investment Objective:	The Fund seeks capital appreciation.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Aberdeen Asset Management, Inc.; Morgan Stanley Investment Management; Neuberger Berman Management, Inc.; Putnam Investment Management, LLC; and Waddell & Reed Investment Management Company
Investment Objective:	The Fund seeks capital appreciation.

Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	HighMark Capital Management, Inc.
Investment Objective:	The Fund seeks total return through a flexible combination of capital appreciation and current income.

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Nationwide Variable Insurance Trust - NVIT Real Estate Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Brookfield Investment Management Inc.
Investment Objective:	The Fund seeks current income and long-term capital appreciation.

Nationwide Variable Insurance Trust - NVIT S&P 500 Index Fund: Class I

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	BlackRock Investment Management, LLC
Investment Objective:	Long-term capital appreciation.

Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Nationwide Asset Management, LLC
Investment Objective:	The Fund seeks to provide a high level of current income while preserving capital and minimizing fluctuations in share value.

Nationwide Variable Insurance Trust - NVIT Small Cap Index Fund: Class II

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	BlackRock Investment Management, LLC
Investment Objective:	The Fund seeks to match the performance of the Russell 2000® Index.

Nationwide Variable Insurance Trust - Templeton NVIT International Value Fund: Class I

This Sub-Account is only available in policies issued before May 1, 2014

Investment Advisor:	Nationwide Fund Advisors
Sub-advisor:	Templeton Investment Counsel, LLC
Investment Objective:	The Fund seeks to maximize total return consisting of capital appreciation and/or current income.

Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class Shares

This Sub-Account is only available in policies issued before May 1, 2012

Investment Advisor:	Neuberger Berman Management LLC
Sub-advisor:	Neuberger Berman Fixed Income LLC
Investment Objective:	Highest available current income consistent with liquidity and low risk to principal; total return is a secondary goal.

Neuberger Berman Advisers Management Trust - AMT Small Cap Growth Portfolio: S Class Shares

This Sub-Account is only available in policies issued before May 1, 2008

Investment Advisor:	Neuberger Berman Management LLC
Sub-advisor:	Neuberger Berman, LLC
Investment Objective:	Long-term capital growth.

Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class Shares

This Sub-Account is only available in policies issued before May 1, 2008

Investment Advisor:	Neuberger Berman Management LLC
Sub-advisor:	Neuberger Berman, LLC
Investment Objective:	Long-term growth by investing primarily in securities of companies that meet financial criteria and social policy.

Northern Lights Variable Trust - TOPS Managed Risk Balanced ETF Portfolio: Class 3

Investment Advisor:	ValMark Advisers, Inc.
Sub-advisor:	Milliman, Inc.
Investment Objective:	Seeks to provide income and capital appreciation with less volatility than the fixed income and equity markets.

Designation: FF, VOL

Northern Lights Variable Trust - TOPS Managed Risk Growth ETF Portfolio: Class 3

Investment Advisor:	ValMark Advisers, Inc.
Sub-advisor:	Milliman, Inc.
Investment Objective:	Seeks capital appreciation with less volatility than the equity markets.

Designation: FF, VOL

Northern Lights Variable Trust - TOPS Managed Risk Moderate Growth ETF Portfolio: Class 3

Investment Advisor:	ValMark Advisers, Inc.
Sub-advisor:	Milliman, Inc.
Investment Objective:	Seeks capital appreciation with less volatility than the equity markets.

Designation: FF, VOL

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Oppenheimer Variable Account Funds - Oppenheimer Capital Income Fund/VA: Non-Service Shares

This Sub-Account is only available in policies issued before May 1, 2003

Investment Advisor:	OFI Global Asset Management, Inc.
Sub-advisor:	OppenheimerFunds, Inc.
Investment Objective:	High total investment return which includes current income and capital appreciation in the value of its shares.

Oppenheimer Variable Account Funds - Oppenheimer Core Bond Fund/VA: Non-Service Shares

This Sub-Account is only available in policies issued before May 1, 2003

Investment Advisor:	OFI Global Asset Management, Inc.
Sub-advisor:	OppenheimerFunds, Inc.
Investment Objective:	High level of current income and, secondarily, capital appreciation when consistent with goal of high current income.

Oppenheimer Variable Account Funds - Oppenheimer Discovery Mid Cap Growth Fund/VA: Non-Service Shares

This Sub-Account is only available in policies issued before May 1, 2003

Investment Advisor:	OFI Global Asset Management, Inc.
Sub-advisor:	OppenheimerFunds, Inc.
Investment Objective:	Capital appreciation.

Oppenheimer Variable Account Funds - Oppenheimer Global Fund/VA: Non-Service Shares

Investment Advisor:	OFI Global Asset Management, Inc.
Sub-advisor:	OppenheimerFunds, Inc.
Investment Objective:	The Fund seeks long-term capital appreciation by investing a substantial portion of its assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations that are considered to have appreciation possibilities.

Oppenheimer Variable Account Funds - Oppenheimer Global Strategic Income Fund/VA: Non-Service Shares

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	OFI Global Asset Management, Inc.
Sub-advisor:	OppenheimerFunds, Inc.
Investment Objective:	High level of current income principally derived from interest on debt securities.

Oppenheimer Variable Account Funds - Oppenheimer International Growth Fund/VA: Non-Service Shares

Investment Advisor:	OFI Global Asset Management, Inc.
Sub-advisor:	OppenheimerFunds, Inc.
Investment Objective:	The Fund seeks long-term capital appreciation.

Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Non-Service Shares

Investment Advisor:	OFI Global Asset Management, Inc.
Sub-advisor:	OppenheimerFunds, Inc.
Investment Objective:	High total return which includes growth in the value of its shares as well as current income from equity and debt securities.

Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Non-Service Shares

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	OFI Global Asset Management, Inc.
Sub-advisor:	OppenheimerFunds, Inc.
Investment Objective:	Capital appreciation.

PIMCO Variable Insurance Trust - All Asset Portfolio: Administrative Class

Investment Advisor:	Pacific Investment Management Company LLC
Sub-advisor:	Research Affiliates
Investment Objective:	Seeks maximum real return consistent with preservation of capital and prudent investment management. The portfolio seeks to achieve its investment objective by investing under normal circumstances substantially all of its assets in Institutional Class Shares of the Underlying PIMCO Funds

Designation: FF

PIMCO Variable Insurance Trust - CommodityRealReturn® Strategy Portfolio: Administrative Class

Investment Advisor:	Pacific Investment Management Company LLC
Investment Objective:	The Portfolio seeks maximum real return, consistent with prudent investment management.

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PIMCO Variable Insurance Trust - Foreign Bond Portfolio (Unhedged): Administrative Class

Investment Advisor:

Pacific Investment Management Company LLC

Investment Objective:

Seeks maximum total return consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in Fixed Income Instruments that are economically tied to foreign (non-U.S.) countries, representing at least three foreign countries, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements.

PIMCO Variable Insurance Trust - Low Duration Portfolio: Administrative Class

Investment Advisor:

Pacific Investment Management Company LLC

Investment Objective:

Seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 65% of its assets in a diversified portfolio of Fixed Income Instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements.

PIMCO Variable Insurance Trust - Total Return Portfolio: Administrative Class

Investment Advisor:

Pacific Investment Management Company LLC

Investment Objective:

Seeks maximum total return consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objectives by investing under normal circumstances at least 65% of its total assets in a diversified portfolio of Fixed Income Instruments of varying maturities, which may be represented by forwards or derivatives such as option, futures contracts or swap agreements.

Putnam Variable Trust - Putnam VT Growth & Income Fund: Class IB

This Sub-Account is only available in policies issued before May 1, 2005

Investment Advisor:	Putnam Investment Management, LLC
Sub-advisor:	Putnam Investments Limited
Investment Objective:	Capital growth and current income.

Putnam Variable Trust - Putnam VT International Equity Fund: Class IB

This Sub-Account is only available in policies issued before May 1, 2004

Investment Advisor:	Putnam Investment Management, LLC
Sub-advisor:	Putnam Investments Limited and Putnam Advisory Company, LLC
Investment Objective:	Capital appreciation.

Putnam Variable Trust - Putnam VT Voyager Fund: Class IB

This Sub-Account is only available in policies issued before May 1, 2005

Investment Advisor:	Putnam Investment Management, LLC
Sub-advisor:	Putnam Investments Limited
Investment Objective:	Capital appreciation.

T. Rowe Price Equity Series, Inc. - T. Rowe Price Health Sciences Portfolio: II

Investment Advisor:	T. Rowe Price Associates, Inc.
Investment Objective:	Long-term capital appreciation.

The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class I

This Sub-Account is only available in policies issued before May 1, 2009

Investment Advisor:	Morgan Stanley Investment Management Inc.
Investment Objective:	Above-average total return over a market cycle of three to five years by investing primarily in a diversified portfolio of fixed income securities.

The Universal Institutional Funds, Inc. - Emerging Markets Debt Portfolio: Class I

This Sub-Account is only available in policies issued before May 1, 2004

Investment Advisor:	Morgan Stanley Investment Management Inc.
Investment Objective:	High total return by investing primarily in fixed income securities of government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries.

Van Eck VIP Trust - Van Eck VIP Emerging Markets Fund: Initial Class

This Sub-Account is only available in policies issued before May 1, 2002

Investment Advisor:	Van Eck Associates Corporation
Investment Objective:	Long-term capital appreciation by investing primarily in equity securities in emerging markets around the world.

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Van Eck VIP Trust - Van Eck VIP Global Hard Assets Fund: Initial Class

Investment Advisor:	Van Eck Associates Corporation
Investment Objective:	Long-term capital appreciation by investing primarily in hard asset securities. Income is a secondary consideration.

Van Eck VIP Trust - Van Eck VIP Unconstrained Emerging Markets Bond Fund: Initial Class

This Sub-Account is only available in policies issued before May 1, 2002

Investment Advisor:	Van Eck Associates Corporation
Investment Objective:	High total return – income plus capital appreciation – by investing globally, primarily in a variety of debt securities.

Wells Fargo Advantage Variable Trust - Wells Fargo Advantage VT Small Cap Growth Fund: Class 2

This Sub-Account is only available in policies issued before May 1, 2013

Investment Advisor:	Wells Fargo Funds Management, LLC
Sub-advisor:	Wells Capital Management Inc.
Investment Objective:	The Fund seeks long-term capital appreciation

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Appendix B: Definitions

Accumulation Unit – The measure of an investment in, or share of, a Sub-Account. Accumulation Unit values are initially set at $10 for each Sub-Account.

Attained Age – A person's Issue Age plus the number of full years since the Policy Date.

Base Policy Specified Amount – The amount of insurance coverage selected under the base policy, excluding any Rider Specified Amount.

Cash Surrender Value – The Cash Value minus Indebtedness and any surrender charge.

Cash Value – The total of amounts allocated to the Sub-Accounts, the policy loan account, and the Fixed Account.

Code – The Internal Revenue Code of 1986, as amended.

Death Benefit – The amount paid upon the Insured's death, before the deduction of any Indebtedness or due and unpaid policy charges.

Fixed Account – An investment option that is funded by Nationwide's general account.

Grace Period – A 61-day period after which the Policy will Lapse if sufficient payments are not made to prevent Lapse.

In Force – Any time during which benefits are payable under the policy and any elected Rider(s).

Indebtedness – The total amount of all outstanding policy loans, including principal and interest due.

Insured – The person whose life is insured under the policy, and whose death triggers payment of the Death Benefit.

Investment Experience – The market performance of a mutual fund/Sub-Account.

Issue Age – A person's age based on their last birthday on or before the Policy Date.

Lapse – The policy terminates without value.

Maturity Date – The policy anniversary on which the Insured reaches 100.

Minimum Required Death Benefit – The lowest Death Benefit that will qualify the policy as life insurance under the Code.

Nationwide – Nationwide Life Insurance Company, us, we, or our.

Net Amount At Risk – The policy's base Death Benefit minus the policy's Cash Value.

Net Asset Value (NAV) – The price of each share of a mutual fund in which a Sub-Account invests. NAV is calculated by subtracting the mutual fund's liabilities from its total assets, and dividing that figure by the number of shares outstanding. Nationwide uses NAV to calculate the value of Accumulation Units. NAV does not reflect deductions made for charges taken from the Sub-Accounts.

Policy Data Page(s) – The Policy Data Page(s) contains more detailed information about the policy, some of which is unique to the policy owner, the beneficiary, and the Insured.

Policy Date – The date the policy takes effect as shown on the Policy Data Page. Policy years, months, and anniversaries are measured from this date.

Policy owner or Owner – The person or entity named as the owner on the application, or the person or entity assigned ownership rights.

Policy Proceeds or Proceeds – Policy Proceeds may constitute the Death Benefit, or the amount payable if the policy matures or is surrendered, adjusted to account for any unpaid charges, Indebtedness and Rider benefits.

Premium – Amount(s) paid to purchase and maintain the policy.

Rider – An optional benefit purchased under the policy. Rider availability and Rider terms may vary depending on the state in which the policy was issued.

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Rider Specified Amount – The portion of the Total Specified Amount attributable to the Base Insured Term Rider.

SEC – The Securities and Exchange Commission.

Service Center – The department of Nationwide responsible for receiving all service and transaction requests relating to the policy. For service and transaction requests submitted other than by telephone (including fax requests), the Service Center is Nationwide's mail and document processing facility. For service and transaction requests communicated by telephone, the Service Center is Nationwide's operations processing facility, see Contacting the Service Center.

Sub-Account(s) – The mechanism used to account for allocations of Net Premium and Cash Value among the policy's variable investment options.

Substandard Rating – An underwriting classification based on medical and/or non-medical factors used to determine what to charge for life insurance based on characteristics of the Insured beyond traditional factors for standard risks, which include age, sex, and smoking habits of the Insured. Substandard Ratings are shown in the Policy Data Pages as rate class multiples (medical factors) and/or monthly flat extras (medical and/or non-medical factors). The higher the rate class multiple or monthly flat extra, the greater the risk assessed and the higher the cost of coverage.

Total Specified Amount – The sum of the Base Policy Specified Amount and the Rider Specified Amount, if applicable.

Valuation Period – The period during which Nationwide determines the change in the value of the Sub-Accounts. One Valuation Period ends and another begins with the close of trading on the NYSE.

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Appendix C: Illustrations of Surrender Charges

Example 1. A female non-tobacco user, age 45, purchases a policy with a Base Policy Specified Amount of $50,000 and a scheduled Premium of $750. She now wishes to surrender the policy during the first policy year. By using the "Initial Surrender Charge" table reproduced below (also see "Surrender Charges"), the total surrender charge per thousand, multiplied by the Base Policy Specified Amount expressed in thousands, equals the total surrender charge of $569.80 ($11.396 x 50=569.80).

Example 2. A male non-tobacco user, age 35, purchases a policy with a Base Policy Specified Amount and a Total Specified Amount of $100,000 and a scheduled Premium of $1,100. He now wants to surrender the policy in the sixth policy year. The total initial surrender charge is calculated using the method illustrated above. (Surrender charge per 1,000=6.817 x 100 for a total of $681.70 maximum initial surrender charge). Because the fifth policy year has been completed, the maximum initial surrender charge is reduced by multiplying it by the applicable percentage factor from the "Reductions to Surrender Charges" table below. (Also see "Reductions to Surrender Charges"). In this case, $681.70 x 60%=$409.02, which is the amount we deduct as a total surrender charge.

The following tables illustrate the maximum initial surrender charge per $1,000 of initial Base Policy Specified Amount for policies that are issued on a standard basis:

Initial Base Policy Specified Amount $50,000-$99,999

Issue Age	Male Non-Tobacco	Female Non-Tobacco	Male Standard	Female Standard
25	$ 7.776	$ 7.521	$ 8.369	$ 7.818
35	$ 8.817	$ 8.398	$ 9.811	$ 8.891
45	$12.191	$11.396	$13.887	$12.169
55	$15.636	$14.011	$18.415	$15.116
65	$22.295	$19.086	$26.577	$20.641

Initial Base Policy Specified Amount $100,000 or More

Issue Age	Male Non-Tobacco	Female Non-Tobacco	Male Standard	Female Standard
25	$ 5.776	$ 5.521	$ 6.369	$ 5.818
35	$ 6.817	$ 6.398	$ 7.811	$ 6.891
45	$ 9.691	$ 8.896	$11.387	$ 9.669
55	$13.136	$11.511	$15.915	$12.616
65	$21.295	$18.086	$25.577	$19.641

Reductions to Surrender Charges

Completed Policy Years	Surrender Charge as a % of Initial Surrender Charges	Completed Policy Years	Surrender Charge as a % of Initial Surrender Charges
0	100%	5	60%
1	100%	6	50%
2	90%	7	40%
3	80%	8	30%
4	70%	9+	0%

The illustrations of current values in this prospectus are the same for Pennsylvania. However, the illustrations of guaranteed values in this prospectus do not reflect guaranteed maximum surrender charges which are spread out over 14 years. If this policy is issued in Pennsylvania, please contact our Service Center for an illustration.

67

The current surrender charges are the same for all states. However, in Pennsylvania, the guaranteed maximum surrender charges are spread out over 14 years. The guaranteed maximum surrender charges in subsequent years in Pennsylvania are reduced in the following manner:

Completed Policy Years	Surrender Charge as a % of Initial Surrender Charges	Completed Policy Years	Surrender Charge as a % of Initial Surrender Charges	Completed Policy Years	Surrender Charge as a % of Initial Surrender Charges
0	100%	5	60%	10	20%
1	100%	6	50%	11	15%
2	90%	7	40%	12	10%
3	80%	8	30%	13	5%
4	70%	9	25%	14+	0%

The illustrations of current values in this prospectus are the same for Pennsylvania. However, the illustrations of guaranteed values in this prospectus do not reflect guaranteed maximum surrender charges which are spread out over 14 years. If this policy is issued in Pennsylvania, please contact our Service Center for an illustration.

68

Outside back cover page

To learn more about the policy, the policy owner should read the Statement of Additional Information (the "SAI") dated the same date as this prospectus. For a free copy of the SAI, to receive personalized illustrations of Death Benefits, Net Cash Surrender Values, and Policy Account Values, and to request other information about the policy contact the Service Center:

• by telephone at 1-800-848-6331

• by mail to Nationwide Life Insurance Company
P.O. Box 182835
Columbus, OH 43218-2835

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

Investment Company Act of 1940 Registration File No. 811-05311

Securities Act of 1933 Registration File No. 033-42180

Nationwide VLI Separate Account-2

(Registrant)

Nationwide Life Insurance Company

(Depositor)

Service Center

P.O. Box 182835

Columbus, OH 43218-2835
1-800-848-6331

TDD: 1-800-238-3035

STATEMENT OF ADDITIONAL INFORMATION

Individual Flexible Premium Variable Universal Life Insurance Policies

This Statement of Additional Information ("SAI'') contains additional information regarding Individual Flexible Premium Variable Universal Life Insurance Policies offered by Nationwide Life Insurance Company ("Nationwide"). This SAI is not a prospectus and should be read together with the policy prospectus dated May 1, 2014 and the prospectuses for the mutual funds. The prospectus is incorporated by reference in this SAI. Copies may be obtained FREE OF CHARGE by writing or calling the Service Center. Capitalized terms in this SAI correspond to terms defined in the prospectus.

The date of this Statement of Additional Information is May 1, 2014.

TABLE OF CONTENTS

	Page
General Information and History	2
Nationwide VLI Separate Account-2	2
Nationwide Investment Services Corporation (NISC)	2
Services	2
Underwriting Procedure	2
Policy Restoration Procedure	3
Maximum Surrender Charge and Maximum Surrender Charge Calculation	4
Illustrations	5
Advertising	5
Tax Definition of Life Insurance	6

General Information and History

Nationwide VLI Separate Account-2 (the "Variable Account") is a separate investment account of Nationwide Life Insurance Company ("Nationwide"). Nationwide is a stock life insurance company organized under the laws of the State of Ohio in March 1929 with its Home Office at One Nationwide Plaza, Columbus, Ohio 43215. Nationwide provides life insurance, annuities and retirement products. Nationwide is admitted to do business in all states, the District of Columbia and Puerto Rico. Nationwide is a member of the Nationwide group of companies and all of its common stock is owned by Nationwide Financial Services, Inc. ("NFS"), a holding company. Nationwide Corporation owns all of NFS's common stock and is a holding company, as well. All of Nationwide Corporation's common stock is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), the ultimate controlling persons of the Nationwide group of companies. The Nationwide group of companies is one of America's largest insurance and financial services family of companies, with combined assets of over $183.1 billion as of December 31, 2013.

Nationwide VLI Separate Account-2

Nationwide VLI Separate Account-2 is a separate account that invests in mutual funds offered and sold to insurance companies and certain retirement plans. Nationwide established the Variable Account on May 7, 1987 pursuant to Ohio law. Although the Variable Account is registered with the SEC as a unit investment trust pursuant to the Investment Company Act of 1940, the SEC does not supervise the management of Nationwide or the management of the Variable Account. Nationwide serves as the custodian of the assets of the Variable Account.

Nationwide Investment Services Corporation (NISC)

The policies are distributed by NISC, located at One Nationwide Plaza, Columbus, Ohio 43215, a wholly owned subsidiary of Nationwide. For policies issued in Michigan, all references to NISC will mean Nationwide Investment Svcs. Corporation.

The policies will be sold on a continuous basis by licensed insurance agents in those states where the policies may lawfully be sold. Agents are registered representatives of broker dealers registered under the Securities Exchange Act of 1934 who are member firms of the Financial Industry Regulatory Authority (FINRA).

Gross first year commissions plus any expense allowance payments paid by Nationwide on the sale of these policies provided by NISC will not exceed the maximum (99% of first year premium and no more than 4% of any excess and renewal premium). Commission may also be paid as an asset-based amount instead of a premium based amount. If an asset-based commission is paid, it will not exceed 0.25% of the non-loaned Cash Value per year.

No underwriting commissions were paid to NISC for each of this Variable Account's last three fiscal years.

Services

Nationwide has responsibility for administration of the policies and the Variable Account. Nationwide also maintains the records of the name, address, taxpayer identification number, and other pertinent information for each policy owner and the number and type of policy issued to each policy owner and records with respect to the policy value of each policy.

Nationwide will maintain a record of all purchases and redemption of shares of the mutual funds.

Independent Registered Public Accounting Firm

The financial statements of Nationwide VLI Separate Account-2 and the consolidated financial statements and schedules of Nationwide Life Insurance Company and subsidiaries for the periods indicated have been included herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. KPMG LLP is located at 191 West Nationwide Blvd., Suite 500, Columbus, Ohio 43215.

Underwriting Procedure

Nationwide underwrites the policies issued through Nationwide VLI Separate Account-2. The policy's cost of insurance depends upon the Insured's sex, issue age, risk class, and length of time the policy has been In Force. The rates will vary depending upon tobacco use and other risk factors. Monthly cost of insurance rates will not exceed those guaranteed in the policy. Guaranteed cost of insurance rates for policies issued on Specified Amounts less than $100,000 are based on the 1980 Commissioners' Extended Term Mortality Table, Age Last Birthday (1980 CET). Guaranteed cost of insurance

2

rates for policies issued on Specified Amounts $100,000 or more are based on the 1980 Commissioners' Standard Ordinary Mortality Table, Age Last Birthday (1980 CSO). For policies issued in Texas on a standard basis ("Special Class–

Standard" in Texas), guaranteed cost of insurance rates for Specified Amounts less than $100,000 are based on 130% of the 1980 CSO. Guaranteed cost of insurance rates for policies issued on a substandard basis are based on appropriate percentage multiples of the standard guaranteed cost of insurance rate on a standard basis. That is, standard guaranteed cost of insurance rates for substandard risks are guaranteed cost of insurance rates for standard risks times a percentage greater than 100%. These mortality tables are sex distinct. In addition, separate mortality tables will be used for tobacco and non-tobacco. As a component of base policy and Rider cost of insurance charges, we may deduct a "flat extra charge," which is an additional factor in determining the constant charge per $1,000 of Specified Amount, for certain activities or medical conditions of the Insured. We apply the same flat extra charge to all Insureds that engage in the same activity or have the same medical condition irrespective of their sex, issue age, underwriting class, or Substandard Rating, if any.

The rate class of an insured may affect the cost of insurance rate. Nationwide currently places Insureds into both standard rate classes and substandard rate classes that involve a higher mortality risk. In an otherwise identical policy, an insured in the standard rate class will have a lower cost of insurance than an insured in a rate class with higher mortality risks. Any change in the cost of insurance rates will apply to all Insureds of the same age, gender, risk class and whose policies have been in effect for the same length of time. The cost of insurance rates, policy charges, and payment options for policies issued in some states or in connection with certain employee benefit arrangements may be issued on a gender-neutral (unisex) basis. The unisex rates will be higher than those applicable to females and lower than those applicable to males. If the rating class for any increase in the Specified Amount of insurance coverage is not the same as the rating class at issue, the cost of insurance rate used after such increase will be a composite rate based upon a weighted average of the rates of the different rating classes. The actual charges made during the policy year will be shown in the annual report delivered to policy owners.

Policy Restoration Procedure

Requests to restore a surrendered policy must meet the following requirements:

• the request must be in writing and signed by the policy owner (if the surrender was a Code Section 1035 exchange to a new policy with a different insurer, the signature of an officer of the replacing insurer is also required);

• the written request must be received at the Service Center within 30 days of the date the policy was surrendered (periods up to 60 days will be permitted based on the right to examine period applicable to replaced life insurance policies in the state where the policy was issued);

• the surrender Proceeds must be returned in their entirety; and

• the insured must be alive on the date the restoration request is received.

No proof of insurability or additional underwriting will be required for requests to restore a surrendered policy that meet the above requirements.

A restored policy will be treated as if it had never been surrendered for all purposes, including Investment Experience, accrual of interest, and deduction of charges, resulting in the following:

• the returned surrender proceeds and any amount taken as a surrender charge will be used to purchase Accumulation Units according to the allocations currently in effect on, and priced as of, the surrender date;

• any charges that would otherwise have been assessed during the period of surrender will be assessed as of the date(s) they were due resulting in the cancellation of Accumulation Units priced as of the applicable date(s);

• interest will be credited on any allocation to a fixed investment option at the rate(s) in effect during the period of surrender;

• interest charged and credited on any Indebtedness will accrue at the rates in effect for the period of surrender; and

• any transfer of loan interest charged or credited that would have occurred during the period of surrender will be transferred as of the date(s) such transfers would have otherwise occurred.

Policy restoration is not a contract right of the policy; it is an administrative procedure based on requirements of state insurance law and the terms are subject to change without notice at any time.

3

Maximum Surrender Charge and Maximum Surrender Charge Calculation

The surrender charge equals the underwriting component and 26.5% of the sales expense component. The underwriting component is designed to cover the administrative expenses associated with underwriting and issuing policies and varies by issue age in the following manner:

Per $1,000 of Initial Specified Amount

Issue Age	Specified Amounts less than $100,000	Specified Amounts $100,000 or more
0-35	$6.00	$4.00
36-55	$7.50	$5.00
56-80	$7.50	$6.50

The sales expense component will not exceed 26.5% of the lesser of the guideline level Premium required in the first year, or Premiums paid in the first policy year. The sales component is designed to reimburse us for expenses incurred in the distribution of the policies.

The maximum surrender charge under the policy is based on the following calculation.

Maximum Surrender Charge 26.50% multiplied by the lesser of (a) or (b),where:
(a)	=	the Specified Amount multiplied by the rate indicated on the chart "Surrender Target Factor" below divided by 1,000; and
(b)	=	Premiums paid by the policy owner during the first policy year
Plus (c) multiplied by (d) where:
(c)	=	the Specified Amount divided by 1,000; and
(d)	=	the applicable rate from the "Administrative Target Factor" chart below.

The Surrender Target Factor allows the company to account for the probability that our costs incurred in the sales process will not be recouped. The Administrative Target Factor allows the company to account for the probability (at various ages) that death will occur and no surrender charge will be recouped.

Surrender Target Factor

Age	Male Non-Tobacco	Female Non-Tobacco	Male Tobacco	Female Tobacco
0	N/A	N/A	3.43	2.61
1	N/A	N/A	3.46	2.64
2	N/A	N/A	3.58	2.73
3	N/A	N/A	3.72	2.83
4	N/A	N/A	3.86	2.93
5	N/A	N/A	4.01	3.04
6	N/A	N/A	4.18	3.16
7	N/A	N/A	4.35	3.28
8	N/A	N/A	4.54	3.42
9	N/A	N/A	4.75	3.56
10	N/A	N/A	4.96	3.70
11	N/A	N/A	5.19	3.86
12	N/A	N/A	5.42	4.03
13	N/A	N/A	5.67	4.20
14	N/A	N/A	5.92	4.38
15	N/A	N/A	6.17	4.57
16	N/A	N/A	6.14	4.76
17	N/A	N/A	6.66	4.96
18	5.21	4.36	6.91	5.17
19	5.40	4.54	7.17	5.39
20	5.63	4.76	7.47	5.65
21	5.84	4.96	7.76	5.90
22	6.07	5.17	8.06	6.15
23	6.31	5.39	8.38	6.42

Age	Male Non-Tobacco	Female Non-Tobacco	Male Tobacco	Female Tobacco
24	6.56	5.62	8.73	6.70
25	6.84	5.86	9.11	7.00
26	7.13	6.12	9.51	7.32
27	7.45	6.39	9.94	7.65
28	7.78	6.68	10.41	8.01
29	8.14	6.99	10.90	8.38
30	8.56	7.34	11.46	8.81
31	8.96	7.68	12.03	9.22
32	9.39	8.04	12.62	9.66
33	9.85	8.42	13.26	10.12
34	10.34	8.82	13.93	10.61
35	10.85	9.24	14.65	11.13
36	11.39	9.69	15.41	11.67
37	11.97	10.16	16.21	12.24
38	12.58	10.66	17.06	12.85
39	13.23	11.18	17.96	13.48
40	13.95	11.77	18.94	14.17
41	14.67	12.35	19.95	14.86
42	15.44	12.95	21.00	15.58
43	16.26	13.60	22.12	16.34
44	17.12	14.27	23.30	17.13
45	18.04	14.99	24.55	17.96
46	19.02	15.74	25.86	18.83
47	20.06	16.55	27.26	19.75

4

Age	Male Non-Tobacco	Female Non-Tobacco	Male Tobacco	Female Tobacco
48	21.16	17.39	28.74	20.72
49	22.34	18.29	30.31	21.75
50	23.64	19.29	32.02	22.87
51	24.98	20.30	33.79	24.02
52	26.41	21.38	35.67	25.23
53	27.93	22.52	37.66	26.50
54	29.56	23.73	39.76	27.85
55	31.29	25.02	41.99	29.27
56	33.14	26.40	44.34	30.79
57	35.11	27.87	46.83	32.40
58	37.22	29.44	49.48	34.13
59	39.49	31.14	52.30	35.98
60	42.01	33.07	55.42	38.09
61	44.61	35.05	58.63	40.26
62	47.40	37.18	62.04	42.59
63	50.38	39.47	65.65	45.08
64	53.58	41.92	69.47	47.74
65	56.99	44.55	73.51	50.56
66	60.65	47.37	77.78	53.58

Age	Male Non-Tobacco	Female Non-Tobacco	Male Tobacco	Female Tobacco
67	64.57	50.41	82.30	56.81
68	68.78	53.71	87.12	60.31
69	73.33	57.30	92.26	64.13
70	78.52	61.49	98.10	68.57
71	83.82	65.79	103.99	73.14
72	89.50	70.49	110.27	78.11
73	95.58	75.59	116.89	83.47
74	102.05	81.11	123.85	89.23
75	108.92	87.06	131.11	95.38
76	116.22	93.48	138.65	101.95
77	123.91	100.35	146.41	108.92
78	132.14	107.81	154.56	116.44
79	141.00	115.96	163.19	124.59
80	150.61	124.91	172.42	133.51
81	160.93	134.65	182.18	143.16
82	172.06	145.31	192.54	153.68
83	183.91	156.85	203.37	165.03
84	196.41	169.27	214.56	177.14
85	209.46	182.58	226.02	189.97

Illustrations

Nationwide will provide illustrations of future benefits under the policy before the policy is purchased and upon request thereafter. Nationwide may assess a $25 fee for this service to persons who request more than one policy illustration during a policy year.

Note: The policy owner selects the Premium amount and frequency shown in the policy illustration to show Nationwide how much Premium the policy owner intends to pay and when. Illustrated Premium and hypothetical rates of return are not guaranteed. Investment Experience varies over time, is rarely the same year-over-year, and may be negative. Because the policy is a variable universal life insurance policy with the potential for unfavorable Investment Experience, including extended periods of significant stock market decline, additional Premium may be required to meet a policy owner's goals and/or to prevent the policy from Lapsing. Generally, variable universal life insurance is considered a long-term investment. Policy owners should weigh the investment risk and costs associated with the policy against their objectives, time horizon, risk tolerance, and ability to pay additional Premium if necessary.

Advertising

Rating Agencies

Independent financial rating services, including Moody's, Standard & Poor's and A.M. Best Company rank and rate Nationwide. The purpose of these ratings is to reflect the financial strength or claims-paying ability of Nationwide. The ratings are not intended to reflect the Investment Experience or financial strength of the Variable Account. Nationwide may advertise these ratings from time to time. In addition, Nationwide may include in certain advertisements, endorsements in the form of a list of organizations, individuals or other parties which recommend Nationwide or the policies. Furthermore, Nationwide may occasionally include in advertisements comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets, or discussions of alternative investment vehicles and general economic conditions.

Money Market Yields

Nationwide may advertise the "yield" and "effective yield" for the money market Sub-Account. Yield and effective yield are annualized, which means that it is assumed that the underlying mutual fund generates the same level of net income throughout a year.

5

Yield is a measure of the net dividend and interest income earned over a specific seven-day period (which period will be stated in the advertisement) expressed as a percentage of the offering price of the underlying mutual fund's units. The effective yield is calculated similarly, but reflects assumed compounding, calculated under rules prescribed by the SEC. Thus, effective yield will be slightly higher than yield, due to the compounding.

Historical Performance of the Sub-Accounts

Nationwide will advertise historical performance of the Sub-Accounts in accordance with SEC prescribed calculations. Performance information is annualized. However, if a Sub-Account has been available in the Variable Account for less than one year, the performance information for that Sub-Account is not annualized. Performance information is based on historical earnings and is not intended to predict or project future results.

Additional Materials

Nationwide may provide information on various topics to owners and prospective purchasers in advertising, sales literature, or other materials.

Tax Definition of Life Insurance

Section 7702(b)(1) of the Internal Revenue Code provides that if one of two alternate tests is met, a policy will be treated as life insurance for federal tax purposes. The two tests are referred to as the Guideline Premium/Cash Value Corridor Test and the Cash Value Accumulation Test. Both tests are available to flexible premium policies such as this one.

The tables that follow show, numerically, the requirements for each test.

Guideline Premium/Cash Value Corridor Test

Table of Applicable Percentages of Cash Value

Attained Age of Insured	Percentage of Cash Value
0-40	250%
41	243%
42	236%
43	229%
44	222%
45	215%
46	209%
47	203%
48	197%
49	191%
50	185%
51	178%
52	171%
53	164%
54	157%
55	150%
56	146%
57	142%
58	138%
59	134%

Attained Age of Insured	Percentage of Cash Value
60	130%
61	128%
62	126%
63	124%
64	122%
65	120%
66	119%
67	118%
68	117%
69	116%
70	115%
71	113%
72	111%
73	109%
74	107%
75	105%
76	105%
77	105%
78	105%
79	105%
80	105%

Attained Age of Insured	Percentage of Cash Value
81	105%
82	105%
83	105%
84	105%
85	105%
86	105%
87	105%
88	105%
89	105%
90	105%
91	104%
92	103%
93	102%
94	101%
95	101%
96	101%
97	101%
98	101%
99	101%
100	100%

6

Cash Value Accumulation Test

The Cash Value Accumulation Test also requires the Death Benefit to exceed an applicable percentage of the Cash Value. These applicable percentages are calculated by determining net single premiums, as defined in Code Section 7702(b), for each policy year given a set of actuarial assumptions. The relevant material assumptions include an interest rate of 4% and 1980 CSO guaranteed mortality as prescribed in Revenue Code Section 7702 for the Cash Value Accumulation Test. The resulting net single premiums are then inverted (i.e., multiplied by 1/net single premium) to give the applicable cash value percentages. These premiums vary with the ages, sexes, and risk classifications of the Insureds.

The table below provides an example of applicable percentages for the Cash Value Accumulation Test. This example is for a male non-tobacco preferred issue age 55.

Policy Year	Percentage of Cash Value
1	221%
2	215%
3	209%
4	203%
5	197%
6	192%
7	187%
8	182%
9	177%
10	172%
11	168%
12	164%
13	160%
14	157%
15	153%

Policy Year	Percentage of Cash Value
16	150%
17	147%
18	144%
19	141%
20	138%
21	136%
22	133%
23	131%
24	129%
25	127%
26	125%
27	124%
28	122%
29	120%
30	119%

Policy Year	Percentage of Cash Value
31	118%
32	117%
33	115%
34	114%
35	113%
36	112%
37	111%
38	110%
39	109%
40	108%
41	107%
42	106%
43	104%
44	103%
45	102%

7

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life Insurance Company and Subsidiaries 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 (comprised of the sub-accounts listed in note 1(b), (collectively, “the Accounts”)) as of December 31, 2013, and the related statements of operations for the period then ended, the statements of changes in contract owners’ equity for each of the periods in the two-year period then ended, and the financial highlights for each of the periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Accounts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2013, by correspondence with the transfer agents of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Accounts as of December 31, 2013, the results of their operations for the period then ended, the changes in contract owners’ equity for each of the periods in the two-year period then ended, and the financial highlights for each of the periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Columbus, Ohio

March 13, 2014

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2013

Assets:
Investments at fair value:
VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)
	429 shares (cost $4,282)	$	5,034
Global Allocation V.I. Fund - Class II (MLVGA2)
	208,420 shares (cost $3,425,800)		3,659,863
VIP Small Cap Value Series: Service Class (DWVSVS)
	1,437 shares (cost $53,784)		59,766
Stock Index Fund, Inc. - Initial Shares (DSIF)
	1,133,789 shares (cost $32,669,925)		46,303,931
Socially Responsible Growth Fund Inc - Initial Shares (DSRG)
	164,225 shares (cost $4,108,414)		7,239,044
Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)
	1,500 shares (cost $17,077)		17,203
Van Kampen V.I. Mid Cap Growth Fund - Series I Shares (IVKMG1)
	40,374 shares (cost $161,257)		216,000
Janus Aspen Series - Balanced Portfolio - Service Shares (JABS)
	47,560 shares (cost $1,370,724)		1,508,602
Janus Aspen Series - Forty Portfolio - Service Shares (JACAS)
	78,126 shares (cost $2,923,311)		4,093,812
Janus Aspen Series - Global Technology Portfolio - Service Shares (JAGTS)
	235,530 shares (cost $1,536,844)		1,964,316
Janus Aspen Series - Overseas Portfolio - Service Shares (JAIGS)
	115,499 shares (cost $4,571,615)		4,726,216
Investors Growth Stock Series - Initial Class (MIGIC)
	14,107 shares (cost $156,921)		216,125
Variable Insurance Trust - MFS New Discovery Series - Intital Class (MNDIC)
	14,171 shares (cost $257,016)		312,761
Value Series - Initial Class (MVFIC)
	101,074 shares (cost $1,366,838)		1,948,704
Core Plus Fixed Income Portfolio - Class I (MSVFI)
	26,136 shares (cost $271,411)		266,846
Emerging Markets Debt Portfolio - Class I (MSEM)
	151,563 shares (cost $1,336,888)		1,245,848
U.S. Real Estate Portfolio - Class I (MSVRE)
	79,292 shares (cost $1,142,477)		1,248,061
American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)
	406,442 shares (cost $5,862,388)		7,880,915
American Funds NVIT Asset Allocation Fund - Class II (GVAAA2)
	78,229 shares (cost $1,432,854)		1,875,921
American Funds NVIT Bond Fund - Class II (GVABD2)
	76,654 shares (cost $806,141)		860,058
American Funds NVIT Global Growth Fund - Class II (GVAGG2)
	54,864 shares (cost $1,279,538)		1,670,052
American Funds NVIT Growth Fund - Class II (GVAGR2)
	24,859 shares (cost $1,338,858)		1,941,958
American Funds NVIT Growth-Income Fund - Class II (GVAGI2)
	17,826 shares (cost $637,702)		971,004
Federated NVIT High Income Bond Fund - Class I (HIBF)
	15,979 shares (cost $109,498)		110,413
Federated NVIT High Income Bond Fund - Class III (HIBF3)
	207,716 shares (cost $1,431,540)		1,433,242
NVIT Emerging Markets Fund - Class I (GEM)
	71,557 shares (cost $831,288)		844,369
NVIT Emerging Markets Fund - Class III (GEM3)
	206,243 shares (cost $2,358,861)		2,429,545
NVIT International Equity Fund - Class I (GIG)
	63,199 shares (cost $536,598)		679,391
NVIT International Equity Fund - Class III (GIG3)
	361,553 shares (cost $2,749,711)		3,890,314
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)
	1,367,963 shares (cost $11,000,331)		15,594,779
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)
	9,038 shares (cost $101,522)		136,300

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2013

NVIT Cardinal Aggressive Fund - Class I (NVCRA1)
	30,861 shares (cost $303,966)	$	345,029
NVIT Cardinal Balanced Fund - Class I (NVCRB1)
	36,292 shares (cost $403,201)		432,967
NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)
	65,709 shares (cost $678,822)		803,618
NVIT Cardinal Conservative Fund - Class I (NVCCN1)
	138,712 shares (cost $1,448,906)		1,506,413
NVIT Cardinal Moderate Fund - Class I (NVCMD1)
	99,204 shares (cost $977,609)		1,197,388
NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)
	56,813 shares (cost $556,214)		674,940
NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)
	29,151 shares (cost $308,686)		337,283
NVIT Core Bond Fund - Class I (NVCBD1)
	53,329 shares (cost $588,697)		570,082
NVIT Core Plus Bond Fund - Class I (NVLCP1)
	14,581 shares (cost $167,629)		162,580
NVIT Nationwide Fund - Class I (TRF)
	3,808,418 shares (cost $39,597,427)		50,233,030
NVIT Government Bond Fund - Class I (GBF)
	626,036 shares (cost $7,429,886)		6,761,187
American Century NVIT Growth Fund - Class I (CAF)
	699,454 shares (cost $7,225,581)		14,066,013
NVIT International Index Fund - Class VI (GVIX6)
	51,501 shares (cost $421,831)		507,802
NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)
	191,117 shares (cost $1,537,108)		2,392,787
NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)
	7,114 shares (cost $93,349)		107,428
NVIT Investor Destinations Capital Appreciation Fund - Class II (NVDCA2)
	7,721 shares (cost $115,422)		134,893
NVIT Investor Destinations Conservative Fund - Class II (GVIDC)
	54,789 shares (cost $567,755)		578,029
NVIT Investor Destinations Moderate Fund - Class II (GVIDM)
	369,600 shares (cost $3,710,735)		4,775,236
NVIT Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)
	398,506 shares (cost $4,272,395)		5,355,922
NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)
	279,911 shares (cost $2,844,147)		3,300,156
NVIT Mid Cap Index Fund - Class I (MCIF)
	253,442 shares (cost $4,762,466)		6,189,053
NVIT Money Market Fund - Class I (SAM)
	18,711,080 shares (cost $18,711,080)		18,711,080
NVIT Multi-Manager International Growth Fund - Class III (NVMIG3)
	382,689 shares (cost $3,057,554)		4,615,228
NVIT Multi-Manager International Value Fund - Class I (GVDIVI)
	13,371 shares (cost $177,029)		155,232
NVIT Multi-Manager International Value Fund - Class III (GVDIV3)
	42,654 shares (cost $413,928)		493,501
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
	158,493 shares (cost $1,607,584)		2,082,596
NVIT Multi-Manager Large Cap Value Fund - Class I (NVMLV1)
	127,469 shares (cost $1,198,466)		1,519,432
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
	2,306,551 shares (cost $19,216,839)		31,738,136
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
	1,742,805 shares (cost $15,658,477)		23,074,741
NVIT Multi-Manager Small Cap Growth Fund - Class I (SCGF)
	84,799 shares (cost $1,498,757)		2,019,903
NVIT Multi-Manager Small Cap Value Fund - Class I (SCVF)
	374,946 shares (cost $3,905,686)		6,164,106
NVIT Multi-Manager Small Company Fund - Class I (SCF)
	733,025 shares (cost $13,584,169)		20,187,495
NVIT Multi-Sector Bond Fund - Class I (MSBF)
	162,574 shares (cost $1,478,164)		1,472,925
NVIT Short Term Bond Fund - Class II (NVSTB2)
	56,047 shares (cost $585,637)		584,006
NVIT Large Cap Growth Fund - Class I (NVOLG1)
	2,303,579 shares (cost $35,104,014)		54,111,078
Templeton NVIT International Value Fund - Class III (NVTIV3)
	12,541 shares (cost $165,004)		178,955
Invesco NVIT Comstock Value Fund - Class I (EIF)
	48,680 shares (cost $551,455)		754,059

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2013

NVIT Real Estate Fund - Class I (NVRE1)
	892,332 shares (cost $7,490,479)	$	7,950,682
NVIT Small Cap Index Fund Class II (NVSIX2)
	3,779 shares (cost $49,019)		52,944
NVIT S&P 500 Index Fund Class I (GVEX1)
	75,907 shares (cost $937,442)		976,159
TOPS Managed Risk Growth ETF Portfolio - Class 3 (NOTG3)
	207 shares (cost $2,229)		2,422
VPS Growth and Income Portfolio - Class A (ALVGIA)
	27,493 shares (cost $642,616)		764,314
VPS Small/Mid Cap Value Portfolio - Class A (ALVSVA)
	49,815 shares (cost $891,760)		1,140,273
VP Balanced Fund - Class I (ACVB)
	642,680 shares (cost $4,117,619)		5,192,854
VP Capital Appreciation Fund - Class I (ACVCA)
	97,696 shares (cost $1,061,961)		1,785,886
VP Income & Growth Fund - Class I (ACVIG)
	284,370 shares (cost $2,076,692)		2,607,670
American Century VP Inflation Protection Fund - Class II (ACVIP2)
	131,704 shares (cost $1,535,086)		1,376,306
VP International Fund - Class I (ACVI)
	57,735 shares (cost $406,043)		620,074
VP International Fund - Class III (ACVI3)
	19,148 shares (cost $145,523)		205,651
VP Mid Cap Value Fund - Class I (ACVMV1)
	104,439 shares (cost $1,537,798)		1,928,994
VP Ultra(R) Fund - Class I (ACVU1)
	12,614 shares (cost $182,736)		185,682
VP Vista(SM) Fund - Class I (ACVVS1)
	2,134 shares (cost $29,360)		48,331
Small Cap Stock Index Portfolio - Service Shares (DVSCS)
	139,000 shares (cost $1,891,329)		2,585,408
Appreciation Portfolio - Initial Shares (DCAP)
	104,801 shares (cost $3,996,230)		5,025,211
Opportunistic Small Cap Portfolio: Initial Shares (DSC)
	12,943 shares (cost $482,483)		608,712
Growth and Income Portfolio - Initial Shares (DGI)
	53,089 shares (cost $1,125,315)		1,588,426
Managed Tail Risk Fund II: Primary Shares (FVCA2P)
	22,936 shares (cost $149,385)		161,931
Quality Bond Fund II - Primary Shares (FQB)
	137,757 shares (cost $1,559,815)		1,574,557
Equity-Income Portfolio - Initial Class (FEIP)
	1,897,960 shares (cost $42,782,619)		44,203,488
High Income Portfolio - Initial Class (FHIP)
	1,445,743 shares (cost $7,698,998)		8,385,307
VIP Asset Manager Portfolio - Initial Class (FAMP)
	736,245 shares (cost $10,638,149)		12,692,872
VIP Energy Portfolio - Service Class 2 (FNRS2)
	112,698 shares (cost $2,183,367)		2,685,599
VIP Freedom Fund 2010 Portfolio - Service Class (FF10S)
	32,827 shares (cost $345,579)		403,445
VIP Freedom Fund 2020 Portfolio - Service Class (FF20S)
	92,853 shares (cost $922,053)		1,169,025
VIP Freedom Fund 2030 Portfolio - Service Class (FF30S)
	96,868 shares (cost $946,423)		1,241,845
VIP Growth Portfolio - Initial Class (FGP)
	1,063,418 shares (cost $37,970,701)		60,763,705
VIP High Income Portfolio - Initial Class R (FHIPR)
	632,898 shares (cost $3,571,592)		3,658,148
VIP Investment Grade Bond Portfolio - Service Class (FIGBS)
	282,831 shares (cost $3,649,297)		3,461,849
VIP Mid Cap Portfolio - Service Class (FMCS)
	236,197 shares (cost $6,527,930)		8,540,896
VIP Overseas Portfolio - Initial Class (FOP)
	337,172 shares (cost $6,496,116)		6,959,224
VIP Overseas Portfolio - Service Class R (FOSR)
	235,122 shares (cost $3,509,292)		4,824,697
VIP Value Strategies Portfolio - Service Class (FVSS)
	83,583 shares (cost $903,289)		1,198,575
Franklin Income Securities Fund - Class 2 (FTVIS2)
	114,559 shares (cost $1,732,838)		1,840,965
Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)
	166,410 shares (cost $3,471,976)		4,682,764

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2013

Franklin Small Cap Value Securities Fund - Class 1 (FTVSVI)
	170,362 shares (cost $2,568,462)	$	4,180,688
Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)
	104,571 shares (cost $1,061,515)		1,058,258
Templeton Foreign Securities Fund - Class 1 (TIF)
	11,609 shares (cost $170,313)		203,859
Templeton Foreign Securities Fund - Class 3 (TIF3)
	87,546 shares (cost $1,249,410)		1,504,042
Templeton Global Bond Securities Fund - Class 3 (FTVGI3)
	125,991 shares (cost $2,396,126)		2,345,955
VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)
	21,082 shares (cost $160,943)		156,426
Short Duration Bond Portfolio - I Class Shares (AMTB)
	266,050 shares (cost $2,946,362)		2,868,020
Balanced Portfolio - I Class Shares (AMBP)
	2,859 shares (cost $25,382)		38,859
Growth Portfolio - I Class Shares (AMTG)
	74,161 shares (cost $1,220,750)		2,044,630
Guardian Portfolio - I Class Shares (AMGP)
	7,841 shares (cost $167,740)		209,279
International Portfolio - S Class Shares (AMINS)
	1,693 shares (cost $17,402)		19,534
Mid-Cap Growth Portfolio - S Class Shares (AMMCGS)
	433 shares (cost $13,980)		17,290
Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)
	205,785 shares (cost $1,785,834)		3,095,002
Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class S (AMRS)
	1,476 shares (cost $21,528)		26,865
Small-Cap Growth Portfolio - S Class Shares (AMFAS)
	9,720 shares (cost $132,412)		187,104
Socially Responsive Portfolio - I Class Shares (AMSRS)
	36,733 shares (cost $596,411)		797,834
Capital Income Fund/VA - Non-Service Shares (OVMS)
	436,459 shares (cost $6,503,536)		6,040,587
Core Bond Fund/VA - Non-Service Shares (OVB)
	637,571 shares (cost $5,481,472)		4,992,179
Global Securities Fund/VA - Class 3 (OVGS3)
	222,675 shares (cost $6,375,814)		9,163,071
Global Securities Fund/VA - Non-Service Shares (OVGS)
	364,545 shares (cost $10,639,487)		14,895,312
Main Street Fund(R)/VA - Non-Service Shares (OVGI)
	40,414 shares (cost $901,042)		1,262,541
Main Street Small- & Mid-Cap Fund(R)/VA - Non-Service Shares (OVSC)
	54,950 shares (cost $1,142,494)		1,527,618
Discovery Mid Cap Growth Fund/VA - Non-Service Shares (OVAG)
	14,762 shares (cost $719,522)		1,099,905
Global Strategic Income Fund/VA: Non-service Shares (OVSB)
	33,369 shares (cost $183,384)		179,524
All Asset Portfolio - Administrative Class (PMVAAA)
	45,792 shares (cost $521,358)		498,219
Foreign Bond Portfolio (Unhedged) - Administrative Class (PMVFBA)
	51,292 shares (cost $608,406)		550,878
Low Duration Portfolio - Administrative Class (PMVLDA)
	182,945 shares (cost $1,931,067)		1,941,045
Total Return Portfolio - Administrative Class (PMVTRA)
	113,911 shares (cost $1,306,128)		1,250,746
Putnam VT Growth and Income Fund - Class IB (PVGIB)
	5,662 shares (cost $111,117)		135,370
Putnam VT International Equity Fund - Class IB (PVTIGB)
	21,065 shares (cost $242,258)		301,017
Putnam VT Voyager Fund - Class IB (PVTVB)
	9,944 shares (cost $417,604)		512,609
VI American Franchise Fund - Series I Shares (ACEG)
	488 shares (cost $20,251)		24,708
VI Value Opportunities Fund - Series I Shares (AVBVI)
	675 shares (cost $4,641)		6,313
Invesco - Invesco VI Mid Cap Core Equity Fund: Series I Shares (AVMCCI)
	82 shares (cost $1,089)		1,237
Variable Fund - Multi-Hedge Strategies (RVARS)
	13 shares (cost $290)		290
Health Sciences Portfolio - II (TRHS2)
	147,797 shares (cost $3,434,690)		4,404,352

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2013

Limited-Term Bond Portfolio - II (TRLT2)
	6,846 shares (cost $33,713)	$	33,478
VIP Trust - Unconstrained Emerging Markets Bond Fund - Initial Class (VWBF)
	136,926 shares (cost $1,572,845)		1,451,411
VIP Trust Emerging Markets Fund - Initial Class (VWEM)
	435,375 shares (cost $5,323,620)		6,487,082
VIP Trust Global Hard Assets Fund - Initial Class (VWHA)
	242,568 shares (cost $7,522,464)		7,614,225
Variable Insurance Portfolios - Asset Strategy (WRASP)
	228,742 shares (cost $2,335,194)		3,030,509
Variable Insurance Portfolios - High Income (WRHIP)
	264,075 shares (cost $1,025,419)		1,055,216
Variable Insurance Portfolios - Mid Cap Growth (WRMCG)
	33,161 shares (cost $314,695)		355,594
Advantage VT Discovery Fund (SVDF)
	24,173 shares (cost $629,786)		850,880
Advantage VT Opportunity Fund - Class 2 (SVOF)
	57,942 shares (cost $874,314)		1,515,173
Advantage VT Small Cap Growth Fund - Class 2 (WFVSCG)
	53,569 shares (cost $463,182)		601,048
Total Investments		$	677,275,375
Other Accounts Receivable			22,592
Accounts Receivable-VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)			3
Accounts Receivable-U.S. Real Estate Portfolio - Class I (MSVRE)			470
Accounts Receivable-American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)			5,040
Accounts Receivable-NVIT Government Bond Fund - Class I (GBF)			2,849
Accounts Receivable-NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)			9,265
Accounts Receivable-NVIT Mid Cap Index Fund - Class I (MCIF)			5,467
Accounts Receivable-NVIT Multi-Manager Small Company Fund - Class I (SCF)			44,884
Accounts Receivable-VP Capital Appreciation Fund - Class I (ACVCA)			9,496
Accounts Receivable-VP Income & Growth Fund - Class I (ACVIG)			4,508
Accounts Receivable-VP International Fund - Class I (ACVI)			16,823
Accounts Receivable-Equity-Income Portfolio - Initial Class (FEIP)			25,722
Accounts Receivable-High Income Portfolio - Initial Class (FHIP)			5,238
Accounts Receivable-VIP Asset Manager Portfolio - Initial Class (FAMP)			4,237
Accounts Receivable-VIP Growth Portfolio - Initial Class (FGP)			15,776
Accounts Receivable-VIP Overseas Portfolio - Initial Class (FOP)			3,594
Accounts Receivable-Short Duration Bond Portfolio - I Class Shares (AMTB)			1,941
Accounts Receivable-Growth Portfolio - I Class Shares (AMTG)			3,429
Accounts Receivable-Guardian Portfolio - I Class Shares (AMGP)			53
Accounts Receivable-International Portfolio - S Class Shares (AMINS)			7
Accounts Receivable-Mid-Cap Growth Portfolio - S Class Shares (AMMCGS)			11
Accounts Receivable-Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)			2,533
Accounts Receivable-Capital Income Fund/VA - Non-Service Shares (OVMS)			3,839
Accounts Receivable-Core Bond Fund/VA - Non-Service Shares (OVB)			4,308
Accounts Receivable-Global Securities Fund/VA - Non-Service Shares (OVGS)			25,566
Accounts Receivable-VIP Trust Global Hard Assets Fund - Initial Class (VWHA)			15,463
Accounts Receivable-Advantage VT Opportunity Fund - Class 2 (SVOF)			11,575
Accounts Payable-NVIT Money Market Fund - Class I (SAM)			(91,028	)
Accounts Payable-TOPS Managed Risk Growth ETF Portfolio - Class 3 (NOTG3)			(2	)
Accounts Payable-Invesco - Invesco VI Mid Cap Core Equity Fund: Series I Shares (AVMCCI)			(3	)
Accounts Payable-Variable Fund - Multi-Hedge Strategies (RVARS)			(2	)
		$	677,429,029
Contract Owners’ Equity:
Accumulation units			677,429,029
Total Contract Owners’ Equity (note 8)		$	677,429,029

See accompanying notes to financial statements.

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	Total			ALVDAA			MLVGA2			DWVSVS			DSIF			DSRG			GVGMNS			IVKMG1
Reinvested dividends	$	8,515,193			18			37,215			-			812,542			81,736			7			774
Asset charges (note 3)		(3,433,601	)		(24	)		(17,292	)		(115	)		(217,953	)		(38,607	)		(50	)		(913	)
Net investment income (loss)		5,081,592			(6	)		19,923			(115	)		594,589			43,129			(43	)		(139	)
Realized gain (loss) on investments		17,848,642			6			90,962			498			2,017,310			61,681			508			3,328
Change in unrealized gain (loss) on investments		110,647,503			515			220,499			5,981			8,964,501			1,786,062			111			55,982
Net gain (loss) on investments		128,496,145			521			311,461			6,479			10,981,811			1,847,743			619			59,310
Reinvested capital gains		10,692,737			17			131,343			-			490,403			-			410			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	144,270,474			532			462,727			6,364			12,066,803			1,890,872			986			59,171
Investment Activity:	JABS			JACAS			JAGTS			JAIGS			MIGIC			MNDIC			MVFIC			MSVFI
Reinvested dividends	$	28,634			21,638			-			140,753			1,411			-			22,831			13,351
Asset charges (note 3)		(6,541	)		(20,149	)		(7,220	)		(25,142	)		(991	)		(1,096	)		(8,805	)		(1,314	)
Net investment income (loss)		22,093			1,489			(7,220	)		115,611			420			(1,096	)		14,026			12,037
Realized gain (loss) on investments		(7,560	)		365,262			164,974			(160,062	)		16,296			9,564			187,691			(1,281	)
Change in unrealized gain (loss) on investments		170,125			633,138			312,284			629,812			29,688			54,674			351,169			(12,021	)
Net gain (loss) on investments		162,565			998,400			477,258			469,750			45,984			64,238			538,860			(13,302	)
Reinvested capital gains		65,593			-			-			-			7,056			2,189			5,906			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	250,251			999,889			470,038			585,361			53,460			65,331			558,792			(1,265	)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	MSEM			MSVRE			NVAMV1			GVAAA2			GVABD2			GVAGG2			GVAGR2			GVAGI2
Reinvested dividends	$	53,619			19,757			137,526			21,613			15,753			5,827			5,860			8,620
Asset charges (note 3)		(7,983	)		(12,053	)		(38,163	)		(8,195	)		(4,539	)		(7,798	)		(9,049	)		(4,156	)
Net investment income (loss)		45,636			7,704			99,363			13,418			11,214			(1,971	)		(3,189	)		4,464
Realized gain (loss) on investments		64,768			172,662			314,945			85,324			18,277			146,130			150,645			26,157
Change in unrealized gain (loss) on investments		(274,717	)		(137,711	)		1,471,924			228,653			(57,955	)		234,189			309,813			204,897
Net gain (loss) on investments		(209,949	)		34,951			1,786,869			313,977			(39,678	)		380,319			460,458			231,054
Reinvested capital gains		16,435			-			144,781			402			262			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(147,878	)		42,655			2,031,013			327,797			(28,202	)		378,348			457,269			235,518
Investment Activity:	HIBF			HIBF3			GEM			GEM3			GIG			GIG3			NVNMO1			NVNSR1
Reinvested dividends	$	7,168			93,576			9,787			28,302			3,539			19,526			143,012			984
Asset charges (note 3)		(269	)		(6,725	)		(6,502	)		(11,039	)		(3,059	)		(18,840	)		(72,224	)		(556	)
Net investment income (loss)		6,899			86,851			3,285			17,263			480			686			70,788			428
Realized gain (loss) on investments		(291	)		27,491			12,910			117,111			58,642			112,609			324,147			1,655
Change in unrealized gain (loss) on investments		533			(19,608	)		(16,346	)		(128,871	)		47,547			479,592			3,894,869			31,401
Net gain (loss) on investments		242			7,883			(3,436	)		(11,760	)		106,189			592,201			4,219,016			33,056
Reinvested capital gains		-			-			-			-			-			-			580,724			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	7,141			94,734			(151	)		5,503			106,669			592,887			4,870,528			33,484

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	NVCRA1			NVCRB1			NVCCA1			NVCCN1			NVCMD1			NVCMA1			NVCMC1			NVCBD1
Reinvested dividends	$	3,918			6,974			11,636			27,690			18,894			9,774			5,898			10,872
Asset charges (note 3)		(1,619	)		(1,910	)		(3,180	)		(7,604	)		(5,788	)		(3,648	)		(1,070	)		(2,558	)
Net investment income (loss)		2,299			5,064			8,456			20,086			13,106			6,126			4,828			8,314
Realized gain (loss) on investments		12,586			13,812			11,422			9,102			22,801			19,801			12,320			746
Change in unrealized gain (loss) on investments		40,411			19,129			74,611			13,331			112,993			77,561			11,403			(23,542	)
Net gain (loss) on investments		52,997			32,941			86,033			22,433			135,794			97,362			23,723			(22,796	)
Reinvested capital gains		6,440			8,234			15,958			23,223			27,081			26,789			6,760			4,794
Net increase (decrease) in contract owners’ equity resulting from operations	$	61,736			46,239			110,447			65,742			175,981			130,277			35,311			(9,688	)
Investment Activity:	NVLCP1			TRF			GBF			CAF			GVIX6			GVIDA			NVDBL2			NVDCA2
Reinvested dividends	$	3,127			618,072			143,334			86,768			12,826			35,617			1,720			2,182
Asset charges (note 3)		(804	)		(288,944	)		(41,251	)		(76,797	)		(1,861	)		(11,527	)		(591	)		(710	)
Net investment income (loss)		2,323			329,128			102,083			9,971			10,965			24,090			1,129			1,472
Realized gain (loss) on investments		2,167			61,165			(128,519	)		553,075			(1,031	)		55,532			677			1,351
Change in unrealized gain (loss) on investments		(11,073	)		11,927,008			(438,927	)		2,760,045			84,747			418,804			9,381			14,739
Net gain (loss) on investments		(8,906	)		11,988,173			(567,446	)		3,313,120			83,716			474,336			10,058			16,090
Reinvested capital gains		2,993			-			86,593			-			-			-			904			1,807
Net increase (decrease) in contract owners’ equity resulting from operations	$	(3,590	)		12,317,301			(378,770	)		3,323,091			94,681			498,426			12,091			19,369

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	GVIDC			GVIDM			GVDMA			GVDMC			MCIF			SAM			NVMIG3			GVDIVI
Reinvested dividends	$	10,107			76,932			84,355			55,494			64,895			-			53,867			3,316
Asset charges (note 3)		(3,469	)		(20,618	)		(27,921	)		(17,446	)		(30,459	)		(113,659	)		(23,612	)		(739	)
Net investment income (loss)		6,638			56,314			56,434			38,048			34,436			(113,659	)		30,255			2,577
Realized gain (loss) on investments		20,095			3,595			(78,814	)		11,524			507,081			-			173,124			(8,043	)
Change in unrealized gain (loss) on investments		(8,550	)		653,264			1,043,874			211,930			885,674			-			621,335			32,842
Net gain (loss) on investments		11,545			656,859			965,060			223,454			1,392,755			-			794,459			24,799
Reinvested capital gains		9,099			-			-			40,187			148,870			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	27,282			713,173			1,021,494			301,689			1,576,061			(113,659	)		824,714			27,376
Investment Activity:	GVDIV3			NVMLG1			NVMLV1			NVMMG1			NVMMV2			SCGF			SCVF			SCF
Reinvested dividends	$	10,422			13,897			19,202			-			252,347			-			45,500			24,320
Asset charges (note 3)		(2,003	)		(8,019	)		(6,633	)		(160,722	)		(119,685	)		(11,776	)		(25,395	)		(91,198	)
Net investment income (loss)		8,419			5,878			12,569			(160,722	)		132,662			(11,776	)		20,105			(66,878	)
Realized gain (loss) on investments		12,972			75,931			63,504			1,360,756			872,868			73,842			226,583			5,550
Change in unrealized gain (loss) on investments		65,341			304,576			263,502			5,920,035			4,278,593			479,707			1,602,123			6,099,713
Net gain (loss) on investments		78,313			380,507			327,006			7,280,791			5,151,461			553,549			1,828,706			6,105,263
Reinvested capital gains		-			113,304			68,967			2,099,505			990,965			98,857			-			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	86,732			499,689			408,542			9,219,574			6,275,088			640,630			1,848,811			6,038,385

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	MSBF			NVSTB2			NVOLG1			NVTIV3			EIF			NVRE1			NVSIX2			GVEX1
Reinvested dividends	$	45,482			6,294			382,158			3,055			-			123,816			655			16,136
Asset charges (note 3)		(10,368	)		(2,078	)		(249,600	)		(556	)		(2,919	)		(45,606	)		(91	)		(1,290	)
Net investment income (loss)		35,114			4,216			132,558			2,499			(2,919	)		78,210			564			14,846
Realized gain (loss) on investments		79,014			4,382			1,728,076			2,983			51,947			575,421			511			22,074
Change in unrealized gain (loss) on investments		(152,432	)		(6,811	)		13,369,063			15,406			118,383			(1,006,093	)		3,925			38,717
Net gain (loss) on investments		(73,418	)		(2,429	)		15,097,139			18,389			170,330			(430,672	)		4,436			60,791
Reinvested capital gains		-			504			-			1,218			-			596,191			-			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(38,304	)		2,291			15,229,697			22,106			167,411			243,729			5,000			75,637
Investment Activity:	NOTG3			ALVGIA			ALVSVA			ACVB			ACVCA			ACVIG			ACVIP2			ACVI
Reinvested dividends	$	23			5,215			6,217			76,559			-			46,296			29,562			9,747
Asset charges (note 3)		(10	)		(2,721	)		(5,017	)		(28,203	)		(12,888	)		(10,490	)		(7,673	)		(2,984	)
Net investment income (loss)		13			2,494			1,200			48,356			(12,888	)		35,806			21,889			6,763
Realized gain (loss) on investments		3			77,058			103,241			21,075			17,342			171,099			28,157			(4,789	)
Change in unrealized gain (loss) on investments		193			66,496			156,767			578,835			355,355			372,856			(290,686	)		113,341
Net gain (loss) on investments		196			143,554			260,008			599,910			372,697			543,955			(262,529	)		108,552
Reinvested capital gains		-			-			57,709			90,503			61,503			-			71,752			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	209			146,048			318,917			738,769			421,312			579,761			(168,888	)		115,315

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	ACVI3			ACVMV1			ACVU1			ACVVS1			DVSCS			DCAP			DSC			DGI
Reinvested dividends	$	2,954			23,250			151			-			22,488			97,201			-			12,789
Asset charges (note 3)		-			(9,334	)		(155	)		-			(11,097	)		(24,433	)		(2,566	)		(7,151	)
Net investment income (loss)		2,954			13,916			(4	)		-			11,391			72,768			(2,566	)		5,638
Realized gain (loss) on investments		25,335			93,651			13,116			502			125,416			398,563			77,674			30,943
Change in unrealized gain (loss) on investments		10,127			316,534			(960	)		10,856			560,846			453,934			104,553			399,147
Net gain (loss) on investments		35,462			410,185			12,156			11,358			686,262			852,497			182,227			430,090
Reinvested capital gains		-			27,586			-			-			27,653			11,946			-			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	38,416			451,687			12,152			11,358			725,306			937,211			179,661			435,728
Investment Activity:	FVCA2P			FQB			FEIP			FHIP			FAMP			FNRS2			FF10S			FF20S
Reinvested dividends	$	2,274			81,030			1,045,233			486,705			191,755			18,021			6,213			19,107
Asset charges (note 3)		(622	)		(10,415	)		(236,959	)		(45,127	)		(76,060	)		(13,398	)		(1,701	)		(6,019	)
Net investment income (loss)		1,652			70,615			808,274			441,578			115,695			4,623			4,512			13,088
Realized gain (loss) on investments		5,178			9,252			913,978			572,630			228,364			237,322			7,058			46,448
Change in unrealized gain (loss) on investments		11,652			(75,920	)		5,664,905			(553,451	)		1,363,254			281,565			30,228			88,417
Net gain (loss) on investments		16,830			(66,668	)		6,578,883			19,179			1,591,618			518,887			37,286			134,865
Reinvested capital gains		4,650			-			2,771,326			-			29,748			15,898			4,521			15,564
Net increase (decrease) in contract owners’ equity resulting from operations	$	23,132			3,947			10,158,483			460,757			1,737,061			539,408			46,319			163,517

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	FF30S			FGP			FHIPR			FIGBS			FMCS			FOP			FOSR			FVSS
Reinvested dividends	$	18,975			156,550			212,301			81,611			31,526			86,469			56,369			9,121
Asset charges (note 3)		(6,613	)		(310,237	)		(20,333	)		(18,844	)		(39,081	)		(35,763	)		(21,053	)		(6,499	)
Net investment income (loss)		12,362			(153,687	)		191,968			62,767			(7,555	)		50,706			35,316			2,622
Realized gain (loss) on investments		47,097			(255,789	)		45,493			30,221			223,482			98,274			(148,624	)		262,503
Change in unrealized gain (loss) on investments		145,333			16,953,537			(49,850	)		(234,078	)		1,133,823			1,497,633			1,218,633			61,806
Net gain (loss) on investments		192,430			16,697,748			(4,357	)		(203,857	)		1,357,305			1,595,907			1,070,009			324,309
Reinvested capital gains		16,672			37,274			-			43,544			990,196			23,704			16,607			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	221,464			16,581,335			187,611			(97,546	)		2,339,946			1,670,317			1,121,932			326,931
Investment Activity:	FTVIS2			FTVRDI			FTVSVI			FTVDM3			TIF			TIF3			FTVGI3			FTVFA2
Reinvested dividends	$	97,870			82,882			54,327			22,603			4,667			27,005			119,096			13,769
Asset charges (note 3)		(7,244	)		(22,115	)		(18,283	)		(5,664	)		(941	)		(6,115	)		(12,492	)		(476	)
Net investment income (loss)		90,626			60,767			36,044			16,939			3,726			20,890			106,604			13,293
Realized gain (loss) on investments		30,036			395,342			323,252			19,441			(2,145	)		75,602			89,230			73
Change in unrealized gain (loss) on investments		65,080			676,924			711,312			(62,224	)		36,436			155,443			(185,287	)		(10,565	)
Net gain (loss) on investments		95,116			1,072,266			1,034,564			(42,783	)		34,291			231,045			(96,057	)		(10,492	)
Reinvested capital gains		-			-			60,160			-			-			-			31,051			20,080
Net increase (decrease) in contract owners’ equity resulting from operations	$	185,742			1,133,033			1,130,768			(25,844	)		38,017			251,935			41,598			22,881

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	AMTB			AMBP			AMTG			AMGP			AMINS			AMMCGS			AMTP			AMRS
Reinvested dividends	$	61,159			-			-			1,596			258			-			33,207			226
Asset charges (note 3)		(16,410	)		(238	)		(10,225	)		(804	)		-			-			(4,707	)		-
Net investment income (loss)		44,749			(238	)		(10,225	)		792			258			-			28,500			226
Realized gain (loss) on investments		(29,880	)		961			97,923			17,042			30			72			125,568			(869	)
Change in unrealized gain (loss) on investments		(11,058	)		5,069			418,899			36,023			3,293			3,183			604,706			9,242
Net gain (loss) on investments		(40,938	)		6,030			516,822			53,065			3,323			3,255			730,274			8,373
Reinvested capital gains		-			-			-			10,132			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	3,811			5,792			506,597			63,989			3,581			3,255			758,774			8,599
Investment Activity:	AMFAS			AMSRS			OVMS			OVB			OVGS3			OVGS			OVGI			OVSC
Reinvested dividends	$	-			4,967			142,744			260,813			115,110			192,419			12,575			12,144
Asset charges (note 3)		(707	)		(3,207	)		(34,570	)		(27,100	)		(43,996	)		(73,619	)		(4,900	)		(6,777	)
Net investment income (loss)		(707	)		1,760			108,174			233,713			71,114			118,800			7,675			5,367
Realized gain (loss) on investments		8,879			41,333			(143,790	)		(189,438	)		27,698			567,488			118,180			116,200
Change in unrealized gain (loss) on investments		49,028			144,460			737,509			(73,732	)		1,866,555			2,631,265			185,126			277,309
Net gain (loss) on investments		57,907			185,793			593,719			(263,170	)		1,894,253			3,198,753			303,306			393,509
Reinvested capital gains		-			-			-			-			-			-			-			15,987
Net increase (decrease) in contract owners’ equity resulting from operations	$	57,200			187,553			701,893			(29,457	)		1,965,367			3,317,553			310,981			414,863

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	OVAG			OVSB			PMVAAA			PMVFBA			PMVLDA			PMVTRA			PVGIB			PVTIGB
Reinvested dividends	$	124			9,136			25,072			10,090			31,447			30,905			3,134			3,568
Asset charges (note 3)		(6,284	)		(803	)		(3,025	)		(2,762	)		(9,001	)		(7,241	)		(840	)		(1,362	)
Net investment income (loss)		(6,160	)		8,333			22,047			7,328			22,446			23,664			2,294			2,206
Realized gain (loss) on investments		50,327			(2,600	)		7,766			(8,924	)		11,625			(14,554	)		24,534			9,371
Change in unrealized gain (loss) on investments		264,547			(6,763	)		(30,403	)		(44,455	)		(47,621	)		(57,331	)		14,624			51,704
Net gain (loss) on investments		314,874			(9,363	)		(22,637	)		(53,379	)		(35,996	)		(71,885	)		39,158			61,075
Reinvested capital gains		-			-			-			5,574			-			10,958			-			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	308,714			(1,030	)		(590	)		(40,477	)		(13,550	)		(37,263	)		41,452			63,281
Investment Activity:	PVTVB			ACEG			AVBVI			AVMCCI			RVARS			TRHS2			TRLT2			VWBF
Reinvested dividends	$	3,365			54			88			9			-			-			1,241			37,971
Asset charges (note 3)		(2,286	)		(82	)		-			(12	)		(98	)		(16,399	)		-			(11,043	)
Net investment income (loss)		1,079			(28	)		88			(3	)		(98	)		(16,399	)		1,241			26,928
Realized gain (loss) on investments		69,398			190			4,198			223			(579	)		289,431			(1,971	)		2,635
Change in unrealized gain (loss) on investments		92,770			4,741			(700	)		148			-			853,317			280			(206,033	)
Net gain (loss) on investments		162,168			4,931			3,498			371			(579	)		1,142,748			(1,691	)		(203,398	)
Reinvested capital gains		-			-			-			90			-			179,068			-			307
Net increase (decrease) in contract owners’ equity resulting from operations	$	163,247			4,903			3,586			458			(677	)		1,305,417			(450	)		(176,163	)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENT OF OPERATIONS

Year Ended December 31, 2013

Investment Activity:	VWEM			VWHA			WRASP			WRHIP			WRMCG			SVDF			SVOF			WFVSCG
Reinvested dividends	$	101,529			54,287			35,114			43,004			-			68			2,907			-
Asset charges (note 3)		(32,375	)		(43,781	)		(13,725	)		(4,639	)		(1,622	)		(6,874	)		(9,686	)		(2,539	)
Net investment income (loss)		69,154			10,506			21,389			38,365			(1,622	)		(6,806	)		(6,779	)		(2,539	)
Realized gain (loss) on investments		421,232			436,069			173,415			31,217			37,783			117,806			167,730			18,477
Change in unrealized gain (loss) on investments		203,931			123,772			422,205			12,031			36,417			155,594			244,660			144,923
Net gain (loss) on investments		625,163			559,841			595,620			43,248			74,200			273,400			412,390			163,400
Reinvested capital gains		-			155,183			-			-			7,573			26,398			-			27,056
Net increase (decrease) in contract owners’ equity resulting from operations	$	694,317			725,530			617,009			81,613			80,151			292,992			405,611			187,917

See accompanying notes to financial statements.

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	Total						ALVDAA						MLVGA2						DWVSVS
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	5,081,592			5,361,963			(6	)		(4	)		19,923			32,783			(115	)		-
Realized gain (loss) on investments		17,848,642			7,207,338			6			-			90,962			49,392			498			-
Change in unrealized gain (loss) on investments		110,647,503			50,246,021			515			238			220,499			208,032			5,981			-
Reinvested capital gains		10,692,737			14,253,603			17			3			131,343			10,030			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		144,270,474			77,068,925			532			237			462,727			300,237			6,364			-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		26,560,363			30,059,702			-			114			158,981			145,150			3,928			-
Transfers between funds		-			5,279,887			-			4,267			61,530			295,941			50,492			-
Surrenders (note 6)		(52,859,707	)		(60,288,395	)		-			-			(233,251	)		(177,742	)		-			-
Death Benefits (note 4)		(8,217,470	)		(9,162,116	)		-			-			(17,182	)		-			-			-
Net policy repayments (loans) (note 5)		4,925,415			7,872,788			-			-			(1,376	)		(95,216	)		16			-
Deductions for surrender charges (note 2d)		(1,785	)		(14,929	)		-			-			-			(3	)		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(35,084,239	)		(36,842,744	)		(26	)		(13	)		(183,012	)		(163,111	)		(1,036	)		-
Asset charges (note 3):
MSP contracts		(287,571	)		(275,659	)		-			-			(3,239	)		(2,446	)		-			-
SL contracts or LSFP contracts		(147,523	)		(144,302	)		-			-			-			-			-			-
Adjustments to maintain reserves		48,702			37,353			3			(77	)		6			60			6			-
Net equity transactions		(65,063,815	)		(63,478,415	)		(23	)		4,291			(217,543	)		2,633			53,406			-
Net change in contract owners’ equity		79,206,659			13,590,510			509			4,528			245,184			302,870			59,770			-
Contract owners’ equity beginning of period		598,222,370			584,631,860			4,528			-			3,414,684			3,111,814			-			-
Contract owners’ equity end of period	$	677,429,029			598,222,370			5,037			4,528			3,659,868			3,414,684			59,770			-
CHANGES IN UNITS:
Beginning units		30,145,125			33,156,409			443			-			244,658			244,481			-			-
Units purchased		2,897,049			4,044,171			-			444			23,320			32,317			4,957			-
Units redeemed		(5,649,154	)		(7,055,455	)		(2	)		(1	)		(37,999	)		(32,140	)		(98	)		-
Ending units		27,393,020			30,145,125			441			443			229,979			244,658			4,859			-

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	DSIF						DSRG						GVGMNS					IVKMG1
	2013			2012			2013			2012			2013			2012		2013			2012
Investment activity:
Net investment income (loss)	$	594,589			633,823			43,129			12,345			(43	)		-		(139	)		(551	)
Realized gain (loss) on investments		2,017,310			1,784,958			61,681			(93,648	)		508			-		3,328			(3,193	)
Change in unrealized gain (loss) on investments		8,964,501			1,393,156			1,786,062			734,647			111			16		55,982			(1,238	)
Reinvested capital gains		490,403			2,036,849			-			-			410			-		-			53
Net increase (decrease) in contract owners’ equity resulting from operations		12,066,803			5,848,786			1,890,872			653,344			986			16		59,171			(4,929	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,657,683			1,897,238			389,697			427,837			254			-		13,488			8,595
Transfers between funds		63,159			93,317			23,046			(103,814	)		10,746			5,448		1,428			179,830
Surrenders (note 6)		(5,306,346	)		(4,788,770	)		(426,465	)		(457,491	)		-			-		(17,444	)		(3,392	)
Death Benefits (note 4)		(752,991	)		(1,232,038	)		(29,755	)		(105,540	)		-			-		-			-
Net policy repayments (loans) (note 5)		411,713			819,952			22,471			51,699			-			-		3,701			(281	)
Deductions for surrender charges (note 2d)		(75	)		(4,014	)		-			(30	)		-			-		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(2,352,266	)		(2,500,512	)		(456,243	)		(466,727	)		(246	)		-		(14,493	)		(9,439	)
Asset charges (note 3):
MSP contracts		(19,754	)		(17,880	)		(1,784	)		(1,588	)		-			-		(36	)		(18	)
SL contracts or LSFP contracts		(19,712	)		(18,004	)		(1,028	)		(953	)		-			-		(127	)		(76	)
Adjustments to maintain reserves		3,051			1,933			169			153			(4	)		4		(2	)		19
Net equity transactions		(6,315,538	)		(5,748,778	)		(479,892	)		(656,454	)		10,750			5,452		(13,485	)		175,238
Net change in contract owners’ equity		5,751,265			100,008			1,410,980			(3,110	)		11,736			5,468		45,686			170,309
Contract owners’ equity beginning of period		40,564,178			40,464,170			5,828,570			5,831,680			5,468			-		170,309			-
Contract owners’ equity end of period	$	46,315,443			40,564,178			7,239,550			5,828,570			17,204			5,468		215,995			170,309
CHANGES IN UNITS:
Beginning units		1,268,393			1,438,434			209,089			237,092			532			-		17,386			-
Units purchased		65,785			87,807			20,263			21,189			975			532		2,264			18,899
Units redeemed		(243,408	)		(257,848	)		(36,162	)		(49,192	)		(21	)		-		(3,480	)		(1,513	)
Ending units		1,090,770			1,268,393			193,190			209,089			1,486			532		16,170			17,386

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	JABS						JACAS						JAGTS						JAIGS
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	22,093			28,709			1,489			1,903			(7,220	)		(5,637	)		115,611			9,804
Realized gain (loss) on investments		(7,560	)		48,528			365,262			250,143			164,974			111,020			(160,062	)		(588,417	)
Change in unrealized gain (loss) on investments		170,125			19,668			633,138			473,989			312,284			56,379			629,812			28,630
Reinvested capital gains		65,593			93,273			-			-			-			-			-			629,929
Net increase (decrease) in contract owners’ equity resulting from operations		250,251			190,178			999,889			726,035			470,038			161,762			585,361			79,946
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		59,027			46,912			164,828			188,610			49,093			46,454			169,672			174,382
Transfers between funds		(206,311	)		(4,677	)		(274,314	)		272,496			57,115			594,498			(401,280	)		3,147,291
Surrenders (note 6)		(23,308	)		(259,567	)		(201,384	)		(521,699	)		(42,907	)		(123,331	)		(313,118	)		(493,321	)
Death Benefits (note 4)		(18,870	)		-			(191,444	)		(28,862	)		(15,582	)		(43,488	)		(16,774	)		(4,667	)
Net policy repayments (loans) (note 5)		(6,578	)		(14,770	)		(12,887	)		19,743			12,212			8,473			(164	)		73,105
Deductions for surrender charges (note 2d)		-			-			-			(302	)		-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(59,472	)		(59,240	)		(191,259	)		(203,117	)		(54,517	)		(49,875	)		(233,068	)		(217,526	)
Asset charges (note 3):
MSP contracts		(1,056	)		(721	)		(1,734	)		(1,798	)		(169	)		(146	)		(1,133	)		(939	)
SL contracts or LSFP contracts		(143	)		(145	)		(1,203	)		(1,212	)		(999	)		(1,026	)		(1,084	)		(1,394	)
Adjustments to maintain reserves		18			13			38			68			24			51			102			1,384
Net equity transactions		(256,693	)		(292,195	)		(709,359	)		(276,073	)		4,270			431,610			(796,847	)		2,678,315
Net change in contract owners’ equity		(6,442	)		(102,017	)		290,530			449,962			474,308			593,372			(211,486	)		2,758,261
Contract owners’ equity beginning of period		1,515,049			1,617,066			3,803,305			3,353,343			1,490,012			896,640			4,937,709			2,179,448
Contract owners’ equity end of period	$	1,508,607			1,515,049			4,093,835			3,803,305			1,964,320			1,490,012			4,726,223			4,937,709
CHANGES IN UNITS:
Beginning units		77,338			93,316			327,052			354,159			244,704			172,944			358,477			174,339
Units purchased		5,013			9,146			19,033			42,666			18,600			204,113			19,793			339,045
Units redeemed		(17,824	)		(25,124	)		(76,263	)		(69,773	)		(24,003	)		(132,353	)		(76,720	)		(154,907	)
Ending units		64,527			77,338			269,822			327,052			239,301			244,704			301,550			358,477

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	MIGIC						MNDIC						MVFIC						MSVFI
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	420			(74	)		(1,096	)		(36	)		14,026			23,521			12,037			16,933
Realized gain (loss) on investments		16,296			2,994			9,564			(282	)		187,691			109,952			(1,281	)		7,711
Change in unrealized gain (loss) on investments		29,688			15,891			54,674			1,071			351,169			135,058			(12,021	)		2,097
Reinvested capital gains		7,056			8,648			2,189			40			5,906			15,069			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		53,460			27,459			65,331			793			558,792			283,600			(1,265	)		26,741
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		9,597			10,176			20,232			4,497			78,493			48,923			14,703			9,066
Transfers between funds		7,562			(5,074	)		212,163			36,595			58,138			(416,545	)		40,918			103,015
Surrenders (note 6)		(32,034	)		(4,914	)		(10,830	)		(3,971	)		(240,373	)		(110,274	)		(109,462	)		(29,083	)
Death Benefits (note 4)		-			-			-			-			(6,381	)		(55,553	)		-			-
Net policy repayments (loans) (note 5)		1,357			1,308			(341	)		(34	)		(927	)		564			8,661			2,328
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(11,441	)		(10,203	)		(11,413	)		(266	)		(73,657	)		(112,139	)		(16,812	)		(15,202	)
Asset charges (note 3):
MSP contracts		-			-			-			-			(949	)		(860	)		(163	)		(163	)
SL contracts or LSFP contracts		(89	)		(51	)		-			-			(550	)		(325	)		(259	)		(249	)
Adjustments to maintain reserves		6			18			10			4			(1	)		32			(17	)		5
Net equity transactions		(25,042	)		(8,740	)		209,821			36,825			(186,207	)		(646,177	)		(62,431	)		69,717
Net change in contract owners’ equity		28,418			18,719			275,152			37,618			372,585			(362,577	)		(63,696	)		96,458
Contract owners’ equity beginning of period		187,711			168,992			37,618			-			1,576,122			1,938,699			330,542			234,084
Contract owners’ equity end of period	$	216,129			187,711			312,770			37,618			1,948,707			1,576,122			266,846			330,542
CHANGES IN UNITS:
Beginning units		10,656			11,174			3,653			-			77,887			110,832			23,156			17,839
Units purchased		2,089			790			19,963			3,683			8,488			4,769			11,823			9,206
Units redeemed		(3,278	)		(1,308	)		(2,042	)		(30	)		(15,290	)		(37,714	)		(16,312	)		(3,889	)
Ending units		9,467			10,656			21,574			3,653			71,085			77,887			18,667			23,156

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	MSEM						MSVRE						NVAMV1						GVAAA2
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	45,636			36,563			7,704			1,802			99,363			31,116			13,418			11,632
Realized gain (loss) on investments		64,768			73,059			172,662			360,486			314,945			89,263			85,324			72,858
Change in unrealized gain (loss) on investments		(274,717	)		143,936			(137,711	)		(103,004	)		1,471,924			536,037			228,653			89,353
Reinvested capital gains		16,435			-			-			-			144,781			284,491			402			-
Net increase (decrease) in contract owners’ equity resulting from operations		(147,878	)		253,558			42,655			259,284			2,031,013			940,907			327,797			173,843
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		31,335			174,275			24,287			48,988			208,573			232,098			56,903			59,578
Transfers between funds		(328,158	)		157,186			(514,944	)		(23,711	)		(53,646	)		(611,969	)		231,210			453,543
Surrenders (note 6)		(31,295	)		(264,165	)		(77,873	)		(213,714	)		(624,164	)		(545,420	)		(59,836	)		(250,293	)
Death Benefits (note 4)		(9,680	)		(13,613	)		(8,630	)		(38,138	)		(167,135	)		(8,492	)		-			(11,079	)
Net policy repayments (loans) (note 5)		(21,131	)		(6,848	)		(50,666	)		82,682			(25,249	)		45,478			1,854			32,566
Deductions for surrender charges (note 2d)		-			-			-			-			(56	)		(19	)		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(49,039	)		(59,947	)		(35,330	)		(47,572	)		(400,256	)		(404,578	)		(62,171	)		(52,958	)
Asset charges (note 3):
MSP contracts		(695	)		(794	)		-			-			(3,893	)		(3,415	)		(1,192	)		(607	)
SL contracts or LSFP contracts		(389	)		(424	)		(1,658	)		(1,930	)		(2,659	)		(2,760	)		-			-
Adjustments to maintain reserves		(8	)		12			50			76			251			111			1			16
Net equity transactions		(409,060	)		(14,318	)		(664,764	)		(193,319	)		(1,068,234	)		(1,298,966	)		166,769			230,766
Net change in contract owners’ equity		(556,938	)		239,240			(622,109	)		65,965			962,779			(358,059	)		494,566			404,609
Contract owners’ equity beginning of period		1,802,771			1,563,531			1,870,640			1,804,675			6,923,176			7,281,235			1,381,348			976,739
Contract owners’ equity end of period	$	1,245,833			1,802,771			1,248,531			1,870,640			7,885,955			6,923,176			1,875,914			1,381,348
CHANGES IN UNITS:
Beginning units		56,091			56,917			51,441			56,216			428,821			514,465			112,653			91,610
Units purchased		2,613			6,411			677			997			22,822			23,167			25,267			46,447
Units redeemed		(16,159	)		(7,237	)		(19,719	)		(5,772	)		(79,600	)		(108,811	)		(13,560	)		(25,404	)
Ending units		42,545			56,091			32,399			51,441			372,043			428,821			124,360			112,653

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	GVABD2						GVAGG2						GVAGR2						GVAGI2
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	11,214			15,582			(1,971	)		4,028			(3,189	)		(4,981	)		4,464			3,822
Realized gain (loss) on investments		18,277			24,900			146,130			129,493			150,645			106,110			26,157			73,230
Change in unrealized gain (loss) on investments		(57,955	)		9,678			234,189			151,867			309,813			170,142			204,897			56,627
Reinvested capital gains		262			-			-			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		(28,202	)		50,160			378,348			285,388			457,269			271,271			235,518			133,679
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		31,435			30,228			57,079			104,991			62,771			78,732			40,932			77,747
Transfers between funds		5,558			7,395			(47,450	)		(334,211	)		134,119			(307,442	)		(26,483	)		(270,683	)
Surrenders (note 6)		(24,772	)		(281,187	)		(113,140	)		(177,428	)		(156,341	)		(93,739	)		(23,331	)		(181,103	)
Death Benefits (note 4)		(28,338	)		(26,263	)		-			(17,286	)		-			(40,345	)		-			-
Net policy repayments (loans) (note 5)		(19,458	)		(3,200	)		(1,010	)		515			(109,922	)		9,901			19,511			(2,598	)
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(27,237	)		(33,859	)		(66,920	)		(67,415	)		(77,242	)		(83,496	)		(26,486	)		(37,974	)
Asset charges (note 3):
MSP contracts		(327	)		(451	)		(748	)		(618	)		(942	)		(898	)		(284	)		(240	)
SL contracts or LSFP contracts		-			-			-			-			-			-			-			-
Adjustments to maintain reserves		7			4			47			183			2			35			13			12
Net equity transactions		(63,132	)		(307,333	)		(172,142	)		(491,269	)		(147,555	)		(437,252	)		(16,128	)		(414,839	)
Net change in contract owners’ equity		(91,334	)		(257,173	)		206,206			(205,881	)		309,714			(165,981	)		219,390			(281,160	)
Contract owners’ equity beginning of period		951,395			1,208,568			1,463,841			1,669,722			1,632,247			1,798,228			751,622			1,032,782
Contract owners’ equity end of period	$	860,061			951,395			1,670,047			1,463,841			1,941,961			1,632,247			971,012			751,622
CHANGES IN UNITS:
Beginning units		76,209			101,073			114,108			157,982			142,174			182,925			76,013			121,678
Units purchased		5,119			3,179			5,943			10,849			17,347			7,965			3,918			5,884
Units redeemed		(10,151	)		(28,043	)		(18,385	)		(54,723	)		(28,373	)		(48,716	)		(5,688	)		(51,549	)
Ending units		71,177			76,209			101,666			114,108			131,148			142,174			74,243			76,013

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	HIBF						HIBF3						GEM						GEM3
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	6,899			8,358			86,851			127,650			3,285			(2,542	)		17,263			(257	)
Realized gain (loss) on investments		(291	)		(3,859	)		27,491			71,873			12,910			19,131			117,111			48,213
Change in unrealized gain (loss) on investments		533			13,578			(19,608	)		39,543			(16,346	)		130,064			(128,871	)		362,606
Reinvested capital gains		-			-			-			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		7,141			18,077			94,734			239,066			(151	)		146,653			5,503			410,562
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		-			-			68,783			67,041			-			22,708			126,352			139,862
Transfers between funds		-			(10,720	)		(318,305	)		(130,439	)		(85,056	)		(32,995	)		(40,145	)		(374,997	)
Surrenders (note 6)		(18	)		(26,591	)		(59,191	)		(320,776	)		(20,853	)		(61,734	)		(136,342	)		(227,697	)
Death Benefits (note 4)		-			(3,975	)		(1,402	)		-			-			(4,873	)		(6,284	)		(12,371	)
Net policy repayments (loans) (note 5)		(98	)		(101	)		795			17,811			(6,540	)		(13,895	)		(3,241	)		31,669
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(2,416	)		(4,063	)		(74,583	)		(73,237	)		(26,168	)		(37,253	)		(134,109	)		(157,658	)
Asset charges (note 3):
MSP contracts		(361	)		(570	)		(1,676	)		(1,268	)		-			-			(1,358	)		(1,371	)
SL contracts or LSFP contracts		(97	)		(90	)		(227	)		(224	)		(65	)		(70	)		(1,004	)		(1,094	)
Adjustments to maintain reserves		(16	)		6			(5	)		48			4			22			11			30
Net equity transactions		(3,006	)		(46,104	)		(385,811	)		(441,044	)		(138,678	)		(128,090	)		(196,120	)		(603,627	)
Net change in contract owners’ equity		4,135			(28,027	)		(291,077	)		(201,978	)		(138,829	)		18,563			(190,617	)		(193,065	)
Contract owners’ equity beginning of period		106,263			134,290			1,724,319			1,926,297			983,200			964,637			2,620,166			2,813,231
Contract owners’ equity end of period	$	110,398			106,263			1,433,242			1,724,319			844,371			983,200			2,429,549			2,620,166
CHANGES IN UNITS:
Beginning units		5,384			7,746			104,831			133,932			40,391			46,053			140,359			175,916
Units purchased		-			90			6,166			9,587			250			123			10,866			10,090
Units redeemed		(149	)		(2,452	)		(29,290	)		(38,688	)		(5,972	)		(5,785	)		(21,471	)		(45,647	)
Ending units		5,235			5,384			81,707			104,831			34,669			40,391			129,754			140,359

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	GIG						GIG3						NVNMO1						NVNSR1
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	480			2,590			686			11,670			70,788			106,363			428			126
Realized gain (loss) on investments		58,642			18,641			112,609			70,642			324,147			99,344			1,655			1,309
Change in unrealized gain (loss) on investments		47,547			66,091			479,592			409,585			3,894,869			691,865			31,401			19,497
Reinvested capital gains		-			-			-			-			580,724			819,234			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		106,669			87,322			592,887			491,897			4,870,528			1,716,806			33,484			20,932
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		24,771			26,677			160,937			163,252			535,025			619,849			2,598			4,043
Transfers between funds		54,744			(32,244	)		(169	)		(25,556	)		9,544			(213,885	)		13,237			(153,802	)
Surrenders (note 6)		(88,435	)		(34,196	)		(239,771	)		(286,905	)		(733,114	)		(745,984	)		(1,258	)		(2,511	)
Death Benefits (note 4)		-			-			(44,922	)		(29,761	)		(25,461	)		(121,962	)		-			-
Net policy repayments (loans) (note 5)		(12,746	)		7,874			17,429			66,374			67,588			113,043			(94	)		(30	)
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(19,863	)		(20,810	)		(175,963	)		(187,938	)		(721,055	)		(697,257	)		(3,671	)		(13,802	)
Asset charges (note 3):
MSP contracts		(273	)		(240	)		(2,365	)		(2,292	)		(8,419	)		(6,661	)		-			-
SL contracts or LSFP contracts		(290	)		(409	)		-			-			(8	)		(6	)		-			-
Adjustments to maintain reserves		6			16			16			60			108			264			(6	)		317
Net equity transactions		(42,086	)		(53,332	)		(284,808	)		(302,766	)		(875,792	)		(1,052,599	)		10,806			(165,785	)
Net change in contract owners’ equity		64,583			33,990			308,079			189,131			3,994,736			664,207			44,290			(144,853	)
Contract owners’ equity beginning of period		614,813			580,823			3,582,250			3,393,119			11,600,085			10,935,878			92,005			236,858
Contract owners’ equity end of period	$	679,396			614,813			3,890,329			3,582,250			15,594,821			11,600,085			136,295			92,005
CHANGES IN UNITS:
Beginning units		45,936			49,914			434,159			472,896			1,255,134			1,376,634			8,694			24,827
Units purchased		7,484			2,841			35,748			30,504			86,860			97,229			2,042			410
Units redeemed		(10,033	)		(6,819	)		(67,748	)		(69,241	)		(162,984	)		(218,729	)		(1,400	)		(16,543	)
Ending units		43,387			45,936			402,159			434,159			1,179,010			1,255,134			9,336			8,694

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	NVCRA1						NVCRB1						NVCCA1						NVCCN1
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	2,299			715			5,064			1,266			8,456			4,544			20,086			19,651
Realized gain (loss) on investments		12,586			5,834			13,812			3,674			11,422			14,661			9,102			2,080
Change in unrealized gain (loss) on investments		40,411			8,287			19,129			8,730			74,611			30,757			13,331			45,124
Reinvested capital gains		6,440			7,054			8,234			1,895			15,958			6,959			23,223			20,767
Net increase (decrease) in contract owners’ equity resulting from operations		61,736			21,890			46,239			15,565			110,447			56,921			65,742			87,622
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		17,839			22,632			8,120			10,674			35,756			30,242			87,776			24,422
Transfers between funds		117,158			21,617			172,609			102,448			185,913			63,482			(47,619	)		1,309,173
Surrenders (note 6)		-			(25,272	)		(46,748	)		(19,501	)		(4,179	)		(17,533	)		(26,688	)		(22,226	)
Death Benefits (note 4)		-			-			(1,063	)		-			-			-			(45,191	)		-
Net policy repayments (loans) (note 5)		375			(16	)		25,974			(2,594	)		906			(361	)		4,131			8,138
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(11,259	)		(19,926	)		(10,163	)		(10,508	)		(30,799	)		(28,658	)		(47,000	)		(26,830	)
Asset charges (note 3):
MSP contracts		-			-			(48	)		(44	)		(52	)		(46	)		(29	)		(49	)
SL contracts or LSFP contracts		-			-			-			-			-			-			-			-
Adjustments to maintain reserves		(1	)		8			10			(12	)		3			8			9			7
Net equity transactions		124,112			(957	)		148,691			80,463			187,548			47,134			(74,611	)		1,292,635
Net change in contract owners’ equity		185,848			20,933			194,930			96,028			297,995			104,055			(8,869	)		1,380,257
Contract owners’ equity beginning of period		159,186			138,253			238,035			142,007			505,624			401,569			1,515,281			135,024
Contract owners’ equity end of period	$	345,034			159,186			432,965			238,035			803,619			505,624			1,506,412			1,515,281
CHANGES IN UNITS:
Beginning units		15,770			15,796			21,042			13,929			46,481			41,773			128,438			12,223
Units purchased		11,852			4,634			18,833			10,314			17,579			9,210			8,763			123,303
Units redeemed		(1,168	)		(4,660	)		(6,422	)		(3,201	)		(2,909	)		(4,502	)		(14,988	)		(7,088	)
Ending units		26,454			15,770			33,453			21,042			61,151			46,481			122,213			128,438

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	NVCMD1						NVCMA1						NVCMC1						NVCBD1
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	13,106			9,593			6,126			3,316			4,828			4,570			8,314			12,335
Realized gain (loss) on investments		22,801			23,578			19,801			5,169			12,320			14,069			746			10,147
Change in unrealized gain (loss) on investments		112,993			58,991			77,561			35,192			11,403			9,618			(23,542	)		6,012
Reinvested capital gains		27,081			14,887			26,789			12,225			6,760			7,324			4,794			2,859
Net increase (decrease) in contract owners’ equity resulting from operations		175,981			107,049			130,277			55,902			35,311			35,581			(9,688	)		31,353
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		55,448			44,203			38,906			119,713			19,054			21,451			8,526			23,580
Transfers between funds		39,157			43,078			112,582			-			35,204			32,946			158,275			38,001
Surrenders (note 6)		(33,986	)		(37,751	)		(60,040	)		(19,267	)		(66,831	)		(63,201	)		(94,282	)		(105,294	)
Death Benefits (note 4)		-			-			-			-			-			-			-			-
Net policy repayments (loans) (note 5)		6,970			17,936			802			962			8,140			17,637			56,380			(2,177	)
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(68,697	)		(65,346	)		(37,309	)		(31,113	)		(41,153	)		(44,496	)		(13,929	)		(13,521	)
Asset charges (note 3):
MSP contracts		(922	)		(823	)		-			-			(1,378	)		(1,279	)		(196	)		(218	)
SL contracts or LSFP contracts		-			-			-			-			-			-			(29	)		(266	)
Adjustments to maintain reserves		(5	)		9			7			12			55			7			6			3
Net equity transactions		(2,035	)		1,306			54,948			70,307			(46,909	)		(36,935	)		114,751			(59,892	)
Net change in contract owners’ equity		173,946			108,355			185,225			126,209			(11,598	)		(1,354	)		105,063			(28,539	)
Contract owners’ equity beginning of period		1,023,436			915,081			489,723			363,514			348,892			350,246			465,023			493,562
Contract owners’ equity end of period	$	1,197,382			1,023,436			674,948			489,723			337,294			348,892			570,086			465,023
CHANGES IN UNITS:
Beginning units		92,029			92,039			46,451			39,348			29,959			33,039			35,977			40,724
Units purchased		10,781			11,187			16,699			12,487			6,946			5,849			19,572			7,734
Units redeemed		(11,061	)		(11,197	)		(11,460	)		(5,384	)		(10,843	)		(8,929	)		(10,074	)		(12,481	)
Ending units		91,749			92,029			51,690			46,451			26,062			29,959			45,475			35,977

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	NVLCP1						TRF						GBF						CAF
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	2,323			3,853			329,128			337,090			102,083			162,396			9,971			(5,446	)
Realized gain (loss) on investments		2,167			959			61,165			(909,440	)		(128,519	)		41,077			553,075			334,165
Change in unrealized gain (loss) on investments		(11,073	)		4,609			11,927,008			5,980,991			(438,927	)		(276,212	)		2,760,045			1,218,560
Reinvested capital gains		2,993			3,946			-			-			86,593			320,659			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		(3,590	)		13,367			12,317,301			5,408,641			(378,770	)		247,920			3,323,091			1,547,279
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		6,098			6,518			3,139,339			3,407,021			303,406			376,459			865,034			941,227
Transfers between funds		(40,269	)		63,140			(248,107	)		(285,049	)		(344,862	)		(365,835	)		(68,272	)		(136,249	)
Surrenders (note 6)		-			(3,869	)		(3,697,262	)		(3,473,186	)		(1,424,489	)		(871,919	)		(1,136,879	)		(979,433	)
Death Benefits (note 4)		-			-			(724,027	)		(908,073	)		(454,952	)		(403,302	)		(138,281	)		(35,972	)
Net policy repayments (loans) (note 5)		(1,737	)		(2,336	)		744,920			778,139			169,431			62,266			163,704			77,724
Deductions for surrender charges (note 2d)		-			-			(684	)		(348	)		-			(3	)		(30	)		(19	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(7,581	)		(10,431	)		(3,800,736	)		(3,952,998	)		(478,305	)		(556,356	)		(989,572	)		(1,038,209	)
Asset charges (note 3):
MSP contracts		-			-			(11,199	)		(12,672	)		(10,543	)		(11,944	)		(3,064	)		(2,852	)
SL contracts or LSFP contracts		-			-			(6,057	)		(5,702	)		(1,252	)		(1,576	)		(2,454	)		(3,012	)
Adjustments to maintain reserves		5			4			2,059			1,645			1,376			221			585			456
Net equity transactions		(43,484	)		53,026			(4,601,754	)		(4,451,223	)		(2,240,190	)		(1,771,989	)		(1,309,229	)		(1,176,339	)
Net change in contract owners’ equity		(47,074	)		66,393			7,715,547			957,418			(2,618,960	)		(1,524,069	)		2,013,862			370,940
Contract owners’ equity beginning of period		209,660			143,267			42,525,245			41,567,827			9,382,996			10,907,065			12,054,397			11,683,457
Contract owners’ equity end of period	$	162,586			209,660			50,240,792			42,525,245			6,764,036			9,382,996			14,068,259			12,054,397
CHANGES IN UNITS:
Beginning units		14,970			10,922			1,080,920			1,206,188			298,463			359,233			551,597			606,750
Units purchased		637			5,739			112,623			115,752			17,556			18,426			56,376			51,119
Units redeemed		(3,728	)		(1,691	)		(224,981	)		(241,020	)		(100,266	)		(79,196	)		(108,230	)		(106,272	)
Ending units		11,879			14,970			968,562			1,080,920			215,753			298,463			499,743			551,597

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	GVIX6						GVIDA						NVDBL2						NVDCA2
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	10,965			11,994			24,090			17,930			1,129			1,063			1,472			922
Realized gain (loss) on investments		(1,031	)		(5,265	)		55,532			26,989			677			205			1,351			935
Change in unrealized gain (loss) on investments		84,747			80,969			418,804			212,611			9,381			4,700			14,739			6,467
Reinvested capital gains		-			-			-			-			904			934			1,807			1,113
Net increase (decrease) in contract owners’ equity resulting from operations		94,681			87,698			498,426			257,530			12,091			6,902			19,369			9,437
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		5,825			4,611			122,552			123,514			5,853			5,458			7,598			2,957
Transfers between funds		2,118			1,442			667			(33,679	)		(1,390	)		13,082			29,165			1,752
Surrenders (note 6)		(123,937	)		(14,371	)		(11,542	)		(146,188	)		(3,594	)		-			-			(60	)
Death Benefits (note 4)		(9,128	)		-			-			(38,456	)		-			-			-			-
Net policy repayments (loans) (note 5)		(2,097	)		(14,422	)		16,891			30,282			5,087			1,579			(74	)		(26	)
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(14,123	)		(15,283	)		(102,039	)		(108,274	)		(4,447	)		(3,699	)		(10,683	)		(6,818	)
Asset charges (note 3):
MSP contracts		(1,245	)		(1,238	)		(657	)		(531	)		-			-			(31	)		-
SL contracts or LSFP contracts		-			-			-			-			-			-			-			-
Adjustments to maintain reserves		2			17			(3,305	)		38			(8	)		9			22			318
Net equity transactions		(142,585	)		(39,244	)		22,567			(173,294	)		1,501			16,429			25,997			(1,877	)
Net change in contract owners’ equity		(47,904	)		48,454			520,993			84,236			13,592			23,331			45,366			7,560
Contract owners’ equity beginning of period		555,714			507,260			1,871,817			1,787,581			93,837			70,506			89,539			81,979
Contract owners’ equity end of period	$	507,810			555,714			2,392,810			1,871,817			107,429			93,837			134,905			89,539
CHANGES IN UNITS:
Beginning units		58,370			62,729			115,731			127,486			6,800			5,552			6,030			6,154
Units purchased		2,539			2,199			13,215			10,779			1,244			1,624			2,294			901
Units redeemed		(16,871	)		(6,558	)		(12,179	)		(22,534	)		(1,149	)		(376	)		(689	)		(1,025	)
Ending units		44,038			58,370			116,767			115,731			6,895			6,800			7,635			6,030

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	GVIDC						GVIDM						GVDMA						GVDMC
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	6,638			7,276			56,314			52,180			56,434			51,620			38,048			35,624
Realized gain (loss) on investments		20,095			48,390			3,595			(165,469	)		(78,814	)		(215,257	)		11,524			(8,844	)
Change in unrealized gain (loss) on investments		(8,550	)		(25,148	)		653,264			589,032			1,043,874			802,170			211,930			171,283
Reinvested capital gains		9,099			12,655			-			-			-			-			40,187			11,904
Net increase (decrease) in contract owners’ equity resulting from operations		27,282			43,173			713,173			475,743			1,021,494			638,533			301,689			209,967
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		18,471			25,179			255,478			265,019			189,957			240,749			180,243			180,806
Transfers between funds		(35,470	)		20,369			222,252			(184,986	)		(4,496	)		121,188			109,244			79,292
Surrenders (note 6)		(117,825	)		(268,212	)		(273,440	)		(432,003	)		(504,679	)		(981,284	)		(68,960	)		(140,628	)
Death Benefits (note 4)		-			-			(150,241	)		(217,456	)		(292,904	)		(5,943	)		(110,382	)		-
Net policy repayments (loans) (note 5)		20,633			14			(66,975	)		(21,696	)		211,422			133,735			10,725			21,281
Deductions for surrender charges (note 2d)		-			-			-			-			-			(538	)		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(47,656	)		(57,871	)		(407,821	)		(325,880	)		(250,877	)		(289,755	)		(100,114	)		(106,128	)
Asset charges (note 3):
MSP contracts		(692	)		(698	)		(9,858	)		(9,200	)		(3,509	)		(3,378	)		(765	)		(1,859	)
SL contracts or LSFP contracts		(263	)		(240	)		(2,046	)		(1,314	)		(1,079	)		(975	)		-			(111	)
Adjustments to maintain reserves		32			(8	)		(29	)		100			13			110			76			50
Net equity transactions		(162,770	)		(281,467	)		(432,680	)		(927,416	)		(656,152	)		(786,091	)		20,067			32,703
Net change in contract owners’ equity		(135,488	)		(238,294	)		280,493			(451,673	)		365,342			(147,558	)		321,756			242,670
Contract owners’ equity beginning of period		713,531			951,825			4,494,727			4,946,400			4,990,584			5,138,142			2,987,665			2,744,995
Contract owners’ equity end of period	$	578,043			713,531			4,775,220			4,494,727			5,355,926			4,990,584			3,309,421			2,987,665
CHANGES IN UNITS:
Beginning units		49,104			68,635			282,525			341,515			308,078			359,038			192,674			189,958
Units purchased		5,067			9,108			41,599			31,798			25,670			26,454			20,536			18,887
Units redeemed		(15,754	)		(28,639	)		(66,584	)		(90,788	)		(62,954	)		(77,414	)		(18,298	)		(16,171	)
Ending units		38,417			49,104			257,540			282,525			270,794			308,078			194,912			192,674

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	MCIF						SAM						NVMIG3						GVDIVI
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	34,436			23,678			(113,659	)		(130,737	)		30,255			1,196			2,577			(176	)
Realized gain (loss) on investments		507,081			644,050			-			15			173,124			131,132			(8,043	)		(8,517	)
Change in unrealized gain (loss) on investments		885,674			(213,331	)		-			(6	)		621,335			462,423			32,842			29,727
Reinvested capital gains		148,870			327,787			-			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		1,576,061			782,184			(113,659	)		(130,728	)		824,714			594,751			27,376			21,034
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		262,362			199,459			1,435,071			1,515,551			189,068			209,643			-			-
Transfers between funds		319,406			(244,547	)		328,076			4,184,820			(76,977	)		(96,070	)		(2,977	)		-
Surrenders (note 6)		(289,111	)		(469,675	)		(4,525,650	)		(6,218,103	)		(336,669	)		(367,607	)		(4,760	)		(2,304	)
Death Benefits (note 4)		(93,586	)		(25,830	)		(235,503	)		(300,085	)		(38,466	)		(170,606	)		-			(2,248	)
Net policy repayments (loans) (note 5)		(120,912	)		123,254			1,385,883			910,296			82,520			110,627			(241	)		(229	)
Deductions for surrender charges (note 2d)		-			-			-			(6,289	)		(3	)		(356	)		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(402,325	)		(436,066	)		(1,773,480	)		(1,968,265	)		(229,297	)		(255,917	)		(5,506	)		(5,629	)
Asset charges (note 3):
MSP contracts		(2,604	)		(2,128	)		(13,386	)		(15,414	)		(1,579	)		(1,618	)		-			-
SL contracts or LSFP contracts		(814	)		(847	)		(7,148	)		(8,546	)		-			-			(29	)		(24	)
Adjustments to maintain reserves		172			92			(351	)		453			6			82			18			(15	)
Net equity transactions		(327,412	)		(856,288	)		(3,406,488	)		(1,905,582	)		(411,397	)		(571,822	)		(13,495	)		(10,449	)
Net change in contract owners’ equity		1,248,649			(74,104	)		(3,520,147	)		(2,036,310	)		413,317			22,929			13,881			10,585
Contract owners’ equity beginning of period		4,945,871			5,019,975			22,140,199			24,176,509			4,201,919			4,178,990			141,360			130,775
Contract owners’ equity end of period	$	6,194,520			4,945,871			18,620,052			22,140,199			4,615,236			4,201,919			155,241			141,360
CHANGES IN UNITS:
Beginning units		234,630			278,335			1,293,558			1,421,436			423,936			486,078			8,612			9,298
Units purchased		26,517			13,591			197,939			459,736			28,101			34,140			55			-
Units redeemed		(39,160	)		(57,296	)		(381,219	)		(587,614	)		(66,464	)		(96,282	)		(842	)		(686	)
Ending units		221,987			234,630			1,110,278			1,293,558			385,573			423,936			7,825			8,612

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	GVDIV3						NVMLG1						NVMLV1						NVMMG1
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	8,419			(371	)		5,878			(652	)		12,569			10,292			(160,722	)		(149,265	)
Realized gain (loss) on investments		12,972			(194	)		75,931			74,305			63,504			(4,983	)		1,360,756			1,225,296
Change in unrealized gain (loss) on investments		65,341			70,166			304,576			132,457			263,502			187,385			5,920,035			24,284
Reinvested capital gains		-			-			113,304			39,903			68,967			-			2,099,505			2,407,452
Net increase (decrease) in contract owners’ equity resulting from operations		86,732			69,601			499,689			246,013			408,542			192,694			9,219,574			3,507,767
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		28,588			34,196			66,050			152,236			63,319			72,701			1,111,561			1,279,468
Transfers between funds		9,810			(31,553	)		224,871			(217,061	)		55,836			(34,922	)		(4,126	)		(494,308	)
Surrenders (note 6)		(57,613	)		(40,124	)		(108,194	)		(215,598	)		(147,678	)		(170,229	)		(2,183,807	)		(2,549,379	)
Death Benefits (note 4)		-			(17,989	)		(25,972	)		-			-			(28,110	)		(88,791	)		(273,262	)
Net policy repayments (loans) (note 5)		(2,892	)		(937	)		13,546			35,510			12,976			(5,091	)		50,327			255,211
Deductions for surrender charges (note 2d)		-			-			-			(204	)		-			-			(260	)		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(27,505	)		(26,112	)		(88,517	)		(93,931	)		(74,504	)		(69,731	)		(1,562,534	)		(1,665,594	)
Asset charges (note 3):
MSP contracts		(253	)		(167	)		(1,054	)		(972	)		(320	)		(344	)		(9,703	)		(8,237	)
SL contracts or LSFP contracts		(205	)		(194	)		(802	)		(758	)		(457	)		(535	)		(189	)		(167	)
Adjustments to maintain reserves		5			9			5			25			2			18			178			481
Net equity transactions		(50,065	)		(82,871	)		79,933			(340,753	)		(90,826	)		(236,243	)		(2,687,344	)		(3,455,787	)
Net change in contract owners’ equity		36,667			(13,270	)		579,622			(94,740	)		317,716			(43,549	)		6,532,230			51,980
Contract owners’ equity beginning of period		456,848			470,118			1,502,977			1,597,717			1,201,717			1,245,266			25,205,961			25,153,981
Contract owners’ equity end of period	$	493,515			456,848			2,082,599			1,502,977			1,519,433			1,201,717			31,738,191			25,205,961
CHANGES IN UNITS:
Beginning units		44,955			54,042			142,573			175,647			120,539			146,217			2,322,977			2,648,801
Units purchased		6,049			5,292			28,411			11,131			13,495			11,674			209,360			178,802
Units redeemed		(10,897	)		(14,379	)		(23,682	)		(44,205	)		(20,953	)		(37,352	)		(416,427	)		(504,626	)
Ending units		40,107			44,955			147,302			142,573			113,081			120,539			2,115,910			2,322,977

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	NVMMV2						SCGF						SCVF						SCF
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	132,662			100,678			(11,776	)		(11,652	)		20,105			16,681			(66,878	)		(58,128	)
Realized gain (loss) on investments		872,868			519,826			73,842			33,920			226,583			(198,584	)		5,550			(608,234	)
Change in unrealized gain (loss) on investments		4,278,593			288,589			479,707			171,186			1,602,123			1,049,462			6,099,713			2,899,453
Reinvested capital gains		990,965			1,791,437			98,857			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		6,275,088			2,700,530			640,630			193,454			1,848,811			867,559			6,038,385			2,233,091
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		683,944			784,762			28,984			35,382			147,476			168,024			542,126			606,513
Transfers between funds		271,371			(327,162	)		(13,239	)		35,259			101,356			(49,390	)		(386,225	)		(307,582	)
Surrenders (note 6)		(1,789,565	)		(1,753,093	)		(158,477	)		(283,659	)		(346,415	)		(486,984	)		(992,200	)		(1,343,282	)
Death Benefits (note 4)		(108,972	)		(53,127	)		-			(6,626	)		(79,645	)		(71,191	)		(46,911	)		(263,482	)
Net policy repayments (loans) (note 5)		260,395			204,163			31,177			(98,459	)		(125,093	)		30,538			(79,769	)		256,839
Deductions for surrender charges (note 2d)		(66	)		-			-			-			-			-			-			(137	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,057,926	)		(1,055,635	)		(61,328	)		(66,133	)		(261,513	)		(258,296	)		(853,704	)		(872,059	)
Asset charges (note 3):
MSP contracts		(6,290	)		(5,731	)		(488	)		(405	)		(2,798	)		(2,420	)		(8,597	)		(7,269	)
SL contracts or LSFP contracts		(10	)		(22	)		(560	)		(408	)		(4,389	)		(3,759	)		(4,307	)		(4,117	)
Adjustments to maintain reserves		150			331			27			37			34			68			13,176			4,609
Net equity transactions		(1,746,969	)		(2,205,514	)		(173,904	)		(385,012	)		(570,987	)		(673,410	)		(1,816,411	)		(1,929,967	)
Net change in contract owners’ equity		4,528,119			495,016			466,726			(191,558	)		1,277,824			194,149			4,221,974			303,124
Contract owners’ equity beginning of period		18,546,666			18,051,650			1,553,188			1,744,746			4,886,267			4,692,118			16,010,405			15,707,281
Contract owners’ equity end of period	$	23,074,785			18,546,666			2,019,914			1,553,188			6,164,091			4,886,267			20,232,379			16,010,405
CHANGES IN UNITS:
Beginning units		1,588,483			1,788,622			194,158			248,091			180,700			209,000			383,102			431,988
Units purchased		146,458			109,851			9,159			19,317			13,244			10,824			18,082			20,542
Units redeemed		(270,994	)		(309,990	)		(27,085	)		(73,250	)		(30,369	)		(39,124	)		(57,055	)		(69,428	)
Ending units		1,463,947			1,588,483			176,232			194,158			163,575			180,700			344,129			383,102

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	MSBF						NVSTB2						NVOLG1						NVTIV3
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	35,114			44,099			4,216			4,481			132,558			79,688			2,499			1,886
Realized gain (loss) on investments		79,014			54,035			4,382			676			1,728,076			634,926			2,983			(1,698	)
Change in unrealized gain (loss) on investments		(152,432	)		152,197			(6,811	)		8,918			13,369,063			6,982,530			15,406			9,221
Reinvested capital gains		-			-			504			-			-			-			1,218			1,159
Net increase (decrease) in contract owners’ equity resulting from operations		(38,304	)		250,331			2,291			14,075			15,229,697			7,697,144			22,106			10,568
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		35,649			32,154			13,151			13,609			1,650,902			1,899,617			3,786			2,395
Transfers between funds		(453,325	)		212,206			62,413			158,710			(1,037,213	)		(1,899,784	)		95,844			40,123
Surrenders (note 6)		(209,027	)		(231,233	)		(1,846	)		(85,247	)		(4,160,360	)		(3,439,428	)		(29,436	)		(961	)
Death Benefits (note 4)		(10,333	)		-			-			-			(771,001	)		(729,968	)		-			-
Net policy repayments (loans) (note 5)		18,522			(5,872	)		(6,318	)		(4,150	)		118,263			334,747			(1,021	)		133
Deductions for surrender charges (note 2d)		-			-			-			-			(57	)		(190	)		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(70,838	)		(99,295	)		(15,305	)		(16,327	)		(2,464,897	)		(2,616,231	)		(7,130	)		(4,995	)
Asset charges (note 3):
MSP contracts		(835	)		(1,395	)		(127	)		(128	)		(19,919	)		(18,470	)		-			-
SL contracts or LSFP contracts		(446	)		(650	)		-			-			(16,144	)		(15,666	)		(55	)		(49	)
Adjustments to maintain reserves		(12	)		(101	)		(9	)		13			135			1,501			10			(16	)
Net equity transactions		(690,645	)		(94,186	)		51,959			66,480			(6,700,291	)		(6,483,872	)		61,998			36,630
Net change in contract owners’ equity		(728,949	)		156,145			54,250			80,555			8,529,406			1,213,272			84,104			47,198
Contract owners’ equity beginning of period		2,201,869			2,045,724			529,757			449,202			45,581,782			44,368,510			94,856			47,658
Contract owners’ equity end of period	$	1,472,920			2,201,869			584,007			529,757			54,111,188			45,581,782			178,960			94,856
CHANGES IN UNITS:
Beginning units		112,778			117,076			47,427			41,430			2,816,828			3,238,286			6,634			3,984
Units purchased		2,869			13,894			8,835			10,191			140,842			175,013			6,827			3,536
Units redeemed		(38,958	)		(18,192	)		(3,781	)		(4,194	)		(499,097	)		(596,471	)		(2,943	)		(886	)
Ending units		76,689			112,778			52,481			47,427			2,458,573			2,816,828			10,518			6,634

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	EIF						NVRE1						NVSIX2					GVEX1
	2013			2012			2013			2012			2013			2012		2013			2012
Investment activity:
Net investment income (loss)	$	(2,919	)		3,402			78,210			46,021			564			-		14,846			-
Realized gain (loss) on investments		51,947			48,216			575,421			855,789			511			-		22,074			-
Change in unrealized gain (loss) on investments		118,383			42,150			(1,006,093	)		(436,653	)		3,925			-		38,717			-
Reinvested capital gains		-			-			596,191			864,675			-			-		-			-
Net increase (decrease) in contract owners’ equity resulting from operations		167,411			93,768			243,729			1,329,832			5,000			-		75,637			-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		31,258			38,158			293,397			359,081			1,097			-		674			-
Transfers between funds		155,066			(121,494	)		(344,394	)		(207,653	)		48,023			-		1,347,889			-
Surrenders (note 6)		(68,255	)		(109,079	)		(621,836	)		(1,191,253	)		-			-		(438,019	)		-
Death Benefits (note 4)		-			-			(92,870	)		(116,136	)		-			-		-			-
Net policy repayments (loans) (note 5)		1,614			25,937			44,350			(9,600	)		117			-		-			-
Deductions for surrender charges (note 2d)		-			-			-			(360	)		-			-		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(35,112	)		(42,044	)		(442,829	)		(522,794	)		(1,291	)		-		(10,021	)		-
Asset charges (note 3):
MSP contracts		(9	)		(7	)		(3,769	)		(3,944	)		-			-		-			-
SL contracts or LSFP contracts		(97	)		(259	)		(1,106	)		(1,188	)		-			-		-			-
Adjustments to maintain reserves		(3	)		(8	)		(12	)		181			-			-		(3	)		-
Net equity transactions		84,462			(208,796	)		(1,169,069	)		(1,693,666	)		47,946			-		900,520			-
Net change in contract owners’ equity		251,873			(115,028	)		(925,340	)		(363,834	)		52,946			-		976,157			-
Contract owners’ equity beginning of period		502,187			617,215			8,876,026			9,239,860			-			-		-			-
Contract owners’ equity end of period	$	754,060			502,187			7,950,686			8,876,026			52,946			-		976,157			-
CHANGES IN UNITS:
Beginning units		27,511			40,014			767,061			919,617			-			-		-			-
Units purchased		10,165			4,342			43,205			58,784			4,307			-		122,027			-
Units redeemed		(6,861	)		(16,845	)		(140,420	)		(211,340	)		(116	)		-		(39,275	)		-
Ending units		30,815			27,511			669,846			767,061			4,191			-		82,752			-

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	NOTG3					ALVGIA						ALVSVA						ACVB
	2013			2012		2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	13			-		2,494			2,737			1,200			(10	)		48,356			62,464
Realized gain (loss) on investments		3			-		77,058			34,392			103,241			38,600			21,075			79
Change in unrealized gain (loss) on investments		193			-		66,496			9,283			156,767			79,910			578,835			370,623
Reinvested capital gains		-			-		-			-			57,709			24,568			90,503			-
Net increase (decrease) in contract owners’ equity resulting from operations		209			-		146,048			46,412			318,917			143,068			738,769			433,166
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		2,265			-		8,865			7,309			37,272			107,043			163,475			187,333
Transfers between funds		-			-		350,465			(5,153	)		(124,186	)		(47,603	)		413,410			388,561
Surrenders (note 6)		-			-		(14,236	)		(5,820	)		(6,512	)		(140,425	)		(123,472	)		(115,126	)
Death Benefits (note 4)		-			-		-			-			-			(28,103	)		(82,855	)		(104,463	)
Net policy repayments (loans) (note 5)		-			-		6,237			(18,977	)		(21,867	)		291			(10,975	)		17,174
Deductions for surrender charges (note 2d)		-			-		-			-			-			-			(24	)		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(51	)		-		(27,499	)		(17,250	)		(51,372	)		(44,917	)		(241,650	)		(257,607	)
Asset charges (note 3):
MSP contracts		-			-		(178	)		(145	)		(489	)		(402	)		(2,315	)		(2,226	)
SL contracts or LSFP contracts		-			-		(23	)		(19	)		(257	)		(253	)		(823	)		(822	)
Adjustments to maintain reserves		(3	)		-		6			2			9			(5	)		13			89
Net equity transactions		2,211			-		323,637			(40,053	)		(167,402	)		(154,374	)		114,784			112,913
Net change in contract owners’ equity		2,420			-		469,685			6,359			151,515			(11,306	)		853,553			546,079
Contract owners’ equity beginning of period		-			-		294,638			288,279			988,740			1,000,046			4,339,220			3,793,141
Contract owners’ equity end of period	$	2,420			-		764,323			294,638			1,140,255			988,740			5,192,773			4,339,220
CHANGES IN UNITS:
Beginning units		-			-		17,027			19,480			39,888			47,496			167,449			163,757
Units purchased		228			-		17,851			618			3,856			2,505			26,591			25,043
Units redeemed		(5	)		-		(1,986	)		(3,071	)		(10,266	)		(10,113	)		(20,806	)		(21,351	)
Ending units		223			-		32,892			17,027			33,478			39,888			173,234			167,449

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	ACVCA						ACVIG						ACVIP2						ACVI
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	(12,888	)		(11,740	)		35,806			26,213			21,889			47,366			6,763			2,088
Realized gain (loss) on investments		17,342			11,810			171,099			(148,312	)		28,157			83,527			(4,789	)		(12,970	)
Change in unrealized gain (loss) on investments		355,355			116,921			372,856			350,447			(290,686	)		(23,970	)		113,341			115,243
Reinvested capital gains		61,503			78,923			-			-			71,752			56,141			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		421,312			195,914			579,761			228,348			(168,888	)		163,064			115,315			104,361
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		17,487			5,982			45,877			60,347			54,954			82,875			129			22
Transfers between funds		(5,261	)		28,921			767,847			(91,844	)		(590,624	)		64,691			(8,413	)		17,545
Surrenders (note 6)		(18,823	)		(15,236	)		(188,285	)		(259,726	)		(165,579	)		(263,735	)		(67,144	)		(147,183	)
Death Benefits (note 4)		(23,785	)		(77,341	)		(91,817	)		(125,027	)		(54,527	)		-			-			(21,436	)
Net policy repayments (loans) (note 5)		(15,791	)		71,571			77,434			79,904			59,063			3,229			(1,947	)		141,227
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(43,354	)		(43,715	)		(100,309	)		(99,970	)		(93,758	)		(122,898	)		(19,403	)		(23,644	)
Asset charges (note 3):
MSP contracts		-			-			(2,176	)		(1,915	)		(2,787	)		(3,080	)		-			-
SL contracts or LSFP contracts		(1,327	)		(1,142	)		(489	)		(438	)		(185	)		(386	)		(1,095	)		(1,213	)
Adjustments to maintain reserves		2,373			1,104			106			14			(2	)		43			3,099			2,438
Net equity transactions		(88,481	)		(29,856	)		508,188			(438,655	)		(793,445	)		(239,261	)		(94,774	)		(32,244	)
Net change in contract owners’ equity		332,831			166,058			1,087,949			(210,307	)		(962,333	)		(76,197	)		20,541			72,117
Contract owners’ equity beginning of period		1,462,551			1,296,493			1,524,229			1,734,536			2,338,647			2,414,844			616,356			544,239
Contract owners’ equity end of period	$	1,795,382			1,462,551			2,612,178			1,524,229			1,376,314			2,338,647			636,897			616,356
CHANGES IN UNITS:
Beginning units		107,645			110,222			103,967			134,693			144,454			159,716			40,913			43,714
Units purchased		1,725			5,494			56,565			8,423			7,484			14,466			22			2,219
Units redeemed		(8,450	)		(8,071	)		(20,899	)		(39,149	)		(58,656	)		(29,728	)		(4,820	)		(5,020	)
Ending units		100,920			107,645			139,633			103,967			93,282			144,454			36,115			40,913

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	ACVI3						ACVMV1						ACVU1						ACVVS1
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	2,954			1,569			13,916			19,282			(4	)		(253	)		-			-
Realized gain (loss) on investments		25,335			21,829			93,651			49,650			13,116			2,835			502			360
Change in unrealized gain (loss) on investments		10,127			15,137			316,534			47,737			(960	)		4,339			10,856			4,905
Reinvested capital gains		-			-			27,586			75,061			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		38,416			38,535			451,687			191,730			12,152			6,921			11,358			5,265
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		15,562			17,070			45,224			69,260			1,866			(3	)		-			5
Transfers between funds		(3,023	)		(10,238	)		299,293			(215,884	)		114,617			39,077			-			(33	)
Surrenders (note 6)		(50,349	)		(37,524	)		(85,862	)		(64,473	)		(18,626	)		-			-			-
Death Benefits (note 4)		-			-			-			-			-			-			-			-
Net policy repayments (loans) (note 5)		102			537			(37,699	)		(10,982	)		(1,205	)		(428	)		-			28
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(4,007	)		(5,784	)		(68,800	)		(57,371	)		(3,584	)		(11,082	)		(964	)		(890	)
Asset charges (note 3):
MSP contracts		-			-			(505	)		(390	)		-			-			-			-
SL contracts or LSFP contracts		(748	)		(834	)		(39	)		(8	)		(62	)		(150	)		(159	)		(139	)
Adjustments to maintain reserves		(8	)		(1	)		(10	)		23			(16	)		5			(3	)		6
Net equity transactions		(42,471	)		(36,774	)		151,602			(279,825	)		92,990			27,419			(1,126	)		(1,023	)
Net change in contract owners’ equity		(4,055	)		1,761			603,289			(88,095	)		105,142			34,340			10,232			4,242
Contract owners’ equity beginning of period		209,698			207,937			1,325,688			1,413,783			80,536			46,196			38,100			33,858
Contract owners’ equity end of period	$	205,643			209,698			1,928,977			1,325,688			185,678			80,536			48,332			38,100
CHANGES IN UNITS:
Beginning units		13,657			16,408			76,468			94,413			6,088			4,026			2,628			2,700
Units purchased		925			1,257			18,902			3,252			7,890			2,923			-			2
Units redeemed		(3,641	)		(4,008	)		(9,474	)		(21,197	)		(3,087	)		(861	)		(67	)		(74	)
Ending units		10,941			13,657			85,896			76,468			10,891			6,088			2,561			2,628

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	DVSCS						DCAP						DSC						DGI
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	11,391			(521	)		72,768			175,533			(2,566	)		(1,270	)		5,638			11,601
Realized gain (loss) on investments		125,416			200,224			398,563			275,791			77,674			8,424			30,943			12,242
Change in unrealized gain (loss) on investments		560,846			(18,936	)		453,934			85,359			104,553			34,854			399,147			180,169
Reinvested capital gains		27,653			69,247			11,946			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		725,306			250,014			937,211			536,683			179,661			42,008			435,728			204,012
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		85,241			97,354			176,064			193,370			16,822			22,213			64,082			62,914
Transfers between funds		322,539			27,629			(442,612	)		(517,117	)		43,644			191,571			11,465			(3,828	)
Surrenders (note 6)		(188,259	)		(396,902	)		(409,797	)		(352,943	)		(8,672	)		(8,105	)		(107,018	)		(92,658	)
Death Benefits (note 4)		-			-			(19,715	)		(2,834	)		-			(5,659	)		-			(32,647	)
Net policy repayments (loans) (note 5)		(53,520	)		961			(58,994	)		18,396			(15,046	)		(2,024	)		22,385			20,860
Deductions for surrender charges (note 2d)		-			(250	)		-			(2	)		-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(95,105	)		(85,634	)		(237,289	)		(277,728	)		(31,590	)		(20,438	)		(95,869	)		(102,271	)
Asset charges (note 3):
MSP contracts		(1,435	)		(1,175	)		(1,557	)		(1,443	)		(46	)		-			(786	)		(694	)
SL contracts or LSFP contracts		(819	)		(869	)		(2,418	)		(2,488	)		(46	)		(38	)		(624	)		(590	)
Adjustments to maintain reserves		2			26			49			92			14			2			(19	)		19
Net equity transactions		68,644			(358,860	)		(996,269	)		(942,697	)		5,080			177,522			(106,384	)		(148,895	)
Net change in contract owners’ equity		793,950			(108,846	)		(59,058	)		(406,014	)		184,741			219,530			329,344			55,117
Contract owners’ equity beginning of period		1,791,438			1,900,284			5,084,399			5,490,413			423,975			204,445			1,259,070			1,203,953
Contract owners’ equity end of period	$	2,585,388			1,791,438			5,025,341			5,084,399			608,716			423,975			1,588,414			1,259,070
CHANGES IN UNITS:
Beginning units		95,136			116,307			257,978			321,432			29,707			17,180			75,494			85,537
Units purchased		19,586			7,831			12,631			22,610			4,391			15,612			6,162			5,598
Units redeemed		(16,545	)		(29,002	)		(58,494	)		(86,064	)		(5,279	)		(3,085	)		(11,188	)		(15,641	)
Ending units		98,177			95,136			212,115			257,978			28,819			29,707			70,468			75,494

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	FVCA2P						FQB						FEIP						FHIP
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	1,652			21			70,615			72,904			808,274			967,535			441,578			475,592
Realized gain (loss) on investments		5,178			3			9,252			15,426			913,978			12,183			572,630			(234,668	)
Change in unrealized gain (loss) on investments		11,652			3,602			(75,920	)		93,792			5,664,905			2,440,455			(553,451	)		1,001,442
Reinvested capital gains		4,650			4,081			-			-			2,771,326			2,414,078			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		23,132			7,707			3,947			182,122			10,158,483			5,834,251			460,757			1,242,366
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		3,929			3,788			34,465			43,389			1,648,437			1,749,187			59,597			168,754
Transfers between funds		1,717			63,659			(130,448	)		42,138			(574,334	)		(173,342	)		(311,665	)		407,925
Surrenders (note 6)		(550	)		-			(147,568	)		(207,571	)		(3,159,667	)		(2,420,161	)		(378,093	)		(2,135,217	)
Death Benefits (note 4)		-			-			(145,174	)		(24,201	)		(718,199	)		(554,682	)		(109,256	)		(120,638	)
Net policy repayments (loans) (note 5)		(1,600	)		469			(19,783	)		69,497			389,528			538,483			(80,965	)		63,319
Deductions for surrender charges (note 2d)		-			-			-			(515	)		(135	)		(51	)		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(5,174	)		(5,531	)		(83,810	)		(85,989	)		(2,357,910	)		(2,411,031	)		(367,125	)		(442,376	)
Asset charges (note 3):
MSP contracts		-			-			(1,887	)		(2,457	)		(21,779	)		(19,343	)		(6,256	)		(6,152	)
SL contracts or LSFP contracts		(222	)		(132	)		(476	)		(597	)		(5,994	)		(5,407	)		(3,709	)		(3,002	)
Adjustments to maintain reserves		(18	)		17			(2	)		21			5,614			3,669			312			815
Net equity transactions		(1,918	)		62,270			(494,683	)		(166,285	)		(4,794,439	)		(3,292,678	)		(1,197,160	)		(2,066,572	)
Net change in contract owners’ equity		21,214			69,977			(490,736	)		15,837			5,364,044			2,541,573			(736,403	)		(824,206	)
Contract owners’ equity beginning of period		140,712			70,735			2,065,289			2,049,452			38,865,166			36,323,593			9,126,948			9,951,154
Contract owners’ equity end of period	$	161,926			140,712			1,574,553			2,065,289			44,229,210			38,865,166			8,390,545			9,126,948
CHANGES IN UNITS:
Beginning units		9,069			5,114			124,241			134,437			880,660			951,673			291,771			325,266
Units purchased		476			4,535			8,790			11,310			41,885			47,571			7,338			45,806
Units redeemed		(573	)		(580	)		(38,414	)		(21,506	)		(155,006	)		(118,584	)		(41,629	)		(79,301	)
Ending units		8,972			9,069			94,617			124,241			767,539			880,660			257,480			291,771

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	FAMP						FNRS2						FF10S						FF20S
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	115,695			108,978			4,623			5,230			4,512			4,466			13,088			15,891
Realized gain (loss) on investments		228,364			398,960			237,322			259,766			7,058			37,104			46,448			(8,691	)
Change in unrealized gain (loss) on investments		1,363,254			815,084			281,565			(146,245	)		30,228			853			88,417			104,192
Reinvested capital gains		29,748			89,127			15,898			-			4,521			5,783			15,564			12,182
Net increase (decrease) in contract owners’ equity resulting from operations		1,737,061			1,412,149			539,408			118,751			46,319			48,206			163,517			123,574
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		429,226			537,431			138,339			169,488			25,358			10,320			24,699			26,451
Transfers between funds		38,736			10,551			(27,768	)		(466,868	)		10,629			(72,814	)		6,411			249,367
Surrenders (note 6)		(1,064,639	)		(1,378,562	)		(179,155	)		(240,890	)		(28,824	)		(25,695	)		(108,542	)		(96,987	)
Death Benefits (note 4)		(220,557	)		(697,108	)		(22,753	)		(22,476	)		-			-			-			(6,238	)
Net policy repayments (loans) (note 5)		242,135			393,152			20,248			34,213			3,968			708			(2,505	)		1,365
Deductions for surrender charges (note 2d)		-			(129	)		-			(3	)		-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(690,101	)		(753,054	)		(182,318	)		(204,752	)		(19,548	)		(20,373	)		(47,003	)		(48,209	)
Asset charges (note 3):
MSP contracts		(3,836	)		(4,023	)		(834	)		(760	)		(588	)		(668	)		(574	)		(392	)
SL contracts or LSFP contracts		(952	)		(980	)		(671	)		(763	)		-			-			-			-
Adjustments to maintain reserves		595			646			33			32			9			9			(13	)		27
Net equity transactions		(1,269,393	)		(1,892,076	)		(254,879	)		(732,779	)		(8,996	)		(108,513	)		(127,527	)		125,384
Net change in contract owners’ equity		467,668			(479,927	)		284,529			(614,028	)		37,323			(60,307	)		35,990			248,958
Contract owners’ equity beginning of period		12,229,441			12,709,368			2,401,088			3,015,116			366,133			426,440			1,133,026			884,068
Contract owners’ equity end of period	$	12,697,109			12,229,441			2,685,617			2,401,088			403,456			366,133			1,169,016			1,133,026
CHANGES IN UNITS:
Beginning units		389,255			453,960			136,737			178,905			25,198			32,653			77,596			68,322
Units purchased		29,580			21,662			12,535			10,940			2,958			3,215			3,523			16,040
Units redeemed		(63,913	)		(86,367	)		(25,493	)		(53,108	)		(3,572	)		(10,670	)		(11,768	)		(6,766	)
Ending units		354,922			389,255			123,779			136,737			24,584			25,198			69,351			77,596

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	FF30S						FGP						FHIPR						FIGBS
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	12,362			15,567			(153,687	)		1,213			191,968			193,930			62,767			73,277
Realized gain (loss) on investments		47,097			(16,571	)		(255,789	)		(1,260,034	)		45,493			195,936			30,221			183,992
Change in unrealized gain (loss) on investments		145,333			134,746			16,953,537			7,833,936			(49,850	)		87,153			(234,078	)		(133,339	)
Reinvested capital gains		16,672			9,442			37,274			-			-			-			43,544			115,644
Net increase (decrease) in contract owners’ equity resulting from operations		221,464			143,184			16,581,335			6,575,115			187,611			477,019			(97,546	)		239,574
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		81,646			53,439			2,656,764			2,952,412			480,517			579,030			129,203			132,007
Transfers between funds		(6,059	)		88,484			(694,418	)		(177,948	)		(100,612	)		(413,515	)		(355,177	)		(194,110	)
Surrenders (note 6)		(96,927	)		(15,205	)		(3,449,421	)		(4,458,049	)		(335,291	)		(356,694	)		(265,519	)		(454,812	)
Death Benefits (note 4)		(12,745	)		-			(590,895	)		(491,022	)		(59,193	)		(15,758	)		(34,895	)		(56,601	)
Net policy repayments (loans) (note 5)		17,040			(1,531	)		469,330			598,858			158,295			128,006			26,627			9,405
Deductions for surrender charges (note 2d)		-			-			(365	)		(121	)		(6	)		(138	)		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(65,547	)		(68,739	)		(3,250,793	)		(3,456,275	)		(332,609	)		(372,896	)		(155,628	)		(177,548	)
Asset charges (note 3):
MSP contracts		(64	)		(37	)		(14,532	)		(13,800	)		(1,921	)		(2,151	)		(1,967	)		(2,726	)
SL contracts or LSFP contracts		-			-			(10,659	)		(9,747	)		-			-			(708	)		(1,188	)
Adjustments to maintain reserves		11			21			4,560			2,691			-			202			(2	)		57
Net equity transactions		(82,645	)		56,432			(4,880,429	)		(5,053,001	)		(190,820	)		(453,914	)		(658,066	)		(745,516	)
Net change in contract owners’ equity		138,819			199,616			11,700,906			1,522,114			(3,209	)		23,105			(755,612	)		(505,942	)
Contract owners’ equity beginning of period		1,103,027			903,411			49,078,575			47,556,461			3,661,356			3,638,251			4,217,470			4,723,412
Contract owners’ equity end of period	$	1,241,846			1,103,027			60,779,481			49,078,575			3,658,147			3,661,356			3,461,858			4,217,470
CHANGES IN UNITS:
Beginning units		76,179			71,678			1,208,074			1,356,975			261,159			294,862			273,385			322,206
Units purchased		6,874			11,599			66,292			79,498			50,097			56,585			11,131			22,949
Units redeemed		(12,033	)		(7,098	)		(177,769	)		(228,399	)		(63,669	)		(90,288	)		(54,510	)		(71,770	)
Ending units		71,020			76,179			1,096,597			1,208,074			247,587			261,159			230,006			273,385

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	FMCS						FOP						FOSR						FVSS
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	(7,555	)		(1,127	)		50,706			79,929			35,316			51,189			2,622			998
Realized gain (loss) on investments		223,482			191,305			98,274			(39,767	)		(148,624	)		(171,899	)		262,503			168,235
Change in unrealized gain (loss) on investments		1,133,823			219,588			1,497,633			1,004,605			1,218,633			754,583			61,806			68,783
Reinvested capital gains		990,196			542,896			23,704			19,454			16,607			12,575			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		2,339,946			952,662			1,670,317			1,064,221			1,121,932			646,448			326,931			238,016
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		261,846			315,881			1,033			11,595			446,345			469,548			26,568			31,449
Transfers between funds		(74,977	)		(533,797	)		(44,332	)		(28,839	)		(153,836	)		279,455			(310,457	)		241,870
Surrenders (note 6)		(682,383	)		(800,623	)		(366,419	)		(359,591	)		(466,878	)		(314,487	)		(62,274	)		(169,366	)
Death Benefits (note 4)		(1,463	)		(127,327	)		(111,647	)		(19,660	)		(26,621	)		(867	)		-			-
Net policy repayments (loans) (note 5)		161,593			128,282			24,436			(35,257	)		101,319			147,662			(8,799	)		28,304
Deductions for surrender charges (note 2d)		-			(450	)		-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(341,016	)		(374,305	)		(227,879	)		(240,593	)		(287,936	)		(290,967	)		(65,087	)		(61,534	)
Asset charges (note 3):
MSP contracts		(1,419	)		(1,324	)		(3,019	)		(2,609	)		(995	)		(832	)		(903	)		(537	)
SL contracts or LSFP contracts		(1,086	)		(1,382	)		(1,349	)		(1,214	)		(1,233	)		(1,045	)		(414	)		(531	)
Adjustments to maintain reserves		73			130			883			598			36			61			2			18
Net equity transactions		(678,832	)		(1,394,915	)		(728,293	)		(675,570	)		(389,799	)		288,528			(421,364	)		69,673
Net change in contract owners’ equity		1,661,114			(442,253	)		942,024			388,651			732,133			934,976			(94,433	)		307,689
Contract owners’ equity beginning of period		6,879,812			7,322,065			6,020,794			5,632,143			4,092,570			3,157,594			1,293,006			985,317
Contract owners’ equity end of period	$	8,540,926			6,879,812			6,962,818			6,020,794			4,824,703			4,092,570			1,198,573			1,293,006
CHANGES IN UNITS:
Beginning units		239,445			290,887			246,603			276,643			307,163			284,955			71,462			68,196
Units purchased		15,883			13,279			3,732			4,369			39,854			75,005			4,668			22,580
Units redeemed		(35,679	)		(64,721	)		(25,143	)		(34,409	)		(67,780	)		(52,797	)		(25,009	)		(19,314	)
Ending units		219,649			239,445			225,192			246,603			279,237			307,163			51,121			71,462

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	FTVIS2						FTVRDI						FTVSVI						FTVDM3
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	90,626			73,477			60,767			58,739			36,044			16,695			16,939			12,887
Realized gain (loss) on investments		30,036			3,413			395,342			278,987			323,252			78,007			19,441			94,393
Change in unrealized gain (loss) on investments		65,080			55,345			676,924			92,487			711,312			445,296			(62,224	)		37,681
Reinvested capital gains		-			-			-			-			60,160			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		185,742			132,235			1,133,033			430,213			1,130,768			539,998			(25,844	)		144,961
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		64,360			42,195			166,654			128,599			84,658			131,840			34,026			46,698
Transfers between funds		455,887			187,884			137,469			296,049			(56,122	)		(226,339	)		(59,903	)		(173,851	)
Surrenders (note 6)		(81,419	)		(203,718	)		(391,845	)		(559,175	)		(145,213	)		(131,174	)		(57,451	)		(91,142	)
Death Benefits (note 4)		-			-			(19,519	)		(10,419	)		(11,122	)		(59,019	)		(2,885	)		(25,348	)
Net policy repayments (loans) (note 5)		(827	)		20,667			(42,150	)		14,309			(19,969	)		(1,280	)		(19,937	)		16,468
Deductions for surrender charges (note 2d)		-			-			(5	)		-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(83,593	)		(73,376	)		(164,539	)		(161,622	)		(115,506	)		(114,146	)		(54,485	)		(69,085	)
Asset charges (note 3):
MSP contracts		(1,690	)		(1,479	)		(785	)		(553	)		(848	)		(740	)		(252	)		(279	)
SL contracts or LSFP contracts		-			-			(946	)		(1,226	)		(476	)		(420	)		(376	)		(504	)
Adjustments to maintain reserves		(4	)		22			19			49			65			19			20			10
Net equity transactions		352,714			(27,805	)		(315,647	)		(293,989	)		(264,533	)		(401,259	)		(161,243	)		(297,033	)
Net change in contract owners’ equity		538,456			104,430			817,386			136,224			866,235			138,739			(187,087	)		(152,072	)
Contract owners’ equity beginning of period		1,302,505			1,198,075			3,865,387			3,729,163			3,314,479			3,175,740			1,245,366			1,397,438
Contract owners’ equity end of period	$	1,840,961			1,302,505			4,682,773			3,865,387			4,180,714			3,314,479			1,058,279			1,245,366
CHANGES IN UNITS:
Beginning units		93,198			96,131			200,895			215,866			131,056			148,289			66,989			84,552
Units purchased		33,694			18,625			16,097			29,391			5,549			6,057			3,621			4,228
Units redeemed		(10,645	)		(21,558	)		(28,970	)		(44,362	)		(14,963	)		(23,290	)		(12,845	)		(21,791	)
Ending units		116,247			93,198			188,022			200,895			121,642			131,056			57,765			66,989

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	TIF						TIF3						FTVGI3						FTVFA2
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	3,726			6,649			20,890			23,613			106,604			180,353			13,293			3,023
Realized gain (loss) on investments		(2,145	)		(30,568	)		75,602			(2,131	)		89,230			97,817			73			4,045
Change in unrealized gain (loss) on investments		36,436			52,206			155,443			133,465			(185,287	)		146,300			(10,565	)		8,532
Reinvested capital gains		-			-			-			-			31,051			4,947			20,080			-
Net increase (decrease) in contract owners’ equity resulting from operations		38,017			28,287			251,935			154,947			41,598			429,417			22,881			15,600
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		-			(38	)		42,997			40,168			104,367			83,735			32,361			10,055
Transfers between funds		-			(82,604	)		311,213			(138,541	)		47,849			(397,975	)		43,334			(40,986	)
Surrenders (note 6)		-			(12,015	)		(59,862	)		(89,536	)		(932,275	)		(146,016	)		-			(2,205	)
Death Benefits (note 4)		-			-			(2,908	)		(13,219	)		(16,264	)		-			(12,913	)		-
Net policy repayments (loans) (note 5)		(2,490	)		(2,172	)		(4,878	)		5,393			(35,035	)		19,011			526			603
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(4,471	)		(5,902	)		(40,927	)		(37,255	)		(112,252	)		(125,514	)		(10,424	)		(15,386	)
Asset charges (note 3):
MSP contracts		(37	)		(31	)		(193	)		(164	)		(1,633	)		(2,227	)		(307	)		(89	)
SL contracts or LSFP contracts		-			-			(214	)		(211	)		(340	)		(317	)		-			-
Adjustments to maintain reserves		22			(16	)		16			34			7			54			(3	)		7
Net equity transactions		(6,976	)		(102,778	)		245,244			(233,331	)		(945,576	)		(569,249	)		52,574			(48,001	)
Net change in contract owners’ equity		31,041			(74,491	)		497,179			(78,384	)		(903,978	)		(139,832	)		75,455			(32,401	)
Contract owners’ equity beginning of period		172,840			247,331			1,006,879			1,085,263			3,249,940			3,389,772			80,972			113,373
Contract owners’ equity end of period	$	203,881			172,840			1,504,058			1,006,879			2,345,962			3,249,940			156,427			80,972
CHANGES IN UNITS:
Beginning units		7,807			13,177			70,559			89,496			165,597			197,596			7,639			12,272
Units purchased		46			-			23,870			4,022			13,142			8,425			6,520			2,521
Units redeemed		(346	)		(5,370	)		(8,320	)		(22,959	)		(60,694	)		(40,424	)		(2,295	)		(7,154	)
Ending units		7,507			7,807			86,109			70,559			118,045			165,597			11,864			7,639

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	AMTB						AMBP						AMTG						AMGP
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	44,749			72,749			(238	)		(226	)		(10,225	)		(8,859	)		792			(94	)
Realized gain (loss) on investments		(29,880	)		(11,401	)		961			1,452			97,923			55,631			17,042			1,668
Change in unrealized gain (loss) on investments		(11,058	)		51,445			5,069			1,420			418,899			141,918			36,023			16,991
Reinvested capital gains		-			-			-			-			-			-			10,132			1,257
Net increase (decrease) in contract owners’ equity resulting from operations		3,811			112,793			5,792			2,646			506,597			188,690			63,989			19,822
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		72,727			92,061			2,718			2,887			46,269			31,609			2,406			(234	)
Transfers between funds		220,498			356,309			(21	)		(5	)		(9,752	)		(67,217	)		64,353			(21,350	)
Surrenders (note 6)		(244,397	)		(106,801	)		-			(2,028	)		(51,447	)		(36,027	)		(73,080	)		-
Death Benefits (note 4)		(44,261	)		(71,366	)		-			-			(87,585	)		(25,189	)		-			-
Net policy repayments (loans) (note 5)		(101,628	)		86,729			327			370			32,362			21,877			106			1,372
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(110,365	)		(124,360	)		(2,582	)		(2,493	)		(53,144	)		(51,797	)		(7,371	)		(6,921	)
Asset charges (note 3):
MSP contracts		(4,241	)		(4,245	)		-			-			-			-			-			-
SL contracts or LSFP contracts		(678	)		(829	)		-			-			(2,912	)		(2,670	)		(466	)		(495	)
Adjustments to maintain reserves		20			148			(15	)		21			915			756			30			(6	)
Net equity transactions		(212,325	)		227,646			427			(1,248	)		(125,294	)		(128,658	)		(14,022	)		(27,634	)
Net change in contract owners’ equity		(208,514	)		340,439			6,219			1,398			381,303			60,032			49,967			(7,812	)
Contract owners’ equity beginning of period		3,078,475			2,738,036			32,631			31,233			1,666,756			1,606,724			159,365			167,177
Contract owners’ equity end of period	$	2,869,961			3,078,475			38,850			32,631			2,048,059			1,666,756			209,332			159,365
CHANGES IN UNITS:
Beginning units		168,853			151,467			1,601			1,643			134,482			145,365			10,255			12,326
Units purchased		28,610			37,443			495			146			4,045			6,676			3,503			194
Units redeemed		(35,704	)		(20,057	)		(283	)		(188	)		(11,845	)		(17,559	)		(3,247	)		(2,265	)
Ending units		161,759			168,853			1,813			1,601			126,682			134,482			10,511			10,255

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	AMINS						AMMCGS						AMTP						AMRS
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	258			128			-			-			28,500			6,108			226			79
Realized gain (loss) on investments		30			(11	)		72			4			125,568			54,517			(869	)		5,270
Change in unrealized gain (loss) on investments		3,293			2,561			3,183			172			604,706			308,395			9,242			(6,278	)
Reinvested capital gains		-			-			-			-			-			-			-			5,297
Net increase (decrease) in contract owners’ equity resulting from operations		3,581			2,678			3,255			176			758,774			369,020			8,599			4,368
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		103			205			43			179			60,463			71,791			(13	)		328
Transfers between funds		7,589			7,008			12,654			(1	)		3,590			(42,787	)		(10,637	)		(4,623	)
Surrenders (note 6)		(14,851	)		-			-			-			(238,961	)		(69,464	)		-			(10,671	)
Death Benefits (note 4)		-			-			-			-			(10,979	)		(55,543	)		-			-
Net policy repayments (loans) (note 5)		-			7			-			1			414			44,395			10,290			248
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(371	)		(138	)		(284	)		(60	)		(58,564	)		(62,861	)		(3,328	)		(3,937	)
Asset charges (note 3):
MSP contracts		-			-			-			-			-			-			-			-
SL contracts or LSFP contracts		(72	)		(78	)		(40	)		(8	)		(10,469	)		(9,161	)		(88	)		(88	)
Adjustments to maintain reserves		6			4			17			-			604			300			7			4
Net equity transactions		(7,596	)		7,008			12,390			111			(253,902	)		(123,330	)		(3,769	)		(18,739	)
Net change in contract owners’ equity		(4,015	)		9,686			15,645			287			504,872			245,690			4,830			(14,371	)
Contract owners’ equity beginning of period		23,556			13,870			1,656			1,369			2,592,663			2,346,973			22,041			36,412
Contract owners’ equity end of period	$	19,541			23,556			17,301			1,656			3,097,535			2,592,663			26,871			22,041
CHANGES IN UNITS:
Beginning units		1,723			1,202			68			63			114,677			122,685			1,543			2,941
Units purchased		538			538			480			8			3,225			4,309			695			58
Units redeemed		(1,048	)		(17	)		(11	)		(3	)		(12,546	)		(12,317	)		(862	)		(1,456	)
Ending units		1,213			1,723			537			68			105,356			114,677			1,376			1,543

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	AMFAS						AMSRS						OVMS						OVB
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	(707	)		(1,065	)		1,760			(1,622	)		108,174			44,471			233,713			222,426
Realized gain (loss) on investments		8,879			8,149			41,333			48,846			(143,790	)		(154,146	)		(189,438	)		(266,035	)
Change in unrealized gain (loss) on investments		49,028			19,331			144,460			1,181			737,509			767,556			(73,732	)		514,478
Reinvested capital gains		-			-			-			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		57,200			26,415			187,553			48,405			701,893			657,881			(29,457	)		470,869
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		4,277			6,858			16,901			20,522			288,868			310,823			242,396			270,702
Transfers between funds		33,038			(295,750	)		247,886			(106,115	)		(32,568	)		(95,653	)		88,911			194,173
Surrenders (note 6)		(318	)		(24,331	)		(73,198	)		(19,088	)		(382,217	)		(328,480	)		(379,352	)		(315,261	)
Death Benefits (note 4)		-			-			-			(4,460	)		(219,540	)		(226,973	)		(88,354	)		(54,021	)
Net policy repayments (loans) (note 5)		566			(3,749	)		(4,657	)		2,198			123,031			82,768			114,290			7,859
Deductions for surrender charges (note 2d)		-			-			-			-			-			(101	)		(6	)		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(5,805	)		(12,715	)		(24,402	)		(21,763	)		(365,496	)		(398,697	)		(293,941	)		(313,389	)
Asset charges (note 3):
MSP contracts		(92	)		(76	)		(134	)		(112	)		(3,704	)		(3,482	)		(4,078	)		(4,348	)
SL contracts or LSFP contracts		(44	)		(35	)		(49	)		(23	)		(514	)		(585	)		(777	)		(838	)
Adjustments to maintain reserves		20			5			1			-			446			453			(46	)		503
Net equity transactions		31,642			(329,793	)		162,348			(128,841	)		(591,694	)		(659,927	)		(320,957	)		(214,620	)
Net change in contract owners’ equity		88,842			(303,378	)		349,901			(80,436	)		110,199			(2,046	)		(350,414	)		256,249
Contract owners’ equity beginning of period		98,282			401,660			447,945			528,381			5,934,227			5,936,273			5,346,901			5,090,652
Contract owners’ equity end of period	$	187,124			98,282			797,846			447,945			6,044,426			5,934,227			4,996,487			5,346,901
CHANGES IN UNITS:
Beginning units		6,998			31,077			24,432			31,842			225,752			251,161			255,265			268,490
Units purchased		2,577			619			12,310			1,570			14,355			14,433			25,973			26,544
Units redeemed		(387	)		(24,698	)		(4,990	)		(8,980	)		(42,224	)		(39,842	)		(46,104	)		(39,769	)
Ending units		9,188			6,998			31,752			24,432			197,883			225,752			235,134			255,265

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	OVGS3						OVGS						OVGI						OVSC
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	71,114			113,526			118,800			209,292			7,675			6,837			5,367			636
Realized gain (loss) on investments		27,698			(179,067	)		567,488			370,043			118,180			27,164			116,200			48,661
Change in unrealized gain (loss) on investments		1,866,555			1,374,047			2,631,265			1,848,647			185,126			110,634			277,309			78,952
Reinvested capital gains		-			-			-			-			-			-			15,987			-
Net increase (decrease) in contract owners’ equity resulting from operations		1,965,367			1,308,506			3,317,553			2,427,982			310,981			144,635			414,863			128,249
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		591,584			688,656			(51	)		(906	)		45,386			41,965			38,067			41,234
Transfers between funds		250,902			(259,095	)		(249,561	)		(120,396	)		5,104			149,489			354,744			47,839
Surrenders (note 6)		(752,302	)		(781,791	)		(699,057	)		(916,526	)		(188,522	)		(153,813	)		(94,319	)		(111,069	)
Death Benefits (note 4)		(53,284	)		(184,104	)		(121,403	)		(189,175	)		-			(24,483	)		-			(8,575	)
Net policy repayments (loans) (note 5)		247,521			375,548			(153,825	)		(63,298	)		72,789			18,551			17,891			33,764
Deductions for surrender charges (note 2d)		-			(180	)		-			(2	)		-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(471,832	)		(448,668	)		(497,288	)		(548,200	)		(52,114	)		(63,375	)		(56,973	)		(39,323	)
Asset charges (note 3):
MSP contracts		(1,183	)		(973	)		(8,135	)		(7,179	)		(2,220	)		(1,547	)		(360	)		(46	)
SL contracts or LSFP contracts		(1,504	)		(1,231	)		(2,213	)		(1,963	)		(259	)		(306	)		(138	)		(169	)
Adjustments to maintain reserves		25			130			5,532			3,900			(7	)		29			31			22
Net equity transactions		(190,073	)		(611,708	)		(1,726,001	)		(1,843,745	)		(119,843	)		(33,490	)		258,943			(36,323	)
Net change in contract owners’ equity		1,775,294			696,798			1,591,552			584,237			191,138			111,145			673,806			91,926
Contract owners’ equity beginning of period		7,387,796			6,690,998			13,329,326			12,745,089			1,071,415			960,270			853,840			761,914
Contract owners’ equity end of period	$	9,163,090			7,387,796			14,920,878			13,329,326			1,262,553			1,071,415			1,527,646			853,840
CHANGES IN UNITS:
Beginning units		473,187			516,862			306,647			352,029			90,490			94,664			35,783			37,417
Units purchased		74,808			72,238			2,699			1,166			14,300			23,131			14,918			4,830
Units redeemed		(84,928	)		(115,913	)		(40,206	)		(46,548	)		(23,502	)		(27,305	)		(5,172	)		(6,464	)
Ending units		463,067			473,187			269,140			306,647			81,288			90,490			45,529			35,783

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	OVAG						OVSB						PMVAAA						PMVFBA
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	(6,160	)		(6,017	)		8,333			(128	)		22,047			20,303			7,328			33,522
Realized gain (loss) on investments		50,327			(10,403	)		(2,600	)		9			7,766			2,314			(8,924	)		20,234
Change in unrealized gain (loss) on investments		264,547			155,735			(6,763	)		2,904			(30,403	)		7,265			(44,455	)		(37,593	)
Reinvested capital gains		-			-			-			-			-			-			5,574			13,081
Net increase (decrease) in contract owners’ equity resulting from operations		308,714			139,315			(1,030	)		2,785			(590	)		29,882			(40,477	)		29,244
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		56,225			57,144			16,315			3,389			9,079			2,270			14,779			17,789
Transfers between funds		(29,293	)		(87,745	)		30,691			162,487			(235,705	)		766,506			8,179			(178,277	)
Surrenders (note 6)		(64,073	)		(62,922	)		(26,584	)		(3,694	)		(2,180	)		(53,084	)		(47,383	)		(46,999	)
Death Benefits (note 4)		(8,225	)		(30,931	)		-			-			-			-			(2,456	)		-
Net policy repayments (loans) (note 5)		12,671			59,859			5,065			2,645			2,983			75			17,395			17,309
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(101,807	)		(100,774	)		(10,833	)		(1,923	)		(16,811	)		(4,207	)		(23,602	)		(28,746	)
Asset charges (note 3):
MSP contracts		(270	)		(230	)		(211	)		(45	)		-			-			(159	)		(451	)
SL contracts or LSFP contracts		(150	)		(127	)		(124	)		(21	)		-			-			-			-
Adjustments to maintain reserves		9			18			607			3			2			(2	)		18			47
Net equity transactions		(134,913	)		(165,708	)		14,926			162,841			(242,632	)		711,558			(33,229	)		(219,328	)
Net change in contract owners’ equity		173,801			(26,393	)		13,896			165,626			(243,222	)		741,440			(73,706	)		(190,084	)
Contract owners’ equity beginning of period		926,106			952,499			165,626			-			741,440			-			624,561			814,645
Contract owners’ equity end of period	$	1,099,907			926,106			179,522			165,626			498,218			741,440			550,855			624,561
CHANGES IN UNITS:
Beginning units		140,680			169,111			16,283			-			69,393			-			46,261			63,383
Units purchased		9,175			19,061			5,193			16,651			3,057			74,907			4,972			3,985
Units redeemed		(26,153	)		(47,492	)		(3,730	)		(368	)		(25,698	)		(5,514	)		(7,362	)		(21,107	)
Ending units		123,702			140,680			17,746			16,283			46,752			69,393			43,871			46,261

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	PMVLDA						PMVTRA						PVGIB						PVTIGB
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	22,446			36,521			23,664			19,753			2,294			1,033			2,206			3,245
Realized gain (loss) on investments		11,625			13,040			(14,554	)		26,757			24,534			638			9,371			2,113
Change in unrealized gain (loss) on investments		(47,621	)		79,919			(57,331	)		4,503			14,624			12,752			51,704			32,908
Reinvested capital gains		-			-			10,958			28,254			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		(13,550	)		129,480			(37,263	)		79,267			41,452			14,423			63,281			38,266
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		46,732			76,422			78,192			35,840			3,693			8,721			18,145			8,794
Transfers between funds		(191,000	)		424,978			(22,946	)		1,513,691			15,595			(12	)		28,733			31,650
Surrenders (note 6)		(201,525	)		(417,745	)		(153,251	)		(424,316	)		(10,839	)		-			(9,121	)		(13,240	)
Death Benefits (note 4)		(14,743	)		-			-			-			-			-			-			-
Net policy repayments (loans) (note 5)		(26,268	)		(14,283	)		(15,671	)		(7,668	)		177			(99	)		(25,091	)		16,050
Deductions for surrender charges (note 2d)		-			(3	)		-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(68,231	)		(90,572	)		(65,974	)		(50,271	)		(8,236	)		(6,345	)		(14,395	)		(10,459	)
Asset charges (note 3):
MSP contracts		(3,675	)		(4,030	)		-			-			(5	)		-			-			-
SL contracts or LSFP contracts		-			-			-			-			(8	)		(7	)		(24	)		(30	)
Adjustments to maintain reserves		50			109			62			(36	)		12			(12	)		25			(10	)
Net equity transactions		(458,660	)		(25,124	)		(179,588	)		1,067,240			389			2,246			(1,728	)		32,755
Net change in contract owners’ equity		(472,210	)		104,356			(216,851	)		1,146,507			41,841			16,669			61,553			71,021
Contract owners’ equity beginning of period		2,413,206			2,308,850			1,467,592			321,085			93,532			76,863			239,475			168,454
Contract owners’ equity end of period	$	1,940,996			2,413,206			1,250,741			1,467,592			135,373			93,532			301,028			239,475
CHANGES IN UNITS:
Beginning units		196,950			198,617			133,615			31,881			6,023			5,866			14,023			11,967
Units purchased		5,988			37,188			12,322			146,735			1,270			618			3,302			3,722
Units redeemed		(43,713	)		(38,855	)		(29,195	)		(45,001	)		(845	)		(461	)		(3,492	)		(1,666	)
Ending units		159,225			196,950			116,742			133,615			6,448			6,023			13,833			14,023

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	PVTVB						ACEG						AVBVI						AVMCCI
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	1,079			(606	)		(28	)		(51	)		88			236			(3	)		-
Realized gain (loss) on investments		69,398			(26,913	)		190			(1,241	)		4,198			280			223			-
Change in unrealized gain (loss) on investments		92,770			82,868			4,741			(284	)		(700	)		1,741			148			-
Reinvested capital gains		-			-			-			-			-			-			90			-
Net increase (decrease) in contract owners’ equity resulting from operations		163,247			55,349			4,903			(1,576	)		3,586			2,257			458			-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		16,433			26,064			569			540			618			4,236			56			-
Transfers between funds		4,920			(180,391	)		8,688			13,566			(765	)		(963	)		1,271			-
Surrenders (note 6)		(31,711	)		(54,364	)		(290	)		-			(11,522	)		-			-			-
Death Benefits (note 4)		(2,916	)		-			-			-			-			-			-			-
Net policy repayments (loans) (note 5)		7,390			2,479			8			54			-			11			-			-
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(20,564	)		(23,164	)		(1,020	)		(698	)		(1,409	)		(667	)		(549	)		-
Asset charges (note 3):
MSP contracts		(185	)		(176	)		-			(29	)		-			-			-			-
SL contracts or LSFP contracts		(7	)		(50	)		-			-			(54	)		(49	)		-			-
Adjustments to maintain reserves		(2	)		10			8			(11	)		-			(1	)		(2	)		-
Net equity transactions		(26,642	)		(229,592	)		7,963			13,422			(13,132	)		2,567			776			-
Net change in contract owners’ equity		136,605			(174,243	)		12,866			11,846			(9,546	)		4,824			1,234			-
Contract owners’ equity beginning of period		375,999			550,242			11,846			-			15,860			11,036			-			-
Contract owners’ equity end of period	$	512,604			375,999			24,712			11,846			6,314			15,860			1,234			-
CHANGES IN UNITS:
Beginning units		23,071			38,313			1,220			-			1,028			842			-			-
Units purchased		2,534			1,609			698			1,298			34			301			146			-
Units redeemed		(3,605	)		(16,851	)		(91	)		(78	)		(756	)		(115	)		(50	)		-
Ending units		22,000			23,071			1,827			1,220			306			1,028			96			-

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	RVARS					TRHS2						TRLT2						VWBF
	2013			2012		2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	(98	)		-		(16,399	)		(9,054	)		1,241			2,720			26,928			31,650
Realized gain (loss) on investments		(579	)		-		289,431			165,316			(1,971	)		(981	)		2,635			18,748
Change in unrealized gain (loss) on investments		-			-		853,317			142,521			280			1,155			(206,033	)		13,222
Reinvested capital gains		-			-		179,068			40,703			-			267			307			28,256
Net increase (decrease) in contract owners’ equity resulting from operations		(677	)		-		1,305,417			339,486			(450	)		3,161			(176,163	)		91,876
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		20			-		208,734			248,772			2,506			5,701			57,159			64,426
Transfers between funds		1,894			-		1,002,068			1,205,199			(94,252	)		41,433			(5,875	)		(99,592	)
Surrenders (note 6)		-			-		(140,909	)		(183,802	)		(5,045	)		-			(146,944	)		(190,838	)
Death Benefits (note 4)		-			-		(18,691	)		(4,315	)		-			-			(14,447	)		(61,889	)
Net policy repayments (loans) (note 5)		(697	)		-		(63,095	)		24,320			-			-			2,887			13,468
Deductions for surrender charges (note 2d)		-			-		-			-			-			-			(13	)		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(252	)		-		(159,503	)		(86,726	)		(1,728	)		(2,310	)		(88,212	)		(99,724	)
Asset charges (note 3):
MSP contracts		-			-		(2,964	)		(1,593	)		-			-			(916	)		(1,043	)
SL contracts or LSFP contracts		-			-		-			-			(304	)		(470	)		(123	)		(190	)
Adjustments to maintain reserves		-			-		(185	)		30			3			10			(40	)		107
Net equity transactions		965			-		825,455			1,201,885			(98,820	)		44,364			(196,524	)		(375,275	)
Net change in contract owners’ equity		288			-		2,130,872			1,541,371			(99,270	)		47,525			(372,687	)		(283,399	)
Contract owners’ equity beginning of period		-			-		2,273,490			732,119			132,750			85,225			1,824,066			2,107,465
Contract owners’ equity end of period	$	288			-		4,404,362			2,273,490			33,480			132,750			1,451,379			1,824,066
CHANGES IN UNITS:
Beginning units		-			-		149,737			62,889			10,329			6,793			69,088			83,766
Units purchased		139			-		66,510			97,249			195			3,754			4,830			3,739
Units redeemed		(110	)		-		(22,621	)		(10,401	)		(7,916	)		(218	)		(12,695	)		(18,417	)
Ending units		29			-		193,626			149,737			2,608			10,329			61,223			69,088

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	VWEM						VWHA						WRASP						WRHIP
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	69,154			(32,910	)		10,506			945			21,389			17,880			38,365			(1,637	)
Realized gain (loss) on investments		421,232			845,092			436,069			(439,386	)		173,415			36,321			31,217			29,431
Change in unrealized gain (loss) on investments		203,931			754,002			123,772			(187,666	)		422,205			382,841			12,031			17,766
Reinvested capital gains		-			-			155,183			827,476			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		694,317			1,566,184			725,530			201,369			617,009			437,042			81,613			45,560
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		136,751			271,656			341,414			684,543			103,635			113,971			78,455			3,577
Transfers between funds		(184,736	)		(463,597	)		(709,916	)		(898,064	)		(67,141	)		206,222			198,842			761,536
Surrenders (note 6)		(343,293	)		(466,364	)		(387,359	)		(1,344,310	)		(377,357	)		(156,553	)		(27,362	)		(22,386	)
Death Benefits (note 4)		(10,734	)		(36,564	)		(112,542	)		(36,163	)		(475	)		(10,217	)		-			-
Net policy repayments (loans) (note 5)		(9,018	)		45,087			7,134			62,231			(20,545	)		7,621			(13,033	)		13
Deductions for surrender charges (note 2d)		-			(144	)		-			(25	)		-			(3	)		-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(279,821	)		(289,416	)		(324,379	)		(397,656	)		(93,766	)		(91,242	)		(39,424	)		(12,180	)
Asset charges (note 3):
MSP contracts		(2,156	)		(2,553	)		(4,099	)		(4,965	)		(1,664	)		(2,207	)		-			-
SL contracts or LSFP contracts		(2,543	)		(2,604	)		(803	)		(1,050	)		-			-			-			-
Adjustments to maintain reserves		6			136			1,549			575			19			38			(3	)		4
Net equity transactions		(695,544	)		(944,363	)		(1,189,001	)		(1,934,884	)		(457,294	)		67,630			197,475			730,564
Net change in contract owners’ equity		(1,227	)		621,821			(463,471	)		(1,733,515	)		159,715			504,672			279,088			776,124
Contract owners’ equity beginning of period		6,488,332			5,866,511			8,093,159			9,826,674			2,870,801			2,366,129			776,124			-
Contract owners’ equity end of period	$	6,487,105			6,488,332			7,629,688			8,093,159			3,030,516			2,870,801			1,055,212			776,124
CHANGES IN UNITS:
Beginning units		236,690			275,202			170,000			214,307			203,310			198,560			71,390			-
Units purchased		8,511			12,093			7,871			8,754			11,025			32,393			24,578			74,737
Units redeemed		(33,252	)		(50,605	)		(32,109	)		(53,061	)		(41,960	)		(27,643	)		(7,667	)		(3,347	)
Ending units		211,949			236,690			145,762			170,000			172,375			203,310			88,301			71,390

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2013 and 2012

	WRMCG						SVDF						SVOF						WFVSCG
	2013			2012			2013			2012			2013			2012			2013			2012
Investment activity:
Net investment income (loss)	$	(1,622	)		(308	)		(6,806	)		(5,000	)		(6,779	)		(8,960	)		(2,539	)		(2,302	)
Realized gain (loss) on investments		37,783			4,626			117,806			64,150			167,730			20,554			18,477			30,686
Change in unrealized gain (loss) on investments		36,417			4,482			155,594			42,976			244,660			198,776			144,923			(12,785	)
Reinvested capital gains		7,573			-			26,398			-			-			538			27,056			19,112
Net increase (decrease) in contract owners’ equity resulting from operations		80,151			8,800			292,992			102,126			405,611			210,908			187,917			34,711
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		40,508			525			3,487			20,630			6,902			2,182			14,033			35,908
Transfers between funds		80,156			211,615			81,126			(138,142	)		(194,196	)		(47,243	)		150,842			(121,806	)
Surrenders (note 6)		(7,569	)		(48,347	)		(45,640	)		(28,777	)		(138,626	)		(18,805	)		(65,319	)		(42,318	)
Death Benefits (note 4)		-			-			(32,371	)		-			(122,252	)		-			(1,454	)		(29,887	)
Net policy repayments (loans) (note 5)		91			(30	)		(17,561	)		10,320			23,439			8,424			(539	)		(533	)
Deductions for surrender charges (note 2d)		-			-			-			-			-			-			-			-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(8,499	)		(1,809	)		(17,839	)		(14,439	)		(49,605	)		(45,779	)		(22,340	)		(22,942	)
Asset charges (note 3):
MSP contracts		-			-			-			-			-			-			(58	)		(22	)
SL contracts or LSFP contracts		-			-			(587	)		(444	)		(2,105	)		(1,899	)		-			-
Adjustments to maintain reserves		(3	)		2			4			(2	)		2,815			1,366			(13	)		12
Net equity transactions		104,684			161,956			(29,381	)		(150,854	)		(473,628	)		(101,754	)		75,152			(181,588	)
Net change in contract owners’ equity		184,835			170,756			263,611			(48,728	)		(68,017	)		109,154			263,069			(146,877	)
Contract owners’ equity beginning of period		170,756			-			587,253			635,981			1,594,765			1,485,611			337,977			484,854
Contract owners’ equity end of period	$	355,591			170,756			850,864			587,253			1,526,748			1,594,765			601,046			337,977
CHANGES IN UNITS:
Beginning units		16,870			-			23,267			29,996			80,184			85,290			20,028			30,813
Units purchased		11,987			21,828			4,244			685			888			1,099			9,269			1,254
Units redeemed		(1,678	)		(4,958	)		(4,105	)		(7,414	)		(26,306	)		(6,205	)		(5,495	)		(12,039	)
Ending units		27,179			16,870			23,406			23,267			54,766			80,184			23,802			20,028

See accompanying notes to financial statements.

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

(1) Background and 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 is 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 and certain other fees, were offered for purchase. Beginning December 31, 1990, contracts with a front-end sales charge and certain other fees, are offered for purchase. See note 2 for a discussion of policy charges and note 3 for asset charges.

With certain exceptions, contract owners may invest in the following:

ALLIANCE BERNSTEIN FUNDS

VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)

BLACKROCK FUNDS

Global Allocation V.I. Fund - Class II (MLVGA2)

DELAWARE GROUP

VIP Small Cap Value Series: Service Class (DWVSVS)

DREYFUS CORPORATION

Stock Index Fund, Inc. - Initial Shares (DSIF)

Socially Responsible Growth Fund Inc - Initial Shares (DSRG)

GOLDMAN SACHS ASSET MANAGEMENT GROUP

Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)

INVESCO INVESTMENTS

Van Kampen V.I. Mid Cap Growth Fund - Series I Shares (IVKMG1)

JANUS FUNDS

Janus Aspen Series - Balanced Portfolio - Service Shares (JABS)

Janus Aspen Series - Forty Portfolio - Service Shares (JACAS)

Janus Aspen Series - Global Technology Portfolio - Service Shares (JAGTS)

Janus Aspen Series - Overseas Portfolio - Service Shares (JAIGS)

MASSACHUSETTS FINANCIAL SERVICES CO.

Investors Growth Stock Series - Initial Class (MIGIC)

Variable Insurance Trust - MFS New Discovery Series - Intital Class (MNDIC)

Value Series - Initial Class (MVFIC)

MORGAN STANLEY

Core Plus Fixed Income Portfolio - Class I (MSVFI)

Emerging Markets Debt Portfolio - Class I (MSEM)

U.S. Real Estate Portfolio - Class I (MSVRE)

NATIONWIDE FUNDS GROUP

American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)

American Funds NVIT Asset Allocation Fund - Class II (GVAAA2)

American Funds NVIT Bond Fund - Class II (GVABD2)

American Funds NVIT Global Growth Fund - Class II (GVAGG2)

American Funds NVIT Growth Fund - Class II (GVAGR2)

American Funds NVIT Growth-Income Fund - Class II (GVAGI2)

Federated NVIT High Income Bond Fund - Class I (HIBF)

Federated NVIT High Income Bond Fund - Class III (HIBF3)

NVIT Emerging Markets Fund - Class I (GEM)

NVIT Emerging Markets Fund - Class III (GEM3)

NVIT International Equity Fund - Class I (GIG)

NVIT International Equity Fund - Class III (GIG3)

Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)

Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)

Neuberger Berman NVIT Socially Responsible Fund - Class II (NVNSR2)*

NVIT Cardinal Aggressive Fund - Class I (NVCRA1)

NVIT Cardinal Balanced Fund - Class I (NVCRB1)

NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)

NVIT Cardinal Conservative Fund - Class I (NVCCN1)

NVIT Cardinal Moderate Fund - Class I (NVCMD1)

NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)

NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)

NVIT Core Bond Fund - Class I (NVCBD1)

NVIT Core Plus Bond Fund - Class I (NVLCP1)

NVIT Nationwide Fund - Class I (TRF)

NVIT Government Bond Fund - Class I (GBF)

American Century NVIT Growth Fund - Class I (CAF)

NVIT International Index Fund - Class VI (GVIX6)

NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)

NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)

NVIT Investor Destinations Capital Appreciation Fund - Class II (NVDCA2)

NVIT Investor Destinations Conservative Fund - Class II (GVIDC)

NVIT Investor Destinations Moderate Fund - Class II (GVIDM)

NVIT Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)

NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)

NVIT Mid Cap Index Fund - Class I (MCIF)

NVIT Money Market Fund - Class I (SAM)

NVIT Multi-Manager International Growth Fund - Class III (NVMIG3)

NVIT Multi-Manager International Value Fund - Class I (GVDIVI)

NVIT Multi-Manager International Value Fund - Class III (GVDIV3)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)

NVIT Multi-Manager Large Cap Value Fund - Class I (NVMLV1)

NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)

NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)

NVIT Multi-Manager Small Cap Growth Fund - Class I (SCGF)

NVIT Multi-Manager Small Cap Value Fund - Class I (SCVF)

NVIT Multi-Manager Small Company Fund - Class I (SCF)

NVIT Multi-Sector Bond Fund - Class I (MSBF)

NVIT Short Term Bond Fund - Class II (NVSTB2)

NVIT Large Cap Growth Fund - Class I (NVOLG1)

Templeton NVIT International Value Fund - Class III (NVTIV3)

Invesco NVIT Comstock Value Fund - Class I (EIF)

NVIT Real Estate Fund - Class I (NVRE1)

Loring Ward NVIT Capital Appreciation Fund - Class P (NVLCAP)*

Loring Ward NVIT Moderate Fund - Class P (NVLMP)*

NVIT Small Cap Index Fund Class II (NVSIX2)

NVIT S&P 500 Index Fund Class I (GVEX1)

NORTHERN LIGHTS

TOPS Managed Risk Balanced ETF Portfolio - Class 3 (NOTB3)*

TOPS Managed Risk Growth ETF Portfolio - Class 3 (NOTG3)

TOPS Managed Risk Moderate Growth ETF Portfolio - Class 3 (NOTMG3)*

PORTFOLIOS OF THE ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC

VPS Growth and Income Portfolio - Class A (ALVGIA)

VPS Small/Mid Cap Value Portfolio - Class A (ALVSVA)

PORTFOLIOS OF THE AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.

VP Balanced Fund - Class I (ACVB)

VP Capital Appreciation Fund - Class I (ACVCA)

VP Income & Growth Fund - Class I (ACVIG)

American Century VP Inflation Protection Fund - Class II (ACVIP2)

VP International Fund - Class I (ACVI)

VP International Fund - Class III (ACVI3)

VP Mid Cap Value Fund - Class I (ACVMV1)

VP Ultra(R) Fund - Class I (ACVU1)

VP Value Fund - Class I (ACVV)*

VP Vista(SM) Fund - Class I (ACVVS1)

PORTFOLIOS OF THE DREYFUS INVESTMENT PORTFOLIOS

Small Cap Stock Index Portfolio - Service Shares (DVSCS)

PORTFOLIOS OF THE DREYFUS VARIABLE INVESTMENT FUND

Appreciation Portfolio - Initial Shares (DCAP)

Opportunistic Small Cap Portfolio: Initial Shares (DSC)

Growth and Income Portfolio - Initial Shares (DGI)

PORTFOLIOS OF THE FEDERATED INSURANCE SERIES

Managed Tail Risk Fund II: Primary Shares (FVCA2P)

Quality Bond Fund II - Primary Shares (FQB)

PORTFOLIOS OF THE FIDELITY(R) VARIABLE INSURANCE PRODUCTS

Equity-Income Portfolio - Initial Class (FEIP)

High Income Portfolio - Initial Class (FHIP)

VIP Asset Manager Portfolio - Initial Class (FAMP)

VIP Contrafund(R) Portfolio - Initial Class (FCP)*

VIP Energy Portfolio - Service Class 2 (FNRS2)

VIP Freedom Fund 2010 Portfolio - Service Class (FF10S)

VIP Freedom Fund 2020 Portfolio - Service Class (FF20S)

VIP Freedom Fund 2030 Portfolio - Service Class (FF30S)

VIP Growth Opportunities Portfolio - Initial Class (FGOP)*

VIP Growth Portfolio - Initial Class (FGP)

VIP High Income Portfolio - Initial Class R (FHIPR)

VIP Investment Grade Bond Portfolio - Service Class (FIGBS)

VIP Mid Cap Portfolio - Service Class (FMCS)

VIP Overseas Portfolio - Initial Class (FOP)

VIP Overseas Portfolio - Service Class R (FOSR)

VIP Value Strategies Portfolio - Service Class (FVSS)

PORTFOLIOS OF THE FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRU

Franklin Income Securities Fund - Class 2 (FTVIS2)

Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)

Franklin Small Cap Value Securities Fund - Class 1 (FTVSVI)

Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)

Templeton Foreign Securities Fund - Class 1 (TIF)

Templeton Foreign Securities Fund - Class 3 (TIF3)

Templeton Global Bond Securities Fund - Class 3 (FTVGI3)

VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)

PORTFOLIOS OF THE NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST

Short Duration Bond Portfolio - I Class Shares (AMTB)

Balanced Portfolio - I Class Shares (AMBP)

Growth Portfolio - I Class Shares (AMTG)

Guardian Portfolio - I Class Shares (AMGP)

International Portfolio - S Class Shares (AMINS)

Mid-Cap Growth Portfolio - S Class Shares (AMMCGS)

Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)

Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class S (AMRS)

Small-Cap Growth Portfolio - S Class Shares (AMFAS)

Socially Responsive Portfolio - I Class Shares (AMSRS)

PORTFOLIOS OF THE OPPENHEIMER VARIABLE ACCOUNT FUNDS

Capital Income Fund/VA - Non-Service Shares (OVMS)

Capital Appreciation Fund/VA - Non-Service Shares (OVGR)*

Core Bond Fund/VA - Non-Service Shares (OVB)

Global Securities Fund/VA - Class 3 (OVGS3)

Global Securities Fund/VA - Non-Service Shares (OVGS)

Main Street Fund(R)/VA - Non-Service Shares (OVGI)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

Main Street Small- & Mid-Cap Fund(R)/VA - Non-Service Shares (OVSC)

Discovery Mid Cap Growth Fund/VA - Non-Service Shares (OVAG)

Global Strategic Income Fund/VA: Non-service Shares (OVSB)

PORTFOLIOS OF THE PIMCO VARIABLE INSURANCE TRUST

All Asset Portfolio - Administrative Class (PMVAAA)

Foreign Bond Portfolio (Unhedged) - Administrative Class (PMVFBA)

Low Duration Portfolio - Administrative Class (PMVLDA)

Total Return Portfolio - Administrative Class (PMVTRA)

PORTFOLIOS OF THE PUTNAM VARIABLE TRUST

Putnam VT Growth and Income Fund - Class IB (PVGIB)

Putnam VT International Equity Fund - Class IB (PVTIGB)

Putnam VT Voyager Fund - Class IB (PVTVB)

PORTFOLIOS OF THE INVESCO INVESTMENTS TRUST

VI American Franchise Fund - Series I Shares (ACEG)

VI Value Opportunities Fund - Series I Shares (AVBVI)

Invesco - Invesco VI Mid Cap Core Equity Fund: Series I Shares (AVMCCI)

GUGGENHEIM INVESTMENTS

Variable Fund - Multi-Hedge Strategies (RVARS)

T. ROWE PRICE

Blue Chip Growth Portfolio - II (TRBCG2)*

Equity Income Portfolio - II (TREI2)*

Health Sciences Portfolio - II (TRHS2)

Limited-Term Bond Portfolio - II (TRLT2)

VAN ECK ASSOCIATES CORPORATION

VIP Trust - Unconstrained Emerging Markets Bond Fund - Initial Class (VWBF)

VIP Trust Emerging Markets Fund - Initial Class (VWEM)

VIP Trust Global Hard Assets Fund - Initial Class (VWHA)

WADDELL & REED, INC.

Variable Insurance Portfolios - Asset Strategy (WRASP)

Variable Insurance Portfolios - High Income (WRHIP)

Variable Insurance Portfolios - Mid Cap Growth (WRMCG)

WELLS FARGO FUNDS

Advantage VT Discovery Fund (SVDF)

Advantage VT Opportunity Fund - Class 2 (SVOF)

Advantage VT Small Cap Growth Fund - Class 2 (WFVSCG)

*At December 31, 2013, contract owners were not invested in this fund.

The contract owners’ equity is affected by the investment results of each fund, equity transactions by contract owners and certain policy and assets charges (see notes 2 and 3). The accompanying financial statements include only contract owners’ purchase payments pertaining to the variable portions of their contracts and exclude any purchase payments for fixed dollar benefits, the latter being included in the accounts of the Company.

A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans.

Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially.

A purchase payment could be presented as a negative equity transaction in the Statements of Changes in Contract Owners’ Equity if a prior period purchase payment is refunded to a contract owner due to a contract cancellation during the free look period, and/or if a gain is realized by the contract owner during the free look period.

The Company allocates purchase payments to sub-accounts and/or the fixed account as instructed by the contract owner. Shares of the sub-accounts are purchased at Net Asset Value, then converted into accumulation units. Certain transactions may be subject to conditions imposed by the underlying mutual funds, as well as those set forth in the contract.

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued at the closing net asset value per share at December 31, 2013 of such funds. The cost of investments sold is determined on a first in - first out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed), and dividends and capital gain distributions are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.

(d) Federal Income Taxes

Operations of the Account form a part of, and are taxed with, operations of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code. The Company does not provide for income taxes within the Account. Taxes are generally the responsibility of the contract owner upon termination or withdrawal.

(e) Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S generally accepted accounting principles may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(f) Recently Issued Accounting Standards

There are no recently issued accounting standards applicable to the Account.

(g) Subsequent Events

The Company evaluated subsequent events through the date the financial statements were issued with the SEC.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

(2) Policy Charges

(a) Deductions from Premiums

For single premium and modified single premium contracts, no deduction is made from any premium at the time of payment. On multiple payment and flexible premium contracts, the Company deducts a premium load charge that will not exceed 6%. The 6% is comprised of a charge for premium taxes that ranges from 2.50% to 3.50% of each premium payment and a charge for the sales load that ranges from 2.50% to 3.50% of each premium payment. For flexible premium contracts, the sales load is reduced to 0.50% on any portion of the annual premium paid in excess of the annual break point premium. On last survivor flexible premium contracts, the Company deducts a charge for state premium taxes equal to 3.50% 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 5.00% of each premium payment during the first ten years and 1.50% of each premium payment ten years and 1.50% of each premium payment thereafter.

For policies issued in New York, the Company deducts a sales load from each premium payment received not to exceed 9.50% of each premium payment during the first ten years and 6.00% of each premium payment thereafter. The Company may at its sole discretion reduce this sales loading. For the periods ended December 31, 2013 and 2012, total front-end sales charge deductions were $1,607,903 and $1,752,778, respectively and were recognized as a reduction of purchase payments on the Statements of Changes in Contract Owners’ Equity.

(b) Cost of Insurance

A cost of insurance charge is assessed monthly against each contract by liquidating units. The amount of the charge varies widely and 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 contract owner.

(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.

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 totaling less than $25,000 – $10/month

Purchase payments totaling $25,000 or more – none

Contracts issued on or after April 16, 1990:

Purchase payments totaling less than $25,000 – $90/year ($65/year in New York)

Purchase payments totaling $25,000 or more – $50/year

For multiple payment contracts, the Company currently deducts a monthly administrative charge of $5.00 (not to exceed $7.50 per month). For flexible premium contracts, the Company currently deducts a monthly administrative charge of $12.50 during the first policy year. For all subsequent years, a monthly administrative charge is deducted (currently $5.00 per month not to exceed $7.50). Additionally, the Company deducts an increase charge when the policy’s specified amount is increased. The charge is equal $2.04 per year per $1,000 of the specified amount increase.

For modified single premium contracts, the Company deducts a monthly administrative charge equal to an annualized rate of 0.30% multiplied by the policy’s cash value to cover administrative, premium tax and deferred acquisition costs. For policy years 11 and later, this monthly charge is reduced to an annualized rate of 0.15% of the policy’s cash value. The monthly charge is subject to a $10.00 minimum.

For last survivor flexible premium contracts, the Company deducts a monthly administrative charge equal to the sum of the per policy charge and the per $1,000.00 basic coverage charge. For policy years one through ten, the per policy charge is $10.00. Additionally, there is a $0.04 per $1,000.00 basic coverage charge (not less than $20.00 or more than $80.00 per policy per year). For policy years eleven and after, the per policy charge is $5.00. Additionally, there is a $0.02 per $1,000 basic coverage charge (not less than $10.00 or more than $40.00 per policy per year). For policies issued in New York, the per policy charge is guaranteed not to exceed $7.50 per month in all years and there is a $0.04 per $1,000.00 basic coverage charge in policy year one only.

(d) Surrender Charges

Policy surrenders result in a withdrawal of contract value from the Account and payment of the surrender proceeds to the policy 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 a percentage of the original purchase payment. For single premium contracts issued prior to April 16, 1990, the charge is 8.00% in the first year and declines a specified amount each year. After the ninth year, the charge is 0.00%. For single premium contracts issued on or after April 16, 1990, the charge is 8.50% in the first year, and declines a specified amount each year. After the ninth year, the charge is 0.00%. However, if a policy’s specified amount increases, the amount of the increase will have a nine-year surrender charge period.

For multiple payment contracts, last survivor flexible premium contract and flexible premium contracts, the amount charged is based upon a specified percentage of the initial specified amount and varies by issue age, sex and rate class. The charge is reduced at certain time intervals, and declines a specified amount each year. After the eighth year for flexible premium contracts, after the ninth year for multiple payment contracts and after the tenth year for last survivor contracts, the charge is 0.00%. However, if a policy’s specified amount increases, the amount of the increase will have the same nine-year surrender charge period.

For modified single premium contracts, the amount charged is based on a percentage of the original premium payment. The charge is 10.00% of the initial premium payment and declines a specified amount each year to 0.00% after the end of the ninth year.

The Company may waive the surrender charge for certain contracts in which the sales expenses normally associated with the distribution of a contract are not incurred.

The charges above are assessed against each contract by liquidating units.

(3) Asset Charges

The Company deducts a charge related to the assumption of mortality and expense risk.

For modified single premium contracts (MSP), the Company deducts a charge equal to an annualized rate of 0.90%. For flexible premium contracts, the Company deducts a charge equal to an annualized rate of 0.80% in policy years one through nine. After the ninth year, the annualized rate is 0.80% on the first $25,000 of cash value and 0.50% on additional cash value. For last survivor flexible premium contracts (LSFP), the Company deducts a charge equal to an annualized rate of 0.80% in policy years one through ten. In policy years eleven and after, the charge will continue to be deducted, but may be reduced for policies at specified asset levels. For LSFP issued in New York, the Company deducts a charge equal to an annualized rate of 0.80% in policy years one through ten and 0.50% thereafter, regardless of cash value. This charge is assessed monthly by liquidating units.

For single premium contracts issued prior to April 16, 1990, the Company deducts a charge equal to an annualized rate of 0.95% during the first ten policy years, and 0.50% thereafter. For single premium contracts issued on or after April 16, 1990, the charge is equal to an annualized rate of 1.30% during the first ten policy years, and 1.00% thereafter. For multiple payment contracts, the Company deducts a charge equal to an annualized rate of 0.80%. For flexible premium and Variable Executive Life contracts, the charge is equal to an annualized rate of 0.80% during the first ten policy years, and 0.50% thereafter. This charge is assessed through a reduction in the unit value.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

The following table provides mortality and expense risk charges by contract type for those charges that are assessed through a reduction in the unit value for the period ended December 31, 2013:

	Total		ALVDAA		MLVGA2		DWVSVS		DSIF
Single Premium issue prior to April 16, 1990	$	3,132		-		-		-		11
Single Premium issue after to April 16, 1990		433,154		-		-		-		21,359
Multiple Payment and Flexible Premium contracts		2,985,284		24		17,292		115		195,883
Variable Executive Life		12,031		-		-		-		700
Total	$	3,433,601		24		17,292		115		217,953
	DSRG		GVGMNS		IVKMG1		JABS		JACAS
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		1,475		-		-		-		4,798
Multiple Payment and Flexible Premium contracts		37,132		50		913		6,541		15,351
Variable Executive Life		-		-		-		-		-
Total		38,607		50		913		6,541		20,149
	JAGTS		JAIGS		MIGIC		MNDIC		MVFIC
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		1,766		3,926		-		-		-
Multiple Payment and Flexible Premium contracts		5,454		21,200		991		1,096		8,805
Variable Executive Life		-		16		-		-		-
Total		7,220		25,142		991		1,096		8,805
	MSVFI		MSEM		MSVRE		NVAMV1		GVAAA2
Single Premium issue prior to April 16, 1990		-		10		-		-		-
Single Premium issue after to April 16, 1990		-		2,543		12,049		6,923		-
Multiple Payment and Flexible Premium contracts		1,314		5,430		4		30,960		8,195
Variable Executive Life		-		-		-		280		-
Total		1,314		7,983		12,053		38,163		8,195
	GVABD2		GVAGG2		GVAGR2		GVAGI2		HIBF
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		-		-		-		-
Multiple Payment and Flexible Premium contracts		4,539		7,798		9,030		4,156		269
Variable Executive Life		-		-		19		-		-
Total		4,539		7,798		9,049		4,156		269
	HIBF3		GEM		GEM3		GIG		GIG3
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		4,232		-		242		-
Multiple Payment and Flexible Premium contracts		6,725		2,270		11,000		2,817		18,754
Variable Executive Life		-		-		39		-		86
Total		6,725		6,502		11,039		3,059		18,840
	NVNMO1		NVNSR1		NVCRA1		NVCRB1		NVCCA1
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		327		-		-		-		-
Multiple Payment and Flexible Premium contracts		71,661		556		1,619		1,910		3,180
Variable Executive Life		236		-		-		-		-
Total		72,224		556		1,619		1,910		3,180
	NVCCN1		NVCMD1		NVCMA1		NVCMC1		NVCBD1
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		-		-		-		1,112
Multiple Payment and Flexible Premium contracts		7,604		5,788		3,648		1,070		1,446
Variable Executive Life		-		-		-		-		-
Total		7,604		5,788		3,648		1,070		2,558
	NVLCP1		TRF		GBF		CAF		GVIX6
Single Premium issue prior to April 16, 1990		$-		158		214		-		-
Single Premium issue after to April 16, 1990		-		11,462		10,728		4,464		-
Multiple Payment and Flexible Premium contracts		804		276,435		30,302		72,206		1,861
Variable Executive Life		-		889		7		127		-
Total	$	804		288,944		41,251		76,797		1,861
	GVIDA		NVDBL2		NVDCA2		GVIDC		GVIDM
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		139		-		-		920		3,296
Multiple Payment and Flexible Premium contracts		11,388		591		710		2,549		17,322
Variable Executive Life		-		-		-		-		-
Total		11,527		591		710		3,469		20,618
	GVDMA		GVDMC		MCIF		SAM		NVMIG3
Single Premium issue prior to April 16, 1990		-		-		-		29		-
Single Premium issue after to April 16, 1990		4,152		2,865		5,502		29,812		1,538
Multiple Payment and Flexible Premium contracts		23,647		14,581		24,855		82,916		22,074
Variable Executive Life		122		-		102		902		-
Total		27,921		17,446		30,459		113,659		23,612
	GVDIVI		GVDIV3		NVMLG1		NVMLV1		NVMMG1
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		-		1,024		238		800
Multiple Payment and Flexible Premium contracts		739		2,003		6,995		6,395		159,603
Variable Executive Life		-		-		-		-		319
Total		739		2,003		8,019		6,633		160,722

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

	NVMMV2		SCGF		SCVF		SCF		MSBF
Single Premium issue prior to April 16, 1990		-		-		13		9		-
Single Premium issue after to April 16, 1990		607		7,013		3,701		3,986		4,788
Multiple Payment and Flexible Premium contracts		119,078		4,744		21,629		86,005		5,580
Variable Executive Life		-		19		52		1,198		-
Total		119,685		11,776		25,395		91,198		10,368
	NVSTB2		NVOLG1		NVTIV3		EIF		NVRE1
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		23,524		-		-		2,705
Multiple Payment and Flexible Premium contracts		2,078		224,998		556		2,919		42,730
Variable Executive Life		-		1,078		-		-		171
Total		2,078		249,600		556		2,919		45,606
	NVSIX2		GVEX1		NOTG3		ALVGIA		ALVSVA
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		-		-		-		-
Multiple Payment and Flexible Premium contracts		91		1,290		10		2,721		5,017
Variable Executive Life		-		-		-		-		-
Total		91		1,290		10		2,721		5,017
	ACVB		ACVCA		ACVIG		ACVIP2		ACVI
Single Premium issue prior to April 16, 1990		-		171		-		-		-
Single Premium issue after to April 16, 1990		8,400		12,514		2,977		-		2,862
Multiple Payment and Flexible Premium contracts		19,803		203		7,513		7,562		122
Variable Executive Life		-		-		-		111		-
Total		28,203		12,888		10,490		7,673		2,984
	ACVI3		ACVMV1		ACVU1		DVSCS		DCAP
Single Premium issue prior to April 16, 1990		$-		-		-		-		-
Single Premium issue after to April 16, 1990		-		-		155		3,369		4,300
Multiple Payment and Flexible Premium contracts		0		9,334		-		7,728		20,133
Variable Executive Life		-		-		-		-		-
Total	$	-		9,334		155		11,097		24,433
	DSC		DGI		FVCA2P		FQB		FEIP
Single Premium issue prior to April 16, 1990		-		-		-		-		545
Single Premium issue after to April 16, 1990		-		1,112		-		4,828		38,298
Multiple Payment and Flexible Premium contracts		2,566		6,022		622		5,587		196,641
Variable Executive Life		-		17		-		-		1,475
Total		2,566		7,151		622		10,415		236,959
	FHIP		FAMP		FNRS2		FF10S		FF20S
Single Premium issue prior to April 16, 1990		93		254		-		-		-
Single Premium issue after to April 16, 1990		12,151		20,942		-		-		-
Multiple Payment and Flexible Premium contracts		32,643		54,819		13,360		1,701		6,019
Variable Executive Life		240		45		38		-		-
Total		45,127		76,060		13,398		1,701		6,019
	FF30S		FGP		FHIPR		FIGBS		FMCS
Single Premium issue prior to April 16, 1990		-		885		-		-		-
Single Premium issue after to April 16, 1990		-		36,627		-		-		-
Multiple Payment and Flexible Premium contracts		6,613		270,633		20,284		18,815		39,057
Variable Executive Life		-		2,092		49		29		24
Total		6,613		310,237		20,333		18,844		39,081
	FOP		FOSR		FVSS		FTVIS2		FTVRDI
Single Premium issue prior to April 16, 1990		90		-		-		-		-
Single Premium issue after to April 16, 1990		10,427		-		1,949		-		-
Multiple Payment and Flexible Premium contracts		25,222		21,006		4,550		7,244		22,115
Variable Executive Life		24		47		-		-		-
Total		35,763		21,053		6,499		7,244		22,115
	FTVSVI		FTVDM3		TIF		TIF3		FTVGI3
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		-		-		-		-
Multiple Payment and Flexible Premium contracts		18,283		5,664		941		6,115		12,387
Variable Executive Life		-		-		-		-		105
Total		18,283		5,664		941		6,115		12,492
	FTVFA2		AMTB		AMBP		AMTG		AMGP
Single Premium issue prior to April 16, 1990		-		49		-		425		-
Single Premium issue after to April 16, 1990		-		9,245		-		9,644		804
Multiple Payment and Flexible Premium contracts		476		7,037		238		156		-
Variable Executive Life		-		79		-		-		-
Total		476		16,410		238		10,225		804
	AMTP		AMFAS		AMSRS		OVMS		OVB
Single Premium issue prior to April 16, 1990		-		-		-		-		$-
Single Premium issue after to April 16, 1990		4,689		-		-		6,860		5,063
Multiple Payment and Flexible Premium contracts		18		681		3,207		27,703		22,037
Variable Executive Life		-		26		-		7		-
Total		4,707		707		3,207		34,570	$	27,100

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

	OVGS3		OVGS		OVGI		OVSC		OVAG
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		9,541		522		-		1,716
Multiple Payment and Flexible Premium contracts		43,644		63,412		4,378		6,777		4,568
Variable Executive Life		352		666		-		-		-
Total		43,996		73,619		4,900		6,777		6,284
	OVSB		PMVAAA		PMVFBA		PMVLDA		PMVTRA
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		-		-		-		-
Multiple Payment and Flexible Premium contracts		803		3,025		2,762		8,993		7,241
Variable Executive Life		-		-		-		8		-
Total		803		3,025		2,762		9,001		7,241
	PVGIB		PVTIGB		PVTVB		ACEG		AVMCCI
Single Premium issue prior to April 16, 1990		-		-		-		-		-
Single Premium issue after to April 16, 1990		-		-		-		-		-
Multiple Payment and Flexible Premium contracts		840		1,362		2,286		82		12
Variable Executive Life		-		-		-		-		-
Total		840		1,362		2,286		82		12
	RVARS		TRHS2		VWBF		VWEM		VWHA
Single Premium issue prior to April 16, 1990		-		-		9		-		-
Single Premium issue after to April 16, 1990		-		-		5,858		5,902		12,071
Multiple Payment and Flexible Premium contracts		98		16,324		5,123		26,450		31,626
Variable Executive Life		-		75		53		23		84
Total		98		16,399		11,043		32,375		43,781
	WRASP		WRHIP		WRMCG		SVDF		SVOF
Single Premium issue prior to April 16, 1990		-		-		-		-		167
Single Premium issue after to April 16, 1990		-		-		-		6,874		9,438
Multiple Payment and Flexible Premium contracts		13,725		4,639		1,622		-		81
Variable Executive Life		-		-		-		-		-
Total		13,725		4,639		1,622		6,874		9,686
	WFVSCG
Single Premium issue prior to April 16, 1990		-
Single Premium issue after to April 16, 1990		-
Multiple Payment and Flexible Premium contracts		2,539
Variable Executive Life		-
Total		2,539

(4) Death Benefits

Death benefit proceeds result in a redemption of the contract value from the Account and payment of those proceeds, less any outstanding policy loans (and policy charges), to the legal beneficiary. For last survivor flexible premium contracts, the proceeds are payable on the death of the last surviving insured. In the event that the guaranteed death benefit exceeds the contract value on the date of death, the excess is paid by the Company’s general account.

(5) Policy Loans (Net of Repayments)

Contract provisions allow contract owners to borrow up to 90.00% (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, 6.50% interest is due and payable annually in advance of the policy anniversary date. For single premium contracts issued on or after April 16, 1990, multiple payment, flexible premium, modified single and last survivor flexible premium contracts, 6.00% 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 credited 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, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company.

Contract owners may, with certain restrictions, transfer their assets between the Account and a fixed dollar contract (fixed account) maintained in the accounts of the Company. These transfers are the result of the contract owner executing fund exchanges. Fund exchanges from the Account to the fixed account are included in surrenders, and fund exchanges from the fixed account to the Account are included in purchase payments received from contract owners, as applicable, on the accompanying Statements of Change in Contract Owners’ Equity. Policy loan transactions (note 5), executed at the direction of the contract owner, also result in transfers between the Account and the fixed account of the Company, but are included in Net Policy (Loans) Repayments. The fixed account assets are not reflected in the accompanying financial statements. For the periods ended December 31, 2013 and 2012, total transfers into the Account from the fixed account were $22,301,983 and $24,183,016, respectively, and total transfers from the Account to the fixed account were $ 22,275,279 and $24,051,007, respectively.

(7) Fair Value Measurement

FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Account generally uses the market approach as the valuation technique due to the nature of the mutual fund investments offered in the Account. This technique maximizes the use of observable inputs and minimizes the use of unobservable inputs.

In accordance with FASB ASC 820, the Account categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

The Account categorizes financial assets recorded at fair value as follows:

ŸLevel 1 – Unadjusted quoted prices accessible in active markets and mutual funds where the value per share (unit) is determined and published and is the basis for current transactions for identical assets or liabilities at the measurement date.

ŸLevel 2 – Unadjusted quoted prices for similar assets or liabilities in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

ŸLevel 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate about the assumptions market participants would use at the measurement date in pricing the asset or liability. Consideration is given to the risk inherent in both the method of valuation and the valuation inputs.

The Account recognizes transfers between fair value hierarchy levels at the reporting period end. There were no transfers between Level 1 and 2 as of December 31, 2013.

The following table summarizes assets measured at fair value on a recurring basis as of December 31, 2013:

	Level 1		Level 2		Level 3		Total
Separate Account Investments	$	677,275,375	$	0	$	0	$	677,275,375

The cost of purchases and proceeds from sales of Investments for the year ended December 31, 2013 are as follows:

	Purchases of Investments		Sales of Investments
VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)	$	35	$	50
Global Allocation V.I. Fund - Class II (MLVGA2)		952,803		1,019,064
VIP Small Cap Value Series: Service Class (DWVSVS)		59,932		6,646
Stock Index Fund, Inc. - Initial Shares (DSIF)		1,856,578		7,089,745
Socially Responsible Growth Fund Inc - Initial Shares (DSRG)		194,720		631,588
Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)		16,679		5,558
Van Kampen V.I. Mid Cap Growth Fund - Series I Shares (IVKMG1)		15,339		28,937
Janus Aspen Series - Balanced Portfolio - Service Shares (JABS)		317,840		486,856
Janus Aspen Series - Forty Portfolio - Service Shares (JACAS)		672,877		1,380,760
Janus Aspen Series - Global Technology Portfolio - Service Shares (JAGTS)		650,179		653,083
Janus Aspen Series - Overseas Portfolio - Service Shares (JAIGS)		365,378		1,045,246
Investors Growth Stock Series - Initial Class (MIGIC)		43,627		61,197
Variable Insurance Trust - MFS New Discovery Series - Intital Class (MNDIC)		264,762		53,854
Value Series - Initial Class (MVFIC)		309,107		475,367
Core Plus Fixed Income Portfolio - Class I (MSVFI)		171,786		222,165
Emerging Markets Debt Portfolio - Class I (MSEM)		384,696		731,675
U.S. Real Estate Portfolio - Class I (MSVRE)		76,438		733,532
American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)		653,204		1,482,285
American Funds NVIT Asset Allocation Fund - Class II (GVAAA2)		410,663		230,063
American Funds NVIT Bond Fund - Class II (GVABD2)		61,774		113,435
American Funds NVIT Global Growth Fund - Class II (GVAGG2)		447,890		621,991
American Funds NVIT Growth Fund - Class II (GVAGR2)		337,016		487,748
American Funds NVIT Growth-Income Fund - Class II (GVAGI2)		106,575		118,245
Federated NVIT High Income Bond Fund - Class I (HIBF)		7,167		3,258
Federated NVIT High Income Bond Fund - Class III (HIBF3)		217,431		516,379
NVIT Emerging Markets Fund - Class I (GEM)		34,739		170,130
NVIT Emerging Markets Fund - Class III (GEM3)		245,868		424,726
NVIT International Equity Fund - Class I (GIG)		113,358		154,966
NVIT International Equity Fund - Class III (GIG3)		125,697		409,810
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)		1,062,794		1,287,028
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)		43,196		31,956
NVIT Cardinal Aggressive Fund - Class I (NVCRA1)		233,251		100,398
NVIT Cardinal Balanced Fund - Class I (NVCRB1)		298,860		136,880
NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)		240,801		28,839
NVIT Cardinal Conservative Fund - Class I (NVCCN1)		150,630		181,935
NVIT Cardinal Moderate Fund - Class I (NVCMD1)		107,715		69,551
NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)		178,402		90,541
NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)		81,187		116,510
NVIT Core Bond Fund - Class I (NVCBD1)		391,148		263,294
NVIT Core Plus Bond Fund - Class I (NVLCP1)		57,804		95,974
NVIT Nationwide Fund - Class I (TRF)		654,690		4,928,875
NVIT Government Bond Fund - Class I (GBF)		477,415		2,528,762
American Century NVIT Growth Fund - Class I (CAF)		173,311		1,473,030
NVIT International Index Fund - Class VI (GVIX6)		101,452		233,070
NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)		183,464		136,817
NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)		8,346		4,803
NVIT Investor Destinations Capital Appreciation Fund - Class II (NVDCA2)		39,315		10,059
NVIT Investor Destinations Conservative Fund - Class II (GVIDC)		151,403		298,463
NVIT Investor Destinations Moderate Fund - Class II (GVIDM)		644,102		1,020,414
NVIT Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)		216,011		815,701
NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)		379,183		290,132
NVIT Mid Cap Index Fund - Class I (MCIF)		1,225,766		1,375,305
NVIT Money Market Fund - Class I (SAM)		10,763,641		14,284,467
NVIT Multi-Manager International Growth Fund - Class III (NVMIG3)		194,768		575,883
NVIT Multi-Manager International Value Fund - Class I (GVDIVI)		3,316		14,249
NVIT Multi-Manager International Value Fund - Class III (GVDIV3)		107,809		149,455
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)		512,395		313,275
NVIT Multi-Manager Large Cap Value Fund - Class I (NVMLV1)		298,900		308,183
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)		2,580,475		3,328,944
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)		1,999,902		2,623,178
NVIT Multi-Manager Small Cap Growth Fund - Class I (SCGF)		249,957		336,781
NVIT Multi-Manager Small Cap Value Fund - Class I (SCVF)		843,324		1,394,181
NVIT Multi-Manager Small Company Fund - Class I (SCF)		293,821		2,189,853
NVIT Multi-Sector Bond Fund - Class I (MSBF)		486,865		1,142,377
NVIT Short Term Bond Fund - Class II (NVSTB2)		388,568		331,880
NVIT Large Cap Growth Fund - Class I (NVOLG1)		521,010		7,088,557
Templeton NVIT International Value Fund - Class III (NVTIV3)		142,871		77,164
Invesco NVIT Comstock Value Fund - Class I (EIF)		249,270		167,723
NVIT Real Estate Fund - Class I (NVRE1)		1,096,539		1,591,164
NVIT Small Cap Index Fund Class II (NVSIX2)		55,320		6,811
NVIT S&P 500 Index Fund Class I (GVEX1)		1,412,903		497,534

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS December 31, 2013

TOPS Managed Risk Growth ETF Portfolio - Class 3 (NOTG3)		2,288		61
VPS Growth and Income Portfolio - Class A (ALVGIA)		543,709		217,581
VPS Small/Mid Cap Value Portfolio - Class A (ALVSVA)		263,132		371,623
VP Balanced Fund - Class I (ACVB)		658,704		405,048
VP Capital Appreciation Fund - Class I (ACVCA)		75,836		117,881
VP Income & Growth Fund - Class I (ACVIG)		1,333,314		793,820
American Century VP Inflation Protection Fund - Class II (ACVIP2)		277,493		977,286
VP International Fund - Class I (ACVI)		23,611		114,586
VP International Fund - Class III (ACVI3)		25,789		65,300
VP Mid Cap Value Fund - Class I (ACVMV1)		770,265		577,140
VP Ultra(R) Fund - Class I (ACVU1)		187,146		94,148
VP Vista(SM) Fund - Class I (ACVVS1)		0		1,123
Small Cap Stock Index Portfolio - Service Shares (DVSCS)		670,407		562,699
Appreciation Portfolio - Initial Shares (DCAP)		252,186		1,163,759
Opportunistic Small Cap Portfolio: Initial Shares (DSC)		424,669		422,162
Growth and Income Portfolio - Initial Shares (DGI)		56,596		157,317
Managed Tail Risk Fund II: Primary Shares (FVCA2P)		93,911		89,506
Quality Bond Fund II - Primary Shares (FQB)		304,627		728,687
Equity-Income Portfolio - Initial Class (FEIP)		4,533,704		5,755,013
High Income Portfolio - Initial Class (FHIP)		1,044,055		1,799,860
VIP Asset Manager Portfolio - Initial Class (FAMP)		612,683		1,737,097
VIP Energy Portfolio - Service Class 2 (FNRS2)		378,462		612,827
VIP Freedom Fund 2010 Portfolio - Service Class (FF10S)		44,483		44,455
VIP Freedom Fund 2020 Portfolio - Service Class (FF20S)		63,785		162,641
VIP Freedom Fund 2030 Portfolio - Service Class (FF30S)		166,119		219,732
VIP Growth Portfolio - Initial Class (FGP)		505,362		5,506,119
VIP High Income Portfolio - Initial Class R (FHIPR)		525,583		524,416
VIP Investment Grade Bond Portfolio - Service Class (FIGBS)		318,090		869,835
VIP Mid Cap Portfolio - Service Class (FMCS)		1,440,093		1,136,276
VIP Overseas Portfolio - Initial Class (FOP)		120,553		775,221
VIP Overseas Portfolio - Service Class R (FOSR)		587,887		925,755
VIP Value Strategies Portfolio - Service Class (FVSS)		270,158		688,891
Franklin Income Securities Fund - Class 2 (FTVIS2)		792,351		348,997
Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)		931,461		1,186,325
Franklin Small Cap Value Securities Fund - Class 1 (FTVSVI)		470,327		638,679
Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)		164,306		308,623
Templeton Foreign Securities Fund - Class 1 (TIF)		4,667		7,937
Templeton Foreign Securities Fund - Class 3 (TIF3)		588,976		322,847
Templeton Global Bond Securities Fund - Class 3 (FTVGI3)		743,939		1,551,853
VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)		113,722		27,774
Short Duration Bond Portfolio - I Class Shares (AMTB)		859,471		1,027,040
Balanced Portfolio - I Class Shares (AMBP)		2,502		2,299
Growth Portfolio - I Class Shares (AMTG)		101,631		237,972
Guardian Portfolio - I Class Shares (AMGP)		80,289		83,418
International Portfolio - S Class Shares (AMINS)		15,136		22,480
Mid-Cap Growth Portfolio - S Class Shares (AMMCGS)		12,698		324
Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)		70,505		296,484
Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class S (AMRS)		10,232		13,781
Small-Cap Growth Portfolio - S Class Shares (AMFAS)		65,269		34,354
Socially Responsive Portfolio - I Class Shares (AMSRS)		283,441		119,329
Capital Income Fund/VA - Non-Service Shares (OVMS)		177,064		660,964
Core Bond Fund/VA - Non-Service Shares (OVB)		520,028		607,177
Global Securities Fund/VA - Class 3 (OVGS3)		718,490		837,427
Global Securities Fund/VA - Non-Service Shares (OVGS)		231,164		1,843,574
Main Street Fund(R)/VA - Non-Service Shares (OVGI)		186,043		298,197
Main Street Small- & Mid-Cap Fund(R)/VA - Non-Service Shares (OVSC)		676,898		396,617
Discovery Mid Cap Growth Fund/VA - Non-Service Shares (OVAG)		42,013		183,085
Global Strategic Income Fund/VA: Non-service Shares (OVSB)		105,746		82,480
All Asset Portfolio - Administrative Class (PMVAAA)		137,342		357,926
Foreign Bond Portfolio (Unhedged) - Administrative Class (PMVFBA)		102,255		122,603
Low Duration Portfolio - Administrative Class (PMVLDA)		162,819		599,098
Total Return Portfolio - Administrative Class (PMVTRA)		718,553		863,591
Putnam VT Growth and Income Fund - Class IB (PVGIB)		108,647		105,976
Putnam VT International Equity Fund - Class IB (PVTIGB)		152,662		152,206
Putnam VT Voyager Fund - Class IB (PVTVB)		320,104		345,661
VI American Franchise Fund - Series I Shares (ACEG)		10,469		2,546
VI Value Opportunities Fund - Series I Shares (AVBVI)		892		13,936
Invesco - Invesco VI Mid Cap Core Equity Fund: Series I Shares (AVMCCI)		4,815		3,949
Variable Fund - Multi-Hedge Strategies (RVARS)		77,511		76,643
Health Sciences Portfolio - II (TRHS2)		2,046,974		1,058,862
Limited-Term Bond Portfolio - II (TRLT2)		21,286		118,869
VIP Trust - Unconstrained Emerging Markets Bond Fund - Initial Class (VWBF)		125,134		294,381
VIP Trust Emerging Markets Fund - Initial Class (VWEM)		552,096		1,178,455
VIP Trust Global Hard Assets Fund - Initial Class (VWHA)		606,443		1,631,093
Variable Insurance Portfolios - Asset Strategy (WRASP)		339,544		775,442
Variable Insurance Portfolios - High Income (WRHIP)		870,426		634,579
Variable Insurance Portfolios - Mid Cap Growth (WRMCG)		402,812		292,172
Advantage VT Discovery Fund (SVDF)		353,351		363,130
Advantage VT Opportunity Fund - Class 2 (SVOF)		59,277		542,293
Advantage VT Small Cap Growth Fund - Class 2 (WFVSCG)		210,115		110,428
	$	70,342,654	$	119,700,096

(8) Financial Highlights

The following tabular presentation is a summary of units, unit fair values, contract owners’ equity outstanding and contract expense rates for variable life contracts as of December 31, 2013, and the investment income ratio and total return for each of the periods in the five year period ended December 31, 2013. Total return and investment income ratio for periods with no ending contract owners’ equity were considered to be irrelevant, and therefore are not presented.

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)
2013		0.50%		441	$	11.420733	$	5,037		0.37%		11.75%
2012		0.50%		443		10.220316		4,528		0.14%		2.20%		5/1/2012
Global Allocation V.I. Fund - Class II (MLVGA2)
2013		0.00%		23,846		16.276845		388,138		1.06%		14.55%
2013		0.50%		178,617		15.901450		2,840,269		1.06%		13.98%
2013		0.80%		27,516		15.680379		431,461		1.06%		13.64%
2012		0.00%		24,810		14.209224		352,531		1.49%		10.14%
2012		0.50%		187,347		13.951062		2,613,690		1.49%		9.59%
2012		0.80%		32,501		13.798429		448,463		1.49%		9.26%
2011		0.00%		16,561		12.900807		213,650		2.10%		-3.63%
2011		0.50%		195,667		12.730054		2,490,851		2.10%		-4.11%
2011		0.80%		32,253		12.628697		407,313		2.10%		-4.39%
2010		0.00%		18,901		13.386468		253,018		1.39%		9.88%
2010		0.50%		186,041		13.275367		2,469,763		1.39%		9.33%
2010		0.80%		27,324		13.209155		360,927		1.39%		9.01%
2009		0.00%		11,131		12.182592		135,604		2.53%		21.83%		5/1/2009
2009		0.50%		65,483		12.142000		795,095		2.53%		21.42%		5/1/2009
2009		0.80%		9,208		12.117715		111,580		2.53%		21.18%		5/1/2009
VIP Small Cap Value Series: Service Class (DWVSVS)
2013		0.50%		4,856		12.300808		59,733		0.00%		23.01%		5/1/2013
2013		0.80%		3		12.276201		37		0.00%		22.76%		5/1/2013
Stock Index Fund, Inc. - Initial Shares (DSIF)
2013		0.00%		211,211		37.394784		7,898,190		1.83%		32.03%
2013		0.50%		592,197		49.676048		29,418,007		1.83%		31.37%
2013		0.80%		147,183		47.692575		7,019,536		1.83%		30.98%
2013		1.00%		140,164		14.119622		1,979,063		1.83%		30.71%
2013		1.30%		15		43.100987		647		1.83%		30.32%
2012		0.00%		232,518		28.323595		6,585,746		2.02%		15.74%
2012		0.50%		675,418		37.814121		25,540,338		2.02%		15.16%
2012		0.80%		177,439		36.413259		6,461,132		2.02%		14.81%
2012		1.00%		183,017		10.801888		1,976,929		2.02%		14.58%
2012		1.30%		1		33.072407		33		2.02%		14.24%
2011		0.00%		242,229		24.472264		5,927,892		1.81%		1.88%
2011		0.50%		801,833		32.836419		26,329,324		1.81%		1.37%
2011		0.80%		201,415		31.715171		6,387,911		1.81%		1.07%
2011		1.00%		192,956		9.427090		1,819,014		1.81%		0.87%
2011		1.30%		1		28.950048		29		1.81%		0.56%
2010		0.00%		283,297		24.021269		6,805,153		1.83%		14.84%
2010		0.50%		880,255		32.392494		28,513,655		1.83%		14.27%
2010		0.80%		231,031		31.380193		7,249,797		1.83%		13.92%
2010		1.00%		227,384		9.346157		2,125,167		1.83%		13.70%
2010		1.30%		1		28.787558		29		1.83%		13.36%
2009		0.00%		340,061		20.917605		7,113,262		2.10%		26.33%
2009		0.50%		917,137		28.348457		25,999,419		2.10%		25.70%
2009		0.80%		259,068		27.544961		7,136,018		2.10%		25.33%
2009		1.00%		262,346		8.220290		2,156,560		2.10%		25.08%
2009		1.30%		1		25.395713		25		2.10%		24.70%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Socially Responsible Growth Fund Inc - Initial Shares (DSRG)
2013		0.00%		17,865	$	29.509325	$	527,184		1.24%		34.34%
2013		0.50%		97,257		41.561726		4,042,169		1.24%		33.67%
2013		0.80%		62,939		39.901274		2,511,346		1.24%		33.27%
2013		1.00%		15,129		10.499772		158,851		1.24%		33.01%
2012		0.00%		19,449		21.965624		427,209		0.80%		11.97%
2012		0.50%		99,652		31.091907		3,098,371		0.80%		11.42%
2012		0.80%		72,243		29.939352		2,162,909		0.80%		11.08%
2012		1.00%		17,745		7.894104		140,081		0.80%		10.86%
2011		0.00%		21,010		19.616581		412,144		0.89%		0.90%
2011		0.50%		108,447		27.906384		3,026,364		0.89%		0.40%
2011		0.80%		82,025		26.952830		2,210,806		0.89%		0.10%
2011		1.00%		25,610		7.120901		182,366		0.89%		-0.10%
2010		0.00%		22,495		19.441383		437,334		0.87%		14.82%
2010		0.50%		113,089		27.795479		3,143,363		0.87%		14.24%
2010		0.80%		92,318		26.926201		2,485,773		0.87%		13.90%
2010		1.00%		17,088		7.128076		121,805		0.87%		13.67%
2009		0.00%		25,239		16.932768		427,366		0.97%		33.76%
2009		0.50%		124,121		24.330103		3,019,877		0.97%		33.09%
2009		0.80%		100,952		23.639940		2,386,499		0.97%		32.69%
2009		1.00%		17,511		6.270634		109,805		0.97%		32.42%
Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)
2013		0.50%		527		11.614308		6,121		0.08%		13.00%
2013		0.80%		959		11.556408		11,083		0.08%		12.66%
2012		0.50%		532		10.278168		5,468		0.00%		2.78%		5/1/2012
Van Kampen V.I. Mid Cap Growth Fund - Series I Shares (IVKMG1)
2013		0.00%		2,463		13.465170		33,165		0.41%		37.01%
2013		0.50%		10,788		13.352737		144,049		0.41%		36.33%
2013		0.80%		2,919		13.285742		38,781		0.41%		35.92%
2012		0.00%		2,945		9.827596		28,942		0.00%		-1.72%		4/27/2012
2012		0.50%		10,719		9.794347		104,986		0.00%		-2.06%		4/27/2012
2012		0.80%		3,722		9.774456		36,381		0.00%		-2.26%		4/27/2012
Janus Aspen Series - Balanced Portfolio - Service Shares (JABS)
2013		0.00%		6,681		24.571761		164,164		2.03%		19.80%
2013		0.50%		53,592		23.295722		1,248,464		2.03%		19.20%
2013		0.80%		4,254		22.562091		95,979		2.03%		18.85%
2012		0.00%		6,544		20.510267		134,219		2.45%		13.37%
2012		0.50%		66,020		19.542573		1,290,201		2.45%		12.81%
2012		0.80%		4,774		18.983974		90,629		2.45%		12.47%
2011		0.00%		3,796		18.090668		68,672		2.42%		1.35%
2011		0.50%		84,060		17.323728		1,456,233		2.42%		0.85%
2011		0.80%		5,460		16.879234		92,161		2.42%		0.55%
2010		0.00%		4,409		17.848881		78,696		2.53%		8.12%
2010		0.50%		63,353		17.177664		1,088,257		2.53%		7.58%
2010		0.80%		4,368		16.787086		73,326		2.53%		7.26%
2009		0.00%		4,468		16.508530		73,760		2.97%		25.58%
2009		0.50%		59,924		15.967283		956,823		2.97%		24.96%
2009		0.80%		4,174		15.651080		65,328		2.97%		24.58%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Janus Aspen Series - Forty Portfolio - Service Shares (JACAS)
2013		0.00%		36,834	$	16.209830	$	597,073		0.57%		30.89%
2013		0.50%		173,739		15.138919		2,630,221		0.57%		30.23%
2013		0.80%		35,260		14.530669		512,351		0.57%		29.84%
2013		1.00%		23,989		14.764693		354,190		0.57%		29.58%
2012		0.00%		43,000		12.384741		532,544		0.58%		23.86%
2012		0.50%		188,843		11.624473		2,195,200		0.58%		23.24%
2012		0.80%		45,537		11.190935		509,602		0.58%		22.87%
2012		1.00%		49,672		11.393919		565,959		0.58%		22.62%
2011		0.00%		61,290		9.999175		612,849		0.23%		-6.94%
2011		0.50%		204,085		9.432470		1,925,026		0.23%		-7.40%
2011		0.80%		51,667		9.108015		470,584		0.23%		-7.68%
2011		1.00%		37,117		9.291820		344,884		0.23%		-7.87%
2010		0.00%		64,750		10.745026		695,740		0.22%		6.48%
2010		0.50%		295,574		10.186784		3,010,948		0.22%		5.95%
2010		0.80%		60,260		9.865878		594,518		0.22%		5.63%
2010		1.00%		54,095		10.085087		545,553		0.22%		5.42%
2009		0.00%		75,049		10.091229		757,337		0.01%		46.01%
2009		0.50%		369,606		9.614858		3,553,709		0.01%		45.29%
2009		0.80%		66,045		9.339933		616,856		0.01%		44.85%
2009		1.00%		57,975		9.566552		554,621		0.01%		44.56%
Janus Aspen Series - Global Technology Portfolio - Service Shares (JAGTS)
2013		0.00%		43,908		8.720680		382,908		0.00%		35.39%
2013		0.50%		151,983		8.144356		1,237,804		0.00%		34.72%
2013		0.80%		16,143		7.817003		126,190		0.00%		34.31%
2013		1.00%		27,256		7.973959		217,338		0.00%		34.04%
2013		1.30%		11		7.300366		80		0.00%		33.64%
2012		0.00%		44,277		6.441181		285,196		0.00%		19.15%
2012		0.50%		155,921		6.045616		942,638		0.00%		18.55%
2012		0.80%		19,980		5.820037		116,284		0.00%		18.20%
2012		1.00%		24,515		5.948768		145,834		0.00%		17.96%
2012		1.30%		11		5.462609		60		0.00%		17.61%
2011		0.00%		59,113		5.405987		319,564		0.00%		-8.66%
2011		0.50%		83,027		5.099493		423,396		0.00%		-9.11%
2011		0.80%		13,985		4.923995		68,862		0.00%		-9.38%
2011		1.00%		16,819		5.043000		84,818		0.00%		-9.56%
2010		0.00%		64,558		5.918354		382,077		0.00%		24.40%
2010		0.50%		100,059		5.610750		561,406		0.00%		23.78%
2010		0.80%		17,459		5.433907		94,871		0.00%		23.41%
2010		1.00%		22,621		5.576370		126,143		0.00%		23.16%
2009		0.00%		72,366		4.757691		344,295		0.00%		56.90%
2009		0.50%		214,031		4.532982		970,199		0.00%		56.11%
2009		0.80%		27,209		4.403280		119,809		0.00%		55.65%
2009		1.00%		41,272		4.527754		186,869		0.00%		55.34%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Janus Aspen Series - Overseas Portfolio - Service Shares (JAIGS)
2013		0.00%		26,990	$	16.731743	$	451,590		3.03%		14.28%
2013		0.50%		206,980		15.626200		3,234,311		3.03%		13.71%
2013		0.80%		42,158		14.998307		632,299		3.03%		13.37%
2013		1.00%		25,422		16.050014		408,023		3.03%		13.14%
2012		0.00%		29,255		14.640868		428,319		0.85%		13.18%
2012		0.50%		248,458		13.741998		3,414,309		0.85%		12.62%
2012		0.80%		52,919		13.229420		700,088		0.85%		12.28%
2012		1.00%		27,845		14.185418		394,993		0.85%		12.05%
2011		0.00%		40,409		12.935745		522,721		0.40%		-32.34%
2011		0.50%		60,202		12.202589		734,620		0.40%		-32.67%
2011		0.80%		12,846		11.782833		151,362		0.40%		-32.88%
2011		1.00%		60,882		12.659656		770,745		0.40%		-33.01%
2010		0.00%		50,895		19.117945		973,008		0.55%		25.02%
2010		0.50%		68,702		18.124805		1,245,210		0.55%		24.39%
2010		0.80%		17,122		17.553917		300,558		0.55%		24.02%
2010		1.00%		102,765		18.897953		1,942,048		0.55%		23.77%
2009		0.00%		45,724		15.292392		699,229		2.82%		79.07%
2009		0.50%		85,296		14.570522		1,242,807		2.82%		78.18%
2009		0.80%		21,214		14.153914		300,261		2.82%		77.65%
2009		1.00%		100,674		15.268085		1,537,099		2.82%		77.29%
Investors Growth Stock Series - Initial Class (MIGIC)
2013		0.00%		622		24.074646		14,974		0.67%		30.29%
2013		0.50%		7,834		22.824329		178,806		0.67%		29.64%
2013		0.80%		1,011		22.105451		22,349		0.67%		29.25%
2012		0.00%		911		18.477561		16,833		0.46%		16.97%
2012		0.50%		8,376		17.605660		147,465		0.46%		16.39%
2012		0.80%		1,369		17.102335		23,413		0.46%		16.04%
2011		0.00%		884		15.796502		13,964		0.55%		0.58%
2011		0.50%		8,677		15.126718		131,255		0.55%		0.08%
2011		0.80%		1,613		14.738500		23,773		0.55%		-0.22%
2010		0.00%		897		15.705759		14,088		0.50%		12.47%
2010		0.50%		8,710		15.115038		131,652		0.50%		11.91%
2010		0.80%		1,611		14.771276		23,797		0.50%		11.58%
2009		0.00%		844		13.963862		11,785		0.67%		39.55%
2009		0.50%		15,623		13.505951		211,003		0.67%		38.86%
2009		0.80%		2,002		13.238396		26,503		0.67%		38.44%
Variable Insurance Trust - MFS New Discovery Series - Intital Class (MNDIC)
2013		0.50%		19,043		14.505988		276,238		0.00%		40.81%
2013		0.80%		2,531		14.433683		36,532		0.00%		40.39%
2012		0.50%		3,032		10.301526		31,234		0.00%		3.02%		5/1/2012
2012		0.80%		621		10.280941		6,384		0.00%		2.81%		5/1/2012
Value Series - Initial Class (MVFIC)
2013		0.00%		9,427		28.794051		271,442		1.22%		35.89%
2013		0.50%		54,778		27.298649		1,495,365		1.22%		35.21%
2013		0.80%		6,880		26.438908		181,900		1.22%		34.80%
2012		0.00%		7,952		21.189802		168,501		1.75%		16.26%
2012		0.50%		62,380		20.189915		1,259,447		1.75%		15.68%
2012		0.80%		7,555		19.612765		148,174		1.75%		15.33%
2011		0.00%		10,143		18.226114		184,867		1.48%		-0.30%
2011		0.50%		92,819		17.453308		1,619,999		1.48%		-0.80%
2011		0.80%		7,870		17.005440		133,833		1.48%		-1.10%
2010		0.00%		10,028		18.281385		183,326		1.49%		11.53%
2010		0.50%		94,055		17.593817		1,654,786		1.49%		10.98%
2010		0.80%		8,354		17.193742		143,637		1.49%		10.65%
2009		0.00%		9,300		16.390924		152,436		1.34%		22.71%
2009		0.50%		85,805		15.853449		1,360,305		1.34%		22.10%
2009		0.80%		8,888		15.539458		138,115		1.34%		21.74%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Core Plus Fixed Income Portfolio - Class I (MSVFI)
2013		0.00%		7,055	$	14.803414	$	104,438		3.97%		-0.32%
2013		0.50%		10,340		14.034591		145,118		3.97%		-0.81%
2013		0.80%		1,272		13.592553		17,290		3.97%		-1.11%
2012		0.00%		5,129		14.850467		76,168		5.75%		9.44%
2012		0.50%		16,286		14.149776		230,443		5.75%		8.89%
2012		0.80%		1,741		13.745300		23,931		5.75%		8.57%
2011		0.00%		5,195		13.569488		70,493		3.62%		5.65%
2011		0.50%		10,523		12.994186		136,738		3.62%		5.12%
2011		0.80%		2,121		12.660760		26,853		3.62%		4.81%
2010		0.00%		1,267		12.844145		16,274		6.62%		7.14%
2010		0.50%		11,622		12.361057		143,660		6.62%		6.61%
2010		0.80%		2,208		12.079951		26,673		6.62%		6.29%
2009		0.00%		1,129		11.987667		13,534		4.15%		9.64%
2009		0.50%		14,932		11.594606		173,131		4.15%		9.10%
2009		0.80%		2,681		11.364963		30,469		4.15%		8.77%
Emerging Markets Debt Portfolio - Class I (MSEM)
2013		0.00%		5,572		31.976955		178,176		3.76%		-8.75%
2013		0.50%		24,973		29.362442		733,268		3.76%		-9.20%
2013		0.80%		4,398		28.030943		123,280		3.76%		-9.48%
2013		1.00%		7,602		27.770198		211,109		3.76%		-9.66%
2012		0.00%		5,484		35.042942		192,175		2.88%		17.96%
2012		0.50%		33,503		32.339111		1,083,457		2.88%		17.37%
2012		0.80%		6,099		30.965468		188,858		2.88%		17.02%
2012		1.00%		11,005		30.738881		338,281		2.88%		16.78%
2011		0.00%		6,472		29.707233		192,265		3.16%		7.03%
2011		0.50%		34,581		27.552804		952,804		3.16%		6.50%
2011		0.80%		6,431		26.461901		170,176		3.16%		6.18%
2011		1.00%		9,433		26.320970		248,286		3.16%		5.97%
2010		0.00%		14,151		27.755292		392,765		3.44%		9.74%
2010		0.50%		49,756		25.871094		1,287,242		3.44%		9.20%
2010		0.80%		7,575		24.921222		188,778		3.44%		8.87%
2010		1.00%		10,356		24.837987		257,222		3.44%		8.65%
2009		0.00%		12,742		25.290832		322,256		8.37%		30.21%
2009		0.50%		47,197		23.692027		1,118,193		8.37%		29.56%
2009		0.80%		7,957		22.890693		182,141		8.37%		29.17%
2009		1.00%		10,375		22.859877		237,171		8.37%		28.91%
U.S. Real Estate Portfolio - Class I (MSVRE)
2013		0.00%		6,565		64.537567		423,689		1.21%		2.05%
2013		0.80%		7		61.979946		434		1.21%		1.24%
2013		1.00%		25,827		31.920385		824,408		1.21%		1.04%
2012		0.00%		7,751		63.238652		490,163		0.84%		15.84%
2012		0.80%		7		61.220395		429		0.84%		14.91%
2012		1.00%		43,683		31.592343		1,380,048		0.84%		14.68%
2011		0.00%		9,460		54.593503		516,455		0.97%		5.92%
2011		0.80%		7		53.276522		373		0.97%		5.08%
2011		1.00%		46,749		27.548115		1,287,847		0.97%		4.87%
2010		0.00%		12,054		51.542559		621,294		2.16%		29.96%
2010		0.80%		7		50.702174		355		2.16%		28.93%
2010		1.00%		32,923		26.269333		864,865		2.16%		28.67%
2009		0.00%		15,029		39.660220		596,053		5.11%		28.36%
2009		0.80%		7		39.326304		275		5.11%		27.33%
2009		1.00%		36,695		20.416080		749,168		5.11%		27.08%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)
2013		0.00%		54,402	$	21.699995	$	1,180,415		1.83%		31.90%
2013		0.50%		242,960		21.199628		5,150,662		1.83%		31.24%
2013		0.80%		42,091		20.904981		879,912		1.83%		30.85%
2013		1.00%		32,590		20.710842		674,966		1.83%		30.59%
2012		0.00%		64,944		16.452105		1,068,466		0.95%		14.66%
2012		0.50%		264,220		16.153244		4,268,010		0.95%		14.09%
2012		0.80%		52,739		15.976557		842,588		0.95%		13.75%
2012		1.00%		46,918		15.859841		744,112		0.95%		13.52%
2011		0.00%		75,881		14.348277		1,088,762		1.63%		0.65%
2011		0.50%		321,145		14.158408		4,546,902		1.63%		0.15%
2011		0.80%		64,614		14.045709		907,549		1.63%		-0.15%
2011		1.00%		52,825		13.971078		738,022		1.63%		-0.35%
2010		0.00%		96,307		14.256071		1,372,959		1.92%		13.46%
2010		0.50%		370,983		14.137798		5,244,883		1.92%		12.90%
2010		0.80%		73,607		14.067316		1,035,453		1.92%		12.56%
2010		1.00%		50,951		14.020534		714,360		1.92%		12.34%
2009		0.00%		929		12.564442		11,672		0.89%		25.64%		5/1/2009
2009		0.50%		552		12.522611		6,912		0.89%		25.23%		5/1/2009
2009		0.80%		4		12.497580		50		0.89%		24.98%		5/1/2009
American Funds NVIT Asset Allocation Fund - Class II (GVAAA2)
2013		0.00%		12,346		15.663250		193,378		1.34%		23.28%
2013		0.50%		94,608		15.074035		1,426,124		1.34%		22.67%
2013		0.80%		17,406		14.731250		256,412		1.34%		22.30%
2012		0.00%		5,562		12.704984		70,665		1.43%		15.72%
2012		0.50%		85,379		12.288311		1,049,164		1.43%		15.14%
2012		0.80%		21,712		12.044923		261,519		1.43%		14.79%
2011		0.00%		5,660		10.979437		62,144		1.43%		0.93%
2011		0.50%		70,814		10.672693		755,776		1.43%		0.43%
2011		0.80%		15,136		10.492803		158,819		1.43%		0.13%
2010		0.00%		6,984		10.878393		75,975		1.51%		12.02%
2010		0.50%		84,386		10.627363		896,801		1.51%		11.46%
2010		0.80%		14,478		10.479549		151,723		1.51%		11.13%
2009		0.00%		6,425		9.711378		62,396		0.08%		23.41%
2009		0.50%		92,676		9.534796		883,647		0.08%		22.80%
2009		0.80%		14,397		9.430409		135,770		0.08%		22.43%
American Funds NVIT Bond Fund - Class II (GVABD2)
2013		0.00%		424		12.571090		5,330		1.73%		-2.57%
2013		0.50%		66,168		12.098332		800,522		1.73%		-3.06%
2013		0.80%		4,585		11.823220		54,209		1.73%		-3.35%
2012		0.00%		3,749		12.903197		48,374		1.92%		4.97%
2012		0.50%		67,226		12.480192		838,993		1.92%		4.44%
2012		0.80%		5,234		12.233039		64,028		1.92%		4.13%
2011		0.00%		5,942		12.292646		73,043		2.31%		5.72%
2011		0.50%		89,002		11.949408		1,063,521		2.31%		5.20%
2011		0.80%		6,129		11.748041		72,004		2.31%		4.88%
2010		0.00%		6,068		11.627184		70,554		2.07%		5.99%
2010		0.50%		96,320		11.359007		1,094,100		2.07%		5.46%
2010		0.80%		8,644		11.201040		96,822		2.07%		5.15%
2009		0.00%		7,087		10.970085		77,745		0.35%		12.15%
2009		0.50%		122,112		10.770767		1,315,240		0.35%		11.59%
2009		0.80%		9,442		10.652882		100,585		0.35%		11.26%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
American Funds NVIT Global Growth Fund - Class II (GVAGG2)
2013		0.00%		6,010	$	17.080144	$	102,652		0.38%		28.64%
2013		0.50%		82,382		16.437630		1,354,165		0.38%		28.00%
2013		0.80%		13,274		16.063746		213,230		0.38%		27.62%
2012		0.00%		5,401		13.277399		71,711		0.80%		22.09%
2012		0.50%		93,461		12.841941		1,200,221		0.80%		21.48%
2012		0.80%		15,246		12.587521		191,909		0.80%		21.11%
2011		0.00%		6,655		10.875437		72,376		0.95%		-9.31%
2011		0.50%		137,757		10.571579		1,456,309		0.95%		-9.76%
2011		0.80%		13,570		10.393328		141,037		0.95%		-10.03%
2010		0.00%		7,375		11.991721		88,439		0.85%		11.30%
2010		0.50%		140,805		11.715019		1,649,533		0.85%		10.75%
2010		0.80%		18,883		11.552053		218,137		0.85%		10.41%
2009		0.00%		6,075		10.774250		65,454		0.00%		41.60%
2009		0.50%		118,760		10.578350		1,256,285		0.00%		40.90%
2009		0.80%		24,294		10.462500		254,176		0.00%		40.47%
American Funds NVIT Growth Fund - Class II (GVAGR2)
2013		0.00%		7,647		15.391784		117,701		0.33%		29.61%
2013		0.50%		108,301		14.812689		1,604,229		0.33%		28.96%
2013		0.80%		15,200		14.475737		220,031		0.33%		28.58%
2012		0.00%		7,791		11.875465		92,522		0.22%		17.40%
2012		0.50%		117,743		11.485910		1,352,386		0.22%		16.81%
2012		0.80%		16,640		11.258336		187,339		0.22%		16.46%
2011		0.00%		9,503		10.115272		96,125		0.27%		-4.69%
2011		0.50%		154,823		9.832585		1,522,310		0.27%		-5.16%
2011		0.80%		18,599		9.666797		179,793		0.27%		-5.45%
2010		0.00%		6,030		10.612804		63,995		0.15%		18.19%
2010		0.50%		187,568		10.367833		1,944,674		0.15%		17.60%
2010		0.80%		25,085		10.223579		256,458		0.15%		17.25%
2009		0.00%		5,838		8.979238		52,421		0.00%		38.78%
2009		0.50%		166,832		8.815893		1,470,773		0.00%		38.09%
2009		0.80%		25,748		8.719320		224,505		0.00%		37.68%
American Funds NVIT Growth-Income Fund - Class II (GVAGI2)
2013		0.00%		2,514		13.522509		33,996		1.03%		32.97%
2013		0.50%		67,370		13.079019		881,134		1.03%		32.31%
2013		0.80%		4,359		12.819916		55,882		1.03%		31.91%
2012		0.00%		2,914		10.169772		29,635		0.95%		17.06%
2012		0.50%		69,302		9.885503		685,085		0.95%		16.48%
2012		0.80%		3,797		9.718758		36,902		0.95%		16.13%
2011		0.00%		2,657		8.687464		23,083		0.99%		-2.24%
2011		0.50%		115,306		8.487048		978,608		0.99%		-2.72%
2011		0.80%		3,715		8.369014		31,091		0.99%		-3.01%
2010		0.00%		2,714		8.886120		24,117		0.91%		10.97%
2010		0.50%		114,596		8.724545		999,798		0.91%		10.42%
2010		0.80%		4,706		8.629010		40,608		0.91%		10.09%
2009		0.00%		2,815		8.007342		22,541		0.00%		30.69%
2009		0.50%		99,198		7.901119		783,775		0.00%		30.04%
2009		0.80%		3,815		7.838054		29,902		0.00%		29.65%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Federated NVIT High Income Bond Fund - Class I (HIBF)
2013		0.00%		2,808	$	21.657285	$	60,814		6.61%		7.07%
2013		0.50%		2,043		20.532668		41,948		6.61%		6.54%
2013		0.80%		384		19.886039		7,636		6.61%		6.22%
2012		0.00%		2,854		20.226839		57,727		6.54%		14.56%
2012		0.50%		2,123		19.272608		40,916		6.54%		13.98%
2012		0.80%		407		18.721734		7,620		6.54%		13.64%
2011		0.00%		4,766		17.656619		84,151		8.19%		3.82%
2011		0.50%		2,410		16.908181		40,749		8.19%		3.30%
2011		0.80%		570		16.474351		9,390		8.19%		2.99%
2010		0.00%		5,015		17.007403		85,292		8.44%		13.15%
2010		0.50%		3,245		16.367890		53,114		8.44%		12.59%
2010		0.80%		782		15.995730		12,509		8.44%		12.25%
2009		0.00%		5,085		15.030278		76,429		9.75%		46.00%
2009		0.50%		3,955		14.537578		57,496		9.75%		45.27%
2009		0.80%		1,534		14.249701		21,859		9.75%		44.84%
Federated NVIT High Income Bond Fund - Class III (HIBF3)
2013		0.00%		15,332		18.202636		279,083		6.11%		6.94%
2013		0.50%		60,057		17.431017		1,046,855		6.11%		6.40%
2013		0.80%		6,318		16.983857		107,304		6.11%		6.09%
2012		0.00%		14,697		17.021800		250,169		7.64%		14.71%
2012		0.50%		83,641		16.381922		1,370,200		7.64%		14.13%
2012		0.80%		6,493		16.009620		103,950		7.64%		13.79%
2011		0.00%		11,678		14.839228		173,293		8.22%		3.81%
2011		0.50%		116,173		14.353153		1,667,449		8.22%		3.29%
2011		0.80%		6,081		14.069186		85,555		8.22%		2.98%
2010		0.00%		13,586		14.295077		194,213		7.86%		13.16%
2010		0.50%		116,167		13.895948		1,614,251		7.86%		12.60%
2010		0.80%		5,805		13.661828		79,307		7.86%		12.26%
2009		0.00%		13,384		12.632602		169,075		11.37%		46.08%
2009		0.50%		250,028		12.341429		3,085,703		11.37%		45.35%
2009		0.80%		8,303		12.169932		101,047		11.37%		44.92%
NVIT Emerging Markets Fund - Class I (GEM)
2013		0.00%		754		27.100074		20,433		1.13%		0.75%
2013		0.50%		14,668		25.362948		372,024		1.13%		0.24%
2013		0.80%		1,886		24.374582		45,970		1.13%		-0.06%
2013		1.00%		17,361		23.382534		405,944		1.13%		-0.26%
2012		0.00%		869		26.899413		23,376		0.49%		17.22%
2012		0.50%		16,753		25.301371		423,874		0.49%		16.63%
2012		0.80%		2,308		24.388485		56,289		0.49%		16.28%
2012		1.00%		20,461		23.442718		479,661		0.49%		16.05%
2011		0.00%		985		22.948246		22,604		0.64%		-22.37%
2011		0.50%		19,654		21.693374		426,362		0.64%		-22.76%
2011		0.80%		2,961		20.973634		62,103		0.64%		-22.99%
2011		1.00%		22,453		20.200753		453,568		0.64%		-23.15%
2010		0.00%		3,906		29.562687		115,472		0.06%		16.17%
2010		0.50%		28,449		28.086103		799,022		0.06%		15.60%
2010		0.80%		3,689		27.235796		100,473		0.06%		15.25%
2010		1.00%		22,540		26.284637		592,456		0.06%		15.02%
2009		0.00%		4,227		25.446836		107,564		1.30%		63.31%
2009		0.50%		30,891		24.296820		750,553		1.30%		62.50%
2009		0.80%		4,456		23.631906		105,304		1.30%		62.01%
2009		1.00%		40,087		22.852194		916,076		1.30%		61.69%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Emerging Markets Fund - Class III (GEM3)
2013		0.00%		21,484	$	19.481483	$	418,540		1.16%		0.75%
2013		0.50%		89,902		18.655252		1,677,144		1.16%		0.25%
2013		0.80%		18,368		18.176470		333,865		1.16%		-0.05%
2012		0.00%		24,409		19.336082		471,974		0.45%		17.24%
2012		0.50%		93,486		18.608853		1,739,667		0.45%		16.65%
2012		0.80%		22,464		18.185755		408,525		0.45%		16.30%
2011		0.00%		28,288		16.493303		466,563		0.71%		-22.39%
2011		0.50%		121,016		15.952745		1,930,537		0.71%		-22.78%
2011		0.80%		26,612		15.636987		416,131		0.71%		-23.01%
2010		0.00%		30,788		21.252025		654,307		0.07%		16.21%
2010		0.50%		129,852		20.658460		2,682,542		0.07%		15.63%
2010		0.80%		32,166		20.310361		653,303		0.07%		15.29%
2009		0.00%		35,576		18.287102		650,582		1.28%		63.48%
2009		0.50%		129,200		17.865296		2,308,196		1.28%		62.67%
2009		0.80%		36,539		17.616947		643,706		1.28%		62.18%
NVIT International Equity Fund - Class I (GIG)
2013		0.00%		7,722		16.641029		128,502		0.54%		17.83%
2013		0.50%		29,091		15.574278		453,071		0.54%		17.24%
2013		0.80%		4,751		14.967429		71,110		0.54%		16.89%
2013		1.00%		1,823		14.653397		26,713		0.54%		16.66%
2012		0.00%		9,497		14.122631		134,123		0.85%		15.61%
2012		0.50%		30,028		13.283536		398,878		0.85%		15.03%
2012		0.80%		5,275		12.804278		67,543		0.85%		14.68%
2012		1.00%		1,136		12.560723		14,269		0.85%		14.46%
2011		0.00%		11,889		12.216006		145,236		1.21%		-9.76%
2011		0.50%		29,995		11.547898		346,379		1.21%		-10.21%
2011		0.80%		5,692		11.164772		63,550		1.21%		-10.48%
2011		1.00%		2,338		10.974373		25,658		1.21%		-10.66%
2010		0.00%		11,232		13.537857		152,057		0.86%		13.29%
2010		0.50%		38,649		12.861523		497,085		0.86%		12.73%
2010		0.80%		6,415		12.472134		80,009		0.86%		12.39%
2010		1.00%		6,894		12.283958		84,686		0.86%		12.16%
2009		0.00%		12,461		11.949736		148,906		1.12%		29.72%
2009		0.50%		54,336		11.409586		619,951		1.12%		29.08%
2009		0.80%		6,545		11.097348		72,632		1.12%		28.69%
2009		1.00%		17,782		10.951765		194,744		1.12%		28.43%
NVIT International Equity Fund - Class III (GIG3)
2013		0.00%		28,099		9.956257		279,761		0.53%		17.81%
2013		0.50%		315,286		9.678019		3,051,344		0.53%		17.23%
2013		0.80%		58,774		9.514826		559,224		0.53%		16.87%
2012		0.00%		31,591		8.450909		266,973		0.85%		15.58%
2012		0.50%		330,469		8.255888		2,728,315		0.85%		15.00%
2012		0.80%		72,099		8.141051		586,962		0.85%		14.65%
2011		0.00%		32,972		7.311920		241,089		1.26%		-9.76%
2011		0.50%		360,822		7.179063		2,590,364		1.26%		-10.21%
2011		0.80%		79,102		7.100526		561,666		1.26%		-10.48%
2010		0.00%		37,162		8.103077		301,127		0.98%		13.27%
2010		0.50%		354,843		7.995676		2,837,210		0.98%		12.70%
2010		0.80%		92,562		7.931942		734,196		0.98%		12.37%
2009		0.00%		44,927		7.153834		321,400		0.02%		29.67%
2009		0.50%		399,958		7.094353		2,837,443		0.02%		29.02%
2009		0.80%		100,960		7.058922		712,669		0.02%		28.64%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)
2013		0.00%		80,186	$	13.621982	$	1,092,292		1.04%		43.82%
2013		0.50%		889,883		13.241308		11,783,215		1.04%		43.10%
2013		0.80%		204,304		13.018003		2,659,630		1.04%		42.67%
2013		1.00%		4,637		12.871222		59,684		1.04%		42.39%
2012		0.00%		81,034		9.471654		767,526		1.47%		16.94%
2012		0.50%		929,767		9.253058		8,603,188		1.47%		16.36%
2012		0.80%		244,333		9.124314		2,229,371		1.47%		16.01%
2011		0.00%		88,502		8.099461		716,818		0.57%		-11.62%
2011		0.50%		1,006,367		7.952277		8,002,909		0.57%		-12.06%
2011		0.80%		281,765		7.865245		2,216,151		0.57%		-12.32%
2010		0.00%		101,840		9.164158		933,278		0.21%		15.61%
2010		0.50%		1,125,978		9.042668		10,181,845		0.21%		15.03%
2010		0.80%		315,664		8.970544		2,831,678		0.21%		14.69%
2009		0.00%		119,590		7.927018		947,992		0.18%		52.96%
2009		0.50%		1,236,830		7.861103		9,722,848		0.18%		52.20%
2009		0.80%		356,967		7.821802		2,792,125		0.18%		51.74%
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)
2013		0.50%		8,369		14.624455		122,392		0.94%		38.07%
2013		0.80%		967		14.377892		13,903		0.94%		37.66%
2012		0.50%		8,154		10.591756		86,365		0.59%		10.94%
2012		0.80%		540		10.444446		5,640		0.59%		10.61%
2011		0.50%		23,204		9.547148		221,532		0.78%		-3.66%
2011		0.80%		1,623		9.442714		15,326		0.78%		-3.95%
2010		0.50%		3,454		9.910000		34,229		1.85%		22.96%
2010		0.80%		163		9.830999		1,602		1.85%		22.60%
2009		0.50%		3,846		8.059273		30,996		0.44%		30.88%
2009		0.80%		2		8.018999		16		0.44%		30.49%
NVIT Cardinal Aggressive Fund - Class I (NVCRA1)
2013		0.50%		18,478		13.109417		242,236		1.50%		29.00%
2013		0.80%		7,976		12.888391		102,798		1.50%		28.62%
2012		0.50%		8,186		10.162172		83,188		1.08%		15.64%
2012		0.80%		7,584		10.020827		75,998		1.08%		15.30%
2011		0.50%		10,030		8.787510		88,139		2.01%		-6.65%
2011		0.80%		5,766		8.691366		50,114		2.01%		-6.93%
2010		0.50%		7,354		9.413816		69,229		0.36%		14.43%
2010		0.80%		3,331		9.338751		31,107		0.36%		14.09%
2009		0.50%		5,424		8.226880		44,623		0.88%		28.65%
2009		0.80%		5,678		8.185776		46,479		0.88%		28.27%
NVIT Cardinal Balanced Fund - Class I (NVCRB1)
2013		0.00%		417		13.351426		5,568		2.05%		14.72%
2013		0.50%		26,818		12.978480		348,057		2.05%		14.15%
2013		0.80%		6,218		12.759683		79,340		2.05%		13.80%
2012		0.00%		426		11.638522		4,958		1.48%		11.24%
2012		0.50%		12,209		11.370100		138,818		1.48%		10.68%
2012		0.80%		8,407		11.211995		94,259		1.48%		10.35%
2011		0.00%		437		10.462826		4,572		2.59%		-1.26%
2011		0.50%		3,104		10.272876		31,887		2.59%		-1.75%
2011		0.80%		10,388		10.160539		105,548		2.59%		-2.05%
2010		0.00%		447		10.596561		4,737		1.01%		10.46%
2010		0.50%		13,188		10.456211		137,897		1.01%		9.91%
2010		0.80%		8,559		10.372881		88,781		1.01%		9.58%
2009		0.00%		458		9.593104		4,394		2.36%		19.88%
2009		0.50%		17,112		9.513461		162,794		2.36%		19.28%
2009		0.80%		6,831		9.465975		64,662		2.36%		18.93%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)
2013		0.00%		463	$	13.546578	$	6,272		1.94%		21.44%
2013		0.50%		52,578		13.168123		692,354		1.94%		20.84%
2013		0.80%		8,110		12.946159		104,993		1.94%		20.48%
2012		0.00%		474		11.154725		5,287		1.51%		13.74%
2012		0.50%		39,272		10.897413		427,963		1.51%		13.17%
2012		0.80%		6,735		10.745888		72,374		1.51%		12.83%
2011		0.00%		485		9.807509		4,757		2.24%		-3.37%
2011		0.50%		34,007		9.629406		327,467		2.24%		-3.85%
2011		0.80%		7,281		9.524103		69,345		2.24%		-4.13%
2010		0.00%		497		10.149086		5,044		0.75%		12.46%
2010		0.50%		31,110		10.014640		311,555		0.75%		11.89%
2010		0.80%		7,218		9.934815		71,709		0.75%		11.56%
2009		0.00%		509		9.025006		4,594		1.80%		24.25%
2009		0.50%		27,157		8.950049		243,056		1.80%		23.63%
2009		0.80%		4,616		8.905361		41,107		1.80%		23.26%
NVIT Cardinal Conservative Fund - Class I (NVCCN1)
2013		0.00%		256		12.686282		3,248		1.85%		5.03%
2013		0.50%		118,087		12.331960		1,456,244		1.85%		4.50%
2013		0.80%		3,870		12.124095		46,920		1.85%		4.19%
2012		0.00%		262		12.078891		3,165		1.97%		7.58%
2012		0.50%		125,677		11.800384		1,483,037		1.97%		7.04%
2012		0.80%		2,499		11.636337		29,079		1.97%		6.72%
2011		0.00%		2,769		11.227964		31,090		2.16%		1.50%
2011		0.50%		7,054		11.024191		77,765		2.16%		0.99%
2011		0.80%		2,400		10.903683		26,169		2.16%		0.69%
2010		0.00%		2,051		11.062310		22,689		1.23%		6.87%
2010		0.50%		22,454		10.915841		245,104		1.23%		6.33%
2010		0.80%		2,943		10.828868		31,869		1.23%		6.01%
2009		0.00%		1,920		10.351566		19,875		3.09%		13.22%
2009		0.50%		11,740		10.265671		120,519		3.09%		12.66%
2009		0.80%		1,442		10.214479		14,729		3.09%		12.32%
NVIT Cardinal Moderate Fund - Class I (NVCMD1)
2013		0.00%		8,120		13.446120		109,182		1.72%		17.98%
2013		0.50%		61,511		13.070501		803,980		1.72%		17.39%
2013		0.80%		22,118		12.850167		284,220		1.72%		17.04%
2012		0.00%		8,286		11.397169		94,437		1.52%		12.45%
2012		0.50%		61,650		11.134287		686,429		1.52%		11.89%
2012		0.80%		22,093		10.979484		242,570		1.52%		11.55%
2011		0.00%		8,440		10.135390		85,543		2.45%		-2.25%
2011		0.50%		61,673		9.951354		613,730		2.45%		-2.73%
2011		0.80%		21,926		9.842542		215,808		2.45%		-3.02%
2010		0.00%		8,618		10.368348		89,354		0.95%		11.42%
2010		0.50%		75,415		10.230997		771,571		0.95%		10.87%
2010		0.80%		21,238		10.149462		215,554		0.95%		10.54%
2009		0.00%		7,297		9.305236		67,900		2.08%		22.00%
2009		0.50%		69,130		9.227958		637,929		2.08%		21.40%
2009		0.80%		18,764		9.181897		172,289		2.08%		21.03%
NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)
2013		0.50%		37,730		13.117335		494,917		1.59%		23.74%
2013		0.80%		13,960		12.896172		180,031		1.59%		23.36%
2012		0.50%		28,065		10.601144		297,521		1.37%		14.10%
2012		0.80%		18,386		10.453700		192,202		1.37%		13.75%
2011		0.50%		18,827		9.291441		174,930		2.58%		-5.05%
2011		0.80%		20,521		9.189793		188,584		2.58%		-5.33%
2010		0.50%		11,208		9.785569		109,677		0.83%		12.93%
2010		0.80%		17,780		9.707544		172,600		0.83%		12.59%
2009		0.50%		7,130		8.664997		61,781		1.62%		26.06%
2009		0.80%		14,506		8.621717		125,067		1.62%		25.68%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)
2013		0.00%		12,117	$	13.169178	$	159,571		1.72%		11.33%
2013		0.50%		10,274		12.801334		131,521		1.72%		10.78%
2013		0.80%		3,671		12.585576		46,202		1.72%		10.44%
2012		0.00%		12,345		11.828808		146,027		1.57%		10.13%
2012		0.50%		13,367		11.556019		154,469		1.57%		9.58%
2012		0.80%		4,247		11.395367		48,396		1.57%		9.25%
2011		0.00%		12,584		10.740467		135,158		2.72%		-0.28%
2011		0.50%		15,078		10.545498		159,005		2.72%		-0.78%
2011		0.80%		5,377		10.430205		56,083		2.72%		-1.07%
2010		0.00%		12,829		10.770841		138,179		1.16%		9.31%
2010		0.50%		29,763		10.628200		316,327		1.16%		8.77%
2010		0.80%		5,352		10.543510		56,429		1.16%		8.44%
2009		0.00%		11,907		9.853071		117,321		3.06%		17.64%
2009		0.50%		29,224		9.771284		285,556		3.06%		17.05%
2009		0.80%		6,000		9.722537		58,335		3.06%		16.70%
NVIT Core Bond Fund - Class I (NVCBD1)
2013		0.00%		632		13.048920		8,247		2.58%		-1.91%
2013		0.50%		24,060		12.684452		305,188		2.58%		-2.40%
2013		0.80%		2,795		12.470693		34,856		2.58%		-2.69%
2013		1.00%		17,988		12.330187		221,795		2.58%		-2.89%
2012		0.00%		5,364		13.303193		71,358		3.26%		7.75%
2012		0.50%		15,991		12.996442		207,826		3.26%		7.22%
2012		0.80%		1,564		12.815824		20,044		3.26%		6.89%
2012		1.00%		13,058		12.696813		165,795		3.26%		6.68%
2011		0.00%		10,606		12.345910		130,941		3.44%		6.59%
2011		0.50%		18,261		12.121845		221,357		3.44%		6.06%
2011		0.80%		1,634		11.989375		19,591		3.44%		5.75%
2011		1.00%		10,223		11.901878		121,673		3.44%		5.54%
2010		0.00%		5,920		11.582155		68,566		3.10%		7.06%
2010		0.50%		11,379		11.428775		130,048		3.10%		6.52%
2010		0.80%		1,336		11.337733		15,147		3.10%		6.20%
2010		1.00%		6,040		11.277452		68,116		3.10%		5.99%
2009		0.00%		5,380		10.818752		58,205		5.39%		8.78%
2009		0.50%		4,328		10.728983		46,435		5.39%		8.24%
2009		0.80%		872		10.675484		9,309		5.39%		7.92%
2009		1.00%		2,052		10.639980		21,833		5.39%		7.70%
NVIT Core Plus Bond Fund - Class I (NVLCP1)
2013		0.50%		10,722		13.709338		146,992		2.06%		-2.26%
2013		0.80%		1,157		13.478328		15,594		2.06%		-2.56%
2012		0.50%		13,334		14.026661		187,031		2.43%		6.84%
2012		0.80%		1,636		13.831749		22,629		2.43%		6.52%
2011		0.50%		10,094		13.128149		132,516		2.91%		5.84%
2011		0.80%		828		12.984709		10,751		2.91%		5.53%
2010		0.50%		3,988		12.403480		49,465		2.97%		7.81%
2010		0.80%		1,345		12.304709		16,550		2.97%		7.49%
2009		0.50%		1,483		11.504485		17,061		5.73%		16.04%
2009		0.80%		190		11.447139		2,175		5.73%		15.70%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Nationwide Fund - Class I (TRF)
2013		0.00%		101,369	$	31.037588	$	3,146,249		1.32%		31.10%
2013		0.50%		369,380		66.194760		24,451,020		1.32%		30.45%
2013		0.80%		411,985		52.049003		21,443,409		1.32%		30.06%
2013		1.00%		85,828		13.982782		1,200,114		1.32%		29.80%
2012		0.00%		117,116		23.674524		2,772,666		1.41%		14.21%
2012		0.50%		378,810		50.744233		19,222,423		1.41%		13.64%
2012		0.80%		486,478		40.020036		19,468,867		1.41%		13.30%
2012		1.00%		98,516		10.772753		1,061,289		1.41%		13.08%
2011		0.00%		142,775		20.728147		2,959,461		1.14%		0.53%
2011		0.50%		412,184		44.652135		18,404,896		1.14%		0.03%
2011		0.80%		542,718		35.321483		19,169,605		1.14%		-0.27%
2011		1.00%		108,508		9.527060		1,033,762		1.14%		-0.47%
2011		1.30%		3		34.329664		103		1.14%		-0.77%
2010		0.00%		168,440		20.619110		3,473,083		1.02%		13.45%
2010		0.50%		444,744		44.639451		19,853,128		1.02%		12.88%
2010		0.80%		599,906		35.417325		21,247,066		1.02%		12.55%
2010		1.00%		113,338		9.571998		1,084,871		1.02%		12.32%
2009		0.00%		179,695		18.174730		3,265,908		1.35%		26.10%
2009		0.50%		502,814		39.544533		19,883,545		1.35%		25.47%
2009		0.80%		653,320		31.469156		20,559,429		1.35%		25.09%
2009		1.00%		128,057		8.521969		1,091,298		1.35%		24.84%
NVIT Government Bond Fund - Class I (GBF)
2013		0.00%		51,599		24.701818		1,274,589		1.81%		-4.06%
2013		0.50%		88,492		41.930997		3,710,558		1.81%		-4.53%
2013		0.80%		37,197		31.058943		1,155,300		1.81%		-4.82%
2013		1.00%		38,465		16.211842		623,589		1.81%		-5.01%
2012		0.00%		66,264		25.745883		1,706,025		2.14%		3.06%
2012		0.50%		112,707		43.922389		4,950,361		2.14%		2.54%
2012		0.80%		44,154		32.631769		1,440,823		2.14%		2.23%
2012		1.00%		75,338		17.066917		1,285,787		2.14%		2.03%
2011		0.00%		71,393		24.982190		1,783,553		2.93%		7.25%
2011		0.50%		134,783		42.833702		5,773,255		2.93%		6.72%
2011		0.80%		52,003		31.918804		1,659,874		2.93%		6.40%
2011		1.00%		101,054		16.727524		1,690,383		2.93%		6.19%
2010		0.00%		78,091		23.292436		1,818,930		2.93%		4.78%
2010		0.50%		150,926		40.136055		6,057,574		2.93%		4.26%
2010		0.80%		60,113		29.998155		1,803,279		2.93%		3.95%
2010		1.00%		114,512		15.752353		1,803,833		2.93%		3.74%
2009		0.00%		90,071		22.229504		2,002,234		3.32%		2.69%
2009		0.50%		154,092		38.496449		5,931,995		3.32%		2.18%
2009		0.80%		67,098		28.859126		1,936,390		3.32%		1.87%
2009		1.00%		132,506		15.184570		2,012,047		3.32%		1.67%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
American Century NVIT Growth Fund - Class I (CAF)
2013		0.00%		48,008	$	22.149716	$	1,063,364		0.67%		29.74%
2013		0.50%		236,432		31.865009		7,533,908		0.67%		29.09%
2013		0.80%		162,440		30.656078		4,979,773		0.67%		28.71%
2013		1.00%		52,842		9.284963		490,636		0.67%		28.45%
2013		1.30%		21		27.505011		578		0.67%		28.06%
2012		0.00%		58,712		17.072452		1,002,358		0.55%		14.02%
2012		0.50%		248,603		24.683788		6,136,464		0.55%		13.45%
2012		0.80%		189,859		23.818612		4,522,178		0.55%		13.11%
2012		1.00%		54,423		7.228500		393,397		0.55%		12.88%
2011		0.00%		71,801		14.973016		1,075,078		0.58%		-0.69%
2011		0.50%		266,244		21.757113		5,792,701		0.58%		-1.18%
2011		0.80%		211,204		21.057718		4,447,474		0.58%		-1.48%
2011		1.00%		57,501		6.403442		368,204		0.58%		-1.68%
2010		0.00%		72,600		15.077159		1,094,602		0.63%		19.25%
2010		0.50%		281,742		22.018021		6,203,401		0.63%		18.65%
2010		0.80%		237,543		21.374125		5,077,274		0.63%		18.30%
2010		1.00%		40,018		6.512646		260,623		0.63%		18.06%
2009		0.00%		80,041		12.643680		1,012,013		0.56%		33.47%
2009		0.50%		310,833		18.556714		5,768,039		0.56%		32.81%
2009		0.80%		257,511		18.068103		4,652,735		0.56%		32.41%
2009		1.00%		34,260		5.516318		188,989		0.56%		32.14%
NVIT International Index Fund - Class VI (GVIX6)
2013		0.00%		13,690		11.841416		162,109		2.52%		21.27%
2013		0.50%		29,809		11.395830		339,698		2.52%		20.67%
2013		0.80%		539		11.136536		6,003		2.52%		20.31%
2012		0.00%		13,989		9.764428		136,595		2.66%		18.29%
2012		0.50%		44,277		9.444081		418,156		2.66%		17.70%
2012		0.80%		104		9.256914		963		2.66%		17.35%
2011		0.00%		17,130		8.254444		141,399		2.90%		-12.72%
2011		0.50%		45,497		8.023727		365,056		2.90%		-13.15%
2011		0.80%		102		7.888392		805		2.90%		-13.41%
2010		0.00%		19,297		9.456969		182,491		2.13%		7.54%
2010		0.50%		39,561		9.238694		365,492		2.13%		7.01%
2010		0.80%		639		9.110128		5,821		2.13%		6.69%
2009		0.00%		21,817		8.793694		191,852		2.63%		28.62%
2009		0.50%		38,936		8.633738		336,163		2.63%		27.98%
2009		0.80%		697		8.539143		5,952		2.63%		27.59%
NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)
2013		0.00%		3,770		21.847269		82,364		1.68%		27.25%
2013		0.50%		92,423		20.582038		1,902,254		1.68%		26.61%
2013		0.80%		19,777		19.858311		392,738		1.68%		26.23%
2013		1.00%		797		19.389984		15,454		1.68%		25.98%
2012		0.00%		3,629		17.169227		62,307		1.52%		15.90%
2012		0.50%		88,197		16.255930		1,433,724		1.52%		15.32%
2012		0.80%		23,100		15.731416		363,396		1.52%		14.98%
2012		1.00%		805		15.391139		12,390		1.52%		14.75%
2011		0.00%		3,697		14.813448		54,765		1.80%		-3.93%
2011		0.50%		95,067		14.095927		1,340,057		1.80%		-4.41%
2011		0.80%		27,902		13.682175		381,760		1.80%		-4.70%
2011		1.00%		820		13.413080		10,999		1.80%		-4.89%
2010		0.00%		13,121		15.419576		202,320		1.64%		14.63%
2010		0.50%		99,024		14.746126		1,460,220		1.64%		14.06%
2010		0.80%		37,157		14.356213		533,434		1.64%		13.72%
2010		1.00%		834		14.101999		11,761		1.64%		13.49%
2009		0.00%		5,371		13.451838		72,250		1.15%		27.21%
2009		0.50%		118,079		12.928735		1,526,612		1.15%		26.57%
2009		0.80%		36,824		12.624661		464,891		1.15%		26.19%
2009		1.00%		852		12.425900		10,587		1.15%		25.94%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)
2013		0.50%		5,308	$	15.630658	$	82,968		1.71%		12.86%
2013		0.80%		1,587		15.413373		24,461		1.71%		12.52%
2012		0.50%		4,538		13.849830		62,851		1.85%		8.84%
2012		0.80%		2,262		13.698322		30,986		1.85%		8.51%
2011		0.50%		4,133		12.725028		52,593		2.03%		0.38%
2011		0.80%		1,419		12.623728		17,913		2.03%		0.08%
2010		0.50%		17,228		12.676549		218,392		1.09%		9.27%
2010		0.80%		516		12.613336		6,508		1.09%		8.94%
2009		0.50%		3,613		11.601491		41,916		0.61%		16.01%		5/1/2009
NVIT Investor Destinations Capital Appreciation Fund - Class II (NVDCA2)
2013		0.00%		248		18.167791		4,506		1.88%		19.49%
2013		0.50%		4,501		17.748867		79,888		1.88%		18.90%
2013		0.80%		2,886		17.502158		50,511		1.88%		18.54%
2012		0.50%		3,118		14.927778		46,545		1.64%		11.69%
2012		0.80%		2,912		14.764482		42,994		1.64%		11.35%
2011		0.50%		3,601		13.365506		48,129		1.77%		-1.43%
2011		0.80%		2,553		13.259099		33,850		1.77%		-1.72%
2010		0.80%		271		13.491613		3,656		1.63%		11.14%
2009		0.50%		1,619		12.163837		19,693		1.57%		21.64%		5/1/2009
2009		0.80%		51		12.139517		619		1.57%		21.40%		5/1/2009
NVIT Investor Destinations Conservative Fund - Class II (GVIDC)
2013		0.00%		5,998		16.160183		96,929		1.58%		4.83%
2013		0.50%		14,238		15.224446		216,766		1.58%		4.31%
2013		0.80%		10,338		14.689194		151,857		1.58%		4.00%
2013		1.00%		7,843		14.342829		112,491		1.58%		3.79%
2012		0.00%		9,213		15.415374		142,022		1.31%		5.18%
2012		0.50%		21,627		14.595544		315,658		1.31%		4.65%
2012		0.80%		11,313		14.124710		159,793		1.31%		4.34%
2012		1.00%		6,951		13.819265		96,058		1.31%		4.13%
2011		0.00%		6,588		14.656785		96,559		2.41%		2.93%
2011		0.50%		41,779		13.947019		582,693		2.41%		2.42%
2011		0.80%		13,467		13.537768		182,313		2.41%		2.11%
2011		1.00%		6,801		13.271591		90,260		2.41%		1.91%
2010		0.00%		8,555		14.239553		121,819		2.28%		5.89%
2010		0.50%		39,855		13.617720		542,734		2.28%		5.36%
2010		0.80%		13,404		13.257742		177,707		2.28%		5.05%
2010		1.00%		6,820		13.023020		88,817		2.28%		4.84%
2009		0.00%		9,384		13.447193		126,188		1.79%		9.08%
2009		0.50%		70,008		12.924398		904,811		1.79%		8.54%
2009		0.80%		15,117		12.620548		190,785		1.79%		8.22%
2009		1.00%		2,044		12.421919		25,390		1.79%		8.00%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Investor Destinations Moderate Fund - Class II (GVIDM)
2013		0.00%		80,435	$	19.530736	$	1,570,955		1.61%		16.63%
2013		0.50%		105,749		18.399703		1,945,750		1.61%		16.05%
2013		0.80%		51,634		17.752817		916,649		1.61%		15.70%
2013		1.00%		19,722		17.334221		341,866		1.61%		15.47%
2012		0.00%		77,643		16.746328		1,300,235		1.58%		10.81%
2012		0.50%		112,911		15.855596		1,790,271		1.58%		10.26%
2012		0.80%		70,907		15.344089		1,088,003		1.58%		9.93%
2012		1.00%		21,064		15.012265		316,218		1.58%		9.71%
2011		0.00%		109,350		15.112388		1,652,540		2.13%		-0.04%
2011		0.50%		137,944		14.380454		1,983,697		2.13%		-0.54%
2011		0.80%		75,950		13.958439		1,060,143		2.13%		-0.84%
2011		1.00%		18,271		13.683980		250,020		2.13%		-1.03%
2010		0.00%		90,987		15.118520		1,375,589		1.97%		10.91%
2010		0.50%		150,866		14.458239		2,181,257		1.97%		10.36%
2010		0.80%		84,980		14.076015		1,196,180		1.97%		10.03%
2010		1.00%		17,093		13.826815		236,342		1.97%		9.81%
2009		0.00%		92,413		13.630962		1,259,678		1.55%		19.14%
2009		0.50%		181,042		13.100931		2,371,819		1.55%		18.54%
2009		0.80%		87,135		12.792885		1,114,708		1.55%		18.19%
2009		1.00%		17,020		12.591533		214,308		1.55%		17.95%
NVIT Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)
2013		0.00%		33,364		21.066347		702,858		1.63%		22.38%
2013		0.50%		165,735		19.846371		3,289,238		1.63%		21.77%
2013		0.80%		51,703		19.148562		990,038		1.63%		21.40%
2013		1.00%		19,992		18.697056		373,792		1.63%		21.16%
2012		0.00%		38,658		17.214305		665,471		1.56%		13.76%
2012		0.50%		166,722		16.298646		2,717,343		1.56%		13.19%
2012		0.80%		67,326		15.772806		1,061,920		1.56%		12.85%
2012		1.00%		35,372		15.431703		545,850		1.56%		12.63%
2011		0.00%		37,793		15.132127		571,888		2.01%		-2.13%
2011		0.50%		204,010		14.399187		2,937,578		2.01%		-2.61%
2011		0.80%		81,321		13.976593		1,136,591		2.01%		-2.90%
2011		1.00%		35,914		13.701766		492,085		2.01%		-3.10%
2010		0.00%		46,787		15.460895		723,369		1.87%		12.83%
2010		0.50%		218,019		14.785639		3,223,550		1.87%		12.27%
2010		0.80%		89,682		14.394739		1,290,949		1.87%		11.94%
2010		1.00%		36,475		14.139877		515,752		1.87%		11.71%
2009		0.00%		50,619		13.702388		693,601		1.32%		24.39%
2009		0.50%		233,130		13.169552		3,070,218		1.32%		23.77%
2009		0.80%		96,148		12.859856		1,236,449		1.32%		23.40%
2009		1.00%		37,075		12.657436		469,274		1.32%		23.15%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)
2013		0.00%		6,944	$	18.129719	$	125,893		1.73%		10.49%
2013		0.50%		155,987		17.079857		2,664,236		1.73%		9.94%
2013		0.80%		12,071		16.479401		198,923		1.73%		9.61%
2013		1.00%		19,910		16.090841		320,369		1.73%		9.40%
2012		0.00%		12,744		16.407771		209,101		1.74%		8.04%
2012		0.50%		154,565		15.535096		2,401,182		1.74%		7.50%
2012		0.80%		13,202		15.033966		198,478		1.74%		7.18%
2012		1.00%		12,163		14.708875		178,904		1.74%		6.96%
2011		0.00%		18,920		15.186765		287,334		2.27%		2.06%
2011		0.50%		146,362		14.451279		2,115,118		2.27%		1.55%
2011		0.80%		11,647		14.027229		163,375		2.27%		1.25%
2011		1.00%		13,029		13.751450		179,168		2.27%		1.05%
2010		0.00%		16,332		14.879939		243,019		2.08%		8.52%
2010		0.50%		155,524		14.230110		2,213,124		2.08%		7.98%
2010		0.80%		15,867		13.853943		219,821		2.08%		7.65%
2010		1.00%		28,219		13.608694		384,024		2.08%		7.44%
2009		0.00%		16,706		13.712188		229,076		1.78%		14.56%
2009		0.50%		37,901		13.179057		499,499		1.78%		13.99%
2009		0.80%		119,770		12.869197		1,541,344		1.78%		13.65%
2009		1.00%		23,982		12.666675		303,772		1.78%		13.42%
NVIT Mid Cap Index Fund - Class I (MCIF)
2013		0.00%		21,008		30.319093		636,944		1.14%		33.05%
2013		0.50%		153,576		28.316283		4,348,701		1.14%		32.38%
2013		0.80%		21,551		27.178692		585,728		1.14%		31.99%
2013		1.00%		25,852		24.104406		623,147		1.14%		31.72%
2012		0.00%		18,906		22.788209		430,834		1.01%		17.47%
2012		0.50%		165,403		21.389461		3,537,881		1.01%		16.89%
2012		0.80%		24,568		20.591788		505,899		1.01%		16.53%
2012		1.00%		25,753		18.299103		471,257		1.01%		16.30%
2011		0.00%		26,862		19.398700		521,088		0.77%		-2.54%
2011		0.50%		190,987		18.299463		3,494,960		0.77%		-3.03%
2011		0.80%		26,979		17.670078		476,721		0.77%		-3.32%
2011		1.00%		33,507		15.734191		527,206		0.77%		-3.51%
2010		0.00%		33,688		19.905073		670,562		1.24%		26.20%
2010		0.50%		197,467		18.871107		3,726,421		1.24%		25.57%
2010		0.80%		29,893		18.276712		546,346		1.24%		25.20%
2010		1.00%		27,986		16.306885		456,364		1.24%		24.95%
2009		0.00%		35,437		15.772556		558,932		0.98%		36.76%
2009		0.50%		223,509		15.028105		3,358,917		0.98%		36.07%
2009		0.80%		34,428		14.598417		502,594		0.98%		35.67%
2009		1.00%		21,651		13.051063		282,569		0.98%		35.39%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Money Market Fund - Class I (SAM)
2013		0.00%		185,079	$	15.554998	$	2,856,986		0.00%
2013		0.50%		522,730		20.443941		10,686,661		0.00%		-0.50%
2013		0.80%		135,933		16.031513		2,179,212		0.00%		-0.80%
2013		1.00%		265,650		10.855923		2,883,876		0.00%		-1.00%
2013		1.30%		886		15.030270		13,317		0.00%		-1.30%
2012		0.00%		202,588		15.554998		3,151,256		0.00%
2012		0.50%		646,978		20.546671		13,293,244		0.00%		-0.50%
2012		0.80%		158,342		16.160793		2,558,932		0.00%		-0.80%
2012		1.00%		284,606		10.965576		3,120,869		0.00%		-1.00%
2012		1.30%		1,044		15.228234		15,898		0.00%		-1.30%
2011		0.00%		276,659		15.554998		4,303,430		0.00%		0.00%
2011		0.50%		656,999		20.650204		13,567,163		0.00%		-0.50%
2011		0.80%		172,798		16.291469		2,815,133		0.00%		-0.80%
2011		1.00%		314,552		11.076639		3,484,179		0.00%		-1.00%
2011		1.30%		428		15.429352		6,604		0.00%		-1.30%
2010		0.00%		229,241		15.554987		3,565,841		0.00%		0.00%
2010		0.50%		519,077		20.753682		10,772,759		0.00%		-0.50%
2010		0.80%		116,670		16.422479		1,916,011		0.00%		-0.80%
2010		1.00%		304,520		11.188204		3,407,032		0.00%		-1.00%
2010		1.30%		250		15.632002		3,908		0.00%		-1.30%
2009		0.00%		293,432		15.554967		4,564,325		0.05%		0.04%
2009		0.50%		625,978		20.857934		13,056,608		0.05%		-0.46%
2009		0.80%		140,909		16.554897		2,332,734		0.05%		-0.76%
2009		1.00%		317,630		11.301196		3,589,599		0.05%		-0.96%
2009		1.30%		268		15.837870		4,245		0.05%		-1.26%
NVIT Multi-Manager International Growth Fund - Class III (NVMIG3)
2013		0.00%		16,184		12.166606		196,904		1.24%		21.34%
2013		0.50%		299,439		11.826670		3,541,366		1.24%		20.74%
2013		0.80%		61,094		11.627292		710,358		1.24%		20.37%
2013		1.00%		8,856		18.812997		166,608		1.24%		20.13%
2012		0.00%		18,564		10.026765		186,137		0.58%		15.78%
2012		0.50%		325,197		9.795449		3,185,451		0.58%		15.20%
2012		0.80%		70,859		9.659227		684,443		0.58%		14.85%
2012		1.00%		9,316		15.659940		145,888		0.58%		14.62%
2011		0.00%		20,098		8.660251		174,054		1.30%		-9.37%
2011		0.50%		372,824		8.502961		3,170,108		1.30%		-9.82%
2011		0.80%		83,371		8.409948		701,146		1.30%		-10.09%
2011		1.00%		9,785		13.661922		133,682		1.30%		-10.27%
2010		0.00%		23,527		9.555175		224,805		0.75%		14.04%
2010		0.50%		425,581		9.428595		4,012,631		0.75%		13.47%
2010		0.80%		93,168		9.353449		871,442		0.75%		13.13%
2009		0.00%		32,180		8.379106		269,640		0.84%		36.46%
2009		0.50%		513,260		8.309496		4,264,932		0.84%		35.78%
2009		0.80%		104,749		8.268003		866,065		0.84%		35.37%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Multi-Manager International Value Fund - Class I (GVDIVI)
2013		0.00%		302	$	20.957356	$	6,329		2.32%		21.41%
2013		0.50%		6,629		19.868606		131,709		2.32%		20.80%
2013		0.80%		894		19.242679		17,203		2.32%		20.44%
2012		0.00%		308		17.262313		5,317		0.39%		17.29%
2012		0.50%		7,162		16.447511		117,797		0.39%		16.71%
2012		0.80%		1,142		15.977207		18,246		0.39%		16.36%
2011		0.00%		315		14.717057		4,636		1.51%		-16.24%
2011		0.50%		7,720		14.092846		108,797		1.51%		-16.66%
2011		0.80%		1,263		13.731085		17,342		1.51%		-16.91%
2010		0.00%		321		17.570720		5,640		2.16%		6.19%
2010		0.50%		14,066		16.909786		237,853		2.16%		5.66%
2010		0.80%		1,735		16.525211		28,671		2.16%		5.34%
2009		0.00%		955		16.546611		15,802		2.11%		29.86%
2009		0.50%		16,368		16.003937		261,952		2.11%		29.21%
2009		0.80%		2,462		15.686900		38,621		2.11%		28.82%
NVIT Multi-Manager International Value Fund - Class III (GVDIV3)
2013		0.00%		8,619		12.775201		110,109		2.31%		21.42%
2013		0.50%		25,764		12.233332		315,180		2.31%		20.82%
2013		0.80%		5,724		11.919240		68,226		2.31%		20.45%
2012		0.00%		8,328		10.521355		87,622		0.38%		17.24%
2012		0.50%		29,494		10.125555		298,643		0.38%		16.65%
2012		0.80%		7,133		9.895215		70,583		0.38%		16.30%
2011		0.00%		8,096		8.974574		72,658		1.70%		-16.11%
2011		0.50%		37,989		8.680344		329,758		1.70%		-16.53%
2011		0.80%		7,957		8.508430		67,702		1.70%		-16.78%
2010		0.00%		9,164		10.698362		98,040		2.04%		6.11%
2010		0.50%		61,361		10.399457		638,121		2.04%		5.58%
2010		0.80%		8,310		10.224128		84,963		2.04%		5.27%
2009		0.00%		9,171		10.082162		92,464		2.14%		29.84%
2009		0.50%		87,232		9.849548		859,196		2.14%		29.19%
2009		0.80%		9,816		9.712549		95,338		2.14%		28.80%
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
2013		0.00%		23,427		14.522943		340,229		0.82%		34.74%
2013		0.50%		102,442		14.117223		1,446,197		0.82%		34.07%
2013		0.80%		13,122		13.879225		182,123		0.82%		33.67%
2013		1.00%		8,311		13.722812		114,050		0.82%		33.40%
2012		0.00%		26,317		10.778503		283,658		0.46%		16.35%
2012		0.50%		89,102		10.529858		938,231		0.46%		15.77%
2012		0.80%		18,210		10.383415		189,082		0.46%		15.43%
2012		1.00%		8,944		10.286933		92,006		0.46%		15.19%
2011		0.00%		29,306		9.263525		271,477		0.01%		-2.91%
2011		0.50%		109,085		9.095279		992,159		0.01%		-3.39%
2011		0.80%		21,034		8.995790		189,217		0.01%		-3.68%
2011		1.00%		16,222		8.930079		144,864		0.01%		-3.87%
2010		0.00%		31,606		9.540808		301,547		0.07%		15.51%
2010		0.50%		128,373		9.414378		1,208,552		0.07%		14.93%
2010		0.80%		23,761		9.339315		221,911		0.07%		14.59%
2010		1.00%		20,763		9.289615		192,880		0.07%		14.36%
2009		0.00%		4,410		8.259762		36,426		0.86%		29.78%
2009		0.50%		26,167		8.191112		214,337		0.86%		29.13%
2009		0.80%		7,925		8.150192		64,590		0.86%		28.74%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Multi-Manager Large Cap Value Fund - Class I (NVMLV1)
2013		0.00%		12,985	$	13.777622	$	178,902		1.39%		35.44%
2013		0.50%		89,433		13.392610		1,197,741		1.39%		34.76%
2013		0.80%		9,504		13.166780		125,137		1.39%		34.36%
2013		1.00%		1,159		15.231413		17,653		1.39%		34.09%
2012		0.00%		15,807		10.172659		160,799		1.33%		17.81%
2012		0.50%		91,309		9.937905		907,420		1.33%		17.22%
2012		0.80%		12,168		9.799657		119,242		1.33%		16.87%
2012		1.00%		1,255		11.358976		14,256		1.33%		16.64%
2011		0.00%		34,148		8.634796		294,861		1.08%		-5.83%
2011		0.50%		96,838		8.477900		820,983		1.08%		-6.30%
2011		0.80%		13,969		8.385144		117,132		1.08%		-6.58%
2011		1.00%		1,262		9.738891		12,290		1.08%		-6.77%
2010		0.00%		35,838		9.169345		328,611		0.84%		13.05%
2010		0.50%		101,632		9.047788		919,545		0.84%		12.48%
2010		0.80%		16,970		8.975644		152,317		0.84%		12.15%
2010		1.00%		12,610		10.445550		131,718		0.84%		4.46%		4/30/2010
2009		0.00%		6,514		8.111157		52,836		1.29%		27.59%
2009		0.50%		44,311		8.043706		356,425		1.29%		26.96%
2009		0.80%		6,036		8.003520		48,309		1.29%		26.58%
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
2013		0.00%		83,954		15.479098		1,299,532		0.00%		38.94%
2013		0.50%		1,503,890		15.046656		22,628,515		0.00%		38.25%
2013		0.80%		518,987		14.792956		7,677,352		0.00%		37.84%
2013		1.00%		9,079		14.626229		132,792		0.00%		37.56%
2012		0.00%		87,228		11.140525		971,766		0.00%		14.90%
2012		0.50%		1,587,943		10.883523		17,282,414		0.00%		14.33%
2012		0.80%		642,181		10.732136		6,891,974		0.00%		13.99%
2012		1.00%		5,625		10.632396		59,807		0.00%		13.76%
2011		0.00%		94,806		9.695515		919,193		0.00%		-4.23%
2011		0.50%		1,813,315		9.519437		17,261,738		0.00%		-4.71%
2011		0.80%		731,063		9.415283		6,883,165		0.00%		-4.99%
2011		1.00%		9,617		9.346508		89,885		0.00%		-5.18%
2010		0.00%		101,497		10.123676		1,027,523		0.00%		26.82%
2010		0.50%		1,981,319		9.989544		19,792,473		0.00%		26.19%
2010		0.80%		841,312		9.909902		8,337,319		0.00%		25.81%
2010		1.00%		10,423		9.857166		102,741		0.00%		25.56%
2009		0.00%		115,105		7.982859		918,867		0.00%		27.12%
2009		0.50%		2,272,347		7.916522		17,989,085		0.00%		26.49%
2009		0.80%		940,788		7.876972		7,410,561		0.00%		26.11%
2009		1.00%		8,003		7.850719		62,829		0.00%		25.86%
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
2013		0.00%		43,783		16.263836		712,080		1.18%		35.68%
2013		0.50%		1,088,971		15.809412		17,215,991		1.18%		35.00%
2013		0.80%		325,582		15.542892		5,060,486		1.18%		34.60%
2013		1.00%		5,611		15.367716		86,228		1.18%		34.33%
2012		0.00%		50,732		11.987208		608,135		1.11%		16.35%
2012		0.50%		1,112,518		11.710634		13,028,291		1.11%		15.76%
2012		0.80%		422,872		11.547772		4,883,229		1.11%		15.42%
2012		1.00%		2,361		11.440460		27,011		1.11%		15.19%
2011		0.00%		61,520		10.303092		633,846		0.81%		-2.32%
2011		0.50%		1,245,189		10.115953		12,596,273		0.81%		-2.81%
2011		0.80%		479,786		10.005304		4,800,405		0.81%		-3.10%
2011		1.00%		2,127		9.932212		21,126		0.81%		-3.29%
2010		0.00%		65,042		10.547920		686,058		1.34%		19.63%
2010		0.50%		1,352,323		10.408149		14,075,179		1.34%		19.04%
2010		0.80%		547,009		10.325176		5,647,964		1.34%		18.68%
2010		1.00%		5,316		10.270231		54,597		1.34%		18.44%
2009		0.00%		70,473		8.817001		621,361		0.64%		30.47%
2009		0.50%		1,512,728		8.743730		13,226,885		0.64%		29.82%
2009		0.80%		609,962		8.700057		5,306,704		0.64%		29.43%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Multi-Manager Small Cap Growth Fund - Class I (SCGF)
2013		0.00%		19,859	$	12.544579	$	249,123		0.00%		44.29%
2013		0.50%		69,680		11.715687		816,349		0.00%		43.57%
2013		0.80%		16,277		11.244880		183,033		0.00%		43.14%
2013		1.00%		70,416		10.955026		771,409		0.00%		42.85%
2012		0.00%		22,570		8.694087		196,226		0.00%		13.44%
2012		0.50%		77,757		8.160266		634,518		0.00%		12.87%
2012		0.80%		15,425		7.855846		121,176		0.00%		12.53%
2012		1.00%		78,406		7.668653		601,268		0.00%		12.31%
2011		0.00%		12,333		7.664195		94,523		0.00%		-0.65%
2011		0.50%		93,597		7.229749		676,683		0.00%		-1.14%
2011		0.80%		18,453		6.981005		128,820		0.00%		-1.44%
2011		1.00%		123,708		6.828337		844,720		0.00%		-1.63%
2010		0.00%		9,144		7.714194		70,539		0.00%		25.45%
2010		0.50%		96,747		7.313318		707,542		0.00%		24.82%
2010		0.80%		17,050		7.082879		120,763		0.00%		24.45%
2010		1.00%		69,271		6.941831		480,868		0.00%		24.20%
2009		0.00%		16,609		6.149352		102,135		0.00%		27.46%
2009		0.50%		85,760		5.858978		502,466		0.00%		26.83%
2009		0.80%		17,399		5.691397		99,025		0.00%		26.45%
2009		1.00%		19,372		5.589217		108,274		0.00%		26.19%
NVIT Multi-Manager Small Cap Value Fund - Class I (SCVF)
2013		0.00%		33,572		41.190400		1,382,844		0.82%		40.40%
2013		0.50%		98,427		38.086314		3,748,722		0.82%		39.70%
2013		0.80%		16,716		36.337305		607,414		0.82%		39.28%
2013		1.00%		14,817		28.593267		423,666		0.82%		39.00%
2013		1.30%		43		33.599044		1,445		0.82%		38.59%
2012		0.00%		37,412		29.338040		1,097,595		0.81%		20.44%
2012		0.50%		108,270		27.262957		2,951,760		0.81%		19.84%
2012		0.80%		21,125		26.089050		551,131		0.81%		19.48%
2012		1.00%		13,893		20.570124		285,781		0.81%		19.24%
2011		0.00%		43,501		24.358089		1,059,601		0.46%		-5.07%
2011		0.50%		121,991		22.748905		2,775,162		0.46%		-5.54%
2011		0.80%		23,301		21.834904		508,775		0.46%		-5.83%
2011		1.00%		20,207		17.250436		348,580		0.46%		-6.01%
2010		0.00%		45,999		25.658983		1,180,288		0.59%		26.60%
2010		0.50%		141,538		24.083789		3,408,771		0.59%		25.97%
2010		0.80%		28,308		23.185502		656,335		0.59%		25.60%
2010		1.00%		23,882		18.354081		438,332		0.59%		25.35%
2009		0.00%		53,851		20.267143		1,091,406		0.58%		26.22%
2009		0.50%		157,034		19.118176		3,002,204		0.58%		25.59%
2009		0.80%		32,510		18.460331		600,145		0.58%		25.21%
2009		1.00%		25,324		14.642760		370,813		0.58%		24.96%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Multi-Manager Small Company Fund - Class I (SCF)
2013		0.00%		46,240	$	52.204120	$	2,413,919		0.14%		40.91%
2013		0.50%		219,955		62.948145		13,845,759		0.14%		40.20%
2013		0.80%		58,555		60.248434		3,527,847		0.14%		39.78%
2013		1.00%		19,379		22.955484		444,854		0.14%		39.51%
2012		0.00%		52,840		37.048983		1,957,668		0.15%		15.50%
2012		0.50%		237,355		44.897637		10,656,679		0.15%		14.93%
2012		0.80%		70,077		43.101045		3,020,392		0.15%		14.58%
2012		1.00%		22,830		16.454928		375,666		0.15%		14.35%
2011		0.00%		58,368		32.076366		1,872,233		0.53%		-5.56%
2011		0.50%		267,316		39.066862		10,443,197		0.53%		-6.03%
2011		0.80%		80,173		37.616516		3,015,829		0.53%		-6.31%
2011		1.00%		26,131		14.389885		376,022		0.53%		-6.50%
2010		0.00%		67,976		33.964289		2,308,757		0.29%		25.32%
2010		0.50%		306,407		41.573237		12,738,331		0.29%		24.69%
2010		0.80%		91,283		40.149925		3,665,006		0.29%		24.32%
2010		1.00%		27,683		15.389709		426,033		0.29%		24.07%
2009		0.00%		77,583		27.102331		2,102,680		0.27%		34.70%
2009		0.50%		340,812		33.340069		11,362,696		0.27%		34.03%
2009		0.80%		103,817		32.295248		3,352,796		0.27%		33.63%
2009		1.00%		29,328		12.403715		363,776		0.27%		33.36%
NVIT Multi-Sector Bond Fund - Class I (MSBF)
2013		0.00%		8,647		20.909005		180,800		2.58%		-1.12%
2013		0.50%		43,819		19.528307		855,711		2.58%		-1.62%
2013		0.80%		3,985		18.743985		74,695		2.58%		-1.91%
2013		1.00%		20,238		17.873021		361,714		2.58%		-2.11%
2012		0.00%		14,422		21.146740		304,978		2.55%		12.25%
2012		0.50%		60,062		19.849367		1,192,193		2.55%		11.69%
2012		0.80%		6,494		19.109390		124,096		2.55%		11.35%
2012		1.00%		31,800		18.257940		580,602		2.55%		11.13%
2011		0.00%		13,494		18.839019		254,214		4.57%		5.55%
2011		0.50%		62,879		17.772057		1,117,489		4.57%		5.02%
2011		0.80%		7,241		17.161065		124,263		4.57%		4.71%
2011		1.00%		33,462		16.429316		549,758		4.57%		4.50%
2010		0.00%		13,008		17.848904		232,179		5.92%		10.59%
2010		0.50%		47,334		16.922173		800,994		5.92%		10.04%
2010		0.80%		7,395		16.389349		121,199		5.92%		9.71%
2010		1.00%		20,023		15.721825		314,798		5.92%		9.49%
2009		0.00%		12,961		16.140130		209,192		10.24%		24.38%
2009		0.50%		63,508		15.378776		976,675		10.24%		23.76%
2009		0.80%		8,435		14.939280		126,013		10.24%		23.39%
2009		1.00%		12,411		14.359495		178,216		10.24%		23.14%
NVIT Short Term Bond Fund - Class II (NVSTB2)
2013		0.00%		1,221		11.450912		13,982		1.47%		0.11%
2013		0.50%		48,316		11.131047		537,808		1.47%		-0.39%
2013		0.80%		2,944		10.943432		32,217		1.47%		-0.69%
2012		0.00%		1,240		11.438838		14,184		1.41%		3.52%
2012		0.50%		42,525		11.175048		475,219		1.41%		3.01%
2012		0.80%		3,662		11.019701		40,354		1.41%		2.70%
2011		0.00%		1,279		11.049485		14,132		1.61%		1.30%
2011		0.50%		35,719		10.848926		387,513		1.61%		0.79%
2011		0.80%		4,432		10.730325		47,557		1.61%		0.49%
2010		0.00%		2,211		10.907906		24,117		1.12%		2.42%
2010		0.50%		41,583		10.763451		447,577		1.12%		1.91%
2010		0.80%		4,742		10.677685		50,634		1.12%		1.60%
2009		0.00%		3,355		10.650192		35,731		2.72%		7.11%
2009		0.50%		177,387		10.561833		1,873,532		2.72%		6.58%
2009		0.80%		7,304		10.509149		76,759		2.72%		6.26%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Large Cap Growth Fund - Class I (NVOLG1)
2013		0.00%		287,453	$	22.538634	$	6,467,799		0.78%		36.70%
2013		0.50%		1,711,729		22.019016		37,690,588		0.78%		36.02%
2013		0.80%		350,527		21.712988		7,610,989		0.78%		35.61%
2013		1.00%		108,862		21.511366		2,341,770		0.78%		35.34%
2013		1.30%		2		21.212389		42		0.78%		34.94%
2012		0.00%		338,602		16.487341		5,582,647		0.69%		18.68%
2012		0.50%		1,901,644		16.187910		30,783,642		0.69%		18.09%
2012		0.80%		439,107		16.010853		7,030,478		0.69%		17.74%
2012		1.00%		137,473		15.893913		2,184,984		0.69%		17.50%
2012		1.30%		2		15.720064		31		0.69%		17.15%
2011		0.00%		383,225		13.891692		5,323,644		0.67%		-2.23%
2011		0.50%		2,143,935		13.707902		29,388,851		0.67%		-2.72%
2011		0.80%		511,317		13.598787		6,953,291		0.67%		-3.01%
2011		1.00%		199,807		13.526537		2,702,697		0.67%		-3.20%
2011		1.30%		2		13.418859		27		0.67%		-3.49%
2010		0.00%		485,396		14.209081		6,897,031		0.06%		8.80%
2010		0.50%		2,560,843		14.091225		36,085,415		0.06%		8.26%
2010		0.80%		584,895		14.020971		8,200,796		0.06%		7.93%
2010		1.00%		242,433		13.974338		3,387,841		0.06%		7.72%
2010		1.30%		2		13.904670		28		0.06%		7.40%
2009		0.80%		91		12.990421		1,182		0.07%		29.90%		5/1/2009
2009		1.00%		393		12.973105		5,098		0.07%		29.73%		5/1/2009
Templeton NVIT International Value Fund - Class III (NVTIV3)
2013		0.00%		65		17.430436		1,133		2.50%		20.09%
2013		0.50%		9,731		17.028404		165,703		2.50%		19.50%
2013		0.80%		722		16.791684		12,124		2.50%		19.14%
2012		0.00%		1,527		14.513999		22,163		3.34%		19.56%
2012		0.50%		4,570		14.250281		65,124		3.34%		18.97%
2012		0.80%		537		14.094377		7,569		3.34%		18.61%
2011		0.00%		176		12.139096		2,136		2.58%		-12.43%
2011		0.50%		2,840		11.978398		34,019		2.58%		-12.86%
2011		0.80%		968		11.883015		11,503		2.58%		-13.12%
2010		0.50%		2,751		13.746466		37,817		2.73%		5.82%
2010		0.80%		565		13.677945		7,728		2.73%		5.50%
2009		0.50%		868		12.990964		11,276		0.77%		29.91%		5/1/2009
2009		0.80%		106		12.965005		1,374		0.77%		29.65%		5/1/2009
Invesco NVIT Comstock Value Fund - Class I (EIF)
2013		0.00%		422		25.891306		10,926		0.00%		35.64%
2013		0.50%		26,632		24.546498		653,722		0.00%		34.96%
2013		0.80%		3,761		23.773344		89,412		0.00%		34.56%
2012		0.00%		4,266		19.088364		81,431		1.07%		18.46%
2012		0.50%		19,373		18.187529		352,347		1.07%		17.87%
2012		0.80%		3,872		17.667550		68,409		1.07%		17.52%
2011		0.00%		3,018		16.113167		48,630		1.30%		-2.32%
2011		0.50%		31,295		15.429859		482,877		1.30%		-2.81%
2011		0.80%		5,701		15.033857		85,708		1.30%		-3.10%
2010		0.00%		3,786		16.496681		62,456		1.54%		15.77%
2010		0.50%		37,441		15.876158		594,419		1.54%		15.19%
2010		0.80%		6,522		15.515100		101,189		1.54%		14.85%
2009		0.00%		4,308		14.249315		61,386		1.11%		28.55%
2009		0.50%		33,022		13.781994		455,109		1.11%		27.91%
2009		0.80%		6,110		13.508987		82,540		1.11%		27.52%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Real Estate Fund - Class I (NVRE1)
2013		0.00%		63,337	$	12.221280	$	774,059		1.43%		3.05%
2013		0.50%		476,506		11.879551		5,660,677		1.43%		2.53%
2013		0.80%		112,015		11.679110		1,308,236		1.43%		2.22%
2013		1.00%		17,988		11.547381		207,714		1.43%		2.02%
2012		0.00%		63,489		11.860098		752,986		1.01%		15.79%
2012		0.50%		541,058		11.586264		6,268,841		1.01%		15.21%
2012		0.80%		138,767		11.424998		1,585,413		1.01%		14.86%
2012		1.00%		23,747		11.318740		268,786		1.01%		14.63%
2011		0.00%		67,393		10.243095		690,313		0.86%		6.50%
2011		0.50%		676,021		10.056852		6,798,643		0.86%		5.97%
2011		0.80%		152,282		9.946733		1,514,708		0.86%		5.65%
2011		1.00%		23,921		9.873993		236,196		0.86%		5.44%
2010		0.00%		60,720		9.617905		583,999		1.91%		30.18%
2010		0.50%		723,190		9.490250		6,863,254		1.91%		29.53%
2010		0.80%		178,017		9.414469		1,675,936		1.91%		29.14%
2010		1.00%		17,013		9.364280		159,314		1.91%		28.89%
2009		0.00%		65,646		7.388147		485,002		2.18%		30.84%
2009		0.50%		805,068		7.326555		5,898,375		2.18%		30.18%
2009		0.80%		203,153		7.289844		1,480,954		2.18%		29.79%
2009		1.00%		198		7.265473		1,439		2.18%		29.53%
NVIT Small Cap Index Fund Class II (NVSIX2)
2013		0.50%		3,474		12.637682		43,903		1.91%		26.38%		5/1/2013
2013		0.80%		717		12.612416		9,043		1.91%		26.12%		5/1/2013
NVIT S&P 500 Index Fund Class I (GVEX1)
2013		0.50%		81,634		11.796496		962,995		2.98%		17.96%		5/1/2013
2013		0.80%		1,118		11.772890		13,162		2.98%		17.73%		5/1/2013
TOPS Managed Risk Growth ETF Portfolio - Class 3 (NOTG3)
2013		0.80%		223		10.853777		2,420		1.00%		8.54%		5/1/2013
VPS Growth and Income Portfolio - Class A (ALVGIA)
2013		0.00%		1,123		24.539482		27,558		1.00%		34.96%
2013		0.50%		28,579		23.264880		664,887		1.00%		34.29%
2013		0.80%		3,190		22.532174		71,878		1.00%		33.89%
2012		0.00%		1,144		18.182276		20,801		1.48%		17.52%
2012		0.50%		13,210		17.324203		228,853		1.48%		16.94%
2012		0.80%		2,673		16.828957		44,984		1.48%		16.59%
2011		0.00%		1,168		15.470995		18,070		1.34%		6.32%
2011		0.50%		15,467		14.814923		229,142		1.34%		5.79%
2011		0.80%		2,845		14.434748		41,067		1.34%		5.47%
2010		0.00%		579		14.551780		8,425		0.00%		13.09%
2010		0.50%		13,218		14.004383		185,110		0.00%		12.53%
2010		0.80%		3,483		13.685906		47,668		0.00%		12.19%
2009		0.00%		6,768		12.867191		87,085		4.22%		20.82%
2009		0.50%		22,233		12.445189		276,694		4.22%		20.22%
2009		0.80%		4,088		12.198669		49,868		4.22%		19.86%
VPS Small/Mid Cap Value Portfolio - Class A (ALVSVA)
2013		0.00%		2,802		35.921574		100,652		0.61%		38.06%
2013		0.50%		25,928		34.055816		882,999		0.61%		37.37%
2013		0.80%		4,748		32.983198		156,604		0.61%		36.96%
2012		0.00%		3,380		26.019263		87,945		0.48%		18.75%
2012		0.50%		30,458		24.791368		755,095		0.48%		18.15%
2012		0.80%		6,050		24.082624		145,700		0.48%		17.80%
2011		0.00%		7,367		21.911401		161,421		0.52%		-8.39%
2011		0.50%		33,867		20.982250		710,606		0.52%		-8.85%
2011		0.80%		6,262		20.443783		128,019		0.52%		-9.12%
2010		0.00%		5,927		23.918151		141,763		0.49%		26.91%
2010		0.50%		44,590		23.018557		1,026,397		0.49%		26.28%
2010		0.80%		7,246		22.495125		163,000		0.49%		25.90%
2009		0.00%		3,930		18.846934		74,068		1.08%		42.86%
2009		0.50%		29,568		18.228862		538,991		1.08%		42.14%
2009		0.80%		4,957		17.867799		88,571		1.08%		41.72%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VP Balanced Fund - Class I (ACVB)
2013		0.00%		15,025	$	30.797107	$	462,727		1.61%		17.43%
2013		0.50%		83,445		37.428588		3,123,229		1.61%		16.84%
2013		0.80%		19,379		36.009620		697,830		1.61%		16.49%
2013		1.00%		55,383		16.411564		908,922		1.61%		16.26%
2013		1.30%		2		32.309012		65		1.61%		15.91%
2012		0.00%		15,313		26.226727		401,610		2.08%		11.80%
2012		0.50%		78,313		32.033774		2,508,661		2.08%		11.24%
2012		0.80%		23,027		30.911891		711,808		2.08%		10.91%
2012		1.00%		50,790		14.116446		716,974		2.08%		10.69%
2012		1.30%		6		27.874115		167		2.08%		10.35%
2011		0.00%		17,832		23.458367		418,310		1.88%		5.33%
2011		0.50%		70,885		28.796383		2,041,232		1.88%		4.81%
2011		0.80%		24,908		27.871548		694,225		1.88%		4.49%
2011		1.00%		50,131		12.753560		639,349		1.88%		4.29%
2011		1.30%		1		25.258809		25		1.88%		3.97%
2010		0.00%		20,936		22.270938		466,264		1.89%		11.64%
2010		0.50%		75,406		27.475433		2,071,813		1.89%		11.08%
2010		0.80%		27,822		26.672710		742,088		1.89%		10.75%
2010		1.00%		53,697		12.229364		656,680		1.89%		10.53%
2010		1.30%		1		24.293201		24		1.89%		10.19%
2009		0.00%		22,461		19.949729		448,091		5.53%		15.48%
2009		0.50%		86,103		24.735048		2,129,762		5.53%		14.91%
2009		0.80%		29,897		24.084460		720,053		5.53%		14.56%
2009		1.00%		55,234		11.064741		611,150		5.53%		14.33%
2009		1.30%		1		22.045707		22		5.53%		13.99%
VP Capital Appreciation Fund - Class I (ACVCA)
2013		0.00%		10,970		32.634394		357,999		0.00%		30.92%
2013		0.50%		490		78.645463		38,536		0.00%		30.27%
2013		0.80%		590		47.879398		28,249		0.00%		29.88%
2013		1.00%		88,819		15.404738		1,368,233		0.00%		29.62%
2013		1.30%		51		46.376355		2,365		0.00%		29.23%
2012		0.00%		11,127		24.926638		277,359		0.00%		16.00%
2012		0.50%		492		60.371528		29,703		0.00%		15.42%
2012		0.80%		545		36.864587		20,091		0.00%		15.08%
2012		1.00%		95,454		11.884565		1,134,429		0.00%		14.84%
2012		1.30%		27		35.886221		969		0.00%		14.50%
2011		0.00%		11,225		21.488190		241,205		0.00%		-6.51%
2011		0.50%		495		52.305178		25,891		0.00%		-6.97%
2011		0.80%		461		32.035223		14,768		0.00%		-7.25%
2011		1.00%		98,038		10.348382		1,014,535		0.00%		-7.44%
2011		1.30%		3		31.341703		94		0.00%		-7.71%
2010		0.00%		13,217		22.983587		303,774		0.00%		31.29%
2010		0.50%		498		56.225138		28,000		0.00%		30.64%
2010		0.80%		486		34.539358		16,786		0.00%		30.25%
2010		1.00%		108,509		11.179591		1,213,086		0.00%		29.99%
2009		0.00%		13,421		17.505890		234,947		1.33%		37.07%
2009		0.50%		504		43.039250		21,692		1.33%		36.39%
2009		0.80%		465		26.518517		12,331		1.33%		35.98%
2009		1.00%		128,037		8.600594		1,101,194		1.33%		35.71%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VP Income & Growth Fund - Class I (ACVIG)
2013		0.00%		19,481	$	21.585591	$	420,509		2.26%		35.82%
2013		0.50%		69,689		19.959048		1,390,926		2.26%		35.14%
2013		0.80%		8,198		19.042593		156,111		2.26%		34.74%
2013		1.00%		42,265		15.252150		644,632		2.26%		34.47%
2012		0.00%		19,436		15.892761		308,892		2.03%		14.74%
2012		0.50%		67,927		14.768780		1,003,199		2.03%		14.17%
2012		0.80%		8,532		14.132942		120,582		2.03%		13.83%
2012		1.00%		8,072		11.342396		91,556		2.03%		13.60%
2011		0.00%		24,364		13.850615		337,456		1.54%		3.11%
2011		0.50%		91,748		12.935713		1,186,826		1.54%		2.60%
2011		0.80%		10,171		12.416062		126,284		1.54%		2.29%
2011		1.00%		8,410		9.984507		83,970		1.54%		2.09%
2010		0.00%		25,652		13.432615		344,573		1.54%		14.15%
2010		0.50%		101,037		12.608071		1,273,882		1.54%		13.58%
2010		0.80%		12,313		12.137849		149,453		1.54%		13.24%
2010		1.00%		7,003		9.780279		68,491		1.54%		13.01%
2009		0.00%		26,440		11.767915		311,144		5.01%		18.10%
2009		0.50%		101,794		11.100863		1,130,001		5.01%		17.51%
2009		0.80%		15,113		10.718927		161,995		5.01%		17.16%
2009		1.00%		7,280		8.654230		63,003		5.01%		16.92%
American Century VP Inflation Protection Fund - Class II (ACVIP2)
2013		0.00%		18,670		15.452863		288,505		1.65%		-8.48%
2013		0.50%		63,472		14.648742		929,785		1.65%		-8.94%
2013		0.80%		11,140		14.185241		158,024		1.65%		-9.21%
2012		0.00%		26,763		16.884507		451,880		2.37%		7.39%
2012		0.50%		103,784		16.086145		1,669,484		2.37%		6.85%
2012		0.80%		13,907		15.623984		217,283		2.37%		6.53%
2011		0.00%		25,289		15.723236		397,625		4.00%		11.74%
2011		0.50%		117,480		15.055027		1,768,665		4.00%		11.19%
2011		0.80%		16,947		14.666531		248,554		4.00%		10.86%
2010		0.00%		23,941		14.070730		336,867		1.70%		5.12%
2010		0.50%		96,102		13.540060		1,301,227		1.70%		4.59%
2010		0.80%		15,032		13.230161		198,876		1.70%		4.28%
2009		0.00%		22,549		13.385524		301,830		1.82%		10.21%
2009		0.50%		108,771		12.945320		1,408,075		1.82%		9.66%
2009		0.80%		13,631		12.687145		172,938		1.82%		9.33%
VP International Fund - Class I (ACVI)
2013		0.00%		10,192		30.476017		310,612		1.69%		22.41%
2013		0.80%		572		29.359593		16,794		1.69%		21.44%
2013		1.00%		25,351		12.208224		309,491		1.69%		21.19%
2012		0.00%		13,233		24.896683		329,458		0.85%		21.16%
2012		0.80%		572		24.177125		13,829		0.85%		20.19%
2012		1.00%		27,108		10.073381		273,069		0.85%		19.95%
2011		0.00%		14,027		20.548394		288,232		1.43%		-12.04%
2011		0.80%		572		20.115095		11,506		1.43%		-12.74%
2011		1.00%		29,115		8.397753		244,501		1.43%		-12.92%
2010		0.00%		15,900		23.361398		371,446		2.37%		13.29%
2010		0.50%		133		23.825547		3,169		2.37%		12.73%
2010		0.80%		572		23.052345		13,186		2.37%		12.39%
2010		1.00%		42,377		9.643270		408,653		2.37%		12.17%
2009		0.00%		16,897		20.620545		348,425		3.20%		33.76%
2009		0.80%		572		20.510931		11,732		3.20%		32.70%
2009		1.00%		54,101		8.597301		465,123		3.20%		32.43%
VP International Fund - Class III (ACVI3)
2013		0.00%		10,941		18.795597		205,643		1.61%		22.41%
2012		0.00%		13,657		15.354631		209,698		0.81%		21.16%
2011		0.00%		16,408		12.672898		207,937		1.42%		-12.04%
2010		0.00%		16,935		14.407773		243,996		2.25%		13.29%
2009		0.00%		17,215		12.717392		218,930		3.37%		33.76%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VP Mid Cap Value Fund - Class I (ACVMV1)
2013		0.00%		3,576	$	23.448028	$	83,850		1.27%		30.11%
2013		0.50%		76,643		22.453819		1,720,928		1.27%		29.47%
2013		0.80%		5,677		21.877612		124,199		1.27%		29.08%
2012		0.00%		2,582		18.021035		46,530		1.97%		16.33%
2012		0.50%		68,118		17.343371		1,181,396		1.97%		15.75%
2012		0.80%		5,768		16.949046		97,762		1.97%		15.40%
2011		0.00%		2,657		15.491583		41,161		1.31%		-0.69%
2011		0.50%		84,192		14.983934		1,261,527		1.31%		-1.19%
2011		0.80%		7,564		14.687355		111,095		1.31%		-1.48%
2010		0.00%		4,230		15.599747		65,987		2.37%		19.25%
2010		0.50%		78,645		15.164047		1,192,576		2.37%		18.66%
2010		0.80%		9,365		14.908480		139,618		2.37%		18.30%
2009		0.00%		3,761		13.081223		49,198		3.82%		29.94%
2009		0.50%		65,407		12.779527		835,871		3.82%		29.30%
2009		0.80%		9,006		12.601860		113,492		3.82%		28.91%
VP Ultra(R) Fund - Class I (ACVU1)
2013		1.00%		10,891		17.048782		185,678		0.31%		35.71%
2012		0.00%		2,867		13.977037		40,072		0.00%		13.92%
2012		1.00%		3,221		12.562574		40,464		0.00%		12.79%
2011		0.00%		1,197		12.268729		14,686		0.00%		1.07%
2011		1.00%		2,829		11.138189		31,510		0.00%		0.06%
2010		0.00%		1,897		12.139312		23,028		0.59%		16.08%
2010		1.00%		1,507		11.131199		16,775		0.59%		14.93%
2009		0.00%		2,677		10.457353		27,994		0.46%		34.48%
2009		1.00%		2,132		9.685187		20,649		0.46%		33.14%
VP Value Fund - Class I (ACVV)
2010		0.80%		5		23.542842		118		1.67%		10.31%
2009		0.00%		56,018		23.686331		1,326,861		5.84%		19.86%
2009		0.50%		202,297		22.072010		4,465,101		5.84%		19.27%
2009		0.80%		43,721		21.343028		933,139		5.84%		18.91%
2009		1.00%		42,294		15.543434		657,394		5.84%		18.67%
VP Vista(SM) Fund - Class I (ACVVS1)
2013		0.00%		2,561		18.872253		48,332		0.00%		30.17%
2012		0.00%		2,628		14.497885		38,100		0.00%		15.61%
2011		0.00%		2,700		12.539840		33,858		0.00%		-7.89%
2010		0.00%		3,086		13.614679		42,015		0.00%		23.88%
2009		0.00%		3,463		10.990064		38,059		0.00%		22.47%
Small Cap Stock Index Portfolio - Service Shares (DVSCS)
2013		0.00%		15,916		27.964008		445,075		1.04%		40.71%
2013		0.50%		59,482		26.379283		1,569,093		1.04%		40.01%
2013		0.80%		7,470		25.471900		190,275		1.04%		39.59%
2013		1.00%		15,299		24.884316		380,705		1.04%		39.31%
2013		1.30%		10		24.028258		240		1.04%		38.90%
2012		0.00%		18,874		19.873008		375,083		0.48%		15.74%
2012		0.50%		52,183		18.840668		983,163		0.48%		15.16%
2012		0.80%		8,047		18.247194		146,835		0.48%		14.82%
2012		1.00%		16,022		17.861918		286,184		0.48%		14.59%
2012		1.30%		10		17.299211		173		0.48%		14.24%
2011		0.00%		20,644		17.170194		354,461		0.57%		0.56%
2011		0.50%		66,923		16.360013		1,094,861		0.57%		0.06%
2011		0.80%		9,732		15.892376		154,665		0.57%		-0.24%
2011		1.00%		19,008		15.588032		296,297		0.57%		-0.44%
2010		0.00%		22,647		17.074091		386,677		0.55%		25.83%
2010		0.50%		53,266		16.349821		870,890		0.55%		25.20%
2010		0.80%		11,107		15.930108		176,936		0.55%		24.82%
2010		1.00%		22,243		15.656264		348,242		0.55%		24.58%
2009		0.00%		23,938		13.569574		324,828		2.51%		25.03%
2009		0.50%		57,317		13.059017		748,504		2.51%		24.40%
2009		0.80%		10,571		12.761955		134,907		2.51%		24.03%
2009		1.00%		13,278		12.567656		166,873		2.51%		23.78%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Appreciation Portfolio - Initial Shares (DCAP)
2013		0.00%		33,660	$	26.874296	$	904,589		1.94%		21.10%
2013		0.50%		128,801		24.677241		3,178,453		1.94%		20.50%
2013		0.80%		20,833		23.558053		490,785		1.94%		20.14%
2013		1.00%		28,821		15.666152		451,514		1.94%		19.90%
2012		0.00%		37,329		22.191274		828,378		3.67%		10.43%
2012		0.50%		162,809		20.479145		3,334,189		3.67%		9.88%
2012		0.80%		25,384		19.609067		497,757		3.67%		9.55%
2012		1.00%		32,456		13.066159		424,075		3.67%		9.33%
2011		0.00%		40,442		20.095335		812,696		1.56%		9.01%
2011		0.50%		173,907		18.638060		3,241,289		1.56%		8.47%
2011		0.80%		26,334		17.899937		471,377		1.56%		8.15%
2011		1.00%		80,749		11.951238		965,051		1.56%		7.93%
2010		0.00%		39,151		18.434129		721,715		2.17%		15.32%
2010		0.50%		132,417		17.182815		2,275,297		2.17%		14.74%
2010		0.80%		26,721		16.551777		442,280		2.17%		14.40%
2010		1.00%		65,892		11.073168		729,633		2.17%		14.17%
2009		0.00%		53,869		15.985658		861,131		2.65%		22.56%
2009		0.50%		142,023		14.975150		2,126,816		2.65%		21.95%
2009		0.80%		31,383		14.468488		454,065		2.65%		21.58%
2009		1.00%		67,951		9.698799		659,043		2.65%		21.34%
Opportunistic Small Cap Portfolio: Initial Shares (DSC)
2013		0.00%		1,210		22.325546		27,014		0.00%		48.55%
2013		0.50%		23,615		21.165757		499,829		0.00%		47.81%
2013		0.80%		3,994		20.499021		81,873		0.00%		47.37%
2012		0.00%		705		15.029274		10,596		0.00%		20.56%
2012		0.50%		24,300		14.319838		347,972		0.00%		19.96%
2012		0.80%		4,702		13.910361		65,407		0.00%		19.60%
2011		0.00%		754		12.465849		9,399		0.40%		-13.85%
2011		0.50%		13,055		11.937082		155,839		0.40%		-14.27%
2011		0.80%		3,371		11.630664		39,207		0.40%		-14.53%
2010		0.00%		166		14.469098		2,402		0.56%		31.15%
2010		0.50%		12,962		13.924754		180,493		0.56%		30.50%
2010		0.80%		3,247		13.608033		44,185		0.56%		30.11%
2009		0.00%		184		11.032594		2,030		2.01%		26.04%
2009		0.50%		6,951		10.670685		74,172		2.01%		25.41%
2009		0.80%		3,260		10.459262		34,097		2.01%		25.03%
Growth and Income Portfolio - Initial Shares (DGI)
2013		0.00%		11,166		25.605002		285,905		0.91%		36.78%
2013		0.50%		37,868		23.387364		885,633		0.91%		36.10%
2013		0.80%		13,026		22.345264		291,069		0.91%		35.69%
2013		1.00%		8,408		14.962784		125,807		0.91%		35.42%
2012		0.00%		12,903		18.719510		241,538		1.43%		18.07%
2012		0.50%		40,511		17.183862		696,135		1.43%		17.48%
2012		0.80%		14,291		16.467463		235,337		1.43%		17.13%
2012		1.00%		7,789		11.048962		86,060		1.43%		16.90%
2011		0.00%		13,600		15.854162		215,617		1.22%		-2.79%
2011		0.50%		45,849		14.626679		670,619		1.22%		-3.28%
2011		0.80%		15,440		14.059096		217,072		1.22%		-3.57%
2011		1.00%		10,648		9.451977		100,645		1.22%		-3.76%
2010		0.00%		22,084		16.309863		360,187		1.21%		18.61%
2010		0.50%		50,734		15.122378		767,219		1.21%		18.02%
2010		0.80%		18,856		14.579135		274,904		1.21%		17.66%
2010		1.00%		11,227		9.821184		110,262		1.21%		17.43%
2009		0.00%		23,756		13.751257		326,675		1.34%		28.79%
2009		0.50%		56,255		12.813906		720,846		1.34%		28.14%
2009		0.80%		20,532		12.390653		254,405		1.34%		27.76%
2009		1.00%		13,887		8.363624		116,146		1.34%		27.50%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Managed Tail Risk Fund II: Primary Shares (FVCA2P)
2013		0.00%		4,327	$	18.551848	$	80,274		1.20%		16.45%
2013		0.50%		4,563		17.588218		80,255		1.20%		15.87%
2013		0.80%		82		17.034230		1,397		1.20%		15.52%
2012		0.00%		4,187		15.930913		66,703		0.34%		10.17%
2012		0.50%		4,661		15.179088		70,750		0.34%		9.62%
2012		0.80%		221		14.745134		3,259		0.34%		9.29%
2011		0.50%		4,897		13.846587		67,807		0.65%		-5.76%
2011		0.80%		217		13.491250		2,928		0.65%		-6.05%
2010		0.50%		14,445		14.693647		212,250		0.68%		12.51%
2010		0.80%		204		14.359505		2,929		0.68%		12.17%
2009		0.50%		4,369		13.059781		57,058		1.80%		12.91%
2009		0.80%		1,183		12.801099		15,144		1.80%		12.58%
Quality Bond Fund II - Primary Shares (FQB)
2013		0.00%		11,973		17.856455		213,795		4.39%		1.03%
2013		0.50%		46,659		16.844649		785,954		4.39%		0.53%
2013		0.80%		7,985		16.265318		129,879		4.39%		0.23%
2013		1.00%		28,000		15.890171		444,925		4.39%		0.03%
2012		0.00%		21,760		17.673540		384,576		4.06%		9.72%
2012		0.50%		56,912		16.755664		953,598		4.06%		9.17%
2012		0.80%		9,428		16.228008		152,998		4.06%		8.85%
2012		1.00%		36,141		15.885465		574,117		4.06%		8.63%
2011		0.00%		26,489		16.107550		426,673		4.81%		2.27%
2011		0.50%		56,565		15.347745		868,145		4.81%		1.76%
2011		0.80%		11,285		14.909191		168,250		4.81%		1.46%
2011		1.00%		40,098		14.623773		586,384		4.81%		1.26%
2010		0.00%		26,373		15.749680		415,366		5.38%		8.50%
2010		0.50%		63,895		15.081764		963,649		5.38%		7.96%
2010		0.80%		13,761		14.694701		202,214		5.38%		7.64%
2010		1.00%		9,531		14.442169		137,648		5.38%		7.42%
2009		0.00%		29,675		14.515295		430,741		5.89%		20.43%
2009		0.50%		70,869		13.969361		989,995		5.89%		19.83%
2009		0.80%		12,329		13.651720		168,312		5.89%		19.48%
2009		1.00%		37,387		13.443967		502,630		5.89%		19.24%
Equity-Income Portfolio - Initial Class (FEIP)
2013		0.00%		123,946		34.412915		4,265,343		2.48%		28.15%
2013		0.50%		321,894		86.987217		28,000,663		2.48%		27.51%
2013		0.80%		119,758		70.110604		8,396,306		2.48%		27.13%
2013		1.00%		201,751		17.620899		3,555,034		2.48%		26.87%
2013		1.30%		190		62.439911		11,864		2.48%		26.49%
2012		0.00%		136,674		26.854210		3,670,272		3.10%		17.31%
2012		0.50%		348,829		68.220701		23,797,359		3.10%		16.72%
2012		0.80%		143,114		55.150112		7,892,753		3.10%		16.37%
2012		1.00%		251,923		13.888604		3,498,859		3.10%		16.14%
2012		1.30%		120		49.362236		5,923		3.10%		15.79%
2011		0.00%		149,096		22.892147		3,413,128		2.36%		0.97%
2011		0.50%		379,343		58.447557		22,171,672		2.36%		0.47%
2011		0.80%		160,230		47.391689		7,593,570		2.36%		0.17%
2011		1.00%		263,003		11.958724		3,145,180		2.36%		-0.03%
2011		1.30%		1		42.631104		43		2.36%		-0.33%
2010		0.00%		175,971		22.671870		3,989,592		1.81%		15.15%
2010		0.50%		441,234		58.174736		25,668,671		1.81%		14.58%
2010		0.80%		179,902		47.311929		8,511,511		1.81%		14.23%
2010		1.00%		304,964		11.962455		3,648,118		1.81%		14.00%
2010		1.30%		1		42.772276		43		1.81%		13.66%
2009		0.00%		200,574		19.689180		3,949,138		2.24%		30.21%
2009		0.50%		500,783		50.774293		25,426,903		2.24%		29.56%
2009		0.80%		202,135		41.417283		8,371,882		2.24%		29.17%
2009		1.00%		351,952		10.492986		3,693,027		2.24%		28.91%
2009		1.30%		1		37.630730		38		2.24%		28.53%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
High Income Portfolio - Initial Class (FHIP)
2013		0.00%		76,527	$	23.657339	$	1,810,425		5.55%		5.95%
2013		0.50%		84,651		48.878642		4,137,626		5.55%		5.42%
2013		0.80%		27,795		44.974878		1,250,077		5.55%		5.10%
2013		1.00%		68,487		17.397965		1,191,534		5.55%		4.89%
2013		1.30%		20		44.129723		883		5.55%		4.58%
2012		0.00%		79,361		22.329447		1,772,087		5.44%		14.23%
2012		0.50%		97,105		46.366278		4,502,397		5.44%		13.66%
2012		0.80%		35,866		42.791316		1,534,753		5.44%		13.32%
2012		1.00%		79,435		16.586419		1,317,542		5.44%		13.09%
2012		1.30%		4		42.197632		169		5.44%		12.75%
2011		0.00%		71,464		19.548118		1,396,987		6.27%		4.03%
2011		0.50%		147,031		40.794842		5,998,106		6.27%		3.51%
2011		0.80%		42,868		37.762814		1,618,816		6.27%		3.20%
2011		1.00%		63,903		14.666687		937,245		6.27%		3.00%
2010		0.00%		87,453		18.790698		1,643,303		7.26%		13.82%
2010		0.50%		165,396		39.410184		6,518,287		7.26%		13.26%
2010		0.80%		51,403		36.590379		1,880,855		7.26%		12.92%
2010		1.00%		89,511		14.239694		1,274,609		7.26%		12.69%
2009		0.00%		100,115		16.508703		1,652,769		7.68%		43.96%
2009		0.50%		190,562		34.797509		6,631,083		7.68%		43.24%
2009		0.80%		61,557		32.404743		1,994,739		7.68%		42.81%
2009		1.00%		159,831		12.636025		2,019,629		7.68%		42.53%
VIP Asset Manager Portfolio - Initial Class (FAMP)
2013		0.00%		22,166		30.590553		678,070		1.55%		15.71%
2013		0.50%		147,566		52.044253		7,679,962		1.55%		15.13%
2013		0.80%		49,960		44.017089		2,199,094		1.55%		14.78%
2013		1.00%		135,008		15.777445		2,130,081		1.55%		14.56%
2013		1.30%		222		44.605427		9,902		1.55%		14.21%
2012		0.00%		26,092		26.438122		689,823		1.49%		12.48%
2012		0.50%		159,628		45.205009		7,215,985		1.49%		11.92%
2012		0.80%		61,726		38.347550		2,367,041		1.49%		11.58%
2012		1.00%		141,671		13.772768		1,951,202		1.49%		11.36%
2012		1.30%		138		39.054823		5,390		1.49%		11.03%
2011		0.00%		28,280		23.504361		664,703		1.89%		-2.56%
2011		0.50%		188,094		40.390644		7,597,238		1.89%		-3.05%
2011		0.80%		68,594		34.366682		2,357,348		1.89%		-3.34%
2011		1.00%		168,991		12.367780		2,090,044		1.89%		-3.53%
2011		1.30%		1		35.176377		35		1.89%		-3.82%
2010		0.00%		33,987		24.122023		819,835		1.69%		14.26%
2010		0.50%		209,604		41.659364		8,731,969		1.69%		13.69%
2010		0.80%		76,588		35.552451		2,722,891		1.69%		13.35%
2010		1.00%		185,080		12.820073		2,372,739		1.69%		13.13%
2010		1.30%		1		36.572093		37		1.69%		12.79%
2009		0.00%		37,939		21.110749		800,921		2.27%		29.11%
2009		0.50%		232,760		36.641407		8,528,654		2.27%		28.47%
2009		0.80%		84,006		31.363945		2,634,760		2.27%		28.08%
2009		1.00%		186,964		11.332339		2,118,739		2.27%		27.83%
2009		1.30%		1		32.425044		32		2.27%		27.45%
VIP Contrafund(R) Portfolio - Initial Class (FCP)
2010		0.50%		1		37.528108		38		0.05%		14.11%
2010		0.80%		473		36.264896		17,153		0.05%		13.78%
2009		0.00%		179,893		29.787895		5,358,634		1.36%		35.71%
2009		0.50%		895,768		32.887636		29,459,692		1.36%		35.03%
2009		0.80%		202,693		31.871810		6,460,193		1.36%		34.63%
2009		1.00%		227,784		12.045454		2,743,762		1.36%		34.36%
2009		1.30%		1		29.643503		30		1.36%		33.96%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Energy Portfolio - Service Class 2 (FNRS2)
2013		0.00%		11,257	$	22.684649	$	255,361		0.70%		24.15%
2013		0.50%		87,421		21.722450		1,898,998		0.70%		23.53%
2013		0.80%		25,101		21.164829		531,258		0.70%		23.16%
2012		0.00%		13,031		18.272664		238,111		0.72%		4.73%
2012		0.50%		92,636		17.585266		1,629,029		0.72%		4.21%
2012		0.80%		31,070		17.185312		533,948		0.72%		3.90%
2011		0.00%		15,797		17.446617		275,604		0.77%		-5.20%
2011		0.50%		124,550		16.874679		2,101,741		0.77%		-5.67%
2011		0.80%		38,558		16.540551		637,771		0.77%		-5.95%
2010		0.00%		18,742		18.403422		344,917		0.33%		19.16%
2010		0.50%		137,864		17.889194		2,466,276		0.33%		18.56%
2010		0.80%		42,752		17.587581		751,904		0.33%		18.21%
2009		0.00%		23,134		15.444750		357,299		0.24%		47.57%
2009		0.50%		203,763		15.088373		3,074,452		0.24%		46.84%
2009		0.80%		48,768		14.878509		725,595		0.24%		46.40%
VIP Freedom Fund 2010 Portfolio - Service Class (FF10S)
2013		0.00%		4,122		17.068509		70,356		1.64%		13.39%
2013		0.50%		17,248		16.344867		281,916		1.64%		12.83%
2013		0.80%		3,214		15.925458		51,184		1.64%		12.49%
2012		0.00%		3,524		15.052634		53,045		1.48%		11.69%
2012		0.50%		18,952		14.486686		274,552		1.48%		11.13%
2012		0.80%		2,722		14.157347		38,536		1.48%		10.79%
2011		0.00%		4,071		13.477731		54,868		2.34%		-0.28%
2011		0.50%		24,603		13.036152		320,728		2.34%		-0.78%
2011		0.80%		3,979		12.778157		50,844		2.34%		-1.08%
2010		0.00%		4,161		13.516167		56,241		1.90%		12.74%
2010		0.50%		15,610		13.138702		205,095		1.90%		12.17%
2010		0.80%		5,966		12.917291		77,065		1.90%		11.84%
2009		0.00%		1,759		11.989176		21,089		2.95%		24.15%
2009		0.50%		25,742		11.712729		301,509		2.95%		23.53%
2009		0.80%		3,521		11.549915		40,667		2.95%		23.16%
VIP Freedom Fund 2020 Portfolio - Service Class (FF20S)
2013		0.00%		3,849		17.636606		67,883		1.67%		15.95%
2013		0.50%		53,692		16.888806		906,794		1.67%		15.38%
2013		0.80%		11,810		16.455456		194,339		1.67%		15.03%
2012		0.00%		3,913		15.209948		59,517		2.11%		13.19%
2012		0.50%		58,464		14.638015		855,797		2.11%		12.62%
2012		0.80%		15,219		14.305244		217,712		2.11%		12.28%
2011		0.00%		1,647		13.437783		22,132		2.04%		-1.12%
2011		0.50%		48,519		12.997459		630,624		2.04%		-1.62%
2011		0.80%		18,156		12.740229		231,312		2.04%		-1.91%
2010		0.00%		1,747		13.590648		23,743		2.21%		14.52%
2010		0.50%		56,685		13.211069		748,869		2.21%		13.95%
2010		0.80%		16,901		12.988424		219,517		2.21%		13.61%
2009		0.00%		469		11.867504		5,566		3.20%		28.78%
2009		0.50%		48,825		11.593819		566,068		3.20%		28.13%
2009		0.80%		15,952		11.432637		182,373		3.20%		27.75%
VIP Freedom Fund 2030 Portfolio - Service Class (FF30S)
2013		0.00%		422		18.372029		7,753		1.64%		21.50%
2013		0.50%		53,021		17.592960		932,796		1.64%		20.89%
2013		0.80%		17,577		17.141551		301,297		1.64%		20.53%
2012		0.00%		430		15.121452		6,502		2.04%		15.48%
2012		0.50%		58,115		14.552777		845,735		2.04%		14.90%
2012		0.80%		17,634		14.221942		250,790		2.04%		14.56%
2011		0.50%		54,142		12.665066		685,712		2.06%		-3.18%
2011		0.80%		17,536		12.414407		217,699		2.06%		-3.47%
2010		0.50%		48,330		13.081107		632,210		1.95%		15.42%
2010		0.80%		19,133		12.860663		246,063		1.95%		15.08%
2009		0.50%		28,422		11.333383		322,117		2.30%		30.75%
2009		0.80%		24,962		11.175826		278,971		2.30%		30.36%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Growth Opportunities Portfolio - Initial Class (FGOP)
2010		0.50%		1	$	11.641245	$	12		0.00%		21.34%
2010		0.80%		11		11.215020		123		0.00%		20.99%
2009		0.00%		35,449		10.241993		363,068		0.47%		45.85%
2009		0.50%		176,900		9.594280		1,697,228		0.47%		45.12%
2009		0.80%		29,637		9.269518		274,721		0.47%		44.69%
2009		1.00%		3,666		7.004350		25,678		0.47%		44.40%
VIP Growth Portfolio - Initial Class (FGP)
2013		0.00%		150,521		32.933927		4,957,248		0.29%		36.34%
2013		0.50%		372,839		99.021065		36,918,915		0.29%		35.66%
2013		0.80%		223,483		66.557026		14,874,364		0.29%		35.25%
2013		1.00%		349,541		11.489795		4,016,154		0.29%		34.98%
2013		1.30%		213		60.092605		12,800		0.29%		34.58%
2012		0.00%		161,289		24.156554		3,896,186		0.59%		14.69%
2012		0.50%		394,207		72.994214		28,774,830		0.59%		14.12%
2012		0.80%		266,541		49.210357		13,116,578		0.59%		13.77%
2012		1.00%		385,900		8.512216		3,284,864		0.59%		13.55%
2012		1.30%		137		44.653281		6,117		0.59%		13.20%
2011		0.00%		170,592		21.062729		3,593,133		0.35%		0.20%
2011		0.50%		430,909		63.965181		27,563,172		0.35%		-0.30%
2011		0.80%		300,253		43.253084		12,986,868		0.35%		-0.59%
2011		1.00%		455,202		7.496758		3,412,539		0.35%		-0.79%
2011		1.30%		19		39.444794		749		0.35%		-1.09%
2010		0.00%		196,217		21.020180		4,124,517		0.28%		24.17%
2010		0.50%		499,742		64.155259		32,061,077		0.28%		23.55%
2010		0.80%		333,533		43.511676		14,512,580		0.28%		23.18%
2010		1.00%		534,712		7.556643		4,040,628		0.28%		22.94%
2010		1.30%		17		39.879099		678		0.28%		22.57%
2009		0.00%		206,766		16.928202		3,500,177		0.44%		28.29%
2009		0.50%		557,057		51.924855		28,925,104		0.44%		27.65%
2009		0.80%		370,706		35.322377		13,094,217		0.44%		27.26%
2009		1.00%		585,826		6.146674		3,600,881		0.44%		27.01%
2009		1.30%		17		32.535551		553		0.44%		26.63%
VIP High Income Portfolio - Initial Class R (FHIPR)
2013		0.00%		13,767		15.333544		211,097		5.83%		5.97%
2013		0.50%		163,325		14.830856		2,422,250		5.83%		5.44%
2013		0.80%		70,495		14.537202		1,024,800		5.83%		5.12%
2012		0.00%		16,543		14.470056		239,378		5.71%		14.30%
2012		0.50%		165,561		14.065803		2,328,748		5.71%		13.73%
2012		0.80%		79,055		13.828722		1,093,230		5.71%		13.39%
2011		0.00%		17,595		12.659718		222,748		6.99%		4.05%
2011		0.50%		197,547		12.367874		2,443,236		6.99%		3.53%
2011		0.80%		79,720		12.196027		972,267		6.99%		3.22%
2010		0.00%		16,672		12.167463		202,856		8.05%		13.88%
2010		0.50%		202,755		11.946381		2,422,188		8.05%		13.31%
2010		0.80%		78,191		11.815681		923,880		8.05%		12.97%
2009		0.00%		13,217		10.684849		141,222		9.14%		43.81%
2009		0.50%		224,364		10.543267		2,365,530		9.14%		43.10%
2009		0.80%		69,946		10.459227		731,581		9.14%		42.67%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Investment Grade Bond Portfolio - Service Class (FIGBS)
2013		0.00%		18,225	$	15.839600	$	288,677		2.05%		-1.89%
2013		0.50%		196,708		15.016973		2,953,959		2.05%		-2.38%
2013		0.80%		15,073		14.544041		219,222		2.05%		-2.67%
2012		0.00%		28,073		16.144635		453,228		2.07%		5.77%
2012		0.50%		224,012		15.382891		3,445,952		2.07%		5.24%
2012		0.80%		21,300		14.943212		318,290		2.07%		4.92%
2011		0.00%		34,735		15.264055		530,197		3.22%		7.21%
2011		0.50%		264,186		14.616946		3,861,592		3.22%		6.67%
2011		0.80%		23,285		14.241922		331,623		3.22%		6.36%
2010		0.00%		33,476		14.237787		476,624		3.56%		7.68%
2010		0.50%		283,862		13.702324		3,889,569		3.56%		7.14%
2010		0.80%		25,942		13.390753		347,383		3.56%		6.82%
2009		0.00%		27,224		13.222437		359,968		8.76%		15.67%
2009		0.50%		290,648		12.788918		3,717,073		8.76%		15.10%
2009		0.80%		22,454		12.535648		281,475		8.76%		14.75%
VIP Mid Cap Portfolio - Service Class (FMCS)
2013		0.00%		12,172		41.045629		499,607		0.41%		36.06%
2013		0.50%		180,997		38.914038		7,043,324		0.41%		35.38%
2013		0.80%		26,480		37.688616		997,995		0.41%		34.98%
2012		0.00%		16,990		30.166927		512,536		0.49%		14.75%
2012		0.50%		189,756		28.743525		5,454,256		0.49%		14.18%
2012		0.80%		32,699		27.921947		913,020		0.49%		13.83%
2011		0.00%		21,838		26.289170		574,103		0.14%		-10.72%
2011		0.50%		229,983		25.174584		5,789,726		0.14%		-11.16%
2011		0.80%		39,066		24.528651		958,236		0.14%		-11.43%
2010		0.00%		22,098		29.444519		650,665		0.28%		28.70%
2010		0.50%		264,279		28.337312		7,488,956		0.28%		28.06%
2010		0.80%		43,070		27.693084		1,192,741		0.28%		27.68%
2009		0.00%		23,116		22.878053		528,849		0.60%		40.01%
2009		0.50%		277,478		22.127965		6,140,023		0.60%		39.32%
2009		0.80%		46,369		21.689786		1,005,734		0.60%		38.90%
VIP Overseas Portfolio - Initial Class (FOP)
2013		0.00%		28,857		27.425919		791,430		1.36%		30.44%
2013		0.50%		91,720		46.160265		4,233,820		1.36%		29.79%
2013		0.80%		21,769		34.387281		748,577		1.36%		29.40%
2013		1.00%		82,304		14.254206		1,173,178		1.36%		29.14%
2013		1.30%		542		29.175220		15,813		1.36%		28.75%
2012		0.00%		30,798		21.026341		647,569		1.93%		20.74%
2012		0.50%		104,930		35.566403		3,731,983		1.93%		20.14%
2012		0.80%		26,621		26.574860		707,449		1.93%		19.78%
2012		1.00%		83,926		11.037832		926,361		1.93%		19.54%
2012		1.30%		328		22.659824		7,432		1.93%		19.18%
2011		0.00%		33,271		17.414491		579,398		1.29%		-17.16%
2011		0.50%		118,017		29.604824		3,493,873		1.29%		-17.58%
2011		0.80%		30,982		22.187015		687,398		1.29%		-17.82%
2011		1.00%		94,368		9.233835		871,379		1.29%		-17.99%
2011		1.30%		5		19.013413		95		1.29%		-18.23%
2010		0.00%		47,968		21.022695		1,008,417		1.40%		13.11%
2010		0.50%		136,651		35.917877		4,908,214		1.40%		12.55%
2010		0.80%		37,140		26.999105		1,002,747		1.40%		12.21%
2010		1.00%		117,567		11.259025		1,323,690		1.40%		11.99%
2009		0.00%		52,438		18.585431		974,583		2.07%		26.53%
2009		0.50%		158,444		31.912691		5,056,374		2.07%		25.90%
2009		0.80%		44,371		24.060407		1,067,584		2.07%		25.52%
2009		1.00%		120,336		10.053608		1,209,811		2.07%		25.27%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Overseas Portfolio - Service Class R (FOSR)
2013		0.00%		32,000	$	18.029345	$	576,939		1.32%		30.30%
2013		0.50%		200,439		17.264814		3,460,542		1.32%		29.65%
2013		0.80%		46,798		16.821709		787,222		1.32%		29.26%
2012		0.00%		35,975		13.836689		497,775		1.91%		20.67%
2012		0.50%		216,949		13.316294		2,888,957		1.91%		20.07%
2012		0.80%		54,239		13.013481		705,838		1.91%		19.71%
2011		0.00%		24,016		11.466618		275,382		1.12%		-17.30%
2011		0.50%		207,184		11.090775		2,297,831		1.12%		-17.71%
2011		0.80%		53,755		10.871192		584,381		1.12%		-17.96%
2010		0.00%		33,994		13.865532		471,345		1.32%		13.01%
2010		0.50%		257,797		13.478254		3,474,653		1.32%		12.45%
2010		0.80%		57,338		13.251079		759,790		1.32%		12.11%
2009		0.00%		37,807		12.269434		463,870		2.17%		26.49%
2009		0.50%		307,164		11.986428		3,681,799		2.17%		25.86%
2009		0.80%		56,862		11.819747		672,094		2.17%		25.48%
VIP Value Strategies Portfolio - Service Class (FVSS)
2013		0.00%		9,006		24.961619		224,804		0.74%		30.44%
2013		0.50%		26,777		23.546747		630,511		0.74%		29.79%
2013		0.80%		4,896		22.736642		111,319		0.74%		29.41%
2013		1.00%		10,442		22.212133		231,939		0.74%		29.15%
2012		0.00%		9,336		19.135795		178,652		0.58%		27.10%
2012		0.50%		46,104		18.141557		836,398		0.58%		26.47%
2012		0.80%		6,450		17.570001		113,327		0.58%		26.09%
2012		1.00%		9,572		17.199023		164,629		0.58%		25.83%
2011		0.00%		19,441		15.055580		292,696		0.80%		-8.85%
2011		0.50%		36,543		14.345026		524,210		0.80%		-9.30%
2011		0.80%		5,608		13.934920		78,147		0.80%		-9.57%
2011		1.00%		6,604		13.668049		90,264		0.80%		-9.75%
2010		0.00%		25,254		16.516915		417,118		0.41%		26.45%
2010		0.50%		41,802		15.816183		661,148		0.41%		25.82%
2010		0.80%		6,185		15.410121		95,312		0.41%		25.45%
2010		1.00%		11,335		15.145229		171,671		0.41%		25.20%
2009		0.00%		21,462		13.061648		280,329		0.57%		57.40%
2009		0.50%		63,858		12.570115		802,702		0.57%		56.61%
2009		0.80%		6,437		12.284130		79,073		0.57%		56.14%
2009		1.00%		9,300		12.097114		112,503		0.57%		55.83%
Franklin Income Securities Fund - Class 2 (FTVIS2)
2013		0.00%		11,930		16.436367		196,086		6.46%		13.94%
2013		0.50%		89,778		15.818160		1,420,123		6.46%		13.37%
2013		0.80%		14,539		15.458527		224,752		6.46%		13.03%
2012		0.00%		12,161		14.425332		175,426		6.60%		12.65%
2012		0.50%		68,091		13.952339		950,029		6.60%		12.09%
2012		0.80%		12,946		13.676069		177,050		6.60%		11.75%
2011		0.00%		11,961		12.805162		153,163		6.21%		2.38%
2011		0.50%		70,842		12.447515		881,807		6.21%		1.87%
2011		0.80%		13,328		12.237789		163,105		6.21%		1.57%
2010		0.00%		9,146		12.507001		114,389		7.07%		12.67%
2010		0.50%		63,635		12.218491		777,524		7.07%		12.11%
2010		0.80%		12,959		12.048616		156,138		7.07%		11.78%
2009		0.00%		9,101		11.100337		101,024		8.10%		35.59%
2009		0.50%		74,134		10.898585		807,956		8.10%		34.92%
2009		0.80%		12,802		10.779315		137,997		8.10%		34.52%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)
2013		0.00%		13,999	$	26.225783	$	367,135		1.83%		30.05%
2013		0.50%		159,701		24.863682		3,970,755		1.83%		29.40%
2013		0.80%		14,322		24.080637		344,883		1.83%		29.02%
2012		0.00%		14,390		20.165763		290,185		1.95%		12.18%
2012		0.50%		171,328		19.214168		3,291,925		1.95%		11.61%
2012		0.80%		15,177		18.664910		283,277		1.95%		11.28%
2011		0.00%		27,085		17.976970		486,906		1.64%		6.29%
2011		0.50%		171,680		17.214712		2,955,422		1.64%		5.76%
2011		0.80%		17,101		16.772979		286,835		1.64%		5.45%
2010		0.00%		15,172		16.912694		256,599		1.78%		20.94%
2010		0.50%		139,647		16.276552		2,272,972		1.78%		20.34%
2010		0.80%		20,329		15.906413		323,361		1.78%		19.98%
2009		0.00%		13,906		13.984451		194,468		1.83%		17.67%
2009		0.50%		144,617		13.525832		1,956,065		1.83%		17.09%
2009		0.80%		20,222		13.257914		268,102		1.83%		16.74%
Franklin Small Cap Value Securities Fund - Class 1 (FTVSVI)
2013		0.00%		6,811		36.238435		246,820		1.48%		36.50%
2013		0.50%		104,422		34.356208		3,587,544		1.48%		35.82%
2013		0.80%		10,409		33.274117		346,350		1.48%		35.42%
2012		0.00%		6,825		26.547381		181,186		1.03%		18.75%
2012		0.50%		111,680		25.294569		2,824,897		1.03%		18.16%
2012		0.80%		12,551		24.571434		308,396		1.03%		17.80%
2011		0.00%		9,471		22.355324		211,727		0.95%		-3.53%
2011		0.50%		124,783		21.407336		2,671,272		0.95%		-4.01%
2011		0.80%		14,035		20.857943		292,741		0.95%		-4.29%
2010		0.00%		8,414		23.172621		194,974		0.88%		28.49%
2010		0.50%		144,260		22.301004		3,217,143		0.88%		27.85%
2010		0.80%		16,135		21.793848		351,644		0.88%		27.47%
2009		0.00%		6,834		18.034685		123,249		1.94%		29.54%
2009		0.50%		131,099		17.443192		2,286,785		1.94%		28.90%
2009		0.80%		15,469		17.097660		264,484		1.94%		28.51%
Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)
2013		0.00%		4,965		19.119582		94,929		1.94%		-0.97%
2013		0.50%		45,657		18.308816		835,926		1.94%		-1.47%
2013		0.80%		7,143		17.838977		127,424		1.94%		-1.76%
2012		0.00%		6,582		19.307248		127,080		1.46%		13.16%
2012		0.50%		50,583		18.581214		939,894		1.46%		12.59%
2012		0.80%		9,824		18.158794		178,392		1.46%		12.25%
2011		0.00%		10,223		17.062376		174,429		0.99%		-15.86%
2011		0.50%		63,119		16.503252		1,041,669		0.99%		-16.28%
2011		0.80%		11,210		16.176657		181,340		0.99%		-16.53%
2010		0.00%		9,970		20.278309		202,175		1.69%		17.51%
2010		0.50%		70,122		19.711997		1,382,245		1.69%		16.93%
2010		0.80%		13,337		19.379887		258,470		1.69%		16.58%
2009		0.00%		7,269		17.256364		125,437		3.67%		72.63%
2009		0.50%		81,267		16.858387		1,370,031		3.67%		71.77%
2009		0.80%		15,116		16.624073		251,289		3.67%		71.26%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Templeton Foreign Securities Fund - Class 1 (TIF)
2013		0.00%		163	$	28.677989	$	4,675		2.54%		23.27%
2013		0.50%		6,799		27.188535		184,855		2.54%		22.66%
2013		0.80%		545		26.332251		14,351		2.54%		22.29%
2012		0.00%		166		23.263845		3,862		3.71%		18.60%
2012		0.50%		7,020		22.166042		155,606		3.71%		18.00%
2012		0.80%		621		21.532384		13,372		3.71%		17.65%
2011		0.00%		169		19.616024		3,315		1.90%		-10.44%
2011		0.50%		12,325		18.784240		231,516		1.90%		-10.89%
2011		0.80%		683		18.302200		12,500		1.90%		-11.16%
2010		0.00%		172		21.903633		3,767		2.09%		8.67%
2010		0.50%		13,857		21.079885		292,104		2.09%		8.13%
2010		0.80%		1,192		20.600592		24,556		2.09%		7.81%
2009		0.00%		176		20.155256		3,547		4.14%		37.34%
2009		0.50%		14,701		19.494379		286,587		4.14%		36.66%
2009		0.80%		1,483		19.108316		28,338		4.14%		36.25%
Templeton Foreign Securities Fund - Class 3 (TIF3)
2013		0.00%		4,947		18.236527		90,216		2.22%		22.98%
2013		0.50%		73,327		17.463266		1,280,529		2.22%		22.37%
2013		0.80%		7,835		17.015082		133,313		2.22%		22.00%
2012		0.00%		5,081		14.829007		75,346		2.99%		18.30%
2012		0.50%		56,458		14.271362		805,733		2.99%		17.71%
2012		0.80%		9,020		13.946827		125,800		2.99%		17.36%
2011		0.00%		6,118		12.534749		76,688		1.73%		-10.68%
2011		0.50%		73,808		12.123973		894,846		1.73%		-11.12%
2011		0.80%		9,570		11.883946		113,729		1.73%		-11.39%
2010		0.00%		5,607		14.033220		78,684		1.74%		8.41%
2010		0.50%		75,119		13.641305		1,024,721		1.74%		7.87%
2010		0.80%		9,620		13.411382		129,017		1.74%		7.54%
2009		0.00%		12,029		12.945045		155,716		3.88%		37.20%
2009		0.50%		75,293		12.646528		952,195		3.88%		36.51%
2009		0.80%		10,766		12.470682		134,259		3.88%		36.10%
Templeton Global Bond Securities Fund - Class 3 (FTVGI3)
2013		0.00%		12,756		20.700503		264,056		4.53%		1.64%
2013		0.50%		95,008		19.822913		1,883,335		4.53%		1.13%
2013		0.80%		10,281		19.314319		198,571		4.53%		0.83%
2012		0.00%		14,188		20.367363		288,972		6.12%		15.06%
2012		0.50%		135,920		19.601667		2,664,259		6.12%		14.49%
2012		0.80%		15,489		19.156120		296,709		6.12%		14.14%
2011		0.00%		20,700		17.701343		366,418		5.58%		-0.83%
2011		0.50%		161,058		17.121471		2,757,550		5.58%		-1.32%
2011		0.80%		15,838		16.782688		265,804		5.58%		-1.62%
2010		0.00%		15,914		17.849519		284,057		1.58%		14.38%
2010		0.50%		151,403		17.351122		2,627,012		1.58%		13.81%
2010		0.80%		14,717		17.058765		251,054		1.58%		13.47%
2009		0.00%		16,059		15.605635		250,611		14.02%		18.69%
2009		0.50%		131,249		15.245867		2,001,005		14.02%		18.09%
2009		0.80%		15,279		15.033976		229,704		14.02%		17.74%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)
2013		0.00%		5,110	$	13.434293	$	68,649		11.80%		23.77%
2013		0.50%		4,833		13.059007		63,114		11.80%		23.15%
2013		0.80%		1,921		12.838902		24,664		11.80%		22.78%
2012		0.00%		959		10.854248		10,409		3.11%		15.33%
2012		0.50%		4,840		10.603889		51,323		3.11%		14.76%
2012		0.80%		1,840		10.456468		19,240		3.11%		14.41%
2011		0.00%		977		9.411247		9,195		0.01%		-1.54%
2011		0.50%		9,398		9.240357		86,841		0.01%		-2.03%
2011		0.80%		1,897		9.139329		17,337		0.01%		-2.32%
2010		0.00%		995		9.558606		9,511		3.02%		10.25%
2010		0.50%		4,234		9.431991		39,935		3.02%		9.70%
2010		0.80%		1,377		9.356850		12,884		3.02%		9.38%
2009		0.00%		1,014		8.669683		8,791		4.16%		30.25%
2009		0.50%		1,011		8.597673		8,692		4.16%		29.60%
2009		0.80%		1,461		8.554781		12,499		4.16%		29.21%
Short Duration Bond Portfolio - I Class Shares (AMTB)
2013		0.00%		35,883		18.068566		648,354		2.13%		0.62%
2013		0.50%		39,560		25.892092		1,024,291		2.13%		0.11%
2013		0.80%		11,902		20.398673		242,785		2.13%		-0.18%
2013		1.00%		74,230		12.810813		950,947		2.13%		-0.38%
2013		1.30%		184		19.479537		3,584		2.13%		-0.68%
2012		0.00%		39,865		17.957800		715,888		3.05%		4.61%
2012		0.50%		46,960		25.862355		1,214,496		3.05%		4.08%
2012		0.80%		12,214		20.436462		249,611		3.05%		3.77%
2012		1.00%		69,717		12.860239		896,577		3.05%		3.56%
2012		1.30%		97		19.613461		1,903		3.05%		3.25%
2011		0.00%		40,577		17.167186		696,593		3.92%		0.29%
2011		0.50%		44,848		24.847995		1,114,383		3.92%		-0.21%
2011		0.80%		14,684		19.694057		289,188		3.92%		-0.51%
2011		1.00%		51,341		12.417925		637,549		3.92%		-0.71%
2011		1.30%		17		18.995943		323		3.92%		-1.00%
2010		0.00%		41,547		17.117742		711,191		5.13%		5.28%
2010		0.50%		45,156		24.900288		1,124,397		5.13%		4.76%
2010		0.80%		17,506		19.794631		346,525		5.13%		4.45%
2010		1.00%		35,502		12.506266		443,997		5.13%		4.24%
2009		0.00%		44,762		16.258487		727,762		7.24%		13.33%
2009		0.50%		48,176		23.768919		1,145,091		7.24%		12.76%
2009		0.80%		16,879		18.952010		319,891		7.24%		12.42%
2009		1.00%		45,151		11.997871		541,716		7.24%		12.20%
Balanced Portfolio - I Class Shares (AMBP)
2013		0.50%		1,279		16.107370		20,601		0.00%		17.89%
2013		0.80%		534		34.174349		18,249		0.00%		17.54%
2012		0.50%		903		13.662782		12,337		0.00%		8.80%
2012		0.80%		698		29.074823		20,294		0.00%		8.47%
2011		0.50%		899		12.558209		11,290		0.31%		-1.13%
2011		0.80%		744		26.804764		19,943		0.31%		-1.42%
2010		0.50%		991		12.701252		12,587		0.90%		18.24%
2010		0.80%		712		27.191348		19,360		0.90%		17.88%
2009		0.50%		2,307		10.742321		24,783		1.16%		21.86%
2009		0.80%		1,017		23.066620		23,459		1.16%		21.49%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Growth Portfolio - I Class Shares (AMTG)
2013		0.00%		28,006	$	32.573007	$	912,240		0.00%		31.85%
2013		0.50%		1,258		74.886699		94,207		0.00%		31.19%
2013		0.80%		413		49.780631		20,559		0.00%		30.80%
2013		1.00%		96,782		10.443227		1,010,716		0.00%		30.54%
2013		1.30%		223		46.355252		10,337		0.00%		30.15%
2012		0.00%		30,131		24.704444		744,370		0.00%		12.60%
2012		0.50%		1,416		57.081042		80,827		0.00%		12.04%
2012		0.80%		492		38.058319		18,725		0.00%		11.70%
2012		1.00%		102,324		8.000039		818,596		0.00%		11.48%
2012		1.30%		119		35.617069		4,238		0.00%		11.14%
2011		0.00%		32,280		21.939823		708,217		0.00%		-0.21%
2011		0.50%		1,676		50.947928		85,389		0.00%		-0.71%
2011		0.80%		506		34.071422		17,240		0.00%		-1.01%
2011		1.00%		110,903		7.176346		795,878		0.00%		-1.21%
2010		0.00%		37,800		21.987079		831,112		0.00%		31.33%
2010		0.50%		1,798		51.313097		92,261		0.00%		30.68%
2010		0.80%		524		34.418528		18,035		0.00%		30.29%
2010		1.00%		122,216		7.263944		887,770		0.00%		30.03%
2009		0.00%		49,082		16.741370		821,700		0.00%		30.36%
2009		0.50%		1,850		39.266295		72,643		0.00%		29.71%
2009		0.80%		542		26.417094		14,318		0.00%		29.32%
2009		1.00%		151,381		5.586407		845,676		0.00%		29.06%
Guardian Portfolio - I Class Shares (AMGP)
2013		0.00%		3,816		23.358987		89,138		0.80%		38.81%
2013		0.80%		2		20.606782		41		0.80%		37.71%
2013		1.00%		6,693		17.952067		120,153		0.80%		37.43%
2012		0.00%		6,748		16.827470		113,552		0.27%		12.73%
2012		0.80%		2		14.963947		30		0.27%		11.83%
2012		1.00%		3,505		13.062262		45,783		0.27%		11.60%
2011		0.00%		7,106		14.927741		106,077		0.45%		-2.94%
2011		0.80%		2		13.381489		27		0.45%		-3.71%
2011		1.00%		5,218		11.704343		61,073		0.45%		-3.90%
2010		0.00%		4,641		15.379896		71,378		0.40%		19.01%
2010		0.80%		2		13.897336		28		0.40%		18.07%
2010		1.00%		11,741		12.179833		143,003		0.40%		17.83%
2009		0.00%		4,964		12.922921		64,149		0.18%		29.69%
2009		0.80%		2		11.770887		24		0.18%		28.65%
2009		1.00%		4,336		10.336808		44,820		0.18%		28.40%
International Portfolio - S Class Shares (AMINS)
2013		0.00%		1,213		16.109309		19,541		1.16%		17.83%
2012		0.00%		1,723		13.671294		23,556		0.82%		18.48%
2011		0.00%		1,202		11.539024		13,870		12.26%		-12.33%
2010		0.00%		172		13.162077		2,264		13.14%		22.01%
2009		0.00%		1,548		10.787351		16,699		0.42%		34.51%
Mid-Cap Growth Portfolio - S Class Shares (AMMCGS)
2013		0.00%		537		32.217787		17,301		0.00%		32.28%
2012		0.00%		68		24.354864		1,656		0.00%		12.10%
2011		0.00%		63		21.725830		1,369		0.00%		0.26%
2009		0.00%		558		16.830660		9,392		0.00%		31.34%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)
2013		0.00%		76,029	$	33.929461	$	2,579,623		1.19%		31.14%
2013		0.80%		56		45.079527		2,524		1.19%		30.09%
2013		1.00%		29,271		17.607455		515,388		1.19%		29.83%
2012		0.00%		84,168		25.873568		2,177,726		0.42%		16.60%
2012		0.80%		56		34.652161		1,941		0.42%		15.67%
2012		1.00%		30,453		13.561747		412,996		0.42%		15.44%
2011		0.00%		86,633		22.190216		1,922,405		0.00%		-11.36%
2011		0.80%		56		29.958324		1,678		0.00%		-12.06%
2011		1.00%		35,996		11.748254		422,890		0.00%		-12.24%
2010		0.00%		94,089		25.033405		2,355,368		0.62%		15.67%
2010		0.80%		56		34.067932		1,908		0.62%		14.74%
2010		1.00%		40,119		13.386569		537,056		0.62%		14.52%
2009		0.00%		105,319		21.642878		2,279,406		0.78%		56.07%
2009		0.80%		56		29.690132		1,663		0.78%		54.83%
2009		1.00%		76,445		11.689700		893,619		0.78%		54.52%
Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class S (AMRS)
2013		0.00%		1,376		19.528070		26,871		0.82%		36.71%
2012		0.00%		1,543		14.284382		22,041		0.30%		15.37%
2011		0.00%		2,941		12.380922		36,412		0.40%		-6.70%
2010		0.00%		1,294		13.270255		17,172		0.25%		25.99%
2009		0.00%		2,195		10.532952		23,120		0.22%		46.16%
Small-Cap Growth Portfolio - S Class Shares (AMFAS)
2013		0.00%		843		21.426193		18,062		0.00%		45.83%
2013		0.50%		7,637		20.313368		155,133		0.00%		45.11%
2013		0.80%		708		19.673555		13,929		0.00%		44.67%
2012		0.00%		856		14.692238		12,577		0.00%		8.82%
2012		0.50%		5,453		13.998892		76,336		0.00%		8.28%
2012		0.80%		689		13.598663		9,369		0.00%		7.95%
2011		0.00%		1,577		13.501272		21,292		0.00%		-1.06%
2011		0.50%		26,395		12.928758		341,255		0.00%		-1.55%
2011		0.80%		3,105		12.596940		39,113		0.00%		-1.85%
2010		0.00%		968		13.645975		13,209		0.00%		19.61%
2010		0.50%		3,748		13.132690		49,221		0.00%		19.01%
2010		0.80%		712		12.834011		9,138		0.00%		18.66%
2009		0.00%		646		11.408745		7,370		0.00%		22.75%
2009		0.50%		6,371		11.034565		70,301		0.00%		22.14%
2009		0.80%		384		10.815956		4,153		0.00%		21.78%
Socially Responsive Portfolio - I Class Shares (AMSRS)
2013		0.00%		1,293		26.524850		34,297		0.78%		37.60%
2013		0.50%		27,419		25.147151		689,510		0.78%		36.92%
2013		0.80%		3,040		24.355078		74,039		0.78%		36.51%
2012		0.00%		898		19.276454		17,310		0.21%		10.98%
2012		0.50%		20,471		18.366751		375,986		0.21%		10.42%
2012		0.80%		3,063		17.841641		54,649		0.21%		10.09%
2011		0.00%		902		17.369356		15,667		0.36%		-3.08%
2011		0.50%		26,477		16.632806		440,387		0.36%		-3.56%
2011		0.80%		4,463		16.205928		72,327		0.36%		-3.85%
2010		0.00%		938		17.921368		16,810		0.04%		22.85%
2010		0.50%		21,590		17.247280		372,369		0.04%		22.24%
2010		0.80%		3,569		16.855027		60,156		0.04%		21.88%
2009		0.00%		984		14.587514		14,354		2.20%		31.43%
2009		0.50%		17,264		14.109102		243,580		2.20%		30.77%
2009		0.80%		3,343		13.829593		46,232		2.20%		30.38%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Capital Income Fund/VA - Non-Service Shares (OVMS)
2013		0.00%		23,362	$	24.479189	$	571,883		2.38%		13.17%
2013		0.50%		91,522		38.977736		3,567,320		2.38%		12.60%
2013		0.80%		35,610		36.034905		1,283,203		2.38%		12.27%
2013		1.00%		47,341		13.105120		620,409		2.38%		12.04%
2013		1.30%		48		33.555465		1,611		2.38%		11.71%
2012		0.00%		25,505		21.630621		551,689		1.33%		12.34%
2012		0.50%		96,541		34.614598		3,341,728		1.33%		11.78%
2012		0.80%		40,574		32.097298		1,302,316		1.33%		11.44%
2012		1.00%		63,128		11.696460		738,374		1.33%		11.22%
2012		1.30%		4		30.038576		120		1.33%		10.89%
2011		0.00%		28,648		19.254563		551,605		2.29%		0.72%
2011		0.50%		109,322		30.967082		3,385,383		2.29%		0.22%
2011		0.80%		44,239		28.801503		1,274,150		2.29%		-0.08%
2011		1.00%		68,952		10.516516		725,135		2.29%		-0.28%
2010		0.00%		35,250		19.116988		673,874		1.39%		12.91%
2010		0.50%		118,952		30.899562		3,675,565		1.39%		12.35%
2010		0.80%		48,388		28.824840		1,394,776		1.39%		12.02%
2010		1.00%		70,620		10.546061		744,763		1.39%		11.79%
2009		0.00%		39,179		16.930557		663,322		0.00%		21.89%
2009		0.50%		128,001		27.502607		3,520,361		0.00%		21.29%
2009		0.80%		51,885		25.732996		1,335,156		0.00%		20.92%
2009		1.00%		101,706		9.433696		959,463		0.00%		20.68%
Capital Appreciation Fund/VA - Non-Service Shares (OVGR)
2010		0.80%		5		16.349692		82		0.20%		7.61%
2009		0.00%		47,969		16.786468		805,230		0.33%		44.52%
2009		0.50%		249,796		15.724961		3,928,032		0.33%		43.80%
2009		0.80%		87,828		15.192792		1,334,353		0.33%		43.37%
2009		1.00%		60,996		7.628780		465,325		0.33%		43.08%
Core Bond Fund/VA - Non-Service Shares (OVB)
2013		0.00%		35,901		17.206945		617,747		5.06%		-0.10%
2013		0.50%		128,564		25.113977		3,228,753		5.06%		-0.60%
2013		0.80%		29,928		22.243594		665,706		5.06%		-0.90%
2013		1.00%		40,654		11.866194		482,408		5.06%		-1.09%
2013		1.30%		87		21.524233		1,873		5.06%		-1.39%
2012		0.00%		41,017		17.224007		706,477		4.88%		10.29%
2012		0.50%		128,505		25.264893		3,246,665		4.88%		9.74%
2012		0.80%		34,873		22.444505		782,707		4.88%		9.41%
2012		1.00%		50,794		11.997337		609,393		4.88%		9.19%
2012		1.30%		76		21.827521		1,659		4.88%		8.86%
2011		0.00%		45,210		15.616793		706,035		5.94%		8.27%
2011		0.50%		129,643		23.022454		2,984,700		5.94%		7.73%
2011		0.80%		38,953		20.513983		799,081		5.94%		7.41%
2011		1.00%		54,684		10.987424		600,836		5.94%		7.19%
2010		0.00%		76,047		14.424409		1,096,933		1.78%		11.41%
2010		0.50%		140,529		21.370887		3,003,229		1.78%		10.86%
2010		0.80%		42,335		19.099412		808,574		1.78%		10.53%
2010		1.00%		47,864		10.250177		490,614		1.78%		10.31%
2009		0.00%		77,718		12.946581		1,006,182		0.00%		9.61%
2009		0.50%		149,430		19.277481		2,880,634		0.00%		9.07%
2009		0.80%		46,461		17.280243		802,857		0.00%		8.74%
2009		1.00%		45,493		9.292438		422,741		0.00%		8.52%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Global Securities Fund/VA - Class 3 (OVGS3)
2013		0.00%		24,114	$	20.707226	$	499,334		1.38%		27.34%
2013		0.50%		359,779		19.829099		7,134,093		1.38%		26.70%
2013		0.80%		79,174		19.320265		1,529,663		1.38%		26.32%
2012		0.00%		27,569		16.261792		448,321		2.14%		21.23%
2012		0.50%		348,574		15.650185		5,455,248		2.14%		20.62%
2012		0.80%		97,044		15.294367		1,484,227		2.14%		20.26%
2011		0.00%		26,357		13.414448		353,565		1.27%		-8.27%
2011		0.50%		386,331		12.974764		5,012,554		1.27%		-8.72%
2011		0.80%		104,174		12.717946		1,324,879		1.27%		-9.00%
2010		0.00%		32,419		14.623513		474,080		1.42%		15.97%
2010		0.50%		408,280		14.215010		5,803,704		1.42%		15.40%
2010		0.80%		113,128		13.975453		1,581,015		1.42%		15.05%
2009		0.00%		35,638		12.609317		449,371		2.12%		39.70%
2009		0.50%		424,101		12.318451		5,224,267		2.12%		39.00%
2009		0.80%		116,945		12.147187		1,420,553		2.12%		38.58%
Global Securities Fund/VA - Non-Service Shares (OVGS)
2013		0.00%		25,705		57.762074		1,484,774		1.38%		27.31%
2013		0.50%		164,315		65.378449		10,742,660		1.38%		26.67%
2013		0.80%		26,742		62.768366		1,678,552		1.38%		26.29%
2013		1.00%		52,368		19.369184		1,014,325		1.38%		26.04%
2013		1.30%		10		56.724747		567		1.38%		25.66%
2012		0.00%		27,835		45.372528		1,262,944		2.15%		21.26%
2012		0.50%		179,840		51.612469		9,281,986		2.15%		20.66%
2012		0.80%		36,797		49.700720		1,828,837		2.15%		20.30%
2012		1.00%		62,172		15.367427		955,424		2.15%		20.06%
2012		1.30%		3		45.140290		135		2.15%		19.70%
2011		0.00%		30,723		37.416119		1,149,535		1.32%		-8.29%
2011		0.50%		208,594		42.775604		8,922,734		1.32%		-8.75%
2011		0.80%		43,138		41.315188		1,782,255		1.32%		-9.02%
2011		1.00%		69,574		12.800257		890,565		1.32%		-9.20%
2010		0.00%		39,829		40.798071		1,624,946		1.48%		15.96%
2010		0.50%		251,175		46.875497		11,773,953		1.48%		15.39%
2010		0.80%		51,453		45.410978		2,336,531		1.48%		15.04%
2010		1.00%		76,786		14.097349		1,082,479		1.48%		14.81%
2009		0.00%		44,678		35.181581		1,571,843		2.37%		39.77%
2009		0.50%		297,880		40.624738		12,101,297		2.37%		39.07%
2009		0.80%		60,528		39.473604		2,389,258		2.37%		38.66%
2009		1.00%		93,248		12.278657		1,144,960		2.37%		38.38%
Main Street Fund(R)/VA - Non-Service Shares (OVGI)
2013		0.00%		21,539		16.458811		354,506		1.10%		31.77%
2013		0.50%		45,618		15.371629		701,223		1.10%		31.12%
2013		0.80%		10,025		14.754067		147,910		1.10%		30.72%
2013		1.00%		4,106		14.348295		58,914		1.10%		30.46%
2012		0.00%		24,343		12.490314		304,052		1.07%		16.87%
2012		0.50%		50,353		11.723693		590,323		1.07%		16.29%
2012		0.80%		11,568		11.286461		130,562		1.07%		15.94%
2012		1.00%		4,226		10.998010		46,478		1.07%		15.71%
2011		0.00%		19,438		10.687265		207,739		0.86%		-0.01%
2011		0.50%		59,890		10.081693		603,793		0.86%		-0.51%
2011		0.80%		12,913		9.734919		125,707		0.86%		-0.81%
2011		1.00%		2,423		9.505148		23,031		0.86%		-1.01%
2010		0.00%		25,292		10.688816		270,342		1.16%		16.11%
2010		0.50%		61,553		10.133572		623,752		1.16%		15.53%
2010		0.80%		14,524		9.814366		142,544		1.16%		15.18%
2010		1.00%		2,540		9.601865		24,389		1.16%		14.95%
2009		0.00%		29,189		9.205990		268,714		2.19%		28.29%
2009		0.50%		82,465		8.771479		723,340		2.19%		27.65%
2009		0.80%		15,097		8.520671		128,637		2.19%		27.26%
2009		1.00%		3,186		8.352856		26,612		2.19%		27.01%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Main Street Small- & Mid-Cap Fund(R)/VA - Non-Service Shares (OVSC)
2013		0.00%		3,573	$	35.423066	$	126,567		0.95%		41.01%
2013		0.50%		34,448		33.583284		1,156,877		0.95%		40.31%
2013		0.80%		7,508		32.525596		244,202		0.95%		39.89%
2012		0.00%		1,538		25.120110		38,635		0.60%		17.99%
2012		0.50%		27,760		23.934670		664,426		0.60%		17.40%
2012		0.80%		6,485		23.250430		150,779		0.60%		17.04%
2011		0.00%		2,898		21.290587		61,700		0.63%		-2.21%
2011		0.50%		27,732		20.387760		565,393		0.63%		-2.70%
2011		0.80%		6,787		19.864554		134,821		0.63%		-2.99%
2010		0.00%		4,878		21.772215		106,205		0.62%		23.41%
2010		0.50%		29,814		20.953275		624,701		0.62%		22.79%
2010		0.80%		7,118		20.476795		145,754		0.62%		22.42%
2009		0.00%		4,551		17.642817		80,292		0.68%		37.20%
2009		0.50%		39,875		17.064211		680,435		0.68%		36.51%
2009		0.80%		8,853		16.726211		148,077		0.68%		36.10%
Discovery Mid Cap Growth Fund/VA - Non-Service Shares (OVAG)
2013		0.00%		7,017		9.900062		69,469		0.01%		35.98%
2013		0.50%		67,291		9.245959		622,170		0.01%		35.31%
2013		0.80%		24,938		8.874402		221,310		0.01%		34.90%
2013		1.00%		24,456		7.644653		186,958		0.01%		34.63%
2012		0.00%		7,137		7.280329		51,960		0.00%		16.45%
2012		0.50%		78,625		6.833364		537,273		0.00%		15.86%
2012		0.80%		27,812		6.578454		182,960		0.00%		15.52%
2012		1.00%		27,106		5.678189		153,913		0.00%		15.29%
2011		0.00%		7,149		6.252049		44,696		0.00%		1.10%
2011		0.50%		88,996		5.897695		524,871		0.00%		0.59%
2011		0.80%		30,607		5.694788		174,300		0.00%		0.29%
2011		1.00%		42,359		4.925320		208,632		0.00%		0.09%
2010		0.00%		5,313		6.184290		32,857		0.00%		27.46%
2010		0.50%		83,759		5.862955		491,075		0.00%		26.83%
2010		0.80%		35,769		5.678217		203,104		0.00%		26.45%
2010		1.00%		35,974		4.920789		177,020		0.00%		26.20%
2009		0.00%		5,414		4.851779		26,268		0.00%		32.61%
2009		0.50%		101,283		4.622700		468,201		0.00%		31.95%
2009		0.80%		47,057		4.490472		211,308		0.00%		31.55%
2009		1.00%		17,313		3.899260		67,508		0.00%		31.29%
Global Strategic Income Fund/VA: Non-service Shares (OVSB)
2013		0.00%		4,623		10.166070		46,998		4.89%		-0.13%
2013		0.50%		10,314		10.106259		104,236		4.89%		-0.63%
2013		0.80%		2,809		10.070537		28,288		4.89%		-0.93%
2012		0.00%		4,557		10.179532		46,388		0.00%		1.80%		10/26/2012
2012		0.50%		8,166		10.170366		83,051		0.00%		1.70%		10/26/2012
2012		0.80%		3,560		10.164863		36,187		0.00%		1.65%		10/26/2012
All Asset Portfolio - Administrative Class (PMVAAA)
2013		0.50%		42,586		10.661336		454,024		4.32%		-0.23%
2013		0.80%		4,166		10.608164		44,194		4.32%		-0.53%
2012		0.50%		66,356		10.685592		709,053		5.75%		6.86%		5/1/2012
2012		0.80%		3,037		10.664248		32,387		5.75%		6.64%		5/1/2012

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Foreign Bond Portfolio (Unhedged) - Administrative Class (PMVFBA)
2013		0.00%		517	$	12.854946	$	6,646		1.79%		-6.47%
2013		0.50%		42,182		12.557432		529,698		1.79%		-6.94%
2013		0.80%		1,172		12.381567		14,511		1.79%		-7.22%
2012		0.00%		2,260		13.744711		31,063		5.63%		5.50%
2012		0.50%		42,282		13.494082		570,557		5.63%		4.97%
2012		0.80%		1,719		13.345323		22,941		5.63%		4.65%
2011		0.00%		2,159		13.028098		28,128		1.99%		8.52%
2011		0.50%		56,209		12.854999		722,567		1.99%		7.98%
2011		0.80%		5,015		12.751830		63,950		1.99%		7.66%
2010		0.00%		1,029		12.004915		12,353		1.38%		9.48%
2010		0.50%		47,663		11.904770		567,417		1.38%		8.93%
2010		0.80%		2,870		11.844845		33,995		1.38%		8.60%
2009		0.00%		1,048		10.965488		11,492		0.82%		9.65%		4/30/2009
2009		0.50%		13,390		10.928657		146,335		0.82%		9.29%		4/30/2009
2009		0.80%		1,381		10.906528		15,062		0.82%		9.07%		4/30/2009
Low Duration Portfolio - Administrative Class (PMVLDA)
2013		0.00%		31,197		12.431406		387,823		1.47%		-0.13%
2013		0.50%		118,845		12.143708		1,443,219		1.47%		-0.63%
2013		0.80%		9,183		11.973624		109,954		1.47%		-0.93%
2012		0.00%		34,675		12.447911		431,631		1.90%		5.86%
2012		0.50%		150,562		12.220936		1,840,009		1.90%		5.33%
2012		0.80%		11,713		12.086211		141,566		1.90%		5.01%
2011		0.00%		36,471		11.759209		428,870		1.68%		1.11%
2011		0.50%		147,186		11.602960		1,707,793		1.68%		0.60%
2011		0.80%		14,960		11.509840		172,187		1.68%		0.30%
2010		0.00%		37,759		11.630295		439,148		1.65%		5.29%
2010		0.50%		148,112		11.533272		1,708,216		1.65%		4.76%
2010		0.80%		12,261		11.475215		140,698		1.65%		4.45%
2009		0.00%		9,815		11.045905		108,416		1.46%		10.46%		4/30/2009
2009		0.50%		128,861		11.008805		1,418,606		1.46%		10.09%		4/30/2009
2009		0.80%		2,513		10.986514		27,609		1.46%		9.87%		4/30/2009
Total Return Portfolio - Administrative Class (PMVTRA)
2013		0.50%		111,647		10.717485		1,196,575		2.18%		-2.45%
2013		0.80%		5,095		10.631288		54,166		2.18%		-2.74%
2012		0.50%		127,731		10.986175		1,403,275		2.57%		9.05%
2012		0.80%		5,884		10.930788		64,317		2.57%		8.72%
2011		0.50%		27,221		10.074350		274,234		1.29%		0.74%		4/29/2011
2011		0.80%		4,660		10.053955		46,851		1.29%		0.54%		4/29/2011
Putnam VT Growth and Income Fund - Class IB (PVGIB)
2013		0.00%		363		22.198468		8,058		2.08%		35.68%
2013		0.50%		4,959		21.045411		104,364		2.08%		35.00%
2013		0.80%		1,126		20.382519		22,951		2.08%		34.60%
2012		0.00%		55		16.361335		900		1.72%		19.14%
2012		0.50%		5,062		15.589153		78,912		1.72%		18.54%
2012		0.80%		906		15.143447		13,720		1.72%		18.19%
2011		0.00%		60		13.733218		824		1.50%		-4.64%
2011		0.50%		4,875		13.150793		64,110		1.50%		-5.12%
2011		0.80%		931		12.813268		11,929		1.50%		-5.40%
2010		0.50%		6,980		13.859825		96,742		0.81%		13.81%
2010		0.80%		1,773		13.544607		24,015		0.81%		13.47%
2009		0.50%		3,027		12.178324		36,864		2.66%		29.16%
2009		0.80%		1,647		11.937066		19,660		2.66%		28.78%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Putnam VT International Equity Fund - Class IB (PVTIGB)
2013		0.00%		224	$	23.021172	$	5,157		1.39%		28.07%
2013		0.50%		11,936		21.825300		260,507		1.39%		27.43%
2013		0.80%		1,673		21.137809		35,364		1.39%		27.05%
2012		0.00%		230		17.975464		4,134		2.14%		21.92%
2012		0.50%		11,969		17.127054		204,994		2.14%		21.31%
2012		0.80%		1,824		16.637352		30,347		2.14%		20.94%
2011		0.00%		238		14.744148		3,509		3.11%		-16.93%
2011		0.50%		9,922		14.118815		140,087		3.11%		-17.35%
2011		0.80%		1,807		13.756422		24,858		3.11%		-17.59%
2010		0.00%		501		17.749703		8,893		3.38%		10.03%
2010		0.50%		14,608		17.082057		249,535		3.38%		9.48%
2010		0.80%		2,288		16.693595		38,195		3.38%		9.15%
2009		0.00%		482		16.132414		7,776		0.00%		24.63%
2009		0.50%		10,114		15.603325		157,812		0.00%		24.01%
2009		0.80%		2,481		15.294248		37,945		0.00%		23.64%
Putnam VT Voyager Fund - Class IB (PVTVB)
2013		0.00%		793		24.616350		19,521		0.77%		43.72%
2013		0.50%		18,702		23.337763		436,463		0.77%		43.01%
2013		0.80%		2,505		22.602678		56,620		0.77%		42.58%
2012		0.00%		1,061		17.127486		18,172		0.38%		14.23%
2012		0.50%		19,100		16.319175		311,696		0.38%		13.66%
2012		0.80%		2,910		15.852589		46,131		0.38%		13.32%
2011		0.00%		2,304		14.994106		34,546		0.00%		-17.85%
2011		0.50%		32,398		14.358253		465,179		0.00%		-18.26%
2011		0.80%		3,611		13.989739		50,517		0.00%		-18.50%
2010		0.00%		1,600		18.251644		29,203		1.03%		20.80%
2010		0.50%		44,057		17.565173		773,869		1.03%		20.20%
2010		0.80%		3,423		17.165733		58,758		1.03%		19.84%
2009		0.00%		3,029		15.109296		45,766		0.21%		63.90%
2009		0.50%		34,997		14.613809		511,439		0.21%		63.08%
2009		0.80%		5,872		14.324349		84,113		0.21%		62.59%
VI American Franchise Fund - Series I Shares (ACEG)
2013		0.50%		1,211		13.549301		16,408		0.38%		39.44%
2013		0.80%		616		13.481308		8,304		0.38%		39.02%
2012		0.50%		794		9.717084		7,715		0.00%		-2.83%		4/27/2012
2012		0.80%		426		9.697354		4,131		0.00%		-3.03%		4/27/2012
VI Value Opportunities Fund - Series I Shares (AVBVI)
2013		0.00%		306		20.634996		6,314		0.67%		33.75%
2012		0.00%		1,028		15.427533		15,860		1.75%		17.70%
2011		0.00%		842		13.107128		11,036		0.80%		-3.05%
2010		0.00%		1,947		13.519409		26,322		0.63%		7.35%
2009		0.00%		1,851		12.593649		23,311		0.19%		48.00%
Invesco - Invesco VI Mid Cap Core Equity Fund: Series I Shares (AVMCCI)
2013		0.50%		96		12.851090		1,234		0.43%		28.17%
Variable Fund - Multi-Hedge Strategies (RVARS)
2013		0.80%		29		9.942289		288		0.00%		-0.58%		5/1/2013
Blue Chip Growth Portfolio - II (TRBCG2)
2009		0.00%		2,666		11.315697		30,168		0.00%		41.79%
2009		0.50%		89,247		11.054670		986,596		0.00%		41.08%
2009		0.80%		3,347		10.900900		36,485		0.00%		40.66%
Equity Income Portfolio - II (TREI2)
2009		0.00%		5,619		10.380043		58,325		1.76%		25.25%
2009		0.50%		108,382		10.140580		1,099,056		1.76%		24.63%
2009		0.80%		12,364		9.999548		123,634		1.76%		24.25%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Health Sciences Portfolio - II (TRHS2)
2013		0.00%		19,954	$	23.149472	$	461,925		0.00%		50.51%
2013		0.50%		153,298		22.729602		3,484,403		0.00%		49.76%
2013		0.80%		20,374		22.481324		458,034		0.00%		49.31%
2012		0.00%		15,998		15.380592		246,059		0.00%		31.00%
2012		0.50%		114,233		15.177218		1,733,739		0.00%		30.34%
2012		0.80%		19,506		15.056482		293,692		0.00%		29.95%
2011		0.00%		2,592		11.741045		30,433		0.00%		10.39%
2011		0.50%		53,213		11.643960		619,610		0.00%		9.84%
2011		0.80%		7,084		11.586088		82,076		0.00%		9.51%
2010		0.50%		16,581		10.601232		175,779		0.00%		6.01%		5/3/2010
2010		0.80%		347		10.580168		3,671		0.00%		5.80%		5/3/2010
Limited-Term Bond Portfolio - II (TRLT2)
2013		0.00%		2,608		12.837345		33,480		1.36%		-0.12%
2012		0.00%		10,329		12.852172		132,750		1.90%		2.44%
2011		0.00%		6,793		12.545962		85,225		2.15%		1.16%
2010		0.00%		6,647		12.402084		82,437		2.56%		2.86%
2009		0.00%		2,944		12.056984		35,496		3.37%		7.35%
VIP Trust - Unconstrained Emerging Markets Bond Fund - Initial Class (VWBF)
2013		0.00%		5,096		23.249070		118,477		2.33%		-9.17%
2013		0.50%		20,817		29.653654		617,300		2.33%		-9.62%
2013		0.80%		7,163		26.009363		186,305		2.33%		-9.89%
2013		1.00%		28,068		18.786130		527,289		2.33%		-10.07%
2013		1.30%		79		25.415144		2,008		2.33%		-10.34%
2012		0.00%		5,549		25.595762		142,031		2.29%		5.55%
2012		0.50%		24,266		32.810536		796,180		2.29%		5.02%
2012		0.80%		8,173		28.864790		235,912		2.29%		4.71%
2012		1.00%		31,066		20.890316		648,979		2.29%		4.50%
2012		1.30%		34		28.346804		964		2.29%		4.18%
2011		0.00%		6,926		24.249965		167,955		7.78%		8.14%
2011		0.50%		29,106		31.241583		909,318		7.78%		7.60%
2011		0.80%		10,022		27.567293		276,279		7.78%		7.28%
2011		1.00%		37,712		19.991316		753,913		7.78%		7.07%
2010		0.00%		6,589		22.424677		147,756		3.73%		6.20%
2010		0.50%		31,573		29.034421		916,704		3.73%		5.67%
2010		0.80%		10,759		25.696459		276,468		3.73%		5.35%
2010		1.00%		39,005		18.671817		728,294		3.73%		5.14%
2009		0.00%		7,706		21.116276		162,722		3.78%		5.98%
2009		0.50%		56,273		27.477379		1,546,235		3.78%		5.45%
2009		0.80%		12,645		24.391466		308,430		3.78%		5.14%
2009		1.00%		45,114		17.759052		801,182		3.78%		4.93%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Trust Emerging Markets Fund - Initial Class (VWEM)
2013		0.00%		31,368	$	32.956519	$	1,033,780		1.56%		12.02%
2013		0.50%		142,175		30.101401		4,279,667		1.56%		11.46%
2013		0.80%		19,831		28.759870		570,337		1.56%		11.13%
2013		1.00%		18,575		32.480271		603,321		1.56%		10.91%
2012		0.00%		33,427		29.420205		983,429		0.00%		29.81%
2012		0.50%		156,688		27.006103		4,231,532		0.00%		29.16%
2012		0.80%		26,610		25.880034		688,668		0.00%		28.77%
2012		1.00%		19,965		29.286403		584,703		0.00%		28.51%
2011		0.00%		45,284		22.664458		1,026,337		1.14%		-25.74%
2011		0.50%		170,495		20.909178		3,564,910		1.14%		-26.11%
2011		0.80%		29,321		20.097645		589,283		1.14%		-26.33%
2011		1.00%		30,102		22.788544		685,981		1.14%		-26.48%
2010		0.00%		49,317		30.519227		1,505,117		0.60%		26.84%
2010		0.50%		218,234		28.296732		6,175,309		0.60%		26.21%
2010		0.80%		36,181		27.280173		987,024		0.60%		25.83%
2010		1.00%		55,809		30.994649		1,729,780		0.60%		25.58%
2009		0.00%		56,278		24.061426		1,354,129		0.15%		113.17%
2009		0.50%		227,315		22.420831		5,096,591		0.15%		112.11%
2009		0.80%		40,628		21.680199		880,823		0.15%		111.48%
2009		1.00%		45,255		24.681404		1,116,957		0.15%		111.06%
VIP Trust Global Hard Assets Fund - Initial Class (VWHA)
2013		0.00%		17,973		41.390053		743,903		0.71%		10.53%
2013		0.50%		86,950		56.457132		4,908,948		0.71%		9.98%
2013		0.80%		12,955		65.687029		850,975		0.71%		9.65%
2013		1.00%		27,875		40.372010		1,125,370		0.71%		9.43%
2013		1.30%		9		54.718336		492		0.71%		9.11%
2012		0.00%		19,950		37.445535		747,038		0.59%		3.39%
2012		0.50%		100,766		51.332730		5,172,594		0.59%		2.87%
2012		0.80%		15,442		59.904317		925,042		0.59%		2.56%
2012		1.00%		33,842		36.891599		1,248,485		0.59%		2.36%
2011		0.00%		26,799		36.218953		970,632		1.22%		-16.45%
2011		0.50%		121,930		49.900813		6,084,406		1.22%		-16.87%
2011		0.80%		18,243		58.408750		1,065,551		1.22%		-17.12%
2011		1.00%		47,335		36.042787		1,706,085		1.22%		-17.28%
2010		0.00%		29,117		43.350096		1,262,225		0.39%		29.23%
2010		0.50%		140,153		60.024884		8,412,668		0.39%		28.59%
2010		0.80%		21,900		70.469849		1,543,290		0.39%		28.21%
2010		1.00%		53,240		43.572420		2,319,796		0.39%		27.95%
2009		0.00%		33,188		33.543671		1,113,247		0.25%		57.54%
2009		0.50%		158,845		46.678903		7,414,710		0.25%		56.75%
2009		0.80%		23,299		54.965986		1,280,653		0.25%		56.28%
2009		1.00%		74,591		34.054133		2,540,132		0.25%		55.97%
Variable Insurance Portfolios - Asset Strategy (WRASP)
2013		0.00%		10,896		17.994414		196,067		1.27%		25.13%
2013		0.50%		144,031		17.579459		2,531,987		1.27%		24.51%
2013		0.80%		17,448		17.335032		302,462		1.27%		24.13%
2012		0.00%		12,697		14.380435		182,588		1.16%		19.18%
2012		0.50%		170,634		14.119186		2,409,213		1.16%		18.58%
2012		0.80%		19,979		13.964683		279,000		1.16%		18.22%
2011		0.00%		23,924		12.066588		288,681		1.03%		-7.21%
2011		0.50%		154,370		11.906878		1,838,065		1.03%		-7.67%
2011		0.80%		20,266		11.812045		239,383		1.03%		-7.94%
2010		0.00%		24,462		13.003550		318,093		1.17%		8.67%
2010		0.50%		135,882		12.895656		1,752,288		1.17%		8.13%
2010		0.80%		18,587		12.831331		238,496		1.17%		7.81%
2009		0.00%		7,118		11.965580		85,171		0.07%		19.66%		5/1/2009
2009		0.50%		91,769		11.925721		1,094,411		0.07%		19.26%		5/1/2009
2009		0.80%		6,426		11.901851		76,481		0.07%		19.02%		5/1/2009

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Variable Insurance Portfolios - High Income (WRHIP)
2013		0.50%		80,665	$	11.955327	$	964,376		4.88%		9.95%
2013		0.80%		7,636		11.895726		90,836		4.88%		9.62%
2012		0.50%		64,758		10.873621		704,154		0.00%		8.74%		5/1/2012
2012		0.80%		6,632		10.851908		71,970		0.00%		8.52%		5/1/2012
Variable Insurance Portfolios - Mid Cap Growth (WRMCG)
2013		0.50%		25,515		13.087276		333,922		0.00%		29.29%
2013		0.80%		1,664		13.022032		21,669		0.00%		28.90%
2012		0.50%		16,373		10.122465		165,735		0.00%		1.22%		5/1/2012
2012		0.80%		497		10.102240		5,021		0.00%		1.02%		5/1/2012
Advantage VT Discovery Fund (SVDF)
2013		0.00%		3,753		52.293829		196,259		0.01%		43.80%
2013		1.00%		19,578		33.173614		649,473		0.01%		42.37%
2013		1.30%		75		68.427642		5,132		0.01%		41.94%
2012		0.00%		3,369		36.365713		122,516		0.00%		17.74%
2012		1.00%		19,854		23.300886		462,616		0.00%		16.56%
2012		1.30%		44		48.207298		2,121		0.00%		16.21%
2011		0.00%		3,336		30.887729		103,041		0.00%		0.42%
2011		1.00%		26,660		19.990260		532,940		0.00%		-0.57%
2010		0.00%		3,906		30.757646		120,139		0.00%		35.54%
2010		1.00%		22,839		20.105763		459,196		0.00%		34.20%
2009		0.00%		3,962		22.692436		89,907		0.00%		40.30%
2009		1.00%		20,769		14.982478		311,171		0.00%		38.91%
Advantage VT Opportunity Fund - Class 2 (SVOF)
2013		0.00%		12,232		50.766884		620,981		0.19%		30.68%
2013		0.50%		407		92.297867		37,565		0.19%		30.03%
2013		0.80%		130		88.795213		11,543		0.19%		29.64%
2013		1.00%		41,935		20.310451		851,719		0.19%		29.38%
2013		1.30%		62		79.677043		4,940		0.19%		28.99%
2012		0.00%		13,164		38.848890		511,407		0.10%		15.52%
2012		0.50%		409		70.983886		29,032		0.10%		14.94%
2012		0.80%		133		68.495126		9,110		0.10%		14.60%
2012		1.00%		66,443		15.698476		1,043,054		0.10%		14.37%
2012		1.30%		35		61.769399		2,162		0.10%		14.03%
2011		0.00%		14,523		33.629016		488,394		0.14%		-5.52%
2011		0.50%		411		61.754991		25,381		0.14%		-5.99%
2011		0.80%		133		59.769284		7,949		0.14%		-6.27%
2011		1.00%		70,223		13.726081		963,887		0.14%		-6.46%
2010		0.00%		17,519		35.593435		623,561		0.74%		23.76%
2010		0.50%		413		65.689479		27,130		0.74%		23.14%
2010		0.80%		139		63.767991		8,864		0.74%		22.77%
2010		1.00%		90,876		14.673656		1,333,483		0.74%		22.53%
2009		0.00%		21,340		28.761168		613,763		0.00%		47.74%
2009		0.50%		416		53.345920		22,192		0.00%		47.00%
2009		0.80%		145		51.940893		7,531		0.00%		46.56%
2009		1.00%		112,638		11.976020		1,348,955		0.00%		46.27%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Advantage VT Small Cap Growth Fund - Class 2 (WFVSCG)
2013		0.00%		546	$	25.874760	$	14,128		0.00%		50.23%
2013		0.50%		20,549		25.278178		519,441		0.00%		49.48%
2013		0.80%		2,707		24.926824		67,477		0.00%		49.03%
2012		0.00%		141		17.223573		2,429		0.00%		7.87%
2012		0.50%		15,807		16.910692		267,307		0.00%		7.33%
2012		0.80%		4,080		16.725680		68,241		0.00%		7.01%
2011		0.00%		144		15.966729		2,299		0.00%		-4.60%
2011		0.50%		25,486		15.755473		401,544		0.00%		-5.07%
2011		0.80%		5,183		15.630041		81,011		0.00%		-5.36%
2010		0.00%		147		16.735960		2,460		0.00%		26.77%
2010		0.50%		39,483		16.597168		655,306		0.00%		26.14%
2010		0.80%		5,084		16.514425		83,959		0.00%		25.76%
2009		0.00%		101		13.201660		1,333		0.00%		32.02%		5/1/2009
2009		0.50%		8,394		13.157716		110,446		0.00%		31.58%		5/1/2009
2009		0.80%		2,262		13.131409		29,703		0.00%		31.31%		5/1/2009
Janus Aspen Series - Global Technology Portfolio - Service II Shares (obsolete) (JAGTS2)
2011		0.00%		634		10.352942		6,564		0.00%		-8.81%
2011		0.50%		29,181		10.267311		299,610		0.00%		-9.26%
2011		0.80%		2,499		10.216274		25,530		0.00%		-9.53%
2010		0.00%		124		11.352948		1,408		0.00%		13.53%		5/3/2010
2010		0.50%		33,970		11.315395		384,384		0.00%		13.15%		5/3/2010
2010		0.80%		2,165		11.292929		24,449		0.00%		12.93%		5/3/2010
Janus Aspen Series - Overseas Portfolio - Service II Shares (obsolete) (JAIGS2)
2011		0.00%		12,274		10.783470		132,356		0.35%		-32.33%
2011		0.50%		327,060		10.482039		3,428,256		0.35%		-32.67%
2011		0.80%		56,163		10.305239		578,773		0.35%		-32.87%
2010		0.00%		20,565		15.936367		327,731		0.52%		25.03%
2010		0.50%		397,289		15.568534		6,185,207		0.52%		24.41%
2010		0.80%		72,914		15.351937		1,119,371		0.52%		24.03%
2009		0.00%		13,452		12.746144		171,461		2.51%		79.07%
2009		0.50%		382,278		12.514261		4,783,927		2.51%		78.18%
2009		0.80%		69,416		12.377175		859,174		2.51%		77.65%
V.I. Capital Appreciation Fund - Series I (obsolete) (AVCA)
2011		0.00%		975		12.681863		12,365		0.11%		-7.91%
2011		0.50%		1,186		12.144062		14,403		0.11%		-8.37%
2011		0.80%		332		11.832421		3,928		0.11%		-8.64%
2010		0.00%		1,644		13.771185		22,640		0.79%		15.49%
2010		0.50%		6,473		13.253190		85,788		0.79%		14.91%
2010		0.80%		344		12.951815		4,455		0.79%		14.57%
2009		0.00%		2,297		11.924271		27,390		0.62%		21.08%
2009		0.50%		4,175		11.533213		48,151		0.62%		20.47%
2009		0.80%		395		11.304770		4,465		0.62%		20.11%
V.I. Capital Development Fund - Series I (obsolete) (AVCDI)
2011		0.00%		1,934		17.690502		34,213		0.00%		-7.16%
2011		0.50%		5,587		16.940285		94,645		0.00%		-7.62%
2011		0.80%		2,090		16.505466		34,496		0.00%		-7.90%
2010		0.00%		2,574		19.054589		49,047		0.00%		18.78%
2010		0.50%		5,657		18.337860		103,737		0.00%		18.19%
2010		0.80%		2,177		17.920764		39,014		0.00%		17.83%
2009		0.00%		3,822		16.042234		61,313		0.00%		42.37%
2009		0.50%		8,616		15.516104		133,687		0.00%		41.66%
2009		0.80%		2,761		15.208702		41,991		0.00%		41.24%
AllianceBernstein NVIT Global Fixed Income Fund - Class III (obsolete) (NVAGF3)
2010		0.50%		5,296		12.257318		64,915		7.07%		7.70%
2010		0.80%		546		12.196157		6,659		7.07%		7.38%
2009		0.50%		2,998		11.381006		34,120		3.82%		13.81%		5/1/2009

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
AllianceBernstein NVIT Global Fixed Income Fund - Class VI (obsolete) (NVAGF6)
2010		0.00%		905	$	12.305369	$	11,136		5.31%		7.76%
2009		0.00%		939		11.419762		10,723		3.79%		14.20%		5/1/2009
Clover Value Fund II - Primary Shares (obsolete) (FALF)
2009		0.50%		3,849		11.259563		43,338		2.05%		14.14%
2009		0.80%		83		11.036543		916		2.05%		13.80%
Credit Suisse Trust-International Equity Flex III Portfolio (obsolete) (CSIEF3)
2010		0.00%		27,655		11.345188		313,751		0.10%		12.23%
2010		0.50%		19,635		11.285605		221,593		0.10%		11.67%
2010		0.80%		6,394		11.250005		71,933		0.10%		11.34%
2010		1.00%		23,244		11.226333		260,945		0.10%		11.12%
2009		0.00%		36,441		10.108851		368,377		0.00%		1.09%		12/11/2009
2009		0.50%		23,959		10.106089		242,132		0.00%		1.06%		12/11/2009
2009		0.80%		6,772		10.104432		68,427		0.00%		1.04%		12/11/2009
2009		1.00%		30,169		10.103328		304,807		0.00%		1.03%		12/11/2009
Gartmore NVIT Global Utilities Fund - Class I (obsolete) (GVGU1)
2009		0.00%		11,222		17.873386		200,575		3.74%		8.01%
2009		0.50%		22,312		17.201149		383,792		3.74%		7.47%
2009		0.80%		4,599		16.809985		77,309		3.74%		7.15%
2009		1.00%		13,437		16.554172		222,438		3.74%		6.93%
NVIT Worldwide Leaders Fund - Class III (obsolete) (GEF3)
2010		0.50%		5,113		14.811453		75,731		0.94%		10.81%
2009		0.50%		5,406		13.366903		72,261		0.74%		33.67%		5/1/2009
High Income Fund/VA - Class 3 (obsolete) (OVHI3)
2011		0.00%		3,739		2.908819		10,876		11.87%		-1.88%
2011		0.50%		16,503		2.841668		46,896		11.87%		-2.37%
2011		0.80%		8,693		2.802120		24,359		11.87%		-2.66%
2010		0.00%		3,857		2.964546		11,434		7.14%		14.68%
2010		0.50%		43,908		2.910601		127,799		7.14%		14.11%
2010		0.80%		7,579		2.878683		21,818		7.14%		13.77%
2009		0.00%		3,525		2.584961		9,112		0.00%		26.75%
2009		0.50%		51,883		2.550630		132,334		0.00%		26.12%
2009		0.80%		6,895		2.530249		17,446		0.00%		25.74%
High Income Fund/VA - Non-Service Shares (obsolete) (OVHI)
2011		0.00%		6,730		4.084054		27,486		9.44%		-2.34%
2011		0.50%		5,992		3.910839		23,434		9.44%		-2.82%
2011		0.80%		1,889		3.810426		7,198		9.44%		-3.11%
2010		0.00%		6,482		4.181802		27,106		6.51%		14.81%
2010		0.50%		8,401		4.024459		33,809		6.51%		14.24%
2010		0.80%		2,311		3.932889		9,089		6.51%		13.90%
2009		0.00%		7,571		3.642267		27,576		0.00%		25.32%
2009		0.50%		9,956		3.522783		35,073		0.00%		24.69%
2009		0.80%		2,712		3.452973		9,364		0.00%		24.32%
International Equity Flex II Portfolio (obsolete) (WVCP)
2009		0.50%		5		10.887915		54		2.83%		29.85%
2009		0.80%		29		10.529632		305		2.83%		29.48%
INTECH Risk-Managed Core Portfolio - Service Shares (obsolete) (JARLCS)
2009		0.00%		831		14.723271		12,235		1.00%		22.55%
Market Opportunity Fund II - Service Shares (obsolete) (FVMOS)
2009		0.00%		5,927		10.283025		60,947		1.19%		1.28%
2009		0.50%		21,405		10.096031		216,106		1.19%		0.78%
2009		0.80%		1,673		9.985463		16,706		1.19%		0.48%
NVIT Global Financial Services Fund - Class I (obsolete) (GVGF1)
2009		0.00%		4,227		13.889643		58,712		1.17%		31.75%
2009		0.50%		24,715		13.366897		330,363		1.17%		31.10%
2009		0.80%		3,898		13.062701		50,918		1.17%		30.70%
2009		1.00%		7,696		12.863780		99,000		1.17%		30.44%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

	Contract Expense Rate*		Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Health Sciences Fund - Class I (obsolete) (GVGH1)
2009		0.00%		1,969	$	13.810897	$	27,194		0.30%		19.16%
2009		0.50%		4,346		13.291259		57,764		0.30%		18.57%
2009		0.80%		905		12.988959		11,755		0.30%		18.21%
2009		1.00%		6,585		12.791190		84,230		0.30%		17.98%
NVIT Health Sciences Fund - Class III (obsolete) (GVGHS)
2009		0.00%		8,049		11.124833		89,544		0.29%		19.11%
2009		0.50%		31,770		10.868248		345,284		0.29%		18.52%
2009		0.80%		1,899		10.717146		20,352		0.29%		18.16%
NVIT Leaders Fund - Class I (obsolete) (GVUS1)
2009		0.00%		3,522		12.049802		42,439		0.79%		33.79%
2009		0.50%		5,347		11.596383		62,006		0.79%		33.12%
2009		0.80%		1,533		11.332557		17,373		0.79%		32.72%
2009		1.00%		216		11.160018		2,411		0.79%		32.46%
NVIT Technology & Communications Fund - Class I (obsolete) (GGTC)
2009		0.00%		1,823		3.325931		6,063		0.00%		52.47%
2009		0.50%		43,071		3.175501		136,772		0.00%		51.71%
2009		0.80%		6,450		3.088555		19,921		0.00%		51.25%
2009		1.00%		50,209		2.946550		147,943		0.00%		50.95%
NVIT Technology & Communications Fund - Class III (obsolete) (GGTC3)
2009		0.00%		4,024		12.888766		51,864		0.00%		52.44%
2009		0.50%		27,463		12.591433		345,799		0.00%		51.68%
2009		0.80%		4,272		12.416314		53,042		0.00%		51.23%
NVIT U.S. Growth Leaders Fund - Class I (obsolete) (GVUG1)
2009		0.00%		3,678		14.212216		52,273		0.00%		25.84%
2009		0.50%		26,597		13.677495		363,780		0.00%		25.21%
2009		0.80%		4,858		13.366367		64,934		0.00%		24.84%
U.S. Equity Flex I Portfolio (obsolete) (WSCP)
2010		0.00%		40,705		13.231673		538,595		0.15%		14.46%
2010		0.50%		231,659		17.541110		4,063,556		0.15%		13.89%
2010		0.80%		85,337		16.948037		1,446,295		0.15%		13.55%
2010		1.00%		44,938		6.626564		297,785		0.15%		13.32%
2009		0.00%		48,415		11.560237		559,689		1.14%		24.67%
2009		0.50%		261,548		15.402040		4,028,373		1.14%		24.04%
2009		0.80%		91,575		14.925949		1,366,844		1.14%		23.67%
2009		1.00%		50,084		5.847611		292,872		1.14%		23.43%
2013		Contract owners equity:							$	677,429,029
2012		Contract owners equity:							$	598,222,370
2011		Contract owners equity:							$	589,437,248
2010		Contract owners equity:							$	678,977,225
2009		Contract owners equity:							$	647,741,695

    * This represents the annual contract expense rate of the variable account at the period end indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the underlying mutual funds and charges made directly to contract owner accounts through the redemption of units.

   ** This represents the ratio of dividends for the period indicated, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by monthly average net assets (excluding months where net assets are zero). The investment income ratio for subaccounts initially funded during the period presented has not been annualized. The ratios exclude those expenses that result in direct reductions to the contract owner accounts through reductions in unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

 *** This represents the total return for the period. The total returns do not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return is not annualized if the underlying mutual fund option is initially offered, funded, or both during the period presented.

**** This represents the date the underlying mutual fund option was initially added and funded.

	KPMG LLP
	Suite 500
	191 West Nationwide Blvd. Columbus, OH 43215-2568

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholder

Nationwide Life Insurance Company:

We have audited the accompanying consolidated balance sheets of Nationwide Life Insurance Company and subsidiaries (the Company) as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2013. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedules as listed in the accompanying index. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Nationwide Life Insurance Company and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Columbus, Ohio

February 28, 2014

KPMG  LLP  is  a  Delaware  limited  liability  partnership,

the U.S. member firm of KPMG International Cooperative

(“KPMG International”), a Swiss entity.

1

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Operations

(in millions)

	Year ended December 31,
	2013			2012			2011
				(As Adjusted)
Revenues
Policy charges	$	1,849		$	1,670		$	1,506
Premiums		724			635			531
Net investment income		1,849			1,825			1,844
Net realized investment gains (losses), net of other-than-temporary impairment losses		678			319			(1,676	)
Other revenues		17			7			3
Total revenues	$	5,117		$	4,456		$	2,208
Benefits and expenses
Interest credited to policyholder account values	$	1,067		$	1,038		$	1,033
Benefits and claims		1,354			1,227			1,062
Policyholder dividends		59			54			67
Amortization of deferred policy acquisition costs		374			575			65
Other expenses, net of deferrals		922			863			830
Total benefits and expenses	$	3,776		$	3,757		$	3,057
Income (loss) before federal income taxes and noncontrolling interests	$	1,341		$	699		$	(849	)
Federal income tax expense (benefit)		313			99			(427	)
Net income (loss)	$	1,028		$	600		$	(422	)
Less: Loss attributable to noncontrolling interest, net of tax		(82	)		(61	)		(56	)
Net income (loss) attributable to Nationwide Life Insurance Company	$	1,110		$	661		$	(366	)

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

2

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Comprehensive Income (Loss)

(in millions)

	Year ended December 31,
	2013			2012			2011
				(As Adjusted)
Net income (loss)	$	1,028		$	600		$	(422	)
Other comprehensive (loss) income, net of tax
Changes in:
Net unrealized (losses) gains on available-for-sale securities		(663	)		571			317
Other		(7	)		(5	)		12
Total other comprehensive (loss) income, net of tax	$	(670	)	$	566		$	329
Total comprehensive income (loss)	$	358		$	1,166		$	(93	)
Less: Comprehensive loss attributable to noncontrolling interests, net of tax		(82	)		(61	)		(56	)
Total comprehensive income (loss) attributable to Nationwide Life Insurance Company	$	440		$	1,227		$	(37	)

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

3

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Balance Sheets

(in millions, except for share and per share amounts)

	December 31,
	2013		2012
Assets
Investments
Fixed maturity securities, available-for-sale	$	32,249	$	31,811
Mortgage loans, net of allowance		6,341		5,827
Policy loans		987		980
Short-term investments		411		1,034
Other investments		767		639
Total investments	$	40,755	$	40,291
Cash and cash equivalents		61		62
Accrued investment income		603		566
Deferred policy acquisition costs		3,778		3,249
Goodwill		200		200
Other assets		3,979		4,362
Separate account assets		84,069		71,440
Total assets	$	133,445	$	120,170
Liabilities and equity
Liabilities
Future policy benefits and claims	$	36,765	$	36,154
Short-term debt		278		300
Long-term debt		707		1,038
Other liabilities		4,122		4,507
Separate account liabilities		84,069		71,440
Total liabilities	$	125,941	$	113,439
Shareholder’s equity
Common stock ($1 par value; authorized - 5,000,000 shares, issued and outstanding - 3,814,779 shares)	$	4	$	4
Additional paid-in capital		1,718		1,718
Retained earnings		4,520		3,410
Accumulated other comprehensive income		582		1,252
Total shareholder’s equity	$	6,824	$	6,384
Noncontrolling interest		680		347
Total equity	$	7,504	$	6,731
Total liabilities and equity	$	133,445	$	120,170

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

4

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Changes in Equity

(in millions)

	Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive income			Total shareholder’s equity			Non-controlling interest			Total equity
Balance as of December 31, 2010	$	4	$	1,718	$	3,155		$	357		$	5,234		$	355		$	5,589
Comprehensive (loss) income:
Net loss		—		—		(366	)		—			(366	)		(56	)		(422	)
Other comprehensive income		—		—		—			329			329			—			329
Total comprehensive (loss) income		—		—		(366	)		329			(37	)		(56	)		(93	)
Change in noncontrolling interest		—		—		—			—			—			46			46
Balance as of December 31, 2011	$	4	$	1,718	$	2,789		$	686		$	5,197		$	345		$	5,542
Cash dividend paid		—		—		(40	)		—			(40	)		—			(40	)
Comprehensive income (loss):
Net income (loss)		—		—		661			—			661			(61	)		600
Other comprehensive income		—		—		—			566			566			—			566
Total comprehensive income (loss)		—		—		661			566			1,227			(61	)		1,166
Change in noncontrolling interest		—		—		—			—			—			63			63
Balance as of December 31, 2012	$	4	$	1,718	$	3,410		$	1,252		$	6,384		$	347		$	6,731
Comprehensive income (loss):
Net income (loss)		—		—		1,110			—			1,110			(82	)		1,028
Other comprehensive loss		—		—		—			(670	)		(670	)		—			(670	)
Total comprehensive income (loss)		—		—		1,110			(670	)		440			(82	)		358
Change in noncontrolling interest		—		—		—			—			—			415			415
Balance as of December 31, 2013	$	4	$	1,718	$	4,520		$	582		$	6,824		$	680		$	7,504

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

5

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Cash Flows

(in millions)

	Year ended December 31,
	2013			2012			2011
				(As Adjusted)
Cash flows from operating activities:
Net income (loss)	$	1,028		$	600		$	(422	)
Adjustments to net income (loss):
Net realized investment (gains) losses, net of other-than-temporary impairment losses		(678	)		(319	)		1,676
Interest credited to policyholder account values		1,067			1,038			1,033
Capitalization of deferred policy acquisition costs		(604	)		(470	)		(604	)
Amortization of deferred policy acquisition costs		374			575			65
Amortization and depreciation		77			80			48
Deferred tax expense (benefit)		346			243			(482	)
Changes in:
Policy liabilities		(475	)		(548	)		(608	)
Derivatives, net		(483	)		(490	)		(364	)
Other, net		88			(84	)		(265	)
Net cash provided by operating activities	$	740		$	625		$	77
Cash flows from investing activities:
Proceeds from maturities of available-for-sale securities	$	3,689		$	2,909		$	2,705
Proceeds from sales of available-for-sale securities		1,091			796			1,585
Purchases of available-for-sale securities		(6,842	)		(5,167	)		(6,176	)
Proceeds from repayments and sales of mortgage loans		1,091			1,048			1,124
Issuances and purchases of mortgage loans		(1,593	)		(1,114	)		(751	)
Net decrease (increase) in short-term investments		654			98			(61	)
Collateral (paid) received, net		(637	)		(208	)		359
Other, net		42			(12	)		104
Net cash used in investing activities	$	(2,505	)	$	(1,650	)	$	(1,111	)
Cash flows from financing activities:
Net change in short-term debt	$	(22	)	$	(477	)	$	477
Proceeds from issuance of long-term debt		2			13			13
Cash dividend paid to Nationwide Financial Services, Inc.		—			(40	)		—
Repayments of long-term debt		(299	)		—			—
Investment and universal life insurance product deposits		6,139			5,566			5,314
Investment and universal life insurance product withdrawals		(4,034	)		(4,063	)		(5,024	)
Other, net		(22	)		39			(34	)
Net cash provided by financing activities	$	1,764		$	1,038		$	746
Net (decrease) increase in cash and cash equivalents	$	(1	)	$	13		$	(288	)
Cash and cash equivalents, beginning of period		62			49			337
Cash and cash equivalents, end of period	$	61		$	62		$	49

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

6

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements

December 31, 2013, 2012 and 2011

(1) Nature of Operations

Nationwide Life Insurance Company (“NLIC,” or collectively with its subsidiaries, “the Company”) was incorporated in 1929 and is an Ohio domiciled stock life insurance company. The Company is a member of the Nationwide group of companies (“Nationwide”), which is comprised of Nationwide Mutual Insurance Company (“NMIC”) and all of its subsidiaries and affiliates.

All of the outstanding shares of NLIC’s common stock are owned by Nationwide Financial Services, Inc. (“NFS”), a holding company formed by Nationwide Corporation (“Nationwide Corp.”), a majority-owned subsidiary of NMIC.

Wholly-owned subsidiaries of NLIC as of December 31, 2013 include Nationwide Life and Annuity Insurance Company (“NLAIC”), Nationwide Investment Services Corporation (“NISC”) and Nationwide Investment Advisor (“NIA”). NLAIC primarily offers universal life insurance, variable universal life insurance, term life insurance, corporate-owned life insurance (“COLI”) and individual annuity contracts on a non-participating basis. NISC is a registered broker-dealer. NIA is a registered investment advisor.

The Company is a leading provider of long-term savings and retirement products in the United States (“U.S.”). The Company develops and sells a diverse range of products and services including individual annuities, private and public sector group retirement plans, investment products sold to institutions, life insurance and advisory services.

The Company sells its products through a diverse distribution network. Unaffiliated entities that sell the Company’s products to their own customer bases include independent broker-dealers, financial institutions, wirehouse and regional firms, pension plan administrators and life insurance specialists. Representatives of affiliates who market products directly to a customer base include Nationwide Retirement Solutions, Inc. (“NRS”) and Nationwide Financial Network (“NFN”) producers, which includes the agency distribution force of the Company’s ultimate parent company, NMIC.

As of December 31, 2013 and 2012, the Company did not have a significant concentration of financial instruments in a single investee, industry or geographic region of the U.S. Also, the Company did not have a concentration of business transactions with a particular customer, lender, distribution source, market or geographic region of the U.S. in which the Company is overly vulnerable to a single event which could cause a severe impact to the Company’s financial position.

(2) Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling financial interest. The consolidated financial statements include majority-owned subsidiaries and consolidated variable interest entities (“VIEs”). All significant intercompany accounts and transactions have been eliminated.

Entities in which NLIC does not have a controlling interest, but the Company has significant influence over the operating and financing decisions and also certain other investments, are reported using the equity method.

7

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Use of Estimates

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The preparation of the consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates include the balance and amortization of deferred policy acquisition costs (“DAC”), legal and regulatory reserves, certain investment and derivative valuations including investment impairment losses, future policy benefits and claims including the valuation of embedded derivatives resulting from living benefit guarantees on variable annuity contracts, goodwill, provision for income taxes and valuation of deferred tax assets. Actual results could differ significantly from those estimates.

Revenues and Benefits

Investment and universal life insurance products. Investment products are long duration contracts that do not subject the Company to significant risk arising from mortality (the relative incidence of death in a given time) or morbidity (the relative incidence of disability resulting from disease or physical impairment). These include variable and fixed deferred annuity contracts in the accumulation phase with both individuals and groups and certain annuities without life contingencies. Universal life insurance products include long duration insurance contracts that do not have fixed or guaranteed terms. These include universal life insurance, variable universal life insurance, COLI, bank-owned life insurance (“BOLI”) and other interest-sensitive life insurance policies. Revenues for investment products and universal life insurance products consist of net investment income, surrender charges and other policy charges earned and assessed against policy account balances during the period. Policy charges are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. Assessments for services provided in future periods are recorded as unearned revenue and recognized as revenue over the periods benefited. Surrender charges are recognized as revenue upon surrender of a contract in accordance with contractual terms. Policy benefits and claims that are charged to expense include interest credited to policyholder accounts and benefits and claims incurred in the period in excess of related policyholder accounts.

Traditional life insurance products. Traditional life insurance products include those products with fixed and guaranteed terms, primarily consisting of whole life insurance, term life insurance and certain annuities with life contingencies. Premiums for traditional life insurance products are generally recognized as revenue when due. For certain annuities with life contingencies, any excess of gross premium over the net premium is deferred and recognized with the amount of expected future benefits. Benefits and expenses are associated with earned premiums so that profits are recognized over the life of the contract. This association is accomplished through the provision for future policy benefits and the deferral and amortization of policy acquisition costs.

Future Policy Benefits and Claims

Investment and universal life insurance products. The Company calculates its liability for future policy benefits and claims for investment products in the accumulation phase and for universal life insurance policies as the policy accrued account balance, which represents participants’ net deposits adjusted for investment performance, interest credited and applicable contract charges.

8

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The Company offers certain universal life insurance, variable universal life insurance and variable annuity products with secondary guarantees, guaranteed minimum death benefits (“GMDB”), and guaranteed minimum income benefits (“GMIB”). Liabilities for these guarantees are calculated by multiplying the current benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative secondary guarantee benefit payments plus interest. The Company regularly evaluates its experience and assumptions and adjusts the benefit ratio as appropriate. If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes with a related charge or credit to other benefits and claims in the period of evaluation. Determination of the expected benefit payments and assessments are based on a range of scenarios and assumptions including those related to market rates of return and volatility, contract surrenders and mortality experience. The accounting for these guarantees impacts estimated gross profits used to calculate the balance and amortization of DAC and other. Refer to Note 4 for further discussion of these guarantees.

Guarantees to variable annuity contractholders can include a return of no less than the total deposits made on the contract less any customer withdrawals, total deposits made on the contract less any customer withdrawals plus a minimum return, or the highest contract value on a specified anniversary date minus any customer withdrawals following the contract anniversary. In addition, these guarantees can include benefits payable in the event of death, upon annuitization, upon periodic withdrawal or at specified dates during the accumulation period. Refer to Note 4 for further discussion of these guarantees.

The Company’s guaranteed minimum accumulation benefit (“GMAB”) and guaranteed living withdrawal benefit (“GLWB”) are living benefit guarantees which represent embedded derivatives in variable annuity contracts that are required to be separated from, and valued apart from, the host variable annuity contracts. The embedded derivatives are held at fair value and include the present value of attributed fees. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of net realized investment gains and losses. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions. Projections of cash flows inherent in the valuation of the embedded derivatives incorporate numerous assumptions including, but not limited to, mortality, lapse rates, index volatility, wait period (the number of years the policyholder is assumed to wait prior to beginning withdrawals once eligible), efficiency of benefit utilization (the percent of the maximum permitted withdrawal that a policyholder takes) and discounting, including liquidity and non-performance risk (the risk that the liability will not be fulfilled and affects the value at which the liability is transferred). The assumptions used to calculate the fair value of embedded derivatives are reviewed as part of an annual comprehensive study of assumptions. Quarterly, consideration is given as to whether adjustments to these assumptions are necessary.

The Company’s equity indexed products (life and annuity) have the policyholders’ interest credits based on market performance with caps and floors. The interest credits represent embedded derivatives within the insurance contract and therefore are required to be separated from, and valued apart from, the host contracts. The embedded derivatives are held at fair value. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of interest credited. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions. Projections of cash flows inherent in the valuation of the embedded derivative incorporate numerous assumptions including, but not limited to, mortality, lapse rates and index volatility. The assumptions used to calculate the fair value of embedded derivatives are reviewed as part of an annual comprehensive study of assumptions. Quarterly, consideration is given as to whether adjustments to these assumptions are necessary.

Traditional life insurance products. The process of calculating reserve amounts for traditional life insurance products involves the use of a number of assumptions, including those related to persistency, mortality, morbidity, interest rates (the rates expected to be paid or received on financial instruments) and certain other expenses.

9

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The liability for future policy benefits and claims for traditional life insurance policies was determined using the net level premium method with weighted average interest rates of 6.6% and estimates of mortality, morbidity, investment yields and persistency that were used or being experienced at the time the policies were issued with a provision for adverse deviation.

The liability for future policy benefits for certain annuities with life contingencies was calculated using the present value of future benefits and certain expenses discounted using weighted average interest rates of 5.3% with a provision for adverse deviation.

Reinsurance ceded

The Company cedes insurance to other companies in order to limit potential losses and to diversify its exposures. Such agreements do not relieve the original insurer from its primary obligation to the policyholder in the event the reinsurer is unable to meet the obligations it has assumed. Reinsurance premiums ceded and reinsurance recoveries on benefits and claims incurred are deducted from the respective income and expense accounts. Assets and liabilities related to reinsurance ceded are reported in the consolidated balance sheets on a gross basis, separately from the related future policy benefits and claims of the Company.

Deferred Policy Acquisition Costs

The Company has deferred certain acquisition costs that are directly related to the successful acquisition of new and renewal insurance and investment contracts. The methods and assumptions used to amortize and assess recoverability of the DAC balance depend on the type of product.

Investment and universal life insurance products. For certain investment and universal life insurance products, DAC is amortized with interest over the lives of the policies in relation to the present value of estimated gross profits, which is determined primarily from projected interest margins, policy charges and net realized investment gains and losses, less policy benefits and other expenses. The DAC asset related to investment and universal life insurance products is adjusted to reflect the impact of unrealized gains and losses on available-for-sale securities with the corresponding adjustment recorded in accumulated other comprehensive income (“AOCI”). This adjustment to DAC represents the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. DAC for investment and universal life insurance products is subject to recoverability testing in the year of policy issuance and DAC for universal life insurance products is also subject to loss recognition testing at the end of each reporting period.

The Company regularly evaluates and adjusts the DAC balance when actual gross profits in a given reporting period vary from management’s initial estimates. Additionally, the assumptions used in the estimation of future gross profits are based on the Company’s current best estimates of future events and are reviewed as part of an annual process. During the annual process, the Company performs a comprehensive study of assumptions, including mortality and persistency studies, maintenance expense studies and an evaluation of projected general and separate account investment returns. The most significant assumptions that are involved in the estimation of future gross profits include future net separate account investment performance, surrender/lapse rates, interest margins, renewal premiums and mortality. The Company refers to this process as “unlocking.” Quarterly, consideration is given as to whether adjustments to these assumptions are necessary. The Company uses a reversion to the mean process to determine the assumption for the future net separate account investment performance. This process assumes different performance levels over the next three years such that the separate account mean return measured from the anchor date to the end of the life of the product equals the long-term assumption. The Company’s long-term assumption for net separate account investment performance is approximately 7% growth per year.

10

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Changes in assumptions and the emergence of actual gross profits can have a significant impact on the amount of DAC reported for investment and universal life insurance products and their related amortization patterns. Additionally, the amortization of DAC can be affected by the change in the valuation of the Company’s variable annuity guarantees. See Future Policy Benefits and Claims for further discussion of the valuation of the Company’s variable annuity guarantees. In the event actual experience differs from assumptions or future assumptions are revised, the Company will record an increase or decrease in DAC amortization expense, which could be significant.

Traditional life insurance. DAC is amortized with interest over the premium-paying period of the related policies in proportion to premium revenue recognized. These assumptions are consistent with those used in the calculation of liabilities for future policy benefits at issuance. DAC is evaluated for recoverability at the time of policy issuance, and loss recognition testing is conducted each reporting period.

Refer to Note 5 for discussion regarding assumption changes impacting DAC amortization and related balances.

Investments

Available-for-sale securities. Available-for-sale securities are reported at fair value, with unrealized holding gains and losses reported as a separate component of other comprehensive income, net of adjustments for DAC, future policy benefits and claims, policyholder dividend obligations and deferred federal income taxes. Realized gains and losses on sales of available-for-sale securities are recognized in income based on the specific identification method. Interest and dividend income is recognized when earned.

As of December 31, 2013 and 2012, 99% of fixed maturity securities were priced using external source data. Independent pricing services are most often utilized (86% as of December 31, 2013 and 2012) to determine the fair value of securities for which market quotations are available. For these securities, the Company obtains the pricing services’ methodologies, inputs and assumptions and classifies the investments accordingly in the fair value hierarchy.

A corporate pricing matrix or an internally developed pricing model is used in valuing certain corporate debt securities. The corporate pricing matrix is developed using private spreads for corporate securities with varying weighted average lives and credit quality ratings. The weighted average life and credit quality rating of a particular fixed maturity security to be priced using the corporate pricing matrix are important inputs into the model and are used to determine a corresponding spread that is added to the appropriate U.S. Treasury yield to create an estimated market yield for that security. The estimated market yield and other relevant factors are then used to estimate the fair value of the particular security.

Non-binding broker quotes are also utilized to determine the fair value of certain corporate debt, mortgage-backed and other asset-backed securities when quotes are not available from independent pricing services, corporate pricing matrix or internal pricing models. These securities are classified with the lowest priority in the fair value hierarchy as only one broker quote is ordinarily obtained, the investment is not traded on an exchange, the pricing is not available to other entities and/or the transaction volume in the same or similar investments has decreased. Inputs used in the development of prices are not provided to the Company by the brokers, as the brokers often do not provide the necessary transparency into their quotes and methodologies. The Company performs reviews and tests to ensure that quotes are a reasonable estimate of the investments’ fair value at least annually. Price movements of broker quotes are subject to validation and require approval from the Company’s management. Management uses its knowledge of the investment and current market conditions to determine if the price is indicative of the investment’s fair value.

When the collectability of contractual interest payments on fixed maturity securities is considered doubtful, such securities are placed in non-accrual status and any accrued interest is excluded from investment income. These securities are not restored to accrual status until the Company determines that payment of future principal and interest is probable.

11

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

For investments in certain residential and commercial mortgage-backed securities, the Company recognizes income and amortizes discounts and premiums using the effective-yield method based on prepayment assumptions and the estimated economic life of the securities. When actual prepayments differ significantly from estimated prepayments, the effective-yield is recalculated to reflect actual payments to date and anticipated future payments. Any resulting adjustment is included in net investment income in the period the estimates are revised. All other investment income is recorded using the effective-yield method without anticipating the impact of prepayments.

The Company periodically reviews its available-for-sale securities to determine if any decline in fair value to below amortized cost is other-than-temporary. Factors considered in determining whether a decline is other-than-temporary include the length of time a security has been in an unrealized loss position, the severity of the unrealized loss, reasons for the decline in value and expectations for the amount and timing of a recovery in fair value.

In assessing corporate debt securities for other-than-temporary impairment, the Company evaluates the ability of the issuer to meet its debt obligations, the value of the company or specific collateral securing the debt, the Company’s intent to sell the security and whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost basis. The Company evaluates U.S. Treasury securities and obligations of U.S. Government corporations and agencies and obligations of states, political subdivisions and foreign governments for other-than-temporary impairment by examining similar characteristics.

When evaluating whether residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities are other-than-temporarily impaired, the Company examines characteristics of the underlying collateral, such as delinquency and default rates, the quality of the underlying borrower, the type of collateral in the pool, the vintage year of the collateral, subordination levels within the structure of the collateral pool, the quality of any credit guarantors, the Company’s intent to sell the security and whether it is more likely than not it will be required to sell the security before the recovery of its amortized cost basis.

The Company evaluates its intent to sell on an individual security basis. Other-than-temporary impairment losses on debt securities when the Company does not intend to sell the security and it is not more likely than not it will be required to sell the security prior to recovery of the security’s amortized cost basis are bifurcated with the credit portion of the impairment loss being recognized in earnings and the non-credit loss portion of the impairment and any subsequent changes in the fair value of those debt securities being recognized in other comprehensive income, net of applicable taxes and other offsets. To estimate the credit portion of an impairment loss recognized in earnings, the Company considers the timing and present value of the cash flows. To the extent that the present value of cash flows generated by a debt security is less than the amortized cost, an other-than-temporary impairment is recognized through earnings.

It is reasonably possible that further declines in fair values of such investments, or changes in assumptions or estimates of anticipated recoveries and/or cash flows, may cause further other-than-temporary impairments in the near term, which could be significant.

Mortgage loans, net of allowance. The Company holds commercial mortgage loans that are collateralized by properties throughout the U.S. These mortgage loans are further segregated into the following classes based on the unique risk profiles of the underlying property types: office, industrial, retail, apartment and other. Mortgage loans held-for-investment are held at amortized cost less a valuation allowance.

As part of the underwriting process, specific guidelines are followed to ensure the initial quality of a new mortgage loan. Third-party appraisals are generally obtained to support loaned amounts as the loans are usually collateral dependent.

12

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The collectability and value of a mortgage loan are based on the ability of the borrower to repay and/or the value of the underlying collateral. Many of the Company’s commercial mortgage loans are structured with balloon payment maturities, exposing the Company to risks associated with the borrowers’ ability to make the balloon payment or refinance the property.

The Company actively monitors the credit quality of its mortgage loans to support the development of the valuation allowance. This monitoring process includes quantitative analyses which facilitate the identification of deteriorating loans, and qualitative analyses, which consider other factors relevant to the borrowers’ ability to repay. Loans with deteriorating credit fundamentals are identified through special surveillance procedures and are evaluated based on the severity of their deterioration and management’s judgment as to the likelihood of loss.

Mortgage loans require a loan-specific reserve when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When management determines that a loan requires a loan-specific reserve, a provision for loss is established equal to the difference between the carrying value and either the fair value of the collateral less costs to sell or the present value of expected future cash flows discounted at the loan’s market interest rate. Loan-specific reserve charges are recorded in net realized investment gains and losses. In the event a loan-specific reserve charge is reversed, the recovery is recorded in net realized investment gains and losses.

In addition to the loan-specific reserves, the Company maintains a non-specific reserve based primarily on loan surveillance categories and property type classes, which reflects management’s best estimate of probable credit losses inherent in the portfolio as of the balance sheet date but not yet attributable to specific loans. Management’s periodic evaluation of the adequacy of the non-specific reserve is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect a borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Non-specific reserve changes are recorded in net realized investment gains and losses.

Interest income on performing mortgage loans is recognized over the life of the loan using the effective-yield method. Loans in default or in the process of foreclosure are placed on non-accrual status. Interest received on non-accrual status mortgage loans is included in net investment income in the period received. Loans are considered delinquent when contractual payments are 90 days past due.

Policy loans. Policy loans, which are collateralized by the related insurance policy, are held at the outstanding principal balance and do not exceed the net cash surrender value of the policy. As such, no valuation allowance for policy loans is required.

Short-term investments. Short-term investments consist of highly liquid mutual funds and government agency discount notes with maturities of twelve months or less at acquisition. The Company and various affiliates maintains agreements with Nationwide Cash Management Company (“NCMC”), an affiliate, under which NCMC acts as a common agent in handling the purchase and sale of short-term securities for the respective accounts of the participants. Amounts on deposit with NCMC for the benefit of the Company are included in short-term investments on the consolidated balance sheets. The Company carries short-term investments at fair value.

Other investments. Other investments consist primarily of equity method investments in joint ventures and partnerships, equity securities, capital stock with the Federal Home Loan Bank of Cincinnati (“FHLB”) and trading securities.

13

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Securities lending. The Company has entered into securities lending agreements with a custodial bank whereby eligible securities are loaned to third parties, primarily major brokerage firms. These transactions are used to generate additional income on the securities portfolio. The Company is entitled to receive from the borrower any payments of interest and dividends received on loaned securities during the loan term. The agreements require a minimum of 102% of the fair value of loaned securities to be held as collateral. Cash collateral is invested by the custodial bank in investment-grade securities, which are included in the total investments of the Company. Periodically, the Company may receive non-cash collateral, which would be recorded off-balance sheet. The Company recognizes loaned securities in either available-for-sale or other investments. A securities lending payable is recorded in other liabilities for the amount of cash collateral received. Net income received from securities lending activities is included in net investment income.

Variable interest entities. In the normal course of business, the Company has relationships with VIEs. If the Company determines that it has a variable interest and is the primary beneficiary, it consolidates the VIE. This determination is based on a review of the entity’s contract and other deal related information, such as the entity’s equity investment at risk, decision-making abilities, obligations to absorb economic risks and right to receive economic rewards of the entity. The Company is the primary beneficiary if the Company has the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and the obligation to absorb losses or receive benefits from the entity that could be potentially significant to the VIE.

The majority of the VIEs consolidated by the Company are due to guarantees provided to limited partners related to the amount of tax credits that will be generated by the Low-Income-Housing Tax Credit Funds (“Tax Credit Funds”). The results of operations and financial position of each VIE for which the Company is the primary beneficiary as well as the corresponding noncontrolling interests, are recorded in the consolidated financial statements. Ownership interests held by unrelated third parties in the consolidated VIEs are presented as noncontrolling interests in the equity section of the consolidated financial statements. Loss attributable to noncontrolling interests is excluded from the net income attributable to NLIC on the consolidated statements of operations.

The Company invests in fixed maturity securities that could qualify as VIEs, including corporate securities, mortgage-backed securities and asset-backed securities. The Company is not the primary beneficiary of these securities as the Company does not have the power to direct the activities that most significantly impact the entities’ performance. The Company’s maximum exposure to loss is limited to the carrying values of these securities. There are no liquidity arrangements, guarantees or other commitments by third parties that affect the fair value of the Company’s interest in these assets. Refer to Note 6 for additional disclosures related to these investments.

The Company is not required and does not intend to provide financial or other support outside of contractual requirements to any VIE.

Derivative Instruments

The Company uses derivative instruments to manage exposures and mitigate risks primarily associated with interest rates, equity markets and foreign currency. These derivative instruments primarily include interest rate swaps, futures contracts and options. Certain features embedded in the Company’s indexed products and certain variable annuity contracts require derivative accounting. Refer to the prior discussion of Future Policy Benefits and Claims for a description of the valuation applicable to these products. All derivative instruments are held at fair value and are reflected as assets or liabilities in the consolidated balance sheets.

14

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Fair value of derivative instruments is determined using various valuation techniques relying predominantly on observable market inputs. These inputs include interest rate swap curves, credit spreads, interest rates, counterparty credit risk, equity volatility and equity index levels. In cases where observable inputs are not available, the Company will utilize non-binding broker quotes to determine fair value, and these instruments are classified accordingly in the fair value hierarchy. Price movements of these broker quotes are subject to validation and require approval from the Company’s management. Management uses models to internally value the instruments for comparison to the values received through broker quotes.

For derivatives that are not designated for hedge accounting, the gain or loss on the derivative is primarily recognized in net realized investment gains and losses.

For derivative instruments that are designated and qualify for fair value hedge accounting, the gain or loss on the derivative instrument, as well as the hedged item to the extent of the risk being hedged, are recognized in net realized investment gains and losses.

For derivative instruments that are designated and qualify for cash flow hedge accounting, the effective portion of the gain or loss on the derivative instrument is reported as a component of AOCI and reclassified into earnings in the same period or periods that the hedged transaction impacts earnings. The ineffective portion of the derivative’s change in value, if any, along with any of the derivative’s change in value that is excluded from the assessment of hedge effectiveness, are recorded in net realized investment gains and losses.

The Company’s derivative transaction counterparties are generally financial institutions. To reduce the credit risk associated with open contracts, the Company enters into master netting agreements, which permit the closeout and netting of transactions with the same counterparty upon the occurrence of certain events. In addition, the Company attempts to reduce credit risk by obtaining collateral from counterparties. The determination of the need for and the levels of collateral vary based on an assessment of the credit risk of the counterparty. The Company accepts collateral in the form of cash and marketable securities.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources while unobservable inputs reflect the Company’s view of market assumptions in the absence of observable market information. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. In determining fair value, the Company uses various methods, primarily market and income approaches.

The Company categorizes its fair value measurements into a three-level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

15

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The Company categorizes assets and liabilities held at fair value in the consolidated balance sheets as follows:

• Level 1 – Unadjusted quoted prices accessible in active markets for identical assets or liabilities at the measurement date and mutual funds where the value per share (unit) is determined and published daily and is the basis for current transactions.

• Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. Primary inputs to this valuation technique may include comparative trades, bid/asks, interest rate movements, U.S. Treasury rates, London Interbank Offered Rate (“LIBOR”), prime rates, cash flows, maturity dates, call ability, estimated prepayments, and/or underlying collateral values.

• Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate about the assumptions market participants would use at the measurement date in pricing the asset or liability. Consideration is given to the risk inherent in both the method of valuation and the valuation inputs.

The Company reviews its fair value hierarchy classifications for assets and liabilities quarterly. Changes in observability of significant valuation inputs identified during these reviews may trigger reclassifications. Reclassifications are reported as transfers at the beginning of the period in which the change occurs.

Fair Value Option

The Company assesses the fair value option election for newly acquired assets or liabilities on a prospective basis. There are no material assets or liabilities for which the Company elected the fair value option.

Federal Income Taxes

The Company recognizes deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss in the years in which those temporary differences are expected to be recovered or settled. Under this method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce a deferred tax asset to the amount expected to be realized. Interest expense and any associated penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) are recorded as income tax expense.

The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to change the provision for federal income taxes recorded in the consolidated financial statements, which could be significant.

Tax reserves are reviewed regularly and are adjusted as events occur that management believes impact its liability for additional taxes, such as lapsing of applicable statutes of limitations, conclusion of tax audits or substantial agreement with taxing authorities on the deductibility/nondeductibility of uncertain items, additional exposure based on current calculations, identification of new issues, release of administrative guidance or rendering of a court decision affecting a particular tax issue.

16

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

NLIC files a separate consolidated federal income tax return, with its subsidiaries, and is eligible to join the NMIC consolidated federal tax return group in 2015.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original maturities of less than three months.

Goodwill

In connection with business acquisitions, the Company recognizes goodwill as the excess of the purchase price over the fair value of net assets acquired as goodwill. Goodwill is not amortized, but is evaluated for impairment at the reporting unit level annually. Goodwill of a reporting unit is tested for impairment on an interim basis, in addition to the annual evaluation if an event occurs or circumstances change which would more likely than not reduce the fair value of a reporting unit below its carrying amount. If a reporting unit’s fair value is less than its carrying value, the Company will calculate implied goodwill. An impairment would be recognized on a reporting unit for the amount that the carrying value of its goodwill exceeds the implied value of its goodwill.

The process of evaluating goodwill for impairment requires several judgments and assumptions to be made to determine the fair value of the reporting units, including the method used to determine fair value, discount rates, expected levels of cash flows, revenues and earnings, and the selection of comparable companies used to develop market-based assumptions. The Company performed its 2013 annual impairment test and determined that no impairment was required.

Closed Block

In connection with the sponsored demutualization of Provident Mutual Life Insurance Company (“Provident”) prior to its acquisition by the Company, Provident established a closed block for the benefit of certain classes of individual participating policies that had a dividend scale payable in 2001. Assets were allocated to the closed block in an amount that produces cash flows which, together with anticipated revenues from closed block business, is reasonably expected to be sufficient to provide for (1) payment of policy benefits, specified expenses and taxes, and (2) the continuation of dividends throughout the life of the Provident policies included in the closed block based upon the dividend scales payable for 2001, if the experience underlying such dividend scales continues.

Assets allocated to the closed block benefit only the holders of the policies included in the closed block and will not revert to the benefit of the Company. No reallocation, transfer, borrowing or lending of assets can be made between the closed block and other portions of the Company’s general account, any of its separate accounts, or any affiliate of the Company without the approval of the Pennsylvania Insurance Department and Ohio Department of Insurance (“ODI”). The closed block will remain in effect as long as any policy in the closed block is in force.

If, over time, the aggregate performance of the closed block assets and policies is better than was assumed in funding the closed block, dividends to policyholders will increase. If, over time, the aggregate performance of the closed block assets and policies is less favorable than was assumed in the funding, dividends to policyholders could be reduced. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from the Company’s assets outside of the closed block, which are general account assets.

The assets and liabilities allocated to the closed block are recorded in the Company’s consolidated financial statements on the same basis as other similar assets and liabilities. The carrying amount of closed block liabilities in excess of the carrying amount of closed block assets at the date Provident was acquired by the Company represents the maximum future earnings from the assets and liabilities designated to the closed block that can be recognized in income, for the benefit of stockholders, over the period the policies in the closed block remain in force.

17

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

If actual cumulative earnings exceed expected cumulative earnings, the expected earnings are recognized in income. This is because the excess actual cumulative earnings over expected cumulative earnings, which represents undistributed accumulated earnings attributable to policyholders, is recorded as a policyholder dividend obligation. Therefore, the excess will be paid to closed block policyholders as an additional policyholder dividend expense in the future unless it is otherwise offset by future performance of the closed block that is less favorable than originally expected. If actual cumulative performance is less favorable than expected, actual earnings will be recognized in income.

The principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, purchases and sales of investments, policyholder benefits, policyholder dividends, premium taxes and income taxes. The principal income and expense items excluded from the closed block are management and maintenance expenses, commissions and net investment income and realized gains and losses on investments held outside of the closed block that support the closed block business, all of which enter into the determination of total gross margins of closed block policies. See Note 10 for further disclosure.

Separate Accounts

Separate account assets and liabilities represent contractholders’ funds that have been legally segregated into accounts with specific investment objectives. In the separate account, investment income and gains and losses on investments accrue directly to, and investment risk is borne by, the contractholder. Separate account assets are primarily comprised of public, privately registered and non-registered mutual funds. Separate account assets are recorded at fair value based on the methodology that would be applicable to the underlying assets. The value of separate account liabilities is set to equal the fair value for separate account assets.

Participating Business

Participating business, which refers to policies that participate in profits through policyholder dividends, represented approximately 4% of the Company’s life insurance in force in 2013 (5% in 2012 and 2011) and 38% of the number of life insurance policies in force in 2013 (40% in 2012 and 42% in 2011). The provision for policyholder dividends was based on the respective year’s dividend scales and has been included in future policy benefits and claims in the consolidated balance sheets.

Change in Accounting Principle

In October 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-26, which amends FASB Accounting Standards Codification (“ASC”) 944, Financial Services – Insurance. The amended guidance modifies the definition of the types of costs incurred by insurance entities that can be capitalized in the acquisition of new and renewal insurance and investment contracts. Under the amended guidance, acquisition costs are to include only those costs that are directly related to the successful acquisition of new or renewal insurance and investment contracts. The methods and assumptions used to amortize and assess recoverability of DAC were not impacted as a result of adopting this guidance.

The Company adjusted the presentation of its consolidated financial statements and accompanying notes for all periods presented, to reflect the retrospective adoption of this change in accounting principle.

18

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following tables summarize the impact of the retrospective change in accounting principle on the consolidated statements of operations for the periods indicated:

	Year ended December 31, 2011
(in millions)	As Originally Reported			As Adjusted			Effect of Change
Amortization of deferred policy acquisition costs	$	76		$	65		$	11
Other expenses, net of deferrals1	$	620		$	760		$	(140	)
Federal income tax benefit	$	(382	)	$	(427	)	$	45
Net loss attributable to Nationwide Life Insurance Company	$	(282	)	$	(366	)	$	(84	)

¹  Excludes interest expense, which is included in other expenses, net of deferrals on the consolidated statements of operations.

Subsequent Events

The Company evaluated subsequent events through February 28, 2014, the date the consolidated financial statements were issued.

(3) Recently Issued Accounting Standards

Adopted Accounting Standards

On January 1, 2013, the Company adopted ASU 2011-11, which expands the disclosure requirements within ASC 210-10, Balance Sheet – Offsetting. The new disclosures require improved information about certain financial instruments and derivatives that are either offset in accordance with GAAP or subject to enforceable master offsetting arrangements irrespective of GAAP. The Company also adopted ASU 2013-01, which clarifies the scope of these disclosures. The adoption of this guidance resulted in increased disclosures only and had no impact on the Company’s consolidated financial statements.

On January 1, 2013, the Company adopted ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amends FASB ASC 220, Comprehensive Income. The amended guidance requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by significant component. For significant amounts reclassified into net income in their entirety in the same reporting period, the amended guidance also requires entities to present or disclose the effect of these reclassifications on line items of net income. The adoption of this guidance resulted in increased disclosures only and had no impact on the Company’s consolidated financial statements.

On July 17, 2013, the Company adopted ASU 2013-10, which permits the Overnight Index Swap Rate to be designed as a U.S. benchmark interest rate for hedge accounting purposes. This guidance is applied prospectively on new or redesigned hedging relationships and accordingly had no impact to the Company’s consolidated financial statements.

On January 1, 2012, the Company adopted ASU 2011-04, which amends existing guidance in ASC 820, Fair Value Measurements and Disclosures. The guidance in this ASU clarifies existing fair value measurement guidance and expands disclosures primarily related to Level 3 fair value measurements. The Company also adopted ASU 2013-03, which clarifies the applicability of these disclosures. The adoption of this guidance resulted in increased disclosures only and had no impact on the Company’s consolidated financial statements.

19

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

On January 1, 2012, the Company adopted ASU 2011-05, which amends existing guidance in ASC 220, Comprehensive Income. The amended guidance requires reporting entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. The Company elected two separate but consecutive statements of operations and comprehensive income and adopted ASU 2011-05 retrospectively.

Pending Accounting Standards

In February 2013, the FASB issued ASU 2013-04, which amends existing guidance in ASC 405, Liabilities. The ASU provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The guidance is effective retrospectively for the Company’s annual and interim periods beginning January 1, 2014. The Company is currently in the process of determining the impact of adoption.

In June 2013, the FASB issued ASU 2013-08, which amends existing guidance in ASC 946, Financial Services – Investment Companies. The amended guidance modifies the definition of investment companies and requires new disclosures around the status and operations of investment companies. In addition, the guidance requires an investment company to measure its noncontrolling interests in another investment company at fair value rather than the equity method of accounting. The Company will adopt the ASU for interim and annual reporting periods beginning January 1, 2014. The Company is currently in the process of determining the impact of adoption.

In July 2013, the FASB issued ASU 2013-11, which amends existing guidance in ASC 740, Income Taxes. The amended guidance provides clarification on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The Company will adopt the ASU for interim and annual periods beginning January 1, 2014. The Company is currently in the process of determining the impact of adoption.

In January 2014, the FASB issued ASU 2014-01, which amends existing guidance in ASC 323, Equity Method and Joint Ventures. The amended guidance permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. The Company will adopt the ASU for interim and annual reporting periods beginning January 1, 2015. The Company is currently in the process of determining the impact of adoption.

(4) Certain Long-Duration Contracts

Variable Annuity Contracts

Contractholder assets are invested in general and separate account investment options as directed by the contractholder. The Company issues variable annuity contracts through its separate accounts. The Company also provides various forms of guarantees to benefit the related contractholders. The Company provides five primary guarantee types: (1) GMDB; (2) GMAB; (3) GLWB; (4) a hybrid guarantee with GMAB and GLWB; and (5) GMIB.

The GMDB, offered on every variable annuity contract, provides a specified minimum return upon death. Many of these death benefits are spousal, whereby a death benefit will be paid upon death of the first spouse. The survivor has the option to terminate the contract or continue it by having the death benefit paid into the contract and having a second death benefit paid upon the survivor’s death.

20

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The GMAB, which was offered in the Company’s Capital Preservation Plus product, is a living benefit that provides the contractholder with a guaranteed return of deposits, adjusted proportionately for withdrawals, after a specified time period (5, 7 or 10 years) selected by the contractholder at the issuance of the variable annuity contract. In some cases, the contractholder also has the option, after a specified time period, to drop the guarantee and continue the variable annuity contract without the GMAB. In general, the GMAB requires a minimum allocation to guaranteed term options or adherence to limitations required by an approved asset allocation strategy.

The GLWB, offered in the Company’s Lifetime Income products, are living benefits that provide for enhanced retirement income security without the liquidity loss associated with annuitization. The withdrawal rates vary based on the age when withdrawals begin and are applied to a benefit base to determine the guaranteed lifetime income amount available to a contractholder. The benefit base is equal to the variable annuity premium at contract issuance and may increase as a result of a feature driven by account performance and policy duration.

The GMIB, which was offered with several variable annuity contracts, is a living benefit that provides the contractholder with a guaranteed annuitization stream of income.

The following table summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts, as of the dates indicated (a contract may contain multiple guarantees):

	December 31, 2013								December 31, 2012
(in millions)	General account value		Separate account value		Net amount at risk1		Average age2		General account value		Separate account value		Net amount at risk1		Average age2
Contracts with GMDB:
Return of net deposits	$	916	$	19,927	$	13		64	$	836	$	14,963	$	24		64
Minimum return or anniversary contract value		2,031		33,520		237		69		2,048		29,787		561		68
Total contracts with GMDB	$	2,947	$	53,447	$	250		67	$	2,884	$	44,750	$	585		66
GMAB Return of net deposits3	$	92	$	2,383	$	—		64	$	165	$	3,230	$	12		64
GLWB Minimum return or anniversary contract value	$	178	$	28,071	$	74		64	$	128	$	22,031	$	613		65
GMIB Minimum return or anniversary contract value	$	49	$	510	$	—		64	$	49	$	514	$	1		65

¹  Net amount at risk is calculated on a policy-level basis and equals the respective guaranteed benefit less the account value (or zero if the account value exceeds the guaranteed benefit).

²  Represents the weighted average attained age of contractholders.

³  Contracts with the hybrid accumulation/withdrawal benefits are included with the accumulation benefits contracts.

21

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes the reserve balances for guarantees on variable annuity contracts, as of the dates indicated:

(in millions)	December 31, 2013			December 31, 2012
GMDB	$	55		$	65
GMAB1, 2	$	(19	)	$	57
GLWB1	$	(1,075	)	$	600
GMIB	$	2		$	2

¹  The fair value of the living benefit liability includes the present value of attributed fees.

²  Contracts with the hybrid accumulation/withdrawal benefits are included with the accumulation benefits contracts.

Paid claims for GMDBs were $22 million and $30 million for the years ended December 31, 2013 and 2012, respectively.

Paid claims for GMABs, GLWBs and GMIBs were immaterial for the years ended December 31, 2013 and 2012.

The following table summarizes account balances of deferred variable annuity contracts with guarantees invested in separate accounts, as of the dates indicated:

(in millions)	December 31, 2013		December 31, 2012
Mutual funds:
Bond	$	5,685	$	5,634
Domestic equity		43,505		35,277
International equity		3,179		2,614
Total mutual funds	$	52,369	$	43,525
Money market funds		1,078		1,225
Total1	$	53,447	$	44,750

¹  Excludes $30.6 billion and $26.7 billion as of December 31, 2013 and 2012, respectively, of separate account assets not related to deferred variable annuity contracts with guarantees and are primarily attributable to retirement plan, variable universal life and COLI products.

The Company did not transfer any assets from the general account to the separate account to cover guarantees for any of its variable annuity contracts during the years ended December 31, 2013 and 2012.

Universal and Variable Universal Life Insurance Contracts

The Company offers certain universal life and variable universal life insurance products with secondary guarantees. These no-lapse guarantees provide that a policy will not lapse so long as the policyholder makes minimum premium payments. The reserve balances on these guarantees were $325 million and $216 million as of December 31, 2013 and 2012, respectively. Paid claims on contracts maintained in force by these guarantees were immaterial for the years ended December 31, 2013 and 2012.

22

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes information regarding universal and variable universal life insurance contracts with no-lapse guarantees invested in general and separate accounts, as of the dates indicated:

(in millions)	General account value		Separate account value		Adjusted insurance in force1		Average age2
December 31, 2013	$	1,270	$	362	$	16,960		55
December 31, 2012	$	992	$	328	$	12,321		56

¹  The adjusted insurance in force is calculated on a policy-level basis and equals the respective guaranteed death benefit less the account value (or zero if the account value exceeds the guaranteed benefit).

²  Represents the weighted average attained age of contractholders.

(5) Deferred Policy Acquisition Costs

The following table summarizes changes in the DAC balance, as of the dates indicated:

(in millions)	December 31, 2013			December 31, 2012			December 31, 20111
Balance at beginning of year	$	3,249		$	3,487		$	3,125
Capitalization of DAC		604			470			604
Amortization of DAC, excluding unlocks		(373	)		(525	)		(200	)
Amortization of DAC related to unlocks		(1	)		(50	)		135
Adjustments to DAC related to unrealized gains and losses on available-for-sale securities		299			(133	)		(177	)
Balance at end of year	$	3,778		$	3,249		$	3,487

¹  The balances reflect a change in accounting principle, as described in Note 2.

During 2013, the net change in DAC amortization as a result of the annual comprehensive review of model assumptions was immaterial.

During 2012, the Company incurred additional DAC amortization of $50 million as a result of the annual comprehensive review of model assumptions, as well as a deviation from equity market performance as compared to assumed net separate account returns. The updated assumptions were primarily related to actual gross profits and the in force block of business deviating from expectations, renewal premiums, general account margins and lapses.

During 2011, the Company recognized a reduction in DAC amortization of $135 million as a result of the annual comprehensive review of model assumptions. The updated assumptions related to interest spread, mortality, maintenance expense and market performance assumptions. The 2011 reduction in DAC amortization reflects the impact of the retrospective change in accounting principle described in Note 2.

23

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(6) Investments

Available-for-Sale Securities

The following table summarizes amortized cost, unrealized gains and losses and fair value of available-for-sale securities, as of the dates indicated:

(in millions)	Amortized cost		Unrealized gains		Unrealized losses		Fair value
December 31, 2013
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	484	$	79	$	2	$	561
Obligations of states, political subdivisions and foreign governments		1,892		111		40		1,963
Corporate public securities		18,004		1,076		295		18,785
Corporate private securities		4,374		258		38		4,594
Residential mortgage-backed securities		3,919		163		79		4,003
Commercial mortgage-backed securities		1,439		86		21		1,504
Other asset-backed securities		890		26		77		839
Total fixed maturity securities	$	31,002	$	1,799	$	552	$	32,249
Equity securities		6		18		—		24
Total available-for-sale securities	$	31,008	$	1,817	$	552	$	32,273
December 31, 2012
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	476	$	121	$	—	$	597
Obligations of states, political subdivisions and foreign governments		1,820		301		1		2,120
Corporate public securities		16,152		1,891		33		18,010
Corporate private securities		4,216		392		19		4,589
Residential mortgage-backed securities		4,506		267		106		4,667
Commercial mortgage-backed securities		1,219		133		15		1,337
Other asset-backed securities		533		45		87		491
Total fixed maturity securities	$	28,922	$	3,150	$	261	$	31,811
Equity securities		15		5		—		20
Total available-for-sale securities	$	28,937	$	3,155	$	261	$	31,831

The fair value of the Company’s investments may fluctuate significantly in response to changes in interest rates, investment quality ratings and credit spreads. The Company has the ability and intent to hold equity securities until recovery. The Company does not have the intent to sell, nor is it more likely than not it will be required to sell, debt securities in an unrealized loss position.

24

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes the amortized cost and fair value of fixed maturity securities, by contractual maturity, as of December 31, 2013. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without early redemption penalties.

(in millions)	Amortized cost		Fair value
Fixed maturity securities:
Due in one year or less	$	1,081	$	1,097
Due after one year through five years		8,927		9,685
Due after five years through ten years		7,805		7,967
Due after ten years		6,941		7,154
Subtotal	$	24,754	$	25,903
Residential mortgage-backed securities		3,919		4,003
Commercial mortgage-backed securities		1,439		1,504
Other asset-backed securities		890		839
Total fixed maturity securities	$	31,002	$	32,249

The following table summarizes components of net unrealized gains and losses, as of the dates indicated:

(in millions)	December 31, 2013			December 31, 2012
Net unrealized gains on available-for-sale securities, before adjustments, taxes and fair value hedging	$	1,265		$	2,894
Change in fair value attributable to fixed maturity securities designated in fair value hedging relationships		—			(4	)
Net unrealized gains on available-for-sale securities, before adjustments and taxes1	$	1,265		$	2,890
Adjustment to DAC and other		(176	)		(482	)
Adjustment to future policy benefits and claims		(89	)		(295	)
Adjustment to policyholder dividend obligation		(85	)		(177	)
Deferred federal income tax expense		(314	)		(672	)
Net unrealized gains on available-for-sale securities	$	601		$	1,264

¹  Includes net unrealized losses of $(40) million and $(48) million as of December 31, 2013 and 2012, respectively, related to the non-credit portion of other-than-temporarily impaired securities.

25

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes the change in net unrealized gains and losses reported in accumulated other comprehensive income, for the years ended:

(in millions)	December 31, 2013			December 31, 2012
Balance at beginning of year	$	1,264		$	693
Unrealized gains and losses arising during the period:
Net unrealized (losses) gains on available-for-sale securities before adjustments		(1,657	)		990
Non-credit impairments and subsequent changes in fair value of impaired debt securities		8			178
Net adjustment to DAC and other		306			(135	)
Net adjustment to future policy benefits and claims		206			(112	)
Net adjustment to policyholder dividend obligation		92			(45	)
Related federal income tax benefit (expense)		366			(308	)
Change in unrealized (losses) gains on available-for-sale securities	$	(679	)	$	568
Reclassification adjustment for net losses realized on available-for-sale securities, net of tax benefit ($8 and $2 as of December 31, 2013 and 2012, respectively)		(16	)		(3	)
Change in net unrealized (losses) gains on available-for-sale securities	$	(663	)	$	571
Balance at end of year	$	601		$	1,264

26

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes by asset class available-for-sale securities, in an unrealized loss position based on the amount of time each type of security has been in an unrealized loss position, as well as the related fair value and number of securities, as of the dates indicated:

	Less than or equal to one year						More than one year						Total
(in millions, except number of securities)	Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses		Number of securities
December 31, 2013
Fixed maturity securities:
Corporate public securities	$	4,889	$	256		346	$	442	$	39		34	$	5,331	$	295		380
Residential mortgage-backed securities		725		16		70		604		63		148		1,329		79		218
Other asset-backed securities		507		6		32		144		71		40		651		77		72
Other		1,838		85		126		222		16		20		2,060		101		146
Total	$	7,959	$	363		574	$	1,412	$	189		242	$	9,371	$	552		816
December 31, 2012
Fixed maturity securities:
Corporate public securities	$	710	$	11		68	$	150	$	22		10	$	860	$	33		78
Residential mortgage-backed securities		89		2		12		1,029		104		190		1,118		106		202
Other asset-backed securities		27		1		5		163		86		46		190		87		51
Other		326		4		23		284		31		36		610		35		59
Total	$	1,152	$	18		108	$	1,626	$	243		282	$	2,778	$	261		390

The following table summarizes gross unrealized losses based on the ratio of fair value to amortized cost, for available-for-sale securities in an unrealized loss position, as of the dates indicated:

	December 31, 2013						December 31, 2012
(in millions)	Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total
99.9% - 80.0%	$	363	$	107	$	470	$	18	$	85	$	103
Less than 80.0%
Residential mortgage-backed securities		—		21		21		—		50		50
Other asset-backed securities		—		61		61		—		72		72
Other		—		—		—		—		36		36
Total	$	363	$	189	$	552	$	18	$	243	$	261

27

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Residential mortgage-backed securities are assessed for impairment using default estimates based on loan level data, where available. Where loan level data is not available, a proxy based on collateral characteristics is used. The impairment assessment considers loss severity as a function of multiple factors, including unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property value, loan-to-value (“LTV”) ratio at origination and prepayment speeds. Cash flows generated by the collateral are then utilized, along with consideration for the instrument’s position in the overall structure, to determine cash flows associated with the security.

Certain other asset-backed securities are assessed for impairment using expected cash flows based on various inputs including default estimates based on the underlying corporate securities, historical and forecasted loss severities or other market inputs when recovery estimates are not feasible. When the collateral is regional bank and insurance company trust preferred securities, default estimates used to estimate cash flows are based on U.S. Bank Rating service data and broker research.

The Company believes the unrealized losses on these available-for-sale securities represent temporary fluctuations in economic factors that are not indicative of other-than-temporary impairment.

Mortgage Loans, Net of Allowance

The following table summarizes the amortized cost of mortgage loans by method of evaluation for credit loss, and the related valuation allowances by type of credit loss, as of the dates indicated:

(in millions)	December 31, 2013		December 31, 2012
Amortized cost:
Loans with non-specific reserves	$	6,350	$	5,820
Loans with specific reserves		26		51
Total amortized cost	$	6,376	$	5,871
Valuation allowance:
Non-specific reserves	$	29	$	33
Specific reserves		6		11
Total valuation allowance	$	35	$	44
Mortgage loans, net of allowance	$	6,341	$	5,827

The following table summarizes activity in the valuation allowance for mortgage loans, for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 2011
Balance at beginning of year	$	44		$	60		$	96
Current period provision1		(4	)		2			25
Recoveries2		(5	)		(15	)		(7	)
Charge offs and other		—			(3	)		(54	)
Balance at end of year	$	35		$	44		$	60

¹  Includes specific reserve provisions and all changes in non-specific reserves.

²  Includes recoveries on sales and increases in the valuation of loans with specific reserves.

28

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes impaired commercial mortgage loans by class, for the years ended:

(in millions)	Office			Industrial			Retail			Other		Total
December 31, 2013
Amortized cost	$	—		$	26		$	—		$	—	$	26
Specific reserves		—			(6	)		—			—		(6	)
Carrying value of impaired mortgage loans, net of allowance	$	—		$	20		$	—		$	—	$	20
December 31, 2012
Amortized cost	$	13		$	26		$	12		$	—	$	51
Specific reserves		(2	)		(7	)		(2	)		—		(11	)
Carrying value of impaired mortgage loans, net of allowance	$	11		$	19		$	10		$	—	$	40

The following table summarizes average recorded investment and interest income recognized for impaired commercial mortgage loans by class, for the years ended:

(in millions)	Office		Industrial		Retail		Other		Total
December 31, 2013
Average recorded investment	$	5	$	20	$	5	$	—	$	30
Interest income recognized	$	1	$	1	$	1	$	—	$	3
December 31, 2012
Average recorded investment	$	9	$	20	$	11	$	34	$	74
Interest income recognized	$	1	$	2	$	1	$	6	$	10

As of December 31, 2013 and 2012, the Company’s mortgage loans classified as delinquent and/or in non-accrual status were immaterial in relation to the total mortgage loan portfolio. The Company had no mortgage loans 90 days or more past due and still accruing interest.

Management evaluates the credit quality of individual mortgage loans and the portfolio as a whole through a number of loan quality measurements, including, but not limited to, LTV and debt service coverage (“DSC”) ratios. The LTV ratio is calculated as a ratio of the amortized cost of a loan to the estimated value of the underlying collateral. DSC is the amount of cash flow generated by the underlying collateral of the mortgage loan available to meet periodic interest and principal payments of the loan. This process identifies mortgage loans representing the lowest risk profile and lowest potential for loss and those representing the highest risk profile and highest potential for loss. These factors are updated and evaluated at least annually.

29

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes the LTV ratio and DSC ratios of the mortgage loan portfolio, as of the dates indicated:

	LTV ratio								DSC ratio
(in millions)	Less than 80%		80% - less than 90%		90% or greater		Total		Greater than 1.10			1.00-1.10			Less than 1.00			Total
December 31, 2013:
Apartment	$	1,788	$	52	$	30	$	1,870	$	1,857		$	6		$	7		$	1,870
Industrial		951		52		86		1,089		893			122			74			1,089
Office		837		30		38		905		800			43			62			905
Retail		2,236		41		21		2,298		2,214			61			23			2,298
Other		213		—		1		214		214			—			—			214
Total	$	6,025	$	175	$	176	$	6,376	$	5,978		$	232		$	166		$	6,376
Weighted average DSC ratio		1.77		1.22		1.00		1.74		n/a			n/a			n/a			n/a
Weighted average LTV ratio		n/a		n/a		n/a		n/a		60	%		61	%		91	%		61	%
December 31, 2012:
Apartment	$	1,119	$	129	$	62	$	1,310	$	1,303		$	5		$	2		$	1,310
Industrial		922		76		162		1,160		951			121			88			1,160
Office		776		55		42		873		783			16			74			873
Retail		1,940		250		86		2,276		2,139			92			45			2,276
Other		189		57		6		252		252			—			—			252
Total	$	4,946	$	567	$	358	$	5,871	$	5,428		$	234		$	209		$	5,871
Weighted average DSC ratio		1.74		1.27		1.07		1.65		n/a			n/a			n/a			n/a
Weighted average LTV ratio		n/a		n/a		n/a		n/a		66	%		76	%		96	%		68	%

While these loan quality measurements contribute to management’s assessment of relative credit risk in the mortgage loan portfolio for the dates indicated based on underwriting criteria and ongoing assessment of the properties’ performance, management believes the amounts, net of valuation allowance, are collectible.

Available-For-Sale Securities on Deposit, Held in Trust and Pledged as Collateral

Available-for-sale securities with a carrying value of $8 million and $9 million were on deposit with various regulatory agencies as required by law as of December 31, 2013 and 2012, respectively. Additionally, available-for-sale securities with a carrying value of $849 million and $73 million were pledged as collateral to secure recoveries under reinsurance contracts and other funding agreements as of December 31, 2013 and 2012, respectively. These securities are primarily included in fixed maturity securities in the consolidated balance sheets.

30

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Tax Credit Funds

The Company has sold $1.2 billion and $0.9 billion in Tax Credit Funds to unrelated third parties as of December 31, 2013 and 2012, respectively. The Company has guaranteed after-tax benefits to the third party investors through periods ending in 2028. The Company held immaterial reserves on these transactions as of December 31, 2013 and 2012. These guarantees are in effect for periods of approximately 15 years each. The Tax Credit Funds provide a stream of tax benefits to the investors that will generate a yield and return of capital. If the tax benefits are not sufficient to provide these cumulative after-tax yields, the Company must fund any shortfall. The maximum amount of undiscounted future payments that the Company could be required to pay the investors under the terms of the guarantees is $796 million, but the company does not anticipate making any material payments related to the guarantees. The Company’s risks are mitigated in the following ways: (1) the Company has the right to buyout the equity related to the guarantee under certain circumstances, (2) the Company may replace underperforming properties to mitigate exposure to guarantee payments and (3) the Company oversees the asset management of the deals.

Consolidated VIEs

The Company has relationships with VIEs where the Company is the primary beneficiary. These consolidated VIEs are primarily made up of Low-Income-Housing Tax Credit Funds with guarantees to limited partners. Net assets (controlling and noncontrolling interests) of all consolidated VIEs totaled $680 million and $347 million as of December 31, 2013 and 2012, respectively, which were composed primarily of other investments of $554 million, other assets of $182 million and other liabilities of $82 million as of December 31, 2013, and other investments of $348 million as of December 31, 2012. The Company’s general credit is not exposed to the creditors or beneficial interest holders of these consolidated VIEs.

Unconsolidated VIEs

In addition to the consolidated VIEs, the Company holds investments in VIEs where the Company is not the primary beneficiary, which are primarily investments in Tax Credit Funds without guarantees to limited partners. The carrying value of these investments was $104 million and $222 million as of December 31, 2013 and 2012, respectively. In addition, the Company has made commitments for further investments in these VIEs of $29 million and $66 million as of December 31, 2013 and 2012, respectively.

Net Investment Income

The following table summarizes net investment income by investment type, for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 2011
Fixed maturity securities, available-for-sale	$	1,565		$	1,506		$	1,502
Mortgage loans		348			366			370
Policy loans		52			53			56
Other		(57	)		(45	)		(34	)
Gross investment income	$	1,908		$	1,880		$	1,894
Investment expenses		59			55			50
Net investment income	$	1,849		$	1,825		$	1,844

31

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Net Realized Investment Gains and Losses, Net of Other-Than-Temporary Impairments

The following table summarizes net realized investment gains and losses, net of other-than-temporary impairments, by source, for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 2011
Net derivative gains (losses)	$	705		$	314		$	(1,636	)
Realized gains on sales		32			48			64
Realized losses on sales		(54	)		(23	)		(45	)
Other		—			12			(19	)
Net realized investment gains (losses) before other-than-temporary impairments on fixed maturity securities	$	683		$	351		$	(1,636	)
Other-than-temporary impairments on fixed maturity securities1		(5	)		(32	)		(40	)
Net realized investment gains (losses), net of other-than-temporary impairments	$	678		$	319		$	(1,676	)

¹  Other-than-temporary impairments on fixed maturity securities are net $6 million, $36 million and $95 million of non-credit losses included in other comprehensive income for the years ended December 31, 2013, 2012 and 2011, respectively.

Proceeds from the sale of available-for-sale securities were $1.1 billion, $0.8 billion and $1.6 billion during the years ended December 31, 2013, 2012 and 2011, respectively. Gross gains of $31 million, $47 million and $50 million and gross losses of $50 million, $20 million and $39 million were realized on sales of available-for-sale securities during the years ended December 31, 2013, 2012 and 2011, respectively.

The following table summarizes the cumulative credit losses, for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 2011
Cumulative credit losses at beginning of year1	$	(289	)	$	(328	)	$	(340	)
New credit losses		(3	)		(18	)		(8	)
Incremental credit losses		(3	)		(10	)		(29	)
Losses related to securities included in the beginning balance sold or paid down during the period		23			67			49
Cumulative credit losses at end of year1	$	(272	)	$	(289	)	$	(328	)

¹  Cumulative credit losses are defined as amounts related to the Company’s credit portion of the other-than-temporary impairment losses on debt securities that the Company does not intend to sell and that it is not more likely than not the Company will be required to sell prior to recovery of the amortized cost basis.

32

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(7) Derivative Instruments

The Company is exposed to certain risks related to its ongoing business operations which are managed using derivative instruments.

Interest rate risk management. The Company uses interest rate contracts, primarily interest rate swaps, to reduce or alter interest rate exposure arising from mismatches between assets and liabilities. In the case of interest rate swaps, the Company enters into a contractual agreement with a counterparty to exchange, at specified intervals, the difference between fixed and variable rates of interest, calculated on a reference notional amount.

Interest rate swaps are used by the Company in association with fixed and variable rate investments to achieve cash flow streams that support certain financial obligations of the Company and to produce desired investment returns. As such, interest rate swaps are generally used to convert fixed rate cash flow streams to variable rate cash flow streams or vice versa. The Company also enters into interest rate swap transactions which are structured to provide an offset against the negative impact of higher interest rates on the Company’s capital position.

Equity market and interest rate risk management. The Company has a variety of variable annuity products with guaranteed benefit features. These products and related obligations expose the Company to various market risks, primarily equity and interest rate risks. Adverse changes in the equity markets or interest rate movements expose the Company to significant volatility. To mitigate these risks and hedge the guaranteed benefit obligations, the Company enters into a variety of derivatives including interest rate swaps, equity index futures, options and total return swaps.

Foreign currency risk management. As part of its regular investing activities, the Company may purchase foreign currency denominated investments. These investments and the associated income expose the Company to volatility associated with movements in foreign exchange rates. As foreign exchange rates change, the increase or decrease in the cash flows of the derivative instrument generally offsets the changes in the functional-currency equivalent cash flows of the hedged item. To mitigate this risk, the Company uses cross-currency swaps and futures, which are primarily included in other derivative contracts in the following tables.

Credit risk associated with derivative transactions. The Company periodically evaluates the risks within the derivative portfolios due to credit exposure. When evaluating this risk, the Company considers several factors which include, but are not limited to, the counterparty credit risk associated with derivative receivables, the Company’s own credit as it relates to derivative payables, the collateral thresholds associated with each counterparty and changes in relevant market data in order to gain insight into the probability of default by the counterparty. In addition, the impact the Company’s exposure to credit risk could have on the effectiveness of the Company’s hedging relationships is considered. As of December 31, 2013 and 2012, the impact of the exposure to credit risk on the fair value measurement of derivatives and the effectiveness of the Company’s hedging relationships was immaterial.

33

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes the fair value and related notional amounts of derivative instruments, as of the dates indicated:

	Derivative assets				Derivative liabilities
(in millions)	Fair value		Notional		Fair value		Notional
December 31, 2013
Derivatives designated and qualifying as hedging instruments	$	1	$	6	$	26	$	345
Derivatives not designated as hedging instruments:
Interest rate contracts	$	1,787	$	26,156	$	2,100	$	29,715
Equity contracts		343		6,556		—		—
Total return swaps		6		1,101		52		1,183
Other derivative contracts		—		—		5		2
Total derivative positions1	$	2,137	$	33,819	$	2,183	$	31,245
December 31, 2012
Derivatives designated and qualifying as hedging instruments	$	4	$	79	$	21	$	192
Derivatives not designated as hedging instruments:
Interest rate contracts	$	1,960	$	21,216	$	2,065	$	23,746
Equity contracts		822		7,445		—		—
Total return swaps		4		1,513		32		1,551
Other derivative contracts		—		10		5		17
Total derivative positions1	$	2,790	$	30,263	$	2,123	$	25,506

¹  Derivative assets and liabilities are included in other assets and other liabilities, respectively, in the consolidated balance sheets. As of December 31, 2013 and 2012, derivative assets exclude $196 million and $170 million, respectively, of accrued interest receivable, and derivative liabilities exclude $227 million and $179 million, respectively, of accrued interest payable.

The fair value of the Company’s derivative positions, subject to offsetting by master netting agreements of $1.7 billion and $2.0 billion as of December 31, 2013 and 2012, respectively, and by collateral received from or posted with counterparties, resulted in immaterial net uncollateralized derivative asset and liability positions as of December 31, 2013 and 2012. As of December 31, 2013 and 2012, the Company held cash collateral from derivative counterparties of $382 million and $798 million, respectively. The Company held $29 million of securities as off-balance sheet collateral as of December 31, 2013. No securities were held as off-balance sheet collateral as of December 31, 2012. As of December 31, 2013 and 2012, the Company had posted cash collateral of $435 million and $228 million, respectively, and pledged securities with a fair value of $173 million and $148 million, respectively, with derivative counterparties.

34

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes gains and losses for derivative instruments recognized in net realized investment gains and losses in the consolidated statements of operations, for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 2011
Derivatives designated and qualifying as hedging instruments	$	(1	)	$	(1	)	$	(4	)
Derivatives not designated as hedging instruments:
Interest rate contracts	$	(209	)	$	(125	)	$	(44	)
Equity contracts		(776	)		(665	)		(45	)
Total return swaps		(321	)		(343	)		(17	)
Other derivative contracts		(9	)		(1	)		(6	)
Net interest settlements		14			53			34
Total derivative losses1	$	(1,302	)	$	(1,082	)	$	(82	)
Change in embedded derivatives on guaranteed benefit annuity programs2		1,751			1,185			(1,674	)
Other revenue on guaranteed benefit annuity programs		256			211			120
Change in embedded derivative liabilities and related fees	$	2,007		$	1,396		$	(1,554	)
Net realized derivative gains (losses)	$	705		$	314		$	(1,636	)

¹  Included in total derivative losses are economic hedging losses of $1.8 billion, $827 million and gains of $1.0 billion related to the guaranteed benefit annuity programs for the years ended December 31, 2013, 2012 and 2011, respectively.

²  As part of the Company’s annual comprehensive review of DAC model assumptions, all relevant assumptions impacting the fair value of embedded derivatives on annuity programs are also reviewed and updated. For the individual variable annuity business, the change in the embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2013 includes model enhancements and updated assumptions for discounting, benefit utilization, mortality and lapse rates. The change in embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2012 included updated assumptions for lapse rates, mortality, withdrawal behavior and benefit utilization.

35

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(8) Fair Value Measurements

The following table summarizes assets and liabilities held at fair value on a recurring basis as of December 31, 2013:

(in millions)	Level 1		Level 2			Level 3			Total
Assets
Investments:
Fixed maturity securities, available-for-sale:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	557	$	1		$	3		$	561
Obligations of states, political subdivisions and foreign governments		63		1,900			—			1,963
Corporate public securities		1		18,705			79			18,785
Corporate private securities		—		3,791			803			4,594
Residential mortgage-backed securities		791		3,203			9			4,003
Commercial mortgage-backed securities		—		1,504			—			1,504
Other asset-backed securities		—		645			194			839
Total fixed maturity securities, available-for-sale, at fair value	$	1,412	$	29,749		$	1,088		$	32,249
Other investments at fair value		64		357			45			466
Investments at fair value	$	1,476	$	30,106		$	1,133		$	32,715
Derivative assets		—		1,794			343			2,137
Separate account assets		80,647		1,339			2,083			84,069
Assets at fair value	$	82,123	$	33,239		$	3,559		$	118,921
Liabilities
Future policy benefits and claims:
Embedded derivatives on living benefits	$	—	$	—		$	1,094		$	1,094
Embedded derivatives on indexed products		—		—			(84	)		(84	)
Total future policy benefits and claims	$	—	$	—		$	1,010		$	1,010
Derivative liabilities		—		(2,178	)		(5	)		(2,183	)
Liabilities at fair value	$	—	$	(2,178	)	$	1,005		$	(1,173	)

36

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013:

	Balance as of December 31, 2012			Net gains (losses)																Balance as of December 31, 2013
(in millions)				In operations1			In other comprehensive income			Purchases		Sales			Transfers into Level 3		Transfers out of Level 3
Assets
Investments:
Fixed maturity securities, available-for-sale:
Corporate private securities	$	772		$	(1	)$		(2	)$		91	$	(117	)$		127	$	(67	)$		803
Other asset-backed securities		291			—			10			6		(62	)		15		(66	)		194
Other		134			—			(7	)		18		(53	)		—		(1	)		91
Total fixed maturity securities, available-for-sale, at fair value2	$	1,197			(1	)		1			115		(232	)		142		(134	)		1,088
Other investments at fair value		62			(6	)		6			5		(22	)		—		—			45
Derivative assets3		822			(447	)		—			129		(161	)		—		—			343
Separate account assets		2,025			58			—			—		—			—		—			2,083
Assets at fair value	$	4,106		$	(396	)$		7		$	249	$	(415	)$		142	$	(134	)$		3,559
Liabilities
Future policy benefits and claims:
Embedded derivatives on living benefits	$	(657	)$		1,751		$	—		$	—	$	—		$	—	$	—		$	1,094
Embedded derivatives on indexed products		(91	)		7			—			—		—			—		—			(84	)
Total future policy benefits and claims	$	(748	)$		1,758		$	—		$	—	$	—		$	—	$	—		$	1,010
Derivative liabilities3		(5	)		—			—			—		—			—		—			(5	)
Liabilities at fair value	$	(753	)$		1,758		$	—		$	—	$	—		$	—	$	—		$	1,005

¹  Net gains and losses included in operations are reported in net realized investment gains and losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets are attributable to contractholders and therefore are not included in the Company’s earnings. The change in unrealized (losses) gains included in operations on assets and liabilities still held at the end of the year was $(6) million for other investments at fair value, $(297) million for derivative assets and $1.8 billion for future policy benefits and claims.

²  Non-binding broker quotes were utilized to determine a fair value of $924 million of total fixed maturity securities as of December 31, 2013.

³  Non-binding broker quotes were utilized to determine a fair value of all Level 3 derivative assets and liabilities.

Transfers into and out of Level 3 during the year ended December 31, 2013 are primarily due to certain corporate private securities and other asset-backed securities, which changed pricing sources between broker quotes and independent pricing services. There were no transfers between Levels 1 and 2 during the year ended December 31, 2013.

37

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

As discussed in Note 2, the valuation of embedded derivatives in living benefit guarantees and equity indexed products incorporates many inputs. Significant unobservable inputs for living benefit guarantees include discounting, index volatility, mortality, lapse rates, wait period and benefit utilization, while significant unobservable inputs for equity indexed products include mortality, lapse rates and index volatility. For both products, the Company derives these inputs, which vary widely by product, attained age, policy duration, benefits in the money (living benefit guarantees only) and the existence of surrender charges, from current experience and industry data. The fair value for these benefits is calculated using the mean of discounted cash flows across numerous random scenarios, an approach that is commonly used by the insurance industry for this type of valuation. This process considers a broader range of assumptions than what would be found in a deterministic approach.

Living Benefit Guarantees

The following table summarizes significant unobservable inputs used for fair value measurements for living benefits liabilities classified as Level 3 as of December 31, 2013:

Unobservable Inputs	Range
Mortality	0.1%-8%2
Lapse	0%-35%
Wait period	0 yrs – 30 yrs3
Efficiency of benefit utilization1	65%-100%
Discount rate	See footnote 4
Index volatility	15%-25%

¹  The unobservable input is not applicable to GMABs.

²  Represents the mortality for the majority of business with living benefits, with policyholders ranging from 45 to 85.

³  A portion of the contractholders could never use the benefit, which would extend the range to an indeterminate period.

⁴  Incorporates the liquidity and non-performance risk adjustment. The liquidity spread takes into consideration market observables for spreads in illiquid assets. The non-performance risk adjustment reflects an additional spread over LIBOR determined by market observables for similarly rated public bonds.

The following changes in any of the significant unobservable inputs presented in the table above may result in a change in the fair value measurements of the living benefits liability:

Higher mortality rates tend to decrease the value of the liability and lower mortality rates tend to increase the value of the liability.

Higher lapse rates tend to decrease the value of the liability and lower lapse rates tend to increase the value of the liability. Factors that impact the predicted lapse rate can include: age, policy duration, policy size, benefit in-the-moneyness and applicable surrender charges. All else being equal, policies that are in-the-money will have lower lapse rates than policies that are out-of-the-money, and policies that have a surrender charge present will have lower lapse rates than policies without a surrender charge.

The assumed wait period and the efficiency of utilization determine the timing and amount of living benefits withdrawals. These assumptions vary by the product type, age of the policyholder and policy duration. Many products have a bonus feature which enhances the guarantee on every policy anniversary for the first ten years so long as withdrawals have not commenced. All else being equal, policies commencing withdrawals at a time around the year ten bonus will have higher liability values than policies commencing withdrawals 20 years after issue or policies commencing withdrawals only one year after issue. In addition, policies that are assumed to withdraw the maximum permitted amount will have a higher liability value than a policy that is assumed to withdraw less than the maximum allowed amount.

38

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

A higher discount rate tends to decrease the value of the liability and a lower discount rate tends to increase the value of the liability.

Higher index volatility tends to increase the value of the liability and lower index volatility tends to decrease the value of the liability.

Equity Indexed Products

The following table summarizes significant unobservable inputs used for fair value measurements for indexed universal life equity indexed products classified as Level 3 as of December 31, 2013:

Unobservable Inputs	Range
Mortality	0%-4%1
Lapse	0%-10%
Index volatility	15%-25%

¹  Represents the mortality for the majority of business, with policyholders ranging from 0 to 75.

The following changes in any of the significant unobservable inputs presented in the table above may result in a change in the fair value measurements of the equity indexed products:

Higher mortality rates tend to decrease the value of the liability and lower mortality rates tend to increase the value of the liability.

Higher lapse rates tend to decrease the value of the liability and lower lapse rates tend to increase the value of the liability. Factors that impact the predicted lapse rate can include: age, policy duration, policy size, and applicable surrender charges. All else being equal, policies with a surrender charge present will have lower lapse rates than policies without a surrender charge.

Higher index volatility tends to increase the value of the liability and lower index volatility tends to decrease the value of the liability.

Separate Accounts

The Company’s separate account assets include an investment in a mutual fund with a non-readily determinable fair value. Net asset value has been used to estimate the fair value of this investment as a practical expedient. The investments are included in Level 3 as they may not be redeemed until a seven year guarantee period expires in 2016. The investment strategy of this fund is to build a portfolio where the assets shall be sufficient to achieve a target portfolio value by the end of the seven year guarantee period. The net asset value of this fund reported in separate account assets was $1.7 billion and $1.6 billion as of December 31, 2013 and 2012, respectively.

39

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes assets and liabilities held at fair value on a recurring basis as of December 31, 2012:

(in millions)	Level 1		Level 2			Level 3			Total
Assets
Investments:
Fixed maturity securities, available-for-sale:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	592	$	2		$	3		$	597
Obligations of states, political subdivisions and foreign governments		73		2,047			—			2,120
Corporate public securities		1		17,890			119			18,010
Corporate private securities		—		3,817			772			4,589
Residential mortgage-backed securities		484		4,173			10			4,667
Commercial mortgage-backed securities		—		1,335			2			1,337
Other asset-backed securities		—		200			291			491
Total fixed maturity securities, available-for-sale, at fair value	$	1,150	$	29,464		$	1,197		$	31,811
Other investments at fair value		45		1,001			62			1,108
Investments at fair value	$	1,195	$	30,465		$	1,259		$	32,919
Derivative assets		—		1,968			822			2,790
Separate account assets		68,185		1,230			2,025			71,440
Assets at fair value	$	69,380	$	33,663		$	4,106		$	107,149
Liabilities
Future policy benefits and claims:
Embedded derivatives on living benefits	$	—	$	—		$	(657	)	$	(657	)
Embedded derivatives on indexed products		—		—			(91	)		(91	)
Total future policy benefits and claims	$	—	$	—		$	(748	)	$	(748	)
Derivative liabilities		—		(2,118	)		(5	)		(2,123	)
Liabilities at fair value	$	—	$	(2,118	)	$	(753	)	$	(2,871	)

40

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012:

	Balance as of December 31, 2011			Net gains (losses)															Balance as of December 31, 2012
(in millions)				In operations1			In other comprehensive income		Purchases		Sales			Transfers into Level 3		Transfers out of Level 3
Assets
Investments:
Fixed maturity securities, available-for-sale:
Corporate private securities	$	1,209		$	2		$	13	$	69	$	(187	)$		40	$	(374	)$		772
Other asset-backed securities		251			2			53		36		(61	)		10		—			291
Other		131			—			11		2		(8	)		1		(3	)		134
Total fixed maturity securities, available-for-sale, at fair value2	$	1,591			4			77		107		(256	)		51		(377	)		1,197
Other investments at fair value		43			16			3		—		—			—		—			62
Derivative assets3		1,004			(353	)		—		350		(179	)		—		—			822
Separate account assets		1,952			73			—		—		—			—		—			2,025
Assets at fair value	$	4,590		$	(260	)$		80	$	457	$	(435	)$		51	$	(377	)$		4,106
Liabilities
Future policy benefits and claims:
Embedded derivatives on living benefits	$	(1,842	)$		1,185		$	—	$	—	$	—		$	—	$	—		$	(657	)
Embedded derivatives on indexed products		(63	)		(28	)		—		—		—			—		—			(91	)
Total future policy benefits and claims	$	(1,905	)$		1,157		$	—	$	—	$	—		$	—	$	—		$	(748	)
Derivative liabilities3		(6	)		1			—		—		—			—		—			(5	)
Liabilities at fair value	$	(1,911	)$		1,158		$	—	$	—	$	—		$	—	$	—		$	(753	)

¹  Net gains and losses included in operations are reported in net realized investment gains and losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets are attributable to contractholders and therefore are not included in the Company’s earnings. The change in unrealized gains (losses) included in operations on assets and liabilities still held as of the end of the year was $16 million for other investments at fair value, $(257) million for derivative assets, $1.2 billion for future policy benefits and claims and $(1) million for derivative liabilities.

²  Non-binding broker quotes were utilized to determine a fair value of $1.1 billion of total fixed maturity securities as of December 31, 2012.

³  Non-binding broker quotes were utilized to determine a fair value of all Level 3 derivative assets and liabilities.

During the year ended December 31, 2012, transfers from Level 1 to Level 2 within the debt securities issued by foreign governments were $42 million. There were no transfers from Level 2 to Level 1 during the year ended December 31, 2012.

Transfers into and out of Level 3 during the year ended December 31, 2012 represented changes in the sources used to price certain securities and changes in the Company’s assumptions related to the observability of certain inputs.

41

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Financial Instruments Not Carried at Fair Value

The following table summarizes the carrying value and fair value of the Company’s financial instruments not carried at fair value as of the dates indicated. The valuation techniques used to estimate these fair values are described below.

	December 31, 2013								December 31, 2012
(in millions)	Carrying value		Fair value		Level 2		Level 3		Carrying value		Fair value		Level 2		Level 3
Assets
Investments:
Mortgage loans, net of allowance	$	6,341	$	6,481	$	—	$	6,481	$	5,827	$	5,988	$	—	$	5,988
Policy loans	$	987	$	987	$	—	$	987	$	980	$	980	$	—	$	980
Liabilities
Investment contracts	$	21,874	$	20,436	$	—	$	20,436	$	20,123	$	19,561	$	—	$	19,561
Short-term debt	$	278	$	278	$	—	$	278	$	300	$	300	$	—	$	300
Long-term debt	$	707	$	1,004	$	997	$	7	$	1,038	$	1,323	$	1,282	$	41

Mortgage loans, net of allowance. The fair values of mortgage loans are estimated using discounted cash flow analyses based on interest rates currently being offered for similar loans to borrowers with similar credit ratings.

Policy loans. The carrying amount reported in the consolidated balance sheets approximates fair value.

Investment contracts. For investment contracts without defined maturities, fair value is the amount payable on demand, net of surrender charges. For investment contracts with known or determined maturities, fair value is estimated using discounted cash flow analysis. Interest rates used in this analysis are similar to currently offered contracts with maturities consistent with those remaining for the contracts being valued. The fair value of adjustable rate contracts approximates their carrying value.

Short-term debt. The carrying amount reported in the consolidated balance sheets approximates fair value.

Long-term debt. The fair value for long-term debt are based on estimated market prices using observable inputs from similar debt instruments.

42

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(9) Goodwill

The following table summarizes changes in the carrying value of goodwill by segment for the years indicated:

(in millions)	Retirement Plans		Individual Products & Solutions - Life and NBSG		Total
Balance as of December 31, 20111	$	25	$	175	$	200
Adjustments		—		—		—
Balance as of December 31, 20121	$	25	$	175	$	200
Adjustments		—		—		—
Balance as of December 31, 20131	$	25	$	175	$	200

¹ The goodwill balances have not been previously impaired.

43

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(10) Closed Block

The amounts shown in the following tables for assets, liabilities, revenues and expenses of the closed block are those that enter into the determination of amounts that are to be paid to policyholders.

The following table summarizes financial information for the closed block, as of the dates indicated:

(in millions)	December 31, 2013			December 31, 2012
Liabilities:
Future policyholder benefits	$	1,703		$	1,732
Policyholder funds and accumulated dividends		141			142
Policyholder dividends payable		23			24
Policyholder dividend obligation		113			198
Other policy obligations and liabilities		29			32
Total liabilities	$	2,009		$	2,128
Assets:
Fixed maturity securities, available-for-sale	$	1,320		$	1,511
Mortgage loans, net of allowance		257			183
Policy loans		157			164
Other assets		93			77
Total assets	$	1,827		$	1,935
Excess of reported liabilities over assets		182			193
Portion of above representing other comprehensive income:
(Decrease) increase in unrealized gain on fixed maturity securities, available-for-sale	$	(92	)	$	45
Adjustment to policyholder dividend obligation		92			(45	)
Total	$	—		$	—
Maximum future earnings to be recognized from assets and liabilities	$	182		$	193
Other comprehensive income:
Fixed maturity securities, available-for-sale:
Fair value	$	1,320		$	1,511
Amortized cost		1,235			1,334
Shadow policyholder dividend obligation		(85	)		(177	)
Net unrealized appreciation	$	—		$	—

44

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table summarizes closed block operations for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 2011
Revenues:
Premiums	$	66		$	73		$	77
Net investment income		94			98			102
Realized investment gains (losses)		—			1			(3	)
Realized losses credited to policyholder benefit obligation		(4	)		(5	)		(1	)
Total revenues	$	156		$	167		$	175
Benefits and expenses:
Policy and contract benefits	$	123		$	134		$	145
Change in future policyholder benefits and interest credited to policyholder accounts		(29	)		(27	)		(35	)
Policyholder dividends		44			50			55
Change in policyholder dividend obligation		3			(8	)		(8	)
Other expenses		(2	)		1			1
Total benefits and expenses	$	139		$	150		$	158
Total revenues, net of benefits and expenses, before federal income tax expense	$	17		$	17		$	17
Federal income tax expense		6			6			6
Revenues, net of benefits and expenses and federal income tax expense	$	11		$	11		$	11
Maximum future earnings from assets and liabilities:
Beginning of period	$	193		$	204		$	215
Change during period		(11	)		(11	)		(11	)
End of period	$	182		$	193		$	204

Cumulative closed block earnings from inception through December 31, 2013, 2012 and 2011 were higher than expected as determined in the actuarial calculation. Therefore, policyholder dividend obligations (excluding the adjustment for unrealized gains on available-for-sale securities) were $28 million, $21 million and $23 million as of December 31, 2013, 2012 and 2011, respectively.

45

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(11) Short-Term Debt

The Company classifies debt as short-term if the maturity date at inception is less than one year and all other debt instruments as long-term.

The following table summarizes the carrying value of short-term debt and weighted average annual interest rates, as of the dates indicated:

(in millions)	December 31, 2013		December 31, 2012
$600 million commercial paper program (0.24% and 0.29%, respectively)	$	278	$	300
Total short-term debt	$	278	$	300

In March 2012, NLIC entered into an agreement with the FHLB that allows the Company access to borrow up to $250 million and expires on March 28, 2014. The Company had $4.3 billion in eligible collateral and no amounts outstanding under the agreement as of December 31, 2013. Additionally, as part of the agreement, NLIC purchased $25 million in capital stock with the FHLB.

In May 2011, NMIC, NFS, and NLIC entered into a $600 million revolving variable rate credit facility upon expiration of its existing facility of the same amount. The new facility matures on May 6, 2015 and is subject to various covenants, as defined in the agreement. NLIC had no amounts outstanding under the facility as of December 31, 2013 and 2012.

The Company has entered into an agreement with its custodial bank to borrow against the cash collateral that is posted in connection with its securities lending program. The maximum amount available under the agreement is $350 million. The borrowing rate on this program is equal to one-month U.S. LIBOR. The Company had no amounts outstanding under this agreement as of December 31, 2013 and 2012.

The terms of each debt instrument contain various restrictive covenants, including, but not limited to, minimum statutory surplus and minimum net worth requirements, and maximum debt to tangible net worth requirements, as defined in the agreements. The Company was in compliance with all covenants as of December 31, 2013 and 2012.

The amount of interest paid on short-term debt was immaterial in 2013, 2012 and 2011.

(12) Long-Term Debt

The following table summarizes the carrying value of long-term debt, as of the dates indicated:

(in millions)	December 31, 2013		December 31, 2012
8.15% surplus note, due June 26, 2032, payable to NFS	$	300	$	300
7.50% surplus note, due December 17, 2031, payable to NFS		300		300
6.75% surplus note, due December 23, 2033, payable to NFS		100		100
Variable funding surplus note, repaid June 2013		—		297
Other		7		41
Total long-term debt	$	707	$	1,038

46

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

On December 31, 2010, Olentangy Reinsurance, LLC (Olentangy), a special purpose financial captive insurance company subsidiary of NLAIC domiciled in the State of Vermont, issued a variable funding surplus note due on December 31, 2040 to Nationwide Corporation, a majority-owned subsidiary of NMIC. In June 2013, the Company paid the outstanding balance of the surplus note. The Company made interest payments on this surplus note totaling $5 million and $10 million for the years ending December 31, 2013 and 2012, respectively. Any payment of interest or principal on the note requires the prior approval of the State of Vermont.

The Company made interest payments to NFS on surplus notes totaling $54 million for the years ended December 31, 2013, 2012 and 2011. Payments of interest and principal under the notes require the prior approval of the ODI.

(13) Federal Income Taxes

The following table summarizes the federal income tax expense (benefit) attributable to income (loss) before loss attributable to noncontrolling interests, for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 20111
Current tax (benefit) expense	$	(33	)	$	(144	)	$	55
Deferred tax expense (benefit)		346			243			(482	)
Total tax expense (benefit)	$	313		$	99		$	(427	)

¹  The balances reflect a change in accounting principle, as described in Note 2.

The following table summarizes how the total federal income tax expense (benefit) differs from the amount computed by applying the U.S. federal income tax rate to income (loss) before loss attributable to noncontrolling interests, for the years ended:

	December 31, 2013						December 31, 2012						December 31, 20111
(in millions)	Amount			%			Amount			%			Amount			%
Rate reconciliation:
Computed (expected tax expense (benefit))	$	469			35	%	$	245			35	%	$	(297	)		35	%
Dividends received deduction		(112	)		(8	)%		(75	)		(11	)%		(99	)		12	%
Tax credits		(82	)		(6	)%		(85	)		(12	)%		(30	)		3	%
Other, net		38			2	%		14			2	%		(1	)		—	%
Total	$	313			23	%	$	99			14	%	$	(427	)		50	%

¹  The balances reflect a change in accounting principle, as described in Note 2.

The Company’s current federal income tax (liability) receivable was $(13) million and $61 million as of December 31, 2013 and 2012, respectively.

Total federal income taxes (refunded) paid were $(107) million, $(95) million and $121 million for the years ended December 31, 2013, 2012 and 2011, respectively.

During 2013 and 2011, the Company recorded a tax benefit of $13 million and $10 million, respectively. These changes in estimates were primarily driven by differences in the Company’s separate account dividends received deduction (“DRD”) between the previous year’s estimate and the amount reported on the previous year’s tax return. No material changes in estimated income tax expense were recorded in 2012.

47

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

As of December 31, 2013, the Company has gross federal net operating loss carryforwards of $797 million, which expire between 2027 and 2028. In addition, the Company has $222 million in low-income-housing credit carryforwards, which expire between 2024 and 2033, $90 million in alternative minimum tax credit carryforwards, which have an unlimited carryforward and $40 million in foreign tax credit carryforwards which expire between 2019 and 2023. The Company expects to fully utilize all carryforwards.

The following table summarizes the tax effects of temporary differences that gave rise to significant components of the net deferred tax liability included in other liabilities in the consolidated balance sheets, as of the dates indicated:

(in millions)	December 31, 2013			December 31, 2012
Deferred tax assets:
Future policy benefits and claims	$	1,244		$	1,295
Derivatives, including embedded derivatives		—			94
Tax credit carryforwards		352			288
Other		845			478
Gross deferred tax assets	$	2,441		$	2,155
Valuation allowance		(17	)		(18	)
Net deferred tax assets		2,424			2,137
Deferred tax liabilities:
Deferred policy acquisition costs	$	(1,048	)	$	(874	)
Available-for-sale securities		(821	)		(1,338	)
Derivatives, including embedded derivatives		(600	)		—
Other		(255	)		(239	)
Gross deferred tax liabilities	$	(2,724	)	$	(2,451	)
Net deferred tax liability	$	(300	)	$	(314	)

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the total gross deferred tax assets will not be realized. Valuation allowances are established when necessary to reduce the deferred tax assets to amounts expected to be realized. The valuation allowance was $17 million and $18 million as of December 31, 2013 and 2012, respectively. The change in the valuation allowance for the years ended December 31, 2013 and 2011 was $1 million and $6 million, respectively, while there was no change in the valuation allowance for the year ended December 31, 2012. Based on management’s analysis, it is more likely than not that the results of future operations and the implementation of tax planning strategies will generate sufficient taxable income to enable the Company to realize the deferred tax assets for which the Company has not established valuation allowances.

48

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following table is a rollforward of the beginning and ending uncertain tax positions, including permanent and temporary differences, but excluding interest and penalties:

(in millions)	2013			2012			2011
Balance at beginning of period	$	36		$	76		$	119
Additions for current year tax positions		2			(2	)		9
Additions for prior years tax positions		—			25			—
Reductions for prior years tax positions		(2	)		(63	)		(52	)
Balance at end of period	$	36		$	36		$	76

The Company does not anticipate any significant changes to unrecognized tax benefits during the next twelve months.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities through the 2005 tax year. In 2013, the IRS commenced an examination of the Company’s U.S. income tax returns for the years 2009 through 2010. Any adjustments that may result from IRS examination of tax returns are not expected to have a material effect on the results of operations, cash flows or financial position of the Company.

(14) Statutory Financial Information

Statutory Results

The Company’s life insurance subsidiaries are required to prepare statutory financial statements in conformity with the statutory accounting practices prescribed and permitted by insurance regulatory authorities, subject to any deviations prescribed or permitted by the applicable state department of insurance. Olentangy was granted a permitted practice from the State of Vermont that changed NLAIC’s valuation of this subsidiary by $66 million as of December 31, 2013, which also allowed NLIC to admit additional deferred tax assets of $10 million as of December 31, 2013. Statutory accounting practices focus on insurer solvency and materially differ from GAAP primarily due to charging policy acquisition and other costs to expense as incurred, establishing future policy benefits and claims reserves using different actuarial assumptions, excluding certain assets from statutory admitted assets; and valuing investments and establishing deferred taxes on a different basis.

The following table summarizes the statutory net income (loss) and statutory capital and surplus for the Company’s primary life insurance subsidiary for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 2011
Statutory net income (loss)
NLIC	$	262		$	764		$	18
NLAIC	$	(103	)	$	(54	)	$	(61	)
Statutory capital and surplus
NLIC	$	3,550		$	3,837		$	3,591
NLAIC	$	534		$	311		$	302

49

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Dividend Restrictions

The payment of dividends by NLIC is subject to restrictions set forth in the insurance laws and regulations of the State of Ohio, its domiciliary state. The State of Ohio insurance laws require Ohio-domiciled life insurance companies to seek prior regulatory approval to pay a dividend or distribution of cash or other property if the fair market value thereof, together with that of other dividends or distributions made in the preceding 12 months, exceeds the greater of (1) 10% of statutory-basis policyholders’ surplus as of the prior December 31 or (2) the statutory-basis net income of the insurer for the prior year. During the years ended December 31, 2013 and 2011, NLIC did not pay any dividends to NFS. During the year ended December 31, 2012, NLIC paid a cash dividend of $40 million to NFS. As of January 1, 2014, NLIC has the ability to pay dividends to NFS totaling $355 million without obtaining prior approval.

The State of Ohio insurance laws also require insurers to seek prior regulatory approval for any dividend paid from other than earned surplus. Earned capital and surplus is defined under the State of Ohio insurance laws as the amount equal to the Company’s unassigned funds as set forth in its most recent statutory financial statements, including net unrealized capital gains and losses or revaluation of assets. Additionally, following any dividend, an insurer’s policyholder capital and surplus must be reasonable in relation to the insurer’s outstanding liabilities and adequate for its financial needs. The payment of dividends by the Company may also be subject to restrictions set forth in the insurance laws of the state of New York that limit the amount of statutory profits on the Company’s participating policies (measured before dividends to policyholders) available for the benefit of the Company and its stockholders.

The Company currently does not expect such regulatory requirements to impair the ability to pay operating expenses and dividends in the future.

Regulatory Risk-Based Capital

The National Association of Insurance Commissioners’ (“NAIC”) Risk-Based Capital (“RBC”) model law requires every insurer to calculate its total adjusted capital and RBC requirement to ensure insurer solvency. Regulatory guidelines provide for an insurance commissioner to intervene if the insurer experiences financial difficulty, as evidenced by a company’s total adjusted capital falling below established relationships to required RBC. The model includes components for asset risk, liability risk, interest rate exposure and other factors. The State of Ohio, where NLIC and NLAIC are domiciled, imposes minimum RBC requirements that are developed by the NAIC. The formulas in the model for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital, as defined by the NAIC, to authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, all of which require specified corrective action. NLIC and NLAIC each exceeded the minimum RBC requirements for all periods presented herein.

(15) Related Party Transactions

The Company has entered into significant, recurring transactions and agreements with NMIC, other affiliates and subsidiaries as a part of its ongoing operations. These include annuity and life insurance contracts, employee benefit plans, office space cost sharing arrangements, and agreements related to reinsurance, cost sharing, administrative services, marketing, intercompany loans, intercompany repurchases, cash management services and software licensing. Measures used to allocate expenses among companies include individual employee estimates of time spent, special cost studies, the number of full-time employees, commission expense and other methods agreed to by the participating companies.

In addition, Nationwide Services Company, LLC (“NSC”), a subsidiary of NMIC, provides data processing, systems development, hardware and software support, telephone, mail and other services to the Company, based on specified rates for units of service consumed. For the years ended December 31, 2013, 2012 and 2011, the Company made payments to NMIC and NSC totaling $277 million, $283 million and $241 million, respectively.

50

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The Company has issued group annuity and life insurance contracts and performs administrative services for various employee benefit plans sponsored by NMIC or its affiliates. Total account values of these contracts were $3.3 billion and $3.2 billion as of December 31, 2013 and 2012, respectively. Total revenues from these contracts were $137 million, $140 million and $148 million for the years ended December 31, 2013, 2012 and 2011, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances was $109 million, $113 million and $122 million for the years ended December 31, 2013, 2012 and 2011, respectively. The terms of these contracts are materially consistent with what the Company offers to unaffiliated parties.

The Company has a cost sharing arrangement with NMIC to occupy office space. For the years ended December 31, 2013, 2012 and 2011, the Company made payments to NMIC of $16 million, $15 million and $14 million, respectively. In addition, an affiliate of NMIC has a cost sharing arrangement with the Company to occupy office space.

NLIC has a reinsurance agreement with NMIC whereby all of NLIC’s accident and health business not ceded to unaffiliated reinsurers is ceded to NMIC on a modified coinsurance basis. Either party may terminate the agreement on January 1 of any year with prior notice. Under a modified coinsurance agreement, the ceding company retains invested assets, and investment earnings are paid to the reinsurer. Under the terms of NLIC’s agreements, the investment risk associated with changes in interest rates is borne by the reinsurer. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder. The Company believes that the terms of the modified coinsurance agreements are consistent in all material respects with what the Company could have obtained with unaffiliated parties. Revenues ceded to NMIC for the years ended December 31, 2013, 2012 and 2011 were $179 million, $161 million and $203 million, respectively, while benefits, claims and expenses ceded during these years were $178 million, $167 million and $212 million, respectively.

Funds of Nationwide Funds Group (“NFG”), an affiliate, are offered to the Company’s customers as investment options in certain of the Company’s products. As of December 31, 2013 and 2012, customer allocations to NFG funds totaled $53.2 billion and $45.0 billion, respectively. For the years ended December 31, 2013, 2012 and 2011, NFG paid the Company $163 million, $144 million and $129 million, respectively, for the distribution and servicing of these funds.

Amounts on deposit with NCMC for the benefit of the Company were $228 million and $854 million as of December 31, 2013 and 2012, respectively.

Refer to Note 12 for discussion of variable funding surplus note between Olentangy Reinsurance, LLC and Nationwide Corporation.

Certain annuity products are sold through affiliated companies, which are also subsidiaries of NFS. Total commissions and fees paid to these affiliates were $54 million for the years ended December 31, 2013 and 2012 and $64 million for the year ended December 31, 2011.

The Company provides financing to Nationwide Realty Investors, LTD, a subsidiary of NMIC. As of December 31, 2013 and 2012, the Company had notes receivable outstanding of $146 million and $126 million, respectively.

51

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(16) Contingencies

Legal and Regulatory Matters

The Company is subject to legal and regulatory proceedings in the ordinary course of its business. The Company’s legal and regulatory matters include proceedings specific to the Company and other proceedings generally applicable to business practices in the industries in which the Company operates. These matters are subject to many uncertainties, and given their complexity and scope, their outcomes cannot be predicted. Regulatory proceedings could also affect the outcome of one or more of the Company’s litigation matters. Furthermore, it is often not possible to determine the ultimate outcomes of the pending regulatory investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs’ claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. The Company believes, however, that based on currently known information, the ultimate outcome of all pending legal and regulatory matters is not likely to have a material adverse effect on the Company’s consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that such outcomes could materially affect the Company’s consolidated financial position or results of operations in a particular quarter or annual period.

The various businesses conducted by the Company are subject to oversight by numerous federal and state regulatory entities, including but not limited to the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Department of Labor, the IRS and state insurance authorities. Such regulatory entities may, in the normal course, be engaged in general or targeted inquiries, examinations and investigations of the Company and/or its affiliates. The financial services industry has been the subject of increasing scrutiny in connection with a broad spectrum of regulatory issues; with respect to all such scrutiny directed at the Company and/or its affiliates, the Company is cooperating with regulators. The Company will cooperate with NMIC insofar as any inquiry, examination or investigation encompasses NMIC’s operations.

On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. On November 18, 2009, the plaintiffs filed a sixth amended complaint amending the list of named plaintiffs and claiming to represent a class of qualified retirement plan trustees under the Employee Retirement Income Security Act of 1974 (“ERISA”) that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NFS and NLIC, other unspecified relief for restitution, declaratory and injunctive relief and attorneys’ fees. On November 6, 2009, the Court granted the plaintiffs’ motion for class certification. On October 21, 2010, the District Court dismissed NFS from the lawsuit. On February 6, 2012, the Second Circuit Court of Appeals vacated the November 6, 2009 order granting class certification and remanded the case back to the District Court for further consideration. On September 6, 2013, the District Court granted the plaintiffs’ motion for class certification. The case is set for trial beginning August 11, 2014. NLIC continues to defend this lawsuit vigorously.

52

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

On November 20, 2007, NRS and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On March 12, 2010, NRS and NLIC were named in a Second Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Steven E. Coker, Sandra H. Turner, David N. Lichtenstein and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc, Alabama State Employees Association, Inc., PEBCO, Inc. and Fictitious Defendants A to Z claiming to represent a class of all participants in the Alabama State Employees Association, Inc. (“ASEA”) Plan, excluding members of the Deferred Compensation Committee, ASEA’s directors, officers and board members, and PEBCO’s directors, officers and board members. On October 22, 2010, the parties to this action executed a court approved stipulation of settlement that agreed to certify a class for settlement purposes only, that provided for payments to the settlement class, and that provided for releases, certain bar orders, and dismissal of the case. The settlement fund has been paid out. On December 6, 2011, the Court entered an Order that NRS owes indemnification to ASEA and PEBCO for only the Coker (Gwin) class action, and dismissed NLIC. The Company has resolved the indemnification claims of ASEA. On February 15, 2013, the Court issued its Order determining the amount of fees due to PEBCO on its indemnification claim. On March 28, 2013, the Company filed a notice of appeal to the Alabama Supreme Court. The case is fully briefed. NRS continues to defend this case vigorously.

On June 8, 2011, NMIC and NLIC were named in a lawsuit filed in Court of Common Pleas, Cuyahoga County, Ohio entitled Stanley Andrews and Donald C. Clark v. Nationwide Mutual Insurance Company and Nationwide Life Insurance Company. The complaint alleges that NMIC and NLIC have an obligation to review the Social Security Administration Death Master File database for all life insurance policyholders who have at least a 70% probability of being deceased according to actuarial tables. The complaint further alleges that NMIC and NLIC are not conducting such a review. The complaint seeks injunctive relief and declaratory judgment requiring NMIC and NLIC to conduct such a review, and alleges NMIC and NLIC have violated the covenant of good faith and fair dealing and have been unjustly enriched by not having conducted such reviews. The lower court granted Nationwide’s motion to dismiss. Plaintiffs appealed. The Court of Appeals affirmed the dismissal on October 24, 2012. Plaintiffs filed a petition for rehearing en banc on November 5, 2012. The Court of Appeals denied the petition on December 14, 2012. Plaintiffs filed a notice of appeal to the Ohio Supreme Court on January 24, 2013. Nationwide filed its memorandum in opposition to plaintiffs’ petition for jurisdiction to the Ohio Supreme Court on February 27, 2013. The Ohio Supreme Court denied plaintiffs’ petition for review of the decision of the Court of Appeals on April 24, 2013. Plaintiffs’ time to file a petition for writ of certiorari to the U.S. Supreme Court has expired, concluding this matter.

In 2012, the Plaintiff, Debtor in Possession Lehman Brothers Special Financing, Inc., filed a class action in the United States Bankruptcy Court for the Southern District of New York seeking the recovery of nearly $3.0 billion in assets from all the named defendants including NLIC and NMIC. This litigation arises from two collateralized debt obligation transactions, 801 Grand and Alta, which resulted in payments to NLIC and NMIC after the Plaintiff and its parent company, Lehman Brothers Holding, Inc. filed for bankruptcy in 2008. This triggered an early termination of the above transactions. The Plaintiff seeks to have sums returned to the bankruptcy estate in addition to prejudgment interest and costs. The case is currently stayed. In 2013, Plaintiff sent correspondence to all defendants inviting settlement discussions and has served NMIC and NLIC with a “SPV Derivatives ADR Notice,” formally starting the Alternative Dispute Resolution process. NMIC and NLIC have responded, and are currently taking part in the ADR process. Mediation was scheduled for and proceeded on December 13, 2013, but the parties reached an impasse. On January 10, 2014, Lehman filed another motion to extend the stay for a final four month period. After a hearing, the court extended the stay to the later of (a) May 20, 2014 or (b) 30 days after the court enters a scheduling order governing the Distributed Action. The parties are negotiating the proposed scheduling order for the conduct of the Distributed Action litigation, which will be finalized by March 24, 2014.

53

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

Tax Matters

The Company’s federal income tax returns are routinely audited by the IRS. The Company has established tax reserves as described in Note 2. The Company believes its tax reserves reasonably provide for potential assessments that may result from IRS examinations and other tax-related matters for all open tax years.

Indemnifications

In the normal course of business, the Company provides standard indemnifications to contractual counterparties. The types of indemnifications typically provided include breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated, and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations.

(17) Reinsurance

The following table summarizes the effects of reinsurance on life, accident and health insurance in force and premiums for the years ended:

(in millions)	December 31, 2013			December 31, 2012			December 31, 2011
Premiums
Direct	$	1,015		$	890		$	832
Assumed from other companies		—			—			—
Ceded to other companies		(291	)		(255	)		(301	)
Net	$	724		$	635		$	531
Life, accident and health insurance in force
Direct	$	228,095		$	216,002		$	209,732
Assumed from other companies		6			5			5
Ceded to other companies		(58,310	)		(59,895	)		(60,499	)
Net	$	169,791		$	156,112		$	149,238

Total amounts recoverable under reinsurance contracts totaled $675 million, $684 million and $704 million as of December 31, 2013, 2012 and 2011, respectively.

(18) Segment Information

Management views the Company’s business primarily based on its underlying products and uses this basis to define its four reportable segments: Individual Products and Solutions-Annuity (formerly named Individual Investments), Retirement Plans, Individual Products and Solutions-Life and NBSG (formerly named Individual Protection) and Corporate and Other.

54

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The primary segment profitability measure that management uses is a non-GAAP financial measure called pre-tax operating earnings (loss), which is calculated by adjusting income before federal income taxes to exclude: (1) net realized investment gains and losses, except for operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts); (2) the adjustment to amortization of DAC and other related to net realized investment gains and losses; and (3) net losses attributable to noncontrolling interest.

Due to a change in the manner in which we view our reportable segments, certain prior period amounts have been restated.

Individual Products and Solutions-Annuity

The Individual Products & Solutions-Annuity segment consists of individual annuity products marketed under the Nationwide DestinationSM and other Nationwide-specific or private label brands. Deferred annuity contracts provide the customer with tax-deferred accumulation of savings and flexible payout options including lump sum, systematic withdrawal or a stream of payments for life. In addition, deferred variable annuity contracts provide the customer with access to a wide range of investment options and asset protection features, while deferred fixed annuity contracts generate a return for the customer at a specified interest rate fixed for prescribed periods. Immediate annuities differ from deferred annuities in that the initial premium is exchanged for a stream of income for a certain period or for the owner’s lifetime without future access to the original investment. The majority of assets and recent sales for the Individual Products & Solutions-Annuity segment consist of deferred variable annuities.

Retirement Plans

The Retirement Plans segment is comprised of the Company’s private and public sector retirement plans businesses. The private sector primarily includes Internal Revenue Code (“IRC”) Section 401 fixed and variable group annuity business, and the public sector primarily includes IRC Section 457 and Section 401(a) business in the form of full-service arrangements that provide plan administration and fixed and variable group annuities as well as administration-only business. The Retirement Plan segment also includes managed account services and stable value wrap products.

Individual Products and Solutions-Life and NBSG

The Individual Products & Solutions-Life and NBSG segment consists of life insurance products, including individual variable universal life, COLI and BOLI products; traditional life insurance products; fixed universal life insurance products; and indexed universal life products. Life insurance products provide a death benefit and generally allow the customer to build cash value on a tax-advantaged basis.

Corporate and Other

The Corporate and Other segment includes non-operating realized gains and losses and related amortization, including mark-to-market adjustments on embedded derivatives, net of economic hedges, related to products with living benefits included in the Individual Products & Solutions-Annuity segment and other revenues and expenses not allocated to other segments.

55

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

The following tables summarize the Company’s business segment operating results for the years ended:

(in millions)	Individual Products and Solutions- Annuity			Retirement Plans			Individual Products and Solutions-Life and NBSG		Corporate and Other			Total
December 31, 2013
Revenues:
Policy charges	$	1,021		$	101		$	727	$	—		$	1,849
Premiums		416			—			282		26			724
Net investment income		546			743			544		16			1,849
Non-operating net realized investment gains, net of other-than-temporary impairment losses1		—			—			—		791			791
Other revenues2		(109	)		—			—		13			(96	)
Total revenues	$	1,874		$	844		$	1,553	$	846		$	5,117
Benefits and expenses:
Interest credited to policyholder accounts	$	377		$	473		$	213	$	4		$	1,067
Benefits and claims		688			—			636		30			1,354
Policyholder dividends		—			—			61		(2	)		59
Amortization of DAC		185			(2	)		125		66			374
Other expenses, net of deferrals		303			151			284		184			922
Total benefits and expenses	$	1,553		$	622		$	1,319	$	282		$	3,776
Income before federal income taxes and noncontrolling interests	$	321		$	222		$	234	$	564		$	1,341
Less:    non-operating net realized investment gains, net of other-than-temporary impairment losses1		—			—			—		(791	)
Less:    adjustment to amortization of DAC and other related to net realized investment gains and losses		—			—			—		70
Less:    net loss attributable to noncontrolling interest		—			—			—		82
Pre-tax operating earnings (loss)	$	321		$	222		$	234	$	(75	)
Assets as of year end	$	68,805		$	29,904		$	27,183	$	7,553		$	133,445

¹  Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts).

²  Includes operating items discussed above.

56

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(in millions)	Individual Products and Solutions- Annuity			Retirement Plans		Individual Products and Solutions-Life and NBSG		Corporate and Other			Total
December 31, 2012
Revenues:
Policy charges	$	899		$	94	$	677	$	—		$	1,670
Premiums		334			—		274		27			635
Net investment income		551			736		534		4			1,825
Non-operating net realized investment gains, net of other-than-temporary impairment losses1		—			—		—		428			428
Other revenues2		(124	)		—		—		22			(102	)
Total revenues	$	1,660		$	830	$	1,485	$	481		$	4,456
Benefits and expenses:
Interest credited to policyholder accounts	$	375		$	457	$	199	$	7		$	1,038
Benefits and claims		595			—		589		43			1,227
Policyholder dividends		—			—		57		(3	)		54
Amortization of DAC		185			14		150		226			575
Other expenses, net of deferrals		285			163		250		165			863
Total benefits and expenses	$	1,440		$	634	$	1,245	$	438		$	3,757
Income before federal income taxes and noncontrolling interests	$	220		$	196	$	240	$	43		$	699
Less:    non-operating net realized investment gains, net of other-than-temporary impairment losses1		—			—		—		(428	)
Less:    adjustment to amortization of DAC and other related to net realized investment gains and losses		—			—		—		243
Less:    net loss attributable to noncontrolling interest		—			—		—		61
Pre-tax operating earnings (loss)	$	220		$	196	$	240	$	(81	)
Assets as of year end	$	58,707		$	27,842	$	25,301	$	8,320		$	120,170

¹  Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts).

²  Includes operating items discussed above.

57

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2013, 2012 and 2011

(in millions)	Individual Products and Solutions- Annuity			Retirement Plans		Individual Products and Solutions-Life and NBSG		Corporate and Other			Total
December 31, 20113
Revenues:
Policy charges	$	781		$	96	$	629	$	—		$	1,506
Premiums		234			—		272		25			531
Net investment income		527			715		531		71			1,844
Non-operating net realized investment losses, net of other-than-temporary impairment losses1		—			—		—		(1,613	)		(1,613	)
Other revenues2		(59	)		—		—		(1	)		(60	)
Total revenues	$	1,483		$	811	$	1,432	$	(1,518	)	$	2,208
Benefits and expenses:
Interest credited to policyholder accounts	$	374		$	441	$	198	$	20		$	1,033
Benefits and claims		476			—		577		9			1,062
Policyholder dividends		—			—		67		—			67
Amortization of DAC		80			11		75		(101	)		65
Other expenses, net of deferrals		269			166		235		160			830
Total benefits and expenses	$	1,199		$	618	$	1,152	$	88		$	3,057
Income (loss) before federal income taxes and noncontrolling interests	$	284		$	193	$	280	$	(1,606	)	$	(849	)
Less:    non-operating net realized investment losses, net of other-than-temporary impairment losses1		—			—		—		1,613
Less:    adjustment to amortization of DAC and other related to net realized investment gains and losses		—			—		—		(115	)
Less:    net loss attributable to noncontrolling interest		—			—		—		56
Pre-tax operating earnings (loss)	$	284		$	193	$	280	$	(52	)
Assets as of year end	$	57,741		$	25,114	$	22,503	$	6,628		$	111,986

¹  Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts).

²  Includes operating items discussed above.

³  The balances reflect a change in accounting principle, as described in Note 2.

58

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule I Consolidated Summary of Investments – Other Than Investments in Related Parties

As of December 31, 2013 (in millions)

Column A	Column B		Column C		Column D
Type of investment	Cost		Fair value		Amount at which shown in the consolidated balance sheet
Fixed maturity securities, available-for-sale:
Bonds:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	484	$	561	$	561
Obligations of states, political subdivisions and foreign governments		1,892		1,963		1,963
Public utilities		2,616		2,759		2,759
All other corporate, mortgage-backed and asset-backed securities		26,010		26,966		26,966
Total fixed maturity securities, available-for-sale	$	31,002	$	32,249	$	32,249
Equity securities, available-for-sale:
Common stocks:
Industrial, miscellaneous and all other	$	6	$	14	$	14
Nonredeemable preferred stocks		—		10		10
Total equity securities, available-for-sale	$	6	$	24	$	24
Trading assets		30		31		31
Mortgage loans, net of allowance		6,376				6,341	1
Policy loans		987				987
Other investments		712				712
Short-term investments		411				411
Total investments	$	39,524			$	40,755

¹  Difference from Column B primarily is attributable to valuation allowances due to impairments on mortgage loans (see Note 6 to the audited consolidated financial statements).

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

59

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule III Supplementary Insurance Information

As of December 31, 2013, 2012 and 2011 and for each of the years then ended (in millions)

Column A	Column B			Column C		Column D			Column E		Column F
Year: Segment	Deferred policy acquisition costs3			Future policy benefits, losses, claims and loss expenses		Unearned premiums1			Other policy claims and benefits payable1		Premium revenue
2013
IPS - Annuity	$	2,214		$	10,985						$	416
Retirement Plans		179			14,313							—
IPS - Life and NBSG		1,557			10,068							282
Corporate and Other		(172	)		1,399							26
Total	$	3,778		$	36,765						$	724
2012
IPS - Annuity	$	2,110		$	12,214						$	334
Retirement Plans		168			13,628							—
IPS - Life and NBSG		1,442			9,564							301
Corporate and Other		(471	)		748							—
Total	$	3,249		$	36,154						$	635
2011
IPS - Annuity	$	2,232		$	12,550						$	234
Retirement Plans		172			12,638							—
IPS - Life and NBSG		1,421			9,338							297
Corporate and Other		(338	)		726							—
Total	$	3,487		$	35,252						$	531
Column A	Column G			Column H		Column I			Column J		Column K
Year: Segment	Net investment income2			Benefits, claims, losses and settlement expenses		Amortization of deferred policy acquisition costs3			Other operating expenses2,3		Premiums written
2013
IPS - Annuity	$	546		$	1,065	$	185		$	303
Retirement Plans		743			473		(2	)		151
IPS - Life and NBSG		544			910		125			284
Corporate and Other		16			32		66			184
Total	$	1,849		$	2,480	$	374		$	922
2012
IPS - Annuity	$	551		$	970	$	185		$	285
Retirement Plans		736			457		14			163
IPS - Life and NBSG		536			868		150			255
Corporate and Other		2			24		226			160
Total	$	1,825		$	2,319	$	575		$	863
2011
IPS - Annuity	$	527		$	850	$	80		$	269
Retirement Plans		715			441		11			166
IPS - Life and NBSG		533			863		75			238
Corporate and Other		69			8		(101	)		157
Total	$	1,844		$	2,162	$	65		$	830

¹  Unearned premiums and other policy claims and benefits payable are included in Column C amounts.

²  Allocations of net investment income and certain operating expenses are based on numerous assumptions and estimates, and reported segment operating results would change if different methods were applied.

³  The 2011 balances reflect a change in accounting principle, as described in Note 2.

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

60

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule IV Reinsurance

As of December 31, 2013, 2012 and 2011 and for each of the years then ended (in millions)

Column A	Column B		Column C			Column D		Column E		Column F
	Gross amount		Ceded to other companies			Assumed from other companies		Net amount		Percentage of amount assumed to net
2013
Life, accident and health insurance in force	$	228,095	$	(58,310	)	$	6	$	169,791		—
Premiums:
Life insurance1	$	783	$	(59	)	$	—	$	724		—
Accident and health insurance		232		(232	)		—		—		—
Total	$	1,015	$	(291	)	$	—	$	724		—
2012
Life, accident and health insurance in force	$	216,002	$	(59,895	)	$	5	$	156,112		—
Premiums:
Life insurance1	$	701	$	(66	)	$	—	$	635		—
Accident and health insurance		189		(189	)		—		—		—
Total	$	890	$	(255	)	$	—	$	635		—
2011
Life, accident and health insurance in force	$	209,732	$	(60,499	)	$	5	$	149,238		—
Premiums:
Life insurance1	$	596	$	(65	)	$	—	$	531		—
Accident and health insurance		236		(236	)		—		—		—
Total	$	832	$	(301	)	$	—	$	531		—

¹  Primarily represents premiums from traditional life insurance and life-contingent immediate annuities and excludes deposits on investment and universal life insurance products.

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

61

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule V Valuation and Qualifying Accounts

Years ended December 31, 2013, 2012 and 2011 (in millions)

Column A	Column B		Column C					Column D		Column E
Description	Balance at beginning of period		Charged to costs and expenses			Charged to other accounts		Deductions1		Balance at end of period
2013
Valuation allowances - mortgage loans	$	44	$	(4	)	$	—	$	5	$	35
2012
Valuation allowances - mortgage loans	$	60	$	1		$	—	$	17	$	44
2011
Valuation allowances - mortgage loans	$	96	$	25		$	—	$	61	$	60

¹ Amounts generally represent payoffs, sales and recoveries.

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

62

PART C. OTHER INFORMATION

Item 26. Exhibits

a)	Resolution of the Depositor's Board of Directors authorizing the establishment of the Registrant – Filed previously on Form N8B-2 for the NW VLI Separate Account – 2 (033-62795) and hereby incorporated by reference.
b)	Not Applicable
c)	Underwriting or Distribution of contracts between the Depositor and Principal Underwriter – Filed previously with the Post-Effective Amendment No. 18 (033-42180) and hereby incorporated by reference.
d)	The form of the contract – Filed previously with initial registration statement (033-42180) and hereby incorporated by reference.
e)	The form of the contract application – Filed previously with initial registration statement (033-42180) and hereby incorporated by reference.
f)	Depositor's Certificate of Incorporation and By-Laws.

1)	Amended Articles of Incorporation for Nationwide Life Insurance Company. Filed previously with initial registration statement (333-164119) on January 4, 2010 as document "exhibitf1.htm" and hereby incorporated by reference.
2)	Amended and Restated Code of Regulations of Nationwide Life Insurance Company. Filed previously with initial registration statement (333-164119) on January 4, 2010 as document "exhibitf2.htm" and hereby incorporated by reference.
3)	Articles of Merger of Nationwide Life Insurance Company of America with and into Nationwide Life Insurance Company, effective December 31, 2009. Filed previously with initial registration statement (333-164119) on January 4, 2010 as document "exhibitf3.htm" and hereby incorporated by reference.

g)	Reinsurance Contracts -Filed previously with registration statement (333-31725) and hereby incorporated by reference.
h)	Participation Agreements - The following Fund Participation Agreements were previously filed on July 17, 2007 with pre-effective amendment number 1 of registration statement (333-140608) under Exhibit 26(h), and are hereby incorporated by reference.

1)	Fund Participation Agreement with AIM Variable Insurance Funds, AIM Advisors, Inc., and AIM Distributors dated January 6, 2003, under document "aimfpa99h1.htm".
2)	Amended and Restated Fund Participation and Shareholder Services Agreement with American Century Investment Services, Inc. dated September 15, 2004, as amended, under document "amcentfpa99h2"
3)	Restated and Amended Fund Participation Agreement with The Dreyfus Corporation dated January 27, 2000, as amended, under document "dreyfusfpa99h3.htm".
4)	Fund Participation Agreement with Federated Insurance Series and Federated Securities Corp. dated April 1, 2006, as amended, under document "fedfpa99h4.htm".
5)	Fund Participation Agreement with Fidelity Variable Insurance Products Fund dated May 1, 1988, as amended, including Fidelity Variable Insurance Products Fund IV and Fidelity Variable Insurance Products Fund V, under document "fidifpa99h5.htm".
6)	Amended and Restated Fund Participation Agreement with Franklin Templeton Variable Insurance Products Trust and Franklin/Templeton Distributors, Inc. dated May 1, 2003; as amended, under document "frankfpa99h8.htm".
7)	Fund Participation Agreement, Service and Institutional Shares, with Janus Aspen Series, dated December 31, 1999, under document "janusfpa99h9a.htm".
8)	Fund Participation Agreement, Service II Shares, with Janus Aspen Series, dated May 5, 2002, under document "janusfpa99h9b.htm".
9)	Amended and Restated Fund Participation Agreement with MFS Variable Insurance Trust and Massachusetts Financial Services Company dated February 1, 2003, as amended, under document "mfsfpa99h11.htm".
10)	Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust) dated May 2, 2005, as amended, under document "nwfpa99h12a.htm".

11)	Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust), American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2007, as amended, under document "nwfpa99h12b.htm".
12)	Fund Participation Agreement with Neuberger Berman Management, Inc. dated January 1, 2006, under document "neuberfpa99h13.htm".
13)	Fund Participation Agreement with Oppenheimer Variable Account Funds and Oppenheimer Funds, Inc. dated April 13, 2007, under document "oppenfpa99h14.htm".
14)	Fund Participation Agreement with T. Rowe Price Equity Series, Inc., T. Rowe Price International Series, Inc., T. Rowe Price Fixed Income Series, Inc., and T. Rowe Price Investment Services, Inc. dated October 1, 2002, as amended, under document "trowefpa99h15.htm".
15)	Fund Participation Agreement with The Universal Institutional Funds, Inc., Morgan Stanley & Co., Inc., and Morgan Stanley Investment Management, Inc. dated February 1, 2002, as amended, under document "univfpa99h16.htm".
	The following Fund Participation Agreements were previously filed on September 27, 2007 with pre-effective amendment number 3 of registration statement (333-137202) under Exhibit 26(h), and are hereby incorporated by reference.
16)	Fund Participation Agreement (Amended and Restated) with Alliance Capital Management L.P. and Alliance-Bernstein Investment Research and Management, Inc. dated June 1, 2003, as document "alliancebernsteinfpa.htm".
17)	Fund Participation Agreement with BlackRock (formerly FAM Distributors, Inc. and FAM Variable Series Funds, Inc.) dated April 13, 2004, as amended, as document "blackrockfpa.htm".
18)	Fund Participation Agreement with PIMCO Variable Insurance Trust and PIMCO Fund Distributors, LLC dated March 28, 2002, as amended, as document "pimcofpa.htm".
19)	Fund Participation Agreement with Putnam Variable Trust and Putnam Retail Management, L.P., dated February 1, 2002, as document "putnamfpa.htm".
20)	Fund Participation Agreement Van Eck Investment Trust, Van Eck Associates Corporation, Van Eck Securities Corporation dated September 1, 1989, as amended, as document "vaneckfpa.htm".
21)	Fund Participation Agreement with Waddell & Reed Services Company, Waddell & Reed, Inc., and W&R Target Funds, Inc. dated December 1, 2000, as amended, as document "waddellreedfpa.htm".
22)	Administrative Services Agreement with Wells Fargo Management, LLC, Stephens, Inc. dated November 15, 2004, as amended, as document "wellsfargofpa.htm".
	The following Fund Participation Agreement was previously filed on April 18, 2008 with post-effective amendment number 20 of registration statement (333-62692) under Exhibit (26)(h), and is hereby incorporated by reference.
23)	Fund Participation Agreement with Rydex Variable Trust & Rydex Distributors, Inc., dated September 10, 2001, as document "rydexfundpartagreement.htm".
	The following Fund Participation Agreement was previously filed on April 12, 2011 with Post-Effective Amendment No. 43 of registration statement (333-43671) under Exhibit 26(h), and is hereby incorporated by reference.
24)	Fund Participation Agreement with Delaware Management Company and Delaware Distributors, L.P., as amended, dated February 5, 2008, as document "delawarefpa.htm".
25)	Fund Participation Agreement with Goldman Sachs Variable Insurance Trust, and Goldman Sachs & Co. dated December 22, 1998, under document "goldmansachsfpa.htm".
	The following Fund Participation Agreement was previously filed on June 11, 2012 with post-effective amendment number 28 of registration statement (333-62692) under Exhibit (26)(h), and is hereby incorporated by reference.
26)	Fund Participation Agreement with Fund Participation Agreement with Northern Lights Variable Trust and Northern Lights Distributors, LLC., dated February 8, 2012, as document "northernlightsfpa.htm".

i) Not Applicable

j)	Not Applicable
k)	Opinion of Counsel – Filed previously with the registration statement on Form S-6 (033-42180) and hereby incorporated by reference.
l)	Not Applicable
m)	Not Applicable
n)	Consent of Independent Registered Public Accounting Firm – Attached hereto.
o)	Not Applicable
p)	Not Applicable
q)	Redeemability Exemption – Filed previously with registration statement (333-31725) on December 21, 2009 under document "exhibit_26q.htm" and is hereby incorporated by reference.
99)	Power of Attorney – Attached hereto.

Item 27. Directors and Officers of the Depositor

The business address of the Directors and Officers of the Depositor is:
One Nationwide Plaza, Columbus, Ohio 43215

President and Chief Operating Officer and Director	Kirt A. Walker
Executive Vice President-Chief Legal and Governance Officer	Patricia R. Hatler
Executive Vice President	Terri L. Hill
Executive Vice President-Chief Marketing Officer	Matthew Jauchius
Executive Vice President-Chief Information Officer	Michael C. Keller
Executive Vice President-Chief Human Resources Officer	Gale V. King
Executive Vice President	Mark A. Pizzi
Executive Vice President and Director	Mark R. Thresher
Senior Vice President-Government Relations	Steven M. English
Senior Vice President	Harry H. Hallowell
Senior Vice President and Treasurer	David LaPaul
Senior Vice President-Business Transformation Office	Mark A. Gaetano
Senior Vice President-Chief Claims Officer	David A. Bano
Senior Vice President-Chief Compliance Officer	Sandra L. Rich
Senior Vice President-Chief Economist	David W. Berson
Senior Vice President-Chief Financial Officer and Director	Timothy G. Frommeyer
Senior Vice President-Chief Financial Officer-Property and Casualty	Michael P. Leach
Senior Vice President-Chief Risk Officer	Michael W. Mahaffey
Senior Vice President-CIO Allied Group	Daniel G. Greteman
Senior Vice President-CIO Enterprise Applications	Michael A. Richardson
Senior Vice President-CIO IT Infrastructure	Gregory S. Moran
Senior Vice President-CIO NF Systems	Susan J. Gueli
Senior Vice President-Controller	James D. Benson
Senior Vice President-Corporate Strategy	Katherine M. Liebel
Senior Vice President-Deputy General Counsel	Sandra L. Neely
Senior Vice President-NW Retirement Plans and Director	John L. Carter
Senior Vice President-Enterprise Chief Technology Officer	Guruprasad C. Vasudeva
Senior Vice President-Field Operations EC	Amy T. Shore
Senior Vice President-Field Operations IC	Thomas E. Clark
Senior Vice President-Head of Taxation	Pamela A. Biesecker
Senior Vice President-Individual Products & Solutions and Director	Eric S. Henderson
Senior Vice President-Internal Audit	Kai V. Monahan
Senior Vice President-Investment Management Group	Michael S. Spangler
Senior Vice President-IT Finance & Head of Sourcing	Andrew Walker
Senior Vice President-IT Strategic Initiatives	Tammy Craig
Senior Vice President-Nationwide Financial	Steven C. Power
Senior Vice President-Nationwide Financial Network	Peter A. Golato
Senior Vice President-Corporate Marketing	William J. Burke
Senior Vice President-NFS Legal	Rae Ann Dankovic
Senior Vice President-NF Distribution and Sales	David L. Giertz
Senior Vice President-NI Brand Marketing	Jennifer M. Hanley
Senior Vice President-NW Retirement Plans	Anne L. Arvia
Senior Vice President-Personal Lines Product Management	Eric E. Smith
Senior Vice President-PCIO Sales Support	Melissa D. Gutierrez
Senior Vice President-President-Nationwide Bank	J. Lynn Anderson
Senior Vice President-Property and Casualty Commercial/Farm Product Pricing	W. Kim Austen
Senior Vice President-Talent, Div & Org Effect	Terri L Forgy
Senior Vice President-Trial Division	Peter J. Hersha
Vice President-Corporate Governance and Secretary	Robert W. Horner, III
Director	Stephen S. Rasmussen

Item 28. Persons Controlled by or Under Common Control with the Depositor or Registrant.

Following is a list of entities directly or indirectly controlled by or under common control with the depositor or registrant. Ownership is indicated through indentation. Unless otherwise indicated, each subsidiary is either wholly-owned or majority-owned by the parent company immediately preceding it. (For example, Nationwide Fund Distributors, LLC is either wholly-owned or majority owned by NFS Distributors, Inc.) Separate accounts that have been established pursuant to board resolution but are not, and have never been, active are omitted.

Company	Jurisdiction of Domicile	Brief Description of Business
Nationwide Financial Services, Inc.	Delaware	The company acts primarily as a holding company for companies within the Nationwide organization that offer or distribute life insurance, long-term savings and retirement products.
NFS Distributors, Inc.	Delaware	The company acts primarily as a holding company for Nationwide Financial Services, Inc. companies.
Nationwide Financial General Agency, Inc.	Pennsylvania	The company is a multi-state licensed insurance agency.
Nationwide Financial Institution Distributors Agency, Inc.	Delaware	The company is an insurance agency.
Nationwide Fund Distributors, LLC	Delaware	The company is a limited purpose broker-dealer.
Nationwide Fund Management, LLC	Delaware	The company provides administration, transfer and dividend disbursing agent services to various mutual fund entities.
Nationwide Retirement Solutions, Inc.	Delaware	The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Arizona	Arizona	The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions Insurance Agency, Inc.	Massachusetts	The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Ohio, Inc.1	Ohio	The company provides retirement products, marketing and education and administration to public employees.
Nationwide Retirement Solutions, Inc. of Texas, Inc.1	Texas	The company markets and administers deferred compensation plans for public employees.
Nationwide Securities, LLC	Delaware	The company is a registered broker-dealer.
Nationwide Bank	Federal	This is a federally chartered savings bank supervised by the Office of the Office of the Comptroller of the Currency to exercise deposit, lending, agency, custody and fiduciary powers and to engage in activities permissible for federal savings banks under the Home Owners' Loan Act of 1933.
Nationwide Financial Services Capital Trust	Delaware	The trust's sole purpose is to issue and sell certain securities representing individual beneficial interests in the assets of the trust
Nationwide Life Insurance Company2	Ohio	A stock corporation. The corporation provides individual life insurance, group and health insurance, fixed and variable annuity products and other life insurance products.
MFS Variable Account2,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Multi-Flex Variable Account2,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account2,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-II2,3	Ohio	A separate account issuing variable annuity contracts.

Company	Jurisdiction of Domicile	Brief Description of Business
Nationwide Variable Account-32,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-42,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-52,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-62,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-72,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-82,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-92,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-102,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-112,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-122,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-132,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Variable Account-142,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Provident VA Separate Account 12,3	Pennsylvania	A separate account issuing variable annuity contracts.
Nationwide VLI Separate Account2,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-22,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-32,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-42,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-52,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-62,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-72,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide Provident VLI Separate Account 12,3	Pennsylvania	A separate account issuing variable life insurance policies.
Nationwide Investment Services Corporation3	Oklahoma	This is a limited purpose broker-dealer and distributor of variable annuities and variable life products for Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company. The company also provides educational services to retirement plan sponsors and its participants.
Nationwide Financial Assignment Company3	Ohio	The company is an administrator of structured settlements.
Nationwide Investment Advisors, LLC3	Ohio	The company provides investment advisory services.
Life Reo Holdings, LLC3	Ohio	The company is an investment holding company.
Nationwide Life and Annuity Insurance Company2,3	Ohio	The company engages in underwriting life insurance and granting, purchasing and disposing of annuities.

Company	Jurisdiction of Domicile	Brief Description of Business
Nationwide VA Separate Account-A2,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide VA Separate Account-B2,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide VA Separate Account-C2,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide VA Separate Account-D2,3	Ohio	A separate account issuing variable annuity contracts.
Nationwide Provident VA Separate Account A2,3	Delaware	A separate account issuing variable annuity contracts.
Nationwide VL Separate Account-A2,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VL Separate Account-B2,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VL Separate Account-C2,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VL Separate Account-D2,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide VL Separate Account-G2,3	Ohio	A separate account issuing variable life insurance policies.
Nationwide Provident VLI Separate Account A2,3	Delaware	A separate account issuing variable life insurance policies.
Olentangy Reinsurance, LLC3	Vermont	The company is a captive life reinsurance company.
Registered Investment Advisors Services, Inc.3	Texas	The company is a technology company that facilitates third-party money management services for registered investment advisors
Nationwide Fund Advisors3,4	Delaware	The trust acts as a registered investment advisor.

1	This subsidiary/entity is controlled by its immediate parent through contractual association.
2	This subsidiary/entity files separate financial statements.
3	Information for this subsidiary/entity is included in the consolidated financial statements of its immediate parent.
4	This subsidiary/entity is a business trust.

Item 29. Indemnification

Provision is made in Nationwide's Amended and Restated Code of Regulations and expressly authorized by the General Corporation Law of the State of Ohio, for indemnification by Nationwide of any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that such person is or was a director, officer or employee of Nationwide, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, to the extent and under the circumstances permitted by the General Corporation Law of the State of Ohio.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 ("Act") may be permitted to directors, officers or persons controlling Nationwide pursuant to the foregoing provisions, Nationwide has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act

and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 30. Principal Underwriter

Nationwide Investment Services Corporation ("NISC")

(a) NISC serves as principal underwriter and general distributor for the following separate investment accounts of Nationwide or its affiliates:

MFS Variable Account	Nationwide VA Separate Account-D
Multi-Flex Variable Account	Nationwide VLI Separate Account
Nationwide Variable Account	Nationwide VLI Separate Account-2
Nationwide Variable Account-II	Nationwide VLI Separate Account-3
Nationwide Variable Account-3	Nationwide VLI Separate Account-4
Nationwide Variable Account-4	Nationwide VLI Separate Account-5
Nationwide Variable Account-5	Nationwide VLI Separate Account-6
Nationwide Variable Account-6	Nationwide VLI Separate Account-7
Nationwide Variable Account-7	Nationwide VL Separate Account-A
Nationwide Variable Account-8	Nationwide VL Separate Account-C
Nationwide Variable Account-9	Nationwide VL Separate Account-D
Nationwide Variable Account-10	Nationwide VL Separate Account-G
Nationwide Variable Account-11	Nationwide Provident VA Separate Account 1
Nationwide Variable Account-12	Nationwide Provident VA Separate Account A
Nationwide Variable Account-13	Nationwide Provident VLI Separate Account 1
Nationwide Variable Account-14	Nationwide Provident VLI Separate Account A
Nationwide VA Separate Account-A
Nationwide VA Separate Account-B
Nationwide VA Separate Account-C

(b) Directors and Officers of NISC:

President	Robert O. Cline
Vice President, Treasurer and Director	Keith L. Sheridan
Vice President-Chief Compliance Officer	James J. Rabenstine
Associate Vice President and Secretary	Kathy R. Richards
Associate Vice President and Assistant Secretary	Parag H. Shah
Associate Vice President-Finance Operations and Assistant Treasurer	Terry C. Smetzer
Assistant Treasurer	J. Morgan Elliott
Assistant Treasurer	Jerry L. Greene
Director	John L. Carter
Director	Eric S. Henderson

The business address of the Directors and Officers of NISC is:
One Nationwide Plaza, Columbus, Ohio 43215.

(c)

Name of Principal Underwriter	Net Underwriting Discounts and Commissions	Compensation on Redemption or Annuitization	Brokerage Commissions	Compensation
Nationwide Investment Services Corporation	N/A	N/A	N/A	N/A

Item 31. Location of Accounts and Records

Timothy G. Frommeyer
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, OH 43215

Item 32. Management Services

Not Applicable

Item 33. Fee Representation

Nationwide Life Insurance Company represents that the fees and charges deducted under the contract in the aggregate are reasonable in relation to the services rendered, the expenses expected to be incurred and risks assumed by Nationwide Life Insurance Company.

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Rule 485(b) under the Securities Act of 1933 for effectiveness of the Registration Statement and has caused this Registration Statement to be signed by the undersigned, duly authorized, in the City of Columbus, and State of Ohio, on April 21, 2014.

Nationwide VLI Separate Account-2

(Registrant)

Nationwide Life Insurance Company

(Depositor)

By: /s/ JAMIE RUFF CASTO

Jamie Ruff Casto
Attorney-in-Fact

As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated, on April 21, 2014.

KIRT A. WALKER
Kirt A. Walker, President and Chief Operating Officer, and Director
MARK R. THRESHER
Mark R. Thresher, Executive Vice President and Director
TIMOTHY G. FROMMEYER
Timothy G. Frommeyer, Senior Vice President-Chief Financial Officer and Director
ERIC S. HENDERSON
Eric S. Henderson, Senior Vice President - Individual Products & Solutions and Director
JOHN L. CARTER
John L. Carter, Senior Vice President – Nationwide Retirement Plans and Director
STEPHEN S. RASMUSSEN
Stephen S. Rasmussen, Director
	By /s/ JAMIE RUFF CASTO
	Jamie Ruff Casto Attorney-in-Fact

EX-99.(N) 2 d697767dex99n.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Consent of Independent Registered Public Accounting Firm

The Board of Directors and Shareholder
Nationwide Life Insurance Company:

We consent to the use of our reports with respect to Nationwide VLI Separate Account-2 dated March 13, 2014 and Nationwide Life Insurance Company  and subsidiaries (the Company) dated February 28, 2014, included herein, and to the reference to our firm under the heading "Independent Registered Public Accounting Firm" in the Statement of Additional Information (File No. 033-42180) on Form N-6.

/s/ KPMG LLP

Columbus, Ohio
April 18, 2014

11

EX-99.(99) 3 d697767dex9999.htm POWER OF ATTORNEY

POWER OF ATTORNEY

Each of the undersigned as directors and/or officers of NATIONWIDE LIFE INSURANCE COMPANY and NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY, both Ohio corporations, which have filed or will file with the U.S. Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended; the Investment Company Act of 1940, as amended; and, if applicable, the Securities Exchange Act of 1934, various registration statements and amendments thereto for the registration of current, as well as any future, separate accounts established by said corporations for the purpose of registering under said Act(s) immediate or deferred variable annuity contracts, fixed interest rate options subject to a market value adjustment, group flexible fund retirement annuity contracts and variable life insurance policies in connection with the separate accounts and contracts listed below:

Variable Annuities and Variable Life Insurance Policies
Separate Account (1940 Act File No.)	1933 Act File Nos.
MFS Variable Account (811-2662)	002-73432
Multi-Flex Variable Account (811-3338)	033-23905, 002-75174
Nationwide Variable Account (811-2716)	002-58043, 333-80481, 033-60239, 333-176908
Nationwide Variable Account-II (811-3330)	002-75059, 033-67636, 033-60063, 333-103093, 333-103094, 333-103095, 333-104513, 333-104511, 333-104512, 333-104510, 333-105992, 333-147273, 333-140621, 333-144053, 333-147198, 333-151990, 333-160635, 333-164886, 333-168818, 333-177934, 333-177581, 333-177582, 333-177316, 333-177319, 333-177439, 333-177441, 333-177729, 333-177731, 333-173349, 333-177938, 333-182494
Nationwide Variable Account-3 (811-5405)	033-18422, 033-24434
Nationwide Variable Account-4 (811-5701)	033-25734, 033-26454, 333-62692, 333-135650, 333-140812
Nationwide Variable Account-5 (811-8142)	033-71440
Nationwide Variable Account-6 (811-8684)	033-82370, 333-21909
Nationwide Variable Account-7 (811-8666)	033-82190, 033-82174, 033-89560
Nationwide Variable Account-8 (811-7357)	033-62637, 033-62659
Nationwide Variable Account-9 (811-08241)	333-28995, 333-52579, 333-56073, 333-53023, 333-79327, 333-69014, 333-75360
Nationwide Variable Account-10 (811-09407)	333-81701
Nationwide Variable Account-11 (811-10591)	333-74904, 333-74908
Nationwide Variable Account-12 (811-21099)	333-88612, 333-108894, 333-178057, 333-178059
Nationwide Variable Account-13 (811-21139)	333-91890
Nationwide Variable Account-14 (811-21205)	333-104339
Nationwide VA Separate Account-A (811-5606)	033-85164, 033-22940
Nationwide VA Separate Account-B (811-06399)	033-86408, 033-93482, 333-11415
Nationwide VA Separate Account-C (811-7908)	033-66496, 333-44485
Nationwide VA Separate Account-D (811-10139)	333-45976
Nationwide VLI Separate Account (811-4399)	033-00145, 033-44290, 033-35698
Nationwide VLI Separate Account-2 (811-5311)	033-16999, 033-62795, 033-42180, 033-35783, 033-63179, 333-27133
Nationwide VLI Separate Account-3 (811-6140)	033-44789, 033-44296
Nationwide VLI Separate Account-4 (811-08301)	333-31725, 333-43671, 333-52617, 333-94037, 333-52615, 333-53728, 333-69160, 333-83010, 333-137202, 333-153343, 333-169879
Nationwide VLI Separate Account-5 (811-10143)	333-46338, 333-46412, 333-66572, 333-121881, 333-125481, 333-125482
Nationwide VLI Separate Account-6 (811-21398)	333-106908
Nationwide VLI Separate Account-7 (811-21610)	333-117998, 333-121879, 333-146649, 333-140606, 333-149295, 333-156020, 333-182893, 333-182887

12

Variable Annuities and Variable Life Insurance Policies
Separate Account (1940 Act File No.)	1933 Act File Nos.
Nationwide VL Separate Account-A (811-6137)	033-44792, 033-44300, 033-35775, 333-27123, 333-22677
Nationwide VL Separate Account-B (811-07819)	333-12333
Nationwide VL Separate Account-C (811-8351)	333-43639, 333-36869
Nationwide VL Separate Account-D (811-08891)	333-59517
Nationwide VL Separate Account-G (811-21697)	333-121878, 333-140608, 333-146073, 333-146650, 333-149213, 333-155153, 333-156020, 333-182897, 333-182896
Nationwide Provident VA Separate Account 1 (811-7708)	333-164127; 333-164125; 333-164126; 333-164124
Nationwide Provident VLI Separate Account 1 (811-4460)	333-164180; 333-164117; 333-164178; 333-164179; 333-164119; 333-164120; 333-164115; 333-164118; 333-164116
Nationwide Provident VA Separate Account A (811-6484)	333-164131; 333-164130; 333-164132; 333-164129; 333-164128
Nationwide Provident VLI Separate Account A (811-8722)	333-164188; 333-164123; 333-164185; 333-164122; 333-164121

General Account Products
Insurance Company	1933 Act File Nos.
Nationwide Life Insurance Company	333-133163, 333-49112, 333-149613, 333-155368, 333-160418
Nationwide Life and Annuity Insurance Company	333-47640

hereby constitute and appoint Stephen S. Rasmussen, Kirt A. Walker, John L. Carter, Eric S. Henderson, and Jamie Ruff Casto, and each of them with power to act without the others, as his/her attorney, with full power of substitution for and in his/her name, place and stead, in any and all capacities, to approve, and sign such Registration Statements, and any and all amendments thereto, with power to affix the corporate seal of said corporation thereto and to attest said seal and to file the same, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, hereby granting unto said attorneys, and each of them, full power and authority to do and perform all and every act and thing requisite to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming that which said attorneys, or any of them, may lawfully do or cause to be done by virtue hereof. This instrument may be executed in one or more counterparts.

IN WITNESS WHEREOF, the undersigned have herewith set their names as of this 13^th day of March, 2013.

/s/ Timothy G. Frommeyer	/s/ Eric S. Henderson
TIMOTHY G. FROMMEYER, Director	ERIC S. HENDERSON, Director
/s/ Stephen S. Rasmussen	/s/ Mark R. Thresher
STEPHEN S. RASMUSSEN, Director	MARK R. THRESHER, Director
/s/ Kirt A. Walker	/s/ John L.Carter
KIRT A. WALKER, Director	JOHN L. CARTER, Director

13

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EX-99.(N)

Consent of Independent Registered Public Accounting Firm

 

EX-99.(99)

Power of Attorney