N-30D 1 l90214an-30d.txt NATIONWIDE VA SEPARATE ACCOUNT - C FORM N-30D 1 [NATIONWIDE(R) LOGO] NATIONWIDE(R) VA SEPARATE ACCOUNT-C SEMI-ANNUAL REPORT TO CONTRACT OWNERS JUNE 30, 2001 NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY HOME OFFICE: COLUMBUS, OHIO FHL-474-6/01 2 [NATIONWIDE(R) LOGO] NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220 [PICTURE] PRESIDENT'S MESSAGE On behalf of Nationwide Life and Annuity Insurance Company we are pleased to bring you the 2001 semi-annual report of the Nationwide VA Separate Account-C. Equity markets continued in the doldrums during the first half of 2001. While it's too early to detect solid evidence of a turn in the market, it is encouraging to note that the major market indices registered positive performance during the second quarter. The market seems to be looking across the valley, and we believe the basic elements are in place to begin to reenergize equity performance. The Federal Reserve has aggressively lowered interest rates during this period, and more easing is expected. Further stimulus may be anticipated from tax reductions and tax rebates. Corporate earnings have been a drag on performance, but quarter-to-quarter earnings comparisons should become more favorable as the economy absorbs the effect of lower interest rates and lower effective tax rates. As we move beyond the current downturn, equity-based financial assets should again return to prominence. We are pleased you have selected Nationwide Financial to help you achieve your financial planning and retirement saving goals. We continue to direct our strategic focus to enhancing our existing product offerings and service, and to the development of new and innovative investment products to better serve your future needs. /s/ Joseph J. Gasper Joseph J. Gasper, President August 14, 2001 3 3 HOW TO READ THE SEMI-ANNUAL REPORT This semi-annual report is a presentation of the variable account as a whole and only describes the underlying contracts and products of the variable account in general terms. Please note the variable account may have more than one variable product available. Such products may have different underlying mutual funds available than those available in your contract. Therefore, not all funds listed in this report may be available in your contract. Please refer to your most recent account statement for specific information about your investment in the Nationwide VA Separate Account-C. Rules and regulations of the U.S. Securities and Exchange Commission and recognized conventions of accounting principles generally accepted in the United States of America prescribe the format and content of this report. We also invite you to call our service center at 1-800-860-3946 if you have questions about your account, or you may access your account using our voice response unit. And, please visit our web-site at www.nwservicecenter.com for additional information about your contract and to learn more about other products and services offered by Nationwide Financial. THE SEMI-ANNUAL REPORT HAS FOUR MAJOR FINANCIAL SECTIONS: Statement of Assets,Liabilities and Contract Owners'Equity This statement begins on page 5 and lists all of the underlying mutual funds of the variable account, the number of shares owned, the amount paid for the shares and their fair value as of the close of business on June 30, 2001. The mutual funds are listed in alphabetical order. The fair value of the assets changes as the underlying mutual funds change in value. As contract owners make exchange transactions between the funds, the number of shares increases or decreases accordingly. When money is deposited or withdrawn by a contract owner, shares are correspondingly purchased or redeemed. The total fair value of the funds is equal to the TOTAL INVESTMENTS of the variable account. ACCOUNTS RECEIVABLE, if applicable, represents an asset of the variable account for money market fund shares purchased by contract owners and reinvested dividend shares added to contract owners' accounts, but not yet added to Total investments. Total investments plus Accounts receivable equal TOTAL ASSETS of the variable account. ACCOUNTS PAYABLE, if applicable, is a liability of the variable account for money market fund shares redeemed by contract owners but not yet deducted from Total investments. Total assets minus Accounts payable equals CONTRACT OWNERS' EQUITY. A summary of Contract owners' equity by fund series may be found on page 14. This summary also includes certain performance measures for each fund series for the periods indicated. Statements of Operations, Statements of Changes in Contract Owners' Equity These statements begin on page 6 and present the financial activity of each underlying mutual fund sub-account of the variable account, for the periods indicated. The STATEMENTS OF OPERATIONS show income and expenses to the variable account from INVESTMENT ACTIVITY for reinvested dividends and capital gain distributions paid by the underlying mutual funds; and expenses included are the mortality, expense and, if applicable, an administration charge, which are assessed through the daily unit value calculation and that represent an expense to the variable account and its contract owners. This statement also shows the realized gain or loss as mutual fund shares are sold, and the change in unrealized gain or loss, which represents the changes in fair value of the underlying fund shares. The STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY includes Investment activity for income and expenses shown on the STATEMENTS OF OPERATIONS. In addition, the Equity transactions section of this statement illustrates the receipt of purchase payments, as new contracts are sold or additional payments are made to existing contracts. Also presented are deductions from the variable account when the contract owners withdraw money. The sum of the above two sections represents the NET CHANGE IN CONTRACT OWNERS' EQUITY which when added to the beginning Contract owners' equity equals Contract owners'equity at the end of the reporting period. The CHANGES IN UNITS section illustrates the number of units purchased and redeemed for each mutual fund subaccount during the period reported. NOTES TO FINANCIAL STATEMENTS, beginning on page 12, provide further disclosures about the variable account and its underlying contract provisions. 4 4 -------------------------------------------------------------------------------- NATIONWIDE VA SEPARATE ACCOUNT-C STATEMENT OF ASSETS,LIABILITIES AND CONTRACT OWNERS'EQUITY JUNE 30, 2001 (UNAUDITED)
Assets: Investments at fair value: Fidelity VIP - Equity-Income Portfolio: Initial Class (FidVIPEI) 5,090,570 shares (cost $116,134,262) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 120,748,321 Fidelity VIP - Overseas Portfolio: Initial Class (FidVIPOv) 1,206,780 shares (cost $24,420,228). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,813,698 Nationwide(R) Separate Account Trust - Money Market Fund (NSATMyMkt) 25,030,181 shares (cost $25,030,181) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,030,181 Nationwide(R) Separate Account Trust - Total Return Fund (NSATTotRe) 6,858,401 shares (cost $101,464,278) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,247,725 One Group(R) Investment Trust - Balanced Portfolio (OGBal) 13,085,072 shares (cost $193,159,399). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,051,611 One Group(R) Investment Trust - Bond Portfolio (OGBond) 5,179,855 shares (cost $53,632,689). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,061,864 One Group(R) Investment Trust - Diversified Equity Portfolio (OGDivEq) 3,686,917 shares (cost $63,275,538). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,663,379 One Group(R) Investment Trust - Diversified Mid Cap Portfolio (OGDivMidCap) 1,920,377 shares (cost $30,806,382). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,671,234 One Group(R) Investment Trust - Equity Index Portfolio (OGEqIx) 8,990,157 shares (cost $106,292,722) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,205,760 One Group(R) Investment Trust - Government Bond Portfolio (OGGvtBd) 10,712,903 shares (cost $111,455,809). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,485,484 One Group(R) Investment Trust - Large Cap Growth Portfolio (OGLgCapGr) 16,123,762 shares (cost $318,413,660). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243,307,567 One Group(R) Investment Trust - Mid Cap Growth Portfolio (OGMidCapGr) 11,476,339 shares (cost $195,428,574). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,228,106 One Group(R) Investment Trust - Mid Cap Value Portfolio (OGMidCapV) 3,400,115 shares (cost $38,949,505). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,929,488 --------------- Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,253,444,418 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,936,223 --------------- Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,257,380,641 Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - --------------- Contract owners' equity (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,257,380,641 ===============
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 5 5 -------------------------------------------------------------------------------- NATIONWIDE VA SEPARATE ACCOUNT-C STATEMENTS OF OPERATIONS SIX MONTH PERIOD ENDED JUNE 30, 2001 (UNAUDITED)
Total FidVIPEI FidVIPOv NSATMyMkt NSATTotRe Investment activity: Reinvested dividends .................. $ 11,766,119 2,086,220 1,043,179 501,417 280,157 Mortality and expense risk charges (note 2) ............................ (8,057,747) (804,210) (135,338) (145,254) (502,829) ------------- ------------- ------------- ------------- ------------- Net investment income ............... 3,708,372 1,282,010 907,841 356,163 (222,672) ------------- ------------- ------------- ------------- ------------- Proceeds from mutual funds shares sold 44,278,087 7,376,139 1,467,691 7,716,491 5,099,302 Cost of mutual fund shares sold ....... (37,952,135) (6,030,465) (1,556,331) (7,716,491) (5,877,699) ------------- ------------- ------------- ------------- ------------- Realized gain (loss) on investments . 6,325,952 1,345,674 (88,640) -- (778,397) Change in unrealized gain (loss) on investments ...................... (159,974,345) (10,488,799) (5,122,336) -- (6,137,060) ------------- ------------- ------------- ------------- ------------- Net gain (loss) on investments ...... (153,648,393) (9,143,125) (5,210,976) -- (6,915,457) ------------- ------------- ------------- ------------- ------------- Reinvested capital gains .............. 75,683,981 5,861,284 1,648,896 -- -- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ....... $ (74,256,040) (1,999,831) (2,654,239) 356,163 (7,138,129) ============= ============= ============= ============= =============
OGBal OGBond OGDivEq Investment activity: Reinvested dividends .................. 2,544,179 1,540,917 111,498 Mortality and expense risk charges (note 2) ............................ (1,296,151) (308,348) (325,868) ------------- ------------- ------------- Net investment income ............... 1,248,028 1,232,569 (214,370) ------------- ------------- ------------- Proceeds from mutual funds shares sold 6,589,189 -- 86,504 Cost of mutual fund shares sold ....... (5,072,876) -- (100,239) ------------- ------------- ------------- Realized gain (loss) on investments.. 1,516,313 -- (13,735) Change in unrealized gain (loss) on investments ...................... (10,075,443) 63,944 (3,243,357) ------------- ------------- ------------- Net gain (loss) on investments ...... (8,559,130) 63,944 (3,257,092) ------------- ------------- ------------- Reinvested capital gains .............. 747,188 -- -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ....... (6,563,914) 1,296,513 (3,471,462) ============= ============= =============
OGDivMidCap OGEqIx OGGvtBd OGLgCapGr OGMidCapGr OGMidCapV Investment activity: Reinvested dividends .................. $ 35,744 368,881 3,118,137 -- -- 135,790 Mortality and expense risk charges (note 2) ............................ (161,956) (598,596) (683,087) (1,678,650) (1,169,796) (247,664) ----------- ----------- ----------- ----------- ----------- ----------- Net investment income ............... (126,212) (229,715) 2,435,050 (1,678,650) (1,169,796) (111,874) ----------- ----------- ----------- ----------- ----------- ----------- Proceeds from mutual funds shares sold 277,355 1,063,745 900,818 9,998,591 3,287,255 415,007 Cost of mutual fund shares sold ....... (261,504) (1,047,446) (847,519) (6,792,962) (2,322,982) (325,621) ----------- ----------- ----------- ----------- ----------- ----------- Realized gain (loss) on investments . 15,851 16,299 53,299 3,205,629 964,273 89,386 Change in unrealized gain (loss) on investments ...................... (3,589,178) (6,947,786) (333,815) (70,557,408) (43,212,961) (330,146) ----------- ----------- ----------- ----------- ----------- ----------- Net gain (loss) on investments ...... (3,573,327) (6,931,487) (280,516) (67,351,779) (42,248,688) (240,760) ----------- ----------- ----------- ----------- ----------- ----------- Reinvested capital gains .............. 3,450,503 -- -- 32,107,536 29,222,978 2,645,596 ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ....... $ (249,036) (7,161,202) 2,154,534 (36,922,893) (14,195,506) 2,292,962 =========== =========== =========== =========== =========== ===========
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 6 6 -------------------------------------------------------------------------------- NATIONWIDE VA SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS'EQUITY SIX MONTH PERIODS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)
Total FidVIPEI ----------------------------------- ---------------------------------- 2001 2000 2001 2000 Investment activity: Net investment income ............... $ 3,708,372 2,231,917 1,282,010 1,344,035 Realized gain (loss) on investments . 6,325,952 4,675,323 1,345,674 1,675,849 Change in unrealized gain (loss) on investments .................... (159,974,345) (5,390,171) (10,488,799) (15,785,042) Reinvested capital gains ............ 75,683,981 23,329,618 5,861,284 8,265,251 --------------- ------------- ----------- ----------- Net increase (decrease) in contract owners'equity resulting from operations ...................... (74,256,040) 24,846,687 (1,999,831) (4,499,907) --------------- ------------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ................... 136,356,925 189,528,730 877,878 3,420,622 Transfers between funds ............. -- -- 30,365 (5,009,836) Redemptions ......................... (56,856,055) (40,289,323) (5,834,949) (5,228,115) Annuity benefits .................... -- (59,245) -- (14,662) Annual contract maintenance charges (note 2) .................. (30) -- -- -- Contingent deferred sales charges (note 2) .................. (1,217,306) (1,089,847) (95,901) (112,870) Adjustments to maintain reserves .... (87,519) (30,935) (15,778) 48,135 --------------- ------------- ----------- ----------- Net equity transactions ......... 78,196,015 148,059,380 (5,038,385) (6,896,726) --------------- ------------- ----------- ----------- Net change in contract owners'equity .. 3,939,975 172,906,067 (7,038,216) (11,396,633) Contract owners'equity beginning of period ........................... 1,253,440,666 1,061,413,808 127,784,031 132,467,377 --------------- ------------- ----------- ----------- Contract owners'equity end of period .. $ 1,257,380,641 1,234,319,875 120,745,815 121,070,744 =============== ============= =========== =========== CHANGES IN UNITS: Beginning units ..................... 66,184,298 47,911,957 5,610,525 5,945,562 --------------- ------------- ----------- ----------- Units purchased ..................... 13,896,265 12,154,767 196,802 132,509 Units redeemed ...................... (6,921,947) (2,645,144) (411,831) (467,546) --------------- ------------- ----------- ----------- Ending units ........................ 73,158,616 57,421,580 5,395,496 5,610,525 =============== ============= =========== ===========
FidVIPOv NSATMyMkt ---------------------------------- ------------------------------ 2001 2000 2001 2000 Investment activity: Net investment income ............... 907,841 208,401 356,163 343,403 Realized gain (loss) on investments . (88,640) 373,038 -- -- Change in unrealized gain (loss) on investments .................... (5,122,336) (4,730,861) -- -- Reinvested capital gains ............ 1,648,896 2,471,671 -- -- ---------- ---------- ---------- ---------- Net increase (decrease) in contract owners'equity resulting from operations ...................... (2,654,239) (1,677,751) 356,163 343,403 ---------- ---------- ---------- ---------- Equity transactions: Purchase payments received from contract owners ................... 143,808 833,735 610,678 1,645,786 Transfers between funds ............. (474,047) 1,739,912 9,651,763 (5,014,322) Redemptions ......................... (862,288) (1,086,015) (3,603,703) (1,239,355) Annuity benefits .................... -- (15,038) -- -- Annual contract maintenance charges (note 2) .................. (6) -- -- -- Contingent deferred sales charges (note 2) .................. (17,029) (22,682) (59,747) (32,942) Adjustments to maintain reserves .... (11,025) 22,414 (1,232) 200 ---------- ---------- ---------- ---------- Net equity transactions ......... (1,220,587) 1,472,326 6,597,759 (4,640,633) ---------- ---------- ---------- ---------- Net change in contract owners'equity .. (3,874,826) (205,425) 6,953,922 (4,297,230) Contract owners'equity beginning of period ........................... 22,687,521 28,241,421 18,075,431 19,481,812 ---------- ---------- ---------- ---------- Contract owners'equity end of period .. 18,812,695 28,035,996 25,029,353 15,184,582 ========== ========== ========== ========== CHANGES IN UNITS: Beginning units ..................... 1,482,481 1,418,346 1,213,509 1,590,430 ---------- ---------- ---------- ---------- Units purchased ..................... 26,608 91,988 1,412,533 215,009 Units redeemed ...................... (107,853) (27,853) (901,787) (591,930) ---------- ---------- ---------- ---------- Ending units ........................ 1,401,236 1,482,481 1,724,255 1,213,509 ========== ========== ========== ==========
(Continued) 7 7 NATIONWIDE VA SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS'EQUITY, Continued SIX MONTH PERIODS ENDED JUNE 30, 2001 and 2000 (UNAUDITED)
NSATTotRe OGBal ----------------------------- ----------------------------- 2001 2000 2001 2000 Investment activity: Net investment income ............... $ (222,672) (339,618) 1,248,028 1,839,910 Realized gain (loss) on investments . (778,397) 1,710,295 1,516,313 330,144 Change in unrealized gain (loss) on investments .................... (6,137,060) 982,323 (10,075,443) 2,060,240 Reinvested capital gains ............ -- -- 747,188 136,329 ------------ ---------- ----------- ----------- Net increase (decrease) in contract owners'equity resulting from operations ...................... (7,138,129) 2,353,000 (6,563,914) 4,366,623 ------------ ---------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ................... 1,114,163 3,328,184 9,462,624 22,108,220 Transfers between funds ............. (1,132,025) (1,753,544) (944,595) (1,289,299) Redemptions ......................... (3,536,070) (3,817,190) (10,147,688) (5,525,876) Annuity benefits .................... -- (14,730) -- -- Annual contract maintenance charges (note 2) .......................... (7) -- -- -- Contingent deferred sales charges (note 2) .......................... (66,284) (91,042) (229,160) (165,237) Adjustments to maintain reserves .... (11,721) 11,179 (1,729) 10,284 ------------ ---------- ----------- ----------- Net equity transactions ......... (3,631,944) (2,337,143) (1,860,548) 15,138,092 ------------ ---------- ----------- ----------- Net change in contract owners'equity .. (10,770,073) 15,857 (8,424,462) 19,504,715 Contract owners'equity beginning of period ........................... 84,017,445 92,522,015 203,670,320 183,356,734 ------------ ---------- ----------- ----------- Contract owners'equity end of period .. $ 73,247,372 92,537,872 195,245,858 202,861,449 ============ ========== =========== =========== CHANGES IN UNITS: Beginning units ..................... 3,823,136 3,934,051 10,094,696 9,319,175 ------------ ---------- ----------- ----------- Units purchased ..................... 137,161 108,764 755,795 1,136,744 Units redeemed ...................... (311,526) (219,679) (858,796) (361,223) ------------ ---------- ----------- ----------- Ending units ........................ 3,648,771 3,823,136 9,991,695 10,094,696 ============ ========== =========== ===========
OGBond OGDivEq --------------------------- ------------------------------ 2001 2000 2001 2000 Investment activity: Net investment income ............... 1,232,569 452,083 (214,370) (56,255) Realized gain (loss) on investments . -- -- (13,735) -- Change in unrealized gain (loss) on investments .................... 63,944 97,976 (3,243,357) 570,443 Reinvested capital gains ............ -- -- -- -- ---------- ---------- ---------- ---------- Net increase (decrease) in contract owners'equity resulting from operations ...................... 1,296,513 550,059 (3,471,462) 514,188 ---------- ---------- ---------- ---------- Equity transactions: Purchase payments received from contract owners ................... 17,430,874 15,066,518 19,426,689 18,095,263 Transfers between funds ............. 1,154,249 (251,118) 987,174 34,022 Redemptions ......................... (1,641,993) (242,753) (1,671,026) (333,452) Annuity benefits .................... -- -- -- -- Annual contract maintenance charges (note 2) .......................... -- -- -- -- Contingent deferred sales charges (note 2) .......................... (40,844) (5,585) (49,084) (11,174) Adjustments to maintain reserves .... 194 (50,633) (3,196) 2,974 ---------- ---------- ---------- ---------- Net equity transactions ......... 16,902,480 14,516,429 18,690,557 17,787,633 ---------- ---------- ---------- ---------- Net change in contract owners'equity .. 18,198,993 15,066,488 15,219,095 18,301,821 Contract owners'equity beginning of period ........................... 37,691,054 5,292,462 42,496,627 6,712,487 ---------- ---------- ---------- ---------- Contract owners'equity end of period .. 55,890,047 20,358,950 57,715,722 25,014,308 ========== ========== ========== ========== CHANGES IN UNITS: Beginning units ..................... 1,966,049 527,721 2,336,918 634,909 ---------- ---------- ---------- ---------- Units purchased ..................... 1,866,779 1,725,945 2,263,275 1,728,997 Units redeemed ...................... (376,881) (287,617) (304,642) (26,988) ---------- ---------- ---------- ---------- Ending units ........................ 3,455,947 1,966,049 4,295,551 2,336,918 ========== ========== ========== ==========
8 8 NATIONWIDE VA SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, Continued SIX MONTH PERIODS ENDED JUNE 30, 2001 and 2000 (UNAUDITED)
OGDivMidCap OGEqIx ------------------------------ ----------------------------- 2001 2000 2001 2000 Investment activity: Net investment income ............... $ (126,212) (19,695) (229,715) (33,318) Realized gain (loss) on investments . 15,851 -- 16,299 2,432 Change in unrealized gain (loss) on investments .................... (3,589,178) 451,183 (6,947,786) (1,430,839) Reinvested capital gains ............ 3,450,503 259,972 -- 1,054,653 ------------ ---------- ---------- ---------- Net increase (decrease) in contract owners'equity resulting from operations ...................... (249,036) 691,460 (7,161,202) (407,072) ------------ ---------- ---------- ---------- Equity transactions: Purchase payments received from contract owners ................... 8,601,536 8,333,203 15,803,839 24,308,074 Transfers between funds ............. (709,710) 142,179 (279,842) 3,946,009 Redemptions ......................... (805,276) (189,390) (3,560,122) (2,107,942) Annuity benefits .................... -- -- -- (14,815) Annual contract maintenance charges (note 2) .......................... -- -- -- -- Contingent deferred sales charges (note 2) .......................... (27,156) (7,048) (84,549) (66,280) Adjustments to maintain reserves .... (8,914) (129,582) (13,659) 15,738 ------------ ---------- ---------- ---------- Net equity transactions ......... 7,050,480 8,149,362 11,865,667 26,080,784 ------------ ---------- ---------- ---------- Net change in contract owners'equity .. 6,801,444 8,840,822 4,704,465 25,673,712 Contract owners'equity beginning of period ........................... 21,880,537 2,797,178 90,689,512 54,058,615 ------------ ---------- ---------- ---------- Contract owners'equity end of period .. $ 28,681,981 11,638,000 95,393,977 79,732,327 ============ ========== ========== ========== CHANGES IN UNITS: Beginning units ..................... 968,344 256,836 6,159,051 4,127,917 ------------ ---------- ---------- ---------- Units purchased ..................... 749,341 724,382 1,776,432 2,076,270 Units redeemed ...................... (177,066) (12,874) (713,136) (45,136) ------------ ---------- ---------- ---------- Ending units ........................ 1,540,619 968,344 7,222,347 6,159,051 ============ ========== ========== ==========
OGGvtBd OGLgCapGr ---------------------------- ----------------------------- 2001 2000 2001 2000 Investment activity: Net investment income ............... 2,435,050 1,774,463 (1,678,650) (2,212,569) Realized gain (loss) on investments . 53,299 (22,245) 3,205,629 542,933 Change in unrealized gain (loss) on investments .................... (333,815) 485,485 (70,557,408) (5,910,952) Reinvested capital gains ............ -- -- 32,107,536 6,914,049 ----------- ---------- ----------- ----------- Net increase (decrease) in contract owners'equity resulting from operations ...................... 2,154,534 2,237,703 (36,922,893) (666,539) ----------- ---------- ----------- ----------- Equity transactions: Purchase payments received from contract owners ................... 18,600,846 17,944,928 14,607,001 39,154,190 Transfers between funds ............. 4,514,210 (5,688,614) (7,109,294) 6,105,335 Redemptions ......................... (4,683,823) (3,110,246) (11,951,424) (12,287,418) Annuity benefits .................... -- -- -- -- Annual contract maintenance charges (note 2) .......................... -- -- (7) -- Contingent deferred sales charges (note 2) .......................... (90,585) (101,403) (255,783) (337,485) Adjustments to maintain reserves .... (1,949) 864 (6,038) 24,988 ----------- ---------- ----------- ----------- Net equity transactions ......... 18,338,699 9,045,529 (4,715,545) 32,659,610 ----------- ---------- ----------- ----------- Net change in contract owners'equity .. 20,493,233 11,283,232 (41,638,438) 31,993,071 Contract owners'equity beginning of period ........................... 93,602,993 63,170,455 284,944,544 329,541,396 ----------- ---------- ----------- ----------- Contract owners'equity end of period .. 114,096,226 74,453,687 243,306,106 361,534,467 =========== ========== =========== =========== CHANGES IN UNITS: Beginning units ..................... 5,608,503 4,913,504 11,101,330 10,080,320 ----------- ---------- ----------- ----------- Units purchased ..................... 1,979,363 750,458 896,251 1,264,890 Units redeemed ...................... (712,664) (55,459) (1,115,056) (243,880) ----------- ---------- ----------- ----------- Ending units ........................ 6,875,202 5,608,503 10,882,525 11,101,330 =========== ========== =========== ===========
(Continued) 9 9 NATIONWIDE VA SEPARATE ACCOUNT-C STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, Continued SIX MONTH PERIODS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)
OGMidCapGr OGMidCapV 2001 2000 2001 2000 ------------------------------- ---------------------------- Investment activity: Net investment income ............... $ (1,169,796) (1,082,682) (111,874) 13,759 Realized gain (loss) on investments . 964,273 62,877 89,386 -- Change in unrealized gain (loss) on investments .................... (43,212,961) 17,574,143 (330,146) 245,730 Reinvested capital gains ............ 29,222,978 4,225,947 2,645,596 1,746 ------------- ----------- ---------- ---------- Net increase (decrease) in contract owners'equity resulting from operations ...................... (14,195,506) 20,780,285 2,292,962 261,235 ------------- ----------- ---------- ---------- Equity transactions: Purchase payments received from contract owners ................... 16,565,814 23,760,872 13,111,175 11,529,135 Transfers between funds ............. (2,799,094) 6,977,735 (2,889,154) 61,541 Redemptions ......................... (7,317,494) (4,893,525) (1,240,199) (228,046) Annuity benefits .................... -- -- -- -- Annual contract maintenance charges (note 2) .......................... (10) -- -- -- Contingent deferred sales charges (note 2) .......................... (163,000) (128,328) (38,184) (7,771) Adjustments to maintain reserves .... (8,601) 19,242 (3,871) (6,738) ------------- ----------- ---------- ---------- Net equity transactions ......... 6,277,615 25,735,996 8,939,767 11,348,121 ------------- ----------- ---------- ---------- Net change in contract owners'equity .. (7,917,891) 46,516,281 11,232,729 11,609,356 Contract owners'equity beginning of period ........................... 193,140,882 139,732,977 32,759,769 4,038,879 ------------- ----------- ---------- ---------- Contract owners'equity end of period .. $ 185,222,991 186,249,258 43,992,498 15,648,235 ============= =========== ========== ========== CHANGES IN UNITS: Beginning units ..................... 5,566,423 4,765,508 1,490,615 397,678 ------------- ----------- ---------- ---------- Units purchased ..................... 756,638 919,225 1,079,287 1,279,586 Units redeemed ...................... (541,089) (118,310) (389,620) (186,649) ------------- ----------- ---------- ---------- Ending units ........................ 5,781,972 5,566,423 2,180,282 1,490,615 ============= =========== ========== ==========
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 10 10 -------------------------------------------------------------------------------- NATIONWIDE VA SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 AND 2000 (UNAUDITED) (1) Summary of Significant Accounting Policies (a) Organization and Nature of Operations Nationwide VASeparate Account-C (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life and Annuity Insurance Company (the Company) on July 24, 1991. The Account has been registered as a unit investment trust under the Investment Company Act of 1940. On August 17, 1994, the Company (Depositor) transferred to the Account, 97,500 shares of the One Group-Asset Allocation Fund, 500,000 shares of the One Group-Government Bond Fund, 300,000 shares of the One Group-Large Company Growth Fund and 2,500 shares of the One Group-Small Company Growth Fund, for which the Account was credited with 97,500 units of the One Group-Asset Allocation Fund, 500,000 units of the One Group-Government Bond Fund, 300,000 units of the One Group-Large Company Growth Fund and 2,500 units of the One Group-Small Company Growth Fund. These amounts represented the initial funding of the Account. The Company offers tax qualified and non-tax qualified Individual Deferred Variable Annuity Contracts through the Account. The primary distribution for the contracts is through banks and other financial institutions. (b) The Contracts Only contracts without a front-end sales charge, but with a contingent deferred sales charge and certain other fees, are offered for purchase. See note 2 for a discussion of contract expenses. With certain exceptions, contract owners in either the accumulation or the payout phase may invest in any of the following funds:
Portfolios of the Fidelity(R) Variable Insurance Products Fund (Fidelity VIP); Fidelity(R) VIP - Equity-Income Portfolio: Initial Class (FidVIPEI) Fidelity(R) VIP - Overseas Portfolio:Initial Class (FidVIPOv) Funds of the Nationwide(R) Separate Account Trust (Nationwide SAT) (managed for a fee by an affiliated investment advisor); Nationwide(R) SAT - Money Market Fund (NSATMyMkt) Nationwide(R) SAT - Total Return Fund (NSATTotRe) Funds of The One Group(R) Investment Trust (One Group); One Group - Balanced Portfolio (OGBal) (formerly One Group - Asset Allocation Fund) One Group - Bond Portfolio (OGBond) One Group - Diversified Equity Portfolio (OGDivEq) One Group - Diversified Mid Cap Portfolio (OGDivMidCap) One Group - Equity Index Portfolio (OGEqIx) (formerly One Group - Equity Index Fund) One Group - Government Bond Portfolio (OGGvtBd) (formerly One Group - Government Bond Fund) One Group - Large Cap Growth Portfolio (OGLgCapGr) (formerly One Group - Large Company Growth Fund)) One Group - Mid Cap Growth Portfolio (OGMidCapGr) (formerly One Group - Growth Opportunities Fund) One Group - Mid Cap Value Portfolio (OGMidCapV)
(Continued) 11 11 NATIONWIDE VA SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS, Continued At June 30, 2001, contract owners have invested in all of the above funds. The contract owners'equity is affected by the investment results of each fund, equity transactions by contract owners and certain contract expenses (see note 2). The accompanying financial statements include only contract owners' purchase payments pertaining to the variable portions of their contracts and exclude any purchase payments for fixed dollar benefits, the latter being included in the accounts of the Company. A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans. Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially. (c) Security Valuation, Transactions and Related Investment Income The fair value of the underlying mutual funds is based on the closing net asset value per share at June 30, 2001. The cost of investments sold is determined on a specific identification basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date. (d) Federal Income Taxes Operations of the Account form a part of, and are taxed with, operations of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code. The Company does not provide for income taxes within the Account. Taxes are the responsibility of the contract owner upon termination or withdrawal. (e) Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.Actual results could differ from those estimates. (f) Calculation of Annuity Reserves Annuity reserves are computed for contracts in the variable payout stage according to industry standard mortality tables. The assumed investment return is 3.5 percent unless the annuitant elects otherwise, in which case the rate may vary from 3.5 percent to 7 percent, as regulated by the laws of the respective states. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the Account by the Company to cover greater longevity of annuitants than expected. Conversely, if reserves exceed amounts required, transfers may be made to the Company. 12 12 (2) Expenses The Company does not deduct a sales charge from purchase payments received from the contract owners. However, if any part of the contract value of such contracts is surrendered, the Company will, with certain exceptions, deduct from a contract owner's contract value a contingent deferred sales charge not to exceed 7% of the lesser of purchase payments or the amount surrendered, such charge declining 1% per year, to 0%, after the purchase payment has been held in the contract for 84 months. No sales charges are deducted on redemptions used to purchase units in the fixed investment options of the Company. The Company deducts a mortality risk charge, an expense risk charge and an administration charge assessed through the daily unit value calculation equal to an annual rate of 0.80%, 0.45% and 0.05%, respectively. No charges are deducted from the initial funding by the Depositor, or from earnings thereon. (3) Related Party Transactions The Company performs various services on behalf of the Mutual Fund Companies in which the Account invests and may receive fees for the services performed. These services include, among other things, share- holder communications, preparation, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company. (Continued) 13 13 NATIONWIDE VA SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS, Continued (4) Financial Highlights The following is a summary of units outstanding, unit fair values and contract owners' equity for variable annuity contracts as of the end of the period indicated, and the expense ratios and total return for each of the five years in the period ended June 30, 2001.
Unit Contract Units Fair Value Owners'Equity --------- ---------- --------------- Fidelity VIP - Equity-Income Portfolio:Initial Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,135,413 23.474824 $ 120,552,914 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,610,525 21.544687 120,877,005 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,917,067 23.771055 140,654,925 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,318,886 21.159972 112,547,479 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,645,650 17.622693 64,246,171 Fidelity VIP - Overseas Portfolio:Initial Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,335,625 13.985593 18,679,509 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,482,481 18.779911 27,840,861 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,390,368 15.192910 21,123,736 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,285,023 14.642593 18,816,069 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942,053 13.353749 12,579,939 Nationwide(R) Separate Account Trust - Money Market Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,920,721 13.031226 25,029,349 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,213,509 12.512952 15,184,580 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 905,345 12.030488 10,891,742 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771,350 11.615424 8,959,558 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 809,644 11.171421 9,044,874 Nationwide(R) Separate Account Trust - Total Return Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,514,958 20.792740 73,085,608 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,823,136 24.151274 92,333,606 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,864,905 24.516311 94,753,213 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,297,670 21.800224 71,889,945 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,121,585 17.755595 37,670,004 One Group(R) Investment Trust - Balanced Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,213,642 19.116184 195,245,858 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,094,696 20.095844 202,861,436 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,669,299 19.323528 148,197,914 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,162,261 17.311541 72,055,152 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,713,854 14.471808 24,802,566 One Group(R) Investment Trust - Bond Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,883,390 11.444929 55,890,047 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,966,049 10.355257 20,358,942 One Group(R) Investment Trust - Diversified Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,216,487 9.284299 57,715,722 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,336,918 10.703972 25,014,305 One Group(R) Investment Trust - Diversified Mid Cap Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,276,288 12.600330 28,681,981 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968,344 12.018518 11,638,060
Total Expenses(*) Return(**) ----------- ---------- Fidelity VIP - Equity-Income Portfolio:Initial Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25% -1.55% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34% -3.30% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24% 11.97% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24% 9.81% 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29% 15.64% Fidelity VIP - Overseas Portfolio:Initial Class 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29% -12.03% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.26% -5.68% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34% 7.41% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.27% 15.21% 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23% 15.68% Nationwide(R) Separate Account Trust - Money Market Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.32% 1.65% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.37% 2.15% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.31% 1.64% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.31% 1.96% 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.27% 1.88% Nationwide(R) Separate Account Trust - Total Return Fund 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.31% -8.49% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.27% 2.69% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22% 10.03% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22% 14.03% 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29% 18.64% One Group(R) Investment Trust - Balanced Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.26% -3.17% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.28% 2.14% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.27% 4.88% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25% 10.45% 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.32% 12.00% One Group(R) Investment Trust - Bond Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.28% 3.04% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.31% 3.25% One Group(R) Investment Trust - Diversified Equity Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30% -6.98% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29% 1.24% One Group(R) Investment Trust - Diversified Mid Cap Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30% -1.87% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33% 10.35%
14 14
Unit Contract Units Fair Value Owners'Equity ---------- ---------- ------------- One Group((R))Investment Trust - Equity Index Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,798,831 10.824369 95,241,793 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,159,051 12.913512 79,534,979 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,358,030 12.247828 28,880,746 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,781 10.063323 1,155,078 One Group((R))Investment Trust - Government Bond Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,852,346 14.530208 114,096,226 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,608,503 13.275145 74,453,691 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,890,469 12.908597 50,220,497 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,814,181 12.856302 23,323,658 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 944,469 11.773328 11,119,544 One Group((R))Investment Trust - Large Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,242,765 21.641127 243,306,106 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,101,330 32.566769 361,534,450 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,047,064 28.417857 257,098,171 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,624,843 22.323221 147,887,835 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,845,053 16.926329 65,082,632 One Group((R))Investment Trust - Mid Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,523,738 28.392155 185,222,991 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,566,423 33.459413 186,249,246 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,332,717 24.612919 106,640,812 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,601,144 19.942906 71,817,276 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,207,573 15.552959 34,334,292 One Group((R))Investment Trust - Mid Cap Value Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,244,413 13.559465 43,992,498 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,490,615 10.497837 15,648,233 ========== ========= 2001 Reserves for annuity contracts in pay out phase: Non-taxqualified . . . . . . . . . . . . . . . . . . . . . . . . . . . 640,039 --------------- 2001 Contract owners'equity . . . . . . . . . . . . . . . . . $ 1,257,380,641 ===============
Total Expenses(*) Return(**) ----------- ---------- One Group((R))Investment Trust - Equity Index Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.36% -7.49% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.26% -1.39% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33% 11.80% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.26% 0.63% 05/01/98 One Group((R))Investment Trust - Government Bond Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33% 2.23% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.32% 3.26% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30% -2.20% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35% 3.18% 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34% 2.27% One Group((R))Investment Trust - Large Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30% -12.95% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23% -0.38% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29% 10.91% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23% 21.47% 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.32% 19.94% One Group((R))Investment Trust - Mid Cap Growth Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.21% -7.27% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29% 14.11% 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.28% 3.91% 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.21% 15.36% 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34% 15.27% One Group((R))Investment Trust - Mid Cap Value Portfolio 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29% 5.74% 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.38% 3.36% 2001 Reserves for annuity contracts in pay out phase: Non-taxqualified. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2001 Contract owners'equity . . . . . . . . . . . . . . . . . . . . . . . .
(*) This represents annualized expenses as a percentage of the average net assets of the variable account for the period indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the underlying fund portfolios and charges made directly to contract owner accounts through the redemption of units. (**) This represents the total return for the six-month period indicated and includes a deduction only for expenses assessed through the daily unit value calculation. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction of the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Account. The total return is calculated for the six-month period indicated or from the effective date through the end of the six-month period. -------------------------------------------------------------------------------- 15 15
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY HOME OFFICE: ONE NATIONWIDE PLAZA o COLUMBUS, OHIO 43215-2220 Bulk Rate U.S.Postage P A I D Columbus, Ohio Permit No.521 Nationwide(R) is a registered federal service mark of Nationwide Mutual Insurance Company