nationwide 4Q06 Statistical Supplement

2006 Nationwide Financial® Statistical Supplement

Fourth Quarter2006

Nationwide Financial Services, Inc.Statistical SupplementDecember 31, 2006

This Page Intentionally Left Blank.

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Nationwide Financial Services, Inc.Statistical Supplement

Table of Contents

Page

Quarterly Financial Highlights 1-2

NFS Financial Reporting Structure 2

Quarterly Consolidated Income Statements 4

Combining Income StatementsFor the three months ended December 31, 2006 5For the three months ended December 31, 2005 6

Quarterly Consolidated Balance Sheets 8

Individual Investments SegmentQuarterly earnings trends 9Account value activity 9Account values by product 10Sales by product 10Sales by channel 10

Retirement Plans SegmentQuarterly earnings trends 11Account value activity 11Account values by product 12Sales by product 12Sales by channel 12

Individual Protection SegmentQuarterly earnings trends 13Policy reserves 13Insurance in force 13Sales by product 14Sales by channel 14Investment life quarterly earnings trends 15Investment life policy reserve activity 15Fixed life quarterly earnings trends 16Fixed life policy reserve activity 16

Corporate and Other SegmentQuarterly earnings trends 17Medium term notes account value activity 17

Other DataCustomer funds managed and administered 18Separate account assets by segment and fund type 18Securities available-for-sale 19Aging of gross unrealized losses on securities available-for-sale 19Credit quality of fixed maturity securities available-for-sale 20Mortgage loans by region and property type 20Deferred policy acquisition costs 21Individual variable annuity deferred acquisition costs 22Value of business acquired 23Individual variable annuity guaranteed minimum death benefits 24Individual variable annuity guaranteed minimum accumulation benefits 25Individual variable annuity guaranteed minimum income benefits 25Individual variable annuity guaranteed lifetime withdrawal benefits 25Individual variable annuity guaranteed minimum death benefit reserve activity 26Individual variable annuity guaranteed minimum accumulation benefit embedded derivative activity 26Individual fixed annuity and fixed option of variable annuity summary of crediting rate detail 26

Historical Data 27-40

Glossary 41-44

Shareholder Information 45

December 31, 2006


Quarterly Financial Highlights

($ in millions except for per share data) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Operating Revenues

Individual investments 380.1$ 382.6$ 373.2$ 382.3$ 376.2$ Retirement plans 267.7 269.5 285.7 277.4 278.3 Individual protection 339.7 338.4 333.7 338.6 334.8 Corporate and other 103.5 100.1 111.5 108.8 125.0

Total operating revenues 1,091.0$ 1,090.6$ 1,104.1$ 1,107.1$ 1,114.3$

Net realized gains (losses) on investments, hedging instruments and hedged items (1) 3.7 (8.1) (11.0) 5.5 13.0

Total revenues 1,094.7$ 1,082.5$ 1,093.1$ 1,112.6$ 1,127.3$

Pre-tax Operating EarningsIndividual investments 53.4$ 56.4$ 52.5$ 60.4$ 41.5$ Retirement plans 49.9 53.6 64.5 53.7 44.7 Individual protection 59.6 64.9 60.5 71.0 78.4 Corporate and other 22.6 11.6 16.6 21.7 17.8

Pre-tax operating earnings 185.5$ 186.5$ 194.1$ 206.8$ 182.4$ Federal income tax expense 33.2 42.2 (69.9) 52.1 37.5

Net operating earnings 152.3$ 144.3$ 264.0$ 154.7$ 144.9$

Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) 2.4 (5.3) (7.2) 3.6 8.5

Adjustment to amortization related to net realized gains (losses), net of taxes 0.1 3.3 1.0 1.2 0.8

Discontinued operations, net of taxes (24.5) - - - - Net income 130.3$ 142.3$ 257.8$ 159.5$ 154.2$

Per Diluted ShareNet operating earnings 0.99$ 0.94$ 1.76$ 1.03$ 0.97$

Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) 0.02 (0.03) (0.05) 0.02 0.05

Adjustment to amortization related to net realized gains (losses), net of taxes - 0.02 0.01 0.01 0.01


Sales by ChannelNon-affiliated Independent broker/dealers 1,207.9$ 1,487.8$ 1,380.7$ 1,363.9$ 1,525.8$ Wirehouse and regional firms 482.3 590.1 555.6 596.4 691.5 Financial institutions 424.3 523.7 580.7 570.1 620.6 Pension plan administrators 104.9 135.9 139.6 124.8 132.5 Life specialists 69.0 172.6 84.0 46.3 277.7 Affiliated Nationwide Retirement Solutions 948.8 1,028.5 1,001.2 1,031.3 989.2 Nationwide agents 207.2 196.4 203.1 186.6 201.7 Nationwide Financial Network 181.6 185.7 171.0 168.3 173.7 The 401(k) Company 288.3 535.9 422.3 365.2 399.3 TBG Financial 36.0 110.4 62.7 21.4 31.6

Total 3,950.3$ 4,967.0$ 4,600.9$ 4,474.3$ 5,043.6$

(1) Excluding operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations).

Note: The results of operations of NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior years. In addition, the results of operations of The 401(k) Company are reflected as discontinued operations for 2006 and all prior years.

1


Quarterly Financial Highlights

($ in millions except for per share data) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Balance Sheet Data

Total assets 116,159.9$ 116,558.7$ 113,083.0$ 114,880.0$ 119,411.6$

Customer funds managed and administered 155,612.9$ 162,451.7$ 160,051.6$ 163,240.5$ 174,891.1$

Shareholders' equity Including accumulated other comprehensive income (AOCI) (1) 5,350.4$ 5,126.2$ 5,236.8$ 5,630.0$ 5,538.3$ AOCI 100.7 (77.9) (202.0) 47.8 31.9 Excluding AOCI 5,249.7$ 5,204.1$ 5,438.8$ 5,582.2$ 5,506.4$

Net operating return on average equity excluding AOCI 11.7% 11.0% 19.8% 11.2% 10.5%

Adjusted net operating return on average equity excluding AOCI (2) 11.7% 11.0% 11.5% 11.2% 10.5%

Statutory capital and surplus 3,262.1$ 3,279.3$ 3,437.4$ 3,504.2$ 3,330.8$

Stock DataClosing Price 44.00$ 43.02$ 44.08$ 48.10$ 54.20$

Weighted average shares outstanding Basic 152.9 152.3 149.2 149.5 148.7 Diluted 153.6 152.9 149.9 150.3 149.8

Book value per share Including AOCI 35.08$ 34.40$ 35.08$ 37.61$ 37.93$ Excluding AOCI 34.42$ 34.93$ 36.43$ 37.29$ 37.72$

(1) Includes changes in fair value of certain investments and derivatives under SFAS 115 and SFAS 133.

(2) 2Q 2006 return adjusted for $113.1 million of released tax reserves and associated tax-related adjustments relating to prior tax years.


NFS Operating Segment Reporting Structure

NATIONWIDE FINANCIAL SERVICES, INC.

IndividualInvestments

RetirementPlans

IndividualProtection

Corporate& Other

Variable Annuities

Fixed Annuities

Income Products

Advisory Services

Public Sector - 457

Private Sector – 401(k)

Fixed Life

Investment Life Corporate Other

Medium Term Notes

Structured Products

Universal

Whole

Term

Variable Universal

COLI

2



3


Quarterly Consolidated Income Statements

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Operating Revenues

Asset fees 163.0$ 168.9$ 170.0$ 169.2$ 183.1$ Cost of insurance charges 97.5 98.9 100.2 100.6 102.3 Administrative fees 27.7 30.2 47.2 36.2 25.5 Surrender fees 22.6 23.0 20.2 21.6 18.9

Total policy charges 310.8 321.0 337.6 327.6 329.8

Traditional life and immediate annuity premiums 107.1 107.8 109.7 110.5 113.5 Net investment income 587.9 577.3 572.1 577.9 571.2 Operating realized gains (losses) 1.1 1.3 1.1 4.1 3.1 Other income 84.1 83.2 83.6 87.0 96.7

Total operating revenues 1,091.0 1,090.6 1,104.1 1,107.1 1,114.3

BenefitsInterest credited 347.7 342.1 345.7 348.2 344.3 Life insurance and annuity benefits 149.9 156.1 156.4 163.8 170.5 Policyholder dividends 27.0 20.2 24.5 24.6 21.4

Total benefits 524.6 518.4 526.6 536.6 536.2

ExpensesCommissions 140.1 153.1 160.4 160.7 174.2 General operating expenses 200.8 204.3 205.3 191.8 244.8 Debt extinguishment costs - - - - - Deferral of policy acquisition costs (120.8) (135.1) (147.4) (138.8) (167.1)

Subtotal 220.1 222.3 218.3 213.7 251.9

Amortization of policy acquisition costs 123.7 125.7 127.5 109.8 109.6 Amortization of value of business acquired 10.0 11.6 12.5 14.9 7.0 Interest expense on debt 27.1 26.1 25.1 25.3 27.2

Total expenses 380.9 385.7 383.4 363.7 395.7

Pre-tax operating earnings 185.5$ 186.5$ 194.1$ 206.8$ 182.4$ Federal income tax expense 33.2 42.2 (69.9) 52.1 37.5


Net realized gains (losses) on investments, hedging

instruments and hedged items, net of taxes (1)

Realized gains on sales, net of hedging 20.5 7.3 11.0 10.2 31.2 Realized losses on sales, net of hedging (7.9) (12.9) (19.1) (4.4) (12.5) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (7.5) (0.6) (2.5) (2.9) (5.0) Credit default swaps (0.4) (0.1) (0.1) (0.1) (0.5) Derivatives, excluding hedging gains and losses on sales and credit default swaps (1.9) 0.5 3.4 0.3 (4.6) Amounts credited to policyholder dividend obligation 0.3 0.1 (0.7) 0.5 0.1 Adjustment to VOBA amortization (0.7) 0.4 0.8 - (0.2)

Subtotal 2.4 (5.3) (7.2) 3.6 8.5

Adjustment to amortization related to net realized gains (losses), net of taxes 0.1 3.3 1.0 1.2 0.8




4


Combining Income StatementFor the three months ended December 31, 2006

Individual Retirement Individual Corporate($ in millions) Investments Plans Protection and Other TotalOperating Revenues

Asset fees 137.2$ 33.6$ 12.3$ -$ 183.1$ Cost of insurance charges - - 102.3 - 102.3 Administrative fees 5.4 2.8 17.3 - 25.5 Surrender fees 12.5 1.1 5.3 - 18.9

Total policy charges 155.1 37.5 137.2 - 329.8

Traditional life and immediate annuity premiums 38.7 - 74.8 - 113.5 Net investment income 181.7 163.5 116.8 109.2 571.2 Operating realized gains (losses) - - - 3.1 3.1 Other income 0.7 77.3 6.0 12.7 96.7

Total operating revenues 376.2 278.3 334.8 125.0 1,114.3

BenefitsInterest credited 126.4 113.2 47.1 57.6 344.3 Life insurance and annuity benefits 56.3 - 114.2 - 170.5 Policyholder dividends - - 21.4 - 21.4

Total benefits 182.7 113.2 182.7 57.6 536.2

ExpensesCommissions 94.7 39.8 33.0 6.7 174.2 General operating expenses 65.0 81.8 82.0 16.0 244.8 Deferral of policy acquisition costs (98.7) (9.2) (59.2) - (167.1)

Subtotal 61.0 112.4 55.8 22.7 251.9

Amortization of policy acquisition costs 90.8 7.6 11.2 - 109.6 Amortization of value of business acquired 0.2 0.4 6.5 (0.1) 7.0 Interest expense on debt - - 0.2 27.0 27.2

Total expenses 152.0 120.4 73.7 49.6 395.7

Pre-tax operating earnings 41.5$ 44.7$ 78.4$ 17.8$ 182.4$

Federal income tax expense 37.5 Net operating earnings 144.9$



Realized gains on sales, net of hedging 31.2 Realized losses on sales, net of hedging (12.5) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (5.0) Credit default swaps (0.5) Derivatives, excluding hedging gains and losses on sales and credit default swaps (4.6) Amounts credited to policyholder dividend obligation 0.1 Adjustment to VOBA amortization (0.2)

Subtotal 8.5

Adjustment to amortization related to net realized gains (losses), net of taxes 0.8

Discontinued operations, net of taxes -

Net income 154.2$


5


Combining Income StatementFor the three months ended December 31, 2005

Individual Retirement Individual Corporate($ in millions) Investments Plans Protection and Other TotalOperating Revenues

Asset fees 118.1$ 34.4$ 10.5$ -$ 163.0$ Cost of insurance charges - - 97.5 - 97.5 Administrative fees 4.3 2.4 21.0 - 27.7 Surrender fees 14.2 1.9 6.5 - 22.6

Total policy charges 136.6 38.7 135.5 - 310.8

Traditional life and immediate annuity premiums 29.7 - 77.4 - 107.1 Net investment income 213.4 167.1 117.6 89.8 587.9 Operating realized gains (losses) - - - 1.1 1.1 Other income 0.4 61.9 9.2 12.6 84.1

Total operating revenues 380.1 267.7 339.7 103.5 1,091.0

BenefitsInterest credited 144.5 115.6 47.5 40.1 347.7 Life insurance and annuity benefits 42.0 - 107.9 - 149.9 Policyholder dividends - - 27.0 - 27.0

Total benefits 186.5 115.6 182.4 40.1 524.6

ExpensesCommissions 65.7 34.3 33.8 6.3 140.1 General operating expenses 50.7 64.3 78.4 7.4 200.8 Deferral of policy acquisition costs (62.0) (8.9) (49.9) - (120.8)

Subtotal 54.4 89.7 62.3 13.7 220.1

Amortization of policy acquisition costs 83.7 11.9 28.1 - 123.7 Amortization of value of business acquired 2.1 0.6 7.2 0.1 10.0 Interest expense on debt - - 0.1 27.0 27.1

Total expenses 140.2 102.2 97.7 40.8 380.9


Federal income tax expense 33.2 Net operating earnings 152.3$



Realized gains on sales, net of hedging 20.5 Realized losses on sales, net of hedging (7.9) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (7.5) Credit default swaps (0.4) Derivatives, excluding hedging gains and losses on sales and credit default swaps (1.9) Amounts credited to policyholder dividend obligation 0.3 Adjustment to VOBA amortization (0.7)

Subtotal 2.4

Adjustment to amortization related to net realized gains (losses), net of taxes 0.1

Discontinued operations, net of taxes (24.5)

Net income 130.3$


Note: The results of operations of NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior years.

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7


Quarterly Consolidated Balance Sheets

($ in millions, except per share data) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Assets

InvestmentsSecurities available-for-sale: Fixed maturity securities 30,106.0$ 28,645.0$ 27,980.9$ 28,579.0$ 28,160.0$ Equity securities 75.6 76.5 63.2 65.2 67.6 Trading assets 34.4 27.8 21.0 22.8 24.3 Mortgage loans 9,148.6 9,048.3 9,060.7 8,981.2 8,909.8 Real estate 108.7 108.6 108.4 104.8 76.7 Policy loans 930.6 933.9 948.3 957.7 966.9 Other long-term investments 691.9 688.9 687.4 680.6 780.1 Short-term investments 2,073.2 2,830.5 2,169.7 1,917.4 2,215.6

Total investments 43,169.0 42,359.5 41,039.6 41,308.7 41,201.0

Cash 16.4 23.9 23.6 12.9 20.2 Accrued investment income 396.3 398.9 388.7 412.6 373.8 Deferred policy acquisition costs 3,685.4 3,794.7 3,875.6 3,783.5 3,851.0 Value of business acquired 449.7 443.3 405.2 399.1 392.7 Other intangible assets 45.6 45.4 44.9 44.2 43.6 Goodwill 364.5 359.0 359.0 359.0 359.0 Other assets 2,069.2 2,200.3 2,117.3 2,433.2 2,475.6 Assets held in separate accounts 65,963.8 66,933.7 64,829.1 66,126.8 70,694.7

Total assets 116,159.9$ 116,558.7$ 113,083.0$ 114,880.0$ 119,411.6$

Liabilities and shareholders' equityFuture policy benefits and claims 39,748.1$ 39,519.4$ 38,451.3$ 38,131.9$ 38,097.8$ Short-term debt 252.3 147.4 189.8 88.6 85.2 Long-term debt 1,398.0 1,398.3 1,398.4 1,398.1 1,398.5 Other liabilities 3,447.3 3,433.7 2,977.6 3,504.6 3,597.1 Liabilities related to separate accounts 65,963.8 66,933.7 64,829.1 66,126.8 70,694.7

110,809.5 111,432.5 107,846.2 109,250.0 113,873.3

Shareholders' equity 5,350.4 5,126.2 5,236.8 5,630.0 5,538.3 Total liabilities and shareholders' equity 116,159.9$ 116,558.7$ 113,083.0$ 114,880.0$ 119,411.6$

Capital Structure

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06

Total capital, including AOCI 6,748.4$ 6,524.5$ 6,635.2$ 7,028.1$ 6,936.8$ Less AOCI 100.7 (77.9) (202.0) 47.8 31.9 Total capital, excluding AOCI 6,647.7$ 6,602.4$ 6,837.2$ 6,980.3$ 6,904.9$

Leverage, including AOCI Long-term debt--to--total capital 20.7% 21.4% 21.1% 19.9% 20.2%

Leverage, excluding AOCI Long-term debt--to--total capital 21.0% 21.2% 20.5% 20.0% 20.3%

Ratio of pre-tax operating earnings before interest expense to interest expense 7.8X 8.1X 8.7X 9.2X 7.7X

8


Individual InvestmentsQuarterly Earnings Trends


Asset fees 118.1$ 124.0$ 125.0$ 125.2$ 137.2$ Administrative fees 4.3 4.6 4.9 5.5 5.4 Surrender fees 14.2 15.2 14.2 14.7 12.5


Net Investment Income General account assets 220.3 212.7 200.0 205.9 187.7 Charge for invested capital (6.9) (6.3) (6.1) (6.8) (6.0)

Total net investment income 213.4 206.4 193.9 199.1 181.7

Premiums on income products 29.7 31.9 34.6 37.3 38.7 Other income 0.4 0.5 0.6 0.5 0.7

Total operating revenues 380.1 382.6 373.2 382.3 376.2

Benefits Interest credited 144.5 137.7 132.7 131.5 126.4 Immediate annuity benefits 25.7 28.5 30.4 31.7 36.3 Policy benefits 16.3 12.5 19.2 23.8 20.0

Total benefits 186.5 178.7 182.3 187.0 182.7

ExpensesCommissions 65.7 73.6 86.2 86.0 94.7 General operating expenses 50.7 48.4 56.0 54.5 65.0 Deferral of policy acquisition costs (62.0) (74.4) (90.8) (86.9) (98.7)

Subtotal 54.4 47.6 51.4 53.6 61.0

Amortization of policy acquisition costs 83.7 97.6 84.8 79.5 90.8 Amortization of value of business acquired 2.1 2.3 2.2 1.8 0.2

Total expenses 140.2 147.5 138.4 134.9 152.0


Key Ratios/StatisticsAverage Account Values: General account 15,515.1$ 14,825.4$ 14,374.0$ 13,824.3$ 13,223.4$ Separate account 35,975.9 36,504.3 36,815.8 36,824.2 38,340.3 Advisory services program 393.7 443.3 491.6 528.7 573.2

Total average individual investments account values 51,884.7$ 51,773.0$ 51,681.4$ 51,177.2$ 52,136.9$

Earned rate 5.68% 5.74% 5.56% 5.95% 5.67%Credited rate 3.73% 3.72% 3.69% 3.80% 3.82%

Interest spread on average general account values 1.95% 2.02% 1.87% 2.15% 1.85%Prepayment penalties and bond call premium income 0.19% 0.11% 0.09% 0.24% 0.17%

Base interest spread on average general account values 1.76% 1.91% 1.78% 1.91% 1.68%

Asset fees to average separate account values 1.31% 1.36% 1.36% 1.36% 1.43%

General operating expenses to average account values 0.39% 0.37% 0.43% 0.43% 0.50%

Pre-tax operating earnings to average account values 0.41% 0.44% 0.41% 0.47% 0.32%

Pre-tax operating earnings to operating revenues 14.0% 14.7% 14.1% 15.8% 11.0%

Average allocated capital 1,649.3$ 1,563.0$ 1,504.3$ 1,467.4$ 1,441.9$

Return on average allocated capital 12.1% 11.9% 11.8% 13.1% 10.3%

Note: The results of operations of NFS Bermuda are reflected as discontinued operations for 2005 and all prior years.

Individual InvestmentsAccount Value Activity

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Individual Variable Annuities

Balance, beginning of period 41,651.8$ 40,796.0$ 42,071.5$ 41,140.7$ 41,771.1$

Deposits 903.5 1,045.0 1,279.9 1,263.4 1,446.6 Withdrawals and surrenders (1,456.8) (1,535.4) (1,479.4) (1,554.2) (1,564.3)

Net flows (553.3) (490.4) (199.5) (290.8) (117.7)

Investment performance/interest credited 971.1 1,903.4 (605.1) 1,070.8 2,373.2 Policy charges (137.6) (140.6) (141.3) (141.2) (153.1) Benefits and other 24.6 3.1 15.1 (8.4) (68.7) Acquisitions/(terminations), net (1,160.6) - - - - Balance, end of period 40,796.0$ 42,071.5$ 41,140.7$ 41,771.1$ 43,804.8$

Individual Fixed AnnuitiesBalance, beginning of period 8,559.3$ 8,041.8$ 7,746.6$ 7,425.0$ 6,995.6$

Deposits 31.0 38.6 42.7 53.3 43.6 Withdrawals and surrenders (330.0) (400.9) (437.5) (534.1) (521.3)

Net flows (299.0) (362.3) (394.8) (480.8) (477.7)

Policyholder interest credited 77.6 73.4 79.2 68.2 63.6 Policy charges (2.6) (2.8) (2.5) (3.1) (2.2) Benefits and other (3.9) (3.5) (3.5) (13.7) (43.2) Acquisitions/(terminations), net (289.6) - - - - Balance, end of period 8,041.8$ 7,746.6$ 7,425.0$ 6,995.6$ 6,536.1$

Income Products 1,978.3$ 2,025.1$ 1,970.6$ 1,994.0$ 2,025.6$ Advisory Services Program 411.5$ 475.0$ 508.1$ 549.2$ 597.1$

Total individual investment account values 51,227.6$ 52,318.2$ 51,044.4$ 51,309.9$ 52,963.6$

9


Individual InvestmentsAccount Values by Product


BEST of AMERICA products 32,937.0$ 34,117.5$ 33,495.1$ 34,215.3$ 36,106.8$ Private label annuities 7,398.9 7,505.5 7,243.9 7,171.5 7,319.7 Nationwide Financial Network and other 460.1 448.5 401.7 384.3 378.3

Total individual variable annuities 40,796.0$ 42,071.5$ 41,140.7$ 41,771.1$ 43,804.8$

Individual Fixed Annuities 8,041.8$ 7,746.6$ 7,425.0$ 6,995.6$ 6,536.1$ Income Products 1,978.3$ 2,025.1$ 1,970.6$ 1,994.0$ 2,025.6$ Advisory Services Program 411.5$ 475.0$ 508.1$ 549.2$ 597.1$


Individual InvestmentsSales by Product


BEST of AMERICA products 767.6$ 912.5$ 1,116.3$ 1,096.6$ 1,265.5$ Private label annuities 82.3 73.0 96.7 94.8 92.1 Nationwide Financial Network and other 1.1 0.9 1.0 1.0 0.7

Total individual variable annuities 851.0$ 986.4$ 1,214.0$ 1,192.4$ 1,358.3$

Individual Fixed Annuities 32.6$ 39.5$ 45.8$ 57.2$ 44.0$ Income Products 54.8$ 58.5$ 55.9$ 57.1$ 59.2$ Advisory Services Program 49.2$ 62.6$ 70.1$ 47.7$ 42.4$

Total individual investment sales 987.6$ 1,147.0$ 1,385.8$ 1,354.4$ 1,503.9$

Individual InvestmentsSales by Channel


Non-affiliated Independent broker/dealers 311.5$ 347.7$ 412.6$ 403.1$ 443.1$ Wirehouse and regional firms 197.8 220.8 274.4 312.7 363.9 Financial institutions 250.3 318.2 410.6 383.3 446.7 Life specialists - 0.8 - - - Affiliated Nationwide agents 60.5 63.6 71.3 51.0 59.2 Nationwide Financial Network 30.9 35.3 45.1 42.3 45.4

Total individual variable annuities 851.0$ 986.4$ 1,214.0$ 1,192.4$ 1,358.3$

Individual Fixed AnnuitiesNon-affiliated Independent broker/dealers 1.6$ 2.6$ 2.5$ 5.4$ 2.9$ Wirehouse and regional firms 1.9 1.0 3.0 3.1 2.7 Financial institutions 8.8 14.7 19.0 20.5 18.2 Affiliated Nationwide agents 17.9 17.4 19.8 24.7 17.8 Nationwide Financial Network 2.4 3.8 1.5 3.5 2.4

Total individual fixed annuities 32.6$ 39.5$ 45.8$ 57.2$ 44.0$

Income ProductsNon-affiliated Independent broker/dealers 20.4$ 28.1$ 28.5$ 19.5$ 22.0$ Wirehouse and regional firms 18.2 17.0 15.5 25.8 26.4 Financial institutions 8.6 6.1 9.4 7.9 7.3 Affiliated Nationwide agents 3.9 3.6 3.1 2.9 2.0 Nationwide Financial Network 3.7 3.7 (0.6) 1.0 1.5

Total income products 54.8$ 58.5$ 55.9$ 57.1$ 59.2$

Advisory Services ProgramNon-affiliated Independent broker/dealers 44.4$ 48.0$ 60.2$ 41.3$ 31.0$ Financial institutions 3.2 4.0 5.7 2.3 3.5 Affiliated Nationwide Financial Network 1.6 10.6 4.2 4.1 7.9

Total advisory services program 49.2$ 62.6$ 70.1$ 47.7$ 42.4$

Total individual investment sales 987.6$ 1,147.0$ 1,385.8$ 1,354.4$ 1,503.9$

10





Net investment income 167.1 164.2 159.8 164.7 163.5 Other income 61.9 67.2 68.6 71.1 77.3


Benefits Interest credited 115.6 113.2 113.0 112.2 113.2


Subtotal 89.7 91.5 96.1 97.6 112.4


Total expenses 102.2 102.7 108.2 111.5 120.4


Key Ratios/StatisticsAverage Account Values: General account 11,151.0$ 11,241.2$ 11,050.0$ 10,909.6$ 11,079.3$ Separate account 19,737.8 19,298.8 18,155.5 17,668.4 18,193.8 Non insurance assets 14,056.6 15,258.6 16,085.7 16,611.8 17,962.0 Administration only 37,508.5 39,690.3 42,162.9 43,048.9 46,248.5

Total average retirement plan account values 82,453.9$ 85,488.9$ 87,454.1$ 88,238.7$ 93,483.6$




Asset fees to average separate account values 0.70% 0.70% 0.74% 0.74% 0.74%



Pre-tax operating earnings to operating revenue 18.6% 19.9% 22.6% 19.4% 16.1%

Average allocated capital 806.5$ 816.2$ 817.1$ 806.7$ 815.4$


Note: The results of operations of The 401(k) Company are reflected as discontinued operations for 2006 and all prior years.

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Private Sector Pension Plans


New deposits/sales 1,676.4 2,327.7 1,873.8 1,828.3 2,005.0 Participant withdrawals and surrenders (1,581.8) (1,799.5) (1,597.1) (1,632.6) (1,707.4)

Net flows 94.6 528.2 276.7 195.7 297.6

Investment performance/interest credited 1,007.7 2,055.8 (64.2) 1,310.4 2,989.4 Policy charges and other (57.8) (25.2) (73.1) (66.8) (66.6) Case acquisitions/(terminations), net 626.3 784.6 260.8 (82.3) 2,239.6

Balance, end of period 42,906.5$ 46,249.9$ 46,650.1$ 48,007.1$ 53,467.1$

Public Sector Pension PlansBalance, beginning of period 40,673.4$ 40,092.0$ 41,729.2$ 40,278.9$ 41,541.2$

New deposits/sales 940.3 1,020.0 993.2 1,023.4 981.8 Participant withdrawals and surrenders (625.0) (694.2) (654.2) (567.9) (496.5)

Net flows 315.3 325.8 339.0 455.5 485.3

Investment performance/interest credited 850.3 1,376.2 (370.1) 914.6 1,882.2 Policy charges and other (17.4) (18.0) (38.1) (19.0) (19.7) Case acquisitions/(terminations), net (1,729.6) (46.8) (1,381.1) (88.8) 62.8


Total retirement plan account values 82,998.5$ 87,979.1$ 86,929.0$ 89,548.3$ 97,418.9$

Account Value Activity

Retirement PlansQuarterly Earnings Trends

Retirement Plans

11


Retirement PlansAccount Values by Product


BEST of AMERICA annuity products 7,791.9$ 7,738.8$ 7,399.3$ 7,360.4$ 7,557.1$ BEST of AMERICA trust products 14,479.5 16,037.7 16,133.6 17,089.9 18,834.1

Subtotal BEST of AMERICA 22,271.4 23,776.5 23,532.9 24,450.3 26,391.2

The 401(k) Company 13,147.7 16,349.9 17,024.0 17,405.2 20,821.8 Nationwide Financial Network products 1,378.4 1,316.5 1,304.8 1,256.1 1,268.2 Nationwide employee and agent benefit plans 5,504.2 4,207.1 4,204.7 4,322.0 4,435.6 Other 604.8 599.9 583.7 573.5 550.3

Total private sector pension plans 42,906.5$ 46,249.9$ 46,650.1$ 48,007.1$ 53,467.1$

Public Sector Pension PlansIRC Section 457 annuities 15,790.2$ 16,148.1$ 14,908.2$ 15,243.4$ 15,979.5$ Administration only agreements 24,301.8 25,581.1 25,370.7 26,297.8 27,972.3

Total public sector pension plans 40,092.0$ 41,729.2$ 40,278.9$ 41,541.2$ 43,951.8$


Retirement PlansSales by Product


BEST of AMERICA annuity products 285.8$ 351.0$ 327.8$ 291.0$ 260.4$ BEST of AMERICA trust products 971.2 1,277.5 976.9 1,024.5 1,225.1


The 401(k) Company 288.3 535.9 422.3 365.2 399.3 Nationwide Financial Network products 58.4 56.5 40.6 42.9 48.2 Other 10.9 12.6 20.8 15.0 21.0

Total private sector pension plan 1,614.6$ 2,233.5$ 1,788.4$ 1,738.6$ 1,954.0$

Public Sector Pension PlansIRC Section 457 annuities 379.0$ 407.3$ 389.0$ 381.6$ 355.4$ Administration only agreements 561.3 612.6 604.2 641.8 626.3 Other - - - - -

Total public sector pension plans 940.3$ 1,019.9$ 993.2$ 1,023.4$ 981.7$

Total retirement plan sales 2,554.9$ 3,253.4$ 2,781.6$ 2,762.0$ 2,935.7$

Retirement PlansSales by Channel


Non-affiliated Independent broker/dealers 770.3$ 994.7$ 810.4$ 824.6$ 964.3$ Wirehouse and regional firms 248.4 337.0 245.8 239.7 282.2 Financial institutions 137.2 167.7 120.4 141.2 130.5 Pension plan administrators 104.9 135.9 139.6 124.8 132.5 Affiliated Nationwide Retirement Solutions 8.5 8.6 8.0 7.9 7.5 Nationwide agents 19.2 24.0 20.2 16.2 19.9 Nationwide Financial Network 37.8 29.7 21.7 19.0 17.8 The 401(k) Company 288.3 535.9 422.3 365.2 399.3


Public Sector Pension Plans Nationwide Retirement Solutions 940.3$ 1,019.9$ 993.2$ 1,023.4$ 981.7$


12



Asset fees 10.5$ 11.0$ 11.4$ 11.1$ 12.3$ Administrative fees 21.0 22.9 19.7 22.8 17.3 Surrender fees 6.5 6.3 4.9 6.1 5.3 Cost of insurance 97.5 98.9 100.2 100.6 102.3




Traditional life premiums 77.4 75.9 75.1 73.2 74.8 Other income 9.2 7.2 5.9 6.2 6.0


BenefitsInterest credited 47.5 45.6 49.5 49.5 47.1 Life benefits 107.9 115.1 106.8 108.3 114.2 Policyholder dividends 27.0 20.2 24.5 24.6 21.4

Total benefits 182.4 180.9 180.8 182.4 182.7


Subtotal 62.3 66.3 51.4 55.6 55.8


Total expenses 97.7 92.6 92.4 85.2 73.7


Key Ratios/StatisticsGeneral operating expenses to operating revenues 23.1% 24.2% 19.9% 20.3% 24.5%Pre-tax operating earnings to operating revenues 17.5% 19.2% 18.1% 21.0% 23.4%Average allocated capital 1,817.9$ 1,829.6$ 1,845.5$ 1,852.3$ 1,869.0$ Return on average allocated capital 9.5% 9.8% 9.2% 10.4% 11.6%


Individual ProtectionPolicy Reserves

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Individual investment life 5,329.5$ 5,573.1$ 5,435.3$ 5,545.3$ 5,842.5$ Corporate investment life - excluding experience rated BOLI 5,613.8 5,997.2 6,030.6 6,235.8 6,600.9 Corporate investment life - experience rated BOLI 1,130.8 1,143.6 1,134.2 1,189.8 1,913.5

Subtotal investment life 12,074.1 12,713.9 12,600.1 12,970.9 14,356.9

Traditional life 4,225.2 4,210.3 4,301.0 4,282.9 4,170.9 Universal life 1,089.3 1,108.1 1,129.7 1,158.6 1,159.0

Subtotal fixed life 5,314.5 5,318.4 5,430.7 5,441.5 5,329.9

Total individual protection policy reserves 17,388.6$ 18,032.3$ 18,030.8$ 18,412.4$ 19,686.8$

Individual ProtectionInsurance In Force

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Individual investment life 57,021.7$ 57,164.1$ 57,336.8$ 57,189.7$ 57,536.7$ Corporate investment life - excluding experience rated BOLI 10,305.0 10,633.5 10,730.7 10,904.1 11,451.7 Corporate investment life - experience rated BOLI 13,330.5 13,330.5 13,330.5 13,320.3 13,312.7




Total individual protection insurance in force 126,361.1$ 127,999.3$ 129,914.1$ 131,460.3$ 133,312.7$

Individual Protection Quarterly Earnings Trends

13


Individual ProtectionSales by Product

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06BEST of AMERICA Variable Life Series

First year sales 35.0$ 34.2$ 37.8$ 34.3$ 31.7$ Renewal sales 73.1 75.9 72.3 72.9 78.2

Total BEST of AMERICA variable life series 108.1 110.1 110.1 107.2 109.9

Nationwide Financial Network Variable Life ProductsFirst year sales 5.8 5.0 9.8 4.5 1.7 Renewal sales 49.5 51.2 41.6 42.7 45.2 Total Nationwide Financial Network variable life products 55.3 56.2 51.4 47.2 46.9

Corporate Owned Life Insurance (COLI)First year sales 35.7 83.5 54.6 10.2 248.3 Renewal sales 69.3 198.7 92.1 57.5 61.0

Total COLI 105.0 282.2 146.7 67.7 309.3

Traditional/Universal lifeFirst year sales 30.1 21.6 23.0 32.5 25.5 Renewal sales 109.3 96.5 102.3 103.3 112.4

Total traditional/universal life 139.4 118.1 125.3 135.8 137.9

Total individual protection sales 407.8$ 566.6$ 433.5$ 357.9$ 604.0$

Individual ProtectionSales by Channel

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Non-affiliated Independent broker/dealers 59.7$ 66.7$ 66.5$ 70.0$ 62.5$ Wirehouse and regional firms 16.0 14.3 16.9 15.1 16.3 Financial institutions 16.2 13.0 15.6 14.9 14.4 Life specialists 69.0 171.8 84.0 46.3 277.7 Affiliated Nationwide agents 105.7 87.8 88.7 91.8 102.8 Nationwide Financial Network 105.2 102.6 99.1 98.4 98.7 TBG Financial 36.0 110.4 62.7 21.4 31.6

Total individual protection sales 407.8$ 566.6$ 433.5$ 357.9$ 604.0$

14


Investment LifeQuarterly Earnings Trends






Other income 9.2 7.2 5.9 6.2 6.0


BenefitsInterest credited 28.5 26.8 28.8 29.2 27.6 Life benefits 34.1 39.1 32.1 34.7 35.9

Total benefits 62.6 65.9 60.9 63.9 63.5


Subtotal 34.5 41.2 26.5 30.4 31.1


Total expenses 60.8 59.9 57.7 56.1 59.8


Key Ratios/Statistics

Cost of insurance per $1,000 of average net amount at risk (1) 6.00$ 6.07$ 6.11$ 6.08$ 6.16$ Life benefits per $1,000 of average net amount at risk (1) 2.42$ 2.78$ 2.28$ 2.46$ 2.54$ General operating expenses to operating revenues 26.7% 31.4% 22.0% 23.0% 31.4%Pre-tax operating earnings to operating revenues 23.3% 22.2% 24.9% 25.7% 21.4%Average allocated capital 1,259.5$ 1,262.2$ 1,271.9$ 1,275.7$ 1,283.5$ Return on average allocated capital 9.1% 8.3% 9.0% 9.1% 7.9%

(1) Excludes experience rated BOLI corporate investment life.Note: The results of operations of NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior year

Investment LifePolicy Reserve Activity

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Balance, beginning of period 11,852.5$ 12,074.1$ 12,713.9$ 12,600.1$ 12,970.9$

Deposits 261.0 419.9 288.1 320.6 1,180.0 Withdrawals and surrenders (168.4) (146.2) (165.5) (128.5) (136.5)

Net flows 92.6 273.7 122.6 192.1 1,043.5

Investment performance/interest credited 227.3 470.8 (126.7) 326.7 619.6 Policy charges (118.6) (121.8) (118.1) (121.3) (116.7) Benefits and other 21.8 17.1 8.4 (26.7) (160.5) Acquired business (1.5) - - - - Balance, end of period 12,074.1$ 12,713.9$ 12,600.1$ 12,970.9$ 14,356.8$

15


Fixed LifeQuarterly Earnings Trends


Administrative fees 3.7$ 3.4$ 3.2$ 4.1$ 4.3$ Surrender fees 0.4 0.7 0.5 0.4 0.8 Cost of insurance 12.9 13.5 14.0 14.8 15.4


Net investment income 84.4 83.3 83.0 84.7 82.7 Traditional life premiums 77.4 75.9 75.1 73.2 74.8



Total benefits 119.8 115.0 119.9 118.5 119.2


Subtotal 27.8 25.1 24.9 25.2 24.7

Amortization of policy acquisition costs 7.5 5.4 7.5 1.2 (12.7) Amortization of value of business acquired 1.6 2.2 2.3 2.7 1.9

Total expenses 36.9 32.7 34.7 29.1 13.9


Key Ratios/StatisticsLife benefits per $1,000 of average life insurance in force 6.55$ 6.57$ 6.26$ 5.97$ 6.20$ General operating expenses to operating revenues 19.8% 17.6% 18.0% 17.8% 18.4%Pre-tax operating earnings to operating revenues 12.4% 16.5% 12.1% 16.7% 25.2%Average allocated capital 558.4$ 567.4$ 573.6$ 576.6$ 585.5$ Return on average allocated capital 10.3% 13.3% 9.6% 13.3% 19.9%

Fixed LifePolicy Reserve Activity

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Traditional/Universal Life

Balance, beginning of period 5,297.5$ 5,314.5$ 5,318.4$ 5,430.7$ 5,441.5$ Deposits 121.4 106.0 112.3 116.7 120.9 Withdrawals and surrenders (51.9) (51.2) (57.2) (50.7) (55.4)

Net flows 69.5 54.8 55.1 66.0 65.5

Interest credited 19.0 22.7 20.7 20.6 19.9 Policy charges (17.0) (17.6) (17.7) (19.3) (20.2) Benefits and other (54.5) (56.0) 54.2 (56.5) (176.8) Balance, end of period 5,314.5$ 5,318.4$ 5,430.7$ 5,441.5$ 5,329.9$

16


Corporate and OtherQuarterly Earnings Trends


Net Investment Income General account assets 90.9$ 90.8$ 102.2$ 95.8$ 109.7$ Periodic net coupon settlements on non-qualifying derivatives (1.1) (0.3) (0.3) (0.3) (0.5)


Operating realized gains (losses) 1.1 1.3 1.1 4.1 3.1 Other income 12.6 8.3 8.5 9.2 12.7


BenefitsInterest Credited Products 39.9 45.4 50.4 55.0 57.9 Periodic net coupon settlements on non-qualifying derivatives 0.2 0.2 0.1 - (0.3)

Total benefits 40.1 45.6 50.5 55.0 57.6

ExpensesCommissions 6.3 6.1 5.3 7.4 6.7 General operating expenses 7.4 10.8 14.1 (0.5) 16.0 Amortization of value of business acquired 0.1 0.1 - - (0.1) Interest expense on debt 27.0 25.9 25.0 25.2 27.0

Total expenses 40.8 42.9 44.4 32.1 49.6



Medium Term Notes

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Key Ratios/Statistics

Average Account Values: General account 4,024.0$ 4,060.1$ 4,084.7$ 4,008.6$ 4,284.7$




Account Value ActivityBalance, beginning of period 4,049.8$ 3,998.2$ 4,122.1$ 4,047.4$ 3,969.9$ Deposits 300.0 250.0 300.0 - 1,225.0 Maturities (340.0) (125.0) (379.4) (73.8) (602.1)

Net flows (40.0) 125.0 (79.4) (73.8) 622.9

Interest credited and amortization 31.0 44.7 52.5 56.6 59.6 Other benefits - interest payments (42.6) (45.8) (47.8) (60.3) (52.9)


17


Customer Funds Managed and Administered

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Individual variable annuities 40,796.0$ 42,071.5$ 41,140.7$ 41,771.1$ 43,804.8$ Individual fixed annuities 8,041.8 7,746.6 7,425.0 6,995.6 6,536.1 Income products 1,978.3 2,025.1 1,970.6 1,994.0 2,025.6 Advisory services program 411.5 475.0 508.1 549.2 597.1

Subtotal individual investments 51,227.6 52,318.2 51,044.4 51,309.9 52,963.6

Private sector pension plans 42,906.5 46,249.9 46,650.1 48,007.1 53,467.1 Public sector pension plans 40,092.0 41,729.2 40,278.9 41,541.2 43,951.8

Subtotal retirement plans 82,998.5 87,979.1 86,929.0 89,548.3 97,418.9

Individual protection investment life 12,074.1 12,713.9 12,600.1 12,970.9 14,356.9 Individual protection investment lifeIndividual protection fixed life 5,314.5 5,318.4 5,430.7 5,441.5 5,329.9

Subtotal individual protection 17,388.6 18,032.3 18,030.8 18,412.4 19,686.8

Medium term notes 3,998.2 4,122.1 4,047.4 3,969.9 4,599.5 Nationwide Bank - - - - 222.3

Subtotal corporate & other 3,998.2 4,122.1 4,047.4 3,969.9 4,821.8 Customer funds managed and administered 155,612.9$ 162,451.7$ 160,051.6$ 163,240.5$ 174,891.1$

Separate Account Assets by Segment and Fund Type

Q4'05 Q1'06 Q2'06 Q3'06 Q4'06($ in millions)Individual Investments

Equity 30,533.0$ 32,002.5$ 30,490.7$ 31,275.7$ 33,531.0$ Bond 3,899.8 3,809.9 4,134.1 4,355.0 4,499.2 Money market 1,371.4 1,392.0 1,802.4 1,590.5 1,429.1

Subtotal individual investments 35,804.2 37,204.4 36,427.2 37,221.2 39,459.3

Retirement PlansEquity 16,826.1$ 15,873.7$ 14,709.4$ 14,794.1$ 15,603.8$ Bond 1,993.0 1,851.0 1,782.8 1,830.4 1,934.8 Money market 513.3 468.2 508.8 514.3 472.4 Other 530.9 541.4 575.7 621.3 616.4

Subtotal retirement plans 19,863.3 18,734.3 17,576.7 17,760.1 18,627.4

Individual ProtectionEquity 7,073.6$ 7,653.4$ 7,397.0$ 7,744.9$ 8,672.3$ Bond 2,059.4 2,081.8 2,174.1 2,040.9 1,954.8 Money market 580.5 600.8 628.1 768.2 1,325.3

Subtotal individual protection 9,713.5 10,336.0 10,199.2 10,554.0 11,952.4

Corporate and OtherEquity 525.0$ 597.2$ 561.7$ 534.0$ 592.5$ Bond 50.8 55.3 57.4 50.1 55.9 Money market 7.0 6.5 6.9 7.4 7.2

Subtotal corporate and other 582.8 659.0 626.0 591.5 655.6

TotalEquity 54,957.7$ 56,126.8$ 53,158.8$ 54,348.7$ 58,399.6$ Bond 8,003.0 7,798.0 8,148.4 8,276.4 8,444.7 Money market 2,472.2 2,467.5 2,946.2 2,880.4 3,234.0 Other 530.9 541.4 575.7 621.3 616.4

Total separate account assets by fund type 65,963.8$ 66,933.7$ 64,829.1$ 66,126.8$ 70,694.7$

18


Securities Available-For-Sale

Gross GrossAmortized Unrealized Unrealized Estimated

($ in millions) Cost Gains Losses Fair ValueDecember 31, 2006Fixed maturity securities:

U.S. Treasury securities and obligations of U.S. Government corporations 179.0$ 12.2$ 2.1$ 189.1$ Agencies not backed by the full faith and credit of the U.S. Government 564.5 46.2 2.3 608.4 Obligations of states and political subdivisions 274.7 0.7 7.4 268.0 Debt securities issued by foreign governments 36.2 1.7 0.2 37.7 Corporate securities Public 9,732.8 220.0 127.4 9,825.4 Private 6,605.1 131.5 83.8 6,652.8 Mortgage-backed securities--U.S. Government backed 6,946.0 23.8 122.8 6,847.0 Asset-backed securities 3,728.9 45.5 42.8 3,731.6

Total fixed maturities 28,067.2 481.6 388.8 28,160.0 Equity securities 57.2 11.0 0.6 67.6

Total 28,124.4$ 492.6$ 389.4$ 28,227.6$

December 31, 2005Fixed maturity securities:

U.S. Treasury securities and obligations of U.S. Government corporations 197.1$ 14.4$ 1.2$ 210.3$ Agencies not backed by the full faith and credit of the U.S. Government 882.3 61.2 6.7 936.8 Obligations of states and political subdivisions 314.5 2.4 3.9 313.0 Debt securities issued by foreign governments 42.7 2.7 0.1 45.3 Corporate securities Public 10,728.5 302.0 122.0 10,908.5 Private 7,199.3 200.7 77.5 7,322.5 Mortgage-backed securities--U.S. Government backed 6,824.7 21.3 117.0 6,729.0 Asset-backed securities 3,641.7 44.2 45.3 3,640.6

Total fixed maturities 29,830.8 648.9 373.7 30,106.0 Equity securities 64.8 11.2 0.4 75.6

Total 29,895.6$ 660.1$ 374.1$ 30,181.6$

Aging of Gross Unrealized Losses on Securities Available-For-Sale

Than One Year TotalGross Gross Gross

Estimated Unrealized Estimated Unrealized Estimated Unrealized($ in millions) Fair Value Losses Fair Value Losses Fair Value LossesDecember 31, 2006Fixed maturity securities:

U.S. Treasury securities & obligations of U.S. Government corporations 66.5$ 1.0$ 29.9$ 1.1$ 96.4$ 2.1$ Agencies not backed by the full faith and credit of the U.S. Government 31.7 0.1 125.2 2.2 156.9 2.3 Obligations of states and political subdivisions 84.5 1.0 161.9 6.4 246.4 7.4 Debt securities issued by foreign governments 12.8 0.1 1.3 0.1 14.1 0.2 Corporate securities Public 2,627.7 27.8 3,525.8 99.6 6,153.5 127.4 Private 1,288.6 15.0 2,165.1 68.8 3,453.7 83.8 Mortgage-backed securities--U.S.. Government backed 966.9 7.6 4,194.0 115.2 5,160.9 122.8 Asset-backed securities 580.2 4.5 1,475.0 38.3 2,055.2 42.8

Total fixed maturities 5,658.9 57.1 11,678.2 331.7 17,337.1 388.8 Equity securities 17.6 0.3 3.4 0.3 21.0 0.6

Total 5,676.5$ 57.4$ 11,681.6$ 332.0$ 17,358.1$ 389.4$

Percentage of gross unrealized losses 15% 85%

December 31, 2005Fixed maturity securities:

U.S. Treasury securities & obligations of U.S. Government corporations 37.4$ 0.8$ 11.6$ 0.4$ 49.0$ 1.2$ Agencies not backed by the full faith and credit of the U.S. Government 329.2 5.4 42.2 1.3 371.4 6.7 Obligations of states and political subdivisions 157.8 3.1 29.7 0.8 187.5 3.9 Debt securities issued by foreign governments 8.6 0.1 - - 8.6 0.1 Corporate securities Public 3,731.0 73.4 1,247.0 48.6 4,978.0 122.0 Private 1,957.3 46.5 767.7 31.0 2,725.0 77.5 Mortgage-backed securities--U.S.. Government backed 4,526.2 96.0 702.9 21.0 5,229.1 117.0 Asset-backed securities 1,516.4 28.2 490.2 17.1 2,006.6 45.3

Total fixed maturities 12,263.9 253.5 3,291.3 120.2 15,555.2 373.7 Equity securities 20.8 0.4 20.8 0.4

Total 12,284.7$ 253.9$ 3,291.3$ 120.2$ 15,576.0$ 374.1$

Percentage of gross unrealized losses 68% 32%

or Equal to One YearUnrealized Losses MoreUnrealized Losses Less Than

19


Amortized Fair Amortized Fair($ in millions) Cost Value Cost Value

NAIC Designation Rating Agency Equivalent Designation19,945.0$ 20,053.4$ 19,362.3$ 19,351.3$ 8,105.1 8,247.9 6,928.8 6,997.2 1,090.0 1,096.7 1,091.5 1,101.6

546.1 549.2 647.8 659.8 53.3 60.5 18.5 27.3 91.3 98.3 18.3 22.8

29,830.8$ 30,106.0$ 28,067.2$ 28,160.0$

($ in millions) Apartment December 31, 2006 Office Warehouse Retail & Other TotalNew England 176.4$ 15.3$ 99.6$ 84.2$ 375.5$ Middle Atlantic 196.3 328.4 359.2 186.0 1,069.9 East North Central 97.4 245.9 614.4 513.4 1,471.1 West North Central 40.2 90.2 65.9 138.3 334.6 South Atlantic 203.7 489.5 886.4 667.5 2,247.1 East South Central 34.6 58.0 127.8 164.1 384.5 West South Central 52.9 151.6 177.6 232.4 614.5 Mountain 114.7 136.8 206.4 354.9 812.8 Pacific 346.1 431.1 468.8 366.9 1,612.9

Subtotal - Principal 1,262.3$ 1,946.8$ 3,006.1$ 2,707.7$ 8,922.9$ Valuation allowance (36.0) Unamortized premium 17.8 Change in fair value of hedged mortgage loans and commitments 5.1

Total mortgage loans on real estate, net 8,909.8$

Apartment December 31, 2005 Office Warehouse Retail & Other TotalNew England 230.0$ 15.7$ 112.0$ 53.7$ 411.4$ Middle Atlantic 211.0 370.2 395.6 119.8 1,096.6 East North Central 316.5 271.2 583.4 493.4 1,664.5 West North Central 75.0 87.4 68.2 81.3 311.9 South Atlantic 211.0 404.5 842.4 690.1 2,148.0 East South Central 39.3 79.7 123.4 121.0 363.4 West South Central 199.4 155.0 149.8 232.0 736.2 Mountain 189.7 120.0 222.3 258.8 790.8 Pacific 404.5 486.0 409.6 324.0 1,624.1

Subtotal - Principal 1,876.4$ 1,989.7$ 2,906.7$ 2,374.1$ 9,146.9$ Valuation allowance (34.0) Unamortized premium 35.9 Change in fair value of hedged mortgage loans and commitments (0.2)

Total mortgage loans on real estate, net 9,148.6$

Mortgage Loans by Region and Property Type

6 In or near defaultTotal fixed maturities

December 31, 2006

1 Aaa/Aa/A 2 Baa 3 Ba

Credit Quality of Fixed Maturity Securities Available-For-Sale

4 B 5 Caa and lower

December 31, 2005

20


Deferred Policy Acquisition Costs

Individual Retirement Individual Corporate($ in millions) Investments Plans Protection and Other TotalYear Ended December 31, 2006Balance, beginning of period 1,997.7$ 294.8$ 1,410.9$ (18.0)$ 3,685.4$

Capitalization 350.8 36.8 200.8 - 588.4 Amortization (352.7) (38.3) (81.6) - (472.6) Adjustments to unrealized gains and losses on securities available-for-sale and other - - - 49.8 49.8

Balance, end of period 1,995.8$ 293.3$ 1,530.1$ 31.8$ 3,851.0$

Year Ended December 31, 2005Balance, beginning of period 2,080.6$ 305.0$ 1,312.6$ (137.1)$ 3,561.1$

Capitalization 250.7 37.2 201.1 - 489.0 Amortization (329.3) (47.4) (102.7) - (479.4) Adjustments to unrealized gains and losses on - securities available-for-sale and other (4.3) - (0.1) 119.1 114.7

Balance, end of period 1,997.7$ 294.8$ 1,410.9$ (18.0)$ 3,685.4$


Capitalization 293.6 41.5 204.1 - 539.2 Amortization (276.1) (39.9) (114.4) - (430.4) Adjustments to unrealized gains and losses on securities available-for-sale and other 11.0 - - 111.4 122.4



Capitalization 376.8 43.8 199.5 - 620.1 Amortization (228.3) (45.7) (120.6) - (394.6) Adjustments to unrealized gains and losses on securities available-for-sale and other 18.0 - - 59.5 77.5



Capitalization 414.7 49.2 204.7 - 668.6 Amortization (528.2) (53.7) (92.7) - (674.6) Adjustments to unrealized gains and losses on securities available-for-sale and other 22.5 - 9.8 (213.1) (180.8)


21


($ in millions)

Account DAC Annualized Account DAC AnnualizedYear Values Balance Lapse Rate Values Balance Lapse Rate

1 4,633.0$ 285.2$ 3,000.3$ 200.6$ 2 3,194.1 174.3 3,521.0 212.8 3 3,639.6 186.5 4,361.5 224.6 4 4,425.8 191.2 4,519.7 199.0 5 4,584.6 165.4 4,752.0 210.0 6 4,697.1 169.4 4,662.3 189.1 7 4,599.3 153.3 3,569.7 128.5 8 2,862.0 97.0 3,006.1 96.8 9 2,514.9 89.7 2,169.5 84.9 10 1,934.5 84.0 2,029.1 75.5

11-15 5,635.7 233.9 4,386.3 168.0 16-20 783.7 30.1 512.5 19.4 21-27 300.5 2.3 306.0 2.2

Total: 43,804.8$ 1,862.3$ 14.6% 40,796.0$ 1,811.4$ 13.5%


1 3,748.9$ 253.1$ 4,500.3$ 310.6$ 2 4,649.3 259.9 4,638.5 284.0 3 4,844.1 239.2 5,014.8 283.3 4 5,106.3 243.4 4,864.6 275.1 5 4,917.0 206.2 3,886.5 170.6 6 3,813.5 148.0 3,833.3 140.9 7 3,708.0 121.0 3,114.6 116.5 8 2,624.7 101.5 2,685.2 72.8 9 2,315.0 84.8 1,877.4 52.3 10 1,690.1 62.5 1,415.8 35.7

11-15 3,427.8 132.6 2,493.5 61.0 16-20 316.6 13.6 186.4 3.5 21-27 320.6 2.3 325.0 1.2

Total: 41,481.9$ 1,868.1$ 12.5% 38,835.9$ 1,807.5$ 12.5%


1 3,922.1$ 310.3$ 5,322.0$ 322.4$ 2 4,442.5 312.6 5,585.8 371.5 3 4,327.7 303.1 4,473.6 260.9 4 3,564.3 190.1 4,473.6 235.5 5 3,579.4 158.0 3,836.3 215.1 6 2,996.5 132.1 3,678.8 136.2 7 2,817.0 83.2 2,845.0 100.7 8 1,956.2 59.9 2,030.2 69.8 9 1,410.6 40.9 1,330.4 47.5 10 937.1 27.5 977.7 33.7

11-15 1,590.1 43.9 1,292.4 44.5 16-20 143.9 3.0 184.8 5.5 21-25 194.5 1.7 315.1 0.5

Total: 31,881.9$ 1,666.3$ 14.4% 36,345.7$ 1,843.8$ 12.6%

December 31, 2001

Individual Variable Annuity Deferred Acquisition Costs

December 31, 2006 December 31, 2005

December 31, 2003

December 31, 2002

December 31, 2004

22


Individual Retirement Individual Corporate($ in millions) Investments Plans Protection and Other TotalYear Ended December 31, 2006Balance, beginning of period 29.4$ 15.7$ 398.2$ 6.4$ 449.7$

Amortization (6.5) (6.9) (32.6) - (46.0) Adjustments to realized and unrealized gains and losses on securities available-for-sale (8.8) (3.9) 1.9 (0.2) (11.0)

Balance, end of period 14.1$ 4.9$ 367.5$ 6.2$ 392.7$

Year Ended December 31, 2005Balance, beginning of period 27.1$ 16.5$ 430.4$ 6.4$ 480.4$

Amortization (7.2) (3.5) (34.2) (0.1) (45.0) Adjustments to realized and unrealized gains and losses on securities available-for-sale 9.5 2.7 2.0 0.1 14.3



Amortization (7.5) (4.7) (40.1) - (52.3) Adjustments to realized and unrealized gains and losses on securities available-for-sale 1.6 1.6 6.9 (0.4) 9.7



Amortization (6.3) (2.0) (38.0) (0.1) (46.4) Adjustments to realized and unrealized gains and losses on securities available-for-sale and other (2.6) (1.5) 3.9 0.3 0.1


Value of Business Acquired

23


($ in millions)

Account AccountGMDB Benefit Type Values Gross Net Values Gross Net

Return of premium 9,243.7$ 42.9$ 17.1$ 9,272.7$ 83.3$ 32.5$ Reset 17,752.7 177.3 26.0 17,130.4 388.0 61.8 Ratchet 13,651.6 195.2 17.4 11,233.2 410.3 31.6 Roll-up 568.1 87.7 5.7 629.1 143.8 8.4 Combo 2,588.7 30.1 14.9 2,530.6 45.7 22.3

Subtotal 43,804.8$ 533.2 81.1 40,796.0$ 1,071.1 156.6

Earnings enhancement 477.8$ 41.1$ 41.1$ 418.5$ 27.6$ 27.6$ Total 574.3$ 122.2$ 1,098.7$ 184.2$

GAAP GMDB reserves 29.6$ 27.2$ Statutory GMDB reserves 27.3$ 38.4$


Return of premium 9,848.6$ 136.8$ 54.1$ 9,713.8$ 247.8$ 199.8$ Reset 18,084.1 751.7 158.1 17,834.0 1,313.4 579.6 Ratchet 10,322.1 644.5 46.3 8,433.7 1,008.3 147.8 Roll-up 707.2 167.5 9.7 725.7 195.8 22.3 Combo 2,519.9 39.8 19.2 2,128.7 42.0 39.6

Subtotal 41,481.9$ 1,740.3 287.4 38,835.9$ 2,807.3 989.1

Earnings enhancement 310.1$ 18.0$ 18.0$ 314.1$ 10.9$ 10.9$ Total 1,758.3$ 305.4$ 2,818.2$ 1,000.0$


Return of premium 8,743.2$ 832.0$ 736.7$ 11,410.6$ 471.9$ 407.2$ Reset 15,272.2 3,532.5 1,842.1 17,377.3 1,601.2 700.1 Ratchet 6,087.5 1,977.1 411.2 6,245.9 1,150.3 153.7 Roll-up 675.0 290.9 34.3 817.7 148.0 17.3 Combo 1,104.0 114.8 111.6 494.2 17.0 15.5

Subtotal 31,881.9$ 6,747.3 3,135.9 36,345.7$ 3,388.4 1,293.8

Earnings enhancement 213.1$ 1.7$ 1.7$ 88.6$ 2.1$ 2.1$ Total 6,749.0$ 3,137.6$ 3,390.5$ 1,295.9$

Wghtd. Avg.GMDB Benefit Type 0 to 50 51 to 60 61 to 70 71 to 80 Over 81 Total Attained Age

Return of premium 4.4$ 6.3$ 4.5$ 1.2$ 0.7$ 17.1$ 60 Reset 2.4 6.3 8.5 7.1 1.7 26.0 63 Ratchet 1.8 4.1 6.1 3.5 1.9 17.4 65 Roll-up 0.4 1.0 1.7 1.6 1.0 5.7 70 Combo 1.1 2.9 4.7 4.1 2.1 14.9 68

Subtotal 10.1 20.6 25.5 17.5 7.4 81.1 64

Earnings enhancement 5.3 12.4 17.3 6.1 - 41.1 61Total 15.4$ 33.0$ 42.8$ 23.6$ 7.4$ 122.2$ 63

Definition of GMDB Benefit TypesReturn of premium: provides the greater of account value or total deposits made to the contract less any partial withdrawals and assessments, which is referred to as "net premiums." In general, there is no lock in age for this benefit, however for some contracts, the GMDB reverts to the account value at a specified age, typically age 75.Reset: provides the greater of a return of premium death benefit or the most recent five-year anniversary (prior to lock in age) account value adjusted for withdrawals. For most contracts, this GMDB locks in at age 86 or 90 and for others the GMDB reverts to the account value at age 75, 85, 86 or 90.Ratchet: provides the greater of a return of premium death benefit or the highest "anniversary" account value (prior to age 86) adjusted for withdrawals. Currently, there are three versions of ratchet, with the difference being based on the definition of anniversary: monthaversary - evaluated monthly, annual - evaluated annually, and five-year - evaluated every fifth year. The majority of the business is an annual ratchet.Rollup: provides the greater of a return of premium death benefit or premiums adjusted for withdrawals accumulated at generally 5% simple interest up to the earlier of age 86 or 200% of adjusted premiums. There are two variations of this benefit. For certain contracts, this GMDB locks in at age 86 and for others the GMDB reverts to the account value at age 75.Combo: provides the greater of annual ratchet death benefit or the rollup death benefit. This benefit locks in at either age 81 or 86.Earnings enhancement: provides an enhancement to the death benefit that is a specified percentage of the adjusted earnings accumulated on the contract at the date of death. There are two versions of this benefit, one where the benefit expires at age 86 and a credit of 4% of account value is deposited into the contract and the second where the benefit doesn't have an end age, but has a cap on the payout and is paid upon the first death in a spousal situation. Both benefits have age limitations. This benefit is paid in addition to any other death benefits paid under the contract.

Individual Variable Annuity Guaranteed Minimum Death Benefits

December 31, 2001Net Amount at RiskNet Amount at Risk

December 31, 2003Net Amount at Risk

December 31, 2005

Net Amount at Risk, Net of Reinsurance by Benefit Type and Age at December 31, 2006

December 31, 2006Net Amount at Risk Net Amount at Risk


December 31, 2002

24


December 31, 2006

($ in millions)

Account AccountGMAB Benefit Type Values Gross Net Values Gross Net

5 Year 2,131.1$ 0.1$ 0.1$ 1,041.8$ 0.5$ 0.5$ 7 Year 1,865.7 0.1 0.1 1,103.5 0.2 0.2 10 Year 784.0 - - 595.5 0.1 0.1

Total 4,780.8$ 0.2$ 0.2$ 2,740.8$ 0.8$ 0.8$

CPPLI included in totals 2,946.4$ 0.2$ 0.2$ 939.1$ 0.6$ 0.6$

AccountGMAB Benefit Type Values Gross Net

5 Year 512.2$ 0.1$ 0.1$ 7 Year 647.5 - - 10 Year 332.4 - -

Total 1,492.1$ 0.1$ 0.1$

($ in millions)

Account AccountGMIB Benefit Type Values Gross Net Values Gross Net

Ratchet 450.6$ 0.2$ -$ 444.7$ 0.3$ -$ Roll-up 1,187.1 3.3 - 1,189.3 5.0 - Combo 0.5 - - 0.5 - -

Total 1,638.2$ 3.5$ -$ 1,634.5$ 5.3$ -$


Ratchet 439.7$ 0.7$ -$ 418.0$ 1.0$ -$ Roll-up 1,188.7 7.2 - 1,132.2 8.6 - Combo 1.0 - - 1.1 - -

Total 1,629.4$ 7.9$ -$ 1,551.3$ 9.6$ -$


Ratchet 307.8$ 4.6$ -$ 151.1$ 0.8$ -$ Roll-up 664.4 20.4 - 329.2 1.5 - Combo 0.1 - - - - -

Total 972.3$ 25.0$ -$ 480.3$ 2.3$ -$

($ in millions)

AccountGLWB Benefit Type Values Gross Net

L.INC 993.8$ -$ -$ Total 993.8$ -$ -$

Definition of Benefit Types5 Year, 7 Year, 10 Year: the waiting period required to receive the guaranteed accumulation benefit.Ratchet: provides an annuitization value equal to the greater of account value, net premiums paid or the highest one-year anniversary account value (prior to age 86) adjusted for withdrawals.Rollup: provides an annuitization value equal to the greater of account value and premiums adjusted for withdrawals accumulated at 5% compound interest up to the earlier of age 86 or 200% of adjusted premiums.Combo: provides an annuitization value equal to the greater of account value, ratchet GMIB benefit or rollup GMIB benefit.CPPLI: Capital Preservation Plus Lifetime Income is a living benefit rider that combines a GMAB feature in its first five to 10 years with a lifetime withdrawal benefit which begins upon the maturity of the GMAB and extends for the duration of the insured's life.L.INC: Lifetime Income is a living benefit rider that provides a lifetime withdrawal benefit to the insured. The withdrawal percent is based on the insured's age at the time of the first withdrawal.

Individual Variable Annuity Guaranteed Lifetime Withdrawal Benefits







Individual Variable Annuity Guaranteed Minimum Income Benefits

December 31, 2006 December 31, 2005Net Amount at Risk Net Amount at Risk

Individual Variable Annuity Guaranteed Minimum Accumulation Benefits

December 31, 2006 December 31, 2005Net Amount at Risk Net Amount at Risk

25


Individual Variable Annuity Guaranteed Minimum Death Benefit Reserve Activity

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Balance, beginning of period 24.7$ 27.2$ 26.9$ 30.2$ 31.8$

Expense provision 8.2 8.3 8.3 8.4 7.9 Net claims paid (5.7) (8.6) (5.0) (6.8) (10.1)


Individual Variable Annuity Guaranteed Minimum Accumulation Benefit Embedded Derivative Activity

($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06Balance, beginning of period 53.4$ 67.9$ 77.6$ 102.4$ 109.7$

Value of new business sold 20.7 26.8 26.0 18.2 24.2 Change in fair value (6.2) (17.1) (1.2) (10.9) (17.6)


CPPLI included in end of period balance 12.0$ 16.3$ 20.7$ 15.2$ 22.0$

Individual Fixed Annuity and Fixed Option of Variable Annuity Summary of Crediting Rate Detail as of December 31, 2006

Account Wtd. Avg. Account Wtd. Avg.($ in millions) Value Crediting Rate Value Crediting RateMinimum interest rate of 3.50% or greater -$ - 1,027.5$ 4.28%Minimum interest rate of 3.0% to 3.49% 2,130.2 4.59% 4,720.4 3.13%Minimum interest rate lower than 3.00% 848.3 3.32% 615.2 3.59%MVA with no minimum interest rate guarantee - - - -

Total 2,978.5$ 4.23% 6,363.1$ 3.36%

Account Wtd. Avg. Account Wtd. Avg.Value Crediting Rate Value Crediting Rate

Minimum interest rate of 3.50% or greater -$ - 1,027.5 4.28%Minimum interest rate of 3.0% to 3.49% - - 6,850.6 3.58%Minimum interest rate lower than 3.00% 38.3 3.91% 1,501.8 3.45%MVA with no minimum interest rate guarantee 1,586.9 2.88% 1,586.9 2.88%

Total 1,625.2$ 2.91% 10,966.8$ 3.53%

MVA & Other

ResetRatchet

Total

26


Historical Financial Highlights

($ in millions except for per share data) 2002 2003 2004 2005 2006Operating Revenues

Individual investments 1,210.4$ 1,392.8$ 1,477.4$ 1,514.5$ 1,514.3$ Retirement plans 898.8 930.5 979.5 1,041.7 1,110.9 Individual protection 1,001.9 1,348.7 1,350.1 1,348.5 1,345.5 Corporate and other 220.4 278.1 310.0 385.0 445.4

Total operating revenues 3,331.5$ 3,950.1$ 4,117.0$ 4,289.7$ 4,416.1$

Net realized gains (losses) on investments, hedging instruments and hedged items (1) (87.6) (86.3) (40.9) 18.2 (0.6)

Total revenues 3,243.9$ 3,863.8$ 4,076.1$ 4,307.9$ 4,415.5$

Pre-tax Operating Earnings (Loss)Individual investments (120.5)$ 182.9$ 234.4$ 237.0$ 210.8$ Retirement plans 142.5 152.8 180.3 187.8 216.5 Individual protection 188.1 215.5 242.7 258.2 274.8 Corporate and other 18.2 54.8 58.6 55.7 67.7

Pre-tax operating earnings 228.3$ 606.0$ 716.0$ 738.7$ 769.8$ Federal income tax expense 25.7 150.1 181.7 126.7 61.9


Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) (56.9) (56.2) (26.6) 11.9 (0.4)

Adjustment to amortization related to net realized gains (losses), net of taxes - - - (0.5) 6.3

Discontinued operations, net of taxes (1.5) (1.3) (2.3) (24.7) -

Cumulative effect of adoption of accounting principles, net of taxes - (0.6) (3.4) - -

Net income 144.2$ 397.8$ 502.0$ 598.7$ 713.8$

Per Diluted ShareNet operating earnings 1.53$ 2.99$ 3.49$ 3.98$ 4.70$

Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) (0.43) (0.37) (0.17) 0.08 -

Adjustment to amortization related to net realized gains (losses), net of taxes - - - - 0.04


Cumulative effect of adoption of accounting principles, net of taxes - - (0.02) - -

Net income 1.09$ 2.61$ 3.28$ 3.90$ 4.74$

Sales by ChannelNon-affiliated Independent broker/dealers 4,391.2$ 4,615.1$ 5,223.2$ 5,266.0$ 5,758.2$ Wirehouse and regional firms 2,204.8 1,995.0 1,992.1 1,912.5 2,433.6 Financial institutions 4,180.6 3,758.2 2,618.5 1,808.0 2,295.1 Pension plan administrators 747.4 574.8 476.1 469.0 532.8 Life specialists 510.6 387.5 382.8 382.4 580.6 Affiliated Nationwide Retirement Solutions 2,633.1 3,209.9 3,665.9 3,914.7 4,050.2 Nationwide agents 736.7 686.3 714.3 757.8 787.8 Nationwide Financial Network 274.5 793.6 760.9 658.0 698.7 The 401(k) Company 472.5 680.9 893.1 1,342.3 1,722.7 TBG Financial 146.9 160.9 184.2 275.4 226.1

Total 16,298.3$ 16,862.2$ 16,911.1$ 16,786.1$ 19,085.8$


Note: The results of operations of Cap Pro Holding, Inc., NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior years. In addition, the results of operations of The 401(k) Company are reflected as discontinued operations for 2006 and all prior years.

27


($ in millions except for per share data) 2002 2003 2004 2005 2006Balance Sheet Data

Total assets 95,560.3$ 111,088.2$ 116,950.6$ 116,159.9$ 119,411.6$

Total customer funds managed and administered 102,853.8$ 132,061.6$ 149,227.7$ 155,612.9$ 174,891.1$

Shareholder's equity Including AOCI 4,443.3$ 4,875.4$ 5,215.1$ 5,350.4$ 5,538.3$ AOCI 400.3 504.9 432.2 100.7 31.9 Excluding AOCI 4,043.0$ 4,370.5$ 4,782.9$ 5,249.7$ 5,506.4$

Net operating return on average equity excluding AOCI 6.0% 10.9% 11.7% 12.2% 13.1%

Adjusted net operating return on average equity excluding AOCI (1) 6.0% 10.9% 11.7% 11.4% 11.2%

Statutory capital and surplus 2,015.7$ 2,730.0$ 2,967.5$ 3,262.1$ 3,330.8$

Stock DataClosing Price 28.65$ 33.06$ 38.23$ 44.00$ 54.20$

Weighted average shares outstanding Basic 132.4 151.8 152.1 152.9 149.9 Diluted 132.6 152.3 152.9 153.6 150.7

Book value per share Including AOCI 29.25$ 32.10$ 34.20$ 35.08$ 37.93$ Excluding AOCI 26.62$ 28.77$ 31.36$ 34.42$ 37.72$

(1) 2005 return adjusted for $37.9 million impact of one-time tax adjustments associated with separate account dividend received deductions. 2006 return adjusted for $113.1 million of released tax reserves and associated tax-related adjustments relating to prior tax years.


Historical Financial Highlights

28


($ in millions) 2002 2003 2004 2005 2006Operating Revenues Asset fees 547.6$ 547.2$ 620.7$ 639.9$ 691.2$ Cost of insurance charges 266.5 371.3 379.7 388.5 402.0 Administrative fees 125.5 107.7 117.9 114.9 139.1 Surrender fees 85.3 94.2 104.3 98.2 83.7

Total policy charges 1,024.9 1,120.4 1,222.6 1,241.5 1,316.0

Traditional life premiums 302.3 426.2 402.7 399.9 441.5 Net investment income 1,892.5 2,198.0 2,231.7 2,343.9 2,298.5 Operating realized gains and (losses) 8.9 15.7 8.7 2.6 9.6 Other income 102.9 189.8 251.3 301.8 350.5


Benefits Interest credited 1,260.7 1,367.6 1,328.3 1,380.9 1,380.3 Life insurance and annuity benefits 392.0 581.7 548.6 574.9 646.8 Policyholder dividends 63.5 105.7 101.4 107.3 90.7

Total benefits 1,716.2 2,055.0 1,978.3 2,063.1 2,117.8

Expenses Commissions 629.0 594.9 565.4 546.7 648.4 General operating expenses 660.1 777.5 811.4 776.1 846.2 Debt extinguishment costs - - - 21.7 - Deferral of policy acquisition costs (668.6) (620.1) (539.2) (489.0) (588.4)

Subtotal 620.5 752.3 837.6 855.5 906.2


Total expenses 1,387.0 1,289.1 1,422.7 1,487.9 1,528.5


Federal income tax expense 25.7 150.1 181.7 126.7 61.9




Realized gains on sales, net of hedging 14.4 69.0 64.8 63.0 59.7 Realized losses on sales, net of hedging (9.8) (20.8) (19.5) (18.4) (48.9) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (78.6) (110.7) (67.1) (26.9) (11.0) Credit default swaps (4.2) 8.6 0.3 (4.8) (0.8) Derivatives, excluding hedging gains and losses on sales and credit default swaps 6.2 0.8 (3.4) 0.8 (0.4) Amounts credited to policyholder dividend obligation - (3.5) (4.7) (3.3) - Adjustment to VOBA amortization 15.1 0.4 3.0 1.5 1.0

Subtotal (56.9) (56.2) (26.6) 11.9 (0.4)

Adjustment to amortization related to net realized gains (losses), net of taxes - - - (0.5) 6.3


Cumulative effect of adoption of accounting principles, net of taxes - (0.6) (3.4) - -

Net income 144.2$ 397.8$ 502.0$ 598.7$ 713.8$



Historical Consolidated Earnings Trends

29


Historical Consolidated Balance Sheet

($ in millions, except per share data) 2002 2003 2004 2005 2006Assets

InvestmentsSecurities available-for-sale: Fixed maturity securities 27,754.2$ 30,787.1$ 31,516.8$ 30,106.0$ 28,160.0$ Equity securities 134.7 128.7 87.0 75.6 67.6 Trading assets - 4.9 15.9 34.4 24.3 Mortgage loans 8,486.5 8,964.7 9,267.5 9,148.6 8,909.8 Real estate 145.6 123.4 108.3 108.7 76.7 Policy loans 986.4 963.2 987.2 930.6 966.9 Other long-term investments 205.0 194.6 604.2 691.9 780.1 Short-term investments 1,420.1 1,970.3 2,009.9 2,073.2 2,215.6

Total investments 39,132.5 43,136.9 44,596.8 43,169.0 41,201.0

Cash 21.7 11.5 52.4 16.4 20.2 Accrued investment income 402.4 439.6 428.7 396.3 373.8 Deferred policy acquisition costs 3,026.9 3,329.9 3,561.1 3,685.4 3,851.0 Value of business acquired 569.3 523.0 480.4 449.7 392.7 Other intangible assets 58.7 52.3 48.7 45.6 43.6 Goodwill 399.4 406.7 382.3 364.5 359.0 Other assets 1,601.1 2,250.7 2,497.0 2,069.2 2,475.6 Assets held in separate accounts 50,348.3 60,937.6 64,903.2 65,963.8 70,694.7

Total assets 95,560.3$ 111,088.2$ 116,950.6$ 116,159.9$ 119,411.6$

Liabilities and shareholders' equityFuture policy benefits and claims 36,274.3$ 40,049.3$ 41,077.2$ 39,748.1$ 38,097.8$ Short-term debt 2.7 205.3 230.8 252.3 85.2 Long term debt 1,197.6 1,405.6 1,406.0 1,398.0 1,398.5 Other liabilities 3,294.1 3,615.0 4,118.3 3,447.3 3,597.1 Liabilities related to separate accounts 50,348.3 60,937.6 64,903.2 65,963.8 70,694.7

91,117.0 106,212.8 111,735.5 110,809.5 113,873.3

Shareholders' equity 4,443.3 4,875.4 5,215.1 5,350.4 5,538.3 Total liabilities and shareholders' equity 95,560.3$ 111,088.2$ 116,950.6$ 116,159.9$ 119,411.6$

Capital Structure

2002 2003 2004 2005 2006

Total capital, including AOCI 5,640.9$ 6,281.0$ 6,621.1$ 6,748.4$ 6,936.8$ Less AOCI 400.3 504.9 432.2 100.7 31.9 Total capital, excluding AOCI 5,240.6$ 5,776.1$ 6,188.9$ 6,647.7$ 6,904.9$

Leverage including AOCI Long-term debt--to--total capital 21.2% 22.4% 21.2% 20.7% 20.2%

Leverage excluding AOCI Long-term debt--to--total capital 22.9% 24.3% 22.7% 21.0% 20.3%

Ratio of pre-tax operating earnings before interestexpense to interest expense 4.0X 7.3X 8.0X 7.8X 8.4X

30


Individual Investments

($ in millions) 2002 2003 2004 2005 2006Operating Revenues



Net Investment IncomeGeneral account assets 717.4 886.5 895.3 895.9 806.3 Charge for invested capital (36.4) (26.1) (22.5) (26.0) (25.2)


Premiums on income products 69.4 93.4 90.8 102.9 142.5 Other income - - 0.4 1.5 2.3


Benefits Interest credited 513.2 637.5 606.1 589.1 528.3 Immediate annuity benefits 55.1 82.0 76.1 89.2 126.9 Policy benefits 61.6 78.5 63.1 66.2 75.5

Total benefits 629.9 798.0 745.3 744.5 730.7


Subtotal 169.5 177.3 214.1 196.5 213.6


Total expenses 701.0 411.9 497.7 533.0 572.8

Pre-tax operating earnings (loss) (120.5)$ 182.9$ 234.4$ 237.0$ 210.8$

Key Ratios/StatisticsAverage Account Values:

General account 10,793.7$ 15,340.9$ 16,211.1$ 15,966.7$ 14,041.3$ Separate account 30,091.0 29,170.6 34,198.8 35,600.5 37,223.3 Advisory services program - 7.8 99.1 309.3 508.1

Total average individual investment account values 40,884.7$ 44,519.3$ 50,509.0$ 51,876.5$ 51,772.7$




Total asset fees to average separate account values 1.25% 1.27% 1.27% 1.30% 1.37%


Pre-tax operating earnings (loss) to average account values (0.29%) 0.41% 0.46% 0.46% 0.41%

Pre-tax operating earnings (loss) to operating revenues (10.0%) 13.1% 15.9% 15.6% 13.9%

Average allocated capital 1,658.8$ 1,805.6$ 1,747.0$ 1,671.0$ 1,499.3$

Return on average allocated capital (2.9%) 8.2% 10.4% 13.0% 11.7%


Individual InvestmentsAccount Value Activity

($ in millions) 2002 2003 2004 2005 2006Individual Variable Annuities


Deposits 5,038.1 5,023.8 4,409.2 3,661.2 5,034.9 Withdrawals and surrenders (4,852.1) (4,347.8) (4,964.4) (5,574.2) (6,133.3)

Net flows 186.0 676.0 (555.2) (1,913.0) (1,098.4)

Investment performance/interest credited (4,852.6) 6,757.7 3,681.9 2,922.1 4,742.3 Policy charges (459.7) (437.2) (515.0) (543.4) (576.2) Benefits and other (0.6) (42.5) 34.3 9.0 (58.9) Acquisitions/(terminations), net 663.1 - - (1,160.6) -


Individual Fixed AnnuitiesBalance, beginning of period 4,250.2$ 7,338.1$ 8,630.7$ 8,902.5$ 8,041.8$

Deposits 2,392.3 1,553.4 672.9 160.9 178.2 Withdrawals and surrenders (474.4) (605.1) (753.6) (1,044.0) (1,893.8)

Net flows 1,917.9 948.3 (80.7) (883.1) (1,715.6)

Policyholder interest credited 298.6 364.8 362.7 327.7 284.4 Policy charges (3.6) (8.1) (9.9) (11.4) (10.6) Benefits and other (2.8) (12.4) (0.3) (4.3) (63.9) Acquisitions/(terminations), net 877.8 - - (289.6) -


Income Products 1,676.5$ 1,840.7$ 1,901.6$ 1,978.3$ 2,025.6$ Advisory Services Program -$ 26.6$ 195.9$ 411.5$ 597.1$


Historical Earnings Trends

31


December 31, 2006

Individual Investments


BEST of AMERICA products 25,880.2$ 31,058.5$ 33,573.0$ 32,937.0$ 36,106.8$ Private label annuities 5,339.5 7,123.4 7,350.9 7,398.9 7,319.7 Nationwide Financial Network and other 662.2 654.0 558.0 460.1 378.3


Individual Fixed Annuities 7,338.1$ 8,630.7$ 8,902.5$ 8,041.8$ 6,536.1$ Income Products 1,676.5$ 1,840.7$ 1,901.6$ 1,978.3$ 2,025.6$ Advisory Services Program -$ 26.6$ 195.9$ 411.5$ 597.1$


Individual InvestmentsSales by Product


BEST of AMERICA products 3,824.7$ 4,066.8$ 3,674.3$ 3,135.5$ 4,390.9$ Private label annuities 795.3 659.3 449.0 346.6 356.6 Nationwide Financial Network and other 2.5 9.3 7.0 4.7 3.6


Individual Fixed Annuities 2,564.6$ 1,824.5$ 858.8$ 194.4$ 186.5$ Income Products 143.2$ 153.2$ 168.4$ 196.7$ 230.7$ Advisory Services Program -$ 25.7$ 181.0$ 231.3$ 222.8$

Total individual investment sales 7,330.3$ 6,738.8$ 5,338.5$ 4,109.2$ 5,391.1$

Individual InvestmentsSales by Channel


Non-affiliated Independent broker/dealers 1,750.1$ 1,683.7$ 1,534.6$ 1,304.3$ 1,606.5$ Wirehouse and regional firms 1,264.1 1,086.4 991.6 821.9 1,171.8 Financial institutions 1,313.9 1,657.0 1,270.8 1,031.5 1,558.8 Life specialists - 3.4 2.3 0.3 0.8 Affiliated Nationwide Retirement Solutions - - - - - Nationwide agents 214.8 185.3 224.6 230.3 245.1 Nationwide Financial Network 79.6 119.6 106.4 98.5 168.1


Individual Fixed AnnuitiesNon-affiliated Independent broker/dealers 47.3$ 48.7$ 17.1$ 7.0$ 13.4$ Wirehouse and regional firms 133.0 58.0 20.6 8.2 9.8 Financial institutions 2,224.0 1,628.7 774.3 129.4 72.4 Pension plan administrators 3.4 - - - - Affiliated Nationwide Retirement Solutions 13.2 - - - - Nationwide agents 126.0 60.7 38.6 44.3 79.7 Nationwide Financial Network 17.7 28.4 8.2 5.5 11.2

Total individual fixed annuities 2,564.6$ 1,824.5$ 858.8$ 194.4$ 186.5$

Income ProductsNon-affiliated Independent broker/dealers 61.9$ 75.6$ 70.8$ 76.9$ 98.1$ Wirehouse and regional firms 14.2 44.9 52.2 63.4 84.7 Financial institutions 65.4 15.5 23.4 29.2 30.7 Pension plan administrators - - - - - Affiliated Nationwide Retirement Solutions - - - - - Nationwide agents 1.7 7.5 8.7 12.7 11.6 Nationwide Financial Network - 9.7 13.3 14.5 5.6

Total income products 143.2$ 153.2$ 168.4$ 196.7$ 230.7$

Advisory Services ProgramNon-affiliated Independent broker/dealers -$ 21.2$ 160.0$ 205.3$ 180.5$ Wirehouse and regional firms - - - - - Financial institutions - 3.0 8.9 8.1 15.5 Pension plan administrators - - - - - Affiliated Nationwide Financial Network - 1.5 12.1 17.9 26.8

Total advisory services program -$ 25.7$ 181.0$ 231.3$ 222.8$

Total individual investment sales 7,330.3$ 6,738.8$ 5,338.5$ 4,109.2$ 5,391.1$

Account Values by Product

32


Retirement Plans




Net investment income 655.3 662.9 647.6 661.4 652.2 Other income 69.4 106.2 160.1 225.6 284.2

Total operating revenues 898.8 930.5 979.5 1,041.7 1,110.9

Benefits Interest credited 467.8 458.9 446.1 455.0 451.6


Subtotal 235.1 271.1 308.5 348.0 397.6

Amortization of policy acquisition costs 53.7 45.7 39.9 47.4 38.3 Amortization of value of business acquired (0.3) 2.0 4.7 3.5 6.9

Total expenses 288.5 318.8 353.1 398.9 442.8


Key Ratios/StatisticsAverage Account Values:

General account 8,888.5$ 9,786.0$ 10,175.6$ 10,881.2$ 11,093.0$ Separate account 19,505.3 18,743.7 20,287.9 19,792.0 18,512.4 Non insurance assets 2,142.2 4,312.4 8,315.6 12,500.3 16,515.0 Administration only 14,833.4 22,590.3 30,078.1 36,217.3 42,854.4

Total average retirement plan account values 45,369.4$ 55,432.4$ 68,857.2$ 79,390.8$ 88,974.8$




Total asset fees to average separate account values 0.78% 0.78% 0.74% 0.70% 0.72%



Pre-tax operating earnings to operating revenues 15.8% 16.4% 18.4% 18.0% 19.5%

Average allocated capital 611.7$ 689.2$ 724.4$ 773.9$ 815.1$


Retirement PlansAccount Value Activity

($ in millions) 2002 2003 2004 2005 2006Private Sector Pension Plans



Net flows 931.9 1,103.9 1,303.6 1,624.5 1,298.2

Investment performance/interest credited (2,244.4) 4,837.0 3,688.5 3,020.4 6,291.4 Policy charges and other (150.9) (196.6) (198.0) (216.5) (231.7) Net, case acquisitions/(terminations) 706.4 1,947.4 3,263.0 742.1 3,202.7 Acquired business 1,531.2 - - - -


Public Sector Pension PlansBalance, beginning of period 26,076.2$ 23,537.6$ 34,545.4$ 38,925.2$ 40,092.0$


Net flows 499.8 1,300.6 1,394.6 1,242.7 1,605.6

Investment performance/interest credited (2,205.4) 4,781.0 2,869.6 2,577.1 3,802.9 Policy charges and other (62.3) (57.6) (65.8) (69.4) (94.8) Net, case acquisitions/(terminations) (770.7) 4,983.8 181.4 (2,583.6) (1,453.9)




33





The 401(k) Company 3,817.2 6,889.7 11,232.9 13,147.7 20,821.8 Nationwide Financial Network products 1,494.5 1,584.1 1,483.7 1,378.4 1,268.2 Nationwide employee and agent benefit plans 3,954.2 4,530.2 4,985.3 5,504.2 4,435.6 Other 613.7 644.5 629.9 604.8 550.3





Retirement PlansSales by Product




The 401(k) Company 472.5 681.0 893.1 1,342.3 1,722.7 Nationwide Financial Network products 95.4 366.4 335.8 205.9 188.2 Other 46.8 31.0 28.1 75.8 69.4





Retirement PlansSales by Channel


Non-affiliated Independent broker/dealers 2,243.0$ 2,534.7$ 3,154.4$ 3,412.0$ 3,594.0$ Wirehouse and regional firms 726.5 742.2 863.7 953.7 1,104.7 Financial institutions 519.0 411.4 493.3 551.2 559.8 Pension plan administrators 744.0 574.8 476.1 469.0 532.8 Affiliated Nationwide Retirement Solutions 38.1 32.5 28.8 33.0 32.0 Nationwide agents 45.6 58.1 71.2 95.5 80.3 Nationwide Financial Network 54.2 188.9 188.1 113.3 88.2 The 401(k) Company 472.5 680.9 893.1 1,342.3 1,722.7


Public Sector Pension Plans Nationwide Retirement Solutions 2,581.8$ 3,177.4$ 3,637.1$ 3,881.7$ 4,018.2$


Account Values by ProductRetirement Plans

34


Individual Protection






Traditional life premiums 232.9 332.8 311.9 297.0 299.0 Other income 16.5 33.3 32.9 29.8 25.3



Total benefits 527.0 720.2 700.2 717.5 726.8


Subtotal 182.0 254.4 252.8 235.6 229.1

Amortization of policy acquisition costs 92.7 120.6 114.4 102.7 81.6 Amortization of value of business acquired 12.2 38.0 40.1 34.2 32.6 Interest expense on debt (0.1) - (0.1) 0.3 0.6

Total expenses 286.8 413.0 407.2 372.8 343.9


Key Ratios/StatisticsGeneral operating expenses to operating revenues 23.2% 23.6% 23.3% 22.7% 22.2%Pre-tax operating earnings to operating revenues 18.8% 16.0% 18.0% 19.1% 20.4%Average allocated capital 1,224.2$ 1,722.4$ 1,731.1$ 1,788.9$ 1,849.2$ Return on average allocated capital 10.4% 8.4% 9.5% 10.2% 10.3%


Individual ProtectionPolicy Reserves

($ in millions) 2002 2003 2004 2005 2006Individual investment life 3,514.8$ 4,443.8$ 4,962.1$ 5,329.5$ 5,842.5$ Corporate investment life - excluding experience rated BOLI 3,652.8 4,401.5 5,063.0 5,613.8 6,600.9 Corporate investment life - experience rated BOLI - - 381.1 1,130.8 1,913.5


Traditional life 4,154.9 4,155.0 4,278.9 4,225.2 4,170.9 Universal life 836.4 896.8 997.9 1,089.3 1,159.0


Total individual protection policy reserves 12,158.9$ 13,897.1$ 15,683.0$ 17,388.6$ 19,686.8$

Individual ProtectionInsurance In Force

($ in millions) 2002 2003 2004 2005 2006Individual investment life 55,581.0$ 56,478.4$ 56,836.7$ 57,021.7$ 57,536.7$ Corporate investment life - excluding experience rated BOLI 8,387.1 9,263.3 9,774.3 10,305.0 11,451.7 Corporate investment life - experience rated BOLI - - 1,129.8 13,330.5 13,312.7




Total individual protection insurance in force 106,849.0$ 107,820.3$ 109,225.7$ 126,361.1$ 133,312.7$


35


Individual Protection

($ in millions) 2002 2003 2004 2005 2006BEST of AMERICA Variable Life Series

First year sales 229.7$ 131.1$ 131.7$ 121.9$ 138.0$ Renewal sales 288.5 304.3 307.9 304.1 299.3

Total BEST of AMERICA variable life series 518.2 435.4 439.6 426.0 437.3

Nationwide Financial Network Variable Life ProductsFirst year sales 13.6 35.1 32.0 24.0 21.0 Renewal sales 55.0 229.1 223.8 205.0 180.7

Total Nationwide Financial Network variable life products 68.6 264.2 255.8 229.0 201.7

Corporate Owned Life Insurance (COLI)First year sales 247.6 173.2 157.0 227.8 396.6 Renewal sales 409.9 371.8 407.5 429.7 409.3

Total COLI 657.5 545.0 564.5 657.5 805.9

Traditional/Universal lifeFirst year sales 40.1 77.6 114.6 111.4 102.6 Renewal sales 258.9 400.3 392.3 401.3 414.5

Total traditional/universal life 299.0 477.9 506.9 512.7 517.1

Total individual protection sales 1,543.3$ 1,722.5$ 1,766.8$ 1,825.2$ 1,962.0$

Individual ProtectionSales by Channel

($ in millions) 2002 2003 2004 2005 2006Non-affiliated Independent broker/dealers 288.9$ 251.2$ 286.3$ 260.5$ 265.7$ Wirehouse and regional firms 67.0 63.5 64.0 65.3 62.6 Financial institutions 58.3 42.6 47.8 58.6 57.9 Life specialists 510.6 384.1 380.5 382.1 579.8 Affiliated Nationwide agents 348.6 374.7 371.2 375.0 371.1 Nationwide Financial Network 123.0 445.5 432.8 408.3 398.8 TBG Financial 146.9 160.9 184.2 275.4 226.1

Total individual protection sales 1,543.3$ 1,722.5$ 1,766.8$ 1,825.2$ 1,962.0$

Sales by Product

36


Investment Life






Other income 16.5 33.3 32.9 29.8 25.3 - -


BenefitsInterest credited 115.0 120.7 117.0 116.3 112.4 Life benefits 82.2 118.2 128.1 128.4 141.8

Total benefits 197.2 238.9 245.1 244.7 254.2


Subtotal 106.7 149.6 144.3 131.6 129.2

Amortization of policy acquisition costs 67.0 91.7 85.1 85.7 80.2 Amortization of value of business acquired 12.5 27.4 22.5 25.1 23.5 Interest expense on debt (0.1) - (0.1) 0.3 0.6

Total expenses 186.1 268.7 251.8 242.7 233.5


Key Ratios/Statistics

Cost of insurance per $1,000 of average net amount at risk (1) 5.86$ 5.84$ 5.88$ 6.01$ 6.10$ Life benefits per $1,000 of average net amount at risk (1) 2.10$ 2.08$ 2.25$ 2.28$ 2.51$ General operating expenses to operating revenues 30.6% 32.4% 30.2% 27.5% 27.0%Pre-tax operating earnings to operating revenues 21.8% 19.5% 22.6% 25.1% 23.5%Average allocated capital 819.0$ 1,143.4$ 1,191.5$ 1,246.1$ 1,273.2$ Return on average allocated capital 9.0% 7.5% 8.5% 9.7% 8.5%

(1) Excludes experience rated BOLI corporate investment life.

Investment LifePolicy Reserve Activity

($ in millions) 2002 2003 2004 2005 2006Balance, beginning of period 5,440.5$ 7,167.6$ 8,845.3$ 10,406.2$ 12,074.1$

Deposits 1,303.5 1,242.4 1,642.7 2,153.8 2,208.6 Withdrawals and surrenders (198.5) (464.4) (467.4) (780.8) (576.7)

Net flows 1,105.0 778.0 1,175.3 1,373.0 1,631.9

Investment performance/interest credited (405.2) 1,357.0 842.8 731.6 1,290.4 Policy charges (343.5) (468.0) (478.0) (481.4) (477.9) Benefits and other 20.0 10.7 20.8 46.2 (161.7) Acquired business 1,350.8 - - (1.5) - Balance, end of period 7,167.6$ 8,845.3$ 10,406.2$ 12,074.1$ 14,356.8$

37


Fixed Life


Administrative fees 9.1$ 11.2$ 13.9$ 14.3$ 15.0$ Surrender fees 1.0 0.8 0.8 1.6 2.4 Cost of insurance 37.4 40.1 44.8 49.5 57.7


Net investment income 231.6 333.4 337.0 335.5 333.7 Traditional life premiums 232.9 332.8 311.9 297.0 299.0



Total benefits 329.8 481.3 455.1 472.8 472.6


Subtotal 75.3 104.8 108.5 104.0 99.9

Amortization of policy acquisition costs 25.7 28.9 29.3 17.0 1.4 Amortization of value of business acquired (0.3) 10.6 17.6 9.1 9.1

Total expenses 100.7 144.3 155.4 130.1 110.4


Key Ratios/StatisticsLife benefits per $1,000 of average life insurance in force 5.56$ 7.15$ 6.77$ 6.70$ 6.25$ General operating expenses to operating revenues 16.2% 15.9% 17.1% 18.3% 18.0%Pre-tax operating earnings to operating revenues 15.9% 12.9% 13.8% 13.6% 17.6%Average allocated capital 405.3$ 579.0$ 539.6$ 542.9$ 576.1$ Return on average allocated capital 13.0% 10.4% 11.8% 11.4% 14.1%

Fixed LifePolicy Reserve Activity

($ in millions) 2002 2003 2004 2005 2006Traditional/Universal Life


Deposits 294.0 441.0 457.6 448.6 455.9 Withdrawals and surrenders (128.0) (188.9) (196.9) (214.0) (214.5)

Net flows 166.0 252.1 260.7 234.6 241.4

Interest credited 73.2 72.6 72.4 74.4 83.9 Policy charges (47.5) (52.1) (59.5) (65.4) (74.8) Benefits and other (99.4) (212.1) (48.6) (205.9) (235.1) Acquired business 2,240.3 - - - -



38



39


Corporate and Other


Net investment income General account assets 200.1$ 219.0$ 247.6$ 337.6$ 398.5$ Periodic net coupon settlements on non-qualifying derivatives (5.6) (6.9) (4.2) (0.1) (1.4)


Realized gain on securitizations - - - - - Operating realized gains (losses) 8.9 15.7 8.7 2.6 9.6 Other income 17.0 50.3 57.9 44.9 38.7


BenefitsInterest credited Products 88.2 69.1 84.2 144.9 208.7 Periodic net coupon settlements on non-qualifying derivatives 3.3 8.8 2.5 1.2 -

Total benefits 91.5 77.9 86.7 146.1 208.7

ExpensesCommissions 7.7 21.0 23.8 25.6 25.5 General operating expenses 26.2 28.5 38.4 28.1 40.4 Amortization of value of business acquired - 0.1 - 0.1 - Debt extinguishment costs - - - 21.7 - Interest expense on debt 76.8 95.8 102.5 107.7 103.1

Total expenses 110.7 145.4 164.7 183.2 169.0

Pre-tax operating earnings (loss) 18.2$ 54.8$ 58.6$ 55.7$ 67.7$

Note: The results of operations of Cap Pro Holding, Inc. and NFS Bermuda are reflected as discontinued operations for 2005 and all prior years.

Medium Term Notes

($ in millions) 2002 2003 2004 2005 2006Key Ratios/Statistics

Average Account Values: General account 3,903.0$ 4,442.8$ 4,647.6$ 4,124.0$ 4,147.4$




Account Value ActivityBalance, beginning of period 3,128.1$ 4,273.6$ 4,606.3$ 4,401.6$ 3,998.2$

Deposits 1,175.0 725.0 900.0 900.0 1,775.0 Maturities - (389.7) (1,115.2) (1,305.4) (1,180.3)

Net flows 1,175.0 335.3 (215.2) (405.4) 594.7

Interest credited and amortization 88.8 69.6 88.4 151.2 213.4 Other benefits - interest payments (118.3) (72.2) (77.9) (149.2) (206.8) Balance, end of period 4,273.6$ 4,606.3$ 4,401.6$ 3,998.2$ 4,599.5$


40


Glossary

Advisory services program - Investment products, including mutual funds, separately managed accounts and variable annuities, provided with advice services, such as asset allocation profiling, through an asset-based fee compensation model.

Allocated capital - A non-GAAP financial measure that is calculated by adding target surplus (calculated as 225% of NAIC defined risk based capital), to the following after-tax amounts: unamortized DAC, the difference between statutory benefit reserves and GAAP benefit reserves, the difference between GAAP invested assets and statutory invested assets, unamortized VOBA, unamortized deferred software costs, unamortized intangible assets, unamortized goodwill, unamortized debt issue costs, unamortized deferred revenue, less deferred premiums.

Annuity - A contract that provides a periodic stream of cash flows at regular intervals for a specified period of time, such as number of years or for life.

Asset fees to average separate account values - A financial measure that is calculated by dividing asset fees by average separate account values.

Average allocated capital - A non-GAAP financial measure that is calculated by taking the mean average of the beginning and ending allocated capital amounts of a quarter for a quarterly average, or the mean average of the beginning of the year allocated capital amount and the ending allocated capital amounts for each of the four quarters for a yearly average.

Average equity - A non-GAAP financial measure that is calculated by taking the mean average of the beginning and ending shareholder’s equity, excluding accumulated other comprehensive income for a quarterly average, or the mean average of the beginning of the year shareholder’s equity excluding accumulated other comprehensive income and the ending shareholder’s equity, excluding accumulated other comprehensive income for each of the four quarters for a yearly average.

Average in force - A metric that is calculated by taking the mean average of the beginning and ending in force amounts of a quarter for a quarterly average, or the mean average of the beginning of the year in force amount and the ending in force amounts for each of the four quarters for a yearly average.

BOLI (Bank Owned Life Insurance) - Generally refers to a large single premium purchase of a Modified Endowment Contract to informally fund a block of employee benefit liabilities.

Book value per share excluding accumulated other comprehensive income - A non-GAAP financial measure that is calculated by adjusting book value to exclude accumulated other comprehensive income and then dividing the result by the number of shares outstanding on the date indicated.

COLI (Corporate Owned Life Insurance) - Broadly describes the use of life insurance to informally fund a block of employee benefits. In its truest form refers to corporate owned life insurance but could also refer to other ownership arrangements such as split-dollar.

Cost of Insurance per $1,000 of average net amount at risk - A non-GAAP financial measure that is calculated by annualizing the cost of insurance and dividing by the net amount at risk divided by one thousand.

Credited Rate - A financial measure that is calculated by dividing interest credited by average general account values.

Deferred Annuity - An annuity that can be paid either with a single premium or a series of installments, providing for the income payments to begin at some future date.

Deferred Compensation Plan - A benefit plan that allows an employee to save pre-tax dollars. Many are set up similar to a 401(k) plan, including multiple investment options, but without regulated limits on the amount that can be deposited.

41


Glossary

Deferred Policy Acquisition Costs - The unamortized policy acquisition costs which are capitalized and charged to expense in proportion to premiums or estimated gross profits depending on the type of underlying contract. See Policy Acquisition Costs.

Defined Benefit Plan - A qualified pension plan under Section 401 of the Internal Revenue code which defines the retirement benefit to plan participants. The definition of the retirement benefit may include such variables as age, length of service, and compensation, but it would not reflect the investment experience of the assets held to fund these benefits.

Defined Contribution Plan - A benefit plan under which contributions are fixed in advance by formula, and benefits to retiring employees may vary.

Deposits - Premiums received for interest sensitive life insurance, annuities or life insurance products.

Dollar Cost Averaging - Paying a fixed amount of premium at regular intervals regardless of the unit values of the selected variable accounts or the current interest rate on new premiums paid into the guaranteed account.

Earned Rate - A financial measure that is calculated by dividing net investment income by average general account values.

Fixed Annuity - An annuity contract in which premiums paid are credited with a fixed rate of return by the life insurance company.

GAAP - Refers to accounting principles generally accepted in the United States of America.

General Account - An undivided account in which all investments are held that are not held in the separate account.

General operating expenses to average account values - A GAAP financial measure that is calculated by dividing general operating expenses by average account values.

Group Annuity - A pension plan providing annuities at retirement to a group of people under a master contract. It usually is issued to an employer for the benefit of employees.

Immediate Annuity - An annuity providing for payment to begin immediately after a single premium is paid.

Internal Replacement - Transaction whereby a policyholder's existing insurance product or investment contract is replaced with a similar product issued by the same entity.

Interest spread on average general account assets - A financial measure that is calculated by subtracting the credited rate from the earned rate.

Lapse - Termination of a policy because of failure to pay the premium.

Leverage, excluding AOCI - A non-GAAP financial measure that is calculated by dividing long-term debt by total capital, excluding accumulated other comprehensive income (AOCI).

Leverage, including AOCI - A financial measure that is calculated by dividing long-term debt by total capital.

Life benefits per $1,000 of average net amount at risk - A metric that is calculated by annualizing the life insurance benefit amount and dividing by the average net amount at risk divided by one thousand, excluding separate account corporate investment life business.

Life benefits per $1,000 of average in force - A metric that is calculated by annualizing the life insurance benefit amount and dividing by the average in force amount divided by one thousand, excluding separate account corporate investment life business.

42


Glossary

Life Insurance In Force - The sum of the face amounts, plus dividend additions, of life insurance policies outstanding at a given time.

Nationwide Financial Network - Refers to the affiliated distribution channel that was formerly referred to as Nationwide Provident Producers.

Net Amount at Risk - Insurance in force less accumulated account value. Pertains to investment life products and is the amount for which cost of life insurance is assessed.

Net operating earnings - A non-GAAP financial measure that is calculated by adjusting net income to exclude net realized gains and losses on investments not related to operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations), hedging instruments and hedged items, adjustment to amortization related to net realized gains and losses, discontinued operations and cumulative effect of adoption of accounting principles, if any, all net of tax.

Net operating earnings per diluted share - A non-GAAP financial measure that is calculated by dividing net operating earnings by the number of weighted average diluted shares outstanding for the period indicated.

Non-GAAP financial measures - Key performance indicators used by management that have not been calculated in accordance with GAAP. None of these non-GAAP financial measures should be viewed as substitutes for any GAAP financial measures.

Operating realized gains (losses) - A non-GAAP financial measure that represents net realized gains (losses) on investments related to operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations).

Operating return on average equity - A non-GAAP financial measure that is calculated by annualizing the net operating earnings and dividing by the average equity amount.

Operating revenues - A non-GAAP financial measure that is calculated by adjusting total revenues to exclude net realized gains and losses on investments not related to operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations), hedging instruments and hedged items.

Persistency - Percentage of life insurance policies or annuity contracts remaining in force from one period to another.

Policy Acquisition Costs - Expenses that vary with and are primarily related to the acquisition of new and renewal insurance contracts.

Pre-tax operating earnings - A non-GAAP financial measure that is calculated by adjusting earnings from continuing operations before federal income taxes and cumulative effect of adoption of accounting principles, if any, to exclude adjustment to amortization related to net realized gains and losses, and net realized gains and losses on investments, hedging instruments and hedged items, except for operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations).

Pre-tax operating earnings to average account values - A non-GAAP financial measure that is calculated by dividing pre-tax operating earnings by average account values.

Pre-tax operating earnings to operating revenues - A non-GAAP financial measure that is calculated by dividing pre-tax operating earnings by operating revenues.

Qualified Plan - A plan purchased with pre-tax dollars, generally under a pension plan, specially sponsored program, or individual retirement account that the Internal Revenue Service approves as meeting the requirements of Section 401(a) of the 1986 Internal Revenue Code, as amended. Such plans receive tax advantages.

Ratio of pre-tax operating earnings before interest to interest expense - A non-GAAP financial measure that is calculated by subtracting interest expense from pre-tax operating earnings and dividing the product by interest expense.

Return on average allocated capital - A non-GAAP financial measure that is calculated by dividing annualized after-tax operating earnings by average allocated capital.

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Glossary

Sales - Represents a production volume metric that is primarily comprised of statutory premiums and deposits on individual and group annuities and life insurance products sold to a diverse customer base. Statutory premiums and deposits are calculated in accordance with accounting practices prescribed or permitted by regulatory authorities and then adjusted to arrive at sales. Sales also include deposits on administration-only group pension plans.

Sales are stated net of internal replacements, which in Nationwide Financial’s opinion provides a more meaningful disclosure of sales. In addition, sales exclude: funding agreements issued under Nationwide Financial’s medium-term note program; large case bank-owned life insurance (BOLI); large case pension plan acquisitions; and deposits into Nationwide employee and agent benefitplans. Although these products contribute to asset and earnings growth, they do not produce steady production flow that lends itself to meaningful comparisons and are therefore excluded from sales.

Separate Account - A separate investment account established and maintained by an insurance enterprise used primarily for variable products. This arrangement permits wider latitude in the choice of investments for contract holders.

Surrender Charges - Charges made against withdrawals from the contract value of most variable annuities for a period of time, typically four to seven years.

Statutory capital and surplus - A financial measure that is calculated based on accounting practices prescribed or permitted by the department of insurance of the state of domicile. Each of the states in which the Company’s insurance companies are domiciled has adopted the National Association of Insurance Commissioners (NAIC) statutory accounting practices (NAIC SAP) as the basis of its statutory accounting practices. The Company’s insurance subsidiaries have no statutory accounting practices that differ from NAIC SAP.

Universal Life Insurance - A flexible premium, adjustable benefit life insurance contract that accumulates cash values through the receipt of contractually determined interest credited.

Variable Annuity - An annuity contract in which the funds are invested in investments for which the underlying values can fluctuate.

Variable Life Insurance - A securities-based whole life insurance policy that employs a fixed premium and provides variable cash values and death benefit, dependent upon the performance of the separate account investment election.

Variable Universal Life Insurance - A type of variable life insurance that has flexible premiums.

Value of Business Acquired (VOBA) - Reflects the estimated fair value of the Nationwide Provident business in-force and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the life insurance and annuity contracts existing as of the closing date of the Nationwide Financial Network Merger.

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Shareholder Information

Corporate OfficesNationwide FinancialOne Nationwide PlazaColumbus, OH 43215

InquiriesMark BarnettVice President, Investor Relations

Roger W. GreenOfficer, Investor Relations

[email protected]

Financial Strength RatingsA.M. Best . A+Moody's Aa3Standard & Poors AA-

Stock SymbolNationwide Financial's common stock is traded on the New York Stock Exchange under the symbol "NFS"

Nationwide Financial's trust-preferred securities are traded on the New York Stock Exchange under the symbol "NFS A"

Upcoming Events

1st Quarter 2007 EarningsQuiet Period - April 12th to May 3thEarnings Release - May 3thConference Call - May 4th

Association of Insurance and Financial Analysts (AIFA)Annual ConferenceBoca Raton, FloridaMarch 5th-6thNF Management

Nationwide FinancialInvestor ConferenceNew York, New YorkMarch 27thNF Management

This report is for information purposes only. It should be read in conjuction with documents filed by Nationwide Financial Services, Inc. with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

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Notes

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nationwide 4Q06 Statistical Supplement

Economy & Finance

Transcript of nationwide 4Q06 Statistical Supplement