2006 Nationwide Financial® Statistical Supplement
Fourth Quarter
2006
Nationwide Financial Services, Inc.
Statistical Supplement
December 31, 2006
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Table of Contents
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Quarterly Financial Highlights 1-2
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($ in millions...
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Quarterly Consolidated Income Statements
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Combining Income Statement
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Quarterly Consolidated Balance Sheets
($ in m...
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Individual Investments
Quarterly Earnings Tre...
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Individual Investments
Account Values by Prod...
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($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06...
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Retirement Plans
Account Values by Product
($...
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($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06...
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Individual Protection
Sales by Product
($ in ...
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Investment Life
Quarterly Earnings Trends
($ ...
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Fixed Life
Quarterly Earnings Trends
($ in mi...
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Corporate and Other
Quarterly Earnings Trends...
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Customer Funds Managed and Administered
($ in...
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Securities Available-For-Sale
Gross Gross
Amo...
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Amortized Fair Amortized Fair
($ in millions)...
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Deferred Policy Acquisition Costs
Individual ...
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($ in millions)
Account DAC Annualized Accoun...
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Individual Retirement Individual Corporate
($...
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($ in millions)
Account Account
GMDB Benefit ...
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($ in millions)
Account Account
GMAB Benefit ...
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Individual Variable Annuity Guaranteed Minimu...
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Historical Financial Highlights
($ in million...
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($ in millions except for per share data) 200...
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($ in millions) 2002 2003 2004 2005 2006
Oper...
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Historical Consolidated Balance Sheet
($ in m...
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Individual Investments
($ in millions) 2002 2...
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Individual Investments
($ in millions) 2002 2...
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Retirement Plans
($ in millions) 2002 2003 20...
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($ in millions) 2002 2003 2004 2005 2006
Priv...
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Individual Protection
($ in millions) 2002 20...
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Individual Protection
($ in millions) 2002 20...
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Investment Life
($ in millions) 2002 2003 200...
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Fixed Life
($ in millions) 2002 2003 2004 200...
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nationwide 4Q06 Statistical Supplement
nationwide 4Q06 Statistical Supplement
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nationwide 4Q06 Statistical Supplement
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nationwide 4Q06 Statistical Supplement

Published on: Mar 3, 2016
Published in: Economy & Finance      Business      
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Transcripts - nationwide 4Q06 Statistical Supplement

  • 1. 2006 Nationwide Financial® Statistical Supplement Fourth Quarter 2006
  • 2. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 This Page Intentionally Left Blank. 3
  • 3. 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 Statements For the three months ended December 31, 2006 5 For the three months ended December 31, 2005 6 Quarterly Consolidated Balance Sheets 8 Individual Investments Segment Quarterly earnings trends 9 Account value activity 9 Account values by product 10 Sales by product 10 Sales by channel 10 Retirement Plans Segment Quarterly earnings trends 11 Account value activity 11 Account values by product 12 Sales by product 12 Sales by channel 12 Individual Protection Segment Quarterly earnings trends 13 Policy reserves 13 Insurance in force 13 Sales by product 14 Sales by channel 14 Investment life quarterly earnings trends 15 Investment life policy reserve activity 15 Fixed life quarterly earnings trends 16 Fixed life policy reserve activity 16 Corporate and Other Segment Quarterly earnings trends 17 Medium term notes account value activity 17 Other Data Customer funds managed and administered 18 Separate account assets by segment and fund type 18 Securities available-for-sale 19 Aging of gross unrealized losses on securities available-for-sale 19 Credit quality of fixed maturity securities available-for-sale 20 Mortgage loans by region and property type 20 Deferred policy acquisition costs 21 Individual variable annuity deferred acquisition costs 22 Value of business acquired 23 Individual variable annuity guaranteed minimum death benefits 24 Individual variable annuity guaranteed minimum accumulation benefits 25 Individual variable annuity guaranteed minimum income benefits 25 Individual variable annuity guaranteed lifetime withdrawal benefits 25 Individual variable annuity guaranteed minimum death benefit reserve activity 26 Individual variable annuity guaranteed minimum accumulation benefit embedded derivative activity 26 Individual 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
  • 4. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Quarterly Financial Highlights ($ in millions except for per share data) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Operating 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 Earnings Individual 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 Share Net 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 Discontinued operations, net of taxes (0.16) - - - - Net income 0.85$ 0.93$ 1.72$ 1.06$ 1.03$ Sales by Channel Non-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
  • 5. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Quarterly Financial Highlights ($ in millions except for per share data) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Balance 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 Data Closing 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 $113.1 million of released tax reserves and associated tax-related adjustments relating to prior tax years. Note: The results of operations of NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior years. In addition, the results of operations of The 401(k) Company are reflected as discontinued operations for 2006 and all prior years. NFS Operating Segment Reporting Structure NATIONWIDE FINANCIAL SERVICES, INC. Individual Investments Retirement Plans Individual Protection Corporate & Other Variable Annuities Fixed Annuities Income Products Advisory Services Public Sector - 457 Private Sector – 401(k) Fixed Life Investment Life Corporate Other Medium Term Notes Structured Products Universal Whole Term Variable Universal COLI 2
  • 6. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 This Page Intentionally Left Blank. 3
  • 7. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Quarterly Consolidated Income Statements ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Operating 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 Benefits Interest 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 Expenses Commissions 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 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) 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 Discontinued operations, net of taxes (24.5) - - - - Net income 130.3$ 142.3$ 257.8$ 159.5$ 154.2$ (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. 4
  • 8. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Combining Income Statement For the three months ended December 31, 2006 Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Operating 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 Benefits Interest 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 Expenses Commissions 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$ Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) 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$ (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). 5
  • 9. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Combining Income Statement For the three months ended December 31, 2005 Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Operating 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 Benefits Interest 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 Expenses Commissions 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 Pre-tax operating earnings 53.4$ 49.9$ 59.6$ 22.6$ 185.5$ Federal income tax expense 33.2 Net operating earnings 152.3$ Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) 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$ (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. 6
  • 10. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 This Page Intentionally Left Blank. 7
  • 11. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Quarterly Consolidated Balance Sheets ($ in millions, except per share data) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Assets Investments Securities 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' equity Future 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
  • 12. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Investments Quarterly Earnings Trends ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Operating Revenues 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 Total policy charges 136.6 143.8 144.1 145.4 155.1 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 Expenses Commissions 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 Pre-tax operating earnings 53.4$ 56.4$ 52.5$ 60.4$ 41.5$ Key Ratios/Statistics Average 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 Investments Account Value Activity ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Individual 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 Annuities Balance, 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
  • 13. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Investments Account Values by Product ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Individual Variable Annuities 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$ Total individual investment account values 51,227.6$ 52,318.2$ 51,044.4$ 51,309.9$ 52,963.6$ Individual Investments Sales by Product ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Individual Variable Annuities 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 Investments Sales by Channel ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Individual Variable Annuities 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 Annuities Non-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 Products Non-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 Program Non-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
  • 14. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Operating Revenues Asset fees 34.4$ 33.9$ 33.6$ 32.9$ 33.6$ Administrative fees 2.4 2.7 22.6 7.9 2.8 Surrender fees 1.9 1.5 1.1 0.8 1.1 Total policy charges 38.7 38.1 57.3 41.6 37.5 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 Total operating revenues 267.7 269.5 285.7 277.4 278.3 Benefits Interest credited 115.6 113.2 113.0 112.2 113.2 Expenses Commissions 34.3 37.8 36.6 37.4 39.8 General operating expenses 64.3 63.1 68.9 69.0 81.8 Deferral of policy acquisition costs (8.9) (9.4) (9.4) (8.8) (9.2) Subtotal 89.7 91.5 96.1 97.6 112.4 Amortization of policy acquisition costs 11.9 10.1 10.9 9.7 7.6 Amortization of value of business acquired 0.6 1.1 1.2 4.2 0.4 Total expenses 102.2 102.7 108.2 111.5 120.4 Pre-tax operating earnings 49.9$ 53.6$ 64.5$ 53.7$ 44.7$ Key Ratios/Statistics Average 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$ Earned rate 5.99% 5.84% 5.78% 6.03% 5.91% Credited rate 4.15% 4.03% 4.09% 4.11% 4.09% Interest spread on average general account values 1.84% 1.81% 1.69% 1.92% 1.82% Prepayment penalties and bond call premium income 0.19% 0.09% 0.06% 0.12% 0.09% Base interest spread on average general account values 1.65% 1.72% 1.63% 1.80% 1.73% Asset fees to average separate account values 0.70% 0.70% 0.74% 0.74% 0.74% General operating expenses to average account values 0.31% 0.30% 0.32% 0.31% 0.35% Pre-tax operating earnings to average account values 0.24% 0.25% 0.30% 0.24% 0.19% 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$ Return on average allocated capital 20.2% 19.4% 23.0% 18.9% 16.7% 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 Q4'06 Private Sector Pension Plans Balance, beginning of period 41,235.7$ 42,906.5$ 46,249.9$ 46,650.1$ 48,007.1$ 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 Plans Balance, 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 Balance, end of period 40,092.0$ 41,729.2$ 40,278.9$ 41,541.2$ 43,951.8$ Total retirement plan account values 82,998.5$ 87,979.1$ 86,929.0$ 89,548.3$ 97,418.9$ Account Value Activity Retirement Plans Quarterly Earnings Trends Retirement Plans 11
  • 15. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Retirement Plans Account Values by Product ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Private Sector Pension Plans 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 Plans IRC 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$ Total retirement plan account values 82,998.5$ 87,979.1$ 86,929.0$ 89,548.3$ 97,418.9$ Retirement Plans Sales by Product ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Private Sector Pension Plans 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 Subtotal BEST of AMERICA 1,257.0 1,628.5 1,304.7 1,315.5 1,485.5 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 Plans IRC 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 Plans Sales by Channel ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Private Sector Pension Plans 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 Total private sector pension plans 1,614.6$ 2,233.5$ 1,788.4$ 1,738.6$ 1,954.0$ Public Sector Pension Plans Nationwide Retirement Solutions 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$ 12
  • 16. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Operating Revenues 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 Total policy charges 135.5 139.1 136.2 140.6 137.2 Net Investment Income General account assets 122.3 120.5 120.5 122.0 121.5 Charge for invested capital (4.7) (4.3) (4.0) (3.4) (4.7) Total net investment income 117.6 116.2 116.5 118.6 116.8 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 Total operating revenues 339.7 338.4 333.7 338.6 334.8 Benefits Interest 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 Expenses Commissions 33.8 35.6 32.3 29.9 33.0 General operating expenses 78.4 82.0 66.3 68.8 82.0 Deferral of policy acquisition costs (49.9) (51.3) (47.2) (43.1) (59.2) Subtotal 62.3 66.3 51.4 55.6 55.8 Amortization of policy acquisition costs 28.1 18.0 31.8 20.6 11.2 Amortization of value of business acquired 7.2 8.1 9.1 8.9 6.5 Interest expense on debt 0.1 0.2 0.1 0.1 0.2 Total expenses 97.7 92.6 92.4 85.2 73.7 Pre-tax operating earnings 59.6$ 64.9$ 60.5$ 71.0$ 78.4$ Key Ratios/Statistics General 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% 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. Individual Protection Policy Reserves ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Individual 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 Protection Insurance In Force ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Individual 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 Subtotal investment life 80,657.2 81,128.1 81,398.0 81,414.1 82,301.1 Traditional life 36,589.3 37,678.6 39,040.1 40,326.2 41,061.3 Universal life 9,114.6 9,192.6 9,476.0 9,720.0 9,950.3 Subtotal fixed life 45,703.9 46,871.2 48,516.1 50,046.2 51,011.6 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
  • 17. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Protection Sales by Product ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 BEST 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 Products First 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 life First 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 Protection Sales by Channel ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Non-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
  • 18. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Investment Life Quarterly Earnings Trends ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Operating Revenues Asset fees 10.5$ 11.0$ 11.4$ 11.1$ 12.3$ Administrative fees 17.3 19.5 16.5 18.7 13.0 Surrender fees 6.1 5.6 4.4 5.7 4.5 Cost of insurance 84.6 85.4 86.2 85.8 86.9 Total policy charges 118.5 121.5 118.5 121.3 116.7 Net Investment Income General account assets 37.9 37.2 37.5 37.3 38.8 Charge for invested capital (4.7) (4.3) (4.0) (3.4) (4.7) Total net investment income 33.2 32.9 33.5 33.9 34.1 Other income 9.2 7.2 5.9 6.2 6.0 Total operating revenues 160.9 161.6 157.9 161.4 156.8 Benefits Interest 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 Expenses Commissions 24.6 27.9 22.9 16.7 22.9 General operating expenses 43.0 50.8 34.7 37.2 49.2 Deferral of policy acquisition costs (33.1) (37.5) (31.1) (23.5) (41.0) Subtotal 34.5 41.2 26.5 30.4 31.1 Amortization of policy acquisition costs 20.6 12.6 24.3 19.4 23.9 Amortization of value of business acquired 5.6 5.9 6.8 6.2 4.6 Interest expense on debt 0.1 0.2 0.1 0.1 0.2 Total expenses 60.8 59.9 57.7 56.1 59.8 Pre-tax operating earnings 37.5$ 35.8$ 39.3$ 41.4$ 33.5$ 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 Life Policy Reserve Activity ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Balance, 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
  • 19. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Fixed Life Quarterly Earnings Trends ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Operating Revenues 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 Total policy charges 17.0 17.6 17.7 19.3 20.5 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 operating revenues 178.8 176.8 175.8 177.2 178.0 Benefits Interest credited 19.0 18.8 20.7 20.3 19.5 Life benefits 73.8 76.0 74.7 73.6 78.3 Policyholder dividends 27.0 20.2 24.5 24.6 21.4 Total benefits 119.8 115.0 119.9 118.5 119.2 Expenses Commissions 9.2 7.7 9.4 13.2 10.1 General operating expenses 35.4 31.2 31.6 31.6 32.8 Deferral of policy acquisition costs (16.8) (13.8) (16.1) (19.6) (18.2) 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 Pre-tax operating earnings 22.1$ 29.1$ 21.2$ 29.6$ 44.9$ Key Ratios/Statistics Life 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 Life Policy Reserve Activity ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Traditional/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
  • 20. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Corporate and Other Quarterly Earnings Trends ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Operating Revenues 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) Total net investment income 89.8 90.5 101.9 95.5 109.2 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 Total operating revenues 103.5 100.1 111.5 108.8 125.0 Benefits Interest 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 Expenses Commissions 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 Pre-tax operating earnings 22.6$ 11.6$ 16.6$ 21.7$ 17.8$ Note: The results of operations of NFS Bermuda are reflected as discontinued operations for 2005 and all prior years. Medium Term Notes ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Key Ratios/Statistics Average Account Values: General account 4,024.0$ 4,060.1$ 4,084.7$ 4,008.6$ 4,284.7$ Earned rate 5.25% 5.67% 5.94% 6.69% 6.52% Credited rate 3.97% 4.47% 4.94% 5.49% 5.41% Interest spread on average general account values 1.28% 1.20% 1.00% 1.20% 1.11% Prepayment penalties and bond call premium income 0.09% 0.12% 0.00% 0.05% 0.12% Base interest spread on average general account values 1.19% 1.08% 1.00% 1.15% 0.99% Account Value Activity Balance, 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) Balance, end of period 3,998.2$ 4,122.1$ 4,047.4$ 3,969.9$ 4,599.5$ 17
  • 21. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Customer Funds Managed and Administered ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 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 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 life Individual 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 Plans Equity 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 Protection Equity 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 Other Equity 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 Total Equity 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
  • 22. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Securities Available-For-Sale Gross Gross Amortized Unrealized Unrealized Estimated ($ in millions) Cost Gains Losses Fair Value December 31, 2006 Fixed 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, 2005 Fixed 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 Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized ($ in millions) Fair Value Losses Fair Value Losses Fair Value Losses December 31, 2006 Fixed 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, 2005 Fixed 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 Year Unrealized Losses MoreUnrealized Losses Less Than 19
  • 23. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Amortized Fair Amortized Fair ($ in millions) Cost Value Cost Value NAIC Designation Rating Agency Equivalent Designation 19,945.0$ 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 Total New 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 Total New 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 default Total 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
  • 24. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Deferred Policy Acquisition Costs Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Year Ended December 31, 2006 Balance, 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, 2005 Balance, 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$ Year Ended December 31, 2004 Balance, beginning of period 2,052.1$ 303.4$ 1,222.9$ (248.5)$ 3,329.9$ 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 Balance, end of period 2,080.6$ 305.0$ 1,312.6$ (137.1)$ 3,561.1$ Year Ended December 31, 2003 Balance, beginning of period 1,885.6$ 305.3$ 1,144.0$ (308.0)$ 3,026.9$ 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 Balance, end of period 2,052.1$ 303.4$ 1,222.9$ (248.5)$ 3,329.9$ Year Ended December 31, 2002 Balance, beginning of period 1,976.6$ 309.8$ 1,022.2$ (94.9)$ 3,213.7$ 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) Balance, end of period 1,885.6$ 305.3$ 1,144.0$ (308.0)$ 3,026.9$ 21
  • 25. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 ($ in millions) Account DAC Annualized Account DAC Annualized Year 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% Account DAC Annualized Account DAC Annualized Year Values Balance Lapse Rate Values Balance Lapse Rate 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% Account DAC Annualized Account DAC Annualized Year Values Balance Lapse Rate Values Balance Lapse Rate 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
  • 26. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Year Ended December 31, 2006 Balance, 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, 2005 Balance, 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 Balance, end of period 29.4$ 15.7$ 398.2$ 6.4$ 449.7$ Year Ended December 31, 2004 Balance, beginning of period 33.0$ 19.6$ 463.6$ 6.8$ 523.0$ 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 Balance, end of period 27.1$ 16.5$ 430.4$ 6.4$ 480.4$ Year Ended December 31, 2003 Balance, beginning of period 41.9$ 23.1$ 497.7$ 6.6$ 569.3$ 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 Balance, end of period 33.0$ 19.6$ 463.6$ 6.8$ 523.0$ Value of Business Acquired 23
  • 27. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 ($ in millions) Account Account GMDB 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$ Account Account GMDB Benefit Type Values Gross Net Values Gross Net 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$ Account Account GMDB Benefit Type Values Gross Net Values Gross Net 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 61 Total 15.4$ 33.0$ 42.8$ 23.6$ 7.4$ 122.2$ 63 Definition of GMDB Benefit Types Return 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, 2001 Net Amount at RiskNet Amount at Risk December 31, 2003 Net Amount at Risk December 31, 2005 Net Amount at Risk, Net of Reinsurance by Benefit Type and Age at December 31, 2006 December 31, 2006 Net Amount at Risk Net Amount at Risk December 31, 2004 Net Amount at Risk December 31, 2002 24
  • 28. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 ($ in millions) Account Account GMAB 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$ Account GMAB 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 Account GMIB 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$ -$ Account Account GMIB Benefit Type Values Gross Net Values Gross Net 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$ -$ Account Account GMIB Benefit Type Values Gross Net Values Gross Net 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) Account GLWB Benefit Type Values Gross Net L.INC 993.8$ -$ -$ Total 993.8$ -$ -$ Definition of Benefit Types 5 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 December 31, 2006 Net Amount at Risk December 31, 2004 Net Amount at Risk December 31, 2004 Net Amount at Risk December 31, 2001 Net Amount at Risk December 31, 2002 Net Amount at Risk December 31, 2003 Net Amount at Risk Individual Variable Annuity Guaranteed Minimum Income Benefits December 31, 2006 December 31, 2005 Net Amount at Risk Net Amount at Risk Individual Variable Annuity Guaranteed Minimum Accumulation Benefits December 31, 2006 December 31, 2005 Net Amount at Risk Net Amount at Risk 25
  • 29. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Variable Annuity Guaranteed Minimum Death Benefit Reserve Activity ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Balance, 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) Balance, end of period 27.2$ 26.9$ 30.2$ 31.8$ 29.6$ Individual Variable Annuity Guaranteed Minimum Accumulation Benefit Embedded Derivative Activity ($ in millions) Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Balance, 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) Balance, end of period 67.9$ 77.6$ 102.4$ 109.7$ 116.3$ 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 Rate Minimum 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
  • 30. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Historical Financial Highlights ($ in millions except for per share data) 2002 2003 2004 2005 2006 Operating 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 operating earnings 202.6$ 455.9$ 534.3$ 612.0$ 707.9$ 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 Share Net 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 Discontinued operations, net of taxes (0.01) (0.01) (0.02) (0.16) - 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 Channel Non-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$ (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 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
  • 31. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 ($ in millions except for per share data) 2002 2003 2004 2005 2006 Balance 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 Data Closing 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 $113.1 million of released tax reserves and associated tax-related adjustments relating to prior tax years. Note: The results of operations of Cap Pro Holding, Inc., NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior years. In addition, the results of operations of The 401(k) Company are reflected as discontinued operations for 2006 and all prior years. Historical Financial Highlights 28
  • 32. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 ($ in millions) 2002 2003 2004 2005 2006 Operating 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 Total operating revenues 3,331.5 3,950.1 4,117.0 4,289.7 4,416.1 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 Amortization of policy acquisition costs 674.6 394.6 430.4 479.4 472.6 Amortization of value of business acquired 15.2 46.4 52.3 45.0 46.0 Interest expense on debt 76.7 95.8 102.4 108.0 103.7 Total expenses 1,387.0 1,289.1 1,422.7 1,487.9 1,528.5 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 operating earnings 202.6$ 455.9$ 534.3$ 612.0$ 707.9$ Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) 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 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$ (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 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. Historical Consolidated Earnings Trends 29
  • 33. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Historical Consolidated Balance Sheet ($ in millions, except per share data) 2002 2003 2004 2005 2006 Assets Investments Securities 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' equity Future 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 interest expense to interest expense 4.0X 7.3X 8.0X 7.8X 8.4X 30
  • 34. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Investments ($ in millions) 2002 2003 2004 2005 2006 Operating Revenues Asset fees 375.6$ 370.9$ 435.5$ 461.9$ 511.4$ Administrative fees 23.3 12.1 15.7 16.2 20.4 Surrender fees 61.1 56.0 62.2 62.1 56.6 Total policy charges 460.0 439.0 513.4 540.2 588.4 Net Investment Income General 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) Total net investment income 681.0 860.4 872.8 869.9 781.1 Premiums on income products 69.4 93.4 90.8 102.9 142.5 Other income - - 0.4 1.5 2.3 Total operating revenues 1,210.4 1,392.8 1,477.4 1,514.5 1,514.3 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 Expenses Commissions 381.7 345.5 288.3 257.5 340.5 General operating expenses 202.5 208.6 219.4 189.7 223.9 Deferral of policy acquisition costs (414.7) (376.8) (293.6) (250.7) (350.8) Subtotal 169.5 177.3 214.1 196.5 213.6 Amortization of policy acquisition costs 528.2 228.3 276.1 329.3 352.7 Amortization of value of business acquired 3.3 6.3 7.5 7.2 6.5 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/Statistics Average 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$ Earned rate 6.62% 5.78% 5.52% 5.61% 5.74% Credited rate 4.73% 4.16% 3.74% 3.69% 3.76% Interest spread on average general account values 1.88% 1.62% 1.78% 1.92% 1.98% Prepayment penalties and bond call premium income 0.06% 0.05% 0.12% 0.21% 0.15% Base interest spread on average general account values 1.82% 1.57% 1.66% 1.71% 1.83% Total asset fees to average separate account values 1.25% 1.27% 1.27% 1.30% 1.37% General operating expenses to average account values 0.50% 0.47% 0.43% 0.37% 0.43% 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% Note: The results of operations of NFS Bermuda are reflected as discontinued operations for 2005 and all prior years. Individual Investments Account Value Activity ($ in millions) 2002 2003 2004 2005 2006 Individual Variable Annuities Balance, beginning of period 36,345.7$ 31,881.9$ 38,835.9$ 41,481.9$ 40,796.0$ 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) - Balance, end of period 31,881.9$ 38,835.9$ 41,481.9$ 40,796.0$ 43,804.8$ Individual Fixed Annuities Balance, 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) - Balance, end of period 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$ Total individual investment account values 40,896.5$ 49,333.9$ 52,481.9$ 51,227.6$ 52,963.6$ Historical Earnings Trends 31
  • 35. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Investments ($ in millions) 2002 2003 2004 2005 2006 Individual Variable Annuities 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 Total individual variable annuities 31,881.9$ 38,835.9$ 41,481.9$ 40,796.0$ 43,804.8$ 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$ Total individual investment account values 40,896.5$ 49,333.9$ 52,481.9$ 51,227.6$ 52,963.6$ Individual Investments Sales by Product ($ in millions) 2002 2003 2004 2005 2006 Individual Variable Annuities 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 Total individual variable annuities 4,622.5$ 4,735.4$ 4,130.3$ 3,486.8$ 4,751.1$ 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 Investments Sales by Channel ($ in millions) 2002 2003 2004 2005 2006 Individual Variable Annuities 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 Total individual variable annuities 4,622.5$ 4,735.4$ 4,130.3$ 3,486.8$ 4,751.1$ Individual Fixed Annuities Non-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 Products Non-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 Program Non-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
  • 36. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Retirement Plans ($ in millions) 2002 2003 2004 2005 2006 Operating Revenues Asset fees 151.5$ 146.9$ 150.8$ 137.8$ 134.0$ Administrative fees 15.9 8.8 8.9 8.7 36.0 Surrender fees 6.7 5.7 12.1 8.2 4.5 Total policy charges 174.1 161.4 171.8 154.7 174.5 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 Expenses Commissions 85.8 92.7 111.3 133.3 151.6 General operating expenses 198.5 222.2 238.7 251.9 282.8 Deferral of policy acquisition costs (49.2) (43.8) (41.5) (37.2) (36.8) 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 Pre-tax operating earnings 142.5$ 152.8$ 180.3$ 187.8$ 216.5$ Key Ratios/Statistics Average 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$ Earned rate 7.37% 6.77% 6.36% 6.08% 5.88% Credited rate 5.26% 4.69% 4.38% 4.18% 4.07% Interest spread on average general account values 2.11% 2.08% 1.98% 1.90% 1.81% Prepayment penalties and bond call premium income 0.11% 0.21% 0.18% 0.20% 0.09% Base interest spread on average general account values 2.00% 1.87% 1.80% 1.70% 1.72% Total asset fees to average separate account values 0.78% 0.78% 0.74% 0.70% 0.72% General operating expenses to average account values 0.44% 0.40% 0.35% 0.32% 0.32% Pre-tax operating earnings to average account values 0.31% 0.28% 0.26% 0.24% 0.24% 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$ Return on average allocated capital 18.3% 17.0% 18.6% 20.4% 19.5% Retirement Plans Account Value Activity ($ in millions) 2002 2003 2004 2005 2006 Private Sector Pension Plans Balance, beginning of period 21,213.0$ 21,987.2$ 29,678.9$ 37,736.0$ 42,906.5$ New deposits/sales 5,087.8 5,506.5 6,512.9 7,447.3 8,034.8 Participant withdrawals and surrenders (4,155.9) (4,402.6) (5,209.3) (5,822.8) (6,736.6) 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 - - - - Balance, end of period 21,987.2$ 29,678.9$ 37,736.0$ 42,906.5$ 53,467.1$ Public Sector Pension Plans Balance, beginning of period 26,076.2$ 23,537.6$ 34,545.4$ 38,925.2$ 40,092.0$ New deposits/sales 2,581.8 3,178.9 3,637.1 3,881.6 4,018.4 Participant withdrawals and surrenders (2,082.0) (1,878.3) (2,242.5) (2,638.9) (2,412.8) 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) Balance, end of period 23,537.6$ 34,545.4$ 38,925.2$ 40,092.0$ 43,951.8$ Total retirement plan account values 45,524.8$ 64,224.3$ 76,661.2$ 82,998.5$ 97,418.9$ Historical Earnings Trends 33
  • 37. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 ($ in millions) 2002 2003 2004 2005 2006 Private Sector Pension Plans BEST of AMERICA annuity products 9,229.3$ 9,818.1$ 8,845.8$ 7,791.9$ 7,557.1$ BEST of AMERICA trust products 2,878.3 6,212.3 10,558.4 14,479.5 18,834.1 Subtotal BEST of AMERICA 12,107.6 16,030.4 19,404.2 22,271.4 26,391.2 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 Total private sector pension plans 21,987.2$ 29,678.9$ 37,736.0$ 42,906.5$ 53,467.1$ Public Sector Pension Plans IRC Section 457 annuities 12,065.1$ 13,916.9$ 14,889.2$ 15,790.2$ 15,979.5$ Administration only agreements 11,472.5 20,628.5 24,036.0 24,301.8 27,972.3 Total public sector pension plans 23,537.6$ 34,545.4$ 38,925.2$ 40,092.0$ 43,951.8$ Total retirement plan account values 45,524.8$ 64,224.3$ 76,661.2$ 82,998.5$ 97,418.9$ Retirement Plans Sales by Product ($ in millions) 2002 2003 2004 2005 2006 Private Sector Pension Plans BEST of AMERICA annuity products 2,611.2$ 2,034.9$ 1,679.7$ 1,371.1$ 1,230.2$ BEST of AMERICA trust products 1,617.0 2,110.2 3,232.0 3,974.9 4,504.0 Subtotal BEST of AMERICA 4,228.2 4,145.1 4,911.7 5,346.0 5,734.2 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 Total private sector pension plans 4,842.9$ 5,223.5$ 6,168.7$ 6,970.0$ 7,714.5$ Public Sector Pension Plans IRC Section 457 annuities 1,375.6$ 1,442.4$ 1,514.2$ 1,544.8$ 1,533.3$ Administration only agreements 1,206.2 1,735.0 2,122.9 2,336.9 2,484.9 Total public sector pension plans 2,581.8$ 3,177.4$ 3,637.1$ 3,881.7$ 4,018.2$ Total retirement plan sales 7,424.7$ 8,400.9$ 9,805.8$ 10,851.7$ 11,732.7$ Retirement Plans Sales by Channel ($ in millions) 2002 2003 2004 2005 2006 Private Sector Pension Plans 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 Total private sector pension plans 4,842.9$ 5,223.5$ 6,168.7$ 6,970.0$ 7,714.5$ Public Sector Pension Plans Nationwide Retirement Solutions 2,581.8$ 3,177.4$ 3,637.1$ 3,881.7$ 4,018.2$ Total retirement plan sales 7,424.7$ 8,400.9$ 9,805.8$ 10,851.7$ 11,732.7$ Account Values by Product Retirement Plans 34
  • 38. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Protection ($ in millions) 2002 2003 2004 2005 2006 Operating Revenues Asset fees 20.5$ 29.4$ 34.4$ 40.2$ 45.8$ Administrative fees 86.3 86.8 93.3 90.0 82.7 Surrender fees 17.5 32.5 30.0 27.9 22.6 Cost of insurance 266.5 371.3 379.7 388.5 402.0 Total policy charges 390.8 520.0 537.4 546.6 553.1 Net Investment Income General account assets 378.9 486.1 487.2 492.7 484.5 Charge for invested capital (17.2) (23.5) (19.3) (17.6) (16.4) Total net investment income 361.7 462.6 467.9 475.1 468.1 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 operating revenues 1,001.9 1,348.7 1,350.1 1,348.5 1,345.5 Benefits Interest credited 188.2 193.3 189.4 190.7 191.7 Life benefits 275.3 421.2 409.4 419.5 444.4 Policyholder dividends 63.5 105.7 101.4 107.3 90.7 Total benefits 527.0 720.2 700.2 717.5 726.8 Expenses Commissions 153.8 135.7 142.0 130.3 130.8 General operating expenses 232.9 318.2 314.9 306.4 299.1 Deferral of policy acquisition costs (204.7) (199.5) (204.1) (201.1) (200.8) 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 Pre-tax operating earnings 188.1$ 215.5$ 242.7$ 258.2$ 274.8$ Key Ratios/Statistics General 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% 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. Individual Protection Policy Reserves ($ in millions) 2002 2003 2004 2005 2006 Individual 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 Subtotal investment life 7,167.6 8,845.3 10,406.2 12,074.1 14,356.9 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 Subtotal fixed life 4,991.3 5,051.8 5,276.8 5,314.5 5,329.9 Total individual protection policy reserves 12,158.9$ 13,897.1$ 15,683.0$ 17,388.6$ 19,686.8$ Individual Protection Insurance In Force ($ in millions) 2002 2003 2004 2005 2006 Individual 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 Subtotal investment life 63,968.1 65,741.7 67,740.8 80,657.2 82,301.1 Traditional life 34,958.4 33,671.2 32,979.4 36,589.3 41,061.3 Universal life 7,922.5 8,407.4 8,505.5 9,114.6 9,950.3 Subtotal fixed life 42,880.9 42,078.6 41,484.9 45,703.9 51,011.6 Total individual protection insurance in force 106,849.0$ 107,820.3$ 109,225.7$ 126,361.1$ 133,312.7$ Historical Earnings Trends 35
  • 39. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Individual Protection ($ in millions) 2002 2003 2004 2005 2006 BEST 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 Products First 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 life First 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 Protection Sales by Channel ($ in millions) 2002 2003 2004 2005 2006 Non-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
  • 40. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Investment Life ($ in millions) 2002 2003 2004 2005 2006 Operating Revenues Asset fees 20.5$ 29.4$ 34.4$ 40.2$ 45.8$ Administrative fees 77.2 75.6 79.4 75.7 67.7 Surrender fees 16.5 31.7 29.2 26.3 20.2 Cost of insurance 229.1 331.2 334.9 339.0 344.3 Total policy charges 343.3 467.9 477.9 481.2 478.0 Net Investment Income General account assets 147.3 152.7 150.2 157.2 150.8 Charge for invested capital (17.2) (23.5) (19.3) (17.6) (16.4) Total net investment income 130.1 129.2 130.9 139.6 134.4 Other income 16.5 33.3 32.9 29.8 25.3 - - Total operating revenues 489.9 630.4 641.7 650.6 637.7 Benefits Interest 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 Expenses Commissions 136.1 107.1 99.5 95.6 90.4 General operating expenses 149.8 204.2 193.9 178.8 171.9 Deferral of policy acquisition costs (179.2) (161.7) (149.1) (142.8) (133.1) 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 Pre-tax operating earnings 106.6$ 122.8$ 144.8$ 163.2$ 150.0$ 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 Life Policy Reserve Activity ($ in millions) 2002 2003 2004 2005 2006 Balance, 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
  • 41. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 Fixed Life ($ in millions) 2002 2003 2004 2005 2006 Operating Revenues 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 Total policy charges 47.5 52.1 59.5 65.4 75.1 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 operating revenues 512.0 718.3 708.4 697.9 707.8 Benefits Interest credited 73.2 72.6 72.4 74.4 79.3 Life benefits 193.1 303.0 281.3 291.1 302.6 Policyholder dividends 63.5 105.7 101.4 107.3 90.7 Total benefits 329.8 481.3 455.1 472.8 472.6 Expenses Commissions 17.7 28.6 42.5 34.7 40.4 General operating expenses 83.1 114.0 121.0 127.6 127.2 Deferral of policy acquisition costs (25.5) (37.8) (55.0) (58.3) (67.7) 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 Pre-tax operating earnings 81.5$ 92.7$ 97.9$ 95.0$ 124.8$ Key Ratios/Statistics Life 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 Life Policy Reserve Activity ($ in millions) 2002 2003 2004 2005 2006 Traditional/Universal Life Balance, beginning of period 2,658.7$ 4,991.3$ 5,051.8$ 5,276.8$ 5,314.5$ 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 - - - - Balance, end of period 4,991.3$ 5,051.8$ 5,276.8$ 5,314.5$ 5,329.9$ Historical Earnings Trends 38
  • 42. Nationwide Financial Services, Inc. Statistical Supplement December 31, 2006 This Page Intentionally Left Blank. 39

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