nationwide 2Q06 Statistical Supplement

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nationwide 2Q06 Statistical Supplement

  1. 1. 2006 Second Quarter 2006 Nationwide Financial® Statistical Supplement
  2. 2. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 This Page Intentionally Left Blank.
  3. 3. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 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 June 30, 2006 5 For the three months ended June 30, 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 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
  4. 4. Nationwide Financial Services, Inc. Statistical Supplement June 30,2006 Quarterly Financial Highlights ($ in millions except for per share data) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Operating Revenues Individual investments $ 377.3 $ 385.3 $ 380.1 $ 382.6 $ 373.2 Retirement plans 262.6 271.4 276.0 278.6 294.9 Individual protection 338.8 331.4 339.7 338.4 333.7 Corporate and other 96.2 97.4 103.5 100.1 111.5 Total operating revenues $ 1,074.9 $ 1,085.5 $ 1,099.3 $ 1,099.7 $ 1,113.3 Net realized gains (losses) on investments, hedging instruments and hedged items (1) 1.7 (14.5) 3.7 (8.1) (11.0) Total revenues $ 1,076.6 $ 1,071.0 $ 1,103.0 $ 1,091.6 $ 1,102.3 Pre-tax Operating Earnings Individual investments $ 66.1 $ 56.2 $ 53.4 $ 56.4 $ 52.5 Retirement plans 45.3 45.4 49.7 53.6 64.4 Individual protection 63.0 63.8 59.6 64.9 60.5 Corporate and other 21.3 (1.1) 22.6 11.6 16.6 Pre-tax operating earnings $ 195.7 $ 164.3 $ 185.3 $ 186.5 $ 194.0 Federal income tax expense 50.8 (8.0) 33.1 42.2 (70.0) Net operating earnings $ 144.9 $ 172.3 $ 152.2 $ 144.3 $ 264.0 Net realized gains (losses) on investments, hedging (1) instruments and hedged items, net of taxes 1.1 (9.4) 2.4 (5.3) (7.2) Adjustment to DAC amortization related to net realized gains (losses), net of taxes (2.5) 2.9 0.1 3.3 1.0 Discontinued operations, net of taxes (2.3) 0.9 (24.4) - - Net income $ 141.2 $ 166.7 $ 130.3 $ 142.3 $ 257.8 Per Diluted Share Net operating earnings $ 0.94 $ 1.12 $ 0.99 $ 0.94 $ 1.76 Net realized gains (losses) on investments, hedging (1) instruments and hedged items, net of taxes 0.01 (0.07) 0.02 (0.03) (0.05) Adjustment to DAC amortization related to net realized gains (losses), net of taxes (0.02) 0.02 - 0.02 0.01 Discontinued operations, net of taxes (0.01) 0.01 (0.16) - - Net income $ 0.92 $ 1.08 $ 0.85 $ 0.93 $ 1.72 Sales by Channel Non-affiliated Independent broker/dealers $ 1,292.1 $ 1,280.4 $ 1,207.9 $ 1,487.8 $ 1,380.7 Wirehouse and regional firms 479.2 449.1 482.3 590.1 555.6 Financial institutions 470.5 398.8 424.3 523.7 580.7 Pension plan administrators 116.0 108.2 104.9 135.9 139.6 Life specialists 104.3 82.5 69.0 172.6 84.0 Affiliated Nationwide Retirement Solutions 993.7 1,012.7 948.8 1,028.5 1,001.2 Nationwide agents 184.9 188.8 207.2 196.4 203.1 Nationwide Financial Network 155.3 160.2 181.6 185.7 171.0 The 401(k) Company 323.7 303.5 288.3 535.9 422.3 TBG Financial 38.6 92.3 36.0 110.4 62.7 Total $ 4,158.3 $ 4,076.5 $ 3,950.3 $ 4,967.0 $ 4,600.9 (1) Excluding operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, and trading portfolio valuation changes). Note: All prior periods have been reclassified to reflect Cap Pro Holding, Inc., NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) as discontinued operations. 1
  5. 5. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Quarterly Financial Highlights ($ in millions except for per share data) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Balance Sheet Data Total assets $ 115,699.7 $ 117,421.3 $ 116,159.9 $ 116,558.7 $ 113,083.0 Customer funds managed and administered $ 150,614.7 $ 155,650.6 $ 155,612.9 $ 162,451.7 $ 160,051.6 Shareholders' equity (1) Including accumulated other comprehensive income (AOCI) $ 5,434.9 $ 5,375.6 $ 5,350.4 $ 5,126.2 $ 5,236.8 AOCI 395.7 196.1 100.7 (77.9) (202.0) Excluding AOCI $ 5,039.2 $ 5,179.5 $ 5,249.7 $ 5,204.1 $ 5,438.8 Net operating return on average equity excluding AOCI 11.6% 13.5% 11.7% 11.0% 19.8% (2) Adjusted net operating return on average equity excluding AOCI 11.6% 11.2% 11.7% 11.0% 11.5% Statutory capital and surplus $ 3,152.3 $ 3,305.9 $ 3,262.1 $ 3,279.3 $ 3,437.3 Stock Data Closing Price $ 37.94 $ 40.05 $ 44.00 $ 43.02 $ 44.08 Weighted average shares outstanding Basic 153.0 153.1 152.9 152.3 149.2 Diluted 153.7 153.9 153.6 152.9 149.9 Book value per share Including AOCI $ 35.52 $ 35.09 $ 35.08 $ 34.40 $ 35.08 Excluding AOCI $ 32.94 $ 33.81 $ 34.42 $ 34.93 $ 36.43 (1) Includes changes in fair value of certain investments and derivatives under SFAS 115 and SFAS 133. (2) 3Q 2005 return adjusted for $42.6 million impact of one-time tax adjustments associated with separate account dividend received deductions and $14.1 million charge related to calling of trust preferred securities. 2Q 2006 return adjusted for $113.1 million of released tax reserves and associated tax-related adjustments relating to prior tax years. Note: All prior periods have been reclassified to reflect Cap Pro Holding, Inc., NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) as discontinued operations. NFS Operating Segment Reporting Structure NATIONWIDE FINANCIAL SERVICES, INC. Individual Retirement Individual Corporate Investments Plans Protection & Other Variable Annuities Public Sector - 457 Fixed Life Medium Term Notes Universal Fixed Annuities Private Sector – 401(k) Structured Products Whole Term In Retirement Corporate Other Investment Life Income Products Variable Universal Advisory Services COLI 2
  6. 6. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 This Page Intentionally Left Blank. 3
  7. 7. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Quarterly Consolidated Income Statements ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Operating Revenues Asset fees $ 156.8 $ 163.1 $ 163.0 $ 168.9 $ 170.0 Cost of insurance charges 96.8 97.8 97.5 98.9 100.2 Administrative fees 27.0 29.6 27.7 30.2 47.2 Surrender fees 26.4 24.1 22.6 23.0 20.2 Total policy charges 307.0 314.6 310.8 321.0 337.6 Traditional life and immediate annuity premiums 99.7 97.2 107.1 107.8 109.7 Net investment income 587.1 592.8 587.9 577.3 572.1 Operating realized gains (losses) 0.8 0.5 1.1 1.3 1.1 Other income 80.3 80.4 92.4 92.3 92.8 Total operating revenues 1,074.9 1,085.5 1,099.3 1,099.7 1,113.3 Benefits Interest credited 348.1 350.6 347.7 342.1 345.7 Life insurance and annuity benefits 145.9 142.9 149.9 156.1 156.4 Policyholder dividends 26.3 27.1 27.0 20.2 24.5 Total benefits 520.3 520.6 524.6 518.4 526.6 Expenses Commissions 138.6 130.2 140.1 153.1 160.4 General operating expenses 197.7 198.9 209.3 213.4 214.6 Debt extinguishment costs - 21.7 - - - Deferral of policy acquisition costs (126.9) (112.4) (120.8) (135.1) (147.4) Subtotal 209.4 238.4 228.6 231.4 227.6 Amortization of policy acquisition costs 111.0 122.9 123.7 125.7 127.5 Amortization of value of business acquired 11.7 11.3 10.0 11.6 12.5 Interest expense on debt 26.8 28.0 27.1 26.1 25.1 Total expenses 358.9 400.6 389.4 394.8 392.7 Pre-tax operating earnings $ 195.7 $ 164.3 $ 185.3 $ 186.5 $ 194.0 Federal income tax expense 50.8 (8.0) 33.1 42.2 (70.0) Net operating earnings $ 144.9 $ 172.3 $ 152.2 $ 144.3 $ 264.0 Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) Realized gains on sales, net of hedging 9.4 8.4 20.5 7.3 11.0 Realized losses on sales, net of hedging (4.2) (3.3) (7.9) (12.9) (19.1) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (3.8) (12.6) (7.5) (0.6) (2.5) Credit default swaps (0.5) (2.8) (0.4) (0.1) (0.1) Derivatives, excluding hedging gains and losses on sales and credit default swaps 0.8 1.4 (1.9) 0.5 3.4 Amounts credited to policyholder dividend obligation (0.7) (2.1) 0.3 0.1 (0.7) Adjustment to VOBA amortization 0.1 1.6 (0.7) 0.4 0.8 Subtotal 1.1 (9.4) 2.4 (5.3) (7.2) Adjustment to DAC amortization related to net realized gains (losses), net of taxes (2.5) 2.9 0.1 3.3 1.0 Discontinued operations, net of taxes (2.3) 0.9 (24.4) - - Net income $ 141.2 $ 166.7 $ 130.3 $ 142.3 $ 257.8 (1) Excluding operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, and trading portfolio valuation changes). Note: All prior periods have been reclassified to reflect Cap Pro Holding, Inc., NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) as discontinued operations. 4
  8. 8. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Combining Income Statement For the three months ended June 30, 2006 Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Operating Revenues Asset fees $ 125.0 $ 33.6 $ 11.4 $ - $ 170.0 Cost of insurance charges - - 100.2 - 100.2 Administrative fees 4.9 22.6 19.7 - 47.2 Surrender fees 14.2 1.1 4.9 - 20.2 Total policy charges 144.1 57.3 136.2 - 337.6 Traditional life and immediate annuity premiums 34.6 - 75.1 - 109.7 Net investment income 193.9 159.8 116.5 101.9 572.1 Operating realized gains (losses) - - - 1.1 1.1 Other income 0.6 77.8 5.9 8.5 92.8 Total operating revenues 373.2 294.9 333.7 111.5 1,113.3 Benefits Interest credited 132.7 113.0 49.5 50.5 345.7 Life insurance and annuity benefits 49.6 - 106.8 - 156.4 Policyholder dividends - - 24.5 - 24.5 Total benefits 182.3 113.0 180.8 50.5 526.6 Expenses Commissions 86.2 36.6 32.3 5.3 160.4 General operating expenses 56.0 78.2 66.3 14.1 214.6 Deferral of policy acquisition costs (90.8) (9.4) (47.2) - (147.4) Subtotal 51.4 105.4 51.4 19.4 227.6 Amortization of policy acquisition costs 84.8 10.9 31.8 - 127.5 Amortization of value of business acquired 2.2 1.2 9.1 - 12.5 Interest expense on debt - - 0.1 25.0 25.1 Total expenses 138.4 117.5 92.4 44.4 392.7 Pre-tax operating earnings $ 52.5 $ 64.4 $ 60.5 $ 16.6 $ 194.0 Federal income tax expense (70.0) Net operating earnings $ 264.0 Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) Realized gains on sales, net of hedging 11.0 Realized losses on sales, net of hedging (19.1) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (2.5) Credit default swaps (0.1) Derivatives, excluding hedging gains and losses on sales and credit default swaps 3.4 Amounts credited to policyholder dividend obligation (0.7) Adjustment to VOBA amortization 0.8 Subtotal (7.2) Adjustment to DAC amortization related to net realized gains (losses), net of taxes 1.0 Discontinued operations, net of taxes - Net income $ 257.8 (1) Excluding operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, and trading portfolio valuation changes). 5
  9. 9. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Combining Income Statement For the three months ended June 30, 2005 Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Operating Revenues Asset fees $ 112.7 $ 34.1 $ 10.0 $ - $ 156.8 Cost of insurance charges - - 96.8 - 96.8 Administrative fees 3.6 2.0 21.4 - 27.0 Surrender fees 16.2 2.5 7.7 - 26.4 Total policy charges 132.5 38.6 135.9 - 307.0 Traditional life and immediate annuity premiums 24.7 - 75.0 - 99.7 Net investment income 219.8 162.3 121.3 83.7 587.1 Operating realized gains (losses) - - - 0.8 0.8 Other income 0.3 61.7 6.6 11.7 80.3 Total operating revenues 377.3 262.6 338.8 96.2 1,074.9 Benefits Interest credited 149.8 112.2 49.6 36.5 348.1 Life insurance and annuity benefits 42.3 - 103.6 - 145.9 Policyholder dividends - - 26.3 - 26.3 Total benefits 192.1 112.2 179.5 36.5 520.3 Expenses Commissions 67.7 31.6 32.8 6.5 138.6 General operating expenses 47.2 70.7 74.6 5.2 197.7 Debt extinguishment costs - - - - - Deferral of policy acquisition costs (68.5) (9.2) (49.2) - (126.9) Subtotal 46.4 93.1 58.2 11.7 209.4 Amortization of policy acquisition costs 70.8 11.1 29.1 - 111.0 Amortization of value of business acquired 1.9 0.9 8.9 - 11.7 Interest expense on debt - - 0.1 26.7 26.8 Total expenses 119.1 105.1 96.3 38.4 358.9 Pre-tax operating earnings $ 66.1 $ 45.3 $ 63.0 $ 21.3 $ 195.7 Federal income tax expense 50.8 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 9.4 Realized losses on sales, net of hedging (4.2) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (3.8) Credit default swaps (0.5) Derivatives, excluding hedging gains and losses on sales and credit default swaps 0.8 Amounts credited to policyholder dividend obligation (0.7) Adjustment to VOBA amortization 0.1 Subtotal 1.1 Adjustment to DAC amortization related to net realized gains (losses), net of taxes (2.5) Discontinued operations, net of taxes (2.3) Net income $ 141.2 (1) Excluding operating items (periodic net coupon settlements on non-qualifying derivatives, trading portfolio realized gains and losses, and trading portfolio valuation changes). Note: All prior periods have been reclassified to reflect Cap Pro Holding, Inc., NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) as discontinued operations. 6
  10. 10. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 This Page Intentionally Left Blank. 7
  11. 11. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Quarterly Consolidated Balance Sheets ($ in millions, except per share data) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Assets Investments Securities available-for-sale: Fixed maturity securities $ 31,778.5 $ 31,092.2 $ 30,106.0 $ 28,645.0 $ 27,980.9 Equity securities 80.8 78.6 75.6 76.5 63.2 Trading assets 28.5 34.7 34.4 27.8 21.0 Mortgage loans 9,214.7 9,332.5 9,148.6 9,048.3 9,060.7 Real estate 103.8 107.7 108.7 108.6 108.4 Policy loans 928.6 935.6 930.6 933.9 948.3 Other long-term investments 628.0 617.6 691.9 688.9 687.4 Short-term investments 2,022.0 2,104.2 2,073.2 2,830.5 2,169.7 Total investments 44,784.9 44,303.1 43,169.0 42,359.5 41,039.6 Cash 45.8 47.6 16.4 23.9 23.6 Accrued investment income 409.6 436.8 396.3 398.9 388.7 Deferred policy acquisition costs 3,581.0 3,710.4 3,685.4 3,794.7 3,875.6 Value of business acquired 458.9 457.7 449.7 443.3 405.2 Other intangible assets 46.7 46.1 45.6 45.4 44.9 Goodwill 389.6 389.6 364.5 359.0 359.0 Other assets 2,214.1 2,227.5 2,069.2 2,200.3 2,117.3 Assets held in separate accounts 63,769.1 65,802.5 65,963.8 66,933.7 64,829.1 Total assets $ 115,699.7 $ 117,421.3 $ 116,159.9 $ 116,558.7 $ 113,083.0 Liabilities and shareholders' equity Future policy benefits and claims $ 40,842.3 $ 40,787.4 $ 39,748.1 $ 39,519.4 $ 38,451.3 Short-term debt 352.1 391.2 252.3 147.4 189.8 Long-term debt 1,406.1 1,406.0 1,398.0 1,398.3 1,398.4 Other liabilities 3,895.2 3,658.6 3,447.3 3,433.7 2,977.6 Liabilities related to separate accounts 63,769.1 65,802.5 65,963.8 66,933.7 64,829.1 110,264.8 112,045.7 110,809.5 111,432.5 107,846.2 Shareholders' equity 5,434.9 5,375.6 5,350.4 5,126.2 5,236.8 Total liabilities and shareholders' equity $ 115,699.7 $ 117,421.3 $ 116,159.9 $ 116,558.7 $ 113,083.0 Capital Structure ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Total capital, including AOCI $ 6,841.0 $ 6,781.6 $ 6,748.4 $ 6,524.5 $ 6,635.2 Less AOCI 395.7 196.1 100.7 (77.9) (202.0) Total capital, excluding AOCI $ 6,445.3 $ 6,585.5 $ 6,647.7 $ 6,602.4 $ 6,837.2 Leverage, including AOCI Long-term debt--to--total capital 20.6% 20.7% 20.7% 21.4% 21.1% Leverage, excluding AOCI Long-term debt--to--total capital 21.8% 21.3% 21.0% 21.2% 20.5% Ratio of pre-tax operating earnings before interest expense to interest expense 8.3X 6.9X 7.8X 8.1X 8.7X 8
  12. 12. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Individual Investments Quarterly Earnings Trends ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Operating Revenues Asset fees $ 112.7 $ 118.5 $ 118.1 $ 124.0 $ 125.0 Administrative fees 3.6 4.1 4.3 4.6 4.9 Surrender fees 16.2 16.0 14.2 15.2 14.2 Total policy charges 132.5 138.6 136.6 143.8 144.1 Net Investment Income General account assets 226.1 226.4 220.3 212.7 200.0 Charge for invested capital (6.3) (6.5) (6.9) (6.3) (6.1) Total net investment income 219.8 219.9 213.4 206.4 193.9 Premiums on income products 24.7 26.4 29.7 31.9 34.6 Other income 0.3 0.4 0.4 0.5 0.6 Total operating revenues 377.3 385.3 380.1 382.6 373.2 Benefits Interest credited 149.8 148.2 144.5 137.7 132.7 Immediate annuity benefits 21.1 22.7 25.7 28.5 30.4 Policy benefits 21.2 14.6 16.3 12.5 19.2 Total benefits 192.1 185.5 186.5 178.7 182.3 Expenses Commissions 67.7 62.4 65.7 73.6 86.2 General operating expenses 47.2 47.3 50.7 48.4 56.0 Deferral of policy acquisition costs (68.5) (59.9) (62.0) (74.4) (90.8) Subtotal 46.4 49.8 54.4 47.6 51.4 Amortization of policy acquisition costs 70.8 92.2 83.7 97.6 84.8 Amortization of value of business acquired 1.9 1.6 2.1 2.3 2.2 Total expenses 119.1 143.6 140.2 147.5 138.4 Pre-tax operating earnings $ 66.1 $ 56.2 $ 53.4 $ 56.4 $ 52.5 Key Ratios/Statistics Average Account Values: General account $ 16,223.7 $ 16,110.5 $ 15,515.1 $ 14,825.4 $ 14,374.0 Separate account 35,060.4 35,669.0 35,975.9 36,504.3 36,815.8 Advisory services program 281.5 345.3 393.7 443.3 491.6 Total average individual investments account values $ 51,565.6 $ 52,124.8 $ 51,884.7 $ 51,773.0 $ 51,681.4 Earned rate 5.57% 5.62% 5.68% 5.74% 5.56% Credited rate 3.69% 3.68% 3.73% 3.72% 3.69% Interest spread on average general account values 1.88% 1.94% 1.95% 2.02% 1.87% Prepayment penalties and bond call premium income 0.17% 0.30% 0.19% 0.11% 0.09% Base interest spread on average general account values 1.71% 1.64% 1.76% 1.91% 1.78% Asset fees to average separate account values 1.29% 1.33% 1.31% 1.36% 1.36% General operating expenses to average account values 0.37% 0.36% 0.39% 0.37% 0.43% Pre-tax operating earnings to average account values 0.51% 0.43% 0.41% 0.44% 0.41% Pre-tax operating earnings to operating revenues 17.5% 14.6% 14.0% 14.7% 14.1% Average allocated capital $ 1,678.2 $ 1,689.8 $ 1,649.3 $ 1,563.0 $ 1,504.3 Return on average allocated capital 12.0% 16.7% 12.1% 11.9% 11.8% (1) Adjusted return on average allocated capital 12.0% 10.9% 12.1% 11.9% 11.8% (1) 3Q 2005 return adjusted for $24.3 million impact of one-time tax adjustments associated with separate account dividend received deductions. Note: All prior periods have been reclassified to reflect NFS Bermuda as discontinued operations. Individual Investments Account Value Activity ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Individual Variable Annuities Balance, beginning of period $ 40,441.0 $ 40,726.4 $ 41,651.8 $ 40,796.0 $ 42,071.5 Deposits 943.1 870.2 903.5 1,045.0 1,279.9 Withdrawals and surrenders (1,388.7) (1,429.5) (1,456.8) (1,535.4) (1,479.4) Net flows (445.6) (559.3) (553.3) (490.4) (199.5) Investment performance/interest credited 848.7 1,615.9 971.1 1,903.4 (605.1) Policy charges (133.5) (138.9) (137.6) (140.6) (141.3) Benefits and other 15.8 7.7 24.6 3.1 15.1 Acquisitions/(terminations), net - - (1,160.6) - - Balance, end of period $ 40,726.4 $ 41,651.8 $ 40,796.0 $ 42,071.5 $ 41,140.7 Individual Fixed Annuities Balance, beginning of period $ 8,817.6 $ 8,731.8 $ 8,559.3 $ 8,041.8 $ 7,746.6 Deposits 52.4 27.4 31.0 38.6 42.7 Withdrawals and surrenders (230.0) (274.0) (330.0) (400.9) (437.5) Net flows (177.6) (246.6) (299.0) (362.3) (394.8) Policyholder interest credited 83.7 82.8 77.6 73.4 79.2 Policy charges (2.9) (3.2) (2.6) (2.8) (2.5) Benefits and other 11.0 (5.5) (3.9) (3.5) (3.5) Acquisitions/(terminations), net - - (289.6) - - Balance, end of period $ 8,731.8 $ 8,559.3 $ 8,041.8 $ 7,746.6 $ 7,425.0 Income Products $ 1,935.0 $ 1,954.7 $ 1,978.3 $ 2,025.1 $ 1,970.6 Advisory services program $ 314.6 $ 375.9 $ 411.5 $ 475.0 $ 508.1 Total individual investment account values $ 51,707.8 $ 52,541.7 $ 51,227.6 $ 52,318.2 $ 51,044.4 9
  13. 13. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Individual Investments Account Values by Product ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Individual Variable Annuities BEST of AMERICA products $ 33,119.9 $ 33,989.0 $ 32,937.0 $ 34,117.5 $ 33,495.1 Private label annuities 7,110.0 7,178.4 7,398.9 7,505.5 7,243.9 Nationwide Financial Network and other 496.5 484.4 460.1 448.5 401.7 Total individual variable annuities $ 40,726.4 $ 41,651.8 $ 40,796.0 $ 42,071.5 $ 41,140.7 Individual Fixed Annuities $ 8,731.8 $ 8,559.3 $ 8,041.8 $ 7,746.6 $ 7,425.0 Income Products $ 1,935.0 $ 1,954.7 $ 1,978.3 $ 2,025.1 $ 1,970.6 Advisory Services Program $ 314.6 $ 375.9 $ 411.5 $ 475.0 $ 508.1 Total individual investment account values $ 51,707.8 $ 52,541.7 $ 51,227.6 $ 52,318.2 $ 51,044.4 Individual Investments Sales by Product ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Individual Variable Annuities BEST of AMERICA products $ 832.4 $ 720.1 $ 767.6 $ 912.5 $ 1,116.3 Private label annuities 95.3 79.8 82.3 73.0 96.7 Nationwide Financial Network and other 1.3 1.1 1.1 0.9 1.0 Total individual variable annuities $ 929.0 $ 801.0 $ 851.0 $ 986.4 $ 1,214.0 Individual Fixed Annuities $ 67.6 $ 31.5 $ 32.6 $ 39.5 $ 45.8 Income Products $ 47.7 $ 49.3 $ 54.8 $ 58.5 $ 55.9 Advisory Services Program $ 63.8 $ 65.1 $ 49.2 $ 62.6 $ 70.1 Total individual investment sales $ 1,108.1 $ 946.9 $ 987.6 $ 1,147.0 $ 1,385.8 Individual Investments Sales by Channel ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Individual Variable Annuities Non-affiliated Independent broker/dealers $ 355.5 $ 309.4 $ 311.5 $ 347.7 $ 412.6 Wirehouse and regional firms 217.6 198.3 197.8 220.8 274.4 Financial institutions 267.2 224.8 250.3 318.2 410.6 Life specialists - - - 0.8 - Affiliated Nationwide agents 63.2 48.1 60.5 63.6 71.3 Nationwide Financial Network 25.5 20.4 30.9 35.3 45.1 Total individual variable annuities $ 929.0 $ 801.0 $ 851.0 $ 986.4 $ 1,214.0 Individual Fixed Annuities Non-affiliated Independent broker/dealers $ 1.9 $ 1.9 $ 1.6 $ 2.6 $ 2.5 Wirehouse and regional firms 3.4 1.2 1.9 1.0 3.0 Financial institutions 53.5 16.3 8.8 14.7 19.0 Affiliated Nationwide agents 7.9 11.0 17.9 17.4 19.8 Nationwide Financial Network 0.9 1.1 2.4 3.8 1.5 Total individual fixed annuities $ 67.6 $ 31.5 $ 32.6 $ 39.5 $ 45.8 Income Products Non-affiliated Independent broker/dealers $ 16.6 $ 17.6 $ 20.4 $ 28.1 $ 28.5 Wirehouse and regional firms 15.5 19.0 18.2 17.0 15.5 Financial institutions 9.0 4.8 8.6 6.1 9.4 Affiliated Nationwide agents 3.1 3.7 3.9 3.6 3.1 Nationwide Financial Network 3.5 4.2 3.7 3.7 (0.6) Total income products $ 47.7 $ 49.3 $ 54.8 $ 58.5 $ 55.9 Advisory Services Program Non-affiliated Independent broker/dealers $ 54.9 $ 57.7 $ 44.4 $ 48.0 $ 60.2 Financial institutions 2.9 1.5 3.2 4.0 5.7 Affiliated Nationwide Financial Network 6.0 5.9 1.6 10.6 4.2 Total advisory services program $ 63.8 $ 65.1 $ 49.2 $ 62.6 $ 70.1 Total individual investment sales $ 1,108.1 $ 946.9 $ 987.6 $ 1,147.0 $ 1,385.8 10
  14. 14. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Retirement Plans Quarterly Earnings Trends ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Operating Revenues Asset fees $ 34.1 $ 34.2 $ 34.4 $ 33.9 $ 33.6 Administrative fees 2.0 1.8 2.4 2.7 22.6 Surrender fees 2.5 1.7 1.9 1.5 1.1 Total policy charges 38.6 37.7 38.7 38.1 57.3 Net investment income 162.3 165.7 167.1 164.2 159.8 Other income 61.7 68.0 70.2 76.3 77.8 Total operating revenues 262.6 271.4 276.0 278.6 294.9 Benefits Interest credited 112.2 115.4 115.6 113.2 113.0 Expenses Commissions 31.6 33.7 34.3 37.8 36.6 General operating expenses 70.7 72.6 72.8 72.2 78.2 Deferral of policy acquisition costs (9.2) (9.1) (8.9) (9.4) (9.4) Subtotal 93.1 97.2 98.2 100.6 105.4 Amortization of policy acquisition costs 11.1 12.1 11.9 10.1 10.9 Amortization of value of business acquired 0.9 1.3 0.6 1.1 1.2 Total expenses 105.1 110.6 110.7 111.8 117.5 Pre-tax operating earnings $ 45.3 $ 45.4 $ 49.7 $ 53.6 $ 64.4 Key Ratios/Statistics Average Account Values: General account $ 10,795.0 $ 11,010.1 $ 11,151.0 $ 11,241.2 $ 11,050.0 Separate account 19,582.4 19,342.2 19,737.8 19,298.8 18,155.5 Non insurance assets 11,914.9 13,023.6 14,056.6 15,258.6 16,085.7 Administration only 35,400.4 36,725.4 37,508.5 39,690.3 42,162.9 Total average retirement plan account values $ 77,692.7 $ 80,101.3 $ 82,453.9 $ 85,488.9 $ 87,454.1 Earned rate 6.01% 6.02% 5.99% 5.84% 5.78% Credited rate 4.16% 4.19% 4.15% 4.03% 4.09% Interest spread on average general account values 1.85% 1.83% 1.84% 1.81% 1.69% Prepayment penalties and bond call premium income 0.19% 0.18% 0.19% 0.09% 0.06% Base interest spread on average general account values 1.66% 1.65% 1.65% 1.72% 1.63% Asset fees to average separate account values 0.70% 0.71% 0.70% 0.70% 0.74% General operating expenses to average account values 0.36% 0.36% 0.35% 0.34% 0.36% Pre-tax operating earnings to average account values 0.23% 0.23% 0.24% 0.25% 0.29% Pre-tax operating earnings to operating revenue 17.3% 16.7% 18.0% 19.2% 21.8% Average allocated capital $ 753.6 $ 784.1 $ 806.5 $ 816.2 $ 817.1 Return on average allocated capital 17.7% 25.1% 20.1% 19.4% 23.0% (1) Adjusted return on average allocated capital 17.7% 17.7% 20.1% 19.4% 23.0% (1) 3Q 2005 return adjusted for $14.6 million impact of one-time tax adjustments associated with separate account dividend received deductions. Retirement Plans Account Value Activity ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Private Sector Pension Plans Balance, beginning of period $ 38,109.3 $ 39,324.9 $ 41,235.7 $ 42,906.5 $ 46,249.9 New deposits/sales 1,682.4 1,833.3 1,676.4 2,327.7 1,873.8 Participant withdrawals and surrenders (1,308.3) (1,464.6) (1,601.7) (1,855.7) (1,624.0) Net flows 374.1 368.7 74.7 472.0 249.8 Investment performance/interest credited 811.6 1,591.8 1,027.6 2,112.0 (48.2) Policy and other charges (52.9) (53.5) (57.8) (25.2) (62.2) Case acquisitions/(terminations), net 82.8 3.8 626.3 784.6 260.8 Balance, end of period $ 39,324.9 $ 41,235.7 $ 42,906.5 $ 46,249.9 $ 46,650.1 Public Sector Pension Plans Balance, beginning of period $ 38,982.5 $ 38,968.6 $ 40,673.4 $ 40,092.0 $ 41,729.2 New deposits/sales 984.8 1,004.2 940.3 1,020.0 993.2 Participant withdrawals and surrenders (640.6) (634.2) (625.0) (694.2) (654.2) Net flows 344.2 370.0 315.3 325.8 339.0 Investment performance/interest credited 575.5 1,359.3 850.3 1,376.2 (370.1) Policy and other charges (17.3) (17.5) (17.4) (18.0) (38.1) Case acquisitions/(terminations), net (916.3) (7.0) (1,729.6) (46.8) (1,381.1) Balance, end of period $ 38,968.6 $ 40,673.4 $ 40,092.0 $ 41,729.2 $ 40,278.9 Total retirement plan account values $ 78,293.5 $ 81,909.1 $ 82,998.5 $ 87,979.1 $ 86,929.0 11
  15. 15. Nationwide Financial Services, Inc. Statistical Supplement June 30, 2006 Retirement Plans Account Values by Product ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Private Sector Pension Plans BEST of AMERICA annuity products $ 7,995.6 $ 7,969.2 $ 7,791.9 $ 7,738.8 $ 7,399.3 BEST of AMERICA trust products 12,413.4 13,633.7 14,479.5 16,037.7 16,133.6 Subtotal BEST of AMERICA 20,409.0 21,602.9 22,271.4 23,776.5 23,532.9 The 401(k) Company 11,712.4 12,215.3 13,147.7 16,349.9 17,024.0 Nationwide Financial Network products 1,411.2 1,372.3 1,378.4 1,316.5 1,304.8 Nationwide employee and agent benefit plans 5,155.2 5,426.4 5,504.2 4,207.1 4,204.7 Other 637.1 618.8 604.8 599.9 583.7 Total private sector pension plans $ 39,324.9 $ 41,235.7 $ 42,906.5 $ 46,249.9 $ 46,650.1 Public Sector Pension Plans IRC Section 457 annuities $ 14,797.6 $ 15,321.2 $ 15,790.2 $ 16,148.1 $ 14,908.2 Administration only agreements 24,171.0 25,352.2 24,301.8 25,581.1 25,370.7 Total public sector pension plans $ 38,968.6 $ 40,673.4 $ 40,092.0 $ 41,729.2 $ 40,278.9 Total retirement plan account values $ 78,293.5 $ 81,909.1 $ 82,998.5 $ 87,979.1 $ 86,929.0 Retirement Plans Sales by Product ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Private Sector Pension Plans BEST of AMERICA annuity products $ 357.5 $ 361.0 $ 296.7 $ 351.0 $ 327.8 BEST of AMERICA trust products 888.7 948.0 971.2 1,277.5 976.9 Subtotal BEST of AMERICA 1,246.2 1,309.0 1,267.9 1,628.5 1,304.7 The 401(k) Company 323.7 303.5 288.3 535.9 422.3 Nationwide Financial Network products 41.7 52.6 58.4 56.5 40.6 Other 16.0 - - 12.6 20.8 Total private sector pension plan $ 1,627.6 $ 1,665.1 $ 1,614.6 $ 2,233.5 $ 1,788.4 Public Sector Pension Plans IRC Section 457 annuities $ 394.4 $ 397.6 $ 379.0 $ 407.3 $ 389.0 Administration only agreements 590.4 606.7 561.3 612.6 604.2 Total public sector pension plans $ 984.8 $ 1,004.3 $ 940.3 $ 1,019.9 $ 993.2 Total retirement plan sales $ 2,612.4 $ 2,669.4 $ 2,554.9 $ 3,253.4 $ 2,781.6 Retirement Plans Sales by Channel ($ in millions) Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Private Sector Pension Plans Non-affiliated Independent broker/dealers $ 793.2 $ 828.6 $ 770.3 $ 994.7 $ 810.4 Wirehouse and regional firms 225.1 215.3 248.4 337.0 245.8 Financial institutions 125.7 133.8 137.2 167.7 120.4 Pension plan administrators 116.0 108.2 104.9 135.9 139.6 Affiliated Nationwide Retirement Solutions 8.9 8.4 8.5 8.6 8.0 Nationwide agents 16.5 39.0 19.2 24.0 20.2 Nationwide Financial Network 18.5 28.3 37.8 29.7 21.7 The 401(k) Company 323.7 303.5 288.3 535.9 422.3 Total private sector pension plans $ 1,627.6 $ 1,665.1 $ 1,614.6 $ 2,233.5 $ 1,788.4 Public Sector Pension Plans Nationwide Retirement Solutions $ 984.8 $ 1,004.3 $ 940.3 $ 1,019.9 $ 993.2 Total retirement plan sales $ 2,612.4 $ 2,669.4 $ 2,554.9 $ 3,253.4 $ 2,781.6 12

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