nationwide 3Q07 Statistical Supplement

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nationwide 3Q07 Statistical Supplement

  1. 1. THIRD QUARTER 2007 Nationwide Financial® Statistical Supplement
  2. 2. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 This Page Intentionally Left Blank.
  3. 3. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 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 September 30, 2007 5 For the three months ended September 30, 2006 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 Nationwide Bank and Medium Term Notes Key Ratios and Statistics 17 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 27-42 Glossary 43-46 Shareholder Information 47
  4. 4. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Quarterly Financial Highlights ($ in millions except for per share data) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Operating Revenues Individual investments $ 386.9 $ 380.6 $ 371.2 $ 368.9 $ 359.0 Retirement plans 279.8 279.6 281.1 283.3 284.9 Individual protection 339.0 335.3 343.2 336.6 335.3 Corporate and other 145.8 164.4 182.0 188.5 172.1 Total operating revenues $ 1,151.5 $ 1,159.9 $ 1,177.5 $ 1,177.3 $ 1,151.3 Net realized gains (losses) on investments, hedging (1) instruments and hedged items 5.5 13.0 (13.5) (4.2) (17.0) Total revenues $ 1,157.0 $ 1,172.9 $ 1,164.0 $ 1,173.1 $ 1,134.3 Pre-tax Operating Earnings Individual investments $ 65.0 $ 45.9 $ 57.2 $ 109.4 $ 65.0 Retirement plans 55.4 46.2 52.2 64.9 59.6 Individual protection 71.4 78.9 83.6 79.4 67.0 Corporate and other 17.3 19.5 32.3 26.1 13.6 Pre-tax operating earnings $ 209.1 $ 190.5 $ 225.3 $ 279.8 $ 205.2 Federal income tax expense 52.0 41.4 49.8 81.3 49.8 Net operating earnings $ 157.1 $ 149.1 $ 175.5 $ 198.5 $ 155.4 Net realized gains (losses) on investments, hedging (1) instruments and hedged items, net of taxes 3.6 8.5 (8.8) (2.7) (11.0) Adjustment to amortization related to net realized gains (losses), net of taxes 1.2 0.8 1.7 1.5 2.6 Discontinued operations, net of taxes - - 45.9 - - Cumulative effect of adoption of accounting principles, net of taxes - - (6.0) - - Net income $ 161.9 $ 158.4 $ 208.3 $ 197.3 $ 147.0 Per Common Diluted Share Net operating earnings $ 1.05 $ 1.00 $ 1.19 $ 1.38 $ 1.09 Net realized gains (losses) on investments, hedging (1) instruments and hedged items, net of taxes 0.02 0.05 (0.05) (0.02) (0.08) Adjustment to amortization related to net realized gains (losses), net of taxes 0.01 0.01 0.01 0.01 0.02 Discontinued operations, net of taxes - - 0.31 - - Cumulative effect of adoption of accounting principles, net of taxes - - (0.04) - - Net income $ 1.08 $ 1.06 $ 1.42 $ 1.37 $ 1.03 Sales by Channel Non-affiliated Independent broker/dealers $ 1,363.9 $ 1,525.8 $ 1,708.7 $ 1,510.5 $ 1,555.0 Wirehouse and regional firms 596.4 691.5 679.7 680.7 703.6 Financial institutions 570.1 620.6 590.5 642.8 604.1 Pension plan administrators 124.8 132.5 175.8 98.9 95.6 Life specialists 46.3 277.7 88.3 91.1 12.9 Affiliated Nationwide Retirement Solutions 1,031.3 989.2 1,082.2 1,079.6 1,073.8 Nationwide agents 186.6 201.7 196.1 195.8 183.1 Nationwide Financial Network 168.3 173.7 158.3 174.2 174.6 Mullin TBG 21.4 31.6 115.0 62.5 41.5 Total $ 4,109.1 $ 4,644.3 $ 4,794.6 $ 4,536.1 $ 4,444.2 (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: During the quarter ended June 30, 2007, NFS restated its consolidated financial statements for all periods presented to reflect 1) the resulting change in reporting entity related to a current year acquisition (Nationwide Funds Group (NFG)) and 2) the change in accounting principle related to the accrual for litigation loss contingency legal expenses. In addition, the results of operations of The 401(k) Company are reflected as discontinued operations for 2006 and all prior years and the sales and account value sections in the subsequent portions of the report exclude amounts applicable to the operations that were discontinued. 1
  5. 5. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Quarterly Financial Highlights ($ in millions except for per share data) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Balance Sheet Data Total assets $ 114,962.0 $ 119,531.1 $ 120,469.7 $ 121,390.3 $ 121,460.5 Customer funds managed and administered $ 148,759.1 $ 156,909.9 $ 158,898.3 $ 164,261.0 $ 165,275.2 Shareholders' equity (1) Including accumulated other comprehensive income (AOCI) $ 5,686.9 $ 5,622.7 $ 5,807.7 $ 5,453.2 $ 5,340.4 AOCI 47.8 31.9 83.6 (69.1) (61.1) Excluding AOCI $ 5,639.1 $ 5,590.8 $ 5,724.1 $ 5,522.3 $ 5,401.5 Net operating return on average equity excluding AOCI 11.3% 10.6% 12.4% 14.1% 11.4% Statutory capital and surplus $ 3,504.2 $ 3,336.6 $ 3,010.3 $ 3,182.6 $ 3,249.3 Stock Data Closing Price $ 48.10 $ 54.20 $ 53.86 $ 63.22 $ 53.82 Weighted average common shares outstanding Basic 149.5 148.7 145.9 143.2 141.8 Diluted 150.3 149.8 147.1 144.3 142.7 Book value per share Including AOCI $ 37.99 $ 38.51 $ 39.94 $ 38.08 $ 38.48 Excluding AOCI $ 37.67 $ 38.29 $ 39.37 $ 38.56 $ 38.92 (1) Includes changes in fair value of certain investments and derivatives under SFAS 115 and SFAS 133. Note: 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 Retirement Individual Corporate Investments Plans Protection and Other Variable Annuities Public Sector - 457 Fixed Life Medium Term Notes Universal Nationwide Bank Whole Fixed Annuities Private Sector – 401(k) Term Income Products Nationwide Funds Group Investment Life Variable Universal Advisory Services Structured Products COLI Corporate Other 2
  6. 6. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 This Page Intentionally Left Blank. 3
  7. 7. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Quarterly Consolidated Income Statements ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Operating Revenues Asset fees $ 169.2 $ 183.1 $ 184.2 $ 193.0 $ 193.5 Cost of insurance charges 100.6 102.3 104.1 103.7 105.1 Administrative fees 36.2 25.5 29.0 28.0 29.7 Surrender fees 21.6 18.9 18.6 18.4 17.2 Total policy charges 327.6 329.8 335.9 343.1 345.5 Traditional life and immediate annuity premiums 110.5 113.5 110.4 104.9 101.7 Net investment income 578.2 572.4 589.8 577.8 547.3 Operating realized gains (losses) 4.1 3.1 2.1 1.5 (3.4) Other income 131.1 141.1 139.3 150.0 160.2 Total operating revenues 1,151.5 1,159.9 1,177.5 1,177.3 1,151.3 Benefits Interest credited 348.2 345.5 342.1 337.0 333.3 Life insurance and annuity benefits 163.8 170.5 153.6 186.1 161.4 Policyholder dividends 24.6 21.4 21.3 20.0 23.1 Total benefits 536.6 537.4 517.0 543.1 517.8 Expenses Commissions 161.1 175.7 170.0 182.7 180.9 General operating expenses 233.6 279.5 239.5 255.8 245.1 Debt extinguishment costs - - - 10.2 - Deferral of policy acquisition costs (138.8) (167.1) (145.1) (158.0) (155.0) Subtotal 255.9 288.1 264.4 290.7 271.0 Amortization of policy acquisition costs 109.8 109.6 135.7 20.8 116.3 Amortization of value of business acquired 14.8 7.1 10.3 15.3 11.9 Interest expense on debt 25.3 27.2 24.8 27.6 29.1 Total expenses 405.8 432.0 435.2 354.4 428.3 Pre-tax operating earnings $ 209.1 $ 190.5 $ 225.3 $ 279.8 $ 205.2 Federal income tax expense 52.0 41.4 49.8 81.3 49.8 Net operating earnings $ 157.1 $ 149.1 $ 175.5 $ 198.5 $ 155.4 Net realized gains (losses) on investments, hedging (1) instruments and hedged items, net of taxes Realized gains on sales, net of hedging 10.2 31.2 14.9 12.4 13.9 Realized losses on sales, net of hedging (4.4) (12.5) (14.8) (11.6) (13.4) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (2.9) (5.0) (8.6) (4.1) (10.7) Credit default swaps (0.1) (0.5) (0.2) (1.0) (0.8) Derivatives, excluding hedging gains and losses on sales and credit default swaps 0.3 (4.6) 0.4 1.5 0.3 Amounts credited to policyholder dividend obligation 0.5 0.1 (0.7) (0.1) (0.5) Adjustment to VOBA amortization - (0.2) 0.2 0.2 0.2 Subtotal 3.6 8.5 (8.8) (2.7) (11.0) Adjustment to amortization related to net realized gains (losses), net of taxes 1.2 0.8 1.7 1.5 2.6 Discontinued operations, net of taxes - - 45.9 - - Cumulative effect of adoption of accounting principles, net of taxes - - (6.0) - - Net income $ 161.9 $ 158.4 $ 208.3 $ 197.3 $ 147.0 (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 The 401(k) Company are reflected as discontinued operations for 2006 and all prior years. 4
  8. 8. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Combining Income Statement For the three months ended September 30, 2007 Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Operating Revenues Asset fees $ 148.0 $ 32.1 $ 13.4 $ - $ 193.5 Cost of insurance charges - - 105.1 - 105.1 Administrative fees 7.0 3.2 19.5 - 29.7 Surrender fees 11.5 0.6 5.1 - 17.2 Total policy charges 166.5 35.9 143.1 - 345.5 Traditional life and immediate annuity premiums 29.7 - 72.0 - 101.7 Net investment income 153.4 162.1 116.7 115.1 547.3 Operating realized gains (losses) - - - (3.4) (3.4) Other income 9.4 86.9 3.5 60.4 160.2 Total operating revenues 359.0 284.9 335.3 172.1 1,151.3 Benefits Interest credited 109.7 111.9 48.1 63.6 333.3 Life insurance and annuity benefits 51.9 - 109.5 - 161.4 Policyholder dividends - - 23.1 - 23.1 Total benefits 161.6 111.9 180.7 63.6 517.8 Expenses Commissions 101.1 42.2 30.8 6.8 180.9 General operating expenses 50.2 70.1 65.6 59.2 245.1 Deferral of policy acquisition costs (100.1) (9.0) (45.9) - (155.0) Subtotal 51.2 103.3 50.5 66.0 271.0 Amortization of policy acquisition costs 79.8 9.4 27.1 - 116.3 Amortization of value of business acquired 1.4 0.7 9.8 - 11.9 Interest expense on debt - - 0.2 28.9 29.1 Total expenses 132.4 113.4 87.6 94.9 428.3 Pre-tax operating earnings $ 65.0 $ 59.6 $ 67.0 $ 13.6 $ 205.2 Federal income tax expense 49.8 Net operating earnings $ 155.4 Net realized gains (losses) on investments, hedging (1) instruments and hedged items, net of taxes (11.0) Adjustment to amortization related to net realized gains (losses), net of taxes 2.6 Net income $ 147.0 (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. 9. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Combining Income Statement For the three months ended September 30, 2006 Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Operating Revenues Asset fees $ 125.2 $ 32.9 $ 11.1 $ - $ 169.2 Cost of insurance charges - - 100.6 - 100.6 Administrative fees 5.5 7.9 22.8 - 36.2 Surrender fees 14.7 0.8 6.1 - 21.6 Total policy charges 145.4 41.6 140.6 - 327.6 Traditional life and immediate annuity premiums 37.3 - 73.2 - 110.5 Net investment income 199.1 164.7 118.6 95.8 578.2 Operating realized gains (losses) - - - 4.1 4.1 Other income 5.1 73.5 6.6 45.9 131.1 Total operating revenues 386.9 279.8 339.0 145.8 1,151.5 Benefits Interest credited 131.5 112.2 49.5 55.0 348.2 Life insurance and annuity benefits 55.5 - 108.3 - 163.8 Policyholder dividends - - 24.6 - 24.6 Total benefits 187.0 112.2 182.4 55.0 536.6 Expenses Commissions 86.0 37.4 29.9 7.8 161.1 General operating expenses 54.5 69.7 68.8 40.6 233.6 Deferral of policy acquisition costs (86.9) (8.8) (43.1) - (138.8) Subtotal 53.6 98.3 55.6 48.4 255.9 Amortization of policy acquisition costs 79.5 9.7 20.6 - 109.8 Amortization of value of business acquired 1.8 4.2 8.9 (0.1) 14.8 Interest expense on debt - - 0.1 25.2 25.3 Total expenses 134.9 112.2 85.2 73.5 405.8 Pre-tax operating earnings $ 65.0 $ 55.4 $ 71.4 $ 17.3 $ 209.1 Federal income tax expense 52.0 Net operating earnings $ 157.1 Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) 3.6 Adjustment to amortization related to net realized gains (losses), net of taxes 1.2 Net income $ 161.9 (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 The 401(k) Company are reflected as discontinued operations for 2006 and all prior years. 6
  10. 10. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 This Page Intentionally Left Blank. 7
  11. 11. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Quarterly Consolidated Balance Sheets ($ in millions, except per share data) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Assets Investments Securities available-for-sale: Fixed maturity securities $ 28,579.0 $ 28,160.0 $ 28,356.6 $ 27,479.5 $ 27,295.4 Equity securities 65.2 67.6 69.0 71.3 69.7 Trading assets 22.8 24.3 24.3 28.2 24.7 Mortgage loans 8,981.2 8,909.8 8,689.8 8,457.5 8,534.5 Real estate 104.8 76.7 67.8 65.2 46.6 Policy loans 957.7 966.9 974.6 991.5 1,007.2 Other long-term investments 698.3 856.0 1,256.2 1,277.6 1,195.7 Short-term investments 1,917.4 2,215.6 2,469.3 1,756.9 1,395.2 Total investments 41,326.4 41,276.9 41,907.6 40,127.7 39,569.0 Cash 62.2 84.1 88.8 53.8 73.2 Accrued investment income 412.6 373.8 393.3 356.1 412.5 Deferred policy acquisition costs 3,783.5 3,851.0 3,819.6 4,051.1 4,054.1 Value of business acquired 399.1 392.7 385.6 370.8 363.9 Other intangible assets 48.5 47.6 46.7 45.9 45.1 Goodwill 359.0 359.0 341.7 341.7 350.6 Other assets 2,443.9 2,451.3 2,198.3 2,250.4 2,805.4 Assets held in separate accounts 66,126.8 70,694.7 71,288.1 73,792.8 73,786.7 Total assets $ 114,962.0 $ 119,531.1 $ 120,469.7 $ 121,390.3 $ 121,460.5 Liabilities and shareholders' equity Future policy benefits and claims $ 38,131.9 $ 38,097.8 $ 37,322.6 $ 36,453.5 $ 36,313.2 Short-term debt 88.6 85.2 156.6 249.7 454.1 Long-term debt 1,398.1 1,398.5 1,398.9 1,499.7 1,515.1 Other liabilities 3,529.7 3,632.2 4,495.8 3,941.4 4,051.0 Liabilities related to separate accounts 66,126.8 70,694.7 71,288.1 73,792.8 73,786.7 109,275.1 113,908.4 114,662.0 115,937.1 116,120.1 Shareholders' equity 5,686.9 5,622.7 5,807.7 5,453.2 5,340.4 Total liabilities and shareholders' equity $ 114,962.0 $ 119,531.1 $ 120,469.7 $ 121,390.3 $ 121,460.5 Capital Structure ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Total capital, including AOCI $ 7,085.0 $ 7,021.2 $ 7,206.6 $ 6,952.9 $ 6,855.5 Less AOCI 47.8 31.9 83.6 (69.1) (61.1) Total capital, excluding AOCI $ 7,037.2 $ 6,989.3 $ 7,123.0 $ 7,022.0 $ 6,916.6 Leverage, including AOCI Long-term debt--to--total capital 19.7% 19.9% 19.4% 21.6% 22.1% Leverage, excluding AOCI Long-term debt--to--total capital 19.9% 20.0% 19.6% 21.4% 21.9% Ratio of pre-tax operating earnings before interest expense to interest expense 9.3X 8.0X 10.1X 11.1X 8.1X 8
  12. 12. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Individual Investments Quarterly Earnings Trends ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Operating Revenues Asset fees $ 125.2 $ 137.2 $ 137.8 $ 146.8 $ 148.0 Administrative fees 5.5 5.4 6.3 6.2 7.0 Surrender fees 14.7 12.5 12.6 12.6 11.5 Total policy charges 145.4 155.1 156.7 165.6 166.5 Net Investment Income General account assets 205.9 187.7 181.0 174.5 160.8 Charge for invested capital (6.8) (6.0) (7.0) (7.5) (7.4) Total net investment income 199.1 181.7 174.0 167.0 153.4 Premiums on income products 37.3 38.7 33.5 30.2 29.7 Other income 5.1 5.1 7.0 6.1 9.4 Total operating revenues 386.9 380.6 371.2 368.9 359.0 Benefits Interest credited 131.5 126.4 118.2 114.4 109.7 Immediate annuity benefits 31.7 36.3 28.9 26.9 27.1 Policy benefits 23.8 20.0 17.7 47.8 24.8 Total benefits 187.0 182.7 164.8 189.1 161.6 Expenses Commissions 86.0 94.7 88.8 100.0 101.1 General operating expenses 54.5 65.0 50.6 57.3 50.2 Deferral of policy acquisition costs (86.9) (98.7) (91.0) (100.9) (100.1) Subtotal 53.6 61.0 48.4 56.4 51.2 Amortization of policy acquisition costs 79.5 90.8 99.5 12.7 79.8 Amortization of value of business acquired 1.8 0.2 1.3 1.3 1.4 Total expenses 134.9 152.0 149.2 70.4 132.4 Pre-tax operating earnings $ 65.0 $ 45.9 $ 57.2 $ 109.4 $ 65.0 Key Ratios/Statistics Average Account Values: General account $ 13,824.3 $ 13,223.4 $ 12,664.0 $ 12,172.9 $ 11,588.1 Separate account 36,824.2 38,340.3 39,726.2 40,992.6 42,502.5 Advisory services program 528.7 573.2 607.0 630.3 656.6 Total average individual investments account values $ 51,177.2 $ 52,136.9 $ 52,997.2 $ 53,795.8 $ 54,747.2 Earned rate 5.95% 5.67% 5.71% 5.73% 5.55% Credited rate 3.80% 3.82% 3.73% 3.76% 3.79% Interest spread on average general account values 2.15% 1.85% 1.98% 1.97% 1.76% Income from mortgage loan prepayments and bond call premiums 0.24% 0.17% 0.15% 0.17% 0.09% Base interest spread on average general account values 1.91% 1.68% 1.83% 1.80% 1.67% Asset fees to average separate account values 1.36% 1.43% 1.39% 1.43% 1.39% General operating expenses to average account values 0.43% 0.50% 0.38% 0.43% 0.37% Pre-tax operating earnings to average account values 0.51% 0.35% 0.43% 0.81% 0.48% Pre-tax operating earnings to operating revenues 16.8% 12.1% 15.4% 29.7% 18.1% Average allocated capital $ 1,467.4 $ 1,441.9 $ 1,383.1 $ 1,393.8 $ 1,454.6 Return on average allocated capital 13.9% 11.1% 14.7% 22.4% 15.4% Key ratios excluding DAC items discussed 2Q'07 Return on average allocated capital 11.0% Pre-tax operating earnings to average account values 0.36% Pre-tax operating earnings to operating revenues 13.0% Individual Investments Account Value Activity ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Individual Variable Annuities Balance, beginning of period $ 41,140.7 $ 41,771.1 $ 43,804.8 $ 44,211.7 $ 46,131.5 Deposits 1,263.4 1,446.6 1,314.8 1,499.1 1,496.9 Withdrawals and surrenders (1,554.2) (1,564.3) (1,586.1) (1,714.0) (1,707.2) Net flows (290.8) (117.7) (271.3) (214.9) (210.3) Investment performance/interest credited 1,070.8 2,373.2 825.9 2,213.2 1,237.6 Policy charges (141.2) (153.1) (154.2) (162.5) (165.6) Benefits and other (8.4) (68.7) 6.5 84.0 73.8 Balance, end of period $ 41,771.1 $ 43,804.8 $ 44,211.7 $ 46,131.5 $ 47,067.0 Individual Fixed Annuities Balance, beginning of period $ 7,425.0 $ 6,995.6 $ 6,536.1 $ 6,158.4 $ 5,721.2 Deposits 53.3 43.6 44.2 45.8 49.8 Withdrawals and surrenders (534.1) (521.3) (470.4) (535.4) (706.3) Net flows (480.8) (477.7) (426.2) (489.6) (656.5) Policyholder interest credited 68.2 63.6 58.1 54.3 50.5 Policy charges (3.1) (2.2) (2.1) (1.9) (1.9) Benefits and other (13.7) (43.2) (7.5) - - Balance, end of period $ 6,995.6 $ 6,536.1 $ 6,158.4 $ 5,721.2 $ 5,113.3 Income Products $ 1,994.0 $ 2,025.6 $ 2,043.8 $ 2,064.4 $ 2,083.8 Advisory Services Program $ 549.2 $ 597.1 $ 616.8 $ 643.7 $ 669.5 Total individual investment account values $ 51,309.9 $ 52,963.6 $ 53,030.7 $ 54,560.8 $ 54,933.6 9
  13. 13. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Individual Investments Account Values by Product ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Individual Variable Annuities BEST of AMERICA products $ 34,215.3 $ 36,106.8 $ 36,628.6 $ 38,367.4 $ 39,167.0 Private label annuities 7,171.5 7,319.7 7,233.7 7,414.2 7,561.7 Nationwide Financial Network and other 384.3 378.3 349.4 349.9 338.3 Individual Fixed Annuities $ 6,995.6 $ 6,536.1 $ 6,158.4 $ 5,721.2 $ 5,113.3 Income Products $ 1,994.0 $ 2,025.6 $ 2,043.8 $ 2,064.4 $ 2,083.8 Advisory Services Program $ 549.2 $ 597.1 $ 616.8 $ 643.7 $ 669.5 Total individual investment account values $ 51,309.9 $ 52,963.6 $ 53,030.7 $ 54,560.8 $ 54,933.6 Individual Investments Sales by Product ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Individual Variable Annuities BEST of AMERICA products $ 1,096.6 $ 1,265.5 $ 1,166.9 $ 1,296.5 $ 1,274.4 Private label annuities 94.8 92.1 73.2 97.5 118.5 Nationwide Financial Network and other 1.0 0.7 0.9 0.8 0.6 Total individual variable annuities $ 1,192.4 $ 1,358.3 $ 1,241.0 $ 1,394.8 $ 1,393.5 Individual Fixed Annuities $ 57.2 $ 44.0 $ 37.3 $ 40.1 $ 37.0 Income Products $ 57.1 $ 59.2 $ 55.5 $ 50.2 $ 54.4 Advisory Services Program $ 47.7 $ 42.4 $ 36.8 $ 36.6 $ 42.6 Total individual investment sales $ 1,354.4 $ 1,503.9 $ 1,370.6 $ 1,521.7 $ 1,527.5 Individual Investments Sales by Channel ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Individual Variable Annuities Non-affiliated Independent broker/dealers $ 403.1 $ 443.1 $ 427.9 $ 448.9 $ 464.3 Wirehouse and regional firms 312.7 363.9 314.0 370.1 392.0 Financial institutions 383.3 446.7 402.4 465.8 442.1 Life specialists - - 0.1 - - Affiliated Nationwide agents 51.0 59.2 62.3 63.6 53.0 Nationwide Financial Network 42.3 45.4 34.3 46.4 42.1 Total individual variable annuities $ 1,192.4 $ 1,358.3 $ 1,241.0 $ 1,394.8 $ 1,393.5 Individual Fixed Annuities Non-affiliated Independent broker/dealers $ 5.4 $ 2.9 $ 5.4 $ 5.1 $ 7.3 Wirehouse and regional firms 3.1 2.7 3.6 2.3 2.0 Financial institutions 20.5 18.2 14.3 13.9 9.9 Affiliated Nationwide agents 24.7 17.8 12.4 14.5 14.7 Nationwide Financial Network 3.5 2.4 1.6 4.3 3.1 Total individual fixed annuities $ 57.2 $ 44.0 $ 37.3 $ 40.1 $ 37.0 Income Products Non-affiliated Independent broker/dealers $ 19.5 $ 22.0 $ 26.0 $ 24.8 $ 25.2 Wirehouse and regional firms 25.8 26.4 16.9 15.7 20.3 Financial institutions 7.9 7.3 8.8 6.3 5.1 Affiliated Nationwide agents 2.9 2.0 2.4 2.4 1.9 Nationwide Financial Network 1.0 1.5 1.4 1.0 1.9 Total income products $ 57.1 $ 59.2 $ 55.5 $ 50.2 $ 54.4 Advisory Services Program Non-affiliated Independent broker/dealers $ 41.3 $ 31.0 $ 28.7 $ 25.2 $ 27.0 Financial institutions 2.3 3.5 2.1 3.2 2.4 Affiliated Nationwide Financial Network 4.1 7.9 6.0 8.2 13.2 Total advisory services program $ 47.7 $ 42.4 $ 36.8 $ 36.6 $ 42.6 Total individual investment sales $ 1,354.4 $ 1,503.9 $ 1,370.6 $ 1,521.7 $ 1,527.5 10
  14. 14. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Retirement Plans Quarterly Earnings Trends ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Operating Revenues Asset fees $ 32.9 $ 33.6 $ 33.7 $ 33.1 $ 32.1 Administrative fees 7.9 2.8 2.6 2.6 3.2 Surrender fees 0.8 1.1 1.0 1.1 0.6 Total policy charges 41.6 37.5 37.3 36.8 35.9 Net investment income 164.7 163.5 165.5 161.9 162.1 Other income 73.5 78.6 78.3 84.6 86.9 Total operating revenues 279.8 279.6 281.1 283.3 284.9 Benefits Interest credited 112.2 113.2 111.1 111.0 111.9 Expenses Commissions 37.4 39.8 41.7 42.2 42.2 General operating expenses 69.7 81.6 74.9 74.8 70.1 Deferral of policy acquisition costs (8.8) (9.2) (9.0) (9.3) (9.0) Subtotal 98.3 112.2 107.6 107.7 103.3 Amortization of policy acquisition costs 9.7 7.6 9.8 (0.9) 9.4 Amortization of value of business acquired 4.2 0.4 0.4 0.6 0.7 Total expenses 112.2 120.2 117.8 107.4 113.4 Pre-tax operating earnings $ 55.4 $ 46.2 $ 52.2 $ 64.9 $ 59.6 Key Ratios/Statistics Average Account Values: General account $ 10,909.6 $ 11,079.3 $ 11,175.4 $ 11,216.3 $ 11,176.4 Separate account 17,668.4 18,193.8 18,441.8 18,256.8 17,569.7 Non insurance assets 16,611.8 17,962.0 19,314.3 20,581.9 21,648.1 Administration only 25,834.3 27,135.0 28,314.4 29,485.9 30,715.0 Total average retirement plan account values $ 71,024.1 $ 74,370.1 $ 77,245.9 $ 79,540.9 $ 81,109.2 Earned rate 6.03% 5.91% 5.92% 5.77% 5.80% Credited rate 4.11% 4.09% 3.97% 3.95% 4.00% Interest spread on average general account values 1.92% 1.82% 1.95% 1.82% 1.80% Income from mortgage loan prepayments and bond call premiums 0.12% 0.09% 0.11% 0.07% 0.06% Base interest spread on average general account values 1.80% 1.73% 1.84% 1.75% 1.74% Asset fees to average separate account values 0.74% 0.74% 0.73% 0.73% 0.73% General operating expenses to average account values 0.39% 0.44% 0.39% 0.38% 0.35% Pre-tax operating earnings to average account values 0.31% 0.25% 0.27% 0.33% 0.29% Pre-tax operating earnings to operating revenue 19.8% 16.5% 18.6% 22.9% 20.9% Average allocated capital $ 806.7 $ 815.4 $ 795.0 $ 737.4 $ 747.1 Return on average allocated capital 19.4% 17.1% 19.6% 24.8% 23.5% (1) Adjusted return on average allocated capital 19.4% 17.1% 19.6% 24.8% 23.5% Key ratios excluding DAC items discussed 2Q'07 Return on average allocated capital 21.1% Pre-tax operating earnings to average account values 0.27% Pre-tax operating earnings to operating revenues 19.2% Note: The results of operations of The 401(k) Company are reflected as discontinued operations for 2006 and all prior years. Retirement Plans Account Value Activity ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Private Sector Pension Plans Balance, beginning of period $ 29,626.1 $ 30,601.9 $ 32,645.3 $ 32,927.9 $ 33,929.2 New deposits/sales 1,427.9 1,563.6 2,006.0 1,506.2 1,536.8 Participant withdrawals and surrenders (1,225.2) (1,322.9) (1,520.2) (1,255.6) (1,402.9) Net flows 202.7 240.7 485.8 250.6 133.9 Investment performance/interest credited 838.9 1,867.9 598.6 1,506.2 721.2 Policy charges and other (65.8) (65.2) (65.1) (65.8) (66.5) Case acquisitions/(terminations), net - - (736.7) (689.7) (1,991.3) Balance, end of period $ 30,601.9 $ 32,645.3 $ 32,927.9 $ 33,929.2 $ 32,726.5 Public Sector Pension Plans Balance, beginning of period $ 40,278.9 $ 41,541.2 $ 43,951.8 $ 44,966.9 $ 47,257.8 New deposits/sales 1,023.4 981.8 1,074.4 1,071.9 1,066.0 Participant withdrawals and surrenders (567.9) (496.5) (717.3) (747.2) (812.7) Net flows 455.5 485.3 357.1 324.7 253.3 Investment performance/interest credited 914.6 1,882.2 692.4 2,032.2 1,065.0 Policy charges and other (19.0) (19.7) (19.5) (20.4) (21.0) Case acquisitions/(terminations), net (88.8) 62.8 (14.9) (45.6) (250.3) Balance, end of period $ 41,541.2 $ 43,951.8 $ 44,966.9 $ 47,257.8 $ 48,304.8 Total retirement plan account values $ 72,143.1 $ 76,597.1 $ 77,894.8 $ 81,187.0 $ 81,031.3 11
  15. 15. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Retirement Plans Account Values by Product ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Private Sector Pension Plans BEST of AMERICA annuity products $ 7,360.4 $ 7,557.1 $ 7,383.9 $ 7,514.0 $ 7,470.0 BEST of AMERICA trust products 17,089.9 18,834.1 19,794.4 21,369.3 21,926.9 Subtotal BEST of AMERICA 24,450.3 26,391.2 27,178.3 28,883.3 29,396.9 Nationwide Financial Network products 1,256.1 1,268.2 1,020.6 1,044.0 1,033.2 Nationwide employee and agent benefit plans 4,322.0 4,435.6 4,200.4 3,482.8 1,782.5 Other 573.5 550.3 528.6 519.1 513.9 Total private sector pension plans $ 30,601.9 $ 32,645.3 $ 32,927.9 $ 33,929.2 $ 32,726.5 Public Sector Pension Plans IRC Section 457 annuities $ 15,243.4 $ 15,979.5 $ 16,310.2 $ 16,942.6 $ 17,190.1 Administration only agreements 26,297.8 27,972.3 28,656.7 30,315.2 31,114.7 Total public sector pension plans $ 41,541.2 $ 43,951.8 $ 44,966.9 $ 47,257.8 $ 48,304.8 Total retirement plan account values $ 72,143.1 $ 76,597.1 $ 77,894.8 $ 81,187.0 $ 81,031.3 Retirement Plans Sales by Product ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Private Sector Pension Plans BEST of AMERICA annuity products $ 291.0 $ 260.4 $ 318.5 $ 254.8 $ 249.3 BEST of AMERICA trust products 1,024.5 1,225.1 1,487.4 1,190.1 1,201.7 Subtotal BEST of AMERICA 1,315.5 1,485.5 1,805.9 1,444.9 1,451.0 Nationwide Financial Network products 42.9 48.2 35.9 31.2 38.6 Other 15.0 21.0 21.0 19.8 14.9 Total private sector pension plans $ 1,373.4 $ 1,554.7 $ 1,862.8 $ 1,495.9 $ 1,504.5 Public Sector Pension Plans IRC Section 457 annuities $ 381.6 $ 355.4 $ 389.7 $ 385.5 $ 387.1 Administration only agreements 641.8 626.3 684.6 686.5 679.0 Total public sector pension plans $ 1,023.4 $ 981.7 $ 1,074.3 $ 1,072.0 $ 1,066.1 Total retirement plan sales $ 2,396.8 $ 2,536.4 $ 2,937.1 $ 2,567.9 $ 2,570.6 Retirement Plans Sales by Channel ($ in millions) Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Private Sector Pension Plans Non-affiliated Independent broker/dealers $ 824.6 $ 964.3 $ 1,157.3 $ 945.0 $ 959.4 Wirehouse and regional firms 239.7 282.2 326.3 274.3 267.6 Financial institutions 141.2 130.5 148.2 137.9 126.6 Pension plan administrators 124.8 132.5 175.8 98.9 95.6 Affiliated Nationwide Retirement Solutions 7.9 7.5 7.9 7.6 7.7 Nationwide agents 16.2 19.9 29.3 15.6 24.8 Nationwide Financial Network 19.0 17.8 18.0 16.6 22.8 Total private sector pension plans $ 1,373.4 $ 1,554.7 $ 1,862.8 $ 1,495.9 $ 1,504.5 Public Sector Pension Plans Nationwide Retirement Solutions $ 1,023.4 $ 981.7 $ 1,074.3 $ 1,072.0 $ 1,066.1 Total retirement plan sales $ 2,396.8 $ 2,536.4 $ 2,937.1 $ 2,567.9 $ 2,570.6 12
  16. 16. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2007 Individual Protection Quarterly Earnings Trends Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 ($ in millions) Operating Revenues Asset fees $ 11.1 $ 12.3 $ 12.7 $ 13.1 $ 13.4 Administrative fees 22.8 17.3 20.1 19.2 19.5 Surrender fees 6.1 5.3 5.0 4.7 5.1 Cost of insurance 100.6 102.3 104.1 103.7 105.1 Total policy charges 140.6 137.2 141.9 140.7 143.1 Net Investment Income General account assets 122.0 121.5 123.7 120.5 120.8 Charge for invested capital (3.4) (4.7) (4.1) (4.7) (4.1) Total net investment income 118.6 116.8 119.6 115.8 116.7 Traditional life premiums 73.2 74.8 76.9 74.7 72.0 Other income 6.6 6.5 4.8 5.4 3.5 Total operating revenues 339.0 335.3 343.2 336.6 335.3 Benefits Interest credited 49.5 47.1 47.3 47.6 48.1 Life benefits 108.3 114.2 107.0 111.4 109.5 Policyholder dividends 24.6 21.4 21.3 20.0 23.1 Total benefits 182.4 182.7 175.6 179.0 180.7 Expenses Commissions 29.9 33.0 31.2 32.6 30.8 General operating expenses 68.8 82.0 62.7 70.9 65.6 Deferral of policy acquisition costs (43.1) (59.2) (45.1) (47.8) (45.9) Subtotal 55.6 55.8 48.8 55.7 50.5 Amortization of policy acquisition costs 20.6 11.2 26.4 9.0 27.1 Amortization of value of business acquired 8.9 6.5 8.6 13.4 9.8 Interest expense on debt 0.1 0.2 0.2 0.1 0.2 Total expenses 85.2 73.7 84.0 78.2 87.6 Pre-tax operating earnings $ 71.4 $ 78.9 $ 83.6 $ 79.4 $ 67.0 Key Ratios/Statistics General operating expenses to operating revenues 20.3% 24.5% 18.3% 21.1% 19.6% Pre-tax operating earnings to operating revenues 21.1% 23.5% 24.4% 23.6% 20.0% Average allocated capital $ 1,852.3 $ 1,869.0 $ 1,933.2 $ 1,973.6 $ 1,973.5 Return on average allocated capital 10.5% 11.7% 12.1% 11.0% 9.7% Key ratios excluding DAC items discussed 2Q'07 Return on average allocated capital 9.7% Pre-tax operating earnings to operating revenues 20.6% Individual Protection Policy Reserves Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 ($ in millions) Individual investment life $ 5,545.3 $ 5,842.5 $ 5,927.3 $ 6,251.2 $ 6,400.5 Corporate investment life - excluding experience rated BOLI 6,235.8 6,600.9 6,738.2 7,049.6 7,162.0 Corporate investment life - experience rated BOLI 1,189.8 1,913.5 1,965.7 2,009.4 2,023.3 Subtotal investment life 12,970.9 14,356.9 14,631.2 15,310.2 15,585.8 Traditional life 4,282.9 4,170.9 4,153.8 4,150.0 4,152.0 Universal life 1,158.6 1,159.0 1,169.3 1,191.4 1,218.6 Subtotal fixed life 5,441.5 5,329.9 5,323.1 5,341.4 5,370.6 Total individual protection policy reserves $ 18,412.4 $ 19,686.8 $ 19,954.3 $ 20,651.6 $ 20,956.4 Individual Protection Insurance In Force Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 ($ in millions) Individual investment life $ 57,189.7 $ 57,536.7 $ 57,748.8 $ 57,489.0 $ 57,514.1 Corporate investment life - excluding experience rated BOLI 10,904.1 11,451.7 11,560.9 11,963.4 11,963.0 Corporate investment life - experience rated BOLI 13,320.3 13,312.7 13,308.7 13,295.4 13,289.7 Subtotal investment life 81,414.1 82,301.1 82,618.4 82,747.8 82,766.8 Traditional life 40,326.2 41,061.3 40,504.2 41,631.0 41,882.4 Universal life 9,720.0 9,950.3 10,082.2 10,270.3 10,100.8 Subtotal fixed life 50,046.2 51,011.6 50,586.4 51,901.3 51,983.2 Total individual protection insurance in force $ 131,460.3 $ 133,312.7 $ 133,204.8 $ 134,649.1 $ 134,750.0 13

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