nationwide 3Q06 Statistical Supplement

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nationwide 3Q06 Statistical Supplement

  1. 1. 2006 Third Quarter 2006 Nationwide Financial® Statistical Supplement
  2. 2. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 This Page Intentionally Left Blank.
  3. 3. Nationwide Financial Services, Inc. Statistical Supplement September 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 September 30, 2006 5 For the three months ended September 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 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 27-40 Historical Data Glossary 41-44 Shareholder Information 45
  4. 4. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 Quarterly Financial Highlights ($ in millions except for per share data) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Operating Revenues Individual investments $ 385.3 $ 380.1 $ 382.6 $ 373.2 $ 382.3 Retirement plans 271.4 276.0 278.6 294.9 286.5 Individual protection 331.4 339.7 338.4 333.7 338.6 Corporate and other 97.4 103.5 100.1 111.5 108.8 Total operating revenues $ 1,085.5 $ 1,099.3 $ 1,099.7 $ 1,113.3 $ 1,116.2 Net realized gains (losses) on investments, hedging (1) instruments and hedged items (14.5) 3.7 (8.1) (11.0) 5.5 Total revenues $ 1,071.0 $ 1,103.0 $ 1,091.6 $ 1,102.3 $ 1,121.7 Pre-tax Operating Earnings Individual investments $ 56.2 $ 53.4 $ 56.4 $ 52.5 $ 60.4 Retirement plans 45.4 49.7 53.6 64.4 53.6 Individual protection 63.8 59.6 64.9 60.5 71.0 Corporate and other (1.1) 22.6 11.6 16.6 21.7 Pre-tax operating earnings $ 164.3 $ 185.3 $ 186.5 $ 194.0 $ 206.7 Federal income tax expense (8.0) 33.1 42.2 (70.0) 52.0 Net operating earnings $ 172.3 $ 152.2 $ 144.3 $ 264.0 $ 154.7 Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) (9.4) 2.4 (5.3) (7.2) 3.6 Adjustment to amortization related to net realized gains (losses), net of taxes 2.9 0.1 3.3 1.0 1.2 Discontinued operations, net of taxes 0.9 (24.4) - - - Net income $ 166.7 $ 130.3 $ 142.3 $ 257.8 $ 159.5 Per Diluted Share Net operating earnings $ 1.12 $ 0.99 $ 0.94 $ 1.76 $ 1.03 Net realized gains (losses) on investments, hedging (1) (0.07) 0.02 (0.03) (0.05) 0.02 instruments and hedged items, net of taxes Adjustment to amortization related to net realized gains (losses), net of taxes 0.02 - 0.02 0.01 0.01 Discontinued operations, net of taxes 0.01 (0.16) - - - Net income $ 1.08 $ 0.85 $ 0.93 $ 1.72 $ 1.06 Sales by Channel Non-affiliated Independent broker/dealers $ 1,280.4 $ 1,207.9 $ 1,487.8 $ 1,380.7 $ 1,363.9 Wirehouse and regional firms 449.1 482.3 590.1 555.6 596.4 Financial institutions 398.8 424.3 523.7 580.7 570.1 Pension plan administrators 108.2 104.9 135.9 139.6 124.8 Life specialists 82.5 69.0 172.6 84.0 46.3 Affiliated Nationwide Retirement Solutions 1,012.7 948.8 1,028.5 1,001.2 1,031.3 Nationwide agents 188.8 207.2 196.4 203.1 186.6 Nationwide Financial Network 160.2 181.6 185.7 171.0 168.3 The 401(k) Company 303.5 288.3 535.9 422.3 365.2 TBG Financial 92.3 36.0 110.4 62.7 21.4 Total $ 4,076.5 $ 3,950.3 $ 4,967.0 $ 4,600.9 $ 4,474.3 (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: All prior periods have been reclassified to reflect NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) as discontinued operations. 1
  5. 5. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 Quarterly Financial Highlights ($ in millions except for per share data) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Balance Sheet Data Total assets $ 117,421.3 $ 116,159.9 $ 116,558.7 $ 113,083.0 $ 114,880.0 Customer funds managed and administered $ 155,650.6 $ 155,612.9 $ 162,451.7 $ 160,051.6 $ 163,240.5 Shareholders' equity (1) Including accumulated other comprehensive income (AOCI) $ 5,375.6 $ 5,350.4 $ 5,126.2 $ 5,236.8 $ 5,630.0 AOCI 196.1 100.7 (77.9) (202.0) 47.8 Excluding AOCI $ 5,179.5 $ 5,249.7 $ 5,204.1 $ 5,438.8 $ 5,582.2 Net operating return on average equity excluding AOCI 13.5% 11.7% 11.0% 19.8% 11.2% (2) Adjusted net operating return on average equity excluding AOCI 11.2% 11.7% 11.0% 11.4% 11.2% Statutory capital and surplus $ 3,305.9 $ 3,262.1 $ 3,279.3 $ 3,437.4 $ 3,504.2 Stock Data Closing Price $ 40.05 $ 44.00 $ 43.02 $ 44.08 $ 48.10 Weighted average shares outstanding Basic 153.1 152.9 152.3 149.2 149.5 Diluted 153.9 153.6 152.9 149.9 150.3 Book value per share Including AOCI $ 35.09 $ 35.08 $ 34.40 $ 35.08 $ 37.61 Excluding AOCI $ 33.81 $ 34.42 $ 34.93 $ 36.43 $ 37.29 (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 $113.1 million of released tax reserves and associated tax-related adjustments relating to prior tax years. Note: All prior periods have been reclassified to reflect NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) as discontinued operations. NFS Operating Segment Reporting Structure NATIONWIDE FINANCIAL SERVICES, INC. Individual Retirement Individual Corporate Investments Plans Protection & Other Variable Annuities Public Sector - 457 Fixed Life Medium Term Notes Universal Fixed Annuities Private Sector – 401(k) Structured Products Whole Term Income Products Corporate Other Investment Life Variable Universal Advisory Services COLI 2
  6. 6. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 This Page Intentionally Left Blank. 3
  7. 7. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 Quarterly Consolidated Income Statements ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Operating Revenues Asset fees $ 163.1 $ 163.0 $ 168.9 $ 170.0 $ 169.2 Cost of insurance charges 97.8 97.5 98.9 100.2 100.6 Administrative fees 29.6 27.7 30.2 47.2 36.2 Surrender fees 24.1 22.6 23.0 20.2 21.6 Total policy charges 314.6 310.8 321.0 337.6 327.6 Traditional life and immediate annuity premiums 97.2 107.1 107.8 109.7 110.5 Net investment income 592.8 587.9 577.3 572.1 577.9 Operating realized gains (losses) 0.5 1.1 1.3 1.1 4.1 Other income 80.4 92.4 92.3 92.8 96.1 Total operating revenues 1,085.5 1,099.3 1,099.7 1,113.3 1,116.2 Benefits Interest credited 350.6 347.7 342.1 345.7 348.2 Life insurance and annuity benefits 142.9 149.9 156.1 156.4 163.8 Policyholder dividends 27.1 27.0 20.2 24.5 24.6 Total benefits 520.6 524.6 518.4 526.6 536.6 Expenses Commissions 130.2 140.1 153.1 160.4 160.7 General operating expenses 198.9 209.3 213.4 214.6 201.0 Debt extinguishment costs 21.7 - - - - Deferral of policy acquisition costs (112.4) (120.8) (135.1) (147.4) (138.8) Subtotal 238.4 228.6 231.4 227.6 222.9 Amortization of policy acquisition costs 122.9 123.7 125.7 127.5 109.8 Amortization of value of business acquired 11.3 10.0 11.6 12.5 14.9 Interest expense on debt 28.0 27.1 26.1 25.1 25.3 Total expenses 400.6 389.4 394.8 392.7 372.9 Pre-tax operating earnings $ 164.3 $ 185.3 $ 186.5 $ 194.0 $ 206.7 Federal income tax expense (8.0) 33.1 42.2 (70.0) 52.0 Net operating earnings $ 172.3 $ 152.2 $ 144.3 $ 264.0 $ 154.7 Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) Realized gains on sales, net of hedging 8.4 20.5 7.3 11.0 10.2 Realized losses on sales, net of hedging (3.3) (7.9) (12.9) (19.1) (4.4) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (12.6) (7.5) (0.6) (2.5) (2.9) Credit default swaps (2.8) (0.4) (0.1) (0.1) (0.1) Derivatives, excluding hedging gains and losses on sales and credit default swaps 1.4 (1.9) 0.5 3.4 0.3 Amounts credited to policyholder dividend obligation (2.1) 0.3 0.1 (0.7) 0.5 Adjustment to VOBA amortization 1.6 (0.7) 0.4 0.8 - Subtotal (9.4) 2.4 (5.3) (7.2) 3.6 Adjustment to amortization related to net realized gains (losses), net of taxes 2.9 0.1 3.3 1.0 1.2 Discontinued operations, net of taxes 0.9 (24.4) - - - Net income $ 166.7 $ 130.3 $ 142.3 $ 257.8 $ 159.5 (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: All prior periods have been reclassified to reflect NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) as discontinued operations. 4
  8. 8. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 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 95.5 577.9 Operating realized gains (losses) - - - 4.1 4.1 Other income 0.5 80.2 6.2 9.2 96.1 Total operating revenues 382.3 286.5 338.6 108.8 1,116.2 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 7.4 160.7 General operating expenses 54.5 78.2 68.8 (0.5) 201.0 Deferral of policy acquisition costs (86.9) (8.8) (43.1) - (138.8) Subtotal 53.6 106.8 55.6 6.9 222.9 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 - 14.9 Interest expense on debt - - 0.1 25.2 25.3 Total expenses 134.9 120.7 85.2 32.1 372.9 Pre-tax operating earnings $ 60.4 $ 53.6 $ 71.0 $ 21.7 $ 206.7 Federal income tax expense 52.0 Net operating earnings $ 154.7 Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) Realized gains on sales, net of hedging 10.2 Realized losses on sales, net of hedging (4.4) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (2.9) Credit default swaps (0.1) Derivatives, excluding hedging gains and losses on sales and credit default swaps 0.3 Amounts credited to policyholder dividend obligation 0.5 Adjustment to VOBA amortization - Subtotal 3.6 Adjustment to amortization related to net realized gains (losses), net of taxes 1.2 Discontinued operations, net of taxes - Net income $ 159.5 (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, 2006 Combining Income Statement For the three months ended September 30, 2005 Individual Retirement Individual Corporate ($ in millions) Investments Plans Protection and Other Total Operating Revenues Asset fees $ 118.5 $ 34.2 $ 10.4 $ - $ 163.1 Cost of insurance charges - - 97.8 - 97.8 Administrative fees 4.1 1.8 23.7 - 29.6 Surrender fees 16.0 1.7 6.4 - 24.1 Total policy charges 138.6 37.7 138.3 - 314.6 Traditional life and immediate annuity premiums 26.4 - 70.8 - 97.2 Net investment income 219.9 165.7 117.1 90.1 592.8 Operating realized gains (losses) - - - 0.5 0.5 Other income 0.4 68.0 5.2 6.8 80.4 Total operating revenues 385.3 271.4 331.4 97.4 1,085.5 Benefits Interest credited 148.2 115.4 48.0 39.0 350.6 Life insurance and annuity benefits 37.3 - 105.6 - 142.9 Policyholder dividends - - 27.1 - 27.1 Total benefits 185.5 115.4 180.7 39.0 520.6 Expenses Commissions 62.4 33.7 27.9 6.2 130.2 General operating expenses 47.3 72.6 75.3 3.7 198.9 Debt extinguishment costs - - - 21.7 21.7 Deferral of policy acquisition costs (59.9) (9.1) (43.4) - (112.4) Subtotal 49.8 97.2 59.8 31.6 238.4 Amortization of policy acquisition costs 92.2 12.1 18.6 - 122.9 Amortization of value of business acquired 1.6 1.3 8.4 - 11.3 Interest expense on debt - - 0.1 27.9 28.0 Total expenses 143.6 110.6 86.9 59.5 400.6 Pre-tax operating earnings $ 56.2 $ 45.4 $ 63.8 $ (1.1) $ 164.3 Federal income tax expense (8.0) Net operating earnings $ 172.3 Net realized gains (losses) on investments, hedging instruments and hedged items, net of taxes (1) Realized gains on sales, net of hedging 8.4 Realized losses on sales, net of hedging (3.3) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (12.6) Credit default swaps (2.8) Derivatives, excluding hedging gains and losses on sales and credit default swaps 1.4 Amounts credited to policyholder dividend obligation (2.1) Adjustment to VOBA amortization 1.6 Subtotal (9.4) Adjustment to amortization related to net realized gains (losses), net of taxes 2.9 Discontinued operations, net of taxes 0.9 Net income $ 166.7 (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: All prior periods have been reclassified to reflect NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) as discontinued operations. 6
  10. 10. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 This Page Intentionally Left Blank. 7
  11. 11. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 Quarterly Consolidated Balance Sheets ($ in millions, except per share data) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Assets Investments Securities available-for-sale: Fixed maturity securities $ 31,092.2 $ 30,106.0 $ 28,645.0 $ 27,980.9 $ 28,579.0 Equity securities 78.6 75.6 76.5 63.2 65.2 Trading assets 34.7 34.4 27.8 21.0 22.8 Mortgage loans 9,332.5 9,148.6 9,048.3 9,060.7 8,981.2 Real estate 107.7 108.7 108.6 108.4 104.8 Policy loans 935.6 930.6 933.9 948.3 957.7 Other long-term investments 617.6 691.9 688.9 687.4 680.6 Short-term investments 2,104.2 2,073.2 2,830.5 2,169.7 1,917.4 Total investments 44,303.1 43,169.0 42,359.5 41,039.6 41,308.7 Cash 47.6 16.4 23.9 23.6 12.9 Accrued investment income 436.8 396.3 398.9 388.7 412.6 Deferred policy acquisition costs 3,710.4 3,685.4 3,794.7 3,875.6 3,783.5 Value of business acquired 457.7 449.7 443.3 405.2 399.1 Other intangible assets 46.1 45.6 45.4 44.9 44.2 Goodwill 389.6 364.5 359.0 359.0 359.0 Other assets 2,227.5 2,069.2 2,200.3 2,117.3 2,433.2 Assets held in separate accounts 65,802.5 65,963.8 66,933.7 64,829.1 66,126.8 Total assets $ 117,421.3 $ 116,159.9 $ 116,558.7 $ 113,083.0 $ 114,880.0 Liabilities and shareholders' equity Future policy benefits and claims $ 40,787.4 $ 39,748.1 $ 39,519.4 $ 38,451.3 $ 38,131.9 Short-term debt 391.2 252.3 147.4 189.8 88.6 Long-term debt 1,406.0 1,398.0 1,398.3 1,398.4 1,398.1 Other liabilities 3,658.6 3,447.3 3,433.7 2,977.6 3,504.6 Liabilities related to separate accounts 65,802.5 65,963.8 66,933.7 64,829.1 66,126.8 112,045.7 110,809.5 111,432.5 107,846.2 109,250.0 Shareholders' equity 5,375.6 5,350.4 5,126.2 5,236.8 5,630.0 Total liabilities and shareholders' equity $ 117,421.3 $ 116,159.9 $ 116,558.7 $ 113,083.0 $ 114,880.0 Capital Structure ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Total capital, including AOCI $ 6,781.6 $ 6,748.4 $ 6,524.5 $ 6,635.2 $ 7,028.1 Less AOCI 196.1 100.7 (77.9) (202.0) 47.8 Total capital, excluding AOCI $ 6,585.5 $ 6,647.7 $ 6,602.4 $ 6,837.2 $ 6,980.3 Leverage, including AOCI Long-term debt--to--total capital 20.7% 20.7% 21.4% 21.1% 19.9% Leverage, excluding AOCI Long-term debt--to--total capital 21.3% 21.0% 21.2% 20.5% 20.0% Ratio of pre-tax operating earnings before interest expense to interest expense 6.9X 7.8X 8.1X 8.7X 9.2X 8
  12. 12. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 Individual Investments Quarterly Earnings Trends ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Operating Revenues Asset fees $ 118.5 $ 118.1 $ 124.0 $ 125.0 $ 125.2 Administrative fees 4.1 4.3 4.6 4.9 5.5 Surrender fees 16.0 14.2 15.2 14.2 14.7 Total policy charges 138.6 136.6 143.8 144.1 145.4 Net Investment Income General account assets 226.4 220.3 212.7 200.0 205.9 Charge for invested capital (6.5) (6.9) (6.3) (6.1) (6.8) Total net investment income 219.9 213.4 206.4 193.9 199.1 Premiums on income products 26.4 29.7 31.9 34.6 37.3 Other income 0.4 0.4 0.5 0.6 0.5 Total operating revenues 385.3 380.1 382.6 373.2 382.3 Benefits Interest credited 148.2 144.5 137.7 132.7 131.5 Immediate annuity benefits 22.7 25.7 28.5 30.4 31.7 Policy benefits 14.6 16.3 12.5 19.2 23.8 Total benefits 185.5 186.5 178.7 182.3 187.0 Expenses Commissions 62.4 65.7 73.6 86.2 86.0 General operating expenses 47.3 50.7 48.4 56.0 54.5 Deferral of policy acquisition costs (59.9) (62.0) (74.4) (90.8) (86.9) Subtotal 49.8 54.4 47.6 51.4 53.6 Amortization of policy acquisition costs 92.2 83.7 97.6 84.8 79.5 Amortization of value of business acquired 1.6 2.1 2.3 2.2 1.8 Total expenses 143.6 140.2 147.5 138.4 134.9 Pre-tax operating earnings $ 56.2 $ 53.4 $ 56.4 $ 52.5 $ 60.4 Key Ratios/Statistics Average Account Values: General account $ 16,110.5 $ 15,515.1 $ 14,825.4 $ 14,374.0 $ 13,824.3 Separate account 35,669.0 35,975.9 36,504.3 36,815.8 36,824.2 Advisory services program 345.3 393.7 443.3 491.6 528.7 Total average individual investments account values $ 52,124.8 $ 51,884.7 $ 51,773.0 $ 51,681.4 $ 51,177.2 Earned rate 5.62% 5.68% 5.74% 5.56% 5.95% Credited rate 3.68% 3.73% 3.72% 3.69% 3.80% Interest spread on average general account values 1.94% 1.95% 2.02% 1.87% 2.15% Prepayment penalties and bond call premium income 0.30% 0.19% 0.11% 0.09% 0.24% Base interest spread on average general account values 1.64% 1.76% 1.91% 1.78% 1.91% Asset fees to average separate account values 1.33% 1.31% 1.36% 1.36% 1.36% General operating expenses to average account values 0.36% 0.39% 0.37% 0.43% 0.43% Pre-tax operating earnings to average account values 0.43% 0.41% 0.44% 0.41% 0.47% Pre-tax operating earnings to operating revenues 14.6% 14.0% 14.7% 14.1% 15.8% Average allocated capital $ 1,689.8 $ 1,649.3 $ 1,563.0 $ 1,504.3 $ 1,467.4 Return on average allocated capital 16.7% 12.1% 11.9% 11.8% 13.1% Adjusted return on average allocated capital (1) 10.9% 12.1% 11.9% 11.8% 13.1% (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) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Individual Variable Annuities Balance, beginning of period $ 40,726.4 $ 41,651.8 $ 40,796.0 $ 42,071.5 $ 41,140.7 Deposits 870.2 903.5 1,045.0 1,279.9 1,263.4 Withdrawals and surrenders (1,429.5) (1,456.8) (1,535.4) (1,479.4) (1,554.2) Net flows (559.3) (553.3) (490.4) (199.5) (290.8) Investment performance/interest credited 1,615.9 971.1 1,903.4 (605.1) 1,070.8 Policy charges (138.9) (137.6) (140.6) (141.3) (141.2) Benefits and other 7.7 24.6 3.1 15.1 (8.4) Acquisitions/(terminations), net - (1,160.6) - - - Balance, end of period $ 41,651.8 $ 40,796.0 $ 42,071.5 $ 41,140.7 $ 41,771.1 Individual Fixed Annuities Balance, beginning of period $ 8,731.8 $ 8,559.3 $ 8,041.8 $ 7,746.6 $ 7,425.0 Deposits 27.4 31.0 38.6 42.7 53.3 Withdrawals and surrenders (274.0) (330.0) (400.9) (437.5) (534.1) Net flows (246.6) (299.0) (362.3) (394.8) (480.8) Policyholder interest credited 82.8 77.6 73.4 79.2 68.2 Policy charges (3.2) (2.6) (2.8) (2.5) (3.1) Benefits and other (5.5) (3.9) (3.5) (3.5) (13.7) Acquisitions/(terminations), net - (289.6) - - - Balance, end of period $ 8,559.3 $ 8,041.8 $ 7,746.6 $ 7,425.0 $ 6,995.6 Income Products $ 1,954.7 $ 1,978.3 $ 2,025.1 $ 1,970.6 $ 1,994.0 Advisory services program $ 375.9 $ 411.5 $ 475.0 $ 508.1 $ 549.2 Total individual investment account values $ 52,541.7 $ 51,227.6 $ 52,318.2 $ 51,044.4 $ 51,309.9 9
  13. 13. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 Individual Investments Account Values by Product ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Individual Variable Annuities BEST of AMERICA products $ 33,989.0 $ 32,937.0 $ 34,117.5 $ 33,495.1 $ 34,215.3 Private label annuities 7,178.4 7,398.9 7,505.5 7,243.9 7,171.5 Nationwide Financial Network and other 484.4 460.1 448.5 401.7 384.3 Total individual variable annuities $ 41,651.8 $ 40,796.0 $ 42,071.5 $ 41,140.7 $ 41,771.1 Individual Fixed Annuities $ 8,559.3 $ 8,041.8 $ 7,746.6 $ 7,425.0 $ 6,995.6 Income Products $ 1,954.7 $ 1,978.3 $ 2,025.1 $ 1,970.6 $ 1,994.0 Advisory Services Program $ 375.9 $ 411.5 $ 475.0 $ 508.1 $ 549.2 Total individual investment account values $ 52,541.7 $ 51,227.6 $ 52,318.2 $ 51,044.4 $ 51,309.9 Individual Investments Sales by Product ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Individual Variable Annuities BEST of AMERICA products $ 720.1 $ 767.6 $ 912.5 $ 1,116.3 $ 1,096.6 Private label annuities 79.8 82.3 73.0 96.7 94.8 Nationwide Financial Network and other 1.1 1.1 0.9 1.0 1.0 Total individual variable annuities $ 801.0 $ 851.0 $ 986.4 $ 1,214.0 $ 1,192.4 Individual Fixed Annuities $ 31.5 $ 32.6 $ 39.5 $ 45.8 $ 57.2 Income Products $ 49.3 $ 54.8 $ 58.5 $ 55.9 $ 57.1 Advisory Services Program $ 65.1 $ 49.2 $ 62.6 $ 70.1 $ 47.7 Total individual investment sales 946.9 $ $ 987.6 $ 1,147.0 $ 1,385.8 $ 1,354.4 Individual Investments Sales by Channel ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Individual Variable Annuities Non-affiliated Independent broker/dealers $ 309.4 $ 311.5 $ 347.7 $ 412.6 $ 403.1 Wirehouse and regional firms 198.3 197.8 220.8 274.4 312.7 Financial institutions 224.8 250.3 318.2 410.6 383.3 Life specialists - - 0.8 - - Affiliated Nationwide agents 48.1 60.5 63.6 71.3 51.0 Nationwide Financial Network 20.4 30.9 35.3 45.1 42.3 Total individual variable annuities $ 801.0 $ 851.0 $ 986.4 $ 1,214.0 $ 1,192.4 Individual Fixed Annuities Non-affiliated Independent broker/dealers $ 1.9 $ 1.6 $ 2.6 $ 2.5 $ 5.4 Wirehouse and regional firms 1.2 1.9 1.0 3.0 3.1 Financial institutions 16.3 8.8 14.7 19.0 20.5 Affiliated Nationwide agents 11.0 17.9 17.4 19.8 24.7 Nationwide Financial Network 1.1 2.4 3.8 1.5 3.5 Total individual fixed annuities $ 31.5 $ 32.6 $ 39.5 $ 45.8 $ 57.2 Income Products Non-affiliated Independent broker/dealers $ 17.6 $ 20.4 $ 28.1 $ 28.5 $ 19.5 Wirehouse and regional firms 19.0 18.2 17.0 15.5 25.8 Financial institutions 4.8 8.6 6.1 9.4 7.9 Affiliated Nationwide agents 3.7 3.9 3.6 3.1 2.9 Nationwide Financial Network 4.2 3.7 3.7 (0.6) 1.0 Total income products $ 49.3 $ 54.8 $ 58.5 $ 55.9 $ 57.1 Advisory Services Program Non-affiliated Independent broker/dealers $ 57.7 $ 44.4 $ 48.0 $ 60.2 $ 41.3 Financial institutions 1.5 3.2 4.0 5.7 2.3 Affiliated Nationwide Financial Network 5.9 1.6 10.6 4.2 4.1 Total advisory services program $ 65.1 $ 49.2 $ 62.6 $ 70.1 $ 47.7 Total individual investment sales $ 946.9 $ 987.6 $ 1,147.0 $ 1,385.8 $ 1,354.4 10
  14. 14. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 Retirement Plans Quarterly Earnings Trends ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Operating Revenues Asset fees $ 34.2 $ 34.4 $ 33.9 $ 33.6 $ 32.9 Administrative fees 1.8 2.4 2.7 22.6 7.9 Surrender fees 1.7 1.9 1.5 1.1 0.8 Total policy charges 37.7 38.7 38.1 57.3 41.6 Net investment income 165.7 167.1 164.2 159.8 164.7 Other income 68.0 70.2 76.3 77.8 80.2 Total operating revenues 271.4 276.0 278.6 294.9 286.5 Benefits Interest credited 115.4 115.6 113.2 113.0 112.2 Expenses Commissions 33.7 34.3 37.8 36.6 37.4 General operating expenses 72.6 72.8 72.2 78.2 78.2 Deferral of policy acquisition costs (9.1) (8.9) (9.4) (9.4) (8.8) Subtotal 97.2 98.2 100.6 105.4 106.8 Amortization of policy acquisition costs 12.1 11.9 10.1 10.9 9.7 Amortization of value of business acquired 1.3 0.6 1.1 1.2 4.2 Total expenses 110.6 110.7 111.8 117.5 120.7 Pre-tax operating earnings $ 45.4 $ 49.7 $ 53.6 $ 64.4 $ 53.6 Key Ratios/Statistics Average Account Values: General account $ 11,010.1 $ 11,151.0 $ 11,241.2 $ 11,050.0 $ 10,909.6 Separate account 19,342.2 19,737.8 19,298.8 18,155.5 17,668.4 Non insurance assets 13,023.6 14,056.6 15,258.6 16,085.7 16,611.8 Administration only 36,725.4 37,508.5 39,690.3 42,162.9 43,048.9 Total average retirement plan account values $ 80,101.3 $ 82,453.9 $ 85,488.9 $ 87,454.1 $ 88,238.7 Earned rate 6.02% 5.99% 5.84% 5.78% 6.03% Credited rate 4.19% 4.15% 4.03% 4.09% 4.11% Interest spread on average general account values 1.83% 1.84% 1.81% 1.69% 1.92% Prepayment penalties and bond call premium income 0.18% 0.19% 0.09% 0.06% 0.12% Base interest spread on average general account values 1.65% 1.65% 1.72% 1.63% 1.80% Asset fees to average separate account values 0.71% 0.70% 0.70% 0.74% 0.74% General operating expenses to average account values 0.36% 0.35% 0.34% 0.36% 0.35% Pre-tax operating earnings to average account values 0.23% 0.24% 0.25% 0.29% 0.24% Pre-tax operating earnings to operating revenue 16.7% 18.0% 19.2% 21.8% 18.7% Average allocated capital $ 784.1 $ 806.5 $ 816.2 $ 817.1 $ 806.7 Return on average allocated capital 25.1% 20.1% 19.4% 23.0% 18.8% (1) Adjusted return on average allocated capital 17.7% 20.1% 19.4% 23.0% 18.8% (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) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Private Sector Pension Plans Balance, beginning of period $ 39,324.9 $ 41,235.7 $ 42,906.5 $ 46,249.9 $ 46,650.1 New deposits/sales 1,833.3 1,676.4 2,327.7 1,873.8 1,828.3 Participant withdrawals and surrenders (1,464.6) (1,601.7) (1,855.7) (1,624.0) (1,632.6) Net flows 368.7 74.7 472.0 249.8 195.7 Investment performance/interest credited 1,591.8 1,027.6 2,112.0 (37.3) 1,310.4 Policy charges and other (53.5) (57.8) (25.2) (73.1) (66.8) Case acquisitions/(terminations), net 3.8 626.3 784.6 260.8 (82.3) Balance, end of period $ 41,235.7 $ 42,906.5 $ 46,249.9 $ 46,650.1 $ 48,007.1 Public Sector Pension Plans Balance, beginning of period $ 38,968.6 $ 40,673.4 $ 40,092.0 $ 41,729.2 $ 40,278.9 New deposits/sales 1,004.2 940.3 1,020.0 993.2 1,023.4 Participant withdrawals and surrenders (634.2) (625.0) (694.2) (654.2) (567.9) Net flows 370.0 315.3 325.8 339.0 455.5 Investment performance/interest credited 1,359.3 850.3 1,376.2 (370.1) 914.6 Policy charges and other (17.5) (17.4) (18.0) (38.1) (19.0) Case acquisitions/(terminations), net (7.0) (1,729.6) (46.8) (1,381.1) (88.8) Balance, end of period $ 40,673.4 $ 40,092.0 $ 41,729.2 $ 40,278.9 $ 41,541.2 Total retirement plan account values $ 81,909.1 $ 82,998.5 $ 87,979.1 $ 86,929.0 $ 89,548.3 11
  15. 15. Nationwide Financial Services, Inc. Statistical Supplement September 30, 2006 Retirement Plans Account Values by Product ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Private Sector Pension Plans BEST of AMERICA annuity products $ 7,969.2 $ 7,791.9 $ 7,738.8 $ 7,399.3 $ 7,360.4 BEST of AMERICA trust products 13,633.7 14,479.5 16,037.7 16,133.6 17,089.9 Subtotal BEST of AMERICA 21,602.9 22,271.4 23,776.5 23,532.9 24,450.3 The 401(k) Company 12,215.3 13,147.7 16,349.9 17,024.0 17,405.2 Nationwide Financial Network products 1,372.3 1,378.4 1,316.5 1,304.8 1,256.1 Nationwide employee and agent benefit plans 5,426.4 5,504.2 4,207.1 4,204.7 4,322.0 Other 618.8 604.8 599.9 583.7 573.5 Total private sector pension plans $ 41,235.7 $ 42,906.5 $ 46,249.9 $ 46,650.1 $ 48,007.1 Public Sector Pension Plans IRC Section 457 annuities $ 15,321.2 $ 15,790.2 $ 16,148.1 $ 14,908.2 $ 15,243.4 Administration only agreements 25,352.2 24,301.8 25,581.1 25,370.7 26,297.8 Total public sector pension plans $ 40,673.4 $ 40,092.0 $ 41,729.2 $ 40,278.9 $ 41,541.2 Total retirement plan account values $ 81,909.1 $ 82,998.5 $ 87,979.1 $ 86,929.0 $ 89,548.3 Retirement Plans Sales by Product ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Private Sector Pension Plans BEST of AMERICA annuity products $ 335.3 $ 285.8 $ 351.0 $ 327.8 $ 291.0 BEST of AMERICA trust products 947.9 971.2 1,277.5 976.9 1,024.5 Subtotal BEST of AMERICA 1,283.2 1,257.0 1,628.5 1,304.7 1,315.5 The 401(k) Company 303.5 288.3 535.9 422.3 365.2 Nationwide Financial Network products 52.6 58.4 56.5 40.6 42.9 Other 25.8 10.9 12.6 20.8 15.0 Total private sector pension plan $ 1,665.1 $ 1,614.6 $ 2,233.5 $ 1,788.4 $ 1,738.6 Public Sector Pension Plans IRC Section 457 annuities $ 397.6 $ 379.0 $ 407.3 $ 389.0 $ 381.6 Administration only agreements 606.7 561.3 612.6 604.2 641.8 Total public sector pension plans $ 1,004.3 $ 940.3 $ 1,019.9 $ 993.2 $ 1,023.4 Total retirement plan sales $ 2,669.4 $ 2,554.9 $ 3,253.4 $ 2,781.6 $ 2,762.0 Retirement Plans Sales by Channel ($ in millions) Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Private Sector Pension Plans Non-affiliated Independent broker/dealers $ 828.6 $ 770.3 $ 994.7 $ 810.4 $ 824.6 Wirehouse and regional firms 215.3 248.4 337.0 245.8 239.7 Financial institutions 133.8 137.2 167.7 120.4 141.2 Pension plan administrators 108.2 104.9 135.9 139.6 124.8 Affiliated Nationwide Retirement Solutions 8.4 8.5 8.6 8.0 7.9 Nationwide agents 39.0 19.2 24.0 20.2 16.2 Nationwide Financial Network 28.3 37.8 29.7 21.7 19.0 The 401(k) Company 303.5 288.3 535.9 422.3 365.2 Total private sector pension plans $ 1,665.1 $ 1,614.6 $ 2,233.5 $ 1,788.4 $ 1,738.6 Public Sector Pension Plans Nationwide Retirement Solutions $ 1,004.3 $ 940.3 $ 1,019.9 $ 993.2 $ 1,023.4 Total retirement plan sales $ 2,669.4 $ 2,554.9 $ 3,253.4 $ 2,781.6 $ 2,762.0 12

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