nationwide 3q08 statistical supplement

Nationwide Financial Services, Inc.Statistical Supplement

Table of Contents

Page

Quarterly Financial Highlights 1-2

NFS Financial Reporting Structure 2

Quarterly Consolidated Income Statements 4

Combining Income StatementsFor the three months ended September 30, 2008 5For the three months ended September 30, 2007 6

Quarterly Consolidated Balance Sheets 8

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

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

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

Corporate and Other SegmentQuarterly earnings trends 17Nationwide Bank and Medium Term Notes Key Ratios and Statistics 17Account value activity 17

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

Historical Data 27-40

Glossary 41-44

Shareholder Information 45

September 30, 2008

Nationwide Financial Services, Inc.Statistical SupplementSeptember 30, 2008

($ in millions except for per share data) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08

Operating RevenuesIndividual investments 359.0$ 370.7$ 338.8$ 330.3$ 314.5$ Retirement plans 284.9 296.9 279.1 281.0 275.0 Individual protection 332.8 345.8 344.6 354.7 346.3 Corporate and other 172.1 173.4 135.9 144.3 82.7

Total operating revenues 1,148.8$ 1,186.8$ 1,098.4$ 1,110.3$ 1,018.5$

Net realized investment gains/(losses) (1) (17.0) (118.1) (182.1) (29.8) (533.9) Total revenues 1,131.8$ 1,068.7$ 916.3$ 1,080.5$ 484.6$

Pre-tax Operating Earnings (Loss)Individual investments 65.0$ 69.1$ 62.5$ 47.7$ (120.7)$ Retirement plans 59.6 75.9 53.9 55.6 55.3 Individual protection 65.2 69.3 64.9 78.4 72.2 Corporate and other 13.9 2.3 (13.9) 4.9 (50.4)

Pre-tax operating earnings (loss) 203.7$ 216.6$ 167.4$ 186.6$ (43.6)$ Federal income tax expense 49.1 54.9 35.9 59.0 (21.8)

Net operating earnings (loss) 154.6$ 161.7$ 131.5$ 127.6$ (21.8)$

Net realized investment gains/(losses), net of taxes (2) (8.4) (66.2) (87.9) (41.5) (315.4)

Discontinued operations, net of taxes 0.8 (21.3) 0.9 (0.7) (9.2) Net income (loss) 147.0$ 74.2$ 44.5$ 85.4$ (346.4)$

Per Common Diluted ShareNet operating earnings (loss) 1.08$ 1.16$ 0.95$ 0.92$ (0.16)$

Net realized investment gains/(losses), net of taxes (2) (0.06) (0.48) (0.64) (0.29) (2.29)

Discontinued operations, net of taxes 0.01 (0.15) 0.01 (0.01) (0.06) Net income (loss) 1.03$ 0.53$ 0.32$ 0.62$ (2.51)$

Sales by ChannelNon-affiliated Independent broker/dealers 1,555.0$ 1,580.5$ 1,561.9$ 1,425.4$ 1,291.1$ Wirehouse and regional firms 703.6 815.0 706.4 608.9 522.2 Financial institutions 604.1 663.8 610.7 553.3 462.5 Pension plan administrators 95.6 137.4 119.6 101.1 109.1 Life specialists 12.9 137.3 105.6 95.3 47.2 Affiliated Nationwide Retirement Solutions 1,073.8 1,064.3 1,161.1 1,114.2 1,135.6 Nationwide Financial Network 357.7 386.8 320.9 316.6 302.0 Mullin TBG 41.5 4.2 99.9 53.5 22.4

Total 4,444.2$ 4,789.3$ 4,686.1$ 4,268.3$ 3,892.1$

(1) Excluding operating items (periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations).

(2) Excluding operating items (periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations), and net of adjustment to amortization related to net realized gains/(losses).

Note: The results of operations of TBG Financial are reflected as discontinued operations.

Quarterly Financial Highlights

1


($ in millions except for per share data) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Balance Sheet Data

Total assets 121,460.5$ 119,207.1$ 112,612.6$ 110,771.2$ 102,086.9$

Customer funds managed and administered 165,275.2$ 162,365.4$ 153,304.6$ 152,818.5$ 140,882.5$

Shareholders' equity Including accumulated other comprehensive income (AOCI) (1) 5,340.4$ 5,324.6$ 5,003.9$ 4,912.6$ 4,211.6$ AOCI (61.1) (81.5) (378.4) (525.2) (844.4) Excluding AOCI 5,401.5$ 5,406.1$ 5,382.3$ 5,437.8$ 5,056.0$

Net operating return on average equity excluding AOCI 11.3% 12.0% 9.8% 9.4% (1.7%)

Statutory capital and surplus 3,249.3$ 3,175.1$ 2,990.9$ 3,015.0$ 2,825.8$

Stock DataClosing Price 53.82$ 45.01$ 47.28$ 48.01$ 49.33$

Weighted average common shares outstanding Basic 141.8 139.0 137.9 137.8 137.9 Diluted 142.7 139.7 138.3 138.6 137.9

Book value per share Including AOCI 38.48$ 38.44$ 36.31$ 35.62$ 30.52$ Excluding AOCI 38.92$ 39.03$ 39.06$ 39.43$ 36.64$

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


NFS Operating Segment Reporting Structure

Quarterly Financial Highlights

NATIONWIDE FINANCIAL SERVICES, INC.

IndividualInvestments

RetirementPlans

IndividualProtection

Corporateand Other

Variable Annuities

Fixed Annuities

Income Products

Advisory Services

Public Sector - 457

Private Sector – 401(k)

Fixed Life

Investment Life

Nationwide Bank

Medium Term Notes

Structured Products

Universal

Whole

Term

Variable Universal

COLI

Nationwide Funds Group

Corporate Other

2


This Page Intentionally Left Blank.

3


($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Operating Revenues

Asset fees 193.5$ 202.5$ 183.9$ 187.6$ 174.3$ Cost of insurance charges 105.1 107.6 109.5 111.2 113.4 Administrative fees 29.7 32.7 32.9 39.4 33.1 Surrender fees 17.2 16.6 18.8 16.2 16.0

Total policy charges 345.5 359.4 345.1 354.4 336.8

Premiums 101.7 115.7 109.1 105.2 89.8 Net investment income 547.3 561.8 519.5 511.5 480.8 Operating realized gains (losses) (3.4) (12.7) (16.8) (4.1) (21.2) Other income 157.7 162.6 141.5 143.3 132.3

Total operating revenues 1,148.8 1,186.8 1,098.4 1,110.3 1,018.5

BenefitsInterest credited to policyholder accounts 333.3 329.6 312.6 294.1 300.8 Life insurance and annuity benefits 161.4 181.8 183.5 178.7 188.1 Policyholder dividends 23.1 18.7 23.9 24.4 23.7

Total benefits 517.8 530.1 520.0 497.2 512.6

ExpensesCommissions 182.2 202.4 181.2 179.9 154.0 General operating expenses 242.2 236.2 233.5 239.5 219.5 Deferral of policy acquisition costs (155.0) (173.2) (154.5) (158.1) (128.6)

Subtotal 269.4 265.4 260.2 261.3 244.9

Amortization of policy acquisition costs 116.3 134.8 113.9 135.2 268.9 Amortization of VOBA and other intangible assets 12.7 10.2 9.2 4.1 9.6 Interest expense 28.9 29.7 27.7 25.9 26.1

Total expenses 427.3 440.1 411.0 426.5 549.5

Pre-tax operating earnings (loss) 203.7$ 216.6$ 167.4$ 186.6$ (43.6)$ Federal income tax expense 49.1 54.9 35.9 59.0 (21.8)

Net operating earnings (loss) 154.6$ 161.7$ 131.5$ 127.6$ (21.8)$

Net realized investment gains/(losses), net of taxes (1)

Realized gains/(losses) on sales, net of hedging 3.1 1.2 (5.0) (1.4) (17.2) Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (10.7) (52.7) (57.5) (62.1) (257.8) Credit default swaps (0.8) (1.9) (1.7) (1.1) (4.0) Derivatives, excluding hedging gains and losses on sales and credit default swaps 0.3 (12.6) (23.8) 20.5 (42.0) Amounts credited to policyholder dividend obligation (0.5) (0.4) (0.1) 2.4 5.6 Adjustment to VOBA amortization 0.2 0.2 0.2 0.2 -

Subtotal (8.4) (66.2) (87.9) (41.5) (315.4)

Discontinued operations, net of taxes 0.8 (21.3) 0.9 (0.7) (9.2)

Net income (loss) 147.0$ 74.2$ 44.5$ 85.4$ (346.4)$



Quarterly Consolidated Income Statements

4


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

Asset fees 135.7$ 26.3$ 12.3$ -$ 174.3$ Cost of insurance charges - - 113.4 - 113.4 Administrative fees 8.9 2.6 21.6 - 33.1 Surrender fees 11.0 0.4 4.6 - 16.0

Total policy charges 155.6 29.3 151.9 - 336.8

Premiums 20.2 - 69.6 - 89.8 Net investment income 131.5 163.9 123.9 61.5 480.8 Operating realized gains (losses) - - - (21.2) (21.2) Other income 7.2 81.8 0.9 42.4 132.3

Total operating revenues 314.5 275.0 346.3 82.7 1,018.5

BenefitsInterest credited to policyholder accounts 93.3 110.6 50.1 46.8 300.8 Life insurance and annuity benefits 70.4 1.1 116.6 - 188.1 Policyholder dividends - - 23.7 - 23.7

Total benefits 163.7 111.7 190.4 46.8 512.6

ExpensesCommissions 75.4 39.5 34.9 4.2 154.0 General operating expenses 39.9 67.4 56.6 55.6 219.5 Deferral of policy acquisition costs (70.6) (8.5) (49.5) - (128.6)

Subtotal 44.7 98.4 42.0 59.8 244.9

Amortization of policy acquisition costs 226.3 9.1 33.5 - 268.9 Amortization of VOBA and other intangible assets 0.5 0.5 8.2 0.4 9.6 Interest expense - - - 26.1 26.1

Total expenses 271.5 108.0 83.7 86.3 549.5

Pre-tax operating earnings (loss) (120.7)$ 55.3$ 72.2$ (50.4)$ (43.6)$

Federal income tax expense (21.8) Net operating earnings (loss) (21.8)$

Net realized investment gains/(losses), net of taxes (1) (315.4)

Discontinued operations, net of taxes (9.2) Net income (loss) (346.4)$



For the three months ended September 30, 2008Combining Income Statement

5


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

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 1.0 60.4 157.7

Total operating revenues 359.0 284.9 332.8 172.1 1,148.8

BenefitsInterest credited to policyholder accounts 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

ExpensesCommissions 101.1 42.2 32.1 6.8 182.2 General operating expenses 50.2 70.0 63.5 58.5 242.2 Deferral of policy acquisition costs (100.1) (9.0) (45.9) - (155.0)

Subtotal 51.2 103.2 49.7 65.3 269.4

Amortization of policy acquisition costs 79.8 9.4 27.1 - 116.3 Amortization of VOBA and other intangible assets 1.4 0.8 10.1 0.4 12.7 Interest expense - - - 28.9 28.9

Total expenses 132.4 113.4 86.9 94.6 427.3

Pre-tax operating earnings (loss) 65.0$ 59.6$ 65.2$ 13.9$ 203.7$

Federal income tax expense 49.1 Net operating earnings (loss) 154.6$

Net realized investment gains/(losses), net of taxes (1) (8.4)

Discontinued operations, net of taxes 0.8 Net income (loss) 147.0$



For the three months ended September 30, 2007Combining Income Statement

6



7


($ in millions, except per share data) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Assets

InvestmentsSecurities available-for-sale, at fair value: Fixed maturity securities 27,295.4$ 27,189.2$ 26,796.7$ 26,209.8$ 24,849.6$ Equity securities 69.7 124.2 117.6 114.7 69.3 Trading assets 24.7 37.7 66.5 55.4 63.7 Mortgage loans on real estate, net 8,534.5 8,316.1 8,156.4 7,940.6 7,913.9 Real estate 29.5 21.8 21.6 18.0 16.4 Policy loans 1,007.2 1,018.3 1,036.7 1,042.0 1,050.4 Other long-term investments 1,195.7 1,187.2 1,164.3 1,156.0 1,228.8 Short-term investments 1,395.2 1,173.6 1,327.5 1,008.5 1,188.6

Total investments 39,551.9 39,068.1 38,687.3 37,545.0 36,380.7

Cash 73.2 73.6 73.0 180.9 145.0 Accrued investment income 412.5 368.4 420.1 337.7 388.7 Deferred policy acquisition costs 4,054.1 4,095.6 4,267.0 4,367.6 4,428.3 Value of business acquired 363.9 354.8 345.9 345.7 338.2 Other intangible assets 45.1 44.3 43.5 42.7 41.9 Goodwill 350.6 301.2 301.2 301.2 292.4 Other assets 2,822.5 2,046.1 2,187.0 1,893.8 2,163.2 Separate account assets 73,786.7 72,855.0 66,287.6 65,756.6 57,908.5

Total assets 121,460.5$ 119,207.1$ 112,612.6$ 110,771.2$ 102,086.9$

Liabilities and shareholders' equityFuture policy benefits and claims 36,313.2$ 35,441.5$ 35,523.0$ 34,568.6$ 34,252.3$ Short-term debt 454.1 309.3 327.6 412.5 336.6 Long-term debt 1,515.1 1,565.1 1,620.0 1,660.1 1,720.3 Other liabilities 4,051.0 3,711.6 3,850.5 3,460.8 3,657.6 Separate account liabilities 73,786.7 72,855.0 66,287.6 65,756.6 57,908.5

116,120.1 113,882.5 107,608.7 105,858.6 97,875.3

Shareholders' equity 5,340.4 5,324.6 5,003.9 4,912.6 4,211.6 Total liabilities and shareholders' equity 121,460.5$ 119,207.1$ 112,612.6$ 110,771.2$ 102,086.9$

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08

Total capital, including AOCI 6,855.5$ 6,889.7$ 6,623.9$ 6,572.7$ 5,931.9$ Less AOCI (61.1) (81.5) (378.4) (525.2) (844.4) Total capital, excluding AOCI 6,916.6$ 6,971.2$ 7,002.3$ 7,097.9$ 6,776.3$

Leverage, including AOCI Long-term debt--to--total capital 22.1% 22.7% 24.5% 25.3% 29.0%

Leverage, excluding AOCI Long-term debt--to--total capital 21.9% 22.5% 23.1% 23.4% 25.4%

Ratio of pre-tax operating earnings (loss) before interest expense to interest expense 8.0X 8.3X 7.0X 8.2X -0.7X

Quarterly Consolidated Balance Sheets

Capital Structure

8


Individual InvestmentsQuarterly Earnings Trends


Asset fees 148.0$ 155.0$ 141.9$ 145.2$ 135.7$ Administrative fees 7.0 7.6 7.3 8.3 8.9 Surrender fees 11.5 11.2 11.5 9.7 11.0


Net Investment Income General account assets 160.8 155.5 142.6 134.3 132.8 Charge for invested capital (7.4) (7.0) (5.6) (4.4) (1.3)

Total net investment income 153.4 148.5 137.0 129.9 131.5

Premiums 29.7 39.9 34.1 30.0 20.2 Other income 9.4 8.5 7.0 7.2 7.2

Total operating revenues 359.0 370.7 338.8 330.3 314.5

Benefits Interest credited to policyholder accounts 109.7 102.0 96.0 92.4 93.3 Immediate annuity benefits 27.1 36.7 31.4 31.5 19.5 Policy benefits 24.8 23.6 23.1 25.8 50.9

Total benefits 161.6 162.3 150.5 149.7 163.7


Subtotal 51.2 42.9 47.3 47.5 44.7

Amortization of policy acquisition costs 79.8 95.1 77.7 82.0 226.3 Amortization of VOBA and other intangible assets 1.4 1.3 0.8 3.4 0.5

Total expenses 132.4 139.3 125.8 132.9 271.5

Pre-tax operating earnings (loss) 65.0$ 69.1$ 62.5$ 47.7$ (120.7)$

Key Ratios/StatisticsAverage Account Values: General account 11,588.1$ 10,909.1$ 10,486.4$ 10,181.8$ 10,028.4$ Separate account 42,502.5 42,692.8 40,617.9 38,688.8 36,171.4 Advisory services program 656.6 658.4 625.8 563.6 441.3

Total average individual investments account values 54,747.2$ 54,260.3$ 51,730.1$ 49,434.2$ 46,641.1$

Earned rate 5.55% 5.70% 5.44% 5.28% 5.30%Credited rate 3.79% 3.74% 3.66% 3.63% 3.72%

Interest spread on average general account values 1.76% 1.96% 1.78% 1.65% 1.58%Income from mortgage loan prepayments and bond call premiums 0.09% 0.18% 0.04% 0.00% 0.09%

Base interest spread on average general account values 1.67% 1.78% 1.74% 1.65% 1.49%

Asset fees to average separate account values 1.39% 1.45% 1.40% 1.50% 1.50%General operating expenses to average account values 0.37% 0.30% 0.34% 0.36% 0.34%Pre-tax operating earnings (loss) to average account values 0.48% 0.51% 0.48% 0.39% -1.04%Pre-tax operating earnings (loss) to operating revenues 18.1% 18.6% 18.4% 14.4% -38.4%Average allocated capital 1,454.6$ 1,439.5$ 1,414.4$ 1,392.0$ 1,347.6$ Return on average allocated capital 15.4% 14.4% 15.0% 9.8% -21.7%

Individual InvestmentsAccount Value Activity

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Individual Variable Annuities

Balance, beginning of period 46,131.5$ 47,067.0$ 46,121.5$ 42,698.3$ 42,075.0$

Deposits 1,496.9 1,673.9 1,309.5 1,217.8 978.5 Withdrawals and surrenders (1,707.2) (1,776.6) (1,669.9) (1,678.9) (1,546.4)

Net flows (210.3) (102.7) (360.4) (461.1) (567.9)

Investment performance/interest credited to policyholder accounts 1,237.6 (536.8) (3,123.1) 85.7 (4,034.8) Policy charges (165.6) (171.0) (159.5) (161.7) (154.4) Benefits and other 73.8 (135.0) 219.8 (86.2) 342.2 Balance, end of period 47,067.0$ 46,121.5$ 42,698.3$ 42,075.0$ 37,660.1$

Individual Fixed AnnuitiesBalance, beginning of period 5,721.2$ 5,113.3$ 4,717.3$ 4,468.0$ 4,273.1$

Deposits 49.8 52.5 43.7 45.0 81.5 Withdrawals and surrenders (706.3) (491.5) (331.8) (275.3) (236.4)

Net flows (656.5) (439.0) (288.1) (230.3) (154.9)

Policyholder interest credited 50.5 44.4 39.8 37.9 36.8 Policy charges (1.9) (1.4) (0.9) (0.9) (0.9) Benefits and other - - (0.1) (1.6) 0.9 Balance, end of period 5,113.3$ 4,717.3$ 4,468.0$ 4,273.1$ 4,155.0$

Income Products 2,083.8$ 2,101.0$ 2,102.5$ 2,124.1$ 2,112.3$ Advisory Services Program 669.5$ 647.2$ 604.4$ 522.8$ 359.8$

Total individual investment account values 54,933.6$ 53,587.0$ 49,873.2$ 48,995.0$ 44,287.2$

9



BEST of AMERICA products 39,167.0$ 38,371.2$ 35,629.1$ 35,183.3$ 31,657.3$ Private label annuities 7,561.7 7,438.1 6,801.6 6,638.2 5,793.0 Nationwide Financial Network and other 338.3 312.2 267.6 253.5 209.8

Total individual variable annuities 47,067.0$ 46,121.5$ 42,698.3$ 42,075.0$ 37,660.1$

Individual Fixed Annuities 5,113.3$ 4,717.3$ 4,468.0$ 4,273.1$ 4,155.0$ Income Products 2,083.8$ 2,101.0$ 2,102.5$ 2,124.1$ 2,112.3$ Advisory Services Program 669.5$ 647.2$ 604.4$ 522.8$ 359.8$



BEST of AMERICA products 1,274.4$ 1,431.2$ 1,090.4$ 997.1$ 804.4$ Private label annuities 118.5 145.4 118.0 113.5 89.2 Nationwide Financial Network and other 0.6 0.5 0.7 0.5 0.4

Total individual variable annuities 1,393.5$ 1,577.1$ 1,209.1$ 1,111.1$ 894.0$

Individual Fixed Annuities 37.0$ 41.9$ 40.6$ 43.1$ 77.2$ Income Products 54.4$ 56.6$ 48.8$ 57.5$ 37.7$ Advisory Services Program 42.6$ 31.2$ 23.2$ 24.9$ 4.6$

Total individual investment sales 1,527.5$ 1,706.8$ 1,321.7$ 1,236.6$ 1,013.5$


Non-affiliated Independent broker/dealers 464.3$ 502.8$ 385.7$ 364.0$ 312.9$ Wirehouse and regional firms 392.0 481.9 345.1 313.4 234.8 Financial institutions 442.1 478.1 395.0 360.2 285.6 Affiliated Nationwide Financial Network 95.1 114.3 83.3 73.5 60.7

Total individual variable annuities 1,393.5$ 1,577.1$ 1,209.1$ 1,111.1$ 894.0$

Individual Fixed AnnuitiesNon-affiliated Independent broker/dealers 7.3$ 2.9$ 9.3$ 6.5$ 12.3$ Wirehouse and regional firms 2.0 3.0 1.3 2.7 7.7 Financial institutions 9.9 16.9 14.7 14.6 26.3 Affiliated Nationwide Financial Network 17.8 19.1 15.3 19.3 30.9

Total individual fixed annuities 37.0$ 41.9$ 40.6$ 43.1$ 77.2$

Income ProductsNon-affiliated Independent broker/dealers 25.2$ 25.8$ 20.7$ 28.6$ 16.6$ Wirehouse and regional firms 20.3 15.5 16.8 16.4 12.5 Financial institutions 5.1 10.1 8.0 8.7 4.9 Affiliated Nationwide Financial Network 3.8 5.2 3.3 3.8 3.7

Total income products 54.4$ 56.6$ 48.8$ 57.5$ 37.7$

Advisory Services ProgramNon-affiliated Independent broker/dealers 27.0$ 17.7$ 16.8$ 18.3$ 3.3$ Financial institutions 2.4 3.9 2.4 1.3 0.5 Affiliated Nationwide Financial Network 13.2 9.6 4.0 5.3 0.8

Total advisory services program 42.6$ 31.2$ 23.2$ 24.9$ 4.6$


Sales by Channel

Individual InvestmentsAccount Values by Product

Individual InvestmentsSales by Product

Individual Investments

10





Net investment income 162.1 165.7 161.7 160.3 163.9 Other income 86.9 93.9 84.4 87.3 81.8


Benefits Interest credited to policyholder accounts 111.9 109.3 107.6 106.5 110.6 Other Policy Benefits - - - - 1.1

Total benefits 111.9 109.3 107.6 106.5 111.7


Subtotal 103.2 102.0 106.9 106.5 98.4


Total expenses 113.4 111.7 117.6 118.9 108.0

Pre-tax operating earnings 59.6$ 75.9$ 53.9$ 55.6$ 55.3$

Key Ratios/StatisticsAverage Account Values: General account 11,176.4$ 11,040.5$ 11,042.8$ 11,122.8$ 11,214.5$ Separate account 17,569.7 16,738.5 15,791.2 14,881.8 13,880.9 Non insurance assets 21,648.1 21,870.7 21,315.7 20,985.4 20,123.7 Administration only 30,715.0 31,139.3 30,396.6 29,746.7 28,856.2

Total average retirement plan account values 81,109.2$ 80,789.0$ 78,546.3$ 76,736.7$ 74,075.3$




Asset fees to average separate account values 0.73% 0.80% 0.74% 0.79% 0.76%

General operating expenses to average account values 0.35% 0.33% 0.37% 0.38% 0.36%

Pre-tax operating earnings to average account values 0.29% 0.38% 0.27% 0.29% 0.30%

Pre-tax operating earnings to operating revenue 20.9% 25.6% 19.3% 19.8% 20.1%

Average allocated capital 747.1$ 774.0$ 774.8$ 770.3$ 762.0$

Return on average allocated capital 23.5% 26.8% 20.4% 19.2% 19.9%

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Private Sector Pension Plans


New deposits/sales 1,536.8 1,580.9 1,760.2 1,496.5 1,451.6 Participant withdrawals and surrenders (1,402.9) (1,624.3) (1,460.4) (1,406.6) (1,300.7)

Net flows 133.9 (43.4) 299.8 89.9 150.9

Investment performance/interest credited to policyholder accounts 721.2 (328.5) (1,954.9) 70.1 (2,957.7) Policy charges and other (66.5) (68.1) (60.4) (62.3) (56.8) Case acquisitions/(terminations), net (1,991.3) - - - -

Balance, end of period 32,726.5$ 32,286.5$ 30,571.0$ 30,668.7$ 27,805.1$

Public Sector Pension PlansBalance, beginning of period 47,257.8$ 48,304.8$ 48,260.1$ 45,975.0$ 46,258.7$

New deposits/sales 1,066.0 1,055.8 1,153.1 1,107.5 1,127.4 Participant withdrawals and surrenders (812.7) (780.6) (883.0) (826.4) (794.0)

Net flows 253.3 275.2 270.1 281.1 333.4

Investment performance/interest credited 1,065.0 (141.2) (2,482.6) 131.8 (3,113.6) Policy charges and other (21.0) (21.4) (18.3) (18.6) (18.6) Case acquisitions/(terminations), net (250.3) (157.3) (54.3) (110.6) (41.8)


Total retirement plan account values 81,031.3$ 80,546.6$ 76,546.0$ 76,927.4$ 71,223.2$

Account Value Activity

Retirement PlansQuarterly Earnings Trends

Retirement Plans

11


Retirement PlansAccount Values by Product


BEST of AMERICA annuity products 7,470.0$ 7,178.6$ 6,452.7$ 6,235.8$ 5,470.4$ BEST of AMERICA trust products 21,926.9 21,814.6 20,816.8 21,154.0 19,093.3

Subtotal BEST of AMERICA 29,396.9 28,993.2 27,269.5 27,389.8 24,563.7

Nationwide Financial Network products 1,033.2 1,014.5 960.1 955.9 874.6 Nationwide employee and agent benefit plans 1,782.5 1,795.4 1,862.7 1,859.1 1,911.8 Other 513.9 483.4 478.7 463.9 455.0

Total private sector pension plans 32,726.5$ 32,286.5$ 30,571.0$ 30,668.7$ 27,805.1$

Public Sector Pension PlansIRC Section 457 annuities 17,190.1$ 17,096.3$ 16,345.6$ 16,394.5$ 15,569.6$ Administration only agreements 31,114.7 31,163.8 29,629.4 29,864.2 27,848.5

Total public sector pension plans 48,304.8$ 48,260.1$ 45,975.0$ 46,258.7$ 43,418.1$


Retirement PlansSales by Product


BEST of AMERICA annuity products 249.3$ 242.1$ 257.3$ 218.7$ 201.3$ BEST of AMERICA trust products 1,201.7 1,247.1 1,383.7 1,205.0 1,141.3


Nationwide Financial Network products 38.6 43.7 46.9 32.6 40.7 Other 14.9 27.0 20.8 19.5 21.1


Public Sector Pension PlansIRC Section 457 annuities 387.1$ 386.2$ 435.8$ 443.4$ 434.2$ Administration only agreements 679.0 669.5 717.2 663.3 693.3

Total public sector pension plans 1,066.1 1,055.7 1,153.0 1,106.7 1,127.5

Total retirement plan sales 2,570.6$ 2,615.6$ 2,861.7$ 2,582.5$ 2,531.9$

Retirement PlansSales by Channel


Non-affiliated Independent broker/dealers 959.4$ 949.3$ 1,048.4$ 927.2$ 872.1$ Wirehouse and regional firms 267.6 293.8 324.0 256.6 251.2 Financial institutions 126.6 134.2 172.6 152.7 130.8 Pension plan administrators 95.6 137.4 119.6 101.1 109.1 Affiliated Nationwide Retirement Solutions 7.7 8.6 8.1 7.5 8.1 Nationwide Financial Network 47.6 36.6 36.0 30.7 33.1


Public Sector Pension Plans Nationwide Retirement Solutions 1,066.1$ 1,055.7$ 1,153.0$ 1,106.7$ 1,127.5$


12









BenefitsInterest credited to policyholder accounts 48.1 49.0 47.6 48.3 50.1 Life benefits 109.5 121.5 129.0 121.4 116.6 Policyholder dividends 23.1 18.7 23.9 24.4 23.7

Total benefits 180.7 189.2 200.5 194.1 190.4


Subtotal 49.7 49.0 45.8 41.1 42.0

Amortization of policy acquisition costs 27.1 30.6 26.1 41.2 33.5 Amortization of VOBA and other intangible assets 10.1 7.7 7.3 (0.1) 8.2

Total expenses 86.9 87.3 79.2 82.2 83.7


Key Ratios/StatisticsGeneral operating expenses to operating revenues 19.1% 18.3% 17.3% 16.6% 16.3%Pre-tax operating earnings to operating revenues 19.6% 20.0% 18.8% 22.1% 20.8%Average allocated capital 1,973.5$ 1,998.0$ 2,024.4$ 2,042.4$ 2,053.6$ Return on average allocated capital 9.4% 9.5% 9.1% 10.2% 9.5%


($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Individual investment life 6,400.5$ 6,298.2$ 5,776.6$ 5,748.4$ 5,083.7$ Corporate investment life - excluding experience rated BOLI 7,162.0 7,192.9 7,002.4 7,065.0 6,620.3 Corporate investment life - experience rated BOLI 2,023.3 2,085.9 1,501.3 1,474.6 1,305.2

Subtotal investment life 15,585.8 15,577.0 14,280.3 14,288.0 13,009.2

Traditional life 4,152.0 4,156.4 4,156.1 4,166.0 4,156.9 Universal life 1,218.6 1,257.1 1,294.0 1,327.7 1,354.8

Subtotal fixed life 5,370.6 5,413.5 5,450.1 5,493.7 5,511.7

Total individual protection policy reserves 20,956.4$ 20,990.5$ 19,730.4$ 19,781.7$ 18,520.9$

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Individual investment life 57,514.1$ 57,772.0$ 57,196.0$ 57,030.2$ 56,290.1$ Corporate investment life - excluding experience rated BOLI 11,963.0 11,980.3 12,014.9 12,150.9 11,796.8 Corporate investment life - experience rated BOLI 13,289.7 13,311.2 13,284.0 13,270.7 13,261.2




Total individual protection insurance in force 134,750.0$ 137,518.7$ 138,158.8$ 140,730.0$ 142,481.1$

Individual ProtectionInsurance In Force

Individual Protection Quarterly Earnings Trends

Policy ReservesIndividual Protection

13


Individual ProtectionSales by Product


BEST of AMERICA Variable Life SeriesFirst year sales 39.6$ 39.4$ 30.1$ 32.9$ 24.8$ Renewal sales 73.2 80.2 71.2 72.9 73.4

Total BEST of AMERICA variable life series 112.8 119.6 101.3 105.8 98.2

Nationwide Financial Network Variable Life ProductsFirst year sales 1.5 1.6 1.9 1.8 0.8 Renewal sales 42.0 43.8 41.6 38.9 38.4

Total Nationwide Financial Network variable life products 43.5 45.4 43.5 40.7 39.2

Corporate Owned Life Insurance (COLI)First year sales 20.6 61.3 69.9 49.3 36.7 Renewal sales 33.8 80.2 135.6 99.5 32.9

Total COLI 54.4 141.5 205.5 148.8 69.6

Traditional/Universal lifeFirst year sales 32.0 44.7 48.2 41.4 31.6 Renewal sales 103.4 115.7 104.2 112.5 108.1

Total traditional/universal life 135.4 160.4 152.4 153.9 139.7

Total individual protection sales 346.1$ 466.9$ 502.7$ 449.2$ 346.7$


Non-affiliated Independent broker/dealers 71.8$ 82.0$ 81.0$ 80.8$ 73.9$ Wirehouse and regional firms 21.7 20.8 19.2 19.8 16.0 Financial institutions 18.0 20.6 18.0 15.8 14.4 Life specialists 12.9 137.3 105.6 95.3 47.2 Affiliated Nationwide Financial Network 180.2 202.0 179.0 184.0 172.8 Mullin TBG 41.5 4.2 99.9 53.5 22.4

Total individual protection sales 346.1$ 466.9$ 502.7$ 449.2$ 346.7$

Individual ProtectionSales by Channel

14


Quarterly Earnings Trends






Other income 1.0 1.5 0.7 0.9 0.9 Total operating revenues 153.6 159.0 156.5 162.1 157.9

BenefitsInterest credited to policyholder accounts 28.2 28.7 28.0 27.3 28.8 Life benefits 35.3 45.4 44.3 41.5 41.3

Total benefits 63.5 74.1 72.3 68.8 70.1


Subtotal 25.1 22.3 21.1 19.3 19.9

Amortization of policy acquisition costs 16.5 19.3 18.6 32.8 19.3 Amortization of VOBA and other intangible assets 7.6 5.8 5.3 (3.8) 5.6

Total expenses 49.2 47.4 45.0 48.3 44.8


Key Ratios/Statistics

Cost of insurance per $1,000 of average net amount at risk (1) 6.30$ 6.38$ 6.39$ 6.38$ 6.45$ Life benefits per $1,000 of average net amount at risk (1) 2.52$ 3.24$ 3.14$ 2.94$ 2.93$ General operating expenses to operating revenues 21.9% 20.0% 21.0% 18.5% 17.8%Pre-tax operating earnings to operating revenues 26.6% 23.6% 25.0% 27.8% 27.2%Average allocated capital 1,307.3$ 1,310.1$ 1,320.1$ 1,313.3$ 1,287.8$ Return on average allocated capital 9.4% 8.3% 8.9% 9.2% 9.3%

(1) Excludes experience rated BOLI corporate investment life.


Investment LifePolicy Reserve Activity

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Balance, beginning of period 15,310.2$ 15,585.8$ 15,577.0$ 14,280.3$ 14,288.0$


Net flows 81.6 193.3 210.4 186.9 119.1

Investment performance/interest credited to policyholder accounts 303.2 (96.0) (1,398.5) (43.9) (1,272.6) Policy charges (119.1) (121.6) (123.9) (125.7) (121.3) Benefits and other 9.9 15.5 15.3 (9.6) (4.0) Balance, end of period 15,585.8$ 15,577.0$ 14,280.3$ 14,288.0$ 13,009.2$

Investment Life

15



Cost of insurance charges 16.9 18.2 19.5 21.2 22.5 Administrative fees 5.8$ 7.7$ 8.3$ 9.8$ 7.4$ Surrender fees 0.6 0.8 0.8 0.9 0.6


Net investment income 83.9 84.3 84.5 85.5 88.3 Premiums 72.0 75.8 75.0 75.2 69.6



Total benefits 117.2 115.1 128.2 125.3 120.3


Subtotal 24.6 26.7 24.7 21.8 22.1


Total expenses 37.7 39.9 34.2 33.9 38.9


Key Ratios/StatisticsLife benefits per $1,000 of average life insurance in force 5.71$ 5.72$ 6.15$ 5.61$ 5.04$ General operating expenses to operating revenues 16.6% 16.9% 14.2% 15.0% 15.1%Pre-tax operating earnings to operating revenues 13.6% 17.0% 13.7% 17.3% 15.5%Average allocated capital 666.3$ 687.9$ 704.3$ 729.1$ 765.8$ Return on average allocated capital 9.5% 12.0% 9.5% 11.9% 9.9%

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Traditional/Universal Life



Net flows 60.6 92.7 79.3 73.0 64.7

Interest credited to policyholder accounts 20.5 20.8 20.6 21.3 22.0 Policy charges (24.1) (26.8) (29.5) (31.8) (30.8) Benefits and other (27.8) (43.8) (33.8) (18.9) (37.9) Balance, end of period 5,370.6$ 5,413.5$ 5,450.1$ 5,493.7$ 5,511.7$

Policy Reserve Activity

Fixed LifeQuarterly Earnings Trends

Fixed Life

16



Net Investment Income General account assets 115.1$ 127.4$ 103.3$ 100.5$ 61.5$


Operating realized gains (losses) (3.4) (12.7) (16.8) (4.1) (21.2) Other income 60.4 58.7 49.4 47.9 42.4


BenefitsInterest credited Products 63.6 69.3 61.4 46.9 46.8

Total benefits 63.6 69.3 61.4 46.9 46.8

ExpensesCommissions 6.8 5.9 4.1 3.2 4.2 General operating expenses 58.5 65.6 56.1 63.0 55.6 Amortization of VOBA and other intangible assets 0.4 0.6 0.5 0.4 0.4 Interest expense 28.9 29.7 27.7 25.9 26.1

Total expenses 94.6 101.8 88.4 92.5 86.3

Pre-tax operating earnings (loss) 13.9$ 2.3$ (13.9)$ 4.9$ (50.4)$


Key Ratio / Statistics Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Total Assets 995.4 1,062.8 1,348.3 1,492.1 1,852.3 Net Interest Margin 3.08% 3.18% 2.98% 3.24% 2.94%

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Key Ratios/Statistics

Daily Average Account Values: General account 4,107.7$ 4,527.5$ 4,527.2$ 4,307.0$ 4,165.1$


Interest spread on daily average general account values 0.93% 1.16% 0.83% 1.10% 0.85%Income from mortgage loan prepayments and bond call premiums 0.15% 0.28% 0.08% 0.02% 0.07%

Base interest spread on daily average general account values 0.78% 0.88% 0.75% 1.08% 0.78%

($ in millions)Medium Term Notes Q3'07 Q4'07 Q1'08 Q2'08 Q3'08

Balance, beginning of period 3,939.9$ 4,529.0$ 4,525.7$ 4,528.7$ 4,294.3$ Deposits 899.8 - - - 125.0 Maturities (320.0) - - (223.8) (735.0)

Net flows 579.8 - - (223.8) (610.0)

Interest credited to policyholder accounts and amortization 55.7 61.1 53.2 38.7 37.0 Other benefits - interest payments (46.4) (64.4) (50.2) (49.3) (30.8)


Nationwide Bank 798.6$ 798.3$ 985.7$ 1,028.4$ 1,381.8$ Nationwide Funds Group 3,026.3$ 1,917.3$ 1,640.6$ 1,791.7$ 1,778.9$

Total corporate and other account values 8,353.9$ 7,241.3$ 7,155.0$ 7,114.4$ 6,851.2$

Corporate and OtherAccount Value Activity

Corporate and OtherQuarterly Earnings Trends

Nationwide Bank

Medium Term Notes

17


($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Individual variable annuities 47,067.0$ 46,121.5$ 42,698.3$ 42,075.0$ 37,660.1$ Individual fixed annuities 5,113.3 4,717.3 4,468.0 4,273.1 4,155.0 Income products 2,083.8 2,101.0 2,102.5 2,124.1 2,112.3 Advisory services program 669.5 647.2 604.4 522.8 359.8

Subtotal individual investments 54,933.6 53,587.0 49,873.2 48,995.0 44,287.2

Private sector pension plans 32,726.5 32,286.5 30,571.0 30,668.7 27,805.1 Public sector pension plans 48,304.8 48,260.1 45,975.0 46,258.7 43,418.1

Subtotal retirement plans 81,031.3 80,546.6 76,546.0 76,927.4 71,223.2

Individual protection investment life 15,585.8 15,577.0 14,280.3 14,288.0 13,009.2 Individual protection fixed life 5,370.6 5,413.5 5,450.1 5,493.7 5,511.7

Subtotal individual protection 20,956.4 20,990.5 19,730.4 19,781.7 18,520.9

Medium term notes 4,529.0 4,525.7 4,528.7 4,294.3 3,690.5 Nationwide Bank 798.6 798.3 985.7 1,028.4 1,381.8 Nationwide Funds Group 3,026.3 1,917.3 1,640.6 1,791.7 1,778.9

Subtotal corporate and other 8,353.9 7,241.3 7,155.0 7,114.4 6,851.2 Customer funds managed and administered 165,275.2$ 162,365.4$ 153,304.6$ 152,818.5$ 140,882.5$

Note: Total Customer Funds Managed and Administered includes NFG funds as detailed below.

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Individual Investments 15,396.2 15,690.1 14,884.5 14,936.7 14,837.0

Retirement Plans 8,871.4 9,020.1 8,813.0 9,258.7 8,327.7

Individual Protection 3,682.1 3,543.2 3,369.3 3,323.3 3,132.7

Corporate and Other 3,026.3 1,917.3 1,640.6 1,791.7 1,778.9 Customer funds managed and administered 30,976.0$ 30,170.7$ 28,707.4$ 29,310.4$ 28,076.3$

Q3'07 Q4'07 Q1'08 Q2'08 Q3'08($ in millions)Individual Investments

Equity 36,383.4$ 35,459.8$ 31,632.0$ 31,434.8$ 26,857.6$ Bond 4,998.5 5,170.9 5,318.6 5,274.5 4,974.8 Money market 1,630.9 1,742.1 1,912.3 1,805.3 1,995.9

Subtotal individual investments 43,012.8 42,372.8 38,862.9 38,514.6 33,828.3

Retirement PlansEquity 14,725.5$ 14,311.9$ 12,543.8$ 12,334.6$ 10,494.2$ Bond 925.6 996.0 1,083.9 1,094.4 1,099.7 Money market 544.3 555.9 598.2 573.8 593.9 Other 686.5 731.3 761.4 773.4 797.7

Subtotal retirement plans 16,881.9 16,595.1 14,987.3 14,776.2 12,985.5

Individual ProtectionEquity 9,570.3$ 9,387.5$ 8,486.6$ 8,197.0$ 7,037.8$ Bond 2,180.2 2,860.0 2,379.1 2,468.5 2,235.3 Money market 1,375.2 955.3 1,001.0 1,202.0 1,287.3

Subtotal individual protection 13,125.7 13,202.8 11,866.7 11,867.5 10,560.4

Corporate and OtherEquity 692.6$ 615.5$ 504.6$ 526.9$ 464.1$ Bond 64.2 59.8 55.3 59.9 58.4 Money market 9.5 9.0 10.8 11.5 11.8

Subtotal corporate and other 766.3 684.3 570.7 598.3 534.3

TotalEquity 61,371.8$ 59,774.7$ 53,167.0$ 52,493.3$ 44,853.7$ Bond 8,168.5 9,086.7 8,836.9 8,897.3 8,368.2 Money market 3,559.9 3,262.3 3,522.3 3,592.6 3,888.9 Other 686.5 731.3 761.4 773.4 797.7

Total separate account assets by fund type 73,786.7$ 72,855.0$ 66,287.6$ 65,756.6$ 57,908.5$

Customer Funds Managed and Administered

Nationwide Funds Group - Customer Funds Managed and Administered

Separate Account Assets by Segment and Fund Type

18


Gross GrossAmortized Unrealized Unrealized Estimated

($ in millions) Cost Gains Losses Fair ValueSeptember 30, 2008Fixed maturity securities:

U.S. Treasury securities and obligations of U.S. Government corporations 140.0$ 18.5$ -$ 158.5$ Agencies not backed by the full faith and credit of the U.S. Government 397.1 52.6 0.4 449.3 Obligations of states and political subdivisions 272.6 0.5 9.9 263.2 Debt securities issued by foreign governments 50.1 2.3 0.5 51.9 Corporate securities Public 8,995.3 73.5 650.0 8,418.8 Private 5,373.7 55.1 245.8 5,183.0 Mortgage-backed securities 7,504.3 24.1 560.5 6,967.9 Asset-backed securities 3,818.3 24.4 485.7 3,357.0

Total fixed maturity securities 26,551.4 251.0 1,952.8 24,849.6 Equity securities 72.0 0.7 3.4 69.3

Total 26,623.4$ 251.7$ 1,956.2$ 24,918.9$

December 31, 2007Fixed maturity securities:

U.S. Treasury securities and obligations of U.S. Government corporations 172.8$ 17.4$ 0.9$ 189.3$ Agencies not backed by the full faith and credit of the U.S. Government 418.1 61.5 - 479.6 Obligations of states and political subdivisions 273.3 1.7 2.8 272.2 Debt securities issued by foreign governments 56.2 2.5 0.3 58.4 Corporate securities Public 9,233.2 175.2 178.8 9,229.6 Private 6,010.7 135.7 66.9 6,079.5 Mortgage-backed securities 7,142.5 40.3 108.2 7,074.6 Asset-backed securities 3,957.1 33.4 184.5 3,806.0

Total fixed maturity securities 27,263.9 467.7 542.4 27,189.2 Equity securities 117.5 8.3 1.6 124.2

Total 27,381.4$ 476.0$ 544.0$ 27,313.4$

More Than One Year TotalGross Gross Gross

Estimated Unrealized Estimated Unrealized Estimated Unrealized($ in millions) Fair Value Losses Fair Value Losses Fair Value LossesSeptember 30, 2008Fixed maturity securities:

U.S. Treasury securities and obligations of U.S. Government corporations 11.3$ -$ -$ -$ 11.3$ -$ Agencies not backed by the full faith and credit of the U.S. Government 11.0 0.4 - - 11.0 0.4 Obligations of states and political subdivisions 149.8 7.4 31.0 2.5 180.8 9.9 Debt securities issued by foreign governments 20.0 0.5 1.2 - 21.2 0.5 Corporate securities Public 4,991.7 408.0 1,377.1 242.0 6,368.8 650.0 Private 2,561.9 163.3 1,076.9 82.5 3,638.8 245.8 Mortgage-backed securities 3,105.4 187.3 1,853.6 373.2 4,959.0 560.5 Asset-backed securities 1,543.0 220.3 1,462.6 265.4 3,005.6 485.7

Total fixed maturity securities 12,394.1 987.2 5,802.4 965.6 18,196.5 1,952.8 Equity securities 27.6 3.3 0.1 0.1 27.7 3.4

Total 12,421.7$ 990.5$ 5,802.5$ 965.7$ 18,224.2$ 1,956.2$

Percentage of gross unrealized losses 51% 49%

December 31, 2007Fixed maturity securities:

U.S. Treasury securities and obligations of U.S. Government corporations 23.7$ 0.6$ 4.2$ 0.3$ 27.9$ 0.9$ Agencies not backed by the full faith and credit of the U.S. Government - - 13.9 - 13.9 - Obligations of states and political subdivisions 23.9 0.2 154.3 2.6 178.2 2.8 Debt securities issued by foreign governments 26.4 0.3 1.2 - 27.6 0.3 Corporate securities Public 2,452.6 103.4 2,287.7 75.4 4,740.3 178.8 Private 740.4 18.8 2,076.6 48.1 2,817.0 66.9 Mortgage-backed securities 1,448.4 27.6 2,775.7 80.6 4,224.1 108.2 Asset-backed securities 1,515.3 132.3 1,211.6 52.2 2,726.9 184.5

Total fixed maturity securities 6,230.7 283.2 8,525.2 259.2 14,755.9 542.4 Equity securities 37.5 1.6 0.1 - 37.6 1.6

Total 6,268.2$ 284.8$ 8,525.3$ 259.2$ 14,793.5$ 544.0$

Percentage of gross unrealized losses 52% 48%

or Equal to One Year Less Than

Securities Available-For-Sale

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

19


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

NAIC Designation Rating Agency Equivalent Designation18,503.4$ 17,226.2$ 19,153.4$ 19,056.5$ 6,139.2 5,901.7 6,445.9 6,512.7 1,219.9 1,120.4 1,194.0 1,166.7

414.2 358.2 348.2 341.6 199.3 170.0 83.8 73.1 75.4 73.1 38.6 38.6

26,551.4$ 24,849.6$ 27,263.9$ 27,189.2$

($ in millions) Apartment September 30, 2008 Office Warehouse Retail & Other TotalNew England 135.9$ 26.6$ 75.6$ 101.2$ 339.3$ Middle Atlantic 258.3 263.7 353.2 117.6 992.8 East North Central 107.2 217.2 558.0 479.8 1,362.2 West North Central 11.6 68.0 67.3 138.6 285.5 South Atlantic 136.8 477.7 735.6 468.0 1,818.1 East South Central 22.3 43.7 118.9 127.0 311.9 West South Central 15.6 168.3 185.6 233.1 602.6 Mountain 111.7 134.7 138.4 324.7 709.5 Pacific 337.1 436.4 419.8 349.1 1,542.4

Subtotal - Principal 1,136.5$ 1,836.3$ 2,652.4$ 2,339.1$ 7,964.3$ Valuation allowance (31.7) Unamortized premium 1.0 Fair value adjustment on mortgage loans held for sale (31.1) Cummulative change in fair value of hedged mortgage loans and commitments 11.4

Total mortgage loans on real estate, net 7,913.9$

Apartment December 31, 2007 Office Warehouse Retail & Other TotalNew England 141.1$ 27.1$ 78.3$ 92.5$ 339.0$ Middle Atlantic 172.9 278.0 355.5 164.0 970.4 East North Central 91.2 239.2 555.8 491.7 1,377.9 West North Central 34.9 70.7 77.0 152.3 334.9 South Atlantic 155.9 494.1 737.1 562.4 1,949.5 East South Central 25.8 45.0 122.0 154.0 346.8 West South Central 22.8 170.1 179.7 242.4 615.0 Mountain 123.0 138.1 168.4 359.4 788.9 Pacific 333.0 434.5 438.6 386.2 1,592.3

Subtotal - Principal 1,100.6$ 1,896.8$ 2,712.4$ 2,604.9$ 8,314.7$ Valuation allowance (24.8) Unamortized premium 12.9 Fair value adjustment on mortgage loans held for sale (3.8) Cummulative change in fair value of hedged mortgage loans and commitments 17.1

Total mortgage loans on real estate, net 8,316.1$

Mortgage Loans by Region and Property Type

6 In or near defaultTotal fixed maturity securities

September 30, 2008

1 Aaa/Aa/A 2 Baa 3 Ba

Credit Quality of Fixed Maturity Securities Available-For-Sale

4 B 5 Caa and lower

December 31, 2007

20


Individual Retirement Individual Corporate($ in millions) Investments Plans Protection and Other TotalNine Months Ended September 30, 2008Balance, beginning of period 2,078.0$ 292.9$ 1,637.6$ 87.1$ 4,095.6$

Capitalization 241.9 26.6 172.7 - 441.2 Amortization (386.0) (31.2) (100.8) - (518.0) Adjustments to unrealized gains and losses on securities available-for-sale and other 56.7 1.5 0.7 350.6 409.5

Balance, end of period 1,990.6$ 289.8$ 1,710.2$ 437.7$ 4,428.3$

Year Ended December 31, 2007Balance, beginning of period 1,945.0$ 292.1$ 1,530.5$ 83.4$ 3,851.0$

Capitalization 398.6 36.1 196.6 - 631.3 Amortization (287.1) (27.4) (93.1) - (407.6) Adjustments to unrealized gains and losses on securities available-for-sale and other 21.5 (7.9) 3.6 3.7 20.9


Year Ended December 31, 2006Balance, beginning of period 1,936.4$ 294.5$ 1,412.0$ 42.5$ 3,685.4$

Capitalization 350.8 36.8 200.8 - 588.4 Amortization (352.7) (38.3) (81.6) - (472.6) Adjustments to unrealized gains and losses on securities available-for-sale and other 10.5 (0.9) (0.7) 40.9 49.8


Year Ended December 31, 2005Balance, beginning of period 2,094.6$ 304.9$ 1,314.2$ (152.6)$ 3,561.1$

Capitalization 250.7 37.2 201.1 - 489.0 Amortization (329.3) (47.4) (102.7) - (479.4) Adjustments to unrealized gains and losses on securities available-for-sale and other (79.6) (0.2) (0.6) 195.1 114.7



Capitalization 293.6 41.5 204.1 - 539.2 Amortization (276.1) (39.9) (114.4) - (430.4) Adjustments to unrealized gains and losses on securities available-for-sale and other 25.0 - 1.2 96.2 122.4

Balance, end of period 2,094.6$ 304.9$ 1,314.2$ (152.6)$ 3,561.1$


Capitalization 376.8 43.8 199.5 - 620.1 Amortization (228.3) (45.7) (120.6) - (394.6) Adjustments to unrealized gains and losses on securities available-for-sale and other 18.0 (0.1) 0.4 59.2 77.5

Balance, end of period 2,052.1$ 303.3$ 1,223.3$ (248.8)$ 3,329.9$

Deferred Policy Acquisition Costs

21


($ in millions)

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

1 2,832.5$ 219.6$ 5,368.6$ 290.5$ 2 4,433.3 290.3 4,762.3 189.8 3 3,872.5 171.4 3,177.3 160.6 4 2,606.0 144.0 3,598.2 173.8 5 2,829.0 149.8 4,310.5 178.7 6 3,250.4 143.1 4,363.6 154.0 7 3,390.9 127.4 4,593.7 163.6 8 3,132.3 130.4 3,533.0 140.7 9 2,351.2 119.1 2,309.3 97.3 10 1,639.8 83.3 2,164.7 89.6

11-15 5,599.0 291.9 6,371.0 294.7 16-20 1,422.2 66.3 1,247.3 51.0 21+ 301.0 3.5 322.0 3.4

Total: 37,660.1$ 1,940.1$ 15.5% 46,121.5$ 1,987.7$ 14.9%


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

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

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


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

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

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

Individual Variable Annuity Deferred Acquisition Costs

September 30, 2008 December 31, 2007

December 31, 2004 December 31, 2003

December 31, 2005December 31, 2006

22


Individual Retirement Individual Corporate($ in millions) Investments Plans Protection and Other TotalNine Months Ended September 30, 2008Balance, beginning of period 13.5$ 5.8$ 329.5$ 6.0$ 354.8$

Amortization (4.7) (1.1) (14.6) (0.1) (20.5) Adjustments to realized and unrealized gains and losses on securities available-for-sale - 1.6 2.3 - 3.9

Balance, end of period 8.8$ 6.3$ 317.2$ 5.9$ 338.2$

Year Ended December 31, 2007Balance, beginning of period 14.1$ 4.9$ 367.5$ 6.2$ 392.7$

Amortization (5.3) (2.2) (39.3) (0.2) (47.0) Adjustments to realized and unrealized gains and losses on securities available-for-sale 4.7 3.1 1.3 - 9.1



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



Amortization (7.2) (3.5) (34.3) - (45.0) Adjustments to realized and unrealized gains and losses on securities available-for-sale 9.5 2.7 2.1 - 14.3



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



Amortization (6.3) (2.0) (38.0) - (46.3) Adjustments to realized and unrealized gains and losses on securities available-for-sale and other (2.6) (1.5) 3.9 0.2 -


Value of Business Acquired

23


($ in millions)

Account AccountGMDB Benefit Type Values Gross Net Values Gross Net

Return of premium 7,094.2$ 124.0$ 108.5$ 9,086.7$ 23.4$ 18.7$ Reset 14,434.9 1,342.6 1,076.8 18,055.4 120.7 62.1 Ratchet 13,804.9 2,473.1 2,102.6 15,931.7 224.4 133.3 Roll-up 351.9 117.5 16.1 492.2 61.7 8.4 Combo 1,974.2 367.0 365.1 2,555.5 48.0 47.0

Subtotal 37,660.1$ 4,424.2 3,669.1 46,121.5$ 478.2 269.5

Earnings enhancement 407.2$ 20.1$ 20.1$ 519.2$ 49.8$ 49.8$ Total 4,444.3$ 3,689.2$ 528.0$ 319.3$

GAAP GMDB reserves 95.3$ 47.6$ Statutory GMDB reserves 148.4$ 34.4$


Return of premium 9,243.7$ 42.9$ 33.9$ 9,272.7$ 83.3$ 32.5$ Reset 17,752.7 177.3 49.3 17,130.4 388.0 61.8 Ratchet 13,651.6 195.2 31.7 11,233.2 410.3 31.6 Roll-up 568.1 87.7 11.3 629.1 143.8 8.4 Combo 2,588.7 30.1 28.9 2,530.6 45.7 22.3

Subtotal 43,804.8$ 533.2 155.1 40,796.0$ 1,071.1 156.6

Earnings enhancement 477.8$ 41.1$ 41.1$ 418.5$ 27.6$ 27.6$ Total 574.3$ 196.2$ 1,098.7$ 184.2$

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


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

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

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

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

Return of premium 28.0$ 36.1$ 29.4$ 10.1$ 4.9$ 108.5$ 61 Reset 139.6 325.3 359.8 192.9 59.2 1,076.8 63 Ratchet 191.8 498.6 679.2 483.4 249.6 2,102.6 66 Roll-up 1.1 3.1 4.2 4.4 3.3 16.1 71 Combo 22.9 68.1 123.2 102.1 48.8 365.1 67

Subtotal 383.4 931.2 1,195.8 792.9 365.8 3,669.1 65

Earnings enhancement 1.7 5.2 8.4 4.8 - 20.1 63Total 385.1$ 936.4$ 1,204.2$ 797.7$ 365.8$ 3,689.2$ 65

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

Individual Variable Annuity Guaranteed Minimum Death Benefits

Net Amount at RiskDecember 31, 2004

Net Amount at Risk

December 31, 2007

Net Amount at Risk, Net of Reinsurance by Benefit Type and Age at September 30, 2008

September 30, 2008Net Amount at Risk Net Amount at Risk

December 31, 2005Net Amount at Risk

December 31, 2003


24


($ in millions)Account Account

GMAB Benefit Type Values Gross Net Values Gross Net

5 Year 2,991.4$ 220.8$ 220.8$ 2,985.6$ 4.6$ 4.6$ 7 Year 2,513.2 214.1 214.1 2,644.1 6.2 6.2 10 Year 791.1 41.8 41.8 927.3 1.3 1.3

Total 6,295.7$ 476.7$ 476.7$ 6,557.0$ 12.1$ 12.1$

CPPLI included in totals 4,879.7$ 475.4$ 475.4$ 4,772.4$ 12.1$ 12.1$

Account AccountGMAB Benefit Type Values Gross Net Values Gross Net

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

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

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

AccountGMAB Benefit Type Values Gross Net

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

Total 1,492.1$ 0.1$ 0.1$

CPPLI included in totals - - -


GMIB Benefit Type Values Gross Net Values Gross Net

Ratchet 306.3$ 0.3$ -$ 425.2$ 0.1$ -$ Roll-up 816.4 8.4 0.1 1,119.9 1.8 - Combo 0.2 - - 0.3 - -

Total 1,122.9$ 8.7$ 0.1$ 1,545.4$ 1.9$ -$

Account AccountGMIB Benefit Type Values Gross Net Values Gross Net

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

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

Account AccountGMIB Benefit Type Values Gross Net Values Gross Net

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

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

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


Individual Variable Annuity Guaranteed Minimum Accumulation Benefits

Individual Variable Annuity Guaranteed Minimum Income Benefits

September 30, 2008 December 31, 2007Net Amount at Risk Net Amount at Risk





December 31, 2007Net Amount at Risk Net Amount at Risk

September 30, 2008



25



GLWB Benefit Type Values Gross Net Values Gross Net

L.INC 3,461.4$ 3.8$ 3.8$ 2,865.8$ -$ -$ Total 3,461.4$ 3.8$ 3.8$ 2,865.8$ -$ -$

AccountGLWB Benefit Type Values Gross Net

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

($ in millions) Q3'07 Q4'07 Q1'08 Q2'08 Q3'08Balance, beginning of period 40.7$ 43.4$ 47.6$ 57.0$ 59.5$

Expense provision 6.2 7.6 17.1 8.6 50.0 Net claims paid (3.5) (3.4) (7.7) (6.1) (14.2)


Account Wtd. Avg. Account Wtd. Avg.($ in millions) Value Crediting Rate Value Crediting RateMinimum interest rate of 3.50% or greater -$ - 927.9$ 3.74%Minimum interest rate of 3.00% to 3.49% 1,101.2 4.01% 2,700.4 3.14%Minimum interest rate lower than 3.00% 806.8 3.51% 561.6 3.60%MVA with no minimum interest rate guarantee - - - -

Total 1,908.0$ 3.80% 4,189.9$ 3.33%

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

Minimum interest rate of 3.50% or greater -$ - 927.9 3.74%Minimum interest rate of 3.00% to 3.49% - - 3,801.6 3.39%Minimum interest rate lower than 3.00% 44.8 4.06% 1,413.2 3.56%MVA with no minimum interest rate guarantee 1,957.7 2.42% 1,957.7 2.42%

Total 2,002.5$ 2.46% 8,100.4$ 3.23%

Definition of Benefit TypesL.INC: Lifetime Income is a living benefit rider that provides a lifetime withdrawal benefit to the insured. The withdrawal percent is based on the insured's age at the time of the first withdrawal.

Total


MVA & Other

Individual Variable Annuity Guaranteed Lifetime Withdrawal Benefits

September 30, 2008 December 31, 2007Net Amount at Risk Net Amount at Risk

Individual Variable Annuity Guaranteed Minimum Death Benefit Reserve Activity

Individual Fixed Annuity and Fixed Option of Variable Annuity Summary of Crediting Rate Detail as of September 30, 2008

Ratchet Reset

26


($ in millions except for per share data) 2003 2004 2005 2006 2007Operating Revenues

Individual investments 1,404.5$ 1,487.0$ 1,528.2$ 1,526.6$ 1,469.8$ Retirement plans 934.1 982.5 1,045.2 1,115.6 1,146.2 Individual protection 1,317.1 1,318.2 1,321.1 1,321.0 1,349.7 Corporate and other 367.2 421.1 503.5 599.9 716.0

Total operating revenues 4,022.9$ 4,208.8$ 4,398.0$ 4,563.1$ 4,681.7$

Net realized investment gains/(losses) (1) (86.3) (40.9) 18.2 (0.6) (152.8) Total revenues 3,936.6$ 4,167.9$ 4,416.2$ 4,562.5$ 4,528.9$

Pre-tax Operating Earnings (Loss)Individual investments 194.6$ 244.0$ 250.7$ 223.1$ 300.7$ Retirement plans 156.4 183.3 191.3 221.2 252.6 Individual protection 225.5 247.3 266.1 280.8 299.8 Corporate and other 52.6 66.8 54.9 65.1 74.6

Pre-tax operating earnings 629.1$ 741.4$ 763.0$ 790.2$ 927.7$ Federal income tax expense 158.6 190.3 135.1 69.0 235.2

Net operating earnings 470.5$ 551.1$ 627.9$ 721.2$ 692.5$

Net realized investment gains/(losses), net of taxes (2) (56.2) (26.6) 11.1 5.9 (82.8)

Discontinued operations, net of taxes (6.3) (4.7) (28.6) (3.1) 23.1

Cumulative effect of adoption of accounting principles, net of taxes (0.6) (3.4) - - (6.0)

Net income 407.4$ 516.4$ 610.4$ 724.0$ 626.8$

Per Common Diluted ShareNet operating earnings 3.09$ 3.60$ 4.09$ 4.79$ 4.83$

Net realized investment gains/(losses), net of taxes (2) (0.38) (0.17) 0.07 0.03 (0.58)


Cumulative effect of adoption of accounting principles, net of taxes - (0.02) - - (0.04)

Net income 2.67$ 3.38$ 3.97$ 4.80$ 4.37$

Sales by ChannelNon-affiliated Independent broker/dealers 4,615.0$ 5,223.2$ 5,266.0$ 5,758.2$ 6,354.7$ Wirehouse and regional firms 1,995.0 1,992.1 1,912.5 2,433.6 2,879.0 Financial institutions 3,758.2 2,618.5 1,808.0 2,295.1 2,501.2 Pension plan administrators 574.8 476.1 469.0 532.8 507.7 Life specialists 387.5 382.8 382.4 580.6 329.6 Affiliated Nationwide Retirement Solutions 3,209.9 3,665.9 3,914.7 4,050.2 4,299.9 Nationwide Financial Network 1,479.9 1,475.2 1,415.8 1,486.5 1,468.9 Mullin TBG 160.9 184.2 275.4 226.1 223.2

Total 16,181.2$ 16,018.0$ 15,443.8$ 17,363.1$ 18,564.2$

(1) Excluding operating items (periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, 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 TBG Financial and The 401(k) Company are reflected as discontinued operations for 2007 and all prior years. In addition, the results of operations of Cap Pro Holding, Inc., NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior years.

Historical Financial Highlights

27


($ in millions except for per share data) 2003 2004 2005 2006 2007Balance Sheet Data

Total assets 111,237.8$ 117,121.2$ 116,361.2$ 119,531.1$ 119,207.1$

Total customer funds managed and administered 127,699.0$ 140,296.6$ 145,484.8$ 156,909.9$ 162,365.4$

Shareholder's equity Including AOCI 4,868.9$ 5,234.0$ 5,387.6$ 5,622.7$ 5,324.6$ AOCI 504.9 432.2 100.7 31.9 (81.5) Excluding AOCI 4,364.0$ 4,801.8$ 5,286.9$ 5,590.8$ 5,406.1$

Net operating return on average equity excluding AOCI 11.2% 12.1% 12.4% 13.2% 12.5%

Adjusted net operating return on average equity excluding AOCI (1) 11.2% 12.1% 11.7% 11.3% 12.5%

Statutory capital and surplus 2,730.0$ 2,967.5$ 3,262.1$ 3,336.6$ 3,175.1$

Stock DataClosing Price 33.06$ 38.23$ 44.00$ 54.20$ 45.01$

Weighted average common shares outstanding Basic 151.8 152.1 152.9 149.9 142.5 Diluted 152.3 152.9 153.6 150.7 143.5

Book value per share Including AOCI 32.05$ 34.32$ 35.33$ 38.51$ 38.44$ Excluding AOCI 28.73$ 31.49$ 34.67$ 38.29$ 39.03$

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


Historical Financial Highlights

28


($ in millions) 2003 2004 2005 2006 2007Operating Revenues Asset fees 547.2$ 620.7$ 639.9$ 691.2$ 773.2$ Cost of insurance charges 371.3 379.7 388.5 402.0 420.5 Administrative fees 107.7 117.9 114.9 139.1 119.4 Surrender fees 94.2 104.3 98.2 83.7 70.8

Total policy charges 1,120.4 1,222.6 1,241.5 1,316.0 1,383.9

Premiums 426.2 402.7 399.9 441.5 432.7 Net investment income 2,198.0 2,231.7 2,344.1 2,300.2 2,276.7 Operating realized gains and (losses) 15.7 8.7 2.6 9.7 (12.4) Other income 262.6 343.1 409.9 495.7 600.8


Benefits Interest credited to policyholder accounts 1,367.5 1,328.3 1,380.9 1,381.5 1,342.0 Life insurance and annuity benefits 581.7 548.6 574.9 646.8 682.9 Policyholder dividends 105.7 101.4 107.3 90.7 83.1

Total benefits 2,054.9 1,978.3 2,063.1 2,119.0 2,108.0

Expenses Commissions 597.2 573.2 557.5 658.3 738.8 General operating expenses 823.5 867.6 847.9 959.0 959.9 Debt extinguishment costs - - 21.7 - 10.2 Deferral of policy acquisition costs (620.1) (539.2) (489.0) (588.4) (631.3)

Subtotal 800.6 901.6 938.1 1,028.9 1,077.6

Amortization of policy acquisition costs 394.6 430.4 479.4 472.6 407.6 Amortization of VOBA and other intangible assets 47.9 54.7 46.8 49.3 50.2 Interest expense 95.8 102.4 107.6 103.1 110.6

Total expenses 1,338.9 1,489.1 1,571.9 1,653.9 1,646.0


Federal income tax expense 158.6 190.3 135.1 69.0 235.2

Net operating earnings 470.5$ 551.1$ 627.9$ 721.2$ 692.5$

Net realized investment gains/(losses), net of taxes (1)

Realized gains/(losses) on sales, net of hedging 48.2 45.3 43.8 17.1 8.5 Other-than-temporary impairments, including mortgage loan valuation allowance adjustment (110.7) (67.1) (26.9) (11.0) (76.1) Credit default swaps 8.6 0.3 (4.8) (0.8) (3.9) Derivatives, excluding hedging gains and losses on sales and credit default swaps 0.8 (3.4) 0.8 (0.4) (10.4) Amounts credited to policyholder dividend obligation (3.5) (4.7) (3.3) - (1.7) Adjustment to VOBA amortization 0.4 3.0 1.5 1.0 0.8

Subtotal (56.2) (26.6) 11.1 5.9 (82.8)


Cumulative effect of adoption of accounting principles, net of taxes (0.6) (3.4) - - (6.0)

Net income 407.4$ 516.4$ 610.4$ 724.0$ 626.8$



Historical Consolidated Earnings Trends

29


($ in millions, except per share data) 2003 2004 2005 2006 2007Assets

InvestmentsSecurities available-for-sale at fair value: Fixed maturity securities 30,787.1$ 31,516.8$ 30,106.0$ 28,160.0$ 27,189.2$ Equity securities 128.7 87.0 75.6 67.6 124.2 Trading assets 4.9 15.9 34.4 24.3 37.7 Mortgage loans on real estate, net 8,964.7 9,267.5 9,148.6 8,909.8 8,316.1 Real estate 123.4 108.3 108.7 59.1 21.8 Policy loans 963.2 987.2 930.6 966.9 1,018.3 Other long-term investments 194.6 604.2 691.9 856.0 1,187.2 Short-term investments 1,970.3 2,009.9 2,073.2 2,215.6 1,173.6

Total investments 43,136.9 44,596.8 43,169.0 41,259.3 39,068.1

Cash 15.3 60.3 49.5 84.1 73.6 Accrued investment income 439.6 428.7 396.3 373.8 368.4 Deferred policy acquisition costs 3,329.9 3,561.1 3,685.4 3,851.0 4,095.6 Value of business acquired 523.0 480.4 449.7 392.7 354.8 Other intangible assets 52.3 48.7 45.6 47.6 44.3 Goodwill 406.7 382.3 364.5 359.0 301.2 Other assets 2,396.5 2,659.7 2,237.4 2,468.9 2,046.1 Separate account assets 60,937.6 64,903.2 65,963.8 70,694.7 72,855.0

Total assets 111,237.8$ 117,121.2$ 116,361.2$ 119,531.1$ 119,207.1$

Liabilities and shareholders' equityFuture policy benefits and claims 40,049.3$ 41,077.2$ 39,748.1$ 38,097.8$ 35,441.5$ Short-term debt 205.3 230.8 252.3 85.2 309.3 Long-term debt 1,405.6 1,406.0 1,398.0 1,398.5 1,565.1 Other liabilities 3,771.1 4,270.0 3,611.4 3,632.2 3,711.6 Separate account liabilities 60,937.6 64,903.2 65,963.8 70,694.7 72,855.0

106,368.9 111,887.2 110,973.6 113,908.4 113,882.5

Shareholders' equity 4,868.9 5,234.0 5,387.6 5,622.7 5,324.6 Total liabilities and shareholders' equity 111,237.8$ 117,121.2$ 116,361.2$ 119,531.1$ 119,207.1$

2003 2004 2005 2006 2007

Total capital, including AOCI 6,274.5$ 6,640.0$ 6,785.6$ 7,021.2$ 6,889.7$ Less AOCI 504.9 432.2 100.7 31.9 (81.5) Total capital, excluding AOCI 5,769.6$ 6,207.8$ 6,684.9$ 6,989.3$ 6,971.2$

Leverage including AOCI Long-term debt--to--total capital 22.4% 21.2% 20.6% 19.9% 22.7%

Leverage excluding AOCI Long-term debt--to--total capital 24.4% 22.6% 20.9% 20.0% 22.5%

Ratio of pre-tax operating earnings before interestexpense to interest expense 7.6X 8.2X 8.1X 8.7X 9.4X

Historical Consolidated Balance Sheet

Capital Structure

30


($ in millions) 2003 2004 2005 2006 2007Operating Revenues



Net Investment IncomeGeneral account assets 886.5 895.3 895.9 806.3 671.8 Charge for invested capital (26.1) (22.5) (26.0) (25.2) (28.9)




Benefits Interest credited to policyholder accounts 637.5 606.1 589.1 528.3 444.3 Immediate annuity benefits 82.0 76.1 89.2 126.9 119.6 Policy benefits 78.5 63.1 66.2 75.5 113.9

Total benefits 798.0 745.3 744.5 730.7 677.8


Subtotal 177.3 214.1 196.5 213.6 198.9


Total expenses 411.9 497.7 533.0 572.8 491.3


Key Ratios/StatisticsAverage Account Values:

General account 15,340.9$ 16,211.1$ 15,966.7$ 14,041.3$ 11,814.2$ Separate account 29,170.6 34,198.8 35,600.5 37,223.3 41,366.0 Advisory services program 7.8 99.1 309.3 508.1 634.9

Total average individual investment account values 44,519.3$ 50,509.0$ 51,876.5$ 51,772.7$ 53,815.1$




Total asset fees to average separate account values 1.27% 1.27% 1.30% 1.37% 1.42%


Pre-tax operating earnings (loss) to average account values 0.44% 0.48% 0.48% 0.43% 0.56%

Pre-tax operating earnings (loss) to operating revenues 13.9% 16.4% 16.4% 14.6% 20.5%

Average allocated capital 1,805.6$ 1,747.0$ 1,671.0$ 1,499.3$ 1,420.5$


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

($ in millions) 2003 2004 2005 2006 2007Individual Variable Annuities


Deposits 5,023.8 4,409.2 3,661.2 5,034.9 5,984.7 Withdrawals and surrenders (4,347.8) (4,964.4) (5,574.2) (6,133.3) (6,783.9)

Net flows 676.0 (555.2) (1,913.0) (1,098.4) (799.2)

Investment performance/interest credited to policyholder accounts 6,757.7 3,681.9 2,922.1 4,742.3 3,739.9 Policy charges (437.2) (515.0) (543.4) (576.2) (653.3) Benefits and other (42.5) 34.3 9.0 (58.9) 29.3 Acquisitions/(terminations), net - - (1,160.6) - -


Individual Fixed AnnuitiesBalance, beginning of period 7,338.1$ 8,630.7$ 8,902.5$ 8,041.8$ 6,536.1$

Deposits 1,553.4 672.9 160.9 178.2 192.3 Withdrawals and surrenders (605.1) (753.6) (1,044.0) (1,893.8) (2,203.6)

Net flows 948.3 (80.7) (883.1) (1,715.6) (2,011.3)

Policyholder interest credited 364.8 362.7 327.7 284.4 207.3 Policy charges (8.1) (9.9) (11.4) (10.6) (7.3) Benefits and other (12.4) (0.3) (4.3) (63.9) (7.5) Acquisitions/(terminations), net - - (289.6) - -


Income Products 1,840.7$ 1,901.6$ 1,978.3$ 2,025.6$ 2,101.0$ Advisory Services Program 26.6$ 195.9$ 411.5$ 597.1$ 647.2$


Historical Earnings TrendsIndividual Investments

Individual InvestmentsAccount Value Activity

31



BEST of AMERICA products 31,058.5$ 33,573.0$ 32,937.0$ 36,106.8$ 38,371.2$ Private label annuities 7,123.4 7,350.9 7,398.9 7,319.7 7,438.1 Nationwide Financial Network and other 654.0 558.0 460.1 378.3 312.2


Individual Fixed Annuities 8,630.7$ 8,902.5$ 8,041.8$ 6,536.1$ 4,717.3$ Income Products 1,840.7$ 1,901.6$ 1,978.3$ 2,025.6$ 2,101.0$ Advisory Services Program 26.6$ 195.9$ 411.5$ 597.1$ 647.2$



BEST of AMERICA products 4,066.8$ 3,674.3$ 3,135.5$ 4,390.9$ 5,169.0$ Private label annuities 659.3 449.0 346.6 356.6 434.6 Nationwide Financial Network and other 9.3 7.0 4.7 3.6 2.8


Individual Fixed Annuities 1,824.5$ 858.8$ 194.4$ 186.5$ 156.3$ Income Products 153.2$ 168.4$ 196.7$ 230.7$ 216.7$ Advisory Services Program 25.7$ 181.0$ 231.3$ 222.8$ 147.2$



Non-affiliated Independent broker/dealers 1,683.7$ 1,534.6$ 1,304.3$ 1,606.5$ 1,843.9$ Wirehouse and regional firms 1,086.4 991.6 821.9 1,171.8 1,558.0 Financial institutions 1,657.0 1,270.8 1,031.5 1,558.8 1,788.4 Life specialists 3.4 2.3 0.3 0.8 0.1 Affiliated Nationwide Financial Network 304.9 331.0 328.8 413.2 416.0


Individual Fixed AnnuitiesNon-affiliated Independent broker/dealers 48.7$ 17.1$ 7.0$ 13.4$ 20.7$ Wirehouse and regional firms 58.0 20.6 8.2 9.8 10.9 Financial institutions 1,628.7 774.3 129.4 72.4 55.0 Affiliated Nationwide Financial Network 89.1 46.8 49.8 90.9 69.7

Total individual fixed annuities 1,824.5$ 858.8$ 194.4$ 186.5$ 156.3$

Income ProductsNon-affiliated Independent broker/dealers 75.6$ 70.8$ 76.9$ 98.1$ 101.8$ Wirehouse and regional firms 44.9 52.2 63.4 84.7 68.4 Financial institutions 15.5 23.4 29.2 30.7 30.3 Affiliated Nationwide Financial Network 17.2 22.0 27.2 17.2 16.2

Total income products 153.2$ 168.4$ 196.7$ 230.7$ 216.7$

Advisory Services ProgramNon-affiliated Independent broker/dealers 21.2$ 160.0$ 205.3$ 180.5$ 98.6$ Financial institutions 3.0 8.9 8.1 15.5 11.6 Affiliated Nationwide Financial Network 1.5 12.1 17.9 26.8 37.0

Total advisory services program 25.7$ 181.0$ 231.3$ 222.8$ 147.2$


Individual InvestmentsSales by Channel

Account Values by ProductIndividual Investments

Individual InvestmentsSales by Product

32





Net investment income 662.9 647.6 661.4 652.2 655.2 Other income 109.8 163.1 229.1 288.9 343.7

Total operating revenues 934.1 982.5 1,045.2 1,115.6 1,146.2

Benefits Interest credited to policyholder accounts 458.9 446.1 455.0 451.6 443.3


Subtotal 271.0 308.4 347.8 397.1 420.2


Total expenses 318.8 353.1 398.9 442.8 450.3


Key Ratios/StatisticsAverage Account Values:

General account 9,786.0$ 10,175.6$ 10,881.2$ 11,093.0$ 11,135.3$ Separate account 18,743.7 20,287.9 19,792.0 18,512.4 17,723.6 Non insurance assets 4,312.4 8,315.6 12,500.3 16,515.0 20,747.9 Administration only 17,184.0 21,995.8 24,289.9 25,904.7 29,844.5

Total average retirement plan account values 50,026.1$ 60,774.9$ 67,463.4$ 72,025.1$ 79,451.3$




Total asset fees to average separate account values 0.78% 0.74% 0.70% 0.72% 0.75%


Pre-tax operating earnings to average account values 0.31% 0.30% 0.28% 0.31% 0.32%

Pre-tax operating earnings to operating revenues 16.7% 18.7% 18.3% 19.8% 22.0%

Average allocated capital 689.2$ 724.4$ 773.9$ 815.1$ 770.4$


Note: The results of operations of The 401(k) Company are reflected as discontinued operations for 2007 and all prior years.

($ in millions) 2003 2004 2005 2006 2007Private Sector Pension Plans



Net flows 1,000.6 1,311.9 1,383.9 937.4 826.9

Investment performance/interest credited to policyholder accounts 3,811.9 2,596.3 2,083.3 3,654.9 2,497.5 Policy charges and other (193.3) (194.3) (211.5) (226.9) (265.5) Net, case acquisitions/(terminations) - - - (1,478.9) (3,417.7)


Public Sector Pension PlansBalance, beginning of period 23,537.6$ 34,545.4$ 38,925.2$ 40,092.0$ 43,951.8$


Net flows 1,300.6 1,394.6 1,242.7 1,605.6 1,210.3

Investment performance/interest credited 4,781.0 2,869.6 2,577.1 3,802.9 3,648.4 Policy charges and other (57.6) (65.8) (69.4) (94.8) (82.3) Net, case acquisitions/(terminations) 4,983.8 181.4 (2,583.6) (1,453.9) (468.1)



Historical Earnings TrendsRetirement Plans

Retirement PlansAccount Value Activity

33





Nationwide Financial Network products 1,584.1 1,483.7 1,378.4 1,268.2 1,014.5 Nationwide employee and agent benefit plans 4,530.2 4,985.3 5,504.2 4,435.6 1,795.4 Other 644.5 629.9 604.8 550.3 483.4








Nationwide Financial Network products 366.4 335.8 205.9 188.2 149.4 Other 31.0 28.1 75.8 69.4 82.7






Non-affiliated Independent broker/dealers 2,534.6$ 3,154.4$ 3,412.0$ 3,594.0$ 4,011.0$ Wirehouse and regional firms 742.2 863.7 953.7 1,104.7 1,162.0 Financial institutions 411.4 493.3 551.2 559.8 546.9 Pension plan administrators 574.8 476.1 469.0 532.8 507.7 Affiliated Nationwide Retirement Solutions 32.5 28.8 33.0 32.0 31.8 Nationwide Financial Network 247.0 259.3 208.8 168.5 163.7


Public Sector Pension Plans Nationwide Retirement Solutions 3,177.4$ 3,637.1$ 3,881.7$ 4,018.2$ 4,268.1$


Sales by Channel

Account Values by ProductRetirement Plans

Retirement PlansSales by Product

Retirement Plans

34


($ in millions) 2003 2004 2005 2006 2007

Operating RevenuesAsset fees 29.4$ 34.4$ 40.2$ 45.8$ 53.1$ Cost of insurance charges 371.3 379.7 388.5 402.0 420.5 Administrative fees 86.8 93.3 90.0 82.7 80.5 Surrender fees 32.5 30.0 27.9 22.6 19.9







Total benefits 720.2 700.2 717.5 726.8 724.5


Subtotal 211.9 214.5 199.5 198.0 191.9


Total expenses 371.4 370.7 337.5 313.4 325.4


Key Ratios/StatisticsGeneral operating expenses to operating revenues 20.8% 20.5% 19.7% 19.8% 18.4%Pre-tax operating earnings to operating revenues 17.1% 18.8% 20.1% 21.3% 22.2%Average allocated capital 1,722.4$ 1,731.1$ 1,788.9$ 1,849.2$ 1,965.2$ Return on average allocated capital 8.8% 9.7% 10.5% 10.5% 10.6%

Note: The results of operations of TBG Financial are reflected as discontinued operations for 2007 and all prior years. In addition, the results of operations of NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior years.

($ in millions) 2003 2004 2005 2006 2007

Individual investment life 4,443.8$ 4,962.1$ 5,329.5$ 5,842.5$ 6,298.2$ Corporate investment life - excluding experience rated BOLI 4,401.5 5,063.0 5,613.8 6,600.9 7,192.9 Corporate investment life - experience rated BOLI - 381.1 1,130.8 1,913.5 2,085.9


Traditional life 4,155.0 4,278.9 4,225.2 4,170.9 4,156.4 Universal life 896.8 997.9 1,089.3 1,159.0 1,257.1


Total individual protection policy reserves 13,897.1$ 15,683.0$ 17,388.6$ 19,686.8$ 20,990.5$

($ in millions) 2003 2004 2005 2006 2007

Individual investment life 56,478.4$ 56,836.7$ 57,021.7$ 57,536.7$ 57,772.0$ Corporate investment life - excluding experience rated BOLI 9,263.3 9,774.3 10,305.0 11,451.7 11,980.3 Corporate investment life - experience rated BOLI - 1,129.8 13,330.5 13,312.7 13,311.2




Total individual protection insurance in force 107,820.3$ 109,225.7$ 126,361.1$ 133,312.7$ 137,518.7$

Individual ProtectionInsurance In Force

Historical Earnings TrendsIndividual Protection

Individual ProtectionPolicy Reserves

35


($ in millions) 2003 2004 2005 2006 2007BEST of AMERICA Variable Life Series

First year sales 131.1$ 131.7$ 121.9$ 138.0$ 141.9$ Renewal sales 304.3 307.9 304.1 299.3 307.0

Total BEST of AMERICA variable life series 435.4 439.6 426.0 437.3 448.9

Nationwide Financial Network Variable Life ProductsFirst year sales 35.1 32.0 24.0 21.0 6.7 Renewal sales 229.1 223.8 205.0 180.7 183.7

Total Nationwide Financial Network variable life products 264.2 255.8 229.0 201.7 190.4

Corporate Owned Life Insurance (COLI)First year sales 173.2 157.0 227.8 396.6 181.9 Renewal sales 371.8 407.5 429.7 409.3 370.8

Total COLI 545.0 564.5 657.5 805.9 552.7

Traditional/Universal lifeFirst year sales 77.6 114.6 111.4 102.6 120.9 Renewal sales 400.3 392.3 401.3 414.5 433.5

Total traditional/universal life 477.9 506.9 512.7 517.1 554.4

Total individual protection sales 1,722.5$ 1,766.8$ 1,825.2$ 1,962.0$ 1,746.4$

($ in millions) 2003 2004 2005 2006 2007Non-affiliated Independent broker/dealers 251.2$ 286.3$ 260.5$ 265.7$ 278.7$ Wirehouse and regional firms 63.5 64.0 65.3 62.6 79.7 Financial institutions 42.6 47.8 58.6 57.9 69.0 Life specialists 384.1 380.5 382.1 579.8 329.5 Affiliated Nationwide Financial Network 820.2 804.0 783.3 769.9 766.3 Mullin TBG 160.9 184.2 275.4 226.1 223.2

Total individual protection sales 1,722.5$ 1,766.8$ 1,825.2$ 1,962.0$ 1,746.4$

Sales by Channel

Sales by ProductIndividual Protection

Individual Protection

36







Other income 1.7 1.0 2.4 0.8 4.0 Total operating revenues 598.8 609.8 623.2 613.2 621.1

BenefitsInterest credited to policyholder accounts 120.7 117.0 116.3 112.4 113.5 Life benefits 118.2 128.1 128.4 141.8 144.3

Total benefits 238.9 245.1 244.7 254.2 257.8


Subtotal 107.1 106.0 95.5 98.1 90.4


Total expenses 227.1 215.3 207.4 203.0 179.0


Key Ratios/Statistics

Cost of insurance per $1,000 of average net amount at risk (1) 5.84$ 5.88$ 6.01$ 6.10$ 6.27$ Life benefits per $1,000 of average net amount at risk (1) 2.08$ 2.25$ 2.28$ 2.51$ 2.56$ General operating expenses to operating revenues 26.8% 24.4% 21.3% 21.8% 20.4%Pre-tax operating earnings to operating revenues 22.2% 24.5% 27.5% 25.4% 29.7%Average allocated capital 1,143.4$ 1,191.5$ 1,246.1$ 1,273.2$ 1,303.2$ Return on average allocated capital 8.0% 8.8% 10.2% 8.9% 10.3%

(1) Excludes experience rated BOLI corporate investment life.Note: The results of operations of TBG Financial are reflected as discontinued operations for 2007 and all prior years. In addition, the results of operations of NFS Bermuda and TBG Lynch (a subsidiary of TBG Financial) are reflected as discontinued operations for 2005 and all prior years.

($ in millions) 2003 2004 2005 2006 2007Balance, beginning of period 7,167.6$ 8,845.3$ 10,406.2$ 12,074.1$ 14,356.9$

Deposits 1,242.4 1,642.7 2,153.8 2,208.6 1,265.6 Withdrawals and surrenders (464.4) (467.4) (780.8) (576.7) (639.7)

Net flows 778.0 1,175.3 1,373.0 1,631.9 625.9

Investment performance/interest credited to policyholder accounts 1,357.0 842.8 731.6 1,290.5 1,064.1 Policy charges (468.0) (478.0) (481.4) (477.9) (481.1) Benefits and other 10.7 20.8 46.2 (161.7) 11.2 Acquired business - - (1.5) - - Balance, end of period 8,845.3$ 10,406.2$ 12,074.1$ 14,356.9$ 15,577.0$


Historical Earnings TrendsInvestment Life

Investment Life

37



Cost of insurance charges 40.1 44.8 49.5 57.7 67.4 Administrative fees 11.2$ 13.9$ 14.3$ 15.0$ 22.2$ Surrender fees 0.8 0.8 1.6 2.4 2.6


Net investment income 333.4 337.0 335.5 333.7 337.0 Premiums 332.8 311.9 297.0 299.0 299.4



Total benefits 481.3 455.1 472.8 472.6 466.7


Subtotal 104.8 108.5 104.0 99.9 101.5


Total expenses 144.3 155.4 130.1 110.4 146.4


Key Ratios/StatisticsLife benefits per $1,000 of average life insurance in force 7.15$ 6.77$ 6.70$ 6.25$ 5.87$ General operating expenses to operating revenues 15.9% 17.1% 18.3% 18.0% 16.6%Pre-tax operating earnings to operating revenues 12.9% 13.8% 13.6% 17.6% 15.9%Average allocated capital 579.0$ 539.6$ 542.9$ 576.1$ 662.0$ Return on average allocated capital 10.4% 11.8% 11.4% 14.1% 11.3%

($ in millions) 2003 2004 2005 2006 2007Traditional/Universal Life



Net flows 252.1 260.7 234.6 241.4 256.0

Interest credited to policyholder accounts 72.6 72.4 74.4 83.9 80.7 Policy charges (52.1) (59.5) (65.4) (74.8) (93.4) Benefits and other (212.1) (48.6) (205.9) (235.1) (159.7)



Fixed LifeHistorical Earnings Trends

Fixed Life

38



39



Net investment income General account assets 219.0$ 247.6$ 337.8$ 400.2$ 507.2$ Periodic net coupon settlements on non-qualifying derivatives (6.9) (4.2) (0.1) (1.4) (0.9)


Operating realized gains (losses) 15.7 8.7 2.6 9.7 (12.4) Other income 139.4 169.0 163.2 191.4 222.1


BenefitsInterest credited Products 69.0 84.2 144.9 209.9 262.3 Periodic net coupon settlements on non-qualifying derivatives 8.8 2.5 1.2 - 0.1

Total benefits 77.8 86.7 146.1 209.9 262.4

ExpensesCommissions 21.8 24.7 26.5 28.4 28.9 General operating expenses 118.6 139.9 146.1 191.8 227.5 Amortization of VOBA and other intangible assets 0.6 0.6 0.6 1.6 1.8 Debt extinguishment costs - - 21.7 - 10.2 Interest expense 95.8 102.4 107.6 103.1 110.6

Total expenses 236.8 267.6 302.5 324.9 379.0


Note: The results of operations of TBG Financial are reflected as discontinued operations for 2007 and all prior years. In addition, the results of operations of Cap Pro Holding, Inc. and NFS Bermuda are reflected as discontinued operations for 2005 and all prior years.

($ in millions) 2003 2004 2005 2006 2007Key Ratios/Statistics

Daily Average Account Values: General account 4,447.2$ 4,701.8$ 4,048.7$ 4,055.9$ 4,323.7$


Interest spread on daily average general account values 1.53% 1.30% 1.29% 1.15% 1.08%Income from mortgage loan prepayments and bond call premiums 0.16% 0.20% 0.14% 0.07% 0.19%

Base interest spread on daily average general account values 1.37% 1.10% 1.15% 1.08% 0.89%

($ in millions) 2003 2004 2005 2006 2007Medium Term Notes


Deposits 725.0 900.0 900.0 1,775.0 1,349.8 Maturities (389.7) (1,115.2) (1,305.4) (1,180.3) (1,420.0)

Net flows 335.3 (215.2) (405.4) 594.7 (70.2)

Interest credited to policyholder accounts and amortization 69.6 88.4 151.2 213.4 232.6 Other benefits - interest payments (72.2) (77.9) (149.2) (206.8) (236.2) Balance, end of period 4,606.3$ 4,401.6$ 3,998.2$ 4,599.5$ 4,525.7$

Nationwide Bank -$ -$ -$ 222.3$ 798.3$ Nationwide Funds Group 2,527.1$ 2,301.8$ 3,019.6$ 2,840.6$ 1,917.3$

Total corporate and other account values 7,133.4$ 6,703.4$ 7,017.8$ 7,662.4$ 7,241.3$

Account Value ActivityCorporate and Other

Historical Earnings TrendsCorporate and Other

Medium Term Notes

40


Glossary

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

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

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

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

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

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

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

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

Book value per common share excluding accumulated other comprehensive income (AOCI) - A non-GAAP financial measure that is calculated by dividing total shareholders's equity less AOCI by the number of common shares outstanding as of the date indicated.

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

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

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

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

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

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

41


Glossary

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

42


Glossary

Net operating earnings (loss) - A non-GAAP financial measure that is calculated by adjusting net income (loss) to exclude net realized gains and losses on investments not related to operating items (periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations), hedging instruments and hedged items, adjustment to amortization related to net realized gains and losses, discontinued operations and cumulative effect of adoption of accounting principles, if any, all net of tax.

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

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

Operating realized gains and (losses) - A non-GAAP financial measure that represents net realized gains and (losses) on investments, hedging instruments and hedged items that are related to operating items (periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations).

Operating return on average equity - A non-GAAP financial measure that is calculated by annualizing net operating earnings (loss) and dividing by average shareholders' equity excluding accumulated other comprehensive income.

Operating revenues - A non-GAAP financial measure that is calculated by adjusting total revenues to include only net realized gains and losses on investments, hedging instruments and hedged items that are related to operating items (periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations).

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

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

Pre-tax operating earnings (loss) - A non-GAAP financial measure that is calculated by adjusting earnings (loss) from continuing operations before federal income taxes and cumulative effect of adoption of accounting principles, if any, to exclude adjustment to amortization related to net realized gains and losses, and net realized gains and losses on investments,hedging instruments and hedged items, except for operating items (periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, trading portfolio realized gains and losses, trading portfolio valuation changes, and net realized gains and losses related to securitizations).

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

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

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

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

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

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Glossary

Sales - Sales refers to a production volume metric that Nationwide Financial regularly monitors and reports. Sales or similar measures are commonly used in the insurance industry as a measure of the volume of new and renewal business generated in a period.

Sales are not derived from any specific GAAP income statement accounts or line items and should not be viewed as a substitute for any financial measure determined in accordance with GAAP, including sales as it relates to non-insurance companies. Additionally, Nationwide Financial’s definition of sales may differ from that used by other companies. As used in the insurance industry, sales, or similarly titled measures, generate customer funds managed and administered, which ultimately drive revenues.

As calculated and analyzed by management, statutory premiums and deposits on individual and group annuities and life insurance products calculated in accordance with accounting practices prescribed or permitted by regulatory authorities anddeposits on administration-only group retirement plans and the advisory services program are adjusted as described below to arrive at sales.

Life insurance premiums determined on a GAAP basis are significantly different than statutory premiums and deposits. Life insurance premiums determined on a GAAP basis are recognized as revenue when due, as calculated on an accrual basis in proportion to the service provided and performance rendered under the contract. In addition, many life insurance and annuity products involve an initial deposit or a series of deposits from customers. These deposits are accounted for as such on a GAAP basis and therefore are not reflected in the GAAP income statement. On a statutory basis, life insurance premiums collected (cash basis) and deposits received (cash basis) are aggregated and reported as statutory premiums and annuity consideration revenues.

Sales, as reported by Nationwide Financial, are stated net of internal replacements, which management believes provides a more meaningful disclosure of production in a given period. In addition, Nationwide Financial’s definition of sales excludes funding agreements issued under its medium term note program; asset transfers associated with large case bank-owned life insurance and large case retirement plan acquisitions; and deposits into Nationwide employee and agent benefit plans. Although these products contribute to asset and earnings growth, their production flows potentially can mask trendsin the underlying business and thus do not provide meaningful comparisons and analyses.

Management believes that the presentation of sales as measured for management purposes enhances the understanding of the Company’s business and helps depict longer-term trends that may not be apparent in the results of operations due to differences between the timing of sales and revenue recognition.

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

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

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

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

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

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

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

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

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Shareholder Information

Corporate OfficesNationwide FinancialOne Nationwide PlazaColumbus, OH 43215

Inquiries(614) 249-8437

Mark BarnettVice President, Investor [email protected]

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

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

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

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

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Notes

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nationwide 3q08 statistical supplement

Economy & Finance