NATIONWIDE

VARIABLE

ACCOUNT-10

Annual Report

to

Contract Owners

December 31, 2008

NATIONWIDE LIFE INSURANCE COMPANY

HOME OFFICE: COLUMBUS, OHIO

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2008

Assets:
Investments at fair value:
American Century VP - Income & Growth Fund - Class I (ACVIG)
9,090 shares (cost $75,796)	$	43,812
American Century VP - International Fund - Class I (ACVI)
7,464 shares (cost $75,763)		44,337
American Century VP - Value Fund - Class I (ACVV)
15,811 shares (cost $129,070)		73,993
Credit Suisse Trust - Large Cap Value Portfolio (WGIP)
514 shares (cost $7,786)		3,889
Dreyfus IP - Small Cap Stock Index Portfolio - Service Class (DVSCS)
395 shares (cost $5,977)		4,090
Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)
6,898 shares (cost $247,489)		158,524
Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)
296 shares (cost $12,447)		8,546
Federated IS - Quality Bond Fund II - Primary Class (FQB)
3,111 shares (cost $34,667)		31,110
Fidelity(R) VIP - Equity-Income Portfolio - Service Class (FEIS)
4,896 shares (cost $124,450)		64,336
Fidelity(R) VIP - Growth Portfolio - Service Class (FGS)
3,282 shares (cost $117,749)		77,025
Fidelity(R) VIP - High Income Portfolio - Service Class (FHIS)
3,932 shares (cost $24,032)		15,492
Fidelity(R) VIP - Overseas Portfolio - Service Class (FOS)
1,749 shares (cost $39,667)		21,201
Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class (FCS)
7,143 shares (cost $214,954)		109,500
Fidelity(R) VIP III - Growth Opportunities Portfolio - Service Class (FGOS)
471 shares (cost $8,590)		4,695
Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)
945 shares (cost $11,813)		4,650
Janus Aspen Series - Forty Portfolio - Service Class (JACAS)
6,275 shares (cost $195,113)		142,570
Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)
8,190 shares (cost $34,940)		23,750
Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)
2,455 shares (cost $127,328)		63,850
Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)
2,464 shares (cost $19,240)		12,295
Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)
6,376 shares (cost $103,740)		44,951
Nationwide VIT - Gartmore Global Utilities Fund - Class I (GVGU1)
722 shares (cost $9,235)		5,614

(Continued)

2

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Nationwide VIT - Gartmore International Equity Fund - Class I (GIG)
4,211 shares (cost $48,983)	$	26,318
Nationwide VIT - Gartmore Worldwide Leaders Fund - Class I (GEF)
3,494 shares (cost $52,121)		28,864
Nationwide VIT - Government Bond Fund - Class I (GBF)
7,525 shares (cost $86,016)		90,370
Nationwide VIT - Growth Fund - Class I (CAF)
2,989 shares (cost $36,439)		26,485
Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)
6,661 shares (cost $71,072)		46,627
Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)
489 shares (cost $14,802)		8,577
Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)
4,072 shares (cost $74,761)		45,811
Nationwide VIT - Money Market Fund - Class I (SAM)
117,447 shares (cost $117,447)		117,447
Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)
1,035 shares (cost $16,994)		9,983
Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)
15,067 shares (cost $182,782)		99,742
Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)
4,880 shares (cost $108,163)		52,508
Nationwide VIT - Nationwide Fund - Class I (TRF)
10,340 shares (cost $129,722)		67,416
Nationwide VIT - Van Kampen Comstock Value Fund - Class I (EIF)
3,465 shares (cost $43,136)		24,223
Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)
10,281 shares (cost $98,029)		75,254
Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)
493 shares (cost $9,497)		6,139
Neuberger Berman AMT - Mid Cap Growth Portfolio - I Class (AMCG)
1,877 shares (cost $44,227)		30,291
Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)
1,484 shares (cost $25,302)		10,552
Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)
2,148 shares (cost $89,261)		55,133
Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)
2,934 shares (cost $102,303)		59,291
Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)
6,497 shares (cost $158,225)		94,599
Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)
1,042 shares (cost $53,248)		28,698
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
2,113 shares (cost $60,021)		41,971

(Continued)

3

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)
139 shares (cost $2,043)	$	818
Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)
999 shares (cost $29,168)		18,723
Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)
234 shares (cost $1,905)		1,514
Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)
2,896 shares (cost $48,897)		23,774
Wells Fargo AVT - Opportunity Fund(SM) (SVOF)
4,648 shares (cost $99,678)		47,228
Total Investments		2,096,586
Total Assets		2,096,586
Accounts Payable		196
	$	2,096,390
Contract Owners’ Equity:
Accumulation units		2,096,390
Total Contract Owners’ Equity (note 5)	$	2,096,390

See accompanying notes to financial statements.

4

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF OPERATIONS

Year Ended December 31, 2008

Investment Activity:	Total			ACVIG		ACVI		ACVV		WGIP		DVSCS		DSIF		DCAP
Reinvested dividends	$	51,456		1,148		536		2,233		150		30		4,781		211
Mortality and expense risk charges (note 2)		(41,801	)	(801	)	(920	)	(1,307	)	(70	)	(47	)	(3,237	)	(148	)
Net investment income (loss)		9,655		347		(384	)	926		80		(17	)	1,544		63
Proceeds from mutual fund shares sold		461,700		1,393		1,435		16,798		70		48		33,586		149
Cost of mutual fund shares sold		(619,347	)	(1,837	)	(1,590	)	(22,858	)	(112	)	(67	)	(40,009	)	(172	)
Realized gain (loss) on investments		(157,647	)	(444	)	(155	)	(6,060	)	(42	)	(19	)	(6,423	)	(23	)
Change in unrealized gain (loss) on investments		(1,458,851	)	(30,927	)	(42,957	)	(36,167	)	(2,808	)	(1,684	)	(98,788	)	(4,578	)
Net gain (loss) on investments		(1,616,498	)	(31,371	)	(43,112	)	(42,227	)	(2,850	)	(1,703	)	(105,211	)	(4,601	)
Reinvested capital gains		210,571		6,876		6,297		11,854		479		525		-		785
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,396,272	)	(24,148	)	(37,199	)	(29,447	)	(2,291	)	(1,195	)	(103,667	)	(3,753	)
Investment Activity:	FQB			FEIS		FGS		FHIS		FOS		FCS		FGOS		FVSS
Reinvested dividends	$	1,554		2,280		895		1,735		799		1,427		29		53
Mortality and expense risk charges (note 2)		(461	)	(1,299	)	(1,704	)	(336	)	(462	)	(2,275	)	(206	)	(103	)
Net investment income (loss)		1,093		981		(809	)	1,399		337		(848	)	(177	)	(50	)
Proceeds from mutual fund shares sold		11,535		2,288		5,316		4,574		13,568		15,024		7,963		105
Cost of mutual fund shares sold		(11,328	)	(2,939	)	(6,559	)	(6,348	)	(15,917	)	(23,366	)	(9,376	)	(172	)
Realized gain (loss) on investments		207		(651	)	(1,243	)	(1,774	)	(2,349	)	(8,342	)	(1,413	)	(67	)
Change in unrealized gain (loss) on investments		(3,752	)	(50,068	)	(71,360	)	(6,531	)	(21,493	)	(83,166	)	(7,973	)	(6,523	)
Net gain (loss) on investments		(3,545	)	(50,719	)	(72,603	)	(8,305	)	(23,842	)	(91,508	)	(9,386	)	(6,590	)
Reinvested capital gains		-		96		-		-		5,120		4,858		-		1,634
Net increase (decrease) in contract owners’ equity resulting from operations	$	(2,452	)	(49,642	)	(73,412	)	(6,906	)	(18,385	)	(87,498	)	(9,563	)	(5,006	)

(Continued)

5

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	JACAS			JAGTS		JAIGS		HIBF		GEM		GVGU1		GIG		GEF
Reinvested dividends	$	21		30		3,919		1,441		1,004		231		616		324
Mortality and expense risk charges (note 2)		(3,015	)	(477	)	(1,917	)	(238	)	(1,193	)	(99	)	(603	)	(571	)
Net investment income (loss)		(2,994	)	(447	)	2,002		1,203		(189	)	132		13		(247	)
Proceeds from mutual fund shares sold		7,961		790		39,551		7,675		5,857		96		2,963		573
Cost of mutual fund shares sold		(6,779	)	(816	)	(48,049	)	(8,309	)	(6,859	)	(125	)	(5,439	)	(666	)
Realized gain (loss) on investments		1,182		(26	)	(8,498	)	(634	)	(1,002	)	(29	)	(2,476	)	(93	)
Change in unrealized gain (loss) on investments		(114,771	)	(18,844	)	(98,855	)	(5,848	)	(81,730	)	(3,081	)	(29,254	)	(31,597	)
Net gain (loss) on investments		(113,589	)	(18,870	)	(107,353	)	(6,482	)	(82,732	)	(3,110	)	(31,730	)	(31,690	)
Reinvested capital gains		-		-		21,005		-		17,513		100		6,544		8,209
Net increase (decrease) in contract owners’ equity resulting from operations	$	(116,583	)	(19,317	)	(84,346	)	(5,279	)	(65,408	)	(2,878	)	(25,173	)	(23,728	)
Investment Activity:	GBF			CAF		BF		SGRF		MCIF		SAM		SCGF		SCVF
Reinvested dividends	$	3,677		100		1,543		-		885		1,419		-		1,508
Mortality and expense risk charges (note 2)		(1,203	)	(518	)	(789	)	(177	)	(1,004	)	(1,037	)	(195	)	(1,854	)
Net investment income (loss)		2,474		(418	)	754		(177	)	(119	)	382		(195	)	(346	)
Proceeds from mutual fund shares sold		2,461		7,612		915		388		20,003		31,270		386		6,089
Cost of mutual fund shares sold		(2,381	)	(7,422	)	(1,078	)	(453	)	(22,749	)	(31,270	)	(458	)	(8,800	)
Realized gain (loss) on investments		80		190		(163	)	(65	)	(2,746	)	-		(72	)	(2,711	)
Change in unrealized gain (loss) on investments		2,664		(18,230	)	(23,964	)	(7,379	)	(30,739	)	-		(8,696	)	(46,907	)
Net gain (loss) on investments		2,744		(18,040	)	(24,127	)	(7,444	)	(33,485	)	-		(8,768	)	(49,618	)
Reinvested capital gains		-		-		6,476		-		4,761		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	5,218		(18,458	)	(16,897	)	(7,621	)	(28,843	)	382		(8,963	)	(49,964	)

(Continued)

6

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	SCF			TRF		EIF		MSBF		AMGP		AMCG		AMTP		OVGR
Reinvested dividends	$	728		1,398		659		6,194		48		-		97		139
Mortality and expense risk charges (note 2)		(1,303	)	(1,367	)	(454	)	(1,150	)	(117	)	(653	)	(254	)	(1,305	)
Net investment income (loss)		(575	)	31		205		5,044		(69	)	(653	)	(157	)	(1,166	)
Proceeds from mutual fund shares sold		30,483		4,989		454		3,507		117		3,243		254		55,358
Cost of mutual fund shares sold		(49,736	)	(8,600	)	(602	)	(4,060	)	(128	)	(4,566	)	(339	)	(56,488	)
Realized gain (loss) on investments		(19,253	)	(3,611	)	(148	)	(553	)	(11	)	(1,323	)	(85	)	(1,130	)
Change in unrealized gain (loss) on investments		(40,598	)	(64,051	)	(15,293	)	(23,076	)	(4,032	)	(23,763	)	(14,741	)	(53,985	)
Net gain (loss) on investments		(59,851	)	(67,662	)	(15,441	)	(23,629	)	(4,043	)	(25,086	)	(14,826	)	(55,115	)
Reinvested capital gains		20,151		16,747		472		2,053		332		-		3,056		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(40,275	)	(50,884	)	(14,764	)	(16,532	)	(3,780	)	(25,739	)	(11,927	)	(56,281	)
Investment Activity:	OVGS			OVGI		OVAG		DSRG		VWEM		VWHA		MSEM		MSVRE
Reinvested dividends	$	1,095		1,977		-		412		-		95		436		1,935
Mortality and expense risk charges (note 2)		(1,072	)	(1,859	)	(636	)	(756	)	(51	)	(560	)	(83	)	(740	)
Net investment income (loss)		23		118		(636	)	(344	)	(51	)	(465	)	353		1,195
Proceeds from mutual fund shares sold		1,059		7,308		636		756		10,157		44,475		4,294		26,339
Cost of mutual fund shares sold		(1,402	)	(9,059	)	(749	)	(832	)	(15,000	)	(78,561	)	(6,141	)	(57,285	)
Realized gain (loss) on investments		(343	)	(1,751	)	(113	)	(76	)	(4,843	)	(34,086	)	(1,847	)	(30,946	)
Change in unrealized gain (loss) on investments		(42,871	)	(69,075	)	(27,691	)	(21,816	)	(3,151	)	(19,205	)	6		(5,499	)
Net gain (loss) on investments		(43,214	)	(70,826	)	(27,804	)	(21,892	)	(7,994	)	(53,291	)	(1,841	)	(36,445	)
Reinvested capital gains		4,811		8,592		-		-		4,911		5,199		252		21,219
Net increase (decrease) in contract owners’ equity resulting from operations	$	(38,380	)	(62,116	)	(28,440	)	(22,236	)	(3,134	)	(48,557	)	(1,236	)	(14,031	)

(Continued)

7

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	SVOF
Reinvested dividends	$	1,664
Mortality and expense risk charges (note 2)		(1,175	)
Net investment income (loss)		489
Proceeds from mutual fund shares sold		19,829
Cost of mutual fund shares sold		(31,496	)
Realized gain (loss) on investments		(11,667	)
Change in unrealized gain (loss) on investments		(44,004	)
Net gain (loss) on investments		(55,671	)
Reinvested capital gains		19,644
Net increase (decrease) in contract owners’ equity resulting from operations	$	(35,538	)

See accompanying notes to financial statements.

8

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2008 and 2007

	Total					ACVIG				ACVI				ACVV
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	9,655		(4,303	)	347		292		(384	)	(567	)	926		186
Realized gain (loss) on investments		(157,647	)	576,707		(444	)	13,148		(155	)	21,219		(6,060	)	9,740
Change in unrealized gain (loss) on investments		(1,458,851	)	(418,168	)	(30,927	)	(14,461	)	(42,957	)	(8,883	)	(36,167	)	(29,357	)
Reinvested capital gains		210,571		178,898		6,876		-		6,297		-		11,854		9,915
Net increase (decrease) in contract owners’ equity resulting from operations		(1,396,272	)	333,134		(24,148	)	(1,021	)	(37,199	)	11,769		(29,447	)	(9,516	)
Equity transactions:
Purchase payments received from contract owners (note 3)		19,549		(875	)	-		(12	)	-		(102	)	-		(2	)
Transfers between funds		-		-		184		1,005		-		(5,172	)	(1,700	)	41,084
Redemptions (note 3)		(194,126	)	(345,388	)	(599	)	(100	)	(514	)	(75	)	(12,297	)	(6,012	)
Adjustments to maintain reserves		2,659		(1,962	)	(5	)	(37	)	(10	)	(45	)	1		(68	)
Net equity transactions		(171,918	)	(348,225	)	(420	)	856		(524	)	(5,394	)	(13,996	)	35,002
Net change in contract owners’ equity		(1,568,190	)	(15,091	)	(24,568	)	(165	)	(37,723	)	6,375		(43,443	)	25,486
Contract owners’ equity beginning of period		3,664,580		3,679,671		68,372		68,537		82,055		75,680		117,429		91,943
Contract owners’ equity end of period	$	2,096,390		3,664,580		43,804		68,372		44,332		82,055		73,986		117,429
CHANGES IN UNITS:
Beginning units		334,600		298,772		6,906		5,640		7,111		6,004		12,582		4,814
Conversion units (note 1(a))		-		69,038		-		1,179		-		1,627		-		4,395
Units purchased		24,128		29,246		21		137		-		-		228		3,991
Units redeemed		(48,317	)	(62,456	)	(67	)	(50	)	(49	)	(520	)	(1,830	)	(618	)
Ending units		310,411		334,600		6,860		6,906		7,062		7,111		10,980		12,582

(Continued)

9

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	WGIP					DVSCS				DSIF				DCAP
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	80		(2	)	(17	)	(42	)	1,544		980		63		36
Realized gain (loss) on investments		(42	)	1,389		(19	)	(13	)	(6,423	)	49,173		(23	)	2,931
Change in unrealized gain (loss) on investments		(2,808	)	(2,500	)	(1,684	)	(199	)	(98,788	)	(37,580	)	(4,578	)	(2,007	)
Reinvested capital gains		479		1,076		525		172		-		-		785		-
Net increase (decrease) in contract owners’ equity resulting from operations		(2,291	)	(37	)	(1,195	)	(82	)	(103,667	)	12,573		(3,753	)	960
Equity transactions:
Purchase payments received from contract owners (note 3)		-		-		-		-		388		(10	)	(3	)	(5	)
Transfers between funds		-		1,087		1,282		-		1,277		(527	)	(339	)	(21	)
Redemptions (note 3)		-		-		-		-		(24,499	)	(27,790	)	-		(3,700	)
Adjustments to maintain reserves		1		(26	)	-		(1	)	210		(91	)	338		(14	)
Net equity transactions		1		1,061		1,282		(1	)	(22,624	)	(28,418	)	(4	)	(3,740	)
Net change in contract owners’ equity		(2,290	)	1,024		87		(83	)	(126,291	)	(15,845	)	(3,757	)	(2,780	)
Contract owners’ equity beginning of period		6,175		5,151		4,006		4,089		284,804		300,649		12,303		15,083
Contract owners’ equity end of period	$	3,885		6,175		4,093		4,006		158,513		284,804		8,546		12,303
CHANGES IN UNITS:
Beginning units		613		374		408		276		27,409		27,316		1,161		1,304
Conversion units (note 1(a))		-		137		-		132		-		2,707		-		198
Units purchased		-		102		204		-		244		12		34		8
Units redeemed		-		-		-		-		(3,039	)	(2,626	)	(34	)	(349	)
Ending units		613		613		612		408		24,614		27,409		1,161		1,161

(Continued)

10

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FQB					FEIS				FGS				FHIS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	1,093		1,722		981		394		(809	)	(1,141	)	1,399		1,880
Realized gain (loss) on investments		207		(436	)	(651	)	13,412		(1,243	)	(1,967	)	(1,774	)	(733	)
Change in unrealized gain (loss) on investments		(3,752	)	257		(50,068	)	(23,480	)	(71,360	)	35,649		(6,531	)	(1,173	)
Reinvested capital gains		-		-		96		9,654		-		125		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(2,452	)	1,543		(49,642	)	(20	)	(73,412	)	32,666		(6,906	)	(26	)
Equity transactions:
Purchase payments received from contract owners (note 3)		-		-		-		(25	)	66		180		-		-
Transfers between funds		2,175		(7,636	)	-		(15,126	)	(5,152	)	(22,664	)	(3,000	)	20,450
Redemptions (note 3)		(11,075	)	-		(989	)	(163	)	(847	)	(1,622	)	(1,238	)	(9,063	)
Adjustments to maintain reserves		(6	)	(45	)	(4	)	(69	)	(916	)	(52	)	-		(19	)
Net equity transactions		(8,906	)	(7,681	)	(993	)	(15,383	)	(6,849	)	(24,158	)	(4,238	)	11,368
Net change in contract owners’ equity		(11,358	)	(6,138	)	(50,635	)	(15,403	)	(80,261	)	8,508		(11,144	)	11,342
Contract owners’ equity beginning of period		42,463		48,601		114,963		130,366		157,279		148,771		26,632		15,290
Contract owners’ equity end of period	$	31,105		42,463		64,328		114,963		77,018		157,279		15,488		26,632
CHANGES IN UNITS:
Beginning units		4,097		3,608		11,482		8,840		12,596		16,960		2,635		1,454
Conversion units (note 1(a))		-		1,261		-		4,175		-		(2,059	)	-		76
Units purchased		236		528		-		136		114		111		-		2,005
Units redeemed		(1,050	)	(1,300	)	(109	)	(1,669	)	(854	)	(2,416	)	(561	)	(900	)
Ending units		3,283		4,097		11,373		11,482		11,856		12,596		2,074		2,635

(Continued)

11

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FOS					FCS				FGOS				FVSS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	337		1,047		(848	)	(1,032	)	(177	)	(223	)	(50	)	(50	)
Realized gain (loss) on investments		(2,349	)	16,744		(8,342	)	30,852		(1,413	)	858		(67	)	232
Change in unrealized gain (loss) on investments		(21,493	)	(12,568	)	(83,166	)	(52,217	)	(7,973	)	2,475		(6,523	)	(861	)
Reinvested capital gains		5,120		4,719		4,858		50,047		-		-		1,634		1,049
Net increase (decrease) in contract owners’ equity resulting from operations		(18,385	)	9,942		(87,498	)	27,650		(9,563	)	3,110		(5,006	)	370
Equity transactions:
Purchase payments received from contract owners (note 3)		(54	)	(62	)	-		8		(144	)	114		-		14
Transfers between funds		(5,221	)	(12,294	)	(8,403	)	35,848		3,780		(3,780	)	-		-
Redemptions (note 3)		(7,831	)	(8,242	)	(2,851	)	(10,208	)	(7,756	)	-		-		-
Adjustments to maintain reserves		4		(35	)	-		(66	)	797		(28	)	(4	)	(39	)
Net equity transactions		(13,102	)	(20,633	)	(11,254	)	25,582		(3,323	)	(3,694	)	(4	)	(25	)
Net change in contract owners’ equity		(31,487	)	(10,691	)	(98,752	)	53,232		(12,886	)	(584	)	(5,010	)	345
Contract owners’ equity beginning of period		52,684		63,375		208,243		155,011		17,576		18,160		9,660		9,315
Contract owners’ equity end of period	$	21,197		52,684		109,491		208,243		4,690		17,576		4,650		9,660
CHANGES IN UNITS:
Beginning units		4,585		4,882		17,994		10,170		1,443		2,144		929		618
Conversion units (note 1(a))		-		1,490		-		5,345		-		(337	)	-		311
Units purchased		-		492		232		3,440		-		-		-		-
Units redeemed		(1,252	)	(2,279	)	(1,505	)	(961	)	(574	)	(364	)	-		-
Ending units		3,333		4,585		16,721		17,994		869		1,443		929		929

(Continued)

12

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	JACAS					JAGTS				JAIGS				HIBF
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(2,994	)	(2,534	)	(447	)	(419	)	2,002		(1,692	)	1,203		1,462
Realized gain (loss) on investments		1,182		33,499		(26	)	(860	)	(8,498	)	75,199		(634	)	1,073
Change in unrealized gain (loss) on investments		(114,771	)	30,116		(18,844	)	8,521		(98,855	)	(33,094	)	(5,848	)	(1,840	)
Reinvested capital gains		-		-		-		-		21,005		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(116,583	)	61,081		(19,317	)	7,242		(84,346	)	40,413		(5,279	)	695
Equity transactions:
Purchase payments received from contract owners (note 3)		-		24		-		25		-		(1,549	)	-		12
Transfers between funds		17,443		1,264		-		-		(25,932	)	51,078		-		(6,763	)
Redemptions (note 3)		(4,954	)	(15,172	)	(313	)	(305	)	(11,702	)	(58,041	)	(7,436	)	-
Adjustments to maintain reserves		(4	)	(56	)	(4	)	(17	)	(1	)	(36	)	(4	)	(14	)
Net equity transactions		12,485		(13,940	)	(317	)	(297	)	(37,635	)	(8,548	)	(7,440	)	(6,765	)
Net change in contract owners’ equity		(104,098	)	47,141		(19,634	)	6,945		(121,981	)	31,865		(12,719	)	(6,070	)
Contract owners’ equity beginning of period		246,665		199,524		43,377		36,432		185,833		153,968		25,008		31,078
Contract owners’ equity end of period	$	142,567		246,665		23,743		43,377		63,852		185,833		12,289		25,008
CHANGES IN UNITS:
Beginning units		18,209		23,314		3,606		9,296		14,732		11,676		2,462		2,224
Conversion units (note 1(a))		-		(3,473	)	-		(5,662	)	-		3,729		-		886
Units purchased		1,387		1,126		-		-		-		4,530		-		351
Units redeemed		(429	)	(2,758	)	(33	)	(28	)	(3,985	)	(5,203	)	(758	)	(999	)
Ending units		19,167		18,209		3,573		3,606		10,747		14,732		1,704		2,462

(Continued)

13

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GEM					GVGU1				GIG				GEF
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(189	)	(620	)	132		84		13		(445	)	(247	)	(490	)
Realized gain (loss) on investments		(1,002	)	21,814		(29	)	862		(2,476	)	8,422		(93	)	11,137
Change in unrealized gain (loss) on investments		(81,730	)	1,764		(3,081	)	(1,361	)	(29,254	)	(1,678	)	(31,597	)	(2,531	)
Reinvested capital gains		17,513		9,439		100		1,575		6,544		3,485		8,209		-
Net increase (decrease) in contract owners’ equity resulting from operations		(65,408	)	32,397		(2,878	)	1,160		(25,173	)	9,784		(23,728	)	8,116
Equity transactions:
Purchase payments received from contract owners (note 3)		-		(24	)	-		(1	)	-		(1	)	-		-
Transfers between funds		(4,665	)	24,804		-		1,087		2,011		1,087		-		-
Redemptions (note 3)		-		-		-		-		-		(2,608	)	-		-
Adjustments to maintain reserves		(2	)	(26	)	-		(11	)	(1	)	(32	)	(5	)	(25	)
Net equity transactions		(4,667	)	24,754		-		1,075		2,010		(1,554	)	(5	)	(25	)
Net change in contract owners’ equity		(70,075	)	57,151		(2,878	)	2,235		(23,163	)	8,230		(23,733	)	8,091
Contract owners’ equity beginning of period		115,025		57,874		8,493		6,258		49,481		41,251		52,596		44,505
Contract owners’ equity end of period	$	44,950		115,025		5,615		8,493		26,318		49,481		28,863		52,596
CHANGES IN UNITS:
Beginning units		8,081		2,494		719		326		3,953		3,354		4,468		3,434
Conversion units (note 1(a))		-		3,341		-		302		-		775		-		1,034
Units purchased		-		2,246		-		91		370		81		-		-
Units redeemed		(498	)	-		-		-		(370	)	(257	)	-		-
Ending units		7,583		8,081		719		719		3,953		3,953		4,468		4,468

(Continued)

14

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GBF					CAF				GVGH1			BF
	2008			2007		2008		2007		2008	2007		2008		2007
Investment activity:
Net investment income (loss)	$	2,474		2,331		(418	)	(482	)	-	(23	)	754		505
Realized gain (loss) on investments		80		(3,873	)	190		(3,044	)	-	67		(163	)	8,760
Change in unrealized gain (loss) on investments		2,664		6,228		(18,230	)	10,352		-	(8	)	(23,964	)	(9,062	)
Reinvested capital gains		-		-		-		-		-	57		6,476		1,747
Net increase (decrease) in contract owners’ equity resulting from operations		5,218		4,686		(18,458	)	6,826		-	93		(16,897	)	1,950
Equity transactions:
Purchase payments received from contract owners (note 3)		455		21		(99	)	2		-	-		5		(13	)
Transfers between funds		(340	)	3,652		-		-		-	-		(472	)	4,075
Redemptions (note 3)		(900	)	(18,412	)	-		(7,759	)	-	(2,830	)	-		(3,625	)
Adjustments to maintain reserves		(393	)	(44	)	1,226		(39	)	-	(9	)	342		(45	)
Net equity transactions		(1,178	)	(14,783	)	1,127		(7,796	)	-	(2,839	)	(125	)	392
Net change in contract owners’ equity		4,040		(10,097	)	(17,331	)	(970	)	-	(2,746	)	(17,022	)	2,342
Contract owners’ equity beginning of period		86,318		96,415		43,803		44,773		-	2,746		63,645		61,303
Contract owners’ equity end of period	$	90,358		86,318		26,472		43,803		-	-		46,623		63,645
CHANGES IN UNITS:
Beginning units		8,183		7,114		3,728		7,740		-	214		6,180		5,400
Conversion units (note 1(a))		-		2,541		-		(3,251	)	-	59		-		737
Units purchased		690		383		-		-		-	-		-		396
Units redeemed		(808	)	(1,855	)	-		(761	)	-	(273	)	(13	)	(353	)
Ending units		8,065		8,183		3,728		3,728		-	-		6,167		6,180

(Continued)

15

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SGRF					MCIF				SAM				SCGF
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(177	)	(208	)	(119	)	(49	)	382		1,851		(195	)	(254	)
Realized gain (loss) on investments		(65	)	2,291		(2,746	)	22,032		-		-		(72	)	2,102
Change in unrealized gain (loss) on investments		(7,379	)	(703	)	(30,739	)	(19,685	)	-		-		(8,696	)	(510	)
Reinvested capital gains		-		-		4,761		3,022		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(7,621	)	1,380		(28,843	)	5,320		382		1,851		(8,963	)	1,338
Equity transactions:
Purchase payments received from contract owners (note 3)		(80	)	52		-		(1	)	413		11		-		7
Transfers between funds		3,102		(3,163	)	(9,346	)	4,412		99,587		(371	)	-		725
Redemptions (note 3)		-		(3,985	)	(8,373	)	(12,517	)	(30,247	)	(42,508	)	(190	)	(34	)
Adjustments to maintain reserves		369		(19	)	(4	)	(36	)	(7	)	(20	)	1		(38	)
Net equity transactions		3,391		(7,115	)	(17,723	)	(8,142	)	69,746		(42,888	)	(189	)	660
Net change in contract owners’ equity		(4,230	)	(5,735	)	(46,566	)	(2,822	)	70,128		(41,037	)	(9,152	)	1,998
Contract owners’ equity beginning of period		12,803		18,538		92,372		95,194		47,319		88,356		19,133		17,135
Contract owners’ equity end of period	$	8,573		12,803		45,806		92,372		117,447		47,319		9,981		19,133
CHANGES IN UNITS:
Beginning units		1,191		1,986		8,737		4,860		4,580		7,984		1,756		1,354
Conversion units (note 1(a))		-		(134	)	-		4,687		-		851		-		344
Units purchased		310		102		205		391		9,627		-		-		61
Units redeemed		-		(763	)	(2,026	)	(1,201	)	(2,910	)	(4,255	)	(22	)	(3	)
Ending units		1,501		1,191		6,916		8,737		11,297		4,580		1,734		1,756

(Continued)

16

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SCVF					SCF				TRF				GGTC
	2008			2007		2008		2007		2008		2007		2008	2007
Investment activity:
Net investment income (loss)	$	(346	)	(422	)	(575	)	(1,628	)	31		(386	)	-	(6	)
Realized gain (loss) on investments		(2,711	)	33,842		(19,253	)	15,353		(3,611	)	24,983		-	535
Change in unrealized gain (loss) on investments		(46,907	)	(70,040	)	(40,598	)	(30,620	)	(64,051	)	(22,844	)	-	(335	)
Reinvested capital gains		-		22,701		20,151		17,071		16,747		5,517		-	-
Net increase (decrease) in contract owners’ equity resulting from operations		(49,964	)	(13,919	)	(40,275	)	176		(50,884	)	7,270		-	194
Equity transactions:
Purchase payments received from contract owners (note 3)		5		(80	)	14		(9	)	-		105		-	-
Transfers between funds		(2,799	)	(8,383	)	(24,640	)	7,481		1,038		(371	)	-	(3,245	)
Redemptions (note 3)		(1,226	)	(284	)	(4,552	)	(4,676	)	-		-		-	-
Adjustments to maintain reserves		1		(95	)	(6	)	(81	)	(3	)	(25	)	-	(2	)
Net equity transactions		(4,019	)	(8,842	)	(29,184	)	2,715		1,035		(291	)	-	(3,247	)
Net change in contract owners’ equity		(53,983	)	(22,761	)	(69,459	)	2,891		(49,849	)	6,979		-	(3,053	)
Contract owners’ equity beginning of period		153,722		176,483		121,953		119,062		117,262		110,283		-	3,053
Contract owners’ equity end of period	$	99,739		153,722		52,494		121,953		67,413		117,262		-	-
CHANGES IN UNITS:
Beginning units		16,743		7,584		12,104		5,616		11,025		9,240		-	944
Conversion units (note 1(a))		-		10,056		-		6,278		-		1,819		-	(637	)
Units purchased		25		748		-		986		524		-		-	-
Units redeemed		(529	)	(1,645	)	(3,555	)	(776	)	(550	)	(34	)	-	(307	)
Ending units		16,239		16,743		8,549		12,104		10,999		11,025		-	-

(Continued)

17

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVUG1				EIF				MSBF				AMGP
	2008		2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	-	(156	)	205		147		5,044		2,250		(69	)	(108	)
Realized gain (loss) on investments		-	3,184		(148	)	5,739		(553	)	(664	)	(11	)	2,506
Change in unrealized gain (loss) on investments		-	(13	)	(15,293	)	(8,866	)	(23,076	)	1,041		(4,032	)	(1,843	)
Reinvested capital gains		-	-		472		1,832		2,053		4		332		-
Net increase (decrease) in contract owners’ equity resulting from operations		-	3,015		(14,764	)	(1,148	)	(16,532	)	2,631		(3,780	)	555
Equity transactions:
Purchase payments received from contract owners (note 3)		-	-		55		15		-		(14	)	-		-
Transfers between funds		-	(15,160	)	(711	)	1,254		2,745		9,833		-		-
Redemptions (note 3)		-	(2,570	)	-		(15,000	)	(2,106	)	(9,039	)	-		-
Adjustments to maintain reserves		-	(28	)	665		(50	)	3		(62	)	(2	)	(2	)
Net equity transactions		-	(17,758	)	9		(13,781	)	642		718		(2	)	(2	)
Net change in contract owners’ equity		-	(14,743	)	(14,755	)	(14,929	)	(15,890	)	3,349		(3,782	)	553
Contract owners’ equity beginning of period		-	14,743		38,974		53,903		91,142		87,793		9,921		9,368
Contract owners’ equity end of period	$	-	-		24,219		38,974		75,252		91,142		6,139		9,921
CHANGES IN UNITS:
Beginning units		-	1,002		4,058		4,760		8,843		6,288		935		648
Conversion units (note 1(a))		-	471		-		648		-		2,495		-		287
Units purchased		-	-		71		133		372		2,572		-		-
Units redeemed		-	(1,473	)	(70	)	(1,483	)	(262	)	(2,512	)	-		-
Ending units		-	-		4,059		4,058		8,953		8,843		935		935

(Continued)

18

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	AMCG					AMTP				OVGR				OVGS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(653	)	(765	)	(157	)	(173	)	(1,166	)	(1,712	)	23		(154	)
Realized gain (loss) on investments		(1,323	)	15,741		(85	)	1,640		(1,130	)	6,306		(343	)	31,941
Change in unrealized gain (loss) on investments		(23,763	)	(4,410	)	(14,741	)	(2,221	)	(53,985	)	12,603		(42,871	)	(31,342	)
Reinvested capital gains		-		-		3,056		2,213		-		-		4,811		4,462
Net increase (decrease) in contract owners’ equity resulting from operations		(25,739	)	10,566		(11,927	)	1,459		(56,281	)	17,197		(38,380	)	4,907
Equity transactions:
Purchase payments received from contract owners (note 3)		-		14		-		5		223		234		(493	)	(9	)
Transfers between funds		1,783		(12,192	)	-		(12,257	)	(32,624	)	(6,044	)	2,690		(22,338	)
Redemptions (note 3)		-		-		-		-		(11,144	)	-		-		-
Adjustments to maintain reserves		(1	)	(34	)	(9	)	(17	)	1,307		(51	)	(374	)	(56	)
Net equity transactions		1,782		(12,212	)	(9	)	(12,269	)	(42,238	)	(5,861	)	1,823		(22,403	)
Net change in contract owners’ equity		(23,957	)	(1,646	)	(11,936	)	(10,810	)	(98,519	)	11,336		(36,557	)	(17,496	)
Contract owners’ equity beginning of period		54,245		55,891		22,484		33,294		153,644		142,308		95,843		113,339
Contract owners’ equity end of period	$	30,288		54,245		10,548		22,484		55,125		153,644		59,286		95,843
CHANGES IN UNITS:
Beginning units		4,503		4,342		2,043		2,132		13,656		12,054		9,159		8,260
Conversion units (note 1(a))		-		1,261		-		1,128		-		2,179		-		3,090
Units purchased		401		-		-		-		-		-		448		-
Units redeemed		(401	)	(1,100	)	(1	)	(1,217	)	(4,535	)	(577	)	-		(2,191	)
Ending units		4,503		4,503		2,042		2,043		9,121		13,656		9,607		9,159

(Continued)

19

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	OVGI					OVAG				DSRG				VWEM
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	118		(948	)	(636	)	(677	)	(344	)	(606	)	(51	)	(120	)
Realized gain (loss) on investments		(1,751	)	39,404		(113	)	6,387		(76	)	(10,825	)	(4,843	)	2,944
Change in unrealized gain (loss) on investments		(69,075	)	(31,181	)	(27,691	)	(1,624	)	(21,816	)	16,399		(3,151	)	(1,012	)
Reinvested capital gains		8,592		-		-		-		-		-		4,911		1,549
Net increase (decrease) in contract owners’ equity resulting from operations		(62,116	)	7,275		(28,440	)	4,086		(22,236	)	4,968		(3,134	)	3,361
Equity transactions:
Purchase payments received from contract owners (note 3)		(1,956	)	(103	)	20,683		107		(339	)	158		-		-
Transfers between funds		-		(18,147	)	-		(12,441	)	-		-		-		2,647
Redemptions (note 3)		(24,400	)	(35,764	)	-		(22,371	)	-		(17,828	)	(10,106	)	(118	)
Adjustments to maintain reserves		(727	)	(70	)	939		(29	)	(362	)	(48	)	1		(15	)
Net equity transactions		(27,083	)	(54,084	)	21,622		(34,734	)	(701	)	(17,718	)	(10,105	)	2,514
Net change in contract owners’ equity		(89,199	)	(46,809	)	(6,818	)	(30,648	)	(22,937	)	(12,750	)	(13,239	)	5,875
Contract owners’ equity beginning of period		183,796		230,605		35,511		66,159		64,898		77,648		14,059		8,184
Contract owners’ equity end of period	$	94,597		183,796		28,693		35,511		41,961		64,898		820		14,059
CHANGES IN UNITS:
Beginning units		17,820		20,320		3,396		6,562		6,108		9,638		1,036		292
Conversion units (note 1(a))		-		2,697		-		70		-		(1,875	)	-		525
Units purchased		-		-		2,068		-		-		-		-		228
Units redeemed		(2,702	)	(5,197	)	-		(3,236	)	-		(1,655	)	(862	)	(9	)
Ending units		15,118		17,820		5,464		3,396		6,108		6,108		174		1,036

(Continued)

20

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	VWHA					MSEM				MSVMG				MSVRE
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(465	)	(544	)	353		329		-		(57	)	1,195		(250	)
Realized gain (loss) on investments		(34,086	)	13,774		(1,847	)	(25	)	-		871		(30,946	)	32,418
Change in unrealized gain (loss) on investments		(19,205	)	(1,364	)	6		(397	)	-		(113	)	(5,499	)	(56,239	)
Reinvested capital gains		5,199		4,593		252		161		-		-		21,219		8,168
Net increase (decrease) in contract owners’ equity resulting from operations		(48,557	)	16,459		(1,236	)	68		-		701		(14,031	)	(15,903	)
Equity transactions:
Purchase payments received from contract owners (note 3)		-		29		-		-		410		-		-		-
Transfers between funds		31,524		(14,333	)	(3,504	)	7,106		-		-		(23,829	)	(17,551	)
Redemptions (note 3)		(493	)	(156	)	(707	)	(214	)	(3,762	)	-		(309	)	(1,893	)
Adjustments to maintain reserves		(2	)	(26	)	13		(8	)	(700	)	(8	)	-		(126	)
Net equity transactions		31,029		(14,486	)	(4,198	)	6,884		(4,052	)	(8	)	(24,138	)	(19,570	)
Net change in contract owners’ equity		(17,528	)	1,973		(5,434	)	6,952		(4,052	)	693		(38,169	)	(35,473	)
Contract owners’ equity beginning of period		36,245		34,272		6,952		-		4,052		3,359		61,941		97,414
Contract owners’ equity end of period	$	18,717		36,245		1,518		6,952		-		4,052		23,772		61,941
CHANGES IN UNITS:
Beginning units		2,442		1,114		664		-		335		394		7,577		2,590
Conversion units (note 1(a))		-		2,194		-		-		-		(59	)	-		7,143
Units purchased		6,023		587		-		685		-		-		294		2,587
Units redeemed		(6,091	)	(1,453	)	(491	)	(21	)	(335	)	-		(3,122	)	(4,743	)
Ending units		2,374		2,442		173		664		-		335		4,749		7,577

(Continued)

21

NATIONWIDE VARIABLE ACCOUNT-10

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SVOF
	2008			2007
Investment activity:
Net investment income (loss)	$	489		(814	)
Realized gain (loss) on investments		(11,667	)	14,623
Change in unrealized gain (loss) on investments		(44,004	)	(23,351	)
Reinvested capital gains		19,644		14,545
Net increase (decrease) in contract owners’ equity resulting from operations		(35,538	)	5,003
Equity transactions:
Purchase payments received from contract owners (note 3)		-		10
Transfers between funds		(17,944	)	-
Redemptions (note 3)		(710	)	(704	)
Adjustments to maintain reserves		(3	)	(27	)
Net equity transactions		(18,657	)	(721	)
Net change in contract owners’ equity		(54,195	)	4,282
Contract owners’ equity beginning of period		101,421		97,139
Contract owners’ equity end of period	$	47,226		101,421
CHANGES IN UNITS:
Beginning units		9,617		7,818
Conversion units (note 1(a))		-		1,865
Units purchased		-		-
Units redeemed		(2,035	)	(66	)
Ending units		7,582		9,617

See accompanying notes to financial statements.

22

NATIONWIDE VARIABLE ACCOUNT- 10

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

(1) Background and Summary of Significant Accounting Policies

(a) Organization and Nature of Operations

The Nationwide Variable Account-10 (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on March 31, 1999. The Account is registered as a unit investment trust under the Investment Company Act of 1940.

The Company offers tax qualified and non-tax qualified Individual Deferred Variable Annuity Contracts through the Account. The primary distribution for the contracts is through the brokerage community; however, other distributors are utilized. Effective January 1, 2007 the administrative and support services for the contracts were transferred to a new computer system and operations group. As a result of the conversion, the number of units for each contract were recalculated based on the initial unit value utilized by the new system. These conversion units are presented separately for each subaccount in the rollforward of units in the Statements of Changes in Contract Owners’ Equity.

(b) The Contracts

Only contracts without a front-end sales charge, but with a contingent deferred sales charge and certain other fees, are offered for purchase. See note 2 for a discussion of contract expenses.

With certain exceptions, contract owners in either the accumulation or payout phase may invest in the following:

Portfolios of the American Century Variable Portfolios, Inc. (American Century VP);

American Century VP - Income & Growth Fund - Class I (ACVIG)

American Century VP - International Fund - Class I (ACVI)

American Century VP - Ultra(R) Fund - Class I (ACVU1)*

American Century VP - Value Fund - Class I (ACVV)

Portfolios of the Credit Suisse Trust;

Credit Suisse Trust - Global Small Cap Portfolio (WVCP)*

Credit Suisse Trust - International Focus Portfolio (WIEP)*

Credit Suisse Trust - Large Cap Value Portfolio (WGIP)

Portfolios of the Dreyfus Investment Portfolios (Dreyfus IP);

Dreyfus IP - European Equity Portfolio (DVEE)*

Dreyfus IP - Small Cap Stock Index Portfolio - Service Class (DVSCS)

Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)

Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF);

Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)

Portfolios of the Federated Insurance Series (Federated IS);

Federated IS - Quality Bond Fund II - Primary Class (FQB)

Portfolios of the Fidelity(R) Variable Insurance Products Fund (Fidelity(R) VIP);

Fidelity(R) VIP - Equity-Income Portfolio - Service Class (FEIS)

Fidelity(R) VIP - Growth Portfolio - Service Class (FGS)

Fidelity(R) VIP - High Income Portfolio - Service Class (FHIS)

Fidelity(R) VIP - Overseas Portfolio - Service Class (FOS)

Portfolios of the Fidelity(R) Variable Insurance Products Fund II (Fidelity(R) VIP II);

Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class (FCS)

Portfolios of the Fidelity(R) Variable Insurance Products Fund III (Fidelity(R) VIP III);

Fidelity(R) VIP III - Growth Opportunities Portfolio - Service Class (FGOS)

Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)

Portfolios of the Janus Aspen Series;

Janus Aspen Series - Forty Portfolio - Service Class (JACAS)

Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)

Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)

Nationwide GVIT Strategic Value Fund - Class I (SVF)*

Portfolios of the Nationwide Variable Insurance Trust (Nationwide VIT);

Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)

Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)

Nationwide VIT - Gartmore Global Utilities Fund - Class I (GVGU1)

Nationwide VIT - Gartmore International Equity Fund - Class I (GIG) (formerly Gartmore International Growth     Fund - Class I)

Nationwide VIT - Gartmore Worldwide Leaders Fund - Class I (GEF)

(Continued)

23

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

Nationwide VIT - Global Financial Services Fund - Class I (GVGF1)*

Nationwide VIT - Government Bond Fund - Class I (GBF)

Nationwide VIT - Growth Fund - Class I (CAF)

Nationwide VIT - Health Sciences Fund - Class I (GVGH1) (formerly Global Health Sciences Fund - Class I)*

Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)

Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)

Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)

Nationwide VIT - Money Market Fund - Class I (SAM)

Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)

Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)

Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)

Nationwide VIT - Nationwide Fund - Class I (TRF)

Nationwide VIT - Nationwide Leaders Fund - Class I (GVUS1)*

Nationwide VIT - Technology and Communications Fund - Class I (GGTC) (formerly Global Technology and     Communications Fund - Class I)*

Nationwide VIT - U.S. Growth Leaders Fund - Class I (GVUG1)*

Nationwide VIT - Van Kampen Comstock Value Fund - Class I (EIF)

Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)

Portfolios of the Neuberger Berman Advisers Management Trust (Neuberger Berman AMT);

Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)

Neuberger Berman AMT - Mid Cap Growth Portfolio - I Class (AMCG)

Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)

Portfolios of the Oppenheimer Variable Account Funds (Oppenheimer VAF);

Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)

Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)

Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)

Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)

The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)

Turner GVIT Growth Focus Fund - Class I (TGF)*

Portfolios of the Van Eck Worldwide Insurance Trust;

Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)

Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)

Portfolios of the Van Kampen - The Universal Institutional Funds, Inc. (Van Kampen UIF);

Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)

Van Kampen UIF - Mid Cap Growth Portfolio- Class I (MSVMG)*

Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)

Portfolios of the Wells Fargo Advantage Variable Trust Funds(SM) (Wells Fargo AVT);

Wells Fargo AVT - Opportunity Fund(SM) (SVOF)

* At December 31, 2008, contract owners were not invested in this fund.

The contract owners’ equity is affected by the investment results of each fund, equity transactions by contract owners and certain contract expenses (see note 2). The accompanying financial statements include only contract owners’ purchase payments pertaining to the variable portions of their contracts and exclude any purchase payments for fixed dollar benefits, the latter being included in the accounts of the Company.

A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans.

Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially.

A purchase payment could be presented as a negative equity transaction in the Statements of Changes in Contract Owners’ Equity if a prior period purchase payment is refunded to a contract owner due to a contract cancellation during the free look period, and/or if a gain is realized by the contract owner during the free look period.

(Continued)

24

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued on the closing net asset value per share at December 31, 2008 of such funds, which value their investment securities at fair value. The cost of investments sold is determined on a first in – first out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed), and dividends and capital gain distributions are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.

(d) Federal Income Taxes

Operations of the Account form a part of, and are taxed with, operations of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code.

The Company does not provide for income taxes within the Account. Taxes are generally the responsibility of the contract owner upon termination or withdrawal.

(e) Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(f) Recently Issued Accounting Standard

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 provides enhanced guidance for using fair value to measure assets and liabilities and requires new disclosures about fair value measurements. SFAS 157 also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. For assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition, the reporting entity shall disclose information that enables financial statement users to assess the inputs used to develop those measurements. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. The Company adopted SFAS 157 effective January 1, 2008. The adoption of SFAS 157 did not have a material impact on the Account’s financial position or results of operations.

(2) Expenses

The Company does not deduct a sales charge from purchase payments received from the contract owners. However, if any part of the contract value of such contracts is redeemed, the company will, with certain exceptions, deduct from a contract owners’ contract value a contingent deferred sales charge not to exceed 8% of purchase payments redeemed. After 5 years, such charge will decline 1% per year. After the purchase payment has been held in the contract for 13 years, the charge is 0%. This charge is assessed against each contract by redeeming units. No sales charges are deducted on redemptions used to purchase units in the fixed investment options of the Company. The Company deducts a mortality and expense risk charge assessed through a reduction of the unit value equal to an annualized rate of 1.40%.

(3) Related Party Transactions

The Company performs various services on behalf of the mutual fund companies in which the Account invests and may receive fees for the services performed. These services include, among other things, shareholder communications, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company. Contract owners may, with certain restrictions, transfer their assets between the Account and a fixed dollar contract (fixed account) maintained in the accounts of the Company. These transfers are the result of the contract owner executing fund exchanges. Fund exchanges from the Account to the fixed account are included in redemptions, and fund exchanges from the fixed account to the Account are included in purchase payments received from contact owners, as applicable, on the accompanying Statements of Change in Contract Owners’ Equity. For the periods ended December 31, 2008 and 2007, total transfers into the Account from the fixed account were $0 and $0, respectively, and total transfers from the Account to the fixed account were $0 and $3,312, respectively.

(Continued)

25

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

(4) Fair Value Measurement

SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Account generally uses the market approach as the valuation technique due to the nature of the mutual fund investments offered in the Account. This technique maximizes the use of observable inputs and minimizes the use of unobservable inputs.

In accordance with SFAS 157, the Account categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

The Company categorizes financial assets recorded at fair value as follows:

• Level 1 – Unadjusted quoted prices accessible in active markets for identical assets at the measurement date. The assets utilizing Level 1 valuations represent investments in publicly-traded registered mutual funds with quoted market prices.

• Level 2 – Unadjusted quoted prices for similar assets in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. The assets utilizing Level 2 valuations represent investments in privately-traded registered mutual funds only offered through insurance products.

• Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The Account invests only in funds with fair value measurements in the first two levels of the fair value hierarchy.

The following table summarizes assets measured at fair value on a recurring basis as of December 31, 2008:

	Level 1	Level 2		Level 3	Total
Separate Account Investments	0	$	2,096,586	0	$	2,096,586

Accounts Payable of $196 are measured at settlement value which approximates the fair value due to the short-term nature of such liabilities.

The Account did not have any assets or liabilities reported at fair value on a nonrecurring basis required to be disclosed under SFAS 157.

(Continued)

26

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

(5) Financial Highlights

The following tabular presentation is a summary of units, unit fair values and contract owners’ equity outstanding for variable annuity contracts as of the end of the periods indicated, and the contract expense rate, investment income ratio and total return for each of the periods in the five year period ended December 31, 2008.

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
American Century VP - Income & Growth Fund - Class I (ACVIG)
2008	1.40	%	6,860	$	6.385373	$	43,804	1.99	%	-35.50	%
2007	1.40	%	6,906		9.900394		68,372	1.86	%	-1.00	%	1/3/2007
2006	1.40	%	5,640		12.151994		68,537	1.78	%	15.45	%
2005	1.40	%	5,652		10.525484		59,490	1.99	%	3.17	%
2004	1.40	%	6,392		10.202044		65,211	1.40	%	11.41	%
American Century VP - International Fund - Class I (ACVI)
2008	1.40	%	7,062		6.277601		44,332	0.81	%	-45.60	%
2007	1.40	%	7,111		11.539148		82,055	0.65	%	15.39	%	1/3/2007
2006	1.40	%	6,004		12.604859		75,680	1.58	%	23.28	%
2005	1.40	%	6,208		10.224538		63,474	1.22	%	11.67	%
2004	1.40	%	7,430		9.155754		68,027	0.56	%	13.32	%
American Century VP - Value Fund - Class I (ACVV)
2008	1.40	%	10,980		6.738207		73,986	2.39	%	-27.80	%
2007	1.40	%	12,582		9.333078		117,429	1.83	%	-6.67	%	1/3/2007
2006	1.40	%	4,814		19.099026		91,943	1.48	%	17.00	%
2005	1.40	%	6,278		16.324353		102,484	0.85	%	3.57	%
2004	1.40	%	4,822		15.762031		76,005	0.97	%	12.73	%
Credit Suisse Trust - Large Cap Value Portfolio (WGIP)
2008	1.40	%	613		6.337720		3,885	2.93	%	-37.08	%
2007	1.40	%	613		10.072840		6,175	1.29	%	0.73	%	1/3/2007
2006	1.40	%	374		13.773024		5,151	0.97	%	17.68	%
2005	1.40	%	420		11.703385		4,915	0.78	%	6.63	%
2004	1.40	%	420		10.975290		4,610	0.54	%	9.78	%
Dreyfus IP - Small Cap Stock Index Portfolio - Service Class (DVSCS)
2008	1.40	%	612		6.687552		4,093	0.83	%	-31.88	%
2007	1.40	%	408		9.817683		4,006	0.40	%	-1.82	%	1/3/2007
2006	1.40	%	276		14.814053		4,089	0.28	%	12.82	%
2005	1.40	%	276		13.130152		3,624	0.00	%	5.75	%
2004	1.40	%	1,438		12.416593		17,855	1.48	%	20.19	%
Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)
2008	1.40	%	24,614		6.439935		158,513	2.05	%	-38.02	%
2007	1.40	%	27,409		10.390881		284,804	1.76	%	3.91	%	1/3/2007
2006	1.40	%	27,316		11.006315		300,649	1.67	%	13.89	%
2005	1.40	%	27,430		9.664366		265,094	1.61	%	3.23	%
2004	1.40	%	29,210		9.361970		273,463	1.82	%	9.09	%
Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)
2008	1.40	%	1,161		7.360741		8,546	1.96	%	-30.54	%
2007	1.40	%	1,161		10.596893		12,303	1.75	%	5.97	%	1/3/2007
2006	1.40	%	1,304		11.566843		15,083	1.52	%	14.85	%
2005	1.40	%	1,306		10.071157		13,153	0.02	%	2.92	%
2004	1.40	%	1,908		9.785354		18,670	1.74	%	3.58	%
Federated IS - Quality Bond Fund II - Primary Class (FQB)
2008	1.40	%	3,283		9.474620		31,105	4.75	%	-8.59	%
2007	1.40	%	4,097		10.364499		42,463	5.08	%	3.64	%	1/3/2007
2006	1.40	%	3,608		13.470373		48,601	4.09	%	2.70	%
2005	1.40	%	3,676		13.116237		48,215	3.26	%	-0.12	%
2004	1.40	%	3,176		13.131591		41,706	4.02	%	2.17	%

(Continued)

27

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Fidelity(R) VIP - Equity-Income Portfolio - Service Class (FEIS)
2008	1.40	%	11,373	$	5.656191	$	64,328	2.43	%	-43.51	%
2007	1.40	%	11,482		10.012446		114,963	1.67	%	0.12	%	1/3/2007
2006	1.40	%	8,840		14.747337		130,366	3.33	%	18.40	%
2005	1.40	%	7,136		12.455145		88,880	1.62	%	4.28	%
2004	1.40	%	8,558		11.943782		102,215	1.38	%	9.82	%
Fidelity(R) VIP - Growth Portfolio - Service Class (FGS)
2008	1.40	%	11,856		6.496156		77,018	0.73	%	-47.97	%
2007	1.40	%	12,596		12.486462		157,279	0.60	%	24.86	%	1/3/2007
2006	1.40	%	16,960		8.771891		148,771	0.28	%	5.24	%
2005	1.40	%	17,084		8.335000		142,395	0.40	%	4.20	%
2004	1.40	%	19,908		7.999204		159,248	0.17	%	1.82	%
Fidelity(R) VIP - High Income Portfolio - Service Class (FHIS)
2008	1.40	%	2,074		7.467833		15,488	7.28	%	-26.11	%
2007	1.40	%	2,635		10.107127		26,632	10.52	%	1.07	%	1/3/2007
2006	1.40	%	1,454		10.516122		15,290	13.85	%	9.63	%
2005	1.40	%	682		9.592754		6,542	12.14	%	1.09	%
2004	1.40	%	1,494		9.489161		14,177	12.43	%	7.94	%
Fidelity(R) VIP - Overseas Portfolio - Service Class (FOS)
2008	1.40	%	3,333		6.359721		21,197	2.40	%	-44.65	%
2007	1.40	%	4,585		11.490519		52,684	3.28	%	14.91	%	1/3/2007
2006	1.40	%	4,882		12.981333		63,375	0.79	%	16.30	%
2005	1.40	%	3,604		11.161905		40,228	0.58	%	17.31	%
2004	1.40	%	4,418		9.514784		42,036	0.91	%	11.90	%
Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class (FCS)
2008	1.40	%	16,721		6.548093		109,491	0.87	%	-43.42	%
2007	1.40	%	17,994		11.572922		208,243	0.92	%	15.73	%	1/3/2007
2006	1.40	%	10,170		15.242016		155,011	1.12	%	10.03	%
2005	1.40	%	11,450		13.852399		158,610	0.19	%	15.22	%
2004	1.40	%	9,550		12.022889		114,819	0.24	%	13.73	%
Fidelity(R) VIP III - Growth Opportunities Portfolio - Service Class (FGOS)
2008	1.40	%	869		5.397012		4,690	0.19	%	-55.69	%
2007	1.40	%	1,443		12.180481		17,576	0.00	%	21.80	%	1/3/2007
2006	1.40	%	2,144		8.470207		18,160	0.60	%	3.83	%
2005	1.40	%	2,144		8.157700		17,490	0.82	%	7.34	%
2004	1.40	%	3,660		7.599714		27,815	0.47	%	5.56	%
Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)
2008	1.40	%	929		5.005428		4,650	0.70	%	-51.86	%
2007	1.40	%	929		10.397846		9,660	0.92	%	3.98	%	1/3/2007
2006	1.40	%	618		15.078159		9,318	0.45	%	14.59	%
2005	1.40	%	508		13.158776		6,685	0.00	%	1.13	%
2004	1.40	%	678		13.011385		8,822	0.00	%	12.40	%
Janus Aspen Series - Forty Portfolio - Service Class (JACAS)
2008	1.40	%	19,167		7.438137		142,567	0.01	%	-45.09	%
2007	1.40	%	18,209		13.546325		246,665	0.17	%	35.46	%	1/3/2007
2006	1.40	%	23,314		8.558108		199,524	0.14	%	7.60	%
2005	1.40	%	23,350		7.953387		185,712	0.01	%	11.00	%
2004	1.40	%	24,508		7.165447		175,611	0.02	%	16.33	%
Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)
2008	1.40	%	3,573		6.645103		23,743	0.09	%	-44.76	%
2007	1.40	%	3,606		12.029048		43,377	0.35	%	20.29	%	1/3/2007
2006	1.40	%	9,296		3.919155		36,432	0.00	%	6.33	%
2005	1.40	%	9,378		3.685735		34,565	0.00	%	10.00	%
2004	1.40	%	11,626		3.350546		38,953	0.00	%	-0.83	%
Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)
2008	1.40	%	10,747		5.941367		63,852	2.86	%	-52.90	%
2007	1.40	%	14,732		12.614208		185,833	0.44	%	26.14	%	1/3/2007
2006	1.40	%	11,676		13.186665		153,968	1.83	%	44.60	%
2005	1.40	%	13,104		9.119582		119,503	1.10	%	30.11	%
2004	1.40	%	11,970		7.009034		83,898	0.83	%	17.04	%

(Continued)

28

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)
2008	1.40	%	1,704	$	7.212016	$	12,289	8.50	%	-29.00	%
2007	1.40	%	2,462		10.157527		25,008	6.51	%	1.58	%	1/3/2007
2006	1.40	%	2,224		13.973939		31,078	7.31	%	9.06	%
2005	1.40	%	2,390		12.813161		30,623	8.15	%	0.95	%
2004	1.40	%	1,494		12.692461		18,963	7.35	%	8.56	%
Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)
2008	1.40	%	7,583		5.927765		44,950	1.17	%	-58.36	%
2007	1.40	%	8,081		14.234055		115,025	0.74	%	42.34	%	1/3/2007
2006	1.40	%	2,494		23.205358		57,874	0.69	%	34.81	%
2005	1.40	%	2,588		17.213353		44,548	0.62	%	30.79	%
2004	1.40	%	1,542		13.161389		20,295	0.85	%	19.05	%
Nationwide VIT - Gartmore Global Utilities Fund - Class I (GVGU1)
2008	1.40	%	719		7.810014		5,615	3.30	%	-33.88	%
2007	1.40	%	719		11.811862		8,493	2.44	%	18.12	%	1/3/2007
2006	1.40	%	326		19.195121		6,258	2.15	%	35.66	%
2005	1.40	%	516		14.149889		7,301	1.93	%	4.91	%
Nationwide VIT - Gartmore International Equity Fund - Class I (GIG)
2008	1.40	%	3,953		6.657605		26,318	1.43	%	-46.81	%
2007	1.40	%	3,953		12.517354		49,481	0.38	%	25.17	%	1/3/2007
2006	1.40	%	3,354		12.299092		41,251	1.11	%	31.11	%
2005	1.40	%	1,072		9.380789		10,056	0.77	%	28.39	%
Nationwide VIT - Gartmore Worldwide Leaders Fund - Class I (GEF)
2008	1.40	%	4,468		6.460009		28,863	0.78	%	-45.12	%
2007	1.40	%	4,468		11.771663		52,596	0.41	%	17.72	%	1/3/2007
2006	1.40	%	3,434		12.960173		44,505	0.90	%	24.12	%
2005	1.40	%	1,268		10.441294		13,240	0.78	%	17.67	%
2004	1.40	%	724		8.873195		6,424	0.00	%	14.05	%
Nationwide VIT - Government Bond Fund - Class I (GBF)
2008	1.40	%	8,065		11.203706		90,358	4.31	%	6.21	%
2007	1.40	%	8,183		10.548475		86,318	3.89	%	5.48	%	1/3/2007
2006	1.40	%	7,114		13.552851		96,415	4.21	%	1.90	%
2005	1.40	%	6,532		13.300351		86,878	3.76	%	1.82	%
2004	1.40	%	6,538		13.062379		85,402	5.18	%	1.82	%
Nationwide VIT - Growth Fund - Class I (CAF)
2008	1.40	%	3,728		7.100868		26,472	0.27	%	-39.57	%
2007	1.40	%	3,728		11.749798		43,803	0.19	%	17.50	%	1/3/2007
2006	1.40	%	7,740		5.784631		44,773	0.06	%	4.69	%
2005	1.40	%	6,428		5.525723		35,519	0.08	%	5.01	%
2004	1.40	%	6,428		5.261896		33,823	0.30	%	6.64	%
Nationwide VIT - Health Sciences Fund - Class I (GVGH1)
2006	1.40	%	214		12.829766		2,746	0.00	%	1.28	%
2005	1.40	%	512		12.667193		6,486	0.00	%	6.94	%
2004	1.40	%	484		11.845553		5,733	0.00	%	6.36	%
Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)
2008	1.40	%	6,167		7.560059		46,623	2.73	%	-26.59	%
2007	1.40	%	6,180		10.298535		63,645	2.24	%	2.99	%	1/3/2007
2006	1.40	%	5,400		11.352415		61,303	2.32	%	10.68	%
2005	1.40	%	5,394		10.256808		55,325	1.95	%	1.11	%
2004	1.40	%	6,450		10.144108		65,429	1.98	%	6.97	%
Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)
2008	1.40	%	1,501		5.711702		8,573	0.00	%	-46.87	%
2007	1.40	%	1,191		10.750095		12,803	0.00	%	7.50	%	1/3/2007
2006	1.40	%	1,986		9.334386		18,538	0.00	%	8.37	%
2005	1.40	%	2,012		8.613187		17,330	0.00	%	8.21	%
2004	1.40	%	1,900		7.959694		15,123	0.00	%	13.72	%

(Continued)

29

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)
2008	1.40	%	6,916	$	6.623199	$	45,806	1.24	%	-37.35	%
2007	1.40	%	8,737		10.572487		92,372	1.44	%	5.72	%	1/3/2007
2006	1.40	%	4,860		19.587192		95,194	1.14	%	8.36	%
2005	1.40	%	4,862		18.076864		87,890	1.00	%	10.53	%
2004	1.40	%	6,170		16.354103		100,905	0.57	%	14.11	%
Nationwide VIT - Money Market Fund - Class I (SAM)
2008	1.40	%	11,297		10.396331		117,447	1.92	%	0.62	%
2007	1.40	%	4,580		10.331763		47,319	3.88	%	3.32	%	1/3/2007
2006	1.40	%	7,984		11.066601		88,356	4.41	%	3.07	%
2005	1.40	%	11,904		10.736889		127,812	2.66	%	1.23	%
2004	1.40	%	15,118		10.605947		160,341	0.75	%	-0.60	%
Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)
2008	1.40	%	1,734		5.756043		9,981	0.00	%	-47.17	%
2007	1.40	%	1,756		10.895686		19,133	0.00	%	8.96	%	1/3/2007
2006	1.40	%	1,354		12.654947		17,135	0.00	%	1.77	%
2005	1.40	%	1,360		12.435369		16,912	0.00	%	6.58	%
2004	1.40	%	2,538		11.667420		29,612	0.00	%	11.83	%
Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)
2008	1.40	%	16,239		6.141923		99,739	1.13	%	-33.10	%
2007	1.40	%	16,743		9.181264		153,722	1.25	%	-8.19	%	1/3/2007
2006	1.40	%	7,584		23.270462		176,483	0.45	%	15.66	%
2005	1.40	%	7,546		20.120403		151,829	0.07	%	1.63	%
2004	1.40	%	8,304		19.796908		164,394	0.00	%	15.66	%
Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)
2008	1.40	%	8,549		6.140372		52,494	0.78	%	-39.06	%
2007	1.40	%	12,104		10.075421		121,953	0.10	%	0.75	%	1/3/2007
2006	1.40	%	5,616		21.200579		119,062	0.09	%	10.47	%
2005	1.40	%	6,670		19.190538		128,001	0.00	%	10.75	%
2004	1.40	%	6,382		17.327879		110,587	0.00	%	17.36	%
Nationwide VIT - Nationwide Fund - Class I (TRF)
2008	1.40	%	10,999		6.128988		67,413	1.43	%	-42.37	%
2007	1.40	%	11,025		10.635976		117,262	1.09	%	6.36	%	1/3/2007
2006	1.40	%	9,240		11.935388		110,283	1.09	%	12.04	%
2005	1.40	%	9,236		10.652647		98,388	0.90	%	5.94	%
2004	1.40	%	10,992		10.055179		110,527	1.27	%	8.21	%
Nationwide VIT - Technology and Communications Fund - Class I (GGTC)
2006	1.40	%	944		3.234018		3,053	0.00	%	9.62	%
2005	1.40	%	944		2.950302		2,785	0.00	%	-1.91	%
2004	1.40	%	944		3.007625		2,839	0.00	%	2.85	%
Nationwide VIT - U.S. Growth Leaders Fund - Class I (GVUG1)
2006	1.40	%	1,002		14.713301		14,743	0.32	%	-1.67	%
2005	1.40	%	830		14.963360		12,420	0.00	%	10.41	%
2004	1.40	%	1,452		13.552459		19,678	0.00	%	10.85	%
Nationwide VIT - Van Kampen Comstock Value Fund - Class I (EIF)
2008	1.40	%	4,059		5.966642		24,219	2.01	%	-37.87	%
2007	1.40	%	4,058		9.604227		38,974	1.69	%	-3.96	%	1/3/2007
2006	1.40	%	4,760		11.324174		53,903	1.70	%	14.29	%
2005	1.40	%	5,712		9.908509		56,597	1.67	%	2.79	%
2004	1.40	%	3,900		9.639397		37,594	1.52	%	15.85	%
Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)
2008	1.40	%	8,953		8.405184		75,252	7.56	%	-18.45	%
2007	1.40	%	8,843		10.306713		91,142	3.81	%	3.07	%	1/3/2007
2006	1.40	%	6,288		13.961929		87,793	4.59	%	3.37	%
2005	1.40	%	4,068		13.506165		54,943	4.10	%	0.75	%
2004	1.40	%	1,714		13.405165		22,976	4.83	%	5.04	%

(Continued)

30

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)
2008	1.40	%	935	$	6.565596	$	6,139	0.57	%	-38.13	%
2007	1.40	%	935		10.611210		9,921	0.28	%	6.11	%	1/3/2007
2006	1.40	%	648		14.457195		9,368	0.68	%	11.79	%
2005	1.40	%	648		12.931987		8,380	0.15	%	6.88	%
2004	1.40	%	648		12.099735		7,841	0.13	%	14.19	%
Neuberger Berman AMT - Mid Cap Growth Portfolio - I Class (AMCG)
2008	1.40	%	4,503		6.726268		30,288	0.00	%	-44.16	%
2007	1.40	%	4,503		12.046463		54,245	0.00	%	20.46	%	1/3/2007
2006	1.40	%	4,342		12.872160		55,891	0.00	%	13.09	%
2005	1.40	%	4,544		11.381961		51,720	0.00	%	12.15	%
2004	1.40	%	5,436		10.148514		55,167	0.00	%	14.68	%
Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)
2008	1.40	%	2,042		5.165768		10,548	0.53	%	-53.06	%
2007	1.40	%	2,043		11.005439		22,484	0.51	%	10.05	%	1/3/2007
2006	1.40	%	2,132		15.616140		33,294	0.48	%	10.67	%
2005	1.40	%	5,338		14.110055		75,319	1.11	%	16.40	%
2004	1.40	%	3,574		12.122204		43,325	0.01	%	17.31	%
Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)
2008	1.40	%	9,121		6.043719		55,125	0.15	%	-46.28	%
2007	1.40	%	13,656		11.251010		153,644	0.24	%	12.51	%	1/3/2007
2006	1.40	%	12,054		11.805876		142,308	0.37	%	6.44	%
2005	1.40	%	12,090		11.091470		134,096	0.89	%	3.63	%
2004	1.40	%	11,544		10.702809		123,553	0.32	%	5.44	%
Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)
2008	1.40	%	9,607		6.171126		59,286	1.42	%	-41.03	%
2007	1.40	%	9,159		10.464374		95,843	1.17	%	4.64	%	1/3/2007
2006	1.40	%	8,260		13.721463		113,339	0.99	%	16.05	%
2005	1.40	%	8,044		11.823860		95,111	1.02	%	12.71	%
2004	1.40	%	7,178		10.490302		75,299	1.27	%	17.50	%
Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)
2008	1.40	%	15,118		6.257226		94,597	1.48	%	-39.33	%
2007	1.40	%	17,820		10.314046		183,796	0.90	%	3.14	%	1/3/2007
2006	1.40	%	20,320		11.348679		230,605	1.10	%	13.42	%
2005	1.40	%	20,618		10.005945		206,303	1.33	%	4.50	%
2004	1.40	%	21,368		9.575362		204,606	0.82	%	7.93	%
Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)
2008	1.40	%	5,464		5.251223		28,693	0.00	%	-49.78	%
2007	1.40	%	3,396		10.456810		35,511	0.00	%	4.57	%	1/3/2007
2006	1.40	%	6,562		10.082202		66,159	0.00	%	1.52	%
2005	1.40	%	7,570		9.931444		75,181	0.00	%	10.76	%
2004	1.40	%	8,638		8.966685		77,454	0.00	%	18.10	%
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
2008	1.40	%	6,108		6.869770		41,961	0.76	%	-35.34	%
2007	1.40	%	6,108		10.625158		64,898	0.55	%	6.25	%	1/3/2007
2006	1.40	%	9,638		8.056423		77,648	0.10	%	7.68	%
2005	1.40	%	9,638		7.482082		72,112	0.00	%	2.17	%
2004	1.40	%	11,256		7.323241		82,430	0.40	%	4.72	%
Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)
2008	1.40	%	174		4.712439		820	0.00	%	-65.27	%
2007	1.40	%	1,036		13.570538		14,059	0.35	%	35.71	%	1/3/2007
2006	1.40	%	292		28.027733		8,184	0.57	%	37.55	%
2005	1.40	%	292		20.377122		5,950	0.91	%	30.15	%
2004	1.40	%	322		15.656055		5,041	0.55	%	24.13	%
Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)
2008	1.40	%	2,374		7.884018		18,717	0.22	%	-46.88	%
2007	1.40	%	2,442		14.842195		36,245	0.13	%	48.42	%	1/3/2007
2006	1.40	%	1,114		30.765179		34,272	0.05	%	22.75	%
2005	1.40	%	810		25.062407		20,301	0.31	%	49.56	%
2004	1.40	%	772		16.757883		12,937	0.21	%	22.49	%

(Continued)

31

NATIONWIDE VARIABLE ACCOUNT-10 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)
2008	1.40	%	173	$	8.777360	$	1,518	7.39	%	-16.17	%
2007	1.40	%	664		10.470093		6,952	10.82	%	4.70	%	1/3/2007
2005	1.40	%	126		22.014894		2,774	0.00	%	10.68	%
Van Kampen UIF - Mid Cap Growth Portfolio- Class I (MSVMG)
2007	1.40	%	335		12.096300		4,052	0.00	%	20.96	%	1/3/2007
2006	1.40	%	394		8.524521		3,359	0.00	%	7.75	%
2005	1.40	%	380		7.911472		3,006	0.00	%	15.93	%
2004	1.40	%	416		6.824496		2,839	0.00	%	19.89	%
Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)
2008	1.40	%	4,749		5.005727		23,772	3.76	%	-38.77	%
2007	1.40	%	7,577		8.174924		61,941	1.31	%	-18.25	%	1/3/2007
2006	1.40	%	2,590		37.611460		97,414	1.15	%	36.12	%
2005	1.40	%	2,730		27.631171		75,433	0.87	%	15.42	%
2004	1.40	%	6,456		23.940083		154,557	1.69	%	34.49	%
Wells Fargo AVT - Opportunity Fund(SM) (SVOF)
2008	1.40	%	7,582		6.228689		47,226	2.00	%	-40.94	%
2007	1.40	%	9,617		10.546019		101,421	0.63	%	5.46	%	1/3/2007
2006	1.40	%	7,818		12.425003		97,139	0.00	%	10.65	%
2005	1.40	%	7,880		11.228889		88,484	0.00	%	6.38	%
2004	1.40	%	9,750		10.555564		102,917	0.00	%	16.57	%
2008	Contract owners’ equity					$	2,096,390
2007	Contract owners’ equity					$	3,664,580
2006	Contract owners’ equity					$	3,679,671
2005	Contract owners’ equity					$	3,320,112
2004	Contract owners’ equity					$	3,291,752

* This represents the annual contract expense rate of the variable account for the period indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the underlying mutual funds.

** This represents the dividends for the period indicated, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by average net assets. The ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions to the contractholder accounts through reductions in unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

*** This represents the total return for the period indicated and includes a deduction only for expenses assessed through a reduction in unit values. Total return is not annualized if the underlying mutual fund option is initially offered, funded, or both, during the period presented.

^ This represents the date the underlying mutual fund option was initially added and funded. Total returns presented in years of initial offering represent the return for the period from the initial offering through year end.

32

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life Insurance Company and

Contract Owners of Nationwide Variable Account-10:

We have audited the accompanying statement of assets, liabilities and contract owners’ equity of Nationwide Variable Account-10 (comprised of the sub-accounts listed in note 1(b) (collectively, “the Accounts”)) as of December 31, 2008, and the related statements of operations and changes in contract owners’ equity, and the financial highlights for the periods indicated herein. These financial statements and financial highlights are the responsibility of the Accounts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the transfer agents of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Accounts as of December 31, 2008, and the results of their operations, changes in contract owners’ equity, and financial highlights for each of the periods indicated herein, in conformity with accounting principles generally accepted in the United States of America.

/s/    KPMG LLP

Columbus, Ohio

March 13, 2009