NATIONWIDE^®

VARIABLE

ACCOUNT-11

Annual Report

to

Contract Owners

December 31, 2005

NATIONWIDE LIFE INSURANCE COMPANY

HOME OFFICE: COLUMBUS, OHIO

APO–5396 –12/05

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2005

Assets:
Investments at fair value:
Federated IS – American Leaders Fund II – Primary Shares (FedAmLead) 306,945 shares (cost $5,175,939)	$	6,562,481
Federated IS – Capital Appreciation Fund II – Primary Shares (FedCapAp) 728,776 shares (cost $3,630,573)		4,285,201
Federated IS – Capital Income Fund II (FedCapInc) 73,866 shares (cost $612,368)		660,361
Federated IS – Equity Income Fund II (FedEqInc) 307,632 shares (cost $3,490,137)		4,174,567
Federated IS – Fund for US Government Securities II (FedGvtSec) 77,333 shares (cost $902,537)		878,507
Federated IS – High Income Bond Fund II – Primary Shares (FedHiInc) 309,558 shares (cost $2,357,274)		2,395,982
Federated IS – International Equity Fund II (FedIntEq) 38,475 shares (cost $483,621)		554,805
Federated IS – Kaufmann Fund II – Primary Shares (FedKaufmann) 300,188 shares (cost $3,179,949)		4,358,730
Federated IS – Mid Cap Growth Strategies Fund II (FedMidCpGr2) 15,918 shares (cost $285,210)		377,091
Federated IS – Prime Money Fund II (FedPriMy) 1,336,286 shares (cost $1,336,286)		1,336,286
Federated IS – Quality Bond Fund II – Primary Shares (FedQualBd) 124,422 shares (cost $1,436,785)		1,405,964
Total investments		26,989,975
Accounts receivable		–
Total assets		26,989,975
Accounts payable		199
Contract owners’ equity (note 4)	$	26,989,776

See accompanying notes to financial statements.

2

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF OPERATIONS

Year Ended December 31, 2005

Investment activity:	Total			FedAmLead		FedCapAp		FedCapInc		FedEqInc		FedGvtSec		FedHiInc		FedIntEq
Reinvested dividends	$	595,156		97,066		45,189		24,340		94,390		35,319		203,338		–
Mortality and expense risk charges (note 2)		(285,690	)	(67,400	)	(44,478	)	(5,024	)	(45,132	)	(10,112	)	(27,064	)	(5,958	)
Net investment income (loss)		309,466		29,666		711		19,316		49,258		25,207		176,274		(5,958	)
Proceeds from mutual fund shares sold		4,730,120		637,643		682,453		74,329		683,711		48,898		607,270		184,570
Cost of mutual fund shares sold		(3,987,160	)	(466,234	)	(535,580	)	(66,776	)	(508,377	)	(51,291	)	(561,208	)	(147,148	)
Realized gain (loss) on investments		742,960		171,409		146,873		7,553		175,334		(2,393	)	46,062		37,422
Change in unrealized gain (loss) on investments		(123,690	)	47,557		(117,486	)	1,097		(133,587	)	(14,989	)	(189,027	)	13,101
Net gain (loss) on investments		619,270		218,966		29,387		8,650		41,747		(17,382	)	(142,965	)	50,523
Reinvested capital gains		14,782		–		–		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	943,518		248,632		30,098		27,966		91,005		7,825		33,309		44,565
Investment activity:	FedKaufmann			FedMidCpGr2		FedPriMy		FedQualBd
Reinvested dividends	$	–		–		39,443		56,071
Mortality and expense risk charges (note 2)		(43,471	)	(4,076	)	(16,389	)	(16,586	)
Net investment income (loss)		(43,471	)	(4,076	)	23,054		39,485
Proceeds from mutual fund shares sold		462,991		26,016		960,719		361,520
Cost of mutual fund shares sold		(294,941	)	(17,511	)	(960,719	)	(377,375	)
Realized gain (loss) on investments		168,050		8,505		–		(15,855	)
Change in unrealized gain (loss) on investments		265,752		34,287		–		(30,395	)
Net gain (loss) on investments		433,802		42,792		–		(46,250	)
Reinvested capital gains		5,162		–		–		9,620
Net increase (decrease) in contract owners’ equity resulting from operations	$	395,493		38,716		23,054		2,855

See accompanying notes to financial statements.

3

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2005 and 2004

	Total					FedAmLead				FedCapAp				FedCapInc
Investment activity:	2005			2004		2005		2004		2005		2004		2005		2004
Net investment income (loss)	$	309,466		390,087		29,666		20,243		711		(20,098	)	19,316		12,344
Realized gain (loss) on investments		742,960		347,088		171,409		75,802		146,873		47,295		7,553		722
Change in unrealized gain (loss) on investments		(123,690	)	1,376,651		47,557		420,943		(117,486	)	238,340		1,097		20,215
Reinvested capital gains		14,782		13,996		–		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations		943,518		2,127,822		248,632		516,988		30,098		265,537		27,966		33,281
Equity transactions:
Purchase payments received from contract owners (note 3)		136,760		3,023,065		43,934		646,223		19,120		422,598		4,131		75,299
Transfers between funds		–		–		97,661		89,226		(117,829	)	151,111		154,769		66,968
Redemptions (note 3)		(1,677,799	)	(1,188,504	)	(368,847	)	(283,672	)	(250,203	)	(186,608	)	(3,779	)	(4,237	)
Annual contract maintenance charges (note 2)		(5,034	)	(5,254	)	(1,234	)	(1,200	)	(835	)	(935	)	(69	)	(63	)
Contingent deferred sales charges (note 2)		(14,328	)	(24,388	)	(2,646	)	(4,656	)	(1,710	)	(3,966	)	–		(163	)
Adjustments to maintain reserves		(265	)	120		(56	)	172		(18	)	126		(28	)	(2	)
Net equity transactions		(1,560,666	)	1,805,039		(231,188	)	446,093		(351,475	)	382,326		155,024		137,802
Net change in contract owners’ equity		(617,148	)	3,932,861		17,444		963,081		(321,377	)	647,863		182,990		171,083
Contract owners’ equity beginning of period		27,606,924		23,674,063		6,545,002		5,581,921		4,606,561		3,958,698		477,355		306,272
Contract owners’ equity end of period	$	26,989,776		27,606,924		6,562,446		6,545,002		4,285,184		4,606,561		660,345		477,355
CHANGES IN UNITS:
Beginning units		2,379,221		2,199,770		574,522		532,185		419,739		383,347		43,589		30,435
Units purchased		227,178		677,540		24,802		72,069		13,642		55,659		19,099		13,609
Units redeemed		(367,193	)	(498,089	)	(44,961	)	(29,732	)	(46,193	)	(19,267	)	(5,376	)	(455	)
Ending units		2,239,206		2,379,221		554,363		574,522		387,188		419,739		57,312		43,589

(Continued)

4

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2005 and 2004

	FedEqInc					FedGvtSec				FedHiInc				FedIntEq
Investment activity:	2005			2004		2005		2004		2005		2004		2005		2004
Net investment income (loss)	$	49,258		31,293		25,207		25,626		176,274		136,356		(5,958	)	(4,811	)
Realized gain (loss) on investments		175,334		82,877		(2,393	)	(2,584	)	46,062		23,776		37,422		41,459
Change in unrealized gain (loss) on investments		(133,587	)	329,276		(14,989	)	(9,214	)	(189,027	)	54,711		13,101		11,583
Reinvested capital gains		–		–		–		4,073		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations		91,005		443,446		7,825		17,901		33,309		214,843		44,565		48,231
Equity transactions:
Purchase payments received from contract owners (note 3)		25,795		460,702		–		23,795		6,233		310,688		5,350		113,124
Transfers between funds		(21,592	)	270,352		115,617		3,054		(56,511	)	106,826		42,419		29,454
Redemptions (note 3)		(321,277	)	(228,026	)	(38,316	)	(26,175	)	(213,322	)	(102,430	)	(29,332	)	(9,340	)
Annual contract maintenance charges (note 2)		(718	)	(733	)	(148	)	(167	)	(507	)	(567	)	(60	)	(47	)
Contingent deferred sales charges (note 2)		(2,543	)	(4,945	)	(572	)	(1,308	)	(1,819	)	(2,030	)	(492	)	(206	)
Adjustments to maintain reserves		(38	)	96		(36	)	(3	)	(32	)	33		4		41
Net equity transactions		(320,373	)	497,446		76,545		(804	)	(265,958	)	312,520		17,889		133,026
Net change in contract owners’ equity		(229,368	)	940,892		84,370		17,097		(232,649	)	527,363		62,454		181,257
Contract owners’ equity beginning of period		4,403,900		3,463,008		794,099		777,002		2,628,583		2,101,220		492,371		311,114
Contract owners’ equity end of period	$	4,174,532		4,403,900		878,469		794,099		2,395,934		2,628,583		554,825		492,371
CHANGES IN UNITS:
Beginning units		367,233		322,353		72,957		73,085		205,696		179,584		43,192		30,778
Units purchased		22,140		78,023		10,631		5,092		24,661		45,517		17,446		26,886
Units redeemed		(48,799	)	(33,143	)	(3,657	)	(5,220	)	(45,605	)	(19,405	)	(15,508	)	(14,472	)
Ending units		340,574		367,233		79,931		72,957		184,752		205,696		45,130		43,192

(Continued)

5

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2005 and 2004

	FedKaufmann					FedMidCpGr2				FedPriMy				FedQualBd
Investment activity:	2005			2004		2005		2004		2005		2004		2005		2004
Net investment income (loss)	$	(43,471	)	(39,707	)	(4,076	)	(3,602	)	23,054		(679	)	39,485		31,471
Realized gain (loss) on investments		168,050		172,423		8,505		22,438		–		–		(15,855	)	(1,171	)
Change in unrealized gain (loss) on investments		265,752		343,118		34,287		20,559		–		–		(30,395	)	(14,068	)
Reinvested capital gains		5,162		221		–		–		–		–		9,620		9,702
Net increase (decrease) in contract owners’ equity resulting from operations		395,493		476,055		38,716		39,395		23,054		(679	)	2,855		25,934
Equity transactions:
Purchase payments received from contract owners (note 3)		12,077		455,274		–		65,190		4,934		10,029		15,186		176,033
Transfers between funds		50,275		(171,533	)	4,346		22,522		(404,543	)	1,589,997		135,388		204,193
Redemptions (note 3)		(160,792	)	(179,776	)	(14,395	)	(8,575	)	(185,680	)	(32,346	)	(91,856	)	(36,550	)
Annual contract maintenance charges (note 2)		(804	)	(798	)	(32	)	(22	)	(344	)	(43	)	(283	)	(225	)
Contingent deferred sales charges (note 2)		(1,755	)	(4,027	)	(637	)	(320	)	(1,920	)	–		(234	)	(929	)
Adjustments to maintain reserves		(34	)	95		26		(23	)	(25	)	(3	)	(28	)	(17	)
Net equity transactions		(101,033	)	99,235		(10,692	)	78,772		(587,578	)	1,567,634		58,173		342,505
Net change in contract owners’ equity		294,460		575,290		28,024		118,167		(564,524	)	1,566,955		61,028		368,439
Contract owners’ equity beginning of period		4,064,236		3,488,946		349,101		230,934		1,900,805		333,850		1,344,911		976,472
Contract owners’ equity end of period	$	4,358,696		4,064,236		377,125		349,101		1,336,281		1,900,805		1,405,939		1,344,911
CHANGES IN UNITS:
Beginning units		314,321		306,045		27,178		20,498		191,079		33,546		119,715		89,008
Units purchased		20,501		59,339		878		13,730		36,411		218,530		36,967		53,468
Units redeemed		(28,501	)	(51,063	)	(1,698	)	(7,050	)	(95,172	)	(60,997	)	(31,723	)	(22,761	)
Ending units		306,321		314,321		26,358		27,178		132,318		191,079		124,959		119,715

(Continued)

6

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2005 and 2004

	FedTotRe
Investment activity:	2005		2004
Net investment income (loss)	$	–	201,651
Realized gain (loss) on investments		–	(115,949	)
Change in unrealized gain (loss) on investments		–	(38,812	)
Reinvested capital gains		–	–
Net increase (decrease) in contract owners’ equity resulting from operations		–	46,890
Equity transactions:
Purchase payments received from contract owners (note 3)		–	264,110
Transfers between funds		–	(2,362,170	)
Redemptions (note 3)		–	(90,769	)
Annual contract maintenance charges (note 2)		–	(454	)
Contingent deferred sales charges (note 2)		–	(1,838	)
Adjustments to maintain reserves		–	(395	)
Net equity transactions		–	(2,191,516	)
Net change in contract owners’ equity		–	(2,144,626	)
Contract owners’ equity beginning of period		–	2,144,626
Contract owners’ equity end of period	$	–	–
CHANGES IN UNITS:
Beginning units		–	198,906
Units purchased		–	35,618
Units redeemed		–	(234,524	)
Ending units		–	–

See accompanying notes to financial statements.

7

NATIONWIDE VARIABLE ACCOUNT-11

NOTES TO FINANCIAL STATEMENTS

December 31, 2005 and 2004

(1) Background and Summary of Significant Accounting Policies

(a) Organization and Nature of Operations

Nationwide Variable Account-11 (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on December 15, 1999 and commenced operations on August 2, 2002. The Account is registered as a unit investment trust under the Investment Company Act of 1940.

The Company offers Individual Deferred Variable Annuity Contracts through the Account. The contracts are distributed by the Company and marketed exclusively through Federated Investors.

(b) The Contracts

Contract owners in either the accumulation or payout phase may invest in any of the following:

Portfolios of the Federated Insurance Series (Federated IS);

    Federated IS – American Leaders Fund II – Primary Shares (FedAmLead)

    Federated IS – Capital Appreciation Fund II – Primary Shares (FedCapAp)

    Federated IS – Capital Income Fund II (FedCapInc)

    Federated IS – Equity Income Fund II (FedEqInc)

    Federated IS – Fund for US Government Securities II (FedGvtSec)

    Federated IS – High Income Bond Fund II – Primary Shares (FedHiInc)

    Federated IS – International Equity Fund II (FedIntEq)

    Federated IS – International Small Company Fund II*

    Federated IS – Kaufmann Fund II – Primary Shares (FedKaufmann)

    Federated IS – Mid Cap Growth Strategies Fund II (FedMidCpGr2)

        (formerly Federated IS – Growth Strategies Fund II)

    Federated IS – Prime Money Fund II (FedPriMy)

    Federated IS – Quality Bond Fund II – Primary Shares (FedQualBd)

    Federated IS – Total Return Bond Fund II*

*At December 31, 2005, 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.

(Continued)

8

NATIONWIDE VARIABLE ACCOUNT-11 (NOTES TO FINANCIAL STATEMENTS, Continued)

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued based on the closing net asset value per share at December 31, 2005 of such funds, which value their investment securities at fair value. The cost of investments sold is determined on the specific identification basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividends (which include 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 Internal Revenue Code.

The Company does not provide for income taxes within the Account. Taxes are 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.

(2) Expenses

For Premium Deferred Variable Annuity contracts, 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 surrendered, the Company will, with certain exceptions, deduct from a contract owners’ contract value a contingent deferred sales charge not to exceed 7% of the purchase payments surrendered. This charge declines 1% per year. After the purchase payment has been held in the contract for 7 years the charge is 0%. No sales charges are deducted on redemptions used to purchase units in the fixed investment options of the Company.

For the Deferred Variable Annuity contracts, a sales charge of up to 5.5% is deducted from each purchase payment. The sales charge declines based upon the amount of the cumulative qualifying purchase payment, which may include certain deposits made to other qualifying investments in addition to the deposits made to the contract. An additional sales charge of 0.5% is applied against any purchase payments in excess of $1 million that are withdrawn within one year of deposit to the contract. No sales charges are deducted on redemptions used to purchase units in the fixed investment options of the Company.

The Company may deduct an annual contract maintenance charge of $40, depending on the amount of assets in the contract, which is satisfied by surrendering units.

The Company deducts a mortality and expense risk charge assessed through the daily unit value calculation. The Option table below illustrates the annual rate for all contract level charges by product, as well as the maximum variable account charge per product. The table also summarizes the contract level options available to contract holders. The options and related charges are described in more detail in the applicable product prospectus.

(Continued)

9

NATIONWIDE VARIABLE ACCOUNT-11 (NOTES TO FINANCIAL STATEMENTS, Continued)

Nationwide Variable Account-11 Options	Deferred		Premium Deferred
Variable Account Charges – Recurring	0.80	%	1.20	%
Death Benefit Option:
Greater of One-Year or 5% Enhanced	0.15	%	0.15	%
If death before annuitization, benefit will be greatest of (i) contract value,
(ii) lessor of purchase payments less surrenders or 2 times the contract value as of the date death benefit is calculated,
(iii) highest contract value before 86th birthday less surrenders or (iv) the 5% interest anniversary value.
Beneficiary Protector Option	0.40	%	0.40	%
Upon annuitant death, in addition to any death benefit payable, an additional amount will be credited to contract.
Maximum Variable Account Charges*:	1.35	%	1.75	%

*When maximum options are elected.

The following table provides mortality and expense risk charges by asset fee rates for the period ended December 31, 2005:

	Total		FedAmLead	FedCapAp	FedCapInc	FedEqInc	FedGvtSec	FedHiInc	FedIntEq
0.80%	$	86,680	22,786	16,346	2,667	14,826	1,938	5,597	1,496
0.95%		14,170	3,476	2,164	48	2,359	49	2,566	359
1.20%		107,954	26,392	16,004	690	14,051	4,840	11,068	1,731
1.35%		64,994	13,021	8,025	1,202	12,786	2,716	6,461	1,853
1.75%		11,892	1,725	1,939	417	1,110	569	1,372	519
Totals	$	285,690	67,400	44,478	5,024	45,132	10,112	27,064	5,958
	FedKaufmann		FedMidCpGr2	FedPriMy	FedQualBd
0.80%	$	12,458	898	4,208	3,460
0.95%		2,059	78	600	412
1.20%		16,923	730	7,191	8,334
1.35%		9,146	2,021	3,765	3,998
1.75%		2,885	349	625	382
Totals	$	43,471	4,076	16,389	16,586

(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, preparation, 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. The fixed account assets are not reflected in the accompanying financial statements. In addition, the Account portion of contract owner loans is transferred to the accounts of the Company for administration and collection. Loan repayments are transferred to the Account at the direction of the contract owner. For the years ended December 31, 2005 and 2004, total transfers to the Account from the fixed account were $86,144 and $1,543,919, respectively, and total transfers from the Account to the fixed account were $0 and $10,000, respectively. Transfers from the Account to the fixed account are included in redemptions, and transfers to the Account from the fixed account are included in purchase payments received from contract owners, as applicable, on the accompanying Statements of Changes in Contract Owners’ Equity.

For guaranteed minimum death benefits, the Company contributed $3,436 and $0 to the Account in the form of additional premium to contract owner accounts for the years ended December 31, 2005 and 2004, respectively. These amounts are included in purchase payments received from contract owners and are credited at time of annuitant death, when applicable.

(Continued)

10

NATIONWIDE VARIABLE ACCOUNT-11 (NOTES TO FINANCIAL STATEMENTS, Continued)

(4) Financial Highlights

The Company offers several variable annuity products through the Account that have unique combinations of features and fees that are assessed to the contract owner. Differences in fee structures result in a variety of contract expense rates, unit fair values and total returns.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 contract expense rate, investment income ratio and total return for each period in the three-year period ended December 31, 2005 and for the period August 2, 2002 (commencement of operations) through December 31, 2002. Beginning in 2003 the information is presented as a range of minimum to maximum values based upon product grouping. The range is determined by identifying the lowest and the highest contract expense rate. The unit fair values and total returns related to these identified contract expense rates are also disclosed as a range below. Accordingly, some individual contract amounts may not be within the ranges presented. For periods prior to 2003 the information is presented as a range of minimum and maximum values, however, such information is exclusive and independent for each column, and there is no intentional relationship among and between the ranges of values presented for contract expense rate, unit fair value and total return.

	Contract Expense *Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income **Ratio**	Total ***Return***
Federated IS – American Leaders Fund II – Primary Shares
2005	0.80% to 1.75%	554,363	$	11.94 to 11.54	$	6,562,446	1.48%	4.18% to    3.19%
2004	0.80% to 1.75%	574,522		11.46 to 11.18		6,545,002	1.37%	8.90% to    7.86%
2003	0.80% to 1.75%	532,185		10.53 to 10.37		5,581,921	0.92%	26.68% to  25.46%
2002	0.80% to 1.75%	130,404		8.26 to   8.31		1,081,811	0.00%	-17.37% to -16.91%	(a) (b)
Federated IS – Capital Appreciation Fund II – Primary Shares
2005	0.80% to 1.75%	387,188		11.16 to 10.79		4,285,184	1.02%	1.10% to    0.14%
2004	0.80% to 1.75%	419,739		11.04 to 10.77		4,606,561	0.55%	6.54% to    5.52%
2003	0.80% to 1.75%	383,347		10.36 to 10.21		3,958,698	0.29%	22.93% to  21.75%
2002	0.80% to 1.75%	87,434		8.38 to   8.43		735,888	0.00%	-16.16% to -15.69%	(a) (b)
Federated IS – Capital Income Fund II
2005	0.80% to 1.75%	57,312		11.60 to 11.21		660,345	4.28%	5.44% to    4.43%
2004	0.80% to 1.75%	43,589		11.00 to 10.73		477,355	4.07%	9.04% to    8.00%
2003	0.80% to 1.75%	30,435		10.09 to   9.94		306,272	0.32%	19.71% to  18.56%
2002	1.20%	389		8.41		3,271	0.00%	-15.90%	(a) (b)
Federated IS – Equity Income Fund II
2005	0.80% to 1.75%	340,574		12.37 to 11.95		4,174,532	2.20%	2.51% to    1.53%
2004	0.80% to 1.75%	367,233		12.07 to 11.77		4,403,900	1.82%	11.94% to  10.87%
2003	0.80% to 1.75%	322,353		10.78 to 10.62		3,463,008	1.04%	26.26% to  25.05%
2002	0.80% to 1.35%	61,927		8.51 to   8.54		528,005	0.00%	-14.87% to -14.59%	(a) (b)
Federated IS – Fund for US Government Securities II
2005	0.80% to 1.75%	79,931		11.13 to 10.75		878,469	4.22%	1.21% to    0.25%
2004	0.80% to 1.75%	72,957		11.00 to 10.73		794,099	4.44%	2.78% to    1.80%
2003	0.80% to 1.75%	73,085		10.70 to 10.54		777,002	3.35%	1.55% to    0.57%
2002	0.80% to 1.75%	25,237		10.48 to 10.53		265,283	0.00%	4.76% to    5.34%	(a) (b)
Federated IS – High Income Bond Fund II – Primary Shares
2005	0.80% to 1.75%	184,752		13.12 to 12.67		2,395,934	8.09%	1.84% to    0.86%
2004	0.80% to 1.75%	205,696		12.88 to 12.56		2,628,583	6.88%	9.58% to    8.53%
2003	0.80% to 1.75%	179,584		11.75 to 11.58		2,101,220	3.94%	21.24% to  20.08%
2002	0.80% to 1.75%	29,703		9.64 to   9.69		287,249	0.00%	-3.60% to   -3.06%	(a) (b)
Federated IS – International Equity Fund II
2005	0.80% to 1.75%	45,130		12.43 to 12.01		554,825	0.00%	8.21% to    7.17%
2004	0.80% to 1.75%	43,192		11.49 to 11.21		492,371	0.00%	13.15% to  12.07%
2003	0.80% to 1.75%	30,778		10.15 to 10.00		311,114	0.00%	30.81% to  29.55%
2002	0.80% to 1.75%	12,310		7.72 to   7.76		95,360	0.00%	-22.80% to -22.37%	(a) (b)
Federated IS – International Small Company Fund II
2002	0.80% to 1.20%	1,421		8.02 to   8.04		11,407	0.00%	-19.79% to -19.60%	(a) (b)
Federated IS – Kaufmann Fund II – Primary Shares
2005	0.80% to 1.75%	306,321		14.37 to 13.89		4,358,696	0.00%	10.36% to    9.30%
2004	0.80% to 1.75%	314,321		13.03 to 12.71		4,064,236	0.00%	13.74% to  12.65%
2003	0.80% to 1.75%	306,045		11.45 to 11.28		3,488,946	0.00%	38.59% to  37.26%
2002	0.80% to 1.75%	78,899		8.22 to   8.26		650,601	0.00%	-17.83% to -17.37%	(a) (b)

(Continued)

11

NATIONWIDE VARIABLE ACCOUNT-11 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense *Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income **Ratio**	Total ***Return***
Federated IS – Mid Cap Growth Strategies Fund II
2005	0.80% to 1.75%	26,358	$	14.50 to 14.01	$	377,125	0.00%	11.80% to  10.74%
2004	0.80% to 1.75%	27,178		12.97 to 12.65		349,101	0.00%	14.51% to  13.41%
2003	0.80% to 1.75%	20,498		11.32 to 11.15		230,934	0.00%	38.96% to  37.63%
2002	1.20% to 1.75%	2,917		8.10 to   8.13		23,680	0.00%	-18.97% to -18.71%	(a) (b)
Federated IS – Prime Money Fund II
2005	0.80% to 1.75%	132,318		10.21 to   9.86		1,336,281	2.44%	1.88% to    0.91%
2004	0.80% to 1.75%	191,079		10.02 to   9.77		1,900,805	0.37%	0.01% to   -0.95%
2003	0.80% to 1.75%	33,546		10.02 to   9.87		333,850	0.91%	-0.12% to   -1.08%
2002	0.80% to 1.75%	3,655		9.97 to 10.03		36,577	0.43%	-0.27% to    0.29%	(a) (b)
Federated IS – Quality Bond Fund II – Primary Shares
2005	0.80% to 1.75%	124,959		11.38 to 11.00		1,405,939	4.08%	0.49% to   -0.47%
2004	0.80% to 1.75%	119,715		11.33 to 11.05		1,344,911	3.81%	2.79% to    1.81%
2003	0.80% to 1.75%	89,008		11.02 to 10.85		976,472	2.43%	3.81% to    2.81%
2002	0.80% to 1.75%	18,954		10.56 to 10.62		200,816	0.00%	5.57% to    6.16%	(a) (b)
Federated IS – Total Return Bond Fund II
2003	0.80% to 1.75%	198,906		10.83 to 10.66		2,144,626	0.01%	2.51% to    1.53%
2002	0.80% to 1.75%	49,241		10.50 to 10.56		519,103	9.40%	5.03% to    5.61%	(a) (b)
2005 Contract owners’ equity					$	26,989,776
2004 Contract owners’ equity					$	27,606,924
2003 Contract owners’ equity					$	23,674,063
2002 Contract owners’ equity					$	4,439,051

*	This represents the range of annual contract expense rates 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 and charges made directly to contract owner accounts through the redemption of units.
**	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 either through reductions in unit values or redemption of units. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.
***	This represents the range of minimum and maximum total returns for the period indicated, including changes in the value of the underlying mutual fund, which reflects the reduction of unit value for expenses assessed. It does not include any expenses assessed through the redemption of units, the inclusion of which would result in a reduction of the total return presented.
(a) & (b)	Denote the minimum and maximum of the total return ranges, respectively, for underlying mutual fund options that were added during the reporting period. These returns were not annualized. Minimum and maximum ranges are not shown for underlying mutual fund options for which a single contract expense rate (product option) is representative of all units issued and outstanding at period end. Such options that were added during the reporting period are designated by these symbols.

12

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life Insurance Company and

    Contract Owners of Nationwide Variable Account-11:

We have audited the accompanying statement of assets, liabilities and contract owners’ equity of Nationwide Variable Account-11 (comprised of the sub-accounts listed in note 1(b)) (collectively, “the Account”) as of December 31, 2005, and the related statements of operations and changes in contract owners’ equity, and the financial highlights for each of the periods indicated herein. These financial statements and financial highlights are the responsibility of the Account’s 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 audit 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, 2005, 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 Account as of December 31, 2005, and the results of its operations, changes in contract owners’ equity, and financial highlights for each of the periods indicated herein, in conformity with U.S. generally accepted accounting principles.

KPMG LLP

Columbus, Ohio

March 8, 2006

13

NATIONWIDE LIFE INSURANCE COMPANY	PRSRT STD
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