Nationwide Multi-Flex Variable Account

N-30D 1 dn30d.htm NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT Nationwide Multi-Flex Variable Account

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Annual Report

December 31, 2007


Nationwide^® Multi-Flex Variable Account

APO–724–12/07

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2007


Assets:
Investments at fair value:
AIM VIF – Capital Appreciation Fund – Series I (AIMCapAp) 108,759 shares (cost $2,308,416)	$	3,194,237
AIM VIF – Global Health Care Fund – Series I (AIMGlobHlth) 15,010 shares (cost $346,705)		361,139
AIM VIF – Global Real Estate Fund – Series I (AIMGlobRE) 56,817 shares (cost $1,605,715)		1,243,162
AIM VIF – International Growth Fund – Series I (AIMIntGr) 68,168 shares (cost $1,869,861)		2,292,469
American Century VP – Balanced Fund – Class I (ACVPBal) 777,297 shares (cost $5,470,423)		5,697,584
American Century VP – Capital Appreciation Fund – Class I (ACVPCapAp) 1,207,809 shares (cost $10,667,581)		19,300,781
American Century VP – Income & Growth Fund – Class I (ACVPIncGr) 719,501 shares (cost $4,682,934)		6,086,983
Dreyfus Stock Index Fund, Inc. – Initial Shares (DryStkIx) 1,678,342 shares (cost $48,417,034)		62,769,974
Dreyfus VIF – Appreciation Portfolio – Initial Shares (DryVApp) 202,755 shares (cost $7,138,364)		9,095,616
Dreyfus VIF – Developing Leaders Portfolio – Initial Shares (DryVDevLd) 1,566,338 shares (cost $57,845,450)		50,655,377
Dreyfus VIF – Quality Bond Portfolio – Initial Shares (DryVQualBd) 734,237 shares (cost $8,334,637)		8,135,349
Fidelity^®VIP – Equity-Income Portfolio – Initial Class (FidVIPEI) 3,382,594 shares (cost $78,313,775)		80,877,806
Fidelity^®VIP – High Income Portfolio – Initial Class (FidVIPHI) 2,534,715 shares (cost $15,878,412)		15,157,594
Fidelity^®VIP II – Contrafund ^®Portfolio – Service Class 2 (FidVIPConS2) 178,571 shares (cost $5,583,684)		4,903,568
Franklin Templeton VIP – Foreign Securities Fund – Class 1 (FrVIPForSec) 1,563,637 shares (cost $20,072,112)		32,179,649
Janus Aspen Series – International Growth Portfolio – Institutional Shares (JAspIntGro) 416,705 shares (cost $12,203,411)		27,214,991
Nationwide VIT – Federated High Income Bond Fund – Class I (NVITFHiInc) 143,455 shares (cost $1,134,909)		1,095,997
Nationwide VIT – Government Bond Fund – Class I (NVITGvtBd) 2,969,334 shares (cost $35,038,901)		34,533,358
Nationwide VIT – Growth Fund – Class I (NVITGrowth) 470,810 shares (cost $4,744,125)		6,826,748
Nationwide VIT – Money Market Fund – Class I (NVITMyMkt) 13,530,190 shares (cost $13,530,190)		13,530,190

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

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


Nationwide VIT – Nationwide Fund – Class I (NVITNWFund) 9,334,076 shares (cost $101,370,858)	$	126,850,091
Neuberger Berman AMT – Balanced Portfolio – I Class Shares (NBTBal) 1,355,258 shares (cost $12,933,677)		17,726,784
Neuberger Berman AMT – Partners Portfolio – Class I (NBTAPart) 13,478 shares (cost $286,493)		279,939
PIMCO VIT – Real Return Portfolio – Administrative Shares (PVITRealRet) 30,628 shares (cost $369,101)		384,991
PIMCO VIT – Total Return Portfolio – Administrative Shares (PVITTotRet) 78,781 shares (cost $800,460)		826,411
Royce Capital Fund – Micro-Cap Portfolio (RCFMicroCap) 92,859 shares (cost $1,379,844)		1,250,806
SBL Fund – Series D (Global Series) (SBLGlob) 80,389 shares (cost $908,521)		965,469
SBL Fund – Series J (Mid Cap Growth Series) (SBLMidCapGr) 9,493 shares (cost $289,424)		265,792
SBL Fund – Series N (Managed Asset Allocation Series) (SBLAsAlloc) 38,284 shares (cost $738,762)		753,044
SBL Fund – Series O (Equity Income Series) (SBLEqInc) 60,109 shares (cost $1,401,884)		1,404,758
SBL Fund – Series P (High Yield Series) (SBLHighYld) 36,296 shares (cost $689,645)		696,150
SBL Fund – Series Q (Small Cap Value Series) (SBLSmCapVal) 37,777 shares (cost $1,046,193)		1,088,736
SBL Fund – Series V (Mid Cap Value Series) (SBLMidCapVal) 75,906 shares (cost $3,592,795)		3,616,193
SBL Fund – Series X (Small Cap Growth Series) (SBLSmCapGr) 12,111 shares (cost $235,804)		246,461
SBL Fund – Series Y (Select 25 Series) (SBLSel25) 1,858 shares (cost $19,341)		18,893
The Dreyfus Socially Responsible Growth Fund, Inc. – Initial Shares (DrySRGro) 733,379 shares (cost $19,227,724)		22,368,060
Wells Fargo AVT – Opportunity Fund^SM (WFVOpp) 1,457,937 shares (cost $29,782,881)		32,118,341

Total investments		596,013,490
Accounts receivable		–

Total assets		596,013,490
Accounts payable		75,102

Contract owners’ equity (note 4)	$	595,938,388

See accompanying notes to financial statements.

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF OPERATIONS

Year Ended December 31, 2007


Investment activity:		Total		AIMCapAp		AIMGlobHlth		AIMGlobRE		AIMIntGr		ACVPBal		ACVPCapAp		ACVPIncGr
Reinvested dividends	$	10,506,262		–		–		76,697		9,432		126,955		–		125,832
Mortality and expense risk charges (note 2)		(8,017,159	)	(42,207	)	(2,003	)	(13,716	)	(30,465	)	(77,063	)	(218,543	)	(83,880	)

Net investment income (loss)		2,489,103		(42,207	)	(2,003	)	62,981		(21,033	)	49,892		(218,543	)	41,952


Proceeds from mutual fund shares sold		115,352,760		851,967		68,549		560,383		920,685		1,530,971		3,344,258		1,214,403
Cost of mutual fund shares sold		(96,641,195	)	(613,704	)	(60,530	)	(504,227	)	(573,867	)	(1,451,591	)	(2,002,396	)	(874,209	)

Realized gain (loss) on investments		18,711,565		238,263		8,019		56,156		346,818		79,380		1,341,862		340,194
Change in unrealized gain (loss) on investments		(17,418,495	)	139,232		8,986		(406,471	)	(31,119	)	(219,771	)	4,989,994		(443,105	)

Net gain (loss) on investments		1,293,070		377,495		17,005		(350,315	)	315,699		(140,391	)	6,331,856		(102,911	)

Reinvested capital gains		29,689,003		–		–		183,059		–		309,100		–		–

Net increase (decrease) in contract owners’ equity resulting from operations	$	33,471,176		335,288		15,002		(104,275	)	294,666		218,601		6,113,313		(60,959	)


Investment activity:		DryStkIx		DryVApp		DryVDevLd		DryVQualBd		FidVIPEI		FidVIPHI		FidVIPConS2		FrVIPForSec
Reinvested dividends	$	1,137,478		140,523		470,010		461,254		1,547,595		1,272,034		36,412		703,146
Mortality and expense risk charges (note 2)		(853,290	)	(112,296	)	(774,388	)	(120,814	)	(1,135,380	)	(202,831	)	(49,965	)	(410,203	)

Net investment income (loss)		284,188		28,227		(304,378	)	340,440		412,215		1,069,203		(13,553	)	292,943


Proceeds from mutual fund shares sold		10,364,563		1,666,350		10,743,636		3,127,406		12,035,813		2,171,890		879,634		5,315,440
Cost of mutual fund shares sold		(8,107,176	)	(1,303,830	)	(10,565,851	)	(3,232,315	)	(10,071,268	)	(2,283,215	)	(856,634	)	(3,344,340	)

Realized gain (loss) on investments		2,257,387		362,520		177,785		(104,909	)	1,964,545		(111,325	)	23,000		1,971,100
Change in unrealized gain (loss) on investments		187,977		118,160		(15,241,675	)	(22,252	)	(8,587,827	)	(707,506	)	(663,794	)	620,405

Net gain (loss) on investments		2,445,364		480,680		(15,063,890	)	(127,161	)	(6,623,282	)	(818,831	)	(640,794	)	2,591,505

Reinvested capital gains		–		–		8,217,467		–		6,824,225		–		1,241,253		1,455,952

Net increase (decrease) in contract owners’ equity resulting from operations	$	2,729,552		508,907		(7,150,801	)	213,279		613,158		250,372		586,906		4,340,400

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2007


Investment activity:		JAspIntGro		NVITFHiInc		NVITGvtBd		NVITGrowth		NVITMyMkt		NVITNWFund		NBTBal		NBTAPart
Reinvested dividends	$	157,873		87,570		1,498,173		11,986		619,106		1,405,525		203,824		1,957
Mortality and expense risk charges (note 2)		(318,170	)	(15,248	)	(441,187	)	(94,460	)	(171,488	)	(1,756,714	)	(229,417	)	(3,217	)

Net investment income (loss)		(160,297	)	72,322		1,056,986		(82,474	)	447,618		(351,189	)	(25,593	)	(1,260	)


Proceeds from mutual fund shares sold		4,543,500		485,087		5,909,406		2,176,682		7,184,780		24,486,786		2,922,461		77,870
Cost of mutual fund shares sold		(1,830,683	)	(497,786	)	(5,867,341	)	(1,623,187	)	(7,184,780	)	(19,800,746	)	(2,253,218	)	(78,905	)

Realized gain (loss) on investments		2,712,817		(12,699	)	42,065		553,495		–		4,686,040		669,243		(1,035	)
Change in unrealized gain (loss) on investments		3,335,740		(38,165	)	793,451		722,023		–		(1,580,170	)	1,726,704		(8,298	)

Net gain (loss) on investments		6,048,557		(50,864	)	835,516		1,275,518		–		3,105,870		2,395,947		(9,333	)

Reinvested capital gains		–		–		–		–		–		6,417,152		–		30,622

Net increase (decrease) in contract owners’ equity resulting from operations	$	5,888,260		21,458		1,892,502		1,193,044		447,618		9,171,833		2,370,354		20,029


Investment activity:		PVITRealRet		PVITTotRet		RCFMicroCap		SBLGlob		SBLMidCapGr		SBLAsAlloc		SBLEqInc		SBLHighYld
Reinvested dividends	$	26,501		31,786		18,856		–		–		–		–		–
Mortality and expense risk charges (note 2)		(7,165	)	(8,327	)	(12,185	)	(10,911	)	(3,060	)	(6,457	)	(19,560	)	(9,214	)

Net investment income (loss)		19,336		23,459		6,671		(10,911	)	(3,060	)	(6,457	)	(19,560	)	(9,214	)


Proceeds from mutual fund shares sold		503,132		264,915		208,503		396,005		40,393		296,095		662,558		506,095
Cost of mutual fund shares sold		(514,062	)	(261,390	)	(190,388	)	(328,605	)	(39,236	)	(261,499	)	(560,475	)	(467,297	)

Realized gain (loss) on investments		(10,930	)	3,525		18,115		67,400		1,157		34,596		102,083		38,798
Change in unrealized gain (loss) on investments		32,262		24,896		(139,147	)	9,097		(30,569	)	(6,008	)	(58,223	)	(25,794	)

Net gain (loss) on investments		21,332		28,421		(121,032	)	76,497		(29,412	)	28,588		43,860		13,004

Reinvested capital gains		–		1,400		107,444		–		–		–		–		–

Net increase (decrease) in contract owners’ equity resulting from operations	$	40,668		53,280		(6,917	)	65,586		(32,472	)	22,131		24,300		3,790

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2007


Investment activity:		SBLSmCapVal		SBLMidCapVal		SBLSmCapGr		SBLSel25		DrySRGro		WFVOpp
Reinvested dividends	$	–		–		–		–		126,583		209,154
Mortality and expense risk charges (note 2)		(10,131	)	(35,372	)	(2,588	)	(276	)	(295,794	)	(439,174	)

Net investment income (loss)		(10,131	)	(35,372	)	(2,588	)	(276	)	(169,211	)	(230,020	)


Proceeds from mutual fund shares sold		129,242		620,184		25,139		5,597		3,431,886		5,680,496
Cost of mutual fund shares sold		(109,172	)	(529,166	)	(21,056	)	(5,000	)	(3,099,125	)	(5,272,925	)

Realized gain (loss) on investments		20,070		91,018		4,083		597		332,761		407,571
Change in unrealized gain (loss) on investments		23,649		(70,857	)	4,303		(1,672	)	1,313,629		(3,186,580	)

Net gain (loss) on investments		43,719		20,161		8,386		(1,075	)	1,646,390		(2,779,009	)

Reinvested capital gains		–		–		–		–		–		4,901,329

Net increase (decrease) in contract owners’ equity resulting from operations	$	33,588		(15,211	)	5,798		(1,351	)	1,477,179		1,892,300

See accompanying notes to financial statements.

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2007 and 2006


		Total				AIMCapAp				AIMGlobHlth				AIMGlobRE
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	2,489,103		3,204,573		(42,207	)	(43,838	)	(2,003	)	(525	)	62,981		3,181
Realized gain (loss) on investments		18,711,565		11,476,897		238,263		112,963		8,019		936		56,156		11,234
Change in unrealized gain (loss) on investments		(17,418,495	)	35,190,421		139,232		93,810		8,986		5,448		(406,471	)	43,918
Reinvested capital gains		29,689,003		21,458,133		–		–		–		–		183,059		17,562

Net increase (decrease) in contract owners’ equity resulting from operations		33,471,176		71,330,024		335,288		162,935		15,002		5,859		(104,275	)	75,895


Equity transactions:
Purchase payments received from contract owners		21,202,860		25,051,538		153,467		199,551		30,286		3,926		77,019		14,768
Transfers between funds (including fixed account), net (note 3)		(2,469,224	)	(3,954,938	)	(125,567	)	(160,153	)	231,295		88,096		871,105		518,720
Redemptions		(89,972,455	)	(98,680,801	)	(502,648	)	(650,223	)	(12,583	)	(357	)	(157,015	)	(51,067	)
Annuity benefits		(82,563	)	(78,827	)	–		–		–		–		–		–
Annual contract maintenance charges (note 2)		(941,915	)	(1,026,916	)	(4,797	)	(5,805	)	(128	)	(33	)	(1,148	)	(228	)
Contingent deferred sales charges (note 2)		(217,432	)	(297,205	)	(2,052	)	(3,104	)	(224	)	–		(610	)	–
Adjustments to maintain reserves		(46,179	)	(1,135	)	364		(1,255	)	(79	)	(3	)	58		33

Net equity transactions		(72,526,908	)	(78,988,284	)	(481,233	)	(620,989	)	248,567		91,629		789,409		482,226


Net change in contract owners’ equity		(39,055,732	)	(7,658,260	)	(145,945	)	(458,054	)	263,569		97,488		685,134		558,121
Contract owners’ equity beginning of period		634,994,120		642,652,380		3,339,466		3,797,520		97,488		–		558,121		–

Contract owners’ equity end of period	$	595,938,388		634,994,120		3,193,521		3,339,466		361,057		97,488		1,243,255		558,121


CHANGES IN UNITS:
Beginning units		20,483,604		22,430,768		277,593		331,083		9,171		–		43,468		–

Units purchased		3,435,809		3,352,780		58,752		47,355		28,710		10,515		116,422		53,606
Units redeemed		(5,067,964	)	(5,299,944	)	(96,232	)	(100,845	)	(7,109	)	(1,344	)	(56,025	)	(10,138	)

Ending units		18,851,449		20,483,604		240,113		277,593		30,772		9,171		103,865		43,468

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		AIMIntGr				ACVPBal				ACVPCapAp				ACVPIncGr
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	(21,033	)	(4,932	)	49,892		51,825		(218,543	)	(189,649	)	41,952		44,257
Realized gain (loss) on investments		346,818		263,884		79,380		349,083		1,341,862		563,114		340,194		289,195
Change in unrealized gain (loss) on investments		(31,119	)	165,318		(219,771	)	(333,612	)	4,989,994		1,665,681		(443,105	)	659,855
Reinvested capital gains		–		–		309,100		473,863		–		–		–		–

Net increase (decrease) in contract owners’ equity resulting from operations		294,666		424,270		218,601		541,159		6,113,313		2,039,146		(60,959	)	993,307


Equity transactions:
Purchase payments received from contract owners		116,001		142,746		176,805		272,403		355,285		537,215		379,978		322,019
Transfers between funds (including fixed account), net (note 3)		100,837		94,605		169,387		(862,058	)	799,623		29,856		(260,944	)	(136,372	)
Redemptions		(330,465	)	(247,520	)	(1,037,754	)	(1,173,585	)	(2,367,299	)	(2,242,333	)	(875,403	)	(1,233,237	)
Annuity benefits		–		–		(26	)	(140	)	(3,313	)	(2,662	)	–		–
Annual contract maintenance charges (note 2)		(2,793	)	(2,478	)	(8,182	)	(10,015	)	(25,575	)	(25,207	)	(9,443	)	(10,385	)
Contingent deferred sales charges (note 2)		(1,000	)	(1,034	)	(3,891	)	(2,991	)	(3,890	)	(6,589	)	(6,499	)	(4,945	)
Adjustments to maintain reserves		(745	)	513		(498	)	1,220		1,576		583		(1,932	)	1,729

Net equity transactions		(118,165	)	(13,168	)	(704,159	)	(1,775,166	)	(1,243,593	)	(1,709,137	)	(774,243	)	(1,061,191	)


Net change in contract owners’ equity		176,501		411,102		(485,558	)	(1,234,007	)	4,869,720		330,009		(835,202	)	(67,884	)
Contract owners’ equity beginning of period		2,115,769		1,704,667		6,183,392		7,417,399		14,430,972		14,100,963		6,921,603		6,989,487

Contract owners’ equity end of period	$	2,292,270		2,115,769		5,697,834		6,183,392		19,300,692		14,430,972		6,086,401		6,921,603


CHANGES IN UNITS:
Beginning units		116,700		119,041		499,893		648,931		592,823		670,184		422,565		493,259

Units purchased		66,387		65,666		87,626		175,263		100,384		100,664		43,884		51,927
Units redeemed		(71,378	)	(68,007	)	(142,709	)	(324,301	)	(142,203	)	(178,025	)	(89,583	)	(122,621	)

Ending units		111,709		116,700		444,810		499,893		551,004		592,823		376,866		422,565

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		DryStkIx				DryVApp				DryVDevLd				DryVQualBd
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	284,188		262,945		28,227		29,569		(304,378	)	(605,783	)	340,440		319,007
Realized gain (loss) on investments		2,257,387		1,199,293		362,520		274,097		177,785		1,116,275		(104,909	)	(94,922	)
Change in unrealized gain (loss) on investments		187,977		7,510,045		118,160		979,696		(15,241,675	)	(5,015,020	)	(22,252	)	62,106
Reinvested capital gains		–		–		–		–		8,217,467		6,063,791		–		–

Net increase (decrease) in contract owners’ equity resulting from operations		2,729,552		8,972,283		508,907		1,283,362		(7,150,801	)	1,559,263		213,279		286,191


Equity transactions:
Purchase payments received from contract owners		2,834,712		3,382,474		440,514		628,849		2,558,626		3,298,923		411,446		596,602
Transfers between funds (including fixed account), net (note 3)		(2,778,366	)	(3,214,484	)	260,391		(461,301	)	(3,763,637	)	(3,065,896	)	(744,463	)	1,051,688
Redemptions		(9,014,000	)	(9,395,490	)	(1,247,950	)	(1,703,257	)	(8,505,536	)	(9,639,381	)	(1,701,829	)	(1,477,436	)
Annuity benefits		–		–		–		–		–		–		–		–
Annual contract maintenance charges (note 2)		(103,383	)	(113,938	)	(13,019	)	(14,739	)	(114,231	)	(139,455	)	(13,411	)	(14,369	)
Contingent deferred sales charges (note 2)		(25,830	)	(33,693	)	(5,478	)	(7,106	)	(26,292	)	(39,027	)	(4,325	)	(5,019	)
Adjustments to maintain reserves		(3,537	)	(91	)	(21	)	904		7,065		2,871		(701	)	218

Net equity transactions		(9,090,404	)	(9,375,222	)	(565,563	)	(1,556,650	)	(9,844,005	)	(9,581,965	)	(2,053,283	)	151,684


Net change in contract owners’ equity		(6,360,852	)	(402,939	)	(56,656	)	(273,288	)	(16,994,806	)	(8,022,702	)	(1,840,004	)	437,875
Contract owners’ equity beginning of period		69,136,170		69,539,109		9,153,308		9,426,596		67,660,440		75,683,142		9,974,084		9,536,209

Contract owners’ equity end of period	$	62,775,318		69,136,170		9,096,652		9,153,308		50,665,634		67,660,440		8,134,080		9,974,084


CHANGES IN UNITS:
Beginning units		2,160,533		2,477,379		596,307		706,112		2,630,656		3,014,064		621,438		611,295

Units purchased		144,924		166,733		94,638		94,537		152,540		180,675		123,660		160,843
Units redeemed		(416,893	)	(483,579	)	(130,461	)	(204,342	)	(539,363	)	(564,083	)	(249,118	)	(150,700	)

Ending units		1,888,564		2,160,533		560,484		596,307		2,243,833		2,630,656		495,980		621,438

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		FidVIPEI				FidVIPHI				FidVIPConS2				FrVIPForSec
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	412,215		1,796,794		1,069,203		1,037,313		(13,553	)	3,252		292,943		52,635
Realized gain (loss) on investments		1,964,545		1,507,279		(111,325	)	(141,811	)	23,000		4,189		1,971,100		1,336,782
Change in unrealized gain (loss) on investments		(8,587,827	)	1,243,723		(707,506	)	670,401		(663,794	)	(16,323	)	620,405		4,405,607
Reinvested capital gains		6,824,225		10,462,439		–		–		1,241,253		168,222		1,455,952		–

Net increase (decrease) in contract owners’ equity resulting from operations		613,158		15,010,235		250,372		1,565,903		586,906		159,340		4,340,400		5,795,024


Equity transactions:
Purchase payments received from contract owners		2,944,433		3,608,201		705,066		824,597		322,052		73,872		1,090,464		1,317,088
Transfers between funds (including fixed account), net (note 3)		(1,072,499	)	(1,806,374	)	(512,767	)	(462,613	)	2,177,641		2,304,950		(1,108,920	)	(685,646	)
Redemptions		(11,634,738	)	(13,274,939	)	(1,873,276	)	(2,358,631	)	(578,942	)	(135,519	)	(4,675,252	)	(4,756,622	)
Annuity benefits		(3,430	)	(3,079	)	–		–		–		–		–		–
Annual contract maintenance charges (note 2)		(126,849	)	(134,201	)	(29,162	)	(32,365	)	(4,602	)	(1,181	)	(48,034	)	(49,796	)
Contingent deferred sales charges (note 2)		(31,213	)	(36,047	)	(4,186	)	(10,958	)	(785	)	(164	)	(10,302	)	(17,460	)
Adjustments to maintain reserves		120		(6,849	)	(110	)	(5,466	)	(1,519	)	300		(1,719	)	10,943

Net equity transactions		(9,924,176	)	(11,653,288	)	(1,714,435	)	(2,045,436	)	1,913,845		2,242,258		(4,753,763	)	(4,181,493	)


Net change in contract owners’ equity		(9,311,018	)	3,356,947		(1,464,063	)	(479,533	)	2,500,751		2,401,598		(413,363	)	1,613,531
Contract owners’ equity beginning of period		90,189,821		86,832,874		16,617,862		17,097,395		2,401,598		–		32,595,352		30,981,821

Contract owners’ equity end of period	$	80,878,803		90,189,821		15,153,799		16,617,862		4,902,349		2,401,598		32,181,989		32,595,352


CHANGES IN UNITS:
Beginning units		2,626,831		3,000,073		1,040,565		1,175,080		218,327		–		1,220,801		1,394,319

Units purchased		169,678		194,562		67,105		75,282		295,115		248,478		64,165		93,273
Units redeemed		(445,596	)	(567,804	)	(172,253	)	(209,797	)	(128,367	)	(30,151	)	(230,164	)	(266,791	)

Ending units		2,350,913		2,626,831		935,417		1,040,565		385,075		218,327		1,054,802		1,220,801

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		JAspIntGro				NVITFHiInc				NVITGvtBd				NVITGrowth
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	(160,297	)	146,537		72,322		80,417		1,056,986		1,052,957		(82,474	)	(96,816	)
Realized gain (loss) on investments		2,712,817		1,397,092		(12,699	)	(1,605	)	42,065		(14,929	)	553,495		(112,352	)
Change in unrealized gain (loss) on investments		3,335,740		5,839,759		(38,165	)	37,274		793,451		(651,150	)	722,023		539,871
Reinvested capital gains		–		–		–		–		–		297,325		–		–

Net increase (decrease) in contract owners’ equity resulting from operations		5,888,260		7,383,388		21,458		116,086		1,892,502		684,203		1,193,044		330,703


Equity transactions:
Purchase payments received from contract owners		816,295		885,645		52,323		79,508		790,655		1,003,828		92,709		158,238
Transfers between funds (including fixed account), net (note 3)		(67,809	)	1,144,922		7,759		(204,279	)	883,298		(1,071,611	)	(91,609	)	(231,398	)
Redemptions		(2,886,965	)	(2,427,884	)	(225,596	)	(223,248	)	(4,678,467	)	(7,132,007	)	(1,576,369	)	(1,444,655	)
Annuity benefits		–		–		–		–		(1,459	)	(1,524	)	(2,968	)	(2,703	)
Annual contract maintenance charges (note 2)		(30,659	)	(27,095	)	(1,524	)	(1,839	)	(48,963	)	(58,535	)	(12,133	)	(14,380	)
Contingent deferred sales charges (note 2)		(6,965	)	(11,153	)	(510	)	(1,610	)	(6,653	)	(18,312	)	(4,187	)	(4,788	)
Adjustments to maintain reserves		209		(386	)	251		(246	)	231		181		(110	)	8

Net equity transactions		(2,175,894	)	(435,951	)	(167,297	)	(351,714	)	(3,061,358	)	(7,277,980	)	(1,594,667	)	(1,539,678	)


Net change in contract owners’ equity		3,712,366		6,947,437		(145,839	)	(235,628	)	(1,168,856	)	(6,593,777	)	(401,623	)	(1,208,975	)
Contract owners’ equity beginning of period		23,504,625		16,557,188		1,242,064		1,477,692		35,702,788		42,296,565		7,228,330		8,437,305

Contract owners’ equity end of period	$	27,216,991		23,504,625		1,096,225		1,242,064		34,533,932		35,702,788		6,826,707		7,228,330


CHANGES IN UNITS:
Beginning units		829,381		847,784		83,360		108,256		769,710		930,129		410,944		502,626

Units purchased		138,160		194,324		23,844		23,982		77,997		56,098		30,089		25,844
Units redeemed		(209,195	)	(212,727	)	(34,941	)	(48,878	)	(143,723	)	(216,517	)	(112,029	)	(117,526	)

Ending units		758,346		829,381		72,263		83,360		703,984		769,710		329,004		410,944

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		NVITMyMkt				NVITNWFund				NBTBal				NBTAPart
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	447,618		404,028		(351,189	)	(311,612	)	(25,593	)	(88,865	)	(1,260	)	164
Realized gain (loss) on investments		–		–		4,686,040		2,650,153		669,243		346,297		(1,035	)	(88	)
Change in unrealized gain (loss) on investments		–		–		(1,580,170	)	13,812,126		1,726,704		1,334,325		(8,298	)	1,744
Reinvested capital gains		–		–		6,417,152		–		–		–		30,622		9,197

Net increase (decrease) in contract owners’ equity resulting from operations		447,618		404,028		9,171,833		16,150,667		2,370,354		1,591,757		20,029		11,017


Equity transactions:
Purchase payments received from contract owners		810,707		508,680		2,245,106		3,299,677		480,463		502,940		18,570		7,523
Transfers between funds (including fixed account), net (note 3)		3,244,824		2,068,053		(3,475,908	)	(2,038,295	)	(200,667	)	80,830		181,293		98,340
Redemptions		(3,979,310	)	(2,820,239	)	(20,549,271	)	(24,334,156	)	(2,593,981	)	(2,531,157	)	(54,033	)	(2,410	)
Annuity benefits		(13,089	)	(10,431	)	(58,062	)	(58,083	)	(216	)	(205	)	–		–
Annual contract maintenance charges (note 2)		(17,833	)	(18,605	)	(189,441	)	(210,809	)	(28,246	)	(30,549	)	(294	)	(43	)
Contingent deferred sales charges (note 2)		(3,619	)	(2,677	)	(39,080	)	(50,463	)	(4,202	)	(5,256	)	(51	)	–
Adjustments to maintain reserves		(11,984	)	1,038		(47,690	)	(7,501	)	(1,913	)	3,323		47		33

Net equity transactions		29,696		(274,181	)	(22,114,346	)	(23,399,630	)	(2,348,762	)	(1,980,074	)	145,532		103,443


Net change in contract owners’ equity		477,314		129,847		(12,942,513	)	(7,248,963	)	21,592		(388,317	)	165,561		114,460
Contract owners’ equity beginning of period		13,037,281		12,907,434		139,738,273		146,987,236		17,705,198		18,093,515		114,460		–

Contract owners’ equity end of period	$	13,514,595		13,037,281		126,795,760		139,738,273		17,726,790		17,705,198		280,021		114,460


CHANGES IN UNITS:
Beginning units		512,094		521,956		1,290,474		1,522,109		688,370		768,558		10,058		–

Units purchased		329,705		244,745		38,278		48,799		39,392		51,674		21,664		10,284
Units redeemed		(330,084	)	(254,607	)	(231,541	)	(280,434	)	(123,616	)	(131,862	)	(8,919	)	(226	)

Ending units		511,715		512,094		1,097,211		1,290,474		604,146		688,370		22,803		10,058

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		PVITRealRet				PVITTotRet				RCFMicroCap				SBLGlob
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	19,336		9,246		23,459		3,669		6,671		(596	)	(10,911	)	(2,084	)
Realized gain (loss) on investments		(10,930	)	1,466		3,525		601		18,115		1,475		67,400		5,792
Change in unrealized gain (loss) on investments		32,262		(16,371	)	24,896		1,054		(139,147	)	10,111		9,097		47,852
Reinvested capital gains		–		14,795		1,400		1,514		107,444		20,930		–		–

Net increase (decrease) in contract owners’ equity resulting from operations		40,668		9,136		53,280		6,838		(6,917	)	31,920		65,586		51,560


Equity transactions:
Purchase payments received from contract owners		39,265		22,944		35,734		10,770		90,252		19,465		94,668		22,851
Transfers between funds (including fixed account), net (note 3)		(72,478	)	535,568		445,667		337,758		803,518		418,210		318,250		563,485
Redemptions		(125,546	)	(69,625	)	(51,262	)	(10,222	)	(82,987	)	(21,544	)	(115,145	)	(34,589	)
Annuity benefits		–		–		–		–		–		–		–		–
Annual contract maintenance charges (note 2)		(661	)	(319	)	(647	)	(89	)	(915	)	(129	)	(893	)	(196	)
Contingent deferred sales charges (note 2)		(27	)	(12	)	(15	)	(1	)	(67	)	–		(106	)	(1	)
Adjustments to maintain reserves		6,535		(46	)	(1,287	)	(73	)	378		99		(421	)	78

Net equity transactions		(152,912	)	488,510		428,190		338,143		810,179		416,101		296,353		551,628


Net change in contract owners’ equity		(112,244	)	497,646		481,470		344,981		803,262		448,021		361,939		603,188
Contract owners’ equity beginning of period		497,646		–		344,981		–		448,021		–		603,188		–

Contract owners’ equity end of period	$	385,402		497,646		826,451		344,981		1,251,283		448,021		965,127		603,188


CHANGES IN UNITS:
Beginning units		49,126		–		33,396		–		40,766		–		51,999		–

Units purchased		65,345		85,011		69,810		39,513		97,789		43,597		71,999		58,873
Units redeemed		(79,656	)	(35,885	)	(28,688	)	(6,117	)	(27,628	)	(2,831	)	(46,540	)	(6,874	)

Ending units		34,815		49,126		74,518		33,396		110,927		40,766		77,458		51,999

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		SBLMidCapGr				SBLAsAlloc				SBLEqInc				SBLHighYld
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	(3,060	)	(671	)	(6,457	)	(3,563	)	(19,560	)	(2,972	)	(9,214	)	(3,280	)
Realized gain (loss) on investments		1,157		423		34,596		40,814		102,083		4,558		38,798		3,187
Change in unrealized gain (loss) on investments		(30,569	)	6,937		(6,008	)	20,289		(58,223	)	61,096		(25,794	)	32,299
Reinvested capital gains		–		–		–		–		–		–		–		–

Net increase (decrease) in contract owners’ equity resulting from operations		(32,472	)	6,689		22,131		57,540		24,300		62,682		3,790		32,206


Equity transactions:
Purchase payments received from contract owners		19,166		4,497		36,753		19,471		124,212		14,546		38,823		16,651
Transfers between funds (including fixed account), net (note 3)		131,150		165,184		456,344		254,529		425,396		949,541		181,002		657,059
Redemptions		(18,813	)	(9,245	)	(50,075	)	(49,480	)	(164,030	)	(29,770	)	(187,028	)	(45,103	)
Annuity benefits		–		–		–		–		–		–		–		–
Annual contract maintenance charges (note 2)		(292	)	(74	)	(483	)	(266	)	(1,690	)	(314	)	(817	)	(321	)
Contingent deferred sales charges (note 2)		–		–		(3	)	(5	)	(106	)	(10	)	(101	)	(13	)
Adjustments to maintain reserves		(181	)	81		6,678		115		343		(134	)	(15	)	104

Net equity transactions		131,030		160,443		449,214		224,364		384,125		933,859		31,864		628,377


Net change in contract owners’ equity		98,558		167,132		471,345		281,904		408,425		996,541		35,654		660,583
Contract owners’ equity beginning of period		167,132		–		281,904		–		996,541		–		660,583		–

Contract owners’ equity end of period	$	265,690		167,132		753,249		281,904		1,404,966		996,541		696,237		660,583


CHANGES IN UNITS:
Beginning units		16,258		–		25,651		–		87,799		–		62,437		–

Units purchased		21,933		17,956		88,589		100,076		114,214		97,599		62,346		77,979
Units redeemed		(8,930	)	(1,698	)	(48,797	)	(74,425	)	(80,056	)	(9,800	)	(59,470	)	(15,542	)

Ending units		29,261		16,258		65,443		25,651		121,957		87,799		65,313		62,437

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		SBLSmCapVal				SBLMidCapVal				SBLSmCapGr				SBLSel25
Investment activity:		2007		2006		2007		2006		2007		2006		2007		2006
Net investment income (loss)	$	(10,131	)	(1,351	)	(35,372	)	(6,529	)	(2,588	)	(377	)	(276	)	(127	)
Realized gain (loss) on investments		20,070		1,496		91,018		5,562		4,083		794		597		494
Change in unrealized gain (loss) on investments		23,649		18,877		(70,857	)	94,256		4,303		6,355		(1,672	)	1,223
Reinvested capital gains		–		–		–		–		–		–		–		–

Net increase (decrease) in contract owners’ equity resulting from operations		33,588		19,022		(15,211	)	93,289		5,798		6,772		(1,351	)	1,590


Equity transactions:
Purchase payments received from contract owners		78,176		28,294		268,545		90,004		17,768		1,871		3,160		1,440
Transfers between funds (including fixed account), net (note 3)		696,607		334,186		1,873,153		1,830,675		139,085		95,636		1,575		26,830
Redemptions		(80,472	)	(19,709	)	(383,812	)	(136,070	)	(17,428	)	(2,789	)	(5,360	)	(8,890	)
Annuity benefits		–		–		–		–		–		–		–		–
Annual contract maintenance charges (note 2)		(813	)	(122	)	(3,112	)	(729	)	(222	)	(27	)	(21	)	(11	)
Contingent deferred sales charges (note 2)		(19	)	(2	)	(402	)	(134	)	–		(2	)	(71	)	–
Adjustments to maintain reserves		254		39		844		(205	)	(63	)	41		(21	)	8

Net equity transactions		693,733		342,686		1,755,216		1,783,541		139,140		94,730		(738	)	19,377


Net change in contract owners’ equity		727,321		361,708		1,740,005		1,876,830		144,938		101,502		(2,089	)	20,967
Contract owners’ equity beginning of period		361,708		–		1,876,830		–		101,502		–		20,967		–

Contract owners’ equity end of period	$	1,089,029		361,708		3,616,835		1,876,830		246,440		101,502		18,878		20,967


CHANGES IN UNITS:
Beginning units		33,616		–		175,077		–		9,845		–		1,936		–

Units purchased		93,879		38,988		267,295		200,474		19,160		12,198		460		3,630
Units redeemed		(34,496	)	(5,372	)	(106,859	)	(25,397	)	(6,059	)	(2,353	)	(512	)	(1,694	)

Ending units		92,999		33,616		335,513		175,077		22,946		9,845		1,884		1,936

(Continued)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006


		DrySRGro				WFVOpp
Investment activity:		2007		2006		2007		2006
Net investment income (loss)	$	(169,211	)	(276,903	)	(230,020	)	(452,750	)
Realized gain (loss) on investments		332,761		(59,192	)	407,571		413,268
Change in unrealized gain (loss) on investments		1,313,629		2,093,482		(3,186,580	)	(241,641	)
Reinvested capital gains		–		–		4,901,329		3,928,495

Net increase (decrease) in contract owners’ equity resulting from operations		1,477,179		1,757,387		1,892,300		3,647,372


Equity transactions:
Purchase payments received from contract owners		1,084,698		1,362,033		1,368,658		1,767,428
Transfers between funds (including fixed account), net (note 3)		(1,107,451	)	(1,331,127	)	(1,485,339	)	(1,872,052	)
Redemptions		(2,860,984	)	(3,300,539	)	(4,770,831	)	(5,687,873	)
Annuity benefits		–		–		–		–
Annual contract maintenance charges (note 2)		(44,526	)	(49,827	)	(52,973	)	(58,442	)
Contingent deferred sales charges (note 2)		(10,804	)	(15,149	)	(13,867	)	(19,480	)
Adjustments to maintain reserves		(421	)	(118	)	3,835		(3,224	)

Net equity transactions		(2,939,488	)	(3,334,727	)	(4,950,517	)	(5,873,643	)


Net change in contract owners’ equity		(1,462,309	)	(1,577,340	)	(3,058,217	)	(2,226,271	)
Contract owners’ equity beginning of period		23,809,612		25,386,952		35,175,040		37,401,311

Contract owners’ equity end of period	$	22,347,303		23,809,612		32,116,823		35,175,040


CHANGES IN UNITS:
Beginning units		1,061,979		1,220,524		1,161,657		1,368,006

Units purchased		70,925		105,587		78,946		96,170
Units redeemed		(195,912	)	(264,132	)	(232,859	)	(302,519	)

Ending units		936,992		1,061,979		1,007,744		1,161,657

See accompanying notes to financial statements.

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

NOTES TO FINANCIAL STATEMENTS

December 31, 2007 and 2006

(1)

Background and Summary of Significant Accounting Policies

(a)

Organization and Nature of Operations

The Nationwide Multi-Flex Variable Account (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on October 7, 1981. 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 distributions for the contracts is through Company agents and an affiliated sales organization; however, other distributors may be utilized.

Effective July 1, 2000, the Company entered into a reinsurance agreement with Security Benefit Life Insurance Company (SBL) to sell, transfer and cede on an indemnity basis all of its obligations in connection with annuity contracts issued pursuant to the NEA Valuebuilder Annuity program (Program). Under the agreement, the Company continued to provide administrative and support services for contracts issued under the Program until September 2001. Thereafter, SBL assumed full responsibility for servicing the contracts and receives all fees and charges of the contracts. The Company is paid a Supplemental Capital Charge by SBL to meet the capital needs of the reinsured contracts. The ceding of risk does not discharge the Company from its primary obligation, including regulatory record keeping and reporting, to the contract owners of the Account.

(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 any of the following:

Portfolios of the AIM Variable Insurance Funds (AIM VIF);

AIM VIF – Capital Appreciation Fund – Series I (AIMCapAp)

AIM VIF – Global Health Care Fund – Series I (AIMGlobHlth)

AIM VIF – Global Real Estate Fund – Series I (AIMGlobRE)

AIM VIF – International Growth Fund – Series I (AIMIntGr)

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

American Century VP – Balanced Fund – Class I (ACVPBal)

American Century VP – Capital Appreciation Fund – Class I (ACVPCapAp)

American Century VP – Income & Growth Fund – Class I (ACVPIncGr)

Dreyfus Stock Index Fund, Inc. – Initial Shares (DryStkIx)

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

Dreyfus VIF – Appreciation Portfolio – Initial Shares (DryVApp)

Dreyfus VIF – Developing Leaders Portfolio – Initial Shares (DryVDevLd)

Dreyfus VIF – Quality Bond Portfolio – Initial Shares (DryVQualBd)

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

Fidelity^® VIP – Equity-Income Portfolio – Initial Class (FidVIPEI)

Fidelity^®VIP – High Income Portfolio – Initial Class (FidVIPHI)

Portfolio of the Fidelity^®Variable Insurance Products Fund II (Fidelity^®VIP II);

Fidelity^®VIP II – Contrafund^®Portfolio – Service Class 2 (FidVIPConS2)

Portfolio of the Franklin Templeton Variable Insurance Products Trust (Franklin Templeton VIP);

Franklin Templeton VIP – Foreign Securities Fund – Class 1 (FrVIPForSec)

(Continued)

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

Janus Aspen Series – International Growth Portfolio – Institutional Shares (JAspIntGro)

Portfolios of the Nationwide Variable Insurance Trust (Nationwide VIT)(formerly Gartmore GVIT);

Nationwide VIT – Federated High Income Bond Fund – Class I (NVITFHiInc)

Nationwide VIT – Government Bond Fund – Class I (NVITGvtBd)

Nationwide VIT – Growth Fund – Class I (NVITGrowth)

Nationwide VIT – Money Market Fund – Class I (NVITMyMkt)

Nationwide VIT – Nationwide Fund – Class I (NVITNWFund)

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

Neuberger Berman AMT – Balanced Portfolio – I Class Shares (NBTBal)

Neuberger Berman AMT – Partners Portfolio – Class I (NBTAPart)

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

PIMCO VIT – Real Return Portfolio – Administrative Shares (PVITRealRet)

PIMCO VIT – Total Return Portfolio – Administrative Shares (PVITTotRet)

Royce Capital Fund – Micro-Cap Portfolio (RCFMicroCap)

SBL Fund – Series D (Global Series) (SBLGlob)

SBL Fund – Series J (Mid Cap Growth Series) (SBLMidCapGr)

SBL Fund – Series N (Managed Asset Allocation Series) (SBLAsAlloc)

SBL Fund – Series O (Equity Income Series) (SBLEqInc)

SBL Fund – Series P (High Yield Series) (SBLHighYld)

SBL Fund – Series Q (Small Cap Value Series) (SBLSmCapVal)

SBL Fund – Series V (Mid Cap Value Series) (SBLMidCapVal)

SBL Fund – Series X (Small Cap Growth Series) (SBLSmCapGr)

SBL Fund – Series Y (Select 25 Series) (SBLSel25)

The Dreyfus Socially Responsible Growth Fund, Inc. – Initial Shares (DrySRGro)

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

Wells Fargo AVT – Opportunity Fund^SM (WFVOpp)

At December 31, 2007, contract owners were invested in all of the above funds. 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)

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT (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, 2007 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 (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.

(f)

Calculation of Annuity Reserves

Annuity reserves are computed for contracts in the variable payout stage according to industry standard mortality tables. The assumed investment return is 3.5% unless the annuitant elects otherwise, in which case the rate may vary from 3.5% to 7%, as regulated by the laws of the respective states. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the Account by the Company to cover greater longevity of annuitants than expected. Conversely, if reserves exceed amounts required, transfers may be made to the Company.

(g)

New Accounting Pronouncement

In September 2006, the FASB issued SFAS 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 will adopt SFAS 157 effective January 1, 2008. SFAS 157 is not expected to have a material impact on the Company’s financial position or results of operations upon adoption.

(Continued)

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

(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 surrendered, the Company will, with certain exceptions, deduct from a contract owners’ contract value a contingent deferred sales charge. For contracts issued prior to February 1, 1989, the contingent deferred sales charge will be equal to 5% of the lesser of the total of all purchase payments or the amount surrendered. For contracts issued on or after February 1, 1989, the Company will deduct a contingent deferred sales charge not to exceed 7% of purchase payments surrendered. This charge declines 1% per year. For both contracts, 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.

The following contract charges are deducted by the Company: (a) an annual contract maintenance charge of up to $30, dependent upon contract type and issue date, which is satisfied by surrendering units; and (b) a mortality and expense risk charge and an administration charge assessed through the daily unit value calculation equal to an annualized rate of 1.25% and 0.05%, respectively; for NEA Valuebuilder Annuity contracts issued before November 3, 1997, or in states which have not approved the applicable contract modifications, a mortality and expense risk charge and an administrative charge assessed through the daily unit value calculation equal to an annualized rate of 1.25% and .05%, respectively; for NEA Valuebuilder Annuity contracts issued on or after the later of November 3, 1997, or the date on which state insurance authorities approve corresponding contract modifications, an actuarial risk charge assessed through the daily unit value calculation equal to an annualized rate of 1.30%.

(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, 2007 and 2006, total transfers to the Account from the fixed account were $408,826 and $495,817, respectively, and total transfers from the Account to the fixed account were $1,160,974 and $1,336,844, respectively. Transfers from the Account to the fixed account, and transfers to the Account from the fixed account are included in transfers between funds (including fixed account), net, on the accompanying Statements of Changes in Contract Owners’ Equity.

For guaranteed minimum death benefits, the Company contributed $0 and $736 to the Account in the form of additional premium to contract owner accounts for the years ended December 31, 2007 and 2006, respectively. These amounts are included in purchase payments received from contract owners and are credited at time of annuitant death.

(Continued)

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

(4)

Financial Highlights

The following 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, 2007. The Account includes contracts administered by Security Benefit Life Insurance Company under a reinsurance agreement discussed in note 1. The mutual fund and product options of the contracts so administered are identified by those unit fair values presented below using two decimal places.


	Contract Expense Rate*	Units	Unit Fair Value			Contract Owners’ Equity		Investment Income Ratio**	Total Return***

AIM VIF – Capital Appreciation Fund – Series I
2007	1.30%	4,791		$	13.303730	$	63,738	0.00%	10.55%
	1.30%	235,322			13.30		3,129,783	0.00%	10.55%
2006	1.30%	5,425			12.034161		65,285	0.05%	4.92%
	1.30%	272,168			12.03		3,274,181	0.05%	4.92%
2005	1.30%	6,623			11.469653		75,964	0.06%	7.43%
	1.30%	324,460			11.47		3,721,556	0.06%	7.43%
2004	1.30%	4,575			10.676868		48,847	0.00%	5.24%
	1.30%	373,290			10.68		3,985,480	0.00%	5.24%
2003	1.30%	8,472			10.145261		85,951	0.00%	27.84%
	1.30%	440,589			10.15		4,471,978	0.00%	27.84%

AIM VIF – Global Health Care Fund – Series I
2007	1.30%	1,790			11.786725		21,098	0.00%	10.39%
	1.30%	28,982			11.73		339,959	0.00%	10.39%
2006	1.30%	9,171			10.63		97,488	0.00%	6.30%	06/08/06

AIM VIF – Global Real Estate Fund – Series I
2007	1.30%	103			11.888124		1,224	8.52%	-6.77%
	1.30%	103,762			11.97		1,242,031	8.52%	-6.77%
2006	1.30%	97			12.751928		1,237	1.82%	27.52%	06/09/06
	1.30%	43,371			12.84		556,884	1.82%	28.40%	06/08/06

AIM VIF – International Growth Fund – Series I
2007	1.30%	848			20.521458		17,402	0.43%	13.22%
	1.30%	110,861			20.52		2,274,868	0.43%	13.22%
2006	1.30%	588			18.125204		10,658	1.00%	26.57%
	1.30%	116,112			18.13		2,105,111	1.00%	26.57%
2005	1.30%	475			14.320119		6,802	0.75%	16.40%
	1.30%	118,566			14.32		1,697,865	0.75%	16.40%
2004	1.30%	420			12.302542		5,167	0.73%	22.39%
	1.30%	77,644			12.30		955,224	0.73%	22.39%
2003	1.30%	589			10.051603		5,920	0.53%	27.39%
	1.30%	57,869			10.05		581,583	0.53%	27.39%

American Century VP – Balanced Fund – Class I
2007	1.30%	129,830			12.808596		1,662,940	2.14%	3.56%
	1.30%	314,980			12.81		4,034,894	2.14%	3.56%
2006	1.30%	140,798			12.367801		1,741,361	2.08%	8.20%
	1.30%	359,095			12.37		4,442,005	2.08%	8.20%
2005	1.30%	172,160			11.430683		1,967,906	1.71%	3.57%
	1.30%	476,771			11.43		5,449,493	1.71%	3.57%
2004	1.30%	212,190			11.036175		2,341,766	1.60%	8.35%
	1.30%	410,602			11.04		4,531,541	1.60%	8.35%
2003	1.30%	207,081			10.185550		2,109,234	2.44%	17.91%
	1.30%	397,687			10.19		4,052,431	2.44%	17.91%

(Continued)

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


	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***

American Century VP – Capital Appreciation Fund – Class I
2007	1.30%	211,010	$	35.001098	$	7,385,582	0.00%	43.90%
	1.30%	339,994		35.00		11,899,790	0.00%	43.90%
2006	1.30%	233,127		24.323239		5,670,404	0.00%	15.70%
	1.30%	359,696		24.32		8,747,807	0.00%	15.70%
2005	1.30%	262,293		21.022816		5,514,137	0.00%	20.48%
	1.30%	407,891		21.02		8,573,869	0.00%	20.48%
2004	1.30%	333,321		17.448933		5,816,096	0.00%	6.19%
	1.30%	436,634		17.45		7,618,830	0.00%	6.19%
2003	1.30%	364,951		16.432489		5,997,053	0.00%	18.91%
	1.30%	482,328		16.43		7,924,649	0.00%	18.91%

American Century VP – Income & Growth Fund – Class I
2007	1.30%	5,220		16.152841		84,318	1.93%	-1.37%
	1.30%	371,646		16.15		6,002,083	1.93%	-1.37%
2006	1.30%	5,352		16.377810		87,654	1.86%	15.57%
	1.30%	417,213		16.38		6,833,949	1.86%	15.57%
2005	1.30%	5,345		14.171369		75,746	2.05%	3.27%
	1.30%	487,914		14.17		6,913,741	2.05%	3.27%
2004	1.30%	5,602		13.722025		76,871	1.41%	11.52%
	1.30%	563,471		13.72		7,731,662	1.41%	11.52%
2003	1.30%	5,818		12.304086		71,585	1.24%	27.67%
	1.30%	573,968		12.30		7,059,806	1.24%	27.67%

Dreyfus Stock Index Fund, Inc. – Initial Shares
2007	1.30%	163,342		33.236639		5,428,939	1.72%	3.88%
	1.30%	1,725,222		33.24		57,346,379	1.72%	3.88%
2006	1.30%	190,451		31.995347		6,093,546	1.63%	14.00%
	1.30%	1,970,082		32.00		63,042,624	1.63%	14.00%
2005	1.30%	225,414		28.065915		6,326,451	1.57%	3.33%
	1.30%	2,251,965		28.07		63,212,658	1.57%	3.33%
2004	1.30%	284,122		27.160283		7,716,834	1.76%	9.20%
	1.30%	2,504,458		27.16		68,022,077	1.76%	9.20%
2003	1.30%	358,961		24.871495		8,927,897	1.45%	26.70%
	1.30%	2,643,224		24.87		65,736,981	1.45%	26.70%

Dreyfus VIF – Appreciation Portfolio – Initial Shares
2007	1.30%	2,133		16.228100		34,615	1.54%	5.73%
	1.30%	558,351		16.23		9,062,037	1.54%	5.73%
2006	1.30%	2,155		15.348290		33,075	1.56%	14.97%
	1.30%	594,152		15.35		9,120,233	1.56%	14.97%
2005	1.30%	4,469		13.350131		59,662	0.02%	3.02%
	1.30%	701,643		13.35		9,366,934	0.02%	3.02%
2004	1.30%	6,659		12.958165		86,288	1.65%	3.68%
	1.30%	799,651		12.96		10,361,822	1.65%	3.68%
2003	1.30%	5,296		12.498159		66,190	1.41%	19.60%
	1.30%	833,474		12.50		10,418,425	1.41%	19.60%

Dreyfus VIF – Developing Leaders Portfolio – Initial Shares
2007	1.30%	23,910		22.575208		539,773	0.79%	-12.22%
	1.30%	2,219,923		22.58		50,125,861	0.79%	-12.22%
2006	1.30%	23,604		25.718654		607,063	0.41%	2.42%
	1.30%	2,607,052		25.72		67,053,377	0.41%	2.42%
2005	1.30%	27,397		25.109832		687,934	0.00%	4.43%
	1.30%	2,986,667		25.11		74,995,208	0.00%	4.43%
2004	1.30%	28,484		24.044779		684,891	0.19%	9.89%
	1.30%	3,399,091		24.04		81,730,521	0.19%	9.89%
2003	1.30%	31,860		21.880107		697,100	0.03%	29.98%
	1.30%	3,653,746		21.88		79,943,962	0.03%	29.98%

(Continued)

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


	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***

Dreyfus VIF – Quality Bond Portfolio – Initial Shares
2007	1.30%	3,519	$	16.402300	$	57,720	5.09%	2.19%
	1.30%	492,461		16.40		8,076,360	5.09%	2.19%
2006	1.30%	4,082		16.050943		65,520	4.51%	2.88%
	1.30%	617,356		16.05		9,908,564	4.51%	2.88%
2005	1.30%	4,534		15.601357		70,737	3.58%	1.15%
	1.30%	606,761		15.60		9,465,472	3.58%	1.15%
2004	1.30%	5,783		15.423994		89,197	4.01%	2.02%
	1.30%	639,652		15.42		9,865,893	4.01%	2.02%
2003	1.30%	5,065		15.117949		76,572	4.04%	3.58%
	1.30%	711,940		15.12		10,764,533	4.04%	3.58%

Fidelity^®VIP – Equity-Income Portfolio – Initial Class
2007	1.30%	321,446		34.399609		11,057,617	1.81%	0.20%
	1.30%	2,029,467		34.40		69,813,665	1.81%	0.20%
2006	1.30%	357,186		34.329754		12,262,108	3.28%	18.64%
	1.30%	2,269,645		34.33		77,916,913	3.28%	18.64%
2005	1.30%	417,174		28.937089		12,071,801	1.64%	4.49%
	1.30%	2,582,899		28.94		74,749,097	1.64%	4.49%
2004	1.30%	467,815		27.692797		12,955,106	1.52%	10.08%
	1.30%	2,880,508		27.69		79,769,188	1.52%	10.08%
2003	1.30%	537,853		25.156955		13,530,744	1.72%	28.64%
	1.30%	3,054,169		25.16		76,842,892	1.72%	28.64%

Fidelity^®VIP – High Income Portfolio – Initial Class
2007	1.30%	11,645		16.203802		188,693	8.01%	1.44%
	1.30%	923,772		16.20		14,965,106	8.01%	1.44%
2006	1.30%	11,556		15.973333		184,588	7.40%	9.79%
	1.30%	1,029,009		15.97		16,433,274	7.40%	9.79%
2005	1.30%	11,336		14.548340		164,920	14.68%	1.37%
	1.30%	1,163,744		14.55		16,932,475	14.68%	1.37%
2004	1.30%	11,638		14.351788		167,026	8.16%	8.17%
	1.30%	1,303,796		14.35		18,711,955	8.16%	8.17%
2003	1.30%	11,371		13.267980		150,870	7.07%	25.61%
	1.30%	1,398,657		13.27		18,560,178	7.07%	25.61%

Fidelity^®VIP II – Contrafund^®Portfolio – Service Class 2
2007	1.30%	7,490		12.775920		95,692	1.00%	15.77%
	1.30%	377,585		12.73		4,806,657	1.00%	15.77%
2006	1.30%	28		11.035607		309	1.16%	10.36%	06/09/06
	1.30%	218,299		11.00		2,401,289	1.16%	10.00%	06/08/06

Franklin Templeton VIP – Foreign Securities Fund – Class 1
2007	1.30%	8,622		30.507646		263,037	2.17%	14.28%
	1.30%	1,046,180		30.51		31,918,952	2.17%	14.28%
2006	1.30%	10,216		26.696591		272,732	1.41%	20.12%
	1.30%	1,210,585		26.70		32,322,620	1.41%	20.12%
2005	1.30%	10,685		22.224937		237,474	1.28%	9.04%
	1.30%	1,383,634		22.22		30,744,347	1.28%	9.04%
2004	1.30%	12,755		20.381609		259,967	1.13%	17.33%
	1.30%	1,552,956		20.38		31,651,786	1.13%	17.33%
2003	1.30%	11,884		17.371469		206,443	1.79%	30.83%
	1.30%	1,647,097		17.37		28,610,075	1.79%	30.83%

Janus Aspen Series – International Growth Portfolio – Institutional Shares
2007	1.30%	11,348		35.885918		407,233	0.62%	26.64%
	1.30%	746,998		35.89		26,809,758	0.62%	26.64%
2006	1.30%	10,496		28.336913		297,424	1.99%	45.12%
	1.30%	818,885		28.34		23,207,201	1.99%	45.12%
2005	1.30%	10,659		19.526904		208,137	1.13%	30.58%
	1.30%	837,125		19.53		16,349,051	1.13%	30.58%
2004	1.30%	7,558		14.954107		113,023	0.88%	17.40%
	1.30%	904,311		14.95		13,523,531	0.88%	17.40%
2003	1.30%	9,453		12.737304		120,406	1.16%	33.16%
	1.30%	996,322		12.74		12,693,142	1.16%	33.16%

(Continued)

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


	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***

Nationwide VIT – Federated High Income Bond Fund – Class I
2007	1.30%	1,230	$	15.165895	$	18,654	7.49%	1.79%
	1.30%	71,033		15.17		1,077,571	7.49%	1.79%
2006	1.30%	1,231		14.899690		18,342	7.20%	9.17%
	1.30%	82,129		14.90		1,223,722	7.20%	9.17%
2005	1.30%	1,259		13.648215		17,183	7.87%	1.05%
	1.30%	106,997		13.65		1,460,509	7.87%	1.05%
2004	1.30%	1,273		13.505990		17,193	7.21%	8.67%
	1.30%	92,960		13.51		1,255,505	7.21%	8.67%
2003	1.30%	185		12.428955		2,299	7.81%	20.68%
	1.30%	81,206		12.43		1,009,391	7.81%	20.68%

Nationwide VIT – Government Bond Fund – Class I
Tax qualified
2007	1.30%	280,226		49.038674		13,741,911	4.27%	5.76%
	1.30%	289,290		49.04		14,186,782	4.27%	5.76%
2006	1.30%	304,367		46.37		14,113,498	3.96%	2.00%
	1.30%	316,072		46.368773		14,655,871	3.96%	2.00%
2005	1.30%	355,478		45.46		16,160,030	3.66%	1.92%
	1.30%	389,643		45.458911		17,712,746	3.66%	1.92%
2004	1.30%	390,334		44.60		17,409,051	5.45%	1.92%
	1.30%	440,719		44.600457		19,656,269	5.45%	1.92%
2003	1.30%	455,751		43.76		19,943,664	3.16%	0.67%
	1.30%	507,035		43.760351		22,188,030	3.16%	0.67%

Non-tax qualified
2007	1.30%	10,473		49.06		513,805	4.27%	5.76%
	1.30%	123,995		49.056784		6,082,796	4.27%	5.76%
2006	1.30%	11,152		46.39		517,341	3.96%	2.00%
	1.30%	138,119		46.385889		6,406,773	3.96%	2.00%
2005	1.30%	14,440		45.48		656,731	3.66%	1.92%
	1.30%	170,568		45.475702		7,756,700	3.66%	1.92%
2004	1.30%	16,561		44.62		738,948	5.45%	1.92%
	1.30%	186,649		44.616924		8,327,704	5.45%	1.92%
2003	1.30%	18,386		43.78		804,939	3.16%	0.67%
	1.30%	223,560		43.776516		9,786,678	3.16%	0.67%

Nationwide VIT – Growth Fund – Class I
2007	1.30%	5,363		20.72		111,121	0.17%	17.98%
	1.30%	323,641		20.724395		6,707,264	0.17%	17.98%
2006	1.30%	5,762		17.57		101,238	0.05%	4.79%
	1.30%	405,182		17.565687		7,117,301	0.05%	4.79%
2005	1.30%	8,925		16.76		149,583	0.08%	5.12%
	1.30%	493,701		16.762531		8,275,678	0.08%	5.12%
2004	1.30%	10,388		15.95		165,642	0.31%	6.75%
	1.30%	560,763		15.946096		8,941,980	0.31%	6.75%
2003	1.30%	8,993		14.94		134,355	0.02%	31.02%
	1.30%	623,995		14.937671		9,321,032	0.02%	31.02%

Nationwide VIT – Money Market Fund – Class I
Tax qualified
2007	1.30%	205,855		25.95		5,341,937	4.66%	3.42%
	1.30%	227,256		25.941461		5,895,353	4.66%	3.42%
2006	1.30%	177,042		25.09		4,441,984	4.38%	3.18%
	1.30%	266,444		25.082875		6,683,182	4.38%	3.18%
2005	1.30%	185,497		24.31		4,509,432	2.60%	1.34%
	1.30%	256,685		24.310982		6,240,264	2.60%	1.34%
2004	1.30%	199,857		24.02		4,801,048	0.78%	-0.50%
	1.30%	295,209		23.990230		7,082,132	0.78%	-0.50%
2003	1.30%	260,352		24.11		6,277,087	0.64%	-0.68%
	1.30%	324,361		24.110582		7,820,532	0.64%	-0.68%

(Continued)

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


	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***

Non-tax qualified
2007	1.30%	1,070	$	28.19	$	30,163	4.66%	3.42%
	1.30%	77,534		28.185866		2,185,363	4.66%	3.42%
2006	1.30%	2,617		27.26		71,339	4.38%	3.18%
	1.30%	65,991		27.252995		1,798,452	4.38%	3.18%
2005	1.30%	2,464		26.41		65,074	2.60%	1.34%
	1.30%	77,310		26.414319		2,042,091	2.60%	1.34%
2004	1.30%	2,425		26.07		63,210	0.78%	-0.50%
	1.30%	91,737		26.065818		2,391,200	0.78%	-0.50%
2003	1.30%	2,990		26.20		78,338	0.64%	-0.68%
	1.30%	131,274		26.196581		3,438,930	0.64%	-0.68%

Nationwide VIT – Nationwide Fund – Class I
Tax qualified
2007	1.30%	391,236		116.01		45,387,288	1.05%	6.77%
	1.30%	491,429		116.006751		57,009,082	1.05%	6.77%
2006	1.30%	447,327		108.65		48,602,079	1.05%	12.15%
	1.30%	590,790		108.653662		64,191,497	1.05%	12.15%
2005	1.30%	513,899		96.88		49,786,535	0.89%	6.05%
	1.30%	716,402		96.878249		69,403,771	0.89%	6.05%
2004	1.30%	581,247		91.35		53,098,368	1.24%	8.32%
	1.30%	824,356		91.352418		75,306,914	1.24%	8.32%
2003	1.30%	633,322		84.33		53,408,044	0.54%	25.86%
	1.30%	938,062		84.332018		79,108,661	0.54%	25.86%

Non-tax qualified
2007	1.30%	7,720		112.67		869,812	1.05%	6.77%
	1.30%	206,826		112.670062		23,303,098	1.05%	6.77%
2006	1.30%	9,133		105.53		963,805	1.05%	12.15%
	1.30%	243,224		105.528470		25,667,057	1.05%	12.15%
2005	1.30%	11,726		94.09		1,103,299	0.89%	6.05%
	1.30%	280,082		94.091731		26,353,400	0.89%	6.05%
2004	1.30%	13,863		88.72		1,229,912	1.24%	8.32%
	1.30%	327,664		88.724843		29,071,937	1.24%	8.32%
2003	1.30%	15,915		81.91		1,303,598	0.54%	25.86%
	1.30%	373,533		81.906372		30,594,733	0.54%	25.86%

Neuberger Berman AMT – Balanced Portfolio – I Class Shares
2007	1.30%	168,163		29.340225		4,933,940	1.15%	14.09%
	1.30%	435,983		29.34		12,791,741	1.15%	14.09%
2006	1.30%	195,611		25.716074		5,030,347	0.78%	9.23%
	1.30%	492,759		25.72		12,673,761	0.78%	9.23%
2005	1.30%	216,420		23.542486		5,095,065	0.92%	7.77%
	1.30%	552,138		23.54		12,997,329	0.92%	7.77%
2004	1.30%	268,004		21.845873		5,854,781	1.19%	7.89%
	1.30%	633,839		21.85		13,846,737	1.19%	7.89%
2003	1.30%	319,097		20.248421		6,461,210	1.72%	14.77%
	1.30%	702,000		20.25		14,215,500	1.72%	14.77%

Neuberger Berman AMT – Partners Portfolio – Class I
2007	1.30%	22,803		12.28		280,021	0.99%	7.91%
2006	1.30%	10,058		11.38		114,460	1.04%	13.80%	06/08/06

PIMCO VIT – Real Return Portfolio – Administrative Shares
2007	1.30%	34,815		11.07		385,402	6.00%	9.28%
2006	1.30%	49,126		10.13		497,646	5.11%	1.30%	06/08/06

PIMCO VIT – Total Return Portfolio – Administrative Shares
2007	1.30%	959		11.139136		10,682	5.43%	7.32%
	1.30%	73,559		11.09		815,769	5.43%	7.32%
2006	1.30%	33,396		10.33		344,981	2.90%	3.30%	06/08/06

Royce Capital Fund – Micro-Cap Portfolio
2007	1.30%	2,196		11.291953		24,797	2.22%	2.62%
	1.30%	108,731		11.28		1,226,486	2.22%	2.62%
2006	1.30%	168		11.003808		1,849	0.31%	10.04%	06/09/06
	1.30%	40,598		10.99		446,172	0.31%	9.90%	06/08/06

(Continued)

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


	Contract Expense Rate*	Units	Unit Fair Value	Contract Owners’ Equity		Investment Income Ratio**	Total Return***

SBL Fund – Series D (Global Series)
2007	1.30%	77,458	$ 12.46	$	965,127	0.00%	7.41%
2006	1.30%	51,999	11.60		603,188	0.00%	16.00%	06/08/06

SBL Fund – Series J (Mid Cap Growth Series)
2007	1.30%	29,261	9.08		265,690	0.00%	-11.67%
2006	1.30%	16,258	10.28		167,132	0.00%	2.80%	06/08/06

SBL Fund – Series N (Managed Asset Allocation Series)
2007	1.30%	65,443	11.51		753,249	0.00%	4.73%
2006	1.30%	25,651	10.99		281,904	0.00%	9.90%	06/08/06

SBL Fund – Series O (Equity Income Series)
2007	1.30%	476	11.564367		5,505	0.00%	1.47%
	1.30%	121,481	11.52		1,399,461	0.00%	1.47%
2006	1.30%	476	11.396634		5,425	0.00%	13.97%	06/09/06
	1.30%	87,323	11.35		991,116	0.00%	13.50%	06/08/06

SBL Fund – Series P (High Yield Series)
2007	1.30%	65,313	10.66		696,237	0.00%	0.76%
2006	1.30%	62,437	10.58		660,583	0.00%	5.80%	06/08/06

SBL Fund – Series Q (Small Cap Value Series)
2007	1.30%	217	11.760475		2,552	0.00%	8.81%
	1.30%	92,782	11.71		1,086,477	0.00%	8.81%
2006	1.30%	33,616	10.76		361,708	0.00%	7.60%	06/08/06

SBL Fund – Series V (Mid Cap Value Series)
2007	1.30%	143	10.812208		1,546	0.00%	0.53%
	1.30%	335,370	10.78		3,615,289	0.00%	0.53%
2006	1.30%	134	10.755372		1,441	0.00%	7.55%	06/09/06
	1.30%	174,943	10.72		1,875,389	0.00%	7.20%	06/08/06

SBL Fund – Series X (Small Cap Growth Series)
2007	1.30%	22,946	10.74		246,440	0.00%	4.17%
2006	1.30%	9,845	10.31		101,502	0.00%	3.10%	06/08/06

SBL Fund – Series Y (Select 25 Series)
2007	1.30%	1,884	10.02		18,878	0.00%	-7.48%
2006	1.30%	1,936	10.83		20,967	0.00%	8.30%	06/08/06

The Dreyfus Socially Responsible Growth Fund, Inc. – Initial Shares
2007	1.30%	10,396	23.854205		247,988	0.55%	6.38%
	1.30%	926,596	23.85		22,099,315	0.55%	6.38%
2006	1.30%	10,128	22.424260		227,113	0.11%	7.78%
	1.30%	1,051,851	22.42		23,582,499	0.11%	7.78%
2005	1.30%	11,469	20.804638		238,608	0.00%	2.27%
	1.30%	1,209,055	20.80		25,148,344	0.00%	2.27%
2004	1.30%	11,970	20.342381		243,498	0.38%	4.83%
	1.30%	1,399,512	20.34		28,469,396	0.38%	4.83%
2003	1.30%	13,643	19.405114		264,744	0.11%	24.37%
	1.30%	1,539,953	19.41		29,890,488	0.11%	24.37%

Wells Fargo AVT – Opportunity Fund^SM
2007	1.30%	13,680	31.871542		436,003	0.62%	5.24%
	1.30%	994,064	31.87		31,680,820	0.62%	5.24%
2006	1.30%	14,003	30.284724		424,077	0.00%	10.76%
	1.30%	1,147,654	30.28		34,750,963	0.00%	10.76%
2005	1.30%	15,971	27.341650		436,674	0.00%	6.49%
	1.30%	1,352,035	27.34		36,964,637	0.00%	6.49%
2004	1.30%	17,147	25.676197		440,270	0.00%	16.68%
	1.30%	1,554,663	25.68		39,917,873	0.00%	16.68%
2003	1.30%	19,661	222.004891		432,638	0.08%	35.23%
	1.30%	1,629,468	22.00		35,848,296	0.08%	35.23%

(Continued)

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


	Contract Owners’ Equity

2007 Reserves for annuity contracts in payout phase:		329,169

2007 Contract owners’ equity	$	595,938,388


2006 Reserves for annuity contracts in payout phase:		399,932

2006 Contract owners’ equity	$	634,994,120


2005 Reserves for annuity contracts in payout phase:		439,260

2005 Contract owners’ equity	$	642,652,380


2004 Reserves for annuity contracts in payout phase:		341,469

2004 Contract owners’ equity	$	687,491,626


2003 Reserves for annuity contracts in payout phase:		371,700

2003 Contract owners’ equity	$	692,411,487

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 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 or annual contract maintenance charges, that result in direct reductions to the contractholder accounts through reductions in unit values or redemption of units. 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 sub- accounts invest.

***

This represents the total return for the period indicated and includes a deduction only for expenses assessed through the daily unit value calculation. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented.

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life Insurance Company and

Contract Owners of Nationwide Multi-Flex Variable Account:

We have audited the accompanying statement of assets, liabilities and contract owners’ equity of Nationwide Multi-Flex Variable Account (comprised of the sub-accounts listed in note 1(b) (collectively, “the Accounts”)) as of December 31, 2007, 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 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, 2007, 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, 2007, and the results of their 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.

/s/ KPMG LLP

Columbus, Ohio

March 18, 2008

NATIONWIDE LIFE INSURANCE COMPANY

HOME OFFICE: ONE NATIONWIDE PLAZA • COLUMBUS, OHIO 43215-2220

PRSRT STD

U.S. POSTAGE

PAID

NATIONWIDE

Nationwide^® is a registered federal service mark of Nationwide Mutual Insurance Company