NATIONWIDE

MULTI-FLEX

VARIABLE

ACCOUNT

Annual Report

to

Contract Owners

December 31, 2009

NATIONWIDE LIFE INSURANCE COMPANY

HOME OFFICE: COLUMBUS, OHIO

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2009

Assets:
Investments at fair value:
Janus Aspen Series - Overseas Portfolio - Institutional Shares (JAIG)
422,721 shares (cost $15,595,853)	$	19,398,663
Federated NVIT High Income Bond Fund - Class I (HIBF)
118,862 shares (cost $814,199)		784,487
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)
39,808 shares (cost $303,741)		336,378
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)
1,582 shares (cost $12,939)		13,336
NVIT Fund - Class I (TRF)
8,468,635 shares (cost $86,939,106)		68,680,631
NVIT Government Bond Fund - Class I (GBF)
2,471,280 shares (cost $29,092,166)		29,012,832
NVIT Growth Fund - Class I (CAF)
363,478 shares (cost $3,918,448)		4,274,497
NVIT Money Market Fund - Class I (SAM)
12,913,441 shares (cost $12,913,441)		12,913,441
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
8,509 shares (cost $66,995)		73,943
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
813,905 shares (cost $6,176,832)		6,828,660
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
2,353,000 shares (cost $19,265,556)		21,482,889
Oppenheimer NVIT Large Cap Growth Fund - Class I (NVOLG1)
2,460 shares (cost $32,144)		34,637
V.I. Capital Appreciation Fund - Series I (AVCA)
88,094 shares (cost $1,993,543)		1,790,954
V.I. Global Health Care Fund - Series I (IVHS)
10,447 shares (cost $158,905)		165,797
V.I. Global Real Estate Fund - Series I (IVRE)
58,642 shares (cost $965,006)		711,919
V.I. International Growth Fund - Series I (AVIE)
83,487 shares (cost $2,342,925)		2,171,509
VP Balanced Fund - Class I (ACVB)
656,990 shares (cost $4,364,350)		3,777,690

(Continued)

2

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

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

VP Capital Appreciation Fund - Class I (ACVCA)
380,441 shares (cost $3,542,411)	$	4,097,354
VP Income & Growth Fund - Class I (ACVIG)
692,368 shares (cost $4,572,359)		3,724,939
Stock Index Fund, Inc. - Initial Shares (DSIF)
1,499,194 shares (cost $41,682,295)		39,443,785
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
610,835 shares (cost $15,814,581)		16,040,519
Appreciation Portfolio - Initial Shares (DCAP)
194,614 shares (cost $6,630,950)		6,110,875
Developing Leaders Portfolio - Initial Shares (DSC)
1,356,562 shares (cost $48,477,646)		31,865,644
Quality Bond Portfolio - Initial Shares (DQBP)
566,337 shares (cost $6,250,852)		6,275,009
Contrafund Portfolio - Service Class 2 (FC2)
180,616 shares (cost $4,558,016)		3,664,695
Equity-Income Portfolio - Initial Class (FEIP)
2,791,054 shares (cost $62,824,926)		46,917,619
High Income Portfolio - Initial Class (FHIP)
2,394,855 shares (cost $13,812,877)		12,668,782
Templeton Foreign Securities Fund - Class 1 (TIF)
1,527,911 shares (cost $20,000,674)		20,901,817
Balanced Portfolio - I Class Shares (AMBP)
1,187,985 shares (cost $11,465,808)		10,691,868
Real Return Portfolio - Administrative Class (PMVRRA)
104,646 shares (cost $1,275,287)		1,301,800
Series D (Global Series) (SBLD)
62,403 shares (cost $643,777)		552,891
Series J (Mid Cap Growth Series) (SBLJ)
14,226 shares (cost $342,362)		344,269
Series N (Managed Asset Allocation Series) (SBLN)
21,051 shares (cost $389,072)		378,707
Series O (All Cap Value Series) (SBLO)
102,379 shares (cost $2,015,490)		1,959,534
Series P (High Yield Series) (SBLP)
35,507 shares (cost $684,198)		823,762
Series Q (Small Cap Value Series) (SBLQ)
48,996 shares (cost $1,227,450)		1,352,278

(Continued)

3

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

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

Series V (Mid Cap Value Series) (SBLV)
66,490 shares (cost $3,033,783)	$	3,261,341
Series X (Small Cap Growth Series) (SBLX)
21,669 shares (cost $293,021)		314,634
Series Y (Select 25 Series) (SBLY)
5,904 shares (cost $40,943)		50,361
Total Return Portfolio - Administrative Class (PMVTRA)
282,015 shares (cost $3,001,749)		3,051,397
Micro-Cap Portfolio - Investment Class (ROCMC)
146,404 shares (cost $1,584,182)		1,395,231
Total Investments		389,641,374
Accounts Receivable - Advantage Funds Variable Trust - VT Opportunity Fund (SVOF)		24
Total Assets		389,641,398
Accounts Payable		9,550
	$	389,631,848
Contract Owners’ Equity:
Accumulation units		389,481,337
Contracts in payout (annuitization) period		150,511
Total Contract Owners’ Equity (note 5)	$	389,631,848

See accompanying notes to financial statements.

4

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF OPERATIONS

Year Ended December 31, 2009

Investment Activity:	Total			JAIG		HIBF		NVNMO1		NVNSR1		TRF		GBF		CAF
Reinvested dividends	$	7,415,477		90,789		67,362		229		38		827,492		1,034,921		21,044
Mortality and expense risk charges (note 2)		(4,468,085	)	(202,719	)	(8,697	)	(2,530	)	(74	)	(792,308	)	(392,267	)	(49,765	)
Net investment income (loss)		2,947,392		(111,930	)	58,665		(2,301	)	(36	)	35,184		642,654		(28,721	)
Realized gain (loss) on investments		(26,543,755	)	1,158,587		(87,369	)	37,953		1,156		(5,532,797	)	(22,574	)	122,456
Change in unrealized gain (loss) on investments		102,306,240		7,390,768		278,489		32,902		400		19,274,910		(643,084	)	984,436
Net gain (loss) on investments		75,762,485		8,549,355		191,120		70,855		1,556		13,742,113		(665,658	)	1,106,892
Reinvested capital gains		4,360,696		452,835		-		725		-		-		427,512		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	83,070,573		8,890,260		249,785		69,279		1,520		13,777,297		404,508		1,078,171
Investment Activity:	SAM			NVMLG1		NVMMG1		NVMMV2		NVOLG1		AVCA		IVHS		IVRE
Reinvested dividends	$	6,474		356		-		94,522		35		10,322		514		-
Mortality and expense risk charges (note 2)		(183,481	)	(3,707	)	(33,586	)	(99,795	)	(154	)	(21,003	)	(1,914	)	(7,358	)
Net investment income (loss)		(177,007	)	(3,351	)	(33,586	)	(5,273	)	(119	)	(10,681	)	(1,400	)	(7,358	)
Realized gain (loss) on investments		-		146,792		14,345		53,681		641		6,327		(61,721	)	(251,212	)
Change in unrealized gain (loss) on investments		-		12,705		655,146		2,219,809		2,498		299,954		98,048		425,867
Net gain (loss) on investments		-		159,497		669,491		2,273,490		3,139		306,281		36,327		174,655
Reinvested capital gains		-		-		-		-		574		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(177,007	)	156,146		635,905		2,268,217		3,594		295,600		34,927		167,297

(Continued)

5

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	AVIE			ACVB		ACVCA		ACVIG		DSIF		DSRG		DCAP		DSC
Reinvested dividends	$	29,363		199,902		79,622		163,364		728,049		137,277		129,084		458,105
Mortality and expense risk charges (note 2)		(22,849	)	(47,367	)	(90,707	)	(42,813	)	(440,663	)	(177,391	)	(63,723	)	(349,591	)
Net investment income (loss)		6,514		152,535		(11,085	)	120,551		287,386		(40,114	)	65,361		108,514
Realized gain (loss) on investments		(114,134	)	(266,366	)	(12,263	)	(72,440	)	(1,328,072	)	(364,551	)	(160,966	)	(2,931,228	)
Change in unrealized gain (loss) on investments		643,170		598,532		2,238,348		482,007		6,706,965		4,430,861		696,819		9,099,587
Net gain (loss) on investments		529,036		332,166		2,226,085		409,567		5,378,893		4,066,310		535,853		6,168,359
Reinvested capital gains		-		-		-		-		2,225,666		-		376,661		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	535,550		484,701		2,215,000		530,118		7,891,945		4,026,196		977,875		6,276,873
Investment Activity:	DQBP			FC2		FEIP		FHIP		TIF		AMBP		AMTP		PMVRRA
Reinvested dividends	$	300,874		37,013		939,554		911,547		653,927		327,637		-		38,101
Mortality and expense risk charges (note 2)		(79,214	)	(40,490	)	(518,632	)	(143,922	)	(227,401	)	(126,771	)	(4,931	)	(15,774	)
Net investment income (loss)		221,660		(3,477	)	420,922		767,625		426,526		200,866		(4,931	)	22,327
Realized gain (loss) on investments		(163,310	)	(713,822	)	(3,451,346	)	(553,602	)	(220,014	)	(267,250	)	(265,920	)	(47,693	)
Change in unrealized gain (loss) on investments		737,549		1,690,022		13,569,391		3,759,820		4,702,603		1,980,251		487,881		164,229
Net gain (loss) on investments		574,239		976,200		10,118,045		3,206,218		4,482,589		1,713,001		221,961		116,536
Reinvested capital gains		-		896		-		-		731,605		-		-		53,002
Net increase (decrease) in contract owners’ equity resulting from operations	$	795,899		973,619		10,538,967		3,973,843		5,640,720		1,913,867		217,030		191,865

(Continued)

6

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	SBLD			SBLJ		SBLN		SBLO		SBLP		SBLQ		SBLV		SBLX
Reinvested dividends	$	-		-		-		-		-		-		-		-
Mortality and expense risk charges (note 2)		(6,874	)	(3,472	)	(4,209	)	(23,905	)	(7,154	)	(14,306	)	(31,341	)	(4,115	)
Net investment income (loss)		(6,874	)	(3,472	)	(4,209	)	(23,905	)	(7,154	)	(14,306	)	(31,341	)	(4,115	)
Realized gain (loss) on investments		(116,713	)	(30,695	)	(10,970	)	(337,684	)	(11,720	)	(115,228	)	(134,444	)	(90,929	)
Change in unrealized gain (loss) on investments		209,079		132,171		89,510		895,621		307,084		633,015		1,039,633		202,534
Net gain (loss) on investments		92,366		101,476		78,540		557,937		295,364		517,787		905,189		111,605
Reinvested capital gains		-		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	85,492		98,004		74,331		534,032		288,210		503,481		873,848		107,490

Investment Activity:	SBLY			PMVTRA		ROCMC		SVOF
Reinvested dividends	$	-		127,960		-		-
Mortality and expense risk charges (note 2)		(425	)	(31,265	)	(13,588	)	(135,834	)
Net investment income (loss)		(425	)	96,695		(13,588	)	(135,834	)
Realized gain (loss) on investments		(1,303	)	(6,767	)	(183,588	)	(10,157,002	)
Change in unrealized gain (loss) on investments		13,119		102,331		696,578		14,964,680
Net gain (loss) on investments		11,816		95,564		512,990		4,807,678
Reinvested capital gains		-		91,220		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	11,391		283,479		499,402		4,671,844

See accompanying notes to financial statements.

7

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2009 and 2008

	Total					JAIG				HIBF				NVNMO1
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	2,947,392		4,446,598		(111,930	)	314,906		58,665		76,470		(2,301	)	(19	)
Realized gain (loss) on investments		(26,543,755	)	(3,704,794	)	1,158,587		1,430,002		(87,369	)	(93,371	)	37,953		-
Change in unrealized gain (loss) on investments		102,306,240		(237,539,256	)	7,390,768		(18,599,558	)	278,489		(269,301	)	32,902		(267	)
Reinvested capital gains		4,360,696		32,392,523		452,835		2,970,809		-		-		725		-
Net increase (decrease) in contract owners’ equity resulting from operations		83,070,573		(204,404,929	)	8,890,260		(13,883,841	)	249,785		(286,202	)	69,279		(286	)
Equity transactions:
Purchase payments received from contract owners		10,709,687		16,924,655		418,472		779,711		21,558		44,132		10,014		1,860
Transfers between funds		(2,961,517	)	(5,479,490	)	181,091		(398,779	)	40,836		34,841		302,124		1,010
Redemptions		(44,772,322	)	(57,624,788	)	(2,308,239	)	(1,439,815	)	(140,834	)	(271,623	)	(46,588	)	-
Annuity benefits		(48,798	)	(63,849	)	-		-		-		-		-		-
Contract maintenance charges (note 2)		(271,819	)	(805,443	)	(8,276	)	(26,941	)	(359	)	(1,384	)	(101	)	(1	)
Contingent deferred sales charges (note 2)		(463,421	)	(84,783	)	(18,075	)	(1,911	)	(747	)	(1,505	)	(210	)	-
Adjustments to maintain reserves		(9,407	)	(20,889	)	1,107		(3,000	)	(65	)	(209	)	185		(727	)
Net equity transactions		(37,817,597	)	(47,154,587	)	(1,733,920	)	(1,090,735	)	(79,611	)	(195,748	)	265,424		2,142
Net change in contract owners’ equity		45,252,976		(251,559,516	)	7,156,340		(14,974,576	)	170,174		(481,950	)	334,703		1,856
Contract owners’ equity beginning of period		344,378,872		595,938,388		12,242,415		27,216,991		614,275		1,096,225		1,856		-
Contract owners’ equity end of period	$	389,631,848		344,378,872		19,398,755		12,242,415		784,449		614,275		336,559		1,856
CHANGES IN UNITS:
Beginning units		17,635,120		18,851,449		721,840		758,346		56,983		72,263		361		-
Units purchased		7,108,602		2,888,418		95,025		94,346		14,473		29,318		131,330		670
Units redeemed		(6,559,550	)	(4,104,747	)	(171,530	)	(130,852	)	(20,953	)	(44,598	)	(88,320	)	(309	)
Ending units		18,184,172		17,635,120		645,335		721,840		50,503		56,983		43,371		361

(Continued)

8

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVNSR1					TRF				GBF				CAF
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(36	)	(10	)	35,184		102,994		642,654		952,850		(28,721	)	(55,116	)
Realized gain (loss) on investments		1,156		-		(5,532,797	)	(1,377,895	)	(22,574	)	(37,026	)	122,456		193,559
Change in unrealized gain (loss) on investments		400		-		19,274,910		(63,012,624	)	(643,084	)	1,069,294		984,436		(2,711,007	)
Reinvested capital gains		-		-		-		15,444,898		427,512		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		1,520		(10	)	13,777,297		(48,842,627	)	404,508		1,985,118		1,078,171		(2,572,564	)
Equity transactions:
Purchase payments received from contract owners		685		1		1,447,752		1,712,495		414,704		627,958		48,743		79,649
Transfers between funds		11,143		461		(953,534	)	(4,365,173	)	(188,440	)	(473,612	)	5,476		(221,305	)
Redemptions		-		-		(7,018,210	)	(13,498,996	)	(3,842,142	)	(4,342,206	)	(401,417	)	(535,199	)
Annuity benefits		-		-		(24,963	)	(36,730	)	(1,298	)	(1,277	)	(1,970	)	(2,744	)
Contract maintenance charges (note 2)		(3	)	-		(82,360	)	(156,374	)	(31,495	)	(48,607	)	(8,980	)	(10,333	)
Contingent deferred sales charges (note 2)		(6	)	-		(51,266	)	(24,494	)	(20,605	)	(3,536	)	(578	)	(928	)
Adjustments to maintain reserves		(5	)	(452	)	(372	)	2,705		(1,294	)	243		(116	)	(8,175	)
Net equity transactions		11,814		10		(6,682,953	)	(16,366,567	)	(3,670,570	)	(4,241,037	)	(358,842	)	(699,035	)
Net change in contract owners’ equity		13,334		-		7,094,344		(65,209,194	)	(3,266,062	)	(2,255,919	)	719,329		(3,271,599	)
Contract owners’ equity beginning of period		-		-		61,586,566		126,795,760		32,278,013		34,533,932		3,555,108		6,826,707
Contract owners’ equity end of period	$	13,334		-		68,680,910		61,586,566		29,011,951		32,278,013		4,274,437		3,555,108
CHANGES IN UNITS:
Beginning units		-		-		923,897		1,097,211		618,883		703,984		283,310		329,004
Units purchased		3,671		294		63,494		33,521		47,723		68,599		21,871		56,850
Units redeemed		(1,994	)	(294	)	(159,290	)	(206,835	)	(117,745	)	(153,700	)	(46,484	)	(102,544	)
Ending units		1,677		-		828,101		923,897		548,861		618,883		258,697		283,310

(Continued)

9

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	SAM					NVMLG1				NVMMG1				NVMMV2
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(177,007	)	109,947		(3,351	)	(52	)	(33,586	)	(49	)	(5,273	)	19
Realized gain (loss) on investments		-		-		146,792		-		14,345		-		53,681		-
Change in unrealized gain (loss) on investments		-		-		12,705		(5,758	)	655,146		(3,318	)	2,219,809		(2,477	)
Reinvested capital gains		-		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(177,007	)	109,947		156,146		(5,810	)	635,905		(3,367	)	2,268,217		(2,458	)
Equity transactions:
Purchase payments received from contract owners		777,807		446,125		(136,183	)	28		229,722		1,680		205,693		4
Transfers between funds		758,503		6,607,386		47,273		19,230		6,243,036		9,879		19,844,142		9,130
Redemptions		(4,041,781	)	(5,016,090	)	(5,499	)	-		(270,534	)	-		(824,180	)	-
Annuity benefits		(16,455	)	(17,102	)	-		-		-		-		-		-
Contract maintenance charges (note 2)		(13,626	)	(19,832	)	(148	)	(10	)	3,624		(2	)	(4,313	)	-
Contingent deferred sales charges (note 2)		(8,018	)	(8,070	)	(40	)	-		(4,766	)	-		(13,020	)	-
Adjustments to maintain reserves		52		883		(164	)	(887	)	(18,810	)	(434	)	(1,430	)	(324	)
Net equity transactions		(2,543,518	)	1,993,300		(94,761	)	18,361		6,182,272		11,123		19,206,892		8,810
Net change in contract owners’ equity		(2,720,525	)	2,103,247		61,385		12,551		6,818,177		7,756		21,475,109		6,352
Contract owners’ equity beginning of period		15,617,842		13,514,595		12,551		-		7,756		-		6,352		-
Contract owners’ equity end of period	$	12,897,317		15,617,842		73,936		12,551		6,825,933		7,756		21,481,461		6,352
CHANGES IN UNITS:
Beginning units		589,424		511,715		1,989		-		1,247		-		948		-
Units purchased		225,151		373,702		900,773		2,447		931,788		1,504		2,874,022		1,193
Units redeemed		(321,934	)	(295,993	)	(893,613	)	(458	)	(59,079	)	(257	)	(385,795	)	(245	)
Ending units		492,641		589,424		9,149		1,989		873,956		1,247		2,489,175		948

(Continued)

10

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVOLG1				AVCA				IVHS				IVRE
	2009			2008	2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(119	)	-	(10,681	)	(30,657	)	(1,400	)	(2,798	)	(7,358	)	37,323
Realized gain (loss) on investments		641		-	6,327		95,344		(61,721	)	(17,997	)	(251,212	)	(316,562	)
Change in unrealized gain (loss) on investments		2,498		-	299,954		(1,388,372	)	98,048		(105,596	)	425,867		(316,396	)
Reinvested capital gains		574		-	-		-		-		45,728		-		75,430
Net increase (decrease) in contract owners’ equity resulting from operations		3,594		-	295,600		(1,323,685	)	34,927		(80,663	)	167,297		(520,205	)
Equity transactions:
Purchase payments received from contract owners		-		-	58,183		127,840		9,892		20,712		38,248		68,861
Transfers between funds		31,071		-	(107,708	)	(57,779	)	10,956		(92,822	)	35,960		(154,575	)
Redemptions		-		-	(189,948	)	(198,400	)	(60,259	)	(37,572	)	(75,809	)	(88,864	)
Annuity benefits		-		-	-		-		-		-		-		-
Contract maintenance charges (note 2)		(6	)	-	(861	)	(3,868	)	(77	)	(229	)	(297	)	(1,108	)
Contingent deferred sales charges (note 2)		(15	)	-	(2,462	)	(198	)	(202	)	(7	)	(606	)	(133	)
Adjustments to maintain reserves		10		-	266		621		(27	)	154		35		50
Net equity transactions		31,060		-	(242,530	)	(131,784	)	(39,717	)	(109,764	)	(2,469	)	(175,769	)
Net change in contract owners’ equity		34,654		-	53,070		(1,455,469	)	(4,790	)	(190,427	)	164,828		(695,974	)
Contract owners’ equity beginning of period		-		-	1,738,052		3,193,521		170,630		361,057		547,281		1,243,255
Contract owners’ equity end of period	$	34,654		-	1,791,122		1,738,052		165,840		170,630		712,109		547,281
CHANGES IN UNITS:
Beginning units		-		-	230,205		240,113		20,625		30,772		83,683		103,865
Units purchased		3,672		-	12,111		23,375		4,273		11,422		23,857		28,573
Units redeemed		(996	)	-	(43,827	)	(33,283	)	(8,990	)	(21,569	)	(23,663	)	(48,755	)
Ending units		2,676		-	198,489		230,205		15,908		20,625		83,877		83,683

(Continued)

11

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	AVIE					ACVB				ACVCA				ACVIG
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	6,514		(14,340	)	152,535		67,163		(11,085	)	(186,343	)	120,551		38,645
Realized gain (loss) on investments		(114,134	)	107,542		(266,366	)	(154,474	)	(12,263	)	847,689		(72,440	)	35,470
Change in unrealized gain (loss) on investments		643,170		(1,237,200	)	598,532		(1,412,354	)	2,238,348		(10,316,605	)	482,007		(2,733,472	)
Reinvested capital gains		-		30,984		-		374,116		-		1,211,260		-		600,559
Net increase (decrease) in contract owners’ equity resulting from operations		535,550		(1,113,014	)	484,701		(1,125,549	)	2,215,000		(8,443,999	)	530,118		(2,058,798	)
Equity transactions:
Purchase payments received from contract owners		81,527		137,416		64,376		115,946		116,288		335,926		116,083		210,970
Transfers between funds		163,600		620,393		(69,875	)	(159,929	)	(6,534,557	)	(935,490	)	(48,687	)	(131,880	)
Redemptions		(304,337	)	(236,115	)	(637,431	)	(577,086	)	(634,182	)	(1,279,578	)	(419,661	)	(545,523	)
Annuity benefits		-		-		-		-		(2,154	)	(3,148	)	-		-
Contract maintenance charges (note 2)		(929	)	(2,808	)	(3,188	)	(7,171	)	(8,058	)	(23,649	)	(1,747	)	(7,551	)
Contingent deferred sales charges (note 2)		(1,995	)	(248	)	(4,006	)	(808	)	(6,231	)	(1,095	)	(4,686	)	(669	)
Adjustments to maintain reserves		(521	)	864		407		(797	)	1,027		1,129		895		1,389
Net equity transactions		(62,655	)	519,502		(649,717	)	(629,845	)	(7,067,867	)	(1,905,905	)	(357,803	)	(473,264	)
Net change in contract owners’ equity		472,895		(593,512	)	(165,016	)	(1,755,394	)	(4,852,867	)	(10,349,904	)	172,315		(2,532,062	)
Contract owners’ equity beginning of period		1,698,758		2,292,270		3,942,440		5,697,834		8,950,788		19,300,692		3,554,339		6,086,401
Contract owners’ equity end of period	$	2,171,653		1,698,758		3,777,424		3,942,440		4,097,921		8,950,788		3,726,654		3,554,339
CHANGES IN UNITS:
Beginning units		140,626		111,709		391,485		444,810		481,110		551,004		340,781		376,866
Units purchased		35,003		79,951		19,119		31,654		296,074		36,045		27,137		27,148
Units redeemed		(40,912	)	(51,034	)	(81,559	)	(84,979	)	(614,545	)	(105,939	)	(61,449	)	(63,233	)
Ending units		134,717		140,626		329,045		391,485		162,639		481,110		306,469		340,781

(Continued)

12

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	DSIF					DSRG				DCAP				DSC
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	287,386		415,453		(40,114	)	(91,206	)	65,361		62,900		108,514		(139,346	)
Realized gain (loss) on investments		(1,328,072	)	364,583		(364,551	)	(68,161	)	(160,966	)	134,795		(2,931,228	)	(1,801,754	)
Change in unrealized gain (loss) on investments		6,706,965		(23,298,424	)	4,430,861		(7,345,250	)	696,819		(3,174,156	)	9,099,587		(18,521,520	)
Reinvested capital gains		2,225,666		-		-		-		376,661		563,684		-		2,242,065
Net increase (decrease) in contract owners’ equity resulting from operations		7,891,945		(22,518,388	)	4,026,196		(7,504,617	)	977,875		(2,412,777	)	6,276,873		(18,220,555	)
Equity transactions:
Purchase payments received from contract owners		1,245,378		2,257,447		534,102		858,139		198,897		362,526		1,151,817		1,983,404
Transfers between funds		(818,704	)	(2,037,286	)	(400,694	)	(789,651	)	460,751		(1,046,240	)	(600,995	)	(2,200,160	)
Redemptions		(4,017,602	)	(5,156,760	)	(1,387,381	)	(1,585,015	)	(599,784	)	(902,430	)	(3,149,768	)	(3,859,579	)
Annuity benefits		-		-		-		-		-		-		-		-
Contract maintenance charges (note 2)		(20,228	)	(85,967	)	(7,304	)	(38,824	)	(2,596	)	(11,269	)	(14,399	)	(88,704	)
Contingent deferred sales charges (note 2)		(57,894	)	(7,951	)	(29,216	)	(3,256	)	(8,489	)	(1,208	)	(61,784	)	(5,891	)
Adjustments to maintain reserves		(115	)	(5,602	)	9,783		10,861		1,812		(2,602	)	(5,922	)	(449	)
Net equity transactions		(3,669,165	)	(5,036,119	)	(1,280,710	)	(1,547,746	)	50,591		(1,601,223	)	(2,681,051	)	(4,171,379	)
Net change in contract owners’ equity		4,222,780		(27,554,507	)	2,745,486		(9,052,363	)	1,028,466		(4,014,000	)	3,595,822		(22,391,934	)
Contract owners’ equity beginning of period		35,220,811		62,775,318		13,294,940		22,347,303		5,082,652		9,096,652		28,273,700		50,665,634
Contract owners’ equity end of period	$	39,443,591		35,220,811		16,040,426		13,294,940		6,111,118		5,082,652		31,869,522		28,273,700
CHANGES IN UNITS:
Beginning units		1,708,090		1,888,564		861,072		936,992		450,589		560,484		2,032,625		2,243,833
Units purchased		93,134		127,492		47,183		55,048		80,435		43,239		128,221		139,526
Units redeemed		(267,139	)	(307,966	)	(121,259	)	(130,968	)	(83,323	)	(153,134	)	(318,673	)	(350,734	)
Ending units		1,534,085		1,708,090		786,996		861,072		447,701		450,589		1,842,173		2,032,625

(Continued)

13

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	DQBP					FC2				FEIP				FHIP
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	221,660		266,570		(3,477	)	(16,523	)	420,922		716,878		767,625		964,216
Realized gain (loss) on investments		(163,310	)	(146,643	)	(713,822	)	(416,600	)	(3,451,346	)	(1,628,625	)	(553,602	)	(394,725	)
Change in unrealized gain (loss) on investments		737,549		(514,098	)	1,690,022		(1,903,223	)	13,569,391		(32,040,737	)	3,759,820		(4,183,102	)
Reinvested capital gains		-		-		896		117,956		-		66,544		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		795,899		(394,171	)	973,619		(2,218,390	)	10,538,967		(32,885,940	)	3,973,843		(3,613,611	)
Equity transactions:
Purchase payments received from contract owners		147,548		277,249		174,291		311,589		1,290,112		2,279,353		331,448		590,703
Transfers between funds		(91,851	)	(598,374	)	5,248		422,796		(434,839	)	(2,861,704	)	(308,057	)	(578,014	)
Redemptions		(1,036,752	)	(934,975	)	(476,073	)	(420,691	)	(5,017,223	)	(6,670,790	)	(1,321,433	)	(1,506,339	)
Annuity benefits		-		-		-		-		(1,840	)	(2,682	)	-		-
Contract maintenance charges (note 2)		(3,218	)	(11,370	)	(1,665	)	(4,876	)	(25,656	)	(101,005	)	(5,930	)	(27,192	)
Contingent deferred sales charges (note 2)		(9,418	)	(899	)	(4,062	)	(652	)	(60,200	)	(6,680	)	(21,837	)	(2,387	)
Adjustments to maintain reserves		1,014		202		909		144		(529	)	(323	)	119		5,905
Net equity transactions		(992,677	)	(1,268,167	)	(301,352	)	308,310		(4,250,175	)	(7,363,831	)	(1,325,690	)	(1,517,324	)
Net change in contract owners’ equity		(196,778	)	(1,662,338	)	672,267		(1,910,080	)	6,288,792		(40,249,771	)	2,648,153		(5,130,935	)
Contract owners’ equity beginning of period		6,471,742		8,134,080		2,992,269		4,902,349		40,629,032		80,878,803		10,022,864		15,153,799
Contract owners’ equity end of period	$	6,274,964		6,471,742		3,664,536		2,992,269		46,917,824		40,629,032		12,671,017		10,022,864
CHANGES IN UNITS:
Beginning units		417,262		495,980		415,549		385,075		2,086,629		2,350,913		835,241		935,417
Units purchased		37,805		39,165		106,478		169,693		131,842		132,892		45,759		53,845
Units redeemed		(98,554	)	(117,883	)	(141,543	)	(139,219	)	(343,413	)	(397,176	)	(137,830	)	(154,021	)
Ending units		356,513		417,262		380,484		415,549		1,875,058		2,086,629		743,170		835,241

(Continued)

14

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	TIF					AMBP				AMTP				PMVRRA
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	426,526		347,729		200,866		345,388		(4,931	)	(488	)	22,327		21,045
Realized gain (loss) on investments		(220,014	)	681,553		(267,250	)	273,410		(265,920	)	(64,505	)	(47,693	)	9,590
Change in unrealized gain (loss) on investments		4,702,603		(15,908,994	)	1,980,251		(7,547,301	)	487,881		(481,327	)	164,229		(153,607	)
Reinvested capital gains		731,605		2,395,802		-		-		-		145,226		53,002		1,795
Net increase (decrease) in contract owners’ equity resulting from operations		5,640,720		(12,483,910	)	1,913,867		(6,928,503	)	217,030		(401,094	)	191,865		(121,177	)
Equity transactions:
Purchase payments received from contract owners		505,165		886,370		194,014		413,747		22,386		27,128		56,626		50,236
Transfers between funds		(394,036	)	(813,366	)	(172,030	)	146,826		(797,604	)	762,477		159,020		995,107
Redemptions		(1,818,962	)	(2,715,906	)	(1,193,929	)	(1,361,773	)	(54,652	)	(54,140	)	(249,205	)	(147,551	)
Annuity benefits		-		-		(118	)	(166	)	-		-		-		-
Contract maintenance charges (note 2)		(9,237	)	(41,169	)	(8,510	)	(25,010	)	(197	)	(622	)	(631	)	(1,183	)
Contingent deferred sales charges (note 2)		(28,371	)	(5,097	)	(12,521	)	(944	)	(404	)	(245	)	(1,256	)	(240	)
Adjustments to maintain reserves		(4,136	)	1,742		735		(606	)	(216	)	132		1,263		(15,674	)
Net equity transactions		(1,749,577	)	(2,687,426	)	(1,192,359	)	(827,926	)	(830,687	)	734,730		(34,183	)	880,695
Net change in contract owners’ equity		3,891,143		(15,171,336	)	721,508		(7,756,429	)	(613,657	)	333,636		157,682		759,518
Contract owners’ equity beginning of period		17,010,653		32,181,989		9,970,361		17,726,790		613,657		280,021		1,144,920		385,402
Contract owners’ equity end of period	$	20,901,796		17,010,653		10,691,869		9,970,361		-		613,657		1,302,602		1,144,920
CHANGES IN UNITS:
Beginning units		945,038		1,054,802		565,805		604,146		106,353		22,803		112,800		34,815
Units purchased		44,659		57,214		20,505		67,283		21,216		101,190		72,509		135,082
Units redeemed		(132,859	)	(166,978	)	(84,379	)	(105,624	)	(127,569	)	(17,640	)	(75,570	)	(57,097	)
Ending units		856,838		945,038		501,931		565,805		-		106,353		109,739		112,800

(Continued)

15

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	SBLD					SBLJ				SBLN				SBLO
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(6,874	)	(10,291	)	(3,472	)	(3,331	)	(4,209	)	(6,199	)	(23,905	)	(27,015	)
Realized gain (loss) on investments		(116,713	)	(20,885	)	(30,695	)	(31,747	)	(10,970	)	(20,056	)	(337,684	)	(81,026	)
Change in unrealized gain (loss) on investments		209,079		(356,910	)	132,171		(106,631	)	89,510		(114,165	)	895,621		(954,459	)
Reinvested capital gains		-		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		85,492		(388,086	)	98,004		(141,709	)	74,331		(140,420	)	534,032		(1,062,500	)
Equity transactions:
Purchase payments received from contract owners		36,348		72,504		12,194		33,867		18,412		34,624		82,678		136,835
Transfers between funds		(61,459	)	49,624		48,483		69,499		16,550		(222,481	)	(374,767	)	1,733,262
Redemptions		(123,873	)	(81,244	)	(26,394	)	(14,588	)	(33,225	)	(121,180	)	(237,787	)	(250,697	)
Annuity benefits		-		-		-		-		-		-		-		-
Contract maintenance charges (note 2)		(275	)	(946	)	(139	)	(358	)	(168	)	(510	)	(956	)	(2,766	)
Contingent deferred sales charges (note 2)		(565	)	(90	)	(364	)	(15	)	(257	)	(23	)	(1,777	)	(786	)
Adjustments to maintain reserves		98		320		174		(10	)	(149	)	(213	)	(32	)	(351	)
Net equity transactions		(149,726	)	40,168		33,954		88,395		1,163		(309,783	)	(532,641	)	1,615,497
Net change in contract owners’ equity		(64,234	)	(347,918	)	131,958		(53,314	)	75,494		(450,203	)	1,391		552,997
Contract owners’ equity beginning of period		617,209		965,127		212,376		265,690		303,046		753,249		1,957,963		1,404,966
Contract owners’ equity end of period	$	552,975		617,209		344,334		212,376		378,540		303,046		1,959,354		1,957,963
CHANGES IN UNITS:
Beginning units		81,426		77,458		39,475		29,261		36,644		65,443		279,709		121,957
Units purchased		13,578		27,787		19,624		120,538		5,147		12,626		42,175		226,958
Units redeemed		(33,288	)	(23,819	)	(14,088	)	(110,324	)	(4,863	)	(41,425	)	(108,679	)	(69,206	)
Ending units		61,716		81,426		45,011		39,475		36,928		36,644		213,205		279,709

(Continued)

16

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	SBLP					SBLQ				SBLV				SBLX
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(7,154	)	(7,437	)	(14,306	)	(15,113	)	(31,341	)	(34,664	)	(4,115	)	(4,221	)
Realized gain (loss) on investments		(11,720	)	(14,793	)	(115,228	)	(18,963	)	(134,444	)	(77,688	)	(90,929	)	(9,802	)
Change in unrealized gain (loss) on investments		307,084		(174,036	)	633,015		(550,714	)	1,039,633		(835,497	)	202,534		(191,573	)
Reinvested capital gains		-		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		288,210		(196,266	)	503,481		(584,790	)	873,848		(947,849	)	107,490		(205,596	)
Equity transactions:
Purchase payments received from contract owners		22,314		34,590		49,011		96,808		120,873		227,210		18,651		36,056
Transfers between funds		164,324		14,988		33,965		473,245		475,106		(446,017	)	(92,500	)	281,277
Redemptions		(75,996	)	(122,977	)	(211,083	)	(93,460	)	(385,780	)	(264,726	)	(34,097	)	(42,122	)
Annuity benefits		-		-		-		-		-		-		-		-
Contract maintenance charges (note 2)		(286	)	(697	)	(588	)	(1,415	)	(1,267	)	(3,316	)	(165	)	(432	)
Contingent deferred sales charges (note 2)		(475	)	(128	)	(1,400	)	(225	)	(2,841	)	(111	)	(282	)	(101	)
Adjustments to maintain reserves		(30	)	128		(555	)	215		(181	)	(765	)	(194	)	256
Net equity transactions		109,851		(74,096	)	(130,650	)	475,168		205,910		(487,725	)	(108,587	)	274,934
Net change in contract owners’ equity		398,061		(270,362	)	372,831		(109,622	)	1,079,758		(1,435,574	)	(1,097	)	69,338
Contract owners’ equity beginning of period		425,875		696,237		979,407		1,089,029		2,181,261		3,616,835		315,778		246,440
Contract owners’ equity end of period	$	823,936		425,875		1,352,238		979,407		3,261,019		2,181,261		314,681		315,778
CHANGES IN UNITS:
Beginning units		57,785		65,313		137,935		92,999		286,630		335,513		56,389		22,946
Units purchased		39,149		24,824		53,383		74,477		93,873		135		21,967		46,606
Units redeemed		(31,334	)	(32,352	)	(67,508	)	(29,541	)	(78,837	)	(49,018	)	(36,230	)	(13,163	)
Ending units		65,600		57,785		123,810		137,935		301,666		286,630		42,126		56,389

(Continued)

17

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	SBLY					PMVTRA				ROCMC				SVOF
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(425	)	(289	)	96,695		60,576		(13,588	)	20,469		(135,834	)	170,564
Realized gain (loss) on investments		(1,303	)	(1,813	)	(6,767	)	13,393		(183,588	)	(87,317	)	(10,157,002	)	(1,009,296	)
Change in unrealized gain (loss) on investments		13,119		(3,257	)	102,331		(78,630	)	696,578		(756,494	)	14,964,680		(17,300,140	)
Reinvested capital gains		-		-		91,220		42,378		-		148,978		-		5,914,311
Net increase (decrease) in contract owners’ equity resulting from operations		11,391		(5,359	)	283,479		37,717		499,402		(674,364	)	4,671,844		(12,224,561	)
Equity transactions:
Purchase payments received from contract owners		1,888		2,126		107,502		109,409		58,756		85,696		405,712		1,045,725
Transfers between funds		34,152		(1,205	)	929,937		1,656,714		116,335		344,488		(20,630,262	)	(1,146,281	)
Redemptions		(9,816	)	-		(385,015	)	(505,231	)	(154,677	)	(128,208	)	(1,550,764	)	(2,617,339	)
Annuity benefits		-		-		-		-		-		-		-		-
Contract maintenance charges (note 2)		(17	)	(24	)	(1,261	)	(2,260	)	(554	)	(1,186	)	(5,372	)	(44,474	)
Contingent deferred sales charges (note 2)		(33	)	-		(2,450	)	(347	)	(1,076	)	(189	)	(18,915	)	(3,716	)
Adjustments to maintain reserves		2		(1,638	)	2,004		(3,443	)	718		(912	)	2,843		(1,239	)
Net equity transactions		26,176		(741	)	650,717		1,254,842		19,502		299,689		(21,796,758	)	(2,767,324	)
Net change in contract owners’ equity		37,567		(6,100	)	934,196		1,292,559		518,904		(374,675	)	(17,124,914	)	(14,991,885	)
Contract owners’ equity beginning of period		12,778		18,878		2,119,010		826,451		876,608		1,251,283		17,124,938		32,116,823
Contract owners’ equity end of period	$	50,345		12,778		3,053,206		2,119,010		1,395,512		876,608		24		17,124,938
CHANGES IN UNITS:
Beginning units		2,051		1,884		184,738		74,518		138,923		110,927		908,965		1,007,744
Units purchased		5,735		6,525		114,832		212,614		30,448		54,635		108,378		58,412
Units redeemed		(1,639	)	(6,358	)	(63,258	)	(102,394	)	(27,695	)	(26,639	)	(1,017,342	)	(157,191	)
Ending units		6,147		2,051		236,312		184,738		141,676		138,923		1		908,965

*See accompanying notes to financial statements.

18

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT

NOTES TO FINANCIAL STATEMENTS

December 31, 2009 and 2008

(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 distribution 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:

JANUS FUNDS

Janus Aspen Series - Overseas Portfolio - Institutional Shares (JAIG)

NATIONWIDE FUNDS GROUP

Federated NVIT High Income Bond Fund - Class I (HIBF)

Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)

Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)

NVIT Fund - Class I (TRF)

NVIT Government Bond Fund - Class I (GBF)

NVIT Growth Fund - Class I (CAF)

NVIT Money Market Fund - Class I (SAM)

NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)

NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)

NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)

Oppenheimer NVIT Large Cap Growth Fund - Class I (NVOLG1)

Portfolios of the AIM Variable Insurance Funds

V.I. Capital Appreciation Fund - Series I (AVCA)

V.I. Global Health Care Fund - Series I (IVHS)

V.I. Global Real Estate Fund - Series I (IVRE)

V.I. International Growth Fund - Series I (AVIE)

Portfolios of the American Century Variable Portfolios, Inc.

VP Balanced Fund - Class I (ACVB)

VP Capital Appreciation Fund - Class I (ACVCA)

VP Income & Growth Fund - Class I (ACVIG)

Portfolios of the Dreyfus Investment Portfolios

Stock Index Fund, Inc. - Initial Shares (DSIF)

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

Portfolios of the Dreyfus Variable Investment Fund

Appreciation Portfolio - Initial Shares (DCAP)

Developing Leaders Portfolio - Initial Shares (DSC)

Quality Bond Portfolio - Initial Shares (DQBP)

Portfolios of the Fidelity Variable Insurance Products Fund Fidelity

Contrafund Portfolio - Service Class 2 (FC2)

Equity-Income Portfolio - Initial Class (FEIP)

High Income Portfolio - Initial Class (FHIP)

Portfolios of the Franklin Templeton Variable Insurance Products Trust

Templeton Foreign Securities Fund - Class 1 (TIF)

Portfolios of the Neuberger Berman Advisers Management Trust

Balanced Portfolio - I Class Shares (AMBP)

Partners Portfolio - I Class Shares (AMTP)*

Portfolios of the PIMCO Variable Insurance Trust

Real Return Portfolio - Administrative Class (PMVRRA)

Series D (Global Series) (SBLD)

Series J (Mid Cap Growth Series) (SBLJ)

Series N (Managed Asset Allocation Series) (SBLN)

Series O (All Cap Value Series) (SBLO)

Series P (High Yield Series) (SBLP)

Series Q (Small Cap Value Series) (SBLQ)

Series V (Mid Cap Value Series) (SBLV)

Series X (Small Cap Growth Series) (SBLX)

Series Y (Select 25 Series) (SBLY)

Total Return Portfolio - Administrative Class (PMVTRA)

ROYCE CAPITAL FUNDS

Micro-Cap Portfolio - Investment Class (ROCMC)

WELLS FARGO FUNDS

Advantage Funds Variable Trust - VT Opportunity Fund (SVOF)

* At December 31, 2009, 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)

19

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT NOTES TO FINANCIAL STATEMENTS

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued at the closing net asset value per share at December 31, 2009 of such funds, which represents fair value. The cost of investments sold is determined on a first in – first out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed), and dividends and capital gain distributions are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.

(d) Federal Income Taxes

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

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

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

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

(f) 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) Recently Issued Accounting Standards

In September 2006, the FASB issued FASB ASC 820, Fair Value Measurements and Disclosures (SFAS No. 157, Fair Value Measurements). FASB ASC 820 provides enhanced guidance for using fair value to measure assets and liabilities and requires new disclosures about fair value measurements and 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. FASB ASC 820 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.

FASB ASC 820 was effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. The Account adopted FASB ASC 820 effective January 1, 2008. The adoption of FASB ASC 820 did not have a material impact on the Account’s financial position or results of operations.

In September 2009 the FASB issued ASU 2009-12, which amends FASB ASC 820, Fair Value Measurements and Disclosures. This guidance applies to reporting entities that hold an investment that is required or permitted to be measured or disclosed at fair value on a recurring or nonrecurring basis if the investment does not have a readily determinable fair value and the investee has attributes of an investment company. For these investments, this update allows, as a practical expedient, the use of net asset value (NAV) as the basis to estimate fair value as long as it is not probable, as of the measurement date that the investment will be sold and NAV is not the value that will be used in the sale. The NAVs must be calculated consistent with the American Institute of Certified Public Accountants Audit and Accounting Guide, Investment Companies, which generally requires these investments to be measured at fair value. Additionally, the guidance provided updated disclosures for investments within its scope and noted that if the investor can redeem the investment with the investee on the measurement date at NAV, the investment should likely be classified as Level 2 in the fair value hierarchy. Investments that cannot be redeemed with the investee at NAV would generally be classified as Level 3 in the fair value hierarchy. If the investment is not redeemable with the investee on the measurement date, but will be at a future date, the length of time until the investment is redeemable should be considered in determining classification as Level 2 or 3. This guidance is effective for interim and annual periods ending after December 15, 2009 with early adoption permitted. The Account adopted this guidance effective the period ending December 31, 2009. The adoption of this guidance did not have a material impact on the financial statements of the Account.

(h) Subsequent Events

The Company evaluated subsequent events through the date the financial statements were issued with the SEC.

(2) Expenses

The Company does not deduct a sales charge from purchase payments received from the contract owners. However, if any part of the contract value of such contracts is redeemed, the Company will, with certain exceptions, deduct from a contract owners’ contract value a contingent deferred sales charge. 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 redeemed. 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 redeemed. 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 additional 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 redeeming units; and (b) a mortality and expense risk charge assessed through a reduction of unit value equal to an annualized rate of 1.30%; 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 assessed through a reduction of unit values equal to an annualized rate of 1.30%; 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 a reduction of unit values 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, 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, 2009 and 2008, total transfers to the Account from the fixed account were $818,404 and $279,943, respectively, and total transfers from the Account to the fixed account were $2,468,432 and $2,289,723, 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 $56 and $0 to the Account in the form of additional premium to contract owner accounts for the years ended December 31, 2009 and 2008, respectively. These amounts are included in purchase payments received from contract owners and are credited at time of annuitant death.

(4) Fair Value Measurement

FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Account generally uses the market approach as the valuation technique due to the nature of the mutual fund investments offered in the Account. This technique maximizes the use of observable inputs and minimizes the use of unobservable inputs.

(Continued)

20

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT NOTES TO FINANCIAL STATEMENTS

In accordance with FASB ASC 820, the Account categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

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

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

• Level 2 – Unadjusted quoted prices for similar assets in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. The assets utilizing Level 2 valuations represent investments in privately-traded registered mutual funds only offered through insurance products. These funds have no unfunded commitments or restrictions and the Account always has the ability to redeem its interest in the funds with the investee at NAV daily. The investment objectives of these mutual funds are described by the fund name in note 1(b) and in more detail in the applicable product prospectus.

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

The following table summarizes assets measured at fair value on a recurring basis as of December 31, 2009:

	Level 1	Level 2		Level 3	Total
Separate Account Investments	0	$	389,641,374	0	$	389,641,374

Net Accounts Payable of $9,526 are measured at settlement value which approximates the fair value due to the short-term nature of such liabilities.

The Account did not have any assets or liabilities reported at fair value on a nonrecurring basis required to be disclosed under FASB ASC 820.

The cost of purchases and sales of Investments for the year ended December 31, 2009 are as follows:

	Purchases of Investments		Sales of Investments
Janus Aspen Series - Overseas Portfolio - Institutional Shares (JAIG)	$	1,794,880	$2,030,419
Federated NVIT High Income Bond Fund - Class I (HIBF)		212,826	321,078
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)		821,602	519,985
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)		24,599	11,661
NVIT Fund - Class I (TRF)		2,020,249	14,201,816
NVIT Government Bond Fund - Class I (GBF)		2,717,878	5,339,478
NVIT Growth Fund - Class I (CAF)		225,373	490,453
NVIT Money Market Fund - Class I (SAM)		3,447,458	6,167,639
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)		6,359,684	6,311,000
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)		6,502,685	336,936
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)		20,222,340	965,611
Oppenheimer NVIT Large Cap Growth Fund - Class I (NVOLG1)		43,712	11,567
V.I. Capital Appreciation Fund - Series I (AVCA)		55,660	302,814
V.I. Global Health Care Fund - Series I (IVHS)		34,592	137,405
V.I. Global Real Estate Fund - Series I (IVRE)		119,475	380,550
V.I. International Growth Fund - Series I (AVIE)		410,630	580,386
VP Balanced Fund - Class I (ACVB)		314,256	1,078,222
VP Capital Appreciation Fund - Class I (ACVCA)		219,810	7,311,494
VP Income & Growth Fund - Class I (ACVIG)		331,308	641,901
Stock Index Fund, Inc. - Initial Shares (DSIF)		3,216,040	5,700,145
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)		285,188	1,980,354
Appreciation Portfolio - Initial Shares (DCAP)		1,277,014	947,185
Developing Leaders Portfolio - Initial Shares (DSC)		576,779	6,074,628
Quality Bond Portfolio - Initial Shares (DQBP)		597,185	1,532,530
Contrafund Portfolio - Service Class 2 (FC2)		544,664	1,563,333
Equity-Income Portfolio - Initial Class (FEIP)		1,510,017	8,790,105
High Income Portfolio - Initial Class (FHIP)		1,066,963	2,178,759
Templeton Foreign Securities Fund - Class 1 (TIF)		1,511,156	2,318,484
Balanced Portfolio - I Class Shares (AMBP)		440,915	1,700,350
Partners Portfolio - I Class Shares (AMTP)		34,053	1,135,375
Real Return Portfolio - Administrative Class (PMVRRA)		783,684	791,495
Series D (Global Series) (SBLD)		83,099	356,510
Series J (Mid Cap Growth Series) (SBLJ)		92,980	93,368
Series N (Managed Asset Allocation Series) (SBLN)		39,769	53,638
Series O (All Cap Value Series) (SBLO)		182,753	1,076,951
Series P (High Yield Series) (SBLP)		386,797	295,789
Series Q (Small Cap Value Series) (SBLQ)		350,392	610,022
Series V (Mid Cap Value Series) (SBLV)		625,575	585,273
Series X (Small Cap Growth Series) (SBLX)		101,988	305,425
Series Y (Select 25 Series) (SBLY)		38,248	13,803
Total Return Portfolio - Administrative Class (PMVTRA)		1,353,039	523,189
Micro-Cap Portfolio - Investment Class (ROCMC)		175,253	353,646
Advantage Funds Variable Trust - VT Opportunity Fund (SVOF)		71,289	32,163,662
Total	$	61,223,857	$118,284,434

(5) 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, 2009. The Account includes contracts administered by Security Benefit Life Insurance Company under a reinsurance agreement discussed in note 1.

(Continued)

21

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate**		Units	Unit Fair Value				Contract Owners’ Equity		Investment Income Ratio***		Total Return****					Inception Date*
Janus Aspen Series - Overseas Portfolio - Institutional Shares (JAIG)
2009	1.30	%	645,335	$	30.06			$	19,398,755	0.93	%	77.22	%
2008	1.30	%	721,840		16.96				12,242,415	4.49	%	-52.74	%
2007	1.30	%	758,346		35.89				27,216,991	0.62	%	26.64	%
2006	1.30	%	829,381		28.34				23,504,625	1.99	%	45.12	%
2005	1.30	%	847,784		19.53				16,557,188	1.13	%	30.58	%
Federated NVIT High Income Bond Fund - Class I (HIBF)
2009	1.30	%	50,503		15.53				784,449	9.61	%	44.10	%
2008	1.30	%	56,983		10.78				614,275	8.93	%	-28.93	%
2007	1.30	%	72,263		15.17				1,096,225	7.49	%	1.79	%
2006	1.30	%	83,360		14.90				1,242,064	7.20	%	9.17	%
2005	1.30	%	108,256		13.65				1,477,692	7.87	%	1.05	%
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)
2009	1.30	%	43,371		7.76				336,559	0.13	%	50.97	%
2008	1.30	%	361		5.14				1,856	0.00	%	-48.63	%
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)
2009	1.30	%	1,677		7.95				13,334	0.57	%	29.82	%
NVIT Fund - Class I (TRF)
2009	1.30	%	828,101		80.89	to	83.28		68,577,532	1.51	%	24.46	%
2008	1.30	%	923,897		64.99	to	66.92		61,480,606	1.53	%	-42.32	%
2007	1.30	%	1,097,211		112.67	to	116.01		126,569,280	1.05	%	6.77	%
2006	1.30	%	1,290,474		105.53	to	108.65		139,424,438	1.05	%	12.15	%
2005	1.30	%	1,522,109		94.09	to	96.88		146,647,005	0.89	%	6.05	%
NVIT Government Bond Fund - Class I (GBF)
2009	1.30	%	548,861		52.84	to	52.86		29,004,723	3.31	%	1.35	%
2008	1.30	%	618,883		52.14	to	52.16		32,269,954	4.08	%	6.32	%
2007	1.30	%	703,984		49.04	to	49.06		34,525,294	4.27	%	5.76	%
2006	1.30	%	769,710		46.37	to	46.39		35,693,483	3.96	%	2.00	%
2005	1.30	%	930,129		45.46	to	45.48		42,286,207	3.66	%	1.92	%
NVIT Growth Fund - Class I (CAF)
2009	1.30	%	258,697		16.52				4,272,690	0.55	%	31.74	%
2008	1.30	%	283,310		12.54				3,551,960	0.27	%	-39.50	%
2007	1.30	%	329,004		20.72				6,818,385	0.17	%	17.98	%
2006	1.30	%	410,944		17.57				7,218,539	0.05	%	4.79	%
2005	1.30	%	502,626		16.76				8,425,261	0.08	%	5.12	%
NVIT Money Market Fund - Class I (SAM)
2009	1.30	%	492,641		25.8	to	28.04		12,868,032	0.04	%	-1.26	%	to	-1.27	%
2008	1.30	%	589,424		26.13	to	28.40		15,572,313	2.03	%	0.73	%
2007	1.30	%	511,715		25.94	to	28.19		13,452,816	4.66	%	3.42	%
2006	1.30	%	512,094		25.08	to	27.26		12,994,957	4.38	%	3.18	%
2005	1.30	%	521,956		24.31	to	26.41		12,856,861	2.60	%	1.34	%
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
2009	1.30	%	9,149		8.08				73,936	0.59	%	28.05	%
2008	1.30	%	1,989		6.31				12,551	0.34	%	-36.91	%
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
2009	1.30	%	873,956		7.81				6,825,933	0.00	%	25.56	%
2008	1.30	%	1,247		6.22				7,756	0.00	%	-37.75	%
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
2009	1.30	%	2,489,175		8.63				21,481,461	1.18	%	28.81	%
2008	1.30	%	948		6.70				6,352	1.14	%	-33.01	%

(Continued)

22

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate**		Units	Unit Fair Value				Contract Owners’ Equity		Investment Income Ratio***		Total Return****					Inception Date*
Oppenheimer NVIT Large Cap Growth Fund - Class I (NVOLG1)
2009	1.30	%	2,676	$	12.95			$	34,654	0.13	%	29.46	%
V.I. Capital Appreciation Fund - Series I (AVCA)
2009	1.30	%	198,489		9.02				1,791,122	0.87	%	19.50	%
2008	1.30	%	230,205		7.55				1,738,052	0.00	%	-43.24	%
2007	1.30	%	240,113		13.30				3,193,521	0.00	%	10.55	%
2006	1.30	%	277,593		12.03				3,339,466	0.05	%	4.92	%
2005	1.30	%	331,083		11.47				3,797,520	0.06	%	7.43	%
V.I. Global Health Care Fund - Series I (IVHS)
2009	1.30	%	15,908		10.42	to	10.46		165,840	0.34	%	26.01	%
2008	1.30	%	20,625		8.27	to	8.30		170,630	0.00	%	-29.55	%
2007	1.30	%	30,772		11.73	to	11.79		361,057	0.00	%	10.39	%
2006	1.30	%	9,171		10.63				97,488	0.00	%	6.30	%				*
V.I. Global Real Estate Fund - Series I (IVRE)
2009	1.30	%	83,877		8.43	to	8.49		712,109	0.00	%	29.82	%
2008	1.30	%	83,683		6.49	to	6.54		547,281	5.32	%	-45.37	%
2007	1.30	%	103,865		11.89	to	11.97		1,243,255	8.52	%	-6.77	%
2006	1.30	%	43,468		12.75	to	12.84		558,121	1.82	%	27.52	%	to	28.4	%	*
V.I. International Growth Fund - Series I (AVIE)
2009	1.30	%	134,717		16.12				2,171,653	1.83	%	33.48	%
2008	1.30	%	140,626		12.08				1,698,758	0.69	%	-41.16	%
2007	1.30	%	111,709		20.52				2,292,270	0.43	%	13.22	%
2006	1.30	%	116,700		18.13				2,115,769	1.00	%	26.57	%
2005	1.30	%	119,041		14.32				1,704,667	0.75	%	16.40	%
VP Balanced Fund - Class I (ACVB)
2009	1.30	%	329,045		11.48				3,777,424	5.51	%	13.98	%
2008	1.30	%	391,485		10.07				3,942,440	2.72	%	-21.37	%
2007	1.30	%	444,810		12.81				5,697,834	2.14	%	3.56	%
2006	1.30	%	499,893		12.37				6,183,366	2.08	%	8.20	%
2005	1.30	%	648,931		11.43				7,417,399	1.71	%	3.57	%
VP Capital Appreciation Fund - Class I (ACVCA)
2009	1.30	%	162,639		25.15				4,090,655	1.49	%	35.29	%
2008	1.30	%	481,110		18.59				8,943,975	0.00	%	-46.89	%
2007	1.30	%	551,004		35.00				19,285,372	0.00	%	43.90	%
2006	1.30	%	592,823		24.32				14,418,211	0.00	%	15.70	%
2005	1.30	%	670,184		21.02				14,088,006	0.00	%	20.48	%
VP Income & Growth Fund - Class I (ACVIG)
2009	1.30	%	306,469		12.16				3,726,654	6.28	%	16.56	%
2008	1.30	%	340,781		10.43				3,554,339	2.60	%	-35.44	%
2007	1.30	%	376,866		16.15				6,086,401	1.93	%	-1.37	%
2006	1.30	%	422,565		16.38				6,921,603	1.86	%	15.57	%
2005	1.30	%	493,259		14.17				6,989,487	2.05	%	3.27	%
Stock Index Fund, Inc. - Initial Shares (DSIF)
2009	1.30	%	1,534,085		25.71				39,443,591	2.43	%	24.69	%
2008	1.30	%	1,708,090		20.62				35,220,811	2.42	%	-37.96	%
2007	1.30	%	1,888,564		33.24				62,775,318	1.72	%	3.88	%
2006	1.30	%	2,160,533		32.00				69,136,170	1.63	%	14.00	%
2005	1.30	%	2,477,379		28.07				69,539,109	1.57	%	3.33	%

(Continued)

23

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate**		Units	Unit Fair Value				Contract Owners’ Equity		Investment Income Ratio***		Total Return****					Inception Date*
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
2009	1.30	%	786,996	$	20.38			$	16,040,426	0.94	%	32.02	%
2008	1.30	%	861,072		15.44				13,294,940	0.74	%	-35.28	%
2007	1.30	%	936,992		23.85				22,347,303	0.55	%	6.38	%
2006	1.30	%	1,061,979		22.42				23,809,612	0.11	%	7.78	%
2005	1.30	%	1,220,524		20.80				25,386,952	0.00	%	2.27	%
Appreciation Portfolio - Initial Shares (DCAP)
2009	1.30	%	447,701		13.65				6,111,118	2.85	%	20.97	%
2008	1.30	%	450,589		11.28				5,082,652	2.41	%	-30.47	%
2007	1.30	%	560,484		16.23				9,096,652	1.54	%	5.73	%
2006	1.30	%	596,307		15.35				9,153,308	1.56	%	14.97	%
2005	1.30	%	706,112		13.35				9,426,596	0.02	%	3.02	%
Developing Leaders Portfolio - Initial Shares (DSC)
2009	1.30	%	1,842,173		17.30				31,869,522	1.91	%	24.40	%
2008	1.30	%	2,032,625		13.91				28,273,700	1.06	%	-38.41	%
2007	1.30	%	2,243,833		22.58				50,665,634	0.79	%	-12.22	%
2006	1.30	%	2,630,656		25.72				67,660,440	0.41	%	2.42	%
2005	1.30	%	3,014,064		25.11				75,683,142	0.00	%	4.43	%
Quality Bond Portfolio - Initial Shares (DQBP)
2009	1.30	%	356,513		17.60				6,274,964	4.52	%	13.46	%
2008	1.30	%	417,262		15.51				6,471,742	4.63	%	-5.43	%
2007	1.30	%	495,980		16.40				8,134,080	5.09	%	2.19	%
2006	1.30	%	621,438		16.05				9,974,084	4.51	%	2.88	%
2005	1.30	%	611,295		15.60				9,536,209	3.58	%	1.15	%
Contrafund Portfolio - Service Class 2 (FC2)
2009	1.30	%	380,484		9.63	to	9.66		3,664,536	1.15	%	33.71	%
2008	1.30	%	415,549		7.20	to	7.23		2,992,269	0.84	%	-43.44	%
2007	1.30	%	385,075		12.73	to	12.78		4,902,349	1.00	%	15.77	%
2006	1.30	%	218,327		11.00	to	11.04		2,401,598	1.16	%	10.00	%	to	10.36	%	*
Equity-Income Portfolio - Initial Class (FEIP)
2009	1.30	%	1,875,058		25.02				46,916,913	2.63	%	28.52	%
2008	1.30	%	2,086,629		19.47				40,626,580	2.72	%	-43.40	%
2007	1.30	%	2,350,913		34.40				80,871,282	1.81	%	0.20	%
2006	1.30	%	2,626,831		34.33				90,179,021	3.28	%	18.64	%
2005	1.30	%	3,000,073		28.94				86,820,898	1.64	%	4.49	%
High Income Portfolio - Initial Class (FHIP)
2009	1.30	%	743,170		17.05				12,671,017	7.95	%	42.09	%
2008	1.30	%	835,241		12.00				10,022,864	8.46	%	-25.96	%
2007	1.30	%	935,417		16.20				15,153,799	8.01	%	1.44	%
2006	1.30	%	1,040,565		15.97				16,617,862	7.40	%	9.79	%
2005	1.30	%	1,175,080		14.55				17,097,395	14.68	%	1.37	%
Templeton Foreign Securities Fund - Class 1 (TIF)
2009	1.30	%	856,838		24.39				20,901,796	5.73	%	35.56	%
2008	1.30	%	945,038		18.00				17,010,653	4.02	%	-41.01	%
2007	1.30	%	1,054,802		30.51				32,181,989	2.17	%	14.28	%
2006	1.30	%	1,220,801		26.70				32,595,352	1.41	%	20.12	%
2005	1.30	%	1,394,319		22.22				30,981,821	1.28	%	9.04	%

(Continued)

24

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate**		Units	Unit Fair Value				Contract Owners’ Equity		Investment Income Ratio***		Total Return****					Inception Date*
Balanced Portfolio - I Class Shares (AMBP)
2009	1.30	%	501,931	$	21.30			$	10,691,173	3.83	%	20.87	%
2008	1.30	%	565,805		17.62				9,969,731	4.10	%	-39.94	%
2007	1.30	%	604,146		29.34				17,725,681	1.15	%	14.09	%
2006	1.30	%	688,370		25.72				17,704,108	0.78	%	9.23	%
2005	1.30	%	768,558		23.54				18,092,394	0.92	%	7.77	%
Partners Portfolio- I Class Shares (AMTP)
2008	1.30	%	106,353		5.77				613,657	1.08	%	-53.01	%
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	%				*
Real Return Portfolio - Administrative Class (PMVRRA)
2009	1.30	%	109,739		11.86	to	11.87		1,302,602	3.02	%	16.81	%	to	16.95	%
2008	1.30	%	112,800		10.15				1,144,920	3.56	%	-8.23	%
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	%				*
Series D (Global Series) (SBLD)
2009	1.30	%	61,716		8.96				552,975	0.00	%	18.21	%
2008	1.30	%	81,426		7.58				617,209	0.00	%	-39.19	%
2007	1.30	%	77,458		12.46				965,127	0.00	%	7.41	%
2006	1.30	%	51,999		11.6				603,188	0.00	%	16.00	%				*
Series J (Mid Cap Growth Series) (SBLJ)
2009	1.30	%	45,011		7.65				344,334	0.00	%	42.19	%
2008	1.30	%	39,475		5.38				212,376	0.00	%	-40.75	%
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	%				*
Series N (Managed Asset Allocation Series) (SBLN)
2009	1.30	%	36,928		10.25				378,540	0.00	%	23.94	%
2008	1.30	%	36,644		8.27				303,046	0.00	%	-28.15	%
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	%				*
Series O (All Cap Value Series) (SBLO)
2009	1.30	%	213,205		9.19				1,959,354	0.00	%	31.29	%
2008	1.30	%	279,709		7.00				1,957,963	0.00	%	-39.23	%
2007	1.30	%	121,957		11.52	to	11.56		1,404,966	0.00	%	1.47	%
2006	1.30	%	87,799		11.35	to	11.4		996,541	0.00	%	13.5	%	to	13.97	%	*
Series P (High Yield Series) (SBLP)
2009	1.30	%	65,600		12.56				823,936	0.00	%	70.42	%
2008	1.30	%	57,785		7.37				425,875	0.00	%	-30.89	%
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	%				*
Series Q (Small Cap Value Series) (SBLQ)
2009	1.30	%	123,810		10.92	to	10.97		1,352,238	0.00	%	53.80	%	to	53.91	%
2008	1.30	%	137,935		7.10	to	7.13		979,407	0.00	%	-39.39	%
2007	1.30	%	92,999		11.71	to	11.76		1,089,029	0.00	%	8.81	%
2006	1.30	%	33,616		10.76				361,708	0.00	%	7.60	%				*
Series V (Mid Cap Value Series) (SBLV)
2009	1.30	%	301,666		10.81	to	10.84		3,261,019	0.00	%	42.05	%	to	42.06	%
2008	1.30	%	286,630		7.61	to	7.63		2,181,261	0.00	%	-29.40	%
2007	1.30	%	335,513		10.78	to	10.81		3,616,835	0.00	%	0.53	%
2006	1.30	%	175,077		10.72	to	10.76		1,876,830	0.00	%	7.2	%	to	7.55	%	*

(Continued)

25

NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate**	Units	Unit Fair Value				Contract Owners’ Equity		Investment Income Ratio***			Total Return****				Inception Date*
Series X (Small Cap Growth Series) (SBLX)
2009	1.30%	42,126	$	7.47			$	314,681		0.00	%	33.39%
2008	1.30%	56,389		5.60				315,778		0.00	%	-47.91%
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%				*
Series Y (Select 25 Series) (SBLY)
2009	1.30%	6,147		8.19				50,345		0.00	%	31.46%
2008	1.30%	2,051		6.23				12,778		0.00	%	-37.89%
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%				*
Total Return Portfolio - Administrative Class (PMVTRA)
2009	1.30%	236,312		12.92	to	12.96		3,053,206		5.12	%	12.55%	to	12.64	%
2008	1.30%	184,738		11.47	to	11.52		2,119,010		4.47	%	3.39%
2007	1.30%	74,518		11.09	to	11.14		826,451		5.43	%	7.32%
2006	1.30%	33,396		10.33				344,981		2.90	%	3.30%				*
Micro-Cap Portfolio - Investment Class (ROCMC)
2009	1.30%	141,676		9.85	to	9.86		1,395,512		0.00	%	55.99%	to	56.10	%
2008	1.30%	138,923		6.31	to	6.32		876,608		2.95	%	-44.01%
2007	1.30%	110,927		11.28	to	11.29		1,251,283		2.22	%	2.62%
2006	1.30%	40,766		10.99	to	11		448,021		0.31	%	9.9%	to	10.04	%	*
Advantage Funds Variable Trust - VT Opportunity Fund (SVOF)
2009	1.30%	1		27.48				24		0.00	%	45.82%
2008	1.30%	908,965		18.84				17,124,938		2.54	%	-40.88%
2007	1.30%	1,007,744		31.87				32,116,823		0.62	%	5.24%
2006	1.30%	1,161,657		30.28				35,175,040		0.00	%	10.76%
2005	1.30%	1,368,006		27.34				37,401,311		0.00	%	6.49%
2009	Reserves for annuity contracts in payout phase:									150,511
2009	Contract owners equity:								$	389,631,848
2008	Reserves for annuity contracts in payout phase:									172,591
2008	Contract owners equity:								$	344,378,872
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:								$	637,994,120
2005	Reserves for annuity contracts in payout phase:									439,260
2005	Contract owners equity:								$	642,652,380

* Denotes the minimum and/or maximum of the total return ranges, for underlying mutual fund options that were added and funded during the reporting period. One or both of the returns presented may not be annualized. Minimum and maximum ranges are not shown for underlying mutual fund options for which a single contract expense rate (product option) exists. In such case, the total return presented is representative of all units issued and outstanding at period end.

** 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 contract maintenance 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 subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

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

26

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, 2009, 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, 2009, 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, 2009, 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 10, 2010

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