NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2007

Assets:
Investments at fair value:
American Century VP – Balanced Fund – Class I (ACVPBal) 196,522 shares (cost $1,331,225)	$	1,440,506
American Century VP – Capital Appreciation Fund – Class I (ACVPCapAp) 45,589 shares (cost $456,154)		728,516
American Century VP – Income & Growth Fund – Class I (ACVPIncGr) 109,907 shares (cost $832,248)		929,814
American Century VP – Inflation Protection Fund – Class II (ACVPInflPro2) 181,188 shares (cost $1,864,998)		1,911,537
American Century VP – International Fund – Class I (ACVPInt) 119,653 shares (cost $773,446)		1,419,085
American Century VP – International Fund – Class III (ACVPInt3) 45,349 shares (cost $389,171)		537,838
American Century VP – Ultra® Fund – Class I (ACVPUltra) 8,404 shares (cost $102,102)		102,103
American Century VP – Value Fund – Class I (ACVPVal) 560,556 shares (cost $4,543,642)		4,187,351
Credit Suisse Trust – Global Small Cap Portfolio (CSTGlobSmCp) 7,730 shares (cost $80,751)		108,843
Credit Suisse Trust – International Focus Portfolio (CSTIntFoc) 50,870 shares (cost $440,804)		806,290
Credit Suisse Trust – Small Cap Core I Portfolio (CSTSmCapGr) 70,558 shares (cost $810,204)		1,091,533
Dreyfus IP – Small Cap Stock Index Portfolio – Service Shares (DryIPSmCap) 50,872 shares (cost $947,060)		897,377
Dreyfus Stock Index Fund, Inc. – Initial Shares (DryStkIx) 324,645 shares (cost $9,240,918)		12,141,740
Dreyfus VIF – Appreciation Portfolio – Initial Shares (DryVApp) 21,985 shares (cost $782,249)		986,267
Dreyfus VIF – Growth and Income Portfolio – Initial Shares (DryVGroInc) 26,032 shares (cost $464,648)		661,983
Federated IS – Quality Bond Fund II – Primary Shares (FedQualBd) 54,782 shares (cost $608,686)		621,230
Fidelity® VIP – Equity-Income Portfolio – Initial Class (FidVIPEI) 625,854 shares (cost $14,834,817)		14,964,162
Fidelity® VIP – Growth Portfolio – Initial Class (FidVIPGr) 123,731 shares (cost $4,079,536)		5,582,762
Fidelity® VIP – High Income Portfolio – Initial Class (FidVIPHI) 720,978 shares (cost $4,615,672)		4,311,449
Fidelity® VIP – Overseas Portfolio – Initial Class (FidVIPOv) 49,446 shares (cost $742,366)		1,251,978
Fidelity® VIP – Overseas Portfolio – Initial Class R (FidVIPOvR) 107,164 shares (cost $2,119,403)		2,708,023

(Continued)

2

NATIONWIDE VA SEPARATE ACCOUNT-B

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

Fidelity® VIP II – Asset Manager Portfolio – Initial Class (FidVIPAM) 217,717 shares (cost $3,036,900)	$	3,607,568
Fidelity® VIP II – Contrafund ® Portfolio – Initial Class (FidVIPCon) 710,195 shares (cost $19,423,745)		19,814,439
Fidelity® VIP II – Investment Grade Bond Portfolio – Service Class (FidVIPIGBdS) 147,753 shares (cost $1,834,917)		1,872,027
Fidelity® VIP III – Growth Opportunities Portfolio – Initial Class (FidVIPGrOp) 44,579 shares (cost $578,817)		997,242
Fidelity® VIP III – Value Strategies Portfolio – Service Class (FidVIPVaIS) 74,462 shares (cost $1,021,871)		933,759
Janus Aspen Series – Forty Portfolio – Service Shares (JAspForty) 7,131 shares (cost $214,355)		290,930
Janus Aspen Series – Global Technology Portfolio – Service II Shares (JAspGlTechS2) 15,495 shares (cost $82,740)		81,813
Janus Aspen Series – Global Technology Portfolio – Service Shares (JAspGlTechS) 4,620 shares (cost $17,587)		23,932
Janus Aspen Series – International Growth Portfolio – Service II Shares (JAspIntGroS2) 14,934 shares (cost $ 748,642)		967,402
Janus Aspen Series – International Growth Portfolio – Service Shares (JAspIntGroS) 805 shares (cost $18,116)		51,898
JPMorgan Series Trust II – Mid Cap Value Portfolio (JPM2MdCap) 6,664 shares (cost $197,742)		204,392
Lehman Brothers AMT – Short Duration Bond Portfolio – I Class (LBTShrtDBd) 358,918 shares (cost $4,624,182)		4,665,928
Nationwide VIT – Gartmore Emerging Markets Fund – Class III (NVITEmMrkts3) 54,077 shares (cost $946,348)		1,221,592
Nationwide VIT – Gartmore Global Utilities Fund – Class III (NVITGlUtl3) 38,293 shares (cost $472,328)		471,004
Nationwide VIT – Gartmore International Growth Fund – Class III (NVITIntGro3) 214,953 shares (cost $3,048,491)		3,024,390
Nationwide VIT – Gartmore Worldwide Leaders Fund – Class III (NVITWLead3) 3,931 shares (cost $69,823)		74,609
Nationwide VIT – Global Financial Services Fund – Class III (NVITGlFin3) 5,108 shares (cost $69,003)		55,631
Nationwide VIT – Global Health Sciences Fund – Class III (NVITGlHlth3) 18,218 shares (cost $198,059)		214,967
Nationwide VIT – Global Technology and Communications Fund – Class III (NVITGlTech3) 4,229 shares (cost $21,984)		21,908
Nationwide VIT – Government Bond Fund – Class I (NVITGvtBd) 408,641 shares (cost $4,639,148)		4,752,493
Nationwide VIT – Growth Fund – Class I (NVITGrowth) 48,994 shares (cost $473,127)		710,415
Nationwide VIT – International Value Fund – Class III (NVITIntVal3) 73,498 shares (cost $1,267,692)		1,281,061
Nationwide VIT – Investor Destinations Aggressive Fund – Class II (NVITIDAgg2) 12,035 shares (cost $141,656)		163,671
Nationwide VIT – Investor Destinations Conservative Fund – Class II (NVITIDCon2) 46,293 shares (cost $481,584)		481,446

(Continued)

3

NATIONWIDE VA SEPARATE ACCOUNT-B

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

Nationwide VIT – Investor Destinations Moderate Fund – Class II (NVITIDMod2) 112,142 shares (cost $1,311,617)	$	1,395,045
Nationwide VIT – Investor Destinations Moderately Aggressive Fund – Class II (NVITIDModAg2) 60,886 shares (cost $719,868)		812,223
Nationwide VIT – Investor Destinations Moderately Conservative Fund – Class II (NVITIDModCon2) 51,534 shares (cost $571,265)		584,910
Nationwide VIT – Mid Cap Growth Fund – Class I (NVITMdCpGr) 8,392 shares (cost $275,978)		273,004
Nationwide VIT – Mid Cap Index Fund – Class I (NVITMidCap) 311,046 shares (cost $5,952,215)		5,965,855
Nationwide VIT – Money Market Fund – Class I (NVITMyMkt) 12,191,067 shares (cost $12,191,067)		12,191,067
Nationwide VIT – Multi-Manager Small Cap Growth Fund – Class I (NVITSmCapGr) 4,438 shares (cost $75,144)		79,932
Nationwide VIT – Multi-Manager Small Cap Value Fund – Class I (NVITSmCapVal) 201,443 shares (cost $2,408,166)		1,990,260
Nationwide VIT – Multi-Manager Small Company Fund – Class I (NVITSmComp) 167,090 shares (cost $3,908,900)		3,711,066
Nationwide VIT – Nationwide Fund – Class I (NVITNWFund) 145,439 shares (cost $1,283,902)		1,976,517
Nationwide VIT – Nationwide Leaders Fund – Class III (NVITNWLead3) 32,005 shares (cost $449,423)		418,310
Nationwide VIT – U.S. Growth Leaders Fund – Class III (NVITUSGro3) 3,386 shares (cost $42,799)		43,984
Nationwide VIT – Van Kampen Comstock Value Fund – Class II (NVITVKVal2) 77,809 shares (cost $939,691)		890,917
Nationwide VIT – Van Kampen Multi Sector Bond Fund – Class I (NVITMltSec) 161,879 shares (cost $1,603,724)		1,596,126
Neuberger Berman AMT – Growth Portfolio – Class I (NBTAGro) 55,565 shares (cost $669,849)		1,072,410
Neuberger Berman AMT – Guardian Portfolio – I Class Shares (NBTAGuard) 17,770 shares (cost $282,506)		375,123
Neuberger Berman AMT – Partners Portfolio – Class I (NBTAPart) 150,339 shares (cost $3,391,664)		3,122,544
Neuberger Berman AMT – Socially Responsive Portfolio Class I (NBTSocRes) 5,700 shares (cost $87,860)		102,090
Oppenheimer VAF – Balanced Fund – Non-Service Shares (OppBal) 115,576 shares (cost $1,757,976)		1,896,600
Oppenheimer VAF – Capital Appreciation Fund – Non-Service Shares (OppCapAp) 26,788 shares (cost $944,621)		1,263,858
Oppenheimer VAF – Core Bond Fund – Non-Service Shares (OppBdFd) 300,820 shares (cost $3,326,416)		3,327,064
Oppenheimer VAF – Global Securities Fund – Class 3 (OppGlSec3) 65,807 shares (cost $2,184,836)		2,423,019
Oppenheimer VAF – Global Securities Fund – Non-Service Shares (OppGlSec) 105,000 shares (cost $2,088,857)		3,843,010
Oppenheimer VAF – Main Street® – Non-Service Shares (OppMSt) 12,569 shares (cost $271,778)		321,896

(Continued)

4

NATIONWIDE VA SEPARATE ACCOUNT-B

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

Oppenheimer VAF – Mid Cap Fund – Non-Service Shares (OppMidCap) 3,263 shares (cost $160,896)	$	176,411
The Dreyfus Socially Responsible Growth Fund, Inc. – Initial Shares (DrySRGro) 14,107 shares (cost $346,760)		430,273
Van Eck Worldwide Insurance Trust – Bond Fund – Class R1 (VEWrldBdR1) 37,296 shares (cost $421,453)		451,654
Van Eck Worldwide Insurance Trust – Bond Fund – Initial Class (VEWrldBd) 15,644 shares (cost $187,596)		189,603
Van Eck Worldwide Insurance Trust – Emerging Markets Fund – Class R1 (VEWrldEMktR1) 15,250 shares (cost $346,885)		422,124
Van Eck Worldwide Insurance Trust – Emerging Markets Fund – Initial Class (VEWrldEMkt) 24,853 shares (cost $388,948)		688,936
Van Eck Worldwide Insurance Trust – Hard Assets Fund – Class R1 (VEWrldHAsR1) 35,332 shares (cost $1,140,247)		1,454,977
Van Eck Worldwide Insurance Trust – Hard Assets Fund – Initial Class (VEWrldHAs) 23,949 shares (cost $433,009)		986,465
Van Kampen UIF – Emerging Markets Debt Portfolio – Class I (VKUEmMkt) 9,031 shares (cost $72,989)		77,031
Van Kampen UIF – U.S. Real Estate Portfolio – Class I (VKUUSRE) 144,639 shares (cost $2,990,615)		3,189,286
Wells Fargo AVT – Discovery FundSM (WFVDisc) 24,733 shares (cost $344,147)		497,385
Wells Fargo AVT – Opportunity FundSM (WFVOpp) 138,738 shares (cost $2,651,013)		3,056,408
Total investments		164,672,287
Accounts receivable		—
Total assets		164,672,287
Accounts payable		431
Contract owners’ equity (note 4)	$	164,671,856

See accompanying notes to financial statements.

5

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF OPERATIONS

Year Ended December 31, 2007

	Total			ACVPBal		ACVPCapAp		ACVPIncGr		ACVPInflPro2		ACVPInt		ACVPInt3		CVPUltra
Investment activity:
Reinvested dividends	$	3,502,072		35,798		—		22,718		86,106		11,478		4,630		—
Mortality and expense risk charges (note 2)		(2,591,021	)	(23,979	)	(8,275	)	(16,584	)	(27,935	)	(22,558	)	(9,026	)	(183	)
Net investment income (loss)		911,051		11,819		(8,275	)	6,134		58,171		(11,080	)	(4,396	)	(183	)
Proceeds from mutual fund shares sold		85,920,406		453,840		171,079		379,212		483,895		445,185		282,802		7,280
Cost of mutual fund shares sold		(74,730,640	)	(363,216	)	(86,436	)	(314,623	)	(505,777	)	(259,127	)	(178,326	)	(6,721	)
Realized gain (loss) on investments		11,189,766		90,624		84,643		64,589		(21,882	)	186,058		104,476		559
Change in unrealized gain (loss) on investments		(12,346,136	)	(129,771	)	124,499		(67,969	)	102,957		55,738		(10,002	)	(103	)
Net gain (loss) on investments		(1,156,370	)	(39,147	)	209,142		(3,380	)	81,075		241,796		94,474		456
Reinvested capital gains		11,368,968		87,160		—		—		—		—		—		—
Net increase (decrease) in contract owners’equity resulting from operations	$	11,123,649		59,832		200,867		2,754		139,246		230,716		90,078		273
	ACVPVal			CSTGlobSmCp		CSTIntFoc		CSTSmCapGr		DryIPSmCap		DryStkIx		DryVApp		DryVGroInc
Investment activity:
Reinvested dividends	$	132,407		—		8,913		—		3,689		204,726		17,109		5,517
Mortality and expense risk charges (note 2)		(106,455	)	(1,743	)	(12,542	)	(18,409	)	(15,044	)	(177,465	)	(15,751	)	(10,804	)
Net investment income (loss)		25,952		(1,743	)	(3,629	)	(18,409	)	(11,355	)	27,261		1,358		(5,287	)
Proceeds from mutual fund shares sold		4,576,938		4,395		180,255		282,789		404,779		2,535,174		273,662		200,705
Cost of mutual fund shares sold		(4,245,202	)	(3,946	)	(100,199	)	(161,175	)	(382,724	)	(1,515,358	)	(216,528	)	(135,367	)
Realized gain (loss) on investments		331,736		449		80,056		121,614		22,055		1,019,816		57,134		65,338
Change in unrealized gain (loss) on investments		(1,144,032	)	(4,785	)	44,498		(122,736	)	(79,265	)	(679,295	)	1,173		(46,609	)
Net gain (loss) on investments		(812,296	)	(4,336	)	124,554		(1,122	)	(57,210	)	340,521		58,307		18,729
Reinvested capital gains		686,625		—		—		—		39,618		—		—		35,998
Net increase (decrease) in contract owners’equity resulting from operations	$	(99,719	)	(6,079	)	120,925		(19,531	)	(28,947	)	367,782		59,665		49,440

(Continued)

6

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2007

	FedQualBd			FidVIPEI		FidVIPGr		FidVIPHI		FidVIPOv		FidVIPOvR		FidVIPAM		FidVIPCon
Investment activity:
Reinvested dividends	$	27,251		285,458		45,661		370,505		42,856		84,071		224,159		178,995
Mortality and expense risk charges (note 2)		(8,818	)	(227,247	)	(80,840	)	(123,552	)	(18,960	)	(37,846	)	(55,394	)	(296,690	)
Net investment income (loss)		18,433		58,211		(35,179	)	246,953		23,896		46,225		168,765		(117,695	)
Proceeds from mutual fund shares sold		127,119		3,290,740		2,260,405		12,786,790		269,589		533,347		786,066		4,298,824
Cost of mutual fund shares sold		(127,890	)	(2,033,052	)	(1,405,605	)	(12,693,251	)	(157,727	)	(323,348	)	(756,592	)	(2,353,285	)
Realized gain (loss) on investments		(771	)	1,257,688		854,800		93,539		111,862		209,999		29,474		1,945,539
Change in unrealized gain (loss)on investments		4,781		(2,620,584	)	448,264		(146,862	)	(34,468	)	(40,828	)	190,694		(3,632,371	)
Net gain (loss) on investments		4,010		(1,362,896	)	1,303,064		(53,323	)	77,394		169,171		220,168		(1,686,832	)
Reinvested capital gains		—		1,258,647		4,623		—		90,224		156,202		106,851		4,787,364
Net increase (decrease) in contract owners’equity resulting from operations	$	22,443		(46,038	)	1,272,508		193,630		191,514		371,598		495,784		2,982,837
	FidVIPIGBdS			FidVIPGrOp		FidVIPVaIS		JAspForty		JAspGlTechS2		JAspGlTechS		JAspIntGroS2		JAspIntGroS
Investment activity:
Reinvested dividends	$	17,689		—		6,162		410		252		76		3,586		358
Mortality and expense risk charges (note 2)		(16,575	)	(14,720	)	(17,588	)	(3,139	)	(656	)	(356	)	(12,190	)	(1,224	)
Net investment income (loss)		1,114		(14,720	)	(11,426	)	(2,729	)	(404	)	(280	)	(8,604	)	(866	)
Proceeds from mutual fund shares sold		617,098		408,304		1,106,480		50,551		142,536		5,244		392,244		67,194
Cost of mutual fund shares sold		(600,955	)	(253,764	)	(1,094,452	)	(36,016	)	(131,432	)	(4,600	)	(288,581	)	(26,288	)
Realized gain (loss) on investments		16,143		154,540		12,028		14,535		11,104		644		103,663		40,906
Change in unrealized gain (loss)on investments		18,370		52,253		(103,907	)	52,347		(5,792	)	3,965		96,691		(22,642	)
Net gain (loss) on investments		34,513		206,793		(91,879	)	66,882		5,312		4,609		200,354		18,264
Reinvested capital gains		—		—		49,686		—		—		—		—		—
Net increase (decrease) in contract owners’equity resulting from operations	$	35,627		192,073		(53,619	)	64,153		4,908		4,329		191,750		17,398

(Continued)

7

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2007

	JPM2MdCap			LBTShrtDBd		NVITEmMrkts3		NVITGlUtl3		NVITIntGro3		NVITWLead3		NVITGlFin3		NVITGlHlth3
Investment activity:
Reinvested dividends	$	14,235		130,198		6,882		10,763		1,830		464		2,711		134
Mortality and expense risk charges (note 2)		(10,693	)	(68,435	)	(13,941	)	(6,357	)	(15,107	)	(1,554	)	(2,343	)	(2,967	)
Net investment income (loss)		3,542		61,763		(7,059	)	4,406		(13,277	)	(1,090	)	368		(2,833	)
Proceeds from mutual fund shares sold		1,506,034		804,849		213,781		129,802		517,151		140,767		245,501		92,575
Cost of mutual fund shares sold		(1,265,735	)	(822,106	)	(147,932	)	(107,698	)	(391,477	)	(128,376	)	(252,436	)	(87,012	)
Realized gain (loss) on investments		240,299		(17,257	)	65,849		22,104		125,674		12,391		(6,935	)	5,563
Change in unrealized gain (loss)on investments		(205,677	)	105,460		172,184		(41,175	)	(85,977	)	2,812		(2,129	)	13,738
Net gain (loss) on investments		34,622		88,203		238,033		(19,071	)	39,697		15,203		(9,064	)	19,301
Reinvested capital gains		71,808		—		108,272		88,038		35,399		—		11,008		3,978
Net increase (decrease) in contract owners’equity resulting from operations	$	109,972		149,966		339,246		73,373		61,819		14,113		2,312		20,446
	NVITGlTech3			NVITGvtBd		NVITGrowth		NVITIntVal3		NVITIDAgg2		NVITIDCon2		NVITIDMod2		NVITIDModAg2
Investment activity:
Reinvested dividends	$	—		254,760		1,245		79,774		3,119		11,876		33,268		16,397
Mortality and expense risk charges (note 2)		(394	)	(85,998	)	(10,836	)	(53,192	)	(2,336	)	(4,215	)	(17,771	)	(10,723	)
Net investment income (loss)		(394	)	168,762		(9,591	)	26,582		783		7,661		15,497		5,674
Proceeds from mutual fund shares sold		64,696		3,144,971		253,179		3,396,486		2,366		191,902		186,413		119,632
Cost of mutual fund shares sold		(53,181	)	(3,324,576	)	(147,158	)	(3,274,882	)	(1,984	)	(188,304	)	(155,781	)	(92,489	)
Realized gain (loss) on investments		11,515		(179,605	)	106,021		121,604		382		3,598		30,632		27,143
Change in unrealized gain (loss) on investments		(6,734	)	315,078		23,702		(191,758	)	291		(3,633	)	(24,931	)	(22,425	)
Net gain (loss) on investments		4,781		135,473		129,723		(70,154	)	673		(35	)	5,701		4,718
Reinvested capital gains		—		—		—		282,807		5,011		4,690		19,342		12,512
Net increase (decrease) in contract owners’equity resulting from operations	$	4,387		304,235		120,132		239,235		6,467		12,316		40,540		22,904

(Continued)

8

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2007

	NVITIDModCon2			NVITJPBal		NVITMdCpGr		NVITMidCap		NVITMyMkt		NVITSmCapGr		NVITSmCapVal		NVITSmComp
Investment activity:
Reinvested dividends	$	20,131		182		—		68,913		401,819		—		27,539		3,575
Mortality and expense risk charges (note 2)		(10,209	)	(118	)	(4,469	)	(75,441	)	(126,476	)	(2,193	)	(40,500	)	(64,662	)
Net investment income (loss)		9,922		64		(4,469	)	(6,528	)	275,343		(2,193	)	(12,961	)	(61,087	)
Proceeds from mutual fund shares sold		210,913		19,471		327,548		1,446,734		14,408,487		164,142		1,304,543		1,288,148
Cost of mutual fund shares sold		(190,767	)	(18,689	)	(280,078	)	(1,234,462	)	(14,408,487	)	(143,756	)	(1,106,025	)	(1,153,301	)
Realized gain (loss) on investments		20,146		782		47,470		212,272		—		20,386		198,518		134,847
Change in unrealized gain (loss)on investments		(24,107	)	(496	)	(26,268	)	(210,720	)	—		(2,559	)	(638,907	)	(550,926	)
Net gain (loss) on investments		(3,961	)	286		21,202		1,552		—		17,827		(440,389	)	(416,079	)
Reinvested capital gains		19,954		191		—		142,698		—		—		298,082		567,894
Net increase (decrease) in contract owners’equity resulting from operations	$	25,915		541		16,733		137,722		275,343		15,634		(155,268	)	90,728
	NVITNWFund			NVITNWLead3		NVITUSGro3		NVITVKVal2		NVITMltSec		NBTAGro		NBTAGuard		NBTAPart
Investment activity:
Reinvested dividends	$	22,076		4,984		—		14,913		60,433		—		1,038		20,193
Mortality and expense risk charges (note 2)		(31,344	)	(19,001	)	(1,192	)	(15,953	)	(21,337	)	(15,095	)	(6,489	)	(63,342	)
Net investment income (loss)		(9,268	)	(14,017	)	(1,192	)	(1,040	)	39,096		(15,095	)	(5,451	)	(43,149	)
Proceeds from mutual fund shares sold		425,035		2,628,095		120,985		283,478		3,362,703		213,333		183,809		3,204,673
Cost of mutual fund shares sold		(251,711	)	(2,633,206	)	(112,514	)	(263,077	)	(3,345,508	)	(115,425	)	(114,789	)	(3,030,598	)
Realized gain (loss) on investments		173,324		(5,111	)	8,471		20,401		17,195		97,908		69,020		174,075
Change in unrealized gain (loss) on investments		(121,878	)	63,363		4,669		(100,869	)	(15,074	)	111,956		(34,839	)	(195,172	)
Net gain (loss) on investments		51,446		58,252		13,140		(80,468	)	2,121		209,864		34,181		(21,097	)
Reinvested capital gains		100,032		68,011		—		42,161		50		—		—		315,991
Net increase (decrease) in contract owners’equity resulting from operations	$	142,210		112,246		11,948		(39,347	)	41,267		194,769		28,730		251,745

(Continued)

9

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2007

	NBTSocRes			OppBal		OppCapAp		OppBdFd		OppGlSec3		OppGlSec		OppMSt		OppMidCap
Investment activity:
Reinvested dividends	$	88		57,390		3,436		176,652		36,823		59,020		4,339		—
Mortality and expense risk charges (note 2)		(1,533	)	(31,424	)	(20,300	)	(49,899	)	(39,890	)	(62,446	)	(5,501	)	(2,951	)
Net investment income (loss)		(1,445	)	25,966		(16,864	)	126,753		(3,067	)	(3,426	)	(1,162	)	(2,951	)
Proceeds from mutual fund shares sold		17,154		503,703		520,863		520,421		703,754		882,961		162,471		58,372
Cost of mutual fund shares sold		(14,104	)	(470,987	)	(371,560	)	(513,150	)	(585,239	)	(427,056	)	(115,890	)	(47,245	)
Realized gain (loss) on investments		3,050		32,716		149,303		7,271		118,515		455,905		46,581		11,127
Change in unrealized gain (loss) on investments		3,289		(181,155	)	30,059		(39,755	)	(111,834	)	(451,606	)	(31,656	)	2,552
Net gain (loss) on investments		6,339		(148,439	)	179,362		(32,484	)	6,681		4,299		14,925		13,679
Reinvested capital gains		332		179,481		—		—		134,063		214,539		—		—
Net increase (decrease) in contract owners’ equity resulting from operations	$	5,226		57,008		162,498		94,269		137,677		215,412		13,763		10,728
	DrySRGro			VEWrldBdR1		VEWrldBd		VEWrldEMktR1		VEWrldEMkt		VEWrldHAsR1		VEWrldHAs		VKUEmMkt
Investment activity:
Reinvested dividends	$	2,897		29,414		13,653		2,604		3,092		1,419		993		5,813
Mortality and expense risk charges (note 2)		(7,525	)	(6,558	)	(2,974	)	(6,970	)	(9,891	)	(17,362	)	(12,484	)	(1,179	)
Net investment income (loss)		(4,628	)	22,856		10,679		(4,366	)	(6,799	)	(15,943	)	(11,491	)	4,634
Proceeds from mutual fund shares sold		176,460		114,061		59,920		432,617		192,898		543,244		64,113		14,733
Cost of mutual fund shares sold		(118,577	)	(124,170	)	(65,116	)	(351,258	)	(94,332	)	(401,480	)	(27,209	)	(13,481	)
Realized gain (loss) on investments		57,883		(10,109	)	(5,196	)	81,359		98,566		141,764		36,904		1,252
Change in unrealized gain (loss) on investments		(19,332	)	19,661		9,359		(34,570	)	(9,072	)	130,759		184,602		(4,610	)
Net gain (loss) on investments		38,551		9,552		4,163		46,789		89,494		272,523		221,506		(3,358	)
Reinvested capital gains		—		—		—		102,858		122,147		138,463		96,872		2,484
Net increase (decrease) in contract owners’ equity resulting from operations	$	33,923		32,408		14,842		145,281		204,842		395,043		306,887		3,760

(Continued)

10

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2007

	VKUUSRE			WFVDisc		WFVOpp
Investment activity:
Reinvested dividends	$	49,480		—		20,927
Mortality and expense risk charges (note 2)		(66,859	)	(7,615	)	(50,429	)
Net investment income (loss)		(17,379	)	(7,615	)	(29,502	)
Proceeds from mutual fund shares sold		1,618,415		155,864		751,659
Cost of mutual fund shares sold		(778,245	)	(82,684	)	(523,774	)
Realized gain (loss) on investments		840,170		73,180		227,885
Change in unrealized gain (loss) on investments		(1,984,690	)	33,050		(502,395	)
Net gain (loss) on investments		(1,144,520	)	106,230		(274,510	)
Reinvested capital gains		386,397		—		490,405
Net increase (decrease) in contract owners’ equity resulting from operations	$	(775,502	)	98,615		186,393

See accompanying notes to financial statements.

11

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2007 and 2006

	Total					ACVPBal				ACVPCapAp				ACVPIncGr
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	911,051		1,347,501		11,819		10,166		(8,275	)	(7,109	)	6,134		31,290
Realized gain (loss) on investments		11,189,766		12,251,229		90,624		59,152		84,643		46,929		64,589		263,961
Change in unrealized gain (loss) on investments		(12,346,136	)	(1,340,568	)	(129,771	)	(45,156	)	124,499		23,240		(67,969	)	(78,492	)
Reinvested capital gains		11,368,968		7,472,523		87,160		127,954		—		—		—		—
Net increase (decrease) in contract owners’ equity resulting from operations		11,123,649		19,730,685		59,832		152,116		200,867		63,060		2,754		216,759
Equity transactions:
Purchase payments received from contract owners (note 3)		1,778,857		1,366,174		2,092		3,485		135		180		3,932		15,661
Transfers between funds		—		—		(18,251	)	(53,653	)	165,527		10,761		(156,666	)	(1,815,295	)
Redemptions (note 3)		(28,524,965	)	(25,343,431	)	(378,234	)	(337,784	)	(116,941	)	(54,711	)	(165,221	)	(308,981	)
Annuity benefits		(1,035	)	(6,915	)	—		—		—		—		—		—
Adjustments to maintain reserves		(618	)	(719	)	(22	)	8		1		(28	)	(9	)	16
Net equity transactions		(26,747,761	)	(23,984,891	)	(394,415	)	(387,944	)	48,722		(43,798	)	(317,964	)	(2,108,599	)
Net change in contract owners’ equity		(15,624,112	)	(4,254,206	)	(334,583	)	(235,828	)	249,589		19,262		(315,210	)	(1,891,840	)
Contract owners’ equity beginning of period		180,295,968		184,550,174		1,775,074		2,010,902		478,921		459,659		1,245,016		3,136,856
Contract owners’ equity end of period	$	164,671,856		180,295,968		1,440,491		1,775,074		728,510		478,921		929,806		1,245,016
CHANGES IN UNITS:
Beginning units		9,631,242		11,215,473		99,945		122,320		33,133		36,737		92,692		269,493
Units purchased		4,015,927		4,834,061		2,519		7,992		13,110		8,884		3,351		7,592
Units redeemed		(5,245,057	)	(6,418,292	)	(24,029	)	(30,367	)	(11,165	)	(12,488	)	(25,747	)	(184,393	)
Ending units		8,402,112		9,631,242		78,435		99,945		35,078		33,133		70,296		92,692

(Continued)

12

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	ACVPInflPro2					ACVPInt				ACVPInt3				ACVPUltra
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	58,171		37,982		(11,080	)	4,048		(4,396	)	1,891		(183	)	(179	)
Realized gain (loss) on investments		(21,882	)	(23,608	)	186,058		89,521		104,476		126,787		559		(595	)
Change in unrealized gain (loss) on investments		102,957		(22,122	)	55,738		233,332		(10,002	)	22,793		(103	)	(162	)
Reinvested capital gains		—		—		—		—		—		—		—		—
Net increase (decrease) in contract owners’ equity resulting from operations		139,246		(7,748	)	230,716		326,901		90,078		151,471		273		(936	)
Equity transactions:
Purchase payments received from contract owners (note 3)		—		8,909		—		—		5,906		14,259		(20	)	—
Transfers between funds		19,765		(385,755	)	(90,294	)	(101,360	)	(36,808	)	17,298		100,588		(22,424	)
Redemptions (note 3)		(184,652	)	(183,605	)	(332,324	)	(193,891	)	(168,492	)	(257,573	)	(637	)	(12,436	)
Annuity benefits		(144	)	(24	)	—		—		—		—		—		—
Adjustments to maintain reserves		(114	)	221		5		(5	)	(17	)	22		1		—
Net equity transactions		(165,145	)	(560,254	)	(422,613	)	(295,256	)	(199,411	)	(225,994	)	99,932		(34,860	)
Net change in contract owners’ equity		(25,899	)	(568,002	)	(191,897	)	31,645		(109,333	)	(74,523	)	100,205		(35,796	)
Contract owners’ equity beginning of period		1,937,219		2,505,221		1,611,004		1,579,359		647,182		721,705		1,898		37,694
Contract owners’ equity end of period	$	1,911,320		1,937,219		1,419,107		1,611,004		537,849		647,182		102,103		1,898
CHANGES IN UNITS:
Beginning units		181,152		234,776		76,162		92,002		42,134		57,895		185		3,503
Units purchased		35,061		54,282		—		—		5,145		10,690		8,813		1,649
Units redeemed		(50,568	)	(107,906	)	(18,493	)	(15,840	)	(17,180	)	(26,451	)	(651	)	(4,967	)
Ending units		165,645		181,152		57,669		76,162		30,099		42,134		8,347		185

(Continued)

13

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	ACVPVal					CSTGlobSmCp				CSTIntFoc				CSTSmCapGr
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	25,952		(7,141	)	(1,743	)	(1,853	)	(3,629	)	(3,645	)	(18,409	)	(21,872	)
Realized gain (loss) on investments		331,736		408,424		449		(367	)	80,056		24,143		121,614		114,657
Change in unrealized gain (loss) on investments		(1,144,032	)	68,811		(4,785	)	15,012		44,498		107,890		(122,736	)	(42,931	)
Reinvested capital gains		686,625		570,839		—		—		—		—		—		—
Net increase (decrease) in contract owners’ equity resulting from operations		(99,719	)	1,040,933		(6,079	)	12,792		120,925		128,388		(19,531	)	49,854
Equity transactions:
Purchase payments received from contract owners (note 3)		51,926		20,128		—		—		—		—		10,959		9,025
Transfers between funds		(3,492,754	)	1,878,894		—		(11,384	)	(486	)	(11,779	)	(39,143	)	(82,806	)
Redemptions (note 3)		(845,356	)	(941,084	)	(2,646	)	(12,825	)	(167,221	)	(48,362	)	(223,064	)	(170,214	)
Annuity benefits		(44	)	(7	)	—		—		—		—		—		—
Adjustments to maintain reserves		(35	)	33		(37	)	35		5		1		(1	)	(30	)
Net equity transactions		(4,286,263	)	957,964		(2,683	)	(24,174	)	(167,702	)	(60,140	)	(251,249	)	(244,025	)
Net change in contract owners’ equity		(4,385,982	)	1,998,897		(8,762	)	(11,382	)	(46,777	)	68,248		(270,780	)	(194,171	)
Contract owners’ equity beginning of period		8,573,319		6,574,422		117,590		128,972		853,063		784,815		1,362,315		1,556,486
Contract owners’ equity end of period	$	4,187,337		8,573,319		108,828		117,590		806,286		853,063		1,091,535		1,362,315
CHANGES IN UNITS:
Beginning units		348,798		312,800		7,775		9,514		60,904		65,522		96,489		113,827
Units purchased		10,136		126,859		—		—		—		—		1,156		3,633
Units redeemed		(176,701	)	(90,861	)	(172	)	(1,739	)	(10,803	)	(4,618	)	(18,531	)	(20,971	)
Ending units		182,233		348,798		7,603		7,775		50,101		60,904		79,114		96,489

(Continued)

14

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	DryIPSmCap					DryStkIx				DryVApp				DryVGroInc
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(11,355	)	(6,215	)	27,261		19,817		1,358		3,528		(5,287	)	(5,516	)
Realized gain (loss) on investments		22,055		47,043		1,019,816		1,255,621		57,134		64,187		65,338		12,718
Change in unrealized gain (loss) on investments		(79,265	)	7,767		(679,295	)	355,718		1,173		94,075		(46,609	)	90,636
Reinvested capital gains		39,618		9,302		—		—		—		—		35,998		—
Net increase (decrease) in contract owners’ equity resulting from operations		(28,947	)	57,897		367,782		1,631,156		59,665		161,790		49,440		97,838
Equity transactions:
Purchase payments received from contract owners (note 3)		30,007		7,180		164,021		153,058		3,572		293		—		128
Transfers between funds		69,484		610,695		977,039		(1,757,439	)	(7,845	)	(404,280	)	(49,807	)	(37,768	)
Redemptions (note 3)		(155,883	)	(132,350	)	(1,606,478	)	(1,876,488	)	(211,191	)	(96,180	)	(137,773	)	(97,386	)
Annuity benefits		—		—		(86	)	(3,627	)	—		—		—		—
Adjustments to maintain reserves		(32	)	15		(118	)	(97	)	(12	)	(10	)	22		(18	)
Net equity transactions		(56,424	)	485,540		(465,622	)	(3,484,593	)	(215,476	)	(500,177	)	(187,558	)	(135,044	)
Net change in contract owners’ equity		(85,371	)	543,437		(97,840	)	(1,853,437	)	(155,811	)	(338,387	)	(138,118	)	(37,206	)
Contract owners’ equity beginning of period		982,741		439,304		12,239,472		14,092,909		1,142,058		1,480,445		800,111		837,317
Contract owners’ equity end of period	$	897,370		982,741		12,141,632		12,239,472		986,247		1,142,058		661,993		800,111
CHANGES IN UNITS:
Beginning units		66,526		33,532		556,906		729,791		75,874		112,905		56,052		66,200
Units purchased		24,241		70,953		84,520		31,879		3,158		5,685		277		485
Units redeemed		(28,715	)	(37,959	)	(108,789	)	(204,764	)	(16,967	)	(42,716	)	(12,932	)	(10,633	)
Ending units		62,052		66,526		532,637		556,906		62,065		75,874		43,397		56,052

(Continued)

15

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	FedQualBd					FidVIPEI				FidVIPGr				FidVIPHI
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	18,433		12,981		58,211		279,353		(35,179	)	(63,650	)	246,953		677,168
Realized gain (loss) on investments		(771	)	(4,182	)	1,257,688		838,262		854,800		780,855		93,539		(163,727	)
Change in unrealized gain (loss) on investments		4,781		5,376		(2,620,584	)	(354,362	)	448,264		(452,939	)	(146,862	)	315,876
Reinvested capital gains		—		—		1,258,647		1,799,519		4,623		—		—		—
Net increase (decrease) in contract owners’ equity resulting from operations		22,443		14,175		(46,038	)	2,562,772		1,272,508		264,266		193,630		829,317
Equity transactions:
Purchase payments received from contract owners (note 3)		2,558		18,626		111,275		96,920		8,131		38,896		10,928		25,887
Transfers between funds		60,427		74,157		1,438,621		435,107		(19,200	)	(1,129,535	)	(5,808,794	)	125,862
Redemptions (note 3)		(48,870	)	(85,406	)	(2,233,848	)	(2,166,761	)	(958,681	)	(1,136,073	)	(878,975	)	(1,028,994	)
Annuity benefits		—		—		(114	)	(18	)	—		(3,135	)	—		—
Adjustments to maintain reserves		10		(14	)	(61	)	(11	)	(36	)	(80	)	(6	)	49
Net equity transactions		14,125		7,363		(684,127	)	(1,634,763	)	(969,786	)	(2,229,927	)	(6,676,847	)	(877,196	)
Net change in contract owners’ equity		36,568		21,538		(730,165	)	928,009		302,722		(1,965,661	)	(6,483,217	)	(47,879	)
Contract owners’ equity beginning of period		584,663		563,125		15,694,310		14,766,301		5,280,016		7,245,677		10,794,658		10,842,537
Contract owners’ equity end of period	$	621,231		584,663		14,964,145		15,694,310		5,582,738		5,280,016		4,311,441		10,794,658
CHANGES IN UNITS:
Beginning units		50,736		50,161		688,451		767,364		293,427		423,840		829,172		913,041
Units purchased		11,934		22,100		110,159		66,563		64,430		8,656		473,024		913,271
Units redeemed		(10,758	)	(21,525	)	(142,517	)	(145,476	)	(109,884	)	(139,069	)	(975,231	)	(997,140	)
Ending units		51,912		50,736		656,093		688,451		247,973		293,427		326,965		829,172

(Continued)

16

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	FidVIPOv					FidVIPOvR				FidVIPAM				FidVIPCon
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	23,896		(7,067	)	46,225		(11,171	)	168,765		48,417		(117,695	)	(23,408	)
Realized gain (loss) on investments		111,862		38,409		209,999		155,712		29,474		(56,521	)	1,945,539		1,315,526
Change in unrealized gain (loss) on investments		(34,468	)	150,184		(40,828	)	152,051		190,694		222,896		(3,632,371	)	(1,129,055	)
Reinvested capital gains		90,224		7,657		156,202		12,897		106,851		—		4,787,364		1,605,648
Net increase (decrease) in contract owners’ equity resulting from operations		191,514		189,183		371,598		309,489		495,784		214,792		2,982,837		1,768,711
Equity transactions:
Purchase payments received from contract owners (note 3)		13		—		5,095		19,376		5,019		24,882		170,026		138,922
Transfers between funds		(80,648	)	(5,627	)	371,293		132,196		(148,747	)	(2,097	)	(180,750	)	2,515,855
Redemptions (note 3)		(169,981	)	(90,503	)	(327,605	)	(127,292	)	(577,442	)	(387,296	)	(3,332,826	)	(2,007,547	)
Annuity benefits		—		—		(81	)	(12	)	—		—		(122	)	(19	)
Adjustments to maintain reserves		(54	)	4		(16	)	(44	)	(16	)	1		30		(70	)
Net equity transactions		(250,670	)	(96,126	)	48,686		24,224		(721,186	)	(364,510	)	(3,343,642	)	647,141
Net change in contract owners’ equity		(59,156	)	93,057		420,284		333,713		(225,402	)	(149,718	)	(360,805	)	2,415,852
Contract owners’ equity beginning of period		1,311,110		1,218,053		2,287,748		1,954,035		3,832,947		3,982,665		20,175,263		17,759,411
Contract owners’ equity end of period	$	1,251,954		1,311,110		2,708,032		2,287,748		3,607,545		3,832,947		19,814,458		20,175,263
CHANGES IN UNITS:
Beginning units		66,548		71,947		137,063		136,227		223,190		245,278		684,496		663,447
Units purchased		—		—		32,180		38,420		809		15,282		31,183		143,359
Units redeemed		(11,579	)	(5,399	)	(28,944	)	(37,584	)	(39,441	)	(37,370	)	(135,545	)	(122,310	)
Ending units		54,969		66,548		140,299		137,063		184,558		223,190		580,134		684,496

(Continued)

17

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	FidVIPIGBdS					FidVIPGrOp				FidVIPVaIS				JAspForty
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	1,114		1,042		(14,720	)	(9,435	)	(11,426	)	(3,262	)	(2,729	)	(3,140	)
Realized gain (loss) on investments		16,143		41,008		154,540		195,434		12,028		(476	)	14,535		30,810
Change in unrealized gain (loss) on investments		18,370		17,049		52,253		(163,431	)	(103,907	)	(10,492	)	52,347		(11,265	)
Reinvested capital gains		—		774		—		—		49,686		70,173		—		—
Net increase (decrease) in contract owners’ equity resulting from operations		35,627		59,873		192,073		22,568		(53,619	)	55,943		64,153		16,405
Equity transactions:
Purchase payments received from contract owners (note 3)		209,046		10,853		—		146		31,661		202		—		591
Transfers between funds		1,589,838		125,946		(78,811	)	(586,717	)	632,606		(11,127	)	70,321		(109,301	)
Redemptions (note 3)		(349,540	)	(132,294	)	(263,783	)	(82,195	)	(117,689	)	(44,558	)	(42,984	)	(55,777	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		(8	)	(12	)	(3	)	(42	)	19		25		(8	)	(7	)
Net equity transactions		1,449,336		4,493		(342,597	)	(668,808	)	546,597		(55,458	)	27,329		(164,494	)
Net change in contract owners’ equity		1,484,963		64,366		(150,524	)	(646,240	)	492,978		485		91,482		(148,089	)
Contract owners’ equity beginning of period		387,050		322,684		1,147,757		1,793,997		440,800		440,315		199,435		347,524
Contract owners’ equity end of period	$	1,872,013		387,050		997,233		1,147,757		933,778		440,800		290,917		199,435
CHANGES IN UNITS:
Beginning units		35,980		30,834		103,990		168,929		29,317		33,536		24,203		45,354
Units purchased		188,866		136,971		4,621		591		95,630		14,164		7,531		6,593
Units redeemed		(55,387	)	(131,825	)	(34,178	)	(65,530	)	(65,266	)	(18,383	)	(5,513	)	(27,744	)
Ending units		169,459		35,980		74,433		103,990		59,681		29,317		26,221		24,203

(Continued)

18

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	JAspGlTechS2					JAspGlTechS				JAspIntGroS2				JAspIntGroS
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(404	)	(386	)	(280	)	(460	)	(8,604	)	5,142		(866	)	275
Realized gain (loss) on investments		11,104		1,393		644		504		103,663		47,471		40,906		21,390
Change in unrealized gain (loss) on investments		(5,792	)	2,307		3,965		2,505		96,691		104,978		(22,642	)	13,741
Reinvested capital gains		—		—		—		—		—		—		—		—
Net increase (decrease) in contract owners’ equity resulting from operations		4,908		3,314		4,329		2,549		191,750		157,591		17,398		35,406
Equity transactions:
Purchase payments received from contract owners (note 3)		42		293		—		—		—		13		—		—
Transfers between funds		40,136		14,289		—		(127	)	155,697		565,417		(1,163	)	(43,018	)
Redemptions (note 3)		(1,323	)	(659	)	(4,883	)	(30,153	)	(101,722	)	(128,629	)	(64,803	)	(5,351	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		(14	)	—		(1	)	(5	)	(10	)	25		(3	)	(6	)
Net equity transactions		38,841		13,923		(4,884	)	(30,285	)	53,965		436,826		(65,969	)	(48,375	)
Net change in contract owners’ equity		43,749		17,237		(555	)	(27,736	)	245,715		594,417		(48,571	)	(12,969	)
Contract owners’ equity beginning of period		38,062		20,825		24,485		52,221		721,689		127,272		100,465		113,434
Contract owners’ equity end of period	$	81,811		38,062		23,930		24,485		967,404		721,689		51,894		100,465
CHANGES IN UNITS:
Beginning units		3,194		1,859		6,069		13,755		31,985		8,155		7,930		12,939
Units purchased		12,959		2,017		—		—		17,989		33,998		—		—
Units redeemed		(10,431	)	(682	)	(1,123	)	(7,686	)	(16,002	)	(10,168	)	(4,683	)	(5,009	)
Ending units		5,722		3,194		4,946		6,069		33,972		31,985		3,247		7,930

(Continued)

19

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	JPM2MdCap					LBTShrtDBd				NVITEmMrkts3				NVITGlUtl3
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	3,542		(21,966	)	61,763		65,478		(7,059	)	(4,996	)	4,406		4,092
Realized gain (loss) on investments		240,299		314,337		(17,257	)	(126,970	)	65,849		76,567		22,104		3,518
Change in unrealized gain (loss) on investments		(205,677	)	(1,403	)	105,460		186,945		172,184		68,113		(41,175	)	58,891
Reinvested capital gains		71,808		49,959		—		—		108,272		9,061		88,038		23,484
Net increase (decrease) in contract owners’ equity resulting from operations		109,972		340,927		149,966		125,453		339,246		148,745		73,373		89,985
Equity transactions:
Purchase payments received from contract owners (note 3)		—		88		4,912		27,098		2,558		1,683		—		—
Transfers between funds		(1,468,411	)	(1,897,298	)	422,324		(1,857,040	)	272,880		222,684		7,981		162,864
Redemptions (note 3)		(26,933	)	(140,804	)	(491,933	)	(545,339	)	(114,750	)	(130,751	)	(52,860	)	(15,903	)
Annuity benefits		—		—		(264	)	(44	)	—		—		—		—
Adjustments to maintain reserves		(9	)	18		5		(164	)	(47	)	3		7		(2	)
Net equity transactions		(1,495,353	)	(2,037,996	)	(64,956	)	(2,375,489	)	160,641		93,619		(44,872	)	146,959
Net change in contract owners’ equity		(1,385,381	)	(1,697,069	)	85,010		(2,250,036	)	499,887		242,364		28,501		236,944
Contract owners’ equity beginning of period		1,589,771		3,286,840		4,580,937		6,830,973		721,693		479,329		442,502		205,558
Contract owners’ equity end of period	$	204,390		1,589,771		4,665,947		4,580,937		1,221,580		721,693		471,003		442,502
CHANGES IN UNITS:
Beginning units		112,774		268,485		343,659		526,675		28,211		25,233		23,063		14,528
Units purchased		—		1,084		70,615		77,287		12,743		23,469		3,750		10,071
Units redeemed		(98,413	)	(156,795	)	(75,221	)	(260,303	)	(7,661	)	(20,491	)	(6,121	)	(1,536	)
Ending units		14,361		112,774		339,053		343,659		33,293		28,211		20,692		23,063

(Continued)

20

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	NVITIntGro3					NVITWLead3				NVITGlFin3				NVITGlHlth3
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(13,277	)	(1,040	)	(1,090	)	(428	)	368		345		(2,833	)	(3,479	)
Realized gain (loss) on investments		125,674		44,477		12,391		6,315		(6,935	)	1,682		5,563		2,687
Change in unrealized gain (loss) on investments		(85,977	)	31,021		2,812		(495	)	(2,129	)	(10,953	)	13,738		4,871
Reinvested capital gains		35,399		662		—		—		11,008		26,393		3,978		—
Net increase (decrease) in contract owners’ equity resulting from operations		61,819		75,120		14,113		5,392		2,312		17,467		20,446		4,079
Equity transactions:
Purchase payments received from contract owners (note 3)		143,739		7,200		—		—		—		—		—		2,321
Transfers between funds		2,797,518		94,469		39,415		(5,631	)	(150,049	)	186,094		65,205		(11,411	)
Redemptions (note 3)		(316,666	)	(62,408	)	(12,241	)	(1,810	)	(42,561	)	(9,352	)	(47,390	)	(80,007	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		15		30		21		(24	)	(15	)	(4	)	(21	)	18
Net equity transactions		2,624,606		39,291		27,195		(7,465	)	(192,625	)	176,738		17,794		(89,079	)
Net change in contract owners’ equity		2,686,425		114,411		41,308		(2,073	)	(190,313	)	194,205		38,240		(85,000	)
Contract owners’ equity beginning of period		338,005		223,594		33,298		35,371		245,944		51,739		176,703		261,703
Contract owners’ equity end of period	$	3,024,430		338,005		74,606		33,298		55,631		245,944		214,943		176,703
CHANGES IN UNITS:
Beginning units		17,241		14,944		1,974		2,600		13,259		3,308		13,792		20,675
Units purchased		126,609		14,780		8,953		6,643		2,587		11,765		7,802		7,417
Units redeemed		(20,725	)	(12,483	)	(7,185	)	(7,269	)	(12,768	)	(1,814	)	(6,558	)	(14,300	)
Ending units		123,125		17,241		3,742		1,974		3,078		13,259		15,036		13,792

(Continued)

21

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	NVITGlTech3					NVITGvtBd				NVITGrowth				NVITIntVal3
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(394	)	(406	)	168,762		157,717		(9,591	)	(12,614	)	26,582		13,098
Realized gain (loss) on investments		11,515		563		(179,605	)	(127,411	)	106,021		106,937		121,604		98,630
Change in unrealized gain (loss) on investments		(6,734	)	2,531		315,078		58,647		23,702		(59,692	)	(191,758	)	127,689
Reinvested capital gains		—		—		—		48,401		—		—		282,807		249,683
Net increase (decrease) in contract owners’ equity resulting from operations		4,387		2,688		304,235		137,354		120,132		34,631		239,235		489,100
Equity transactions:
Purchase payments received from contract owners (note 3)		25		—		233,317		60,016		4,161		8,652		2,877		17
Transfers between funds		28,308		13,561		(968,126	)	2,277,944		(104,550	)	(74,475	)	(3,046,314	)	3,174,793
Redemptions (note 3)		(50,559	)	(395	)	(1,258,394	)	(913,984	)	(97,055	)	(221,654	)	(257,751	)	(316,401	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		1		(5	)	(19	)	19		(13	)	(17	)	(45	)	(328	)
Net equity transactions		(22,225	)	13,161		(1,993,222	)	1,423,995		(197,457	)	(287,494	)	(3,301,233	)	2,858,081
Net change in contract owners’ equity		(17,838	)	15,849		(1,688,987	)	1,561,349		(77,325	)	(252,863	)	(3,061,998	)	3,347,181
Contract owners’ equity beginning of period		39,745		23,896		6,441,461		4,880,112		787,722		1,040,585		4,343,044		995,863
Contract owners’ equity end of period	$	21,907		39,745		4,752,474		6,441,461		710,397		787,722		1,281,046		4,343,044
CHANGES IN UNITS:
Beginning units		3,309		2,178		418,204		322,687		68,796		95,090		199,103		55,229
Units purchased		2,544		1,379		75,548		205,491		3,501		2,473		2,132		258,763
Units redeemed		(4,313	)	(248	)	(201,556	)	(109,974	)	(19,630	)	(28,767	)	(143,335	)	(114,889	)
Ending units		1,540		3,309		292,196		418,204		52,667		68,796		57,900		199,103

(Continued)

22

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	NVITIDAgg2					NVITIDCon2				NVITIDMod2				NVITIDModAg2
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	783		750		7,661		6,581		15,497		9,717		5,674		4,862
Realized gain (loss) on investments		382		4,229		3,598		(6,461	)	30,632		22,471		27,143		54,017
Change in unrealized gain (loss) on investments		291		15,179		(3,633	)	9,685		(24,931	)	51,508		(22,425	)	18,256
Reinvested capital gains		5,011		2,420		4,690		5,857		19,342		7,570		12,512		8,765
Net increase (decrease) in contract owners’ equity resulting from operations		6,467		22,578		12,316		15,662		40,540		91,266		22,904		85,900
Equity transactions:
Purchase payments received from contract owners (note 3)		—		—		—		—		—		—		960		320
Transfers between funds		7,178		(30,358	)	101,597		(19,410	)	280,087		311,072		196,094		10,476
Redemptions (note 3)		(32	)	—		(6,586	)	(38,709	)	(39,576	)	(108,870	)	(94,880	)	(117,543	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		(3	)	4		5		—		7		(29	)	(17	)	2
Net equity transactions		7,143		(30,354	)	95,016		(58,119	)	240,518		202,173		102,157		(106,745	)
Net change in contract owners’ equity		13,610		(7,776	)	107,332		(42,457	)	281,058		293,439		125,061		(20,845	)
Contract owners’ equity beginning of period		150,067		157,843		374,113		416,570		1,113,976		820,537		687,151		707,996
Contract owners’ equity end of period	$	163,677		150,067		481,445		374,113		1,395,034		1,113,976		812,212		687,151
CHANGES IN UNITS:
Beginning units		10,205		12,363		32,297		37,627		84,904		68,632		48,820		56,782
Units purchased		457		174		23,698		21,250		29,766		31,420		14,063		3,022
Units redeemed		(2	)	(2,332	)	(15,971	)	(26,580	)	(12,551	)	(15,148	)	(7,717	)	(10,984	)
Ending units		10,660		10,205		40,024		32,297		102,119		84,904		55,166		48,820

(Continued)

23

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	NVITIDModCon2					NVITJPBal				NVITMdCpGr				NVITMidCap
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	9,922		7,139		64		137		(4,469	)	(9,689	)	(6,528	)	(11,396	)
Realized gain (loss) on investments		20,146		3,119		782		1,218		47,470		172,179		212,272		552,786
Change in unrealized gain (loss) on investments		(24,107	)	19,188		(496	)	514		(26,268	)	(45,583	)	(210,720	)	(273,654	)
Reinvested capital gains		19,954		7,366		191		—		—		—		142,698		62,769
Net increase (decrease) in contract owners’ equity resulting from operations		25,915		36,812		541		1,869		16,733		116,907		137,722		330,505
Equity transactions:
Purchase payments received from contract owners (note 3)		—		—		—		—		1,005		1,687		175,198		4,610
Transfers between funds		(7,199	)	4,139		(5,574	)	1,381		63,257		(1,100,519	)	1,905,360		1,033,633
Redemptions (note 3)		(10,248	)	(19,654	)	(1,741	)	(564	)	(92,908	)	(130,972	)	(736,940	)	(439,173	)
Annuity benefits		—		—		—		—		—		—		(46	)	(7	)
Adjustments to maintain reserves		17		(12	)	(1	)	(1	)	(8	)	(10	)	(12	)	(43	)
Net equity transactions		(17,430	)	(15,527	)	(7,316	)	816		(28,654	)	(1,229,814	)	1,343,560		599,020
Net change in contract owners’ equity		8,485		21,285		(6,775	)	2,685		(11,921	)	(1,112,907	)	1,481,282		929,525
Contract owners’ equity beginning of period		576,432		555,147		6,775		4,090		284,919		1,397,826		4,484,571		3,555,046
Contract owners’ equity end of period	$	584,917		576,432		—		6,775		272,998		284,919		5,965,853		4,484,571
CHANGES IN UNITS:
Beginning units		46,542		47,896		566		378		45,025		239,269		292,850		251,452
Units purchased		14,373		988		972		9,178		42,026		20,234		164,974		205,607
Units redeemed		(15,642	)	(2,342	)	(1,538	)	(8,990	)	(46,892	)	(214,478	)	(90,254	)	(164,209	)
Ending units		45,273		46,542		—		566		40,159		45,025		367,570		292,850

(Continued)

24

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	NVITMyMkt					NVITSmCapGr				NVITSmCapVal				NVITSmComp
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	275,343		243,637		(2,193	)	(3,669	)	(12,961	)	(36,070	)	(61,087	)	(90,259	)
Realized gain (loss) on investments		—		—		20,386		45,620		198,518		389,674		134,847		912,216
Change in unrealized gain (loss) on investments		—		—		(2,559	)	(26,895	)	(638,907	)	(104,063	)	(550,926	)	(308,871	)
Reinvested capital gains		—		—		—		—		298,082		256,768		567,894		129,626
Net increase (decrease) in contract owners’ equity resulting from operations		275,343		243,637		15,634		15,056		(155,268	)	506,309		90,728		642,712
Equity transactions:
Purchase payments received from contract owners (note 3)		201,398		456,546		—		4,974		14,676		10,411		7,305		34,075
Transfers between funds		8,446,077		2,887,435		(17,210	)	(146,000	)	(764,657	)	(292,634	)	(513,466	)	(2,517,306	)
Redemptions (note 3)		(3,381,155	)	(2,584,076	)	(111,787	)	(59,557	)	(453,331	)	(541,943	)	(639,772	)	(673,129	)
Annuity benefits		(46	)	(8	)	—		—		(42	)	(7	)	(46	)	(7	)
Adjustments to maintain reserves		219		(36	)	(7	)	4		(10	)	(19	)	(17	)	11
Net equity transactions		5,266,493		759,861		(129,004	)	(200,579	)	(1,203,364	)	(824,192	)	(1,145,996	)	(3,156,356	)
Net change in contract owners’ equity		5,541,836		1,003,498		(113,370	)	(185,523	)	(1,358,632	)	(317,883	)	(1,055,268	)	(2,513,644	)
Contract owners’ equity beginning of period		6,649,429		5,645,931		193,304		378,827		3,348,895		3,666,778		4,766,357		7,280,001
Contract owners’ equity end of period	$	12,191,265		6,649,429		79,934		193,304		1,990,263		3,348,895		3,711,089		4,766,357
CHANGES IN UNITS:
Beginning units		529,849		463,511		25,971		51,769		149,493		189,246		149,854		252,760
Units purchased		1,687,345		1,507,923		4,110		9,348		3,152		27,899		3,171		22,647
Units redeemed		(1,276,425	)	(1,441,585	)	(20,151	)	(35,146	)	(55,817	)	(67,652	)	(37,097	)	(125,553	)
Ending units		940,769		529,849		9,930		25,971		96,828		149,493		115,928		149,854

(Continued)

25

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	NVITNWFund					NVITNWLead3				NVITUSGro3				NVITVKVal2
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(9,268	)	(9,299	)	(14,017	)	(7,094	)	(1,192	)	(1,482	)	(1,040	)	1,851
Realized gain (loss) on investments		173,324		193,654		(5,111	)	(330	)	8,471		(1,769	)	20,401		16,644
Change in unrealized gain (loss) on investments		(121,878	)	77,246		63,363		(82,391	)	4,669		1,895		(100,869	)	44,180
Reinvested capital gains		100,032		—		68,011		185,820		—		1,847		42,161		28,473
Net increase (decrease) in contract owners’ equity resulting from operations		142,210		261,601		112,246		96,005		11,948		491		(39,347	)	91,148
Equity transactions:
Purchase payments received from contract owners (note 3)		1,075		1,844		—		—		—		—		4,750		1,750
Transfers between funds		(30,201	)	(200,795	)	(2,238,472	)	2,293,337		13,089		(40,678	)	78,310		780,991
Redemptions (note 3)		(358,954	)	(337,896	)	(31,600	)	(2,165	)	(54,605	)	(45,618	)	(167,598	)	(94,764	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		10		(24	)	(28	)	16		(18	)	10		8		6
Net equity transactions		(388,070	)	(536,871	)	(2,270,100	)	2,291,188		(41,534	)	(86,286	)	(84,530	)	687,983
Net change in contract owners’ equity		(245,860	)	(275,270	)	(2,157,854	)	2,387,193		(29,586	)	(85,795	)	(123,877	)	779,131
Contract owners’ equity beginning of period		2,222,373		2,497,643		2,576,162		188,969		73,559		159,354		1,014,802		235,671
Contract owners’ equity end of period	$	1,976,513		2,222,373		418,308		2,576,162		43,973		73,559		890,925		1,014,802
CHANGES IN UNITS:
Beginning units		110,923		139,603		170,879		14,345		4,989		10,621		77,187		20,415
Units purchased		317		614		21,923		159,981		4,713		2,309		14,022		72,012
Units redeemed		(18,700	)	(29,294	)	(167,562	)	(3,447	)	(7,230	)	(7,941	)	(20,601	)	(15,240	)
Ending units		92,540		110,923		25,240		170,879		2,472		4,989		70,608		77,187

(Continued)

26

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	NVITMltSec					NBTAGro				NBTAGuard				NBTAPart
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	39,096		58,909		(15,095	)	(13,976	)	(5,451	)	(4,634	)	(43,149	)	(26,166	)
Realized gain (loss) on investments		17,195		(40,456	)	97,908		73,136		69,020		72,382		174,075		863,543
Change in unrealized gain (loss) on investments		(15,074	)	65,464		111,956		48,186		(34,839	)	(5,954	)	(195,172	)	(1,062,248	)
Reinvested capital gains		50		6,015		—		—		—		—		315,991		573,174
Net increase (decrease) in contract owners’ equity resulting from operations		41,267		89,932		194,769		107,346		28,730		61,794		251,745		348,303
Equity transactions:
Purchase payments received from contract owners (note 3)		3,257		4,166		(4	)	3,258		3,616		5,226		39,538		3,227
Transfers between funds		107,591		(445,764	)	46,742		59,501		(74,351	)	(11,657	)	(15,504	)	102,175
Redemptions (note 3)		(344,088	)	(364,722	)	(126,199	)	(145,980	)	(95,761	)	(159,588	)	(505,558	)	(629,320	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		5		(18	)	12		(36	)	(11	)	3		(34	)	(20	)
Net equity transactions		(233,235	)	(806,338	)	(79,449	)	(83,257	)	(166,507	)	(166,016	)	(481,558	)	(523,938	)
Net change in contract owners’ equity		(191,968	)	(716,406	)	115,320		24,089		(137,777	)	(104,222	)	(229,813	)	(175,635	)
Contract owners’ equity beginning of period		1,788,086		2,504,492		957,070		932,981		512,887		617,109		3,352,363		3,527,998
Contract owners’ equity end of period	$	1,596,118		1,788,086		1,072,390		957,070		375,110		512,887		3,122,550		3,352,363
CHANGES IN UNITS:
Beginning units		131,419		190,188		56,180		61,567		39,366		52,925		136,432		158,825
Units purchased		227,260		116,985		6,153		6,834		982		4,598		99,594		98,319
Units redeemed		(244,896	)	(175,754	)	(10,269	)	(12,221	)	(13,141	)	(18,157	)	(118,078	)	(120,712	)
Ending units		113,783		131,419		52,064		56,180		27,207		39,366		117,948		136,432

(Continued)

27

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	NBTSocRes					OppBal				OppCapAp				OppBdFd
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(1,445	)	(1,201	)	25,966		16,623		(16,864	)	(20,962	)	126,753		152,504
Realized gain (loss) on investments		3,050		1,359		32,716		48,443		149,303		220,523		7,271		37,872
Change in unrealized gain (loss) on investments		3,289		8,639		(181,155	)	35,775		30,059		(111,047	)	(39,755	)	(69,622	)
Reinvested capital gains		332		1,136		179,481		110,786		—		—		—		—
Net increase (decrease) in contract owners’ equity resulting from operations		5,226		9,933		57,008		211,627		162,498		88,514		94,269		120,754
Equity transactions:
Purchase payments received from contract owners (note 3)		—		600		2,754		11,691		8,526		5,757		11,070		17,716
Transfers between funds		(3,249	)	19,433		(47,608	)	(77,420	)	(50,646	)	(712,761	)	326,790		(386,707	)
Redemptions (note 3)		(2,005	)	(454	)	(369,819	)	(458,902	)	(343,811	)	(292,381	)	(413,479	)	(516,183	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		21		(3	)	19		(16	)	(23	)	(26	)	(45	)	5
Net equity transactions		(5,233	)	19,576		(414,654	)	(524,647	)	(385,954	)	(999,411	)	(75,664	)	(885,169	)
Net change in contract owners’ equity		(7	)	29,509		(357,646	)	(313,020	)	(223,456	)	(910,897	)	18,605		(764,415	)
Contract owners’ equity beginning of period		102,111		72,602		2,254,256		2,567,276		1,487,297		2,398,194		3,308,432		4,072,847
Contract owners’ equity end of period	$	102,104		102,111		1,896,610		2,254,256		1,263,841		1,487,297		3,327,037		3,308,432
CHANGES IN UNITS:
Beginning units		7,675		6,115		108,288		135,088		91,433		156,848		213,369		272,535
Units purchased		709		4,270		3,158		5,177		6,317		1,728		26,957		6,028
Units redeemed		(1,147	)	(2,710	)	(22,364	)	(31,977	)	(28,678	)	(67,143	)	(31,743	)	(65,194	)
Ending units		7,237		7,675		89,082		108,288		69,072		91,433		208,583		213,369

(Continued)

28

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	OppGlSec3					OppGlSec				OppMSt				OppMidCap
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(3,067	)	9,419		(3,426	)	(18,169	)	(1,162	)	(1,090	)	(2,951	)	(3,923	)
Realized gain (loss) on investments		118,515		784,361		455,905		295,896		46,581		35,150		11,127		34,772
Change in unrealized gain (loss) on investments		(111,834	)	(475,956	)	(451,606	)	133,599		(31,656	)	17,156		2,552		(20,157	)
Reinvested capital gains		134,063		328,037		214,539		234,344		—		—		—		—
Net increase (decrease) in contract owners’ equity resulting from operations		137,677		645,861		215,412		645,670		13,763		51,216		10,728		10,692
Equity transactions:
Purchase payments received from contract owners (note 3)		51,221		49,833		—		—		15,000		542		4,082		4,401
Transfers between funds		5,265		(3,207,166	)	(143,499	)	(94,380	)	26,849		(49,422	)	(2,582	)	(163,066	)
Redemptions (note 3)		(535,296	)	(633,473	)	(676,995	)	(462,908	)	(120,344	)	(80,215	)	(46,371	)	(19,071	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		(13	)	15		(8	)	(55	)	(1	)	(3	)	(15	)	4
Net equity transactions		(478,823	)	(3,790,791	)	(820,502	)	(557,343	)	(78,496	)	(129,098	)	(44,886	)	(177,732	)
Net change in contract owners’ equity		(341,146	)	(3,144,930	)	(605,090	)	88,327		(64,733	)	(77,882	)	(34,158	)	(167,040	)
Contract owners’ equity beginning of period		2,764,141		5,909,071		4,448,078		4,359,751		386,618		464,500		210,565		377,605
Contract owners’ equity end of period	$	2,422,995		2,764,141		3,842,988		4,448,078		321,885		386,618		176,407		210,565
CHANGES IN UNITS:
Beginning units		126,662		314,061		125,477		142,651		38,154		51,965		34,356		62,514
Units purchased		10,164		42,993		—		—		7,512		2,702		2,244		12,048
Units redeemed		(30,869	)	(230,392	)	(22,004	)	(17,174	)	(14,796	)	(16,513	)	(9,131	)	(40,206	)
Ending units		105,957		126,662		103,473		125,477		30,870		38,154		27,469		34,356

(Continued)

29

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	DrySRGro					VEWrldBdR1				VEWrldBd				VEWrldEMktR1
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(4,628	)	(7,583	)	22,856		28,769		10,679		22,202		(4,366	)	(3,658	)
Realized gain (loss) on investments		57,883		32,755		(10,109	)	(17,644	)	(5,196	)	(17,268	)	81,359		37,258
Change in unrealized gain (loss) on investments		(19,332	)	16,859		19,661		8,463		9,359		7,149		(34,570	)	66,193
Reinvested capital gains		—		—		—		—		—		—		102,858		38,368
Net increase (decrease) in contract owners’ equity resulting from operations		33,923		42,031		32,408		19,588		14,842		12,083		145,281		138,161
Equity transactions:
Purchase payments received from contract owners (note 3)		1,429		180		12		10,131		(51	)	—		459		22
Transfers between funds		(31,924	)	(43,342	)	(1,709	)	75,393		(6,531	)	(43,613	)	(103,328	)	174,212
Redemptions (note 3)		(136,096	)	(70,784	)	(60,804	)	(41,056	)	(50,359	)	(66,308	)	(140,658	)	(57,328	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		(20	)	(18	)	(19	)	21		(6	)	(9	)	(15	)	40
Net equity transactions		(166,611	)	(113,964	)	(62,520	)	44,489		(56,947	)	(109,930	)	(243,542	)	116,946
Net change in contract owners’ equity		(132,688	)	(71,933	)	(30,112	)	64,077		(42,105	)	(97,847	)	(98,261	)	255,107
Contract owners’ equity beginning of period		562,947		634,880		481,754		417,677		231,709		329,556		520,384		265,277
Contract owners’ equity end of period	$	430,259		562,947		451,642		481,754		189,604		231,709		422,123		520,384
CHANGES IN UNITS:
Beginning units		35,661		43,283		43,006		39,097		15,787		23,563		23,099		16,193
Units purchased		285		416		3,843		30,879		—		—		6,262		13,889
Units redeemed		(10,285	)	(8,038	)	(9,593	)	(26,970	)	(3,838	)	(7,776	)	(15,539	)	(6,983	)
Ending units		25,661		35,661		37,256		43,006		11,949		15,787		13,822		23,099

(Continued)

30

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	VEWrldEMkt					VEWrldHAsR1				VEWrldHAs				VKUEmMkt
	2007			2006		2007		2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(6,799	)	(5,033	)	(15,943	)	(13,238	)	(11,491	)	(10,551	)	4,634		7,091
Realized gain (loss) on investments		98,566		65,615		141,764		179,630		36,904		64,527		1,252		7,571
Change in unrealized gain (loss) on investments		(9,072	)	76,439		130,759		(29,862	)	184,602		53,583		(4,610	)	(7,821	)
Reinvested capital gains		122,147		58,311		138,463		60,807		96,872		42,380		2,484		1,872
Net increase (decrease) in contract owners’ equity resulting from operations		204,842		195,332		395,043		197,337		306,887		149,939		3,760		8,713
Equity transactions:
Purchase payments received from contract owners (note 3)		—		—		1,239		3,777		—		—		—		—
Transfers between funds		(20,528	)	(73,739	)	58,518		110,149		—		(28,145	)	—		(13,618	)
Redemptions (note 3)		(162,475	)	(58,719	)	(93,429	)	(80,386	)	(51,601	)	(88,227	)	(13,549	)	(48,390	)
Annuity benefits		—		—		—		—		—		—		—		—
Adjustments to maintain reserves		48		(16	)	(43	)	21		27		(6	)	14		(16	)
Net equity transactions		(182,955	)	(132,474	)	(33,715	)	33,561		(51,574	)	(116,378	)	(13,535	)	(62,024	)
Net change in contract owners’ equity		21,887		62,858		361,328		230,898		255,313		33,561		(9,775	)	(53,311	)
Contract owners’ equity beginning of period		667,069		604,211		1,093,630		862,732		731,183		697,622		86,809		140,120
Contract owners’ equity end of period	$	688,956		667,069		1,454,958		1,093,630		986,496		731,183		77,034		86,809
CHANGES IN UNITS:
Beginning units		33,159		41,290		47,846		46,326		30,884		36,153		4,648		8,193
Units purchased		—		—		17,328		27,104		—		—		—		—
Units redeemed		(7,905	)	(8,131	)	(20,726	)	(25,584	)	(1,794	)	(5,269	)	(719	)	(3,545	)
Ending units		25,254		33,159		44,448		47,846		29,090		30,884		3,929		4,648

(Continued)

31

NATIONWIDE VA SEPARATE ACCOUNT-B

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2007 and 2006

	VKUUSRE					WFVDisc				WFVOpp
	2007			2006		2007		2006		2007		2006
Investment activity:
Net investment income (loss)	$	(17,379	)	(17,656	)	(7,615	)	(8,064	)	(29,502	)	(51,220	)
Realized gain (loss) on investments		840,170		720,737		73,180		83,642		227,885		176,385
Change in unrealized gain (loss) on investments		(1,984,690	)	503,967		33,050		(11,693	)	(502,395	)	(145,869	)
Reinvested capital gains		386,397		330,304		—		—		490,405		377,302
Net increase (decrease) in contract owners’ equity resulting from operations		(775,502	)	1,537,352		98,615		63,885		186,393		356,598
Equity transactions:
Purchase payments received from contract owners (note 3)		12,278		13,253		—		—		151		1,189
Transfers between funds		(704,800	)	(268,481	)	(2,379	)	62,657		(254,743	)	(180,542	)
Redemptions (note 3)		(583,845	)	(741,313	)	(94,832	)	(181,575	)	(435,717	)	(279,349	)
Annuity benefits		—		—		—		—		—		—
Adjustments to maintain reserves		20		32		(6	)	(13	)	(10	)	(4	)
Net equity transactions		(1,276,347	)	(996,509	)	(97,217	)	(118,931	)	(690,319	)	(458,706	)
Net change in contract owners’ equity		(2,051,849	)	540,843		1,398		(55,046	)	(503,926	)	(102,108	)
Contract owners’ equity beginning of period		5,241,129		4,700,286		495,981		551,027		3,560,318		3,662,426
Contract owners’ equity end of period	$	3,189,280		5,241,129		497,379		495,981		3,056,392		3,560,318
CHANGES IN UNITS:
Beginning units		101,442		123,771		24,109		30,263		128,573		146,275
Units purchased		5,896		6,246		2,107		4,441		488		1,608
Units redeemed		(31,801	)	(28,575	)	(6,159	)	(10,595	)	(24,021	)	(19,310	)
Ending units		75,537		101,442		20,057		24,109		105,040		128,573

See accompanying notes to financial statements.

32

NATIONWIDE VA SEPARATE ACCOUNT-B

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 VA Separate Account-B (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life and Annuity Insurance Company (the Company) on March 6, 1991. The Account is registered as a unit investment trust under the Investment Company Act of 1940.

The Company offers tax qualified and non-tax qualified Individual Deferred Variable Annuity Contracts through the Account. The primary distribution for the contracts is through the brokerage community; however, other distributors are utilized.

(b) The Contracts

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

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

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

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

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

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

American Century VP – Inflation Protection Fund – Class II (ACVPInflPro2)

American Century VP – International Fund – Class I (ACVPInt)

American Century VP – International Fund – Class III (ACVPInt3)

American Century VP – Ultra^® Fund – Class I (ACVPUltra)

American Century VP – Value Fund – Class I (ACVPVal)

Portfolios of the Credit Suisse Trust;

Credit Suisse Trust – Global Small Cap Portfolio (CSTGlobSmCp)

Credit Suisse Trust – International Focus Portfolio (CSTIntFoc)

Credit Suisse Trust – Small Cap Core I Portfolio (CSTSmCapGr)

Portfolios of the Dreyfus Investment Portfolios (Dreyfus IP);

Dreyfus IP – Small Cap Stock Index Portfolio – Service Shares (DryIPSmCap)

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 – Growth and Income Portfolio – Initial Shares (DryVGroInc)

Portfolio of the Federated Insurance Series (Federated IS);

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

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

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

Fidelity^® VIP – Growth Portfolio – Initial Class (FidVIPGr)

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

Fidelity^® VIP – Overseas Portfolio – Initial Class (FidVIPOv)

Fidelity^® VIP – Overseas Portfolio – Initial Class R (FidVIPOvR)

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

Fidelity^® VIP II – Asset Manager Portfolio – Initial Class (FidVIPAM)

Fidelity^® VIP II – Contrafund^® Portfolio – Initial Class (FidVIPCon)

Fidelity^® VIP II – Investment Grade Bond Portfolio – Service Class (FidVIPIGBdS)

(Continued)

33

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

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

Fidelity^® VIP III – Growth Opportunities Portfolio – Initial Class (FidVIPGrOp)

Fidelity^® VIP III – Value Strategies Portfolio – Service Class (FidVIPVaIS)

Portfolios of the Janus Aspen Series;

Janus Aspen Series – Forty Portfolio – Service Shares (JAspForty)

Janus Aspen Series – Global Technology Portfolio – Service II Shares (JAspGlTechS2)

Janus Aspen Series – Global Technology Portfolio – Service Shares (JAspGlTechS)

Janus Aspen Series – International Growth Portfolio – Service II Shares (JAspIntGroS2)

Janus Aspen Series – International Growth Portfolio – Service Shares (JAspIntGroS)

JPMorgan Series Trust II – Mid Cap Value Portfolio (JPM2MdCap)

Portfolio of the Lehman Brothers Advisers Management Trust (Lehman Brothers AMT);

Lehman Brothers AMT – Short Duration Bond Portfolio – I Class

(formerly Neuberger Berman AMT – Limited Maturity Bond Portfolio – Class I) (LBTShrtDBd)

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

Nationwide VIT – Gartmore Emerging Markets Fund – Class I (NVITEmMrkts)*

Nationwide VIT – Gartmore Emerging Markets Fund – Class III (NVITEmMrkts3)

Nationwide VIT – Gartmore Global Utilities Fund – Class III (NVITGlUtl3)

Nationwide VIT – Gartmore International Growth Fund – Class I (NVITIntGro)*

Nationwide VIT – Gartmore International Growth Fund – Class III (NVITIntGro3)

Nationwide VIT – Gartmore Worldwide Leaders Fund – Class III (NVITWLead3)

Nationwide VIT – Global Financial Services Fund – Class III (NVITGlFin3)

Nationwide VIT – Global Health Sciences Fund – Class III (NVITGlHlth3)

Nationwide VIT – Global Technology and Communications Fund – Class I (NVITGlTech)*

Nationwide VIT – Global Technology and Communications Fund – Class III (NVITGlTech3)

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

Nationwide VIT – Growth Fund – Class I (NVITGrowth)

Nationwide VIT – International Value Fund – Class III (NVITIntVal3)

Nationwide VIT – Investor Destinations Aggressive Fund – Class II (NVITIDAgg2)

Nationwide VIT – Investor Destinations Conservative Fund – Class II (NVITIDCon2)

Nationwide VIT – Investor Destinations Moderate Fund – Class II (NVITIDMod2)

Nationwide VIT – Investor Destinations Moderately Aggressive Fund – Class II (NVITIDModAg2)

Nationwide VIT – Investor Destinations Moderately Conservative Fund – Class II (NVITIDModCon2)

Nationwide VIT – J.P. Morgan Balanced Fund – Class I (NVITJPBal)*

Nationwide VIT – Mid Cap Growth Fund – Class I (NVITMdCpGr)

Nationwide VIT – Mid Cap Index Fund – Class I (NVITMidCap)

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

Nationwide VIT – Multi-Manager Small Cap Growth Fund – Class I

(formerly Gartmore GVIT – Small Cap Growth Fund – Class I) (NVITSmCapGr)

Nationwide VIT – Multi-Manager Small Cap Value Fund – Class I

(formerly Gartmore GVIT – Small Cap Value Fund – Class I) (NVITSmCapVal)

Nationwide VIT – Multi-Manager Small Company Fund – Class I

(formerly Gartmore GVIT – Small Company Fund – Class I) (NVITSmComp)

Nationwide VIT – Nationwide Fund – Class I (NVITNWFund)

Nationwide VIT – Nationwide Leaders Fund – Class III (NVITNWLead3)

Nationwide VIT – U.S. Growth Leaders Fund – Class III (NVITUSGro3)

Nationwide VIT – Van Kampen Comstock Value Fund – Class II (NVITVKVal2)

Nationwide VIT – Van Kampen Multi Sector Bond Fund – Class I (NVITMltSec)

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

Neuberger Berman AMT – Growth Portfolio – Class I (NBTAGro)

Neuberger Berman AMT – Guardian Portfolio – I Class Shares (NBTAGuard)

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

Neuberger Berman AMT – Socially Responsive Portfolio Class I (NBTSocRes)

(Continued)

34

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

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

Oppenheimer VAF – Balanced Fund – Non-Service Shares (OppBal)

Oppenheimer VAF – Capital Appreciation Fund – Non-Service Shares (OppCapAp)

Oppenheimer VAF – Core Bond Fund – Non-Service Shares (OppBdFd)

Oppenheimer VAF – Global Securities Fund – Class 3 (OppGlSec3)

Oppenheimer VAF – Global Securities Fund – Non-Service Shares (OppGlSec)

Oppenheimer VAF – Main Street^® – Non-Service Shares (OppMSt)

Oppenheimer VAF – Mid Cap Fund – Non-Service Shares (OppMidCap)

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

Turner GVIT Growth Focus Fund – Class I

Portfolios of the Van Eck Worldwide Insurance Trust;

Van Eck Worldwide Insurance Trust – Bond Fund – Class R1 (VEWrldBdR1)

Van Eck Worldwide Insurance Trust – Bond Fund – Initial Class (VEWrldBd)

Van Eck Worldwide Insurance Trust – Emerging Markets Fund – Class R1 (VEWrldEMktR1)

Van Eck Worldwide Insurance Trust – Emerging Markets Fund – Initial Class (VEWrldEMkt)

Van Eck Worldwide Insurance Trust – Hard Assets Fund – Class R1 (VEWrldHAsR1)

Van Eck Worldwide Insurance Trust – Hard Assets Fund – Initial Class (VEWrldHAs)

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

Van Kampen UIF – Emerging Markets Debt Portfolio – Class I (VKUEmMkt)

Van Kampen UIF – U.S. Real Estate Portfolio – Class I (VKUUSRE)

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

Wells Fargo AVT – Discovery Fund^SM (WFVDisc)

Wells Fargo AVT – Opportunity Fund^SM (WFVOpp)

*    At December 31, 2007 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.

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

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)

35

NATIONWIDE VA SEPARATE ACCOUNT-B (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.

(2) Expenses

The Company does not deduct a sales charge from purchase payments made for these contracts, nor is any sales charge deducted upon the surrender of the contract.

The following contract charges are deducted by the Company: 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 0.20%, respectively.

(Continued)

36

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

(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 $66,974 and $77,540, respectively, and total transfers from the Account to the fixed account were $28,315 and $80,665, respectively. Transfers from the Account to the fixed account are included in redemptions, and transfers to the Account from the fixed account are included in purchase payments received from contract owners, as applicable, on the accompanying Statements of Changes in Contract Owners’ Equity.

For guaranteed minimum death benefits, the Company contributed $6,861 and $99,644 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)

37

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

(4) Financial Highlights

The following tabular presentation is a summary of units, unit fair values and contract owners’ equity outstanding for variable annuity contracts as of the end of the periods indicated, and the contract expense rate, investment income ratio and total return for each period in the five-year period ended December 31, 2007.

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
American Century VP – Balanced Fund – Class I
2007	1.45	%	78,435	$	18.365409	$	1,440,491	2.23	%	3.41	%
2006	1.45	%	99,945		17.760504		1,775,074	2.02	%	8.03	%
2005	1.45	%	122,320		16.439679		2,010,902	1.87	%	3.42	%
2004	1.45	%	150,372		15.896375		2,390,370	1.64	%	8.19	%
2003	1.45	%	160,958		14.693472		2,365,032	2.23	%	17.73	%
American Century VP – Capital Appreciation Fund – Class I
2007	1.45	%	35,078		20.768284		728,510	0.00	%	43.68	%
2006	1.45	%	33,133		14.454514		478,921	0.00	%	15.52	%
2005	1.45	%	36,737		12.512142		459,659	0.00	%	20.30	%
2004	1.45	%	47,408		10.400815		493,082	0.00	%	6.02	%
2003	1.45	%	68,291		9.809853		669,925	0.00	%	18.73	%
American Century VP – Income & Growth Fund – Class I
2007	1.45	%	70,296		13.227012		929,806	2.09	%	-1.52	%
2006	1.45	%	92,692		13.431749		1,245,016	2.61	%	15.39	%
2005	1.45	%	269,493		11.639841		3,136,856	1.76	%	3.12	%
2004	1.45	%	157,305		11.287868		1,775,638	1.37	%	11.35	%
2003	1.45	%	194,873		10.136856		1,975,400	0.91	%	27.48	%
American Century VP – Inflation Protection Fund – Class II
2007	1.45	%	165,645		11.527071		1,909,402	4.47	%	7.90	%
2006	1.45	%	181,152		10.683311		1,935,303	3.13	%	0.12	%
2005	1.45	%	234,776		10.670686		2,505,221	4.28	%	0.09	%
2004	1.45	%	239,977		10.660662		2,558,314	3.25	%	4.28	%
2003	1.45	%	48,791		10.223456		498,813	1.36	%	2.23	% 04/30/03
American Century VP – International Fund – Class I
2007	1.45	%	57,669		24.607790		1,419,107	0.76	%	16.34	%
2006	1.45	%	76,162		21.152329		1,611,004	1.68	%	23.22	%
2005	1.45	%	92,002		17.166574		1,579,359	1.17	%	11.62	%
2004	1.45	%	108,751		15.379897		1,672,579	0.56	%	13.26	%
2003	1.45	%	142,015		13.579522		1,928,496	0.82	%	22.71	%
American Century VP – International Fund – Class III
2007	1.45	%	30,099		17.869317		537,849	0.78	%	16.34	%
2006	1.45	%	42,134		15.360086		647,182	1.78	%	23.22	%
2005	1.45	%	57,895		12.465763		721,705	1.34	%	11.47	%
2004	1.45	%	60,727		11.183532		679,142	0.78	%	13.41	%
2003	1.45	%	192,828		9.860964		1,901,470	0.68	%	22.71	%
American Century VP – Ultra® Fund – Class I
2007	1.45	%	8,347		12.232300		102,103	0.00	%	19.25	%
2006	1.45	%	185		10.257482		1,898	0.00	%	-4.67	%
2005	1.45	%	3,503		10.760517		37,694	0.00	%	0.69	%
2004	1.45	%	5,280		10.686944		56,427	0.00	%	9.07	%
2003	1.45	%	22,757		9.798135		222,976	0.00	%	23.09	%
American Century VP – Value Fund – Class I
2007	1.45	%	182,233		22.975045		4,186,811	2.08	%	-6.52	%
2006	1.45	%	348,798		24.577872		8,572,713	1.19	%	16.94	%
2005	1.45	%	312,800		21.017877		6,574,392	0.88	%	3.52	%
2004	1.45	%	328,830		20.304154		6,676,615	0.98	%	12.68	%
2003	1.45	%	336,791		18.019985		6,068,969	0.74	%	27.09	%
Credit Suisse Trust – Global Small Cap Portfolio
2007	1.45	%	7,603		14.313862		108,828	0.00	%	-5.36	%
2006	1.45	%	7,775		15.124054		117,590	0.00	%	11.57	%
2005	1.45	%	9,514		13.555978		128,972	0.00	%	14.47	%
2004	1.45	%	17,456		11.842876		206,729	0.00	%	16.28	%
2003	1.45	%	18,906		10.184879		192,555	0.00	%	45.52	%

(Continued)

38

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Credit Suisse Trust – International Focus Portfolio
2007	1.45	%	50,101	$	16.093212	$	806,286	1.07	%	14.90	%
2006	1.45	%	60,904		14.006682		853,063	1.01	%	16.94	%
2005	1.45	%	65,522		11.977879		784,815	0.82	%	15.74	%
2004	1.45	%	80,381		10.348838		831,850	0.94	%	13.08	%
2003	1.45	%	96,225		9.151856		880,637	0.43	%	31.16	%
Credit Suisse Trust – Small Cap Core I Portfolio
2007	1.45	%	79,114		13.796994		1,091,535	0.00	%	-2.28	%
2006	1.45	%	96,489		14.118860		1,362,315	0.00	%	3.25	%
2005	1.45	%	113,827		13.674136		1,556,486	0.00	%	-4.09	%
2004	1.45	%	140,357		14.256798		2,001,041	0.00	%	9.26	%
2003	1.45	%	172,711		13.048269		2,253,580	0.00	%	46.40	%
Dreyfus IP – Small Cap Stock Index Portfolio – Service Shares
2007	1.45	%	62,052		14.461573		897,370	0.39	%	-2.10	%
2006	1.45	%	66,526		14.772279		982,741	0.23	%	12.76	%
2005	1.45	%	33,532		13.101031		439,304	0.00	%	5.68	%
2004	1.45	%	38,055		12.396547		471,751	0.37	%	20.12	%
2003	1.45	%	39,767		10.320294		410,407	0.24	%	35.78	%
Dreyfus Stock Index Fund, Inc. – Initial Shares
2007	1.45	%	532,637		22.793282		12,140,545	1.68	%	3.72	%
2006	1.45	%	556,906		21.975597		12,238,342	1.61	%	13.83	%
2005	1.45	%	729,791		19.305967		14,089,321	1.56	%	3.18	%
2004	1.45	%	893,047		18.711347		16,710,112	1.72	%	9.04	%
2003	1.45	%	1,036,744		17.160617		17,791,167	1.42	%	26.50	%
Dreyfus VIF – Appreciation Portfolio – Initial Shares
2007	1.45	%	62,065		15.890558		986,247	1.61	%	5.57	%
2006	1.45	%	75,874		15.052035		1,142,058	1.71	%	14.79	%
2005	1.45	%	112,905		13.112310		1,480,445	0.02	%	2.87	%
2004	1.45	%	148,996		12.746646		1,899,199	1.23	%	3.52	%
2003	1.45	%	270,005		12.312854		3,324,532	1.31	%	19.41	%
Dreyfus VIF – Growth and Income Portfolio – Initial Shares
2007	1.45	%	43,397		15.254357		661,993	0.75	%	6.86	%
2006	1.45	%	56,052		14.274447		800,111	0.78	%	12.86	%
2005	1.45	%	66,200		12.648293		837,317	1.33	%	1.86	%
2004	1.45	%	88,010		12.417611		1,092,874	1.18	%	5.91	%
2003	1.45	%	103,025		11.724710		1,207,938	0.73	%	24.74	%
Federated IS – Quality Bond Fund II – Primary Shares
2007	1.45	%	51,912		11.967003		621,231	4.52	%	3.85	%
2006	1.45	%	50,736		11.523629		584,663	3.65	%	2.65	%
2005	1.45	%	50,161		11.226348		563,125	3.85	%	-0.17	%
2004	1.45	%	58,220		11.245176		654,694	3.91	%	2.12	%
2003	1.45	%	420,547		11.011999		4,631,063	2.63	%	3.13	%
Fidelity® VIP – Equity-Income Portfolio – Initial Class
2007	1.45	%	656,093		22.805849		14,962,758	1.86	%	0.05	%
2006	1.45	%	688,451		22.794382		15,692,815	3.27	%	18.46	%
2005	1.45	%	767,364		19.242890		14,766,301	1.69	%	4.33	%
2004	1.45	%	905,354		18.443394		16,697,801	1.52	%	9.91	%
2003	1.45	%	900,411		16.780015		15,108,910	2.03	%	28.44	%
Fidelity® VIP – Growth Portfolio – Initial Class
2007	1.45	%	247,973		22.513491		5,582,738	0.84	%	25.11	%
2006	1.45	%	293,427		17.994310		5,280,016	0.43	%	5.30	%
2005	1.45	%	423,840		17.087845		7,242,512	0.51	%	4.27	%
2004	1.45	%	534,578		16.388199		8,760,771	0.28	%	1.88	%
2003	1.45	%	867,371		16.085893		13,952,437	0.26	%	30.92	%
Fidelity® VIP – High Income Portfolio – Initial Class
2007	1.45	%	326,965		13.186247		4,311,441	4.91	%	1.29	%
2006	1.45	%	829,172		13.018599		10,794,658	7.44	%	9.63	%
2005	1.45	%	913,041		11.875192		10,842,537	14.60	%	1.22	%
2004	1.45	%	1,192,562		11.732532		13,991,772	5.56	%	8.00	%
2003	1.45	%	1,388,476		10.863024		15,083,048	4.00	%	25.42	%

(Continued)

39

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Fidelity® VIP – Overseas Portfolio – Initial Class
2007	1.45	%	54,969	$	22.775633	$	1,251,954	3.34	%	15.60	%
2006	1.45	%	66,548		19.701712		1,311,110	0.87	%	16.37	%
2005	1.45	%	71,947		16.929868		1,218,053	0.67	%	17.33	%
2004	1.45	%	87,648		14.429831		1,264,746	1.24	%	11.99	%
2003	1.45	%	115,590		12.885114		1,489,390	0.88	%	41.29	%
Fidelity® VIP – Overseas Portfolio – Initial Class R
2007	1.45	%	140,299		19.294131		2,706,947	3.37	%	15.65	%
2006	1.45	%	137,063		16.683836		2,286,737	0.88	%	16.31	%
2005	1.45	%	136,227		14.343965		1,954,035	0.63	%	17.39	%
2004	1.45	%	154,689		12.218950		1,890,137	0.50	%	11.94	%
2003	1.45	%	35,678		10.915454		389,442	0.71	%	41.25	%
Fidelity® VIP II – Asset Manager Portfolio – Initial Class
2007	1.45	%	184,558		19.546942		3,607,545	6.03	%	13.82	%
2006	1.45	%	223,190		17.173470		3,832,947	2.64	%	5.77	%
2005	1.45	%	245,278		16.237353		3,982,665	2.66	%	2.54	%
2004	1.45	%	310,573		15.835141		4,917,967	2.78	%	3.94	%
2003	1.45	%	333,906		15.234907		5,087,027	3.75	%	16.27	%
Fidelity® VIP II – Contrafund® Portfolio – Initial Class
2007	1.45	%	580,134		34.152109		19,812,800	0.90	%	15.88	%
2006	1.45	%	684,496		29.472372		20,173,721	1.32	%	10.10	%
2005	1.45	%	663,447		26.768394		17,759,411	0.30	%	15.25	%
2004	1.45	%	783,818		23.226993		18,205,735	0.30	%	13.80	%
2003	1.45	%	707,473		20.409874		14,439,435	0.44	%	26.60	%
Fidelity® VIP II – Investment Grade Bond Portfolio – Service Class
2007	1.45	%	169,459		11.046997		1,872,013	1.57	%	2.69	%
2006	1.45	%	35,980		10.757370		387,050	3.58	%	2.79	%
2005	1.45	%	30,834		10.465216		322,684	6.34	%	0.60	%
2004	1.45	%	175,411		10.402383		1,824,692	6.70	%	2.81	%
2003	1.45	%	10,015		10.118423		101,336	0.00	%	1.18	% 05/01/03
Fidelity® VIP III – Growth Opportunities Portfolio – Initial Class
2007	1.45	%	74,433		13.397728		997,233	0.00	%	21.39	%
2006	1.45	%	103,990		11.037184		1,147,757	0.83	%	3.93	%
2005	1.45	%	168,929		10.619831		1,793,997	0.90	%	7.32	%
2004	1.45	%	186,159		9.895768		1,842,186	0.53	%	5.64	%
2003	1.45	%	194,978		9.367700		1,826,495	0.84	%	27.99	%
Fidelity® VIP III – Value Strategies Portfolio – Service Class
2007	1.45	%	59,681		15.646148		933,778	0.90	%	4.06	%
2006	1.45	%	29,317		15.035657		440,800	0.48	%	14.52	%
2005	1.45	%	33,536		13.129617		440,315	0.00	%	1.07	%
2004	1.45	%	36,457		12.990391		473,591	0.00	%	12.33	%
2003	1.45	%	194,517		11.563978		2,249,390	0.00	%	55.51	%
Janus Aspen Series – Forty Portfolio – Service Shares
2007	1.45	%	26,221		11.094806		290,917	0.17	%	34.64	%
2006	1.45	%	24,203		8.240113		199,435	0.11	%	7.54	%
2005	1.45	%	45,354		7.662477		347,524	0.07	%	10.93	%
2004	1.45	%	40,112		6.907528		277,075	0.02	%	16.26	%
2003	1.45	%	73,146		5.941549		434,601	0.21	%	18.49	%
Janus Aspen Series – Global Technology Portfolio – Service II Shares
2007	1.45	%	5,722		14.297680		81,811	0.42	%	19.98	%
2006	1.45	%	3,194		11.916745		38,062	0.00	%	6.38	%
2005	1.45	%	1,859		11.202161		20,825	0.00	%	9.72	%
2004	1.45	%	10,534		10.210014		107,552	0.00	%	-0.63	%
2003	1.45	%	7,454		10.274404		76,585	0.00	%	45.00	%
Janus Aspen Series – Global Technology Portfolio – Service Shares
2007	1.45	%	4,946		4.838333		23,930	0.31	%	19.92	%
2006	1.45	%	6,069		4.034488		24,485	0.00	%	6.27	%
2005	1.45	%	13,755		3.796495		52,221	0.00	%	9.94	%
2004	1.45	%	15,898		3.453318		54,901	0.00	%	-0.89	%
2003	1.45	%	20,634		3.484403		71,897	0.00	%	44.35	%

(Continued)

40

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Janus Aspen Series – International Growth Portfolio – Service II Shares
2007	1.45	%	33,972	$	28.476500	$	967,404	0.42	%	26.21	%
2006	1.45	%	31,985		22.563352		721,689	2.85	%	44.58	%
2005	1.45	%	8,155		15.606584		127,272	0.72	%	30.11	%
2004	1.45	%	5,975		11.994950		71,670	0.13	%	16.99	%
2003	1.45	%	111,175		10.252980		1,139,875	0.36	%	32.60	%
Janus Aspen Series – International Growth Portfolio – Service Shares
2007	1.45	%	3,247		15.982281		51,894	0.47	%	26.15	%
2006	1.45	%	7,930		12.668948		100,465	1.49	%	44.51	%
2005	1.45	%	12,939		8.766834		113,434	0.96	%	30.03	%
2004	1.45	%	14,743		6.741991		99,397	0.78	%	16.97	%
2003	1.45	%	25,693		5.764054		148,096	1.00	%	32.58	%
JPMorgan Series Trust II – Mid Cap Value Portfolio
2007	1.45	%	14,361		14.232291		204,390	1.59	%	0.96	%
2006	1.45	%	112,774		14.096964		1,589,771	0.51	%	15.15	%
2005	1.45	%	268,485		12.242175		3,286,840	0.16	%	7.63	%
2004	1.45	%	154,934		11.373957		1,762,213	0.00	%	13.74	% 05/03/04
Lehman Brothers AMT – Short Duration Bond Portfolio – I Class
2007	1.45	%	339,053		13.751675		4,662,547	2.82	%	3.24	%
2006	1.45	%	343,659		13.319560		4,577,387	2.49	%	2.70	%
2005	1.45	%	526,675		12.969996		6,830,973	2.93	%	-0.02	%
2004	1.45	%	531,370		12.973064		6,893,497	5.29	%	-0.68	%
2003	1.45	%	403,378		13.062162		5,268,989	4.07	%	0.94	%
Nationwide VIT – Gartmore Emerging Markets Fund – Class I
2003	1.45	%	1,056		11.036792		11,655	0.57	%	62.87	%
Nationwide VIT – Gartmore Emerging Markets Fund – Class III
2007	1.45	%	33,293		36.691806		1,221,580	0.71	%	43.43	%
2006	1.45	%	28,211		25.581976		721,693	0.80	%	34.67	%
2005	1.45	%	25,233		18.996097		479,329	0.47	%	30.74	%
2004	1.45	%	17,353		14.529882		252,137	1.06	%	19.01	%
2003	1.45	%	15,033		12.209330		183,543	0.72	%	62.83	%
Nationwide VIT – Gartmore Global Utilities Fund – Class III
2007	1.45	%	20,692		22.762571		471,003	2.36	%	18.64	%
2006	1.45	%	23,063		19.186665		442,502	2.47	%	35.60	%
2005	1.45	%	14,528		14.149066		205,558	2.51	%	4.94	%
2004	1.45	%	11,917		13.483151		160,679	1.30	%	28.06	%
2003	1.45	%	13,553		10.528435		142,692	0.72	%	22.37	%
Nationwide VIT – Gartmore International Growth Fund – Class III
2007	1.45	%	123,125		24.563902		3,024,430	0.11	%	25.30	%
2006	1.45	%	17,241		19.604737		338,005	1.27	%	31.03	%
2005	1.45	%	14,944		14.962124		223,594	0.72	%	28.29	%
2004	1.45	%	6,002		11.662449		69,998	1.22	%	12.69	%
2003	1.45	%	1,980		10.348693		20,490	0.00	%	33.37	%
Nationwide VIT – Gartmore Worldwide Leaders Fund – Class III
2007	1.45	%	3,742		19.937442		74,606	0.86	%	18.19	%
2006	1.45	%	1,974		16.868480		33,298	0.77	%	23.99	%
2005	1.45	%	2,600		13.604422		35,371	0.26	%	17.61	%
Nationwide VIT – Global Financial Services Fund – Class III
2007	1.45	%	3,078		18.073774		55,631	1.80	%	-2.56	%
2006	1.45	%	13,259		18.549248		245,944	1.23	%	18.60	%
2005	1.45	%	3,308		15.640613		51,739	1.56	%	9.56	%
2004	1.45	%	10,647		14.275369		151,990	1.82	%	19.37	%
2003	1.45	%	10,991		11.958777		131,439	0.72	%	39.41	%
Nationwide VIT – Global Health Sciences Fund – Class III
2007	1.45	%	15,036		14.295226		214,943	0.07	%	11.58	%
2006	1.45	%	13,792		12.811982		176,703	0.00	%	1.22	%
2005	1.45	%	20,675		12.657928		261,703	0.00	%	6.86	%
2004	1.45	%	27,353		11.845780		324,018	0.00	%	6.28	%
2003	1.45	%	15,979		11.145810		178,099	0.00	%	34.79	%

(Continued)

41

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Nationwide VIT – Global Technology and Communications Fund – Class I
2004	1.45	%	1,086	$	3.001143	$	3,259	0.00	%	2.80	%
2003	1.45	%	1,086		2.919387		3,170	0.00	%	52.98	%
Nationwide VIT – Global Technology and Communications Fund – Class III
2007	1.45	%	1,540		14.225227		21,907	0.00	%	18.43	%
2006	1.45	%	3,309		12.011106		39,745	0.00	%	9.48	%
2005	1.45	%	2,178		10.971442		23,896	0.00	%	-1.95	%
2004	1.45	%	5,411		11.189794		60,548	0.00	%	2.77	%
2003	1.45	%	10,283		10.888566		111,967	0.00	%	52.94	%
Nationwide VIT – Government Bond Fund – Class I
2007	1.45	%	292,196		16.264677		4,752,474	4.55	%	5.60	%
2006	1.45	%	418,204		15.402677		6,441,461	4.28	%	1.85	%
2005	1.45	%	322,687		15.123362		4,880,112	3.67	%	1.77	%
2004	1.45	%	401,375		14.860282		5,964,546	5.06	%	1.76	%
2003	1.45	%	645,559		14.602569		9,426,820	3.21	%	0.52	%
Nationwide VIT – Growth Fund – Class I
2007	1.45	%	52,667		13.488463		710,397	0.17	%	17.80	%
2006	1.45	%	68,796		11.450111		787,722	0.04	%	4.63	%
2005	1.45	%	95,090		10.943163		1,040,585	0.08	%	4.96	%
2004	1.45	%	108,784		10.425963		1,134,178	0.29	%	6.59	%
2003	1.45	%	152,698		9.781501		1,493,616	0.02	%	30.82	%
Nationwide VIT – International Value Fund – Class III
2007	1.45	%	57,900		22.125147		1,281,046	2.84	%	1.43	%
2006	1.45	%	199,103		21.813054		4,343,044	2.33	%	20.97	%
2005	1.45	%	55,229		18.031528		995,863	1.89	%	10.43	%
2004	1.45	%	102,424		16.327943		1,672,373	2.13	%	18.52	%
2003	1.45	%	4,472		13.683042		61,191	0.00	%	36.83	% 05/01/03
Nationwide VIT – Investor Destinations Aggressive Fund – Class II
2007	1.45	%	10,660		15.354325		163,677	1.99	%	4.41	%
2006	1.45	%	10,205		14.705289		150,067	2.01	%	15.18	%
2005	1.45	%	12,363		12.767402		157,843	1.76	%	6.37	%
2004	1.45	%	11,456		12.002712		137,503	2.33	%	12.37	%
2003	1.45	%	1,768		10.681108		18,884	0.89	%	29.96	%
Nationwide VIT – Investor Destinations Conservative Fund – Class II
2007	1.45	%	40,024		12.028901		481,445	2.78	%	3.85	%
2006	1.45	%	32,297		11.583512		374,113	3.30	%	4.63	%
2005	1.45	%	37,627		11.071052		416,570	3.37	%	1.81	%
2004	1.45	%	17,525		10.873912		190,565	2.22	%	3.13	%
2003	1.45	%	21,242		10.543381		223,962	2.23	%	6.34	%
Nationwide VIT – Investor Destinations Moderate Fund – Class II
2007	1.45	%	102,119		13.660867		1,395,034	2.65	%	4.12	%
2006	1.45	%	84,904		13.120417		1,113,976	2.37	%	9.74	%
2005	1.45	%	68,632		11.955598		820,537	1.85	%	3.82	%
2004	1.45	%	140,586		11.515594		1,618,931	2.05	%	7.95	%
2003	1.45	%	102,489		10.667735		1,093,325	1.86	%	18.31	%
Nationwide VIT – Investor Destinations Moderately Aggressive Fund – Class II
2007	1.45	%	55,166		14.723058		812,212	2.19	%	4.60	%
2006	1.45	%	48,820		14.075186		687,151	2.17	%	12.88	%
2005	1.45	%	56,782		12.468670		707,996	2.13	%	5.52	%
2004	1.45	%	52,770		11.815958		623,528	1.87	%	10.47	%
2003	1.45	%	28,779		10.696293		307,829	1.80	%	24.81	%
Nationwide VIT – Investor Destinations Moderately Conservative Fund – Class II
2007	1.45	%	45,273		12.919773		584,917	3.47	%	4.32	%
2006	1.45	%	46,542		12.385198		576,432	2.68	%	6.85	%
2005	1.45	%	47,896		11.590666		555,147	2.53	%	2.98	%
2004	1.45	%	44,092		11.255804		496,291	2.41	%	5.61	%
2003	1.45	%	43,835		10.658362		467,209	2.18	%	12.05	%

(Continued)

42

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Nationwide VIT – J.P. Morgan Balanced Fund – Class I
2006	1.45	%	566	$	11.969347	$	6,775	8.54	%	10.63	%
2005	1.45	%	378		10.819661		4,090	2.11	%	1.06	%
2004	1.45	%	79		10.706180		846	3.31	%	7.06	% 05/03/04
Nationwide VIT – Mid Cap Growth Fund – Class I
2007	1.45	%	40,159		6.797920		272,998	0.00	%	7.43	%
2006	1.45	%	45,025		6.328025		284,919	0.00	%	8.32	%
2005	1.45	%	239,269		5.842070		1,397,826	0.00	%	8.16	%
2004	1.45	%	705,062		5.401548		3,808,426	0.00	%	13.67	%
2003	1.45	%	109,111		4.752130		518,510	0.00	%	38.11	%
Nationwide VIT – Mid Cap Index Fund – Class I
2007	1.45	%	367,570		16.228967		5,965,281	1.32	%	5.99	%
2006	1.45	%	292,850		15.311560		4,483,990	1.24	%	8.30	%
2005	1.45	%	251,452		14.138070		3,555,046	0.96	%	10.48	%
2004	1.45	%	274,799		12.797149		3,516,644	0.50	%	14.05	%
2003	1.45	%	332,627		11.220232		3,732,152	0.43	%	32.70	%
Nationwide VIT – Money Market Fund – Class I
2007	1.45	%	940,769		12.958196		12,190,669	4.27	%	3.26	%
2006	1.45	%	529,849		12.548494		6,648,807	5.86	%	3.02	%
2005	1.45	%	463,511		12.180792		5,645,931	3.93	%	1.18	%
2004	1.45	%	565,009		12.038328		6,801,764	1.02	%	-0.65	%
2003	1.45	%	850,554		12.117137		10,306,279	0.70	%	-0.83	%
Nationwide VIT – Multi-Manager Small Cap Growth Fund – Class I
2007	1.45	%	9,930		8.049711		79,934	0.00	%	8.15	%
2006	1.45	%	25,971		7.443078		193,304	0.00	%	1.71	%
2005	1.45	%	51,769		7.317634		378,827	0.00	%	6.53	%
2004	1.45	%	46,476		6.869210		319,253	0.00	%	11.77	%
2003	1.45	%	77,681		6.145755		477,408	0.00	%	32.32	%
Nationwide VIT – Multi-Manager Small Cap Value Fund – Class I
2007	1.45	%	96,828		20.549607		1,989,777	1.03	%	-8.25	%
2006	1.45	%	149,493		22.397866		3,348,324	0.43	%	15.60	%
2005	1.45	%	189,246		19.375725		3,666,778	0.05	%	1.58	%
2004	1.45	%	287,125		19.073856		5,476,581	0.00	%	15.60	%
2003	1.45	%	384,540		16.500143		6,344,965	0.00	%	54.58	%
Nationwide VIT – Multi-Manager Small Company Fund – Class I
2007	1.45	%	115,928		32.007206		3,710,531	0.08	%	0.64	%
2006	1.45	%	149,854		31.802683		4,765,759	0.09	%	10.42	%
2005	1.45	%	252,760		28.802031		7,280,001	0.00	%	10.69	%
2004	1.45	%	275,366		26.019616		7,164,918	0.00	%	17.30	%
2003	1.45	%	403,505		22.182648		8,950,809	0.00	%	38.97	%
Nationwide VIT – Nationwide Fund – Class I
2007	1.45	%	92,540		21.358476		1,976,513	1.05	%	6.60	%
2006	1.45	%	110,923		20.035277		2,222,373	1.05	%	11.98	%
2005	1.45	%	139,603		17.891041		2,497,643	0.88	%	5.89	%
2004	1.45	%	164,622		16.896149		2,781,478	1.20	%	8.16	%
2003	1.45	%	228,928		15.621422		3,576,181	0.55	%	25.67	%
Nationwide VIT – Nationwide Leaders Fund – Class III
2007	1.45	%	25,240		16.573218		418,308	0.33	%	9.93	%
2006	1.45	%	170,879		15.075943		2,576,162	0.11	%	14.44	%
2005	1.45	%	14,345		13.173172		188,969	1.65	%	8.71	%
2004	1.45	%	5,547		12.118224		67,220	0.25	%	17.05	%
2003	1.45	%	13,695		10.353036		141,785	0.23	%	23.77	%
Nationwide VIT – U.S. Growth Leaders Fund – Class III
2007	1.45	%	2,472		17.788467		43,973	0.00	%	20.65	%
2006	1.45	%	4,989		14.744172		73,559	0.20	%	-1.73	%
2005	1.45	%	10,621		15.003694		159,354	0.00	%	10.37	%
2004	1.45	%	5,447		13.593864		74,046	0.00	%	10.82	%
2003	1.45	%	28,886		12.267095		354,347	0.00	%	50.19	%

(Continued)

43

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Nationwide VIT – Van Kampen Comstock Value Fund – Class II
2007	1.45	%	70,608	$	12.617905	$	890,925	1.57	%	-4.03	%
2006	1.45	%	77,187		13.147317		1,014,802	1.56	%	13.89	%
2005	1.45	%	20,415		11.543990		235,671	1.29	%	2.45	%
2004	1.45	%	17,747		11.268116		199,975	0.81	%	12.68	% 05/03/04
Nationwide VIT – Van Kampen Multi Sector Bond Fund – Class I
2007	1.45	%	113,783		14.027738		1,596,118	3.57	%	3.10	%
2006	1.45	%	131,419		13.605994		1,788,086	4.50	%	3.32	%
2005	1.45	%	190,188		13.168507		2,504,492	8.04	%	0.70	%
2004	1.45	%	45,411		13.076645		593,824	5.15	%	4.99	%
2003	1.45	%	49,599		12.455223		617,767	6.04	%	10.49	%
Neuberger Berman AMT – Growth Portfolio – Class I
2007	1.45	%	52,064		20.597538		1,072,390	0.00	%	20.91	%
2006	1.45	%	56,180		17.035779		957,070	0.00	%	12.42	%
2005	1.45	%	61,567		15.153906		932,981	0.00	%	11.86	%
2004	1.45	%	73,596		13.547460		997,039	0.00	%	14.91	%
2003	1.45	%	95,322		11.789399		1,123,789	0.00	%	29.50	%
Neuberger Berman AMT – Guardian Portfolio – I Class Shares
2007	1.45	%	27,207		13.787250		375,110	0.23	%	5.82	%
2006	1.45	%	39,366		13.028676		512,887	0.63	%	11.74	%
2005	1.45	%	52,925		11.660073		617,109	0.15	%	6.82	%
2004	1.45	%	64,337		10.915208		702,252	0.05	%	14.14	%
2003	1.45	%	254,819		9.563366		2,436,927	1.27	%	29.85	%
Neuberger Berman AMT – Partners Portfolio – Class I
2007	1.45	%	117,948		26.473952		3,122,550	0.62	%	7.74	%
2006	1.45	%	136,432		24.571680		3,352,363	1.08	%	10.62	%
2005	1.45	%	158,825		22.213117		3,527,998	0.98	%	16.34	%
2004	1.45	%	166,664		19.093334		3,182,171	0.01	%	17.25	%
2003	1.45	%	213,222		16.284205		3,472,151	0.00	%	33.13	%
Neuberger Berman AMT – Socially Responsive Portfolio Class I
2007	1.45	%	7,237		14.108638		102,104	0.09	%	6.04	%
2006	1.45	%	7,675		13.304427		102,111	0.18	%	12.06	%
2005	1.45	%	6,115		11.872740		72,602	0.00	%	5.31	%
2004	1.45	%	1,613		11.273853		18,185	0.00	%	12.74	% 05/03/04
Oppenheimer VAF – Balanced Fund – Non-Service Shares
2007	1.45	%	89,082		21.290607		1,896,610	2.77	%	2.27	%
2006	1.45	%	108,288		20.817230		2,254,256	2.09	%	9.54	%
2005	1.45	%	135,088		19.004469		2,567,276	1.84	%	2.39	%
2004	1.45	%	159,157		18.561448		2,954,184	1.04	%	8.51	%
2003	1.45	%	181,225		17.106528		3,100,131	2.72	%	23.15	%
Oppenheimer VAF – Capital Appreciation Fund – Non-Service Shares
2007	1.45	%	69,072		18.297446		1,263,841	0.25	%	12.49	%
2006	1.45	%	91,433		16.266524		1,487,297	0.45	%	6.39	%
2005	1.45	%	156,848		15.289921		2,398,194	0.97	%	3.58	%
2004	1.45	%	209,053		14.761593		3,085,955	0.33	%	5.39	%
2003	1.45	%	256,029		14.007176		3,586,243	0.41	%	29.05	%
Oppenheimer VAF – Core Bond Fund – Non-Service Shares
2007	1.45	%	208,583		15.950661		3,327,037	5.32	%	2.87	%
2006	1.45	%	213,369		15.505684		3,308,432	5.54	%	3.76	%
2005	1.45	%	272,535		14.944308		4,072,847	5.40	%	1.10	%
2004	1.45	%	318,093		14.781171		4,701,787	4.61	%	3.96	%
2003	1.45	%	415,506		14.217739		5,907,556	6.13	%	5.23	%
Oppenheimer VAF – Global Securities Fund – Class 3
2007	1.45	%	105,957		22.867724		2,422,995	1.42	%	4.79	%
2006	1.45	%	126,662		21.822967		2,764,141	1.44	%	15.99	%
2005	1.45	%	314,061		18.815041		5,909,071	0.56	%	12.68	%
2004	1.45	%	135,973		16.697062		2,270,350	1.06	%	17.47	%
2003	1.45	%	102,517		14.214155		1,457,193	0.00	%	42.14	% 05/01/03

(Continued)

44

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Oppenheimer VAF – Global Securities Fund – Non-Service Shares
2007	1.45	%	103,473	$	37.140007	$	3,842,988	1.42	%	4.77	%
2006	1.45	%	125,477		35.449353		4,448,078	1.02	%	15.99	%
2005	1.45	%	142,651		30.562360		4,359,751	1.00	%	12.66	%
2004	1.45	%	170,829		27.129075		4,634,433	1.22	%	17.44	%
2003	1.45	%	217,070		23.101153		5,014,567	0.91	%	40.95	%
Oppenheimer VAF – Main Street® – Non-Service Shares
2007	1.45	%	30,870		10.427113		321,885	1.22	%	2.90	%
2006	1.45	%	38,154		10.133095		386,618	1.13	%	13.36	%
2005	1.45	%	51,965		8.938712		464,500	1.50	%	4.44	%
2004	1.45	%	77,021		8.558380		659,175	0.88	%	7.87	%
2003	1.45	%	124,707		7.933793		989,400	0.89	%	24.88	%
Oppenheimer VAF – Mid Cap Fund – Non-Service Shares
2007	1.45	%	27,469		6.422032		176,407	0.00	%	4.78	%
2006	1.45	%	34,356		6.128929		210,565	0.00	%	1.47	%
2005	1.45	%	62,514		6.040334		377,605	0.00	%	10.70	%
2004	1.45	%	61,677		5.456321		336,530	0.00	%	18.04	%
2003	1.45	%	53,613		4.622404		247,821	0.00	%	23.77	%
The Dreyfus Socially Responsible Growth Fund, Inc. – Initial Shares
2007	1.45	%	25,661		16.767038		430,259	0.58	%	6.21	%
2006	1.45	%	35,661		15.786056		562,947	0.10	%	7.62	%
2005	1.45	%	43,283		14.668118		634,880	0.00	%	2.12	%
2004	1.45	%	65,088		14.363971		934,922	0.37	%	4.67	%
2003	1.45	%	72,945		13.723018		1,001,026	0.10	%	24.18	%
Turner GVIT Growth Focus Fund – Class I
2003	1.45	%	4,530		3.181945		14,414	0.00	%	48.78	%
Van Eck Worldwide Insurance Trust – Bond Fund – Class R1
2007	1.45	%	37,256		12.122663		451,642	6.30	%	8.22	%
2006	1.45	%	43,006		11.202009		481,754	7.90	%	4.86	%
2005	1.45	%	39,097		10.683094		417,677	7.47	%	-4.51	%
2004	1.45	%	46,939		11.188102		525,158	0.00	%	11.88	% 05/03/04
Van Eck Worldwide Insurance Trust – Bond Fund – Initial Class
2007	1.45	%	11,949		15.867794		189,604	6.48	%	8.11	%
2006	1.45	%	15,787		14.677199		231,709	9.27	%	4.94	%
2005	1.45	%	23,563		13.986177		329,556	8.20	%	-4.43	%
2004	1.45	%	34,491		14.635162		504,781	11.91	%	7.57	%
2003	1.45	%	90,150		13.605416		1,226,528	1.92	%	16.45	%
Van Eck Worldwide Insurance Trust – Emerging Markets Fund – Class R1
2007	1.45	%	13,822		30.539927		422,123	0.55	%	35.56	%
2006	1.45	%	23,099		22.528407		520,384	0.62	%	37.52	%
2005	1.45	%	16,193		16.382210		265,277	0.55	%	29.96	%
2004	1.45	%	9,898		12.605738		124,772	0.00	%	26.06	% 05/03/04
Van Eck Worldwide Insurance Trust – Emerging Markets Fund – Initial Class
2007	1.45	%	25,254		27.281053		688,956	0.46	%	35.61	%
2006	1.45	%	33,159		20.117283		667,069	0.58	%	37.48	%
2005	1.45	%	41,290		14.633358		604,211	0.84	%	30.09	%
2004	1.45	%	51,914		11.248720		583,966	0.62	%	24.07	%
2003	1.45	%	85,247		9.066702		772,909	0.09	%	51.96	%
Van Eck Worldwide Insurance Trust – Hard Assets Fund – Class R1
2007	1.45	%	44,448		32.733939		1,454,958	0.11	%	43.21	%
2006	1.45	%	47,846		22.857287		1,093,630	0.07	%	22.74	%
2005	1.45	%	46,326		18.623055		862,732	0.18	%	49.43	%
2004	1.45	%	19,204		12.463044		239,340	0.00	%	24.63	% 05/03/04
Van Eck Worldwide Insurance Trust – Hard Assets Fund – Initial Class
2007	1.45	%	29,090		33.911867		986,496	0.12	%	43.24	%
2006	1.45	%	30,884		23.675154		731,183	0.07	%	22.69	%
2005	1.45	%	36,153		19.296380		697,622	0.42	%	49.48	%
2004	1.45	%	64,606		12.908969		833,997	0.30	%	22.43	%
2003	1.45	%	49,973		10.565413		527,985	0.52	%	42.98	%

(Continued)

45

NATIONWIDE VA SEPARATE ACCOUNT-B (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***
Van Kampen UIF – Emerging Markets Debt Portfolio – Class I
2007	1.45	%	3,929	$	19.606620	$	77,034	7.10	%	4.98	%
2006	1.45	%	4,648		18.676669		86,809	7.60	%	9.21	%
2005	1.45	%	8,193		17.102387		140,120	7.11	%	10.63	%
2004	1.45	%	17,197		15.459386		265,855	15.59	%	8.47	%
2003	1.45	%	49,904		14.252709		711,267	0.00	%	26.01	%
Van Kampen UIF – U.S. Real Estate Portfolio – Class I
2007	1.45	%	75,537		42.221432		3,189,280	1.17	%	-18.28	%
2006	1.45	%	101,442		51.666261		5,241,129	1.11	%	36.05	%
2005	1.45	%	123,771		37.975667		4,700,286	1.18	%	15.36	%
2004	1.45	%	146,161		32.919360		4,811,527	1.49	%	34.42	%
2003	1.45	%	189,420		24.490201		4,638,934	0.00	%	35.52	%
Wells Fargo AVT – Discovery FundSM
2007	1.45	%	20,057		24.798275		497,379	0.00	%	20.54	%
2006	1.45	%	24,109		20.572455		495,981	0.00	%	12.99	%
2005	1.45	%	30,263		18.207932		551,027	0.00	%	6.71	%
2004	1.45	%	36,644		17.063457		625,273	0.00	%	14.04	%
2003	1.45	%	41,832		14.962586		625,915	0.00	%	37.41	%
Wells Fargo AVT – Opportunity FundSM
2007	1.45	%	105,040		29.097410		3,056,392	0.63	%	5.08	%
2006	1.45	%	128,573		27.691025		3,560,318	0.00	%	10.60	%
2005	1.45	%	146,275		25.037948		3,662,426	0.00	%	6.33	%
2004	1.45	%	171,897		23.548486		4,047,914	0.00	%	16.51	%
2003	1.45	%	305,709		20.212115		6,179,025	0.08	%	35.02	%
2007 Reserves for annuity contracts in payout phase:							13,273
2007 Contract owners’ equity						$	164,671,856
2006 Reserves for annuity contracts in payout phase:							13,622
2006 Contract owners’ equity						$	180,295,968
2005 Reserves for annuity contracts in payout phase:							6,783
2005 Contract owners’ equity						$	184,550,174
2004 Reserves for annuity contracts in payout phase:							13,369
2004 Contract owners’ equity						$	200,024,574
2003 Reserves for annuity contracts in payout phase:							24,866
2003 Contract owners’ equity						$	215,144,654

* 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, that result in direct reductions to the contractholder accounts through reductions in unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

*** This represents the total return for the period indicated and includes a deduction only for expenses assessed through 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. Investment options with a date notation indicate the effective date of that investment option in the Account. The total return is calculated for the period indicated or from the effective date through the end of the period.

46

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life and Annuity Insurance Company and

Contract Owners of Nationwide VA Separate Account-B:

We have audited the accompanying statement of assets, liabilities and contract owners’ equity of Nationwide VA Separate Account-B (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

47

NATIONWIDE LIFE AND ANNUITY 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