<PAGE> 1
[PROVIDENT MUTUAL LOGO]
PROVIDENT MUTUAL SEMI-ANNUAL REPORT
SECURITY THROUGH FINANCIAL SERVICES
1050 Westlakes Drive
Berwyn, PA 19312
1-800-668-5177
June 30, 1996
Variable Annuity contracts issued by ---------------------------
Provident Mutual are distributed by PROVIDENT MUTUAL LIFE
1717 Capital Management Company, INSURANCE COMPANY
Wilmington, DE, a registered broker-dealer.
This Report has been prepared for
contractowners. It is not authorized for other
distribution unless preceded or
accompanied by an effective prospectus.
PROVIDENT MUTUAL VARIABLE
PM 506 6.96 ANNUITY SEPARATE ACCOUNT
MARKET STREET FUND, INC.
----------------------------
<PAGE> 2
- - --------------------------------------------------------------------------------
To Our Variable Annuity Contract Owners:
- - --------------------------------------------------------------------------------
August 26, 1996
As an owner of a Provident Mutual variable annuity contract, we are pleased
to send you the Semi-Annual Report for the Separate Account and its subaccounts
for our variable annuity contracts.
Attached to the Separate Account Semi-Annual Report is the Semi-Annual
Report for the Market Street Fund, Inc. Under separate cover, you will be
receiving the Semi-Annual Reports for the other Fund groups underlying the
subaccounts to which you have chosen to allocate your premiums.
Thank you for your confidence in Provident Mutual and your variable annuity
contract. Provident Mutual has continued its role as a leader in the variable
insurance products marketplace. We are very pleased with this result and are
glad that you are a part of our success.
We are happy to be of service to you. If you have a question about your
annuity contract, please contact your local agent or call our Service Center
toll free at 1-800-668-5177.
Sincerely,
LOGO
David N. Ingram
1
<PAGE> 3
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1996 (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------------------
ASSETS
Investment in the Market Street
Fund, Inc., at market value:
Growth Portfolio................. $1,518,774
Money Market Portfolio........... $2,423,349
Bond Portfolio................... $338,482
Managed Portfolio................ $570,360
Aggressive Growth Portfolio...... $293,385
International Portfolio.......... $ 1,415,151
Dividends receivable............... 10,850
---------- ---------- ---------- ---------- ---------- -------------
NET ASSETS......................... $1,518,774 $2,434,199 $338,482 $570,360 $293,385 $ 1,415,151
=========== =========== =========== =========== =========== ============
Held for the benefit of
contractowners................... $1,482,518 $2,405,041 $310,759 $538,492 $259,591 $ 1,382,238
Attributable to Provident Mutual
Life Insurance Company........... 36,256 29,158 27,723 31,868 33,794 32,913
---------- ---------- ---------- ---------- ---------- -------------
$1,518,774 $2,434,199 $338,482 $570,360 $293,385 $ 1,415,151
=========== =========== =========== =========== =========== ============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 4
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1996 (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500 CONTRAFUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------------------------
ASSETS
Investment in the Variable
Insurance Products Fund, at
market value:
High Income Portfolio............ $1,234,466
Equity-Income Portfolio.......... $3,557,587
Growth Portfolio................. $2,838,064
Investment in the Variable
Insurance Products Fund II, at
market value:
Asset Manager Portfolio.......... $532,385
Index 500 Portfolio.............. $1,390,959
Contrafund Portfolio............. $ 67,562
---------- ---------- ---------- -------- ---------- -------
NET ASSETS......................... $1,234,466 $3,557,587 $2,838,064 $532,385 $1,390,959 $ 67,562
========== ========== ========== ======== ========== =======
Held for the benefit of
contractowners................... $1,202,586 $3,522,306 $2,799,528 $502,461 $1,353,571 $ 42,430
Attributable to Provident Mutual
Life
Insurance Company................ 31,880 35,281 38,536 29,924 37,388 25,132
---------- ---------- ---------- -------- ---------- -------
$1,234,466 $3,557,587 $2,838,064 $532,385 $1,390,959 $ 67,562
========== ========== ========== ======== ========== =======
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 5
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1996 (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR SCUDDER
QUEST FOR VALUE VALUE SCUDDER GROWTH AND SCUDDER
VALUE EQUITY SMALL CAP MANAGED BOND INCOME INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------
ASSETS
Investment in the OCC Accumulation
Trust, at market value:
Equity Portfolio...................... $1,238,863
Small Cap Portfolio................... $851,456
Managed Portfolio..................... $2,217,562
Investment in the Scudder Variable Life
Investment Fund, at market value:
Bond Portfolio........................ $329,858
Growth and Income Portfolio........... $ 63,875
International Portfolio............... $ 27,297
---------- -------- ---------- -------- ------- -------
NET ASSETS.............................. $1,238,863 $851,456 $2,217,562 $329,858 $ 63,875 $ 27,297
========== ======== ========== ======== ======= =======
Held for the benefit of
contractowners........................ $1,200,981 $820,125 $2,180,552 $300,842 $ 38,603 $ 2,036
Attributable to Provident Mutual Life
Insurance Company..................... 37,882 31,331 37,010 29,016 25,272 25,261
---------- -------- ---------- -------- ------- -------
$1,238,863 $851,456 $2,217,562 $329,858 $ 63,875 $ 27,297
========== ======== ========== ======== ======= =======
</TABLE>
See accompanying notes to financial statements
4
<PAGE> 6
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1996 (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DREYFUS DREYFUS DREYFUS FEDERATED U.S.
ZERO GROWTH SOCIALLY GOVERNMENT FEDERATED
COUPON 2000 AND INCOME RESPONSIBLE BOND FUND UTILITY FUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------------------
ASSETS
Investment in the Dreyfus Variable
Investment Fund, at market value:
Zero Coupon 2000 Portfolio........... $ 309,918
Growth and Income Portfolio.......... $ 62,905
Socially Responsible Portfolio....... $25,187
Investment in the Insurance Management
Series, at market value:
U.S. Government Bond Fund
Portfolio.......................... $ 25,243
Utility Fund Portfolio............... $ 25,959
LIABILITIES
Payable to Provident Mutual Life
Insurance Company.................. 121 69
-------- ------- ------- ------- -------
NET ASSETS............................. $ 309,918 $ 62,905 $25,187 $ 25,122 $ 25,890
======== ======= ======= ======= =======
Held for the benefit of
contractowners....................... $ 280,856 $ 36,625
Attributable to Provident Mutual Life
Insurance Company.................... 29,062 26,280 $25,187 $ 25,122 $ 25,890
-------- ------- ------- ------- -------
$ 309,918 $ 62,905 $25,187 $ 25,122 $ 25,890
======== ======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 7
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Six Months Ended June 30, 1996 (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends................................ $ 17,016 $ 55,821 $ 7,818 $ 5,168 $ 2,750 $10,854
EXPENSES
Mortality and expense risks.............. 8,526 15,614 1,807 2,284 1,736 7,585
-------- ------- -------- ------- ------- -------
Net investment income.................... 8,490 40,207 6,011 2,884 1,014 3,269
-------- ------- -------- ------- ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain distributions reinvested... 50,877 11,758 27,708 44,000
Net realized gain from redemption of
investment shares...................... 2,238 2,118 1,565 2,998 371
-------- ------- -------- ------- ------- -------
Net realized gain on investments......... 53,115 2,118 13,323 30,706 44,371
-------- ------- -------- ------- ------- -------
Net unrealized appreciation
(depreciation) of investments:
Beginning of period.................... 98,207 18,631 32,534 16,806 56,960
End of period.......................... 140,600 4,968 30,551 10,663 81,976
-------- ------- -------- ------- ------- -------
Net unrealized appreciation
(depreciation) during the period....... 42,393 (13,663) (1,983) (6,143) 25,016
-------- ------- -------- ------- ------- -------
Net realized and unrealized gain (loss)
on investments......................... 95,508 (11,545) 11,340 24,563 69,387
-------- ------- -------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations.............. $103,998 $ 40,207 $ (5,534) $ 14,224 $ 25,577 $72,656
======== ======= ======== ======= ======= =======
</TABLE>
See accompanying notes to financial statements
6
<PAGE> 8
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Six Months ended June 30, 1996 (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500 CONTRAFUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends................................ $ 67,232 $ 3,245 $ 4,472 $ 13,562 $ 8,150
EXPENSES
Mortality and expense risks.............. 6,928 17,525 14,358 2,705 6,470
------- -------- ------- ------- ------- ----
Net investment income (loss)............. 60,304 (14,280) (9,886) 10,857 1,680
------- -------- ------- ------- ------- ----
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain distributions reinvested... 13,154 93,026 112,930 11,183 20,958
Net realized gain (loss) from redemption
of investment shares................... 6,383 (6,710) 41,500 6,002 5,062 $ 7
------- -------- ------- ------- ------- ----
Net realized gain on investments......... 19,537 86,316 154,430 17,185 26,020 7
------- -------- ------- ------- ------- ----
Net unrealized appreciation
(depreciation) of investments:
Beginning of period.................... 58,116 196,090 53,656 31,394 30,773
End of period.......................... 41,720 236,503 84,384 24,354 77,636 102
------- -------- ------- ------- ------- ----
Net unrealized appreciation
(depreciation) during the period....... (16,396) 40,413 30,728 (7,040) 46,863 102
------- -------- ------- ------- ------- ----
Net realized and unrealized gain
on investments......................... 3,141 126,729 185,158 10,145 72,883 109
------- -------- ------- ------- ------- ----
Net increase in net assets resulting
from operations........................ $ 63,445 $112,449 $175,272 $ 21,002 $ 74,563 $109
======= ======== ======= ======= ======= ====
</TABLE>
See accompanying notes to financial statements
7
<PAGE> 9
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Six Months Ended June 30, 1996 (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR SCUDDER
QUEST FOR VALUE VALUE SCUDDER GROWTH AND SCUDDER
VALUE EQUITY SMALL CAP MANAGED BOND INCOME INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends............................... $ 8,207 $ 7,588 $ 14,611 $ 11,089
EXPENSES
Mortality and expense risks............. 6,722 4,348 9,211 1,361
-------- ------- -------- ------- ------- ------ -
Net investment income................... 1,485 3,240 5,400 9,728
-------- ------- -------- ------- ------- ------ -
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain distributions
reinvested............................ 16,444 9,318
Net realized gain from redemption of
investment shares..................... 12,096 34,416 2,317 2,342
-------- ------- -------- ------- ------- ------ -
Net realized gain on investments........ 28,540 34,416 11,635 2,342
-------- ------- -------- ------- ------- ------ -
Net unrealized appreciation
(depreciation) of investments:
Beginning of period................... 70,068 44,166 94,978 7,002
End of period......................... 129,965 56,191 164,432 (8,533) $385 $ 267
-------- ------- -------- ------- ------- ------ -
Net unrealized appreciation
(depreciation) during the period...... 59,897 12,025 69,454 (15,535) 385 267
-------- ------- -------- ------- ------- ------ -
Net realized and unrealized gain (loss)
on investments........................ 88,437 46,441 81,089 (13,193) 385 267
-------- ------- -------- ------- ------- ------ -
Net increase (decrease) in net assets
resulting from operations............. $ 89,922 $ 49,681 $ 86,489 $ (3,465) $385 $ 267
======== ======= ======== ======= ======= =======
</TABLE>
See accompanying notes to financial statements
8
<PAGE> 10
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Six Months Ended June 30, 1996 (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DREYFUS DREYFUS DREYFUS FEDERATED FEDERATED
ZERO GROWTH SOCIALLY U.S. GOVERNMENT UTILITY
COUPON 2000 AND INCOME RESPONSIBLE BOND FUND FUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends................................. $ 5,266 $ 246 $ 121 $ 64
EXPENSES
Mortality and expense risks............... 1,393
------ ------ ---- ---- ----
Net investment income..................... 3,873 246 121 64
------ ------ ---- ---- ----
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS
Net realized gain from redemption of
investment shares....................... 2,757 700
------ ------ ---- ---- ----
Net realized gain on investments.......... 2,757 700
------ ------ ---- ---- ----
Net unrealized appreciation (depreciation)
of investments:
Beginning of period..................... 4,458
End of period........................... (6,020) 533 $ 187 1 826
------ ------ ---- ---- ----
Net unrealized appreciation (depreciation)
during the period....................... (10,478) 533 187 1 826
------ ------ ---- ---- ----
Net realized and unrealized gain (loss)
on investments.......................... (7,721) 1,233 187 1 826
------ ------ ---- ---- ----
Net increase (decrease) in net assets
resulting from operations............... $ (3,848) $1,479 $ 187 $ 122 $890
====== ====== ==== ==== ====
</TABLE>
See accompanying notes to financial statements
9
<PAGE> 11
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Six Months Ended June 30, 1996
(unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income.............. $ 8,490 $ 40,207 $ 6,011 $ 2,884 $ 1,014 $ 3,269
Net realized gain on investments... 53,115 2,118 13,323 30,706 44,371
Net unrealized appreciation
(depreciation) of investments
during the period................ 42,393 (13,663) (1,983) (6,143) 25,016
---------- ----------- -------- -------- -------- ----------
Net increase (decrease) in net
assets from operations........... 103,998 40,207 (5,534) 14,224 25,577 72,656
---------- ----------- -------- -------- -------- ----------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractowners' net premiums....... 32,878 7,708,667 10,837 717 11,878 29,755
Administrative charges............. (300 ) (292 ) (62) (159) (152) (295)
Surrenders and forfeitures......... (7,790 ) (54,661 ) (25,705) (8,957) (36,380)
Transfers between investment
portfolios....................... 324,849 (7,199,041 ) 95,048 276,750 (767) 450,017
---------- ----------- -------- -------- -------- ----------
Net increase in net assets derived
from contract transactions....... 349,637 454,673 80,118 268,351 10,959 443,097
---------- ----------- -------- -------- -------- ----------
Total increase in net assets....... 453,635 494,880 74,584 282,575 36,536 515,753
NET ASSETS
Beginning of period.............. 1,065,139 1,939,319 263,898 287,785 256,849 899,398
---------- ----------- -------- -------- -------- ----------
End of period.................... $1,518,774 $2,434,199 $338,482 $570,360 $293,385 $ 1,415,151
========== =========== ======== ======== ======== ==========
</TABLE>
See accompanying notes to financial statements
10
<PAGE> 12
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Six Months Ended June 30, 1996
(unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500 CONTRAFUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss)............. $ 60,304 $ (14,280) $ (9,886) $ 10,857 $ 1,680
Net realized gain on investments......... 19,537 86,316 154,430 17,185 26,020 $ 7
Net unrealized appreciation
(depreciation)
of investments during the period....... (16,396) 40,413 30,728 (7,040) 46,863 102
------- -------- ------- ------- ------- ----
Net increase in net assets from
operations............................. 63,445 112,449 175,272 21,002 74,563 109
------- -------- ------- ------- ------- ----
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractowners' net premiums............. 21,818 140,760 111,003 25,150 50,401
Administrative charges................... (293) (317) (391) (203) (103)
Surrenders and forfeitures............... (59,886) (38,409) (16,579) (2,586) (1,119) (2,007)
Transfers between investment
portfolios............................. 337,978 1,443,542 1,124,105 138,938 631,575 44,460
------- -------- ------- ------- ------- ----
Net increase in net assets derived from
contract transactions.................. 299,617 1,545,576 1,218,138 161,299 680,754 42,453
------- -------- ------- ------- ------- ----
Capital contribution from Provident
Mutual
Life Insurance Company................. 25,000
------- -------- ------- ------- ------- ----
Total increase in net assets............. 363,062 1,658,025 1,393,410 182,301 755,317 67,562
NET ASSETS
Beginning of period.................... 871,404 1,899,562 1,444,654 350,084 635,642 --
------- -------- ------- ------- ------- ----
End of period..........................$1,234,466 $3,557,587 $2,838,064 $532,385 $1,390,959 $ 67,562
========= ======== ======= ======= ======= ====
</TABLE>
See accompanying notes to financial statements
11
<PAGE> 13
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Six Months Ended June 30, 1996
(unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR SCUDDER
QUEST FOR VALUE VALUE SCUDDER GROWTH AND SCUDDER
VALUE EQUITY SMALL CAP MANAGED BOND INCOME INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income................... $ 1,485 $ 3,240 $ 5,400 $ 9,728
Net realized gain on investments........ 28,540 34,416 11,635 2,342
Net unrealized appreciation
(depreciation) of investments during
the period............................ 59,897 12,025 69,454 (15,535) $ 385 $ 267
---------- -------- ---------- -------- ------- -------
Net increase (decrease) in net assets
from operations....................... 89,922 49,681 86,489 (3,465) 385 267
---------- -------- ---------- -------- ------- -------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractowners' net premiums............ 52,770 29,183 27,802 6,332
Administrative charges.................. (263) (196) (359 ) (76)
Surrenders and forfeitures.............. (760) (820 ) (496)
Transfers between investment
portfolios............................ 360,718 323,994 1,235,275 202,209 38,490 2,030
---------- -------- ---------- -------- ------- -------
Net increase in net assets derived from
contract transactions................. 412,465 352,981 1,261,898 207,969 38,490 2,030
---------- -------- ---------- -------- ------- -------
Capital contribution from Provident
Mutual Life Insurance Company......... 25,000 25,000
---------- -------- ---------- -------- ------- -------
Total increase in net assets............ 502,387 402,662 1,348,387 204,504 63,875 27,297
NET ASSETS
Beginning of period................... 736,476 448,794 869,175 125,354 -- --
---------- -------- ---------- -------- ------- -------
End of period......................... $1,238,863 $851,456 $2,217,562 $329,858 $ 63,875 $27,297
========== ======== ========== ======== ======= =======
</TABLE>
See accompanying notes to financial statements
12
<PAGE> 14
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Six Months Ended June 30, 1996
(unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DREYFUS DREYFUS DREYFUS FEDERATED U.S. FEDERATED
ZERO GROWTH SOCIALLY GOVERNMENT UTILITY
COUPON 2000 AND INCOME RESPONSIBLE BOND FUND FUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income............................ $ 3,873 $ 246 $ 121 $ 64
Net realized gain on investments................. 2,757 700
Net unrealized appreciation (depreciation) of
investments during the period.................. (10,478) 533 $ 187 1 826
-------- ------- ------- ------- -------
Net increase (decrease) in net assets
from operations................................ (3,848) 1,479 187 122 890
-------- ------- ------- ------- -------
FROM VARIABLE ANNUITY CONTRACT TRANSACTIONS
Contractowners' net premiums..................... 5,424
Administrative charges........................... (24)
Surrenders and forfeitures....................... (248) (2,679)
Transfers between investment portfolios.......... 168,989 39,105
-------- ------- ------- ------- -------
Net increase in net assets derived from
contract transactions.......................... 174,141 36,426
-------- ------- ------- ------- -------
Capital contribution from Provident Mutual Life
Insurance Company.............................. 25,000 25,000 25,000 25,000
-------- ------- ------- ------- -------
Total increase in net assets..................... 170,293 62,905 25,187 25,122 25,890
NET ASSETS
Beginning of period............................ 139,625 -- -- -- --
-------- ------- ------- ------- -------
End of period.................................. $ 309,918 $ 62,905 $25,187 $ 25,122 $ 25,890
======== ======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements
13
<PAGE> 15
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Year Ended December 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss)....... $ 9,571 $ 33,452 $ 7,855 $ 9,911 $ (2,164) $ (5,423)
Net realized gain on investments... 45,321 160 14,956 11,083 8,264
Net unrealized appreciation of
investments during the year...... 98,680 21,827 35,794 12,443 63,388
---------- ----------- -------- -------- -------- --------
Net increase in net assets
from operations.................. 153,572 33,452 29,842 60,661 21,362 66,229
---------- ----------- -------- -------- -------- --------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractowners' net premiums....... 30,285 8,277,788 11,089 2,043 13,061 67,030
Administrative charges............. (312 ) (196 ) (66) (190) (60) (162)
Surrenders and forfeitures......... (23,011 ) (4,381 ) (2,723) (17,408) (5,030) (3,697)
Transfers between investment
portfolios....................... 436,550 (6,659,462 ) 93,995 (63,542) 114,636 489,394
---------- ----------- -------- -------- -------- --------
Net increase (decrease) in net
assets derived from contract
transactions..................... 443,512 1,613,749 102,295 (79,097) 122,607 552,565
---------- ----------- -------- -------- -------- --------
Total increase (decrease) in
net assets....................... 597,084 1,647,201 132,137 (18,436) 143,969 618,794
NET ASSETS
Beginning of year................ 468,055 292,118 131,761 306,221 112,880 280,604
---------- ----------- -------- -------- -------- --------
End of year...................... $1,065,139 $1,939,319 $263,898 $287,785 $256,849 $ 899,398
========== =========== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
14
<PAGE> 16
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Year Ended December 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss)......................... $ (2,074) $ 9,853 $ (5,657 ) $ (836) $ (1,040)
Net realized gain on investments..................... 916 23,936 12,032 6,351 6,174
Net unrealized appreciation of investments
during the year.................................... 58,315 196,595 51,442 33,307 30,712
-------- ---------- ---------- -------- --------
Net increase in net assets from operations........... 57,157 230,384 57,817 38,822 35,846
-------- ---------- ---------- -------- --------
FROM VARIABLE ANNUITY CONTRACT TRANSACTIONS
Contractowners' net premiums......................... 31,698 169,149 110,921 61,229 4,360
Administrative charges............................... (29) (165 ) (148 ) (73) (21)
Surrenders and forfeitures........................... (8,207) (634 ) (8,909 ) (2,483) (447)
Transfers between investment portfolios.............. 754,221 1,303,751 1,181,641 142,676 564,167
-------- ---------- ---------- -------- --------
Net increase in net assets derived from
contract transactions.............................. 777,683 1,472,101 1,283,505 201,349 568,059
-------- ---------- ---------- -------- --------
Total increase in net assets......................... 834,840 1,702,485 1,341,322 240,171 603,905
NET ASSETS
Beginning of year.................................. 36,564 197,077 103,332 109,913 31,737
-------- ---------- ---------- -------- --------
End of year........................................ $871,404 $1,899,562 $1,444,654 $350,084 $635,642
======== ========== ========== ======== ========
</TABLE>
See accompanying notes to financial statements
15
<PAGE> 17
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Year Ended December 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR DREYFUS
QUEST FOR VALUE VALUE SCUDDER ZERO
VALUE EQUITY SMALL CAP MANAGED BOND COUPON 2000
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
<S> <C> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss)....................... $ (3,084) $ (3,682) $ (4,409) $ 3,535 $ 3,446
Net realized gain on investments................... 3,468 12,778 12,571 28 739
Net unrealized appreciation of investments
during the year.................................. 70,278 41,425 95,716 7,185 4,998
-------- -------- -------- -------- --------
Net increase in net assets from operations......... 70,662 50,521 103,878 10,748 9,183
-------- -------- -------- -------- --------
FROM VARIABLE ANNUITY CONTRACT TRANSACTIONS
Contractowners' net premiums....................... 17,047 56,295 44,576 5,284 13,365
Administrative charges............................. (69) (89) (125) (17) (4)
Surrenders and forfeitures......................... (8,381) (9,833)
Transfers between investment portfolios............ 597,919 240,396 651,090 75,949 92,077
-------- -------- -------- -------- --------
Net increase in net assets derived from
contract transactions............................ 606,516 296,602 685,708 81,216 105,438
-------- -------- -------- -------- --------
Total increase in net assets....................... 677,178 347,123 789,586 91,964 114,621
NET ASSETS
Beginning of year................................ 59,298 101,671 79,589 33,390 25,004
-------- -------- -------- -------- --------
End of year...................................... $736,476 $448,794 $869,175 $125,354 $ 139,625
======== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
16
<PAGE> 18
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes To Financial Statements (unaudited)
- - --------------------------------------------------------------------------------
1. ORGANIZATION
The Provident Mutual Variable Annuity Separate Account (Separate Account)
was established on October 19, 1992 by Provident Mutual Life Insurance Company
(Provident Mutual) under the provisions of Pennsylvania law. The Separate
Account is an investment account to which net proceeds from individual flexible
premium deferred variable annuity contracts (the Contracts) are allocated until
maturity or termination of the Contracts.
The Contracts are distributed through career agents, brokers and personal
producing general agents.
Provident Mutual has structured the Separate Account as a unit investment
trust registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended. The Separate Account is comprised of
twenty-three Subaccounts: the Growth, Money Market, Bond, Managed, Aggressive
Growth and International Subaccounts invest in the corresponding portfolios of
the Market Street Fund, Inc.; the Fidelity High Income, Fidelity Equity-Income
and Fidelity Growth Subaccounts invest in the corresponding portfolios of the
Variable Insurance Products Fund; the Fidelity Asset Manager, Fidelity Index 500
and Fidelity Contrafund Subaccounts invest in the corresponding portfolios of
the Variable Insurance Products Fund II; the Quest for Value Equity, Quest for
Value Small Cap and Quest for Value Managed Subaccounts invest in the
corresponding portfolios of the OCC Accumulation Trust; the Scudder Bond,
Scudder Growth and Income and Scudder International Subaccounts invest in the
corresponding portfolios of the Scudder Variable Life Investment Fund; the
Dreyfus Zero Coupon 2000, Dreyfus Growth and Income and Dreyfus Socially
Responsible Subaccounts invest in the corresponding portfolios of the Dreyfus
Variable Investment Fund; and the Federated U.S. Government Bond Fund and
Federated Utility Fund Subaccounts invest in the corresponding portfolios of the
Insurance Management Series.
The Growth, Money Market, Bond, Managed, Aggressive Growth and
International Subaccounts are available to owners of a Market Street VIP
contract. All twenty-three Subaccounts are available to owners of a Market
Street VIP/2 contract.
Net premiums from the Contracts are allocated to the Subaccounts in
accordance with contractowner instructions and are recorded as variable annuity
contract transactions in the statements of changes in net assets. Such amounts
are used to provide money to pay contract values under the Contracts (Note 4).
The Separate Account's assets are the property of Provident Mutual.
Transfers between investment portfolios include transfers between the
Subaccounts and the Guaranteed Account (not shown), which is part of Provident
Mutual's General Account.
17
<PAGE> 19
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- - --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed
by the Separate Account in the financial statements.
Investment Valuation:
Investment shares are valued at the net asset values of the respective
Portfolios. Transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date.
Realized Gains and Losses:
Realized gains and losses on sales of investment shares are determined
using the specific identification basis for financial reporting and income tax
purposes.
Federal Income Taxes:
The operations of the Separate Account are included in the Federal income
tax return of Provident Mutual. Under the provisions of the Contracts, Provident
Mutual has the right to charge the Separate Account for Federal income tax
attributable to the Separate Account. No charge is currently being made against
the Separate Account for such tax.
Estimates:
The preparation of the accompanying financial statements required
management to make estimates and assumptions that affect the reported values of
assets and liabilities as of June 30, 1996 and the reported amounts from
operations and contract transactions during the six months ended June 30, 1996
and the year ended December 31, 1995. Actual results could differ from those
estimates.
18
<PAGE> 20
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- - --------------------------------------------------------------------------------
3. INVESTMENTS
At June 30, 1996, the investments of the respective Subaccounts are as
follows:
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST MARKET VALUE
<S> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------
Market Street Fund, Inc.:
Growth Portfolio.................................. 90,457 $1,378,174 $1,518,774
Money Market Portfolio............................ 2,423,349 $2,423,349 $2,423,349
Bond Portfolio.................................... 32,175 $333,514 $338,482
Managed Portfolio................................. 40,857 $539,809 $570,360
Aggressive Growth Portfolio....................... 17,340 $282,722 $293,385
International Portfolio........................... 109,363 $1,333,175 $1,415,151
Variable Insurance Products Fund:
High Income Portfolio............................. 104,793 $1,192,746 $1,234,466
Equity-Income Portfolio........................... 182,628 $3,321,084 $3,557,587
Growth Portfolio.................................. 94,413 $2,753,680 $2,838,064
Variable Insurance Products Fund II:
Asset Manager Portfolio........................... 34,062 $508,031 $532,385
Index 500 Portfolio............................... 17,404 $1,313,323 $1,390,959
Contrafund Portfolio.............................. 4,571 $67,460 $67,562
OCC Accumulation Trust:
Equity Portfolio.................................. 45,901 $1,108,898 $1,238,863
Small Cap Portfolio............................... 41,213 $795,265 $851,456
Managed Portfolio................................. 69,061 $2,053,130 $2,217,562
Scudder Variable Life Investment Fund:
Bond Portfolio.................................... 49,978 $338,391 $329,858
Growth and Income Portfolio....................... 7,559 $63,490 $63,875
International Portfolio........................... 2,165 $27,030 $27,297
Dreyfus Variable Investment Fund:
Zero Coupon 2000 Portfolio........................ 25,341 $315,938 $309,918
Growth and Income Portfolio....................... 2,971 $62,372 $62,905
Socially Responsible Portfolio.................... 1,336 $25,000 $25,187
Insurance Management Series:
U.S. Government Bond Fund Portfolio............... 2,540 $25,242 $25,243
Utility Fund Portfolio............................ 2,299 $25,133 $25,959
</TABLE>
19
<PAGE> 21
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements -- continued
- - --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
During the six months ended June 30, 1996 and the year ended December 31,
1995, transactions in investment shares were as follows:
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET STREET FUND, INC.
------------------------------------------------------------------------------------------------------------------
GROWTH PORTFOLIO MONEY MARKET BOND PORTFOLIO
PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995 1996 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased.............................. 22,033 38,671 4,578,151 6,294,574 10,027 12,319
Shares received from reinvestment of:
Dividends................................... 1,069 1,202 44,971 44,361 733 948
Capital gain distributions.................. 3,268 2,735
-------- -------- ----------- ----------- -------- --------
Total shares acquired......................... 26,370 42,608 4,623,122 6,338,935 10,759 13,267
Total shares redeemed......................... (1,019) (10,953) (4,111,498) (4,576,169) (2,575) (2,822)
-------- -------- ----------- ----------- -------- --------
Net increase in shares owned.................. 25,351 31,655 511,624 1,762,766 8,184 10,445
Shares owned, beginning of period............. 65,106 33,451 1,911,725 148,959 23,991 13,546
-------- -------- ----------- ----------- -------- --------
Shares owned, end of period................... 90,457 65,106 2,423,349 1,911,725 32,175 23,991
======== ======== =========== =========== ======== ========
Cost of shares acquired....................... $425,285 $648,886 $ 4,623,122 $ 6,338,935 $113,850 $140,018
======== ======== =========== =========== ======== ========
Cost of shares redeemed....................... $ 14,043 $150,738 $ 4,111,498 $ 4,576,169 $ 25,603 $ 29,747
======== ======== =========== =========== ======== ========
</TABLE>
20
<PAGE> 22
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- - --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET STREET FUND, INC.
------------------------------------------------------------------------------------------------------------------
INTERNATIONAL
MANAGED PORTFOLIO AGGRESSIVE PORTFOLIO
GROWTH PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995 1996 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased..................................... 20,357 10,956 3,252 12,699 38,393 55,062
Shares received from reinvestment of:
Dividends.......................................... 378 1,049 181 878 142
Capital gain distributions......................... 872 29 1,822 64 3,560 672
-------- -------- -------- -------- -------- --------
Total shares acquired................................ 21,606 12,034 5,255 12,763 42,831 55,876
Total shares redeemed................................ (1,031) (17,402) (2,693) (5,297) (3,406) (10,078)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in shares owned.............. 20,576 (5,368) 2,562 7,466 39,425 45,798
Shares owned, beginning of period.................... 20,281 25,649 14,778 7,312 69,938 24,140
-------- -------- -------- -------- -------- --------
Shares owned, end of period.......................... 40,857 20,281 17,340 14,778 109,363 69,938
======== ======== ======== ======== ======== ========
Cost of shares acquired.............................. $297,162 $155,989 $84,350 $209,103 $532,140 $674,316
======== ======== ======== ======== ======== ========
Cost of shares redeemed.............................. $ 12,604 $210,244 $41,671 $ 77,665 $ 41,403 $119,053
======== ======== ======== ======== ======== ========
</TABLE>
21
<PAGE> 23
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- - --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND
------------------------------------------------------------------------------------------------------------------
HIGH INCOME EQUITY-INCOME GROWTH PORTFOLIO
PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995 1996 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased............................. 30,108 69,781 92,397 86,058 46,376 46,058
Shares received from reinvestment of:
Dividends.................................. 5,960 351 172 1,173 161 34
Capital gain distributions................. 1,166 4,932 1,208 4,065
-------- -------- ----------- ----------- ----------- -----------
Total shares acquired........................ 37,234 70,132 97,501 88,439 50,602 46,092
Total shares redeemed........................ (4,757) (1,216) (13,450) (2,713) (5,663) (1,388)
-------- -------- ----------- ----------- ----------- -----------
Net increase in shares owned................. 32,477 68,916 84,052 85,726 44,939 44,704
Shares owned, beginning of period............ 72,316 3,400 98,576 12,850 49,474 4,770
-------- -------- ----------- ----------- ----------- -----------
Shares owned, end of period.................. 104,793 72,316 182,628 98,576 94,413 49,474
======== ======== =========== =========== =========== ===========
Cost of shares acquired...................... $430,215 $789,745 $1,824,277 $1,547,970 $1,483,903 $1,319,208
======== ======== =========== =========== =========== ===========
Cost of shares redeemed...................... $ 50,757 $ 13,244 $ 206,665 $ 42,255 $ 121,221 $ 29,459
======== ======== =========== =========== =========== ===========
</TABLE>
22
<PAGE> 24
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- - --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II
- - -------------------------------------------------------------------------------------------------------------------
ASSET MANAGER INDEX 500 CONTRAFUND
PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares purchased............................................ 14,277 19,640 8,874 8,192 4,707
Shares received from reinvestment of:
Dividends................................................. 898 170 109 9
Capital gain distributions................................ 741 279 1
-------- -------- -------- ------- --------
Total shares acquired....................................... 15,916 19,810 9,262 8,202 4,707
Total shares redeemed....................................... (4,025) (5,615) (254) (371) (136)
-------- -------- -------- ------- --------
Net increase in shares owned................................ 11,891 14,195 9,008 7,831 4,571
Shares owned, beginning of period........................... 22,171 7,976 8,396 565
-------- -------- -------- ------- --------
Shares owned, end of period................................. 34,062 22,171 17,404 8,396 4,571
======== ======== ======== ======= ========
Cost of shares acquired..................................... $244,562 $286,108 $722,920 $594,048 $ 69,461
======== ======== ======== ======= ========
Cost of shares redeemed..................................... $ 55,221 $ 79,324 $ 14,466 $ 20,867 $ 2,001
======== ======== ======== ======= ========
</TABLE>
23
<PAGE> 25
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- - --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OCC ACCUMULATION TRUST
------------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIO SMALL CAP MANAGED PORTFOLIO
PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995 1996 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased.................................. 16,958 26,755 21,963 22,251 39,680 26,602
Shares received from reinvestment of:
Dividends....................................... 318 15 386 19 472 24
Capital gain distributions...................... 638 993 17 301
-------- ------- -------- -------- -------- -------
Total shares acquired............................. 17,915 26,770 23,342 22,287 40,453 26,626
Total shares redeemed............................. (1,414) (645) (4,671) (5,603) (231) (1,612)
-------- ------- -------- -------- -------- -------
Net increase in shares owned...................... 16,501 26,125 18,672 16,684 40,223 25,014
Shares owned, beginning of period................. 29,400 3,275 22,541 5,857 28,838 3,824
-------- ------- -------- -------- -------- -------
Shares owned, end of period....................... 45,901 29,400 41,213 22,541 69,061 28,838
======== ======= ======== ======== ======== =======
Cost of shares acquired........................... $468,486 $618,621 $469,765 $400,418 $1,283,803 $727,971
======== ======= ======== ======== ======== =======
Cost of shares redeemed........................... $ 25,996 $ 11,763 $ 79,128 $ 94,846 $ 4,870 $ 34,167
======== ======= ======== ======== ======== =======
</TABLE>
24
<PAGE> 26
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- - --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER VARIABLE LIFE INVESTMENT FUND
------------------------------------------------------------------------------------------------------------------
INTERNATIONAL
BOND PORTFOLIO GROWTH AND PORTFOLIO
INCOME
PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares purchased............................................ 36,836 11,797 7,559 2,165
Shares received from reinvestment of dividends.............. 1,646 606
-------- ------- -------- --------
Total shares acquired....................................... 38,482 12,403 7,559 2,165
Total shares redeemed....................................... (5,987) (75)
-------- ------- -------- --------
Net increase in shares owned................................ 32,495 12,328 7,559 2,165
Shares owned, beginning of period........................... 17,483 5,155
-------- ------- -------- --------
Shares owned, end of period................................. 49,978 17,483 7,559 2,165
======== ======= ======== ========
Cost of shares acquired..................................... $259,156 $85,256 $ 63,490 $27,030
======== ======= ======== ========
Cost of shares redeemed..................................... $ 39,117 $ 490
======== ======= ======== ========
</TABLE>
25
<PAGE> 27
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- - --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DREYFUS VARIABLE INSURANCE
INVESTMENT FUND MANAGEMENT SERIES
------------------------------------------------------------------------------------------------------------------
ZERO COUPON GROWTH AND SOCIALLY U.S. GOVERNMENT UTILITY
2000 PORTFOLIO INCOME RESPONSIBLE BOND FUND FUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1996 1996 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased............... 17,833 9,272 3,058 1,336 2,515 2,287
Shares received from
reinvestment of:
Dividends.................... 426 324 12 24 12
Capital gain distributions... 38 28
------- ------- -------- ------- -------- --------
Total shares acquired.......... 18,297 9,596 3,097 1,336 2,540 2,299
Total shares redeemed.......... (3,951) (797) (126)
------- ------- -------- ------- -------- --------
Net increase in shares owned... 14,347 8,799 2,971 1,336 2,540 2,299
Shares owned, beginning of
period....................... 10,994 2,195
------- ------- -------- ------- -------- --------
Shares owned, end of period.... 25,341 10,994 2,971 1,336 2,540 2,299
======= ======= ======== ======= ======= =======
Cost of shares acquired........ $227,916 $118,897 $ 64,937 $25,000 $25,242 $25,133
======= ======= ======== ======= ======= =======
Cost of shares redeemed........ $ 47,145 $ 9,274 $ 2,565
======= ======= ======== ======= ======= =======
</TABLE>
26
<PAGE> 28
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- concluded
- - --------------------------------------------------------------------------------
4. RELATED PARTY TRANSACTIONS
Certain deductions are made from the Subaccounts and/or the premiums by
Provident Mutual. The deductions may include (1) surrender charges, (2)
administration fees, (3) transfer processing fees, (4) mortality and expense
risk charges and (5) premium taxes.
There are no sales expenses deducted from premiums at the time the premiums
are paid. If a contract has not been in force for six full years, upon surrender
or for certain withdrawals, a surrender charge is deducted from the proceeds.
However, subject to certain restrictions, up to 10% of the contract account
value as of the beginning of a contract year may be surrendered or withdrawn
free of surrender charges.
An annual administrative fee of $30 is deducted from the contract account
value on each contract anniversary date beginning one year from the issue date
of the contract. In addition, to compensate for costs associated with
administration of the Market Street VIP/2 contracts, Provident Mutual deducts a
daily asset-based administration charge from the assets of the Separate Account
equal to an annual rate of .15%. This daily asset-based administration charge is
reported in the mortality and expense risk charges in the statements of
operations.
During any given contract year, the first four transfers by Market Street
VIP contractowners and the first twelve transfers by Market Street VIP/2
contractowners of amounts in the Subaccounts are free of charge. A fee of $25 is
assessed for each additional transfer. No transfer fees were incurred during the
six months ended June 30, 1996 or the year ended December 31, 1995.
The Separate Account is charged a daily mortality and expense risk charge
at an annual rate of 1.20% for the Market Street VIP contracts and 1.25% for the
Market Street VIP/2 contracts. Provident Mutual reserves the right to increase
this charge for the Market Street VIP contracts, but in no event will it be
greater than 1.25%.
State premium taxes, when applicable, will be deducted depending upon when
such taxes are paid to the taxing authority. The premium taxes are deducted
either from premiums as they are received or from the proceeds upon withdrawal
from or surrender of the contract or upon application of the proceeds to a
payment option.
27
<PAGE> 29
- - --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Supplementary Information (unaudited)
- - --------------------------------------------------------------------------------
The table below shows the net rates of return for the Subaccounts. The net
rate of return is applicable to net assets for a variable annuity contract whose
contract year commences with the beginning date of the year shown and is not
based on the average net assets in the Subaccounts during the year.
The performance for each Subaccount is shown as the net rate of return which
reflects the Subaccounts' investment income and capital gains and losses,
realized or unrealized, less charges against the Subaccounts' assets for the
period shown.
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY
MONEY AGGRESSIVE INTERNA- HIGH EQUITY- FIDELITY
GROWTH MARKET BOND MANAGED GROWTH TIONAL INCOME INCOME GROWTH
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------------------------
MARKET STREET VIP
For the six months ended:
June 30, 1996.......... 8.71% 1.93% (2.02)% 3.91% 9.82% 6.37% -- -- --
For the year ended:
December 31, 1995...... 28.84% 4.35% 18.91% 22.87% 12.13% 12.95% -- -- --
December 31, 1994...... 0.60%(1) 2.45%(2) (6.85)%(1) (2.06)%(3) (2.18)%(1) (3.77)%(1) -- -- --
MARKET STREET VIP/2
For the six months ended:
June 30, 1996.......... 8.60% 1.83% (2.12)% 3.81% 9.71% 6.26% 6.55% 5.12% 9.96%
For the year ended:
December 31, 1995...... 28.58% 4.14% 18.67% 22.62% 11.91% 12.72% 18.93% 33.22% 33.49%
December 31, 1994...... (1.40)%(9) 0.69%(10) 0.68%(11) (0.09)%(12) 0.99%(13) (3.74)%(9) 0.01%(9) (1.73)%(9) 0.94%(9)
<CAPTION>
FIDELITY FIDELITY
ASSET INDEX
MANAGER 500
<S> <C> <C>
- - -------------------------------------------------
MARKET STREET VIP
For the six months ended
June 30, 1996.......... -- --
For the year ended:
December 31, 1995...... -- --
December 31, 1994...... -- --
MARKET STREET VIP/2
For the six months ended
June 30, 1996.......... 5.07% 9.37%
For the year ended:
December 31, 1995...... 15.33% 35.29%
December 31, 1994...... (3.06)%(13) 1.00%(14)
</TABLE>
The net rate of return was calculated from the date contractowner funds were
first allocated to the Subaccount referenced above as follows: (1) February 14,
1994, (2) January 28, 1994, (3) March 10, 1994, (4) May 21, 1996, (5) June 10,
1996, (6) May 13, 1996, (7) May 28, 1996, (8) March 1, 1995, (9) October 21,
1994, (10) October 19, 1994, (11) November 22, 1994, (12) November 14, 1994,
(13) October 26, 1994, (14) November 29, 1994 and (15) November 15, 1994.
28
<PAGE> 30
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST QUEST QUEST SCUDDER
FIDELITY FOR VALUE FOR VALUE FOR VALUE SCUDDER GROWTH AND SCUDDER
CONTRAFUND EQUITY SMALL CAP MANAGED BOND INCOME INTERNATIONAL
<S> <C> <C> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------------
MARKET STREET VIP
For the six months ended:
June 30, 1996.......... -- -- -- -- -- -- --
For the year ended:
December 31, 1995...... -- -- -- -- -- -- --
December 3, 1994.......
MARKET STREET VIP/2
For the six months ended:
June 30, 1996.......... (1.81)%(4) 9.96% 7.73% 8.12% (2.87)% (0.66)%(5) 1.84%(6)
For the year ended:
December 31, 1995...... -- 36.93% 13.63% 43.54% 16.53% -- --
December 31, 1994...... -- (2.54)%(15) 2.02%(9) (1.73)%(9) 0.84%(13) -- --
</TABLE>
<TABLE>
<CAPTION>
DREYFUS DREYFUS DREYFUS FEDERATED U.S. FEDERATED
ZERO GROWTH AND SOCIALLY GOVERNMENT UTILITY
COUPON 2000 INCOME RESPONSIBLE BOND FUND FUND
<S> <C> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------------
MARKET STREET VIP
For the six months ended:
June 30, 1996.......... -- -- -- -- --
For the year ended:
December 31, 1995...... -- -- -- -- --
December 31, 1994...... -- -- -- -- --
MARKET STREET VIP/2
For the six months ended:
June 30, 1996.......... (2.04)% 0.60%(7) -- -- --
For the year ended:
December 31, 1995...... 11.41%(8) -- -- -- --
December 31, 1994...... -- -- -- -- --
</TABLE>
29
