<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
President's Letter...................... 2
Performance Summaries................... 4
NYLIAC Variable Universal Life
Separate Account-I
Statement of Assets and Liabilities..... 6
Statement of Operations................. 8
Statement of Changes in Total Equity.... 10
Notes to Financial Statements........... 15
Report of Independent Accountants....... 29
MainStay VP Series Fund, Inc.
Chairman's Letter....................... 30
MacKay Shields LLC Adviser's Report..... 31
Madison Square Advisors LLC Adviser's
Report................................ 33
Portfolio Managers' Comments............ 34
Glossary................................ 67
Capital Appreciation Portfolio.......... 72
Cash Management Portfolio............... 76
Convertible Portfolio................... 81
Government Portfolio.................... 87
High Yield Corporate Bond Portfolio..... 91
International Equity Portfolio.......... 103
Total Return Portfolio.................. 110
Value Portfolio......................... 119
Bond Portfolio.......................... 123
Growth Equity Portfolio................. 127
Indexed Equity Portfolio................ 132
American Century Income & Growth
Portfolio............................. 142
Dreyfus Large Company Value Portfolio... 149
Eagle Asset Management Growth Equity
Portfolio............................. 153
Notes to Financial Statements........... 157
Report of Independent Accountants....... 174
The Annual Reports for the Portfolios
listed below follow:
Alger American Small Capitalization
Portfolio
Calvert Social Balanced Portfolio
Fidelity Variable Insurance Products
Fund II Contrafund Portfolio
Fidelity Variable Insurance Products
Fund Equity-Income Portfolio
Janus Aspen Series Balanced Portfolio
and Janus Aspen Series Worldwide
Growth Portfolio
Morgan Stanley Dean Witter Emerging
Markets Equity Portfolio
T. Rowe Price Equity Income Portfolio
</TABLE>
1
<PAGE> 2
LETTER FROM THE PRESIDENT
- --------------------------------------------------------------------------------
TO THE OWNERS OF NYLIAC VARIABLE UNIVERSAL LIFE, NYLIAC SURVIVORSHIP VARIABLE
UNIVERSAL LIFE AND NYLIAC VARIABLE UNIVERSAL LIFE 2000 POLICIES:
I am pleased to present the NYLIAC Variable Universal Life (VUL), Survivorship
Variable Universal Life (SVUL) and Variable Universal Life 2000 (VUL 2000)
Annual Report for the year ending December 31, 1999. NYLIAC Variable Universal
Life Separate Account-I serves as the Separate Account for the NYLIAC VUL, SVUL
and the VUL 2000 policies.
This Annual Report contains valuable information, including year-end performance
data and Separate Account financial statements for each of the 22 Investment
Divisions in this Separate Account. Not all Investment Divisions are available
with all products.
This book also contains the following Annual Reports:
MainStay VP Series Fund, Inc.
The Alger American Fund
Calvert Variable Series, Inc.
Fidelity Variable Insurance Products Fund
Fidelity Variable Insurance Products Fund II
Janus Aspen Series
Morgan Stanley Dean Witter Universal Funds, Inc.
T. Rowe Price Equity Series, Inc.
PERMANENT LIFE INSURANCE PROTECTION WITH A VARIETY OF INVESTMENT OPTIONS
As part of your long-term financial plan, your NYLIAC variable life insurance
product offers permanent life insurance protection with a variety of investment
options. With VUL 2000, four new Investment Divisions were added to the 18
Investment Divisions and one Fixed Account already available with the NYLIAC VUL
and SVUL policies. We plan to also introduce these four new Investment Divisions
to the NYLIAC VUL and SVUL policies sometime in May 2000. (Please refer to the
appropriate product Prospectus for complete descriptions of the Investment
Divisions.)
This extensive selection of diversified investment offerings allows you to
customize a policy to suit your individual investment style. As a VUL, SVUL or
VUL 2000 policyowner, you benefit from the experience and professional
management of leading investment advisors who work on your behalf. As always,
your financial well-being is our goal.
FUNDING YOUR VARIABLE LIFE INSURANCE POLICY
One of the most attractive features of these policies is the ability to create
your own payment schedule, indicating the amount and frequency of premium
payments you intend to make. The policy's fees and charges are deducted from the
cash value, and your life insurance coverage remains in effect as long as your
cash surrender value is sufficient to cover these deductions. To help optimize
potential investment results for the future, you may be able to increase your
planned premium payments or make additional unplanned premium payments. (Higher
premium funding may maximize the policy's investment potential and reduce the
likelihood that your policy could terminate due to lower than anticipated
investment performance.) Your registered representative can assist you in
evaluating the effect(s) of different premium funding options so that you can
make an informed choice.
NYLIAC VUL SEPARATE ACCOUNT-I PERFORMANCE
During the one-year period ending December 31, 1999, positive investment returns
were realized in 20 of the 22 Investment Divisions. (Please refer to the
performance summary on the following page for details on the policies'
Investment Divisions and their returns.(1)) These 15 funds experienced
double-digit total returns for this period:
American Century Income & Growth
MainStay VP Capital Appreciation
MainStay VP Convertible
Eagle Asset Management Growth Equity
MainStay VP Growth Equity
MainStay VP High Yield Corporate Bond
MainStay VP Indexed Equity
MainStay VP International Equity
MainStay VP Total Return
Alger American Small Capitalization
Calvert Social Balanced
Fidelity VIP II Contrafund(2)
Janus Aspen Series Balanced
Janus Aspen Series Worldwide Growth
Morgan Stanley Dean Witter Emerging Markets
Equity
2
<PAGE> 3
We hope you are pleased with the year-end results. We owe our financial strength
to you, our valued clients, who continue to place your trust in us. This
strength, in turn, allows us to keep our financial promises to you. Ultimately,
we are dedicated to one overriding purpose: to be there when our clients need
us.
Thank you for making us "The Company You Keep(R)."
/s/ FREDERICK J. SIEVERT
Frederick J. Sievert
President
New York Life Insurance and Annuity Corporation
(A Delaware Corporation)
(1) Past performance is not indicative of future results.
(2) VIP II refers to Variable Insurance Products Fund II.
3
<PAGE> 4
NYLIAC VARIABLE UNIVERSAL LIFE AND
SURVIVORSHIP VARIABLE UNIVERSAL LIFE PERFORMANCE SUMMARY(1):
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDING DECEMBER 31, 1999(2)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
INVESTMENT SINCE
DIVISION INVESTMENT
INCEPTION 1 3 5 DIVISION
INVESTMENT DIVISIONS DATE YEAR YEARS YEARS INCEPTION
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MAINSTAY VP SERIES FUNDS:
Bond 05/01/94 -2.22% 4.88% 6.55% 5.67%
Capital Appreciation 11/15/93 24.54% 27.95% 27.21% 21.12%
Cash Management 11/15/93 4.12% 4.36% 4.45% 4.16%
Convertible 10/01/96 40.99% 18.80% N/A 18.32%
Government 11/15/93 -2.43% 4.71% 6.21% 4.62%
Growth Equity 05/01/94 29.06% 26.87% 26.49% 23.32%
High Yield Corporate Bond 05/01/95 12.09% 8.65% N/A 11.09%
Indexed Equity 11/15/93 19.86% 26.35% 27.23% 22.84%
International Equity 05/01/95 27.16% 17.53% N/A 14.69%
Total Return 11/15/93 16.20% 19.72% 19.47% 15.05%
Value 05/01/95 8.05% 7.87% N/A 13.20%
Alger American Small Capitalization 10/01/96 42.42% 21.81% N/A 18.69%
Calvert Social Balanced 10/01/96 11.44% 15.34% N/A 13.93%
Fidelity VIP II Contrafund 10/01/96 23.39% 25.22% N/A 24.52%
Fidelity VIP Equity - Income 10/01/96 5.59% 14.19% N/A 14.33%
Janus Aspen Series Balanced 10/01/96 25.87% 26.73% N/A 24.99%
Janus Aspen Series Worldwide Growth 10/01/96 63.30% 36.37% N/A 34.29%
Morgan Stanley Dean Witter Emerging Markets Equity 10/01/96 94.32% 13.38% N/A 12.33%
</TABLE>
(1)For periods prior to June 5, 1998, when the Survivorship Variable Universal
Life Insurance Policies became available, performance assumes that these
Policies were available and that the Investment Divisions were offered under the
Survivorship Variable Universal Life Insurance Policies, which they were not.
(2)The values shown are unaudited.
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results. The investment return and
the accumulation value of your policy will fluctuate so that your contract, when
surrendered, may be worth more or less than the original cost. Performance
reflects the percentage change for the period shown with capital gains and
dividends reinvested.
Performance reflects the deduction of the policy's current mortality and expense
risk charge (0.60%), the administration fee (0.10%) and total fund operating
expenses. However, it does not reflect the policy fees or charges. These include
the cost of insurance, surrender charges, monthly contract charges, sales
expense charges, the charge per $1,000 (applicable to SVUL Policies only) and
state and federal tax charges. Had these expenses been deducted, total returns
would have been lower.
NYLIAC assumed a portion of the expenses of the MainStay VP Convertible and the
MainStay VP International Equity Investment Divisions until 12/31/98. This
expense limitation was in effect until 12/31/97 for the MainStay VP High Yield
Corporate Bond and MainStay VP Value Investment Divisions, and until 12/31/96
for all other MainStay VP Investment Divisions. In addition, Janus Capital
Corporation has agreed to reduce the advisory fee for the Janus Aspen Series
Balanced and the Janus Aspen Series Worldwide Growth Investment Divisions to the
level of the corresponding Janus retail mutual fund and Morgan Stanley Dean
Witter Investment Management Inc. has voluntarily waived receipt of the advisory
fee and agreed to reimburse the Morgan Stanley Dean Witter Emerging Markets
Equity Portfolio to the extent that the Total Fund Annual Expenses of the
Portfolio exceed 1.75%. Had these expenses not been assumed or reduced, the
total returns for these Investment Divisions would have been lower.
NOT ALL INVESTMENT DIVISIONS ARE AVAILABLE IN ALL NYLIAC VARIABLE PRODUCTS.
4
<PAGE> 5
NYLIAC VARIABLE UNIVERSAL LIFE 2000
PERFORMANCE SUMMARY(1):
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDING DECEMBER 31, 1999(2)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT DIVISION 1 3 5 10 SINCE INVESTMENT
INVESTMENT DIVISIONS INCEPTION DATE YEAR YEARS YEARS YEARS DIVISION INCEPTION
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MAINSTAY VP SERIES FUNDS:
American Century Income & Growth 05/01/98 17.02% N/A N/A N/A 15.83%
Bond 01/23/84 -2.01% 5.10% 6.77% 7.07% 8.71%
Capital Appreciation 01/29/93 24.81% 28.22% 27.47% N/A 21.46%
Cash Management 01/29/93 4.34% 4.58% 4.66% N/A 4.13%
Convertible 10/01/96 41.29% 19.05% N/A N/A 18.79%
Dreyfus Large Company Value 05/01/98 6.21% N/A N/A N/A 5.21%
Eagle Asset Management Growth Equity 05/01/98 64.70% N/A N/A N/A 48.42%
Government 01/29/93 -2.21% 4.93% 6.43% N/A 5.00%
Growth Equity 01/23/84 29.33% 27.13% 26.75% 17.69% 15.04%
High Yield Corporate Bond 05/01/95 12.30% 8.87% N/A N/A 11.31%
Indexed Equity 01/29/93 20.11% 26.62% 27.49% N/A 20.55%
International Equity 05/01/95 27.43% 17.78% N/A N/A 14.92%
Total Return 01/29/93 16.45% 19.97% 19.71% N/A 15.35%
Value 05/01/95 8.28% 8.09% N/A N/A 13.43%
Alger American Small Capitalization 09/20/88 42.72% 22.06% 22.03% 17.63% 20.25%
Calvert Social Balanced 09/02/86 11.68% 15.58% 17.44% 11.50% 11.10%
Fidelity VIP II Contrafund 01/03/95 23.65% 25.48% N/A N/A 27.10%
Fidelity VIP Equity-Income 10/09/86 5.81% 14.43% 18.02% 13.92% 13.09%
Janus Aspen Series Balanced 09/13/93 26.14% 26.99% 24.07% N/A 20.02%
Janus Aspen Series Worldwide Growth 09/13/93 63.65% 36.65% 32.94% N/A 29.05%
Morgan Stanley Dean Witter Emerging
Markets Equity 10/01/96 94.73% 13.61% N/A N/A 11.74%
T. Rowe Price Equity Income 03/31/94 3.22% 12.56% 17.85% N/A 16.65%
</TABLE>
(1) For periods prior to September 28, 1999, when the NYLIAC Variable Universal
Life 2000 Insurance Policy became available, performance assumes that these
Policies were available and that the Investment Divisions were offered under
the NYLIAC Variable Universal Life 2000 Policies, which they were not.
(2) The values shown are unaudited.
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results. The investment return and
the accumulation value of your policy will fluctuate so that your contract, when
surrendered, may be worth more or less than the original cost. Performance
reflects the percentage change for the period shown with capital gains and
dividends reinvested.
Performance reflects the deduction of the policy's current mortality and expense
risk charge (separate account charge) of (0.50%) and total fund operating
expenses. However, it does not reflect the policy fees or charges. These include
the cost of insurance, surrender charges, monthly contract charges, separate
account administrative charges, sales expense charges, and state and federal tax
charges. Had these expenses been deducted, total returns would have been lower.
NYLIAC assumed a portion of the expenses of the MainStay VP Convertible and the
MainStay VP International Equity Investment Divisions until 12/31/98. This
expense limitation was in effect until 12/31/97 for the MainStay VP High Yield
Corporate Bond and MainStay VP Value Investment Divisions, and until 12/31/96
for all other MainStay VP Investment Divisions. In addition, Janus Capital
Corporation has agreed to reduce the advisory fee for the Janus Aspen Series
Balanced and the Janus Aspen Series Worldwide Growth Investment Divisions to the
level of the corresponding Janus retail mutual fund and Morgan Stanley Dean
Witter Investment Management Inc. has voluntarily waived receipt of the advisory
fee and agreed to reimburse the Morgan Stanley Dean Witter Emerging Markets
Equity Portfolio to the extent that the Total Fund Annual Expenses of the
Portfolio exceed 1.75%. Had these expenses not been assumed or reduced, the
total returns for these Investment Divisions would have been lower.
NOT ALL INVESTMENTS DIVISIONS ARE AVAILABLE IN ALL NYLIAC VARIABLE PRODUCTS.
5
<PAGE> 6
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT
----------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment at net asset value.................. $248,250,589 $ 22,762,437 $ 3,378,694 $ 3,570,800
LIABILITIES:
Liability to New York Life Insurance and
Annuity Corporation for mortality and expense
risk charges................................. 419,994 44,442 5,486 6,133
------------ ------------ ------------ ------------
Total equity............................... $247,830,595 $ 22,717,995 $ 3,373,208 $ 3,564,667
============ ============ ============ ============
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
VUL and SVUL variable accumulation units
outstanding: 7,630,484; 17,483,479;
190,417; 269,503; 1,581,024; 343,179;
2,039,979; 1,578,356; 519,766; 1,946,565;
3,369,197, respectively.................... $246,982,346 $ 22,447,825 $ 3,290,587 $ 3,555,262
VUL 2000 variable accumulation units
outstanding: 70,003; 267,906; 6,871; 936;
8,676; 1,200; 8,883; 8,457; 1,421; 26,277;
175,836, respectively...................... 848,249 270,170 82,621 9,405
------------ ------------ ------------ ------------
Total equity............................... $247,830,595 $ 22,717,995 $ 3,373,208 $ 3,564,667
============ ============ ============ ============
VUL and SVUL variable accumulation unit
value...................................... $ 32.37 $ 1.28 $ 17.28 $ 13.19
============ ============ ============ ============
VUL 2000 variable accumulation unit value.... $ 12.12 $ 1.01 $ 12.02 $ 10.05
============ ============ ============ ============
Identified Cost of Investment.................... $219,380,587 $ 22,762,438 $ 3,075,693 $ 3,834,138
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AMERICAN ALGER
CENTURY DREYFUS LARGE EAGLE ASSET AMERICAN
INCOME & COMPANY MANAGEMENT SMALL
GROWTH VALUE GROWTH EQUITY CAPITALIZATION
----------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment at net asset value.................. $ 35,909 $ 21,032 $ 135,691 $ 16,749,579
LIABILITIES:
Liability to New York Life Insurance and
Annuity Corporation for mortality and expense
risk charges................................. 19 8 13 26,729
------------ ------------ ------------ ------------
Total equity............................... $ 35,890 $ 21,024 $ 135,678 $ 16,722,850
============ ============ ============ ============
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
VUL and SVUL variable accumulation units
outstanding: --; --; --; 954,307; 64,356;
1,813,616; 832,595; 1,091,689; 2,010,023;
455,712; --, respectively.................. $ -- $ -- $ -- $ 16,660,846
VUL 2000 variable accumulation units
outstanding: 3,283; 2,034; 9,759; 4,746;
770; 39,810; 21,318; 76,690; 44,583; 3,912;
8,647, respectively........................ 35,890 21,024 135,678 62,004
------------ ------------ ------------ ------------
Total equity............................... $ 35,890 $ 21,024 $ 135,678 $ 16,722,850
============ ============ ============ ============
VUL and SVUL variable accumulation unit
value...................................... $ -- $ -- $ -- $ 17.46
============ ============ ============ ============
VUL 2000 variable accumulation unit value.... $ 10.93 $ 10.34 $ 13.90 $ 13.06
============ ============ ============ ============
Identified Cost of Investment.................... $ 34,889 $ 20,834 $ 133,193 $ 16,314,853
============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
6
<PAGE> 7
NYLIAC VUL SEPARATE ACCOUNT-I
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP
HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED
CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 25,980,616 $ 6,536,354 $ 48,361,258 $ 28,308,751 $ 7,134,827 $ 64,376,426 $121,088,697
44,501 11,290 83,460 48,083 12,248 112,912 203,551
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 25,936,115 $ 6,525,064 $ 48,277,798 $ 28,260,668 $ 7,122,579 $ 64,263,514 $120,885,146
============ ============ ============ ============ ============ ============ ============
$ 25,846,254 $ 6,511,184 $ 48,176,161 $ 28,171,272 $ 7,108,358 $ 63,941,612 $118,869,113
89,861 13,880 101,637 89,396 14,221 321,902 2,016,033
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 25,936,115 $ 6,525,064 $ 48,277,798 $ 28,260,668 $ 7,122,579 $ 64,263,514 $120,885,146
============ ============ ============ ============ ============ ============ ============
$ 16.35 $ 18.97 $ 23.62 $ 17.85 $ 13.68 $ 32.85 $ 35.28
============ ============ ============ ============ ============ ============ ============
$ 10.36 $ 11.56 $ 11.44 $ 10.57 $ 10.01 $ 12.25 $ 11.47
============ ============ ============ ============ ============ ============ ============
$ 28,535,513 $ 5,282,639 $ 35,502,480 $ 28,298,257 $ 7,727,533 $ 55,166,467 $113,970,586
============ ============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN MORGAN STANLEY
CALVERT FIDELITY FIDELITY JANUS ASPEN SERIES DEAN WITTER T. ROWE
SOCIAL VIP II VIP SERIES WORLDWIDE EMERGING MARKETS PRICE
BALANCED CONTRAFUND EQUITY-INCOME BALANCED GROWTH EQUITY EQUITY INCOME
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 993,327 $ 37,541,549 $ 13,115,902 $ 23,473,542 $ 53,154,029 $ 6,719,728 $ 84,995
1,686 61,031 21,309 37,324 92,836 11,060 3
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 991,641 $ 37,480,518 $ 13,094,593 $ 23,436,218 $ 53,061,193 $ 6,708,668 $ 84,992
============ ============ ============ ============ ============ ============ ============
$ 983,387 $ 37,009,050 $ 12,869,070 $ 22,548,988 $ 52,432,340 $ 6,650,527 $ --
8,254 471,468 225,523 887,230 628,853 58,141 84,992
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 991,641 $ 37,480,518 $ 13,094,593 $ 23,436,218 $ 53,061,193 $ 6,708,668 $ 84,992
============ ============ ============ ============ ============ ============ ============
$ 15.28 $ 20.41 $ 15.46 $ 20.66 $ 26.09 $ 14.59 $ --
============ ============ ============ ============ ============ ============ ============
$ 10.72 $ 11.84 $ 10.58 $ 11.57 $ 14.11 $ 14.86 $ 9.83
============ ============ ============ ============ ============ ============ ============
$ 995,807 $ 29,118,554 $ 12,632,107 $ 19,504,034 $ 46,780,275 $ 4,251,628 $ 86,546
============ ============ ============ ============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
7
<PAGE> 8
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT
----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income................................ $ -- $ 1,033,284 $ 112,711 $ 186,993
Mortality and expense risk charges............. (1,325,374) (149,862) (16,793) (24,832)
------------- ------------- ------------- -------------
Net investment income (loss)............... (1,325,374) 883,422 95,918 162,161
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments.............. 152,344,807 420,117,735 190,880 2,190,273
Cost of investments sold....................... (105,222,446) (420,117,858) (165,136) (2,181,903)
------------- ------------- ------------- -------------
Net realized gain (loss) on investments.... 47,122,361 (123) 25,744 8,370
Realized gain distribution received............ 9,212,178 8 333,649 --
Change in unrealized appreciation
(depreciation) on investments................ (9,158,970) 107 406,847 (259,370)
------------- ------------- ------------- -------------
Net gain (loss) on investments............. 47,175,569 (8) 766,240 (251,000)
------------- ------------- ------------- -------------
Increase (decrease) attributable to funds of
New York Life Insurance and Annuity
Corporation retained by Separate Account..... (57,448) (1,253) (1,036) 47
------------- ------------- ------------- -------------
Net increase (decrease) in total equity
resulting from operations................ $ 45,792,747 $ 882,161 $ 861,122 $ (88,792)
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
AMERICAN EAGLE ASSET ALGER
CENTURY DREYFUS LARGE MANAGEMENT AMERICAN
INCOME & COMPANY GROWTH SMALL
GROWTH(a) VALUE(a) EQUITY(a) CAPITALIZATION
----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income................................ $ 221 $ 156 $ -- $ --
Mortality and expense risk charges............. (18) (8) (12) (64,998)
------------- ------------- ------------- -------------
Net investment income (loss)............... 203 148 (12) (64,998)
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments.............. 6,414 798 2,538 309,989,456
Cost of investments sold....................... (6,273) (771) (1,944) (306,259,435)
------------- ------------- ------------- -------------
Net realized gain (loss) on investments.... 141 27 594 3,730,021
Realized gain distribution received............ -- -- 1,080 735,842
Change in unrealized appreciation
(depreciation) on investments................ 1,020 198 2,499 212,328
------------- ------------- ------------- -------------
Net gain on investments.................... 1,161 225 4,173 4,678,191
------------- ------------- ------------- -------------
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation retained by
Separate Account............................. (1) -- (1) (5,174)
------------- ------------- ------------- -------------
Net increase in total equity resulting from
operations............................... $ 1,363 $ 373 $ 4,160 $ 4,608,019
============= ============= ============= =============
</TABLE>
(a) For the period September 28, 1999 (Commencement of Operations) through
December 31, 1999.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
8
<PAGE> 9
NYLIAC VUL SEPARATE ACCOUNT-I
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP
HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED
CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,919,680 $ 19,396 $ 795,746 $ 349,161 $ 429,660 $ 340,542 $ 1,094,708
(160,799) (34,254) (278,453) (177,341) (46,120) (342,165) (625,794)
------------- ------------- ------------- ------------- ------------- ------------- -------------
2,758,881 (14,858) 517,293 171,820 383,540 (1,623) 468,914
------------- ------------- ------------- ------------- ------------- ------------- -------------
1,691,618 1,039,546 1,942,053 1,474,401 743,861 9,199,644 237,429,723
(1,669,515) (946,738) (1,004,465) (1,186,551) (736,993) (5,816,498) (223,788,302)
------------- ------------- ------------- ------------- ------------- ------------- -------------
22,103 92,808 937,588 287,850 6,868 3,383,146 13,641,421
499,619 133,262 1,305,271 -- 553 5,714,804 1,618,939
(818,497) 1,140,110 3,737,718 1,329,416 (531,346) 4,351,297 734,879
------------- ------------- ------------- ------------- ------------- ------------- -------------
(296,775) 1,366,180 5,980,577 1,617,266 (523,925) 13,449,247 15,995,239
------------- ------------- ------------- ------------- ------------- ------------- -------------
(3,665) (1,636) (8,421) (1,483) 71 (18,194) (21,057)
------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 2,458,441 $ 1,349,686 $ 6,489,449 $ 1,787,603 $ (140,314) $ 13,429,430 $ 16,443,096
============= ============= ============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN MORGAN STANLEY T. ROWE
CALVERT FIDELITY FIDELITY JANUS ASPEN SERIES DEAN WITTER PRICE
SOCIAL VIP II VIP SERIES WORLDWIDE EMERGING MARKETS EQUITY
BALANCED CONTRAFUND EQUITY-INCOME BALANCED GROWTH EQUITY INCOME(a)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 21,450 $ 91,179 $ 130,390 $ 376,018 $ 53,187 $ 760 $ 249
(4,964) (176,020) (74,391) (91,838) (220,680) (24,825) (3)
------------- ------------- ------------- ------------- ------------- ------------- -------------
16,486 (84,841) 55,999 284,180 (167,493) (24,065) 246
------------- ------------- ------------- ------------- ------------- ------------- -------------
80,603 828,229 1,148,237 600,921 189,862,953 638,675 746
(76,785) (545,722) (1,035,736) (420,980) (174,195,638) (817,984) (735)
------------- ------------- ------------- ------------- ------------- ------------- -------------
3,818 282,507 112,501 179,941 15,667,315 (179,309) 11
73,487 668,643 288,230 -- -- -- 1,944
(346) 5,142,920 (219) 3,014,831 4,604,576 3,006,590 (1,551)
------------- ------------- ------------- ------------- ------------- ------------- -------------
76,959 6,094,070 400,512 3,194,772 20,271,891 2,827,281 404
------------- ------------- ------------- ------------- ------------- ------------- -------------
(106) (7,286) (603) (4,490) (22,883) (3,019) --
------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 93,339 $ 6,001,943 $ 455,908 $ 3,474,462 $ 20,081,515 $ 2,800,197 $ 650
============= ============= ============= ============= ============= ============= =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
9
<PAGE> 10
STATEMENT OF CHANGES IN TOTAL EQUITY
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL APPRECIATION CASH MANAGEMENT
------------------------------ ------------------------------
1999 1998 1999 1998
------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................. $ (1,325,374) $ (719,267) $ 883,422 $ 416,851
Net realized gain (loss) on investments....... 47,122,361 28,598,175 (123) 174
Realized gain distribution received........... 9,212,178 1,508,712 8 --
Change in unrealized appreciation
(depreciation) on investments............... (9,158,970) 12,462,126 107 (115)
Increase (decrease) attributable to funds of
New York Life Insurance and Annuity
Corporation retained by Separate Account.... (57,448) (54,151) (1,253) (576)
------------ ------------ ------------ ------------
Net increase (decrease) in total equity
resulting from operations................. 45,792,747 41,795,595 882,161 416,334
------------ ------------ ------------ ------------
Contributions and withdrawals:
Policyowners' premium payments................ 55,159,677 43,015,039 64,486,957 55,826,497
Cost of insurance............................. (18,814,467) (15,632,087) (2,584,763) (2,030,838)
Policyowners' surrenders...................... (8,083,942) (5,755,421) (491,187) (350,776)
Net transfers to Fixed Account................ (4,927,532) (3,314,522) (381,185) (637,496)
Transfers between Investment Divisions........ 15,795,045 6,185,530 (53,599,684) (46,950,717)
Policyowners' death benefits.................. (227,269) (257,174) (188) (18,009)
------------ ------------ ------------ ------------
Net contributions........................... 38,901,512 24,241,365 7,429,950 5,838,661
------------ ------------ ------------ ------------
Increase in total equity.................. 84,694,259 66,036,960 8,312,111 6,254,995
TOTAL EQUITY:
Beginning of year............................. 163,136,336 97,099,376 14,405,884 8,150,889
------------ ------------ ------------ ------------
End of year................................... $247,830,595 $163,136,336 $ 22,717,995 $ 14,405,884
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
INTERNATIONAL EQUITY TOTAL RETURN
------------------------------ ------------------------------
1999 1998 1999 1998
------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................. $ (14,858) $ 69,313 $ 517,293 $ 445,770
Net realized gain on investments.............. 92,808 399,556 937,588 830,540
Realized gain distribution received........... 133,262 -- 1,305,271 933,164
Change in unrealized appreciation
(depreciation) on investments............... 1,140,110 253,950 3,737,718 4,843,628
Increase (decrease) attributable to funds of
New York Life Insurance and Annuity
Corporation retained by Separate Account.... (1,636) (1,447) (8,421) (9,150)
------------ ------------ ------------ ------------
Net increase (decrease) in total equity
resulting from operations................. 1,349,686 721,372 6,489,449 7,043,952
------------ ------------ ------------ ------------
Contributions and withdrawals:
Policyowners' premium payments................ 1,598,744 1,534,922 10,858,597 9,007,541
Cost of insurance............................. (503,092) (529,562) (3,741,166) (3,313,627)
Policyowners' surrenders...................... (162,868) (256,808) (1,584,812) (1,211,414)
Net transfers to Fixed Account................ (187,961) (141,464) (909,132) (772,143)
Transfers between Investment Divisions........ 328,106 (191,458) 1,510,064 524,899
Policyowners' death benefits.................. (86,667) (98,515) (29,909) (122,817)
------------ ------------ ------------ ------------
Net contributions........................... 986,262 317,115 6,103,642 4,112,439
------------ ------------ ------------ ------------
Increase in total equity.................. 2,335,948 1,038,487 12,593,091 11,156,391
TOTAL EQUITY:
Beginning of year............................. 4,189,116 3,150,629 35,684,707 24,528,316
------------ ------------ ------------ ------------
End of year................................... $ 6,525,064 $ 4,189,116 $ 48,277,798 $ 35,684,707
============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
10
<PAGE> 11
NYLIAC VUL SEPARATE ACCOUNT-I
<TABLE>
<CAPTION>
MAINSTAY VP
MAINSTAY VP MAINSTAY VP HIGH YIELD
CONVERTIBLE GOVERNMENT CORPORATE BOND
------------------------------ ------------------------------ ------------------------------
1999 1998 1999 1998 1999 1998
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 95,918 $ 73,863 $ 162,161 $ 127,272 $ 2,758,881 $ 1,590,363
25,744 7,340 8,370 37,886 22,103 64,854
333,649 50,288 -- -- 499,619 47,406
406,847 (85,229) (259,370) 14,939 (818,497) (1,498,958)
(1,036) (23) 47 (204) (3,665) (61)
------------ ------------ ------------ ------------ ------------ ------------
861,122 46,239 (88,792) 179,893 2,458,441 203,604
------------ ------------ ------------ ------------ ------------ ------------
867,144 737,857 1,020,933 766,789 8,302,753 7,559,778
(271,355) (229,862) (338,961) (242,485) (2,619,979) (2,353,235)
(86,364) (23,416) (132,107) (50,424) (944,952) (463,485)
(11,682) (24,417) (38,557) (33,099) (456,296) (263,644)
250,099 377,042 (307,986) 1,168,469 412,072 1,875,550
(739) -- (367) (27,512) (18,566) (8,961)
------------ ------------ ------------ ------------ ------------ ------------
747,103 837,204 202,955 1,581,738 4,675,032 6,346,003
------------ ------------ ------------ ------------ ------------ ------------
1,608,225 883,443 114,163 1,761,631 7,133,473 6,549,607
1,764,983 881,540 3,450,504 1,688,873 18,802,642 12,253,035
------------ ------------ ------------ ------------ ------------ ------------
$ 3,373,208 $ 1,764,983 $ 3,564,667 $ 3,450,504 $ 25,936,115 $ 18,802,642
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP
VALUE BOND GROWTH EQUITY
------------------------------ ------------------------------ ------------------------------
1999 1998 1999 1998 1999 1998
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 171,820 $ 203,854 $ 383,540 $ 270,882 $ (1,623) $ 79,088
287,850 166,506 6,868 2,914 3,383,146 227,341
-- 1,711,646 553 150,296 5,714,804 2,916,300
1,329,416 (3,245,087) (531,346) (24,456) 4,351,297 3,898,766
(1,483) 952 71 (496) (18,194) (10,255)
------------ ------------ ------------ ------------ ------------ ------------
1,787,603 (1,162,129) (140,314) 399,140 13,429,430 7,111,240
------------ ------------ ------------ ------------ ------------ ------------
9,785,258 9,730,766 2,187,714 1,746,262 15,546,512 12,186,740
(3,051,256) (3,192,216) (693,353) (615,607) (5,033,902) (3,822,721)
(1,034,284) (713,023) (278,012) (215,276) (1,962,772) (927,793)
(470,194) (421,071) (106,081) (91,675) (995,672) (618,303)
(339,100) 1,606,497 244,474 702,565 3,855,951 3,326,747
(111,844) (144,245) (7,364) (271,589) (49,043) (27,376)
------------ ------------ ------------ ------------ ------------ ------------
4,778,580 6,866,708 1,347,378 1,254,680 11,361,074 10,117,294
------------ ------------ ------------ ------------ ------------ ------------
6,566,183 5,704,579 1,207,064 1,653,820 24,790,504 17,228,534
21,694,485 15,989,906 5,915,515 4,261,695 39,473,010 22,244,476
------------ ------------ ------------ ------------ ------------ ------------
$ 28,260,668 $ 21,694,485 $ 7,122,579 $ 5,915,515 $ 64,263,514 $ 39,473,010
============ ============ ============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
11
<PAGE> 12
STATEMENT OF CHANGES IN TOTAL EQUITY (CONTINUED)
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
MAINSTAY VP AMERICAN CENTURY
INDEXED EQUITY INCOME & GROWTH
------------------------------ ----------------
1999 1998 1999(a)
---------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................. $ 468,914 $ 315,924 $ 203
Net realized gain on investments.............. 13,641,421 10,716,754 141
Realized gain distribution received........... 1,618,939 557,191 --
Change in unrealized appreciation
(depreciation) on investments............... 734,879 282,888 1,020
Decrease attributable to funds of New York
Life Insurance and Annuity Corporation
retained by Separate Account................ (21,057) (16,684) (1)
------------ ------------ ------------
Net increase in total equity resulting from
operations................................ 16,443,096 11,856,073 1,363
------------ ------------ ------------
Contributions and withdrawals:
Policyowners' premium payments................ 38,307,020 23,448,394 9,386
Cost of insurance............................. (11,332,970) (7,501,864) (1,571)
Policyowners' surrenders...................... (3,449,613) (1,904,644) --
Net transfers from (to) Fixed Account......... (1,221,342) (1,125,551) 26,125
Transfers between Investment Divisions........ 8,893,653 17,788,953 587
Policyowners' death benefits.................. (69,949) (46,244) --
------------ ------------ ------------
Net contributions........................... 31,126,799 30,659,044 34,527
------------ ------------ ------------
Increase in total equity.................. 47,569,895 42,515,117 35,890
TOTAL EQUITY:
Beginning of year............................. 73,315,251 30,800,134 --
------------ ------------ ------------
End of year................................... $120,885,146 $ 73,315,251 $ 35,890
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
FIDELITY FIDELITY
VIP II VIP
CONTRAFUND EQUITY-INCOME
------------------------------ ------------------------------
1999 1998 1999 1998
------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................. $ (84,841) $ (27,964) $ 55,999 $ 5,692
Net realized gain (loss) on investments....... 282,507 54,036 112,501 85,885
Realized gain distribution received........... 668,643 329,061 288,230 150,693
Change in unrealized appreciation
(depreciation) on investments............... 5,142,920 2,790,206 (219) 306,596
Increase (decrease) attributable to funds of
New York Life Insurance and Annuity
Corporation retained by Separate Account.... (7,286) (4,175) (603) (991)
------------ ------------ ------------ ------------
Net increase (decrease) in total equity
resulting from operations................. 6,001,943 3,141,164 455,908 547,875
------------ ------------ ------------ ------------
Contributions and withdrawals:
Policyowners' premium payments................ 13,026,887 7,696,442 4,956,313 3,688,644
Cost of insurance............................. (3,705,244) (2,146,703) (1,482,147) (969,176)
Policyowners' surrenders...................... (667,893) (449,496) (286,960) (171,064)
Net transfers from (to) Fixed Account......... (343,741) (154,308) 53,981 (55,950)
Transfers between Investment Divisions........ 5,534,689 3,975,127 1,108,674 2,915,659
Policyowners' death benefits.................. (52,911) (114,379) (17,479) (328)
------------ ------------ ------------ ------------
Net contributions........................... 13,791,787 8,806,683 4,332,382 5,407,785
------------ ------------ ------------ ------------
Increase in total equity.................. 19,793,730 11,947,847 4,788,290 5,955,660
TOTAL EQUITY:
Beginning of year............................. 17,686,788 5,738,941 8,306,303 2,350,643
------------ ------------ ------------ ------------
End of year................................... $ 37,480,518 $ 17,686,788 $ 13,094,593 $ 8,306,303
============ ============ ============ ============
</TABLE>
(a) For the period September 28, 1999 (Commencement of Operations) through
December 31, 1999.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
12
<PAGE> 13
NYLIAC VUL SEPARATE ACCOUNT-I
<TABLE>
<CAPTION>
DREYFUS LARGE EAGLE ASSET
COMPANY MANAGEMENT ALGER AMERICAN CALVERT
VALUE GROWTH EQUITY SMALL CAPITALIZATION SOCIAL BALANCED
------------- ------------- --------------------------- ---------------------------
1999(a) 1999(a) 1999 1998 1999 1998
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 148 $ (12) $ (64,998) $ (34,358) $ 16,486 $ 8,208
27 594 3,730,021 1,215,940 3,818 15,361
-- 1,080 735,842 374,506 73,487 22,970
198 2,499 212,328 128,347 (346) (1,990)
-- (1) (5,174) (1,817) (106) (57)
------------ ------------ ------------ ------------ ------------ ------------
373 4,160 4,608,019 1,682,618 93,339 44,492
------------ ------------ ------------ ------------ ------------ ------------
7,985 3,878 3,734,375 2,188,725 316,514 220,463
(1,534) (1,165) (1,014,165) (772,586) (111,360) (66,198)
(657) -- (171,665) (129,594) (35,089) (39,108)
14,857 128,805 (94,044) (35,391) (5,479) (4,614)
-- -- 4,697,824 131,223 283,964 121,446
-- -- (30,619) (213) -- (827)
------------ ------------ ------------ ------------ ------------ ------------
20,651 131,518 7,121,706 1,382,164 448,550 231,162
------------ ------------ ------------ ------------ ------------ ------------
21,024 135,678 11,729,725 3,064,782 541,889 275,654
-- -- 4,993,125 1,928,343 449,752 174,098
------------ ------------ ------------ ------------ ------------ ------------
$ 21,024 $ 135,678 $ 16,722,850 $ 4,993,125 $ 991,641 $ 449,752
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN MORGAN STANLEY
JANUS ASPEN SERIES DEAN WITTER T. ROWE
SERIES WORLDWIDE EMERGING MARKETS PRICE
BALANCED GROWTH EQUITY EQUITY INCOME
--------------------------- --------------------------- --------------------------- -------------
1999 1998 1999 1998 1999 1998 1999(a)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 284,180 $ 122,429 $ (167,493) $ 271,229 $ (24,065) $ (1,253) $ 246
179,941 147,872 15,667,315 1,387,577 (179,309) (268,494) 11
-- 20,409 -- 144,214 -- -- 1,944
3,014,831 851,673 4,604,576 1,447,292 3,006,590 (242,047) (1,551)
(4,490) (1,474) (22,883) (4,965) (3,019) 406 --
------------ ------------ ------------ ------------ ------------ ------------ ------------
3,474,462 1,140,909 20,081,515 3,245,347 2,800,197 (511,388) 650
------------ ------------ ------------ ------------ ------------ ------------ ------------
7,857,797 2,528,610 13,190,861 8,596,803 1,501,600 1,516,539 7,374
(1,990,257) (658,423) (3,974,595) (2,591,821) (407,571) (393,054) (1,890)
(263,420) (138,143) (850,986) (474,849) (108,494) (74,822) (654)
542,842 (52,710) (145,095) (198,761) (94,620) (25,939) 79,512
7,429,452 2,191,093 4,014,635 4,521,415 803,924 77,823 --
(11,226) (110,888) (46,785) (66,168) (18,592) (42,802) --
------------ ------------ ------------ ------------ ------------ ------------ ------------
13,565,188 3,759,539 12,188,035 9,786,619 1,676,247 1,057,745 84,342
------------ ------------ ------------ ------------ ------------ ------------ ------------
17,039,650 4,900,448 32,269,550 13,031,966 4,476,444 546,357 84,992
6,396,568 1,496,120 20,791,643 7,759,677 2,232,224 1,685,867 --
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 23,436,218 $ 6,396,568 $ 53,061,193 $ 20,791,643 $ 6,708,668 $ 2,232,224 $ 84,992
============ ============ ============ ============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
13
<PAGE> 14
(THIS PAGE INTENTIONALLY LEFT BLANK)
14
<PAGE> 15
NYLIAC VUL SEPARATE ACCOUNT-I
NOTES TO FINANCIAL STATEMENTS
NOTE 1-- Organization and Accounting Policies:
- --------------------------------------------------------------------------------
NYLIAC Variable Universal Life Separate Account-I ("VUL Separate Account-I")
was established on June 4, 1993, under Delaware law by New York Life Insurance
and Annuity Corporation, a wholly-owned subsidiary of New York Life Insurance
Company. The VUL Separate Account-I funds Flexible Premium Variable Life
Insurance policies ("VUL policies"), Survivorship Variable Universal Life
policies ("SVUL policies"), and Flexible Premium Variable Universal Life
policies ("VUL 2000 policies"). VUL, SVUL, and VUL 2000 policies were first
offered on June 4, 1993, June 5, 1998, and September 28, 1999, respectively. All
three policies are designed for individuals who seek lifetime insurance
protection and flexibility with respect to premium payments and death benefits.
In addition, SVUL policies offer life insurance protection on two insureds.
These policies are distributed by NYLIFE Distributors Inc. and sold by
registered representatives of NYLIFE Securities Inc. and by registered
representatives of broker-dealers who have entered into dealer agreements with
NYLIFE Distributors Inc. NYLIFE Securities Inc. and NYLIFE Distributors Inc. are
wholly-owned subsidiaries of NYLIFE LLC, which is a wholly-owned subsidiary of
New York Life Insurance Company. VUL Separate Account-I is registered under the
Investment Company Act of 1940, as amended, as a unit investment trust.
The assets of VUL Separate Account-I are invested in the shares of the
MainStay VP Series Fund, Inc., the Alger American Fund, the Calvert Variable
Series, Inc. (formerly, "Acacia Capital Corporation"), the Fidelity Variable
Insurance Products Fund II, the Fidelity Variable Insurance Products Fund, the
Janus Aspen Series, the Morgan Stanley Dean Witter Universal Funds, Inc.
(formerly, "Morgan Stanley Universal Funds, Inc."), and the T. Rowe Price Equity
Series, Inc. (collectively, "Funds"). These assets are clearly identified and
distinguished from the other assets and liabilities of New York Life Insurance
and Annuity Corporation.
New York Life Insurance Company, MacKay Shields LLC, Madison Square Advisors
LLC and Monitor Capital Advisors LLC provide investment advisory services to the
MainStay VP Series Funds for a fee. MacKay Shields LLC, Madison Square Advisors
LLC and Monitor Capital Advisors LLC are wholly-owned subsidiaries of NYLIFE
LLC.
VUL Separate Account-I offers twenty-two variable Investment Divisions, with
their respective fund portfolios, for Policyowners to invest premium payments.
The following Investment Divisions are available for VUL, SVUL and VUL 2000
policies: MainStay VP Capital Appreciation, MainStay VP Cash Management,
MainStay VP Convertible, MainStay VP Government, MainStay VP High Yield
Corporate Bond, MainStay VP International Equity, MainStay VP Total Return,
MainStay VP Value, MainStay VP Bond, MainStay VP Growth Equity, MainStay VP
Indexed Equity, Alger American Small Capitalization, Calvert Social Balanced
(formerly, "Calvert Socially Responsible"), Fidelity VIP II Contrafund, Fidelity
VIP Equity-Income, Janus Aspen Series Balanced, Janus Aspen Series Worldwide
Growth, and Morgan Stanley Dean Witter Emerging Markets Equity (formerly,
"Morgan Stanley Emerging Markets Equity"). Additionally, the following are
available to VUL 2000 Policyowners: American Century Income & Growth, Dreyfus
Large Company Value, Eagle Asset Management Growth Equity, and T. Rowe Price
Equity Income. Each Investment Division of VUL Separate Account-I will invest
exclusively in the corresponding eligible portfolio.
For VUL and SVUL policies, initial premium payments received are allocated to
the MainStay VP Cash Management Investment Division until 20 days (10 days in
New York) after the policy issue date. For VUL 2000 policies, initial premium
payments received are allocated to the General Account of New York Life
Insurance and Annuity Corporation until 20 days (10 days in New York) after the
policy issue date. Thereafter, premium payments will be allocated to the
Investment Divisions of VUL Separate Account-I in accordance with the
Policyowner's instructions. In addition, the Policyowner has the option to
transfer amounts between the Investment Divisions of VUL Separate Account-I and
the Fixed Account of New York Life Insurance and Annuity Corporation.
No Federal income tax is payable on investment income or capital gains of VUL
Separate Account-I under current Federal income tax law.
Security Valuation--The investments are valued at the net asset value of
shares of the respective Fund portfolios.
Security Transactions--Realized gains and losses from security transactions
are reported on the identified cost basis. Security transactions are accounted
for as of the date the securities are purchased or sold (trade date).
Distributions Received--Dividend income and capital gain distributions are
recorded on the ex-dividend date and reinvested in the corresponding portfolio.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
15
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--Investments (in 000's):
- --------------------------------------------------------------------------------
At December 31, 1999, the investments of VUL Separate Account-I are as follows:
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Number of shares........................... 6,713 22,763 266 373
Identified cost*........................... $219,381 $ 22,762 $ 3,076 $ 3,834
</TABLE>
<TABLE>
<CAPTION>
AMERICAN ALGER
CENTURY DREYFUS LARGE EAGLE ASSET AMERICAN
INCOME & COMPANY MANAGEMENT SMALL
GROWTH VALUE GROWTH EQUITY CAPITALIZATION
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Number of shares........................... 3 2 7 304
Identified cost*........................... $ 35 $ 21 $ 133 $ 16,315
</TABLE>
* The cost stated also represents the aggregate cost for Federal income tax
purposes.
Investment activity for the year ended December 31, 1999, was as follows:
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases.................................. $199,209 $428,453 $ 1,369 $ 2,556
Proceeds from sales........................ 152,345 420,118 191 2,190
</TABLE>
<TABLE>
<CAPTION>
AMERICAN ALGER
CENTURY DREYFUS LARGE EAGLE ASSET AMERICAN
INCOME & COMPANY MANAGEMENT SMALL
GROWTH(a) VALUE(a) GROWTH EQUITY(a) CAPITALIZATION
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases.................................. $ 41 $ 22 $ 135 $317,788
Proceeds from sales........................ 6 1 3 309,989
</TABLE>
(a) For the period September 28, 1999 (Commencement of Operations) through
December 31, 1999.
16
<PAGE> 17
NYLIAC VUL SEPARATE ACCOUNT-I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP
HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED
CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2,429 422 2,163 1,888 583 2,318 3,971
$ 28,536 $ 5,283 $ 35,502 $ 28,298 $ 7,728 $ 55,166 $113,971
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN MORGAN STANLEY
CALVERT FIDELITY FIDELITY JANUS ASPEN SERIES DEAN WITTER T. ROWE
SOCIAL VIP II VIP SERIES WORLDWIDE EMERGING MARKETS PRICE
BALANCED CONTRAFUND EQUITY-INCOME BALANCED GROWTH EQUITY EQUITY INCOME
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
458 1,288 510 841 1,113 483 5
$ 996 $ 29,119 $ 12,632 $ 19,504 $ 46,780 $ 4,252 $ 87
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP
HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED
CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9,635 $ 2,146 $ 9,881 $ 6,433 $ 2,478 $ 26,301 $270,712
1,692 1,040 1,942 1,474 744 9,200 237,430
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN MORGAN STANLEY
CALVERT FIDELITY FIDELITY JANUS ASPEN SERIES DEAN WITTER T. ROWE
SOCIAL VIP II VIP SERIES WORLDWIDE EMERGING MARKETS PRICE
BALANCED CONTRAFUND EQUITY-INCOME BALANCED GROWTH EQUITY EQUITY INCOME(a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 620 $ 15,229 $ 5,831 $ 14,473 $201,919 $ 2,295 $ 87
81 828 1,148 601 189,863 639 1
</TABLE>
17
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3--Mortality and Expense Risk Charges:
- --------------------------------------------------------------------------------
VUL Separate Account-I is charged for administrative services provided and the
mortality and expense risks assumed by New York Life Insurance and Annuity
Corporation. For VUL and SVUL policies, these charges are made daily at an
annual rate of .70% of the daily net asset value of each Investment Division.
New York Life Insurance and Annuity Corporation may increase these charges in
the future up to a maximum annual rate of 1.00%. For VUL 2000 policies, the
mortality and expense risk charge is made daily at an annual rate of .50% of the
daily net asset value of each Investment Division. New York Life Insurance and
Annuity Corporation may increase this charge to a maximum annual rate of .80%.
The amounts of these charges retained in the Investment Divisions represent
funds of New York Life Insurance and Annuity Corporation. Accordingly, New York
Life Insurance and Annuity Corporation participates in the results of each
Investment Division ratably with the Policyowners.
For VUL 2000 policies, an administrative charge is assessed at the policy
level based on the cash value in the Separate Account as follows: .20% if less
than $10,000; .15% if $10,000 to $19,999.99; .10% if $20,000 to $29,999.99; .05%
if $30,000 to $49,999.99; 0% if $50,000 or more. New York Life Insurance and
Annuity Corporation may increase the administrative charge in the future up to
an annual maximum rate of .20% of the Separate Account cash value.
- --------------------------------------------------------------------------------
NOTE 4 --Distribution of Net Income:
- --------------------------------------------------------------------------------
VUL Separate Account-I does not expect to declare dividends to Policyowners
from accumulated net investment income and realized gains. The income and gains
are distributed to Policyowners as part of withdrawals of amounts (in the form
of surrenders, death benefits or transfers) in excess of the net premium
payments.
18
<PAGE> 19
NYLIAC VUL SEPARATE ACCOUNT-I
(THIS PAGE INTENTIONALLY LEFT BLANK)
19
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5--Unit Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in accumulation units for the years ended December 31, 1999 and
December 31, 1998, were as follows:
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL APPRECIATION CASH MANAGEMENT
--------------------- -----------------
1999(a) 1998 1999(a) 1998
-----------------------------------------
<S> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Units issued on premium payments......... 1,998 2,003 51,235 46,217
Units redeemed on cost of insurance...... (687) (727) (2,039) (1,679)
Units redeemed on surrenders............. (293) (266) (390) (289)
Units redeemed on net transfers to
Fixed Account.......................... (242) (177) (646) (569)
Units issued (redeemed) on transfers
between Investment Divisions........... 585 331 (42,359) (38,887)
Units redeemed on death benefits......... (8) (12) -- (15)
------- ------- ------- -------
Net increase........................... 1,353 1,152 5,801 4,778
Units outstanding, beginning of year..... 6,277 5,125 11,682 6,904
------- ------- ------- -------
Units outstanding, end of year........... 7,630 6,277 17,483 11,682
======= ======= ======= =======
VUL 2000 POLICIES
Units issued on premium payments......... 13 -- 27 --
Units redeemed on cost of insurance...... (3) -- (22) --
Units issued on net transfers from
Fixed Account.......................... 56 -- 427 --
Units issued (redeemed) on transfers
between Investment Divisions........... 4 -- (164) --
------- ------- ------- -------
Net increase........................... 70 -- 268 --
Units outstanding, beginning of year..... -- -- -- --
------- ------- ------- -------
Units outstanding, end of year........... 70 -- 268 --
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
INTERNATIONAL EQUITY TOTAL RETURN
--------------------- -----------------
1999(a) 1998 1999(a) 1998
-----------------------------------------
<S> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Units issued on premium payments......... 102 113 513 509
Units redeemed on cost of insurance...... (32) (39) (178) (187)
Units redeemed on surrenders............. (10) (19) (75) (68)
Units redeemed on net transfers to
Fixed Account.......................... (17) (11) (61) (50)
Units issued (redeemed) on transfers
between Investment Divisions........... 25 (14) 86 35
Units redeemed on death benefits......... (6) (7) (1) (7)
------- ------- ------- -------
Net increase........................... 62 23 284 232
Units outstanding, beginning of year..... 281 258 1,756 1,524
------- ------- ------- -------
Units outstanding, end of year........... 343 281 2,040 1,756
======= ======= ======= =======
VUL 2000 POLICIES
Units issued on premium payments......... -- -- 1 --
Units redeemed on cost of insurance...... -- -- -- --
Units issued on net transfers from
Fixed Account.......................... 1 -- 8 --
------- ------- ------- -------
Net increase........................... 1 -- 9 --
Units outstanding, beginning of year..... -- -- -- --
------- ------- ------- -------
Units outstanding, end of year........... 1 -- 9 --
======= ======= ======= =======
</TABLE>
(a) For VUL 2000 policies, represents the period September 28, 1999
(Commencement of Operations) through December 31, 1999.
20
<PAGE> 21
NYLIAC VUL SEPARATE ACCOUNT-I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP
MAINSTAY VP MAINSTAY VP HIGH YIELD
CONVERTIBLE GOVERNMENT CORPORATE BOND
----------------- ----------------- -----------------
1999(a) 1998 1999(a) 1998 1999(a) 1998
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
59 61 77 59 524 518
(19) (19) (25) (19) (166) (162)
(6) (2) (10) (4) (59) (32)
(3) (3) (5) (3) (37) (20)
15 32 (22) 89 31 129
-- -- -- (2) (1) (1)
------- ------- ------- ------- ------- -------
46 69 15 120 292 432
144 75 255 135 1,289 857
------- ------- ------- ------- ------- -------
190 144 270 255 1,581 1,289
======= ======= ======= ======= ======= =======
1 -- -- -- 1 --
-- -- -- -- -- --
3 -- 1 -- 8 --
3 -- -- -- -- --
------- ------- ------- ------- ------- -------
7 -- 1 -- 9 --
-- -- -- -- -- --
------- ------- ------- ------- ------- -------
7 -- 1 -- 9 --
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP
VALUE BOND GROWTH EQUITY
----------------- ----------------- -----------------
1999(a) 1998 1999(a) 1998 1999(a) 1998
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
556 563 157 131 558 545
(173) (184) (50) (46) (182) (171)
(58) (41) (20) (16) (70) (42)
(39) (26) (11) (8) (50) (30)
(14) 88 21 53 142 151
(7) (8) -- (21) (2) (1)
------- ------- ------- ------- ------- -------
265 392 97 93 396 452
1,313 921 423 330 1,551 1,099
------- ------- ------- ------- ------- -------
1,578 1,313 520 423 1,947 1,551
======= ======= ======= ======= ======= =======
2 -- -- -- 5 --
-- -- -- -- (1) --
6 -- 1 -- 22 --
------- ------- ------- ------- ------- -------
8 -- 1 -- 26 --
-- -- -- -- -- --
------- ------- ------- ------- ------- -------
8 -- 1 -- 26 --
======= ======= ======= ======= ======= =======
</TABLE>
21
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5--Unit Transactions (in 000's) (Continued):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP AMERICAN CENTURY
INDEXED EQUITY INCOME & GROWTH
----------------- ----------------
1999(a) 1998 1999(a)
------------------------------------
<S> <C> <C> <C>
VUL AND SVUL POLICIES
Units issued on premium payments....... 1,172 900 --
Units redeemed on cost of insurance.... (356) (289) --
Units redeemed on surrenders........... (108) (73) --
Units redeemed on net transfers to
Fixed Account........................ (101) (47) --
Units issued on transfers between
Investment Divisions................. 273 667 --
Units redeemed on death benefits....... (2) (2) --
------- ------- -------
Net increase......................... 878 1,156 --
Units outstanding, beginning of year... 2,491 1,335 --
------- ------- -------
Units outstanding, end of year......... 3,369 2,491 --
======= ======= =======
VUL 2000 POLICIES
Units issued on premium payments....... 80 -- 1
Units redeemed on cost of insurance.... (4) -- --
Units issued on net transfers from
Fixed Account........................ 97 -- 2
Units issued on transfers between
Investment Divisions................. 3 -- --
------- ------- -------
Net increase......................... 176 -- 3
Units outstanding, beginning of year... -- -- --
------- ------- -------
Units outstanding, end of year......... 176 -- 3
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
FIDELITY FIDELITY
VIP II VIP
CONTRAFUND EQUITY-INCOME
----------------- -----------------
1999(a) 1998 1999(a) 1998
-------------------------------------
<S> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Units issued on premium payments......... 723 542 320 267
Units redeemed on cost of insurance...... (207) (151) (95) (70)
Units redeemed on surrenders............. (37) (31) (18) (13)
Units redeemed on net transfers to
Fixed Account.......................... (41) (14) (11) (5)
Units issued on transfers between
Investment Divisions................... 310 283 71 210
Units redeemed on death benefits......... (3) (8) (1) --
------- ------- ------- -------
Net increase........................... 745 621 266 389
Units outstanding, beginning of year..... 1,069 448 567 178
------- ------- ------- -------
Units outstanding, end of year........... 1,814 1,069 833 567
======= ======= ======= =======
VUL 2000 POLICIES
Units issued on premium payments......... 9 -- 2 --
Units redeemed on cost of insurance...... (2) -- (1) --
Units issued on net transfers from
Fixed Account.......................... 33 -- 20 --
Units issued on transfers between
Investment Divisions................... -- -- -- --
------- ------- ------- -------
Net increase........................... 40 -- 21 --
Units outstanding, beginning of year..... -- -- -- --
------- ------- ------- -------
Units outstanding, end of year........... 40 -- 21 --
======= ======= ======= =======
</TABLE>
(a) For VUL 2000 policies, represents the period September 28, 1999
(Commencement of Operations) through December 31, 1999.
22
<PAGE> 23
NYLIAC VUL SEPARATE ACCOUNT-I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALGER
DREYFUS LARGE EAGLE ASSET AMERICAN
COMPANY MANAGEMENT SMALL CALVERT
VALUE GROWTH EQUITY CAPITALIZATION SOCIAL BALANCED
------------- ------------- ----------------- -----------------
1999(a) 1999(a) 1999(a) 1998 1999(a) 1998
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-- -- 272 202 22 16
-- -- (77) (71) (8) (5)
-- -- (13) (12) (2) (3)
--
-- -- (11) (4) (1) --
-- -- 379 112 20 10
-- -- (3) -- -- --
------- ------- ------- ------- ------- -------
-- -- 547 227 31 18
-- -- 407 180 33 15
------- ------- ------- ------- ------- -------
-- -- 954 407 64 33
======= ======= ======= ======= ======= =======
1 -- 1 -- -- --
-- -- -- -- -- --
1 10 3 -- 1 --
-- -- 1 -- -- --
------- ------- ------- ------- ------- -------
2 10 5 -- 1 --
-- -- -- -- -- --
------- ------- ------- ------- ------- -------
2 10 5 -- 1 --
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN MORGAN STANLEY
JANUS ASPEN SERIES DEAN WITTER T. ROWE
SERIES WORLDWIDE EMERGING MARKETS PRICE
BALANCED GROWTH EQUITY EQUITY INCOME
----------------- ----------------- ----------------- -------------
1999(a) 1998 1999(a) 1998 1999(a) 1998 1999(a)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
425 180 710 596 156 181 --
(108) (47) (218) (179) (42) (46) --
(14) (10) (45) (33) (11) (9) --
(8) (4) (37) (17) (14) (4) --
407 157 300 317 72 10 --
-- (8) (2) (4) (2) (4) --
------- ------- ------- ------- ------- ------- -------
702 268 708 680 159 128 --
390 122 1,302 622 297 169 --
------- ------- ------- ------- ------- ------- -------
1,092 390 2,010 1,302 456 297 --
======= ======= ======= ======= ======= ======= =======
12 -- 7 -- 1 -- 1
(2) -- (1) -- -- -- --
64 -- 39 -- 3 -- 8
3 -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
77 -- 45 -- 4 -- 9
-- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
77 -- 45 -- 4 -- 9
======= ======= ======= ======= ======= ======= =======
</TABLE>
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Selected Per Unit Data+:
- --------------------------------------------------------------------------------
The following table presents selected per accumulation unit income and capital
changes (for an accumulation unit outstanding throughout each year) with respect
to each Investment Division of VUL Separate Account-I:
<TABLE>
<CAPTION>
MAINSTAY VP
CAPITAL APPRECIATION
-----------------------------------------------
1999(c) 1998 1997 1996 1995
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Unit value, beginning of year............................... $25.99 $18.95 $15.45 $13.10 $ 9.72
Net investment income (loss)................................ (0.19) (0.12) (0.12) (0.09) --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 6.57 7.16 3.62 2.44 3.38
------ ------ ------ ------ ------
Unit value, end of year..................................... $32.37 $25.99 $18.95 $15.45 $13.10
====== ====== ====== ====== ======
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00 $ -- $ -- $ -- $ --
Net investment income (loss)................................ (0.01) -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 2.13 -- -- -- --
------ ------ ------ ------ ------
Unit value, end of year..................................... $12.12 $ -- $ -- $ -- $ --
====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP
GOVERNMENT
-----------------------------------------------
1999(c) 1998 1997 1996 1995
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Unit value, beginning of year............................... $13.52 $12.49 $11.49 $11.31 $ 9.76
Net investment income (loss)................................ 0.60 0.71 0.71 0.76 0.93
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. (0.93) 0.32 0.29 (0.58) 0.62
------ ------ ------ ------ ------
Unit value, end of year..................................... $13.19 $13.52 $12.49 $11.49 $11.31
====== ====== ====== ====== ======
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00 $ -- $ -- $ -- $ --
Net investment income (loss)................................ 1.04 -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. (0.99) -- -- -- --
------ ------ ------ ------ ------
Unit value, end of year..................................... $10.05 $ -- $ -- $ -- $ --
====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP
TOTAL RETURN
-----------------------------------------------
1999(c) 1998 1997 1996 1995
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Unit value, beginning of year............................... $20.32 $16.10 $13.76 $12.37 $ 9.70
Net investment income....................................... 0.27 0.27 0.26 0.26 0.32
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 3.03 3.95 2.08 1.13 2.35
------ ------ ------ ------ ------
Unit value, end of year..................................... $23.62 $20.32 $16.10 $13.76 $12.37
====== ====== ====== ====== ======
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00 $ -- $ -- $ -- $ --
Net investment income....................................... 0.31 -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 1.13 -- -- -- --
------ ------ ------ ------ ------
Unit value, end of year..................................... $11.44 $ -- $ -- $ -- $ --
====== ====== ====== ====== ======
</TABLE>
+ Per unit data based on average monthly units outstanding during the year.
(a) For the period May 1, 1995 (Commencement of Operations) through December 31,
1995.
(b) For the period October 1, 1996 (Commencement of Operations) through December
31, 1996.
(c) For VUL 2000 policies, represents the period September 28, 1999
(Commencement of Operations) through December 31, 1999.
24
<PAGE> 25
NYLIAC VUL SEPARATE ACCOUNT-I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CASH MANAGEMENT CONVERTIBLE
----------------------------------------------- -------------------------------------
1999(c) 1998 1997 1996 1995 1999(c) 1998 1997 1996(b)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1.23 $ 1.18 $ 1.13 $ 1.08 $ 1.03 $12.26 $11.81 $10.31 $10.00
0.06 0.05 0.05 0.04 0.05 0.56 0.68 0.64 0.16
(0.01) -- -- 0.01 -- 4.46 (0.23) 0.86 0.15
------ ------ ------ ------ ------ ------ ------ ------ ------
$ 1.28 $ 1.23 $ 1.18 $ 1.13 $ 1.08 $17.28 $12.26 $11.81 $10.31
====== ====== ====== ====== ====== ====== ====== ====== ======
$ 1.00 $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ --
0.01 -- -- -- -- 0.95 -- -- --
-- -- -- -- -- 1.07 -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
$ 1.01 $ -- $ -- $ -- $ -- $12.02 $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
HIGH YIELD INTERNATIONAL
CORPORATE BOND EQUITY
----------------------------------------------- -----------------------------------------------
1999(c) 1998 1997 1996 1995(a) 1999(c) 1998 1997 1996 1995(a)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$14.58 $14.31 $12.75 $10.95 $10.00 $14.92 $12.20 $11.69 $10.65 $10.00
1.90 1.46 0.67 0.61 0.36 (0.05) 0.26 0.33 0.58 0.46
(0.13) (1.19) 0.89 1.19 0.59 4.10 2.46 0.18 0.46 0.19
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$16.35 $14.58 $14.31 $12.75 $10.95 $18.97 $14.92 $12.20 $11.69 $10.65
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ --
2.31 -- -- -- -- (0.01) -- -- -- --
(1.95) -- -- -- -- 1.57 -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$10.36 $ -- $ -- $ -- $ -- $11.56 $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
VALUE BOND
----------------------------------------------- -----------------------------------------------
1999(c) 1998 1997 1996 1995(a) 1999(c) 1998 1997 1996 1995
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$16.52 $17.35 $14.22 $11.62 $10.00 $13.99 $12.91 $11.85 $11.70 $ 9.96
0.12 0.18 0.12 0.12 0.05 0.80 0.72 0.80 0.92 1.03
1.21 (1.01) 3.01 2.48 1.57 (1.11) 0.36 0.26 (0.77) 0.71
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$17.85 $16.52 $17.35 $14.22 $11.62 $13.68 $13.99 $12.91 $11.85 $11.70
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ --
0.22 -- -- -- -- 1.71 -- -- -- --
0.35 -- -- -- -- (1.70) -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$10.57 $ -- $ -- $ -- $ -- $10.01 $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
25
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Selected Per Unit Data+ (Continued):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP
GROWTH EQUITY
-----------------------------------------------
1999(b) 1998 1997 1996 1995
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Unit value, beginning of year............................... $25.45 $20.25 $16.09 $13.01 $10.14
Net investment income....................................... -- 0.06 0.04 0.08 0.17
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 7.40 5.14 4.12 3.00 2.70
------ ------ ------ ------ ------
Unit value, end of year..................................... $32.85 $25.45 $20.25 $16.09 $13.01
====== ====== ====== ====== ======
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00 $ -- $ -- $ -- $ --
Net investment income....................................... 0.12 -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 2.13 -- -- -- --
------ ------ ------ ------ ------
Unit value, end of year..................................... $12.25 $ -- $ -- $ -- $ --
====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET
DREYFUS LARGE MANAGEMENT
COMPANY VALUE GROWTH EQUITY
------------- -------------
1999(b) 1999(b)
-----------------------------
<S> <C> <C>
VUL AND SVUL POLICIES
Unit value, beginning of year............................... $ -- $ --
Net investment income (loss)................................ -- --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital shared
transactions)............................................. -- --
------ ------
Unit value, end of year..................................... $ -- $ --
====== ======
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00 $10.00
Net investment income (loss)................................ 0.16 --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital shared
transactions)............................................. 0.18 3.90
------ ------
Unit value, end of year..................................... $10.34 $13.90
====== ======
</TABLE>
<TABLE>
<CAPTION>
FIDELITY VIP II CONTRAFUND
-------------------------------------
1999(b) 1998 1997 1996(a)
-------------------------------------
<S> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Unit value, beginning of year............................... $16.54 $12.81 $10.39 $10.00
Net investment income (loss)................................ (0.06) (0.04) (0.06) (0.01)
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital shared
transactions)............................................. 3.93 3.77 2.48 0.40
------ ------ ------ ------
Unit value, end of year..................................... $20.41 $16.54 $12.81 $10.39
====== ====== ====== ======
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00 $ -- $ -- $ --
Net investment income (loss)................................ (0.01) -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 1.85 -- -- --
------ ------ ------ ------
Unit value, end of year..................................... $11.84 $ -- $ -- $ --
====== ====== ====== ======
</TABLE>
+ Per unit data based on average monthly units outstanding during the year.
(a) For the period October 1, 1996 (Commencement of Operations) through
December 31, 1996.
(b) For VUL 2000 policies, represents the period September 28, 1999
(Commencement of Operations) through December 31, 1999.
26
<PAGE> 27
NYLIAC VUL SEPARATE ACCOUNT-I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP AMERICAN CENTURY
INDEXED EQUITY INCOME & GROWTH
----------------------------------------------- ----------------
1999(b) 1998 1997 1996 1995 1999(b)
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$29.44 $23.07 $17.49 $14.39 $10.58 $ --
0.16 0.17 0.22 0.24 0.34 --
5.68 6.20 5.36 2.86 3.47 --
------ ------ ------ ------ ------ ------
$35.28 $29.44 $23.07 $17.49 $14.39 $ --
====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $ -- $10.00
0.22 -- -- -- -- 0.11
1.25 -- -- -- -- 0.82
------ ------ ------ ------ ------ ------
$11.47 $ -- $ -- $ -- $ -- $10.93
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
ALGER AMERICAN CALVERT
SMALL CAPITALIZATION SOCIAL BALANCED
------------------------------------- -------------------------------------
1999(b) 1998 1997 1996(a) 1999(b) 1998 1997 1996(a)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$12.26 $10.69 $ 9.66 $10.00 $13.71 $11.88 $ 9.96 $10.00
(0.10) (0.11) (0.07) (0.01) 0.33 0.36 0.40 0.21
5.30 1.68 1.10 (0.33) 1.24 1.47 1.52 (0.25)
------ ------ ------ ------ ------ ------ ------ ------
$17.46 $12.26 $10.69 $ 9.66 $15.28 $13.71 $11.88 $ 9.96
====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $10.00 $ -- $ -- $ --
(0.02) -- -- -- 0.61 -- -- --
3.08 -- -- -- 0.11 -- -- --
------ ------ ------ ------ ------ ------ ------ ------
$13.06 $ -- $ -- $ -- $10.72 $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
FIDELITY VIP EQUITY-INCOME JANUS ASPEN SERIES BALANCED
------------------------------------- -------------------------------------
1999(b) 1998 1997 1996(a) 1999(b) 1998 1997 1996(a)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$14.64 $13.21 $10.38 $10.00 $16.41 $12.31 $10.15 $10.00
0.08 0.02 (0.04) (0.01) 0.39 0.52 0.35 0.17
0.74 1.41 2.87 0.39 3.86 3.58 1.81 (0.02)
------ ------ ------ ------ ------ ------ ------ ------
$15.46 $14.64 $13.21 $10.38 $20.66 $16.41 $12.31 $10.15
====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $10.00 $ -- $ -- $ --
(0.01) -- -- -- 0.21 -- -- --
0.59 -- -- -- 1.36 -- -- --
------ ------ ------ ------ ------ ------ ------ ------
$10.58 $ -- $ -- $ -- $11.57 $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
27
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Selected Per Unit Data+ (Continued):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Janus Aspen
Series Worldwide Growth
-------------------------------------
1999(b) 1998 1997 1996(a)
-------------------------------------
<S> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Unit value, beginning of year............................... $15.97 $12.48 $10.29 $10.00
Net investment income (loss)................................ (0.10) 0.29 0.06 0.09
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 10.22 3.20 2.13 0.20
------ ------ ------ ------
Unit value, end of year..................................... $26.09 $15.97 $12.48 $10.29
====== ====== ====== ======
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00 $ -- $ -- $ --
Net investment loss......................................... (0.01) -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital shared
transactions)............................................. 4.12 -- -- --
------ ------ ------ ------
Unit value, end of year..................................... $14.11 $ -- $ -- $ --
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MORGAN STANLEY
DEAN WITTER
EMERGING MARKETS EQUITY
-------------------------------------
1999(b) 1998 1997 1996(a)
-------------------------------------
<S> <C> <C> <C> <C>
VUL AND SVUL POLICIES
Unit value, beginning of year............................... $ 7.51 $ 9.97 $10.01 $10.00
Net investment income (loss)................................ (0.07) (0.01) 0.06 0.02
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 7.15 (2.45) (0.10) (0.01)
------ ------ ------ ------
Unit value, end of year..................................... $14.59 $ 7.51 $ 9.97 $10.01
====== ====== ====== ======
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00 $ -- $ -- $ --
Net investment loss......................................... (0.01) -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital share
transactions)............................................. 4.87 -- -- --
------ ------ ------ ------
Unit value, end of year..................................... $14.86 $ -- $ -- $ --
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
T. ROWE PRICE
EQUITY INCOME
-------------
1999(b)
-------------
<S> <C>
VUL 2000 POLICIES
Unit value, beginning of year............................... $10.00
Net investment income....................................... 0.08
Net realized and unrealized gains (losses) on security
transactions and realized capital gain distributions
received (includes the effect of capital shared
transactions)............................................. (0.25)
------
Unit value, end of year..................................... $ 9.83
======
</TABLE>
+ Per unit data based on average monthly units outstanding during the year.
(a) For the period October 1, 1996 (Commencement of Operations) through
December 31, 1996.
(b) For VUL 2000 policies, represents the period September 28, 1999
(Commencement of Operations) through December 31, 1999.
28
<PAGE> 29
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors of New York Life Insurance and
Annuity Corporation and the Variable Universal Life Separate Account-I
Policyowners:
In our opinion, the accompanying statement of assets and liabilities and the
related statement of operations, of changes in total equity and the selected per
unit data present fairly, in all material respects, the financial position of
the MainStay VP Capital Appreciation, MainStay VP Cash Management, MainStay VP
Convertible, Mainstay VP Government, MainStay VP High Yield Corporate Bond,
MainStay VP International Equity, MainStay VP Total Return, MainStay VP Value,
MainStay VP Bond, MainStay VP Growth Equity, MainStay VP Indexed Equity,
American Century Income & Growth, Dreyfus Large Company Value, Eagle Asset
Management Growth Equity, Alger American Small Capitalization, Calvert Social
Balanced, formerly known as Calvert Socially Responsible, Fidelity VIP II
Contrafund, Fidelity VIP Equity-Income, Janus Aspen Series Balanced, Janus Aspen
Series Worldwide Growth, Morgan Stanley Dean Witter Emerging Markets Equity,
formerly known as Morgan Stanley Emerging Markets Equity, and T. Rowe Price
Equity Income Investment Divisions (constituting the NYLIAC Variable Universal
Life Separate Account-I) at December 31, 1999, and the results of each of their
operations, the changes in each of their total equity, and the selected per unit
data for each of the periods presented, in conformity with accounting principles
generally accepted in the United States. These financial statements and the
selected per unit data (herein referred to as the "financial statements") are
the responsibility of management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of investments at December 31, 1999 by
correspondence with the MainStay VP Series Fund, Inc., the Alger American Fund,
the Calvert Variable Series, Inc., the Fidelity Variable Insurance Products Fund
II, the Fidelity Variable Insurance Products Fund, the Janus Aspen Series, and
the Morgan Stanley Dean Witter Universal Funds, Inc., formerly known as Morgan
Stanley Universal Funds, Inc. and the T. Rowe Price Equity Series, Inc., provide
a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
February 17, 2000
29
<PAGE> 30
- --------------------------------------------------------------------------------
To Policyowners:
The assets of NYLIAC Variable Annuity Separate Account-I, NYLIAC Variable
Annuity Separate Account-II, NYLIAC Variable Annuity Separate Account-III,
NYLIAC Variable Universal Life Separate Account-I, NYLIAC Corporate Sponsored
Variable Universal Life Separate Account-I, New York Life Insurance and Annuity
Corporation MFA Separate Account-I, New York Life Insurance and Annuity
Corporation MFA Separate Account-II and New York Life Insurance and Annuity
Corporation VLI Separate Account are invested in shares of MainStay VP Series
Fund, Inc. In addition, the assets of NYLIAC Variable Annuity Separate
Account-I, NYLIAC Variable Annuity Separate Account-II, NYLIAC Variable Annuity
Separate Account-III, NYLIAC Variable Universal Life Separate Account-I and
NYLIAC Corporate Sponsored Variable Universal Life Separate Account-I may be
invested in shares of the Alger American Fund, the Calvert Variable Series,
Inc., Fidelity Variable Insurance Products Fund, Fidelity Variable Insurance
Products Fund II, the Janus Aspen Series, MFS Variable Insurance Trust, Morgan
Stanley Dean Witter Universal Funds, Inc., T. Rowe Price Equity Series, Inc.,
and Van Eck Worldwide Insurance Trust, which are not affiliated with MainStay VP
Series Fund, Inc. or NYLIAC and any of its subsidiaries.
At the Annual Meeting of the Board of Directors of the Fund held on November 16,
1999, executive officers of the Fund were elected. On December 29, 1999, a
dividend distribution was paid to NYLIAC Variable Annuity Separate Account-I,
NYLIAC Variable Annuity Separate Account-II, NYLIAC Variable Annuity Separate
Account-III, NYLIAC Variable Universal Life Separate Account-I, NYLIAC Corporate
Sponsored Variable Universal Life Separate Account-I, New York Life Insurance
and Annuity Corporation MFA Separate Account-I, New York Life Insurance and
Annuity Corporation MFA Separate Account-II and New York Life Insurance and
Annuity Corporation VLI Separate Account as the sole shareholders of record of
MainStay VP Series Fund, Inc.
/s/ Richard M. Kerman Jr.
Chairman of the Board
and Chief Executive Officer
MAINSTAY VP SERIES FUND, INC.
30
<PAGE> 31
- --------------------------------------------------------------------------------
MAINSTAY VP SERIES FUND, INC. PORTFOLIOS
MACKAY SHIELDS LLC
ADVISER'S REPORT
Market Overview
The main story of the financial markets in 1999 was that stocks rose higher than
any other time over the last decade. The best-performing stocks increased in
value by thousands of percentage points. All major market indices closed the
year at record highs. The S&P 500(R) Index(1) gained 21.04% in 1999 and
underperformed the Dow Jones Industrial Average(2), which returned 27.2%.
NASDAQ(3) returned more than 85%, with the highest-returning stocks skewing the
results. More than half the gain occurred after November 3, when the NASDAQ
reached 3000. Even small stocks rebounded in 1999, led by Internet stocks. At
the beginning of the year, market pundits were doubtful that four years of
double digit S&P 500(R) returns could continue for another year, but that is
exactly what happened. Despite the economy's 4% growth rate, inflation remained
low and interest rates, though rising, were still relatively low.
However, the unprecedented S&P 500(R) returns masked the huge gulfs between what
outperformed and what underperformed. Technology issues posted the most positive
results, with the average technology fund returning almost 114%. Investors seem
to have divided into two camps regarding this volatile sector. The fans assert
the high returns are indicative of a new era of technological innovation, which
is changing the economy and is shifting the way business is done. Skeptics on
the other hand, believe the high returns are proof that the bull market has
turned into a mania with a probable poor ending. Stocks associated with the
information revolution have been bid up to stellar heights, while the older
economy stocks have generally languished. In fact, over half the stocks on the
New York Stock Exchange, the S&P 500(R) and NASDAQ are selling at lower prices
today than they did on January 1, 1999. About two-thirds of the stocks on the
New York Stock Exchange were at least 20 percent below their 52-week highs.
Without technology and telecom stocks, the S&P 500(R) would have shown little if
any gain.
1999 also saw the U.S. stock market lag the rest of the world for the first time
in four years. According to Morgan Stanley Capital International EAFE Index
(MSCI EAFE Index)(4), the U.S. market gained 20.86% versus a 28.8% return for
the rest of the world's stock markets. Leading the international fray were
emerging markets which rebounded from a dismal 1998 to a gain of more than 63%.
Europe kept pace with the U.S., however, currency moves of the Euro vs. the
dollar eroded most gains for American investors. The biggest surprise was Japan,
which increased 60.6% in U.S. dollar terms.
In contrast to the ebullient stock market, bonds suffered their worst year since
1994, and second worst year since 1973. Rising interest rates, inflation fears
and Y2K jitters all contributed to the Lehman Brothers Aggregate Bond Index(5)
loss of more than 50 basis points (0.50%), compared to a positive 8.69% return
in 1998. What investors usually think of as the safest bonds, Treasuries, fell
more than 14%, after returning more than 17% last year. Yields moved
accordingly. By year end, the 30-year Treasury bond was yielding 6.48%, up from
5.10% at the beginning of the year. Only emerging market debt provided a
positive return, increasing 23.6%.
31
<PAGE> 32
- --------------------------------------------------------------------------------
Looking forward, diversification, asset allocation and a long term investment
plan may be effective tools for any investor as the markets remain unpredictable
and continue their volatility.
Ravi Akhoury
Chairman and Chief Executive Officer
MacKay Shields LLC
(1) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500 is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(2) The Dow Jones Industrial Average is a trademark of, and the property of, Dow
Jones and Co., Inc. The DJIA Index is a price-weighted average of 30
actively traded blue chip stocks, primarily industrials, but also including
financial, leisure, and other service-oriented firms.
(3) "NASDAQ Composite Index" is an unmanaged index and is considered generally
representative of the U.S. small capitalization stock market.
(4) Morgan Stanley Capital International EAFE Index (MSCI EAFE Index) is an
unmanaged index of the securities of over 1,000 companies traded on the
markets of Europe, Australasia, and the Far East.
(5) Lehman Brothers Aggregate Bond Index is an unmanaged index of more than
5,000 taxable government, investment-grade corporate and mortgage backed
securities. Results assume the reinvestment of all income and capital gains
distributions.
32
<PAGE> 33
- --------------------------------------------------------------------------------
MADISON SQUARE ADVISORS LLC
ADVISER'S REPORT
Market Overview
During 1999, stocks and bonds experienced a dramatic divergence in investment
returns. Strong domestic economic growth, impressive corporate earnings gains,
and modest inflationary pressure combined with the widespread recognition of the
importance and reality of the technology and communications revolution, resulted
in a fifth consecutive year of double-digit returns for the U.S. equity markets.
However, in recognition of this robust growth, the Federal Reserve Bank shifted
to a restrictive monetary policy from accommodative and raised the Federal Funds
rate three different times. As a consequence and in anticipation of future
tightening, the yield on 10 year Treasury bonds increased by over 1 3/4%,
reaching 6.44% by year-end. This significant increase in interest rates produced
returns for fixed income investments in a range of low single digit negative to
positive returns.
As we begin 2000, we anticipate that economic growth in the U.S. will remain
strong. We see a modest pick-up in inflation associated with higher energy
prices and labor costs, partially offset by continued limitations on pricing
power associated with worldwide excess industrial capacity. We anticipate that
economic growth overseas will be stronger than that of the U.S. and believe that
the U.S. dollar will experience downward pressure relative to other major
currencies. These factors should produce some pressure on profit margins of U.S.
corporations, especially those without leading positions in their respective
marketplaces.
We believe that upward pressure on interest rates will continue as inflationary
pressure increases. Separately, one of the most powerful factors for the bond
market will be stock market volatility which should have an especially strong
impact on market technicals, increasing the risk associated with spread fixed
income products despite positive fundamentals.
Looking forward, we believe that the upcoming year will present some challenges,
especially for equity investors accustomed to the returns of the recent past. We
perceive that valuation levels for certain sectors may come under attack.
Nevertheless, we are continuing to benefit from fundamental factors such as
technological innovation, deregulation, improved inventory management, and
increased global trade. Such powerful factors lead us to remain positive in our
outlook for the investment environment.
Jean E. Hoysradt
President, Madison Square Advisors LLC
Senior Vice President
in Charge of the Investment Department,
New York Life Insurance Company
33
<PAGE> 34
MAINSTAY VP CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
In 1999, the S&P 500(R) Index(1) recorded a 21.04% gain, marking the fifth
consecutive year of returns over 20%. Early in the year, investors rotated out
of growth stocks into value equities. As the year progressed, however, many
investors became enamored with Internet and technology stocks, causing growth
stocks to largely outperform other domestic asset classes. Around the world,
stock markets soared as global economies recovered from the crisis in 1998.
On the economic front, three Federal Reserve interest-rate increases triggered
much of the stock market's volatility, as the Federal Reserve ("Fed") tried to
slow economic growth and keep inflation in check. Although surging oil prices
raised inflation concerns, in most sectors pricing power remained limited and
inflation was low. We believe the combination of a strong economy and modest
inflation led many investors to buy stocks in the face of rising interest rates.
As investors began to sense that Y2K concerns were perhaps overblown, they
flocked to stocks at the end of the year.
PERFORMANCE REVIEW
For the year ended December 31, 1999, the MainStay VP Capital Appreciation
Portfolio returned 25.41%, outperforming the 21.04% return of the S&P 500(R)
Index over the same period, but underperforming the 40.06% return of the average
Lipper(2) Variable Products Capital Appreciation Portfolio.
TECHNOLOGY STOCKS
Technology stocks led the market's advance throughout most of 1999. Oracle
(+290%) was the Portfolio's best-performing stock in 1999. Other strong
technology stocks included Sun Microsystems (+262%), EMC (+160%), and Cisco
Systems (+138%). Each of these was among the Portfolio's largest holdings and
had a major positive impact on performance.
Key technology purchases in 1999 included Motorola, Texas Instruments, and
Nextel Communications. Each of these three companies benefited from tremendous
market growth in wireless technology and contributed positively to the
Portfolio's performance.
RADIO, CABLE, AND MEDIA
Throughout the year, the Portfolio benefited from increased exposure to radio,
cable, and media companies that would enjoy increasing revenue and income growth
from higher advertising spending and advanced technology.
During the third quarter we began purchasing Corning for the Portfolio, a
largely misunderstood company whose value lies in its fast-growing fiber-optic
cable and photonics businesses. Corning is a major supplier to telecom carriers
and related equipment companies and is a major beneficiary of the drive to
increase bandwidth through optical technology. Since its initial purchase, the
stock has almost doubled.
In January through June we purchased Omnicom Group for the Portfolio, one of the
world's largest advertising agencies. The company is capitalizing on Internet
trends and stands to benefit in 2000 from advertising spending for the Olympics
and the Presidential election. In the utility sector, we purchased AES, the
world's largest independent power generator for the Portfolio, benefiting from
energy deregulation and contracts to provide energy at competitive prices.
HEALTH CARE AND PHARMACEUTICALS
Genentech, a large biotechnology company, has doubled since its initial purchase
by the Portfolio. The company delivered two promising cancer drugs to market and
moved several products closer to FDA approval. We also purchased Amgen, one of
the world's largest biotech companies for the Portfolio, as new products due in
2000 moved the company into an accelerating growth phase.
While biotech companies soared, traditional drug stocks showed poor performance
throughout the year. Wholesale drug distributor Cardinal Health and
pharmaceutical companies Eli Lilly, Pfizer, and Schering-Plough, were among the
Portfolio's worst performers. We sold the Portfolio's Eli Lilly holdings during
the second quarter and the stock continued to decline after the sale. In
December, we sold Pfizer and trimmed all of the Portfolio's health care
holdings. We believe election debates on health care issues will make these
stocks more controversial in the coming year.
OTHER SECTORS
Retailers had varied results. Home Depot showed accelerating revenue and
earnings growth of greater than 40% and capitalized on a hot housing market to
return 69% for the year. Although Nordstrom held out the promise
34
<PAGE> 35
of a restructuring that would result in an earnings turn around, we sold the
Portfolio's holdings in the department store when anticipated changes failed to
materialize.
Consumer staples had a negative impact on the Portfolio's performance. Kroger
and Safeway, the nation's two largest supermarket chains, declined significantly
in 1999. In December, Kroger reported disappointing earnings, which led us to
sell both of these supermarket stocks. Since the market was moving away from
defensive stocks as Y2K approached, the sales helped position the Portfolio
positively for the year ahead.
While some financial stocks such as Citigroup and American International Group
performed well in 1999, we saw rising interest rates as a reason to sell the
Portfolio's holdings in Fannie Mae, Southtrust, and Conseco early in the year.
We also sold holdings in Freddie Mac in the third quarter and Associates First
Capital in the fourth. Although some of these sales were at a loss for the year,
the proceeds were used to purchase more productive assets, so we believe they
were beneficial for the Portfolio.
LOOKING AHEAD
As we enter the new year, we continue to favor technology, media, and
telecommunications companies. In health care, regulatory concerns have prompted
us to shift our focus more toward biotechnology stocks. Since we anticipate
further tightening moves by the Federal Reserve, the Portfolio will enter 2000
underweighted in financials.
No matter what the economy or the markets may bring, the Portfolio will continue
to seek long-term growth of capital appreciation. Dividend income, if any, is an
incidental consideration.
Rudolph C. Carryl
Edmund C. Spelman
Portfolio Managers
MacKay Shields LLC
$10,000 INVESTED IN THE
MAINSTAY VP CAPITAL APPRECIATION PORTFOLIO
ON 1/29/93 VS S&P 500(R) AND
THE CONSUMER PRICE INDEX(3)
[LINE CHART]
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
PORTFOLIO S&P 500(R) CONSUMER PRICE INDEX
-------------------- ---------- --------------------
<S> <C> <C> <C>
1/29/93 10000.00 10000.00 10000.00
1993 12054.00 11007.00 10275.00
1994 11526.00 11149.00 10549.30
1995 15650.00 15338.80 10785.60
1996 18584.40 18857.50 11142.60
1997 22950.00 25148.00 11332.00
1998 31703.00 32336.00 11515.00
1999 39759.00 39139.00 11823.00
</TABLE>
One Year: 25.41% Five Years: 28.10% Since Inception: 22.06% (1/29/93)
(1) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(2) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(3) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
35
<PAGE> 36
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
36
<PAGE> 37
MAINSTAY VP CASH MANAGEMENT PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Three major factors impacted the money markets over the year ending December 31,
1999 -- strong domestic economic growth, Federal Reserve ("Fed") actions, and
liquidity concerns surrounding Y2K. These factors combined to push yields on
short-term money market securities significantly higher.
Rapid U.S. economic growth, benign inflation, low unemployment, and a
spectacular run-up in the U.S. equity market resulted in strong consumer
spending in 1999. Concerned about the pace of economic growth and the
possibility of inflation, the Federal Reserve raised the targeted federal funds
rate three times in 1999 -- on June 30, August 24, and November 16 -- by 0.25%
each time. The year ended with the targeted federal funds rate at 5.50% and the
discount rate at 5.00%.
Money market investors and issuers alike believed liquidity would be scarce as
the end of the year approached and concern over Y2K heightened. Both corporate
and asset-backed issuers flooded the market with paper early on, hoping to
secure their year-end financing. The resulting supply of debt securities caused
both interest rates and credit spreads to increase substantially during the
summer.
To help calm the markets and ensure liquidity in the financial markets leading
up to the end of the year, the Federal Reserve announced in October that it
would provide the market with several temporary liquidity programs. One such
program was a repurchase-agreement facility with expanded collateral guidelines
to include pass-through mortgage securities of GNMA, FHLMC, and FNMA, STRIP
securities of the U.S. Treasury, and "stripped" securities of other government
agencies. The Federal Reserve also established a temporary standby financing
facility. As with most other secular Y2K fears, the money markets' liquidity
concerns turned out to be for naught.
STRONG RELATIVE PERFORMANCE
For the twelve months ended December 31, 1999, the Portfolio returned 4.84%,
exceeding the 4.75% return of the average Lipper(1) Variable Products Money
Market Portfolio over the same period.
STRATEGIC MATURITY AND SECTOR POSITIONING
During the first half of the year, we lengthened the maturity of the Portfolio
relative to the average money-market fund when we felt that short-term interest
rates had already priced in more than a 0.25% increase in the federal funds rate
even before the Fed made its first official tightening move at the end of June.
This maturity-extending strategy proved effective for Portfolio performance as
the portfolio benefited from the higher rates during this time. Also, when
interest rates declined after the June 30, 1999 Federal Reserve rate hike, the
Portfolio had a comparatively smaller percentage of its assets to reinvest at
the lower rates.
Early in the fourth quarter, we positioned the Portfolio to be able to provide
sufficient liquidity during the months of December and January. We also arranged
to have a certain percentage of the securities in the Portfolio maturing daily
during the months just preceding and following the new year. In October 1999, we
also began to invest in securities maturing after January 1, 2000. The yields on
these securities further benefited Portfolio performance. As of December 31,
1999, the Portfolio's average maturity stood at 58 days.
HIGH CREDIT QUALITY
The Portfolio's investments throughout the year centered on floating-rate notes,
bank certificates of deposit (CDs), commercial paper, and asset-backed
commercial paper. We primarily invested the Portfolio in securities of finance,
insurance, brokerage, industrial, banks, and bank holding companies. We
continued to invest only in first-tier securities, or generally those
money-market instruments in the highest rating category. The Portfolio did not
invest in any second-tier securities nor did it invest in split-rated issues
(those rated in the highest rating category by one credit rating agency and in
the second-highest rating category by another). The Portfolio's concentration on
the highest-quality securities helped manage portfolio risk.
LOOKING AHEAD
As the Federal Reserve Board's 1999 interest-rate increases filter through the
economy, we believe they may help contain inflationary pressures and slow
economic growth in the first half of 2000. Although the consumer remains
confident, higher borrowing costs and fewer opportunities to increase disposable
income will likely temper spending patterns. For example, current 30-year
mortgage rates offer far less incentive to refinance than
37
<PAGE> 38
those available at the beginning of 1999. We believe business spending, however,
may be on the rise early in the year 2000, as cash set aside for potential Y2K
compliance issues is redirected to capital spending.
Recent comments by Federal Reserve officials continue to indicate that they view
the tight labor market as an imminent inflationary risk. The Fed does not
believe that the "new economy" repeals the old rules of supply and demand, which
means we may see further moves to raise rates during the first part of the new
year.
The degree of tightening and the timing of the Federal Reserve's next moves will
be key to U.S. money-market performance. For the near term, we will likely
manage the Portfolio with a shorter maturity than in 1999 to be well positioned
for any potential rate increases. We also intend to remain focused on quality,
as the Portfolio seeks as high a level of current income as is considered
consistent with the preservation of capital and liquidity.
Edward Munshower
Claude Athaide
Portfolio Managers
MacKay Shields LLC
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
Total returns for the Portfolio shown indicate past performance and are not
indicative of future results. Investment return and principal value will
fluctuate so that shares, upon redemption, may be worth more or less than their
original cost. These results do not reflect any deduction of sales charges,
mortality and expense charges, contract charges, or administrative charges.
Please refer to the Performance Summary for returns reflective of these charges.
Though an investment in a money market portfolio is generally considered to be
protected from market risk, this investment is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Portfolio seeks to preserve the value of your investment, it is
possible to lose money by investing in this Portfolio.
38
<PAGE> 39
MAINSTAY VP CONVERTIBLE PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The most significant factor influencing the convertible market in 1999 was the
dramatic upsurge in NASDAQ(1) stocks, which rose 85.59% during the year. Since
convertibles have a high correlation with small- and mid-cap stocks, the
performance of NASDAQ stocks greatly influences the performance of the
convertible market.
The NASDAQ's strength was propelled by advances in the technology and
telecommunications sectors, both of which are well represented in the
convertible market. These factors, combined with solid economic growth, modest
inflation, and stable credit spreads, helped make 1999 an outstanding year for
convertible securities.
PERFORMANCE REVIEW
For the year ended December 31, 1999, the Portfolio returned 41.98%,
outperforming the 33.51% return of the First Boston Convertible Securities
Index(2) and the 21.04% return of the S&P 500(R) Index(3). The Portfolio
underperformed the 48.10% return of the average Lipper(4) Variable Products
Specialty/Miscellaneous Portfolio.
Although the Federal Reserve moved to tighten interest rates three times during
the year, our bottom-up investment strategy allowed us to largely ignore these
macroeconomic changes, which had little impact on market enthusiasm for
small-and mid-cap stocks.
The Portfolio's strongest-performing security was United Global Communications,
whose stock rose 633% in 1999 as the company built a global cable footprint and
profitably leveraged its last-mile infrastructure. Our early access to analysis
of the company's high-yield bond potential allowed the Portfolio to participate
in the stock's rise long before the company drew wide attention from equity
analysts.
An Amkor Technologies convertible was another top-performer for the Portfolio in
1999. Amkor Technologies is a Korean semiconductor packaging company that was
hurt during the Asian financial crisis of 1998. Careful equity and credit
research showed that the company had strong fundamentals, little downside risk,
and strong upside potential. The Portfolio's timely purchase paid off for
shareholders as both the common stock and bond values appreciated.
SIGNIFICANT PURCHASES, SALES, AND SECTOR WEIGHTINGS
At the end of October, when Internet stocks were still out of favor, the
Portfolio purchased US Internetworking, a company that hosts software on its
servers, allowing small- and medium-size businesses to reduce software rental
costs. The Portfolio was able to establish a large position in the bond market
at attractive prices -- and with the subsequent Internet rally, both the stock
and bond doubled in price by year-end.
The Portfolio was overweighted in the oil service sector in April. At the time,
we believed the group was oversold, primarily due to a warm winter and a lack of
drilling. From April through the end of the year, the group performed well. As
Asian economies recovered, demand for oil increased, and better discipline from
OPEC led to a recovery in the price of oil and natural gas, causing stock prices
to rise. The overweighted position contributed positively to the Portfolio's
performance and the Portfolio remained overweighted in oil services as of
year-end.
LOOKING AHEAD
In light of high equity valuations, we anticipate increasing volatility in the
stock market which may translate into substantial downside risk. We believe that
convertibles should exhibit less volatility than stocks and may participate in
any market rise. The Portfolio will continue to look for convertibles where we
believe it can participate in a substantial portion of the common stock's upside
potential while limiting exposure to downside risk.
The Portfolio will continue its bottom-up approach to the convertible market,
focusing on the fundamental characteristics of individual securities rather than
on general economic trends. Whatever the economy or the markets may bring, the
Portfolio will continue to seek capital appreciation together with current
income.
Edmund C. Spelman
Thomas Wynn
Portfolio Managers
MacKay Shields LLC
39
<PAGE> 40
$10,000 INVESTED IN THE
MAINSTAY VP CONVERTIBLE PORTFOLIO
ON 10/1/96 VS S&P 500(R),
FIRST BOSTON CONVERTIBLE SECURITIES INDEX AND
THE CONSUMER PRICE INDEX(5)
[LINE CHART]
<TABLE>
<CAPTION>
FIRST BOSTON
CONVERTIBLE SECURITIES
CONVERTIBLE PORTFOLIO S&P 500(R) CONSUMER PRICE INDEX INDEX
--------------------- ---------- -------------------- ----------------------
<S> <C> <C> <C> <C>
10/1/96 10000.00 10000.00 10000.00 10000.00
1996 10389.00 10833.00 10082.00 10243.00
1997 11992.00 14447.00 10222.00 11948.00
1998 12530.00 18576.00 10386.00 13342.00
1999 17791.00 22484.00 10665.00 17812.00
</TABLE>
One Year: 41.98% Since Inception: 19.38% (10/1/96)
(1) The NASDAQ Composite Index is an unmanaged index and is considered generally
representative of the U.S. small capitalization market.
(2) The First Boston Convertible Securities Index generally includes 250-300
issues -- convertibles must have a minimum issue size of $50 million; bonds
and preferreds must be rated B- or better by S&P; and preferreds must have a
minimum of 500,000 shares outstanding. Eurobonds are also included if they
are issued by U.S.-domiciled companies, rated B- or higher by S&P, and have
an issue size greater than $100 million.
(3) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(4) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(5) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
Certain of the Portfolio's investments have speculative characteristics.
40
<PAGE> 41
MAINSTAY VP GOVERNMENT PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The U.S. economy showed considerable strength in 1999, with gross domestic
product continuing to expand and inflation remaining modest. With consumer
spending on the rise and a tight labor market, many investors paid close
attention to inflation indicators throughout the year -- including oil prices,
wages, commodity values, producer prices, and the cost of consumer goods and
services.
The Federal Reserve moved to slow economic growth and reduce inflationary
pressures by raising the targeted federal funds rate in successive 25
basis-point moves in June, August, and November. Since bond prices tend to
decline when interest rates rise, Federal Reserve activity had a generally
negative impact on domestic bond markets.
As higher interest rates filtered through the economy, they slowed the rate of
business expansion and tempered consumer spending. Corporate bonds suffered in
1999 as rising interest rates made it more expensive for companies to raise the
capital they may need to meet earnings projections. With mortgage rates ending
1999 about 100 basis points higher than at the beginning of the year,
refinancing incentives have declined. As we move into the year 2000, however,
business spending could increase as companies redirect capital from Y2K computer
reprogramming to other productive uses.
PERFORMANCE REVIEW
For the year ended December 31, 1999, the Portfolio returned -1.74%,
outperforming the -2.13% return of the average Lipper(1) Variable Products
General U.S. Government Portfolio and the -2.23% return of the Lehman Brothers
Government Index(2).
Federal Reserve action had a major influence on both the bond markets and the
Portfolio's performance during 1999. Interest rates rose approximately 170 basis
points for 2-year Treasuries and 135 basis points for 30-year Treasuries,
flattening the yield curve by 35 basis points. Although the Portfolio was
initially positioned with an average maturity close to that of the market, early
in the second quarter of 1999, we repositioned the Portfolio very defensively by
shortening duration and emphasizing certain portions of the yield curve. This
helped to protect the portfolio as interest rates rose and the yield curve
flattened.
Throughout 1999, liquidity and supply dynamics played an important role in the
Portfolio's investment strategy. With a continuing budget surplus allowing the
government to pay down Treasury debt, 30-year Treasuries became increasingly
scarce -- and hence, increasingly valuable -- relative to 5-year and 10-year
Treasuries. The Portfolio's 30-year Treasury position was further enhanced later
in the year by increasing demand among investors seeking a measure of Y2K
protection and liquidity.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
During the first quarter of 1999, mortgage-backed securities, collateralized
mortgage obligations, and asset-backed securities all performed well as yield
spreads relative to Treasuries tightened. As interest rates rose during the
second quarter, however, mortgage-backed securities tended to extend maturities,
creating unfavorable risk profiles. To help manage this concern and reduce
credit risk, the Portfolio favored AAA-rated(3) commercial mortgages and U.S.
Treasury securities. In the second quarter of 1999, commercial mortgages
provided attractive returns relative to agency mortgage-backed securities.
Unfortunately, remaining underweighted in agency mortgage-backed securities
detracted from the Portfolio's relative performance in the second half of the
year, as a change in Federal Reserve repurchase guidelines caused spreads to
tighten dramatically throughout the mortgage-backed securities market. Overall,
the Portfolio reduced its commitment to mortgage-backed securities from an above
index weight of 1998 to more of a market weight at the end of 1999.
LOOKING AHEAD
Although inflation has remained modest, the Federal Reserve continues to view a
tight labor market as an imminent inflationary risk. As a result, along with
much of the market, we anticipate additional Federal Reserve tightening in early
2000, which may result in a slightly flatter yield curve. As 2000 unfolds, we
believe commercial mortgage-backed securities and asset-backed securities will
outperform agency mortgage-backed issues, and we have positioned the Portfolio
accordingly.
41
<PAGE> 42
Whatever the economy, the markets, or inflation may bring, the Portfolio will
continue to seek a high level of current income, consistent with safety of
principal.
Edward Munshower
Christopher Harms
Portfolio Managers
MacKay Shields LLC
$10,000 INVESTED IN THE
MAINSTAY VP GOVERNMENT PORTFOLIO
ON 1/29/93 VS LEHMAN BROTHERS GOVERNMENT INDEX AND
THE CONSUMER PRICE INDEX(4)
[LINE CHART]
<TABLE>
<CAPTION>
LEHMAN BROTHERS
GOVERNMENT PORTFOLIO GOVERNMENT INDEX CONSUMER PRICE INDEX
-------------------- ---------------- --------------------
<S> <C> <C> <C>
1/29/93 10000.00 10000.00 10000.00
1993 10563.00 10914.00 10275.00
1994 10368.60 10546.20 10549.30
1995 12102.30 12480.40 10785.60
1996 12378.20 12826.10 11142.60
1997 13552.00 14056.00 11332.00
1998 14771.00 15441.00 11515.00
1999 14514.00 15096.00 11823.00
</TABLE>
One Year: -1.74% Five Years: 6.96% Since Inception: 5.53% (1/29/93)
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) The Lehman Brothers Government Index is an unmanaged index comprised of U.S.
Government and Agency issues as well as investment grade fixed rate debt
securities. Results assume the reinvestment of all income and capital gains
distributions.
(3) Currently, debt rated AAA has the highest rating assigned by Standard &
Poor's, and according to Standard & Poor's, the obligor's capacity to meet
its financial commitment on the obligation is extremely strong. These
ratings are based solely on the creditworthiness of the bonds in the
Portfolio and are not meant to represent the stability or safety of the
Portfolio.
(4) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
42
<PAGE> 43
MAINSTAY VP HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The stock market continued to rise in 1999 with the S&P 500(R) Index(1)
recording its fifth consecutive year with returns over 20%. In the bond market,
however, things weren't quite as rosy. The Federal Reserve moved to raise
interest rates in June, August, and November, causing higher-quality bonds to
provide negative total returns for the year. Despite continuing volatility and
below-average liquidity, the high-yield bond market fared considerably better,
remaining strong through most of the year. However, default rates increased
substantially, nearly tripling to 5.5% according to statistics from Moody's
Investors Services(2).
Navigating in this environment required careful credit analysis, meticulous
security selection, and ongoing monitoring, as many well-established companies
faced difficulties during the year. Many managers shunned single-B issuers in
favor of higher-quality BB issues(3), while other managers were unable to dodge
the abundant credit problems that plagued the market.
PERFORMANCE REVIEW
In 1999, the MainStay VP High Yield Corporate Bond Portfolio returned 12.84%.
The Portfolio outperformed the 3.81% return of the average Lipper(4) Variable
Products High Current Yield Portfolio and the 3.28% return of the First Boston
High Yield Index(5) for the same period, to rank in the top 5% of all portfolios
in the Lipper Variable Products high current yield universe.
The Portfolio outperformed its peers because we were able to overweight the
single-B portion of the market without experiencing a higher default rate in
1999. We had conviction in our investment process and used the market's
uncertainty to add to our favorite names at discounted prices. The Portfolio was
rewarded when several of its holdings in telecom, cable, and media went public
or were acquired by stronger credits. Additionally, our focus on managing the
Portfolio through asset coverage and free cash flow helped minimize mistakes
within the Portfolio.
STRONG AND WEAK PERFORMERS
UIH Australia/Pacific zero-coupon bonds had the greatest positive impact on
performance during 1999. We owned the bonds of this pay-television service and
programming company in 1998 and increased our position during the second half of
1998, believing the company's asset value was improving and competition was
waning. Our view was confirmed when the company's parent went public in July
1999. We continue to have a large position in these securities because we feel
that the company will refinance the bonds when the issue matures.
Spanish Broadcasting System is a domestic Spanish-language radio broadcasting
company. The Portfolio owned Spanish Broadcasting System bonds and preferred
stock when the company went public during the year and tendered for both
securities at significant premiums to the Portfolio's investment cost.
American Telecasting is a wireless cable company that owned a wireless spectrum
in several major markets. We bought American Telecasting bonds for the Portfolio
at deeply discounted prices in 1998, believing the spectrum had untapped value.
Our assessment proved correct when Sprint acquired American Telecasting in 1999,
generating a solid return on the Portfolio's investment.
Tokai Bank is a large, regional Japanese bank with a dominant share of the
markets in which it operates. In 1998, we bought Tokai Bank bonds in the
secondary market at a substantial discount, believing the bank was well
capitalized, would issue a secondary equity offering, and would benefit from
Japanese fiscal reform. As these premises proved true, the bonds traded up
substantially during the year.
Telehub Communications is a start-up company that suffered delays in
implementing its software strategy and performed poorly for the Portfolio in
1999. We continue to hold bonds, believing the company's technology can be
profitably sold to a more-established telecom firm.
IPC Magazines Group is a U.K.-based publisher of specialty magazines that failed
to meet its projections for subscriptions, ad pages, and cash flow growth. When
the company announced poor earnings, the Portfolio's bond investment declined
sharply. Since the company has strong equity sponsorship, good market share,
significant asset coverage, and the possibility of an IPO in 2000, the Portfolio
continues to hold the bonds.
SIGNIFICANT PURCHASES AND SALES
During 1999, we found more value in existing Portfolio positions than in new
issues. One such position was United Pan-Europe Communications (UPC), a sibling
of United International Holdings (UIH) and UIH's most valuable asset. We traded
out of the Portfolio's UIH position during the year and into the UPC credit for
what we believed was a more attractive risk/reward profile.
43
<PAGE> 44
We also added to an existing position in ICG Services, making it one of the
larger telecommunications positions in the Portfolio. Although the company's
traditional business is struggling, ICG Services has moved into dial-up Internet
access, with customers including Microsoft Network and Qwest Communications.
With unlimited demand for the company's Internet offering and over 80% of
forecast additions already in backlog, we believe ICG Services' securities are
likely to outperform the market in 2000.
We increased the Portfolio's position in Millicom International Cellular, a
cellular network owner/operator in Europe, Asia, Latin America, and Africa,
impressed with its rapidly growing subscriber base and telecommunication assets
in Europe that are more than sufficient to cover the Portfolio's bond
investment. In light of global wireless consolidation, we believe these bonds
may outperform in 2000 and may be retired when they begin to pay dividends.
The Portfolio actively purchased a new issue from CD Radio, now called Sirius
Satellite Radio, due to launch its commercial-free radio access later in 2000 or
early 2001. We are attracted to the company because it has little competition
and a strong business model that promises to break even and cover interest
expense even with very low market penetration levels.
The Portfolio's position in Marcus Cable, an owner and operator of cable
systems, was purchased in a tender by the company following its acquisition by
Vulcan Ventures, the investment arm of Paul Allen. We also sold the Portfolio's
position in Tokai Bank when it reached our price target and American
Telecasting, following its acquisition by Sprint.
AVOIDING DEFAULTS
Entering 1999, we believed that the high-yield market was oversold due to weak
technicals brought on by Russia's default and the ongoing liquidation of Long
Term Capital LLC. In hindsight, wide spreads on high-yield securities were a
signal that default rates would rise dramatically during the year. While this
was not surprising, the magnitude was much greater than we anticipated, with
defaults nearly tripling to 5.5% according to Moody's statistics.
Credit difficulties were not limited to weak single-B credits or securities
rated CCC.(6) Several issuers rated BB- or higher also faced debt-service
problems, with several well-established companies among the market's worst
performers, including Fruit of the Loom, Harnischfeger Industries, Pillowtex,
Rite Aid, Service Corp. International, and Sun Healthcare.
SECTOR WEIGHTINGS
The Portfolio continues to invest in industries with high barriers to entry or
companies with large market share. Cable and media continue to dominate the
Portfolio, and this sector had a positive impact on performance. Utilities and
REITs were also overweighted during the year. While these sectors were impacted
by rising rates, spreads tightened considerably on our holdings. The Portfolio
was also overweighted in health care, one of the worst-performing sectors of
1998. The Portfolio focused on credits, including Quest Diagnostics, Medaphis,
and MedPartners, that outperformed the sector and the market during the year.
Although underweighted in telecommunications, which outperformed in 1999, the
Portfolio was not adversely affected, since it owned several top-performing
issues including those of CD Radio, Millicom International Cellular, and
HighwayMaster Communications.
Given our belief that we are in the later stages of an economic cycle, the
Portfolio underweighted cyclicals during 1999. Underweighting paper hurt
performance, since the sector performed well as demand increased with the global
economic recovery. The Portfolio has underweighted retailers and supermarkets,
which have continued to flounder; and gaming and energy, based on their
valuations.
As of year end, the overall credit quality of the securities in the Portfolio's
investment portfolio was single-B. We believe single-B securities offer the
greatest value and potential to managers who can minimize defaults through
stringent credit analysis.
LOOKING AHEAD
With high yield spreads offering nearly an 80% premium to Treasuries at
year-end, we believe the market is undervalued and that spreads may tighten.
While we expect default rates to remain above their historical averages, we
expect them to decline during the year with positive implications for the
market. Positive credit events, including mergers and acquisitions, are likely
to continue in the telecommunications sector. And despite poor performances in
1999, health care, transportation, and textiles, appear to be stabilizing.
As always, the corporate earnings environment and the health of the economy will
play a significant role in high-yield returns. We continue to believe that we
are in the later stages of the economic cycle and that
44
<PAGE> 45
corporate earnings growth is slowing. Whatever the market may bring, the
Portfolio will continue to maximize current income through investment in a
diversified portfolio of high-yield high risk debt securities, which are
ordinarily in the lower ratings categories of recognized ratings agencies, with
capital appreciation as a secondary objective.
Steven Tananbaum
Donald Morgan
Portfolio Managers
MacKay Shields LLC
$10,000 INVESTED IN THE MAINSTAY VP
HIGH YIELD CORPORATE BOND PORTFOLIO
ON 5/1/95 VS THE FIRST BOSTON HIGH YIELD INDEX AND
THE CONSUMER PRICE INDEX(7)
[LINE CHART]
<TABLE>
<CAPTION>
FIRST BOSTON HIGH YIELD HIGH YIELD CORPORATE BOND
INDEX PORTFOLIO CONSUMER PRICE INDEX
----------------------- ------------------------- --------------------
<S> <C> <C> <C>
5/1/95 10000.00 10000.00 10000.00
1995 11006.00 10968.00 10102.00
1996 12894.60 12329.00 10436.40
1997 14574.80 13885.00 10613.80
1998 14962.00 13966.00 10785.00
1999 14424.00 16884.00 11074.00
</TABLE>
One Year: 12.84% Since Inception: 11.86% (5/1/95)
(1) "Standard & Poor's 500 Composite Price Stock Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(2) Moody's Investor Service is an independent debt-rating agency that provides
credit ratings, research and analysis and financial information to the
capital markets.
(3) According to Standard & Poor's, debt rated BB is less vulnerable to
nonpayment than other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions, which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation. Debt rated B is more vulnerable
to nonpayment than obligations rated BB, but the obligor currently has the
capacity to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the obligation.
Ratings may be modified with the addition of a plus or minus sign to show
relative standing within the major rating categories. When applied to
Portfolio investments, these ratings are based solely on the
creditworthiness of the bonds in the portfolio and are not meant to
represent the stability or safety of the Portfolio.
(4) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(5) The First Boston High Yield Index is a market-weighted index that includes
publicly traded bonds rated below BBB by Standard & Poor's and Baa by
Moody's. The index assumes reinvestment of all distributions and interest
payments and does not take into account brokerage fees or taxes. Securities
in the Portfolio will not precisely match those in the index, and so,
performance of the Portfolio will differ.
(6) According to Standard & Poor's, debt rated CCC is currently vulnerable to
nonpayment and is dependent upon favorable business, financial, and economic
conditions for the obligor. In the event of adverse business, financial, or
economic conditions, the obligor is not likely to have the capacity to meet
its financial commitment on the obligation. When applied to Portfolio
investments, these ratings are based solely on the creditworthiness of the
bonds in the portfolio and are not meant to represent the stability or
safety of the Portfolio.
(7) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
High-yield securities run greater risks of price fluctuations, loss of principal
and interest, default or bankruptcy by the issuer, and other risks, which is why
these securities are considered speculative.
45
<PAGE> 46
MAINSTAY VP INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The stock markets began 1999 on a positive note, as a bailout package for
Brazil, led by the International Monetary Fund, eased investor concerns about
continuing volatility in some markets. Early in the year, enthusiasm over the
January introduction of the euro began to fade and European stocks declined,
while a strengthening economy in Japan caused stocks there to rise. European
stocks recovered throughout the remainder of the year, and by year-end all major
European markets posted positive returns in local-currency terms. Finland
(+195.9%) was by far the leader, followed by Sweden (+89.4%), France (+51.4%),
and Germany (+40.6%), all in local-currency terms. For U.S. investors,
performance was generally lower, with several countries providing negative
returns in U.S.-dollar terms, including Belgium (-14.26%), Ireland (-12.63%),
Austria (-9.11%), Portugal (-8.88%), Switzerland (-7.02%), and Italy (-0.26%).
Asian equities continued to advance throughout 1999, as central bank action,
fiscal stimulus packages, tax cuts, and increasing merger and acquisition
activity drew investor attention to the region. Leading Asian markets included
Singapore (+101.33%), Hong Kong (+60.06%), and Japan (+46.57%), all in
local-currency terms. Currency differences had less of a negative impact on
Asian securities, and with the strengthening of the Japanese yen, Japan was the
strongest Asian market in U.S.-dollar terms (+61.53%).
PERFORMANCE REVIEW
For the year ended December 31, 1999, the MainStay VP International Equity
Portfolio returned 28.06%, underperforming the 43.32% return of the average
Lipper(1) Variable Products International Portfolio for the same period. Much of
the Portfolio's underperformance can be attributed to being underweighted in
Japan, overweighted in Europe, and having sizeable investments in a few
underperforming countries.
During 1999, the Portfolio outperformed the 26.96% return of the Morgan Stanley
Capital International EAFE (MSCI EAFE) Index(2).
PACIFIC-RIM INVESTMENTS
Perhaps the most significant move the Portfolio made during 1999 was to
dramatically increase its weighting in Japanese stocks. Since the economic
recovery in Japan was still in its early stages, the Portfolio focused first on
the "new Japan" stocks, with telecom and technology names and other companies
with a worldwide franchise such as Sony and Toyota Motor. Later in the year, the
Portfolio added more stocks of companies with a Japanese market orientation that
were poised to benefit from restructuring efforts. Among the Portfolio's
strongest-performing Japanese stocks were NTT Mobile Communications Network,
Sony, and NTT Data. The Portfolio's positions in Japanese banks and nonlife
insurers lagged the market.
Sony was typical of the kind of restructuring that is benefiting Japanese
stocks. The company is a household name in electronic equipment, televisions,
electronic components, semiconductors, computers, and telecommunications
equipment. In 1999, the company advanced 268.00% in local currency terms after
announcing a new business policy to create value, adopting a new holding-company
structure, and introducing an impressive line-up of consumer products for the
year 2000.
With Japan signaling a recovery, other Asian markets also staged a rapid
comeback, improving their earnings growth and gross domestic product. While the
Portfolio's investments in Hong Kong and Singapore contributed positively to
overall performance, being underweighted in these markets was a negative, given
their outstanding returns in U.S. dollar terms.
In Australia, the Portfolio was neutrally weighted, but focused on natural
resources and telecom companies. Broken Hill Proprietary and WMC were two of the
Portfolio's natural resource investments that benefited from rising commodity
prices in an expanding global economy. Telstra and Cable & Wireless Optus are
the first and second largest telecommunications companies in Australia,
respectively, and both contributed positively to the Portfolio's performance.
EUROPEAN HIGHLIGHTS
In Europe, the Portfolio had established positions in Finland and Sweden late in
1998. During 1999, these were among the best performing European markets.
Finnish cellular company Nokia returned 245.24% in local-currency terms, and was
the Portfolio's largest holding for much of the year. The Portfolio had
purchased Ericsson shares, a Swedish cellular company, late in 1998. Although
the stock had a positive impact on Portfolio performance, we sold it in the
first quarter of 1999 when new product delays and management changes began to
undermine investor confidence in the company.
46
<PAGE> 47
French and German stocks were the leading Euroland markets for the Portfolio in
both local-currency and U.S. dollar terms. Both markets benefited from the
improvements in earnings and Gross Domestic Products growth, as well as
corporate restructurings, mergers, and acquisitions as companies adapt to a new
European business environment with fewer barriers.
Epcos an electronic-component and integrated-circuit producer for the telecom,
auto, and consumer-electronics industries is the product of a ten-year joint
venture between Siemen's of Germany and Matsushita in Japan. The company issued
shares in October 1999, and by year-end had returned 122.39% in local-currency
terms.
German pharmaceutical manufacturer Schering gained 12.28% for the year in
local-currency terms, outperforming the health & personal care sector of the
MSCI EAFE Index by a substantial margin. The company is the leader in fertility
control and is benefiting from a share repurchase program. Another
pharmaceutical name, Roche Holdings, advanced 10.46% in local-currency terms,
also outperforming its EAFE Index sector. The Swiss company increased sales by
12% in 1999, which was better than the market anticipated.
Other strong European performers included Irish cement company CRH which rose
45.29% in local terms on increased infrastructure spending by governments
throughout Europe. The company continues to acquire companies to enhance its
growth. Telefonica is a Spanish telecommunications company serving the Iberian
peninsula, Latin America, and the United States. The stock rose 104.11% in local
terms during the year, contributing positively to the Portfolio's performance.
A stock that underperformed expectations was German automotive giant,
DaimlerChrysler. Despite the manufacturer's worldwide reach and a generally
strong automotive market, the company continued to suffer from margin pressures
due to incentive plans, and returned -8.33% in local terms for the year.
LOOKING AHEAD
The Portfolio continues to view Japan's expansion as an important development
and will seek to capitalize on companies that are well positioned in growing
market sectors. The Portfolio also favors companies with global market reach, as
they may be able to withstand any setbacks the Japanese market may encounter on
its new expansion path.
In Europe, the Portfolio continues to prefer selected peripheral markets,
including Finland, Ireland, Spain, and Portugal, with a concentration on
technology and telecom companies, which we believe have yet to reach their full
potential.
No matter what the global economy or individual markets may bring, the Portfolio
will continue to seek long-term growth of capital by investing in a portfolio
consisting primarily of non-U.S. equity securities, with current income as a
secondary objective.
Joseph Portera
Maureen McFarland
Portfolio Managers
MacKay Shields LLC
47
<PAGE> 48
$10,000 INVESTED IN THE
MAINSTAY VP INTERNATIONAL EQUITY PORTFOLIO
ON 5/1/95 VS EAFE INDEX AND
THE CONSUMER PRICE INDEX(3)
[LINE CHART]
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
PORTFOLIO CONSUMER PRICE INDEX EAFE INDEX
-------------------- -------------------- ----------
<S> <C> <C> <C>
5/1/95 10000.00 10000.00 10000.00
1995 10696.00 10102.00 10520.00
1996 11823.40 10436.40 11189.00
1997 12435.00 10614.00 11388.00
1998 15308.00 10785.00 13666.00
1999 19604.00 11074.00 17350.00
</TABLE>
One Year: 28.06% Since Inception: 15.49% (5/1/95)
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) Morgan Stanley Capital International EAFE Index (MSCI EAFE Index) is an
unmanaged index of the securities of over 1,000 companies traded on the
markets of Europe, Australasia and the Far East.
(3) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
Investments in foreign securities may be subject to greater risks than domestic
investments. These risks include currency fluctuations, changes in U.S. or
foreign tax or currency laws, and changes in monetary policies and economic and
political conditions in foreign countries.
48
<PAGE> 49
MAINSTAY VP TOTAL RETURN PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The U.S. economy showed considerable strength in 1999, with Gross Domestic
Product continuing to expand and inflation remaining modest. With consumer
spending on the rise and a tight labor market, many investors paid close
attention to inflation indicators throughout the year -- including oil prices,
wages, commodity values, producer prices, and the cost of consumer goods and
services.
Throughout most of 1999, the stock market continued to soar, with the S&P 500(R)
Index(1) providing its fifth straight year of returns over 20%. Technology and
Internet stocks led the way, with telecommunications, cable, and media companies
also providing strong results. Despite an early rotation into value stocks, the
market primarily focused on growth equities -- and despite three 25 basis point
tightening moves by the Federal Reserve in June, August, and November, stocks
ended the year on a rapidly rising trend.
Unfortunately, Federal Reserve activity had a generally negative impact on
domestic bond markets. Over time, however, higher interest rates may have
positive effects, by slowing economic growth, holding inflation in check, and
helping control consumer spending.
Corporate bonds suffered in 1999 as rising interest rates made it more expensive
for companies to raise the capital they needed to meet earnings projections.
With mortgage rates ending 1999 about 100 basis points higher than at the
beginning of the year, refinancing incentives have declined. As we move into the
year 2000, however, business spending could increase as companies redirect
capital from Y2K computer reprogramming to other productive uses.
PERFORMANCE REVIEW
For the year ended December 31, 1999, the MainStay VP Total Return Portfolio
returned 17.02%. The Portfolio substantially outperformed the 8.67% return of
the average Lipper(2) Variable Products Balanced Portfolio, to rank within the
top 12% of all peer portfolios. The Portfolio underperformed, however, the S&P
500(R) Index return of 21.04%.
EQUITY STRATEGIES AND RESULTS
In the equity portion of the Portfolio, technology stocks led the market's
advance throughout most of 1999. Oracle (+290%) was the Portfolio's
best-performing stock in 1999. Other strong technology stocks included Sun
Microsystems (+262%), EMC (+160%), and Cisco Systems (+138%). Each of these was
among the Portfolio's largest holdings and had a major positive impact on
performance.
During the third quarter the Portfolio began purchasing Corning, a largely
misunderstood company whose value lies in its fast-growing fiber-optic cable and
photonics businesses. Corning is a major supplier to telecom and related
equipment companies and is a major beneficiary of the drive to increase
bandwidth through optical technology. Since its initial purchase, the stock has
almost doubled.
Key technology purchases in 1999 included Motorola, Texas Instruments, and
Nextel Communications, all of which contributed positively to the Portfolio's
performance.
The equity portion of the Portfolio also benefited from exposure to radio,
cable, and media companies that enjoyed increasing revenue and income growth
from higher advertising spending and advanced technology. We purchased Omnicom
Group, one of the world's largest advertising agencies, for the Portfolio, which
stands to benefit in 2000 from advertising spending for the Olympics and the
Presidential election. In the utility sector, we purchased AES, one of the
world's largest independent power generator, benefiting from energy deregulation
and contracts to provide energy at competitive prices.
The price of shares of Genentech, a large biotechnology company, has doubled
since our initial purchase for the Portfolio. The company delivered two
promising cancer drugs to market and moved several products closer to FDA
approval. We also purchased Amgen, one of the world's largest biotech companies,
for the Portfolio, as new products due in 2000 moved the company into an
accelerating growth phase. While biotech companies soared, traditional drug
stocks showed poor performance throughout the year. Wholesale drug distributor
Cardinal Health and pharmaceutical companies Eli Lilly, Pfizer, and
Schering-Plough, were among the Portfolio's worst performers. We sold the
Portfolio's Eli Lilly holdings during the third quarter and the stock continued
to decline after the sale. In December, we sold the Portfolio's Pfizer holdings
and trimmed all of the Portfolio's health care holdings. We believe election
debates on health care issues will make these stocks more controversial in the
coming year.
49
<PAGE> 50
Retailers had varied results, with Home Depot gaining 69% for the year, while
Nordstrom failed to realize the earnings promise of a proposed restructuring. We
sold the Portfolio's holdings. Consumer staples had a negative impact on the
Portfolio's performance, with Kroger and Safeway declining significantly before
a negative earnings announcement at Kroger prompted us to sell both supermarket
stocks.
While some financial stocks such as Citigroup and American International Group
performed well in 1999, we saw rising interest rates as a reason to sell the
Portfolio's holdings in Fannie Mae, Southtrust, and Conseco early in the year.
We also sold Freddie Mac in the third quarter and Associates First Capital in
the fourth. Although some of these sales were at a loss for the year, the
proceeds were used to purchase more productive assets, so we believe they were
beneficial for the Portfolio.
BOND STRATEGIES AND RESULTS
Federal Reserve action had a major influence on the income portion of the
Portfolio. With 30-year Treasury yields rising less than 2-year Treasuries, the
yield curve flattened, allowing the Portfolio to greatly benefit from a
defensive duration position and concentration in specific parts of the yield
curve.
With a continuing budget surplus allowing the government to pay down Treasury
debt, 30-year Treasuries became increasingly scarce -- and hence, increasingly
valuable -- relative to 5-year and 10-year Treasuries. The Portfolio's 30-year
Treasury position was further enhanced later in the year by increasing demand
among investors seeking a measure of Y2K protection and liquidity.
SECTOR-BY-SECTOR RESULTS
During the first quarter of 1999, mortgage-backed securities, collateralized
mortgage obligations, and asset-backed securities all performed well as yield
spreads relative to Treasuries tightened. As interest rates rose during the
second quarter, however, mortgage-backed securities tended to extend maturities,
creating unfavorable risk profiles. To help manage this concern and reduce
credit risk, the Portfolio favored AAA-rated(3) commercial mortgages and U.S.
Treasury securities, which provided attractive relative returns in the second
quarter of 1999. The decision to underweight agency mortgage-backed securities
detracted from the Portfolio's relative performance in the second half of the
year, however, as a change in Federal Reserve repurchase guidelines caused
spreads to tighten dramatically. Overall, the Portfolio reduced its commitment
to mortgage-backed securities over the course of the year.
Early in 1999, spreads tightened substantially among higher-quality corporate
credits, liquid newer issues, and bonds in less economically sensitive sectors.
The Portfolio's overweighted position in corporate bonds during this period
proved beneficial for performance. In late spring, we anticipated that spreads
would widen and reduced the Portfolio's corporate bond exposure. As Federal
Reserve tightening and many investors Y2K fears of oversupply enveloped the
market, spreads widened in the fall benefiting the Portfolio. The Portfolio is
currently positioned with a neutral corporate bond position relative to the
overall bond market.
LOOKING AHEAD
We continue to have a positive outlook for stocks in 2000, with technology,
media, and telecommunications continuing to show favorable fundamentals, even at
high valuations. We have shifted our health care focus more towards
biotechnology companies with strong product lines. We continue to underweight
financials as we anticipate more rate hikes by the Federal Reserve in early
2000.
If the Federal Reserve acts as we anticipate, it may result in a slightly
flatter yield curve. As 2000 unfolds, we believe commercial mortgage-backed
securities and asset-backed securities will outperform agency mortgage-backed
issues, and we have positioned the Portfolio accordingly.
Whatever the economy or the markets may bring, the Portfolio will continue to
seek to realize current income consistent with reasonable opportunity for future
growth of capital and income.
Rudolph C. Carryl
Edmund C. Spelman
Edward Munshower
Portfolio Managers
MacKay Shields LLC
50
<PAGE> 51
$10,000 INVESTED IN THE
MAINSTAY VP TOTAL RETURN PORTFOLIO
ON 1/29/93 VS S&P 500(R) AND
THE CONSUMER PRICE INDEX(4)
[LINE CHART]
<TABLE>
<CAPTION>
TOTAL RETURN PORTFOLIO S&P 500(R) CONSUMER PRICE INDEX
---------------------- ---------- --------------------
<S> <C> <C> <C>
1/29/93 10000.00 10000.00 10000.00
1993 11504.00 11007.00 10275.00
1994 11045.00 11149.00 10549.30
1995 14174.00 15338.80 10785.60
1996 15886.30 18857.50 11142.60
1997 18712.00 25148.00 11332.00
1998 23789.00 32336.00 11515.00
1999 27838.00 39139.00 11823.00
</TABLE>
One Year: 17.02% Five Years: 20.31% Since Inception: 15.94% (1/29/93)
(1) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(2) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(3) Currently, debt rated AAA has the highest rating assigned by Standard &
Poor's, and according to Standard & Poor's, the obligor's capacity to meet
its financial commitment on the obligation is extremely strong. These
ratings are based solely on the creditworthiness of the bonds in the
Portfolio and are not meant to represent the stability or safety of the
Portfolio.
(4) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
51
<PAGE> 52
MAINSTAY VP VALUE PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
In 1999, the equity markets posted results of historic proportions. The S&P
500(R) Index(1) recorded its fifth straight year of 20% or better returns, and
the NASDAQ Composite Index(2) recorded a gain of 85.59% -- the largest
single-year gain for any U.S. stock index on record. Technology issues led these
market advances, with Internet stocks and initial public offerings (IPOs)
capturing a great deal of investor and media attention.
As in previous years, however, much of the market's performance resulted from a
narrow group of stocks. The top ten performing stocks in the S&P 500(R)
accounted for about 65% of the total return of the Index for the year -- and
eight of those ten companies were technology related. Throughout most of the
year, the market's focus was clearly not on traditional value sectors, with
value stocks underperforming growth issues at all capitalization levels.
Financial and health care companies, which were market leaders in 1998,
underperformed the market in 1999. While value stocks provided respectable
returns in historical perspective, they could not keep pace with the torrid
advances in major technology-dominated indices.
PERFORMANCE REVIEW
For the year ended December 31, 1999, the MainStay VP Value Portfolio returned
8.80%. The Portfolio underperformed the 14.64% return of the average
Lipper(3)Variable Products Growth and Income Portfolio and the 21.04% return of
the S&P 500(R) Index. It outperformed the 7.35% return of the Russell 1000(R)
Value Index.(4)
BASIC MATERIALS, CAPITAL GOODS, AND TECHNOLOGY
During 1999, the Portfolio's best-performing sectors were basic materials,
capital goods, technology and energy -- all of which the Portfolio overweighted
versus the Russell 1000(R) Value Index. Among basic materials stocks,
Georgia-Pacific (+75%), a pulp, paper, and building supplies producer, benefited
from a good pricing environment and a strong housing market. Smurfit-Stone
Container (+55%) benefited from pricing improvements as global economies
strengthened. Reynolds Metals (+49%), a major aluminum producer, not only
benefited from better industry fundamentals, but agreed to be acquired by Alcoa,
one of the world's largest aluminum producers. On the negative side, IMC Global
(-22%) suffered as oversupply in the fertilizer market hurt pricing.
In capital goods, Browning-Ferris, a waste management company, was purchased in
August by Allied Waste, providing a 58% return for the period the stock was held
in the Portfolio. American Standard (+27%), which manufactures air conditioning
systems and plumbing fixtures, also boosted capital goods sector returns. In
technology, Adaptec (+184%), continued to strengthen its market position, and
Seagate Technology (+59%), a stock we purchased for the Portfolio June through
August 1999, benefited from solid demand for disk drives.
Another technology-related stock that performed well for the portfolio was
Nippon Telegraph & Telephone (+131%), a Japanese-based telecom company. During
the year, we also added Bell Atlantic to the Portfolio, a name that we believed
was well positioned to take advantage of global expansion in the
telecommunications market.
ENERGY AND UTILITIES
With rising oil prices and improving fundamentals, energy stocks contributed
positively to the Portfolio's performance, with Kerr-McGee advancing 69%, Union
Pacific Resources Group up 43%, and Unocal gaining 18% for the year. During
1999, the Portfolio took profits in Kerr-McGee, Apache, Ocean Energy, and Santa
Fe Snyder, as these stocks reached our price targets, and we used the proceeds
to bolster positions in El Paso Energy (natural gas pipelines) and establish
positions in Burlington Resources (oil and gas exploration and production) and
Sunoco (refining) at what we believed to be attractive prices.
Illinova is a Midwestern utility that agreed to merge with Dynergy in a
synergistic transaction. The merger not only added value to the company but also
helped boost the stock's price by 46%.
HEALTH CARE
United HealthCare (an HMO), gained 23%. Overall, however, health care was a
challenging sector in 1999. We sold the Portfolio's position in Cigna (an HMO)
in September, when it was up roughly 10% for the year and used the proceeds to
purchase Becton, Dickinson (medical supplies), Health Management Associates
(rural hospitals), and Mylan Laboratories (branded and generic drugs) at what we
believed were depressed levels. Given the uncertainties facing hospitals and
HMOs, we believe repositioning was beneficial for the Portfolio.
52
<PAGE> 53
CONSUMER SECTORS
Consumer staples and consumer cyclicals were weaker sectors for the Portfolio in
1999. Despite strong consumer spending throughout the year, the market perceived
the spending cycle as likely to wind down after record performance. Philip
Morris (-55%) was the Portfolio's worst performing stock, suffering from
continuing concerns over tobacco litigation. Despite what we viewed as
compelling valuations, we sold the Portfolio's entire position at a loss when we
saw that ongoing litigation questions were unlikely to be resolved in the
foreseeable future. Service Corp. International, a leading funeral service
company, also had a negative impact on performance. The Portfolio purchased the
stock in April after a substantial price decline. Despite cost-cutting
initiatives, however, the stock continued to trend downward, and we sold the
Portfolio's entire position in October to cut our losses. We also sold the
Portfolio's position in Kmart at a loss for the year, when an expected
turnaround in operations failed to materialize.
We also sold the Portfolio's position in Federal-Mogul, an automotive parts
supplier, in December, when integration problems from a recent acquisition
overshadowed a good automotive production environment. The stock negatively
impacted the Portfolio's performance.
On a more positive note, we sold the Portfolio's position in Liz Claiborne
(apparel) for a 20% year-to-date gain when the stock reached our price target.
We also sold the Portfolio's position in Jones Apparel Group after the company
made a potentially dilutive acquisition. Early in the year, we sold the
Portfolio's position in Venator Group, which was down roughly 20% for the year,
when we realized that a turnaround was far from imminent. New consumer-stock
purchases in 1999 included Hasbro (toys), Newell Rubbermaid (housewares), Office
Depot (office supplies), and two food manufacturers, Heinz (H.J.) and ConAgra,
none of which have had substantial impact on the Portfolio as of year end.
FINANCIAL SECTOR
The Portfolio's financial sector stocks kept pace with its value benchmark in
1999, with Citigroup (diversified financial services) up 70% for the year, and
MGIC Investment (mortgage insurance) gaining 51%. The Portfolio took some
profits in these names and in Sallie Mae (college loans), as the stocks reached
our price targets. The proceeds were used to initiate positions in American
General (insurance), Chase Manhattan (global banking), and Fleet Boston
Financial (regional banking). We also added to the Portfolio's position in AXA
Financial (diversified financial services) at what we believed were attractive
price levels.
Early in the year, we sold the Portfolio's position in Chubb (insurance), Bank
One and Bank of America (banking), and Countrywide Credit Industries
(mortgages), when we anticipated that earnings would falter. The sales were
positive on the Portfolio since each of the stocks continued to decline through
the remainder of the year. Indeed, we sought ways to reduce the Portfolio's
exposure to financial stocks in a rising rate environment. Among the Portfolio's
weakest financial holdings were Conseco (insurance and lending) down 41%,
Allstate (insurance) down 38%, and Washington Mutual (savings and loan) down
32%. All three of these stocks declined as operating results lagged behind
expectations. Finally, Transamerica provided strong performance for the
Portfolio, gaining 29% from the beginning of the year through July, when its
acquisition by Aegon, a large Dutch insurer, was completed.
SEEKING VALUE IN OTHER SECTORS
During the year, we also purchased Air Products and Chemicals (industrial gas),
Ingersoll-Rand (industrial equipment), and Fluor (engineering and construction)
for the Portfolio. We believe that these stocks were attractively priced at the
time of purchase and that the companies are well positioned in today's expanding
global economy.
LOOKING AHEAD
We remain confident and committed to our value approach to investing. As market
enthusiasm for technology and emerging growth companies reaches speculative
levels, we believe undervalued stocks with catalysts for positive change may
provide superior long-term return potential with lower volatility.
A global economic recovery -- with strengthening economies in Asia, Latin
America, Europe, and the U.S. -- may have a positive impact on revenues and
earnings for many of the Portfolio's largest holdings. We believe double-digit
earnings are possible for selected capital good, basic materials, and energy
stocks in 2000, and currently intend to remain overweighted in these sectors.
Given the potential for continuing rate hikes in the first half of 2000, we are
currently underweighting consumer-related and financial companies.
53
<PAGE> 54
No matter what the economy or the markets may bring, the Portfolio will continue
to seek to realize maximum long-term total return from a combination of capital
growth and income.
Richard A. Rosen
Portfolio Manager
MacKay Shields LLC
$10,000 INVESTED IN THE
MAINSTAY VP VALUE PORTFOLIO
ON 5/1/95 VS S&P 500(R) AND
THE CONSUMER PRICE INDEX(5)
[LINE CHART]
<TABLE>
<CAPTION>
VALUE PORTFOLIO S&P 500(R) CONSUMER PRICE INDEX
--------------- ---------- --------------------
<S> <C> <C> <C>
10000.00 10000.00 10000.00
1995 11676.00 12179.00 12102.00
1996 14387.20 14972.90 10436.40
1997 17680.00 19968.00 10614.00
1998 16948.00 25675.00 10785.00
1999 18440.00 31077.00 11074.00
</TABLE>
One Year: 8.80% Since Inception: 13.99% (5/1/95)
(1) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(2) "NASDAQ Composite Index" is an unmanaged index and is considered generally
representative of the U.S. small capitalization stock market.
(3) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(4) "Russell 1000(R) Value Index" is an unmanaged index that measures the
performance of those Russell 1000(R) companies with lower price-to-book
ratios and lower forecasted growth values. The Russell 1000(R) is an
unmanaged index that measures the performance of the 1,000 largest companies
in the Russell 3000(R) Index, which includes the 3,000 largest U.S.
companies based on total market capitalization. Total returns reflect
reinvestment of all dividends and capital gains.
(5) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
54
<PAGE> 55
MAINSTAY VP BOND PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Early in the year, investor sentiment shifted from an accommodating/neutral
Federal Reserve Bank ("Fed") to a restrictive Federal Reserve Bank. Concerns
about the Fed in conjunction with rising oil prices, a robust stock market and
the potential for strong economic growth and rising inflation put selling
pressure on domestic fixed income assets in 1999. Corporate bonds outperformed
U.S. Treasury securities during the year, with lower quality assets
outperforming higher quality assets in the investment grade sector. The
additional income generated by corporate bonds contributed to the majority of
this sector's strong performance relative to U.S. Treasury securities.
PERFORMANCE/MARKET REVIEW
For the year ended December 31, 1999, the MainStay VP Bond Portfolio had a
return of -1.53%, outperforming both the average portfolio in its Lipper(1) peer
group (Corporate Debt A Rated), which returned -1.96% and the Merrill Lynch
Corporate and Government Master Index(2), which returned -2.05%. Market risk was
limited by maintaining a relatively neutral duration posture throughout the
year. Credit risk was limited by maintaining an average quality of the
investments in the Portfolio of at least AA(3) throughout the year.
Expectations of a restrictive Federal Reserve Bank assisted in putting severe
pressure on interest rates in 1999. During the course of the year, the Fed
tightened rates three times, raising the Federal Funds target to 5.50%. The U.S.
bond market experienced a significant trade off in 1999. Most investment grade
bond sectors experienced negative returns for the year. The yield on the
ten-year U.S. Treasury note increased 179 basis points (1.79%).
PORTFOLIO STRATEGY
The Portfolio continued to maintain a concentration in lower quality investment
grade corporate bonds. This asset allocation worked well as these securities
outperformed in their sector.
The Portfolio increased its allocation to the mortgage-backed sector
significantly during the course of the year. The majority of this asset shift
came from the U.S. Treasury sector. We took these actions because of our belief
that reduced pre-payments in the mortgage-backed sector associated with rising
interest rates, generally result in a strong relative performance versus U.S.
Treasuries.
Our adjustments to the Portfolio during the year added some call risk to the
Portfolio. However, the Portfolio's overall structure continued to be consistent
with our long-term conservative approach to managing the Portfolio. We will
continue to monitor the Portfolio and make the necessary adjustments that our
interest rate forecast dictates.
LOOKING AHEAD
The prospect of a restrictive Federal Reserve Bank should continue to put upward
pressure on U.S. Treasury yields. Lower quality assets should outperform as
investors' risk tolerance increases with fading Y2K, liquidity and supply
concerns. We believe asset allocation trades precipitated by volatility in the
stock market will continue to have a powerful effect on interest rates.
Albert R. Corapi, Jr.
Celia M. Holtzberg
Portfolio Managers
Madison Square Advisors LLC
55
<PAGE> 56
$10,000 INVESTED IN THE
MAINSTAY VP BOND PORTFOLIO
ON 1/23/84 VS MERRILL LYNCH CORPORATE AND
GOVERNMENT MASTER INDEX AND THE CONSUMER PRICE INDEX(4)
[LINE CHART]
<TABLE>
<CAPTION>
MERRILL LYNCH CORPORATE
AND GOVERNMENT MASTER
BOND PORTFOLIO INDEX CONSUMER PRICE INDEX
-------------- ----------------------- --------------------
<S> <C> <C> <C>
1/23/84 10000.00 10000.00 10000.00
1984 11028.00 11422.00 10365.00
1985 13370.40 13583.00 10758.90
1986 15532.30 15706.10 10877.20
1987 17637.00 16035.90 11359.10
1988 17390.00 17273.90 11861.10
1989 19396.90 19714.70 12412.70
1990 20948.60 21388.40 13171.10
1991 24390.50 24787.10 13574.10
1992 26373.40 26690.70 13967.80
1993 29380.00 29642.70 14351.90
1994 28384.00 28673.40 14735.10
1995 33581.10 34138.50 15065.20
1996 34269.50 35132.00 15563.80
1997 37576.50 38567.90 15828.40
1998 42243.00 41004.00 16083.00
1999 40376.00 41377.00 16514.00
</TABLE>
<TABLE>
<S> <C> <C> <C>
One Year: -1.53% Five Years: 7.30% Ten Years: 7.60% Since Inception: 9.26% (1/23/84)
</TABLE>
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) The Merrill Lynch Corporate and Government Master Index is an unmanaged
index consisting of issues of the U.S. Government and agencies as well as
investment-grade corporate securities. Results assume the reinvestment of
all income and capital gains distributions.
(3) Debt rated AA by Standard & Poor's differs from the highest rated issues
only in small degree.
(4) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
56
<PAGE> 57
MAINSTAY VP GROWTH EQUITY PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The U.S. equity market experienced its fifth consecutive year of double-digit
returns in 1999. Strong domestic economic growth and impressive corporate
earnings gains combined with modest inflation to positively influence the
market, sending equity valuations to historically high levels, despite rising
interest rates.
In retrospect, we believe that 1999 will be remembered as a year in which
momentum investing generated superior returns. Investors continued to pay
increasingly higher prices for future earnings growth potential, while virtually
ignoring many relatively cheaper stocks with more predictable earnings trends.
This environment created a favorable backdrop for new equity issues, the
majority of which came from the technology and Internet-related sectors. These
new issues received a good deal of media attention, as investors placed extreme
valuations on a small number of stocks with limited operating history.
Favorable supply/demand dynamics also became a dominant influence in 1999,
benefiting the U.S. equity market overall. Demand was bolstered by the continued
growth of U.S. equity mutual funds and from inflows of foreign money due to the
strength of the U.S. dollar. At the same time, supply contracted with a level of
merger and acquisition activity in 1999 that surpassed the previous year's
record pace.
PORTFOLIO REVIEW
For the twelve months ended December 31, 1999, the MainStay VP Growth Equity
Portfolio returned 29.96%. The Portfolio outperformed the S&P 500(R) Index(1)
return of 21.04% for the same period but underperformed the average Lipper(2)
Variable Products Growth Portfolio, which returned 31.47% during the same
period.
Our ability to reposition the Portfolio's blend of value and growth stocks and
shift the Portfolio's style emphasis during the year had a positive impact on
the Portfolio's performance while helping us manage volatility.
STRATEGIC STYLE AND SECTOR ALLOCATION
The Portfolio entered 1999 with a strong growth bias. Early in March, however,
we began moving into some value-oriented stocks, as corporate earnings started
to come in ahead of expectations. The market maintained its value bias through
mid-June, when growth stocks, led by technology issues, reestablished their
market leadership. We moved the Portfolio's holdings back toward more
growth-oriented equities as soon as it became apparent that the market's move
into traditional value stocks was going to be short-lived, despite continued
strong earnings growth. Although value stocks have historically outperformed
when earnings are accelerating, we believed that the underlying growth trend in
the technology sector would enable that group to outpace traditional value
stocks in this cycle.
Given this view, we moderately overweighted the Portfolio in technology, the
market's best performing sector, through most of the year. Although Internet
stocks gathered most of the headlines in 1999, the Portfolio profited by
investing primarily in Internet-infrastructure companies, enabling the growth of
this medium. We also added to the Portfolio's positions in the semiconductor
industry, where we saw favorable supply/demand dynamics that we believe may
remain in place throughout the year 2000.
One of the Portfolio's best-performing holdings was Nortel Networks (+304%), a
telecommunications equipment manufacturer that benefited from its ability to
offer integrated network solutions spanning data and telephony. Another strong
performer for the Portfolio was Sun Microsystems (+261%), a leading network
integration company that has been a major beneficiary of the ongoing growth in
servers. Texas Instruments (+126%) is a leading semiconductor manufacturer that
capitalized on the growth in digitalization. Finally, two companies that we
highlighted last year, EMC (+157%), the dominant provider of memory storage for
computers, and Cisco Systems (+130%), the preeminent provider of networking and
communications equipment, were once again among the Portfolio's strongest
performers in 1999.
The Portfolio's most significant purchase during the year was Cendant, a
franchiser and direct marketer. We bought the stock based upon the company's
attractive relative valuation and our expectation that the company's
well-publicized shareholder lawsuit would be favorably resolved. The Portfolio
was rewarded with a 34% return from the stock, as the lawsuit ended positively
for the company and Liberty Media made a $400 million investment in Cendant.
Perhaps the worst performers in the Portfolio were Kroger and Safeway, two of
the nation's largest supermarket operators, which suffered as investors turned
their attention to faster-growing industries. We sold the Portfolio's position
in Safeway in November. We continue to hold Kroger, believing that the market
has undervalued its future earnings growth potential. Impacted by rising
interest rates, Freddie Mac, the government sponsored mortgage provider, was
another poor performer, despite strong earnings performance. Our most
significant sale of
57
<PAGE> 58
the year was Iridium World Communications, a satellite phone provider. Having
sold the position in February at about $25 per share, the prudence of our action
was proven when the company filed for bankruptcy later in 1999, rendering its
stock virtually worthless.
LOOKING AHEAD
We maintain a positive outlook for the year 2000. At the same time, however, we
believe that U.S. equity market performance will likely be more moderate than in
the last few years. First, although inflation at the consumer level has remained
modest throughout the current economic expansion, any Federal Reserve action may
impact the market. Second, while we continue to believe in the role of
technology and the Internet over the long term, we are concerned about the
valuation parameters attached to many of these stocks. Eventually, these
companies will have to be evaluated for their real earnings and profitability
and not solely on potential revenue growth. We intend to seek companies that are
early adapters of technology in all sectors, as we believe they will be the
greatest beneficiaries of the information revolution. We also plan to remain
attentive to valuations as we search for attractive growth stocks trading at
discounts to their true potential. No matter where the markets may move, the
Portfolio will continue to seek long-term growth of capital, with income as a
secondary consideration.
James Agostisi
Patricia S. Rossi
Portfolio Managers
Madison Square Advisors LLC
$10,000 INVESTED IN THE
MAINSTAY VP GROWTH EQUITY PORTFOLIO
ON 1/23/84 VS S&P 500(R) AND
THE CONSUMER PRICE INDEX(3)
[LINE CHART]
<TABLE>
<CAPTION>
GROWTH EQUITY PORTFOLIO S&P 500(R) CONSUMER PRICE INDEX
----------------------- ---------- --------------------
<S> <C> <C> <C>
1/23/84 10000.00 10000.00 10000.00
1984 9824.00 10755.00 10365.00
1985 12162.10 14199.80 10758.90
1986 12648.60 16833.90 10877.20
1987 13035.60 17712.60 11359.10
1988 14791.50 20691.90 11861.10
1989 18632.90 27216.00 12421.70
1990 17535.40 26350.60 13171.10
1991 23472.90 34405.90 13574.10
1992 26423.50 37051.80 13967.80
1993 30046.10 40753.20 14351.90
1994 30406.70 41278.90 14735.10
1995 39273.30 56791.50 15065.20
1996 48895.20 69829.60 15563.80
1997 61975.00 93111.00 15828.00
1998 78454.00 119723.00 16083.00
1999 101959.00 144912.00 16514.00
</TABLE>
<TABLE>
<S> <C> <C> <C>
One Year: 29.96% Five Years: 27.38% Ten Years: 18.53% Since Inception: 15.68% (1/23/84)
</TABLE>
(1) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(2) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(3) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
58
<PAGE> 59
MAINSTAY VP INDEXED EQUITY PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
In 1999, the S&P 500(R) Index(1) appreciated more than 20% for a record fifth
consecutive year. Once again, large-capitalization growth-oriented stocks
outperformed their value counterparts during most of the year.
The S&P 500(R) Index was bolstered by a fourth-quarter rally driven by the
technology sector. In fact, the real division in the market during 1999 was not
based on investment style but rather whether stocks were tied to the "new
economy" with close relations to technology. For example, technology stocks such
as QUALCOMM, Sprint PCS, and Nextel Communications at least tripled in value,
while traditional blue chip bellweathers such as Coca-Cola, Gillette, Ford
Motor, and Merck each posted losses for the year. Interestingly, the number of
S&P 500(R) Index stocks that declined in value in 1999 exceeded the number that
appreciated, rendering performance in the U.S. stock market very narrow indeed.
Two other factors that impacted the market in 1999 were tame inflation and
strong corporate earnings, which combined to create an aptly named "Goldilocks"
economy. In this environment, the stock market became rather reactive to the
actions of the Federal Reserve Board. The Federal Reserve's three interest rate
cuts in the fall of 1998 set the stage for the market's strong performance in
the first half of 1999. By late spring, however, Federal Reserve Chairman Alan
Greenspan began expressing concern that economic growth was perhaps too strong
and that inflationary pressures may not be far behind. Seeking to keep inflation
in check, the Federal Reserve raised the targeted federal funds rate by 0.25%
once on June 30 and again on August 24, 1999. The stock market quickly gave back
some of its gains from the prior six months. The trend again reversed itself in
October with the release of lower-than-expected Consumer Price Index(2) and
Gross Domestic Product statistics. With the threat of inflationary pressure
apparently diminishing, even a third Federal Reserve tightening on November 16,
1999, couldn't prevent the market from surging almost 15% in the final three
months of the year.
PERFORMANCE REVIEW
For the twelve months ended December 31, 1999, the MainStay VP Indexed Equity
Portfolio returned 20.70%. For the same period, the Portfolio slightly
outperformed the average Lipper(3) Variable Products S&P 500(R) Index Objective
Portfolio, which returned 20.48%, and slightly underperformed the S&P 500(R)
Index, which returned 21.04%. Investors should anticipate a slight lag, since
the Portfolio incurs real-world expenses that a hypothetical investment in an
index does not.
KEY SECTORS AND SECURITIES
Technology dominated S&P 500(R) Index performance by virtually any measure.
Within the technology sector, the highest returns came from electronic
instruments, communications equipment, semiconductors, and computer software.
QUALCOMM, a high-speed communications equipment provider, topped the list of
high flyers in 1999, up more than 2,600% over the course of the year. Still,
QUALCOMM added just 0.68% to the S&P 500(R) Index return, since it first joined
the Index in July 1999. Three other communications-related companies were among
the Index's top-performing stocks: Sprint PCS (+343.24%), Nextel Communications
(+336.51%), and Nortel Networks (+304.00%). A chip maker, LSI Logic (+318.60%),
rounded out the top five. The metals industry, in the midst of rapid
consolidation, also did well in 1999, especially aluminum and miscellaneous
metals. Based on their Index weightings, the individual securities with the
greatest impact on the S&P 500's performance included Microsoft (+68.36%), Cisco
Systems (+130.84%), General Electric (+51.72%), Wal-Mart Stores (+69.76%), and
Oracle (+289.78%).
At the other end of the spectrum, pollution control, a rather small S&P 500(R)
Index component, was the worst-performing sector in 1999, with a loss of 55.67%.
Tobacco, down 54.24%, suffered from ongoing litigation and the threat of new
taxes. Philip Morris, in particular, was one of the Index's worst performers,
returning -57.01%. Makers of office equipment (-50.87%), operators of retail
stores (-42.12%), and food distributors (-40.77%), also performed poorly. Based
on their Index weightings, pharmaceuticals, especially Pfizer (-22.15%) and Eli
Lilly (-25.18%), and regional banks, particularly First Union (-45.84%), had the
greatest negative impact on the performance of the Index and the Portfolio. The
hardest-hit individual stocks, due primarily to missed earnings, were Service
Corp. International (-81.77%), Rite Aid (-77.64%), McKesson HBOC (-71.54%), and
HEALTHSOUTH (-65.18%).
The composition of the S&P 500(R) Index itself remained relatively constant
through the first six months of 1999, with just a few changes resulting from
merger and acquisition activity. As a result of market appreciation, however,
the characteristics of the Index changed considerably during the second half of
the year. As of December 31, 1999, technology represented more than 25% of the
Index, a larger weighting than at any point in
59
<PAGE> 60
the past, paralleling the increasing importance of technology within the global
economy. The Index was also more concentrated in large-capitalization names than
it was a year ago.
LOOKING AHEAD
The extraordinary performance of U.S. stocks these past several years has left
the market at valuation levels never before seen, especially when measured using
such traditional yardsticks as price-to-earnings and price-to-book ratios. Some
critics view the high valuations like past bubbles that formed and later burst
in real estate, biotechnology stocks and Japanese equities. To more optimistic
investors, the market has just begun to enter a new era in which technology has
rendered traditional valuation measures obsolete.
Of course, as index investors, we do not evaluate or respond to changing
economic and market conditions or concern ourselves with market psychology.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek to provide investment results that correspond to the total return
performance (and reflect reinvestment of dividends) of publicly traded common
stocks represented by the Standard & Poor's 500 Composite Stock Price Index(R).
Jefferson C. Boyce
Stephen B. Killian
Portfolio Managers
Monitor Capital Advisors LLC
$10,000 INVESTED IN THE
MAINSTAY VP INDEXED EQUITY PORTFOLIO
ON 1/29/93 VS S&P 500(R) AND
THE CONSUMER PRICE INDEX
[LINE CHART]
<TABLE>
<CAPTION>
INDEXED EQUITY PORTFOLIO S&P 500(R) CONSUMER PRICE INDEX
------------------------ ---------- --------------------
<S> <C> <C> <C>
10000.00 10000.00 10000.00
1993 10853.00 11008.00 10275.00
1994 10935.50 11149.00 10549.30
1995 14969.60 15338.80 10785.60
1996 18325.80 18857.50 11142.60
1997 24344.00 25148.00 11332.00
1998 31280.00 32336.00 11515.00
1999 37754.00 39139.00 11823.00
</TABLE>
One Year: 20.70% Five Years: 28.12% Since Inception: 21.15% (1/29/93)
(1) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. and have been
licensed for use by Monitor Capital Advisors LLC. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation and
Standard & Poor's makes no representation regarding the advisability of
purchasing the product. The S&P 500(R) is an unmanaged index considered
generally representative of the U.S. stock market. Results assume the
reinvestment of all income and capital gains distributions.
(2) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
(3) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
Unlike other portfolios that generally seek to beat market averages, often with
unpredictable results, index portfolios seek to match the return of their
respective indexes.
60
<PAGE> 61
AMERICAN CENTURY INCOME & GROWTH PORTFOLIO(1)
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
For the year ended December 31, 1999, the American Century Income & Growth
Portfolio had a return of 17.59%, lagging the 21.04% return for its benchmark,
the S&P 500(R) Index(2), while outdistancing the 9.78% return of the average
Lipper(3) Variable Products Equity Income Portfolio.
The Portfolio gained 13.85% in the fourth quarter of 1999, lagging the 14.88%
return of the S&P 500(R) Index. For the same period, the Portfolio outperformed
the 6.88% return of the average Lipper Variable Products Equity Income
Portfolio, ranking the Portfolio in the top quartile of its peers.
For most of the year, growth stocks continued to soundly beat value stocks and
led the way to market highs. Overall mid- and small-cap growth stocks
outperformed large-cap growth for the year while large-cap value stocks
outperformed mid-cap value, which outperformed small-cap value for the year.
The Portfolio has always incorporated both growth and value measures in its
stock selection, as it seeks consistent long-term performance. In such a
bifurcated market, where growth and value have had such wide performance
margins, the Portfolio's exposure to growth aspects of the market has benefited
the Portfolio. Such performance is reflected in the top contributing sectors and
industries to Portfolio performance for the year.
Stock selection among shares in the technology sector boosted absolute Portfolio
performance for the year. The Portfolio's technology weighting was similar to
that of the S&P 500(R) Index. The other top contributors to performance by
sector were stocks in the telecommunication and financial sectors. Stocks in the
electrical equipment industry contributed the most to annual return followed by
computer software, computer hardware, and semiconductors.
While most technology and technology-oriented sectors surged in 1999, the
financial sector overall performed reasonably well based on prospects for global
recovery and agreement in Congress on the financial services industry reform
legislation.
An electrical equipment company that develops and manufactures communications
technologies and products added value for the year. The company that developed a
dominant wireless phone technology, known as CDMA, climbed in price 25-fold for
the year, a sign of investor optimism about growth in wireless phone usage.
Broadly, stocks from the consumer (non-cyclical), utility, and healthcare
sectors, such as those from the food & beverage, property and casualty, and
electrical utility industries, detracted most from annual performance.
As technology stocks set record returns in the year, stocks in the bank and food
& beverage industries were virtually shunned by investors. Rising interest rates
and pressure on credit card earnings put pressure on the bank group as a whole.
The defensive nature of the food group combined with the historically slower
growth of the industry caused this industry to be a source of funds as investors
fueled the tech stock rally. In addition, rising interest rates hurt utility
stocks and warm temperatures continued to pressure the gas and electric utility
stocks. Only utility stocks having key telecom assets held their own.
In retrospect, the gap in annual return of the Portfolio versus the S&P 500(R)
Index can be explained by the events of the first quarter 1999. In the first
quarter, the main reason for the Portfolio's underperformance, compared with the
S&P 500(R) Index, was the dominant performance of a small group of high
multiple, large-cap growth stocks, many of which are heavily represented in the
S&P 500(R) Index. The Portfolio's smaller-cap and value-oriented stocks were a
drag on performance relative to the S&P 500(R) Index for the first quarter.
Entering the second quarter of 1999, conclusions drawn from ongoing research
efforts resulted in a tightening of sector and industry weightings and an
emphasis on individual stock selection within the Portfolio. The investment team
intends to continue the industry-neutral approach, using the disciplined stock
selection process to identify the most attractive stocks within each industry.
The Portfolio's investment process is made up of two primary steps. The first is
stock valuation and ranking (return generation), and the second is portfolio
construction (including risk control). Other important steps include stock
analysis by the investment team, portfolio optimization, and trading. The
portfolio managers are involved throughout the whole investment process.
John Schniedwind
Kurt Borgwardt
Portfolio Managers
American Century Investment Management, Inc.
61
<PAGE> 62
$10,000 INVESTED IN THE
AMERICAN CENTURY INCOME & GROWTH PORTFOLIO
ON 5/1/98 VS S&P 500(R) AND
THE CONSUMER PRICE INDEX(4)
[LINE CHART]
<TABLE>
<CAPTION>
AMERICAN CENTURY INCOME
& GROWTH PORFOLIO S&P 500(R) CONSUMER PRICE INDEX
----------------------- ---------- --------------------
<S> <C> <C> <C>
5/1/98 10000.00 10000.00 10000.00
12/31/98 10960.00 11171.00 10084.00
12/31/99 12888.00 13521.00 10388.00
</TABLE>
One Year: 17.59% Since Inception: 16.40% (5/1/98)
(1) American Century Income & Growth Portfolio is a Portfolio of the MainStay VP
Series Fund, Inc. American Century Investment Management, Inc. serves as
sub-advisor to this Portfolio.
(2) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(3) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(4) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
62
<PAGE> 63
DREYFUS LARGE COMPANY VALUE PORTFOLIO(1)
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
During the year ended December 31, 1999, mega-cap growth stocks dominated the
stock market, that small handful of the largest companies generally selling at
extremely high levels of valuation by almost any historic standard. Value stocks
enjoyed only a brief period in the sun during mid-April. For the year, value
stocks significantly underperformed growth stocks. The Dreyfus Large Company
Value Portfolio normally invests at least 65% of its total assets in equity
securities of large capitalization domestic and foreign issuers which are
characterized as "value" companies. Given that the Portfolio is managed in a
disciplined value style and that growth stocks dominated stock market
performance during this annual period, the Portfolio significantly
underperformed the S&P 500(R) Index(2).
The broad based index for the Portfolio changed about mid-year from the Wilshire
Large Company Value Index(3) to the Russell 1000(R) Value Index(4)*. For the
twelve month period ended December 31, 1999, the Portfolio returned 6.73%
compared to 7.35% for the Russell 1000(R) Value Index, its current broad based
index, and 1.71% for the Wilshire Large Company Value Index.
While value stocks underperformed for the year, we believe that investment
conditions may be favorable for value stock outperformance going forward. The
valuation differences between growth stocks and value stocks are at historic
extremes. Timing, however, is always uncertain. Outperformance might occur as it
did in April of 1999, manifested by a sudden and severe move into value priced
securities, or it could change gradually.
We see value in all economic sectors of the stock market, and continue to manage
the Portfolio in a disciplined value style.
Timothy M. Ghriskey
Portfolio Manager
The Dreyfus Corporation
$10,000 INVESTED IN THE
DREYFUS LARGE COMPANY VALUE PORTFOLIO
ON 5/1/98 VS RUSSELL 1000(R) VALUE INDEX,
WILSHIRE LARGE COMPANY VALUE INDEX
AND THE CONSUMER PRICE INDEX(5)
[LINE CHART]
<TABLE>
<CAPTION>
DREYFUS LARGE
COMPANY VALUE THE WILSHIRE LARGE RUSSELL 1000(R) VALUE
PORTFOLIO COMPANY VALUE INDEX CONSUMER PRICE INDEX INDEX
------------- ------------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
5/1/98 10000.00 10000.00 10000.00 10000.00
12/31/98 10283.00 10075.00 10084.00 10000.00
12/31/99 10975.00 9519.00 10388.00 11043.00
</TABLE>
One Year: 6.73% Since Inception: 5.73% (5/1/98)
* The change from the Wilshire Large Company Value Index to the Russell
1000(R) Value Index was effected because the composition of the Russell
1000(R) Value Index is a more appropriate comparison for the Portfolio.
(1) Dreyfus Large Company Value Portfolio is a Portfolio of the MainStay VP
Series Fund, Inc. The Dreyfus Corporation serves as sub-advisor to this
Portfolio.
(2) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(3) Source: Wilshire Associates: The Wilshire Large Company Value Index is
constructed using a blend of price-to-book and forecast price-to-earnings
ratios. The largest 750 stocks in the Wilshire 5000 are ranked based on a
style score that is 75% price-to-book and 25% forecast price-to-earnings
ratio. The universe is divided so that companies that represent half of the
total capitalization fall into growth and the remainder are placed into
value.
63
<PAGE> 64
(4) Russell 1000(R) Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values.
(5) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
64
<PAGE> 65
EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO(1)
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
We are pleased to report that 1999 was a phenomenal year for the Eagle Asset
Management Growth Equity Portfolio (the "Portfolio"), with the Portfolio
returning 65.50% versus a return of 21.04% for the S&P 500(R)(2).
The biggest positive contribution to the Portfolio's performance was our
decision early in the year to reduce the Portfolio's overall exposure to retail
and financial services stocks and to add to the Portfolio's overall technology
and health care weightings. We cut our exposure in retail and financial services
from a combined 50% to approximately 10% of the Portfolio, because we felt that
advances in e-commerce were putting pressure on the margins of many of the
traditional "brick-n-mortar" retail and financial services companies.
We channeled the proceeds from such sales primarily into technology and health
care stocks as we increased the combined weighting of these two sectors from 35%
to 50% of the Portfolio. We remain very optimistic about the near term and
longer term fundamentals for technology and telecommunications stocks, as they
continue to excel in anticipation of the ongoing build out of the Internet and
the telecom wireless infrastructure. We are also very optimistic about the
long-term prospects for the health care sector, which should continue to benefit
from the aging of the Baby Boom Generation and their increasing health care
needs.
The first quarter of 1999 was excellent for both the U.S. equity markets and the
Portfolio, both benefiting from the push toward technology and Internet stocks.
The Portfolio was up 10.72% for the quarter, while the S&P 500(R) was up 4.99%.
Some of the Portfolio's best performing stocks for the quarter included
technology shares such as Microsoft, EMC and Dell Computer. Certain financial
stocks such as Citigroup and Morgan Stanley Dean Witter also performed extremely
well. The underperformers included health care giant Bristol-Myers Squibb and
mortgage-backers Freddie Mac and Fannie Mae.
The Portfolio had a decent second quarter despite the market leadership's
apparent rotation out of large-cap growth names and into large-cap value names
as a worldwide economic rebound led to fears of rising inflation and interest
rates. As a result, large-cap growth stocks with higher price/earnings ratios
were hit particularly hard, correcting nearly 15% during a three-week period in
April. While this change in leadership hindered the Portfolio's performance
early in the quarter, we used the pull back as an opportunity to add to some of
our favorite names, including Cisco Systems, America Online and Texas
Instruments in technology; Pfizer, Bristol-Myers Squibb and Medtronic in health
care; and Charles Schwab and First Data in financial services. The Portfolio was
up 3.38% for the second quarter, while the S&P 500(R) was up 7.06% for the same
time period.
While a roll over in market leadership was experienced in the second quarter,
the tides turned again and large-cap growth and technology stocks reasserted
their market leadership in the third quarter. Although the Portfolio experienced
a 0.26% dip during the third quarter, it outperformed the S&P 500(R) by more
than 5%. Much of the Portfolio's positive performance was the result of
technology gains as Dell Computer, Cisco Systems and National Semiconductor all
had strong quarters. The financial services, pharmaceutical and consumer non-
durable sectors were responsible for much of the Portfolio's negative
performance during the third quarter.
The fourth quarter was the strongest quarter yet experienced by the Portfolio as
it returned 44.97% for the quarter versus 14.88% for the S&P 500(R). Technology
and telecom stocks again led the way, but major positive contributions also came
from the Portfolio's consumer discretionary and financial services holdings.
In the technology sector, Portfolio holdings such as Candence Design Systems,
Cisco Systems, and Microsoft provided strong positive contributions. Consumer
discretionary names such as retailers Home Depot and Wal-Mart Stores,
advertising company Omnicom Group and media company Time Warner also excelled
during the quarter. Financial services holdings Citigroup, American
International Group and American Express -- all of which have significant
overseas operations -- rebounded from lows experienced earlier in the year and
took advantage of the worldwide economic turnaround that began to accelerate at
the end of the year.
One of the worst performing sectors in the Portfolio for the fourth quarter was
health care. A number of companies in this sector have been depressed due to
uncertainty over the Medicare reimbursement issue. Blue chip companies such as
Guidant, Pfizer and Bristol-Myers Squibb all had a negative impact on the
Portfolio. One bright spot amid the weakness in the health care sector was
Johnson & Johnson.
In 1999, investors' sentiment shifted from worrying about the potential effects
of deflation caused by a global economic meltdown to a focus on inflation. The
U.S. Federal Reserve raised interest rates three times in 1999 when it appeared
that the U.S. economy might overheat due to its torrid pace of growth. We do not
believe that inflation will be a major factor in the U.S. economy in the year
2000 as there is still excess manufacturing capacity worldwide and the Internet
continues to exert downward pressure on prices. Although short-term issues
65
<PAGE> 66
may create a choppy market, we remain bullish on the intermediate and
longer-term fundamentals. Thus, we believe the year 2000 will be another year of
the "stock picker" and may benefit the world class, multinational companies that
comprise the Portfolio.
Ashi Parikh
Portfolio Manager
Eagle Asset Management, Inc.
$10,000 INVESTED IN THE
EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO
ON 5/1/98 VS S&P 500(R) AND
THE CONSUMER PRICE INDEX(3)
[LINE CHART]
<TABLE>
<CAPTION>
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO S&P 500(R) CONSUMER PRICE INDEX
----------------------- ---------- --------------------
<S> <C> <C> <C>
5/1/98 10000.00 10000.00 10000.00
12/31/98 11785.00 11171.00 10084.00
12/31/99 19504.00 13521.00 10388.00
</TABLE>
One Year: 65.50% Since Inception: 49.14% (5/1/98)
(1) Eagle Asset Management Growth Equity Portfolio is a Portfolio of the
MainStay VP Series Fund, Inc. Eagle Asset Management, Inc. serves as
sub-advisor to this Portfolio.
(2) "Standard & Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(3) The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
66
<PAGE> 67
GLOSSARY
ASSET-BACKED SECURITIES: Securities backed by loan paper, receivables, or an
anticipated income stream from the sale of merchandise or services. The
securities are generally originated by banks, credit card companies, or other
providers of credit and often "enhanced" by a bank letter of credit or by
insurance from an institution other than the issuer.
BASIS POINT: One hundredth of one percent in the yield of an investment, i.e.,
100 basis points equals 1%.
BOTTOM-UP INVESTING: Security selection based on the specific portfolio
fundamental merits of individual issues. The opposite of "top-down" investing,
which starts with general economic trends, compares market sectors, and uses
relative security values to narrow the range of issues to examine.
BULL MARKET/BEAR MARKET: A bull market occurs when security prices are rising;
a bear market occurs when security prices decline. A bullish attitude therefore
suggests a positive outlook, while a bearish attitude represents a negative view
of the market or the opportunities it may present.
CALL OPTION: A security that gives its holder the right, but not the
obligation, to buy 100 shares of common stock at a fixed price (the option's
strike price) for a fixed period of time.
CALL RISK: A bondholder's risk that the bond may be redeemed by the issuer
prior to maturity.
CAPITALIZATION: The amount of outstanding equity and debt a company has issued.
Companies may vary greatly in the amount of equity capital they have raised, and
their capitalization may change with new issues or stock repurchases.
COMMERCIAL PAPER: Short-term obligations with maturities ranging from 2 to 270
days issued by banks, corporations, and other borrowers to investors with
temporarily idle cash. Such instruments are unsecured and usually discounted,
although some are interest-bearing. They can be issued directly -- direct
issuers do it that way -- or through brokers equipped to handle the enormous
clerical volume involved. Issuers like commercial paper because the maturities
are flexible and because the rates are usually marginally lower than bank rates.
Investors -- actually lenders, since commercial paper is a form of debt -- like
the flexibility and safety of an instrument that is issued only by top-rated
concerns and is nearly always backed by bank lines of credit. Both Moody's and
Standard & Poor's assign ratings to commercial paper.
COMMODITIES: Bulk goods, such as grains, precious metals, industrial metals,
and foods traded on a commodities exchange.
CREDIT RISK: The risk that the issuer of a security may go into bankruptcy or
default on payments, causing the investor to lose all or part of the investment.
CYCLICALS (CYCLICAL STOCK): A security or stock that tends to rise quickly with
economic upturns and fall quickly when the economy slows. Noncyclical
industries, such as food, insurance, and pharmaceuticals, are likely to have
more consistent performance regardless of economic changes.
DURATION: A measure of price sensitivity, which adjusts for the time value of
the payments investors will receive and which takes into account interest
payments as well as principal payments. Duration is a better gauge of
interest-rate sensitivity than average maturity alone.
EARNINGS PER SHARE: The portion of a company's profit allocated to each share
of outstanding common stock.
EMERGING MARKETS: Countries with smaller or more recently established capital
markets.
FEDERAL RESERVE BOARD: The seven member governing board of the Federal Reserve
System, which is the central bank of the United States. The Board sets policies
on reserve requirements, bank regulations, sets the discount rate, tightens or
loosens the availability of credit in the economy and regulates the purchase of
securities on margin.
FIRST-TIER/SECOND-TIER: Money market instruments in the highest rating category
by two or more major rating agencies are called first-tier or top-tier
securities, while securities in the second-highest rating category by two or
more major rating agencies are referred to as second-tier securities.
FLOATING RATE NOTE: Debt instrument with a variable interest rate. Interest
adjustments are made periodically, often every six months, and are tied to a
money-market index such as Treasury bill rates. Floating rate notes usually have
a maturity of about five years. They provide holders with protection against
rises in interest rates, but pay lower yields than fixed rate notes of the same
maturity. Also known as a FLOATER.
67
<PAGE> 68
GROSS DOMESTIC PRODUCT (GDP): The total value of goods and services produced in
the U.S. economy over a particular period of time, usually one year. The GDP
growth rate measures strictly domestic output and is a primary indicator of the
status of the economy.
GROWTH VERSUS VALUE: Growth investments typically include stocks with rising
prices and positive earnings trends. Value investments typically include
equities that are currently trading below their fair market value, even if they
have the potential to increase in value over time.
HIGH MULTIPLE ISSUES: Represent the highest price-to-earnings companies in the
market. They are considered expensive relative to their earnings.
INFLATION/DEFLATION: Inflation is an increase in the cost of goods and services
over time. As prices rise, the purchasing power of the dollar declines.
Deflation is a reduction in the cost of goods over time. When deflation occurs,
the purchasing power of the dollar increases.
LEVERAGED DERIVATIVES: Financial instrument whose value is based on another
security, such as an option, and whose purchase has been financed with credit.
LIQUIDITY: Securities are said to be liquid when they can be easily bought or
sold in large volume without substantially affecting their price. Some
securities, such as private placements or stocks that have few shares
outstanding are considered illiquid either because there are few market
participants interested in buying or selling the securities or because purchases
and sales may cause wide price swings.
MERGERS AND ACQUISITIONS: A merger is a combination of two companies. An
acquisition is the purchase of a company, division, or business unit. Companies
that engage in mergers and acquisitions often pay shareholders a premium, or an
amount over the current share price, to complete the transaction quickly and
under favorable terms.
MORTGAGE-BACKED SECURITIES: Securities representing interests in "pools" of
mortgages in which principal and interest payments by the holders of underlying
fixed- or adjustable-rate mortgages are, in effect, "passed through" to
investors (net of fees paid to the issuer or guarantor of the securities).
PREPAYMENT: When mortgage or loan holders repay their obligations before they
mature, shortening the stream of interest payments investors receive.
PRICE-TO-BOOK VALUE RATIO: Comparison of a company's market price per share and
its book value per share to determine how much above its "real" value the
company is selling.
PRICE-TO-EARNINGS RATIO: The price of a stock divided by its earnings per
share.
PUT OPTION: A security that gives its holder the right to sell 100 shares of
common stock at a fixed price for a fixed period of time.
REAL ESTATE INVESTMENT TRUST (REIT): A publicly traded company that purchases
and manages a portfolio of real estate properties for the benefit of
shareholders.
RESTRUCTURING: Any action designed to improve the overall financial structure,
labor relations, or productivity of a company. Restructuring may include such
steps as changing management, investing in new plant and equipment, engaging in
mergers and acquisitions, or taking other action to increase output or lower
costs.
SPIN-OFF: A form of corporate divestiture that results in a subsidiary or
division becoming an independent company.
SPLIT ISSUES (SPLIT-RATED ISSUES): Securities rated top tier by one credit
rating agency and second tier by another.
SUPPLY AND DEMAND: In the bond market, supply is influenced by the amount of
new securities issued and the amount of bonds investors wish to sell. Demand
reflects the amount of bonds investors wish to buy, which may decrease when
other markets offer greater opportunities.
In the stock market, an oversupply of a product or service can reduce demand and
lower stock prices. When demand increases relative to supply, stock prices may
recover.
TIGHTEN/EASE: When the Federal Reserve Board moves to raise interest rates, it
is said to be "tightening" or making borrowing more expensive. When it moves to
lower rates, it is said to be "easing" or making borrowing more affordable.
68
<PAGE> 69
TOTAL RETURN: The performance of an investment with all income and capital
gains reinvested.
VOLATILITY: Fluctuations in the price of securities or markets, up or down,
over a short period of time.
WEIGHTING: The proportion of a portfolio allocated to a specific security,
market sector or country, i.e., a portfolio is said to be overweighted in a
sector or country when that portion of the portfolio is greater than the
sector's general relationship to the market as a whole or the country's total
equities relative to the international equity markets as a whole.
YIELD: The income per share (or current value of a security) paid to investors
over a specified period of time as a percentage of the cost of the security.
Mutual fund yields are expressed as a percentage of the fund's current price per
share.
YIELD CURVE: When interest rates available from various short-, intermediate-,
and long-term securities are plotted on a graph, the resulting line is known as
a yield curve.
YIELD SPREAD: The difference in yield between securities in different market
sectors, such as government and mortgage-backed securities -- or between
different securities in a single sector, such as 2- and 30-year Treasuries or
PRIME-1 and PRIME-2 rated commercial paper.
Y2K: A reference to the Year 2000.
69
<PAGE> 70
(THIS PAGE INTENTIONALLY LEFT BLANK)
70
<PAGE> 71
MAINSTAY VP SERIES FUND, INC.
OFFICERS AND DIRECTORS
Richard M. Kernan, Jr., Chairman,
Chief Executive Officer and Director
Anne F. Pollack, President,
Chief Administrative Officer and Director
Michael J. Drabb, Director
Jill Feinberg, Director
Daniel Herrick, Director
Robert D. Rock, Director and Vice President
Roman L. Weil, Director
John Weisser, Director
John A. Flanagan, Treasurer
Joseph McBrien, Secretary
Richard D. Levy, Controller
INVESTMENT ADVISERS
MacKay Shields LLC
Madison Square Advisors LLC
Monitor Capital Advisors LLC
New York Life Insurance Company
ADMINISTRATOR
New York Life Insurance and Annuity Corporation
CUSTODIANS
The Bank of New York
The Chase Manhattan Bank, N.A.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
71
<PAGE> 72
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (96.0%)+
SHARES VALUE
----------------------------
<S> <C> <C>
BANKS (1.8%)
Firstar Corp. .................. 550,800 $ 11,635,650
Wells Fargo & Co. .............. 532,700 21,541,056
--------------
33,176,706
--------------
BIOTECHNOLOGY (1.7%)
Genentech, Inc. (a)............. 227,000 30,531,500
--------------
BROADCAST/MEDIA (7.3%)
AMFM Inc. (a)................... 365,200 28,576,900
CBS Corp. (a)................... 299,800 19,168,462
Clear Channel Communications,
Inc. (a)....................... 448,500 40,028,625
Comcast Corp.-Class A........... 492,300 24,891,919
Fox Entertainment Group, Inc.
Class A (a).................... 300,000 7,481,250
USA Networks Inc. (a)........... 265,000 14,641,250
--------------
134,788,406
--------------
COMMUNICATIONS--EQUIPMENT
MANUFACTURERS (7.4%)
Cisco Systems, Inc. (a)......... 600,050 64,280,356
JDS Uniphase Corp. (a).......... 104,000 16,776,500
Lucent Technologies Inc. ....... 744,400 55,690,425
--------------
136,747,281
--------------
COMPUTER SOFTWARE & SERVICES
(10.2%)
America Online, Inc. (a)........ 304,300 22,955,631
Compuware Corp. (a)............. 1,001,800 37,317,050
Microsoft Corp. (a)............. 544,200 63,535,350
Oracle Corp. (a)................ 585,400 65,601,388
--------------
189,409,419
--------------
COMPUTER SYSTEMS (7.1%)
EMC Corp. (a)................... 623,400 68,106,450
Sun Microsystems, Inc. (a)...... 821,600 63,622,650
--------------
131,729,100
--------------
ELECTRIC POWER COMPANIES (1.8%)
AES Corp. (The) (a)............. 450,300 33,659,925
--------------
ELECTRICAL EQUIPMENT (2.3%)
General Electric Co. ........... 279,500 43,252,625
--------------
ELECTRONICS--INSTRUMENTATION
(0.5%)
PE Corp-PE Biosystems Group..... 75,000 9,023,438
--------------
ELECTRONICS--SEMICONDUCTORS
(6.5%)
Intel Corp. .................... 482,200 39,691,088
Motorola, Inc. ................. 240,900 35,472,525
Texas Instruments Inc. ......... 461,800 44,736,875
--------------
119,900,488
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
ENTERTAINMENT (1.9%)
Time Warner Inc. ............... 490,100 $ 35,501,619
--------------
FINANCE (2.3%)
Citigroup Inc. ................. 774,872 43,053,826
--------------
FOOD & HEALTH CARE DISTRIBUTORS
(0.5%)
Cardinal Health, Inc............ 200,450 9,596,544
--------------
HEALTH CARE--DRUGS (2.4%)
Merck & Co., Inc. .............. 248,600 16,671,738
Schering-Plough Corp. .......... 643,600 27,151,875
--------------
43,823,613
--------------
HEALTH CARE--MEDICAL PRODUCTS
(2.8%)
Guidant Corp. (a)............... 559,900 26,315,300
Medtronic, Inc. ................ 702,400 25,593,700
--------------
51,909,000
--------------
HEALTH CARE--MISCELLANEOUS
(2.4%)
Amgen Inc. (a).................. 453,500 27,238,344
Johnson & Johnson............... 190,262 17,718,149
--------------
44,956,493
--------------
HOTEL/MOTEL (1.3%)
Carnival Corp. ................. 489,500 23,404,219
--------------
HOUSEHOLD PRODUCTS (2.3%)
Colgate-Palmolive Co. .......... 650,400 42,276,000
--------------
INSURANCE (2.5%)
American International Group,
Inc. .......................... 433,228 46,842,777
--------------
INVESTMENT BANK/ BROKERAGE
(0.8%)
Goldman Sachs Group Inc. ....... 150,000 14,128,125
--------------
LEISURE TIME (2.2%)
Harley-Davidson, Inc. .......... 618,500 39,622,656
--------------
MANUFACTURING--DIVERSIFIED
(6.1%)
Corning Inc. ................... 334,500 43,129,594
Honeywell International,
Inc. .......................... 484,850 27,969,784
Tyco International Ltd. ........ 1,084,000 42,140,500
--------------
113,239,878
--------------
PERSONAL LOANS (1.4%)
Providian Financial Corp. ...... 275,300 25,069,506
--------------
RETAIL (11.1%)
Bed Bath & Beyond Inc. (a)...... 521,600 18,125,600
Circuit City Stores-Circuit City
Group.......................... 658,200 29,660,137
CVS Corp. ...................... 341,900 13,654,631
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
72
<PAGE> 73
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
RETAIL (Continued)
Dollar General Corp. ........... 734,978 $ 16,720,750
Home Depot, Inc. (The).......... 960,450 65,850,853
Kohl's Corp. (a)................ 529,000 38,187,188
Staples, Inc. (a)............... 1,102,200 22,870,650
--------------
205,069,809
--------------
SPECIALIZED SERVICES (3.7%)
Cendant Corp. (a)............... 767,130 20,376,891
IMS Health Inc. ................ 743,800 20,222,062
Omnicom Group Inc. ............. 281,400 28,140,000
--------------
68,738,953
--------------
TELECOMMUNICATIONS (3.9%)
Global Crossing Ltd. (a)........ 330,600 16,530,000
MCI WorldCom, Inc. (a).......... 866,082 45,956,476
Nextel Communications Inc. Class
A (a).......................... 97,000 10,003,125
--------------
72,489,601
--------------
TELEPHONE (1.8%)
ALLTEL Corp. ................... 400,600 33,124,612
--------------
Total Common Stocks
(Cost $1,036,603,651).......... 1,775,066,119
--------------
SHORT-TERM INVESTMENTS (4.8%)
PRINCIPAL
AMOUNT
-----------
COMMERCIAL PAPER (3.5%)
American Express Credit Corp.
6.45%, due 1/5/00.............. $ 6,550,000 6,545,297
Ford Motor Credit Corp.
4.50%, due 1/10/00............. 10,000,000 9,988,747
5.68%, due 1/12/00............. 11,840,000 11,819,441
6.35%, due 1/7/00.............. 6,020,000 6,013,611
General Electric Capital Corp.
5.25%, due 1/25/00............. 10,000,000 9,964,990
6.60%, due 1/13/00............. 10,000,000 9,977,980
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Merrill Lynch & Co.
5.80%, due 1/19/00............. $10,000,000 $ 9,970,986
--------------
Total Commercial Paper
(Cost $64,281,052)............. 64,281,052
--------------
<CAPTION>
SHARES
-----------
<S> <C> <C>
INVESTMENT COMPANY (1.3%)
Merrill Lynch Premier
Institutional Fund............. 23,551,680 23,551,680
--------------
Total Investment Company
(Cost $23,551,680)............. 23,551,680
--------------
Total Short-Term Investments
(Cost $87,832,732)............. 87,832,732
--------------
Total Investments
(Cost $1,124,436,383) (b)...... 100.8% 1,862,898,851(c)
Liabilities in Excess of Cash
and Other Assets............... (0.8) (14,384,876)
---------- -----------
Net Assets...................... 100.0% $1,848,513,975
========== ===========
</TABLE>
- ------------
(a) Non-income producing security.
(b) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(c) At December 31, 1999 net unrealized appreciation was $738,462,468, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $751,933,279 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $13,470,811.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
73
<PAGE> 74
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $1,124,436,383)..... $1,862,898,851
Cash................................... 41,510
Receivables:
Investment securities sold........... 6,877,467
Fund shares sold..................... 5,281,989
Dividends............................ 633,180
--------------
Total assets................... 1,875,732,997
--------------
LIABILITIES:
Payables:
Investment securities purchased...... 25,461,916
Fund shares redeemed................. 684,906
Adviser.............................. 533,859
Administrator........................ 296,588
Custodian............................ 29,871
Directors............................ 1,289
Accrued expenses....................... 210,593
--------------
Total liabilities.............. 27,219,022
--------------
Net assets applicable to outstanding
shares............................... $1,848,513,975
==============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share)
50 million shares authorized......... $ 499,891
Additional paid-in capital............. 1,015,531,594
Accumulated undistributed net realized
gain on investments.................. 94,020,022
Net unrealized appreciation
on investments....................... 738,462,468
--------------
Net assets applicable to outstanding
shares............................... $1,848,513,975
==============
Shares of capital stock outstanding.... 49,989,120
==============
Net asset value per share
outstanding.......................... $ 36.98
==============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends............................ $ 5,903,094
Interest............................. 2,507,496
--------------
Total income................... 8,410,590
--------------
Expenses:
Advisory............................. 5,271,133
Administration....................... 2,928,407
Shareholder communication............ 544,053
Custodian............................ 121,999
Professional......................... 104,168
Directors............................ 59,853
Miscellaneous........................ 53,517
--------------
Total expenses................. 9,083,130
--------------
Net investment loss.................... (672,540)
--------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments....... 162,072,973
Net change in unrealized appreciation
on investments....................... 198,709,054
--------------
Net realized and unrealized gain
on investments....................... 360,782,027
--------------
Net increase in net assets resulting
from operations...................... $ 360,109,487
==============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
74
<PAGE> 75
MAINSTAY VP SERIES FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
-------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income (loss).............................. $ (672,540) $ 1,057,695
Net realized gain on investments.......................... 162,072,973 10,978,637
Net change in unrealized appreciation on investments...... 198,709,054 308,212,084
-------------- --------------
Net increase in net assets resulting from operations...... 360,109,487 320,248,416
-------------- --------------
Dividends and distributions to shareholders:
From net investment income................................ -- (1,091,415)
From net realized gain on investments..................... (67,701,570) (11,013,862)
In excess of net realized gain on investments............. -- (351,381)
-------------- --------------
Total dividends and distributions to shareholders....... (67,701,570) (12,456,658)
-------------- --------------
Capital share transactions:
Net proceeds from sale of shares.......................... 522,943,112 246,918,825
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 67,701,570 12,456,658
-------------- --------------
590,644,682 259,375,483
Cost of shares redeemed................................... (271,402,974) (93,381,647)
-------------- --------------
Increase in net assets derived from capital share
transactions............................................ 319,241,708 165,993,836
-------------- --------------
Net increase in net assets.................................. 611,649,625 473,785,594
NET ASSETS:
Beginning of year........................................... 1,236,864,350 763,078,756
-------------- --------------
End of year................................................. $1,848,513,975 $1,236,864,350
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year........ $ 30.61 $ 22.39 $ 18.39 $ 15.49 $ 11.45
------------ ------------ ------------ ------------ ------------
Net investment income (loss)................ (0.02)(a) 0.03 0.00(b) 0.01 0.06
Net realized and unrealized gain on
investments............................... 7.79 8.51 4.31 2.90 4.04
------------ ------------ ------------ ------------ ------------
Total from investment operations............ 7.77 8.54 4.31 2.91 4.10
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income................ -- (0.03) (0.00)(b) (0.01) (0.06)
From net realized gain
on investments.......................... (1.40) (0.29) (0.31) -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions........... (1.40) (0.32) (0.31) (0.01) (0.06)
------------ ------------ ------------ ------------ ------------
Net asset value at end of year.............. $ 36.98 $ 30.61 $ 22.39 $ 18.39 $ 15.49
============ ============ ============ ============ ============
Total investment return..................... 25.41% 38.14% 23.49% 18.75% 35.78%
Ratios (to average net assets)/
Supplemental Data:
Net investment income (loss).............. (0.05%) 0.11% 0.00%(c) 0.09% 0.57%
Net expenses.............................. 0.62% 0.64% 0.65% 0.73% 0.73%
Expenses (before reimbursement)........... 0.62% 0.64% 0.65% 0.75% 0.90%
Portfolio turnover rate..................... 37% 27% 34% 16% 35%
Net assets at end of year (in 000's)........ $ 1,848,514 $ 1,236,864 $ 763,079 $ 503,622 $ 244,536
</TABLE>
- ------------
(a) Per share data based on average shares outstanding during the period.
(b) Less than one cent per share.
(c) Less than one-hundredth of a percent.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
75
<PAGE> 76
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (103.1%)+
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
ASSET-BACKED SECURITIES (5.1%)
AT&T Corp.
6.14%, due 7/13/00 (a)(b)(c)..... $4,000,000 $ 3,999,797
6.18%, due 8/7/00 (a)(b)(c)...... 3,000,000 2,999,364
New Holland Equipment
Recreation Trust
6.15%, due 11/15/00 (a)(c)....... 3,188,510 3,188,510
Riverwoods Funding Corp.
6.00%, due 2/11/00............... 3,000,000 2,979,500
6.03%, due 1/26/00............... 3,000,000 2,987,437
6.08%, due 1/13/00............... 3,000,000 2,993,920
SBC Communications Inc.
5.80%, due 3/6/00 (a)............ 4,000,000 3,958,111
------------
23,106,639
------------
CERTIFICATES OF DEPOSIT (13.2%)
ABN Amro Bank Chicago
5.50%, due 6/5/00 (c)............ 2,000,000 1,999,590
Bank of North America
6.17%, due 12/6/00 (b)(c)........ 4,000,000 4,005,369
Bayerische Hypo Vereinbank New
York
6.38%, due 5/15/00 (b)(c)........ 4,000,000 3,998,610
Bayerische Landesbank New York
5.12%, due 3/21/00 (c)........... 2,000,000 1,999,074
Commerzbank AG New York
5.01%, due 1/10/00 (c)........... 2,000,000 1,999,995
5.09%, due 2/16/00 (c)........... 2,000,000 1,999,915
5.16%, due 2/25/00 (c)........... 2,000,000 1,999,879
6.39%, due 4/10/00 (c)........... 2,000,000 1,999,783
Deutsche Bank New York
5.02%, due 1/11/00 (c)........... 2,000,000 2,000,021
5.06%, due 2/8/00 (c)............ 2,000,000 1,999,930
5.25%, due 5/18/00 (c)........... 2,000,000 1,998,639
Lloyds Bank PLC New York
5.65%, due 7/17/00 (c)........... 3,000,000 2,999,376
Nationsbank North America
4.99%, due 1/11/00 (c)........... 2,000,000 1,999,995
Rabobank Nederland N.V. New York
5.29%, due 5/19/00 (c)........... 2,000,000 1,999,597
5.60%, due 6/14/00 (c)........... 2,000,000 1,999,566
San Paolo New York
5.90%, due 3/7/00 (c)............ 5,000,000 4,998,074
Societe Generale New York
5.29%, due 3/3/00 (c)............ 2,000,000 1,999,771
Svenska Handelsbanken New York
5.23%, due 3/1/00 (c)............ 2,000,000 1,999,810
UBS AG Stamford Connecticut
5.29%, due 3/1/00 (c)............ 2,000,000 1,999,887
5.34%, due 5/30/00 (c)........... 2,000,000 1,999,605
6.24%, due 12/6/00 (c)........... 5,000,000 4,999,064
Westdeutsche Landesbank New York
6.01%, due 6/6/00 (c)............ 4,000,000 4,000,000
Wells Fargo Co. Series J
6.01%, due 3/10/00 (b)(c)........ 3,000,000 2,998,768
------------
59,994,318
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
COMMERCIAL PAPER (71.3%)
Abbey National North America
5.90%, due 1/5/00................ $3,000,000 $ 2,998,033
6.18%, due 1/10/00............... 4,000,000 3,993,820
Alliance & Leicester PLC
6.03%, due 2/4/00 (a)............ 3,000,000 2,982,915
Allianz of America Finance Corp.
5.80%, due 4/18/00 (a)........... 4,000,000 3,930,400
5.92%, due 3/7/00 (a)............ 4,000,000 3,956,587
American Express Credit Corp.
4.00%, due 1/3/00................ 1,500,000 1,499,667
5.50%, due 2/18/00............... 4,000,000 3,970,667
5.80%, due 1/31/00............... 4,000,000 3,980,667
6.35%, due 1/7/00................ 4,000,000 3,995,767
6.42%, due 1/4/00................ 4,000,000 3,997,860
American General Finance Corp.
5.50%, due 2/9/00................ 4,000,000 3,976,167
5.91%, due 3/13/00............... 4,000,000 3,952,720
5.97%, due 2/10/00............... 3,000,000 2,980,100
ANZ Delaware Inc.
6.00%, due 2/3/00................ 3,000,000 2,983,500
Associates Corp. of North America
5.90%, due 4/3/00................ 4,000,000 3,939,033
5.92%, due 3/3/00................ 4,000,000 3,959,218
Associates First Capital Corp.
6.50%, due 2/1/00................ 4,000,000 3,977,611
Atlantis One Funding Corp.
5.97%, due 2/7/00................ 4,000,000 3,975,457
6.06%, due 1/25/00............... 4,000,000 3,983,840
Bayerische Landesbank New York
6.22%, due 1/5/00................ 4,000,000 3,997,236
BellSouth Telecommunications Inc.
5.80%, due 2/10/00............... 3,200,000 3,179,378
5.88%, due 2/3/00................ 3,000,000 2,983,830
British Telecommunications PLC
5.70%, due 2/28/00............... 3,000,000 2,972,450
5.80%, due 1/28/00............... 3,000,000 2,986,950
5.95%, due 1/20/00............... 3,000,000 2,990,579
Caisse Centrale Desjardins Du
Quebec
6.02%, due 1/19/00............... 3,000,000 2,990,970
6.05%, due 1/18/00............... 3,000,000 2,991,426
Chevron USA Inc.
5.80%, due 1/28/00............... 4,000,000 3,982,600
5.90%, due 2/8/00................ 4,000,000 3,975,089
Cregem North America Inc.
5.90%, due 3/1/00................ 4,000,000 3,960,667
Deutsche Bank New York
6.00%, due 2/2/00................ 2,100,000 2,088,800
Edison International
6.25%, due 2/11/00 (a)........... 5,100,000 5,063,698
6.50%, due 2/4/00 (a)............ 4,000,000 3,975,444
Ford Motor Credit Co.
5.58%, due 2/17/00............... 4,000,000 3,970,860
6.36%, due 1/13/00............... 4,500,000 4,490,460
6.38%, due 4/3/00................ 4,000,000 3,998,924
Formosa Plastics Corp. USA
5.95%, due 3/6/00................ 3,000,000 2,967,771
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
76
<PAGE> 77
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (CONTINUED)
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Franklin Resources Inc.
6.04%, due 3/6/00 (a)............ $3,000,000 $ 2,967,310
6.08%, due 3/17/00 (a)........... 4,000,000 3,948,658
General Electric Capital Corp.
5.25%, due 1/25/00............... 3,000,000 2,989,500
5.79%, due 3/3/00................ 4,000,000 3,960,113
6.00%, due 2/17/00............... 3,000,000 2,976,500
6.02%, due 3/31/00............... 3,000,000 2,954,850
Goldman Sachs Group L.P. (The)
5.92%, due 2/29/00............... 3,000,000 2,970,893
5.98%, due 2/22/00............... 4,000,000 3,965,449
6.00%, due 4/7/00................ 4,000,000 3,935,333
6.04%, due 5/19/00............... 4,000,000 3,906,715
IBM Credit Corp.
5.69%, due 3/20/00............... 3,000,000 2,962,541
International Nederlanden (U.S.)
Funding Corp.
5.77%, due 2/4/00................ 3,000,000 2,983,652
5.88%, due 3/24/00............... 3,000,000 2,959,330
Invensys PLC
6.28%, due 1/24/00............... 4,000,000 3,983,951
KFW International Finance Inc.
5.83%, due 2/14/00............... 4,000,000 3,971,498
5.86%, due 2/3/00................ 3,400,000 3,381,736
5.92%, due 3/24/00............... 3,000,000 2,959,053
6.05%, due 6/12/00............... 4,000,000 3,890,428
Lloyds Banks PLC
5.75%, due 4/3/00................ 4,000,000 3,940,583
Merrill Lynch & Co. Inc.
5.86%, due 1/31/00............... 4,000,000 3,980,467
5.86%, due 2/2/00................ 4,000,000 3,979,164
5.90%, due 2/25/00............... 4,000,000 3,963,944
Morgan (J.P.) & Co. Inc.
5.87%, due 4/14/00............... 3,000,000 2,949,127
6.00%, due 2/24/00............... 3,000,000 2,973,000
Morgan Stanley Dean Witter & Co.
4.55%, due 6/7/00 (b)(c)......... 8,000,000 8,000,000
5.43%, due 1/31/00............... 3,000,000 2,986,425
National Rural Utilities
Cooperative
Finance Corp.
5.75%, due 2/18/00............... 3,000,000 2,977,000
5.87%, due 3/17/00............... 4,000,000 3,950,431
Nationwide Building Society
5.90%, due 2/7/00................ 4,000,000 3,975,744
6.08%, due 1/6/00................ 4,000,000 3,996,622
Pemex Capital Inc.
6.10%, due 3/23/00............... 4,000,000 3,944,422
Petrobras International Finance
Co.
6.07%, due 3/15/00............... 4,000,000 3,950,091
Prudential Funding Corp.
5.70%, due 1/12/00............... 3,000,000 2,994,775
5.90%, due 1/27/00............... 3,000,000 2,987,217
6.00%, due 1/24/00............... 3,000,000 2,988,500
6.04%, due 1/20/00............... 3,000,000 2,990,437
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Quebec (Province of)
5.80%, due 5/26/00............... $4,000,000 $ 3,903,478
5.95%, due 5/26/00............... 4,000,000 3,905,911
Rabobank Netherland N.V.
5.83%, due 6/8/00................ 4,000,000 3,897,003
Receivables Capital Corp.
5.90%, due 2/15/00............... 3,000,000 2,977,875
6.01%, due 1/25/00............... 3,000,000 2,987,980
Salomon Smith Barney Holdings Inc.
5.98%, due 1/19/00............... 4,000,000 3,988,040
6.00%, due 1/21/00............... 4,000,000 3,990,683
6.45%, due 1/14/00............... 4,000,000 3,986,667
San Paolo U.S. Financial Co.
5.85%, due 2/7/00................ 4,000,000 3,975,950
5.86%, due 5/22/00............... 4,000,000 3,907,542
Santander Finance (DE) Inc.
6.03%, due 1/28/00............... 3,000,000 2,986,444
Transportadora De Gas Del Sur S.A.
(TGS)
6.12%, due 3/27/00............... 4,000,000 3,941,520
Unifunding Inc.
5.92%, due 2/4/00................ 4,000,000 3,977,635
Wells Fargo & Co.
5.92%, due 2/1/00................ 3,000,000 2,984,707
6.00%, due 2/9/00................ 4,000,000 3,974,000
6.02%, due 3/21/00............... 4,000,000 3,946,489
Wood Street Funding Corp.
6.05%, due 1/14/00 (a)........... 3,000,000 2,993,446
6.75%, due 1/7/00 (a)............ 4,000,000 3,995,500
Xerox Corp.
5.85%, due 2/14/00............... 4,000,000 3,971,400
------------
332,088,890
------------
FEDERAL AGENCIES (4.8%)
Federal Home Loan Mortgage Corp.
(Discount Note)
5.56%, due 2/23/00............... 4,000,000 3,967,258
Federal Mortgage Corporation
(Discount Note)
5.54%, due 2/15/00 - 2/24/00..... 8,000,000 7,939,060
5.56%, due 1/10/00............... 3,000,000 2,995,830
Federal National Mortgage
Association (Discount Note)
5.53%, due 1/18/00............... 4,000,000 3,989,555
5.59%, due 1/21/00............... 3,000,000 2,990,683
------------
21,882,386
------------
MEDIUM-TERM NOTES (5.5%)
IBM Credit Corp.
5.898%, due 8/7/00............... 3,000,000 2,999,445
Merrill Lynch & Co. Inc.
6.47%, due 2/15/00 (b)........... 2,000,000 2,000,784
Morgan (J.P.) & Co. Inc.
6.42%, due 7/6/00 (b)............ 3,000,000 2,998,707
Morgan Stanley Dean Witter & Co.
6.18%, due 3/10/00 (b)........... 3,000,000 3,000,023
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
77
<PAGE> 78
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (CONTINUED)
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
MEDIUM-TERM NOTES (Continued)
National Rural Utilities
Cooperative
Finance Corp.
6.18%, due 7/14/00............... $4,000,000 $ 3,998,979
Xerox Corp., Series F
5.64%, due 7/14/00............... 2,000,000 1,999,534
------------
16,997,472
------------
<CAPTION>
SHARES
----------
<S> <C> <C>
INVESTMENT COMPANY (3.2%)
Merrill Lynch Premier
Institutional Fund............... 14,518,362 14,518,362
------------
Total Short-Term Investments
(Amortized Cost $468,588,067)
(d).............................. 103.1% 468,588,067
Liabilities in Excess of
Cash and Other Assets............ (3.1) (14,117,837)
---------- ------------
Net Assets........................ 100.0% $454,470,230
========== ============
</TABLE>
- ------------
(a) May be sold to institutional investors only.
(b) Floating rate. Rate shown is the rate in effect at December 31, 1999.
(c) Interest bearing security.
(d) The cost stated also represents the aggregate cost for Federal income tax
purposes.
The table below sets forth the diversification of Cash
Management Portfolio investments by industry.
INDUSTRY
DIVERSIFICATION
<TABLE>
<CAPTION>
AMORTIZED
COST PERCENT +
-------------------------
<S> <C> <C>
Auto Finance................ $ 12,460,244 2.7%
Banks #..................... 140,384,478 30.9
Brokerage................... 60,857,304 13.4
Computer & Office Equipment... 7,961,519 1.8
Conglomerates............... 12,880,963 2.8
Consumer Financial
Services.................. 17,444,627 3.8
Diversified Financial
Services.................. 11,998,979 2.7
Diversified Manufacturing... 3,983,951 0.9
Domestic Oils............... 11,907,780 2.6
Equipment Loans............. 3,188,510 0.7
Federal Agencies............ 21,882,386 4.8
Finance..................... 84,402,889 18.6
Foreign Government.......... 7,809,389 1.7
Insurance................... 10,908,987 2.4
Investment Company.......... 14,518,362 3.2
Special Purpose Finance..... 3,960,667 0.9
Telecommunication
Services.................. 26,070,459 5.7
Utilities................... 15,966,573 3.5
----------- ---------
468,588,067 103.1
Liabilities in Excess of
Cash and Other Assets..... (14,117,837) (3.1)
----------- ---------
Net Assets.................. $454,470,230 100.0%
=========== =========
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
# The Portfolio will invest more than 25% of the market value of its total
assets in the securities of banks and bank holding companies, including
certificates of deposit, bankers' acceptances and securities guaranteed by
banks and bank holding companies.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
78
<PAGE> 79
MAINSTAY VP SERIES FUND, INC.
CASH MANAGEMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(amortized cost $468,588,067).......... $468,588,067
Cash..................................... 58,141
Interest receivable...................... 2,140,306
Fund shares sold......................... 428,729
------------
Total assets..................... 471,215,243
------------
LIABILITIES:
Payables:
Fund shares redeemed................... 16,510,769
Adviser................................ 96,063
Administrator.......................... 76,850
Custodian.............................. 10,472
Directors.............................. 288
Accrued expenses......................... 50,571
------------
Total liabilities................ 16,745,013
------------
Net assets applicable to outstanding
shares................................. $454,470,230
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 600 million shares authorized... $ 4,544,743
Additional paid-in capital............... 449,925,517
Accumulated net realized loss on
investments............................ (30)
------------
Net assets applicable to outstanding
shares................................. $454,470,230
============
Shares of capital stock outstanding...... 454,473,289
============
Net asset value per share outstanding.... $ 1.00
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 17,162,292
------------
Expenses:
Advisory............................... 809,273
Administration......................... 647,418
Shareholder communication.............. 100,025
Professional........................... 45,631
Custodian.............................. 33,562
Directors.............................. 12,774
Miscellaneous.......................... 14,730
------------
Total expenses................... 1,663,413
------------
Net investment income.................... 15,498,879
------------
REALIZED LOSS ON INVESTMENTS:
Net realized loss on investments......... (30)
------------
Net increase in net assets resulting from
operations............................. $ 15,498,849
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
79
<PAGE> 80
CASH MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 15,498,879 $ 9,018,849
Net realized gain (loss) on investments................... (30) 2,765
------------- -------------
Net increase in net assets resulting from operations...... 15,498,849 9,021,614
------------- -------------
Dividends and distributions to shareholders:
From net investment income................................ (15,498,879) (9,018,849)
From net realized gain on investments..................... (141) (2,107)
------------- -------------
Total dividends and distributions to shareholders....... (15,499,020) (9,020,956)
------------- -------------
Capital share transactions:
Net proceeds from sale of shares.......................... 977,607,004 485,909,046
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 16,403,044 8,752,871
------------- -------------
994,010,048 494,661,917
Cost of shares redeemed................................... (771,091,687) (403,892,045)
------------- -------------
Increase in net assets derived from capital share
transactions............................................ 222,918,361 90,769,872
------------- -------------
Net increase in net assets.................................. 222,918,190 90,770,530
NET ASSETS:
Beginning of year........................................... 231,552,040 140,781,510
------------- -------------
End of year................................................. $ 454,470,230 $ 231,552,040
============= =============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997 1996 1995
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of
year...................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------
Net investment income....................... 0.05 0.05 0.05 0.05 0.05
------------ ------------ ------------ ------------ ------------
Less dividends:
From net investment income................ (0.05) (0.05) (0.05) (0.05) (0.05)
------------ ------------ ------------ ------------ ------------
Net asset value at end of year.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============ ============
Total investment return..................... 4.84% 5.18% 5.25% 4.95% 5.59%
Ratios (to average net assets)/Supplemental
Data:
Net investment income..................... 4.79% 5.05% 5.13% 4.92% 5.44%
Net expenses.............................. 0.51% 0.54% 0.54% 0.62% 0.62%
Expenses (before reimbursement)........... 0.51% 0.54% 0.54% 0.64% 0.94%
Net assets at end of year
(in 000's)................................ $ 454,470 $ 231,552 $ 140,782 $ 118,347 $ 87,839
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
80
<PAGE> 81
MAINSTAY VP SERIES FUND, INC.
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
CONVERTIBLE SECURITIES (83.1%)+
CONVERTIBLE BONDS (57.1%)
PRINCIPAL
AMOUNT VALUE
---------------------
<S> <C> <C>
ADVERTISING (0.8%)
Lamar Advertising Co.
5.25%, due 9/15/06................ $ 500,000 $ 731,250
-----------
AUTO PARTS & EQUIPMENT (2.1%)
Mark IV Industries, Inc.
4.75%, due 11/1/04................ 1,100,000 897,875
MascoTech, Inc.
4.50%, due 12/15/03............... 1,500,000 1,098,750
-----------
1,996,625
-----------
BANKS (1.4%)
European Bank for Reconstruction &
Development
0.75%, due 7/2/01 (c)............. 1,250,000 1,353,125
-----------
BIOMEDICAL (1.5%)
Inhale Therapeutic Systems, Inc.
6.75%, due 10/13/06 (b)........... 1,000,000 1,412,500
-----------
BROADCAST/MEDIA (6.1%)
CD Radio, Inc.
8.75%, due 9/29/09................ 750,000 1,276,875
Clear Channel Communications, Inc.
1.50%, due 12/1/02................ 300,000 308,250
2.625%, due 4/1/03................ 750,000 1,112,812
News America Holdings, Inc.
(zero coupon), due 3/11/13 (d).... 1,750,000 1,379,228
Rogers Communications, Inc.
2.00%, due 11/26/05 (e)........... 2,000,000 1,740,000
-----------
5,817,165
-----------
COMMUNICATIONS--EQUIPMENT (3.3%)
Aspect Communications Corp.
(zero coupon), due 8/10/18........ 4,000,000 1,600,000
Comverse Technology, Inc.
4.50%, due 7/1/05................. 450,000 1,535,063
-----------
3,135,063
-----------
COMPUTER SOFTWARE & SERVICES (6.9%)
Citrix Systems, Inc.
(zero coupon), due 3/22/19........ 2,000,000 1,775,000
DoubleClick, Inc.
4.75%, due 3/15/06................ 750,000 2,330,625
Network Associates, Inc.
(zero coupon), due 2/13/18........ 5,000,000 1,887,500
Safeguard Scientifics, Inc.
5.00%, due 6/15/06................ 250,000 565,938
-----------
6,559,063
-----------
DRUGS (1.0%)
Roche Holdings, Inc.
Series DTC
(zero coupon), due 4/20/10
(b)(d).......................... 1,500,000 906,570
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------
<S> <C> <C>
ELECTRICAL EQUIPMENT (2.0%)
ASE Test Ltd.
1.00%, due 7/1/04 (b)............. $1,000,000 $ 1,097,500
Solectron Corp.
(zero coupon), due 1/27/19........ 1,000,000 756,250
-----------
1,853,750
-----------
ELECTRONICS--SEMICONDUCTORS (8.0%)
Adaptec, Inc.
4.75%, due 2/1/04................. 1,000,000 1,086,250
Conexant Systems, Inc.
4.25%, due 5/1/06................. 250,000 733,437
Cymer, Inc.
3.50%, due 8/6/04
7.25%, beginning 8/5/00........... 1,000,000 1,112,500
Cypress Semiconductor Corp.
6.00%, due 10/1/02................ 500,000 721,875
Intergrated Process Equipment Corp.
6.25%, due 9/15/04................ 1,000,000 721,250
LSI Logic Corp.
4.25%, due 03/15/04............... 500,000 1,135,625
Photronics, Inc.
6.00%, due 6/1/04................. 1,000,000 1,167,500
S3, Incorporated
5.75%, due 10/1/03................ 1,000,000 933,750
-----------
7,612,187
-----------
FINANCE (1.5%)
Belgelec Finance S.A.
1.50%, due 8/4/04................. E 167,640 165,958
Mannesmann Finance B.V.
1.00%, due 10/13/04............... 1,000,000 1,227,935
-----------
1,393,893
-----------
FINANCIAL--MISCELLANEOUS (1.0%)
Morgan Stanley Dean Witter & Co.
(zero coupon), due 10/19/06....... $ 500,000 967,500
-----------
FINANCIAL SERVICES (2.0%)
Berkshire Hathaway, Inc.
1.00%, due 12/2/01................ 750,000 1,878,750
-----------
GOLD & PRECIOUS METALS MINING (0.4%)
Coeur d' Alene Mines Corp.
7.25%, due 10/31/05............... 700,000 385,000
-----------
INSURANCE--PROPERTY & CASUALTY (1.0%)
Loews Corp.
3.125%, due 9/15/07............... 1,200,000 978,000
-----------
INTERNET SOFTWARE & SERVICES (1.3%)
CNET, Inc.
5.00%, due 3/1/06................. 750,000 1,274,063
-----------
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
81
<PAGE> 82
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
CONVERTIBLE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
---------------------
<S> <C> <C>
INVESTMENT BANK/BROKERAGE (2.8%)
Merrill Lynch & Co., Inc.
0.25%, due 5/10/06................ $2,000,000 $ 1,920,000
1.00%, due 7/20/06................ 850,000 773,500
-----------
2,693,500
-----------
OIL & GAS--EXPLORATION & PRODUCTION
(1.0%)
Devon Energy Corp.
4.90%, due 8/15/08................ 1,000,000 968,750
-----------
REAL ESTATE (0.1%)
Macerich Co. (The)
7.25%, due 12/15/02 (c)........... 135,000 112,556
-----------
RETAIL STORES--SPECIALTY (0.7%)
Office Depot, Inc.
(zero coupon), due 11/1/08 (d).... 1,000,000 680,000
-----------
SEMICONDUCTORS (1.3%)
Advanced Energy Industries, Inc.
5.25%, due 11/15/06............... 1,000,000 1,195,000
-----------
SPECIALIZED SERVICES (1.1%)
CUC International, Inc.
3.00%, due 2/15/02................ 1,000,000 1,010,000
-----------
SPECIALTY PRINTING (1.0%)
World Color Press, Inc.
6.00%, due 10/1/07................ 975,000 967,687
-----------
TELECOMMUNICATION SERVICES (6.6%)
ANTEC Corp.
4.50%, due 5/15/03................ 700,000 1,126,125
EchoStar Communications Corp.
4.875%, due 1/1/07 (b)............ 1,000,000 1,231,250
Fullerton Global Corp.
(zero coupon), due 4/2/03......... 1,000,000 1,105,000
Global TeleSystems Group, Inc.
5.75%, due 7/1/10................. 1,150,000 1,543,875
ITC Deltacom, Inc.
4.50%, due 5/15/06................ 1,000,000 1,200,000
-----------
6,206,250
-----------
TELEPHONE (2.2%)
Bell Atlantic Financial Services,
Inc.
4.25%, due 9/15/05 (b)............ 1,000,000 1,236,250
5.75%, due 4/1/03................. 850,000 860,625
-----------
2,096,875
-----------
Total Convertible Bonds
(Cost $47,959,989)................ 54,185,122
-----------
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCKS (26.0%)
SHARES VALUE
------------------------
<S> <C> <C>
AUTO PARTS & EQUIPMENT (1.5%)
Federal Mogul Financing Trust
7.00%............................. 25,000 $ 837,500
Tower Automotive Capital Trust
6.75%............................. 15,000 566,250
-----------
1,403,750
-----------
BROADCAST/MEDIA (2.7%)
Comcast Corp.
3.35%............................. 11,000 1,090,375
Entercom Communications Capital
Trust
6.25%............................. 18,000 1,460,250
-----------
2,550,625
-----------
CHEMICALS (0.8%)
Hercules Trust II
6.50% (f)......................... 1,000 795,630
-----------
CONSUMER SERVICES (0.5%)
Carriage Services Capital Trust
7.00%............................. 15,000 435,000
-----------
ELECTRIC POWER COMPANIES (1.4%)
Capline Capital Trust
5.75%............................. 20,000 1,312,500
-----------
FOOD (2.2%)
Chiquita Brands International, Inc.
$3.75, Series B................... 11,000 273,625
Suiza Capital Trust II
5.50%............................. 52,000 1,794,000
-----------
2,067,625
-----------
FOOD & HEALTH CARE DISTRIBUTORS (0.5%)
Owens & Minor Trust I
5.375%, Series A.................. 15,000 472,500
-----------
INSURANCE (1.5%)
American General Delaware L.L.C.
6.00%, Series A................... 6,500 611,813
PLC Capital Trust II
6.50%............................. 15,000 793,125
-----------
1,404,938
-----------
MACHINERY--DIVERSIFIED (1.2%)
Ingersoll-Rand Co.
6.75%............................. 44,000 1,122,000
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
82
<PAGE> 83
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
NATURAL GAS DISTRIBUTORS &
PIPELINES (2.0%)
Coastal Corp. (The)
6.625%............................ $ 40,000 $ 932,500
El Paso Energy Capital Trust I
4.75%............................. 19,000 957,125
-----------
1,889,625
-----------
OIL & GAS--DRILLING (0.8%)
Weatherford International, Inc.
5.00%............................. 19,000 762,375
-----------
OIL & GAS--EXPLORATION & PRODUCTION
(1.2%)
Apache Corp.
6.50% (g)......................... 25,000 887,500
Unocal Capital Trust
6.25%............................. 5,000 243,750
-----------
1,131,250
-----------
PAPER & FOREST PRODUCTS (1.1%)
Georgia-Pacific Group
7.50%............................. 20,000 1,022,500
-----------
PUBLISHING--NEWSPAPERS (0.4%)
Tribune Co.
6.25%............................. 23,000 405,375
-----------
REAL ESTATE (2.7%)
General Growth Properties, Inc.
7.25% (h)(i)...................... 85,000 1,700,000
Glenborough Realty Trust, Inc.
7.75%, Series A................... 65,000 905,937
-----------
2,605,937
-----------
TELECOMMUNICATION SERVICES (4.9%)
Adelphia Communications Corp.
5.50%, Series D................... 7,000 1,318,625
Amdocs Automatic Common Exchange
Security Trust
6.75%............................. 37,000 1,188,625
DECS Trust V
7.25%............................. 27,000 776,250
Global TeleSystems Group, Inc.
7.25% (j)......................... 5,000 285,000
Qwest Trends Trust
5.75% (b)......................... 15,000 1,055,625
-----------
4,624,125
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
UTILITY--ELECTRIC (0.6%)
AES Trust III
6.75%............................. 10,000 $ 616,250
-----------
Total Convertible Preferred Stocks
(Cost $25,587,288)................ 24,622,005
-----------
Total Convertible Securities
(Cost $73,547,277)................ 78,807,127
-----------
<CAPTION>
COMMON STOCKS (5.8%)
<S> <C> <C>
COMPUTERS & OFFICE EQUIPMENT (0.8%)
Trikon Technologies, Inc. (a)...... 70,000 743,750
-----------
COMPUTER SOFTWARE & SERVICES (2.0%)
America Online, Inc. (a)........... 2,000 150,875
Baan Company, N.V. (a)............. 25,000 351,563
Intertrust Technologies Corp.
(a)............................... 5,000 588,125
Manugistics Group, Inc. (a)........ 25,000 807,812
-----------
1,898,375
-----------
COMPUTER SYSTEMS (0.8%)
Unisys Corp. (a)................... 25,000 798,437
-----------
ELECTRONICS--SEMICONDUCTORS (0.4%)
S3, Incorporated (a)............... 35,000 404,688
-----------
OIL--INTEGRATED DOMESTIC (0.3%)
EOG Resources, Inc................. 13,400 235,337
-----------
STEEL, ALUMINIUM & OTHER METALS
(0.5%)
AK Steel Holding Corp.............. 25,000 471,875
-----------
TELECOMMUNICATION SERVICES (1.0%)
Intermedia Communications, Inc.
(a)............................... 25,000 970,313
-----------
Total Common Stocks
(Cost $4,924,184)................. 5,522,775
-----------
<CAPTION>
PREFERRED STOCK (0.2%)
<S> <C> <C>
METALS--MINING (0.2%)
Freeport-McMoRan Copper & Gold,
Inc.
7.00%, Series Silver (k)(l)....... 15,000 188,437
-----------
Total Preferred Stock
(Cost $255,750)................... 188,437
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
83
<PAGE> 84
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (10.4%)
PRINCIPAL
AMOUNT VALUE
------------------------
<S> <C> <C>
COMMERCIAL PAPER (6.2%)
American Express Credit Corp.
6.35%, due 1/6/00................. $1,165,000 $ 1,163,970
Associates Corp.
4.00%, due 1/3/00................. 825,000 824,817
Ford Motor Credit Corp.
5.68%, due 1/12/00................ 2,430,000 2,425,780
General Electric Capital Corp.
5.57%, due 1/11/00................ 1,500,000 1,497,678
-----------
Total Commercial Paper
(Cost $5,912,245)................. 5,912,245
-----------
<CAPTION>
SHARES
----------
<S> <C> <C>
INVESTMENT COMPANY (4.2%)
Merrill Lynch Premier Institutional
Fund.............................. 3,961,324 3,961,324
-----------
Total Investment Company
(Cost $3,961,324)................. 3,961,324
-----------
Total Short-Term Investments
(Cost $9,873,569)................. 9,873,569
-----------
Total Investments
(Cost $88,600,780) (m)............ 99.5% 94,391,908(n)
Cash and Other Assets,
Less Liabilities.................. 0.5 441,746
---------- -----------
Net Assets......................... 100.0% $94,833,654
========== ===========
</TABLE>
- ------------
(a) Non-income producing securities.
(b) May be sold to institutional investors only.
(c) Eurobond-bond denominated in U.S. dollars or other currencies and sold to
investors outside the country whose currency is used.
(d) LYON--Liquid Yield Option Note: callable, zero coupon securities priced at
a deep discount from par. They include a "put" feature that enables holders
to redeem them at a specific date, at a specific price. Put prices reflect
fixed interest rates, and therefore increase over time.
(e) Yankee bond.
(f) 1,000 CRESTS Units--Convertible Redeemable Equity Structured Trust
Security. Each unit consists of 1 preferred stock and 1 warrant to acquire
23.4192 shares of common stock at $42.70 at a future date.
(g) Depository Shares--each share represents 0.02 shares of preferred stock.
(h) PIERS--Preferred Income Equity Redeemable Stock.
(i) Depository Shares--each share represents 0.025 shares of 7.25% Preferred
Income Equity Redeemable Stock, Series A.
(j) Depository Shares--each share represents 0.01 shares of preferred stock.
(k) Depository Shares--each share represents 0.025 shares of silver denominated
preferred stock.
(l) Dividend equals U.S. dollar equivalent of 0.04125 oz. of silver per share.
(m) The cost for Federal income tax purposes is $88,921,998.
(n) At December 31, 1999 net unrealized appreciation was $5,469,910, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $10,280,154 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $4,810,244.
(E) Security denominated in Euro.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
84
<PAGE> 85
MAINSTAY VP SERIES FUND, INC.
CONVERTIBLE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $88,600,780).......... $ 94,391,908
Cash..................................... 817,007
Receivables:
Dividends and interest................. 417,724
Fund shares sold....................... 110,217
------------
Total assets..................... 95,736,856
------------
LIABILITIES:
Payables:
Investment securities purchased........ 816,500
Adviser................................ 26,934
Custodian.............................. 15,201
Administrator.......................... 14,964
Accrued expenses......................... 29,603
------------
Total liabilities................ 903,202
------------
Net assets applicable to outstanding
shares................................. $ 94,833,654
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares authorized... $ 74,779
Additional paid-in capital............... 83,650,333
Accumulated undistributed net realized
gain on investments.................... 5,317,497
Net unrealized appreciation on
investments and translation of other
assets and liabilities in foreign
currencies............................. 5,791,045
------------
Net assets applicable to outstanding
shares................................. $ 94,833,654
============
Shares of capital stock outstanding...... 7,477,921
============
Net asset value per share outstanding.... $ 12.68
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 2,449,927
Dividends.............................. 1,204,207
------------
Total income..................... 3,654,134
------------
Expenses:
Advisory............................... 251,961
Administration......................... 139,979
Professional........................... 41,172
Custodian.............................. 24,496
Shareholder communication.............. 18,422
Portfolio pricing...................... 3,246
Directors.............................. 2,813
Miscellaneous.......................... 11,830
------------
Total expenses................... 493,919
------------
Net investment income.................... 3,160,215
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain on investments......... 14,242,503
Net change in unrealized depreciation on
investments and translation of other
assets and liabilities in foreign
currencies............................. 8,272,791
------------
Net realized and unrealized gain on
investments............................ 22,515,294
------------
Net increase in net assets resulting from
operations............................. $ 25,675,509
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
85
<PAGE> 86
CONVERTIBLE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 3,160,215 $ 2,646,321
Net realized gain on investments and translation of other
assets and liabilities in foreign currencies............ 14,242,503 995,633
Net change in unrealized depreciation on investments...... 8,272,791 (2,011,586)
------------ ------------
Net increase in net assets resulting from operations...... 25,675,509 1,630,368
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ (3,154,675) (2,714,731)
From net realized gain on investments..................... (9,351,685) (1,877,278)
------------ ------------
Total dividends and distributions to shareholders....... (12,506,360) (4,592,009)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 17,996,240 21,700,659
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 12,506,360 4,592,009
------------ ------------
30,502,600 26,292,668
Cost of shares redeemed................................... (6,548,819) (5,388,586)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 23,953,781 20,904,082
------------ ------------
Net increase in net assets.................................. 37,122,930 17,942,441
NET ASSETS:
Beginning of year........................................... 57,710,724 39,768,283
------------ ------------
End of year................................................. $ 94,833,654 $ 57,710,724
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
OCTOBER 1,
1996 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1999 1998 1997 1996
----------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period............... $ 10.33 $ 10.76 $ 10.27 $ 10.00
----------- ----------- ----------- -----------
Net investment income................................ 0.49 0.51 0.44 0.10
Net realized and unrealized gain (loss) on
investments........................................ 3.81 (0.02) 1.12 0.29
----------- ----------- ----------- -----------
Total from investment operations..................... 4.30 0.49 1.56 0.39
----------- ----------- ----------- -----------
Less dividends and distributions:
From net investment income......................... (0.49) (0.52) (0.44) (0.10)
From net realized gain on investments.............. (1.46) (0.40) (0.63) (0.02)
----------- ----------- ----------- -----------
Total dividends and distributions.................... (1.95) (0.92) (1.07) (0.12)
----------- ----------- ----------- -----------
Net asset value at end of period..................... $ 12.68 $ 10.33 $ 10.76 $ 10.27
=========== =========== =========== ===========
Total investment return.............................. 41.98% 4.49% 15.43% 3.89%(b)
Ratios (to average net assets)/Supplemental Data:
Net investment income.............................. 4.52% 5.19% 5.13% 5.14%+
Net expenses....................................... 0.71% 0.72% 0.73% 0.73%+
Expenses (before reimbursement).................... 0.71% 0.72% 0.78% 1.46%+
Portfolio turnover rate.............................. 264% 209% 217% 15%
Net assets at end of period (in 000's)............... $ 94,834 $ 57,711 $ 39,768 $ 15,464
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
86
<PAGE> 87
MAINSTAY VP SERIES FUND, INC.
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
LONG-TERM BONDS (83.8%)+
ASSET-BACKED SECURITIES (3.2%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
AIRPLANE LEASES (1.8%)
AerCo Ltd.
Series 1X Class A1
6.6525%, due 7/15/23 (a)(d)..... $ 575,000 $ 574,322
Aircraft Lease Portfolio
Securitization Ltd.
Series 1996-1 Class CX
6.7875%, due 6/15/06 (a)(d)..... 1,698,079 1,664,117
Morgan Stanley Aircraft Finance
Series 1 Class A1
6.6725%, due 3/15/23 (d)........ 825,000 824,753
------------
3,063,192
------------
CONSUMER LOANS (0.0%) (e)
Green Tree Recreational
Equipment & Consumer Trust
Series 1996-C Class A1
6.7025%, due 10/15/17 (d)....... 86,223 86,128
------------
EQUIPMENT LOANS (1.0%)
Case Equipment Loan Trust
Series 1999-A Class A4
5.77%, due 8/15/05.............. 1,360,000 1,319,295
Newcourt Equipment Trust
Securities
Series 1998-1 Class A3
5.24%, due 12/20/02 (d)......... 410,000 404,887
------------
1,724,182
------------
HOME EQUITY LOANS (0.4%)
Saxon Asset Securities Trust
Series 1997-3 Class AF1
6.6413%, due 10/25/20 (d)....... 26,472 26,466
Southern Pacific Secured Assets
Corp.
Series 1997-1 Class A1
6.6713%, due 4/25/27 (d)........ 602,267 600,008
------------
626,474
------------
Total Asset-Backed Securities
(Cost $5,542,203)............... 5,499,976
------------
MORTGAGE-BACKED SECURITIES (10.7%)
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE
OBLIGATIONS) (10.7%)
Asset Securitization Corp.
Series 1997-MD7 Class A1B
7.41%, due 1/13/30.............. 1,370,000 1,327,544
Commercial Mortgage Asset Trust
Series 1999-C2 Class A2
7.546%, due 11/17/32............ 975,000 966,293
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE
OBLIGATIONS) (Continued)
CS First Boston Mortgage
Securities Corp.
Series 1999-C1 Class A2
7.29%, due 9/15/41.............. $ 1,200,000 $ 1,179,000
GMAC Commercial Mortgage
Securities, Inc.
Series 1998-C2 Class A2
6.42%, due 5/15/35.............. 2,390,000 2,229,081
Series 1996-C1 Class A2A
6.79%, due 10/15/28............. 777,272 770,968
GS Mortgage Securities Corp. II
Series 1997-GL Class A2B
6.86%, due 7/13/30.............. 860,000 847,848
Lehman Large Loan
Series 1997-LL1 Class A1
6.79%, due 10/12/34............. 2,515,246 2,490,170
Merrill Lynch Mortgage Investors,
Inc.
Series 1998-C2 Class A1
6.22%, due 2/15/30.............. 1,770,179 1,710,790
Series 1995-C2 Class A1
6.9108%, due 6/15/21 (d)........ 375,133 373,490
Series 1999-C2 Class A1
7.56%, due 11/15/31 (d)......... 975,000 971,841
Nationslink Funding Corp.
Series 1999-2 Class A2C
7.229%, due 6/20/31............. 980,000 960,331
PNC Mortgage Acceptance Corp.
Series 1999-CM1 Class A1B
7.33%, due 12/10/32............. 1,640,000 1,615,170
Salomon Brothers Mortgage
Securities VII
Series 1997-TZH Class A1
7.15%, due 3/25/22.............. 1,318,142 1,305,659
SASCO Floating Rate
Commercial Mortgage
Series 1999-C3 Class A
6.8613%, due 10/21/13 (a)(d).... 1,593,315 1,593,315
------------
Total Mortgage-Backed Securities
(Cost $18,631,907).............. 18,341,500
------------
U.S. GOVERNMENT &
FEDERAL AGENCIES (69.9%)
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (3.2%)
5.375%, due 3/15/02............. 2,630,000 2,565,775
5.625%, due 3/15/01............. 3,000,000 2,972,250
------------
5,538,025
------------
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
87
<PAGE> 88
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
U.S. GOVERNMENT &
FEDERAL AGENCIES (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE PASS-
THROUGH SECURITIES) (21.8%)
6.50%, due 2/17/15 TBA (b)...... $ 2,400,000 $ 2,325,744
6.50%, due 5/1/13 - 4/1/29
(c)............................. 12,152,054 11,537,814
7.00%, due 12/1/12 - 11/1/29.... 6,114,046 5,936,552
7.50%, due 10/1/29.............. 10,012,768 9,903,229
7.50%, due 1/19/30 TBA (b)...... 7,575,000 7,492,130
------------
37,195,469
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION I (MORTGAGE
PASS-THROUGH SECURITIES) (2.0%)
7.00%, due 9/15/28.............. 3,531,851 3,411,556
------------
UNITED STATES TREASURY BONDS
(20.0%)
6.125%, due 8/15/29 (f)......... 30,540,000 29,113,171
8.75%, due 8/15/20 (f).......... 2,455,000 2,974,380
8.875%, due 8/15/17 (f)......... 1,715,000 2,072,732
------------
34,160,283
------------
UNITED STATES TREASURY NOTES
(22.9%)
5.875%, due 11/30/01 (f)........ 36,070,000 35,838,791
6.00%, due 8/15/09.............. 2,400,000 2,325,000
7.00%, due 7/15/06.............. 1,035,000 1,059,840
------------
39,223,631
------------
Total U.S. Government &
Federal Agencies
(Cost $122,427,033)............. 119,528,964
------------
Total Long-Term Bonds
(Cost $146,601,143)............. 143,370,440
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (21.6%)
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
FEDERAL AGENCIES (21.6%)
Federal Home Loan Bank
(Discount Note)
1.30%, due 1/3/00............... $ 4,000,000 $ 3,999,711
4.75%, due 1/12/00.............. 4,000,000 3,994,193
5.73%, due 1/18/00.............. 6,290,000 6,272,940
Federal Mortgage Corp.
(Discount Note)
5.60%, due 1/19/00.............. 6,000,000 5,983,137
5.71%, due 1/13/00.............. 5,000,000 4,990,458
Federal National Mortgage
Association
(Discount Note)
3.50%, due 1/5/00............... 3,935,000 3,933,469
5.64%, due 1/14/00.............. 7,695,000 7,679,283
------------
Total Short-Term Investments
(Cost $36,853,191).............. 36,853,191
------------
Total Investments
(Cost $183,454,334) (g)......... 105.4% 180,223,631(h)
Liabilities in Excess of
Cash and Other Assets........... (5.4) (9,168,734)
---------- ------------
Net Assets....................... 100.0% $171,054,897
========== ============
</TABLE>
- ------------
(a) May be sold to institutional investors only.
(b) TBA: Securities purchased on a forward commitment basis with an approximate
principal amount and maturity date. The actual principal amount and maturity
date will be determined upon settlement.
(c) Segregated or partially segregated as collateral for TBA.
(d) Floating rate. Rate shown is the rate in effect at December 31, 1999.
(e) Less than one tenth of a percent.
(f) Represent securities out on loan or a portion of which is out on loan. (See
note 2J)
(g) The cost for Federal income tax purposes is $183,594,814.
(h) At December 31, 1999 net unrealized depreciation was $3,371,183, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $7,906 and aggregate gross unrealized depreciation
for all investments on which there was excess of cost over market value of
$3,379,089.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
88
<PAGE> 89
MAINSTAY VP SERIES FUND, INC.
GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $183,454,334)......... $180,223,631
Collateral held for securities loaned, at
value (Note 2J)........................ 45,220,749
Cash..................................... 91,462
Receivables:
Interest............................... 1,572,310
Fund shares sold....................... 189,742
------------
Total assets..................... 227,297,894
------------
LIABILITIES:
Securities lending collateral (Note 2J).. 45,220,749
Payables:
Investment securities purchased........ 10,906,535
Adviser................................ 43,507
Administrator.......................... 29,004
Custodian.............................. 8,308
Directors.............................. 143
Accrued expenses......................... 34,751
------------
Total liabilities................ 56,242,997
------------
Net assets applicable to outstanding
shares................................. $171,054,897
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 50 million shares authorized.... $ 178,908
Additional paid-in capital............... 182,984,659
Accumulated undistributed net investment
income................................. 23,532
Accumulated net realized loss on
investments............................ (8,901,499)
Net unrealized depreciation on
investments............................ (3,230,703)
------------
Net assets applicable to outstanding
shares................................. $171,054,897
============
Shares of capital stock outstanding...... 17,890,799
============
Net asset value per share outstanding.... $ 9.56
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 9,832,359
------------
Expenses:
Advisory............................... 486,400
Administration......................... 324,267
Professional........................... 54,168
Shareholder communication.............. 41,959
Custodian.............................. 31,876
Directors.............................. 6,647
Portfolio pricing...................... 1,986
Miscellaneous.......................... 10,218
------------
Total expenses................... 957,521
------------
Net investment income.................... 8,874,838
------------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS:
Net realized loss on investments......... (7,818,364)
Net change in unrealized appreciation on
investments............................ (3,728,048)
------------
Net realized and unrealized loss on
investments............................ (11,546,412)
------------
Net decrease in net assets resulting from
operations............................. $ (2,671,574)
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
89
<PAGE> 90
GOVERNMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 8,874,838 $ 4,997,110
Net realized gain (loss) on investments................... (7,818,364) 3,761,974
Net change in unrealized appreciation on investments...... (3,728,048) (1,193,654)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (2,671,574) 7,565,430
------------ ------------
Dividends to shareholders:
From net investment income................................ (8,915,009) (4,979,006)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 80,144,368 58,973,999
Net asset value of shares issued to shareholders in
reinvestment of dividends............................... 8,915,009 4,979,006
------------ ------------
89,059,377 63,953,005
Cost of shares redeemed................................... (25,438,791) (21,273,046)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 63,620,586 42,679,959
------------ ------------
Net increase in net assets.................................. 52,034,003 45,266,383
NET ASSETS:
Beginning of year........................................... 119,020,894 73,754,511
------------ ------------
End of year................................................. $171,054,897 $119,020,894
============ ============
Accumulated undistributed net investment income at end of
year...................................................... $ 23,532 $ --
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year........ $ 10.27 $ 9.83 $ 9.59 $ 10.01 $ 9.21
------------ ------------ ------------ ------------ ------------
Net investment income....................... 0.53 0.45 0.67 0.65 0.75
Net realized and unrealized gain (loss) on
investments............................... (0.71) 0.44 0.24 (0.42) 0.80
------------ ------------ ------------ ------------ ------------
Total from investment operations............ (0.18) 0.89 0.91 0.23 1.55
------------ ------------ ------------ ------------ ------------
Less dividends:
From net investment income................ (0.53) (0.45) (0.67) (0.65) (0.75)
------------ ------------ ------------ ------------ ------------
Net asset value at end of year.............. $ 9.56 $ 10.27 $ 9.83 $ 9.59 $ 10.01
============ ============ ============ ============ ============
Total investment return..................... (1.74)% 9.00% 9.48% 2.28% 16.72%
Ratios (to average net assets)/Supplemental
Data:
Net investment income..................... 5.47% 5.50% 6.71% 6.66% 7.80%
Net expenses.............................. 0.59% 0.63% 0.63% 0.67% 0.67%
Expenses (before reimbursement)........... 0.59% 0.63% 0.63% 0.71% 0.82%
Portfolio turnover rate..................... 328% 405% 345% 304% 592%
Net assets at end of year (in 000's)........ $ 171,055 $ 119,021 $ 73,755 $ 73,123 $ 64,812
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
90
<PAGE> 91
MAINSTAY VP SERIES FUND, INC.
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
LONG-TERM BONDS (81.0%)+
ASSET-BACKED SECURITIES (1.4%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
ELECTRIC POWER COMPANIES (1.3%)
AES Eastern Energy, L.P.
Pass-Through Certificates
Series 1999-A
9.00%, due 1/2/17 (c)........ $ 9,615,000 $ 9,056,368
------------
ENTERTAINMENT (0.1%)
United Artists Theatre Co.
Pass-Through Certificates
Series 95-A
9.30%, due 7/1/15............ 933,658 668,406
------------
Total Asset-Backed Securities
(Cost $10,268,340)........... 9,724,774
------------
CONVERTIBLE BONDS (4.7%)
CELLULAR TELEPHONES (1.2%)
Metro Pacific Capital Ltd.
2.50%, due 4/11/03 (d)....... 7,630,000 8,164,100
------------
CONGLOMERATES (0.3%)
Loxley Public Co. Ltd.
2.50%, due 4/1/01 (d)(e)..... 3,250,000 812,500
3.50%, due 4/20/05 (d)(e).... 3,103,000 970,646
------------
1,783,146
------------
FOOD, BEVERAGES & TOBACCO
(0.3%)
Triarc Consumer
Products Group, L.L.C.
(zero coupon), due 2/9/18.... 10,550,000 2,373,750
------------
HEALTH CARE--DRUGS (0.2%)
Dura Pharmaceuticals, Inc.
3.50%, due 7/15/02........... 2,100,000 1,701,000
------------
MINING (1.1%)
Agnico-Eagle Mines Ltd.
3.50%, due 1/27/04 (t)....... 2,615,000 1,774,931
TVX Gold, Inc.
5.00%, due 3/28/02........... 7,390,000 5,505,550
------------
7,280,481
------------
OIL & GAS--EQUIPMENT &
SERVICES (0.1%)
Friede Goldman Halter, Inc.
4.50%, due 9/15/04........... 645,000 396,675
------------
TECHNOLOGY (1.2%)
Cirrus Logic, Inc.
6.00%, due 12/15/03.......... 10,235,000 8,610,194
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES
(0.3%)
Technology Resources
Industries Berhad
(zero coupon), due 10/31/04
(e).......................... $ 2,080,000 $ 1,456,000
2.75%, due 11/28/04 (d)(e)... 980,000 735,000
------------
2,191,000
------------
Total Convertible Bonds
(Cost $34,710,586)........... 32,500,346
------------
CORPORATE BONDS (55.5%)
AEROSPACE/DEFENSE (0.7%)
Pacific Aerospace &
Electronics, Inc.
11.25%, due 8/1/05........... 8,190,000 4,914,000
------------
AUTO PARTS & EQUIPMENT (1.4%)
Gentek, Inc.
11.00%, due 8/1/09 (c)....... 3,505,000 3,645,200
Titan Tire Corp.
7.00%, due 2/11/00 (f)....... 6,000,000 5,970,000
------------
9,615,200
------------
BANKS (1.5%)
B.F. Saul Real Estate
Investment Trust
Series B
9.75%, due 4/1/08............ 7,685,000 7,022,169
Local Financial Corp.
11.00%, due 9/8/04........... 3,030,000 3,151,200
------------
10,173,369
------------
BROADCAST/MEDIA (1.6%)
CD Radio, Inc.
(zero coupon), due 12/1/07
15.00%, beginning 12/1/02.... 9,115,000 5,149,975
14.50%, due 5/15/09.......... 2,685,000 2,433,281
Radio Unica Corp.
(zero coupon), due 8/1/06
11.75%, beginning 8/1/02..... 2,213,000 1,443,983
Young America Corp.
Series B
11.625%, due 2/15/06......... 2,875,000 2,213,750
------------
11,240,989
------------
BUILDING MATERIALS (0.3%)
RH Cement Finance, PLC
32.24%, due 3/10/00 (c)...... 2,000,000 2,240,000
------------
BUILDINGS--MAINTENANCE &
SERVICES (1.4%)
Building One Services Corp.
10.50%, due 5/1/09........... 9,750,000 9,360,000
------------
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
91
<PAGE> 92
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
CABLE TV (4.3%)
@Entertainment, Inc.
Series B
(zero coupon), due 7/15/08
14.50%, beginning 7/15/03.... $ 7,500,000 $ 4,725,000
UIH Australia/Pacific, Inc.
Series B
(zero coupon), due 5/15/06
14.00%, beginning 5/15/01.... 24,480,000 21,175,200
Series D
(zero coupon), due 5/15/06
14.00%, beginning 5/15/01.... 40,000 34,600
United International Holdings,
Inc.
Series B
(zero coupon), due 2/15/08
10.75%, beginning 2/15/03.... 5,790,000 3,705,600
------------
29,640,400
------------
CASINOS (2.7%)
El Comandante Capital Corp.
11.75%, due 12/15/03......... 891,000 784,080
International Game Technology
7.875%, due 5/15/04.......... 840,000 812,700
8.375%, due 5/15/09.......... 3,140,000 3,006,550
Louisiana Casino Cruises, Inc.
Series B
11.00%, due 12/1/05.......... 2,875,000 2,961,250
Penn National Gaming, Inc.
10.625%, due 12/15/04........ 7,560,000 7,786,800
President Casinos, Inc.
12.00%, due 9/15/01 (c)(f)... 1,180,000 1,180,000
13.00%, due 9/15/01.......... 2,348,000 1,878,400
------------
18,409,780
------------
CELLULAR TELEPHONES (0.4%)
International Wireless
Communications Holdings, Inc.
(zero coupon) due 8/15/01
(f)(g)....................... 7,775,000 777,500
PageMart Wireless, Inc.
(zero coupon), due 2/1/08
11.25%, beginning 2/1/03..... 5,000,000 2,000,000
------------
2,777,500
------------
CHEMICALS (1.0%)
Agriculture Minerals &
Chemicals, Inc.
10.75%, due 9/30/03.......... 3,215,000 2,250,500
Borden Chemicals & Plastics
L.P.
9.50%, due 5/1/05............ 1,960,000 1,822,800
Lyondell Chemical Co.
Series B
10.875%, due 5/1/09.......... 2,270,000 2,338,100
------------
6,411,400
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
COMMUNICATIONS--EQUIPMENT MANUFACTURERS (0.7%)
Cherokee International L.L.C.
Series B
10.50%, due 5/1/09........... $ 770,000 $ 677,600
EV International, Inc.
Series A
11.00%, due 3/15/07.......... 3,105,000 1,956,150
Pinnacle Holdings, Inc.
(zero coupon), due 3/15/08
10.00%, beginning 3/15/03.... 2,915,000 1,909,325
------------
4,543,075
------------
COMPUTERS & OFFICE EQUIPMENT (0.1%)
Sullivan Graphics, Inc.
12.75%, due 8/1/05........... 745,000 784,113
------------
CONSUMER PRODUCTS (0.5%)
Selmer Co., Inc.
11.00%, due 5/15/05.......... 3,000,000 3,150,000
------------
COSMETICS/PERSONAL CARE (1.1%)
American Tissue, Inc.
12.50%, due 7/15/06 (c)...... 1,465,000 1,508,950
Jafra Cosmetics International,
Inc.
11.75%, due 5/1/08........... 6,200,000 5,983,000
------------
7,491,950
------------
ELECTRIC POWER COMPANIES (1.6%)
CMS Energy Corp.
8.00%, due 7/1/01............ 4,800,000 4,743,816
8.375%, due 7/1/03........... 3,000,000 2,932,503
CMS Energy Corp. &
Atlantic Methanol Capital Co.
Series A-1
10.875%, due 12/15/04 (c).... 3,545,000 3,545,000
------------
11,221,319
------------
ELECTRONICS--SEMICONDUCTORS
(0.6%)
Micron Technology, Inc. 6.50%,
due 9/30/05 (c).............. 5,000,000 3,975,000
------------
ENERGY (0.3%)
Conproca, S.A.
12.00%, due 6/16/10 (c)...... 2,000,000 2,010,000
------------
ENGINEERING & CONSTRUCTION
(0.2%)
Traffic Stream (BVI)
Infrastructure Ltd.
14.25%, due 5/1/06 (c)(e).... 3,350,000 1,591,250
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
92
<PAGE> 93
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
ENTERTAINMENT (2.3%)
Alliance Entertainment Corp.
Series B
11.25%, due 7/15/05 (e)(g)... $ 5,835,000 $ 58,350
Hollywood Entertainment Corp.
Series B
10.625%, due 8/15/04......... 5,870,000 5,429,750
Marvel Enterprises, Inc.
12.00%, due 6/15/09.......... 6,105,000 5,616,600
Sports Club Company, Inc.
(The)
Series B
11.375%, due 3/15/06......... 2,555,000 2,535,838
Town Sports International,
Inc.
Series B
9.75%, due 10/15/04.......... 1,600,000 1,560,000
United Artists Theatre Co.
Series B
9.75%, due 4/15/08........... 1,250,000 243,750
------------
15,444,288
------------
FINANCE (0.9%)
ASAT Finance L.L.C.
12.50%, due 11/1/06 (c)(h)... 1,530 1,644,750
ContiFinancial Corp. 7.50%,
due 3/15/02.................. 1,595,000 179,438
8.375%, due 8/15/03.......... 1,990,000 223,875
Ocwen Asset Investment Corp.
11.50%, due 7/1/05........... 4,635,000 3,893,400
------------
5,941,463
------------
FOOD, BEVERAGES & TOBACCO
(0.8%)
Colorado Prime Corp.
12.50%, due 5/1/04........... 6,430,000 948,425
Standard Commercial Corp.
8.875%, due 8/1/05........... 6,065,000 4,745,863
------------
5,694,288
------------
HEALTH CARE (4.5%)
Abbey Healthcare Group, Inc.
9.50%, due 11/1/02........... 2,985,000 2,929,031
Alaris Medical, Inc.
(zero coupon), due 8/1/08
11.125%, beginning 8/1/03.... 2,395,000 984,944
Fountain View, Inc.
Series B
11.25%, due 4/15/08.......... 2,165,000 1,688,700
Hanger Orthopedic Group, Inc.
11.25%, due 6/15/09.......... 2,770,000 2,880,800
Harborside Healthcare Corp.
(zero coupon), due 8/1/08
11.00%, beginning 8/1/03..... 6,385,000 1,883,575
Magellan Health Services, Inc.
9.00%, due 2/15/08........... 2,390,000 1,935,900
Medaphis Corp.
Series B
9.50%, due 2/15/05........... 11,145,000 8,804,550
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
HEALTH CARE (Continued)
MedPartners, Inc.
6.875%, due 9/1/00........... $ 865,000 $ 830,400
7.375%, due 10/1/06.......... 2,995,000 2,485,850
MultiCare Companies, Inc.
(The)
9.00%, due 8/1/07............ 5,885,000 1,177,000
Team Health, Inc.
12.00%, due 3/15/09 (c)...... 4,445,000 4,378,325
Unilab Corp.
12.75%, due 10/1/09 (c)...... 885,000 915,975
------------
30,895,050
------------
HEALTH CARE--DRUGS (0.3%)
ICN Pharmaceuticals, Inc.
8.75%, due 11/15/08 (c)...... 1,910,000 1,824,050
------------
HEALTH CARE--HOSPITAL
MANAGEMENT (0.7%)
Columbia/HCA Healthcare Corp.
7.50%, due 11/15/95.......... 6,855,000 5,022,048
------------
HEALTH CARE--MEDICAL PRODUCTS
(0.5%)
DJ Orthopedics L.L.C.
12.625%, due 6/15/09......... 3,150,000 3,087,000
------------
HOMEBUILDING (0.7%)
Amatek Industries Pty Ltd.
14.50%, due 2/15/09 (i)...... 4,832,580 4,808,417
------------
HOTEL/MOTEL (0.9%)
Florida Panthers Holdings,
Inc.
9.875%, due 4/15/09.......... 4,340,000 4,209,800
Starwood Hotels &
Resorts Worldwide, Inc.
7.375%, due 11/15/15......... 2,580,000 1,973,027
------------
6,182,827
------------
INDUSTRIAL (1.4%)
Cellco Finance N.V.
12.75%, due 8/1/05 (c)....... 3,060,000 3,170,925
Morris Materials Handling,
Inc.
9.50%, due 4/1/08............ 2,500,000 775,000
Thermadyne Holdings Corp.
(zero coupon), due 6/1/08
12.50%, beginning 6/1/03..... 11,110,000 5,082,825
Woods Equipment Co.
Series B
12.00%, due 7/15/09.......... 745,000 670,500
------------
9,699,250
------------
INSURANCE--MULTI-LINE (0.1%)
Willis Corroon Group, PLC
9.00%, due 2/1/09............ 1,125,000 936,563
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
93
<PAGE> 94
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
LEISURE TIME (0.5%)
Bally Total Fitness Holding
Corp.
Series D
9.875%, due 10/15/07......... $ 3,725,000 $ 3,613,250
------------
MACHINE TOOLS (0.1%)
Grove Worldwide LLC
9.25%, due 5/1/08............ 1,340,000 375,200
------------
MACHINERY--DIVERSIFIED (0.5%)
Generac Portable Products
L.L.C.
11.25%, due 7/1/06........... 2,620,000 2,672,400
Harnischfeger Industries, Inc.
7.25%, due 12/15/25 (e)(g)... 1,675,000 636,500
------------
3,308,900
------------
MANUFACTURING--MISCELLANEOUS
(0.3%)
Desa International, Inc.
9.875%, due 12/15/07......... 3,245,000 2,368,850
------------
MINING (0.5%)
Great Central Mines Ltd.
8.875%, due 4/1/08........... 3,898,000 3,595,905
------------
OIL & GAS--DOMESTIC (0.7%)
Houston Exploration Co. (The)
Series B
8.625%, due 1/1/08........... 2,250,000 2,171,250
Queens Sand Resources, Inc.
12.50%, due 7/1/08........... 4,705,000 2,493,650
------------
4,664,900
------------
OIL & GAS--EQUIPMENT &
SERVICES (0.7%)
Michael Petroleum Corp.
Series B
11.50%, due 4/1/05 (e)(g).... 6,400,000 2,976,000
RBF Finance Co.
11.375%, due 3/15/09......... 1,545,000 1,653,150
------------
4,629,150
------------
OIL & GAS--EXPLORATION AND
PRODUCTION (0.8%)
Contour Energy Co.
14.00%, due 4/15/03.......... 3,390,000 3,322,200
Petro Stopping Centers
Holdings L.P.
(zero coupon), due 8/1/08
15.00%, beginning 8/1/04
(c)(j)....................... 4,314 2,157,000
------------
5,479,200
------------
PAPER & FOREST PRODUCTS (0.2%)
Pope & Talbot, Inc.
8.375%, due 6/1/13........... 1,700,000 1,495,896
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
PUBLISHING (0.3%)
General Media, Inc.
10.625%, due 12/31/00........ $ 2,104,000 $ 1,788,400
------------
REAL ESTATE (3.4%)
CB Richard Ellis Services,
Inc.
8.875%, due 6/1/06........... 7,025,000 6,252,250
Crescent Real Estate Equities
L.P.
7.50%, due 9/15/07........... 12,590,000 10,411,754
Hospitality Properties Trust
7.00%, due 3/1/08............ 1,200,000 1,027,214
LNR Property Corp.
Series B
9.375%, due 3/15/08.......... 4,585,000 4,309,900
10.50%, due 1/15/09.......... 1,480,000 1,465,200
------------
23,466,318
------------
RESTAURANTS (2.4%)
Advantica Restaurant Group,
Inc.
11.25%, due 1/15/08.......... 8,495,000 6,286,300
Avado Brands, Inc.
11.75%, due 6/15/09.......... 2,090,000 1,577,950
CKE Restaurants, Inc.
9.125%, due 5/1/09........... 770,000 571,725
FRI-MRD Corp.
14.00%, due 1/24/02 (c)(f)... 3,000,000 2,955,000
15.00%, due 1/24/02 (c)(f)... 5,400,000 5,373,000
------------
16,763,975
------------
RETAIL (0.1%)
United Auto Group, Inc.
Series A
11.00%, due 7/15/07.......... 680,000 639,200
------------
SPECIALIZED SERVICES (0.3%)
Weight Watchers International
Inc.
13.00%, due 10/1/09 (c)...... 1,940,000 1,961,825
------------
STEEL, ALUMINUM & OTHER METALS
(0.4%)
UCAR Global Enterprises, Inc.
Series B
12.00%, due 1/15/05.......... 2,600,000 2,717,000
------------
TECHNOLOGY (0.7%)
Electronic Retailing Systems
International, Inc.
(zero coupon), due 2/1/04
13.25%, beginning 2/1/00..... 8,115,000 1,785,300
Knowles Electronics Holdings,
Inc.
13.125%, due 10/15/09 (c).... 3,410,000 3,205,400
------------
4,990,700
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
94
<PAGE> 95
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES
(8.0%)
Arch Communications, Inc.
13.75%, due 4/15/08.......... $ 1,315,000 $ 1,066,794
Globalstar L.P. Capital Corp.
10.75%, due 11/1/04.......... 2,490,000 1,668,300
GlobeNet Communications Group
Ltd.
13.00%, due 7/15/07 (c)...... 2,500,000 2,546,875
HighwayMaster
Communications, Inc.
Series B
13.75%, due 9/15/05.......... 7,360,000 3,312,000
ICG Holdings, Inc.
(zero coupon), due 5/1/06
12.50%, beginning 5/1/01..... 2,605,000 1,947,237
ICG Services, Inc.
(zero coupon), due 5/1/08
9.875%, beginning 5/1/03..... 7,245,000 3,749,287
(zero coupon), due 2/15/08
10.00%, beginning 2/15/03.... 7,000,000 3,780,000
ICO Global Communications
Holdings Ltd.
15.00%, due 8/1/05 (e)(g).... 4,050,000 1,903,500
15.00%, due 8/1/05
(e)(g)(k).................... 1,980 930,600
Level 3 Communications, Inc.
(zero coupon), due 12/1/08
10.50%, beginning 12/1/03.... 815,000 493,075
NTL, Inc.
Series A
(zero coupon), due 4/15/05
12.75%, beginning 4/15/00.... 7,150,000 7,185,750
Orion Network Systems, Inc.
(zero coupon), due 1/15/07
12.50%, beginning 1/15/02.... 10,940,000 5,305,900
PageMart Nationwide, Inc.
(zero coupon), due 2/1/05
15.00%, beginning 2/1/00..... 3,650,000 3,285,000
RCN Corp.
(zero coupon), due 10/15/07
11.125%, beginning
10/15/02..................... 4,790,000 3,364,975
10.125%, due 1/15/10......... 1,695,000 1,686,525
T/SF Communications Corp.
Series B
10.375%, due 11/1/07......... 3,290,000 3,158,400
Telehub Communications Corp.
(zero coupon), due 7/31/05
13.875%, beginning 7/31/01... 6,465,000 646,500
United Pan-Europe
Communications N.V.
(zero coupon), due 11/1/09
13.375%, beginning 11/1/04
(c).......................... 12,620,000 7,067,200
10.875%, due 11/1/07 (c)..... 1,350,000 1,390,500
------------
54,488,418
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
TEXTILES--APPAREL
MANUFACTURERS (0.4%)
Delta Mills, Inc.
Series B
9.625%, due 9/1/07........... $ 2,390,000 $ 1,673,000
St. John Knits International,
Inc.
12.50%, due 7/1/09........... 1,650,000 1,460,250
------------
3,133,250
------------
TRANSPORTATION (0.2%)
Pacer International, Inc.
Series B
11.75%, due 6/1/07........... 1,610,000 1,626,100
------------
UTILITIES (0.9%)
PSEG Energy Holdings, Inc.
10.00%, due 10/1/09 (c)...... 5,870,000 6,016,768
------------
UTILITY--ELECTRIC (0.4%)
ESI Tractebel Acquisition
Corp.
Series B
7.99%, due 12/30/11.......... 2,825,000 2,542,500
------------
UTILITY--GAS (0.2%)
Navigator Gas Transport, PLC
10.50%, due 6/30/07 (c)...... 2,905,000 1,336,300
------------
Total Corporate Bonds
(Cost $420,758,968).......... 380,086,594
------------
FOREIGN BONDS (4.1%)
BROADCAST/MEDIA (0.6%)
Central European Media
Enterprises Ltd.
Series BR
8.125%, due 8/15/04.......... DM 2,930,000 600,670
TDL Infomedia Group Ltd.
12.125%, due 10/15/09 (c).... L 2,160,000 3,476,936
------------
4,077,606
------------
PUBLISHING (2.0%)
IPC Magazines Group, PLC
(zero coupon), due 3/15/08
10.75%, beginning 3/15/03.... 4,645,000 2,245,914
9.625%, due 3/15/08.......... 4,980,000 4,494,728
Regional Independent Media
Group
(zero coupon), due 7/1/08
12.875%, beginning 7/1/03.... 6,375,000 6,951,806
------------
13,692,448
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
95
<PAGE> 96
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
FOREIGN BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES
(1.5%)
Global TeleSystems Group, Inc.
11.00%, due 12/1/09 (c)...... E 4,870,000 $ 4,918,281
NTL, Inc.
9.875%, due 11/15/09 (c)..... 2,940,000 2,961,779
Tele1 Europe B.V.
11.875%, due 12/1/09 (c)..... 1,050,000 1,060,410
United Pan-Europe
Communications N.V.
10.875%, due 11/1/07 (c)..... 1,295,000 1,337,046
------------
10,277,516
------------
Total Foreign Bonds
(Cost $33,099,948)........... 28,047,570
------------
<CAPTION>
LOAN ASSIGNMENTS &
PARTICIPATIONS (3.8%)
<S> <C> <C>
CASINOS (0.5%)
Isle of Capri Casinos, Inc.
Bank debt
Tranche A
8.4119%, due 4/23/04
(f)(l)(m).................... $ 3,383,333 3,383,333
------------
CONGLOMERATES (0.4%)
First Pacific Capital Ltd.
Bank debt
7.4375%, due 1/23/00
(f)(m)....................... 3,000,000 2,820,000
------------
ENTERTAINMENT (0.4%)
Affinity Group, Inc.
Bank debt
Tranche B
10.125%, due 6/30/06
(f)(l)(m).................... 1,287,000 1,280,565
Euro Disneyland S.N.C.
Phase 1, Bank debt
Tranche A
3.4323%, due 11/30/06
(f)(l)(m).................... FF 1,817,818 218,758
Tranche D
4.4549%, due 11/30/06
(f)(l)(m).................... 3,382,179 407,016
United Artists Theatre Co.
Bank debt
Term Loan B
10.3093%, due 4/21/06
(f)(l)(m).................... $ 286,643 211,399
Term Loan C
10.3702%, due 4/21/07
(f)(l)(m).................... 427,961 315,621
------------
2,433,359
------------
HEALTH CARE (0.3%)
Unilab Corp.
Bank debt
Term Loan B
10.00%, due 11/23/06
(f)(l)(m).................... 1,970,063 1,957,750
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
OIL & GAS--DOMESTIC (0.1%)
Transtexas Gas Corp.
Bank debt
13.00%, due 12/31/01 (f)..... $ 1,000,000 $ 1,000,000
------------
TELECOMMUNICATION SERVICES
(0.5%)
Orius Corp.
Bridge Loan
13.00%, due 12/15/00
(f)(m)....................... 3,285,000 3,285,000
------------
TRANSPORTATION (1.6%)
Eurotunnel
Bank debt
Tier One
5.28%, due 12/31/12
(f)(l)(m).................... FF 10,595,000 1,279,063
7.03%, due 12/31/12
(f)(l)(m).................... L 7,500,000 9,549,364
------------
10,828,427
------------
Total Loan Assignments &
Participations
(Cost $26,455,288)........... 25,707,869
------------
U.S. GOVERNMENT (0.2%)
UNITED STATES TREASURY BOND
(0.2%)
5.25%, due 2/15/29........... $ 1,730,000 1,430,485
------------
Total U.S. Government
(Cost $1,599,622)............ 1,430,485
------------
YANKEE BONDS (11.3%)
BROADCAST/MEDIA (0.5%)
Central European Media
Enterprises Ltd.
9.375%, due 8/15/04.......... 3,190,000 1,339,800
TV Azteca, S.A. de C.V.
Series B
10.50%, due 2/15/07.......... 2,125,000 1,843,438
------------
3,183,238
------------
CABLE (0.6%)
Rogers Cablesystems Ltd.
10.00%, due 3/15/05.......... 2,210,000 2,381,275
11.00%, due 12/1/15.......... 1,400,000 1,585,500
------------
3,966,775
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
96
<PAGE> 97
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
YANKEE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
CELLULAR TELEPHONES (2.0%)
Dolphin Telecom, PLC
(zero coupon), due 6/1/08
11.50%, beginning 6/1/03..... $ 1,395,000 $ 676,575
Millicom International
Cellular, S.A.
(zero coupon), due 6/1/06
13.50%, beginning 6/1/01..... 15,529,000 12,811,425
------------
13,488,000
------------
CHEMICALS (0.7%)
Brunner Mond Group, PLC
11.00%, due 7/15/08.......... 2,685,000 1,288,800
Octel Developments, PLC
10.00%, due 5/1/06........... 3,500,000 3,465,000
------------
4,753,800
------------
COMPUTER & OFFICE EQUIPMENT
(0.0%) (b)
International Semi-Technology
Microelectronics, Inc.
(zero coupon), due 8/15/03
11.50%, beginning 8/15/00
(g).......................... 8,965,000 89,650
------------
FOOD, BEVERAGES & TOBACCO
(0.4%)
Sparkling Spring Water Group,
Ltd.
11.50%, due 11/15/07......... 3,000,000 2,430,000
------------
MINING (0.7%)
Echo Bay Mines Ltd.
12.00%, due 4/1/27........... 5,145,000 3,087,000
Glencore Nickel Pty Ltd.
9.00%, due 12/1/14........... 1,945,000 1,672,700
------------
4,759,700
------------
OIL & GAS--DOMESTIC (0.0%) (b)
Husky Oil Ltd.
8.90%, due 8/15/28
11.1875%, beginning
8/15/08...................... 200,000 188,000
------------
PAPER & FOREST PRODUCTS (0.5%)
Doman Industries Ltd.
12.00%, due 7/1/04........... 3,400,000 3,540,250
------------
STEEL, ALUMINUM & OTHER METALS
(1.0%)
Ivaco, Inc.
11.50%, due 9/15/05.......... 6,505,000 7,041,663
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES
(3.1%)
Call-Net Enterprises, Inc.
(zero coupon), due 8/15/07
9.27%, beginning 8/15/02..... $ 3,040,000 $ 1,801,200
(zero coupon), due 5/15/09
10.80%, beginning 5/15/04.... 2,715,000 1,337,138
9.375%, due 5/15/09.......... 2,855,000 2,348,237
Colt Telecom Group, PLC
(zero coupon), due 12/15/06
12.00%, beginning 12/15/01... 1,190,000 1,023,400
Hermes Europe Railtel B.V.
11.50%, due 8/15/07.......... 2,830,000 2,914,900
United Pan-Europe
Communications N.V.
(zero coupon), due 8/1/09
12.50%, beginning 8/1/04..... 6,395,000 3,581,200
Series B
10.875%, due 8/1/09.......... 8,300,000 8,466,000
------------
21,472,075
------------
TRANSPORTATION (1.8%)
Ermis Maritime Holdings Ltd.
12.50%, due 3/15/06 (e)...... 9,830,500 2,850,845
Pacific & Atlantic (Holdings)
Inc.
11.50%, due 5/30/08 (e)...... 6,535,000 2,483,300
Pegasus Shipping (Hellas) Ltd.
Series A
11.875%, due 11/15/04 (e).... 4,980,000 1,792,800
11.875%, due 11/15/04
(c)(e)....................... 1,735,000 624,600
Sea Containers Ltd.
Series B
7.875%, due 2/15/08.......... 375,000 323,438
10.75%, due 10/15/06......... 4,185,000 4,185,000
------------
12,259,983
------------
Total Yankee Bonds
(Cost $85,137,641)........... 77,173,134
------------
Total Long-Term Bonds
(Cost $612,030,393).......... 554,670,772
------------
<CAPTION>
COMMON STOCKS (3.9%)
SHARES
--------------
<S> <C> <C>
BROADCAST/MEDIA (0.3%)
Spanish Broadcasting System,
Inc.
Class B (a)(c)............... 71,950 2,113,531
------------
CELLULAR TELEPHONES (0.0%) (b)
Tele Sudeste Celular
Participacoes S.A.
ADR (n)...................... 490 19,018
Telesp Celular Participacoes
S.A.
ADR (n)...................... 983 41,655
------------
60,673
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
97
<PAGE> 98
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
CHEMICALS (0.3%)
Millennium Chemicals, Inc..... 88,460 $ 1,747,085
------------
ENTERTAINMENT (0.0%) (b)
Loews Cineplex Entertainment
Corp. (a).................... 28,500 167,437
------------
FINANCE (0.1%)
AMC Financial, Inc. (a)....... 195,912 877,686
------------
FOOD, BEVERAGES & TOBACCO
(0.3%)
Buenos Aires Embotelladora
Sociedad Anonima
Class B (s).................. 482,687 2,172,308
------------
GOLD & PRECIOUS METALS MINING
(0.1%)
Placer Dome Inc. ............. 76,705 824,579
------------
HEALTH CARE (0.3%)
General Healthcare Group Ltd.
(a)(o)....................... 572 27,657
Quest Diagnostics, Inc. (a)... 70,875 2,166,117
------------
2,193,774
------------
HOTEL/MOTEL (0.5%)
Starwood Hotels & Resorts
Worldwide, Inc............... 149,700 3,517,950
------------
OIL & GAS--EXPLORATION &
PRODUCTION (0.2%)
Union Pacific Resources Group,
Inc. ........................ 122,325 1,559,644
------------
PAPER & FOREST PRODUCTS (0.2%)
TimberWest Forest Corp.
(p)(q)....................... 156,965 1,027,469
------------
REAL ESTATE (1.2%)
Equity Office Properties
Trust........................ 229,900 5,661,287
Highwoods Properties, Inc..... 17,180 399,435
Metropolis Realty Trust,
Inc.......................... 56,290 1,463,540
------------
7,524,262
------------
STEEL (0.2%)
USX-U.S. Steel Group.......... 45,040 1,486,320
------------
TELECOMMUNICATION SERVICES
(0.2%)
Call-Net Enterprises, Inc.
Series B (a)(p).............. 444,625 1,378,634
Embratel Participacoes S.A.
ADR (n)...................... 2,500 68,125
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES
(Continued)
Tele Centro Sul Participacoes
S.A. ADR (n)................. 495 $ 44,921
Tele Norte Leste Participacoes
S.A. ADR (n)................. 2,498 63,699
Telecommunicacoes de Sao Paulo
ADR (n)...................... 2,449 59,847
------------
1,615,226
------------
TEXTILES--APPAREL MANUFACTURERS (0.0%) (b)
Hosiery Corp. of America, Inc.
(a).......................... 500 20,000
------------
TRANSPORTATION (0.0%) (b)
Eumenides Ltd. (a)............ 4,380 44
------------
Total Common Stocks
(Cost $29,186,933)........... 26,907,988
------------
PREFERRED STOCKS (3.7%)
BROADCAST/MEDIA (0.9%)
Paxson Communications Corp.
12.50% (r)................... 6,154 6,277,549
------------
EQUIPMENT LOANS (0.4%)
GPA Group, PLC (a)(f)......... 4,750,000 2,470,000
------------
FINANCIAL SERVICES (0.2%)
North Atlantic Trading Co.
12.00% (r)................... 88,206 1,521,551
------------
OIL & GAS--EQUIPMENT &
SERVICES (0.8%)
R&B Falcon Corp. 13.875%
(r).......................... 5,049 5,326,241
------------
PAPER & FOREST PRODUCTS (0.3%)
Paperboard Industries
International, Inc.
5.00%, Class A (c)(f)(p)..... 145,000 2,304,183
------------
REAL ESTATE (0.1%)
Crown American Realty Trust
11.00%, Series A............. 26,120 923,995
------------
TECHNOLOGY (0.0%) (b)
Metawave Communications Corp.
Series D (a)(c)(f)(u)........ 53,509 296,975
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
98
<PAGE> 99
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
PREFERRED STOCKS (CONTINUED)
SHARES VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES
(1.0%)
ICG Holdings, Inc. 14.25%
(r).......................... 2,253 $ 2,157,247
Nextel Communications, Inc.
13.00%, Series D (r)......... 3,973 4,251,110
------------
6,408,357
------------
Total Preferred Stocks
(Cost $25,042,317)........... 25,528,851
------------
WARRANTS (0.4%)
BROADCAST/MEDIA (0.1%)
CD Radio, Inc. expire 5/15/09
(a)(c)....................... 8,055 654,469
------------
CASINOS (0.0%) (b)
Isle of Capri Casinos, Inc.
expire 5/3/01 (a)............ 1,249 12
------------
CELLULAR TELEPHONES (0.0%) (b)
Occidente y Caribe Celular,
S.A. expire 3/15/04 (a)(c)... 10,680 160,200
------------
FINANCIAL SERVICES (0.0%) (b)
North Atlantic Trading Co.
expire 6/15/07 (a)(c)........ 74 1
------------
FOOD, BEVERAGES & TOBACCO
(0.0%) (b)
Colorado Prime Corp. expire
12/31/03 (a)(c).............. 5,210 52
------------
HOMEBUILDING (0.1%)
Amatek Industries Pty Ltd.
Common Rights (a)............ 3,125 1,719
Preferred Rights (a)......... 740,721 407,397
------------
409,116
------------
OIL & GAS--EQUIPMENT &
SERVICES (0.2%)
R&B Falcon Corp. expire 5/1/09
(a)(c)....................... 4,700 1,316,000
------------
PUBLISHING (0.0%) (b)
General Media, Inc. expire
12/21/03 (a)(c).............. 900 9
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES
(0.0%) (b)
ICO Global Communications
Holdings Ltd. expire 8/1/05
(a).......................... 2,800 $ 28
Telehub Communications Corp.
expire 7/31/05 (a)(c)........ 6,465 65
------------
93
------------
TELECOMMUNICATIONS-- LONG DISTANCE (0.0%) (b)
Sprint Corp. expire 6/1/00
(a).......................... 1,580 16
------------
Total Warrants
(Cost $1,332,889)............ 2,539,968
------------
<CAPTION>
SHORT-TERM
INVESTMENTS (8.8%)
PRINCIPAL
AMOUNT
--------------
<S> <C> <C>
COMMERCIAL PAPER (5.4%)
Associates Corp. 4.00%, due
1/3/00....................... $ 5,105,000 5,103,865
Ford Motor Credit Co. 6.05%,
due 1/18/00.................. 11,300,000 11,267,597
6.35%, due 1/7/00............ 4,785,000 4,779,921
Merrill Lynch & Co., Inc.
5.80%, due 1/19/00........... 6,000,000 5,982,592
Morgan Stanley Dean Witter &
Co. 4.55%, due 6/7/00 (m).... 10,000,000 10,000,000
------------
Total Commercial Paper
(Cost $37,133,975)........... 37,133,975
------------
<CAPTION>
SHARES
--------------
<S> <C> <C>
INVESTMENT COMPANY (3.1%)
Merrill Lynch Premier
Institutional Fund........... 21,144,533 21,144,533
------------
Total Investment Company
(Cost $21,144,533)................. 21,144,533
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
99
<PAGE> 100
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
SHORT-TERM LOAN
ASSIGNMENTS (0.3%)
HEALTH CARE--MEDICAL PRODUCTS
(0.3%)
Inamed Corp.
Bridge Loan
13.4763%, due 6/2/00
(f)(m)....................... $ 1,679,852 $ 1,679,852
------------
TEXTILES--APPAREL
MANUFACTURERS (0.0%) (b)
Synthetic Industries, Inc.
Bridge Loan
13.00%, due 12/14/00
(f)(m)....................... 110,000 108,900
------------
Total Short-Term Loan
Assignments
(Cost $1,778,016)............ 1,788,752
------------
Total Short-Term Investments
(Cost $60,056,524)........... 60,067,260
------------
Total Investments
(Cost $727,649,056) (v)...... 97.8% 669,714,839(w)
Cash and Other Assets,
Less Liabilities............. 2.2 15,241,642
-------------- ------------
Net Assets.................... 100.0% $684,956,481
============== ============
</TABLE>
- ------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) Eurobond -- bond denominated in U.S. dollars or other currencies and sold
to investors outside the country whose currency is used.
(e) Issue in default.
(f) Restricted security.
(g) Issuer in bankruptcy.
(h) 1,530 Units -- Each unit reflects $1,000 principal amount of 12.50% Senior
Notes plus 1 warrant to acquire 2.3944 shares of common stock of ASAT
Holding Corp. at $18.60 per share at a future date.
(i) CIK ("Cash in Kind") -- interest payment is made with cash or additional
securities.
(j) 4,314 Units -- Each unit reflects $1,000 principal amount of (zero coupon),
due 8/1/08, 15.00%, beginning 8/1/04 Senior Discounted Notes plus 1 warrant
to acquire common stock at an average price of $156.11 per share at a
future date.
(k) 1,980 Units -- Each unit reflects $1,000 principal amount of 15.00% Senior
Notes plus 1 warrant to acquire 19.85 shares of common stock at $13.20 per
share at a future date.
(l) Multiple tranche facilities.
(m) Floating rate. Rate shown is the rate in effect at December 31, 1999.
(n) ADR -- American Depository Receipt.
(o) British security.
(p) Canadian security.
(q) Stapled Unit -- Each unit consists of 1 common share, 100 preferred shares
and 1 Subordinated Note receipt.
(r) PIK ("Payment in Kind") -- interest or dividend payment is made with
additional securities.
(s) Argentinean security.
(t) Yankee Bond.
(u) Illiquid security.
(v) The cost for Federal income tax purposes is $727,976,793.
(w) At December 31, 1999 net unrealized depreciation was $58,261,954, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $23,965,538 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $82,227,492.
DM --Deutsche Mark
E --Euro
FF --French Franc
L --Pound Sterling.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
100
<PAGE> 101
MAINSTAY VP SERIES FUND, INC.
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $727,649,056)......... $669,714,839
Cash..................................... 355,071
Receivables:
Dividends and interest................. 13,699,148
Investment securities sold............. 1,121,861
Fund shares sold....................... 193,996
Unrealized appreciation on foreign
currency forward contracts............. 826,889
------------
Total assets..................... 685,911,804
------------
LIABILITIES:
Payables:
Investment securities purchased........ 189,391
Adviser................................ 171,958
Administrator.......................... 114,639
Fund shares redeemed................... 64,396
Shareholder communication.............. 55,438
Custodian.............................. 12,600
Directors.............................. 573
Accrued expenses......................... 84,311
Unrealized depreciation on foreign
currency forward contracts............. 262,017
------------
Total liabilities................ 955,323
------------
Net assets applicable to outstanding
shares................................. $684,956,481
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares authorized... $ 640,575
Additional paid-in capital............... 745,859,727
Accumulated distribution in excess of net
investment income...................... (3,350,338)
Accumulated distribution in excess of net
realized gain on investments........... (820,736)
Net unrealized depreciation on
investments............................ (57,934,217)
Net unrealized appreciation on
translation of other assets and
liabilities in
foreign currencies and foreign currency
forward contracts...................... 561,470
------------
Net assets applicable to outstanding
shares................................. $684,956,481
============
Shares of capital stock outstanding...... 64,057,465
============
Net asset value per share outstanding.... $ 10.69
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 71,818,272
Dividends (a).......................... 4,346,639
------------
Total income..................... 76,164,911
------------
Expenses:
Advisory............................... 1,920,756
Administration......................... 1,280,504
Shareholder communication.............. 166,232
Professional........................... 160,553
Custodian.............................. 51,580
Directors.............................. 26,729
Portfolio pricing...................... 11,804
Miscellaneous.......................... 16,469
------------
Total expenses................... 3,634,627
------------
Net investment income.................... 72,530,284
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Security transactions.................. 22,135,514
Foreign currency transactions.......... (593,506)
------------
Net realized gain on investments and
foreign currency transactions.......... 21,542,008
------------
Net change in unrealized depreciation on:
Security transactions.................. (20,710,057)
Translation of other assets and
liabilities in
foreign currencies and foreign
currency forward contracts........... 702,348
------------
Net unrealized loss on investments and
foreign currency transactions.......... (20,007,709)
------------
Net realized and unrealized gain on
investments and foreign currency
transactions........................... 1,534,299
------------
Net increase in net assets resulting from
operations............................. $ 74,064,583
============
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $3,570.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
101
<PAGE> 102
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $72,530,284 $ 51,345,752
Net realized gain (loss) on investments................... 22,135,514 (7,676,643)
Net realized loss on foreign currency transactions........ (593,506) (424,119)
Net change in unrealized depreciation on investments...... (20,710,057) (34,140,189)
Net change in unrealized depreciation on translation of
other assets and liabilities in foreign currencies and
foreign currency forward contracts...................... 702,348 (129,893)
------------ ------------
Net increase in net assets resulting from operations...... 74,064,583 8,974,908
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ (73,662,076) (51,219,831)
From net realized gain on investments..................... (12,344,416) (1,567,336)
In excess of net investment income........................ (3,350,338) (455,590)
In excess of net realized gain on investments............. (820,736) --
------------ ------------
Total dividends and distributions to shareholders....... (90,177,566) (53,242,757)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 84,828,143 171,504,905
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 90,177,566 53,242,757
------------ ------------
175,005,709 224,747,662
Cost of shares redeemed................................... (43,749,083) (35,233,498)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 131,256,626 189,514,164
------------ ------------
Net increase in net assets.................................. 115,143,643 145,246,315
NET ASSETS:
Beginning of year........................................... 569,812,838 424,566,523
------------ ------------
End of year................................................. $684,956,481 $569,812,838
============ ============
Accumulated distribution in excess of net investment income
at end of year............................................ $(3,350,338) $ (455,590)
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
1995 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period..... $ 10.92 $ 11.73 $ 11.61 $ 10.55 $ 10.00
------------ ------------ ------------ ------------ ------------
Net investment income...................... 1.31 1.08 0.85 0.59 0.37
Net realized and unrealized gain (loss) on
investments.............................. 0.07 (0.76) 0.65 1.22 0.61
Net realized and unrealized gain (loss) on
foreign currency transactions............ 0.01 (0.00)(b) -- -- --
------------ ------------ ------------ ------------ ------------
Total from investment operations........... 1.39 0.32 1.50 1.81 0.98
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income............... (1.32) (1.09) (0.84) (0.59) (0.37)
From net realized gain on investments.... (0.23) (0.04) (0.54) (0.16) (0.04)
In excess of net investment income....... (0.06) -- -- -- --
In excess of net realized gain on
investments............................ (0.01) -- -- -- (0.02)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions.......... (1.62) (1.13) (1.38) (0.75) (0.43)
------------ ------------ ------------ ------------ ------------
Net asset value at end of period........... $ 10.69 $ 10.92 $ 11.73 $ 11.61 $ 10.55
============ ============ ============ ============ ============
Total investment return.................... 12.84% 2.66% 13.03% 17.16% 10.06%(c)
Ratios (to average net assets)/
Supplemental Data:
Net investment income.................... 11.33% 9.93% 8.84% 8.59% 10.02%+
Net expenses............................. 0.57% 0.58% 0.59% 0.67% 0.67%+
Expenses (before reimbursement).......... 0.57% 0.58% 0.59% 0.71% 1.25%+
Portfolio turnover rate.................... 93% 151% 153% 149% 95%
Net assets at end of period (in 000's)..... $ 684,956 $ 569,813 $ 424,567 $ 205,001 $ 43,314
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Less than one cent per share.
(c) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
102
<PAGE> 103
MAINSTAY VP SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (98.0%)+
SHARES VALUE
---------------------
<S> <C> <C>
AUSTRALIA (2.3%)
Australia & New Zealand Banking
Group, Ltd. (banking)............. 37,722 $ 273,537
Broken Hill Proprietary Co., Ltd.
(energy sources).................. 25,999 340,291
Cable & Wireless Optus, Ltd.
(telecommunications) (a).......... 98,766 328,979
Telstra Corp., Ltd.
(telecommunications).............. 50,956 276,101
Telstra Corp., Ltd.
(telecommunications) (c).......... 20,980 73,726
WMC, Ltd. (metals-nonferrous)...... 61,801 339,717
-----------
1,632,351
-----------
BELGIUM (1.5%)
Delhaize-Le Lion, S.A.
(merchandising)................... 1,840 137,962
Electrabel, S.A.
(utilities-electrical & gas)...... 960 312,748
Fortis AG (insurance).............. 11,930 428,356
Solvay, S.A. Class A (chemicals)... 2,560 210,423
-----------
1,089,489
-----------
FINLAND (5.0%)
Comptel Oyj (telecommunications)
(a)............................... 392 27,443
Merita PLC (banking)............... 27,130 159,091
Nokia Oyj Class A (electrical &
electronics)...................... 15,932 2,874,631
Outokumpu Oyj
(metals-nonferrous)............... 17,630 248,295
UPM-Kymmene Oyj (forest products &
paper)............................ 7,480 299,917
-----------
3,609,377
-----------
FRANCE (7.6%)
Air Liquide, S.A. (chemicals)...... 1,260 209,914
AXA, S.A. (insurance).............. 2,274 315,476
Carrefour, S.A. (merchandising).... 3,474 637,613
Elf Aquitaine, S.A. (energy
sources).......................... 1 153
France Telecom, S.A.
(telecommunications).............. 3,493 459,730
Groupe Danone, S.A. (food &
household products)............... 1,032 242,067
Lafarge, S.A. (building materials &
components)....................... 1,182 136,967
L'Oreal, S.A. (health & personal
care)............................. 807 644,316
Pernod-Ricard, S.A. (beverages &
tobacco).......................... 1,800 102,485
Pinault-Printemps-Redoute, S.A.
(merchandising)................... 827 217,193
PSA Peugeot Citroen
(automobiles)..................... 1,714 387,261
Schneider, S.A. (electrical &
electronics)...................... 2,039 159,321
Societe Generale, S.A. Class A
(banking)......................... 751 173,897
Suez Lyonnaise des Eaux, S.A.
(business & public services)...... 1,540 245,601
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
FRANCE (Continued)
Suez Lyonnaise des Eaux, S.A. Strip
(business & public services)
(f)............................... 1,540 $ 15
Thomson CSF, S.A. (aerospace &
military technology).............. 3,762 123,652
Total Fina, S.A. Class B (energy
sources).......................... 6,175 820,148
Total Fina, S.A. Strip (energy
sources) (f)...................... 2,070 21
Vivendi, S.A. (business & public
services)......................... 7,276 653,856
-----------
5,529,686
-----------
GERMANY (8.9%)
Allianz AG Registered
(insurance)....................... 1,314 439,269
Bayer AG (chemicals)............... 8,651 407,571
DaimlerChrysler AG (automobiles)... 7,188 556,243
Deutsche Bank AG (banking)......... 3,940 331,161
Deutsche Telekom AG
(telecommunications).............. 15,138 1,072,821
Dresdner Bank AG (banking)......... 6,215 336,414
Epcos AG (electronic components &
instruments) (a).................. 6,600 492,878
Karstadt AG (merchandising)........ 5,540 221,020
Mannesmann AG
(telecommunications).............. 1,297 311,376
Metro AG (merchandising)........... 3,667 196,287
Muenchener Rueckversicherungs-
Gesellschaft AG Registered
(insurance)....................... 482 121,658
RWE AG (utilities-electrical &
gas).............................. 6,399 249,518
SAP AG (business & public
services)......................... 832 407,823
Schering AG (health & personal
care)............................. 6,333 761,781
Veba AG (utilities-electrical &
gas).............................. 6,559 317,230
Viag AG (utilities-electrical &
gas).............................. 12,558 229,103
-----------
6,452,153
-----------
GREECE (0.5%)
Hellenic Telecommunications
Organization S.A.
(telecommunications).............. 30,400 362,900
-----------
HONG KONG (0.5%)
Cheung Kong (Holdings) Ltd. (real
estate)........................... 31,000 393,805
-----------
IRELAND (3.5%)
Allied Irish Banks PLC (banking)... 31,555 358,058
CRH PLC (building materials &
components)....................... 43,548 934,160
Eircom PLC (telecommunications).... 64,220 278,739
Elan Corp. PLC (health & personal
care) (a)......................... 11,307 323,560
Irish Life & Permanent PLC
(insurance)....................... 8,065 75,993
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
103
<PAGE> 104
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
<S> <C> <C>
IRELAND (Continued)
Kerry Group PLC Class A (food &
household products)............... 14,909 $ 177,842
Smurfit (Jefferson) Group PLC
(forest products & paper)......... 129,658 389,906
-----------
2,538,258
-----------
ITALY (2.8%)
Assicurazioni Generali S.p.A.
(insurance)....................... 5,542 182,213
Banca Commerciale Italiana S.p.A.
(banking)......................... 29,737 160,965
ENI S.p.A. (energy sources)........ 86,051 470,964
Riunione Adriatica di Sicurta
S.p.A. (insurance)................ 3,006 30,011
Telecom Italia S.p.A.
(telecommunications).............. 21,467 301,258
Telecom Italia Mobile S.p.A.
(telecommunications).............. 60,547 673,075
Unicredito Italiano S.p.A.
(banking)......................... 43,987 215,171
-----------
2,033,657
-----------
JAPAN (30.6%) (d)
Ajinomoto Co., Inc. (food &
household products)............... 26,000 270,531
Bandai Co., Ltd. (recreation &
other consumer goods)............. 8,000 254,020
Bank of Tokyo-Mitsubishi, Ltd.
(banking) (b)..................... 34,000 473,024
Bridgestone Corp. (industrial
components)....................... 5,000 109,912
CSK Corp. (business & public
services)......................... 2,700 437,891
DDI Corp. (telecommunications)..... 25 341,950
Fuji Bank (banking)................ 27,000 261,943
Fujitsu, Ltd. (data processing &
reproduction)..................... 24,000 1,092,677
Hitachi, Ltd. (electrical &
electronics) (b).................. 19,000 304,433
Honda Motor Co., Ltd.
(automobiles)..................... 12,000 445,512
Industrial Bank of Japan, Ltd.
(The) (banking) (b)............... 49,000 471,549
Ito-Yokado Co., Ltd.
(merchandising)................... 5,000 542,235
Japan Airlines Co., Ltd.
(transportation-airlines)......... 86,000 254,587
Matsushita Electric Industrial Co.,
Ltd. (appliances & household
durables)......................... 8,000 221,193
Mitsubishi Electric Corp.
(electrical & electronics)........ 54,000 348,203
Mitsubishi Estate Co., Ltd. (real
estate)........................... 4,000 38,963
Mitsubishi Heavy Industries, Ltd.
(machinery & engineering)......... 34,000 113,273
Mitsui Fudosan Co., Ltd. (real
estate)........................... 13,000 87,891
NEC Corp. (electrical &
electronics)...................... 30,000 713,699
Nikko Securities Co., Ltd.
(financial services).............. 38,000 480,039
Nintendo Co., Ltd. (recreation &
other consumer goods)............. 1,200 199,074
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
JAPAN (Continued)
Nippon Express Co., Ltd.
(transportation-road & rail)...... 17,000 $ 93,841
Nippon Mitsubishi Oil Corp. (energy
sources).......................... 11,000 48,362
Nippon Steel Corp.
(metals-steel).................... 58,000 135,432
Nippon Telegraph & Telephone Corp.
(telecommunications).............. 117 2,000,407
NKK Corp. (metals-steel) (a)....... 406,000 273,697
NTT Data Corp. (business & public
services)......................... 69 1,584,206
NTT Mobile Communications Network,
Inc. (telecommunications)......... 36 1,382,259
OKI Electric Industries Co. Ltd.
(electrical & electronics) (a).... 51,000 299,959
Olympus Optical Co., Ltd.
(electronic components &
instruments)...................... 11,000 155,294
Rohm Co., Ltd. (electronic
components & instruments)......... 3,000 1,231,020
Sharp Corp. (appliances & household
durables)......................... 7,000 178,840
Sony Corp. (appliances & household
durables)......................... 7,300 2,161,026
Sumitomo Bank, Ltd. (banking)...... 22,000 300,701
Sumitomo Electric Industries
(industrial components)........... 7,000 80,769
Sumitomo Forestry Co., Ltd.
(building materials &
components)....................... 19,000 146,648
Sumitomo Marine & Fire Insurance
Co., Ltd. (insurance)............. 82,000 504,718
Takeda Chemical Industries, Ltd.
(health & personal care).......... 8,000 394,708
TDK Corp. (electronic components &
instruments)...................... 2,000 275,709
Tokio Marine & Fire Insurance Co.,
Ltd. (insurance).................. 48,000 560,407
Tokyo Electric Power Co., Inc.
(utilities-electrical & gas)...... 4,100 109,756
Tokyo Seimitsu Co., Ltd.
(electronic components &
instruments)...................... 4,100 660,940
Toshiba Corp. (electrical &
electronics)...................... 44,000 335,306
Tostem Corp. (building materials &
components)....................... 7,000 125,496
Toyota Motor Corp. (automobiles)... 24,000 1,160,676
Trans Cosmos Inc. (business &
public services).................. 400 170,389
Yamanouchi Pharmaceutical Co., Ltd.
(health & personal care).......... 8,000 279,031
-----------
22,112,196
-----------
NETHERLANDS (3.7%)
ABN AMRO Holding N.V. (banking).... 13,301 330,655
Akzo Nobel N.V. (chemicals)........ 3,302 164,834
Heineken N.V. (beverages &
tobacco).......................... 3,742 181,622
ING Groep N.V. (financial
services)......................... 7,286 437,769
Koninklijke KPN N.V.
(telecommunications).............. 3,613 350,939
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
104
<PAGE> 105
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
<S> <C> <C>
NETHERLANDS (Continued)
Koninklijke (Royal) Philips
Electronics N.V. (appliance &
household durables)............... 3,080 $ 416,796
Royal Dutch Petroleum Co. (energy
sources).......................... 9,209 561,710
TNT Post Group N.V. (business &
public services).................. 3,486 99,414
Wolters Kluwer CVA N.V.
(broadcasting & publishing)....... 3,312 111,550
-----------
2,655,289
-----------
NEW ZEALAND (0.2%)
Contact Energy Ltd. (utilities-
electrical & gas)................. 69,450 121,331
-----------
PORTUGAL (2.2%)
Banco Comercial Portugues, S.A.
Registered (banking).............. 66,590 367,790
Banco Espirito Santo, S.A.
(banking)......................... 15,450 432,088
Electricidade de Portugal, S.A.
(utilities-electrical & gas)...... 8,736 151,758
Portugal Telecom, S.A. Registered
(telecommunications).............. 21,395 233,550
Sonae SGPS, SA (forest products &
paper)............................ 7,734 406,233
-----------
1,591,419
-----------
SPAIN (3.3%)
Acerinox, S.A. (metals-steel)...... 4,900 194,505
Banco Bilbao Vizcaya, S.A.
Registered (banking).............. 21,560 305,589
Banco Santander Central Hispano,
S.A. (banking).................... 34,572 389,520
Endesa, S.A. (utilities-electrical
& gas)............................ 10,743 212,252
Gas Natural SDG, S.A. (utilities-
electrical & gas)................. 4,611 105,706
Iberdrola, S.A.
(utilities-electrical & gas)...... 10,722 147,888
Repsol, S.A. (energy sources)...... 10,998 253,781
Telefonica, S.A.
(telecommunications) (a).......... 29,370 730,121
Terra Networks, S.A. (business &
public services) (a).............. 1,400 76,650
-----------
2,416,012
-----------
SWEDEN (1.7%)
AstraZeneca AB Series A (health &
personal care).................... 6,104 257,221
ForeningsSparbanken AB (banking)... 7,474 109,359
Hennes & Mauritz AB Series B
(merchandising)................... 5,568 185,752
Icon Medialab International AB
(business & public services)
(a)............................... 11,370 393,951
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
SWEDEN (Continued)
Skandia Forsakrings AB
(insurance)....................... 5,567 $ 167,473
Svenska Handelsbanken Series A
(banking)......................... 8,685 108,779
-----------
1,222,535
-----------
SWITZERLAND (5.1%)
Credit Suisse Group Registered
(banking)......................... 2,131 421,354
Nestle S.A. Registered (food &
household products)............... 373 679,729
Novartis AG Registered (health &
personal care).................... 275 401,668
PubliGroupe S.A. (broadcasting &
publishing)....................... 209 205,645
Roche Holdings AG Genusscheine
(health & personal care).......... 69 814,706
Schweizerische Rueckversicherungs
Gesellschaft Registered
(insurance)....................... 138 282,001
UBS AG Registered (banking)........ 2,425 651,434
Zurich Allied AG Registered
(insurance)....................... 414 234,842
-----------
3,691,379
-----------
UNITED KINGDOM (18.1%)
Abbey National PLC (banking)....... 13,598 216,968
Allied Zurich PLC (insurance)...... 8,426 99,068
Barclays PLC (banking)............. 13,215 379,543
Bass PLC (leisure & tourism)....... 38,109 473,245
BG Group PLC (utilities electrical
& gas)............................ 43,513 280,521
Boots Co. PLC (merchandising)...... 14,397 139,687
BP Amoco PLC (energy sources)...... 81,192 814,589
British Aerospace PLC (aerospace &
military technology).............. 18,371 121,396
British Airways PLC
(transportation-airlines)......... 35,003 227,915
British American Tobacco PLC
(beverages & tobacco)............. 8,366 47,428
British Telecommunications PLC
(telecommunications).............. 61,893 1,509,269
Cable & Wireless PLC
(telecommunications).............. 42,533 719,097
Carlton Communications PLC
(broadcasting & publishing)....... 95,535 928,466
CGU PLC (insurance)................ 10,637 171,009
Diageo PLC (beverages & tobacco)... 45,286 363,479
Ebookers.com PLC (business & public
services) (a)..................... 1,400 24,238
EMI Group PLC (recreation & other
consumer goods)................... 42,613 417,229
Granada Group PLC (leisure &
tourism).......................... 25,130 254,151
Great Universal Stores PLC (The)
(merchandising)................... 17,980 104,902
Imperial Chemical Industries PLC
(chemicals)....................... 47,070 497,282
Jazztel PLC (telecommunications)
(a)............................... 1,904 123,998
Kingfisher PLC (merchandising)..... 27,999 310,017
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
105
<PAGE> 106
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
<S> <C> <C>
UNITED KINGDOM (Continued)
Lloyds TSB Group PLC (banking)..... 38,820 $ 484,577
Marconi PLC (telecommunications)... 42,845 756,482
Marks & Spencer PLC
(merchandising)................... 22,514 106,953
National Power PLC (utilities-
electrical & gas)................. 17,268 99,774
National Westminster Bank PLC
(banking)......................... 11,006 235,921
Peninsular & Oriental Steam
Navigation Co. Deferred Stock
(The) (transportation-shipping)... 5,972 99,427
Prudential Corp. PLC (insurance)... 19,463 382,698
Reed International PLC
(broadcasting & publishing)....... 17,406 130,027
Rio Tinto PLC Registered (metals-
nonferrous)....................... 18,714 450,914
Royal Bank of Scotland Group PLC
(banking)......................... 17,665 312,609
Sainsbury (J.) PLC
(merchandising)................... 16,234 91,379
Scottish Power PLC (utilities-
electrical & gas)................. 9,826 74,274
SmithKline Beecham PLC (health &
personal care).................... 55,882 711,517
Unilever PLC (food & household
products)......................... 34,257 251,492
Vodafone Group PLC
(telecommunications).............. 132,344 654,297
-----------
13,065,838
-----------
UNITED STATES (0.5%)
Global Telesystems Group, Inc.
(telecommunications) (a).......... 11,400 394,725
-----------
Total Common Stocks
(Cost $51,617,565)................ 70,912,400
-----------
PURCHASED OPTIONS (0.0%) (e)
<CAPTION>
NOTIONAL
AMOUNT
----------
<S> <C> <C>
UNITED STATES (0.0%) (e)
U.S. Dollar Call/Euro Put Strike
price E0.99 Expire 1/27/00
(a)(i)............................ 3,255,000 23,504
U.S. Dollar Call/Japanese Yen Put
Strike price Y110 Expire 2/9/00
(a)(i)............................ 3,000,000 2,919
-----------
Total Purchased Options
(Cost $77,417).................... 26,423
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------
SHORT-TERM INVESTMENT (0.5%)
AMOUNT
----------
<S> <C> <C>
COMMERCIAL PAPER (0.5%)
UNITED STATES (0.5%)
Associates Corp. 5.33%, due 1/3/00
(financial services).............. $ 350,000 $ 349,922
-----------
Total Short-Term Investment
(Cost $349,922).................... 349,922
-----------
Total Investments
(Cost $52,044,904) (g)............ 98.5% 71,288,745(h)
Cash and Other Assets,
Less Liabilities.................. 1.5 1,050,565
---------- -----------
Net Assets......................... 100.0% $72,339,310
========== ===========
</TABLE>
- ------------
(a) Non-income producing security.
(b) Segregated or partially segregated as collateral for forward foreign
currency contracts.
(c) Installment receipt is a transaction with a set contract price which is
paid in installments over a period of time. Each installment receipt
entitles the holder to purchase 1 share of the company's common stock at
A$3.05 on November 2, 2000.
(d) At December 31, 1999, substantially all of the Portfolio's net assets
consist of securities of issuers which are denominated in foreign
currencies. Changes in currency exchange rates will affect the value of and
investment income from such securities.
As of December 31, 1999, the Portfolio invested approximately 30.6% of its
net assets in issuers in Japan. The issuers' abilities to meet their
obligations may be affected by economic or political developments in the
specific region or country.
Substantially all of the Portfolio's net assets consist of securities which
are subject to greater price volatility, limited capitalization and
liquidity, and higher rates of inflation than securities of companies based
in the United States. In addition, certain securities may be subject to
substantial governmental involvement in the economy and social, economic
and political uncertainty.
(e) Less than one tenth of a percent.
(f) Strip securities represent a secondary class of shares traded in the
foreign market.
(g) The cost for Federal income tax purposes is $52,267,131.
(h) At December 31, 1999 net unrealized appreciation for securities was
$19,021,614, based on cost for Federal income tax purposes. This consisted
of aggregate gross unrealized appreciation for all investments on which
there was an excess of market value over cost of $21,009,584 and aggregate
gross unrealized depreciation for all investments on which there was an
excess of cost over market value of $1,987,970.
(i) The following abbreviations are used in the above portfolio:
A$ -- Australian Dollars
E -- Euro
Y -- Japanese Yen
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
106
<PAGE> 107
MAINSTAY VP SERIES FUND, INC.
The table below sets forth the diversification of International Equity
Portfolio investments, excluding currency options, by industry.
INDUSTRY
DIVERSIFICATION
<TABLE>
<CAPTION>
VALUE PERCENT +
------------------------
<S> <C> <C>
Aerospace & Military
Technology.................. $ 245,047 0.3%
Appliances & Household
Durables.................... 2,977,855 4.1
Automobiles................... 2,549,693 3.5
Banking....................... 8,261,698 11.4
Beverages & Tobacco........... 695,014 1.0
Broadcasting & Publishing..... 1,375,688 1.9
Building Materials &
Components.................. 1,343,270 1.9
Business & Public Services.... 4,094,034 5.7
Chemicals..................... 1,490,024 2.1
Data Processing &
Reproduction................ 1,092,677 1.5
Electrical & Electronics...... 5,035,552 7.0
Electronic Components &
Instruments................. 2,815,842 3.9
Energy Sources................ 3,310,019 4.6
Financial Services............ 1,267,730 1.8
Food & Household Products..... 1,621,661 2.2
Forest Products & Paper....... 689,823 1.0
Health & Personal Care........ 4,588,508 6.3
Industrial Components......... 190,681 0.3
Insurance..................... 3,995,192 5.5
Leisure & Tourism............. 727,397 1.0
Machinery & Engineering....... 424,649 0.6
Merchandising................. 3,297,233 4.6
Metals-Nonferrous............. 1,038,926 1.4
Metals-Steel.................. 603,633 0.8
Real Estate................... 520,659 0.7
Recreation & Other Consumer
Goods....................... 870,323 1.2
Telecommunications............ 13,051,866 18.0
Transportation-Airlines....... 482,502 0.7
Transportation-Road & Rail.... 93,841 0.1
Transportation-Shipping....... 99,427 0.1
Utilities-Electrical & Gas.... 2,411,858 3.3
----------- ------
71,262,322 98.5
Cash and Other Assets, Less
Liabilities................. 1,076,988 1.5
----------- ------
Net Assets.................... $72,339,310 100.0%
=========== ======
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
107
<PAGE> 108
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $52,044,904).......... $ 71,288,745
Cash denominated in foreign currencies
(identified cost $842,130)............. 840,308
Cash..................................... 206,161
Receivables:
Dividends and interest................. 160,019
Fund shares sold....................... 108,882
Unrealized appreciation on foreign
currency forward contracts............. 101,449
------------
Total assets..................... 72,705,564
------------
LIABILITIES:
Payables:
Investment securities purchased........ 200,952
Adviser................................ 34,619
Administrator.......................... 11,539
Fund shares redeemed................... 10,902
Custodian.............................. 10,488
Shareholder communication.............. 6,402
Accrued expenses......................... 26,158
Unrealized depreciation on foreign
currency forward contracts............. 65,194
------------
Total liabilities................ 366,254
------------
Net assets applicable to outstanding
shares................................. $ 72,339,310
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares authorized... $ 46,717
Additional paid-in capital............... 52,364,068
Accumulated distribution in excess of net
investment income...................... (440,287)
Accumulated net realized gain on
investments............................ 1,104,416
Net unrealized appreciation on
investments............................ 19,243,841
Net unrealized appreciation on
translation of other assets and
liabilities in foreign currencies and
foreign currency forward contracts..... 20,555
------------
Net assets applicable to outstanding
shares................................. $ 72,339,310
============
Shares of capital stock outstanding...... 4,671,723
============
Net asset value per share outstanding.... $ 15.48
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).......................... $ 895,470
Interest............................... 102,377
------------
Total income..................... 997,847
------------
Expenses:
Advisory............................... 324,223
Administration......................... 108,074
Custodian.............................. 48,995
Professional........................... 43,786
Portfolio pricing...................... 21,160
Shareholder communication.............. 17,468
Directors.............................. 2,052
Miscellaneous.......................... 10,708
------------
Total expenses................... 576,466
------------
Net investment income.................... 421,381
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Security transactions.................. 3,814,397
Option transactions.................... (29,928)
Foreign currency transactions.......... (642,180)
------------
Net realized gain on investments and
foreign currency transactions.......... 3,142,289
------------
Net change in unrealized appreciation
(depreciation) on:
Security transactions.................. 11,991,536
Translation of other assets and
liabilities in foreign currencies and
foreign currency forward contracts... 103,866
------------
Net unrealized gain on investments and
foreign currency transactions.......... 12,095,402
------------
Net realized and unrealized gain on
investments and foreign currency
transactions........................... 15,237,691
------------
Net increase in net assets resulting from
operations............................. $ 15,659,072
============
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$123,597.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
108
<PAGE> 109
MAINSTAY VP SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 421,381 $ 389,647
Net realized gain on investments.......................... 3,814,397 364,490
Net realized loss on option transactions.................. (29,928) (35,720)
Net realized gain (loss) on foreign currency
transactions............................................ (642,180) 20,112
Net change in unrealized appreciation on investments...... 11,991,536 6,418,225
Net change in unrealized appreciation (depreciation) on
translation of other assets and liabilities in foreign
currencies and foreign currency forward contracts....... 103,866 (175,712)
------------ ------------
Net increase in net assets resulting from operations...... 15,659,072 6,981,042
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ -- (698,611)
From net realized gain on investments and foreign currency
transactions............................................ (1,467,137) --
In excess of net investment income........................ (232,996) (180,241)
------------ ------------
Total dividends and distributions to shareholders....... (1,700,133) (878,852)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 26,647,460 13,924,150
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 1,700,133 878,852
------------ ------------
28,347,593 14,803,002
Cost of shares redeemed................................... (7,973,405) (13,171,173)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 20,374,188 1,631,829
------------ ------------
Net increase in net assets.................................. 34,333,127 7,734,019
NET ASSETS:
Beginning of year........................................... 38,006,183 30,272,164
------------ ------------
End of year................................................. $72,339,310 $ 38,006,183
============ ============
Accumulated distribution in excess of net investment income
at end of year............................................ $ (440,287) $ (180,241)
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
1995 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period..... $ 12.40 $ 10.31 $ 10.65 $ 10.20 $ 10.00
------------ ------------ ------------ ------------ ------------
Net investment income...................... 0.11 0.23 1.06 0.44 0.64
Net realized and unrealized gain on
investments.............................. 3.46 2.20 0.27 0.06 0.01
Net realized and unrealized gain (loss) on
foreign
currency transactions.................... (0.12) (0.05) (0.78) 0.56 0.05
------------ ------------ ------------ ------------ ------------
Total from investment operations........... 3.45 2.38 0.55 1.06 0.70
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income............... -- (0.23) (0.89) (0.60) (0.06)
From net realized gain on investments and
foreign currency transactions.......... (0.32) -- -- (0.01) (0.44)
In excess of net investment income....... (0.05) (0.06) -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions.......... (0.37) (0.29) (0.89) (0.61) (0.50)
------------ ------------ ------------ ------------ ------------
Net asset value at end of period........... $ 15.48 $ 12.40 $ 10.31 $ 10.65 $ 10.20
============ ============ ============ ============ ============
Total investment return.................... 28.06% 23.11% 5.17% 10.54% 6.96%(b)
Ratios (to average net assets)/Supplemental
Data:
Net investment income.................... 0.78% 1.13% 1.25% 1.01% 1.07%+
Net expenses............................. 1.07% 0.97% 0.97% 0.97% 0.97%+
Expenses (before reimbursement).......... 1.07% 1.17% 1.25% 1.51% 2.51%+
Portfolio turnover rate.................... 37% 57% 61% 16% 14%
Net assets at end of period (in 000's)..... $ 72,339 $ 38,006 $ 30,272 $ 34,509 $ 14,631
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
109
<PAGE> 110
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
LONG-TERM BONDS (30.0%)+
ASSET-BACKED SECURITIES (3.5%)
<S> <C> <C>
PRINCIPAL
AMOUNT VALUE
-----------------------
AIRLINES (0.3%)
America West Airlines, Inc.
Series C
6.86%, due 1/2/06............... $ 1,232,384 $ 1,209,313
Northwest Airlines Inc.
9.485%, due 10/1/16............. 930,000 921,277
------------
2,130,590
------------
AIRPLANE LEASES (1.1%)
AerCo Ltd.
Series 1X Class A1
6.6525%, 7/15/23 (d)............ 1,245,000 1,243,531
Aircraft Finance Trust
Series 1999-1 Class C
8.00%, due 5/15/24 (c).......... 1,615,000 1,439,256
Aircraft Lease Portfolio
Securitization Ltd.
Series 1996-1 Class CX
7.85%, due 6/15/06 (d).......... 1,956,011 1,916,891
Airplanes Pass-Through Trust
Series 1 Class C
8.15%, due 3/15/19.............. 2,836,375 2,541,789
Morgan Stanley Aircraft Finance
Series 1 Class A1
6.6725%, due 3/15/23 (d)........ 1,770,000 1,769,469
------------
8,910,936
------------
AUTO LEASES (0.3%)
Premier Auto Trust
Series 1999-1 Class A3
5.69%, due 11/8/02.............. 2,890,000 2,852,690
------------
EQUIPMENT LOANS (0.7%)
Case Equipment Loan Trust
Series 1999-A Class A4
5.77%, due 8/15/05.............. 1,790,000 1,736,425
IKON Receivables, LLC
Series 1999-1 Class A3
5.99%, due 5/15/05.............. 2,995,000 2,956,245
Newcourt Equipment Trust
Securities
Series 1998-1 Class A3
5.24%, due 12/20/02 (d)......... 680,000 671,520
------------
5,364,190
------------
ELECTRIC UTILITIES (0.2%)
Boston Edison Corp.
Series 1999-1 Class A2
6.45%, due 9/15/05.............. 1,935,000 1,907,039
------------
FINANCE (0.3%)
Green Tree Financial Corp.
Series 1999-3 Class A1
4.948%, due 6/1/00.............. 322,306 322,048
Series 1999-4 Class A4
6.64%, due 5/1/31............... 1,885,000 1,858,082
------------
2,180,130
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
HOME EQUITY LOAN (0.1%)
Conseco Finance Trust
Series 1999-F Class A2
6.72%, due 10/15/14 (d)......... $ 1,305,000 $ 1,294,456
------------
LEISURE TIME (0.2%)
Harley Davidson Eaglemark
Motorcycle Trust
Series 1999-1 Class A2
5.52%, due 2/15/05.............. 1,450,000 1,411,270
------------
TRANSPORTATION (0.3%)
Atlas Air, Inc.
Series 1999-1C
8.77%, due 1/2/11............... 2,670,000 2,557,086
------------
Total Asset-Backed Securities
(Cost $29,597,902).............. 28,608,387
------------
CORPORATE BONDS (5.9%)
AEROSPACE/DEFENSE (0.1%)
Newport News Shipbuilding, Inc.
8.625%, due 12/1/06............. 615,000 607,312
------------
AIRLINES (0.2%)
Delta Airlines, Inc.
8.30%, due 12/15/29 (c)......... 1,775,000 1,721,040
------------
AUTOMOBILES (0.2%)
DaimlerChrysler North America
Holding Corp.
7.20%, due 9/1/09............... 1,740,000 1,709,950
------------
AUTO PARTS & EQUIPMENT (0.1%)
Delphi Automotive Systems Corp.
7.125%, due 5/1/29.............. 1,115,000 986,608
------------
BANKS--MONEY CENTER (0.1%)
Bank of America Corp.
6.625%, due 6/15/04............. 1,090,000 1,066,053
------------
BEVERAGES--ALCOHOLIC (0.1%)
Canandaigua Brands, Inc.
8.625%, due 8/1/06.............. 305,000 303,856
Seagram, Joseph E. & Sons, Inc.
5.79%, due 4/15/01.............. 905,000 889,144
------------
1,193,000
------------
BROADCAST/MEDIA (0.4%)
Liberty Media Corp.
8.50%, due 7/15/29 (c).......... 1,375,000 1,396,973
Turner Broadcasting Systems Inc.
8.375%, due 7/1/13.............. 2,100,000 2,177,931
------------
3,574,904
------------
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
110
<PAGE> 111
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
BUILDING MATERIALS (0.1%)
Vulcan Materials Co.
6.00%, due 4/1/09............... $ 1,125,000 $ 1,012,286
------------
CHEMICALS--DIVERSIFIED (0.1%)
Georgia Gulf Corp.
10.375%, due 11/1/07 (c)........ 230,000 240,062
Lyondell Chemical Co.
Series B
9.875%, due 5/1/07.............. 255,000 260,100
------------
500,162
------------
COMPUTER SYSTEMS (0.1%)
Unisys Corp.
11.75%, due 10/15/04............ 330,000 360,525
------------
CONSUMER FINANCE (0.4%)
Fremont General Corp.
Series B
7.70%, due 3/17/04.............. 2,315,000 2,003,563
Household Finance Corp.
6.50%, due 11/15/08............. 1,420,000 1,313,372
------------
3,316,935
------------
ELECTRIC POWER COMPANIES (0.1%)
AES Eastern Energy Corp.
9.00%, due 7/2/17 (c)........... 365,000 343,794
------------
ELECTRIC UTILITIES (0.0%) (b)
ESI Tractebel Acquisition Corp.
7.99%, due 12/30/11............. 300,000 270,000
------------
ENERGY (0.1%)
Caithness Coso Funding Corp.
Series B
9.05%, due 12/15/09............. 425,000 422,875
CMS Energy Corp.
10.875%, due 12/15/04 (c)....... 315,000 315,000
------------
737,875
------------
ENTERTAINMENT (0.0%) (b)
CSC Holdings, Inc.
7.625%, due 7/15/18............. 200,000 186,000
------------
FINANCE--AUTO LOANS (0.3%)
Ford Motor Credit Corp
7.375%, due 10/28/09............ 2,390,000 2,362,300
------------
FINANCIAL--MISCELLANEOUS (0.4%)
Morgan Stanley Dean Witter & Co
7.125%, due 1/15/03............. 2,940,000 2,937,854
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FINANCIAL SERVICES (0.1%)
Sears Roebuck Acceptance Corp.
Medium-Term Note
Series IV
6.36%, due 12/4/01.............. $ 1,165,000 $ 1,143,390
------------
FOOD (0.0%) (b)
Smithfield Foods Inc.
7.625%, due 2/15/08............. 140,000 126,000
------------
FOOD, BEVERAGE & TOBACCO (0.0%)
(b)
Standard Commercial Tobacco Corp.
8.875%, due 8/1/05.............. 210,000 164,325
------------
HEALTHCARE--HOSPITAL MANAGEMENT
(0.1%)
Columbia/HCA Healthcare Corp.
7.50%, due 11/15/95............. 380,000 278,392
Tenet Health Care Corp.
8.00%, due 1/15/05.............. 135,000 129,262
------------
407,654
------------
HOMEBUILDING (0.0%) (b)
Standard Pacific Corp.
8.50%, due 4/1/09............... 180,000 170,100
------------
HOTEL (0.1%)
Felcor Suites L.P.
7.625%, due 10/1/07............. 245,000 212,900
Mandalay Resort Group
7.625%, due 7/15/13............. 240,000 208,800
Starwood Hotels & Resorts
Worldwide, Inc.
7.375%, due 11/15/15............ 200,000 152,948
------------
574,648
------------
INSURANCE--LIFE (0.2%)
Conseco, Inc.
6.40%, due 6/15/01.............. 1,750,000 1,711,308
------------
INSURANCE MULTI-LINE (0.1%)
Willis Corroon Group PLC
9.00%, due 2/1/09............... 260,000 216,450
------------
INVESTMENT BANK/ BROKERAGE (0.4%)
Donaldson, Lufkin & Jenrette Inc.
6.50%, due 6/1/08............... 1,710,000 1,572,465
Goldman Sachs Group Inc.
Series A
6.6038%, due 1/8/01 (c)(d)...... 1,225,000 1,229,655
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
111
<PAGE> 112
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
INVESTMENT BANK/BROKERAGE
(Continued)
Labranche & Co. Inc.
9.50%, due 8/15/04 (c).......... $ 250,000 $ 242,500
Lehman Brothers Holding Inc.
6.625%, due 2/5/06.............. 525,000 496,682
------------
3,541,302
------------
METALS--MINING (0.1%)
Great Central Mines, Ltd.
8.875%, due 4/1/08.............. 415,000 382,838
------------
NATURAL GAS DISTRIBUTORS &
PIPELINES (0.0%) (b)
Western Gas Resources, Inc.
10.00%, due 6/15/09............. 245,000 251,125
------------
OIL & GAS--EQUIPMENT SERVICES
(0.1%)
R & B Falcon Corp.
Series B
6.95%, due 4/15/08.............. 430,000 372,488
RBF Finance Co.
11.375%, due 3/15/09............ 60,000 64,200
------------
436,688
------------
OIL & GAS--EXPLORATION &
PRODUCTION (0.1%)
Vastar Resources Inc.
6.50%, due 4/1/09............... 1,135,000 1,055,005
------------
OIL--INTEGRATED DOMESTIC (0.4%)
Amerada Hess Corp.
7.875%, due 10/1/29............. 3,515,000 3,432,433
------------
PAPER & FOREST PRODUCTS (0.2%)
Georgia-Pacific Corp.
7.75%, due 11/15/29............. 1,395,000 1,332,169
Pope & Talbot Inc.
8.375%, due 6/1/13.............. 475,000 417,971
------------
1,750,140
------------
REAL ESTATE (0.1%)
Crescent Real Estate Equities Co.
7.50%, due 9/15/07 (d).......... 460,000 380,414
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
REAL ESTATE INVESTMENT/
MANAGEMENT (0.0%) (b)
CB Richard Ellis Service, Inc.
8.875%, due 6/1/06.............. $ 180,000 $ 160,200
------------
REAL ESTATE INVESTMENT TRUST
(0.0%) (b)
Hospitality Properties Trust
7.00%, due 3/1/08............... 285,000 243,963
------------
RESIDENTIAL MORTGAGE LOAN (0.3%)
Abbey National PLC
7.95%, due 10/26/29............. 2,620,000 2,615,651
------------
RETAIL STORES--GENERAL
MERCHANDISE (0.2%)
Kmart Corp.
8.375%, due 12/1/04-7/1/22...... 420,000 398,269
Wal-Mart Stores, Inc.
6.625%, due 8/10/09............. 920,000 896,227
------------
1,294,496
------------
SPECIALIZED SERVICES (0.1%)
WPP Finance USA Corp.
6.625%, due 7/15/05............. 970,000 903,749
------------
STEEL (0.0%) (b)
LTV Corp.
11.75%, due 11/15/09 (c)........ 230,000 239,200
------------
TELECOMMUNICATION LONG DISTANCE
(0.3%)
Sprint Capital Corp.
6.875%, due 11/15/28............ 2,515,000 2,241,494
------------
TELECOMMUNICATION SERVICES (0.1%)
Orange PLC
8.00%, due 8/1/08............... 190,000 191,663
Price Communications Wireless,
Inc.
Series B
9.125%, due 12/15/06............ 570,000 577,125
Williams Communications Group,
Inc.
10.875%, due 10/1/09............ 190,000 198,550
------------
967,338
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
112
<PAGE> 113
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
UTILITIES (0.1%)
PSEG Energy Holdings, Inc.
10.00%, due 10/1/09 (c)......... $ 260,000 $ 266,501
Tenaska Georgia Partners L.P.
9.50%, due 2/1/30 (c)........... 880,000 884,435
------------
1,150,936
------------
Total Corporate Bonds
(Cost $49,808,714).............. 48,447,445
------------
MORTGAGE-BACKED SECURITIES (2.6%)
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE
OBLIGATIONS) (2.6%)
Asset Securitization Corp.
Series 1997-MD7 Class A1B
7.41%, due 1/13/30.............. 1,455,000 1,409,910
Commercial Mortgage Asset Trust
Series 1999-C2 Class A2
7.546%, due 11/17/32............ 1,335,000 1,323,078
CS First Boston Mortgage
Securities Corp.
Series 1999-C1 Class A2
7.29%, due 9/15/41.............. 1,945,000 1,910,962
GMAC Commercial Mortgage
Securities Inc.
Series 1998-C2 Class A2
6.42%, due 5/15/35.............. 1,900,000 1,772,073
Series 1996-C1 Class A2A
6.79%, due 10/15/28............. 1,069,674 1,060,999
GS Mortgage Securities Corp. II
Series 1997-GL Class A2B
6.86%, due 7/13/30.............. 1,180,000 1,163,327
Lehman Large Loan
Series 1997-LLI Class A1
6.79%, due 6/12/04.............. 1,281,352 1,268,577
Merrill Lynch Mortgage Investors,
Inc.
Series 1998-C2 Class A1
6.22%, due 2/15/30.............. 2,044,187 1,975,605
Series 1995-C1 Class A2
7.0793%, due 6/15/21 (d)........ 985,781 981,463
Series 1999-C1 Class A2
7.56%, due 11/15/31............. 1,360,000 1,355,595
Nationslink Funding Corp.
Series 1999-2 Class A2C
7.229%, due 6/20/31............. 1,350,000 1,322,906
PNC Mortgage Acceptance Corp.
Series 1999-CM1 Class A1B
7.33%, due 12/10/32............. 2,245,000 2,211,011
Salomon Brothers Mortgage
Securities VII
Series 1997-TZH Class A1
7.15%, due 3/25/25.............. 1,804,207 1,787,121
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE
OBLIGATIONS) (Continued)
SASCO Floating Rate Commercial
Mortgage Trust
Series 1999-C3A Class A
6.8613%, due 10/21/13 (c)(d).... $ 2,165,912 $ 2,165,912
------------
Total Mortgage-Backed Securities
(Cost $22,061,050).............. 21,708,539
------------
U.S. GOVERNMENT & FEDERAL
AGENCIES (17.8%)
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (1.3%)
5.125%, due 2/13/04 (e)......... 10,950,000 10,290,481
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE
PASS-THROUGH SECURITIES) (5.2%)
6.50%, due 5/1/13-4/1/29........ 27,825,592 26,325,891
7.00%, due 11/1/12-12/1/12...... 3,832,860 3,790,928
7.50%, due 10/1/29.............. 12,892,062 12,751,023
------------
42,867,842
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION 1 (MORTGAGE
PASS-THROUGH SECURITIES) (1.4%)
7.00%, due 9/15/28 (e).......... 7,397,588 7,145,626
7.50%, due 12/15/23-11/15/28.... 4,579,101 4,531,325
------------
11,676,951
------------
UNITED STATES TREASURY BONDS
(2.7%)
6.125%, due 8/15/29 (e)......... 21,565,000 20,557,483
8.75%, due 8/15/20.............. 1,365,000 1,653,779
------------
22,211,262
------------
UNITED STATES TREASURY NOTES
(7.2%)
5.25%, due 8/15/03.............. 10,000 9,642
5.625%, due 11/30/00 (e)........ 7,485,000 7,453,413
5.875%, due 11/30/01-11/15/04
(e)............................. 42,300,000 41,932,163
6.00%, due 8/15/09 (e).......... 3,880,000 3,758,750
6.25%, due 2/28/02.............. 1,545,000 1,544,521
7.00%, due 7/15/06.............. 3,985,000 4,080,640
------------
58,779,129
------------
Total U.S. Government &
Federal Agencies
(Cost $149,801,630)............. 145,825,665
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
113
<PAGE> 114
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
YANKEE BONDS (0.2%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
BANKS (0.1%)
Barclays Bank PLC
7.40%, due 12/15/09............. $ 1,035,000 $ 1,017,705
------------
BROADCAST/MEDIA (0.0%)(b)
Rogers Communications, Inc.
8.875%, due 7/15/07............. 245,000 245,000
------------
CABLE TV (0.0%) (b)
Rogers Cablesystem, Ltd.
10.125%, due 9/1/12............. 90,000 94,950
------------
METALS--MINING (0.0%) (b)
Glencore Nickel Property Ltd.
9.00%, due 12/1/14.............. 220,000 189,200
------------
OIL & GAS (0.0%) (b)
Husky Oil, Ltd.
8.90%, due 8/15/28 (d).......... 30,000 28,200
------------
TRANSPORTATION (0.1%)
Sea Containers Ltd.
7.875%, due 2/15/08............. 75,000 64,688
10.75%, due 10/15/06............ 190,000 190,000
Stena AB
10.50%, due 12/15/05............ 280,000 254,800
------------
509,488
------------
Total Yankee Bonds
(Cost $2,148,654)............... 2,084,543
------------
Total Long-Term Bonds
(Cost $253,417,950)............. 246,674,579
------------
<CAPTION>
COMMON STOCKS (67.5%)
SHARES
-----------
<S> <C> <C>
BANKS--MAJOR REGIONAL (1.3%)
Firstar Corp. ................... 173,500 3,665,187
Wells Fargo Co. ................. 163,200 6,599,400
------------
10,264,587
------------
BIOTECHNOLOGY (0.8%)
Genentech, Inc. (a).............. 50,000 6,725,000
------------
BROADCAST/MEDIA (4.5%)
AMFM Inc. (a).................... 114,000 8,920,500
CBS Corp. (a).................... 93,600 5,984,550
Clear Channel Communications,
Inc. (a)........................ 115,600 10,317,300
Comcast Corp. ................... 153,900 7,781,569
USA Networks, Inc. (a)........... 82,400 4,552,600
------------
37,556,519
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
COMMUNICATIONS--EQUIPMENT
MANUFACTURERS (5.2%)
Cisco Systems, Inc. (a).......... 186,750 $ 20,005,594
JDS Uniphase Corp. (a)........... 33,000 5,323,312
Lucent Technologies Inc. ........ 231,700 17,334,056
------------
42,662,962
------------
COMPUTER SOFTWARE SERVICE (7.2%)
America Online Inc. (a).......... 94,200 7,106,212
Compuware Corp. (a).............. 314,200 11,703,950
Microsoft Corp. (a).............. 169,500 19,789,125
Oracle Corp. (a)................. 181,155 20,300,682
------------
58,899,969
------------
COMPUTER SYSTEMS (4.9%)
EMC Corp. (a).................... 184,800 20,189,400
Sun Microsystems, Inc. (a)....... 263,500 20,404,781
------------
40,594,181
------------
ELECTRICAL EQUIPMENT (1.6%)
General Electric Co. ............ 87,200 13,494,200
------------
ELECTRONICS--INSTRUMENTATION
(0.3%)
PE Corp.-PE Biosystems Group..... 22,000 2,646,875
------------
ELECTRONICS--SEMICONDUCTORS
(4.4%)
Intel Corp. ..................... 138,200 11,375,587
Motorola, Inc. .................. 77,300 11,382,425
Texas Instruments Inc. .......... 140,800 13,640,000
------------
36,398,012
------------
ENTERTAINMENT (1.3%)
Time Warner Inc. ................ 150,700 10,916,331
------------
FOOD & HEALTH CARE DISTRIBUTORS
(0.4%)
Cardinal Health, Inc. ........... 62,350 2,985,006
------------
FINANCIAL--MISCELLANEOUS (1.7%)
Citigroup Inc. .................. 248,350 13,798,947
------------
HEALTH CARE--DIVERSIFIED (0.7%)
Johnson & Johnson................ 59,352 5,527,155
------------
HEALTH CARE--DRUGS (1.3%)
Merck & Co., Inc................. 77,700 5,210,756
Schering-Plough Corp. ........... 139,300 5,876,719
------------
11,087,475
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
114
<PAGE> 115
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
<S> <C> <C>
HEALTH CARE--MEDICAL PRODUCT
(2.0%)
Guidant Corp. (e)................ 179,700 $ 8,445,900
Medtronic, Inc. ................. 222,300 8,100,056
------------
16,545,956
------------
HEALTH CARE--MISCELLANEOUS (1.0%)
Amgen Inc. (a)................... 142,000 8,528,875
------------
HOTEL/MOTEL (0.9%)
Carnival Corp. .................. 157,200 7,516,125
------------
HOUSEHOLD PRODUCTS (1.6%)
Colgate-Palmolive Co. ........... 204,400 13,286,000
------------
INSURANCE MULTI-LINE (1.8%)
American International Group,
Inc. ........................... 137,830 14,902,835
------------
INVESTMENT BANK/ BROKERAGE (0.5%)
Goldman Sachs Group Inc. ........ 45,000 4,238,437
------------
LEISURE TIME (1.5%)
Harley-Davidson Inc. ............ 198,000 12,684,375
------------
MANUFACTURING--DIVERSIFIED (2.7%)
Honeywell International Inc. .... 151,912 8,763,423
Tyco International Ltd. ......... 346,000 13,450,750
------------
22,214,173
------------
MISCELLANEOUS (3.0%)
AES Corp. (a).................... 140,400 10,494,900
Corning Inc. .................... 106,800 13,770,525
------------
24,265,425
------------
PERSONAL LOANS (1.0%)
Providian Financial Corp. ....... 89,250 8,127,328
------------
RETAIL STORES -- DEPARTMENT
(1.6%)
Kohl's Corp. (a)................. 179,800 12,979,312
------------
RETAIL STORES -- SPECIALTY (6.5%)
Bed Bath & Beyond, Inc. (a)(e)... 173,800 6,039,550
Circuit City Stores-Circuit City
Group........................... 212,800 9,589,300
CVS Corp. ....................... 107,700 4,301,270
Dollar General Corp. ............ 258,573 5,882,536
Home Depot, Inc. (The)........... 300,900 20,630,456
Staples, Inc. (a)................ 350,750 7,278,062
------------
53,721,174
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
SPECIALIZED SERVICES (3.5%)
Cendant Corp. ................... 165,203 $ 4,388,205
IMS Health Inc. ................. 237,000 6,443,437
Omnicom Group, Inc. ............. 89,200 8,920,000
Young & Rubicam, Inc. ........... 125,500 8,879,125
------------
28,630,767
------------
TELECOMMUNICATION LONG DISTANCE
(2.3%)
Global Crossing Ltd. (a)......... 103,400 5,170,000
MCI WorldCom, Inc. (a)........... 270,648 14,361,259
------------
19,531,259
------------
TELECOMMUNICATION SERVICES (0.3%)
Nextel Communications, Inc. Class
A (a)........................... 30,000 3,093,750
------------
TELEPHONE (1.7%)
Alltel Corp. .................... 125,200 10,352,475
------------
Total Common Stocks
(Cost $303,533,367)............. 554,175,485
------------
PREFERRED STOCKS (0.1%)
ENTERTAINMENT (0.0%) (b)
Time Warner Capital I
8.875%, 12/31/25................ 7,700 191,537
------------
PAPER & FOREST PRODUCTS (0.1%)
Paperboard Industries
International, Inc.
5.00%, Class A (c)(f)(g)........ 15,000 238,364
------------
Total Preferred Stocks
(Cost $448,227)................. 429,901
------------
<CAPTION>
SHORT-TERM
INVESTMENTS (2.5%)
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
COMMERCIAL PAPER (0.7%)
Ford Motor Credit Corp.
5.68%, due 1/12/00.............. $ 1,890,000 1,886,718
General Electric Capital Corp.
5.57%, due 1/25/00.............. 4,085,000 4,070,699
------------
Total Commercial Paper
(Cost $5,957,417)............... 5,957,417
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
115
<PAGE> 116
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (CONTINUED)
SHARES VALUE
--------------------------
<S> <C> <C>
INVESTMENT COMPANY (1.8%)
Merrill Lynch Premier
Institutional Fund.............. 14,741,063 $ 14,741,063
------------
Total Investment Company
(Cost $14,741,063).............. 14,741,063
------------
Total Short Term Investments
(Cost $20,698,480).............. 20,698,480
------------
Total Investments
(Cost $578,098,024) (h)......... 100.1% 821,978,445(i)
Liabilities in Excess of
Cash and Other Assets........... (0.1) (447,296)
----------- ------------
Net Assets....................... 100.0% $821,531,149
=========== ============
</TABLE>
- ------------
<TABLE>
<S> <C>
(a) Non-income producing securities.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) Floating rate. Rate shown is the rate in effect at
December 31, 1999.
(e) Represent securities out on loan or a portion
which is out on loan. (See Note 2J).
(f) Restricted Security
(g) Canadian Security
(h) The cost for Federal income tax purposes is
$578,541,561.
(i) At December 31, 1999 net unrealized appreciation
was $243,436,884, based on cost for Federal income
tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on
which there was an excess of market value over
cost of $254,859,221 and aggregate gross
unrealized depreciation for all investments on
which there was an excess of cost over market
value of $11,422,337.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
116
<PAGE> 117
MAINSTAY VP SERIES FUND, INC.
TOTAL RETURN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $578,098,024)......... $821,978,445
Collateral held for securities loaned, at
value (Note 2J)........................ 82,886,985
Cash..................................... 269,740
Receivables:
Investment securities sold............. 10,745,485
Dividends and interest................. 3,083,982
Fund shares sold....................... 254,172
------------
Total assets..................... 919,218,809
------------
LIABILITIES:
Securities lending collateral
(Note 2J).............................. 82,886,985
Payables:
Investment securities purchased........ 14,242,539
Adviser................................ 215,617
Administrator.......................... 134,761
Fund shares redeemed................... 93,847
Custodian.............................. 18,387
Directors.............................. 635
Accrued expenses......................... 94,889
------------
Total liabilities................ 97,687,660
------------
Net assets applicable to outstanding
shares................................. $821,531,149
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 50 million shares authorized.... $ 367,402
Additional paid-in capital............... 538,289,128
Accumulated undistributed net investment
income................................. 65,522
Accumulated undistributed net realized
gain on investments.................... 38,928,676
Net unrealized appreciation on
investments............................ 243,880,421
------------
Net assets applicable to outstanding
shares................................. $821,531,149
============
Shares of capital stock outstanding...... 36,740,259
============
Net asset value per share outstanding.... $ 22.36
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 15,458,696
Dividends(a)........................... 2,131,735
------------
Total income..................... 17,590,431
------------
Expenses:
Advisory............................... 2,287,643
Administration......................... 1,429,777
Shareholder communication.............. 205,033
Custodian.............................. 97,667
Professional........................... 73,184
Directors.............................. 29,879
Portfolio pricing...................... 9,058
Miscellaneous.......................... 26,578
------------
Total expenses................... 4,158,819
------------
Net investment income.................... 13,431,612
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments......... 60,286,739
Net change in unrealized appreciation on
investments............................ 44,347,068
------------
Net realized and unrealized gain on
investments............................ 104,633,807
------------
Net increase in net assets resulting from
operations............................. $118,065,419
============
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $1,522.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
117
<PAGE> 118
TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 13,431,612 $ 11,612,124
Net realized gain on investments.......................... 60,286,739 15,978,852
Net change in unrealized appreciation on investments...... 44,347,068 103,139,834
------------ ------------
Net increase in net assets resulting from operations...... 118,065,419 130,730,810
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ (13,520,480) (11,697,070)
From net realized gain on investments..................... (22,287,175) (16,858,107)
------------ ------------
Total dividends and distributions to shareholders....... (35,807,655) (28,555,177)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 93,597,950 89,034,995
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 35,807,655 28,555,177
------------ ------------
129,405,605 117,590,172
Cost of shares redeemed................................... (34,493,505) (22,028,105)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 94,912,100 95,562,067
------------ ------------
Net increase in net assets.................................. 177,169,864 197,737,700
NET ASSETS:
Beginning of year........................................... 644,361,285 446,623,585
------------ ------------
End of year................................................. $821,531,149 $644,361,285
============ ============
Accumulated undistributed net investment income at end of
year...................................................... $ 65,522 $ 21,516
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year........ $ 19.99 $ 16.47 $ 14.56 $ 13.26 $ 10.58
------------ ------------ ------------ ------------ ------------
Net investment income....................... 0.39 0.38 0.37 0.30 0.31
Net realized and unrealized gain on
investments............................... 3.00 4.07 2.21 1.30 2.69
------------ ------------ ------------ ------------ ------------
Total from investment operations............ 3.39 4.45 2.58 1.60 3.00
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income................ (0.39) (0.38) (0.36) (0.30) (0.32)
From net realized gain
on investments.......................... (0.63) (0.55) (0.31) -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions........... (1.02) (0.93) (0.67) (0.30) (0.32)
------------ ------------ ------------ ------------ ------------
Net asset value at end of year.............. $ 22.36 $ 19.99 $ 16.47 $ 14.56 $ 13.26
============ ============ ============ ============ ============
Total investment return..................... 17.02% 27.13% 17.79% 12.08% 28.33%
Ratios (to average net assets)/Supplemental
Data:
Net investment income..................... 1.88% 2.20% 2.46% 2.52% 3.06%
Net expenses.............................. 0.58% 0.60% 0.60% 0.69% 0.69%
Expenses (before reimbursement)........... 0.58% 0.60% 0.60% 0.71% 0.81%
Portfolio turnover rate..................... 133% 158% 125% 175% 253%
Net assets at end of year (in 000's)........ $ 821,531 $ 644,361 $ 446,624 $ 332,897 $ 194,893
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
118
<PAGE> 119
MAINSTAY VP SERIES FUND, INC.
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (96.2%)+
SHARES VALUE
--------------------------
<S> <C> <C>
ALUMINUM (2.0%)
Reynolds Metals Co............... 87,300 $ 6,689,362
------------
AUTO PARTS & EQUIPMENT (0.9%)
Mark IV Industries, Inc.......... 164,900 2,916,669
------------
BANKS (5.0%)
Chase Manhattan Corp. (The)...... 68,900 5,352,669
Fleet Boston Financial Corp. .... 183,330 6,382,175
Washington Mutual, Inc. ......... 189,500 4,927,000
------------
16,661,844
------------
CHEMICALS (3.0%)
Air Products and Chemicals,
Inc. ........................... 131,800 4,423,538
Geon Co. (The)................... 49,600 1,612,000
IMC Global Inc. ................. 240,500 3,938,187
------------
9,973,725
------------
COMPUTER SYSTEMS (2.8%)
Seagate Technology, Inc. (a)..... 198,200 9,228,687
------------
CONTAINERS (4.9%)
Owens-Illinois, Inc. (a)......... 168,400 4,220,525
Smurfit-Stone Container Corp.
(a)............................. 335,000 8,207,500
Temple-Inland Inc. .............. 57,000 3,758,438
------------
16,186,463
------------
ELECTRIC POWER COMPANIES (7.3%)
DTE Energy Co. .................. 110,500 3,466,937
Energy East Corp. ............... 142,600 2,967,863
Illinova Corp. .................. 202,700 7,043,825
Niagara Mohawk Holdings Inc.
(a)............................. 347,700 4,846,069
Texas Utilities Co. ............. 160,300 5,700,669
------------
24,025,363
------------
ELECTRONICS--
SEMICONDUCTORS (0.9%)
Adaptec, Inc. (a)................ 62,500 3,117,187
------------
ENGINEERING &
CONSTRUCTION (1.9%)
Fluor Corp. ..................... 137,100 6,289,462
------------
FINANCE (7.6%)
American General Corp. .......... 117,700 8,930,487
AXA Financial, Inc. ............. 247,300 8,377,288
Citigroup Inc. .................. 89,823 4,990,790
Franklin Resources, Inc. ........ 24,400 782,325
SLM Holding Corp. ............... 51,500 2,175,875
------------
25,256,765
------------
FOOD (3.1%)
ConAgra, Inc. ................... 205,400 4,634,338
Heinz (H.J.) Co. ................ 138,400 5,510,050
------------
10,144,388
------------
HEALTH CARE--DRUGS (0.6%)
Mylan Laboratories Inc. ......... 77,500 1,952,031
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
HEALTH CARE--
MEDICAL PRODUCTS (1.6%)
Becton, Dickinson & Co. ......... 191,700 $ 5,127,975
------------
HEALTH CARE--
MISCELLANEOUS (3.1%)
Health Management Associates,
Inc. Class A (a)................ 276,000 3,691,500
Manor Care, Inc. (a)............. 98,300 1,572,800
United HealthCare Corp. ......... 95,500 5,073,438
------------
10,337,738
------------
HEAVY DUTY TRUCKS &
PARTS (1.1%)
Dana Corp. ...................... 116,879 3,499,065
------------
HOTEL/MOTEL (1.5%)
Harrah's Entertainment, Inc.
(a)............................. 189,900 5,020,481
------------
HOUSEWARES (0.7%)
Newell Rubbermaid Inc. .......... 77,500 2,247,500
------------
INSURANCE (4.1%)
Allstate Corp. (The)............. 246,900 5,925,600
Conseco, Inc. ................... 148,400 2,652,650
MGIC Investment Corp. ........... 85,500 5,146,031
------------
13,724,281
------------
LEISURE TIME (0.4%)
Callaway Golf Co. ............... 72,700 1,285,881
------------
MACHINERY (4.9%)
American Standard Cos. Inc.
(a)............................. 232,200 10,652,175
Ingersoll-Rand Co. .............. 103,800 5,715,488
------------
16,367,663
------------
MANUFACTURING--
DIVERSIFIED (1.8%)
Honeywell International Inc. .... 105,450 6,083,147
------------
NATURAL GAS DISTRIBUTORS &
PIPELINES (3.3%)
Coastal Corp. (The).............. 178,200 6,314,963
El Paso Energy Corp. ............ 122,400 4,750,650
------------
11,065,613
------------
OIL & GAS SERVICES (9.0%)
Burlington Resources, Inc. ...... 126,100 4,169,181
Noble Affiliates, Inc. .......... 311,000 6,667,063
Union Pacific Resources Group
Inc. ........................... 660,700 8,423,925
Unocal Corp. .................... 176,800 5,933,850
Valero Energy Corp. ............. 237,400 4,718,325
------------
29,912,344
------------
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
119
<PAGE> 120
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
<S> <C> <C>
OIL--INTEGRATED DOMESTIC (4.0%)
Kerr-McGee Corp. ................ 68,752 $ 4,262,624
Sunoco, Inc. .................... 104,200 2,448,700
Tosco Corp. ..................... 237,300 6,451,594
------------
13,162,918
------------
OIL--INTEGRATED
INTERNATIONAL (1.3%)
Texaco Inc. ..................... 79,200 4,301,550
------------
PAPER & FOREST PRODUCTS (3.1%)
Georgia-Pacific Corp. ........... 176,500 8,957,375
International Paper Co. ......... 23,800 1,343,212
------------
10,300,587
------------
RETAIL (4.7%)
Federated Department Stores, Inc.
(a)............................. 128,000 6,472,000
Office Depot, Inc. (a)........... 546,300 5,975,156
Payless ShoeSource, Inc. (a)..... 68,300 3,210,100
------------
15,657,256
------------
STEEL (1.8%)
USX-U.S. Steel Group............. 181,300 5,982,900
------------
TELECOMMUNICATIONS--
LONG DISTANCE (2.9%)
AT&T Corp. ...................... 185,900 9,434,425
------------
TELEPHONE (3.8%)
Bell Atlantic Corp. ............. 126,400 7,781,500
Nippon Telegraph & Telephone
Corp. ADR (b) (c)............... 55,600 4,788,550
------------
12,570,050
------------
TEXTILES--HOME
FURNISHINGS (1.3%)
Shaw Industries, Inc. ........... 282,900 4,367,269
------------
TOYS (1.8%)
Hasbro, Inc. .................... 309,100 5,892,219
------------
Total Common Stocks
(Cost $299,900,524)............. 318,782,808
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
SHORT-TERM
INVESTMENTS (4.7%)
<S> <C> <C>
COMMERCIAL PAPER (1.1%)
American Express Credit Corp.
6.45%, due 1/5/00............... $ 3,585,000 $ 3,582,426
------------
Total Commercial Paper
(Cost $3,582,426)............... 3,582,426
------------
<CAPTION>
SHARES
-----------
<S> <C> <C>
INVESTMENT COMPANY (3.6%)
Merrill Lynch Premier
Institutional Fund.............. 12,063,054 12,063,054
------------
Total Investment Company
(Cost $12,063,054).............. 12,063,054
------------
Total Short-Term Investments
(Cost $15,645,480).............. 15,645,480
------------
Total Investments
(Cost $315,546,004) (d)......... 100.9% 334,428,288(e)
Liabilities in Excess of
Cash and Other Assets........... (0.9) (2,955,235)
---------- ------------
Net Assets....................... 100.0% $331,473,053
========== ===========-
</TABLE>
- ------------
(a) Non-income producing security.
(b) ADR--American Depository Receipt.
(c) Segregated as collateral for foreign currency forward contract.
(d) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(e) At December 31, 1999 net unrealized appreciation was $18,882,284, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $43,098,973 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $24,216,689.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
120
<PAGE> 121
MAINSTAY VP SERIES FUND, INC.
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $315,546,004)......... $334,428,288
Cash..................................... 17,535
Receivables:
Investment securities sold............. 1,631,552
Dividends.............................. 634,164
Fund shares sold....................... 48,434
------------
Total assets..................... 336,759,973
------------
LIABILITIES:
Payables:
Investment securities purchased........ 4,862,675
Fund shares redeemed................... 171,454
Adviser................................ 99,303
Administrator.......................... 55,168
Shareholder communication.............. 31,546
Custodian.............................. 9,105
Directors.............................. 296
Unrealized depreciation on foreign
currency forward contract.............. 41,023
Accrued expenses......................... 16,350
------------
Total liabilities................ 5,286,920
------------
Net assets applicable to outstanding
shares................................. $331,473,053
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares authorized... $ 221,047
Additional paid-in capital............... 320,596,870
Accumulated undistributed net investment
income................................. 2,787
Accumulated net realized loss on
investments............................ (8,188,912)
Net unrealized appreciation on
investments............................ 18,882,284
Net unrealized depreciation on foreign
currency forward contract.............. (41,023)
------------
Net assets applicable to outstanding
shares................................. $331,473,053
============
Shares of capital stock outstanding...... 22,104,725
============
Net asset value per share outstanding.... $ 15.00
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends(a)........................... $ 5,674,181
Interest............................... 730,921
------------
Total income..................... 6,405,102
------------
Expenses:
Advisory............................... 1,195,407
Administration......................... 664,115
Shareholder communication.............. 98,123
Professional........................... 49,526
Custodian.............................. 35,418
Directors.............................. 13,951
Miscellaneous.......................... 19,529
------------
Total expenses................... 2,076,069
------------
Net investment income.................... 4,329,033
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
FORWARD CONTRACT TRANSACTIONS:
Net realized loss from:
Security transactions.................. (7,116,844)
Foreign currency forward contract
transactions......................... (235,199)
------------
Net realized loss on investments and
foreign currency forward contract
transactions........................... (7,352,043)
------------
Net change in unrealized appreciation
(depreciation) on investments:
Security transactions.................. 28,900,867
Foreign currency forward contract...... 37,993
------------
Net unrealized gain on investments and
foreign currency forward contract
transactions........................... 28,938,860
------------
Net realized and unrealized gain on
investments and foreign currency
forward contract transactions.......... 21,586,817
------------
Net increase in net assets resulting from
operations............................. $ 25,915,850
============
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes of $6,440.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
121
<PAGE> 122
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 4,329,033 $ 5,023,618
Net realized gain (loss) on investments................... (7,116,844) 21,769,146
Net realized loss on foreign currency forward contract
transactions............................................ (235,199) --
Net change in unrealized appreciation (depreciation) on
investments............................................. 28,900,867 (44,777,169)
Net unrealized appreciation (depreciation) on foreign
currency forward contract............................... 37,993 (79,016)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. 25,915,850 (18,063,421)
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ (4,091,047) (5,031,657)
From net realized gain on investments..................... -- (24,497,929)
In excess of net realized gain on investments............. -- (1,072,068)
------------ ------------
Total dividends and distributions to shareholders....... (4,091,047) (30,601,654)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 29,009,373 90,387,964
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 4,091,047 30,601,654
------------ ------------
33,100,420 120,989,618
Cost of shares redeemed................................... (43,195,183) (16,760,962)
------------ ------------
Increase (decrease) in net assets derived from capital
share transactions...................................... (10,094,763) 104,228,656
------------ ------------
Net increase in net assets.................................. 11,730,040 55,563,581
NET ASSETS:
Beginning of year........................................... 319,743,013 264,179,432
------------ ------------
End of year................................................. $331,473,053 $319,743,013
============ ============
Accumulated undistributed net investment income at end of
year...................................................... $ 2,787 $ --
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
1995 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period........... $ 13.96 $ 16.09 $ 13.90 $ 11.58 $ 10.00
------------ ------------ ------------ ------------ ------------
Net investment income............................ 0.20 0.24 0.21 0.17 0.10
Net realized and unrealized gain (loss) on
investments.................................... 1.03 (0.90) 2.94 2.52 1.58
------------ ------------ ------------ ------------ ------------
Total from investment operations................. 1.23 (0.66) 3.15 2.69 1.68
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income..................... (0.19) (0.24) (0.21) (0.17) (0.10)
From net realized gain on investments.......... -- (1.23) (0.75) (0.20) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions................ (0.19) (1.47) (0.96) (0.37) (0.10)
------------ ------------ ------------ ------------ ------------
Net asset value at end of period................. $ 15.00 $ 13.96 $ 16.09 $ 13.90 $ 11.58
============ ============ ============ ============ ============
Total investment return.......................... 8.80% (4.14%) 22.89% 23.22% 16.76%(b)
Ratios (to average net assets)/Supplemental Data:
Net investment income.......................... 1.30% 1.60% 1.78% 2.10% 2.57%+
Net expenses................................... 0.63% 0.65% 0.65% 0.73% 0.73%+
Expenses (before reimbursement)................ 0.63% 0.65% 0.65% 0.79% 1.45%+
Portfolio turnover rate.......................... 74% 69% 48% 41% 20%
Net assets at end of period (in 000's)........... $ 331,473 $ 319,743 $ 264,179 $ 120,415 $ 24,429
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
122
<PAGE> 123
MAINSTAY VP SERIES FUND, INC.
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
LONG-TERM BONDS (97.1%)+
CORPORATE BONDS (52.6%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
AUTOMOBILES (1.7%)
DaimlerChrysler North America
Holding Corp.
6.90%, due 9/1/04............... $ 5,000,000 $ 4,950,000
------------
BANKS--MAJOR REGIONAL (3.2%)
Fleet National Bank
5.75%, due 1/15/09.............. 5,000,000 4,393,750
Popular Inc.
6.20%, due 4/30/01.............. 5,000,000 4,925,000
------------
9,318,750
------------
BANKS--MONEY CENTER (1.4%)
Bank of America Corp.
7.75%, due 7/15/02.............. 4,000,000 4,065,000
------------
BANKS--SAVINGS & LOANS (0.4%)
Golden West Financial Corp.
10.25%, due 12/1/00 (a)......... 1,000,000 1,027,500
------------
BROADCAST/MEDIA (1.5%)
News America Inc.
7.125%, due 4/8/28.............. 5,000,000 4,375,000
------------
CHEMICALS (2.4%)
Rohm & Haas Co.
6.95%, due 7/15/04.............. 2,000,000 1,977,028
7.85%, due 7/15/29.............. 5,000,000 5,025,100
------------
7,002,128
------------
CONTAINERS--METAL & GLASS (1.5%)
Owens-Illinois, Inc.
7.80%, due 5/15/18.............. 5,000,000 4,381,250
------------
DISTRIBUTION/WHOLESALE (2.2%)
Pepsi Bottling Group, Inc.
Series B
7.00%, due 3/1/29............... 7,000,000 6,361,250
------------
ELECTRIC POWER COMPANIES (2.9%)
Commonwealth Edison Co.
6.95%, due 7/15/18.............. 5,000,000 4,518,750
Niagara Mohawk Power Corp.
7.125%, due 7/1/01.............. 3,780,489 3,775,763
------------
8,294,513
------------
ELECTRONICS--DEFENSE (1.7%)
Raytheon Co.
5.95%, due 3/15/01.............. 5,000,000 4,912,500
------------
FINANCIAL--MISCELLANEOUS (15.3%)
Chrysler Financial Corp.
5.875%, due 2/7/01.............. 5,000,000 4,950,000
CIT Group Inc.
6.50%, due 6/14/02.............. 3,000,000 2,958,750
7.125%, due 10/15/04............ 2,000,000 1,985,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
CORPORATE BONDS (52.6%)
<S> <C> <C>
FINANCIAL--MISCELLANEOUS (Continued)
Finova Capital Corp.
7.25%, due 11/8/04.............. $ 5,000,000 $ 4,943,750
Ford Motor Credit Corp.
7.375%, due 10/28/09............ 5,000,000 4,942,050
General Motors Acceptance Corp.
5.625%, due 2/15/01............. 6,000,000 5,917,500
Household Finance Corp.
6.50%, due 11/15/08............. 7,000,000 6,474,370
John Deere Capital Corp.
5.35%, due 10/23/01............. 5,000,000 4,862,500
Norwest Financial, Inc.
6.85%, due 7/15/09.............. 7,000,000 6,702,500
------------
43,736,420
------------
OIL--INTEGRATED DOMESTIC (1.6%)
Conoco, Inc.
6.95%, due 4/15/29.............. 5,000,000 4,518,750
------------
PAPER & FOREST PRODUCTS (1.6%)
Champion International Corp.
9.875%, due 6/1/00 (a).......... 4,500,000 4,556,250
------------
RAILROADS (4.8%)
CSX Corp.
7.05%, due 5/1/02............... 7,000,000 6,973,750
Norfolk Southern Corp.
7.80%, due 5/15/27.............. 7,000,000 6,851,250
------------
13,825,000
------------
RETAIL STORES--DEPARTMENT (2.4%)
Harcourt General, Inc.
9.50%, due 3/15/00 (a).......... 2,000,000 2,010,000
Penney (J.C.) Co., Inc.
6.95%, due 4/1/00 (a)........... 5,000,000 5,000,000
------------
7,010,000
------------
RETAIL STORES--GENERAL
MERCHANDISE (1.7%)
Wal-Mart Stores, Inc.
6.875%, due 8/10/09............. 5,000,000 4,870,800
------------
TELECOMMUNICATIONS--
LONG DISTANCE (4.6%)
MCI Worldcom Inc.
6.40%, due 8/15/05.............. 8,000,000 7,680,000
Sprint Capital Corp.
6.90%, due 5/1/19............... 6,000,000 5,460,000
------------
13,140,000
------------
UTILITY--ELECTRIC (1.7%)
Cleveland Electric Illuminating
Co.
7.88%, due 11/1/17.............. 5,000,000 4,756,250
------------
Total Corporate Bonds
(Cost $157,334,282)............. 151,101,361
------------
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
123
<PAGE> 124
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
U.S. GOVERNMENT &
FEDERAL AGENCIES (44.5%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL HOME LOAN BANK (1.7%)
5.625%, due 3/19/01........... $ 5,000,000 $ 4,953,250
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (2.4%)
5.91%, due 8/25/03............ 7,000,000 6,755,350
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE
PASS-THROUGH SECURITIES) (27.4%)
5.125%, due 2/15/04........... 15,000,000 14,096,550
6.00%, due 2/1/14-10/1/28..... 12,905,251 11,965,280
6.375%, due 6/15/09........... 5,000,000 4,773,050
6.50%, due 11/1/09-6/1/29..... 18,044,861 17,128,634
7.00%, due 2/1/27-1/1/28...... 15,308,922 14,796,992
7.50%, due 7/1/28............. 4,567,651 4,516,266
8.00%, due 5/1/25-12/1/29..... 11,409,996 11,495,571
------------
78,772,343
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION I
(MORTGAGE PASS-THROUGH
SECURITY) (0.6%)
9.00%, due 4/15/26............ 1,685,432 1,764,950
------------
UNITED STATES TREASURY
BONDS (3.8%)
5.25%, due 2/15/29............ 8,000,000 6,614,960
7.125%, due 2/15/23........... 4,000,000 4,161,760
------------
10,776,720
------------
UNITED STATES TREASURY
NOTES (8.6%)
6.00%, due 8/15/09............ 5,000,000 4,843,750
6.125%, due 8/15/07........... 5,000,000 4,876,350
6.50%, due 8/15/05............ 10,000,000 9,997,400
7.00%, due 7/15/06............ 5,000,000 5,120,000
------------
24,837,500
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
FEDERAL AGENCIES (44.5%)
<S> <C> <C>
Total U.S. Government &
Federal Agencies
(Cost $132,476,931)........... $127,860,113
------------
Total Long-Term Bonds
(Cost $289,811,213)............. 278,961,474
------------
SHORT-TERM
INVESTMENT (1.2%)
COMMERCIAL PAPER (1.2%)
Associates Corp. of North America
5.07%, due on demand (b)...... $ 3,457,000 3,457,000
------------
Total Short-Term Investment
(Cost $3,457,000)............... 3,457,000
------------
Total Investments
(Cost $293,268,213) (c)......... 98.3% 282,418,474(d)
Cash and Other Assets,
Less Liabilities................ 1.7 4,942,648
---------- ------------
Net Assets....................... 100.0% $287,361,122
========== ============
</TABLE>
- ------------
(a) Long-term security maturing within the subsequent twelve month period.
(b) Adjustable rate. Rate shown is the rate in effect at December 31, 1999.
(c) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(d) At December 31, 1999, net unrealized depreciation was $10,849,739, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $122,546 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $10,972,285.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
124
<PAGE> 125
MAINSTAY VP SERIES FUND, INC.
BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $293,268,213)......... $282,418,474
Cash..................................... 2,415
Receivables:
Interest............................... 4,754,200
Fund shares sold....................... 638,384
------------
Total assets..................... 287,813,473
------------
LIABILITIES:
Payables:
Fund shares redeemed................... 296,053
Adviser................................ 61,474
Administrator.......................... 49,180
Shareholder communication.............. 23,567
Directors.............................. 260
Accrued expenses......................... 21,817
------------
Total liabilities................ 452,351
------------
Net assets applicable to outstanding
shares................................. $287,361,122
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares authorized... $ 234,721
Additional paid-in capital............... 301,427,423
Accumulated net realized loss on
investments............................ (3,451,283)
Net unrealized depreciation on
investments............................ (10,849,739)
------------
Net assets applicable to outstanding
shares................................. $287,361,122
============
Shares of capital stock outstanding...... 23,472,084
============
Net asset value per share outstanding.... $ 12.24
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 18,603,215
------------
Expenses:
Advisory............................... 731,761
Administration......................... 585,409
Shareholder communication.............. 56,494
Professional........................... 54,015
Directors.............................. 12,485
Portfolio pricing...................... 8,142
Miscellaneous.......................... 13,454
------------
Total expenses................... 1,461,760
------------
Net investment income.................... 17,141,455
------------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS:
Net realized loss on investments......... (3,386,687)
Net change in unrealized appreciation on
investments............................ (18,241,917)
------------
Net realized and unrealized loss on
investments............................ (21,628,604)
------------
Net decrease in net assets resulting from
operations............................. $ (4,487,149)
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
125
<PAGE> 126
BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 17,141,455 $ 14,515,227
Net realized gain (loss) on investments................... (3,386,687) 6,948,226
Net change in unrealized appreciation on investments...... (18,241,917) 19,352
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (4,487,149) 21,482,805
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ (17,287,214) (14,391,518)
From net realized gain on investments..................... (25,226) (7,064,292)
------------ ------------
Total dividends and distributions to shareholders....... (17,312,440) (21,455,810)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 59,285,805 63,383,438
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 17,312,440 21,455,810
------------ ------------
76,598,245 84,839,248
Cost of shares redeemed................................... (44,829,765) (36,423,049)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 31,768,480 48,416,199
------------ ------------
Net increase in net assets.................................. 9,968,891 48,443,194
NET ASSETS:
Beginning of year........................................... 277,392,231 228,949,037
------------ ------------
End of year................................................. $287,361,122 $277,392,231
============ ============
Accumulated undistributed net investment income at end of
year...................................................... $ -- $ 7,643
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997 1996 1995
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year...... $ 13.23 $ 13.14 $ 12.83 $ 13.42 $ 12.09
------------ ------------ ------------ ------------ ------------
Net investment income..................... 0.78 0.74 0.88 0.87 0.88
Net realized and unrealized gain (loss) on
investments............................. (0.99) 0.46 0.35 (0.59) 1.33
------------ ------------ ------------ ------------ ------------
Total from investment operations.......... (0.21) 1.20 1.23 0.28 2.21
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income.............. (0.78) (0.74) (0.88) (0.87) (0.88)
From net realized gain
on investments........................ (0.00)(a) (0.37) (0.04) -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions......... (0.78) (1.11) (0.92) (0.87) (0.88)
------------ ------------ ------------ ------------ ------------
Net asset value at end of year............ $ 12.24 $ 13.23 $ 13.14 $ 12.83 $ 13.42
============ ============ ============ ============ ============
Total investment return................... (1.53%) 9.12% 9.65% 2.05% 18.31%
Ratios (to average net
assets)/Supplemental Data:
Net investment income................... 5.86% 5.86% 6.42% 6.31% 6.55%
Net expenses............................ 0.50% 0.52% 0.50% 0.58% 0.62%
Expenses (before reimbursement)......... 0.50% 0.52% 0.50% 0.58% 0.91%
Portfolio turnover rate................... 161% 206% 187% 103% 81%
Net assets at end of year (in 000's)...... $ 287,361 $ 277,392 $ 228,949 $ 226,375 $ 235,030
</TABLE>
- ---------------
(a) Less than one cent per share.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
126
<PAGE> 127
MAINSTAY VP SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (93.9%)+
SHARES VALUE
----------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (1.1%)
United Technologies Corp........ 220,000 $ 14,300,000
--------------
ALUMINUM (1.1%)
Alcoa Inc....................... 175,000 14,525,000
--------------
BANKS--MAJOR REGIONAL (1.7%)
Bank of New York Co., Inc.
(The).......................... 300,000 12,000,000
Mellon Financial Corp........... 286,000 9,741,875
--------------
21,741,875
--------------
BANKS--MONEY CENTER (0.8%)
Chase Manhattan Corp. (The)..... 140,000 10,876,250
--------------
BEVERAGES--ALCOHOLIC (0.9%)
Anheuser-Busch Cos., Inc........ 160,000 11,340,000
--------------
BIOTECHNOLOGY (0.2%)
Genentech, Inc. (a)............. 15,000 2,017,500
--------------
BROADCAST/MEDIA (6.8%)
AMFM Inc. (a)................... 189,578 14,834,479
CBS Corp. (a)................... 266,000 17,007,375
Clear Channel Communications,
Inc. (a)....................... 100,000 8,925,000
Comcast Corp. Special Class A... 450,000 22,753,125
MediaOne Group Inc. (a)......... 180,000 13,826,250
Spanish Broadcasting System,
Inc. (a)....................... 25,000 1,006,250
USA Networks, Inc. (a).......... 197,000 10,884,250
--------------
89,236,729
--------------
CHEMICALS (1.4%)
Eastman Chemical Co............. 137,500 6,557,031
Praxair, Inc.................... 125,000 6,289,063
Rohm & Haas Co.................. 133,600 5,435,850
--------------
18,281,944
--------------
COMMUNICATIONS--EQUIPMENT
MANUFACTURERS (12.6%)
ADC Telecommunications, Inc.
(a)............................ 250,000 18,140,625
Cisco Systems, Inc. (a)......... 275,000 29,459,375
Hughes Electronics Corp. (a).... 160,000 15,360,000
JDS Uniphase Corp. (a).......... 50,000 8,065,625
Lucent Technologies Inc......... 200,000 14,962,500
Nokia Corp. ADR (b)............. 125,000 23,750,000
Nortel Networks Corp............ 235,000 23,735,000
QUALCOMM, Inc. (a).............. 88,000 15,499,000
Tellabs, Inc. (a)............... 260,000 16,688,750
--------------
165,660,875
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
COMPUTER SOFTWARE & SERVICES
(4.3%)
ACNielson Corp. (a)............. 230,000 $ 5,663,750
America Online Inc. (a)......... 220,000 16,596,250
Mercury Interactive Corp. (a)... 60,000 6,476,250
Microsoft Corp. (a)............. 125,000 14,593,750
Oracle Corp. (a)................ 76,400 8,561,575
Yahoo! Inc. (a)................. 11,800 5,105,713
--------------
56,997,288
--------------
COMPUTER SYSTEMS (4.5%)
Comdisco, Inc................... 500,000 18,625,000
Compaq Computer Corp............ 232,000 6,278,500
EMC Corp. (a)................... 155,000 16,933,750
Sun Microsystems, Inc. (a)...... 230,000 17,810,625
--------------
59,647,875
--------------
COMPUTERS--NETWORKING (0.2%)
Sycamore Networks, Inc. (a)..... 10,000 3,080,000
--------------
CONTAINERS--PAPER (0.9%)
Smurfit-Stone Container Corp.
(a)............................ 500,000 12,250,000
--------------
COSMETICS/PERSONAL CARE (1.0%)
Avon Products, Inc.............. 400,000 13,200,000
--------------
ELECTRIC POWER COMPANIES (0.4%)
Duke Energy Corp................ 100,000 5,012,500
--------------
ELECTRICAL EQUIPMENT (3.3%)
General Electric Co............. 200,000 30,950,000
SCI Systems, Inc. (a)........... 150,000 12,328,125
--------------
43,278,125
--------------
ELECTRONICS--SEMICONDUCTORS
(7.4%)
Advanced Micro Devices, Inc.
(a)............................ 300,000 8,681,250
Applied Materials, Inc. (a)..... 120,000 15,202,500
Intel Corp...................... 175,000 14,404,688
Motorola, Inc................... 110,000 16,197,500
National Semiconductor Corp.
(a)............................ 250,000 10,703,125
Rambus Inc. (a)................. 40,000 2,697,500
Texas Instruments Inc........... 200,000 19,375,000
Vitesse Semiconductor Corp.
(a)............................ 180,000 9,438,750
--------------
96,700,313
--------------
ENTERTAINMENT (1.1%)
Time Warner Inc................. 200,000 14,487,500
--------------
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
127
<PAGE> 128
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
FINANCIAL-- MISCELLANEOUS (3.9%)
American Express Co............. 90,000 $ 14,962,500
American General Corp........... 140,000 10,622,500
Citigroup Inc................... 300,000 16,668,750
Freddie Mac..................... 200,000 9,412,500
--------------
51,666,250
--------------
FOOD (0.3%)
International Home Foods, Inc.
(a)............................ 216,000 3,753,000
--------------
FOOD & HEALTH CARE DISTRIBUTORS
(1.1%)
SYSCO Corp...................... 360,000 14,242,500
--------------
HEALTH CARE-- DIVERSIFIED (3.3%)
Bristol-Myers Squibb Co......... 190,000 12,195,625
Johnson & Johnson............... 130,000 12,106,250
Warner-Lambert Co............... 227,250 18,620,297
--------------
42,922,172
--------------
HEALTH CARE--DRUGS (2.7%)
Glaxo Wellcome PLC ADR (b)...... 180,000 10,057,500
Lilly (Eli) & Co................ 200,000 13,300,000
SmithKline Beecham PLC ADR (b).. 182,300 11,746,956
--------------
35,104,456
--------------
HEALTH CARE--MEDICAL PRODUCTS
(0.5%)
Guidant Corp. (a)............... 125,000 5,875,000
--------------
HEALTH CARE--MISCELLANEOUS
(0.7%)
Amgen Inc. (a).................. 160,000 9,610,000
--------------
HOUSEHOLD PRODUCTS (1.0%)
Procter & Gamble Co. (The)...... 120,000 13,147,500
--------------
INSURANCE BROKERS (1.0%)
Marsh & McLennan Cos., Inc...... 135,000 12,917,813
--------------
INSURANCE--LIFE (0.8%)
ReliaStar Financial Corp........ 275,000 10,776,562
--------------
INSURANCE--MULTI-LINE (1.0%)
American International Group,
Inc............................ 119,750 12,947,969
--------------
INSURANCE--PROPERTY & CASUALTY
(0.8%)
Allstate Corp. (The)............ 443,000 10,632,000
--------------
LEISURE TIME (0.5%)
Mirage Resorts, Inc. (a)........ 400,000 6,125,000
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
MANUFACTURING--DIVERSIFIED
(1.1%)
Honeywell International Inc..... 260,000 $ 14,998,750
--------------
NATURAL GAS DISTRIBUTORS &
PIPELINES (1.7%)
Coastal Corp. (The)............. 280,000 9,922,500
Enron Corp...................... 270,000 11,981,250
--------------
21,903,750
--------------
OIL & GAS--EQUIPMENT & SERVICES
(1.7%)
Halliburton Co.................. 250,000 10,062,500
Schlumberger Ltd................ 185,000 10,406,250
Transocean Sedco Forex Inc...... 35,816 1,206,551
--------------
21,675,301
--------------
OIL--INTEGRATED DOMESTIC (0.5%)
USX-Marathon Group.............. 250,000 6,171,875
--------------
OIL--INTEGRATED INTERNATIONAL
(2.5%)
BP Amoco PLC ADR (b)............ 131,582 7,804,457
Chevron Corp.................... 120,000 10,395,000
Exxon Mobil Corp................ 184,821 14,889,642
--------------
33,089,099
--------------
PAPER & FOREST PRODUCTS (0.5%)
Boise Cascade Corp.............. 175,000 7,087,500
--------------
PUBLISHING (1.0%)
McGraw-Hill Cos., Inc. (The).... 214,000 13,187,750
--------------
REAL ESTATE INVESTMENT/
MANAGEMENT (1.0%)
First Industrial Realty Trust,
Inc............................ 350,000 9,603,125
Liberty Property Trust.......... 166,500 4,037,625
--------------
13,640,750
--------------
RETAIL STORES--FOOD (0.9%)
Kroger Co. (The) (a)............ 540,000 10,192,500
Smart & Final Inc............... 163,000 1,181,750
--------------
11,374,250
--------------
RETAIL STORES--GENERAL
MERCHANDISE (2.1%)
Dayton Hudson Corp.............. 140,000 10,281,250
Wal-Mart Stores, Inc............ 250,000 17,281,250
--------------
27,562,500
--------------
RETAIL STORES--SPECIALTY (1.0%)
Circuit City Stores-Circuit City
Group.......................... 300,000 13,518,750
--------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
128
<PAGE> 129
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
SEMICONDUCTORS (0.9%)
Novellus Systems, Inc. (a)...... 100,000 $ 12,253,130
--------------
SPECIALIZED SERVICES (2.2%)
Cendant Corp. (a)............... 630,000 16,734,375
Young & Rubicam Inc. (a)........ 175,000 12,381,250
--------------
29,115,625
--------------
TECHNOLOGY (0.0%) (c)
Symyx Technologies, Inc. (a).... 17,500 525,000
--------------
TELECOMMUNICATIONS--LONG
DISTANCE (5.8%)
Allegiance Telecom, Inc. (a).... 126,000 11,623,500
Loral Space & Communications
Ltd. (a)....................... 500,000 12,156,250
MCI WorldCom, Inc. (a).......... 225,000 11,939,062
Qwest Communications
International Inc. (a)......... 400,000 17,200,000
Sprint Corp. (FON Group)........ 250,000 16,828,125
Sprint Corp. (PCS Group) (a).... 55,000 5,637,500
Time Warner Telecom Inc. Class A
(a)............................ 22,500 1,123,594
--------------
76,508,031
--------------
TELECOMMUNICATIONS--SERVICES
(0.1%)
Triton PCS Holdings, Inc. Class
A (a).......................... 30,000 1,365,000
--------------
TELEPHONE (3.2%)
ALLTEL Corp..................... 175,000 14,470,312
Bell Atlantic Corp.............. 200,000 12,312,500
GTE Corp........................ 30,000 2,116,875
SBC Communications Inc.......... 271,096 13,215,930
--------------
42,115,617
--------------
TEXTILES--HOME FURNISHINGS
(0.4%)
WestPoint Stevens Inc........... 260,000 4,550,000
--------------
Total Common Stocks (Cost
$774,206,199).................. 1,232,996,674
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------
SHORT-TERM
INVESTMENTS (5.8%)
<S> <C> <C>
COMMERCIAL PAPER (5.8%)
Associates Corp. of North
America
5.20%, due on demand (d)....... $ 3,675,000 $ 3,675,000
Federal Home Loan Banks Discount
Note
2.00%, due 1/06/00............. 25,000,000 24,993,055
Federal Home Loan Banks Discount
Note
5.76%, due 1/21/00............. 20,000,000 19,935,949
Federal National Mortgage Corp.
Discount Note
5.75%, due 1/18/00............. 18,700,000 18,649,184
Galaxy Funding Inc.
5.60%, due 1/03/00............. 9,100,000 9,097,168
--------------
Total Short-Term Investments
(Cost $76,350,356)............. 76,350,356
--------------
Total Investments
(Cost $850,556,555) (e)........ 99.7% 1,309,347,030(f)
Cash and Other Assets,
Less Liabilities............... 0.3 3,558,448
---------- --------------
Net Assets...................... 100.0% $1,312,905,478
============ ==============
</TABLE>
- ------------
(a) Non-income producing security.
(b) ADR--American Depository Receipt.
(c) Less than one tenth of a percent.
(d) Adjustable rate. Rate shown is the rate in effect at December 31, 1999.
(e) The cost for Federal income tax purposes is $850,361,598.
(f) At December 31, 1999 net unrealized appreciation was $458,985,432, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $477,898,129 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $18,912,697.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
129
<PAGE> 130
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $850,556,555)....... $1,309,347,030
Receivables:
Fund shares sold..................... 4,299,435
Dividends and interest............... 771,954
--------------
Total assets................... 1,314,418,419
--------------
LIABILITIES:
Payables:
Fund shares redeemed................. 898,925
Adviser.............................. 263,295
Administrator........................ 210,634
Shareholder communication............ 103,205
Custodian............................ 11,787
Directors............................ 957
Accrued expenses....................... 24,138
--------------
Total liabilities.............. 1,512,941
--------------
Net assets applicable to outstanding
shares............................... $1,312,905,478
==============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares
authorized........................... $ 472,692
Additional paid-in capital............. 853,447,354
Accumulated undistributed net realized
gain on investments.................. 194,957
Net unrealized appreciation on
investments.......................... 458,790,475
--------------
Net assets applicable to outstanding
shares............................... $1,312,905,478
==============
Shares of capital stock outstanding.... 47,269,160
==============
Net asset value per share
outstanding.......................... $ 27.78
==============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 9,381,337
Interest............................. 2,920,456
--------------
Total income................... 12,301,793
--------------
Expenses:
Advisory............................. 2,737,555
Administration....................... 2,190,044
Shareholder communication............ 258,197
Professional......................... 90,803
Directors............................ 45,294
Miscellaneous........................ 49,342
--------------
Total expenses................. 5,371,235
--------------
Net investment income.................. 6,930,558
--------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments....... 116,289,799
Net change in unrealized appreciation
on investments....................... 175,477,844
--------------
Net realized and unrealized gain on
investments.......................... 291,767,643
--------------
Net increase in net assets resulting
from operations...................... $ 298,698,201
==============
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $61,298.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
130
<PAGE> 131
MAINSTAY VP SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
--------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 6,930,558 $ 7,259,332
Net realized gain on investments.......................... 116,289,799 73,678,921
Net change in unrealized appreciation on investments...... 175,477,844 123,768,075
---------------- -------------
Net increase in net assets resulting from operations...... 298,698,201 204,706,328
---------------- -------------
Dividends and distributions to shareholders:
From net investment income................................ (6,931,381) (7,247,513)
From net realized gain on investments..................... (116,319,036) (73,678,921)
---------------- -------------
Total dividends and distributions to shareholders....... (123,250,417) (80,926,434)
---------------- -------------
Capital share transactions:
Net proceeds from sale of shares.......................... 163,123,595 121,819,072
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 123,250,417 80,926,434
---------------- -------------
286,374,012 202,745,506
Cost of shares redeemed................................... (145,652,758) (88,843,247)
---------------- -------------
Increase in net assets derived from capital share
transactions............................................ 140,721,254 113,902,259
---------------- -------------
Net increase in net assets.................................. 316,169,038 237,682,153
NET ASSETS:
Beginning of year........................................... 996,736,440 759,054,287
---------------- -------------
End of year................................................. $ 1,312,905,478 $ 996,736,440
================ =============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997 1996 1995
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year..... $ 23.62 $ 20.31 $ 18.63 $ 17.22 $ 14.69
------------- ------------- ------------- ------------- -------------
Net investment income.................... 0.16 0.19 0.16 0.18 0.22
Net realized and unrealized gain on
investments............................ 6.89 5.21 4.74 4.06 4.06
------------- ------------- ------------- ------------- -------------
Total from investment operations......... 7.05 5.40 4.90 4.24 4.28
------------- ------------- ------------- ------------- -------------
Less dividends and distributions:
From net investment income............. (0.16) (0.19) (0.16) (0.18) (0.22)
From net realized gain
on investments....................... (2.73) (1.90) (3.06) (2.65) (1.53)
------------- ------------- ------------- ------------- -------------
Total dividends and distributions........ (2.89) (2.09) (3.22) (2.83) (1.75)
------------- ------------- ------------- ------------- -------------
Net asset value at end of year........... $ 27.78 $ 23.62 $ 20.31 $ 18.63 $ 17.22
============= ============= ============= ============= =============
Total investment return.................. 29.96% 26.59% 26.75% 24.50% 29.16%
Ratios (to average net assets)/
Supplemental Data:
Net investment income.................. 0.63% 0.84% 0.80% 0.98% 1.29%
Net expenses........................... 0.49% 0.51% 0.50% 0.58% 0.62%
Expenses (before reimbursement)........ 0.49% 0.51% 0.50% 0.58% 0.91%
Portfolio turnover rate.................. 71% 69% 103% 104% 104%
Net assets at end of year (in 000's)..... $ 1,312,905 $ 996,736 $ 759,054 $ 564,685 $ 427,507
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
131
<PAGE> 132
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (96.7%)+
SHARES VALUE
----------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (0.9%)
Boeing Co. (The)................ 111,567 $ 4,637,004
General Dynamics Corp. ......... 23,783 1,254,553
Goodrich (B.F.) Co. (The)....... 13,126 360,965
Lockheed Martin Corp. .......... 47,208 1,032,675
Northrop Grumman Corp. ......... 8,220 444,394
Raytheon Co. Class B............ 40,326 1,071,159
Rockwell International Corp. ... 22,968 1,099,593
United Technologies Corp. ...... 57,684 3,749,460
--------------
13,649,803
--------------
AIRLINES (0.2%)
AMR Corp. (a)................... 18,365 1,230,455
Delta Air Lines, Inc. .......... 16,813 837,498
Southwest Airlines Co. ......... 60,273 975,669
US Airways Group, Inc. (a)...... 8,784 281,637
--------------
3,325,259
--------------
ALUMINUM (0.3%)
Alcan Aluminum Ltd. ............ 27,079 1,115,316
Alcoa Inc. ..................... 43,979 3,650,257
Reynolds Metals Co. ............ 7,757 594,380
--------------
5,359,953
--------------
AUTO PARTS & EQUIPMENT (0.1%)
Cooper Tire & Rubber Co. ....... 9,064 141,058
Delphi Automotive Systems
Corp. ......................... 67,432 1,062,054
Genuine Parts Co. .............. 21,480 532,973
Goodyear Tire & Rubber Co.
(The).......................... 18,655 525,838
--------------
2,261,923
--------------
AUTOMOBILES (0.9%)
Ford Motor Co. ................. 144,944 7,745,445
General Motors Corp. ........... 76,386 5,552,307
--------------
13,297,752
--------------
BANKS--MAJOR REGIONAL (3.2%)
AmSouth Bancorp................. 46,886 905,486
Bank of New York Co., Inc.
(The).......................... 87,656 3,506,240
Bank One Corp. ................. 136,941 4,390,671
BB&T Corp. ..................... 37,675 1,031,353
Comerica Inc. .................. 18,706 873,336
Fifth Third Bancorp............. 36,050 2,645,169
Firstar Corp. .................. 116,171 2,454,112
FleetBoston Financial Corp. .... 110,310 3,840,167
Huntington Bancshares Inc. ..... 27,584 658,568
KeyCorp......................... 53,669 1,187,427
Mellon Financial Corp. ......... 62,304 2,122,230
National City Corp. ............ 75,130 1,779,642
Northern Trust Corp. ........... 26,748 1,417,644
Old Kent Financial Corp. ....... 14,200 502,325
PNC Bank Corp. ................. 36,416 1,620,512
Regions Financial Corp. ........ 26,816 673,752
Republic New York Corp. ........ 12,524 901,728
SouthTrust Corp. ............... 19,983 755,607
State Street Corp. ............. 19,170 1,400,608
Summit Bancorp.................. 20,588 630,508
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
BANKS--MAJOR REGIONAL (Continued)
SunTrust Banks, Inc. ........... 38,505 $ 2,649,625
Synovus Financial Corp. ........ 32,470 645,341
Union Planters Corp. ........... 17,014 670,990
U.S. Bancorp.................... 87,104 2,074,164
Wachovia Corp. ................. 24,259 1,649,612
Wells Fargo Co. ................ 197,894 8,002,339
--------------
48,989,156
--------------
BANKS--MONEY CENTER (1.6%)
Bank of America Corp. .......... 203,764 10,226,406
Chase Manhattan Corp. (The)..... 99,276 7,712,504
First Union Corp. .............. 115,859 3,801,624
Morgan (J.P.) & Co., Inc. ...... 21,210 2,685,716
--------------
24,426,250
--------------
BANKS--SAVINGS & LOANS (0.2%)
Golden West Financial Corp. .... 20,328 680,988
Washington Mutual, Inc. ........ 69,053 1,795,378
--------------
2,476,366
--------------
BEVERAGES--ALCOHOLIC (0.3%)
Anheuser-Busch Cos., Inc. ...... 55,747 3,951,069
Brown-Forman Corp.
Class B...................... 8,174 467,961
Coors (Adolph) Co.
Class B...................... 4,422 232,155
--------------
4,651,185
--------------
BEVERAGES--SOFT DRINKS (1.6%)
Coca-Cola Co. (The) (c)......... 294,947 17,180,663
Coca-Cola Enterprises Inc. ..... 50,804 1,022,430
PepsiCo, Inc. .................. 174,382 6,146,966
--------------
24,350,059
--------------
BROADCAST/MEDIA (1.3%)
CBS Corp. (a)................... 91,727 5,864,795
Clear Channel Communications,
Inc. (a)....................... 39,824 3,554,292
Comcast Corp. Special Class A... 88,738 4,486,815
MediaOne Group Inc. (a)......... 72,492 5,568,292
--------------
19,474,194
--------------
BUILDING MATERIALS (0.2%)
Masco Corp. .................... 52,850 1,341,069
Owens Corning................... 6,614 127,733
Sherwin-Williams Co. (The)...... 20,328 426,888
Vulcan Materials Co. ........... 12,000 479,250
--------------
2,374,940
--------------
CHEMICALS (1.3%)
Air Products & Chemicals,
Inc. .......................... 27,508 923,237
Dow Chemical Co. (The).......... 26,379 3,524,894
Du Pont (E.I.) De Nemours &
Co. ........................... 124,370 8,192,874
Eastman Chemical Co. ........... 9,500 453,031
Hercules Inc. .................. 12,116 337,733
Monsanto Co. ................... 75,625 2,694,141
Praxair, Inc. .................. 18,882 950,001
Rohm & Haas Co. ................ 25,386 1,032,893
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
132
<PAGE> 133
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
CHEMICALS (Continued)
Union Carbide Corp. ............ 15,844 $ 1,057,587
--------------
19,166,391
--------------
CHEMICALS--DIVERSIFIED (0.2%)
Avery Dennison Corp. ........... 13,590 990,371
Engelhard Corp. ................ 15,005 283,220
FMC Corp. (a)................... 3,737 214,177
PPG Industries, Inc. ........... 20,772 1,299,548
--------------
2,787,316
--------------
CHEMICALS--SPECIALTY (0.0%) (b)
Grace (W.R.) & Co. (a).......... 8,337 115,676
Great Lakes Chemical Corp. ..... 6,971 266,205
Sigma-Aldrich Corp. ............ 12,046 362,133
--------------
744,014
--------------
COMMUNICATIONS--EQUIPMENT MANUFACTURERS
(7.3%)
ADC Telecommunications, Inc.
(a)............................ 17,900 1,298,869
Andrew Corp. (a)................ 9,893 187,349
Cabletron Systems, Inc. (a)..... 21,947 570,622
Cisco Systems, Inc. (a)......... 390,464 41,828,456
Comverse Technology, Inc. (a)... 8,400 1,215,900
General Instrument Corp. (a).... 20,691 1,758,735
Lucent Technologies Inc. ....... 374,008 27,980,473
Network Appliance, Inc. (a)..... 17,600 1,461,900
Nortel Networks Corp. .......... 159,048 16,063,848
QUALCOMM, Inc. (a).............. 78,800 13,878,650
Scientific-Atlanta, Inc. ....... 8,893 494,673
Tellabs, Inc. (a)............... 46,924 3,011,934
3Com Corp. (a).................. 41,178 1,935,366
--------------
111,686,775
--------------
COMPUTER SOFTWARE & SERVICES (10.1%)
Adobe Systems Inc. ............. 14,478 973,645
America Online Inc. (a)......... 267,192 20,156,296
Autodesk, Inc. ................. 7,027 237,161
Automatic Data Processing,
Inc. .......................... 74,078 3,990,952
BMC Software, Inc. (a).......... 28,303 2,262,471
Ceridian Corp. (a).............. 17,229 371,500
Citrix Systems, Inc. (a)........ 10,500 1,291,500
Computer Associates
International, Inc. ........... 64,232 4,492,226
Computer Sciences Corp. (a)..... 19,040 1,801,660
Compuware Corp. (a)............. 43,919 1,635,983
Electronic Data Systems
Corp. ......................... 56,246 3,764,967
Equifax Inc. ................... 17,311 407,890
First Data Corp. ............... 51,618 2,545,413
Microsoft Corp. (a)(c).......... 615,904 71,906,792
Novell, Inc. (a)................ 40,308 1,609,801
Oracle Corp. (a)................ 169,949 19,044,910
Parametric Technology Corp.
(a)............................ 32,364 875,851
Paychex, Inc. .................. 29,418 1,176,720
PeopleSoft, Inc. (a)............ 30,227 644,213
Shared Medical Systems Corp. ... 3,099 157,855
Yahoo! Inc. (a)................. 31,300 13,543,119
--------------
152,890,925
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
COMPUTER SYSTEMS (6.2%)
Apple Computer, Inc. (a)........ 18,985 $ 1,951,895
Compaq Computer Corp. .......... 203,518 5,507,706
Dell Computer Corp. (a)......... 303,679 15,487,629
EMC Corp. (a)................... 121,143 13,234,873
Gateway Inc. (a)................ 37,632 2,711,856
Hewlett-Packard Co. ............ 121,131 13,801,363
International Business.......... 215,154 23,236,632
Machines Corp.
Lexmark International Group,
Inc. (a)....................... 15,400 1,393,700
Seagate Technology, Inc. (a).... 24,943 1,161,409
Silicon Graphics, Inc. (a)...... 22,576 221,527
Sun Microsystems, Inc. (a)...... 185,388 14,355,983
Unisys Corp. (a)................ 36,449 1,164,090
--------------
94,228,663
--------------
CONGLOMERATES (0.1%)
Textron Inc. ................... 18,049 1,384,133
--------------
CONTAINERS--METAL & GLASS (0.1%)
Ball Corp. ..................... 3,607 142,026
Crown Cork & Seal Co., Inc. .... 14,687 328,621
Owens-Illinois, Inc. (a)........ 18,671 467,942
--------------
938,589
--------------
CONTAINERS--PAPER (0.1%)
Bemis Co., Inc. ................ 6,420 223,898
Pactiv Corp. (a)................ 20,490 217,706
Temple-Inland Inc. ............. 6,760 445,737
--------------
887,341
--------------
COSMETICS/PERSONAL CARE (0.5%)
Alberto-Culver Co. Class B...... 6,769 174,725
Avon Products, Inc. ............ 31,293 1,032,669
Gillette Co. (The).............. 128,744 5,302,644
International Flavors &
Fragrances Inc. ............. 12,698 479,349
--------------
6,989,387
--------------
ELECTRIC POWER COMPANIES (1.4%)
Ameren Corp. ................... 16,443 538,508
American Electric Power Co.,
Inc. .......................... 23,092 741,831
Carolina Power & Light Co. ..... 19,065 580,291
Central & South West Corp. ..... 25,432 508,640
Cinergy Corp. .................. 18,972 457,700
CMS Energy Corp. ............... 14,000 436,625
Consolidated Edison, Inc. ...... 27,177 937,607
Constellation Energy Group,
Inc. .......................... 17,859 517,911
Dominion Resources, Inc. ....... 23,003 902,868
DTE Energy Co. ................. 17,361 544,701
Duke Energy Corp. .............. 43,576 2,184,247
Edison International............ 41,613 1,089,740
Entergy Corp. .................. 29,491 759,393
FirstEnergy Corp. .............. 28,141 638,449
Florida Progress Corp. ......... 11,700 495,056
FPL Group, Inc. ................ 21,583 924,022
GPU, Inc. ...................... 15,045 450,410
New Century Energies Inc. ...... 13,747 417,565
Niagara Mohawk Holdings Inc.
(a)............................ 22,412 312,367
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
133
<PAGE> 134
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
ELECTRIC POWER COMPANIES (Continued)
Northern States Power Co. ...... 18,324 $ 357,318
PECO Energy Co. ................ 22,864 794,524
PG&E Corp. ..................... 45,979 942,570
Pinnacle West Capital Corp. .... 9,900 302,569
PP&L Resources, Inc. ........... 18,867 431,583
Public Service Enterprise Group
Inc. .......................... 26,371 918,040
Reliant Energy, Inc. ........... 35,456 811,056
Southern Co. (The).............. 83,446 1,960,981
Texas Utilities Co. ............ 33,605 1,195,078
Unicom Corp. ................... 25,962 869,727
--------------
22,021,377
--------------
ELECTRICAL EQUIPMENT (4.6%)
Cooper Industries, Inc. ........ 11,362 459,451
Emerson Electric Co. ........... 52,151 2,992,164
General Electric Co. (c)........ 392,248 60,700,378
Grainger (W.W.), Inc. .......... 11,174 534,257
Molex Inc. ..................... 18,500 1,048,719
Solectron Corp. (a)............. 35,039 3,333,085
Thomas & Betts Corp. ........... 6,828 217,642
--------------
69,285,696
--------------
ELECTRONICS--DEFENSE (0.0%) (b)
PerkinElmer, Inc. .............. 5,352 223,111
--------------
ELECTRONICS--INSTRUMENTATION (0.1%)
PE Corp.-PE Biosystems Group.... 11,916 1,433,644
Tektronix, Inc. ................ 5,611 218,127
--------------
1,651,771
--------------
ELECTRONICS--SEMICONDUCTORS (4.6%)
Adaptec, Inc. (a)............... 11,800 588,525
Advanced Micro Devices, Inc.
(a)............................ 17,594 509,126
Analog Devices, Inc. (a)........ 20,600 1,915,800
Applied Materials, Inc. (a)..... 44,673 5,659,511
Intel Corp. .................... 398,820 32,827,871
KLA-Tencor Corp. (a)............ 10,428 1,161,419
LSI Logic Corp. (a)............. 17,132 1,156,410
Micron Technology, Inc. (a)..... 32,238 2,506,504
Motorola, Inc. ................. 72,228 10,635,573
National Semiconductor Corp.
(a)............................ 20,103 860,660
Teradyne, Inc. (a).............. 20,500 1,353,000
Texas Instruments Inc. ......... 95,776 9,278,300
Xilinx, Inc. (a)................ 37,800 1,718,721
--------------
70,171,420
--------------
ENGINEERING & CONSTRUCTION (0.0%) (b)
Fluor Corp. .................... 9,062 415,719
Foster Wheeler Corp. ........... 4,900 43,488
--------------
459,207
--------------
ENTERTAINMENT (1.7%)
Seagram Co. Ltd. (The).......... 51,318 2,306,103
Time Warner Inc. ............... 154,522 11,193,187
Viacom Inc. Class B (a)......... 82,686 4,997,335
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
ENTERTAINMENT (Continued)
Walt Disney Co. (The)........... 246,556 $ 7,211,763
--------------
25,708,388
--------------
FINANCIAL--MISCELLANEOUS (4.2%)
AFLAC Inc. ..................... 31,900 1,505,281
American Express Co. ........... 53,456 8,887,060
American General Corp. ......... 30,173 2,289,377
Associates First Capital Corp.
Class A........................ 87,167 2,391,645
Citigroup Inc. ................. 403,815 22,436,971
Fannie Mae...................... 122,737 7,663,391
Franklin Resources Inc. ........ 30,219 968,897
Freddie Mac..................... 83,204 3,915,788
MBIA Inc. ...................... 11,946 630,898
MBNA Corp. ..................... 95,997 2,615,918
Morgan Stanley Dean Witter &
Co. ........................... 66,508 9,494,017
Price (T. Rowe) Associates,
Inc. .......................... 15,200 561,450
SLM Holding Corp. .............. 19,483 823,157
--------------
64,183,850
--------------
FOOD (1.3%)
Bestfoods....................... 33,464 1,758,952
Campbell Soup Co. .............. 52,248 2,021,345
ConAgra, Inc. .................. 58,496 1,319,816
General Mills, Inc. ............ 36,530 1,305,948
Heinz (H.J.) Co. ............... 42,959 1,710,305
Hershey Foods Corp. ............ 16,691 792,822
Kellogg Co. .................... 48,560 1,496,255
Nabisco Group Holdings Corp. ... 38,847 412,749
Quaker Oats Co. (The)........... 16,041 1,052,691
Ralston-Ralston Purina Group.... 39,005 1,087,264
Sara Lee Corp. ................. 108,111 2,385,199
Unilever N.V.................... 68,367 3,721,729
Wrigley (Wm.) Jr. Co. .......... 13,945 1,156,563
--------------
20,221,638
--------------
FOOD & HEALTH CARE DISTRIBUTORS (0.3%)
Cardinal Health, Inc. .......... 32,471 1,554,549
McKesson HBOC, Inc. ............ 33,315 751,670
SUPERVALU Inc. ................. 14,439 288,780
SYSCO Corp. .................... 39,601 1,566,714
--------------
4,161,713
--------------
GOLD & PRECIOUS METALS MINING (0.1%)
Barrick Gold Corp. ............. 46,737 826,661
Homestake Mining Co. ........... 31,102 242,984
Newmont Mining Corp. ........... 20,045 491,103
Placer Dome Inc. ............... 38,916 418,347
--------------
1,979,095
--------------
HARDWARE & TOOLS (0.1%)
Black & Decker Corp. (The)...... 10,450 546,012
Snap-on Inc. ................... 7,927 210,561
Stanley Works (The)............. 10,692 322,097
--------------
1,078,670
--------------
HEALTH CARE--DIVERSIFIED (3.5%)
Abbott Laboratories............. 182,011 6,609,274
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
134
<PAGE> 135
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
HEALTH CARE--DIVERSIFIED (Continued)
Allergan, Inc. ................. 15,928 $ 792,418
American Home Products Corp. ... 147,616 5,821,606
Bristol-Myers Squibb Co. ....... 237,742 15,260,065
Johnson & Johnson............... 166,010 15,459,681
Mallinckrodt Inc. .............. 8,504 270,534
Warner-Lambert Co. ............. 101,955 8,353,938
--------------
52,567,516
--------------
HEALTH CARE--DRUGS (3.5%)
Lilly (Eli) & Co. .............. 130,346 8,668,009
Merck & Co., Inc. .............. 279,746 18,760,466
Pfizer Inc. .................... 462,047 14,987,650
Pharmacia & Upjohn, Inc. ....... 60,657 2,729,565
Schering-Plough Corp. .......... 175,757 7,414,748
Watson Pharmaceuticals, Inc.
(a)............................ 11,400 408,263
--------------
52,968,701
--------------
HEALTH CARE--HMOs (0.2%)
Aetna Inc. ..................... 17,865 997,090
Humana Inc. (a)................. 20,045 164,119
United Healthcare Corp. ........ 20,699 1,099,634
Wellpoint Health Networks Inc.
(a)............................ 8,100 534,094
--------------
2,794,937
--------------
HEALTH CARE--HOSPITAL MANAGEMENT (0.2%)
Columbia/HCA Healthcare
Corp. ......................... 67,953 1,991,872
Tenet Healthcare Corp. (a)...... 37,189 873,942
--------------
2,865,814
--------------
HEALTH CARE--MEDICAL PRODUCTS (0.8%)
Bard (C.R.), Inc. .............. 6,196 328,388
Bausch & Lomb Inc. ............. 6,852 468,934
Baxter International Inc. ...... 34,932 2,194,166
Becton, Dickinson & Co. ........ 30,056 803,998
Biomet, Inc. ................... 13,503 540,120
Boston Scientific Corp. (a)..... 47,464 1,038,275
Guidant Corp. (a)............... 36,163 1,699,661
Medtronic, Inc. ................ 142,660 5,198,174
St. Jude Medical, Inc. (a)...... 10,124 310,680
--------------
12,582,396
--------------
HEALTH CARE--MISCELLANEOUS (0.6%)
ALZA Corp. (a).................. 12,117 419,551
Amgen Inc. (a).................. 122,440 7,354,053
HEALTHSOUTH Corp. (a)........... 49,609 266,648
Manor Care, Inc. (a)............ 13,355 213,680
Quintiles Transnational Corp.
(a)............................ 13,700 256,019
--------------
8,509,951
--------------
HEAVY DUTY TRUCKS & PARTS (0.2%)
Cummins Engine Co., Inc. ....... 4,995 241,321
Dana Corp. ..................... 19,936 596,834
Eaton Corp. .................... 8,612 625,447
ITT Industries, Inc. ........... 10,490 350,759
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
HEAVY DUTY TRUCKS & PARTS (Continued)
Navistar International Corp.
(a)............................ 7,984 $ 378,242
PACCAR Inc. .................... 9,428 417,778
--------------
2,610,381
--------------
HOMEBUILDING (0.0%) (b)
Centex Corp. ................... 7,058 174,244
Kaufman & Broad Home Corp. ..... 5,685 137,506
Pulte Corp. .................... 5,217 117,383
--------------
429,133
--------------
HOTEL/MOTEL (0.3%)
Carnival Corp. ................. 73,433 3,511,015
Harrah's Entertainment, Inc.
(a)............................ 15,285 404,097
Hilton Hotels Corp. ............ 43,404 417,770
Marriott International, Inc.
Class A...................... 29,860 942,456
--------------
5,275,338
--------------
HOUSEHOLD--FURNISHINGS & APPLIANCES (0.1%)
Armstrong World Industries,
Inc. .......................... 4,844 161,669
Leggett & Platt, Inc. .......... 24,000 514,500
Maytag Corp. ................... 10,526 505,248
Whirlpool Corp. ................ 8,995 585,237
--------------
1,766,654
--------------
HOUSEHOLD PRODUCTS (1.9%)
Clorox Co. (The)................ 28,426 1,431,960
Colgate-Palmolive Co. .......... 70,132 4,558,580
Fort James Corp. ............... 26,423 723,329
Kimberly-Clark Corp. ........... 63,776 4,161,384
Procter & Gamble Co. (The)...... 158,277 17,341,224
--------------
28,216,477
--------------
HOUSEWARES (0.1%)
Fortune Brands, Inc. ........... 20,013 661,680
Newell Rubbermaid Inc. ......... 33,773 979,417
Tupperware Corp. ............... 6,845 115,937
--------------
1,757,034
--------------
INSURANCE BROKERS (0.3%)
Aon Corp. ...................... 30,690 1,227,600
Marsh & McLennan Cos., Inc. .... 31,556 3,019,515
--------------
4,247,115
--------------
INSURANCE--LIFE (0.3%)
Conseco, Inc. .................. 38,767 692,960
Jefferson-Pilot Corp. .......... 12,706 867,185
Lincoln National Corp. ......... 24,146 965,840
Torchmark Corp. ................ 15,932 463,024
UNUMProvident Corp. ............ 28,609 917,276
--------------
3,906,285
--------------
INSURANCE--MULTI-LINE (1.5%)
American International Group,
Inc. .......................... 185,455 20,052,322
CIGNA Corp. .................... 22,274 1,794,449
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
135
<PAGE> 136
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
INSURANCE--MULTI-LINE (Continued)
Hartford Financial Services
Group, Inc. (The).............. 27,182 $ 1,287,747
--------------
23,134,518
--------------
INSURANCE--PROPERTY & CASUALTY (0.5%)
Allstate Corp. (The)............ 96,567 2,317,608
Chubb Corp. (The)............... 21,004 1,182,788
Cincinnati Financial Corp. ..... 19,787 617,107
Loews Corp. .................... 13,141 797,494
MGIC Investment Corp. .......... 13,155 791,766
Progressive Corp. (The)......... 8,701 636,261
SAFECO Corp. ................... 16,212 403,274
St. Paul Cos., Inc. (The)....... 27,093 912,696
--------------
7,658,994
--------------
INVESTMENT BANK/BROKERAGE (0.7%)
Bear Stearns Cos., Inc. (The)... 14,638 625,775
Lehman Brothers Holdings
Inc. .......................... 14,158 1,199,006
Merrill Lynch & Co., Inc. ...... 44,043 3,677,590
Paine Webber Group Inc. ........ 17,400 675,337
Schwab (Charles) Corp. (The).... 97,902 3,756,989
--------------
9,934,697
--------------
LEISURE TIME (0.0%) (b)
Brunswick Corp. ................ 11,083 246,597
Mirage Resorts, Inc. (a)........ 23,835 364,973
--------------
611,570
--------------
MACHINE TOOLS (0.0%) (b)
Milacron Inc. .................. 4,484 68,941
--------------
MACHINERY--DIVERSIFIED (0.3%)
Briggs & Stratton Corp. ........ 2,788 149,507
Caterpillar Inc. ............... 42,553 2,002,651
Deere & Co. .................... 27,834 1,207,300
Ingersoll-Rand Co. ............. 19,933 1,097,561
NACCO Industries, Inc. Class
A.............................. 1,000 55,562
Thermo Electron Corp. (a)....... 18,835 282,525
Timken Co. (The)................ 7,354 150,297
--------------
4,945,403
--------------
MANUFACTURED HOUSING (0.0%) (b)
Fleetwood Enterprises, Inc. .... 4,166 85,924
--------------
MANUFACTURING--DIVERSIFIED (1.3%)
Crane Co. ...................... 8,122 161,425
Danaher Corp. .................. 16,191 781,216
Dover Corp. .................... 25,557 1,159,649
Honeywell International Inc. ... 94,653 5,460,295
Illinois Tool Works Inc. ....... 35,598 2,405,090
Johnson Controls, Inc. ......... 10,167 578,248
Millipore Corp. ................ 5,275 203,747
Pall Corp. ..................... 14,961 322,596
Parker-Hannifin Corp. .......... 13,055 669,885
Sealed Air Corp. (a)............ 10,036 519,990
Tyco International Ltd. ........ 200,650 7,800,269
--------------
20,062,410
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
METALS--MINING (0.1%)
Freeport-McMoRan Copper & Gold
Inc. Class B (a)............... 19,573 $ 413,480
Inco Ltd. (a)................... 23,070 542,145
Phelps Dodge Corp. ............. 9,316 625,336
--------------
1,580,961
--------------
MISCELLANEOUS (0.8%)
AES Corp. (The) (a)............. 24,636 1,841,541
American Greetings Corp. Class
A.............................. 8,099 191,339
Archer-Daniels-Midland Co. ..... 73,958 901,363
Corning Inc. ................... 29,095 3,751,436
Jostens, Inc. .................. 4,034 98,077
Minnesota Mining &
Manufacturing Co. ........... 48,219 4,719,435
TRW, Inc. ...................... 14,395 747,640
--------------
12,250,831
--------------
NATURAL GAS DISTRIBUTORS & PIPELINES (0.6%)
Coastal Corp. (The)............. 25,522 904,436
Columbia Energy Group........... 9,901 626,238
Consolidated Natural Gas Co. ... 11,544 749,639
Eastern Enterprises............. 2,778 159,561
El Paso Energy Corp. ........... 27,458 1,065,714
Enron Corp. .................... 84,720 3,759,450
NICOR Inc. ..................... 5,736 186,420
ONEOK, Inc. .................... 3,762 94,520
Peoples Energy Corp. ........... 4,267 142,944
Sempra Energy................... 28,780 500,053
Williams Cos., Inc. (The)....... 51,681 1,579,501
--------------
9,768,476
--------------
OFFICE EQUIPMENT & SUPPLIES (0.2%)
Pitney Bowes Inc. .............. 32,148 1,553,150
Xerox Corp. .................... 79,192 1,796,669
--------------
3,349,819
--------------
OIL & GAS DRILLING (0.0%) (b)
Rowan Cos., Inc. (a)............ 9,922 215,183
--------------
OIL & GAS--EXPLORATION & PRODUCTION (0.2%)
Anadarko Petroleum Corp. ....... 14,535 496,007
Apache Corp. ................... 13,291 490,936
Burlington Resources Inc. ...... 25,497 842,995
Union Pacific Resources Group,
Inc. .......................... 30,179 384,782
Unocal Corp. ................... 29,111 977,038
--------------
3,191,758
--------------
OIL--INTEGRATED DOMESTIC (0.7%)
Amerada Hess Corp. ............. 10,909 619,086
Ashland Inc. ................... 8,855 291,662
Atlantic Richfield Co. ......... 38,589 3,337,948
Conoco Inc. Class B............. 74,761 1,859,680
Kerr-McGee Corp. ............... 10,335 640,770
Occidental Petroleum Corp. ..... 41,739 902,605
Phillips Petroleum Co. ......... 30,207 1,419,729
Sunoco Inc. .................... 10,811 254,058
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
136
<PAGE> 137
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
OIL--INTEGRATED DOMESTIC (Continued)
Tosco Corp. .................... 18,200 $ 494,813
USX-Marathon Group.............. 37,003 913,512
--------------
10,733,863
--------------
OIL--INTEGRATED INTERNATIONAL (3.9%)
Chevron Corp. .................. 78,291 6,781,958
Exxon Mobil Corp. .............. 412,254 33,212,213
Royal Dutch Petroleum Co. ADR
(d)............................ 256,740 15,516,724
Texaco Inc. .................... 65,885 3,578,379
--------------
59,089,274
--------------
OIL WELL-EQUIPMENT & SERVICES (0.5%)
Baker Hughes Inc. .............. 39,204 825,734
Halliburton Co. ................ 52,749 2,123,147
McDermott International,
Inc. .......................... 7,108 64,416
Schlumberger Ltd. .............. 65,530 3,686,063
Transocean Sedco Forex Inc. .... 24,786 834,999
--------------
7,534,359
--------------
PAPER & FOREST PRODUCTS (0.6%)
Boise Cascade Corp. ............ 6,707 271,633
Champion International Corp. ... 11,583 717,422
Georgia-Pacific Group........... 20,518 1,041,289
International Paper Co. ........ 49,088 2,770,404
Louisiana-Pacific Corp. ........ 12,913 184,010
Mead Corp. (The)................ 12,088 525,073
Potlatch Corp. ................. 3,504 156,366
Westvaco Corp. ................. 11,987 391,076
Weyerhaeuser Co. ............... 28,177 2,023,461
Willamette Industries, Inc. .... 13,244 615,018
--------------
8,695,752
--------------
PERSONAL LOANS (0.3%)
Capital One Financial Corp. .... 23,626 1,138,478
Countrywide Credit Industries,
Inc. .......................... 13,523 341,455
Household International,
Inc. .......................... 57,400 2,138,150
Providian Financial Corp. ...... 16,988 1,546,970
--------------
5,165,053
--------------
PHOTOGRAPHY/IMAGING (0.2%)
Eastman Kodak Co. .............. 37,742 2,500,408
IKON Office Solutions, Inc. .... 17,891 121,882
Polaroid Corp. ................. 5,238 98,540
--------------
2,720,830
--------------
POLLUTION CONTROL (0.1%)
Allied Waste Industries, Inc.
(a)............................ 22,400 197,400
Waste Management, Inc. ......... 73,024 1,255,100
--------------
1,452,500
--------------
PUBLISHING (0.1%)
Harcourt General Inc. .......... 8,534 343,494
McGraw-Hill Cos., Inc. (The).... 23,639 1,456,753
Meredith Corp. ................. 6,195 258,254
--------------
2,058,501
--------------
PUBLISHING--NEWSPAPER (0.5%)
Dow Jones & Co., Inc. .......... 10,794 733,992
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
PUBLISHING--NEWSPAPER (Continued)
Gannett Co., Inc. .............. 33,474 $ 2,730,223
Knight-Ridder, Inc. ............ 9,589 570,546
New York Times Co. (The) Class
A.............................. 21,059 1,034,523
Times Mirror Co. (The) Class
A.............................. 6,993 468,531
Tribune Co. .................... 28,424 1,565,097
--------------
7,102,912
--------------
RAILROADS (0.3%)
Burlington Northern Santa Fe
Corp. ......................... 56,171 1,362,147
CSX Corp. ...................... 26,023 816,472
Kansas City Southern Industries,
Inc. .......................... 13,200 985,050
Norfolk Southern Corp. ......... 45,515 933,057
Union Pacific Corp. ............ 29,731 1,297,015
--------------
5,393,741
--------------
RESTAURANTS (0.5%)
Darden Restaurants, Inc. ....... 16,003 290,054
McDonald's Corp. ............... 162,216 6,539,333
Tricon Global Restaurants, Inc.
(a)............................ 18,384 710,082
Wendy's International, Inc. .... 14,846 306,199
--------------
7,845,668
--------------
RETAIL STORES--APPAREL (0.4%)
Gap, Inc. (The)................. 102,777 4,727,742
Limited, Inc. (The)............. 25,550 1,106,635
TJX Cos., Inc. (The)............ 38,428 785,372
--------------
6,619,749
--------------
RETAIL STORES--DEPARTMENT (0.3%)
Dillard's, Inc. Class A......... 12,863 259,672
Federated Department Stores,
Inc. (a)....................... 24,950 1,261,534
Kohl's Corp. (a)................ 19,562 1,412,132
May Department Stores Co.
(The).......................... 40,007 1,290,226
Nordstrom, Inc. ................ 16,953 443,957
Penney (J.C.) Co., Inc. ........ 31,516 628,350
--------------
5,295,871
--------------
RETAIL STORES--DRUGS (0.3%)
Longs Drug Stores Corp. ........ 4,695 121,190
Rite Aid Corp. ................. 30,951 346,264
Walgreen Co. ................... 119,372 3,491,631
--------------
3,959,085
--------------
RETAIL STORES--FOOD (0.4%)
Albertson's, Inc. .............. 50,384 1,624,884
Great Atlantic & Pacific Tea
Co., Inc. (The)................ 4,601 128,253
Kroger Co. (The) (a)............ 98,692 1,862,811
Safeway Inc. (a)................ 59,502 2,116,040
Winn-Dixie Stores, Inc. ........ 17,798 426,040
--------------
6,158,028
--------------
RETAIL STORES--GENERAL MERCHANDISE (2.8%)
Dayton Hudson Corp. ............ 52,928 3,886,900
Kmart Corp. (a)................. 59,079 594,483
Sears, Roebuck & Co. ........... 45,610 1,388,254
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
137
<PAGE> 138
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
RETAIL STORES--GENERAL MERCHANDISE
(Continued)
Wal-Mart Stores, Inc. .......... 531,194 $ 36,718,785
--------------
42,588,422
--------------
RETAIL STORES--SPECIALTY (2.2%)
AutoZone, Inc. (a).............. 18,037 582,821
Bed Bath & Beyond Inc. (a)...... 15,600 542,100
Best Buy Co. Inc. (a)........... 24,400 1,224,575
Circuit City Stores-Circuit City
Group.......................... 24,006 1,081,770
Consolidated Stores Corp. (a)... 13,174 214,077
Costco Wholesale Corp. (a)...... 26,386 2,407,722
CVS Corp. ...................... 46,736 1,866,519
Dollar General Corp. ........... 31,758 722,495
Home Depot, Inc. (The).......... 272,725 18,698,742
Lowe's Cos., Inc. .............. 44,537 2,661,086
Office Depot, Inc. (a).......... 44,800 490,000
Pep Boys-Manny, Moe & Jack
(The).......................... 6,320 57,670
Staples Inc. (a)................ 55,686 1,155,485
Tandy Corp. .................... 23,406 1,151,283
Toys "R" Us, Inc. (a)........... 29,783 426,269
--------------
33,282,614
--------------
SHOES (0.1%)
NIKE, Inc. Class B.............. 33,802 1,675,312
Reebok International Ltd. (a)... 6,704 54,889
--------------
1,730,201
--------------
SPECIALIZED SERVICES (0.6%)
Block (H&R), Inc. .............. 11,624 508,550
Cendant Corp. (a)............... 85,814 2,279,434
Dun & Bradstreet Corp. (The).... 19,576 577,492
Ecolab Inc. .................... 15,506 606,672
IMS Health Inc. ................ 37,917 1,030,869
Interpublic Group of Cos., Inc.
(The).......................... 33,366 1,924,801
National Service Industries,
Inc. .......................... 4,902 144,609
Omnicom Group Inc. ............. 21,439 2,143,900
Service Corp. International..... 32,536 225,719
--------------
9,442,046
--------------
SPECIALTY PRINTING (0.0%) (b)
Deluxe Corp. ................... 9,225 253,111
Donnelley (R.R.) & Sons Co. .... 15,634 387,919
--------------
641,030
--------------
STEEL (0.1%)
Allegheny Technologies Inc. .... 11,521 258,503
Bethlehem Steel Corp. (a)....... 15,619 130,809
Nucor Corp. .................... 10,499 575,476
USX-U.S. Steel Group............ 10,586 349,338
Worthington Industries, Inc. ... 11,079 183,496
--------------
1,497,622
--------------
TELECOMMUNICATIONS--LONG DISTANCE (3.6%)
AT&T Corp. ..................... 381,427 19,357,420
Global Crossing Ltd. (a)........ 91,645 4,582,250
MCI WorldCom, Inc. (a).......... 338,794 17,977,283
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
TELECOMMUNICATIONS--LONG
DISTANCE (Continued)
Sprint Corp. (FON Group)........ 103,546 $ 6,969,940
Sprint Corp. (PCS Group) (a).... 51,461 5,274,753
--------------
54,161,646
--------------
TELECOMMUNICATIONS--SERVICES (0.3%)
Nextel Communications, Inc.
Class A (a).................... 43,235 4,458,609
--------------
TELEPHONE (3.8%)
ALLTEL Corp. ................... 37,497 3,100,533
Bell Atlantic Corp. ............ 185,828 11,440,037
BellSouth Corp. ................ 224,839 10,525,276
CenturyTel, Inc. ............... 16,550 784,056
GTE Corp. ...................... 116,041 8,188,143
SBC Communications Inc. ........ 408,232 19,901,310
US West Inc. ................... 60,281 4,340,232
--------------
58,279,587
--------------
TEXTILES--APPAREL MANUFACTURERS (0.1%)
Liz Claiborne, Inc. ............ 7,491 281,849
Russell Corp. .................. 4,035 67,586
Springs Industries, Inc. Class
A.............................. 2,094 83,629
V.F. Corp. ..................... 14,269 428,070
--------------
861,134
--------------
TOBACCO (0.5%)
Philip Morris Cos. Inc. ........ 285,009 6,608,646
UST Inc. ....................... 21,010 529,190
--------------
7,137,836
--------------
TOYS (0.1%)
Hasbro, Inc. ................... 23,459 447,187
Mattel, Inc. ................... 49,936 655,410
--------------
1,102,597
--------------
TRANSPORTATION--MISCELLANEOUS (0.1%)
FDX Corp. (a)................... 35,622 1,458,275
Ryder System, Inc. ............. 7,645 186,825
--------------
1,645,100
--------------
Total Common Stocks
(Cost $996,067,442)............ 1,471,497,157(e)
--------------
<CAPTION>
SHORT-TERM
INVESTMENTS (2.5%)
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
COMMERCIAL PAPER (1.9%)
BMW US Capital Corp.
6.55%, due 1/10/00 (c)......... $20,500,000 20,466,400
Bridgestone/Firestone Inc.
7.00%, due 1/10/00 (c)......... 1,600,000 1,597,198
Merrill Lynch & Co. Inc.
5.55%, due 1/24/00 (c)......... 300,000 298,936
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
138
<PAGE> 139
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
San Paolo IMI US Financial Co.
5.85%, due 2/3/00 (c).......... $ 1,600,000 $ 1,591,416
Textron Financial Corp.
5.64%, due 1/14/00 (c)......... 4,008,000 3,997,859
Toyota Credit Puerto Rico 5.64%,
due 1/14/00 (c)................ 800,000 797,493
--------------
Total Commercial Paper (Cost
$28,749,302)................... 28,749,302
--------------
U.S. GOVERNMENT (0.6%)
United States Treasury Bills
4.50%, due 1/20/00 (c)......... 2,000,000 1,994,967
4.56%, due 1/27/00 (c)......... 7,000,000 6,974,222
--------------
Total U.S. Government (Cost
$8,969,189).................... 8,969,189
--------------
Total Short-Term Investments
(Cost $37,718,491)............. 37,718,491
--------------
Total Investments (Cost
$1,033,785,933) (f)............ 99.2% 1,509,215,648(g)
Cash and Other Assets, Less
Liabilities.................... 0.8 11,868,905
----------- --------------
Net Assets...................... 100.0% $1,521,084,553
=========== ==============
<CAPTION>
FUTURES CONTRACTS (0.1%)
CONTRACTS UNREALIZED
LONG APPRECIATION(h)
-----------------------------
<S> <C> <C>
Standard & Poor's 500
March 2000
(Settlement Value
$37,847,100) (e)............... 102 $ 1,068,486
--------------
- ------------------------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) Segregated as collateral for futures contracts.
(d) ADR -- American Depository Receipt.
(e) The combined market value of common stocks and settlement
value of Standard & Poor's 500 Index futures contracts
represents 99.2% of net assets.
(f) The cost for Federal income tax purposes is
$1,034,359,739.
(g) At December 31, 1999 net unrealized appreciation was
$474,855,909, based on cost for Federal income tax
purposes. This consisted of aggregate gross unrealized
appreciation for all investments on which there was an
excess of market value over cost of $529,980,080 and
aggregate gross unrealized depreciation for all
investments on which there was an excess of cost over
market value of $55,124,171.
(h) Represents the difference between the value of the
contracts at the time they were opened and the value at
December 31, 1999.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
139
<PAGE> 140
INDEXED EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $1,033,785,933)..... $1,509,215,648
Cash................................... 16,266
Receivables:
Fund shares sold..................... 10,958,687
Dividends and interest............... 1,312,819
Investment securities sold........... 462,806
Variation margin receivable on futures
contracts............................ 86,739
--------------
Total assets................... 1,522,052,965
--------------
LIABILITIES:
Payables:
Investment securities purchased...... 409,991
Administrator........................ 247,143
Shareholder communication............ 128,866
Adviser.............................. 123,572
Custodian............................ 30,000
Directors............................ 1,084
Accrued expenses....................... 27,756
--------------
Total liabilities.............. 968,412
--------------
Net assets applicable to outstanding
shares............................... $1,521,084,553
==============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 50 million shares
authorized........................... $ 498,794
Additional paid-in capital............. 1,041,908,532
Accumulated undistributed net realized
gain on investments.................. 2,179,026
Net unrealized appreciation on
investments and futures
transactions......................... 476,498,201
--------------
Net assets applicable to outstanding
shares............................... $1,521,084,553
==============
Shares of capital stock outstanding.... 49,879,430
==============
Net asset value per share
outstanding.......................... $ 30.50
==============
</TABLE>
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 14,932,059
Interest............................. 3,195,581
--------------
Total income................... 18,127,640
--------------
Expenses:
Administration....................... 2,439,961
Advisory............................. 1,219,981
Shareholder communication............ 382,567
Custodian............................ 151,087
Professional......................... 91,316
Directors............................ 48,445
Miscellaneous........................ 62,592
--------------
Total expenses................. 4,395,949
--------------
Net investment income.................. 13,731,691
--------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain from:
Security transactions................ 14,349,205
Futures transactions................. 2,245,163
--------------
Net realized gain on investments....... 16,594,368
--------------
Net change in unrealized appreciation
on investments:
Security transactions................ 201,112,019
Futures transactions................. 600,737
--------------
Net unrealized gain on investments..... 201,712,756
--------------
Net realized and unrealized gain on
investments.......................... 218,307,124
--------------
Net increase in net assets resulting
from operations...................... $ 232,038,815
==============
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $180,544.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
140
<PAGE> 141
MAINSTAY VP SERIES FUND, INC.
INDEXED EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999
and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
-----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 13,731,691 $ 9,155,693
Net realized gain on investments.......................... 16,594,368 9,947,952
Net change in unrealized appreciation on investments and
futures transactions.................................... 201,712,756 158,250,661
-------------- ------------
Net increase in net assets resulting from operations...... 232,038,815 177,354,306
-------------- ------------
Dividends and distributions to shareholders:
From net investment income................................ (13,732,796) (9,192,904)
From net realized gain on investments..................... (20,997,595) (8,579,470)
-------------- ------------
Total dividends and distributions to shareholders....... (34,730,391) (17,772,374)
-------------- ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 664,113,898 373,005,680
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 34,730,391 17,772,374
-------------- ------------
698,844,289 390,778,054
Cost of shares redeemed................................... (321,853,120) (100,347,307)
-------------- ------------
Increase in net assets derived from capital share
transactions............................................ 376,991,169 290,430,747
-------------- ------------
Net increase in net assets.................................. 574,299,593 450,012,679
NET ASSETS:
Beginning of year........................................... 946,784,960 496,772,281
-------------- ------------
End of year................................................. $1,521,084,553 $946,784,960
============== ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997 1996 1995
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year....... $ 25.89 $ 20.58 $ 16.10 $ 13.53 $ 10.38
------------- -------------- -------------- -------------- --------------
Net investment income...................... 0.28 0.26 0.27 0.24 0.27
Net realized and unrealized gain on
investments.............................. 5.06 5.58 4.99 2.79 3.55
------------- -------------- -------------- -------------- --------------
Total from investment operations........... 5.34 5.84 5.26 3.03 3.82
------------- -------------- -------------- -------------- --------------
Less dividends and distributions:
From net investment income............... (0.28) (0.26) (0.27) (0.24) (0.28)
From net realized gain
on investments......................... (0.45) (0.27) (0.51) (0.22) (0.39)
------------- -------------- -------------- -------------- --------------
Total dividends and distributions.......... (0.73) (0.53) (0.78) (0.46) (0.67)
------------- -------------- -------------- -------------- --------------
Net asset value at end of year............. $ 30.50 $ 25.89 $ 20.58 $ 16.10 $ 13.53
============= ============== ============== ============== ==============
Total investment return.................... 20.70% 28.49% 32.84% 22.42% 36.89%
Ratios (to average net assets)/ Supplemental Data:
Net investment income.................... 1.13% 1.30% 1.75% 2.14% 2.52%
Net expenses............................. 0.36% 0.38% 0.39% 0.47% 0.47%
Expenses (before reimbursement).......... 0.36% 0.38% 0.39% 0.50% 0.62%
Portfolio turnover rate.................... 3% 4% 5% 3% 5%
Net assets at end of year (in 000's)....... $ 1,521,085 $ 946,785 $ 496,772 $ 223,945 $ 105,171
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
141
<PAGE> 142
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (97.1%)+
SHARES VALUE
-----------------------
<S> <C> <C>
AEROSPACE/DEFENSE (1.2%)
Boeing Co. (The)................. 6,100 $ 253,531
General Dynamics Corp. .......... 1,700 89,675
Goodrich (B.F.) Co. (The)........ 200 5,500
Northrop Grumman Corp. .......... 2,800 151,375
Rockwell International Corp. .... 3,200 153,200
United Technologies Corp. ....... 1,900 123,500
-----------
776,781
-----------
AIRLINES (0.1%)
AMR Corp. (a).................... 400 26,800
Delta Air Lines, Inc. ........... 500 24,906
-----------
51,706
-----------
ALUMINUM (0.1%)
Alcan Aluminum Ltd. ............. 1,600 65,900
Alcoa Inc. (d)................... 300 24,900
-----------
90,800
-----------
AUTO PARTS & EQUIPMENT (0.0%) (b)
Delphi Automotive Systems
Corp. .......................... 500 7,875
-----------
AUTOMOBILES (1.6%)
Ford Motor Co. .................. 12,300 657,281
General Motors Corp. ............ 5,300 385,244
-----------
1,042,525
-----------
BANKS (4.9%)
AmSouth Bancorporation........... 8,200 158,362
Bank of America Corp. ........... 15,600 782,925
Bank One Corp. .................. 4,802 153,964
Chase Manhattan Corp. (The)
(d)............................. 14,200 1,103,163
Cullen/Frost Bankers, Inc. ...... 1,700 43,775
First Union Corp. ............... 2,700 88,594
Fleet Boston Financial Corp. .... 4,499 156,621
GreenPoint Financial Corp. ...... 5,600 133,350
KeyCorp.......................... 2,400 53,100
North Fork Bancorporation,
Inc. ........................... 500 8,750
PNC Bank Corp. .................. 1,100 48,950
Pacific Century Financial
Corp. .......................... 1,100 20,556
Republic New York Corp. ......... 500 36,000
UnionBanCal Corp. ............... 5,200 205,075
Wells Fargo Co. ................. 3,700 149,619
-----------
3,142,804
-----------
BEVERAGES (0.4%)
Anheuser-Busch Cos., Inc. ....... 3,000 212,625
Coca-Cola Co. (The).............. 200 11,650
PepsiCo, Inc. ................... 1,200 42,300
-----------
266,575
-----------
BIOTECHNOLOGY (0.3%)
Biogen, Inc. (a)................. 2,100 177,450
Genentech, Inc. (a).............. 100 13,450
-----------
190,900
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
BROADCAST/MEDIA (1.7%)
CBS Corp. (a).................... 10,100 $ 645,769
Comcast Corp. Class A............ 6,000 303,375
MediaOne Group, Inc. (a)......... 1,800 138,262
-----------
1,087,406
-----------
BUILDING MATERIALS (0.2%)
Sherwin-Williams Co. (The)....... 3,100 65,100
USG Corp. ....................... 1,000 47,125
-----------
112,225
-----------
CHEMICALS (1.2%)
Dexter Corp. (The)............... 2,400 95,400
Dow Chemical Co. (The)........... 4,800 641,400
Englehard Corp. ................. 1,600 30,200
-----------
767,000
-----------
COMMUNICATIONS--EQUIPMENT
MANUFACTURERS (7.3%)
Cisco Systems, Inc. (a).......... 15,600 1,671,150
Comverse Technology, Inc. (a).... 1,400 202,650
Lucent Technologies Inc. ........ 13,500 1,009,969
Nortel Networks Corp. ........... 5,600 565,600
QUALCOMM Inc. (a)................ 4,800 845,400
Scientific-Atlanta, Inc. ........ 2,100 116,812
Tellabs, Inc. (a)................ 2,900 186,144
3Com Corp. (a)................... 1,900 89,300
-----------
4,687,025
-----------
COMPUTER SOFTWARE & SERVICES
(9.3%)
Adobe Systems Inc. .............. 2,500 168,125
America Online, Inc. (a)(d)...... 10,700 807,181
American Management Systems, Inc.
(a)............................. 800 25,100
Computer Associates
International, Inc. ............ 2,200 153,863
Compuware Corp. (a).............. 3,900 145,275
Electronic Data Systems Corp. ... 6,700 448,481
Microsoft Corp. (a).............. 26,700 3,117,225
Novell, Inc. (a)................. 2,300 91,856
Oracle Corp. (a)................. 6,000 672,375
Paychex, Inc. ................... 1,200 48,000
Shared Medical Systems Corp. .... 800 40,750
Yahoo! Inc. (a).................. 600 259,613
-----------
5,977,844
-----------
COMPUTER SYSTEMS (5.4%)
Apple Computer, Inc. (a)......... 3,600 370,125
Dell Computer Corp. (a).......... 9,800 499,800
EMC Corp. (a).................... 3,500 382,375
Gateway, Inc. (a)................ 300 21,619
Hewlett-Packard Co. ............. 6,000 683,625
International Business Machines
Corp. .......................... 7,700 831,600
NCR Corp. (a).................... 1,200 45,450
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
142
<PAGE> 143
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
COMPUTER SYSTEMS (Continued)
Sun Microsystems, Inc. (a)....... 6,200 $ 480,112
Unisys Corp. (a)................. 4,000 127,750
Xircom, Inc. (a)................. 300 22,500
-----------
3,464,956
-----------
CONTAINERS (0.3%)
Ball Corp. ...................... 1,000 39,375
Crown Cork & Seal Co., Inc. ..... 3,900 87,263
Temple-Inland Inc. .............. 1,200 79,125
-----------
205,763
-----------
COSMETICS/PERSONAL CARE (0.2%)
Alberto-Culver Co. Class B....... 400 10,325
Avon Products, Inc. ............. 1,900 62,700
Herbalife International, Inc.
Class A......................... 500 7,188
International Flavors &
Fragrances Inc. ................ 1,700 64,175
-----------
144,388
-----------
ELECTRIC POWER COMPANIES (2.0%)
Ameren Corp. .................... 3,800 124,450
Conectiv Inc. Class A............ 300 8,887
Constellation Energy Group,
Inc. ........................... 3,600 104,400
DTE Energy Co. .................. 3,500 109,813
Duke Energy Corp. ............... 2,700 135,337
GPU, Inc. ....................... 4,600 137,713
LG&E Energy Corp. ............... 1,700 29,644
Minnesota Power, Inc. ........... 4,400 74,525
Public Service Enterprise
Group Inc. ..................... 5,500 191,469
Reliant Energy Inc. ............. 500 11,437
Texas Utilities Co. ............. 4,800 170,700
UtiliCorp United Inc. ........... 9,100 176,881
-----------
1,275,256
-----------
ELECTRICAL EQUIPMENT (3.3%)
General Electric Co. ............ 13,400 2,073,650
Solectron Corp. (a).............. 200 19,025
-----------
2,092,675
-----------
ELECTRONICS--COMPONENTS (0.0%)
(b)
AVX Corporation.................. 200 9,988
-----------
ELECTRONICS--DEFENSE (0.2%)
PerkinElmer, Inc. ............... 2,600 108,388
-----------
ELECTRONICS--SEMICONDUCTORS
(5.2%)
Adaptec, Inc. (a)................ 10,400 518,700
Applied Materials, Inc. (a)...... 4,100 519,419
Integrated Device Technology,
Inc. (a)........................ 4,100 118,900
Intel Corp. ..................... 10,300 847,819
KLA-Tencor Corp. (a)............. 500 55,688
Lam Research Corp. (a)........... 2,500 278,906
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
ELECTRONICS--SEMICONDUCTORS
(Continued)
Micron Technology, Inc. (a)...... 2,100 $ 163,275
Motorola, Inc. .................. 3,400 500,650
National Semiconductor Corp.
(a)............................. 500 21,406
SDL, Inc. (a).................... 100 21,800
Texas Instruments Inc. .......... 2,800 271,250
-----------
3,317,813
-----------
ENGINEERING & CONSTRUCTION (0.0%)
(b)
Dycom Industries, Inc. (a)....... 700 30,844
-----------
ENTERTAINMENT (0.6%)
Time Warner Inc. ................ 1,300 94,169
Viacom Inc. Class B (a).......... 4,500 271,969
-----------
366,138
-----------
FINANCE (4.6%)
Ambac Financial Group, Inc. ..... 2,500 130,469
Citigroup Inc. .................. 18,200 1,011,237
Fannie Mae....................... 8,500 530,719
Freddie Mac...................... 700 32,944
MBNA Corp. ...................... 1,300 35,425
Morgan Stanley Dean Witter &
Co. ............................ 8,100 1,156,275
PMI Group, Inc. (The)............ 1,300 63,456
-----------
2,960,525
-----------
FOOD (2.9%)
Bestfoods........................ 100 5,256
ConAgra, Inc. ................... 16,100 363,256
Earthgrains Co. (The)............ 2,800 45,150
General Mills, Inc. ............. 7,600 271,700
Heinz (H.J.) Co. ................ 800 31,850
Hormel Foods Corp. .............. 1,200 48,750
IBP, Inc. ....................... 2,700 48,600
Kellogg Co. ..................... 3,000 92,438
Nabisco Group Holdings Corp. .... 18,100 192,313
Quaker Oats Co. (The)............ 6,500 426,563
Ralston Purina Co. .............. 4,600 128,225
Sara Lee Corp. .................. 2,500 55,156
Unilever N.V..................... 2,442 132,936
-----------
1,842,193
-----------
FOOD & HEALTH CARE DISTRIBUTORS
(0.4%)
Bergen Brunswig Corp. Class A.... 1,900 15,794
SUPERVALU INC. .................. 13,000 260,000
-----------
275,794
-----------
GOLD & PRECIOUS METALS MINING
(0.1%)
Barrick Gold Corp. .............. 2,900 51,294
Homestake Mining Co. ............ 1,100 8,594
-----------
59,888
-----------
HARDWARE & TOOLS (0.0%) (b)
Stanley Works (The).............. 400 12,050
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
143
<PAGE> 144
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
HEALTH CARE--DRUGS (4.2%)
Andrx Corp. (a).................. 2,500 $ 105,781
Forest Laboratories, Inc. (a).... 1,200 73,725
Lilly (Eli) and Co. ............. 4,200 279,300
Merck & Co., Inc. ............... 10,800 724,275
Pfizer Inc. ..................... 26,600 862,838
Pharmacia & Upjohn, Inc. ........ 6,300 283,500
Schering-Plough Corp. ........... 9,200 388,125
-----------
2,717,544
-----------
HEALTH CARE--HMOs (0.7%)
Aetna Inc. ...................... 3,500 195,344
Oxford Health Plans, Inc. (a).... 1,700 21,569
United HealthCare Corp. ......... 4,400 233,750
-----------
450,663
-----------
HEALTH CARE--MEDICAL PRODUCTS
(0.8%)
Bard (C.R.) Inc. ................ 2,000 106,000
Bausch & Lomb Inc. .............. 1,100 75,281
Baxter International Inc. ....... 4,100 257,531
VISX, Inc. (a)................... 1,100 56,925
-----------
495,737
-----------
HEALTH CARE--MISCELLANEOUS (2.8%)
American Home Products Corp. .... 400 15,775
Amgen Inc. (a)(d)................ 3,200 192,200
Bristol-Myers Squibb Co. ........ 9,100 584,106
Johnson & Johnson................ 7,500 698,438
Mallinckrodt Inc. ............... 4,600 146,337
Warner-Lambert Co. .............. 2,000 163,875
-----------
1,800,731
-----------
HEAVY DUTY TRUCKS (0.5%)
Cummins Engine Co., Inc. ........ 5,900 285,044
PACCAR Inc. ..................... 1,400 62,037
-----------
347,081
-----------
HOMEBUILDING (0.0%) (b)
Pulte Corp. ..................... 500 11,250
-----------
HOTEL/MOTEL (0.6%)
Carnival Corp. .................. 8,200 392,063
-----------
HOUSEHOLD--FURNISHINGS &
APPLIANCES (0.3%)
Armstrong World Industries,
Inc. ........................... 1,900 63,412
Whirlpool Corp. ................. 2,000 130,125
-----------
193,537
-----------
HOUSEHOLD PRODUCTS (1.6%)
Church & Dwight Co., Inc. ....... 1,600 42,700
Clorox Co. (The)................. 200 10,075
Kimberly-Clark Corp. ............ 2,400 156,600
Procter & Gamble Co. (The)....... 7,500 821,719
-----------
1,031,094
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
HOUSEWARES (0.4%)
Fortune Brands, Inc. ............ 4,400 $ 145,475
Tupperware Corp. ................ 7,500 127,031
-----------
272,506
-----------
INSURANCE (3.4%)
Allmerica Financial Corp. ....... 500 27,813
American International Group,
Inc. ........................... 625 67,578
Aon Corp. ....................... 500 20,000
Gallagher (Arthur J.) & Co. ..... 1,500 97,125
Lincoln National Corp. .......... 11,000 440,000
Loews Corp. ..................... 2,800 169,925
MGIC Investment Corp. ........... 1,700 102,319
Marsh & McLennan Cos., Inc. ..... 8,400 803,775
Radian Group Inc. ............... 500 23,875
St. Paul Cos., Inc. (The)........ 11,100 373,931
Travelers Property Casualty
Corp. .......................... 1,500 51,375
-----------
2,177,716
-----------
INVESTMENT BANK/ BROKERAGE (0.4%)
Lehman Brothers Holdings Inc. ... 1,400 118,562
Merrill Lynch & Co., Inc. ....... 1,800 150,300
-----------
268,862
-----------
LEISURE TIME (0.1%)
Anchor Gaming (a)................ 400 17,375
Brunswick Corp. ................. 1,300 28,925
-----------
46,300
-----------
MACHINERY--DIVERSIFIED (0.2%)
Briggs & Stratton Corp. ......... 2,000 107,250
Trinity Industries, Inc. ........ 500 14,219
-----------
121,469
-----------
MANUFACTURING--DIVERSIFIED (2.0%)
Corning Inc. .................... 1,500 193,406
Diebold, Inc. ................... 500 11,750
Dover Corp. ..................... 5,300 240,487
Illinois Tool Works Inc. ........ 1,524 102,965
Minnesota Mining and
Manufacturing Co. .............. 3,400 332,775
Pall Corp. ...................... 1,200 25,875
Pentair, Inc. ................... 600 23,100
Tyco International Ltd. ......... 10,000 388,750
-----------
1,319,108
-----------
METALS--MINING (0.4%)
Phelps Dodge Corp. .............. 3,700 248,362
-----------
NATURAL GAS DISTRIBUTORS &
PIPELINES (0.3%)
KeySpan Corp. ................... 1,700 39,419
Sempra Energy.................... 9,800 170,275
-----------
209,694
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
144
<PAGE> 145
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
OFFICE EQUIPMENT & SUPPLIES (0.3%)
Pitney Bowes Inc. ............... 4,400 $ 212,575
-----------
OIL & GAS SERVICES (0.6%)
Apache Corp. .................... 300 11,081
Diamond Offshore Drilling,
Inc. ........................... 2,300 70,294
Noble Drilling Corp. (a)......... 1,200 39,300
Tidewater Inc. .................. 3,300 118,800
Ultramar Diamond Shamrock
Corp. .......................... 6,300 142,931
-----------
382,406
-----------
OIL--INTEGRATED DOMESTIC (2.5%)
Amerada Hess Corp. .............. 2,000 113,500
Atlantic Richfield Co. .......... 2,600 224,900
Kerr-McGee Corp. ................ 12,300 762,600
Occidental Petroleum Corp. ...... 18,800 406,550
Philips Petroleum Co. ........... 1,500 70,500
-----------
1,578,050
-----------
OIL--INTEGRATED INTERNATIONAL (3.1%)
Chevron Corp. ................... 4,100 355,163
Exxon Mobil Corp. ............... 10,500 845,906
Royal Dutch Petroleum Co. ....... 7,700 465,369
Texaco Inc. ..................... 6,400 347,600
-----------
2,014,038
-----------
PAPER & FOREST PRODUCTS (0.7%)
Georgia-Pacific Corp. ........... 1,700 86,275
International Paper Co. ......... 700 39,506
Louisiana-Pacific Corp. ......... 900 12,825
Westvaco Corp. .................. 300 9,788
Weyerhaeuser Co. ................ 4,000 287,250
-----------
435,644
-----------
PHOTOGRAPHY/IMAGING (0.6%)
Eastman Kodak Co. ............... 3,200 212,000
Electronics for Imaging, Inc.
(a)............................. 3,200 186,000
-----------
398,000
-----------
PUBLISHING (0.2%)
Knight-Ridder, Inc. ............. 400 23,800
Reader's Digest Association, Inc.
(The) Class A................... 800 23,400
Tribune Co. ..................... 1,500 82,594
-----------
129,794
-----------
RAILROADS (0.1%)
Union Pacific Corp. ............. 900 39,262
-----------
REAL ESTATE INVESTMENT/
MANAGEMENT (0.3%)
CarrAmerica Realty Corp. ........ 2,400 50,700
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
RENTALS (0.3%)
Hertz Corp. (The) Class A........ 3,600 $ 180,450
-----------
RESTAURANTS (0.4%)
Brinker International, Inc.
(a)............................. 1,600 38,400
Darden Restaurants, Inc. ........ 4,300 77,937
Tricon Global Restaurants, Inc.
(a)............................. 1,000 38,625
Wendy's International, Inc. ..... 5,800 119,625
-----------
274,587
-----------
RETAIL (6.1%)
Abercrombie & Fitch Co.
Class A (a)..................... 2,500 66,719
Albertson's, Inc. ............... 500 16,125
AnnTaylor Stores Corp. (a)....... 200 6,887
Best Buy Co., Inc. (a)........... 3,200 160,600
Circuit City Stores-Circuit City
Group........................... 3,600 162,225
Costco Wholesale Corp. (a)....... 100 9,125
Dayton Hudson Corp. ............. 200 14,687
Federated Department
Stores, Inc. (a)................ 4,600 232,588
Great Atlantic & Pacific Tea Co.,
Inc. (The)...................... 1,200 33,450
Home Depot, Inc. (The)........... 10,050 689,053
Kroger Co. (The) (a)............. 1,300 24,538
Lowe's Cos., Inc. ............... 1,300 77,675
Penney (J.C.) Co., Inc. ......... 1,900 37,881
Ross Stores, Inc. ............... 3,200 57,400
Safeway Inc. (a)................. 1,700 60,456
Sears, Roebuck & Co. ............ 9,500 289,156
TJX Cos., Inc. (The)............. 1,600 32,700
Tandy Corp. ..................... 900 44,269
Tiffany & Co. ................... 200 17,850
Toys "R" Us, Inc. (a)............ 10,700 153,144
Wal-Mart Stores, Inc. ........... 22,400 1,548,400
Winn-Dixie Stores, Inc. ......... 1,600 38,300
Zale Corp. (a)................... 2,300 111,263
-----------
3,884,491
-----------
SPECIALIZED SERVICES (0.9%)
Block (H&R), Inc. ............... 2,400 105,000
Dun & Bradstreet Corp. (The)..... 3,800 112,100
Manpower Inc. ................... 400 15,050
MedQuist Inc. (a)................ 1,000 25,812
National Service Industries,
Inc. ........................... 4,500 132,750
Omnicom Group Inc. .............. 800 80,000
True North Communications
Inc. ........................... 2,900 129,594
-----------
600,306
-----------
SPECIALTY PRINTING (0.4%)
Deluxe Corp. .................... 8,300 227,731
Donnelley (R.R.) & Sons Co. ..... 1,100 27,294
-----------
255,025
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
145
<PAGE> 146
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
STEEL (0.1%)
Nucor Corp. ..................... 600 $ 32,887
Worthington Industries, Inc. .... 1,500 24,844
-----------
57,731
-----------
TELECOMMUNICATIONS (3.4%)
AT&T Corp. (d)................... 19,200 974,400
MCI WorldCom, Inc. (a)........... 13,650 724,303
Nextel Communications, Inc.
(a)............................. 500 51,562
Sprint Corp. (FON Group)......... 2,300 154,819
Sprint Corp. (PCS Group) (a)..... 2,700 276,750
TALK.com Inc. (a)................ 500 8,875
-----------
2,190,709
-----------
TELEPHONE (4.5%)
ALLTEL Corp. .................... 1,400 115,762
Bell Atlantic Corp. (d).......... 6,800 418,625
BellSouth Corp. ................. 15,000 702,188
GTE Corp. ....................... 7,000 493,937
NEXTLINK Communications, Inc.
(a)............................. 200 16,613
SBC Communications Inc. ......... 18,542 903,922
U S West, Inc. .................. 3,100 223,200
-----------
2,874,247
-----------
TEXTILES--APPAREL MANUFACTURERS
(0.1%)
Liz Claiborne, Inc. ............. 300 11,288
Tommy Hilfiger Corp. (a)......... 2,100 48,956
-----------
60,244
-----------
TOBACCO (0.2%)
Philip Morris Cos. Inc. ......... 5,400 125,212
-----------
TRANSPORTATION (0.1%)
United Parcel Service, Inc. ..... 1,000 69,000
-----------
Total Common Stocks
(Cost $51,795,754).............. 62,284,313(c)
-----------
PREFERRED STOCK (0.0%) (B)
ELECTRIC POWER COMPANIES (0.0%)
(b)
Avista Corp. .................... 1,900 28,975
-----------
Total Preferred Stock
(Cost $33,840).................. 28,975
-----------
<CAPTION>
SHORT-TERM
INVESTMENT (2.1%)
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
TIME DEPOSIT (2.1%)
Bank of New York Cayman
3.00%, due 1/3/00............... $1,340,000 $ 1,340,000
-----------
Total Short-Term Investment
(Cost $1,340,000)............... 1,340,000
-----------
Total Investments
(Cost $53,169,594) (f).......... 99.2% 63,653,288(g)
Cash and Other Assets,
Less Liabilities................ 0.8 488,991
--------- -----------
Net Assets....................... 100.0% 64,142,279
========= ===========
<CAPTION>
FUTURES CONTRACTS (0.1%)
CONTRACTS UNREALIZED
LONG APPRECIATION(e)
----------------------------
<S> <C> <C>
Standard & Poor's 500
March 2000...................... 3 $ 14,753
-----------
Total Futures Contracts
(Settlement Value $1,113,150)... $ 14,753
===========
</TABLE>
- ------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) The combined market value of common stocks and settlement value of Standard
& Poor's 500 Index futures contracts represents 98.8% of net assets.
(d) Segregated or partially segregated as collateral for futures contracts.
(e) Represents the difference between the value of the contracts at the time
they were opened and the value at December 31, 1999.
(f) The cost for Federal income tax purposes is $53,296,183.
(g) At December 31, 1999 net unrealized appreciation was $10,357,105, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $12,953,101 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,595,996.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
146
<PAGE> 147
MAINSTAY VP SERIES FUND, INC.
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $53,169,594)........... $63,653,288
Cash...................................... 3,857
Receivables:
Investment securities sold.............. 285,203
Fund shares sold........................ 162,130
Dividends and interest.................. 78,075
Unamortized organization expense.......... 14,250
Variation margin receivable on futures
contracts............................... 2,550
-----------
Total assets...................... 64,199,353
-----------
LIABILITIES:
Payables:
Adviser................................. 25,733
Custodian............................... 11,605
Administrator........................... 7,926
Professional............................ 5,848
Accrued expenses.......................... 5,962
-----------
Total liabilities................. 57,074
-----------
Net assets applicable to outstanding
shares.................................. $64,142,279
===========
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares authorized.... $ 50,336
Additional paid-in capital................ 53,625,339
Accumulated net realized loss on
investments............................. (31,843)
Net unrealized appreciation on
investments............................. 10,498,447
-----------
Net assets applicable to outstanding
shares.................................. $64,142,279
===========
Shares of capital stock outstanding....... 5,033,585
===========
Net asset value per share outstanding..... $ 12.74
===========
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 731,146
Interest................................ 65,694
-----------
Total income...................... 796,840
-----------
Expenses
Advisory................................ 229,261
Administration.......................... 91,704
Custodian............................... 43,125
Professional............................ 28,297
Shareholder communication............... 12,131
Amortization of organization expense.... 4,281
Directors............................... 1,751
Miscellaneous........................... 11,757
-----------
Total expenses before
reimbursement................... 422,307
Expense reimbursement from
Administrator........................... (32,564)
-----------
Net expenses...................... 389,743
-----------
Net investment income..................... 407,097
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain from:
Securities transactions................. 212,029
Futures transactions.................... 141,293
-----------
Net realized gain on investments.......... 353,322
-----------
Net change in unrealized appreciation
(depreciation) on investments:
Securities transactions................. 7,473,187
Futures transactions.................... (111,900)
-----------
Net unrealized gain on investments........ 7,361,287
-----------
Net realized and unrealized gain on
investments............................. 7,714,609
-----------
Net increase in net assets resulting from
operations.............................. $ 8,121,706
===========
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $5,809.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
147
<PAGE> 148
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1999
and the period May 1, 1998 (Commencement of Operations)
through December 31, 1998
<TABLE>
<CAPTION>
1999 1998
-------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 407,097 $ 138,105
Net realized gain (loss) on investments................... 353,322 (385,391)
Net change in unrealized appreciation on investments...... 7,361,287 3,137,160
----------- -----------
Net increase in net assets resulting from operations...... 8,121,706 2,889,874
----------- -----------
Dividends to shareholders:
From net investment income................................ (412,175) (139,956)
----------- -----------
Capital share transactions:
Net proceeds from sale of shares.......................... 29,305,680 28,012,889
Net asset value of shares issued to shareholders in
reinvestment of dividends............................... 412,175 139,956
----------- -----------
29,717,855 28,152,845
Cost of shares redeemed................................... (3,452,393) (735,477)
----------- -----------
Increase in net assets derived from capital share
transactions............................................ 26,265,462 27,417,368
----------- -----------
Net increase in net assets.................................. 33,974,993 30,167,286
NET ASSETS:
Beginning of period......................................... 30,167,286 0
----------- -----------
End of period............................................... $64,142,279 $30,167,286
=========== ===========
Accumulated undistributed net investment income at end of
period.................................................... $ -- $ 957
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
1998 (a)
YEAR ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1999 1998
---------------------------
<S> <C> <C>
Net asset value at beginning of period...................... $ 10.91 $ 10.00
----------- -----------
Net investment income....................................... 0.08 0.05
Net realized and unrealized gain on investments............. 1.83 0.91
----------- -----------
Total from investment operations............................ 1.91 0.96
----------- -----------
Less dividends:
From net investment income................................ (0.08) (0.05)
----------- -----------
Net asset value at end of period............................ $ 12.74 $ 10.91
=========== ===========
Total investment return..................................... 17.59% 9.60%(b)
Ratios (to average net assets)/Supplemental Data:
Net investment income..................................... 0.89% 1.20%+
Net expenses.............................................. 0.85% 0.85%+
Expenses (before reimbursement)........................... 0.92% 1.30%+
Portfolio turnover rate..................................... 51% 34%
Net assets at end of period (in 000's)...................... $ 64,142 $ 30,167
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
148
<PAGE> 149
MAINSTAY VP SERIES FUND, INC.
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (97.7%)+
SHARES VALUE
---------------------
<S> <C> <C>
AEROSPACE/DEFENSE (1.6%)
Boeing Co. (The)................... 7,800 $ 324,188
General Dynamics Corp. ............ 3,000 158,250
-----------
482,438
-----------
ALUMINUM (1.7%)
Alcoa Inc. ........................ 6,300 522,900
-----------
AUTOMOBILES (2.0%)
Ford Motor Co. .................... 5,700 304,594
General Motors Corp. .............. 4,400 319,825
-----------
624,419
-----------
BANKS (11.8%)
Bank of America Corp. ............. 14,200 712,663
Bank of New York Co., Inc. (The)... 7,400 296,000
Bank One Corp. .................... 6,800 218,025
Chase Manhattan Bank Corp. (The)... 9,900 769,106
First Tennessee National Corp. .... 9,000 256,500
Fleet Boston Corp. ................ 13,900 483,894
Morgan (J.P.) & Co. Inc. .......... 3,700 468,512
Wells Fargo & Co. ................. 9,900 400,331
-----------
3,605,031
-----------
BEVERAGES (1.0%)
PepsiCo, Inc. ..................... 8,600 303,150
-----------
BROADCAST/MEDIA (4.0%)
AT&T Liberty Media Group
Class A (a)....................... 8,900 505,075
Charter Communications,
Inc. Class A (a).................. 11,700 255,938
Clear Channel Communications,
Inc. (a).......................... 3,200 285,600
MediaOne Group, Inc. (a)........... 2,500 192,031
-----------
1,238,644
-----------
CHEMICALS (3.5%)
Dow Chemical Co. (The)............. 1,200 160,350
Du Pont (E.I.) De Nemours & Co. ... 5,018 330,561
Eastman Chemical Co. .............. 3,400 162,137
Olin Corp. ........................ 12,800 253,600
PPG Industries, Inc. .............. 2,600 162,663
-----------
1,069,311
-----------
COMPUTER SOFTWARE & SERVICES (3.3%)
Computer Associates
International, Inc. .............. 9,400 657,412
Electronic Data Systems Corp. ..... 5,200 348,075
-----------
1,005,487
-----------
COMPUTER SYSTEMS (4.7%)
Apple Computer, Inc. (a)........... 2,900 298,156
Compaq Computer Corp. ............. 5,700 154,256
EMC Corp. (a)...................... 4,200 458,850
Hewlett-Packard Co. ............... 1,100 125,331
International Business Machines
Corp. ............................ 3,700 399,600
-----------
1,436,193
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
ELECTRIC POWER COMPANIES (4.1%)
AES Corp. (The) (a)................ 2,300 $ 171,925
Duke Energy Corp. ................. 1,900 95,238
Illinova Corp. .................... 13,700 476,075
Niagara Mohawk Holdings, Inc. ..... 17,900 249,481
Pinnacle West Capital Corp. ....... 8,200 250,612
-----------
1,243,331
-----------
ELECTRICAL EQUIPMENT (1.5%)
General Electric Co. .............. 2,900 448,775
-----------
ELECTRONICS--
SEMICONDUCTORS (3.7%)
Intel Corp. ....................... 3,800 312,788
Micron Technology, Inc. (a)........ 1,100 85,525
Motorola, Inc. .................... 5,000 736,250
-----------
1,134,563
-----------
ENTERTAINMENT (3.0%)
Viacom Inc. Class B (a)............ 9,900 598,331
Walt Disney Co. (The).............. 10,800 315,900
-----------
914,231
-----------
FINANCE (11.2%)
American Express Co. .............. 1,000 166,250
American General Corp. ............ 8,400 637,350
Citigroup Inc. .................... 29,800 1,655,763
Freddie Mac........................ 5,300 249,431
Morgan Stanley Dean Witter &
Co. .............................. 5,100 728,025
-----------
3,436,819
-----------
FOOD (1.3%)
Heinz (H.J.) Co. .................. 10,200 406,087
-----------
HEALTH CARE--DRUGS (2.1%)
Merck & Co., Inc. ................. 5,600 375,550
Watson Pharmaceuticals, Inc. (a)... 7,800 279,338
-----------
654,888
-----------
HEALTH CARE--HOSPITAL MANAGEMENT (2.0%)
Columbia/HCA Healthcare Corp. ..... 21,000 615,563
-----------
INSURANCE (4.5%)
Allstate Corp. (The)............... 4,400 105,600
American International Group,
Inc. ............................. 8,872 959,285
XL Capital LTD..................... 6,300 326,813
-----------
1,391,698
-----------
INVESTMENT BANKS/BROKERAGE (0.5%)
Merrill Lynch & Co., Inc. ......... 2,000 167,000
-----------
MACHINERY--DIVERSIFIED (0.3%)
Caterpillar Inc. .................. 2,000 94,125
-----------
MANUFACTURING DIVERSIFIED (2.3%)
Honeywell International Inc. ...... 5,175 298,533
</TABLE>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
149
<PAGE> 150
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
<S> <C> <C>
MANUFACTURING DIVERSIFIED (Continued)
Minnesota Mining &
Manufacturing Co. ................ 2,400 $ 234,900
Tyco International Ltd. ........... 4,100 159,388
-----------
692,821
-----------
NATURAL GAS DISTRIBUTION &
PIPELINES (1.9%)
Coastal Corp. (The)................ 11,100 393,356
Enron Corp. ....................... 3,900 173,063
-----------
566,419
-----------
OIL--INTEGRATED DOMESTIC (1.4%)
Atlantic Richfield Co. ............ 3,700 320,050
Conoco Inc. Class B................ 4,666 116,067
-----------
436,117
-----------
OIL INTEGRATED--
INTERNATIONAL (8.1%)
BP Amoco PLC ADR (b)............... 6,200 367,737
Chevron Corp. ..................... 1,600 138,600
Exxon Mobil Corp. ................. 17,541 1,413,147
Royal Dutch Petroleum Co. ......... 7,200 435,150
Texaco Inc. ....................... 2,400 130,350
-----------
2,484,984
-----------
PAPER & FOREST PRODUCTS (2.1%)
Georgia-Pacific Corp. ............. 6,900 350,175
International Paper Co. ........... 2,500 141,094
Weyerhaeuser Co. .................. 1,900 136,443
-----------
627,712
-----------
TELECOMMUNICATIONS (5.6%)
AT&T Corp. ........................ 16,550 839,912
BCE Inc. .......................... 4,000 360,750
MCI Worldcom, Inc. (a)............. 4,350 230,822
Sprint Corp. (Fon Group)........... 4,000 269,250
-----------
1,700,734
-----------
TELEPHONE (8.0%)
Bell Atlantic Corp. ............... 3,700 227,781
BellSouth Corp. ................... 10,200 477,487
GTE Corp. ......................... 9,900 698,569
SBC Communications Inc. ........... 15,265 744,169
U S West, Inc. .................... 4,300 309,600
-----------
2,457,606
-----------
TOBACCO (0.5%)
Philip Morris Cos. Inc. ........... 6,200 143,762
-----------
Total Common Stocks
(Cost $26,588,049)................ 29,904,808
-----------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (1.8%)
PRINCIPAL
AMOUNT VALUE
---------------------
<S> <C> <C>
FEDERAL AGENCY (1.8%)
Federal Home Loan Bank
1.5%, due 1/3/00.................. $ 536,000 $ 535,955
-----------
Total Short-Term Investment
(Cost $535,955)................... 535,955
-----------
Total Investments
(Cost $27,124,004) (c)............ 99.5% 30,440,763(d)
Cash and Other Assets,
Less Liabilities.................. 0.5 167,312
--------- -----------
Net Assets......................... 100.0% $30,608,075
========= ===========
</TABLE>
- ------------
(a) Non-income producing security.
(b) ADR--American Depository Receipt.
(c) The cost for Federal income tax purposes is $27,183,975.
(d) At December 31, 1999 net unrealized appreciation was $3,256,788, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $4,227,637 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $970,849.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
150
<PAGE> 151
MAINSTAY VP SERIES FUND, INC.
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $27,124,004).......... $ 30,440,763
Receivables:
Investment securities sold............. 1,411,132
Dividends and interest................. 36,492
Fund shares sold....................... 35,452
Unamortized organization expense......... 14,250
------------
Total assets..................... 31,938,089
------------
LIABILITIES:
Payables:
Investment securities purchased........ 1,259,361
Administrator.......................... 42,746
Adviser................................ 15,098
Custodian.............................. 3,359
Directors.............................. 22
Accrued expenses......................... 9,428
------------
Total liabilities................ 1,330,014
------------
Net assets applicable to outstanding
shares................................. $ 30,608,075
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares authorized... $ 28,236
Additional paid-in capital............... 28,332,138
Accumulated net realized loss on
investments............................ (1,069,058)
Net unrealized appreciation on
investments............................ 3,316,759
------------
Net assets applicable to outstanding
shares................................. $ 30,608,075
============
Shares of capital stock outstanding...... 2,823,573
============
Net asset value per share outstanding.... $ 10.84
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).......................... $ 424,946
Interest............................... 34,624
------------
Total income..................... 459,570
------------
Expenses:
Advisory............................... 148,816
Administration......................... 49,605
Professional........................... 21,434
Custodian.............................. 7,420
Shareholder communication.............. 4,390
Amortization of organization expense... 4,281
Portfolio pricing...................... 1,686
Directors.............................. 855
Miscellaneous.......................... 9,569
------------
Total expenses before
reimbursement.................. 248,056
Expense reimbursement from
Administrator.......................... (12,431)
------------
Net expenses..................... 235,625
------------
Net investment income.................... 223,945
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments......... 100,967
Net change in unrealized appreciation on
investments............................ 1,272,936
------------
Net realized and unrealized gain on
investments............................ 1,373,903
------------
Net increase in net assets resulting from
operations............................. $ 1,597,848
============
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $2,862.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
151
<PAGE> 152
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1999
and the period May 1, 1998 (Commencement of Operations)
through December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 223,945 $ 87,669
Net realized gain (loss) on investments................... 100,967 (1,170,025)
Net change in unrealized appreciation on investments...... 1,272,936 2,043,823
------------ ------------
Net increase in net assets resulting from operations...... 1,597,848 961,467
------------ ------------
Dividends to shareholders:
From net investment income................................ (228,939) (90,091)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 12,066,656 18,607,364
Net asset value of shares issued to shareholders in
reinvestment of dividends............................... 228,939 90,091
------------ ------------
12,295,595 18,697,455
Cost of shares redeemed................................... (1,974,875) (650,385)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 10,320,720 18,047,070
------------ ------------
Net increase in net assets.................................. 11,689,629 18,918,446
NET ASSETS:
Beginning of period......................................... 18,918,446 0
------------ ------------
End of period............................................... $ 30,608,075 $ 18,918,446
============ ============
Accumulated undistributed net investment income at end of
period.................................................... $ -- $ 452
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
1998 (a)
YEAR ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1999 1998
---------------------------
<S> <C> <C>
Net asset value at beginning of period...................... $ 10.23 $ 10.00
------------ ------------
Net investment income....................................... 0.08 0.05
Net realized and unrealized gain on investments............. 0.61 0.23
------------ ------------
Total from investment operations............................ 0.69 0.28
------------ ------------
Less dividends:
From net investment income................................ (0.08) (0.05)
------------ ------------
Net asset value at end of period............................ $ 10.84 $ 10.23
============ ============
Total investment return..................................... 6.73% 2.83%(b)
Ratios (to average net assets)/Supplemental Data:
Net investment income..................................... 0.90% 1.02%+
Net expenses.............................................. 0.95% 0.95%+
Expenses (before reimbursement)........................... 1.00% 1.39%+
Portfolio turnover rate..................................... 121% 98%
Net assets at end of period (in 000's)...................... $ 30,608 $ 18,918
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
152
<PAGE> 153
MAINSTAY VP SERIES FUND, INC.
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999
- ------------
<TABLE>
<CAPTION>
COMMON STOCKS (95.6%)+
SHARES VALUE
---------------------
<S> <C> <C>
BROADCAST/MEDIA (2.1%)
AT&T-Liberty Media Group Corp.
Class A (a)....................... 23,950 $ 1,359,163
-----------
COMMUNICATIONS--
EQUIPMENT MANUFACTURERS (11.2%)
Aspect Communications Corp. (a).... 4,000 156,500
Cisco Systems, Inc. (a)............ 27,200 2,913,800
JDS Uniphase Corp. (a)............. 16,000 2,581,000
Nortel Networks Corp. ............. 16,100 1,626,100
-----------
7,277,400
-----------
COMPUTER SOFTWARE & SERVICES
(17.6%)
America Online, Inc. (a)........... 14,750 1,112,703
Candence Design Systems, Inc.
(a)............................... 138,900 3,333,600
E.piphany, Inc. (a)................ 2,550 568,969
InterTrust Technologies Corp.
(a)............................... 3,050 358,756
Marimba, Inc. (a).................. 24,500 1,128,531
MetaSolv Software, Inc. (a)........ 500 40,875
Microsoft Corp. (a)................ 34,000 3,969,500
Oracle Corp. (a)................... 5,500 616,344
VA Linux System, Inc. ............. 400 82,650
Yahoo! Inc. ....................... 500 216,344
-----------
11,428,272
-----------
COMPUTER SYSTEMS (6.9%)
Dell Computer Corp. ............... 64,300 3,279,300
EMC Corp. (a)...................... 7,100 775,675
Whittman-Hart, Inc. ............... 8,000 429,000
-----------
4,483,975
-----------
ELECTRICAL EQUIPMENT (4.8%)
General Electric Co. .............. 20,350 3,149,162
-----------
ELECTRONICS--COMPONENTS (6.5%)
Interlink Electronics, Inc......... 27,900 1,639,125
Sycamore Networks, Inc. (a)........ 8,350 2,571,800
-----------
4,210,925
-----------
ELECTRONICS--
SEMICONDUCTORS (11.4%)
Caliper Technologies Corp. ........ 6,050 403,837
E-Tek Dynamics, Inc. .............. 12,350 1,662,619
Intel Corp. ....................... 6,150 506,222
Lsi Logic Corp. ................... 30,600 2,065,500
MEMC Electronic Materials, Inc..... 54,600 668,850
Microchip Technology Inc. (a)...... 9,700 663,844
National Semiconductor Corp. ...... 33,600 1,438,500
-----------
7,409,372
-----------
ENTERTAINMENT (1.5%)
Time Warner Inc. .................. 13,150 952,553
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
FINANCE (3.0%)
American Express Co. .............. 5,900 $ 980,875
Citigroup Inc. .................... 17,150 952,897
-----------
1,933,772
-----------
HEALTH CARE--DRUGS (4.2%)
Lilly (Eli) and Co. ............... 9,500 631,750
Merck & Co., Inc. ................. 9,700 650,506
Pfizer Inc. ....................... 24,650 799,584
Schering-Plough Corp. ............. 16,350 689,766
-----------
2,771,606
-----------
HEALTH CARE--MEDICAL PRODUCTS
(1.8%)
Guidant Corp. (a).................. 14,500 681,500
Medtronic, Inc. ................... 13,300 484,619
-----------
1,166,119
-----------
HEALTH CARE--
MISCELLANEOUS (3.6%)
American Home Products Corp. ...... 6,050 238,597
Bristol-Myers Squibb Co. .......... 21,900 1,405,706
Johnson & Johnson.................. 7,300 679,813
-----------
2,324,116
-----------
HOUSEHOLD PRODUCTS (1.1%)
Clorox Co. (The)................... 14,000 705,250
-----------
INSURANCE (1.7%)
American International Group,
Inc. ............................. 10,175 1,100,172
-----------
INTERNET SOFTWARE & SERVICES (1.1%)
El Sitio, Inc (a).................. 1,500 52,125
Juniper Networks Inc. (a).......... 300 102,000
Phone.com, Inc. (a)................ 4,900 568,094
-----------
722,219
-----------
RETAIL (6.6%)
Home Depot, Inc. (The)............. 23,600 1,618,075
Kohl's Corp. (a)................... 7,250 523,359
Wal-Mart Stores, Inc. ............. 31,300 2,163,612
-----------
4,305,046
-----------
SPECIALIZED SERVICES (6.3%)
Convergys Corp. ................... 75,600 2,324,700
Omnicom Group Inc. ................ 18,000 1,800,000
-----------
4,124,700
-----------
TELECOMMUNICATIONS (1.2%)
MCI WorldCom, Inc. (a)............. 15,225 807,877
-----------
TELEPHONE (3.0%)
BroadWing Inc. .................... 53,350 1,967,281
-----------
Total Common Stocks
(Cost $48,971,736)................ 62,198,980
-----------
</TABLE>
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
153
<PAGE> 154
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENT (9.5%)
PRINCIPAL
AMOUNT VALUE
------------------------
<S> <C> <C>
TIME DEPOSIT (9.5%)
Bank of New York Cayman
3.00%, due 1/3/00................. $6,200,000 $ 6,200,000
-----------
Total Short-Term Investment
(Cost $6,200,000)................. 6,200,000
-----------
Total Investments
(Cost $55,171,736) (b)............ 105.1% 68,398,980(c)
Liabilities in Excess of
Cash and Other Assets............. (5.1) (3,310,230)
---------- -----------
Net Assets......................... 100.0% $65,088,750
========== ===========
</TABLE>
- ------------
(a) Non-income producing security.
(b) The cost for Federal income tax purposes is $55,275,494.
(c) At December 31, 1999 net unrealized appreciation was $13,123,486, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $13,672,352 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $548,866.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
154
<PAGE> 155
MAINSTAY VP SERIES FUND, INC.
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $55,171,736).......... $ 68,398,980
Cash..................................... 2,888
Receivables:
Investment securities sold............. 2,177,929
Fund shares sold....................... 285,466
Dividends and interest................. 14,833
Unamortized organization expense......... 14,250
------------
Total assets..................... 70,894,346
------------
LIABILITIES:
Payables:
Investment securities purchased........ 5,749,788
Adviser................................ 23,830
Administrator.......................... 16,519
Custodian.............................. 5,357
Accrued expenses......................... 10,102
------------
Total liabilities................ 5,805,596
------------
Net assets applicable to outstanding
shares................................. $ 65,088,750
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares authorized... $ 35,082
Additional paid-in capital............... 45,071,159
Accumulated net realized gain on
investments............................ 6,755,265
Net unrealized appreciation on
investments............................ 13,227,244
------------
Net assets applicable to outstanding
shares................................. $ 65,088,750
============
Shares of capital stock outstanding...... 3,508,171
============
Net asset value per share outstanding.... $ 18.55
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).......................... $ 125,457
Interest............................... 120,310
------------
Total income..................... 245,767
------------
Expenses:
Advisory............................... 151,698
Administration......................... 60,679
Professional........................... 21,798
Custodian.............................. 8,517
Shareholder communication.............. 5,552
Amortization of organization expense... 4,282
Directors.............................. 1,056
Miscellaneous.......................... 11,285
------------
Total expenses before
reimbursement.................. 264,867
Expense reimbursement from
Administrator........................ (6,980)
------------
Net expenses..................... 257,887
------------
Net investment loss...................... (12,120)
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments......... 11,073,031
Net change in unrealized appreciation on
investments............................ 9,293,252
------------
Net realized and unrealized gain on
investments............................ 20,366,283
------------
Net increase in net assets resulting from
operations............................. $ 20,354,163
============
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $621.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
155
<PAGE> 156
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1999
and the period May 1, 1998 (Commencement of Operations)
through December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income (loss).............................. $ (12,120) $ 9,420
Net realized gain (loss) on investments................... 11,073,031 (1,257,077)
Net change in unrealized appreciation on investments...... 9,293,252 3,933,992
------------ ------------
Net increase in net assets resulting from operations...... 20,354,163 2,686,335
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ (831) (11,463)
From net realized gain on investments..................... (3,052,873) --
------------ ------------
Total dividends and distributions to shareholders....... (3,053,704) (11,463)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 29,117,491 16,271,934
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 3,053,704 11,463
------------ ------------
32,171,195 16,283,397
Cost of shares redeemed................................... (2,849,878) (491,295)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 29,321,317 15,792,102
------------ ------------
Net increase in net assets.................................. 46,621,776 18,466,974
NET ASSETS:
Beginning of period......................................... 18,466,974 0
------------ ------------
End of period............................................... $65,088,750 $ 18,466,974
============ ============
Accumulated undistributed net investment income at end of
period.................................................... $ -- $ 831
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
1998 (a)
YEAR ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1999 1998
---------------------------
<S> <C> <C>
Net asset value at beginning of period...................... $ 11.78 $ 10.00
------------ ------------
Net investment income (loss)................................ (0.01)(b) 0.01
Net realized and unrealized gain on investments............. 7.71 1.78
------------ ------------
Total from investment operations............................ 7.70 1.79
------------ ------------
Less dividends and distributions:
From net investment income................................ (0.00)(c) (0.01)
From net realized gain on investments..................... (0.93) --
------------ ------------
Total dividends and distributions......................... (0.93) (0.01)
------------ ------------
Net asset value at end of period............................ $ 18.55 $ 11.78
============ ============
Total investment return..................................... 65.50% 17.85%(d)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss).............................. (0.04)% 0.11%+
Net expenses.............................................. 0.85% 0.85%+
Expenses (before reimbursement)........................... 0.87% 1.28%+
Portfolio turnover rate..................................... 203% 31%
Net assets at end of period (in 000's)...................... $ 65,089 $ 18,467
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Less than one cent per share.
(d) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
156
<PAGE> 157
MAINSTAY VP SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-- Organization and Business:
- --------------------------------------------------------------------------------
MainStay VP Series Fund, Inc. (the "Fund") was incorporated under Maryland
law on June 3, 1983. The Fund is registered under the Investment Company
Act of 1940, as amended, ("Investment Company Act") as an open-end
diversified management investment company. American Century Income & Growth,
Dreyfus Large Company Value and Eagle Asset Management Growth Equity Portfolios,
which commenced operations on May 1, 1998, Convertible Portfolio, which
commenced operations on October 1, 1996, High Yield Corporate Bond,
International Equity and Value Portfolios, which commenced operations on May 1,
1995, Capital Appreciation, Cash Management, Government, Total Return and
Indexed Equity Portfolios, which commenced operations on January 29, 1993 and
Bond and Growth Equity Portfolios, which commenced operations on January 23,
1984, (the "Portfolios"; each separately a "Portfolio") are separate Portfolios
of the Fund. Shares of the Portfolios are currently offered only to New York
Life Insurance and Annuity Corporation ("NYLIAC"), a wholly owned subsidiary of
New York Life Insurance Company ("New York Life"). NYLIAC allocates shares of
the Portfolios to, among others, NYLIAC Variable Universal Life Separate
Account-I (the "Separate Account"). The Separate Account is used to fund
flexible premium variable life insurance and survivorship variable life
insurance policies.
The investment objectives for each of the Portfolios of the Fund are as follows:
Capital Appreciation: to seek long-term growth of capital. Dividend income, if
any, is an incidental consideration.
Cash Management: to seek as high a level of current income as is considered
consistent with the preservation of capital and liquidity.
Convertible: to seek capital appreciation together with current income.
Government: to seek a high level of current income, consistent with safety of
principal.
High Yield Corporate Bond: to maximize current income through investment in a
diversified portfolio of high yield, high risk debt securities which are
ordinarily in the lower rating categories of recognized rating agencies (that
is, rated Baa to B by Moody's or BBB to B by S&P). Capital appreciation is a
secondary objective.
International Equity: to seek long-term growth of capital by investing in a
portfolio consisting primarily of non-U.S. equity securities. Current income is
a secondary objective.
Total Return: to realize current income consistent with reasonable opportunity
for future growth of capital and income.
Value: to realize maximum long-term total return from a combination of capital
growth and income.
Bond: to seek the highest income over the long term consistent with
preservation of principal.
Growth Equity: to seek long-term growth of capital, with income as a secondary
consideration.
Indexed Equity: to seek to provide investment results that correspond to the
total return performance (and reflect reinvestment of dividends) of publicly
traded common stocks represented by the S&P 500 Index.
American Century Income & Growth: to seek dividend growth, current income and
capital appreciation.
Dreyfus Large Company Value: to seek capital appreciation.
Eagle Asset Management Growth Equity: to seek growth through long-term capital
appreciation.
High Yield Corporate Bond Portfolio invests primarily in high yield bonds. These
bonds may involve special risks in addition to the risks associated with
investment in higher rated debt securities. High yield bonds may be more
susceptible to real or perceived adverse economic and competitive industry
conditions than higher grade bonds. Also, the secondary market on which high
yield bonds are traded may be less liquid than the market for higher grade
bonds.
157
<PAGE> 158
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
There are certain risks involved in investing in foreign securities that are in
addition to the usual risks inherent in domestic instruments. These risks
include those resulting from future adverse political and economic developments
and possible imposition of currency exchange blockages or other foreign
governmental laws or restrictions.
- --------------------------------------------------------------------------------
NOTE 2--Significant Accounting Policies:
- --------------------------------------------------------------------------------
The following is a summary of significant accounting policies followed by the
Fund:
(A)
VALUATION OF FUND SHARES. The net asset value per share of each Portfolio is
calculated on each day the New York Stock Exchange (the "Exchange") is open for
trading as of the close of regular trading on the Exchange. The net asset value
per share is calculated for each Portfolio by dividing the current market value
(amortized cost, in the case of Cash Management Portfolio) of the Portfolio's
total assets, less liabilities, by the total number of outstanding shares of
that Portfolio. Each Portfolio's net asset value will fluctuate, and although
the Cash Management Portfolio seeks to preserve the value of your investment of
$1.00 per share, an investor could lose money by investing in any Portfolio. An
investment in the Cash Management Portfolio is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
(B)
SECURITIES VALUATION. Portfolio securities of Cash Management Portfolio are
valued at amortized cost, which approximates market value. The amortized cost
method involves valuing a security at its cost on the date of purchase and
thereafter assuming a constant amortization to maturity of the difference
between such cost and the value on maturity date.
Securities of each of the other Portfolios are stated at value determined (a) by
appraising common and preferred stocks which are traded on the Exchange at the
last sale price on that day or, if no sale occurs, at the mean between the
closing bid and asked prices, (b) by appraising common and preferred stocks
traded on other United States national securities exchanges or foreign
securities exchanges as nearly as possible in the manner described in (a) by
reference to their principal exchange, including the National Association of
Securities Dealers National Market System, (c) by appraising over-the-counter
securities quoted on the National Association of Securities Dealers NASDAQ
system (but not listed on the National Market System) at the bid price supplied
through such system, (d) by appraising over-the-counter securities not quoted on
the National Association of Securities Dealers NASDAQ system and securities
listed or traded on certain foreign exchanges whose operations are similar to
the U.S. over-the-counter market, at prices supplied by the pricing agent or
brokers selected by the Adviser (see Note 3) if these prices are deemed to be
representative of market values at the regular close of business of the
Exchange, (e) by appraising debt securities at prices supplied by a pricing
agent selected by the Adviser, whose prices reflect broker/dealer supplied
valuations and electronic data processing techniques if those prices are deemed
by the Adviser to be representative of market values at the regular close of
business of the Exchange, (f) by appraising options and futures contracts at the
last sale price on the market where such options or futures contracts are
principally traded, and (g) by appraising all other securities and other assets,
including debt securities for which prices are supplied by a pricing agent but
are not deemed by the Adviser to be representative of market values, but
excluding money market instruments with a remaining maturity of sixty days or
less and including restricted securities and securities for which no market
quotations are available, at fair value in accordance with procedures approved
by the Directors. Short-term securities which mature in more than 60 days are
valued at current market quotations. Short-term securities which mature in 60
days or less are valued at amortized cost if their term to maturity at purchase
was 60 days or less, or by amortizing the difference between market value on the
61st day prior to maturity and value on maturity date if their original term to
maturity at purchase exceeded 60 days.
Events affecting the values of certain portfolio securities that occur between
the close of trading on the principal market for such securities (foreign
exchanges and over-the-counter markets) and the regular close of the Exchange
will not be reflected
158
<PAGE> 159
MAINSTAY VP SERIES FUND, INC.
in the Portfolios' calculations of net asset values unless the Adviser believes
that the particular event would materially affect net asset value, in which case
an adjustment would be made.
(C)
FOREIGN CURRENCY FORWARD CONTRACTS. A foreign currency forward contract is an
agreement to buy or sell currencies of different countries on a specified future
date at a specified rate. During the period the forward contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking to market" such contract on a daily basis to reflect the
market value of the contract at the end of each day's trading. When the forward
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
the Portfolio's basis in the contract. The High Yield Corporate Bond,
International Equity and Value Portfolios enter into foreign currency forward
contracts in order to hedge their foreign currency denominated investments and
receivables and payables against adverse movements in future foreign exchange
rates.
The use of foreign currency forward contracts involves, to varying degrees,
elements of market risk in excess of the amount recognized in the statement of
assets and liabilities. The contract amount reflects the extent of the
Portfolio's involvement in these financial instruments. Risks arise from the
possible movements in the foreign exchange rates underlying these instruments.
The unrealized appreciation (depreciation) on forward contracts reflects the
Portfolio's exposure at year-end to credit loss in the event of a counterparty's
failure to perform its obligations.
HIGH YIELD CORPORATE BOND PORTFOLIO
Foreign currency forward contracts open at December 31, 1999:
<TABLE>
<CAPTION>
CONTRACT CONTRACT UNREALIZED
AMOUNT AMOUNT APPRECIATION/
SOLD PURCHASED (DEPRECIATION)
-------- --------- --------------
<S> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
- -------------------------------
Euro vs. U.S. Dollar, expiring 2/7/00....................... E 13,676,413 $ 14,131,083 $ 381,839
Euro vs. U.S. Dollar, expiring 2/7/00....................... E 1,000,000 $ 1,021,550 16,225
Pound Sterling vs. U.S. Dollar, expiring 3/1/00............. L 5,620,000 $ 8,943,809 (114,698)
Pound Sterling vs. U.S. Dollar, expiring 3/1/00............. L 9,809,300 $ 16,239,787 428,825
</TABLE>
<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNT AMOUNT
PURCHASED SOLD
--------- --------
<S> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
- ------------------------------
Euro vs. U.S. Dollar, expiring 2/7/00....................... E 2,410,436 $ 2,550,000 (126,728)
Pound Sterling vs. U.S. Dollar, expiring 3/1/00............. L 1,546,601 $ 2,513,455 (20,591)
---------
Net unrealized appreciation on foreign currency forward
contracts................................................. $ 564,872
=========
</TABLE>
159
<PAGE> 160
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
INTERNATIONAL EQUITY PORTFOLIO
Foreign currency forward contracts open at December 31, 1999:
<TABLE>
<CAPTION>
CONTRACT CONTRACT UNREALIZED
AMOUNT AMOUNT APPRECIATION/
SOLD PURCHASED (DEPRECIATION)
-------- --------- --------------
<S> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
- -------------------------------
Japanese Yen vs. U.S. Dollar, expiring 3/1/00............... Y 893,600,000 $ 8,898,626 $ 80,596
Pound Sterling vs. U.S. Dollar, expiring 2/7/00............. L 1,063,000 $ 1,724,292 10,826
Pound Sterling vs. U.S. Dollar, expiring 2/7/00............. L 167,000 $ 268,135 (1,054)
Swedish Krona vs. Euro, expiring 2/29/00.................... SK 1,710,000 E 199,533 (87)
</TABLE>
<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNT AMOUNT
PURCHASED SOLD
--------- --------
<S> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
- ------------------------------
Euro vs. U.S. Dollar, expiring 2/7/00....................... E 1,090,000 $ 1,135,234 (39,426)
Euro vs. U.S. Dollar, expiring 2/7/00....................... E 610,000 $ 637,877 (24,627)
Japanese Yen vs. U.S. Dollar, expiring 3/1/00............... Y 111,474,300 $ 1,090,000 10,027
---------
Net unrealized appreciation on foreign currency forward
contracts................................................. $ 36,255
=========
</TABLE>
VALUE PORTFOLIO
Foreign currency forward contract open at December 31, 1999:
<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNT AMOUNT UNREALIZED
SOLD PURCHASED DEPRECIATION
-------------- ------------ --------------
<S> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACT
- ------------------------------
Japanese Yen vs. U.S. Dollar, expiring 3/16/00.............. Y 422,000,000 $ 4,133,203 $ (41,023)
---------
Net unrealized depreciation on foreign currency forward
contract.................................................. $ (41,023)
=========
</TABLE>
(D)
FUTURES CONTRACTS. A futures contract is an agreement to purchase or sell a
specified quantity of an underlying instrument at a specified future date and
price, or to make or receive a cash payment based on the value of a securities
index. During the period the futures contract is open, changes in the value of
the contract are recognized as unrealized gains or losses by "marking to market"
such contract on a daily basis to reflect the market value of the contract at
the end of each day's trading. The Portfolio agrees to receive from or pay to
the broker an amount of cash equal to the daily fluctuation in the value of the
contract. Such receipts or payments are known as "variation margin". When the
futures contract is closed, the Portfolio records a realized gain or loss equal
to the difference between the proceeds from (or cost of) the closing transaction
and the Portfolio's basis in the contract. The Indexed Equity and American
Century Income & Growth Portfolios invest in stock index futures contracts to
gain full exposure to changes in stock market prices to fulfill their investment
objectives.
The use of futures contracts involves, to varying degrees, elements of market
risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts and variation margin reflect the
extent of the Portfolio's involvement in open futures positions. Risks arise
from the possible imperfect correlation in movements in the price of futures
contracts and the underlying hedged assets, and the possible inability of
counterparties to meet the terms of their contracts. However, the Portfolio's
activities in futures contracts are conducted through regulated exchanges which
minimize counterparty credit risks.
160
<PAGE> 161
MAINSTAY VP SERIES FUND, INC.
(E)
REPURCHASE AGREEMENTS. At the time a Portfolio enters into a repurchase
agreement, the value of the underlying security, including accrued interest,
will be equal to or exceed the value of the repurchase agreement and, in the
case of repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement. The
underlying securities for all repurchase agreements are held in a segregated
account of the respective Portfolio's custodian. In the case of repurchase
agreements exceeding one day, the market value of the underlying securities are
monitored by the Adviser by pricing them daily.
Each Portfolio may enter into repurchase agreements to earn income. In the event
of the bankruptcy of the seller or the failure of the seller to repurchase the
securities as agreed, a Portfolio could suffer losses, including loss of
interest on or principal of the security and costs associated with delay and
enforcement of the repurchase agreement.
(F)
SECURITY TRANSACTIONS AND INVESTMENT INCOME. The Fund records security
transactions on the trade date. Realized gains and losses on security
transactions are determined using the identified cost method and include gains
and losses from repayments of principal on mortgage related and other
asset-backed securities. Dividend income is recognized on the ex-dividend date
and interest income is accrued daily except when collection is not expected.
Discounts on securities purchased for all Portfolios are accreted on the
constant yield method over the life of the respective securities or, if
applicable, over the period to the first call date. Premiums on securities
purchased are not amortized for any Portfolio except Cash Management Portfolio
which amortizes the premium on the constant yield method over the life of the
respective securities.
(G)
FOREIGN CURRENCY TRANSACTIONS. The books and records of the Fund are recorded in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the
mean between the buying and selling rates last quoted by any major U.S. bank at
the following dates:
(i) market value of investment securities, other assets and
liabilities--at the valuation date,
(ii) purchases and sales of investment securities, income and
expenses--at the date of such transactions.
The assets and liabilities of Convertible, High Yield Corporate Bond and
International Equity Portfolios are presented at the exchange rates and market
values at the close of the year. The changes in net assets arising from
fluctuations in exchange rates and the changes in net assets resulting from
changes in market prices are not separately presented. However, gains and losses
from certain foreign currency transactions are treated as ordinary income for
Federal income tax purposes.
Net realized gain (loss) on foreign currency transactions represents net gains
and losses on foreign currency forward contracts, net currency gains or losses
realized as a result of differences between the amounts of securities sale
proceeds or purchase cost, dividends, interest and withholding taxes recorded on
the Portfolio's books and the U.S. dollar equivalent amount actually received or
paid. Net currency gains or losses from valuing foreign currency denominated
assets and liabilities, other than investments, at year-end exchange rates are
reflected in unrealized foreign exchange gains (losses).
INTERNATIONAL EQUITY PORTFOLIO
Foreign currency held at December 31, 1999:
<TABLE>
<CAPTION>
CURRENCY COST VALUE
- ----------------------------------------- -------- --------
<S> <C> <C> <C> <C>
Euro E 787,179 $791,649 $789,238
Japanese Yen Y 1,842,375 17,994 18,000
New Zealand Dollar N$ 7,640 3,936 3,984
Pound Sterling L 18,041 28,551 29,086
-------- --------
$842,130 $840,308
======== ========
</TABLE>
161
<PAGE> 162
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(H)
MORTGAGE DOLLAR ROLLS. Certain of the Portfolios may enter into mortgage dollar
roll ("MDR") transactions in which they sell mortgage backed securities ("MBS")
from their portfolio to a counterparty from whom they simultaneously agree to
buy a similar security on a delayed delivery basis. The MDR transactions of the
Portfolios are classified as purchase and sale transactions. The securities sold
in connection with the MDRs are removed from the portfolio and a realized gain
or loss is recognized. The securities the Portfolios have agreed to acquire are
included at market value in the portfolio of investments and liabilities for
such purchase commitments are included as payables for investments purchased.
The Portfolios maintain a segregated account with the custodian containing
securities from the respective portfolios having a value not less than the
repurchase price, including accrued interest. MDR transactions involve certain
risks, including the risk that the MBS returned to the Portfolios at the end of
the roll, while substantially similar, could be inferior to what was initially
sold to the counterparty.
(I)
RESTRICTED SECURITIES. A restricted security is a security which has been
purchased through a private offering and cannot be resold to the general public
without prior registration under the Securities Act of 1933. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt sale
at an acceptable price may be difficult. The issuers of the securities will bear
the costs involved in registration under the Securities Act of 1933 and in
connection with the disposition of such securities. The High Yield Corporate
Bond and Total Return Portfolios do not have the right to demand that such
securities be registered.
HIGH YIELD CORPORATE BOND PORTFOLIO
Restricted securities held at December 31, 1999:
<TABLE>
<CAPTION>
PRINCIPAL PERCENT
ACQUISITION AMOUNT/ 12/31/99 OF
SECURITY DATE(S) SHARES COST VALUE NET ASSETS
- -------- ------------------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Affinity Group, Inc.
Bank debt
Tranche B
10.125%, due 6/30/06.................. 12/17/98 $ 1,287,000 $ 1,287,000 $ 1,280,565 0.2%
Euro Disneyland S.N.C.
Phase 1, Bank debt
Tranche A
3.4323%, due 11/30/06................. 7/21/99 FF 1,817,818 207,677 218,758 0.0(b)
Tranche D
4.4549%, due 11/30/06................. 7/21/99 FF 3,382,179 386,234 407,016 0.1
Eurotunnel
Bank debt
Tier One
5.28%, due 12/31/12................... 5/12/99 - 9/8/99 FF10,595,000 1,416,370 1,279,063 0.2
7.03%, due 12/31/12................... 5/12/99 L 7,500,000 10,048,481 9,549,364 1.4
First Pacific Capital Ltd.
Bank debt
7.4375%, due 1/23/00.................. 8/13/98 $ 3,000,000 2,977,402 2,820,000 0.4
FRI-MRD Corp.
14.00%, due 1/24/02................... 10/30/98 $ 3,000,000 3,016,485 2,955,000 0.4
15.00%, due 1/24/02................... 8/12/97 - 4/3/98 $ 5,400,000 5,360,180 5,373,000 0.8
GPA Group, PLC
Preferred Stock....................... 3/7/96 - 11/20/97 4,750,000 2,353,175 2,470,000 0.4
Inamed Corp.
Bridge Loan
13.4763%, due 6/2/00.................. 9/2/99 $ 1,679,852 1,669,618 1,679,852 0.3
International Wireless
Communications Holdings, Inc.
(zero coupon), due 8/15/01............ 6/17/98 $ 7,775,000 2,018,524 777,500 0.1
</TABLE>
162
<PAGE> 163
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
PRINCIPAL PERCENT
ACQUISITION AMOUNT/ 12/31/99 OF
SECURITY DATE(S) SHARES COST VALUE NET ASSETS
- -------- ------------------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Isle of Capri Casinos, Inc.
Bank debt
Tranche A
8.4119%, due 4/23/04.................. 5/12/99 $ 3,383,333 $ 3,350,655 $ 3,383,333 0.5%
Metawave Communications Corp.
Preferred Stock
Series D (c).......................... 5/14/99 53,509 0(a) 296,975 0.0(b)
Orius Corp.
Bridge Loan
13.00%, due 12/15/00.................. 12/30/99 $ 3,285,000 3,203,145 3,285,000 0.5
Paperboard Industries
International, Inc.
Preferred Stock
5.00%, Class A........................ 5/4/98 145,000 2,413,129 2,304,183 0.3
President Casinos, Inc.
12.00%, due 9/15/01................... 12/3/98 $ 1,180,000 1,180,000 1,180,000 0.2
Synthetic Industries, Inc.
Bridge Loan
13.00%, due 12/14/00.................. 12/17/99 $ 110,000 108,399 108,900 0.0(b)
Titan Tire Corp.
7.00%, due 2/11/00.................... 6/24/97 $ 6,000,000 5,988,168 5,970,000 0.8
Transtexas Gas Corp.
Bank debt
13.00%, due 12/31/01.................. 9/21/99 $ 1,000,000 1,000,000 1,000,000 0.1
Unilab Corp.
Bank debt
Term Loan B
10.00%, due 11/23/06.................. 11/23/99 $ 1,970,063 1,970,063 1,957,750 0.3
United Artists Theatre Co.
Bank debt
Term Loan B
10.3093%, due 4/21/06................. 10/18/99 $ 286,643 244,300 211,399 0.0(b)
Term Loan C
10.3702%, due 4/21/07................. 10/18/99 $ 427,961 363,962 315,621 0.1
----------- ----------- ----
$50,562,967 $48,823,279 7.1%
=========== =========== ====
</TABLE>
- ---------------
<TABLE>
<S> <C>
(a) These preferred stock have no cost.
(b) Less than one tenth of a percent.
(c) Illiquid security.
FF--French Franc
L-- Pound Sterling
</TABLE>
TOTAL RETURN PORTFOLIO
Restricted security held at December 31, 1999:
<TABLE>
<CAPTION>
PERCENT
ACQUISITION 12/31/99 OF
SECURITY DATE SHARES COST VALUE NET ASSETS
- -------- ------------------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Paperboard Industries International,
Inc. Preferred Stock, 5.00%, Class
A..................................... 5/4/98 15,000 $ 249,634 $ 238,364 0.1%
=========== =========== ====
</TABLE>
(J)
SECURITIES LENDING. The Portfolios may lend their securities to broker-dealers
and financial institutions. The loans are secured by collateral (cash or
securities) at least equal at all times to the market value of the securities
loaned. The Portfolios may bear the risk of delay in recovery of, or loss of
rights in, the securities loaned should the borrower of the securities
experience financial difficulty. The Portfolios receive compensation for lending
their securities in the form of fees or they
163
<PAGE> 164
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
retain a portion of interest on the investment of any cash received as
collateral. The Portfolios also continue to receive interest and dividends on
the securities loaned, and any gain or loss in the market price of the
securities loaned that may occur during the term of the loan will be for the
account of the Portfolios.
At December 31, 1999, Government and Total Return Portfolios had portfolio
securities with a fair market value of $49,242,822 and $80,234,431,
respectively, on loan to broker-dealers and government securities dealers.
Cash collateral received by Government and Total Return Portfolios is invested
in investment grade commercial paper, or other securities in accordance with the
Portfolios securities lending procedures. Such investments are included as an
asset, and the obligation to return the cash collateral is recorded as a
liability in the Statement of Assets and Liabilities. While the Portfolios
invest cash collateral in investment grade securities or other "high quality"
investment vehicles, the Portfolios bear the risk that liability for the
collateral may exceed the value of the investment.
Non-cash collateral received and held by Government and Total Return Portfolios
in the form of U.S. Government obligations, had a value of $6,275,344 and
$345,838, respectively, as of December 31, 1999.
Net income earned on securities lending amounted to $118,687, $181,184 and
$112,983 net of broker fees and rebates, for the Government, Total Return and
Growth Equity Portfolios, respectively, for the year ended December 31, 1999,
which is included as interest income on the Statement of Operations.
GOVERNMENT PORTFOLIO
Investments made with cash collateral at December 31, 1999:
<TABLE>
<CAPTION>
SHARES VALUE
---------- -----------
<S> <C> <C>
CASH & CASH EQUIVALENTS
AIM Institutional Funds Group............................... 1,000,132 $ 1,000,132
Cash with Security Lending Agent............................ 4,358
-----------
1,004,490
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
SHORT-TERM COMMERCIAL PAPER
Austra Corp.
5.83%, due 2/4/00.......................................... $7,500,000 7,458,917
Concord Minutemen Capital Co. LLC
5.83%, due 2/4/00.......................................... 7,500,000 7,458,917
Galaxy Funding Inc.
5.60%, due 1/3/00.......................................... 5,860,000 5,858,177
Lexington Parker Capital Co. LLC
6.68%, due 2/15/00......................................... 5,000,000 5,000,000
Variable Funding Capital Corp.
6.01%, due 1/18/00......................................... 3,500,000 3,490,248
-----------
29,266,259
-----------
REPURCHASE AGREEMENTS
Donaldson, Lufkin & Jenrette Securities Corp.
4.57%, due 1/3/00
(Collateralized by
$6,102,134 GNMA Pool #781007
6.50%, due 3/15/29 Market Value $6,135,933
$987,442 GNMA Pool #8484
6.75%, due 8/20/24 Market Value $992,726)................ 6,950,000
Prudential Securities Inc.
4.38%, due 1/3/00
(Collateralized by
$8,114,379 Freddie Mac, Series 2130 Class KB 6.38%, due
3/15/29 Market Value $8,160,000)......................... 8,000,000
-----------
14,950,000
-----------
Total investments made with cash collateral................. $45,220,749
===========
</TABLE>
164
<PAGE> 165
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
Non-cash collateral received and held by the Portfolio
at December 31, 1999:
United States Treasury Bond 7.50%, due 11/15/24............. $5,700,000 $ 6,275,344
-----------
Total non-cash collateral................................... $ 6,275,344
===========
Total collateral............................................ $51,496,093
===========
</TABLE>
TOTAL RETURN PORTFOLIO
Investments made with cash collateral at December 31, 1999:
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
CASH & CASH EQUIVALENTS
AIM Institutional Funds Group............................... 3,625,831 $ 3,625,831
Cash with Security Lending Agent............................ 14,938
-----------
3,640,769
-----------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
SHORT-TERM COMMERCIAL PAPER
Crown Point Capital Co. 7.05%, due 1/28/00.................. $ 4,000,000 3,979,000
Galaxy Funding Inc. 5.60%, due 1/3/00....................... 2,790,000 2,789,132
Variable Funding Capital Corp. 6.01%, due 1/18/00 .......... 3,200,000 3,191,084
-----------
9,959,216
-----------
REPURCHASE AGREEMENTS
Bear Stearns Securities Corp. 4.60%, due 1/3/00
(Collateralized by $373,419 FHLMC Pool #C00873
6.50%, due 10/1/29 Market Value $355,333
$1,222,579 FNMA Pool #522673
6.50%, due 4/1/09 Market Value $1,205,471
$948,480 FNMA Pool #512087
7.00%, due 12/1/29 Market Value $925,279
$1,264,023 FNMA Pool #498641
7.50%, due 12/1/14 Market Value $1,280,610
$2,348,504 FNMA Pool #526652
7.50%, due 12/1/29 Market Value $2,333,121
$1,183,707 FNMA Pool #527183
8.00%, due 12/1/29 Market Value $1,199,490
$304,209 FNMA Pool #148428
8.50%, due 3/1/07 Market Value $315,990)................ 7,352,000 7,352,000
Deutsche Bank Securities Inc. 4.60%, due 1/3/00
(Collateralized by $14,165,890 AON Capital Trust A
8.205%, due 1/1/27 Market Value $14,736,751)............ 14,035,000 14,035,000
Donaldson, Lufkin and Jenrette Securities Corp. 4.57%, due
1/3/00
(Collateralized by $29,481,394 GNMA Pool #781007
6.50%, due 3/15/29 Market Value $29,644,689)............ 28,900,000 28,900,000
</TABLE>
165
<PAGE> 166
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
REPURCHASE AGREEMENTS (Continued)
Morgan (J.P.) Securities Inc. 4.58%, due 1/3/00
(Collateralized by $4,200,000 Capital One Bank
7.4525%, due 1/27/04 Market Value $4,200,000)............ $ 4,000,000 $ 4,000,000
Prudential Securities Inc. 4.38%, due 1/3/00
(Collateralized by $11,310,265 FHLMC
6.4625%, due 12/15/26 Market Value $11,377,754
$1,992,500 Raytheon Co.
6.30%, due 8/15/00 Market Value $2,039,750
$1,991,928 TCI Communications, Inc.
6.335%, due 9/11/00 Market Value $1,997,857)............. 15,000,000 15,000,000
-----------
69,287,000
-----------
Total investments made with cash collateral................. $82,886,985
===========
Non-cash collateral received and held by the Portfolio
at December 31, 1999:
United States Treasury Bonds 6.50%, due 11/15/26............ 200,000 $ 196,625
8.75%, due 8/15/20........................................ 120,000 149,213
-----------
Total non-cash collateral................................... $ 345,838
===========
Total collateral............................................ $83,232,823
===========
</TABLE>
(K)
PURCHASED AND WRITTEN OPTIONS. International Equity Portfolio may write covered
call and put options on its portfolio securities or foreign currencies. Premiums
are received and are recorded as liabilities. The liabilities are subsequently
adjusted to reflect the current value of the options written. Premiums received
from writing options which expire are treated as realized gains. Premiums
received from writing options which are exercised or are canceled in closing
purchase transactions are added to the proceeds or netted against the amount
paid on the transaction to determine the realized gain or loss. By writing a
covered call option, a Portfolio foregoes in exchange for the premium the
opportunity for capital appreciation above the exercise price should the market
price of the underlying security or foreign currency increase. By writing a
covered put option, a Portfolio, in exchange for the premium, accepts the risk
of a decline in the market value of the underlying security or foreign currency
below the exercise price.
The Portfolio may purchase call and put options on its portfolio securities or
foreign currencies. The Portfolio may purchase call options to protect against
an increase in the price of the security or foreign currency it anticipates
purchasing. The Portfolio may purchase put options on its securities or foreign
currencies to protect against a decline in the value of the security or foreign
currency or to close out covered written put positions. Risks may arise from an
imperfect correlation between the change in market value of the securities or
foreign currencies held by the Portfolio and the prices of options relating to
the securities or foreign currencies purchased or sold by the Portfolio and from
the possible lack of a liquid secondary market for an option. The maximum
exposure to loss for any purchased option is limited to the premium initially
paid for the option.
166
<PAGE> 167
MAINSTAY VP SERIES FUND, INC.
(L)
LOAN PARTICIPATIONS. High Yield Corporate Bond Portfolio invests in Loan
Participations. When the Portfolio purchases a Participation, the Portfolio
typically enters into a contractual relationship with the lender or third party
selling such Participation ("Selling Participant"), but not with the Borrower.
As a result, the Portfolio assumes the credit risk of the Borrower, the Selling
Participant and any other persons interpositioned between the Portfolio and the
Borrower ("Intermediate Participants"). The Portfolio may not directly benefit
from the collateral supporting the Senior Loan in which it has purchased the
Participation. The Portfolio may be considered to have a concentration of credit
risk in the banking industry, since the Portfolio will only acquire
Participations if the Selling Participant and each Intermediate Participant is a
financial institution.
(M)
FEDERAL INCOME TAXES. Each of the Portfolios is treated as a separate entity for
Federal income tax purposes. The Fund's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of the taxable income to the shareholders of
each Portfolio within the allowable time limits. Therefore, no Federal income
tax provision is required.
Investment income received by a Portfolio from foreign sources may be subject to
foreign income taxes withheld at the source.
(N)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are
recorded on the ex-dividend date. For Cash Management Portfolio, dividends are
declared daily and paid monthly. Each of the other Portfolios intends to declare
and pay, as a dividend, substantially all of their net investment income and net
realized gains no less frequently than once a year. Income dividends and capital
gain distributions are determined in accordance with Federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax differences" are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their Federal tax basis
treatment; temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for Federal tax purposes are reported
as dividends in excess of net investment income or distributions in excess of
net realized capital gains.
The following table discloses the current year reclassifications between
accumulated undistributed net investment income (loss) and accumulated
undistributed net realized gain (loss) on investments and paid-in capital
arising from permanent differences; net assets are not affected.
<TABLE>
<CAPTION>
ACCUMULATED
ACCUMULATED UNDISTRIBUTED
ACCUMULATED UNDISTRIBUTED NET REALIZED
UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON ADDITIONAL
NET INVESTMENT GAIN (LOSS) FOREIGN CURRENCY PAID-IN
INCOME (LOSS) ON INVESTMENTS TRANSACTIONS CAPITAL
-------------- -------------- ---------------- ----------
<S> <C> <C> <C> <C>
Capital Appreciation Portfolio.......................... $ 672,540 $ 0 $ 0 $(672,540)
Convertible Portfolio................................... (5,540) 5,540 0 0
Government Portfolio.................................... 63,703 (67,952) 0 4,249
High Yield Corporate Bond Portfolio..................... 1,587,382 (1,424,978) 0 (162,404)
International Equity Portfolio.......................... (448,431) (193,749) 642,180 0
Total Return Portfolio.................................. 132,874 (132,874) 0 0
Value Portfolio......................................... (235,199) 0 235,199 0
Bond Portfolio.......................................... 138,116 (39,370) 0 (98,746)
Growth Equity Portfolio................................. 823 224,194 0 (225,017)
Indexed Equity Portfolio................................ 1,105 (1,105) 0 0
</TABLE>
167
<PAGE> 168
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATED
ACCUMULATED UNDISTRIBUTED
ACCUMULATED UNDISTRIBUTED NET REALIZED
UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON ADDITIONAL
NET INVESTMENT GAIN (LOSS) FOREIGN CURRENCY PAID-IN
INCOME (LOSS) ON INVESTMENTS TRANSACTIONS CAPITAL
-------------- -------------- ---------------- ----------
<S> <C> <C> <C> <C>
American Century Income & Growth Portfolio.............. $ 4,121 $ 226 $ 0 $ (4,347)
Dreyfus Large Company Value Portfolio................... 4,542 0 0 (4,542)
Eagle Asset Management Growth Equity Portfolio.......... 12,120 (7,816) 0 (4,304)
</TABLE>
The reclassifications for the Portfolios are primarily due to foreign currency
gain (loss), nondeductible organization expenses, distribution
reclassifications, gain on sales of passive foreign investment companies, gain
on sales of step bonds, loss on sales of options, investments in real estate
investment trusts, paydown gain (loss), and net operating losses.
(O)
ORGANIZATION COSTS. Costs incurred in connection with the initial organization
and registration of American Century Income & Growth, Dreyfus Large Company
Value and Eagle Asset Management Growth Equity Portfolios of the Fund are
amortized over a maximum period of 60 months beginning with the commencement of
operations of the respective Portfolios on May 1, 1998. Organization costs for
American Century Income & Growth, Dreyfus Large Company Value and Eagle Asset
Management Growth Equity Portfolios, paid by, and reimbursable to, NYLIAC,
aggregated approximately $64,500. In the event that any of the initial shares
purchased by NYLIAC are redeemed, proceeds of such redemption will be reduced by
the proportionate amount of the unamortized deferred organizational expenses
which the number of shares redeemed bears to the total number of initial shares
purchased.
(P)
EXPENSES. Expenses with respect to the Fund are allocated to the individual
Portfolios in proportion to the net assets of the respective Portfolios when the
expenses are incurred except when direct allocations of expenses can be made.
(Q)
USE OF ESTIMATES. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
NOTE 3--Fees and Related Party Policies:
- --------------------------------------------------------------------------------
(A)
INVESTMENT ADVISORY AND ADMINISTRATION FEES. MacKay Shields LLC ("MacKay
Shields") acts as investment adviser to Capital Appreciation, Cash Management,
Convertible, Government, High Yield Corporate Bond, International Equity,
Total Return and Value Portfolios under an Investment Advisory Agreement. MacKay
Shields is a registered investment adviser, a wholly-owned subsidiary of NYLIFE
LLC and an indirect wholly-owned subsidiary of New York Life. As of May 1, 1999,
Madison Square Advisors LLC ("Madison Square Advisors") acts as investment
adviser to Bond and Growth Equity Portfolios under an Investment Advisory
Agreement. Madison Square Advisors is a registered investment adviser, a
wholly-owned subsidiary of NYLIFE LLC and an indirect subsidiary of New York
Life. Prior to May 1, 1999, New York Life acted as investment adviser to the
Bond and Growth Equity Portfolios and was replaced by Madison Square Advisors
under a Substitution Agreement. The substitution had no effect on investment
personnel, investment strategies or fees of the Portfolios. Monitor Capital
Advisors LLC ("Monitor") acts as investment adviser to Indexed Equity
168
<PAGE> 169
MAINSTAY VP SERIES FUND, INC.
Portfolio under an Investment Advisory Agreement. Monitor is a registered
investment adviser, a wholly-owned subsidiary of NYLIFE LLC and an indirect
wholly-owned subsidiary of New York Life. New York Life acts as investment
adviser to American Century Income & Growth, Dreyfus Large Company Value and
Eagle Asset Management Growth Equity Portfolios under an Investment Advisory
Agreement. New York Life selects and employs Subadvisors for some of the
Portfolios. American Century Investment Management, Inc. serves as Subadvisor to
the American Century Income & Growth Portfolio; The Dreyfus Corporation serves
as Subadvisor to the Dreyfus Large Company Value Portfolio; and The Eagle Asset
Management, Inc. serves as Subadvisor to the Eagle Asset Management Growth
Equity Portfolio.
NYLIAC is Administrator for the Fund.
The Fund, on behalf of each Portfolio, pays the Advisers and Administrator a
monthly fee for the services performed and the facilities furnished at an
approximate annual rate of the average daily net assets of each Portfolio as
follows:
<TABLE>
<CAPTION>
ADVISER ADMINISTRATOR
------- -------------
<S> <C> <C>
Capital Appreciation Portfolio.............................. 0.36% 0.20%
Cash Management Portfolio................................... 0.25% 0.20%
Convertible Portfolio....................................... 0.36% 0.20%
Government Portfolio........................................ 0.30% 0.20%
High Yield Corporate Bond Portfolio......................... 0.30% 0.20%
International Equity Portfolio.............................. 0.60% 0.20%
Total Return Portfolio...................................... 0.32% 0.20%
Value Portfolio............................................. 0.36% 0.20%
Bond Portfolio.............................................. 0.25% 0.20%
Growth Equity Portfolio..................................... 0.25% 0.20%
Indexed Equity Portfolio.................................... 0.10% 0.20%
American Century Income & Growth Portfolio.................. 0.50% 0.20%
Dreyfus Large Company Value Portfolio....................... 0.60% 0.20%
Eagle Asset Management Growth Equity Portfolio.............. 0.50% 0.20%
</TABLE>
The Administrator voluntarily agreed to assume the operating expenses of
American Century Income & Growth, Dreyfus Large Company Value and Eagle Asset
Management Growth Equity Portfolios through December 31, 1999, which on an
annualized basis exceeded the percentages indicated below.
<TABLE>
<S> <C>
American Century Income & Growth Portfolio.................. 0.85%
Dreyfus Large Company Value Portfolio....................... 0.95%
Eagle Asset Management Growth Equity Portfolio.............. 0.85%
</TABLE>
In connection with such expense limitation, the Administrator assumed certain of
the expenses of the above listed Portfolios for the year ended December 31, 1999
as shown on the Statement of Operations.
(B)
DISTRIBUTOR. NYLIFE Distributors Inc. ("NYLIFE Distributors"), a wholly-owned
subsidiary of NYLIFE LLC and an indirect wholly-owned subsidiary of New York
Life, serves as the Fund's distributor and principal underwriter (the
"Distributor") pursuant to a Distribution agreement. NYLIFE Distributors is not
obligated to sell any specific amount of the Fund's shares, and receives no
compensation from the Fund pursuant to the Distribution Agreement.
(C)
DIRECTORS FEES. Directors, other than those affiliated with New York Life,
MacKay Shields, Monitor or NYLIFE Distributors, are paid an annual fee of
$35,000, and $1,500 for each Board meeting and each Committee meeting attended
plus reimbursement for travel and out-of-pocket expenses. The Fund allocates
this expense in proportion to the net assets of the respective Portfolios.
169
<PAGE> 170
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D)
CAPITAL. At December 31, 1999 NYLIAC was the beneficial owner of shares of the
following Portfolios with net asset values as follows:
<TABLE>
<S> <C>
Convertible Portfolio....................................... $12,681,783
American Century Income & Growth Portfolio.................. 12,742,862
Dreyfus Large Company Value Portfolio....................... 10,840,194
Eagle Asset Management Growth Equity Portfolio.............. 18,554,807
</TABLE>
These values represent 13.37%, 19.87%, 35.42% and 28.51%, respectively, of the
net assets of each respective Portfolio at December 31, 1999.
(E)
OTHER. Fees for the cost of legal services provided to the Fund by the Office of
General Counsel of New York Life are charged to the Portfolios. For the year
ended December 31, 1999 these fees, in the following amounts, were included in
Professional fees shown on the Statement of Operations:
<TABLE>
<S> <C>
Capital Appreciation Portfolio.............................. $36,928
Cash Management Portfolio................................... 7,697
Convertible Portfolio....................................... 1,732
Government Portfolio........................................ 4,064
High Yield Corporate Bond Portfolio......................... 18,501
International Equity Portfolio.............................. 1,207
Total Return Portfolio...................................... 18,647
Value Portfolio............................................. 8,729
Bond Portfolio.............................................. 7,893
Growth Equity Portfolio..................................... 31,508
Indexed Equity Portfolio.................................... 29,165
American Century Income & Growth Portfolio.................. 1,045
Dreyfus Large Company Value Portfolio....................... 600
Eagle Asset Management Growth Equity Portfolio.............. 648
</TABLE>
170
<PAGE> 171
MAINSTAY VP SERIES FUND, INC.
NOTE 4--Federal Income Tax:
- --------------------------------------------------------------------------------
At December 31, 1999, for Federal income tax purposes, capital loss
carryforwards, as shown in the table below, were available to the extent
provided by regulations to offset future realized gains of each respective
Portfolio through the years indicated. To the extent that these loss carry
forwards are used to offset future capital gains, it is probable that the
capital gains so offset will not be distributed to shareholders. Additionally,
as shown in the table below, certain Portfolios intend to elect, to the extent
provided by regulations, to treat certain qualifying capital losses that arose
during the year after October 31, 1999 as if they arose on January 1, 2000.
<TABLE>
<CAPTION>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE THROUGH AMOUNT (000'S) DEFERRED (000'S)
----------------- -------------- ----------------
<S> <C> <C> <C>
Convertible Portfolio....................................... $ 0 $ 752
====== ======
Government Portfolio........................................ 2004 $ 812
2007 7,885
------
$8,697 $ 64
====== ======
High Yield Corporate Bond Portfolio......................... $ 0 $ 518
====== ======
Value Portfolio............................................. 2007 $6,295 $1,894
====== ======
Bond Portfolio.............................................. 2007 $3,451 $ 0
====== ======
Dreyfus Large Company Value Portfolio....................... 2006 $ 929 $ 80
====== ======
</TABLE>
International Equity Portfolio intends to elect to treat for Federal income tax
purposes approximately $216,269 of qualifying foreign exchange losses that arose
during the year after October 31, 1999 as if they arose on January 1, 2000. High
Yield Corporate Bond, International Equity, American Century Income & Growth,
Dreyfus Large Company Value and Eagle Asset Management Growth Equity Portfolios
utilized $4,315,968, $427,458, $220,843, $220,233 and $1,027,856, respectively,
of capital loss carryforwards during the current year.
- --------------------------------------------------------------------------------
NOTE 5--Line of Credit:
- --------------------------------------------------------------------------------
Capital Appreciation, Convertible, Government, High Yield Corporate Bond,
International Equity, Total Return, Value, Bond, Growth Equity and Indexed
Equity Portfolios participate in a line of credit of $375,000,000 with a
syndicate of banks in order to secure a source of funds for temporary
purposes to meet unanticipated or excessive shareholder redemption requests. The
Portfolios pay a commitment fee, at an annual rate of 0.075% of the average
commitment amount, regardless of usage to The Bank of New York, which acts as
agent to the syndicate. Such commitment fees are allocated amongst the
Portfolios based upon net assets and other factors. Interest on any revolving
credit loan is charged based upon the Federal Funds Advances rate. There were no
borrowings on this line of credit during the year ended December 31, 1999.
171
<PAGE> 172
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Purchases and Sales of Securities (in 000's):
- --------------------------------------------------------------------------------
During the year ended December 31, 1999, purchases and sales of securities,
other than securities subject to repurchase transactions and short-term
securities, were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION CONVERTIBLE GOVERNMENT
PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Securities......................... $ -- $ -- $ -- $ -- $427,811 $403,599
All others......................................... 742,827 528,649 173,342 168,848 47,772 31,840
------------------------------------------------------------------
Total.............................................. $742,827 $528,649 $173,342 $168,848 $475,583 $435,439
==================================================================
</TABLE>
<TABLE>
<CAPTION>
AMERICAN CENTURY
GROWTH EQUITY INDEXED EQUITY INCOME & GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Securities......................... $ -- $ -- $ -- $ -- $ -- $ --
All others......................................... 765,368 742,896 367,706 34,448 49,059 22,659
------------------------------------------------------------------
Total.............................................. $765,368 $742,896 $367,706 $ 34,448 $ 49,059 $ 22,659
==================================================================
</TABLE>
- --------------------------------------------------------------------------------
NOTE 7--Capital Share Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in capital shares for the years ended December 31, 1999 and
December 31, 1998 were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION CASH MANAGEMENT CONVERTIBLE
PORTFOLIO PORTFOLIO PORTFOLIO
1999 1998 1999 1998 1999 1998
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold........................................ 16,051 9,454 977,614 485,911 1,452 1,946
Shares issued in reinvestment of dividends and
distributions.................................... 1,843 410 16,403 8,753 1,003 434
-----------------------------------------------------------------
17,894 9,864 994,017 494,664 2,455 2,380
Shares redeemed.................................... (8,310) (3,542) (771,097) (403,894) (561) (491)
-----------------------------------------------------------------
Net increase (decrease)............................ 9,584 6,322 222,920 90,770 1,894 1,889
=================================================================
</TABLE>
<TABLE>
<CAPTION>
AMERICAN CENTURY
GROWTH EQUITY INDEXED EQUITY INCOME & GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
1999 1998 1999 1998 1999 1998(A)
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold........................................ 6,274 5,372 23,660 16,025 2,537 2,833
Shares issued in reinvestment of dividends and
distributions.................................... 4,477 3,440 1,162 702 32 13
---------------------------------------------------------------
10,751 8,812 24,822 16,727 2,569 2,846
Shares redeemed.................................... (5,689) (3,977) (11,515) (4,296) (301) (80)
---------------------------------------------------------------
Net increase....................................... 5,062 4,835 13,307 12,431 2,268 2,766
===============================================================
</TABLE>
- ------------
(a) For the period May 1, 1998 (Commencement of Operations) through December 31,
1998.
172
<PAGE> 173
MAINSTAY VP SERIES FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
CORPORATE BOND EQUITY TOTAL RETURN VALUE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 6,375 $ 4,616 $ -- $ -- $552,423 $512,106 $ -- $ -- $227,240 $204,186
579,855 538,384 38,154 19,238 436,377 395,364 232,645 246,334 275,225 252,536
- --------------------------------------------------------------------------------------------------------------------
$586,230 $543,000 $ 38,154 $ 19,238 $988,800 $907,470 $232,645 $246,334 $502,465 $456,722
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET
DREYFUS MANAGEMENT
LARGE COMPANY VALUE GROWTH EQUITY
PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES
- -----------------------------------------------
<S> <C> <C> <C> <C>
$ -- $ -- $ -- $ --
38,955 29,331 83,063 58,964
- -----------------------------------------------
$ 38,955 $ 29,331 $ 83,063 $ 58,964
===============================================
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
GOVERNMENT CORPORATE BOND EQUITY TOTAL RETURN VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
1999 1998 1999 1998 1999 1998 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7,883 5,655 7,140 14,171 2,099 1,187 4,537 4,903 1,885 5,442
931 486 8,441 4,862 115 72 1,617 1,446 276 2,175
- ---------------------------------------------------------------------------------------------------------------
8,814 6,141 15,581 19,033 2,214 1,259 6,154 6,349 2,161 7,617
(2,516) (2,051) (3,708) (3,031) (607) (1,129) (1,649) (1,234) (2,967) (1,122)
- ---------------------------------------------------------------------------------------------------------------
6,298 4,090 11,873 16,002 1,607 130 4,505 5,115 (806) 6,495
===============================================================================================================
<CAPTION>
BOND
PORTFOLIO
1999 1998
- ------------------------
<C> <C>
4,522 4,582
1,412 1,627
- ------------------------
5,934 6,209
(3,431) (2,659)
- ------------------------
2,503 3,550
========================
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET
DREYFUS MANAGEMENT
LARGE COMPANY VALUE GROWTH EQUITY
PORTFOLIO PORTFOLIO
1999 1998(a) 1999 1998(a)
- ------------------------------------------------------
<S> <C> <C> <C> <C>
1,141 1,911 1,987 1,616
21 9 167 1
- ------------------------------------------------------
1,162 1,920 2,154 1,617
(187) (71) (214) (49)
- ------------------------------------------------------
975 1,849 1,940 1,568
======================================================
</TABLE>
173
<PAGE> 174
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
MainStay VP Series Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Capital Appreciation Portfolio,
Cash Management Portfolio, Convertible Portfolio, Government Portfolio, High
Yield Corporate Bond Portfolio, International Equity Portfolio, Total Return
Portfolio, Value Portfolio, Bond Portfolio, Growth Equity Portfolio, Indexed
Equity Portfolio, American Century Income & Growth Portfolio, Dreyfus Large
Company Value Portfolio and Eagle Asset Management Growth Equity Portfolio
(fourteen of the fifteen portfolios constituting MainStay VP Series Fund, Inc.,
hereafter referred to as the "Fund") at December 31, 1999, the results of each
of their operations for the year then ended and the changes in each of their net
assets and the financial highlights for each of the periods presented, in
conformity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 1999 by correspondence with the custodians and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
February 22, 2000
174
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