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[PHOTO]
[NEW YORK LIFE LOGO] The Company You Keep(R)
LIFESTAGES(SM)
1996 ANNUAL REPORT
FLEXIBLE INVESTMENT OPTIONS TO HELP SECURE YOUR FINANCIAL FUTURE.
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[PHOTO]
CONTENTS
<TABLE>
<S> <C>
President's Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Performance Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
MacKay-Shields Financial Corporation
Adviser's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
New York Life Insurance Adviser's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Portfolio Manager's Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
LIFESTAGES(SM) SEPARATE ACCOUNT
(Non-Qualified and Tax-Qualified Policies)
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Statement of Changes in Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
MAINSTAY VP SERIES FUND, INC.
Chairman's Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Capital Appreciation Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Cash Management Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Convertible Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Government Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
High Yield Corporate Bond Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
International Equity Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Total Return Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Value Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Bond Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Growth Equity Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Indexed Equity Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Alger American Small Capitalization Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . A1
Calvert Socially Responsible Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . A17
Fidelity Variable Insurance Products Fund II:
Contrafund Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A31
Fidelity Variable Insurance Products Fund:
Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A55
Janus Aspen Balanced Portfolio & Janus Aspen
Worldwide Growth Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A71
Morgan Stanley Emerging Markets Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . A91
</TABLE>
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PRESIDENT'S LETTER
For the year ended December 31, 1996
TO THE OWNERS OF LIFESTAGES(SM) POLICIES:
[PHOTO]
I am pleased to present the Annual Report for LifeStages(SM) and the MainStay
VP Series Fund, Inc. for the year ended December 31, 1996. This annual report
contains performance information, financial statements, notes and other
pertinent data for each of the MainStay VP Series Fund, Inc. Portfolios
available in LifeStages(SM). Annual reports relating to the Alger American
Small Capitalization, Calvert Socially Responsible, Fidelity VIP II:
Contrafund*, Fidelity VIP: Equity-Income*, Janus Aspen Balanced, Janus Aspen
Worldwide Growth and Morgan Stanley Emerging Markets Equity Portfolios have
also been attached.
Despite predictions that the stock market was due for a major correction,
1996 proved to be another outstanding year. The bull market for equities was
driven by a continuation of moderate growth of the economy, strong earnings
gains, and low inflation. The Dow Jones Industrial Average** passed the 6,000
milestone and closed the year at 6,448, up 26% from last year. The DJIA has
risen 68% since 1994, its highest two year gain in over 40 years! The Standard
& Poor's 500 Composite Stock Price Index*** also showed a strong 23% return,
ending the year at 740.
................................................................................
The unemployment rate drifted downward during the year to levels previously
associated with accelerating inflation. But while consumer prices did rise
slightly, core inflation (excluding food and energy prices) actually moderated.
Faster increases in wage rates were generally offset by slower increases in
benefit costs. Bond yields rose during the year, but short-term interest rates
remained little changed as the Federal Reserve kept monetary policy on hold.
As the economic expansion continues into its seventh year, there are likely
to be increasing concerns about the emergence of late business cycle pressures
on corporate profits. Many economists expect that 1997 will show stronger
growth than 1996, along with lower unemployment rates, higher wage increases,
and a gradual rise in core inflation. Under these conditions, bond yields
should continue their upward trend, and the Federal Reserve is likely to begin
raising short-term interest rates again. Few expect the stock market to
continue at such a rapid pace, following two straight years of returns in
excess of 20%. The longer-term fundamentals remain encouraging, though, with
good prospects for continued disinflation and expanding global opportunities
for highly competitive United States companies.
* Fidelity VIP and VIP II refer to Variable Insurance Products Fund and
Variable Insurance Products Fund II.
** The Dow Jones Industrial Average is a trademark, and the property of, Dow
Jones and Co., Inc.
*** "Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The S&P 500 is an
unmanaged index considered generally representative of the U.S. Stock Market.
2
<PAGE> 4
................................................................................
Over 78 million baby boomers are reaching their 50s and by the year 2000, 13%
of the population will have reached age 65 or older. As more people approach
retirement age, there will continue to be a greater emphasis placed on personal
investments, especially given the ongoing media projections that reductions in
Social Security and company pension plan benefits may be on the horizon. The
benefits of tax deferral, a wide range of investment choices, and other product
features make variable annuities an ideal investment for retirement.
New York Life Insurance and Annuity Corporation received over $1 billion in
variable annuity premiums in 1996, almost triple the amount received in 1995.
Total United States variable annuity sales reached over $69 billion in 1996, a
40% increase over 1995. We expect that variable annuity sales will continue to
flourish in 1997.
[PHOTO]
As you can see, we have changed the name of the New York Life MFA Series
Fund, Inc. to the MainStay VP Series Fund, Inc. Of course, this name change has
not affected the portfolios' objectives and the Fund is still managed by teams
of investment professionals from MacKay-Shields Financial Corporation, New York
Life Insurance Company, and Monitor Capital Advisors, Inc.
................................................................................
[PHOTO]
In our continuing tradition of providing you with a product that is competitive
and responsive to your financial needs, several enhancements were made to
LifeStages(SM) in 1996. An "Interest Only" Periodic Partial Withdrawal feature
and an Interest Sweep feature were added to allow greater flexibility in
accessing and allocating your money. Also, seven new separate account
Investment Divisions, including the MainStay VP Convertible Portfolio and
portfolios managed by Fred Alger Management, Inc., Fidelity Management and
Research Company, Janus Capital Corporation and Morgan Stanley Asset Management
Inc. were also added to complement our existing MainStay VP Series Fund, Inc.
Portfolios. You can now benefit from the expertise of our MainStay VP Series
Fund, Inc. fund managers as well as these nationally recognized fund
management companies.
[PHOTO]
We thank you for selecting us to be "The Company You Keep(R)," and we look
forward to helping you build a solid foundation for your future.
/s/ SEYMOUR STERNBERG
Seymour Sternberg
President
New York Life Insurance
and Annuity Corporation
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<PAGE> 5
LIFESTAGES(SM) PERFORMANCE SUMMARY
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.
For the period of the underlying MainStay VP and Calvert Socially
Responsible Portfolio's inception dates to the date those portfolios were added
to the LifeStages(SM) Separate Account, performance assumes that LifeStages(SM)
was available, which it was not. For the period of the inception dates of the
Alger American Small Capitalization, Fidelity VIP II: Contrafund, Fidelity VIP:
Equity-Income, Janus Aspen Balanced and Janus Aspen Worldwide Growth Portfolios
until these portfolios were added to the LifeStages(SM) Separate Account on
10/1/96, performance assumes that LifeStages(SM) was available and that these
portfolios were offered under LifeStages(SM), which they were not.
There is no performance information for the MainStay VP Convertible and the
Morgan Stanley Emerging Markets Equity Investment Divisions because they are
new funds as of October 1, 1996.
Results include an annualized Asset Fee of 1.40% and show the percentage
change for the period with capital gains and dividends reinvested. A policy
fee, equal to the lesser of $30 or 2% of the accumulation value of the policy,
is not included in these charges, but will be deducted each year on the policy
anniversary if the accumulation value is less than $20,000.
NYLIAC has agreed to assume a portion of the expenses of the MainStay VP
Investment Divisions. This expense limitation was effective for all MainStay VP
Investment Divisions until 12/31/96, and has been extended until 12/31/97 for
the MainStay VP High Yield Corporate Bond, MainStay VP International Equity and
MainStay VP Value Investment Divisions. In addition, Janus Capital Corporation
has agreed to reduce the advisory fee for the Janus Aspen Balanced and the
Janus Aspen Worldwide Growth Investment Divisions. Had these expenses not been
assumed or reduced, the total returns for these Investment Divisions would have
been lower.
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<PAGE> 6
LIFESTAGES(SM) SEPARATE ACCOUNT
Average Annual Total Return* for the Period Ending December 31, 1996
Assuming Contract Not Surrendered**:
<TABLE>
<CAPTION>
Investment Divisions Inception Date One Year Three Years Five Years Ten Years Since Inception
.........................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
MainStay VP Series Funds:
Capital Appreciation 01/29/93 17.10% 13.92% -- -- 15.50%
Cash Management 01/29/93 3.56% 3.36% -- -- 2.86%
Government 01/29/93 0.85% 3.96% -- -- 4.12%
High Yield Corporate Bond 05/01/95 15.55% -- -- -- 14.38%
International Equity 05/01/95 9.00% -- -- -- 10.85%
Total Return 01/29/93 10.52% 9.81% -- -- 10.95%
Value 05/01/95 21.51% -- -- -- 21.04%
Bond 01/23/84 0.62% 3.80% 5.54% 6.79% 8.49%
Growth Equity 01/23/84 22.77% 15.99% 13.91% 12.65% 11.40%
Indexed Equity 01/29/93 20.72% 17.42% -- -- 15.08%
Calvert Socially Responsible 09/02/86 11.06% 10.69% 8.91% 9.56% 8.84%
Alger American Small Capitalization 09/20/88 2.73% 11.28% 9.46% -- 18.53%
Fidelity VIP II: Contrafund 01/03/95 19.52% -- -- -- 28.50%
Fidelity VIP: Equity-Income 10/09/86 12.68% 16.59% 16.34% 11.99% 11.68%
Janus Aspen Balanced 09/13/93 14.57% 11.92% -- -- 13.00%
Janus Aspen Worldwide Growth 09/13/93 27.24% 16.96% -- -- 21.43%
</TABLE>
ASSUMING CONTRACT SURRENDERED:
<TABLE>
<CAPTION>
Investment Divisions Inception Date One Year Three Years Five Years Ten Years Since Inception
.........................................................................................................................
<S> <C> <C> <C> <C> <C> <C>
MainStay VP Series Funds:
Capital Appreciation 01/29/93 10.10% 12.09% -- -- 14.31%
Cash Management 01/29/93 -2.96% 1.15% -- -- 1.41%
Government 01/29/93 -5.50% 1.76% -- -- 2.65%
High Yield Corporate Bond 05/01/95 8.55% -- -- -- 10.51%
International Equity 05/01/95 2.14% -- -- -- 6.89%
Total Return 01/29/93 3.56% 7.84% -- -- 9.61%
Value 05/01/95 14.51% -- -- -- 17.31%
Bond 01/23/84 -5.72% 1.58% 4.58% 6.79% 8.49%
Growth Equity 01/23/84 15.77% 14.23% 13.07% 12.65% 11.40%
Indexed Equity 01/29/93 13.72% 15.70% -- -- 13.88%
Calvert Socially Responsible 09/02/86 4.06% 8.75% 7.91% 9.56% 8.84%
Alger American Small Capitalization 09/20/88 -3.74% 9.36% 8.46% -- 18.53%
Fidelity VIP II: Contrafund 01/03/95 12.52% -- -- -- 25.73%
Fidelity VIP: Equity-Income 10/09/86 5.68% 14.85% 15.56% 11.99% 11.68%
Janus Aspen Balanced 09/13/93 7.57% 10.03% -- -- 11.37%
Janus Aspen Worldwide Growth 09/13/93 20.24% 15.23% -- -- 20.05%
.........................................................................................................................
</TABLE>
**The values shown above are unaudited.
**Assumes no deduction for the contingent deferred sales charges.
The maximum contingent deferred sales charge for each premium payment is 7%,
declining to 0% by the 7th year after a premium payment. Withdrawals may be
taxable transactions, and prior to age 59 1/2 may be subject to a 10% IRS
penalty.
5
<PAGE> 7
MACKAY-SHIELDS FINANCIAL CORPORATION
ADVISER'S REPORT
................................................................................
MARKET OVERVIEW
[PHOTO]
1996 was yet another stunning year for the U.S. stock market, continuing to
delight and astound investors, as the economy continued on its modest growth,
low inflation path. The Dow Jones Industrial Average climbed an impressive
28.91% (total return). Added to the 36.75% gain of 1995, the Dow at year end
was towering 68% above its level at the final bell of 1994, having provided a
cumulative two year total return (with income) of 77.00%, the eighth largest
two year gain in its 100 year history. Meanwhile, the S&P 500* was up 22.96%,
and the NASDAQ**, despite its severe mid-summer drop, still managed a 23.29%
rise, both coming on top of strong gains in 1995. Volatility, however,
increased markedly.
Modest economic growth with low inflation provided the perfect backdrop for
rising stock prices, despite plenty of scares during the year. Business
inventories grew modestly, as companies tried to keep costs in line. Job growth
also slowed, easing fears that rising wages would set off inflation. Although
worries kept surfacing throughout the year that the economy was too weak and
then too strong, its steady path kept the Federal Reserve from having to raise
interest rates. Supply and demand were also driving forces, with the key driver
of demand being cash coming into equity mutual funds. An astonishing $210
billion flowed into stock funds in the first 11 months of the year, almost $100
billion more than a year earlier.
S&P 500 index funds led the parade of strong performance in the fourth
quarter and for the full year. Growth and income funds (which include index
funds in their category) were the most popular in terms of cash flow, and
aggressive growth funds came in second, having taken in more money earlier in
the year. Small stock prices trailed by more than 10 percentage points behind
the big blue chips.
Diversified U.S. stock funds returned an average 19.5%, on top of last
year's return of 31.1%. Little wonder that the individual investor has poured
record sums into stock mutual funds in the past year, boosting the assets of
all mutual funds to $3.5 trillion, or five times the level of a decade ago.
Overseas, the equity markets in Europe were stellar performers (climbing 20%
during 1996, ranging from 52% in Finland to 12% in the U.K., fueled by low
inflation, low interest rates and slow growth), but the world's second largest
market, Japan, slumped noticeably (down 2.6% for the year), offsetting several
impressive advances in smaller markets.
In contrast to the exuberance of the equity markets, 1996 proved to be a
rather mediocre year for bond investors, except in the high yield area, which
continued to excel, especially in lower rated credits. Despite inaction on the
part of the Federal Reserve, which only cut the federal funds rate once by a
quarter point last January 31st, bond prices were anything but stable. Rates
................................................................................
* "Standard and Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The MainStay VP
Series Fund, Inc. is neither sponsored by nor affiliated with 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.
** "NASDAQ Composite Index" is an unmanaged index and is considered to be
generally representative of the U.S. small capitalization stock market.
6
<PAGE> 8
generally rose in the first half of the year, although this trend reversed
itself later in the year. Many believed that rate reductions would be necessary
to head off a recession, and that election year rate-cuts might be in the
offing; instead wage pressures emerged as a new concern and yields climbed into
the summer, before a fall rally brought them back down again. The rally was
fueled by low inflation, steady growth, and a shrinking budget deficit, which
has fallen during the past four years to below 1.5% of the gross domestic
product.
The average bond fund gained 4.7% in 1996, trailing the 4.8% average yield
on money market funds. Consequently, a mere $10.30 billion moved into bond
funds in the 11 months through November 30, paling in comparison to the stock
market, which took in $210 billion. The high yield market once again provided a
strong average double digit return of 13%. Elsewhere, many foreign markets
rallied sharply, with Italy, Spain, and Sweden leading the way. Emerging market
bond funds scored a heady 40.7% return, as bonds from Russia, Ecuador and
Poland were especially ebullient.
As we enter the new year, the U.S. economic picture remains mixed. Although
personal income growth is moderate, unemployment low, and consumer confidence
high, most retailers were disappointed in the Christmas season, and with the
high level of consumer credit card debt outstanding, it is doubtful that the
consumer can fuel an accelerating economy. An area of great concern to the bond
market is the labor market. With the unemployment rate at 5.4%, any further
tightening could result in an increase in wage pressures. Labor is responsible
for two thirds of the cost of production; thus, the repercussions of wage
increases would be substantial. Increased productivity has in fact absorbed
part of the costs, and some economists argue that the end of the Cold War
marked the beginning of a disinflationary period. Also, importantly, there are
many more technological innovations during peacetime. We are just at the
beginning of the computer revolution, which is a powerful deflationary force.
On a shorter term cyclical basis, it is true that the price of gold, a
harbinger of inflation, has declined markedly over the recent period. Oil
prices, on the other hand, have risen. We will continue to be vigilant for any
signs that inflation might rear its ugly head, as this will be most problematic
for both the bond and stock markets if and when it occurs.
Another key issue facing the financial markets is this year's budget
negotiation between President Clinton and Congress. Foreign investors will also
continue to have a significant influence on the U.S. economy. Weak demand
abroad limited exports in 1996, but we expect some improvement in 1997. The
continuation of a strong dollar would benefit bondholders by giving foreigners
(especially the Japanese) a continued incentive to buy U.S. Treasuries, as well
as making imports cheaper, helping to keep domestic prices low and inflation in
check. Despite growth scares, inflation has remained in the manageable 2.5-3.0%
range, and meaningful price increases seem unlikely in the near future. We plan
to maintain a neutral duration position across our bond portfolios relative to
the market as we wait for a more definitive signal on the economy and
inflation.
After such a winning streak in the U.S. stock market, is it possible that
the bulls could continue to keep the bears at bay? What is unmatched is not
1996 performance, which was less than 1995, but rather how strong the market
has been for the last fifteen years. During this stretch, it has risen at a
compounded annual rate of 14.2% a year, breaking the old record of 13.4% set
just before the 1929 crash. One year ago, we observed that the combination of
moderate economic growth, benign inflation and low interest rates should
provide a positive underpinning for stocks, which certainly came to pass. As we
enter the new year, a roughly similar observation can be made, though with less
conviction. The road is narrower, and the risk of being wrong
7
<PAGE> 9
[PHOTO]
has increased. The economy could still conceivably overheat, causing higher
interest rates and inflationary fears. And although the consensus assigns a
very low probability to recession, it is not outside of the realm of
possibilities. Either outcome would be problematic for the market. The real fly
in the ointment, however, is corporate profits, a key factor that has supported
the bull market run over the last few years. Recent data from important
economic sectors, including retailing and autos, seem to suggest that U.S.
corporate profit growth is likely to show less uniformity in 1997 than it has
in the several preceding years. This implies that whatever strength the stock
market exhibits this year will be somewhat less broad based than was the case
last year.
The real fear on Wall Street, however, is whether the great surge of money
into equity mutual funds will recede, leaving the market in shambles.
Regardless of whether the market corrects, continues to climb, or simply
returns to more historical norms on the plus side (single digits), we are of
the firm opinion that active management will have the potential to add
significant value as volatility continues to be a way of life. The strongest
positive force on a secular basis, of course, continues to be the demographics
of the baby boomers, who may just continue to pour money into the stock market
through taxable mutual funds and variable products as well as 401(k) plans, in
an attempt to catch up for lost time in saving for retirement. Whatever 1997
brings, our equity approaches in growth and value will continue to focus upon a
disciplined stock selection process, diversification, and risk management,
which we believe will serve our shareholders in any conceivable market
scenario.
Ravi Akhoury
Chairman and Chief Executive Officer
MacKay-Shields Financial Corporation
8
<PAGE> 10
NEW YORK LIFE INSURANCE COMPANY
ADVISER'S REPORT
................................................................................
[PHOTO]
1996 IN REVIEW AND 1997 OUTLOOK:
During 1996 investment performance for most portfolios was strong, but clearly
the star performance was turned in by the stock market -- with the S&P 500*
producing an annual return of 22.96%. This result was facilitated by continued
profit growth and low levels of inflation. The economy entered its seventh year
of expansion at a relatively modest pace of growth of 2.3%. Thus the stock
market was able to generate two back-to-back years of especially strong
investor returns. The bond market produced acceptable but not overwhelming
returns as interest rates increased over the first half of the year and
declined over the second half.
We do not believe the business cycle is dead. The outlook for the stock and
bond markets will depend upon both fundamental economic factors as well as
technical factors associated with worldwide capital flows. During 1996, the
U.S. dollar appreciated relative to most major currencies -- attracting
overseas bond investors. Economic growth in the U.S. has been stronger than
most other economically advanced nations and has supported even higher growth
in the developing Asian and Latin American economies -- many of which peg their
currencies to the dollar. We anticipate that the European economies, and
possibly even the Japanese economy, will enjoy improved growth going forward.
Domestically, we see the likelihood of somewhat stronger growth as well. These
factors will likely lead to higher interest rates and a cyclical upward creep
in inflation.
This outlook suggests that corporate profits have room to grow, but that
rising interest rates will produce pressure on stock market valuations of
corporate earnings. Ultimately, a potential economic downturn in the out years
will produce pressure on the market's earnings expectations. That said, we will
continue to manage our stock portfolios from a fundamental perspective based
upon our outlook for growth in earnings of the companies we follow. Industries
for which we presently have a favorable view include energy, technology and
health care. We will be managing our bond portfolios cautiously based upon our
expectation of higher rates and potential outflows of international capital
over the course of the next year.
A more detailed description of our investment results and forward strategies
is found in the portfolio manager reviews that follow.
Jean Hoysradt
Senior Vice President in Charge of the Investment Department
New York Life Insurance Company
................................................................................
* "Standard and Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The MainStay VP
Series Fund, Inc. is neither sponsored by nor affiliated with 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.
9
<PAGE> 11
MAINSTAY VP
CAPITAL APPRECIATION PORTFOLIO
[CHART]
<TABLE>
Capital
Appreciation S&P 500 CPI
<S> <C> <C> <C>
1/29/93........ 10000.00 10000.00 10000.00
12/31/93........ 12054.00 11007.00 10275.00
12/31/94........ 11526.03 11148.99 10549.34
12/31/95........ 15650.05 15338.78 10785.65
12/31/96........ 18584.43 18857.50 11142.65
</TABLE>
Capital Appreciation Portfolio
S&P 500
Consumer Price Index
$10,000 Invested in the MAINSTAY VP CAPITAL
APPRECIATION PORTFOLIO on 1/29/93 vs S&P 500
and the Consumer Price Index
* Lipper Analytical Services, Inc., is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies. The Consumer Price Index (CPI) is a commonly used measure of the
rate of inflation.
** "Standard and Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The MainStay VP
Series Fund, Inc. is neither sponsored by nor affiliated with 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.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns 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 page 5 for returns reflective of these
charges.
Average Annual Total
Return as of 12/31/96
.........................
1 Year
18.75%
3 Years
15.52%
Since Inception 1/29/93
17.13%
.........................
For the year ended December 31, 1996, the MainStay VP Capital Appreciation
Portfolio had a return of 18.75%, substantially exceeding the return of 16.34%
for the Lipper* average capital appreciation fund in their variable products
universe and in line with the 19.81% return for the average Lipper growth fund
in the universe. (The Fund is included in Lipper's capital appreciation
universe but is managed more as a growth fund.) The still stronger S&P 500**
registered a gain of 22.96% (with income). This performance gave the Portfolio
a ranking of 19th out of 41 capital appreciation funds in the Lipper universe.
We continued to pursue our objective of capital accumulation in this
Portfolio by using a disciplined approach which focuses on seeking out
companies with above average earnings growth, earnings acceleration and
improving revenue growth, with a favorable relationship between the price
earnings multiple of the stock and the earnings growth rate of the company. Our
bottom up stock selection process seeks out growth catalysts which may include
new management, new products, a change in competition or
acquisitions/divestitures, each of which may contribute to strong, attractive
fundamentals which are key to earnings growth and stock price appreciation.
The backdrop of low inflation, low interest rates, and modest economic
growth was favorable for growth stock investing, especially during the first
nine months of the year. In the first half, the Portfolio enjoyed strong
performance in many consumer cyclical stocks, such as Bed Bath & Beyond,
Lowe's, and Home Depot, as home- related goods began to show signs of
improvement. Also posting solid gains during the first half was our top
consumer sector holding, HFS, which announced its acquisition of Avis, adding
to its stable of famous brand names. The stronger consumer stocks during this
period were Nike and Nine West Group. Financial stocks also outperformed in the
first quarter, but then weakened in the second due to a strong employment
report, the volatile bond market, and a credit quality scare.
HMOs were out of favor for most of 1996, as investors shifted their focus
away from the more defensive areas. There was considerable weakness in such
bellwether names as United HealthCare, especially during the summer correction.
Although this company preannounced disappointing second quarter earnings, we
believed the sell off was overdone, and that the longer-term fundamentals
remained favorable. Other areas of health care, by contrast, had much stronger
performance, namely the medical device companies Medtronic and Guidant.
Edmund Spelman
Rudy Carryl
Eileen Cook
Robert Centrella
Portfolio Managers
MacKay-Shields
Financial Corporation
10
<PAGE> 12
MAINSTAY VP
CAPITAL APPRECIATION PORTFOLIO CONT'D.
As the market grappled with excess capacity, inventory adjustments, and
weaker PC demand, only select technology stocks outperformed during the first
half of 1996. Although commodity-oriented plays like Lam Research and Seagate
Technology did not do well, Intel, Sun Microsystems, and Oracle finished the
first half with notably strong performances.
In the third quarter, after the July correction, the Portfolio followed up a
good August with an especially robust September. Technology showed strength
across the board with Intel leading the way, followed by other top performers
such as 3Com, Cisco Systems, and Computer Associates International. Technology
winners in the fourth quarter included Seagate Technology, Intel, Microsoft,
3Com and Sterling Commerce. But value investing came back into favor while
growth stocks took a breather in the fourth quarter, and the technology sector
gave back some of its gains. Meanwhile, Computer Associates and Electronic Data
Systems announced lower than expected earnings forecasts.
The financial sector, especially non-bank issues, was the strongest sector
in the second half of 1996. Travelers Group, MGIC Investment, Green Tree
Financial and SunAmerica posted solid gains. Consumer stocks were strong
performers in the third quarter, but consumer cyclicals were the worst
performing group in the fourth quarter. (Black and Decker, which preannounced
an earnings shortfall, has subsequently been sold.) Retailers were especially
weak. Selected stocks which added value during this difficult quarter included
WorldCom, Tyco International, and Tidewater.
Looking at the year as a whole, the stocks which had the greatest positive
impact on the Portfolio included SunAmerica, Intel, 3Com, HFS, Abacan
Resources, and Nike. Among the worst performers were United HealthCare, Humana
(which we are eliminating), and Lam Research. Our best strategic decision (in
the context of being a bottom up stock selector) was our overweighting in the
financial sector and our emphasis on large capitalization, well-known companies
such as Intel, Microsoft, and 3Com. Other strong contributors were WorldCom,
Medtronic, and Guidant.
As we enter 1997, we envision a decent year for growth equities. Our view
assumes a continuation of modest economic growth but at an even slower pace
will lend some support to stocks in general and growth equities in particular,
where earnings will likely grow at a faster rate than corporate America as a
whole.
11
<PAGE> 13
MAINSTAY VP
CASH MANAGEMENT PORTFOLIO
The MainStay VP Cash Management Portfolio had a return of 4.95% for the twelve
months ended December 31, 1996, exceeding the average Lipper* money market fund
return of 4.81%, and ranking the Portfolio 57th out of 104 funds.
The objective of this Portfolio is to provide a level of
income consistent with preservation of capital. During 1996, we managed this
Portfolio using our conservative approach which kept the average days to
maturity in a narrow range of 33 to 63 days, shifting at opportune times in
order to maximize yield. The year was interesting in that the money market
asset class outperformed all other domestic investment grade bond asset
classes. We achieved competitive performance while maintaining our low risk
profile.
Looking ahead, we plan to stick to our conservative but innovative strategy,
and we believe that we can continue to meet the objectives of our most
conservative investors.
* Lipper Analytical Services, Inc., is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies. There can be no assurance that the Portfolio will be able to
maintain a stable net asset value of $1.00 per share nor is the value of the
Portfolio's shares insured or guaranteed by the U.S. Government.
Total returns 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 page 5
for returns reflective of these charges.
Ravi Akhoury
Frank Salem
Jessica Terc
Portfolio Managers
MacKay-Shields
Financial Corporation
12
<PAGE> 14
MAINSTAY VP
CONVERTIBLE PORTFOLIO
The MainStay VP Convertible Portfolio was launched on October 1, 1996. Our
objective in the Convertible Portfolio is to provide the opportunity for
participation in some of the upside potential of the underlying equity security
while at the same time offering much of the downside protection afforded by the
convertible bond with its income component, which helps to cushion the
downside. Our approach uses convertible bonds as a means to attain exposure to
the equity markets while emphasizing the protection of principal through
holding in many cases the convertible bonds instead of the common stock. We
emphasize convertible bonds with the best risk/reward profile, enhancing the
timeliness of purchases with proprietary quantitative screening techniques.
Moreover, we seek to control risk by diversifying among sectors and securities,
and we rigorously adhere to a strict and proven sell discipline. Our focus on
the equity markets provides an excellent gauge for the valuation of convertible
bond securities.
During the fourth quarter, the Portfolio's first quarter of operation, we
retained large cash positions throughout most of the period as we adhered to
our strict selection criteria. Specifically in the fourth quarter, we acquired
Microsoft preferred, a new issue. Another example of a fourth quarter purchase
which met our strict criteria was Host Marriott Financial Trust, which will
benefit from the favorable supply demand dynamics in the luxury segment of the
lodging industry. The Host Marriott Financial Trust convertible with a 6.75%
yield will give us downside protection should the fundamentals deteriorate, and
the 23% conversion premium should allow participation in 70% of the upside of
the stock. Despite our significant cash position, there were several noteworthy
performers during the quarter. Specifically, Loral Space Communications (a
manufacturer of satellites spun-off from Loral), Cox Communications (a cable
company), and Nabors Industries (a driller) provided a significant portion of
these gains.
Going forward, we continue to hold a significant stake in Loral, with
additional holdings in Hollinger International (the newspaper publisher).
Nevertheless, should 1997 prove to be a volatile year, we are conservatively
positioned to offer downside protection as well as upside potential. Looking
ahead, we are finding attractive opportunities in utilities (high dividends and
low valuations) selected technology, and select foreign convertibles (which are
dollar denominated, eliminating the currency risk).
Denis Laplaige
Neil Feinberg
Thomas Wynn
Portfolio Managers
MacKay-Shields
Financial Corporation
13
<PAGE> 15
MAINSTAY VP
GOVERNMENT PORTFOLIO
[CHART]
<TABLE>
Lehman Bros
Government Gov't Index CPI
<S> <C> <C> <C>
1/29/93........ 10000.00 10000.00 10000.00
12/31/93........ 10563.00 10914.00 10275.00
12/31/94........ 10368.64 10546.20 10549.34
12/31/95........ 12102.28 12480.37 10785.65
12/31/96........ 12378.21 12826.08 11142.65
</TABLE>
$10,000 Invested in the MAINSTAY VP GOVERNMENT
PORTFOLIO on 1/29/93 vs Lehman Brothers Government Index and the Consumer Price
Index
Government
Portfolio
Lehman Brothers Government Index
Consumer Price Index
* Lipper Analytical Services, Inc., is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies.
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 incomes and capital gains
distributions.
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 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 page 5 for returns reflective of these
charges.
Average Annual
Total Return
as of 12/31/96
.........................
1 Year
2.28%
3 Years
5.43%
Since Inception 1/29/93
5.59%
.........................
The MainStay VP Government Portfolio had a 1996 calendar return of 2.28%,
performing in line with the average government bond fund in the Lipper*
variable products universe, which returned 2.30% over the same period, ranking
our Portfolio 19th out of 33 funds. The Government Portfolio seeks to provide
a high level of current income consistent with high quality and preservation of
capital. Our approach focuses on identifying value among government and
mortgage related sectors of the market, and making modest maturity adjustments
taking into account the level and direction of interest rates, in order to take
advantage of interest rate movements.
1996 was yet another disappointing year for bondholders. Returns have been
negative without the fourth quarter bond rally and overall returns did not earn
the coupon and did not compete with the return on money market funds, much less
the juicy returns offered by the stock market or by alternative asset classes
(high yield, for example). Bond mutual funds languished. We remain of the firm
opinion that investors should continue to build diversified portfolios, because
when the business cycle turns, this asset class will once again return to
favor, undoubtedly when it is least expected.
During the first quarter, the Government Portfolio had a negative return as
interest rates rose. But although it was challenging to add value through
duration adjustments in this time period (a measure of weighted average
maturity which measures the sensitivity of the portfolio to a move in interest
rates), our security selection was an important component of return. In the
volatile markets of February and March, liquidity was at a premium and that led
to stronger returns for new Treasury issues. As the second quarter progressed,
we sold our new Treasury issues and bought the older issues. With the backup in
interest rates, mortgage securities under performed Treasuries and we used this
opportunity to increase our exposure.
In the second quarter, our slightly short of neutral duration, as well as
our security selection in the Treasury and mortgage market, all added to our
performance. Later in the quarter, we moved out the duration a bit longer than
the market. In the mortgage market, we continued to add high yielding, high
quality short-term mortgage assets. We began the third quarter overweighted in
the mortgage sector, which, combined with agency guaranteed collateralized
mortgage obligations, outperformed similar duration Treasuries and therefore
contributed positively to performance. In the third quarter, the market's
rebound in September helped to offset the rise in rates earlier in the quarter.
Mortgage related securities added significant value during the year, because
prepayments were tame, which had the effect of bidding prices higher, and
making spreads less volatile. We concentrated on seasoned high coupon
mortgages, which performed well.
Looking ahead, we continue to believe that in the absence of any pronounced
trend, the market will trade in a range of 6.5% to 7.5% for the long bond, and
we will continue to manage the duration in a neutral range unless and until the
economy heads more definitively toward strength or weakness, and with it, moves
the bond market.
Ravi Akhoury
Edward Munshower
Christopher Harms
Portfolio Managers
MacKay-Shields
Financial Corporation
14
<PAGE> 16
MAINSTAY VP
HIGH YIELD CORPORATE BOND PORTFOLIO
[CHART]
<TABLE>
High Yield
Corp. Bond CPI S&P 500
<S> <C> <C> <C>
5/1/95....... 10000.00 10000.00 10000.00
12/31/95....... 11006.00 10102.00 12179.00
12/31/96....... 12894.63 10436.38 14972.86
</TABLE>
$10,000 Invested in the MAINSTAY VP HIGH YIELD CORPORATE BOND PORTFOLIO on
5/1/96 vs S&P 500 and the Consumer Price Index
High Yield Corporate Bond
Portfolio
S&P 500
Consumer Price Index
* Lipper Analytical Services, Inc., is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies. The average Lipper fund's performance for the Value, High Yield
Corporate Bond and International Equity Portfolios are not available from
5/1/95, but rather from 5/31/95 through 12/31/95.
The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
"Standard and Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The MainStay VP
Series Fund, Inc. is neither sponsored by nor affiliated with 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.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns 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 page 5 for returns reflective of these
charges.
Average Annual Total
Return as of 12/31/96
.........................
1 Year
17.16%
Since Inception 5/1/95
16.44%
.........................
The MainStay VP High Yield Corporate Bond Portfolio enjoyed strong performance
during the year ended December 31, 1996, both in absolute and relative terms,
with a return of 17.16%, substantially in excess of the return of 12.50% of the
average high yield fund in the Lipper* variable products universe. This
performance ranked the fund 3rd out of 42 funds, and placed it in the seventh
percentile.
Our objective in this Portfolio is to provide our investors with a high
level of current income and secondarily, the opportunity for capital
appreciation. Our highly disciplined investment process focuses on the upper
tier, higher quality sectors of the below investment grade market, and seeks
out companies with free cash flow, which allows a company to pay down its debt
quickly, good asset coverage, and a solid competitive position, such as the
monopolistic power of cable. This led us during the year to pick such winners
as Park Communications, which is being acquired by General Media and whose debt
has done well for the past year.
Throughout the year, we maintained our belief that the market did not
represent compelling relative value. Issuance at tight yield spreads over
comparable maturity Treasuries occurred at a near record pace, and the market
was driven by liquidity, as investors perceived the high yield market as "the
only game in town." In anticipation of spreads tightening at some point and
prices declining, we reduced the riskiness of the Portfolio from a credit
standpoint during the year, and refused to violate our strict buy disciplines
in order to reach for yield. This approach resulted in the accumulation of some
cash reserves. Moreover, spreads did not widen during the year, but in fact
tightened even further. Lower quality credits performed especially well.
Despite all of this, the strength of our security selection was strong enough
that we achieved extremely competitive performance, albeit with an especially
low risk profile.
More examples of strong performing issues during the year included Selmer,
Steinway Musical Instrument (a clarinet and piano company) that went public
with an IPO, Gateway 2000, Hosiery Corp. of America, Newflo (an industrial pump
company), Trizec Finance, a real estate company that was taken over by Horsham,
and Microcell Telecommunications, a cellular company.
Looking ahead, in addition to maintaining our defensive posture with cash
reserves, we are underweighted in autos, steels, and metals, and overweighted
in casinos, international cable, and media. We plan to stick with our
conservative strategy in 1997, and are confident that we can continue to meet
the objectives of the Portfolio using our strict approach. Although we have
been early in our defensive posture, the Portfolio is well positioned for the
correction that is inevitable at some point.
Denis Laplaige
Steven Tananbaum
Thomas Hajdukiewicz
Matthew Philo
Portfolio Managers
MacKay-Shields
Financial Corporation
15
<PAGE> 17
MAINSTAY VP
INTERNATIONAL EQUITY PORTFOLIO
[CHART]
<TABLE>
International
Equity CPI EAFE
<S> <C> <C> <C>
5/1/95....... 10000.00 10000.00 10000.00
12/31/95....... 10696.00 10102.00 10520.00
12/31/96....... 11823.36 10436.38 11189.00
</TABLE>
$10,000 Invested in the MAINSTAY VP
INTERNATIONAL EQUITY PORTFOLIO on 5/1/95
vs EAFE Index and the Consumer Price Index
International Equity
Portfolio
EAFE Index
Consumer Price Index
* Lipper Analytical Services, Inc., is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies. The average Lipper fund's performance for the Value, High Yield
Corporate Bond and International Equity Portfolios are not available from
5/1/95, but rather from 5/31/95 through 12/31/95.
** Morgan Stanley Capital International EAFE Index is an unmanaged index of the
securities of over 1,000 companies traded on the markets of Europe, Australia,
New Zealand and the Far East,
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 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 page 5 for returns reflective of these
charges.
Average Annual Total
Return as of 12/31/96
.........................
1 Year
10.54%
Since Inception 5/1/95
10.55%
.........................
The MainStay VP International Equity Portfolio had a return of 10.54% for the
year ended December 31, 1996, lagging the Lipper* international equity average
fund return of 14.54%. This ranked the Portfolio 46th out of 69 international
equity funds in the Lipper universe. This performance, nevertheless, was
superior to that of the Morgan Stanley Capital International EAFE Index**
(Europe, Australia, Far East, which tracks the developed countries outside of
the United States), which had a return of 6.36% for the year ended December 31,
1996.
The objective of this Portfolio is to provide capital accumulation through a
diversified portfolio of core holdings representing quality companies in
developed countries around the world, with a particular emphasis on risk
control and management of the currency risk.
The principal reason for the performance shortfall was our exposure to
Japan, which under performed most other markets last year, and actually had a
negative return. We believed that the market represented an excellent
opportunity at attractive valuation levels, but progress was slower than we had
anticipated, and investors became more negative later in the year. We have
since decided to reduce our exposure to Japan, believing that there are more
attractive opportunities in Europe which will have quicker payoffs.
Nevertheless, there were other components in the Portfolio which had strong
performance during the year.
In the first quarter, we benefited from our investments in Hong Kong and
France. Also, the Portfolio's protection from expensive foreign currencies
which declined against the U.S. dollar also contributed to performance. In the
second quarter, the Portfolio enjoyed significant investments in the three top
equity markets, Spain, Italy and Norway, which rallied on the back of declining
inflation and falling interest rates. Our currency strategy continued to work
well. Only our lack of emerging market exposure was a negative, as Latin
America was a strong performer.
Shigemi Takagi
Portfolio Manager
MacKay-Shields
Financial Corporation
16
<PAGE> 18
MAINSTAY VP
INTERNATIONAL EQUITY PORTFOLIO CONT'D.
In the third quarter, we continued to do well in Hong Kong, but were hurt by
our position in Japan. Finally, during the fourth quarter, especially in
December, Japan under performed as investors seemed to throw in the towel,
giving up all hope of any recovery of the economy.
The Portfolio benefited during the quarter by being invested in many of the
better performing markets, especially in continental Europe where many of the
countries are beginning to emerge from deep recessions. For example, the
Portfolio was invested in Spain (24% gain in local currency terms for the
quarter), which is heavy in utilities and banks, which responded well to lower
interest rates. Rising oil prices were a major positive for the Portfolio's
investments in Norway (15% gain in local return) and the Netherlands (12.7%
gain in local return), which are markets influenced by the energy industry. The
Portfolio's protection of foreign currency gains added to performance as the
Japanese Yen fell another 2.0% against the U.S. dollar. Unfortunately, our
investment in Japan (-7.8% in local currency terms) hurt the Portfolio.
Although we have not given up hope for recovery in Japan and are of the
opinion that the sell off has been clearly overdone, we do believe that the
turnaround may take longer than we had originally anticipated, and that
European markets may offer better opportunities. In the first quarter of 1997,
we are anticipating rising European equity markets due to continued low
interest rates and especially due to corporate restructuring. We have already
begun to scale back on our Japan exposure, and will take further steps to
redeploy some of the Portfolio's assets into more attractive opportunities in
Europe. Within other parts of Asia, we expect markets which are leveraged
suppliers to world economic growth to do well in 1997. The Portfolio will
continue to maintain a pro-active currency defense stance, as we believe that
economic growth and the interest rate differential between the U.S. and the
rest of the G7 countries continue to favor the U.S. dollar.
17
<PAGE> 19
MAINSTAY VP
TOTAL RETURN PORTFOLIO
[CHART]
<TABLE>
Total
Return S&P 500 CPI
<S> <C> <C> <C>
1/29/93....... 10000.00 10000.00 10000.00
12/31/93....... 11504.00 11007.00 10275.00
12/31/94....... 11044.99 11148.99 10549.34
12/31/95....... 14174.04 15338.78 10785.65
12/31/96....... 15886.26 18857.50 11142.65
</TABLE>
$10,000 Invested in the MAINSTAY VP TOTAL RETURN PORTFOLIO on 1/29/93
vs S&P 500 and the Consumer Price Index
Total Return
Portfolio
S&P 500
Consumer Price Index
* Lipper Analytical Services, Inc., is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies.
The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
"Standard and Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The MainStay VP
Series Fund, Inc. is neither sponsored by nor affiliated with 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.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns 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 page 5 for returns reflective of these
charges.
Average Annual
Total Return
as of 12/31/96
.........................
1 Year
12.08%
3 Years
11.36%
Since Inception 1/29/93
12.53%
.........................
The MainStay VP Total Return Portfolio had a return of 12.08% for calendar year
1996, exceeding the 11.35% return of the average balanced fund in the Lipper*
variable products universe. This ranked the Portfolio 15th out of 32 funds.
The Portfolio seeks to provide a combination of capital accumulation and
income oriented toward capital preservation by balancing growth stocks and
investment grade bonds. The equity component provides the engine, whereas the
bond portion provides the anchor.
During the first quarter, the equity component of the Portfolio benefited
from the long awaited improving fundamentals of selected consumer cyclicals.
Health care stocks modestly outperformed the market. Financials outperformed,
despite the rise in interest rates. Technology stocks underperformed, and we
maintained our focus on software, networking, and database management
companies. In the bond component, we increased our exposure to mortgages and
added value through our emphasis on the bank/finance sector in the corporate
bond area.
In the second quarter, the equity portion of the Portfolio was adversely
affected by weakness in health care stocks, especially HMOs, financials, and
technology stocks. There were some notable exceptions, including Intel, Sun
Microsystems, and Oracle. Consumer stocks remained our best performing sector,
led by our top holding, HFS. Other solid gainers included Nike, Mirage Resorts,
CUC International, and Nine West Group. In the bond portion of the Portfolio,
Yankee Bonds were a strong performing group as investors began to take note of
this under-followed sector.
After the July correction, the Total Return Portfolio followed up a good
August showing with very strong performance in September. We benefited from
solid across-the-board gains in each of our four major sectors during the third
quarter-- technology, consumer, health care, and financials. Technology led
September's surge with strength in 3Com, which reported better than expected
earnings, and Intel. Other strong performers included Cisco Systems, Electronic
Data Systems, and Computer Associates International. The bond portfolio
continued to benefit from sector and security selection.
Finally, in the fourth quarter, as value investing emerged as the newly
favored active approach, growth was relegated to waiting in the wings, and the
equity portion of this Portfolio had to take a breather. In October, only
financials outperformed, while consumer cyclicals and health care witnessed
declines. Technology was mixed. November also brought mixed performance.
December was especially challenging, as only financial and energy stocks
acquitted themselves while all other growth sectors under performed. The worst
performing group was consumer cyclicals. The fixed income portion of the
Portfolio, meanwhile, was a positive contributor to performance during the
quarter as interest rates declined and security and sector selection continued
to provide favorable results. Throughout the year, our moderate approach to
asset allocation added value to the total Portfolio without exposing it to
undue risk. At year-end, the Portfolio was invested approximately 58% in
stocks, 40% in bonds, and 2% in cash.
Looking ahead, we believe that a backdrop of continued low inflation and
moderate economic growth can provide a favorable environment for balanced fund
investing through the use of growth stocks and high quality investment grade
bonds.
Ravi Akhoury
Rudy Carryl
Edmund Spelman
Eileen Cook
Christopher Harms
Portfolio Managers
MacKay-Shields
Financial Corporation
18
<PAGE> 20
MAINSTAY VP
VALUE PORTFOLIO
[CHART]
<TABLE>
Value
Portfolio S&P 500 CPI
<S> <C> <C> <C>
5/1/95....... 10000.00 10000.00 10000.00
12/31/95....... 11676.00 12179.00 12102.00
12/31/96....... 14387.17 14972.86 10436.38
</TABLE>
$10,000 Invested in the MAINSTAY VP VALUE PORTFOLIO on 5/1/95 vs S&P 500
and the Consumer Price Index
Value Portfolio
S&P 500
Consumer Price Index
* Lipper Analytical Services, Inc., is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies. The average Lipper fund's performance for the Value, High Yield
Corporate Bond and International Equity Portfolios are not available from
5/1/95, but rather from 5/31/95 through 12/31/95.
The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
** "Standard and Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The MainStay VP
Series Fund, Inc. is neither sponsored by nor affiliated with 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.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns 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 page 5 for returns reflective of these
charges.
Average Annual Total
Return as of 12/31/96
.........................
1 Year
23.22%
Since Inception 5/1/95
24.33%
.........................
The MainStay VP Value Portfolio achieved a strong return both in absolute and
relative terms of 23.22% for the twelve months ended December 31, 1996, which
exceeded both the Lipper* average growth and income return of 19.97% in their
variable products universe, and also the S&P 500** return of 22.96%. The
Portfolio ranked 21st out of 82 funds in the Lipper universe, which placed it
in the twenty-sixth percentile.
Our value approach to investing seeks the lowest priced stocks based upon
the relationship between the price of the stock and the earnings of the
company. We then identify cash generating companies, eliminate financially weak
companies, and identify catalysts which may cause the price of the stock to
appreciate, including a positive earnings trend, stock buy backs by the
company, inside ownership by officers or employees of the company, a dividend
yield higher than that of the broad market, and restructuring within the
company. It is our goal to manage the Portfolio for capital accumulation but at
the same time to manage downside volatility.
For the first nine months of 1996, the value style of investing was
profitable, but did not advance as far generally as growth portfolios or the
broad market as measured by the S&P 500. The fourth quarter marked an important
inflection point at which the value style of investing began to be recognized
and highly rewarded by the market, and the year ended on an especially strong
note for our Value Portfolio.
During the first half of 1996, sectors traded places as to which would
outperform, as interest rates rose and the economy's growth seemed to
accelerate. During the first quarter, financials, consumer non-durables,
utilities, and health care underperformed, while economically sensitive issues,
such as chemicals, retail, and consumer cyclicals started to outperform during
the quarter. As the second quarter unfolded, the stock market experienced a
rotational correction as the battle of economic acceleration versus inventory
corrections/slowdown took place. This led to a correction in financials,
consumer non- durables, and economically sensitive issues. However, strong
performance was exhibited by the tobacco stocks and retail stocks. The capital
goods/technology sector posted mixed results.
During the correction which occurred in the third quarter, the Value
Portfolio outperformed the average Lipper growth and income fund and the S&P
500 on the downside, specifically in the month of July. The Portfolio also
enjoyed a robust August, but in September, slow growth prospects impacted the
economically sensitive sectors most of all, including commodity chemicals
(Lyondell Petrochemical, Georgia Gulf), retailing, and auto related stocks, all
of which lagged the broad averages. Another round of negative publicity also
hurt tobacco stocks. Nevertheless, we had our share of strong performers,
including financial and consumer non-durable stocks, such as Boatmen's
Bancshares, PNC Bank, Fruit of The Loom Class A, and Kroger. Humana and FHP
International were strong performers. Capital goods also were a plus, namely
IBM and Gateway 2000. Finally, the beginning of the battle between Norfolk
Southern and CSX for Conrail started to take place during the third quarter,
which was positive for the Portfolio.
(Report Continued on pg. 20)
Denis Laplaige
Jeffrey Simon
Matthew Shefler
Judy Secunda
Mark Spellman
Michael Sheridan
Portfolio Managers
MacKay-Shields
Financial Corporation
19
<PAGE> 21
MAINSTAY VP
VALUE PORTFOLIO CONT'D.
The fourth quarter was truly ebullient for the Portfolio, as utilities, HMO's,
energy related stocks, consumer non- durables, and tobacco stocks made
substantial gains. The utilities were led by Long Island Lighting and Niagara
Mohawk Power, as a consolidation theme unfolded. Improved perceptions gave a
boost to WellPoint Health Networks and Aetna in the HMO arena. Energy stocks
were led by Parker & Parsley Petroleum. A diverse group of consumer non-durable
stocks were led by Reebok International, Fruit of The Loom, and American
Brands. Finally, the tobacco stocks experienced strong results with Philip
Morris and RJR Nabisco Holdings leading the way. Areas of relative weakness
included basic materials and retailers. Continuing the free cash
flow/acquisition theme, Long Island Lighting announced a merger with Brooklyn
Union for an approximate $3.0 billion stock swap. Also, Conrail received upward
bid revisions from CSX and Norfolk Southern.
Looking ahead, we expect a continuation of moderately positive economic
trends in the upcoming year. Basic materials and consumer cyclical stocks
continue to be the ones identified by our process as sectors we believe are
best positioned for earnings improvement over the next twelve months. Slower
corporate earnings growth and concerns over potentially rising inflation remain
possible culprits of risk to the stock market. We believe our value process
will prove its worth in these more volatile times as we enter the first year of
a new Presidential cycle, historically a difficult period for stock prices.
20
<PAGE> 22
MAINSTAY VP
BOND PORTFOLIO
[CHART]
Bond
Portfolio Merrill CPI
<TABLE>
<S> <C> <C> <C>
1/23/84 ....... 10000.00 10000.00 10000.00
12/31/84 ....... 11028.00 11422.00 10365.00
12/31/85 ....... 13370.35 13583.04 10758.87
12/31/86 ....... 15532.33 15706.07 10877.22
12/31/87 ....... 17636.96 16035.90 11359.08
12/31/88 ....... 17390.05 17273.87 11861.15
12/31/89 ....... 19396.86 19714.67 12412.69
12/31/90 ....... 20948.61 21388.44 13171.11
12/31/91 ....... 24390.46 24787.07 13574.14
12/31/92 ....... 26373.41 26690.71 13967.79
12/31/93 ....... 29379.97 29642.71 14351.91
12/31/94 ....... 28383.99 28673.39 14735.11
12/31/95 ....... 33581.10 34138.54 15065.17
12/31/96 ....... 34269.52 35131.97 15563.83
</TABLE>
$10,000 Invested in the MAINSTAY VP BOND PORTFOLIO on 1/23/84 vs Merrill Lynch
Corporate Government Master Index and the Consumer Price Index
Bond Portfolio
Merrill Lynch Corporate Government Master Index
Consumer Price Index
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.
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 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 page 5 for returns reflective of these
charges.
Average Annual Total
Return as of 12/31/96
.........................
1 Year
2.05%
3 Years
5.26%
5 Years
7.03%
10 Years
8.23%
Since Inception 1/23/84
9.98%
.........................
For the twelve months ended December 31, 1996, the Bond Portfolio registered a
return of 2.05%.
1996 proved to be a very difficult year for bond market investors after
1995's stellar performance. The ten year U.S. Treasury yield rose by 114 basis
points by mid-year, and ended the year 85 basis points higher after a rally in
the fourth quarter.
We began 1996 with many positive expectations priced into the fixed income
market. Investors expected moderate economic growth, an accommodating Federal
Reserve Bank and progress toward a balanced budget in Washington, DC. During
the course of the year this positive sentiment reversed itself as employment
growth fueled concerns of a stronger economy and a restrictive Federal Reserve
Bank. The lack of progress in budget negotiations early in the year and a
warning to the financial markets by Fed Chairman Greenspan late in the year put
added pressure on the market.
During the course of the year the Bond Portfolio's performance was
restricted by weightings along the yield curve, especially an overweighting in
more current long duration U.S. Treasuries which underperformed.
Looking ahead, we expect to see stronger economic growth by the spring of
1997. We will adjust the Portfolio accordingly, seeking to outperform the
market.
Albert R. Corapi, Jr.
Portfolio Manager
New York Life
Insurance Company
21
<PAGE> 23
MAINSTAY VP
GROWTH EQUITY PORTFOLIO
[CHART]
<TABLE>
Growth
Equity S&P 500 CPI
<S> <C> <C> <C>
1/23/84 ....... 10000.00 10000.00 10000.00
12/31/84 ....... 9824.00 10755.00 10365.00
12/31/85 ....... 12162.11 14199.83 10758.87
12/31/86 ....... 12648.60 16833.89 10877.22
12/31/87 ....... 13035.64 17712.62 11359.08
12/31/88 ....... 14791.54 20691.89 11861.15
12/31/89 ....... 18632.91 27216.04 12421.69
12/31/90 ....... 17535.43 26350.57 13171.11
12/31/91 ....... 23472.93 34405.94 13574.14
12/31/92 ....... 26423.47 37051.75 13967.79
12/31/93 ....... 30046.13 40753.22 14351.91
12/31/94 ....... 30406.69 41278.94 14735.11
12/31/95 ....... 39273.28 56791.51 15065.17
12/31/96 ....... 48895.23 69829.55 15563.83
</TABLE>
$10,000 Invested in the MAINSTAY VP GROWTH EQUITY
PORTFOLIO on 1/23/84 vs S&P 500
and the Consumer Price Index
Growth Equity
Portfolio
S&P 500
Consumer Price Index
* Lipper Analytical Services, Inc., is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies.
The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
** "Standard and Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The MainStay VP
Series Fund, Inc. is neither sponsored by nor affiliated with 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.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns 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 page 5 for returns reflective of these
charges.
Average Annual Total
Return as of 12/31/96
.........................
1 Year
24.50%
3 Years
17.62%
5 Years
15.81%
10 Years
14.48%
Since Inception 1/23/84
13.04%
.........................
The Growth Equity Portfolio registered a superb return of 24.5% for the twelve
months ended December 31, 1996, far exceeding the Lipper Growth Fund Average
return of 19.81%* and the S&P 500** return of 22.96%. This marks the fourth
time in the last five years that the Growth Equity Portfolio has outperformed
its peers in the Lipper Growth Fund Average.
Our returns benefitted from exceptional sector selection combined with
strategic stock selection in 1996. First half performance was supported by our
overweighted position in consumer cyclicals such as Price/Costco, Inc. and
Federated Department Stores, Inc. in the retail industry and Marriott
International, Inc. and ITT Corp. in the lodging industry. Second half
performance was led primarily by the energy and financial sectors. Financial
issues such as Chase Manhattan Corp., Allstate Corp. and Republic New York
Corp. appreciated in excess of the market as interest rates began to fall.
Energy stocks such as Halliburton Co., Schlumberger Ltd., and Smith
International, Inc. also provided excellent returns as energy prices increased
throughout the second half of the year. In addition, our timely positioning
into and out of smaller capitalization issues such as Computer Horizons Corp.
in the second quarter enhanced performance.
A key factor in the equity market's strong 1996 performance has been the low
rate of inflation in the economy which has enabled interest rates to remain
favorable and in turn enhance equity valuations. Another factor which supported
stocks in 1996 was the continuation of corporate earnings growth. Record levels
of equity mutual fund inflows and the large volume of mergers and acquisition
activity combined to create a powerful supply/demand environment for stocks.
As we approach 1997, our outlook on the market remains positive, primarily
due to our expectation that continued low inflation will yield a favorable
interest rate environment. Our main concern is decelerating corporate earnings
growth as we enter the seventh year of the current business expansion. In
particular, we see an over extended consumer starting to constrain his spending
and rebuild his balance sheet as evidenced by the recent decrease in consumer
spending figures. Consequently, we believe that outperformance in the coming
year will be highly dependent upon strategic stock selection.
Our strategy for the year ahead entails focusing on sectors in which
earnings growth should remain strong, which includes financials, energy, health
care and selective technology issues. We intend to underweight the more
cyclical areas of the market such as basic materials and consumer cyclicals.
We will continue to employ our successful strategy of investing in quality
growth stocks which sell at reasonable valuations. Within these parameters, we
are always searching for companies with underappreciated assets which should
provide a catalyst for earnings growth in the future.
James Agostisi
Patricia Rossi
Portfolio Managers
New York Life
Insurance Company
22
<PAGE> 24
MAINSTAY VP
INDEXED EQUITY PORTFOLIO
[CHART]
<TABLE>
Index
Equity
Portfolio S&P 500 CPI
<S> <C> <C> <C>
1/23/93 ....... 10000.00 10000.00 10000.00
12/31/93 ....... 10853.00 11008.00 10275.00
12/31/94 ....... 10935.48 11148.99 10549.34
12/31/95 ....... 14969.58 15338.78 10785.65
12/31/96 ....... 18325.76 18857.50 11142.65
</TABLE>
$10,000 Invested in the MAINSTAY VP INDEXED EQUITY PORTFOLIO on 1/29/93 vs S&P
500 and the Consumer Price Index
Indexed Equity
Portfolio
S&P 500
Consumer Price Index
* "Standard and Poor's Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard and Pooris Corporation. The MainStay VP
Series Fund, Inc. is neither sponsored by not affiliated with Standard & Poor's
Corporation. The S&P is an unmanaged index considered generally representative
of the U.S. stock market. Results assume the reinvestment of all income and
capital gains distributions.
** Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies.
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 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 page 5 for returns reflective of these
charges.
Average Annual Total
Return as of 12/31/96
.........................
1 Year
22.42%
3 Years
19.08%
Since Inception 1/29/93
16.71%
.........................
1996 was another stellar year for stocks. Large stocks in particular performed
quite well. This is good news for Indexed Equity Portfolio Investors. The
Portfolio's benchmark -- the Standard and Poor's 500 stock index* -- was one of
the best performing broad market measures in 1996. Funds like the Indexed
Equity Portfolio that are tied to the performance of this index posted
significantly higher returns than the majority of active stock fund managers
for the third year in a row.
The stocks of larger companies earned spectacular returns this year in an
investment environment characterized by strong earnings and low inflation. One
market measure that represents particularly large, blue- chip companies is the
oft-quoted Dow Jones Industrial Index. The DJIA left other market measures
trailing with a remarkable 28.91% gain. The S&P 500 Index* is considerably more
diversified than the Dow, but it too has a greater representation of larger
capitalization companies than most other market measures-and most other mutual
funds. Most mutual funds contain a mix of larger, mid-size, and small-company
stocks. This is a major reason that, as a whole, they underperformed S&P 500
index* funds, including Indexed Equity.
Another reason the Portfolio outperformed the majority of stock mutual funds
is that it had very little cash exposure. Most mutual fund managers keep a
portion of their fund's net assets devoted to cash in order to meet redemption
requests or to be able to respond quickly to new investment opportunities.
Because the objective of the Portfolio is to mirror the performance of the S&P
500 index* - which contains no cash - it was essential to participate in the
bull market in 1996. Of course, in a bear market, this means the Portfolio will
participate fully in market losses as well.
For the year, the Indexed Equity Portfolio tracked its benchmark with a
22.42% gain. This compares to the 22.54% gain earned by its peer group, the
Lipper S&P 500 index fund category. The returns on these funds far exceed the
17.72% return on the Lipper** average diversified U.S. stock fund in 1996. The
indexes have prevailed over longer periods as well. The average annualized
return on the Lipper**average U.S. stock fund over the last five years is
13.07% as compared to a 14.71% return on the Lipper average S&P 500 index fund.
Over the last ten years, the numbers are 12.82% and 14.71%, respectively.
James Mehling
Holly Vinchesi
Portfolio Managers
Monitor Capital
Advisors, Inc.
23
<PAGE> 25
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
ANTHONY W. POLIS
Treasurer
A. THOMAS SMITH III
Secretary
MARC J. CHALFIN
Controller
INVESTMENT ADVISERS
MacKay-Shields Financial Corporation
Monitor Capital Advisors, Inc.
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.
(formerly Chemical Bank)
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
LEGAL COUNSEL
Jorden Burt Berenson & Johnson LLP
24
<PAGE> 26
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE
------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment at net asset
value (Identified Cost:
$88,898,113; $34,862,927;
$12,718,635; $9,406,648;
$81,183,175; $8,238,059;
$61,939,654; $42,200,894;
$13,158,639, respectively).... $ 97,022,945 $ 34,862,901 $ 12,976,783
LIABILITIES:
Liability for mortality and
expense risk charges.......... 305,195 108,803 39,567
------------ ------------ ------------
Total equity................ $ 96,717,750 $ 34,754,098 $ 12,937,216
============ ============ ============
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
Variable accumulation
units outstanding:
6,949,364; 32,708,991;
249,710; 855,087; 6,539,273;
692,262; 5,154,404;
3,377,264; 1,192,662,
respectively............. $ 96,717,750 $ 34,754,098 $ 2,585,046
Equity of New York Life
Insurance and Annuity
Corporation:
Variable accumulation
units outstanding
for the Convertible
Investment
Division: 1,000,000...... -- -- 10,352,170
------------ ------------ ------------
Total equity............. $ 96,717,750 $ 34,754,098 $ 12,937,216
============ ============ ============
Variable accumulation
unit value............... $ 13.92 $ 1.06 $ 10.35
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
ALGER
MAINSTAY VP MAINSTAY VP AMERICAN
GROWTH INDEXED SMALL
EQUITY EQUITY CAPITALIZATION
------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment at net asset value
(Identified Cost:
$33,129,480; $56,034,169;
$1,199,953; $1,550,034;
$2,523,704; $1,562,623;
$1,287,386; $2,764,977;
$792,164, respectively)...... $ 32,001,863 $ 60,653,499 $ 1,197,453
LIABILITIES:
Liability for mortality and
expense risk charges......... 98,411 186,484 1,356
------------ ------------ ------------
Total equity............... $ 31,903,452 $ 60,467,015 $ 1,196,097
============ ============ ============
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
Variable accumulation
units outstanding:
2,276,392; 4,327,291;
125,006; 122,592;
240,533; 149,389;
125,480; 269,333;
80,108, respectively....... $ 31,903,452 $ 60,467,015 $ 1,196,097
============ ============ ============
Variable accumulation
unit value................. $ 14.01 $ 13.97 $ 9.57
============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
26
<PAGE> 27
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP
MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP
GOVERNMENT CORPORATE BOND EQUITY RETURN VALUE BOND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9,142,457 $ 82,084,889 $ 8,249,664 $ 64,901,856 $ 46,605,230 $ 12,727,023
29,443 242,519 27,294 210,212 146,702 41,442
------------ ------------ ------------ ------------ ------------ ------------
$ 9,113,014 $ 81,842,370 $ 8,222,370 $ 64,691,644 $ 46,458,528 $ 12,685,581
============ ============ ============ ============ ============ ============
$ 9,113,014 $ 81,842,370 $ 8,222,370 $ 64,691,644 $ 46,458,528 $ 12,685,581
-- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
$ 9,113,014 $ 81,842,370 $ 8,222,370 $ 64,691,644 $ 46,458,528 $ 12,685,581
============ ============ ============ ============ ============ ============
$ 10.66 $ 12.52 $ 11.88 $ 12.55 $ 13.76 $ 10.64
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
JANUS MORGAN STANLEY
CALVERT FIDELITY FIDELITY JANUS ASPEN EMERGING
SOCIALLY VIP II: VIP: ASPEN WORLDWIDE MARKETS
RESPONSIBLE CONTRAFUND EQUITY-INCOME BALANCED GROWTH EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,532,401 $ 2,559,897 $ 1,562,256 $ 1,285,853 $ 2,792,790 $ 801,791
4,653 3,158 1,503 1,465 2,761 758
------------ ------------ ------------ ------------ ------------ ------------
$ 1,527,748 $ 2,556,739 $ 1,560,753 $ 1,284,388 $ 2,790,029 $ 801,033
============ ============ ============ ============ ============ ============
$ 1,527,748 $ 2,556,739 $ 1,560,753 $ 1,284,388 $ 2,790,029 $ 801,033
============ ============ ============ ============ ============ ============
12.46 $ 10.63 $ 10.45 $ 10.24 $ 10.36 $ 10.00
============ ============ ============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
27
<PAGE> 28
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE(a)
---------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income..................................... $ 61,695 $ 1,135,615 $ 130,516
Mortality and expense risk charges.................. (726,083) (324,977) (38,962)
------------ ------------ ------------
Net investment income (loss).................... (664,388) 810,638 91,554
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments................... 486,600 85,254,960 2,902
Cost of investments sold............................ (404,467) (85,255,180) (2,851)
------------ ------------ ------------
Net realized gain (loss) on investments......... 82,133 (220) 51
Realized gain distribution received................. -- -- 22,531
Change in unrealized appreciation (depreciation) on
investments....................................... 7,874,228 (27) 258,148
------------ ------------ ------------
Net gain (loss) on investments.................. 7,956,361 (247) 280,730
------------ ------------ ------------
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation
retained by Separate Account...................... (8,631) (270) (606)
------------ ------------ ------------
Net increase in total equity resulting from
operations.................................... $ 7,283,342 $ 810,121 $ 371,678
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
ALGER
MAINSTAY VP MAINSTAY VP AMERICAN
GROWTH INDEXED SMALL
EQUITY EQUITY CAPITALIZATION(a)
---------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income..................................... $ 269,488 $ 855,543 $ --
Mortality and expense risk charges.................. (213,996) (393,614) (1,352)
------------ ------------ ------------
Net investment income (loss).................... 55,492 461,929 (1,352)
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments................... 217,409 238,777 13,078
Cost of investments sold............................ (215,047) (204,934) (13,381)
------------ ------------ ------------
Net realized gain (loss) on investments......... 2,362 33,843 (303)
Realized gain distribution received................. 3,899,589 660,493 --
Change in unrealized appreciation (depreciation) on
investments....................................... (956,785) 4,658,706 (2,501)
------------ ------------ ------------
Net gain (loss) on investments.................. 2,945,166 5,353,042 (2,804)
------------ ------------ ------------
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation retained by
Separate Account.................................. (5,191) (10,453) (4)
------------ ------------ ------------
Net increase (decrease) in total equity
resulting from operations..................... $ 2,995,467 $ 5,804,518 $ (4,160)
============ ============ ============
</TABLE>
(a) For the period October 1, 1996 (Commencement of Operations) through December
31, 1996.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
28
<PAGE> 29
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
MAINSTAY VP HIGH YIELD INTERNATIONAL
GOVERNMENT CORPORATE BOND EQUITY
------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income..................................... $ 573,541 $ 3,859,992 $ 400,989
Mortality and expense risk charges.................. (83,465) (537,942) (62,230)
------------ ------------ ------------
Net investment income (loss).................... 490,076 3,322,050 338,759
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments................... 1,484,822 483,940 574,596
Cost of investments sold............................ (1,589,511) (439,697) (543,310)
------------ ------------ ------------
Net realized gain (loss) on investments......... (104,689) 44,243 31,286
Realized gain distribution received................. -- 1,045,061 10,677
Change in unrealized appreciation (depreciation) on
investments....................................... (177,770) 1,034,049 10,409
------------ ------------ ------------
Net gain (loss) on investments.................. (282,459) 2,123,353 52,372
------------ ------------ ------------
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation
retained by Separate Account...................... (704) (11,968) (1,301)
------------ ------------ ------------
Net increase in total equity resulting from $ 206,913 $ 5,433,435 $ 389,830
operations.................................... ============ ============ ============
<CAPTION>
MAINSTAY VP
TOTAL MAINSTAY VP MAINSTAY VP
RETURN VALUE BOND
------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income..................................... $ 1,305,132 $ 546,333 $ 812,105
Mortality and expense risk charges.................. (508,367) (332,109) (104,468)
------------ ------------ ------------
Net investment income (loss).................... 796,765 214,224 707,637
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments................... 893,046 469,189 748,147
Cost of investments sold............................ (825,383) (407,132) (770,277)
------------ ------------ ------------
Net realized gain (loss) on investments......... 67,663 62,057 (22,130)
Realized gain distribution received................. -- 621,260 --
Change in unrealized appreciation (depreciation) on
investments....................................... 2,963,990 4,267,746 (368,463)
------------ ------------ ------------
Net gain (loss) on investments.................. 3,031,653 4,951,063 (390,593)
------------ ------------ ------------
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation
retained by Separate Account...................... (5,906) (9,279) (916)
------------ ------------ ------------
Net increase in total equity resulting from $ 3,822,512 $ 5,156,008 $ 316,128
operations.................................... ============ ============ ============
<CAPTION>
CALVERT FIDELITY FIDELITY
SOCIALLY VIP II: VIP:
RESPONSIBLE CONTRAFUND(a) EQUITY-INCOME(a)
----------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income..................................... $ 32,894 $ -- $ --
Mortality and expense risk charges.................. (10,575) (3,115) (1,504)
------------ ------------ ------------
Net investment income (loss).................... 22,319 (3,115) (1,504)
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments................... 108,666 -- --
Cost of investments sold............................ (106,016) -- --
------------ ------------ ------------
Net realized gain (loss) on investments......... 2,650 -- --
Realized gain distribution received................. 81,014 -- --
Change in unrealized appreciation (depreciation) on
investments....................................... (7,934) 36,193 (367)
------------ ------------ ------------
Net gain (loss) on investments.................. 75,730 36,193 (367)
------------ ------------ ------------
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation retained by
Separate Account.................................. (184) (43) --
------------ ------------ ------------
Net increase (decrease) in total equity $ 97,865 $ 33,035 $ (1,871)
resulting from operations..................... ============ ============ ============
<CAPTION>
JANUS MORGAN STANLEY
JANUS ASPEN EMERGING
ASPEN WORLDWIDE MARKETS
BALANCED(a) GROWTH(a) EQUITY(a)
-----------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income..................................... $ 12,075 $ 12,376 $ 1,324
Mortality and expense risk charges.................. (1,422) (2,724) (750)
------------ ------------ ------------
Net investment income (loss).................... 10,653 9,652 574
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments................... 19,610 2,120 18,001
Cost of investments sold............................ (19,573) (2,122) (18,173)
------------ ------------ ------------
Net realized gain (loss) on investments......... 37 (2) (172)
Realized gain distribution received................. -- -- --
Change in unrealized appreciation (depreciation) on
investments....................................... (1,534) 27,813 9,627
------------ ------------ ------------
Net gain (loss) on investments.................. (1,497) 27,811 9,455
------------ ------------ ------------
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation retained by
Separate Account.................................. (43) (37) (7)
------------ ------------ ------------
Net increase (decrease) in total equity $ 9,113 $ 37,426 $ 10,022
resulting from operations..................... ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
29
<PAGE> 30
STATEMENT OF CHANGES IN TOTAL EQUITY
For the year ended December 31, 1996 and the period
May 1, 1995 (Commencement of Operations) through December 31, 1995
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL APPRECIATION CASH MANAGEMENT
------------------------------- -------------------------------
1996 1995 1996 1995
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................. $ (664,388) $ 17,730 $ 810,638 $ 86,036
Net realized gain (loss) on investments....... 82,133 27,997 (220) (60)
Realized gain distribution received........... -- -- -- --
Change in unrealized appreciation
(depreciation) on investments............... 7,874,228 250,604 (27) --
Decrease attributable to funds of New York
Life Insurance and Annuity Corporation
retained by Separate Account................ (8,631) (466) (270) (176)
------------ ------------ ------------ ------------
Net increase in total equity resulting from
operations................................ 7,283,342 295,865 810,121 85,800
------------ ------------ ------------ ------------
Contributions and withdrawals:
Equity contributions by New York Life
Insurance and Annuity Corporation........... -- -- -- --
Policyowners' premium payments................ 6,695,280 613,994 350,217,192 52,879,690
Policyowners' surrenders...................... (876,617) (19,258) (311,835) 3
Policyowners' annuity and death benefits...... (174,699) -- (89,119) --
Net transfers from (to) Fixed Account......... 320,781 33,040 (2,160,711) (40,722)
Transfers between Investment Divisions........ 72,162,586 10,383,436 (327,243,653) (39,392,668)
------------ ------------ ------------ ------------
Net contributions and withdrawals........... 78,127,331 11,011,212 20,411,874 13,446,303
------------ ------------ ------------ ------------
Increase in total equity.................. 85,410,673 11,307,077 21,221,995 13,532,103
TOTAL EQUITY:
Beginning of period........................... 11,307,077 -- 13,532,103 --
------------ ------------ ------------ ------------
End of period................................. $ 96,717,750 $ 11,307,077 $ 34,754,098 $ 13,532,103
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
TOTAL RETURN VALUE
------------------------------- -------------------------------
1996 1995 1996 1995
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................. $ 796,765 $ 159,502 $ 214,224 $ 28,244
Net realized gain (loss) on investments....... 67,663 6,015 62,057 9,613
Realized gain distribution received........... -- -- 621,260 --
Change in unrealized appreciation
(depreciation) on investments............... 2,963,990 (1,789) 4,267,746 136,591
Decrease attributable to funds of New York
Life Insurance and Annuity Corporation
retained by Separate Account................ (5,906) (266) (9,279) (292)
------------ ------------ ------------ ------------
Net increase (decrease) in total equity
resulting from operations................. 3,822,512 163,462 5,156,008 174,156
------------ ------------ ------------ ------------
Contributions and withdrawals:
Policyowners' premium payments................ 4,782,594 270,670 3,152,430 115,567
Policyowners' surrenders...................... (539,346) (12,611) (375,043) (10,880)
Policyowners' annuity and death benefits...... (18,557) -- (31,082) --
Net transfers from (to) Fixed Account......... (38,671) 44,775 (182,311) 201
Transfers between Investment Divisions........ 49,131,827 7,084,989 33,850,065 4,609,417
------------ ------------ ------------ ------------
Net contributions and withdrawals........... 53,317,847 7,387,823 36,414,059 4,714,305
------------ ------------ ------------ ------------
Increase in total equity.................. 57,140,359 7,551,285 41,570,067 4,888,461
TOTAL EQUITY:
Beginning of period........................... 7,551,285 -- 4,888,461 --
------------ ------------ ------------ ------------
End of period................................. $ 64,691,644 $ 7,551,285 $ 46,458,528 $ 4,888,461
============ ============ ============ ============
</TABLE>
(a) For the period October 1, 1996 (Commencement of Operations) through December
31, 1996.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
30
<PAGE> 31
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CONVERTIBLE GOVERNMENT
------------ -----------------------------
1996(a) 1996 1995
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................... $ 91,554 $ 490,076 $ 125,814
Net realized gain (loss) on investments......... 51 (104,689) 1,438
Realized gain distribution received............. 22,531 -- --
Change in unrealized appreciation
(depreciation) on investments................. 258,148 (177,770) (86,421)
Decrease attributable to funds of New York
Life Insurance and Annuity Corporation
retained by Separate Account.................. (606) (704) (63)
------------ ------------ ------------
Net increase in total equity resulting from
operations.................................. 371,678 206,913 40,768
------------ ------------ ------------
Contributions and withdrawals:
Equity contributions by New York Life
Insurance and Annuity Corporation............. 10,000,000 -- --
Policy owners' premium payments................. 25,163 868,542 34,988
Policyowners' surrenders........................ (3,437) (685,395) (5,368)
Policyowners' annuity and death benefits........ -- (2,576) --
Net transfers from (to) Fixed Account........... 5,137 (2,472) 160
Transfers between Investment Divisions.......... 2,538,675 6,850,594 1,806,860
------------ ------------ ------------
Net contributions and withdrawals............. 12,565,538 7,028,693 1,836,640
------------ ------------ ------------
Increase in total equity.................... 12,937,216 7,235,606 1,877,408
TOTAL EQUITY:
Beginning of period............................. -- 1,877,408 --
------------ ------------ ------------
End of period................................... $12,937,216 $ 9,113,014 $ 1,877,408
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
BOND GROWTH EQUITY
----------------------------- -----------------------------
1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................... $ 707,637 $ 106,909 $ 55,492 $ 24,561
Net realized gain (loss) on investments......... (22,130) 1,005 2,362 12,788
Realized gain distribution received............. -- -- 3,899,589 215,561
Change in unrealized appreciation
(depreciation) on investments................. (368,463) (63,154) (956,785) (170,833
Decrease attributable to funds of New York
Life Insurance and Annuity Corporation
retained by Separate Account.................. (916) (67) (5,191) (179
------------ ------------ ------------ ------------
Net increase in total equity resulting from
operations.................................. 316,128 44,693 2,995,467 81,898
------------ ------------ ------------ ------------
Contributions and withdrawals:
Policy owners' premium payments................. 1,075,713 122,959 1,623,667 76,948
Policyowners' surrenders........................ (170,897) (484) (218,309) (498
Policyowners' annuity and death benefits........ (21,291) -- (54,801) --
Net transfers from (to) Fixed Account........... (251,813) -- 93,346 (552
Transfers between Investment Divisions.......... 9,912,712 1,657,861 24,711,617 2,594,669
------------ ------------ ------------ ------------
Net contributions and withdrawals............. 10,544,424 1,780,336 26,155,520 2,670,567
------------ ------------ ------------ ------------
Increase in total equity.................... 10,860,552 1,825,029 29,150,987 2,752,465
TOTAL EQUITY:
Beginning of period............................. 1,825,029 -- 2,752,465 --
------------ ------------ ------------ ------------
End of period................................... $12,685,581 $ 1,825,029 $ 31,903,452 $ 2,752,465
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP
HIGH YIELD MAINSTAY VP
CORPORATE BOND INTERNATIONAL EQUITY
----------------------------- -------------------------------
1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................... $ 3,322,050 $ 230,146 $ 338,759 $ 32,091
Net realized gain (loss) on investments......... 44,243 8,294 31,286 3,127
Realized gain distribution received............. 1,045,061 41,412 10,677 --
Change in unrealized appreciation
(depreciation) on investments................. 1,034,049 (132,335) 10,409 1,196
Decrease attributable to funds of New York
Life Insurance and Annuity Corporation
retained by Separate Account.................. (11,968) (277) (1,301) (62)
------------ ------------ ------------ ------------
Net increase in total equity resulting from
operations.................................. 5,433,435 147,240 389,830 36,352
------------ ------------ ------------ ------------
Contributions and withdrawals:
Equity contributions by New York Life
Insurance and Annuity Corporation............. -- -- -- --
Policy owners' premium payments................. 6,212,700 283,469 669,296 34,022
Policyowners' surrenders........................ (762,345) (18,337) (127,066) (1,851)
Policyowners' annuity and death benefits........ (62,320) -- -- --
Net transfers from (to) Fixed Account........... 75,022 132 25,429 (91)
Transfers between Investment Divisions.......... 63,927,520 6,605,854 6,538,724 657,725
------------ ------------ ------------ ------------
Net contributions and withdrawals............. 69,390,577 6,871,118 7,106,383 689,805
------------ ------------ ------------ ------------
Increase in total equity.................... 74,824,012 7,018,358 7,496,213 726,157
TOTAL EQUITY:
Beginning of period............................. 7,018,358 -- 726,157 --
------------ ------------ ------------ ------------
End of period................................... $ 81,842,370 $ 7,018,358 $ 8,222,370 $ 726,157
============ ============ ============ =============
</TABLE>
<TABLE>
<CAPTION>
ALGER AMERICAN
MAINSTAY VP SMALL
INDEXED EQUITY CAPITALIZATION
----------------------------- --------------
1996 1995 1996(a)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................... $ 461,929 $ 67,733 $ (1,352)
Net realized gain (loss) on investments......... 33,843 13,374 (303)
Realized gain distribution received............. 660,493 109,107 --
Change in unrealized appreciation
(depreciation) on investments................. 4,658,706 (39,376) (2,501)
Decrease attributable to funds of New York
Life Insurance and Annuity Corporation
retained by Separate Account.................. (10,453) (239) (4)
------------ ------------ ------------
Net increase in total equity resulting from
operations.................................. 5,804,518 150,599 (4,160)
------------ ------------ ------------
Contributions and withdrawals:
Policy owners' premium payments................. 4,036,124 148,405 90,796
Policyowners' surrenders........................ (536,208) (2,608) (2,025)
Policyowners' annuity and death benefits........ (60,199) -- --
Net transfers from (to) Fixed Account........... (142,226) 2,000 5,467
Transfers between Investment Divisions.......... 47,219,415 3,847,195 1,106,019
------------ ------------ ------------
Net contributions and withdrawals............. 50,516,906 3,994,992 1,200,257
------------ ------------ ------------
Increase in total equity.................... 56,321,424 4,145,591 1,196,097
TOTAL EQUITY:
Beginning of period............................. 4,145,591 -- --
------------ ------------ ------------
End of period................................... $ 60,467,015 $ 4,145,591 $ 1,196,097
============ ============ =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
31
<PAGE> 32
STATEMENT OF CHANGES IN TOTAL EQUITY (CONTINUED)
For the year ended December 31, 1996 and the period
May 1, 1995 (Commencement of Operations) through December 31, 1995
<TABLE>
<CAPTION>
CALVERT FIDELITY
SOCIALLY VIP II:
RESPONSIBLE CONTRAFUND
-------------------------------------- --------------
1996 1995 1996(a)
---------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................... $ 22,319 $ 10,729 $ (3,115)
Net realized gain on investments................ 2,650 165 --
Realized gain distribution received............. 81,014 5,463 --
Change in unrealized appreciation (depreciation)
on investments................................ (7,934) (9,699) 36,193
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation retained by
Separate Account.............................. (184) (13) (43)
------------ ------------ ------------
Net increase in total equity resulting from
operations.................................. 97,865 6,645 33,035
------------ ------------ ------------
Contributions and withdrawals:
Policyowners' premium payments.................. 115,702 231 161,508
Policyowners' surrenders........................ (52,684) -- (1,347)
Net transfers from (to) Fixed Account........... (10,686) -- 46,266
Transfers between Investment Divisions.......... 1,190,501 180,174 2,317,277
------------ ------------ ------------
Net contributions and withdrawals............. 1,242,833 180,405 2,523,704
------------ ------------ ------------
Increase in total equity.................... 1,340,698 187,050 2,556,739
TOTAL EQUITY:
Beginning of period............................. 187,050 -- --
------------ ------------ ------------
End of period................................... $ 1,527,748 $ 187,050 $ 2,556,739
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
JANUS MORGAN STANLEY
FIDELITY JANUS ASPEN EMERGING
VIP: ASPEN WORLDWIDE MARKETS
EQUITY-INCOME BALANCED GROWTH EQUITY
-------------- -------------- -------------- --------------
1996(a) 1996(a) 1996(a) 1996(a)
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).................... $ (1,504) $ 10,653 $ 9,652 $ 574
Net realized gain (loss) on investments......... -- 37 (2) (172)
Change in unrealized appreciation (depreciation)
on investments................................ (367) (1,534) 27,813 9,627
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation retained by
Separate Account.............................. -- (43) (37) (7)
------------ ------------ ------------ ------------
Net increase (decrease) in total equity
resulting from operations................... (1,871) 9,113 37,426 10,022
------------ ------------ ------------ ------------
Contributions and withdrawals:
Policyowners' premium payments.................. 57,029 71,053 187,630 70,861
Policyowners' surrenders........................ (3,838) (435) (245) --
Net transfers from Fixed Account................ 19,406 26,917 47,272 2,893
Transfers between Investment Divisions.......... 1,490,027 1,177,740 2,517,946 717,257
------------ ------------ ------------ ------------
Net contributions and withdrawals............. 1,562,624 1,275,275 2,752,603 791,011
------------ ------------ ------------ ------------
Increase in total equity.................... 1,560,753 1,284,388 2,790,029 801,033
TOTAL EQUITY:
Beginning of period............................. -- -- -- --
------------ ------------ ------------ ------------
End of period................................... $ 1,560,753 $ 1,284,388 $ 2,790,029 $ 801,033
============ ============ ============ ============
</TABLE>
(a) For the period October 1, 1996 (Commencement of Operations) through December
31, 1996.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
32
<PAGE> 33
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
NOTE 1-- Organization and Accounting Policies:
- --------------------------------------------------------------------------------
New York Life Insurance and Annuity Corporation LifeStages(SM) Annuity
Separate Account ("Separate Account") was established on November 30, 1994,
under Delaware law by New York Life Insurance and Annuity Corporation, a
wholly-owned subsidiary of New York Life Insurance Company. This account was
established to receive and invest premium payments under Non-Qualified and
Qualified Flexible Premium Variable Retirement Annuity Policies issued by New
York Life Insurance and Annuity Corporation. The non-qualified policies are
designed to establish retirement benefits to provide individuals with
supplemental retirement income. The qualified policies are designed to establish
retirement benefits for individuals who participate in qualified pension, profit
sharing or annuity plans. The policies are distributed by NYLIFE Distributors
Inc. and sold by registered representatives of NYLIFE Securities Inc. and
certain banking institutions which have entered into a distribution agreement
with New York Life Insurance Company. NYLIFE Securities Inc. and NYLIFE
Distributors Inc. are wholly-owned subsidiaries of NYLIFE Inc., which is a
wholly-owned subsidiary of New York Life Insurance Company. The Separate Account
is registered under the Investment Company Act of 1940, as amended, as a unit
investment trust.
The assets of the Separate Account are invested in the shares of the MainStay
VP Series Fund, Inc. (formerly, "New York Life MFA Series Fund, Inc."), The
Alger American Fund, the Acacia Capital Corporation, the Fidelity Variable
Insurance Products Fund, the Fidelity Variable Insurance Products Fund II, the
Janus Aspen Series and the Morgan Stanley Universal Funds, Inc. (collectively,
"Funds"). These assets are clearly identified and distinguished from the other
assets and liabilities of New York Life Insurance and Annuity Corporation.
On October 1, 1996, New York Life Insurance and Annuity Corporation created
seven new Investment Divisions within the Separate Account. These new Investment
Divisions offer the Separate Account seven new Eligible Portfolios to invest in:
the MainStay VP Convertible Portfolio, the Alger American Small Capitalization
Portfolio, the Fidelity VIP II: Contrafund Portfolio, the Fidelity VIP:
Equity-Income Portfolio, the Janus Aspen Balanced Portfolio, the Janus Aspen
Worldwide Growth Portfolio and the Morgan Stanley Emerging Markets Equity
Portfolio.
The Separate Account offers the following eighteen variable Investment
Divisions, with their respective fund portfolios, for Policyowners to invest
premium payments: 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 Socially
Responsible, Fidelity VIP II: Contrafund, Fidelity VIP: Equity-Income, Janus
Aspen Balanced, Janus Aspen Worldwide Growth and Morgan Stanley Emerging Markets
Equity. Each Investment Division of the Separate Account will invest exclusively
in the corresponding Eligible Portfolio.
Initial premium payments received are allocated to the MainStay VP Cash
Management Investment Division until 15 days after the policy issue date.
Thereafter, premium payments will be allocated to the Investment Divisions of
the Separate Account in accordance with the Policyowner's instructions. In
addition, the Policyowner has the option to transfer amounts between the
Investment Divisions of the Separate Account 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 the
Separate Account 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.
33
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--Investments (in 000's):
- --------------------------------------------------------------------------------
At December 31, 1996, the investments of the Separate Account are as follows:
<TABLE>
<CAPTION>
MAINSTAY
MAINSTAY VP VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE
-------------------------------------------------------
<S> <C> <C> <C>
Number of shares........................................ 5,277 34,864 1,264
Identified cost*........................................ $ 88,898 $ 34,863 $ 12,719
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY ALGER
MAINSTAY VP VP AMERICAN
GROWTH INDEXED SMALL
EQUITY EQUITY CAPITALIZATION
-------------------------------------------------------
<S> <C> <C> <C>
Number of shares........................................ 1,718 3,768 29
Identified cost*........................................ $ 33,129 $ 56,034 $ 1,200
</TABLE>
* The cost stated also represents the aggregate cost for Federal income tax
purposes.
Investment activity for the year ended December 31, 1996, was as follows:
<TABLE>
<CAPTION>
MAINSTAY
MAINSTAY VP VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE
-------------------------------------------------------
<S> <C> <C> <C>
Purchases............................................... $ 78,223 $106,561 $ 12,721
Proceeds from sales..................................... 487 85,255 3
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY ALGER
MAINSTAY VP VP AMERICAN
GROWTH INDEXED SMALL
EQUITY EQUITY CAPITALIZATION
-------------------------------------------------------
<S> <C> <C> <C>
Purchases............................................... $ 30,416 $ 52,046 $ 1,213
Proceeds from sales..................................... 217 239 13
</TABLE>
34
<PAGE> 35
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP
MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP
GOVERNMENT CORPORATE BOND EQUITY RETURN VALUE BOND
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of shares.... 953 7,069 774 4,457 3,353 992
Identified cost*.... $ 9,407 $ 81,183 $ 8,238 $ 61,940 $ 42,201 $ 13,159
</TABLE>
<TABLE>
<CAPTION>
JANUS MORGAN STANLEY
CALVERT FIDELITY FIDELITY JANUS ASPEN EMERGING
SOCIALLY VIP II: VIP: ASPEN WORLDWIDE MARKETS
RESPONSIBLE CONTRAFUND EQUITY-INCOME BALANCED GROWTH EQUITY
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of shares.... 864 155 74 87 144 82
Identified cost*.... $ 1,550 $ 2,524 $ 1,563 $ 1,287 $ 2,765 $ 792
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP
MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP
GOVERNMENT CORPORATE BOND EQUITY RETURN VALUE BOND
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of shares.... $ 9,029 $ 74,459 $ 8,055 $ 55,198 $ 37,847 $ 12,037
Identified cost*.... 1,485 484 575 893 469 748
</TABLE>
<TABLE>
<CAPTION>
JANUS MORGAN STANLEY
CALVERT FIDELITY FIDELITY JANUS ASPEN EMERGING
SOCIALLY VIP II: VIP: ASPEN WORLDWIDE MARKETS
RESPONSIBLE CONTRAFUND EQUITY-INCOME BALANCED GROWTH EQUITY
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of shares.... $ 1,459 $ 2,524 $ 1,563 $ 1,307 $ 2,767 $ 810
Identified cost*.... 109 -- -- 20 2 18
</TABLE>
35
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3--Mortality and Expense Risk Charges:
- --------------------------------------------------------------------------------
The Separate Account is charged for administrative services provided and the
mortality and expense risks assumed by New York Life Insurance and Annuity
Corporation. These charges are made daily at an annual rate of 1.40% of the
daily net asset value of each Investment Division. 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.
- --------------------------------------------------------------------------------
NOTE 4 --Distribution of Net Income:
- --------------------------------------------------------------------------------
The Separate Account does 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, transfers, or annuity payments) in
excess of the net premium payments.
36
<PAGE> 37
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
(THIS PAGE INTENTIONALLY LEFT BLANK)
37
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5-- Cost to Policyowners and New York Life Insurance and Annuity
Corporation (in 000's):
- --------------------------------------------------------------------------------
At December 31, 1996, the cost to Policyowners and New York Life Insurance
and Annuity Corporation for accumulation units outstanding, with adjustments
for net investment income, market appreciation (depreciation) and deduction
for expenses is as follows:
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE
------------------------------------------------------
<S> <C> <C> <C>
Cost to Policyowners and New York Life Insurance and
Annuity Corporation (net of withdrawals)............... $ 89,139 $ 33,857 $ 12,565
Accumulated net investment income (loss)................. (647) 897 92
Accumulated net realized gain (loss) on investments and
realized gain distributions received................... 110 -- 23
Unrealized appreciation (depreciation) on investments.... 8,125 -- 258
Decrease attributable to funds of New York Life Insurance
and Annuity Corporation retained by Separate Account... (9) -- (1)
-------- -------- --------
Net amount applicable to Policyowners and New York Life
Insurance and Annuity Corporation...................... $ 96,718 $ 34,754 $ 12,937
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
ALGER
MAINSTAY VP MAINSTAY VP AMERICAN
GROWTH INDEXED SMALL
EQUITY EQUITY CAPITALIZATION
------------------------------------------------------
<S> <C> <C> <C>
Cost to Policyowners (net of withdrawals)................ $ 28,826 $ 54,512 $ 1,200
Accumulated net investment income (loss)................. 80 530 (1)
Accumulated net realized gain on investments and realized
gain distributions received............................ 4,130 817 --
Unrealized appreciation (depreciation) on investments.... (1,128) 4,619 (3)
Decrease attributable to funds of New York Life Insurance
and Annuity Corporation retained by Separate Account... (5) (11) --
-------- -------- --------
Net amount applicable to Policyowners.................... $ 31,903 $ 60,467 $ 1,196
======== ======== ========
</TABLE>
38
<PAGE> 39
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY
VP HIGH MAINSTAY MAINSTAY
MAINSTAY YIELD VP INTER- VP MAINSTAY MAINSTAY
VP CORPORATE NATIONAL TOTAL VP VP
GOVERNMENT BOND EQUITY RETURN VALUE BOND
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cost to Policyowners and New York Life Insurance and
Annuity Corporation (net of withdrawals)............... $ 8,865 $ 76,261 $ 7,795 $ 60,706 $ 41,130 $ 12,325
Accumulated net investment income (loss)................. 616 3,552 371 956 242 815
Accumulated net realized gain (loss) on investments and
realized gain distributions received................... (103) 1,139 45 74 693 (21)
Unrealized appreciation (depreciation) on investments.... (264) 902 12 2,962 4,404 (432)
Decrease attributable to funds of New York Life Insurance
and Annuity Corporation retained by Separate Account... (1) (12) (1) (6) (10) (1)
-------- -------- -------- -------- -------- --------
Net amount applicable to Policyowners and New York Life $ 9,113 $ 81,842 $ 8,222 $ 64,692 $ 46,459 $ 12,686
Insurance and Annuity Corporation...................... ======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
JANUS MORGAN
FIDELITY ASPEN STANLEY
CALVERT FIDELITY VIP: JANUS WORLD- EMERGING
SOCIALLY VIP II: EQUITY- ASPEN WIDE MARKETS
RESPONSIBLE CONTRAFUND INCOME BALANCED GROWTH EQUITY
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cost to Policyowners (net of withdrawals)................ $ 1,424 $ 2,524 $ 1,563 $ 1,275 $ 2,752 $ 790
Accumulated net investment income (loss)................. 33 (3) (2) 11 10 1
Accumulated net realized gain on investments and realized
gain distributions received............................ 89 -- -- -- -- --
Unrealized appreciation (depreciation) on investments.... (18) 36 -- (2) 28 10
Decrease attributable to funds of New York Life Insurance
and Annuity Corporation retained by Separate Account... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net amount applicable to Policyowners.................... $ 1,528 $ 2,557 $ 1,561 $ 1,284 $ 2,790 $ 801
======== ======== ======== ======== ======== ========
</TABLE>
39
<PAGE> 40
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Unit Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in accumulation units for the year ended December 31, 1996 and
the period May 1, 1995 (Commencement of Operations) through December 31,
1995, were as follows:
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL APPRECIATION CASH MANAGEMENT
-------------------------- ---------------------------------
1996 1995 1996 1995
------------------------------------------------------------
<S> <C> <C> <C> <C>
Units issued on contribution by New York Life
Insurance and Annuity Corporation................. -- -- -- --
Units issued on premium payments.................... 508 53 334,902 51,863
Units redeemed on surrenders........................ (65) (2) (297) --
Units redeemed on annuity and death benefits........ (13) -- (85) --
Units issued (redeemed) on net transfers from (to)
Fixed Account..................................... 24 3 (2,060) (40)
Units issued (redeemed) on transfers between
Investment Divisions.............................. 5,544 897 (312,941) (38,633)
------ ---- -------- --------
Net increase...................................... 5,998 951 19,519 13,190
Units outstanding, beginning of period.............. 951 -- 13,190 --
------ ---- ------- --------
Units outstanding, end of period.................... 6,949 951 32,709 13,190
====== ==== ======= =========
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
TOTAL RETURN VALUE
-------------------------- ---------------------------------
1996 1995 1996 1995
------------------------------------------------------------
<S> <C> <C> <C> <C>
Units issued on premium payments.................... 400 24 253 11
Units redeemed on surrenders........................ (44) (1) (30) (1)
Units redeemed on annuity and death benefits........ (2) -- (3) --
Units issued (redeemed) on net transfers from (to)
Fixed Account..................................... (3) 4 (15) --
Units issued on transfers between Investment
Divisions......................................... 4,138 638 2,740 422
------ ----- ------ ----
Net increase...................................... 4,489 665 2,945 432
Units outstanding, beginning of period.............. 665 -- 432 --
------ ----- ------ ----
Units outstanding, end of period.................... 5,154 665 3,377 432
====== ===== ====== ====
</TABLE>
(a) For the period October 1, 1996 (Commencement of Operations) through December
31, 1996.
40
<PAGE> 41
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
MAINSTAY VP MAINSTAY VP HIGH YIELD INTERNATIONAL
CONVERTIBLE GOVERNMENT CORPORATE BOND EQUITY
----------- ------------ -------------- ----------------
1996(a) 1996 1995 1996 1995 1996 1995
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Units issued on contribution by New York Life
Insurance and Annuity Corporation................. 1,000 -- -- -- -- -- --
Units issued on premium payments.................... 2 83 3 528 27 58 3
Units redeemed on surrenders........................ -- (67) (1) (64) (2) (11) --
Units redeemed on annuity and death benefits........ -- -- -- (5) -- -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account..................................... 1 -- -- 6 -- 2 --
Units issued (redeemed) on transfers between
Investment Divisions.............................. 247 661 176 5,426 623 576 64
------ ----- ----- ------ ----- ----- ----
Net increase...................................... 1,250 677 178 5,891 648 625 67
Units outstanding, beginning of period.............. -- 178 -- 648 -- 67 --
------ ---- ---- ------ ----- ----- ----
Units outstanding, end of period.................... 1,250 855 178 6,539 648 692 67
====== ==== ==== ====== ===== ===== ====
</TABLE>
<TABLE>
<CAPTION>
ALGER
AMERICAN
MAINSTAY VP MAINSTAY VP MAINSTAY VP SMALL
BOND GROWTH EQUITY INDEXED EQUITY CAPITALIZATION
----------------- ----------------- ------------------ --------------
1996 1995 1996 1995 1996 1995 1996(a)
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Units issued on premium payments.................... 104 12 126 7 316 13 9
Units redeemed on surrenders........................ (16) -- (17) -- (42) -- --
Units redeemed on annuity and death benefits........ (2) -- (4) -- (5) -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account..................................... (24) -- 7 -- (10) -- 1
Units issued on transfers between Investment
Divisions......................................... 958 161 1,923 234 3,710 345 115
------ ---- ------ ----- ------ ----- -----
Net increase...................................... 1,020 173 2,035 241 3,969 358 125
Units outstanding, beginning of period.............. 173 -- 241 -- 358 -- --
------ ---- ------ ----- ------ ----- -----
Units outstanding, end of period.................... 1,193 173 2,276 241 4,327 358 125
===== ==== ====== ===== ====== ===== =====
</TABLE>
41
<PAGE> 42
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Unit Transactions (in 000's) (Continued):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALVERT FIDELITY FIDELITY
SOCIALLY VIP II: VIP:
RESPONSIBLE CONTRAFUND EQUITY-INCOME
-------------------------- -------------- --------------
1996 1995 1996(a) 1996(a)
------------------------------------------------------------
<S> <C> <C> <C> <C>
Units issued on premium payments.................... 10 -- 16 5
Units redeemed on surrenders........................ (4) -- -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account..................................... (1) -- 4 2
Units issued on transfers between Investment
Divisions......................................... 101 17 221 142
---------- ---------- ---------- ----------
Net increase...................................... 106 17 241 149
Units outstanding, beginning of period.............. 17 -- -- --
---------- ---------- ---------- ----------
Units outstanding, end of period.................... 123 17 241 149
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
JANUS MORGAN STANLEY
JANUS ASPEN EMERGING
ASPEN WORLDWIDE MARKETS
BALANCED GROWTH EQUITY
-------- --------- --------------
1996(a) 1996(a) 1996(a)
-----------------------------------------
<S> <C> <C> <C>
Units issued on premium payments.................... 7 18 7
Units issued on net transfers from Fixed Account.... 2 5 --
Units issued on transfers between Investment
Divisions......................................... 116 246 73
---------- ---------- ----------
Net increase...................................... 125 269 80
Units outstanding, beginning of period.............. -- -- --
---------- ---------- ----------
Units outstanding, end of period.................... 125 269 80
============ ============ ============
</TABLE>
(a) For the period October 1, 1996 (Commencement of Operations) through December
31, 1996.
42
<PAGE> 43
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
(THIS PAGE INTENTIONALLY LEFT BLANK)
43
<PAGE> 44
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 7--Selected Per Unit Data+:
- --------------------------------------------------------------------------------
The following table presents selected per accumulation unit income and
capital changes (for an accumulation unit outstanding throughout each
period) with respect to each Investment Division of the Separate Account:
<TABLE>
<CAPTION>
MAINSTAY VP
CAPITAL APPRECIATION
-----------------------
1996 1995(a)
----------------------
<S> <C> <C>
Unit value, beginning of period....................................... $11.89 $10.00
Net investment income (loss).......................................... (0.17) 0.06
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... 2.20 1.83
------ ------
Unit value, end of period............................................. $13.92 $11.89
====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP
INTERNATIONAL EQUITY
-----------------------
1996 1995(a)
----------------------
<S> <C> <C>
Unit value, beginning of period....................................... $10.90 $10.00
Net investment income................................................. 0.87 1.36
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... 0.11 (0.46)
Unit value, end of period............................................. $11.88 $10.90
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP
INDEXED EQUITY
-----------------------
1996 1995(a)
----------------------
<S> <C> <C>
Unit value, beginning of period....................................... $11.58 $10.00
Net investment income (loss).......................................... 0.21 0.62
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... 2.18 0.96
------ ------
Unit value, end of period............................................. $13.97 $11.58
====== ======
</TABLE>
+ Per unit data based on average monthly units outstanding during the period.
(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.
44
<PAGE> 45
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
LIFESTAGES(SM) ANNUITY SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CASH MANAGEMENT CONVERTIBLE
------------------- -----------
1996 1995(a) 1996(b)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Unit value, beginning of period....................................... $ 1.03 $ 1.00 $10.00
Net investment income (loss).......................................... 0.04 0.02 0.08
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... (0.01) 0.01 0.27
------- ------- ------
Unit value, end of period............................................. $ 1.06 $ 1.03 $10.35
======== ======== ======
<CAPTION>
MAINSTAY VP
MAINSTAY VP HIGH YIELD
GOVERNMENT CORPORATE BOND
------------------- -------------------
1996 1995(a) 1996 1995(a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period....................................... $10.57 $10.00 $10.83 $10.00
Net investment income (loss).......................................... 0.86 2.49 1.02 1.15
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... (0.77) (1.92) 0.67 (0.32)
------ ------- ------ ------
Unit value, end of period............................................. $10.66 $10.57 $12.52 $10.83
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
TOTAL RETURN VALUE
------------------- -------------------
1996 1995(a) 1996 1995(a)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period....................................... $11.36 $10.00 $11.32 $10.00
Net investment income ................................................ 0.27 0.79 0.11 0.20
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... 0.92 0.57 2.33 1.12
------ ------ ------- -------
Unit value, end of period............................................. $12.55 $11.36 $13.76 $11.32
====== ====== ====== ======
<CAPTION>
MAINSTAY VP MAINSTAY VP
BOND GROWTH EQUITY
------------------- -------------------
1996 1995(a) 1996 1995(a)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period....................................... $10.57 $10.00 $11.42 $10.00
Net investment income ................................................ 0.99 2.16 0.05 0.35
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... (0.92) (1.59) 2.54 1.07
------- ------- ------- -------
Unit value, end of period............................................. $10.64 $10.57 $14.01 $11.42
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
ALGER
AMERICAN CALVERT FIDELITY
SMALL SOCIALLY VIP II:
CAPITALIZATION RESPONSIBLE CONTRAFUND
-------------- --------------------- -----------
1996(b) 1996 1995(a) 1996(b)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period....................................... 0.00 $ 11.22 $ 10.00 $ 10.00
Net investment income (loss).......................................... 0.02) 0.35 1.60 (0.03)
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... (0.41) 0.89 (0.38) 0.66
----- ------ ------ ------
Unit value, end of period............................................. $9.57 $ 12.46 $ 11.22 $ 10.63
===== ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
MORGAN
JANUS STANLEY
FIDELITY JANUS ASPEN EMERGING
VIP: ASPEM WORLDWIDE MARKETS
EQUITY-INCOME BALANCED GROWTH EQUITY
------------- ------- --------- -------
1996(b) 1996(b) 1996(b) 1996(b)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period....................................... 10.00 $ 10.00 $ 10.00 $ 10.00
Net investment income (loss).......................................... (0.02) 0.17 0.08 0.02
Net realized and unrealized gains (losses) on security transactions
and realized capital gain distributions received (includes the
effect of capital share transactions)............................... 0.47 0.07 0.28 (0.02)
---- ------ ------ ------
Unit value, end of period............................................. $10.45 $ 10.24 $ 10.36 $ 10.00
===== ======= ======= =======
</TABLE>
45
<PAGE> 46
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors of New York Life Insurance and
Annuity Corporation and the LifeStages(SM) Annuity Policyowners:
In our opinion, the accompanying statement of assets and liabilities and the
related statement of operations, the statement of changes in total equity and
the selected per unit data present fairly, in all material respects, the
financial position of the New York Life Insurance and Annuity Corporation
LifeStages(SM) Annuity Separate Account comprised of the MainStay VP Capital
Appreciation Investment Division, MainStay VP Cash Management Investment
Division, MainStay VP Convertible Investment Division, MainStay VP Government
Investment Division, MainStay VP High Yield Corporate Bond Investment Division,
MainStay VP International Equity Investment Division, MainStay VP Total Return
Investment Division, MainStay VP Value Investment Division, MainStay VP Bond
Investment Division, MainStay VP Growth Equity Investment Division, MainStay VP
Indexed Equity Investment Division, Alger American Small Capitalization
Investment Division, Calvert Socially Responsible Investment Division, Fidelity
VIP II: Contrafund Investment Division, Fidelity VIP: Equity-Income Investment
Division, Janus Aspen Balanced Investment Division, Janus Aspen Worldwide Growth
Investment Division, and Morgan Stanley Emerging Markets Equity Investment
Division at December 31, 1996, the results of its operations for the year then
ended (for the MainStay VP Convertible Investment Division, the Alger American
Small Capitalization Investment Division, the Fidelity VIP II: Contrafund
Investment Division, the Fidelity VIP: Equity-Income Investment Division, the
Janus Aspen Balanced Investment Division, the Janus Aspen Worldwide Growth
Investment Division and the Morgan Stanley Emerging Markets Equity Investment
Division for the period October 1, 1996 (commencement of operations) through
December 31, 1996), the changes in its total equity and the selected per unit
data for the period presented in conformity with generally accepted accounting
principles. 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 audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards 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 audit, which included confirmation of investments at
December 31, 1996, with the MainStay VP Series Fund, Inc., The Alger American
Fund, the Acacia Capital Corporation, the Fidelity Variable Insurance Products
Fund, the Fidelity Variable Insurance Products Fund II, the Janus Aspen Series,
and the Morgan Stanley Universal Funds, Inc., provides a reasonable basis for
the opinion expressed above.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York
February 19, 1997
46
<PAGE> 47
(THIS PAGE INTENTIONALLY LEFT BLANK)
47
<PAGE> 48
MAINSTAY VP SERIES FUND, INC.
- --------------------------------------------------------------------------------
To Policyowners:
The assets of NYLIAC Variable Universal Life Separate Account I, NYLIAC
Variable Annuity Separate Account I, NYLIAC Variable Annuity Separate Account
II, NYLIAC LifeStages(SM) Separate Account, 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. (formerly New York Life MFA Series Fund, Inc.). In addition, the
assets of NYLIAC Variable Annuity Separate Account I, NYLIAC Variable Annuity
Separate Account II, NYLIAC Variable Universal Life Separate Account I and
NYLIAC LifeStages(SM) Separate Account may be invested in Acacia Capital
Corporation, the Alger American Fund, Fidelity Variable Insurance Products Fund,
Fidelity Variable Insurance Products Fund II, the Janus Aspen Series, and the
Morgan Stanley Universal Funds Inc., 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
February 22, 1996, executive officers of the Fund were elected. On December 30,
1996, a dividend distribution was paid to NYLIAC Variable Universal Life
Separate Account I, NYLIAC Variable Annuity Separate Account I, NYLIAC Variable
Annuity Separate Account II, NYLIAC LifeStages(SM) Separate Account, 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. Kernan, Jr.
------------------------
Richard M. Kernan, Jr.
Chairman of the Board
and Chief Executive Officer
MAINSTAY VP SERIES FUND, INC.
48
<PAGE> 49
MAINSTAY VP SERIES FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (95.4%)+
SHARES VALUE
-----------------------
<S> <C> <C>
AUTO PARTS (0.9%)
Lear Seating Corp. (a)........... 137,500 $ 4,692,187
------------
BANKS (2.2%)
NationsBank Corp. ............... 55,500 5,425,125
Wells Fargo & Co. ............... 20,566 5,547,678
------------
10,972,803
------------
BROKERAGE (1.1%)
Schwab (Charles) Corp. .......... 170,400 5,452,800
------------
BUILDINGS (0.7%)
Oakwood Homes Corp. ............. 158,000 3,614,250
------------
COMPUTER SERVICES (0.7%)
SABRE Group Holdings Inc. Class
A............................... 122,000 3,400,750
------------
COMPUTERS & OFFICE EQUIPMENT
(6.0%)
Alco Standard Corp. ............. 146,400 7,557,900
Danka Business Systems PLC ADR
(b)............................. 128,500 4,545,687
Hewlett-Packard Co. ............. 114,000 5,728,500
Seagate Technology (a)........... 126,600 5,000,700
Sun Microsystems (a)............. 281,600 7,233,600
------------
30,066,387
------------
CONSUMER DURABLES (1.5%)
Black & Decker Corp. ............ 62,700 1,888,837
Harley-Davidson, Inc. ........... 123,900 5,823,300
------------
7,712,137
------------
CONSUMER FINANCIAL
SERVICES (1.2%)
First Data Corp. ................ 171,600 6,263,400
------------
CONSUMER SERVICES (2.2%)
CUC International Inc. (a)....... 216,600 5,144,250
Service Corp. International...... 206,400 5,779,200
------------
10,923,450
------------
CREDIT & FINANCE (0.8%)
Equifax Inc. .................... 135,000 4,134,375
------------
DRUGS (7.1%)
Amgen Inc. (a)................... 171,600 9,330,750
Elan Corp. PLC ADR (a)(b)........ 186,000 6,184,500
Genzyme Corp. (a)................ 133,000 2,892,750
Pharmacia & Upjohn, Inc. ........ 115,400 4,572,725
Schering-Plough Corp. ........... 125,200 8,106,700
Teva Pharmaceutical Industries
Ltd. ADR (b).................... 93,000 4,673,250
------------
35,760,675
------------
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
ELECTRONICS (1.1%)
Harman International Industries,
Inc. ........................... 50,000 $ 2,781,250
Vishay Intertechnology, Inc.
(a)............................. 105,861 2,474,501
------------
5,255,751
------------
ENERGY (2.0%)
Abacan Resource Corp. (a)........ 652,000 5,664,250
Triton Energy Ltd. (a)........... 92,400 4,481,400
------------
10,145,650
------------
FINANCIAL SERVICES (13.1%)
Associates First Capital
Corp. .......................... 77,000 3,397,625
Federal National Mortgage
Association..................... 130,800 4,872,300
First USA, Inc. ................. 245,400 8,496,975
Green Tree Financial Corp. ...... 318,400 12,298,200
Household International, Inc. ... 101,300 9,344,925
MGIC Investment Corp. ........... 95,800 7,280,800
SunAmerica Inc. ................. 253,200 11,235,750
Travelers Group Inc. ............ 196,332 8,908,564
------------
65,835,139
------------
FOOD DISTRIBUTOR (0.4%)
Richfood Holdings, Inc. ......... 85,500 2,073,375
------------
HEALTH CARE (8.2%)
Cardinal Health Inc. ............ 90,000 5,242,500
Columbia/HCA Healthcare Corp. ... 172,218 7,017,883
HealthCare COMPARE Corp. (a)..... 94,800 4,017,150
HEALTHSOUTH Corp. (a)............ 195,000 7,531,875
Humana Inc. (a).................. 128,000 2,448,000
OrNda HealthCorp. (a)............ 155,500 4,548,375
PacifiCare Health Systems, Inc.
Class B (a)..................... 38,900 3,316,225
Unison HealthCare Corp. (a)...... 54,000 708,750
United Healthcare Corp. ......... 148,000 6,660,000
------------
41,490,758
------------
INDUSTRIAL (1.4%)
Tyco International Ltd. ......... 130,000 6,873,750
------------
INSURANCE (1.7%)
American International Group,
Inc. ........................... 80,250 8,687,063
------------
LEISURE (0.9%)
Mirage Resorts Inc. (a).......... 209,000 4,519,625
------------
MACHINERY (0.6%)
U.S. Robotics Corp. (a).......... 41,000 2,952,000
------------
MEDICAL EQUIPMENT (6.3%)
Guidant Corp. ................... 147,000 8,379,000
Heartport, Inc. ................. 63,000 1,441,125
Johnson & Johnson................ 173,462 8,629,735
Medtronic, Inc. ................. 136,900 9,309,200
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
49
<PAGE> 50
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
MEDICAL EQUIPMENT (Continued)
Waters Corp. (a)................. 136,000 $ 4,131,000
------------
31,890,060
------------
RESTAURANTS &
LODGING (3.4%)
HFS Inc. (a)..................... 233,000 13,921,750
Lone Star Steakhouse &
Saloon, Inc. (a)................ 118,000 3,156,500
------------
17,078,250
------------
RETAIL (9.6%)
AutoZone, Inc. (a)............... 130,200 3,580,500
Bed Bath & Beyond, Inc. (a)...... 144,000 3,492,000
CompUSA Inc. (a)................. 88,000 1,815,000
Gymboree Corp. (The) (a)......... 50,000 1,143,750
Home Depot, Inc. (The)........... 113,000 5,664,125
Kohl's Corp. (a)................. 158,500 6,221,125
Kroger Co. (a)................... 125,000 5,812,500
Lowe's Cos., Inc. ............... 182,900 6,492,950
Mattel, Inc. .................... 133,000 3,690,750
Safeway Inc. (a)................. 166,500 7,117,875
Staples, Inc. (a)................ 186,200 3,363,238
------------
48,393,813
------------
SOFTWARE (6.7%)
Computer Associates
International, Inc. ............ 235,375 11,709,906
Microsoft Corp. (a).............. 66,400 5,486,300
Oracle Corp. (a)................. 221,000 9,226,750
Sterling Commerce, Inc. ......... 125,482 4,423,241
Sterling Software Inc. (a)....... 85,000 2,688,125
------------
33,534,322
------------
TECHNOLOGY (8.4%)
Cisco Systems, Inc. (a).......... 142,000 9,034,750
Electronic Data Systems Corp. ... 100,400 4,342,300
Intel Corp. ..................... 74,800 9,794,125
Lam Research Corp. (a)........... 69,000 1,940,625
Linear Technology Corp. ......... 81,000 3,553,875
3Com Corp. (a)................... 188,400 13,823,850
------------
42,489,525
------------
TELECOMMUNICATION (0.9%)
Lucent Technologies Inc. ........ 100,000 4,625,000
------------
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES (1.6%)
WorldCom, Inc. (a)............... 305,388 $ 7,959,175
------------
TEXTILE & APPAREL (3.6%)
Nike, Inc. Class B............... 163,800 9,787,050
Nine West Group Inc. (a)......... 127,100 5,894,263
Wolverine World Wide, Inc. ...... 85,500 2,479,500
------------
18,160,813
------------
TRANSPORTATION (1.1%)
Tidewater Inc. .................. 121,000 5,475,250
------------
Total Common Stocks
(Cost $362,179,735)............. 480,432,533
------------
<CAPTION>
SHORT-TERM
INVESTMENT (4.5%)
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
COMMERCIAL PAPER (4.5%)
American Express Credit Corp.
6.55%, due 1/2/97............... $22,434,000 22,434,000
------------
Total Short-Term Investment
(Cost $22,434,000).............. 22,434,000
------------
Total Investments
(Cost $384,613,735) (c)......... 99.9% 502,866,533(d)
Cash and Other Assets,
Less Liabilities................ 0.1 755,379
----- ------------
Net Assets....................... 100.0% $503,621,912
===== ============
</TABLE>
- ------------
(a) Non-income producing securities.
(b) ADR--American Depository Receipt.
(c) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(d) At December 31, 1996 net unrealized appreciation was $118,252,798, 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 $128,366,734 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $10,113,936.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
50
<PAGE> 51
MAINSTAY VP SERIES FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $384,613,735)....... $502,866,533
Cash................................... 908
Receivables:
Investment securities sold........... 1,268,344
Fund shares sold..................... 918,634
Dividends and interest............... 119,802
Other assets........................... 888
------------
Total assets..................... 505,175,109
------------
LIABILITIES:
Payables:
Investment securities purchased...... 1,176,174
Adviser.............................. 152,375
Administrator........................ 42,326
NYLIAC............................... 41,060
Custodian............................ 5,493
Directors............................ 194
Accrued expenses....................... 135,575
------------
Total liabilities................ 1,553,197
------------
Net assets applicable to
outstanding shares................... $503,621,912
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 50 million shares authorized.. $ 273,931
Additional paid-in capital............. 392,246,305
Accumulated undistributed net
investment income.................... 679
Accumulated net realized loss
on investments....................... (7,151,801)
Net unrealized appreciation
on investments....................... 118,252,798
-----------
Net assets applicable to
outstanding shares................... $503,621,912
============
Shares of capital stock outstanding.... 27,393,060
============
Net asset value per share
outstanding.......................... $ 18.39
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 1,770,842
Interest............................. 1,273,302
------------
Total income..................... 3,044,144
------------
Expenses:
Advisory............................. 1,341,804
Administration....................... 745,446
Shareholder communication............ 334,148
Recordkeeping........................ 241,301
Professional......................... 86,923
Custodian............................ 39,195
Directors............................ 17,294
Miscellaneous........................ 6,102
------------
Total expenses
before reimbursement........... 2,812,213
Expense reimbursement from
Administrator........................ (91,333)
------------
Net expenses..................... 2,720,880
------------
Net investment income.................. 323,264
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments....... 184,606
Net change in unrealized appreciation
on investments....................... 61,390,345
------------
Net realized and unrealized gain
on investments....................... 61,574,951
------------
Net increase in net assets resulting
from operations...................... $ 61,898,215
===========
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $7,469.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
51
<PAGE> 52
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1996
and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................................................. $ 323,264 $ 966,842
Net realized gain (loss) on investments........................................... 184,606 (4,093,457)
Net change in unrealized appreciation on investments.............................. 61,390,345 52,411,784
------------ ------------
Net increase in net assets resulting from operations.............................. 61,898,215 49,285,169
------------ ------------
Dividends to shareholders:
From net investment income........................................................ (322,585) (967,677)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................................................. 204,401,461 92,210,559
Net asset value of shares issued to shareholders in reinvestment of dividends..... 322,585 967,677
------------ ------------
204,724,046 93,178,236
Cost of shares redeemed........................................................... (7,213,582) (10,959,038)
------------ ------------
Increase in net assets derived from capital share transactions.................. 197,510,464 82,219,198
------------ ------------
Net increase in net assets...................................................... 259,086,094 130,536,690
NET ASSETS:
Beginning of year................................................................... 244,535,818 113,999,128
------------ ------------
End of year......................................................................... $503,621,912 $244,535,818
=========== ===========
Accumulated undistributed net investment income..................................... $ 679 $ --
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1996 1995 1994 1993
--------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period................. $ 15.49 $ 11.45 $ 12.03 $ 10.00
------------ ------------ ------------ ------------
Net investment income.................................. 0.01 0.06 0.05 0.02
Net realized and unrealized gain (loss) on
investments.......................................... 2.90 4.04 (0.58) 2.03
------------ ------------ ------------ ------------
Total from investment operations....................... 2.91 4.10 (0.53) 2.05
------------ ------------ ------------ ------------
Less dividends:
From net investment income........................... (0.01) (0.06) (0.05) (0.02)
------------ ------------ ------------ ------------
Net asset value at end of period....................... $ 18.39 $ 15.49 $ 11.45 $ 12.03
=========== =========== =========== ============
Total investment return (b)............................ 18.75% 35.78% (4.38%) 20.54%
Ratios (to average net assets)/Supplemental Data:
Net investment income................................ 0.09% 0.57% 0.63% 0.46% +
Net expenses......................................... 0.73% 0.73% 0.73% 0.73% +
Expenses (before reimbursement)...................... 0.75% 0.90% 0.91% 1.15% +
Portfolio turnover rate................................ 16% 35% 39% 28%
Average commission rate paid........................... $ 0.0600 (c) (c) (c)
Net assets at end of period (in 000's)................. $ 503,622 $ 244,536 $ 113,999 $ 43,485
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after
September 1, 1995.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
52
<PAGE> 53
MAINSTAY VP SERIES FUND, INC.
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (100.2%)+
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
BANK NOTES (6.3%)
American Express Centurion Bank
5.57%, due 9/12/97 (b)(c)........ $1,000,000 $ 999,927
Bank of America-Illinois
5.82%, due 3/24/97 (c)........... 1,500,000 1,500,000
Boatmens Credit Card Bank
5.54%, due 8/8/97 (b)(c)......... 3,000,000 2,999,656
First National Bank of Maryland
5.13%, due 2/26/97 (c)........... 1,000,000 1,000,037
PNC Bank N.A.-Pittsburgh,
Pennsylvania
5.25%, due 2/6/97 (b)(c)......... 1,000,000 999,938
------------
7,499,558
------------
CERTIFICATES OF DEPOSIT (10.2%)
Deutsche Bank
5.85%, due 11/19/97
(call date 2/19/97) (c).......... 5,000,000 5,000,000
Industrial Bank of Japan
5.61%, due 1/7/97 (c)............ 2,000,000 2,000,003
Sanwa Bank Ltd.
5.56%, due 2/11/97 (c)........... 1,000,000 1,000,011
5.85%, due 1/17/97 (c)........... 4,000,000 4,000,089
------------
12,000,103
------------
COMMERCIAL PAPER (74.2%)
Alfa Corp.
5.75%, due 1/29/97............... 4,400,000 4,380,322
Astro Capital Corp.
5.48%, due 1/6/97 (a)............ 1,500,000 1,498,858
Banca CRT Financial Corp.
5.35%, due 1/14/97............... 2,000,000 1,996,136
5.35%, due 1/15/97............... 1,500,000 1,496,879
5.35%, due 1/21/97............... 1,000,000 997,028
5.40%, due 2/18/97............... 500,000 496,400
5.50%, due 1/14/97............... 170,000 169,662
Bex America Finance Inc.
5.32%, due 2/3/97................ 1,700,000 1,691,710
Caisse Centrale des Banques
Populaires
5.33%, due 1/10/97 (a)........... 4,100,000 4,094,537
Cariplo Finance Inc.
5.45%, due 1/24/97............... 400,000 398,607
China International Marine
Containers (Group) Ltd.
5.57%, due 1/9/97................ 2,500,000 2,496,906
Compagnie Bancaire USA Finance
Corp.
5.33%, due 1/10/97............... 4,700,000 4,693,737
Credito Italiano (DE) Inc.
5.39%, due 4/15/97............... 2,000,000 1,968,858
Galicia Funding Corp.
5.59%, due 3/5/97 (a)............ 2,500,000 2,475,544
Goldman, Sachs & Co.
5.45%, due 1/8/97................ 1,450,000 1,448,463
6.50%, due 1/2/97................ 3,725,000 3,724,327
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Gotham Funding Corp.
5.40%, due 1/9/97 (a)............ $5,500,000 $ 5,493,400
International Securitization Corp.
5.35%, due 1/15/97 (a)........... 3,000,000 2,993,758
Kamehameha Schools-Bishop Estate
5.38%, due 1/15/97 (a)........... 1,000,000 997,908
Kingdom of Sweden
5.65%, due 2/4/97................ 1,105,000 1,099,104
Minmetals Capital & Securities
Inc.
5.39%, due 4/3/97................ 3,000,000 2,958,677
Mitsui & Co. (USA) Inc.
6.00%, due 1/10/97............... 2,500,000 2,496,250
National Fleet Funding Corp.
5.37%, due 1/15/97............... 4,000,000 3,991,647
Nationwide Building Society
5.32%, due 2/24/97............... 2,500,000 2,480,050
5.33%, due 2/24/97............... 1,400,000 1,388,807
Nebraska Higher Education Loan
Program Inc.
5.45%, due 1/13/97............... 1,157,000 1,154,898
Petroleo Brasileiro S.A.-Petrobras
5.42%, due 1/14/97............... 2,000,000 1,996,086
Premium Funding Inc., Series E
5.50%, due 1/13/97 (a)........... 2,150,000 2,146,058
San Paolo U.S. Financial Co.
5.41%, due 2/4/97................ 1,100,000 1,094,380
5.42%, due 3/19/97............... 1,500,000 1,482,611
Sheffield Receivables Corp.
6.50%, due 1/2/97................ 3,000,000 2,999,458
Societe Generale (Canada)
5.40%, due 1/31/97............... 1,800,000 1,791,900
SRD Finance Inc.
5.50%, due 1/23/97............... 3,000,000 2,989,917
Svenska Handelsbanken Inc.
5.45%, due 2/20/97............... 2,000,000 1,984,861
Union Bank of Switzerland
5.90%, due 1/7/97................ 6,000,000 5,994,100
Wood Street Funding Corp.
5.35%, due 1/6/97 (a)............ 2,800,000 2,797,919
Xerox Corp.
6.75%, due 1/2/97................ 3,400,000 3,399,362
------------
87,759,125
------------
FEDERAL AGENCY (2.1%)
Federal Home Loan Bank
5.84%, due 11/24/97 (c).......... 2,500,000 2,500,000
------------
MEDIUM-TERM NOTES (7.4%)
Abbey National Treasury Services
PLC
5.05%, due 3/3/97 (c)............ 3,300,000 3,299,408
Bankers Trust Corp.-New York
5.74%, due 2/14/97 (b)(c)........ 1,500,000 1,500,000
Ford Motor Credit Corp.
5.81%, due 1/5/97 (b)(c)......... 1,000,000 1,000,023
Huntington Bancshares
5.70%, due 3/14/97 (c)........... 1,000,000 1,000,050
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
53
<PAGE> 54
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (CONTINUED)
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
MEDIUM-TERM NOTES (Continued)
Sony Capital Corp.
5.47%, due 8/29/97 (a)(b)(c)..... $2,000,000 $ 2,000,000
------------
8,799,481
------------
Total Short-Term Investments
(Amortized Cost $118,558,267)
(d).............................. 100.2% 118,558,267
Liabilities in Excess of
Cash and Other Assets............ (0.2) (211,345)
------------
Net Assets........................ 100.0% $118,346,922
============
</TABLE>
- ------------
(a) May be sold to institutional investors only.
(b) Floating rate. Rate shown is the rate in effect at December 31, 1996.
(c) Coupon 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.
SHORT-TERM
INVESTMENTS
<TABLE>
<CAPTION>
AMORTIZED
COST PERCENT +
------------------------
<S> <C> <C>
Banks #..................... $ 80,501,362 68.0%
Brokerage................... 5,172,791 4.4
Computers & Office
Equipment................. 3,399,362 2.9
Conglomerates............... 4,496,250 3.8
Consumer Financial
Services.................. 4,991,670 4.2
Education................... 997,908 0.9
Federal Agency.............. 2,500,000 2.1
Finance..................... 15,399,820 13.0
Foreign Government.......... 1,099,104 0.9
------------ ---------
118,558,267 100.2
Liabilities in Excess of
Cash and Other Assets..... (211,345) (0.2)
------------ ---------
Net Assets.................. $118,346,922 100.0%
=========== =========
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
# The Fund 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.
54
<PAGE> 55
MAINSTAY VP SERIES FUND, INC.
CASH MANAGEMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(amortized cost $118,558,267)........ $118,558,267
Cash................................... 21,589
Interest receivable.................... 367,285
Other assets........................... 268
------------
Total assets..................... 118,947,409
------------
LIABILITIES:
Payables:
Adviser.............................. 23,240
NYLIAC............................... 18,338
Administrator........................ 9,296
Custodian............................ 3,029
Directors............................ 45
Accrued expenses....................... 44,793
Dividend payable....................... 501,746
------------
Total liabilities................ 600,487
------------
Net assets applicable to outstanding
shares............................... $118,346,922
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares
authorized........................... $ 1,183,498
Additional paid-in capital............. 117,165,490
Accumulated net realized loss on
investments.......................... (2,066)
------------
Net assets applicable to outstanding
shares............................... $118,346,922
============
Shares of capital stock outstanding.... 118,349,803
============
Net asset value per share
outstanding.......................... $ 1.00
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................. $ 5,319,060
------------
Expenses:
Advisory............................. 240,234
Administration....................... 192,187
Shareholder communication............ 63,697
Recordkeeping........................ 61,266
Professional......................... 31,563
Custodian............................ 20,981
Directors............................ 4,640
Miscellaneous........................ 4,067
------------
Total expenses before
reimbursement.................. 618,635
Expense reimbursement from
Administrator........................ (22,854)
------------
Net expenses..................... 595,781
------------
Net investment income.................. 4,723,279
------------
REALIZED LOSS ON INVESTMENTS:
Net realized loss on investments....... (733)
------------
Net increase in net assets resulting
from operations...................... $ 4,722,546
===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
55
<PAGE> 56
CASH MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1996
and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................................................. $ 4,723,279 $ 3,649,839
Net realized loss on investments.................................................. (733) (949)
------------ ------------
Net increase in net assets resulting from operations.............................. 4,722,546 3,648,890
------------ ------------
Dividends to shareholders:
From net investment income........................................................ (4,723,279) (3,649,839)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................................................. 237,101,140 128,846,016
Net asset value of shares issued to shareholders in reinvestment of dividends..... 4,585,514 3,587,829
------------ ------------
241,686,654 132,433,845
Cost of shares redeemed........................................................... (211,178,343) (115,709,733)
------------ ------------
Increase in net assets derived from capital share transactions.................. 30,508,311 16,724,112
------------ ------------
Net increase in net assets...................................................... 30,507,578 16,723,163
NET ASSETS:
Beginning of year................................................................... 87,839,344 71,116,181
------------ ------------
End of year......................................................................... $118,346,922 $ 87,839,344
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1996 1995 1994 1993
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------
Net investment income................................... 0.05 0.05 0.04 0.02
------------ ------------ ------------ ------------
Less dividends:
From net investment income............................ (0.05) (0.05) (0.04) (0.02)
------------ ------------ ------------ ------------
Net asset value at end of period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =============
Total investment return (b)............................. 4.95% 5.59% 3.82% 2.40%
Ratios (to average net assets)/Supplemental Data:
Net investment income................................. 4.92% 5.44% 3.97% 2.65% +
Net expenses.......................................... 0.62% 0.62% 0.62% 0.62% +
Expenses (before reimbursement)....................... 0.64% 0.94% 0.89% 1.10% +
Net assets at end of period (in 000's).................. $ 118,347 $ 87,839 $ 71,116 $ 26,733
</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.
56
<PAGE> 57
MAINSTAY VP SERIES FUND, INC.
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
CONVERTIBLE SECURITIES (64.3%)+
BONDS (28.7%)
PRINCIPAL
AMOUNT VALUE
----------------------
<S> <C> <C>
BANKS (2.3%)
Banco de Galicia y Buenos Aires
S.A.
7.00%, due 8/1/02................ $ 300,000 $ 352,875
-------------
ELECTRICAL EQUIPMENT (2.1%)
Cypress Semiconductor Corp.
3.15%, due 3/15/01 (b)........... 100,000 107,500
S3, Incorporated
5.75%, due 10/1/03 (b)........... 200,000 218,000
-------------
325,500
-------------
FINANCE (4.5%)
Berkshire Hathaway, Inc.
1.00%, due 12/3/01............... 400,000 369,000
UBS Finance Delaware, Inc.
Medium-Term Note
2.00%, due 12/15/00.............. 350,000 325,500
-------------
694,500
-------------
FOOD, BEVERAGES & TOBACCO (1.5%)
Grand Metropolitan, PLC
6.50%, due 1/31/00 (b)........... 200,000 233,250
-------------
HOUSEHOLD PRODUCTS (2.5%)
Whirlpool Corp.
(zero coupon), due 5/14/11....... 1,000,000 393,750
-------------
OIL SERVICES (2.0%)
Nabors Industries, Inc.
5.00%, due 5/15/06............... 250,000 306,563
-------------
POLLUTION & RELATED (1.6%)
U.S. Filter Corp.
4.50%, due 12/15/01.............. 250,000 253,750
-------------
PUBLISHING (3.4%)
Hollinger, Inc., Series US
(zero coupon), due 10/5/13 (g)... 1,500,000 530,625
-------------
REAL ESTATE (2.6%)
New World China Finance Ltd.
4.00%, due 12/31/99 (b).......... 400,000 399,500
-------------
RETAIL (3.1%)
Home Depot, Inc.
3.25%, due 10/1/01............... 500,000 487,500
-------------
STEEL, ALUMINUM & OTHER METALS
(1.6%)
Inco Ltd.
5.75%, due 7/1/04 (g)............ 200,000 244,250
-------------
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------
<S> <C> <C>
TELECOMMUNICATION
SERVICES (1.5%)
Tele-Communications International,
Inc.
4.50%, due 2/15/06............... $ 300,000 $ 224,250
-------------
Total Bonds
(Cost $4,390,700)................ 4,446,313
-------------
PREFERRED STOCKS (35.6%)
<CAPTION>
SHARES
-----------
<S> <C> <C>
CABLE (2.9%)
Merrill Lynch & Co., Inc.
6.00% (d)........................ 20,000 445,000
-------------
COMPUTERS & OFFICE EQUIPMENT
(4.2%)
Microsoft Corp.
$2.196, Series A................. 8,000 641,000
-------------
DOMESTIC OIL & GAS (2.3%)
Enron Corp.
6.25%............................ 15,000 360,000
-------------
DOMESTIC OILS (3.6%)
Atlantic Richfield Co.
9.00%............................ 16,000 344,000
Nuevo Financing I
5.75%, Series A.................. 4,000 214,500
-------------
558,500
-------------
ELECTRICAL EQUIPMENT (0.6%)
Elsag Bailey Process Automation
N.V.
5.50% (b)........................ 2,500 96,250
-------------
ENERGY (1.5%)
Unocal Corp.
6.25%............................ 4,000 229,000
-------------
FINANCE (4.2%)
Fuji International Finance Trust
0.25% (b)(f)..................... 25 655,447
-------------
FINANCIAL SERVICES (1.7%)
Finova Finance Trust
5.50%............................ 5,000 262,500
-------------
PAPER & FOREST PRODUCTS (3.1%)
James River Corp. of Virginia
9.00%, Series P (c1)............. 15,000 472,500
-------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
57
<PAGE> 58
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
PREFERRED STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
RESTAURANTS &
LODGING (2.4%)
Host Marriott Financial Trust
6.75% (b)........................ 7,000 $ 371,875
-------------
STEEL, ALUMINUM & OTHER METALS
(1.7%)
Bethlehem Steel Corp.
$3.50 (b)........................ 7,000 264,250
-------------
TELECOMMUNICATION EQUIPMENT (3.6%)
Loral Space & Communications Ltd.
6.00% (b)........................ 10,000 562,500
-------------
TEXTILE & APPAREL (3.8%)
Fieldcrest Cannon, Inc.
$3.00, Series A.................. 15,000 588,750
-------------
Total Preferred Stocks
(Cost $5,312,216)................ 5,507,572
-------------
Total Convertible Securities
(Cost $9,702,916)................ 9,953,885
-------------
U.S. GOVERNMENT (26.6%)
PRINCIPAL
AMOUNT
-----------
UNITED STATES TREASURY NOTE
(26.6%)
8.875%, due 11/15/97............. $ 4,000,000 4,107,480
-------------
Total U.S. Government
(Cost $4,132,188)................ 4,107,480
-------------
COMMON STOCKS (3.7%)
SHARES
-----------
CHEMICALS (2.3%)
IMC Global, Inc. ................. 9,000 352,125
-------------
ELECTRIC UTILITIES (0.3%)
Potomac Electric Power Co. ....... 2,000 51,500
-------------
HEALTH CARE (1.1%)
Regency Health Services, Inc.
(a).............................. 17,200 165,550
-------------
Total Common Stocks
(Cost $542,468).................. 569,175
-------------
PREFERRED STOCK (1.7%)
SHARES VALUE
----------------------
MINING (1.7%)
Freeport-McMoRan Copper & Gold,
Inc.
Series Silver (c2)(e)............ 15,000 $ 255,000
-------------
Total Preferred Stock
(Cost $255,750).................. 255,000
-------------
SHORT-TERM
INVESTMENT (2.9%)
PRINCIPAL
AMOUNT
-----------
COMMERCIAL PAPER (2.9%)
American Express Credit Corp.
6.55%, due 1/2/97................ $ 448,000 448,000
-------------
Total Short-Term Investment
(Cost $448,000).................. 448,000
-------------
Total Investments
(Cost $15,081,322) (h)........... 99.2% 15,333,540(i)
Cash and Other Assets, Less
Liabilities...................... 0.8 130,820
------------ -------------
Net Assets........................ 100.0% $15,464,360
============ =============
</TABLE>
- ------------
(a) Non-income producing security.
(b) May be sold to institutional investors only.
(c1) Depository Shares--each share represents one-hundredth of a share of Series
P preferred stock.
(c2) Depository Shares--each share represents 0.025 shares of silver denominated
preferred stock.
(d) STRYPES--Structured Yield Product Exchangeable for Cox Communications, Inc.
common stock.
(e) Dividend equals U.S. dollar equivalent of 0.04125 oz. of silver per share.
(f) 25 Units--each unit reflects an interest in 1,000 Noncumulative Mandatory
Convertible preference shares of the Fuji Bank, Limited. The preference
shares are convertible into ordinary shares at an initial conversion price
of Y(Japanese Yen) 2,002 per ordinary share at a future date.
(g) Yankee bond.
(h) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(i) At December 31, 1996 net unrealized appreciation was $252,218, 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 $381,920 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $129,702.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
58
<PAGE> 59
MAINSTAY VP SERIES FUND, INC.
CONVERTIBLE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $15,081,322)........ $ 15,333,540
Cash................................... 2,177
Receivables:
Dividends and interest............... 90,394
Fund shares sold..................... 55,640
NYLIAC............................... 8,768
Unamortized organization expense....... 43,683
------------
Total assets..................... 15,534,202
------------
LIABILITIES:
Payables:
Organization......................... 41,000
Adviser.............................. 4,272
Administrator........................ 1,187
Custodian............................ 218
Directors............................ 150
Accrued expenses....................... 23,015
------------
Total liabilities................ 69,842
------------
Net assets applicable to outstanding
shares............................... $ 15,464,360
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares
authorized........................... $ 15,064
Additional paid-in capital............. 15,189,934
Accumulated undistributed net
investment income.................... 2,378
Accumulated undistributed net realized
gain on investments.................. 4,766
Net unrealized appreciation on
investments.......................... 252,218
------------
Net assets applicable to outstanding
shares............................... $ 15,464,360
============
Shares of capital stock outstanding.... 1,506,367
============
Net asset value per share
outstanding.......................... $ 10.27
============
</TABLE>
STATEMENT OF OPERATIONS
For the period October 1, 1996 (Commencement of
Operations) through December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends............................ $ 33,132
Interest............................. 142,602
------------
Total income..................... 175,734
------------
Expenses:
Professional......................... 20,961
Advisory............................. 10,776
Administration....................... 5,986
Amortization of organization
expense............................ 2,317
Shareholder communication............ 1,804
Custodian............................ 1,050
Directors............................ 150
Miscellaneous........................ 547
------------
Total expenses before
reimbursement.................. 43,591
Expense reimbursement from
Administrator........................ (21,740)
------------
Net expenses..................... 21,851
------------
Net investment income.................. 153,883
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments....... 31,320
Net unrealized appreciation on
investments.......................... 252,218
------------
Net realized and unrealized gain on
investments.......................... 283,538
------------
Net increase in net assets resulting
from operations...................... $ 437,421
===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
59
<PAGE> 60
CONVERTIBLE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the period October 1, 1996 (Commencement of Operations)
through December 31, 1996
<TABLE>
<CAPTION>
1996
------------
<S> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income......................................................................... $ 153,883
Net realized gain on investments.............................................................. 31,320
Net unrealized appreciation on investments.................................................... 252,218
------------
Net increase in net assets resulting from operations.......................................... 437,421
------------
Dividends and distributions to shareholders:
From net investment income.................................................................... (153,822)
From net realized gain on investments......................................................... (26,554)
------------
Total dividends and distributions to shareholders........................................... (180,376)
------------
Capital share transactions:
Net proceeds from sale of shares.............................................................. 5,079,116
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions................................................................................ 180,376
------------
5,259,492
Cost of shares redeemed....................................................................... (52,177)
------------
Increase in net assets derived from capital share transactions.............................. 5,207,315
------------
Net increase in net assets.................................................................. 5,464,360
NET ASSETS:
Beginning of period............................................................................. 10,000,000
------------
End of period................................................................................... $15,464,360
=============
Accumulated undistributed net investment income................................................. $ 2,378
=============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
OCTOBER 1,
1996 (a)
THROUGH
DECEMBER 31,
1996
------------
<S> <C>
Net asset value at beginning of period............................................................ $ 10.00
------------
Net investment income............................................................................. 0.10
Net realized and unrealized gain on investments................................................... 0.29
------------
Total from investment operations.................................................................. 0.39
------------
Less dividends and distributions:
From net investment income...................................................................... (0.10)
From net realized gain on investments........................................................... (0.02)
------------
Total dividends and distributions................................................................. (0.12)
------------
Net asset value at end of period.................................................................. $ 10.27
=============
Total investment return (b)....................................................................... 3.89%
Ratios (to average net assets)/Supplemental Data:
Net investment income........................................................................... 5.14% +
Net expenses.................................................................................... 0.73% +
Expenses (before reimbursement)................................................................. 1.46% +
Portfolio turnover rate........................................................................... 15%
Average commission rate paid...................................................................... $ 0.0537
Net assets at end of period (in 000's)............................................................ $ 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.
60
<PAGE> 61
MAINSTAY VP SERIES FUND, INC.
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
LONG-TERM U.S. GOVERNMENT
& FEDERAL AGENCIES (98.2%)+
PRINCIPAL
AMOUNT VALUE
---------------------
<S> <C> <C>
FEDERAL HOME LOAN
MORTGAGE CORPORATION
(COLLATERALIZED MORTGAGE
OBLIGATIONS) (2.2%)
Series 1858 Class B
6.00%, due 12/15/05............... $ 925,000 $ 914,881
Series 1783-A Class A
8.00%, due 2/15/00................ 685,108 700,311
------------
1,615,192
------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION
GOLD (MORTGAGE PASS-
THROUGH SECURITY) (0.7%)
7.00%, due 12/1/01................ 500,000 505,155
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (COLLATERALIZED
MORTGAGE OBLIGATIONS) (3.2%)
Series 1993-224 Class PD
5.25%, due 8/25/15................ 1,000,000 991,560
Series 1993-93 Class C
5.50%, due 2/25/06................ 1,343,482 1,327,104
------------
2,318,664
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE PASS-THROUGH
SECURITIES) (19.1%)
6.00%, due 11/1/23................ 1,182,077 1,103,765
6.00%, due 1/23/27
ARM COFI TBA (b)(c)(d)............ 1,500,000 1,492,500
6.52%, due 12/1/03................ 525,000 519,298
6.595%, due 1/31/03
TBA (b)........................... 525,000 521,414
6.605%, due 2/25/07
TBA (b)........................... 825,000 809,177
6.765%, due 1/1/07................ 1,100,000 1,090,870
6.80%, due 1/31/04
TBA (b)........................... 775,000 778,139
6.83%, due 12/1/02
TBA (b)........................... 1,015,000 1,011,062
6.835%, due 1/22/07
TBA (b)........................... 1,100,000 1,096,106
7.00%, due 8/1/11-1/1/24.......... 3,350,068 3,339,135
9.00%, due 1/1/05-6/1/25.......... 2,105,504 2,221,162
------------
13,982,628
------------
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------
<S> <C> <C>
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION I
(MORTGAGE PASS-THROUGH
SECURITIES) (12.6%)
6.50%, due 7/15/23................ $ 494,663 $ 474,258
8.00%, due 12/15/23............... 4,439,191 4,555,009
9.50%, due 12/15/17-5/15/22....... 3,857,628 4,196,075
------------
9,225,342
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION II
(MORTGAGE PASS-THROUGH
SECURITIES) (2.4%)
6.50%, due 1/20/23-2/20/23
ARM (c)........................... 1,106,412 1,128,243
7.00%, due 11/20/21-11/20/22 ARM
(c)............................... 625,757 638,868
------------
1,767,111
------------
UNITED STATES TREASURY BONDS
(22.2%)
6.25%, due 8/15/23................ 3,545,000 3,323,437
6.50%, due 11/15/26............... 5,125,000 5,029,726
8.875%, due 8/15/17............... 3,425,000 4,230,423
11.25%, due 2/15/15............... 2,450,000 3,617,964
------------
16,201,550
------------
UNITED STATES TREASURY NOTES
(35.8%)
5.50%, due 11/15/98............... 3,565,000 3,541,043
5.625%, due 11/30/00.............. 1,275,000 1,251,884
6.375%, due 3/31/01............... 5,850,000 5,889,312
6.375%, due 8/15/02............... 4,425,000 4,454,028
6.50%, due 5/15/05................ 4,875,000 4,907,760
7.875%, due 11/15/99.............. 650,000 680,979
7.875%, due 11/15/04 (a).......... 1,150,000 1,254,938
9.00%, due 5/15/98................ 4,025,000 4,194,815
------------
26,174,759
------------
Total Long-Term U.S. Government
& Federal Agencies
(Cost $71,512,688)................ 71,790,401
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
61
<PAGE> 62
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (7.9%)
PRINCIPAL
AMOUNT VALUE
---------------------
<S> <C> <C>
COMMERCIAL PAPER (1.3%)
American Express Credit Corp.
6.55%, due 1/2/97................. $ 945,000 $ 945,000
------------
FEDERAL AGENCY (6.6%)
Federal Home Loan Bank
6.82%, due 1/14/97 (a)............ 4,850,000 4,838,312
------------
Total Short-Term Investments
(Cost $5,787,866)................. 5,783,312
------------
Total Investments
(Cost $77,300,554) (e)............ 106.1% 77,573,713(f)
Liabilities in Excess of
Cash and Other Assets............. (6.1) (4,451,173)
---------- ------------
Net Assets......................... 100.0% $73,122,540
========== ============
</TABLE>
- ------------
(a) Segregated or partially segregated as collateral for TBA.
(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) ARM--Adjustable Rate Mortgage. Resets monthly.
(d) COFI--Cost of Funds Indexed.
(e) The cost for Federal income tax purposes is $77,572,943.
(f) At December 31, 1996 net unrealized appreciation was $770, 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 $360,025 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $359,255.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
62
<PAGE> 63
MAINSTAY VP SERIES FUND, INC.
GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $77,300,554)........ $ 77,573,713
Cash................................... 2,128
Receivables:
Interest............................. 834,086
Investment securities sold........... 445,628
Fund shares sold..................... 89,523
Other assets........................... 199
------------
Total assets..................... 78,945,277
------------
LIABILITIES:
Payables:
Investment securities purchased...... 5,753,923
Adviser.............................. 18,494
Administrator........................ 6,165
Custodian............................ 3,728
NYLIAC............................... 1,948
Directors............................ 31
Accrued expenses....................... 38,448
------------
Total liabilities................ 5,822,737
------------
Net assets applicable to outstanding
shares............................... $ 73,122,540
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 50 million shares
authorized........................... $ 76,234
Additional paid-in capital............. 77,882,555
Accumulated net realized loss on
investments.......................... (5,109,408)
Net unrealized appreciation on
investments.......................... 273,159
------------
Net assets applicable to outstanding
shares............................... $ 73,122,540
============
Shares of capital stock outstanding.... 7,623,425
============
Net asset value per share
outstanding.......................... $ 9.59
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................. $ 5,111,317
------------
Expenses:
Advisory............................. 209,179
Administration....................... 139,453
Shareholder communication............ 47,140
Recordkeeping........................ 45,657
Professional......................... 28,059
Custodian............................ 18,166
Portfolio pricing.................... 3,417
Directors............................ 3,200
Miscellaneous........................ 2,492
------------
Total expenses before
reimbursement.................. 496,763
Expense reimbursement from
Administrator........................ (29,596)
------------
Net expenses..................... 467,167
------------
Net investment income.................. 4,644,150
------------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS:
Net realized loss on investments....... (1,685,892)
Net change in unrealized appreciation
on investments....................... (1,228,232)
------------
Net realized and unrealized loss on
investments.......................... (2,914,124)
------------
Net increase in net assets resulting
from operations...................... $ 1,730,026
===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
63
<PAGE> 64
GOVERNMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1996
and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................................................. $ 4,644,150 $ 4,519,231
Net realized gain (loss) on investments........................................... (1,685,892) 1,575,754
Net change in unrealized appreciation (depreciation) on investments............... (1,228,232) 2,860,304
------------ ------------
Net increase in net assets resulting from operations.............................. 1,730,026 8,955,289
------------ ------------
Dividends to shareholders:
From net investment income........................................................ (4,616,401) (4,482,125)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................................................. 18,643,180 12,152,261
Net asset value of shares issued to shareholders in reinvestment of dividends..... 4,616,401 4,482,125
------------ ------------
23,259,581 16,634,386
Cost of shares redeemed........................................................... (12,063,044) (17,936,046)
------------ ------------
Increase (decrease) in net assets derived from capital share transactions....... 11,196,537 (1,301,660)
------------ ------------
Net increase in net assets...................................................... 8,310,162 3,171,504
NET ASSETS:
Beginning of year................................................................... 64,812,378 61,640,874
------------ ------------
End of year......................................................................... $ 73,122,540 $ 64,812,378
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
YEAR ENDED DECEMBER 31 THROUGH
-------------------------------------------- DECEMBER 31,
1996 1995 1994 1993
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period.................. $ 10.01 $ 9.21 $ 10.15 $ 10.00
------------ ------------ ------------ ------------
Net investment income................................... 0.65 0.75 0.75 0.82
Net realized and unrealized gain (loss) on
investments........................................... (0.42) 0.80 (0.94) (0.25)
------------ ------------ ------------ ------------
Total from investment operations........................ 0.23 1.55 (0.19) 0.57
------------ ------------ ------------ ------------
Less dividends:
From net investment income............................ (0.65) (0.75) (0.75) (0.42)
------------ ------------ ------------ ------------
Net asset value at end of period........................ $ 9.59 $ 10.01 $ 9.21 $ 10.15
=========== =========== =========== =============
Total investment return (b)............................. 2.28% 16.72% (1.84%) 5.63%
Ratios (to average net assets)/Supplemental Data:
Net investment income................................. 6.66% 7.80% 8.16% 8.46%+
Net expenses.......................................... 0.67% 0.67% 0.67% 0.67%+
Expenses (before reimbursement)....................... 0.71% 0.82% 0.87% 1.02%+
Portfolio turnover rate................................. 304% 592% 483% 501%
Net assets at end of period (in 000's).................. $ 73,123 $ 64,812 $ 61,641 $ 46,766
</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.
64
<PAGE> 65
MAINSTAY VP SERIES FUND, INC.
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
LONG-TERM BONDS (60.5%)+
CONVERTIBLE BONDS (4.8%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
CELLULAR TELEPHONE (1.3%)
United States Cellular Corp.
(zero coupon), due 6/15/15...... $ 7,960,000 $ 2,661,665
------------
PUBLISHING (1.2%)
Hollinger, Inc., Series US
(zero coupon), due 10/5/13
(o)............................. 7,030,000 2,486,862
------------
TELECOMMUNICATION
SERVICES (2.3%)
PLD Telekom, Inc.
9.00%, due 6/1/06 (c)........... 500,000 500,000
Rogers Communications, Inc.
(zero coupon), due 5/20/13
(o)............................. 6,100,000 2,379,000
Tele-Communications
International, Inc.
4.50%, due 2/15/06.............. 2,500,000 1,868,750
------------
4,747,750
------------
Total Convertible Bonds
(Cost $9,810,873)............... 9,896,277
------------
CORPORATE BONDS (44.2%)
AEROSPACE (1.2%)
K&F Industries, Inc.
11.875%, due 12/1/03............ 75,000 80,813
Sequa Corp.
9.375%, due 12/15/03............ 2,000,000 2,040,000
9.625%, due 10/15/99............ 400,000 412,000
------------
2,532,813
------------
AUTO PARTS (1.1%)
CSK Auto, Inc.
11.00%, due 11/1/06 (c)......... 1,600,000 1,680,000
Great Dane Holdings, Inc.
12.75%, due 8/1/01.............. 620,000 615,350
------------
2,295,350
------------
BUILDING MATERIALS (1.7%)
American Standard, Inc.
(zero coupon), due 6/1/05
10.50%, beginning 6/1/98........ 3,000,000 2,790,000
Associated Materials, Inc.
11.50%, due 8/15/03............. 650,000 666,250
------------
3,456,250
------------
BUILDINGS (1.9%)
Greystone Homes, Inc.
10.75%, due 3/1/04.............. 1,600,000 1,636,000
NVR, Inc.
11.00%, due 4/15/03............. 2,200,000 2,310,000
------------
3,946,000
------------
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
CABLE (2.6%)
American Telecasting, Inc.
Series B
(zero coupon), due 8/15/05
14.50%, beginning 8/15/00....... $ 2,142,000 $ 771,120
Heartland Wireless
Communications, Inc.
14.00%, due 10/15/04 (c)........ 1,670,000 1,732,625
United International Holdings,
Inc.
(zero coupon), due 11/15/99..... 2,400,000 1,728,000
Series B
(zero coupon), due 11/15/99..... 1,600,000 1,152,000
------------
5,383,745
------------
CASINOS (5.5%)
Argosy Gaming Co.
13.25%, due 6/1/04.............. 2,000,000 1,865,000
Casino America, Inc.
12.50%, due 8/1/03.............. 2,650,000 2,510,875
Casino Magic Finance Corp.
11.50%, due 10/15/01............ 2,000,000 1,810,000
El Comandante Capital Corp.
11.75%, due 12/15/03............ 2,900,000 2,813,000
Horseshoe Gaming LLC, Series B
12.75%, due 9/30/00............. 500,000 542,500
President Riverboat Casinos, Inc.
13.00%, due 9/15/01............. 2,000,000 1,670,000
------------
11,211,375
------------
CELLULAR TELEPHONE (1.0%)
Centennial Cellular Corp.
8.875%, due 11/1/01............. 1,500,000 1,447,500
10.125%, due 5/15/05............ 500,000 503,750
PriCellular Wireless Corp.,
Series B
(zero coupon), due 11/15/01
14.00%, beginning 11/15/97...... 50,000 49,000
------------
2,000,250
------------
CHEMICALS (0.4%)
Uniroyal Chemical Co., Inc.
9.00%, due 9/1/00............... 800,000 818,000
------------
CHILD CARE SERVICES (0.5%)
La Petite Holdings Corp.
9.625%, due 8/1/01.............. 1,100,000 1,111,000
------------
COMPUTERS & OFFICE EQUIPMENT
(1.2%)
Unisys Corp.
10.625%, due 10/1/99............ 1,500,000 1,554,375
11.75%, due 10/15/04............ 750,000 800,625
------------
2,355,000
------------
CONSUMER DURABLES (0.4%)
Selmer Co., Inc.
11.00%, due 5/15/05............. 650,000 706,875
------------
</TABLE>
The notes to the financial statements are an intergral part of, and should be
read in conjunction with, the financial statements.
65
<PAGE> 66
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
ELECTRIC UTILITIES (1.2%)
Midland Funding Corp. I
Series C-94
10.33%, due 7/23/02............. $ 1,784,382 $ 1,900,367
Panda Funding Corp.
11.625%, due 8/20/12 (c)........ 600,000 621,000
------------
2,521,367
------------
EQUIPMENT FINANCING (1.2%)
Atlas Air, Inc.
12.25%, due 12/1/02............. 650,000 724,750
GPA Delaware, Inc.
8.75%, due 12/15/98............. 1,600,000 1,632,000
------------
2,356,750
------------
FOOD, BEVERAGES & TOBACCO (1.5%)
Great American Cookie Co.
Series B
10.875%, due 1/15/01............ 450,000 411,750
National Tobacco Holding, LLC
13.50%, due 5/17/03
16.50%, beginning 6/1/01
(e)(g)(q)....................... 1,821,748 1,514,784
Penn Traffic Co.
8.625%, due 12/15/03............ 950,000 781,375
11.50%, due 4/15/06............. 450,000 396,000
------------
3,103,909
------------
INDUSTRIAL (1.9%)
Monarch Marking Systems, Inc.
12.50%, due 7/1/03.............. 1,400,000 1,638,000
Newflo Corp., Series B
13.25%, due 11/15/02............ 350,000 387,187
Thermadyne Holdings Corp.
10.75%, due 11/1/03............. 1,900,000 1,957,000
------------
3,982,187
------------
LEISURE (1.5%)
Bally's Health & Tennis Corp.
13.00%, due 1/15/03............. 3,174,000 3,047,040
------------
MACHINERY (1.1%)
Specialty Equipment Cos., Inc.
11.375%, due 12/1/03............ 2,000,000 2,185,000
------------
MEDIA (4.6%)
Affiliated Newspaper Investments,
Inc.
(zero coupon), due 7/1/06
13.25%, beginning 7/1/99........ 1,000,000 820,000
Allbritton Communications Co.
Series B
9.75%, due 11/30/07............. 1,400,000 1,358,000
American Media, Inc.
Series XW
(zero coupon), due 5/15/97...... 750,000 727,500
Comcast Cellular Corp.
Series A
(zero coupon), due 3/5/00....... 1,700,000 1,224,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
MEDIA (Continued)
Garden State Newspapers, Inc.
12.00%, due 7/1/04.............. $ 300,000 $ 327,000
General Media, Inc.
10.625%, due 12/31/00........... 1,600,000 1,368,000
Park Communications, Inc.
Series B
13.75%, due 5/15/04 (g)......... 1,000,000 1,125,000
Park Newspapers, Inc.
Series B
11.875%, due 5/15/04............ 1,000,000 1,175,000
Spanish Broadcasting System, Inc.
7.50%, due 6/15/02
12.50%, beginning 6/15/97....... 250,000 263,750
12.75%, due 6/1/01 (c)(h)(m).... 926,718 926,718
------------
9,314,968
------------
PAPER & FOREST PRODUCTS (0.5%)
Gaylord Container Corp.
11.50%, due 5/15/01............. 900,000 972,000
------------
POLLUTION & RELATED (0.3%)
ICF Kaiser International, Inc.
13.00%, due 12/31/03............ 200,000 190,500
13.00%, due 12/31/03 (t1)....... 450 429,750
------------
620,250
------------
RECREATION & ENTERTAINMENT (1.9%)
Affinity Group, Inc.
11.50%, due 10/15/03............ 2,000,000 2,080,000
Alliance Entertainment Corp.
Series B
11.25%, due 7/15/05............. 2,100,000 1,540,875
Marvel Holdings, Inc.
Series B
(zero coupon), due 4/15/98
(a)(l)(w)....................... 2,055,000 308,250
------------
3,929,125
------------
RESTAURANTS & LODGING (1.7%)
American Restaurant Group, Inc.
Series 93
13.00%, due 9/15/98............. 167,252 153,872
AmeriKing, Inc.
10.75%, due 12/1/06............. 650,000 672,750
Family Restaurant, Inc.
9.75%, due 2/1/02............... 2,700,000 1,957,500
Flagstar Corp.
10.875%, due 12/1/02............ 800,000 730,000
------------
3,514,122
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
66
<PAGE> 67
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
RETAIL (1.4%)
Brylane L.P., Series B
10.00%, due 9/1/03.............. $ 200,000 $ 206,000
Guitar Center Management Co.
11.00%, due 7/1/06 (c).......... 250,000 265,000
IHF Holdings, Inc.
Series B
(zero coupon), due 11/15/04
15.00%, beginning 11/15/99...... 2,200,000 1,738,000
Petro PSC Properties L.P.
12.50%, due 6/1/02.............. 400,000 406,000
Waban, Inc.
11.00%, due 5/15/04............. 250,000 277,500
------------
2,892,500
------------
STEEL, ALUMINUM & OTHER METALS
(1.5%)
Easco Corp.
Series B
10.00%, due 3/15/01............. 800,000 814,000
UCAR Global Enterprises, Inc.
Series B
12.00%, due 1/15/05............. 2,000,000 2,305,000
------------
3,119,000
------------
TELECOMMUNICATION EQUIPMENT
(2.5%)
Telex Communications, Inc.
12.00%, due 7/15/04............. 4,680,000 5,171,400
------------
TELECOMMUNICATION SERVICES (2.0%)
Microcell Telecommunications,
Inc.
Series B
(zero coupon), due 6/1/06
14.00%, beginning 12/1/01....... 1,700,000 947,750
Paging Network, Inc.
11.75%, due 5/15/02............. 2,000,000 2,155,000
ProNet, Inc.
11.875%, due 6/15/05............ 1,050,000 989,625
------------
4,092,375
------------
TEXTILE & APPAREL (1.6%)
Hosiery Corp. of America, Inc.
13.75%, due 8/1/02.............. 3,029,000 3,347,045
------------
UTILITIES (0.3%)
Consolidated Hydro, Inc.
Series B
(zero coupon), due 7/15/03
12.00%, beginning 7/15/98....... 1,575,000 551,250
------------
Total Corporate Bonds
(Cost $87,085,618).............. 90,536,946
------------
<CAPTION>
U.S. GOVERNMENT &
FEDERAL AGENCY (2.7%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (2.6%)
Series B
12.00%, due 6/26/98............. $ 5,000,000 $ 5,422,650
------------
UNITED STATES TREASURY NOTE
(0.1%)
9.125%, due 5/15/99............. 100,000 106,859
------------
Total U.S. Government &
Federal Agency
(Cost $5,628,661)............... 5,529,509
------------
YANKEE BONDS (8.8%)
CABLE (1.5%)
Australis Holdings Property Ltd.
(zero coupon), due 11/1/02
15.00%, beginning 11/1/00
(c)(t2)......................... 2,000 1,150,000
TeleWest, PLC
(zero coupon), due 10/1/07
11.00%, beginning 10/1/00....... 2,600,000 1,813,500
------------
2,963,500
------------
CELLULAR TELEPHONE (1.2%)
Millicom International Cellular,
S.A.
(zero coupon), due 6/1/06
13.50%, beginning 6/1/01........ 1,200,000 744,000
Occidente y Caribe Celular, S.A.
(zero coupon), due 3/15/04
14.00%, beginning 3/15/01 (c)... 3,000,000 1,785,000
------------
2,529,000
------------
COMPUTERS & OFFICE EQUIPMENT
(0.6%)
International Semi-Technology
Microelectronics, Inc.
(zero coupon), due 8/15/03
11.50%, beginning 8/15/00....... 2,000,000 1,310,000
------------
MEDIA (3.5%)
Grupo Televisa, S.A.
(zero coupon), due 5/15/08
13.25%, beginning 5/15/01....... 600,000 396,000
Kabelmedia Holding GmbH
(zero coupon), due 8/1/06
13.625%, beginning 8/1/01....... 3,300,000 1,856,250
Le Groupe Videotron Ltee
10.625%, due 2/15/05............ 3,900,000 4,290,000
Videotron Ltee
10.25%, due 10/15/02............ 500,000 531,250
------------
7,073,500
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
67
<PAGE> 68
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
YANKEE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
PAPER & FOREST PRODUCTS (0.8%)
FSW International Finance Co.
12.50%, due 11/1/06 (c)......... $ 1,500,000 $ 1,590,000
------------
REAL ESTATE (0.4%)
Trizec Finance Ltd.
10.875%, due 10/15/05........... 800,000 888,000
------------
TELECOMMUNICATION SERVICES (0.8%)
Clearnet Communications, Inc.
(zero coupon), due 12/15/05
14.75%, beginning 12/15/00...... 2,650,000 1,656,250
------------
Total Yankee Bonds
(Cost $17,146,443).............. 18,010,250
------------
Total Long-Term Bonds
(Cost $119,671,595)............. 123,972,982
------------
<CAPTION>
COMMON STOCKS (6.2%)
SHARES
-----------
<S> <C> <C>
BUILDINGS (0.3%)
NVR, Inc. (a).................... 40,000 520,000
------------
CABLE (0.7%)
United International Holdings,
Inc.
Class A (a)..................... 122,000 1,494,500
------------
CASINOS (0.9%)
Casino America, Inc. (a)......... 7,053 22,481
Colorado Gaming & Entertainment
Co. (a)......................... 12,488 62,440
Grand Casinos, Inc. (a).......... 59,200 799,200
Station Casinos, Inc. (a)........ 92,000 931,500
------------
1,815,621
------------
CHEMICALS (0.0%) (b)
Millennium Chemicals, Inc. (a)... 2,464 43,736
------------
CONGLOMERATES (0.1%)
Hanson, PLC ADR (d).............. 34,500 232,875
------------
FOOD, BEVERAGES & TOBACCO (0.4%)
Imperial Tobacco Group, PLC ADR
(a)(d).......................... 8,625 111,290
RJR Nabisco Holdings Corp. ...... 22,300 758,200
------------
869,490
------------
GAS UTILITIES (0.5%)
UGI Corp. ....................... 46,200 1,033,725
------------
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
MEDIA (1.2%)
Comcast Corp., Class A........... 69,500 $ 1,224,938
Le Groupe Videotron Ltee (v)..... 69,000 578,901
Matav-Cable Systems Media Ltd.
ADR (a)(d)...................... 24,500 382,813
Metromedia International Group
Inc. (a)........................ 32,400 319,950
------------
2,506,602
------------
RECREATION & ENTERTAINMENT (0.1%)
Steinway Musical Instruments,
Inc. (a)........................ 4,100 71,238
------------
RESTAURANTS & LODGING (0.4%)
Bob Evans Farms, Inc. ........... 10,000 135,000
Lone Star Steakhouse &
Saloon, Inc. (a)................ 22,000 588,500
------------
723,500
------------
RETAIL (0.1%)
Claire's Stores, Inc. ........... 20,000 262,500
------------
STEEL, ALUMINUM & OTHER METALS
(0.1%)
Ryerson Tull, Inc., Class A
(a)............................. 19,500 263,250
------------
TELECOMMUNICATION SERVICES (1.4%)
AirTouch Communications, Inc.
(a)............................. 83,000 2,095,750
Clearnet Communications, Inc.
Class A (a)..................... 20,000 220,000
Paging Network, Inc. (a)......... 23,100 352,275
Rogers Communications, Inc. Class
B (a)(v)........................ 30,000 218,866
------------
2,886,891
------------
TEXTILE & APPAREL (0.0%) (b)
Hosiery Corp. of America, Inc.
(a)............................. 500 3,000
------------
Total Common Stocks
(Cost $12,756,816).............. 12,726,928
------------
PREFERRED STOCKS (3.0%)
CABLE (0.3%)
TCI Pacific Communications, Inc.
5.00% (p)....................... 7,500 685,312
------------
CASINOS (0.2%)
Station Casinos, Inc.
7.00% (p)....................... 9,500 454,813
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
68
<PAGE> 69
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
PREFERRED STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
DRUGS (0.7%)
ICN Pharmaceuticals, Inc. Series
B (c)(g)(p)..................... 1,500 $ 1,500,000
------------
EQUIPMENT FINANCING (0.2%)
GPA Group, PLC (a)(q)............ 1,000,000 440,000
------------
FOOD, BEVERAGES & TOBACCO (0.1%)
National Tobacco Holding, LLC
14.50% (e)(h)(i)(q)............. 242,903 138,236
------------
MEDIA (1.0%)
Paxson Communications Corp.
12.50% (h)...................... 1,000 945,000
Spanish Broadcasting System, Inc.
Series A (c)(h)................. 994 984,060
------------
1,929,060
------------
TELECOMMUNICATION SERVICES (0.5%)
K-III Communications Corp.
10.00%, Series D................ 10,000 980,000
------------
Total Preferred Stocks
(Cost $5,944,126)............... 6,127,421
------------
WARRANTS (0.6%)
CELLULAR TELEPHONE (0.0%) (b)
Occidente y Caribe Celular, S.A.
expire 3/15/04 (a)(c)........... 12,000 120
------------
DOMESTIC OIL & GAS (0.1%)
TransAmerican Refining Corp.
expire 2/15/02 (a).............. 30,000 75,000
------------
FOOD, BEVERAGES & TOBACCO (0.3%)
Cookies USA, Inc.
expire 1/15/01 (a)(c)........... 81 810
National Tobacco Holding, LLC
Class A
expire 5/17/06 (a)(e)(j)(q)..... 617,283 617,283
expire 5/17/06 (a)(e)(k)(q)..... 79,410 0(u)
------------
618,093
------------
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
MEDIA (0.2%)
General Media, Inc.
expire 12/21/00 (a)............. 900 $ 4,500
Park Communications, Inc. (a).... 10,000 205,000
Spanish Broadcasting System, Inc.
expire 6/29/99 (a)(c)........... 1,100 198,000
------------
407,500
------------
POLLUTION & RELATED (0.0%) (b)
ICF Kaiser International, Inc.
expire 12/31/98 (a)............. 960 360
------------
RETAIL (0.0%) (b)
Petro PSC Properties L.P.
expire 6/1/97 (a)............... 400 20,400
------------
TELECOMMUNICATION SERVICES (0.0%)
(b)
Microcell Telecommunications,
Inc.
expire 6/1/06 (a)(c)............ 6,800 47,600
expire 6/1/06 (a)(c)(n)......... 6,800 1,700
------------
49,300
------------
Total Warrants
(Cost $905,932)................. 1,170,773
------------
<CAPTION>
PURCHASED PUT OPTION (0.0%) (b)
NOTIONAL
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
FOOD, BEVERAGES & TOBACCO (0.0%)
(b)
Underlying security
RJR Nabisco, Inc.
8.75%, due 8/15/05
expire 10/6/97 (f).............. $ 2,000,000 12,000
------------
Total Purchased Put Option
(Cost $40,000).................. 12,000
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
69
<PAGE> 70
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (28.8%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
SHORT-TERM BOND (0.9%)
RETAIL (0.9%)
Cosmar Corp.
11.50%, due 12/4/97
(c)(g)(m)(q).................... $ 1,800,000 $ 1,800,000
------------
U.S. GOVERNMENT (27.9%)
United States Treasury Note
8.50%, due 4/15/97.............. 56,775,000 57,271,781
------------
Total Short-Term Investments
(Cost $59,299,138).............. 59,071,781
------------
Total Investments
(Cost $198,617,607) (r)......... 99.1% 203,081,885(s)
Cash and Other Assets,
Less Liabilities................ 0.9 1,919,150
----------- ------------
Net Assets....................... 100.0% $205,001,035
============= ==============
</TABLE>
- ------------
(a) Non-income producing securities.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) ADR--American Depository Receipt.
(e) Fair valued securities. Aggregate at 1.10% of net assets.
(f) Purchased put option is based on spread between the risk/duration of RJR
Nabisco, Inc., 8.75% Note due 8/15/05, multiplied by the yield on the RJR
Nabisco bond less the yield on the U.S. Treasury Bond 6.50%, due 8/15/05,
less 3.50%, multiplied by the notional principal.
(g) CIK ("Cash in Kind") interest or dividend payment is made with cash or
additional securities.
(h) PIK ("Payment in Kind") interest or dividend payment is made with
additional securities.
(i) The 8.89% preferred membership interest entitles the Fund to a Payment in
Kind dividend of 14.50% for the first five years beginning June 30, 1996
and 17.50% for the sixth and seventh year.
(j) The warrants entitle the Fund to 3.4545% of the voting rights and dividend
payments.
(k) The redeemable warrants can be redeemed by National Tobacco Corp. for
nominal consideration during the first five years, only on a pro-rata basis
with prepayment of the subordinated notes.
(l) Issue in default.
(m) Floating rate. Rate shown is the rate in effect at December 31, 1996.
(n) Conditional warrants.
(o) Yankee bond.
(p) Convertible preferred stock.
(q) Restricted securities.
(r) The cost for Federal income tax purposes is $198,840,632.
(s) At December 31, 1996 net unrealized appreciation was $4,241,253, 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 $6,168,119 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $1,926,866.
(t1) 450 Units--each unit reflects $1,000 principal amount of 13.00% Senior
Subordinated Notes, plus 7 warrants to acquire 1 share of common stock at
$2.30 per share at a future date.
(t2) 2,000 Units--each unit reflects $1,000 principal amount of 15.00% Senior
Discounted Notes, plus 1 warrant to acquire 186.527 shares of Australis
Media common stock at $0.20 per share at a future date.
(u) Security has no value.
(v) Canadian security.
(w) Issuer in bankruptcy.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
70
<PAGE> 71
MAINSTAY VP SERIES FUND, INC.
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $198,617,607)....... $203,081,885
Receivables:
Dividends and interest............... 3,663,250
Fund shares sold..................... 1,200,477
Other assets........................... 213
------------
Total assets..................... 207,945,825
------------
LIABILITIES:
Payables:
Investment securities purchased...... 2,779,009
Adviser.............................. 49,200
NYLIAC............................... 29,530
Administrator........................ 16,400
Custodian............................ 14,638
Organization......................... 480
Directors............................ 65
Accrued expenses....................... 55,468
------------
Total liabilities................ 2,944,790
------------
Net assets applicable to outstanding
shares............................... $205,001,035
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares
authorized........................... $ 176,556
Additional paid-in capital............. 198,929,364
Accumulated undistributed net
investment income.................... 50,573
Accumulated undistributed net realized
gain on investments.................. 1,380,264
Net unrealized appreciation on
investments.......................... 4,464,278
------------
Net assets applicable to outstanding
shares............................... $205,001,035
============
Shares of capital stock outstanding.... 17,655,632
============
Net asset value per share
outstanding.......................... $ 11.61
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 306,663
Interest............................. 10,189,398
------------
Total income..................... 10,496,061
------------
Expenses:
Advisory............................. 340,200
Administration....................... 226,800
Shareholder communication............ 100,440
Recordkeeping........................ 64,607
Professional......................... 53,699
Custodian............................ 9,153
Directors............................ 4,156
Portfolio pricing.................... 4,062
Amortization of organization
expense............................ 3,871
Miscellaneous........................ 1,982
------------
Total expenses before
reimbursement.................. 808,970
Expense reimbursement from
Administrator........................ (49,190)
------------
Net expenses..................... 759,780
------------
Net investment income.................. 9,736,281
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments....... 4,084,739
Net change in unrealized appreciation
on investments....................... 3,943,445
------------
Net realized and unrealized gain on
investments.......................... 8,028,184
------------
Net increase in net assets resulting
from operations...................... $ 17,764,465
============
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $1,850.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
71
<PAGE> 72
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1996
and the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1996 1995
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income......................................................... $ 9,736,281 $ 1,500,585
Net realized gain on investments.............................................. 4,084,739 172,097
Net change in unrealized appreciation on investments.......................... 3,943,445 520,833
------------ ------------
Net increase in net assets resulting from operations.......................... 17,764,465 2,193,515
------------ ------------
Dividends and distributions to shareholders:
From net investment income.................................................... (9,685,708) (1,500,585)
From net realized gain on investments......................................... (2,622,325) (172,097)
In excess of net realized gain on investments................................. -- (89,526)
------------ ------------
Total dividends and distributions to shareholders........................... (12,308,033) (1,762,208)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.............................................. 146,492,029 31,553,312
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions............................................................ 12,308,033 1,762,208
------------ ------------
158,800,062 33,315,520
Cost of shares redeemed....................................................... (2,569,930) (432,356)
------------ ------------
Increase in net assets derived from capital share transactions.............. 156,230,132 32,883,164
------------ ------------
Net increase in net assets.................................................. 161,686,564 33,314,471
NET ASSETS:
Beginning of period............................................................. 43,314,471 10,000,000
------------ ------------
End of period................................................................... $205,001,035 $43,314,471
============= =============
Accumulated undistributed net investment income................................. $ 50,573 $ --
============= =============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
YEAR 1995 (a)
ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1996 1995
----------------------------
<S> <C> <C>
Net asset value at beginning of period............................................ $ 10.55 $ 10.00
------------ ------------
Net investment income............................................................. 0.59 0.37
Net realized and unrealized gain on investments................................... 1.22 0.61
------------ ------------
Total from investment operations.................................................. 1.81 0.98
------------ ------------
Less dividends and distributions:
From net investment income...................................................... (0.59) (0.37)
From net realized gain on investments........................................... (0.16) (0.04)
In excess of net realized gain on investments................................... -- (0.02)
------------ ------------
Total dividends and distributions................................................. (0.75) (0.43)
------------ ------------
Net asset value at end of period.................................................. $ 11.61 $ 10.55
============= =============
Total investment return (b)....................................................... 17.16% 10.06%
Ratios (to average net assets)/Supplemental Data:
Net investment income........................................................... 8.59% 10.02% +
Net expenses.................................................................... 0.67% 0.67% +
Expenses (before reimbursement)................................................. 0.71% 1.25% +
Portfolio turnover rate........................................................... 149% 95%
Average commission rate paid...................................................... $ 0.0613 (c)
Net assets at end of period (in 000's)............................................ $ 205,001 $ 43,314
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after
September 1, 1995.
+ Annualized.
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.
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (90.2%)+
SHARES VALUE
---------------------
<S> <C> <C>
AUSTRALIA (4.6%)
Amcor, Ltd. (forest products &
paper)............................ 13,000 $ 83,532
Boral, Ltd. (building materials &
components)....................... 22,100 62,840
Brambles Industries, Ltd. (business
& public services)................ 4,300 83,846
Broken Hill Proprietary Co., Ltd.
(energy sources).................. 24,900 354,403
Coles Myer, Ltd. (merchandising)... 24,470 100,675
CRA, Ltd. (metals-nonferrous)...... 3,225 50,589
CSR, Ltd. (multi-industry)......... 19,200 67,099
Foster's Brewing Group, Ltd.
(beverages & tobacco)............. 28,920 58,573
Mount Isa Mines Holdings, Ltd.
(metals-nonferrous)............... 22,461 31,398
National Australia Bank, Ltd.
(banking)......................... 23,120 271,775
News Corp., Ltd. (broadcasting &
publishing)....................... 17,039 89,861
Pacific Dunlop, Ltd.
(multi-industry).................. 27,400 69,640
Santos, Ltd. (energy sources)...... 15,500 62,786
Westpac Banking Corp., Ltd.
(banking)......................... 19,400 110,325
WMC, Ltd. (metals-nonferrous)...... 14,600 91,957
-----------
1,589,299
-----------
AUSTRIA (3.2%)
Austrian Airlines Oesterreichische
Luftverkehrs AG (transportation-
airlines) (a)..................... 150 22,833
Bank Austria AG (banking).......... 2,950 217,722
Creditanstalt-Bankverein Stamm AG
(banking)......................... 2,050 138,627
EA-Generali AG (insurance)......... 350 103,326
Flughafen Wien AG (transportation-
airlines)......................... 1,200 61,110
Oesterreichische Brau-Beteiligungs
AG (beverages & tobacco).......... 750 50,856
OMV AG (energy sources)............ 1,650 185,861
Verbundgesellschaft-Oesterreichische
Elektrizitatswirtschafts AG Class
A (utilities-electrical & gas).... 1,350 100,943
Voest-Alpine Technologie AG
(machinery & engineering)......... 850 133,269
Wienerberger Baustoffindustrie AG
(building materials &
components)....................... 500 96,868
-----------
1,111,415
-----------
FRANCE (9.9%)
Alcatel Alsthom, SA (electrical &
electronics)...................... 1,348 108,073
AXA, SA (insurance)................ 2,493 158,248
Carrefour, SA (merchandising)...... 515 334,434
Compagnie de Saint Gobain, SA
(miscellaneous-materials &
commodities)...................... 1,521 214,747
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
FRANCE (Continued)
Compagnie de Suez, SA (banking).... 2,112 $ 89,619
Compagnie Financiere de Paribas, SA
Class A (banking)................. 1,451 97,938
Compagnie Generale des Eaux, SA
(business & public services)...... 1,337 165,365
Elf Aquitaine, SA (energy
sources).......................... 2,212 200,958
Eridania Beghin-Say, SA (food &
household products)............... 550 88,339
Groupe Danone, SA (food & household
products)......................... 1,086 151,032
Havas, SA (business & public
services)......................... 1,311 91,792
Lafarge, SA (building materials &
components)....................... 860 51,497
L'Air Liquide, SA (chemicals)...... 1,423 221,713
L'Oreal, SA (health & personal
care)............................. 737 277,009
LVMH (Moet Hennessy Louis Vuitton),
SA (beverages & tobacco).......... 1,070 298,231
Lyonnaise des Eaux, SA
(multi-industry).................. 1,187 110,258
Michelin (CGDE), SA Class B (tire &
rubber)........................... 1,253 67,510
Pernod-Ricard, SA (beverages &
tobacco).......................... 430 23,738
Pinault-Printemps-Redoute, SA
(building materials &
components)....................... 250 98,966
PSA Peugeot, SA (automobiles)...... 150 16,850
Rhone-Poulenc, SA Class A
(chemicals)....................... 1,468 49,952
Schneider, SA (machinery &
engineering)...................... 1,567 72,310
Societe Generale, SA (banking)..... 1,134 122,371
Thomson CSF, SA (aerospace &
military technology).............. 3,047 98,641
Total, SA Class B (energy
sources).......................... 2,584 209,752
-----------
3,419,343
-----------
GERMANY (8.9%)
Allianz AG Holding (insurance)..... 250 454,218
BASF AG (chemicals)................ 8,650 332,729
Bayer AG (chemicals)............... 9,150 372,861
Daimler-Benz AG (automobiles)
(a)............................... 2,000 137,563
Deutsche Bank AG (banking)......... 3,200 149,295
Deutsche Telekom AG
(telecommunications) (a).......... 19,550 411,650
Dresdner Bank AG (banking)......... 9,850 294,648
Karstadt AG (merchandising)........ 50 16,871
Linde AG (machinery &
engineering)...................... 50 30,498
Mannesmann AG (machinery &
engineering)...................... 50 21,640
Preussag AG (multi-industry)....... 50 11,307
RWE AG (utilities-electrical &
gas).............................. 500 21,154
Siemens AG (electrical &
electronics)...................... 11,700 550,415
Thyssen AG (metals-steel).......... 50 8,857
VEBA AG (utilities-electrical &
gas).............................. 3,200 184,802
Viag AG (multi-industry)........... 150 58,789
Volkswagen AG (automobiles)........ 50 20,764
-----------
3,078,061
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
73
<PAGE> 74
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
<S> <C> <C>
HONG KONG (3.9%)
Cheung Kong (Holdings), Ltd. (real
estate)........................... 21,000 $ 186,652
China Light & Power Co., Ltd.
(utilities-electrical & gas)...... 38,500 171,222
Hang Seng Bank, Ltd. (banking)..... 12,400 150,692
Hong Kong Telecommunications, Ltd.
(telecommunications).............. 126,800 204,094
Hutchison Whampoa, Ltd. (multi-
industry)......................... 24,000 188,495
Sun Hung Kai Properties, Ltd. (real
estate)........................... 16,000 195,993
Swire Pacific, Ltd. Class A (multi-
industry)......................... 25,500 243,133
-----------
1,340,281
-----------
ITALY (6.2%)
Assicurazioni Generali S.p.A.
(insurance)....................... 11,880 224,740
Banca Commerciale Italiana S.p.A.
(banking)......................... 28,000 50,850
Benetton Group S.p.A. (textile &
apparel).......................... 4,000 50,508
Credito Italiano S.p.A.
(banking)......................... 12,000 13,155
Edison S.p.A. (energy sources)..... 4,000 25,267
Ente Nazionale Idrocarburi S.p.A.
(energy sources).................. 118,000 604,459
Fiat S.p.A. (automobiles).......... 38,000 114,768
Fiat S.p.A. di Risp
(automobiles)..................... 6,000 10,502
Istituto Bancario San Paolo di
Torino S.p.A. (banking)........... 23,000 140,746
Istituto Nazionale delle
Assicurazioni S.p.A.
(insurance)....................... 72,000 93,615
Italgas S.p.A.
(utilities-electrical & gas)...... 5,000 20,842
Mediobanca S.p.A. (financial
services)......................... 10,000 53,857
Montedison S.p.A. (multi-industry)
(a)............................... 22,940 15,608
Olivetti Group S.p.A. (data
processing & reproduction) (a).... 30,000 10,561
Parmalat Finanziaria S.p.A. (food &
household products)............... 35,000 53,430
Pirelli S.p.A. (industrial
components)....................... 26,000 48,159
Riunione Adriatica di Sicurta
S.p.A. (insurance)................ 5,200 48,416
Sirti S.p.A.
(telecommunications).............. 3,000 18,161
Telecom Italia S.p.A.
(telecommunications).............. 108,000 279,992
Telecom Italia S.p.A. di Risp
(telecommunications).............. 8,000 15,581
Telecom Italia Mobile S.p.A.
(telecommunications).............. 91,000 229,632
Telecom Italia Mobile S.p.A. di
Risp (telecommunications)......... 6,000 8,547
-----------
2,131,396
-----------
JAPAN (29.3%)
Ajinomoto Co., Inc. (food &
household products) (b)........... 3,000 30,497
Asahi Bank, Ltd. (banking) (b)..... 17,000 150,849
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
JAPAN (Continued)
Asahi Chemical Industry Co., Ltd.
(chemicals) (b)................... 19,000 107,377
Asahi Glass Co., Ltd.
(miscellaneous-materials &
components) (b)................... 10,000 $ 93,903
Bank of Tokyo-Mitsubishi, Ltd.
(banking) (b)..................... 4,000 74,089
Bridgestone Corp. (industrial
components) (b)................... 3,000 56,859
Canon, Inc. (recreation & other
consumer goods) (b)............... 8,000 176,435
Chiba Bank, Ltd. (banking) (b)..... 6,000 40,835
Dai Nippon Printing Co., Ltd.
(business & public services)
(b)............................... 5,000 87,442
Daiei, Inc. (merchandising) (b).... 10,000 76,243
Daiwa House Industry Co., Ltd.
(construction & housing) (b)...... 13,000 166,872
Denso Corp. (industrial
components)....................... 8,000 192,287
Fanuc, Ltd. (electronic components
& instruments) (b)................ 2,000 63,923
Fuji Bank, Ltd. (banking) (b)...... 16,000 232,950
Fuji Photo Film, Ltd. (recreation &
other consumer goods)............. 2,000 65,819
Fujitsu, Ltd. (data processing &
reproduction)..................... 11,000 102,346
Furukawa Electric Co. (industrial
components)....................... 15,000 70,944
Hankyu Corp. (transportation-road &
rail)............................. 3,000 14,861
Hitachi Corp., Ltd. (electrical &
electronics)...................... 20,000 186,084
Honda Motor Co., Ltd.
(automobiles)..................... 6,000 171,094
Industrial Bank of Japan, Ltd.
(banking)......................... 19,000 329,007
Ito-Yokado Co., Ltd.
(merchandising)................... 3,000 130,259
Itochu Corp. (wholesale &
international trade).............. 30,000 160,756
Japan Airlines Co. (transportation-
airlines) (a)..................... 9,000 47,684
Japan Energy Corp. (energy
sources).......................... 28,000 75,984
Joyo Bank (banking)................ 3,000 18,040
Kajima Corp. (construction &
housing).......................... 2,000 14,266
Kansai Electric Power Co., Inc.
(utilities-electrical & gas)...... 3,000 62,028
Kao Corp. (food & household
products)......................... 20,000 232,605
Kawasaki Steel Corp.
(metals-steel).................... 6,000 17,213
Kinki Nippon Railway Co., Ltd.
(transportation-road & rail)...... 7,000 43,600
Kirin Brewery Co., Ltd. (beverages
& tobacco)........................ 11,000 108,032
Komatsu, Ltd. (machinery &
engineering)...................... 10,000 81,842
Kubota Corp. (machinery &
engineering)...................... 35,000 168,552
Marubeni Corp. (wholesale &
international trade).............. 17,000 72,935
Marui Co., Ltd. (merchandising).... 2,000 36,011
Matsushita Electric Industrial Co.,
Ltd. (appliances & household
durables)......................... 8,000 130,259
</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.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
<S> <C> <C>
JAPAN (Continued)
Mitsubishi Chemical Corp.
(chemicals)....................... 10,000 $ 32,306
Mitsubishi Corp.
(multi-industry).................. 5,000 51,690
Mitsubishi Electric Corp.
(electrical & electronics)........ 35,000 208,052
Mitsubishi Estate Co., Ltd.
(construction & housing).......... 3,000 30,756
Mitsubishi Heavy Industries, Ltd.
(machinery & engineering)......... 71,000 562,732
Mitsubishi Trust & Banking Co.
(financial services).............. 13,000 173,592
Mitsui Engineering & Shipbuilding
Co., Ltd. (machinery &
engineering) (a).................. 21,000 42,696
Mitsui Fudosan Co. (construction &
housing).......................... 6,000 59,960
Mitsui Marine & Fire Insurance Co.,
Ltd. (insurance).................. 15,000 80,507
Mitsui Trust & Banking Co.
(financial services).............. 3,000 23,390
Mitsukoshi, Ltd. (merchandising)... 3,000 21,245
NEC Corp. (electrical &
electronics)...................... 8,000 96,488
Nippon Express Co., Ltd.
(transportation-road & rail)...... 28,000 191,529
Nippon Oil Co., Ltd. (energy
sources).......................... 8,000 41,007
Nippon Paper Industries Co. (forest
products & paper)................. 6,000 27,913
Nippon Steel Corp.
(metals-steel).................... 70,000 206,243
Nippon Yusen Kabushiki Kaisha
(transportation-shipping)......... 5,000 22,571
Nissan Motor Co., Ltd.
(automobiles)..................... 27,000 156,311
NKK Corp. (metals-steel) (a)....... 58,000 130,414
Nomura Securities Co., Ltd.
(financial services).............. 17,000 254,832
Obayashi Corp. (construction &
housing).......................... 5,000 33,685
Oji Paper Co., Ltd. (forest
products & paper)................. 2,000 12,630
Osaka Gas Co. (utilities-electrical
& gas)............................ 6,000 16,386
Sakura Bank, Ltd. (banking)........ 18,000 128,398
Sankyo Co., Ltd. (health & personal
care)............................. 2,000 56,514
Sanyo Electric Co., Ltd.
(appliances & household
durables)......................... 6,000 24,811
Sekisui Chemical Co. (building
materials & components)........... 2,000 20,159
Sekisui House, Ltd. (construction &
housing).......................... 2,000 20,331
Sharp Corp. (appliances & household
durables)......................... 5,000 71,074
Shimizu Corp. (construction &
housing).......................... 4,000 29,808
Shiseido Co., Ltd. (health &
personal care).................... 8,000 92,353
Sony Corp. (appliances & household
durables)......................... 4,000 261,551
Sumitomo Bank, Ltd. (banking)...... 14,000 201,419
Sumitomo Chemical Co.
(chemicals)....................... 6,000 23,726
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
JAPAN (Continued)
Sumitomo Corp. (wholesale &
international trade).............. 14,000 $ 110,117
Sumitomo Electric Industries
(industrial components)........... 12,000 167,476
Sumitomo Marine & Fire Insurance
Co. (insurance)................... 7,000 43,420
Sumitomo Metal Industries, Ltd.
(metals-steel).................... 8,000 19,642
Sumitomo Metal Mining Co. (metals-
nonferrous)....................... 4,000 26,913
Taisei Corp. (construction &
housing).......................... 19,000 98,211
Taisho Pharmaceutical Co. (health &
personal care).................... 1,000 23,519
Takeda Chemical Industries, Ltd.
(health & personal care).......... 6,000 125,607
Teijin, Ltd. (chemicals)........... 102,000 444,637
Tobu Railway Co., Ltd.
(transportation-road & rail)...... 14,000 68,386
Tohoku Electric Power (utilities-
electrical & gas)................. 1,000 19,814
Tokai Bank (banking)............... 11,000 114,666
Tokio Marine & Fire Insurance Co.
(insurance)....................... 9,000 84,513
Tokyo Dome Corp. (leisure &
tourism).......................... 2,000 34,805
Tokyo Electric Power Co., Inc.
(utilities-electrical & gas)...... 6,000 131,293
Tokyo Gas Co., Ltd. (utilities-
electrical & gas)................. 15,000 40,577
Tokyu Corp. (transportation-road &
rail)............................. 5,000 28,343
Toppan Printing Co., Ltd. (business
& public services)................ 8,000 99,934
Tostem Corp. (building materials &
components)....................... 1,000 27,568
Toto, Ltd. (building materials &
components)....................... 1,000 11,372
Toyoda Automatic Loom Works, Ltd.
(machinery & engineering)......... 1,000 18,694
Toyota Motor Corp. (automobiles)... 30,000 860,638
Yamaichi Securities Co., Ltd.
(financial services).............. 15,000 66,551
Yamanouchi Pharmaceutical Co., Ltd.
(health & personal care).......... 3,000 61,511
Yamazaki Baking Co., Ltd. (food &
household products)............... 1,000 15,938
Yasuda Trust & Banking (financial
services)......................... 15,000 63,449
-----------
10,105,455
-----------
MALAYSIA (2.3%)
AMMB Holdings Berhad (financial
services)......................... 4,000 33,577
DCB Holdings Berhad (financial
services)......................... 5,000 17,125
Edaran Otomobil Nasional Berhad
(automobiles)..................... 2,000 19,996
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
75
<PAGE> 76
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
<S> <C> <C>
MALAYSIA (Continued)
Golden Hope Plantations Berhad
(miscellaneous-materials &
commodities)...................... 28,000 $ 47,674
Hume Industries Berhad (building
materials & components)........... 5,000 31,479
Malayan Banking Berhad (banking)... 9,000 99,782
Malaysia International Shipping
Berhad
Foreign Registered
(transportation-shipping)......... 9,000 26,727
Malaysian Resources Corp. Berhad
(real estate)..................... 7,000 27,579
Resorts World Berhad (leisure &
tourism).......................... 15,000 68,303
Rothmans of Pall Mall Berhad
(beverages & tobacco)............. 4,000 41,972
Sime Darby Berhad
(multi-industry).................. 26,000 102,435
Technology Resources Industries
Berhad (multi-industry) (a)....... 7,000 13,803
Telekom Malaysia Berhad
(telecommunications).............. 11,000 98,000
Tenaga Nasional Berhad (utilities-
electrical & gas)................. 16,000 76,658
United Engineers, Ltd. (machinery &
engineering)...................... 9,000 81,251
YTL Corp. Berhad
(multi-industry).................. 3,000 16,155
-----------
802,516
-----------
NETHERLANDS (2.0%)
Elsevier NV (broadcasting &
publishing)....................... 2,900 48,956
ING Groep NV (insurance)........... 2,570 92,415
Koninklijke PTT Nederland NV
(forest products & paper)......... 1,626 61,948
Philips Electronics NV (appliances
& household durables)............. 1,200 48,562
Royal Dutch Petroleum Co. (energy
sources).......................... 1,600 280,182
Unilever CVA NV (food & household
products)......................... 600 106,005
Wolters Kluwer CVA NV (broadcasting
& publishing)..................... 301 39,936
-----------
678,004
-----------
NORWAY (2.5%)
Bergesen d.y. ASA Class A
(transportation-shipping)......... 3,900 95,280
Bergesen d.y. ASA Class B
(transportation-shipping)......... 500 11,902
Dyno Industrier ASA (chemicals).... 500 12,685
Hafslund ASA Class A (energy
sources).......................... 1,000 7,361
Hafslund ASA Class B (energy
sources).......................... 600 4,106
Kvaerner ASA Class B (machinery &
engineering)...................... 400 17,352
Norsk Hydro ASA (energy sources)... 9,000 486,268
Norske Skogindustrier ASA Class A
(forest products & paper)......... 1,300 43,365
Nycomed ASA Class A (health &
personal care) (a)................ 1,000 15,269
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
NORWAY (Continued)
Nycomed ASA Class B (health &
personal care) (a)................ 600 $ 9,209
Orkla ASA Class A
(multi-industry).................. 2,100 146,350
-----------
849,147
-----------
SINGAPORE (4.8%)
City Developments, Ltd. (real
estate)........................... 14,000 126,106
DBS Land, Ltd. (real estate)....... 21,000 77,315
Development Bank of Singapore, Ltd.
Foreign Registered (banking)...... 11,000 148,626
Fraser & Neave, Ltd. (beverages &
tobacco).......................... 8,000 82,355
Keppel Corp., Ltd. (machinery &
engineering)...................... 10,000 77,923
Oversea-Chinese Banking Corp., Ltd.
Foreign Registered (banking)...... 15,000 186,586
Singapore Airlines, Ltd. Foreign
Registered
(transportation-airlines)......... 19,000 172,503
Singapore Press Holdings, Ltd.
Foreign Registered (broadcasting &
publishing)....................... 5,400 106,547
Singapore Telecommunications, Ltd.
(telecommunications).............. 222,000 523,728
United Overseas Bank, Ltd. Foreign
Registered (banking).............. 14,000 156,132
-----------
1,657,821
-----------
SPAIN (5.3%)
Acerinox, SA (metals-steel)........ 110 15,865
Autopistas Concesionares Espanola,
SA (business & public services)... 7,126 98,064
Banco de Bilbao Vizcaya, SA
Registered (banking).............. 4,380 236,051
Banco de Central Hispanoamericano,
SA (banking)...................... 680 17,435
Banco de Santander, SA (banking)... 2,840 181,440
Corporacion Bancaria de Espana, SA
(banking)......................... 1,410 62,981
Corporacion Mapfre, SA
(insurance)....................... 220 13,379
Empresa Nacional de Electricidad,
SA (utilities-electrical & gas)... 4,570 324,640
Fomento de Construcciones y
Contratas, SA (construction &
housing).......................... 460 42,791
Gas Natural SDG, SA (utilities-
electrical & gas)................. 330 76,619
Iberdrola, SA (utilities-electrical
& gas)............................ 14,620 206,813
Repsol, SA (energy sources)........ 5,220 199,854
Telefonica de Espana, SA
(telecommunications).............. 15,040 348,617
-----------
1,824,549
-----------
UNITED KINGDOM (7.3%)
Abbey National PLC (banking)....... 7,790 101,982
Barclays PLC (banking)............. 6,765 115,827
Bass PLC (beverages & tobacco)..... 1,680 23,604
</TABLE>
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>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
<S> <C> <C>
UNITED KINGDOM (Continued)
B.A.T. Industries PLC (beverages &
tobacco).......................... 6,671 $ 55,311
BOC Group PLC (chemicals).......... 1,223 18,282
Boots Co. PLC (merchandising)...... 1,760 18,147
British Airways PLC
(transportation-airlines)......... 1,498 15,522
British Gas PLC (energy sources)... 11,990 46,064
British Petroleum Co. PLC (energy
sources).......................... 18,274 219,062
British Telecommunications PLC
(telecommunications).............. 11,110 75,004
BTR PLC (multi-industry)........... 16,831 81,800
Cable & Wireless PLC
(telecommunications).............. 9,093 75,548
Commercial Union PLC (insurance)... 1,803 21,089
EMI Group PLC (recreation & other
consumer goods)................... 990 23,380
General Electric Co. PLC
(electrical & electronics)........ 8,700 56,873
GKN PLC (machinery &
engineering)...................... 657 11,254
Glaxo Wellcome PLC (health &
personal care).................... 11,369 184,441
Granada Group PLC (leisure &
tourism).......................... 5,010 73,862
Grand Metropolitan PLC (multi-
industry)......................... 9,955 78,195
Great Universal Stores PLC (The)
(merchandising)................... 12,200 127,773
Guinness PLC (beverages &
tobacco).......................... 15,670 122,684
Hanson PLC (multi-industry)........ 32,398 45,186
HSBC Holdings PLC (financial
services)......................... 2,450 54,756
Imperial Chemical Industries PLC
(chemicals)....................... 830 10,916
Imperial Tobacco Group PLC
(beverages & tobacco)............. 3,239 20,897
Kingfisher PLC (merchandising)..... 1,111 12,006
Lloyds TSB Group PLC (banking)..... 12,654 93,224
Marks & Spencer PLC
(merchandising)................... 10,352 86,983
MEPC PLC (real estate)............. 1,050 7,780
National Power PLC (utilities-
electrical & gas)................. 8,580 71,800
Peninsular & Oriental Steam
Navigation Co. Deferred Stock
(The) (transportation-shipping)... 4,355 43,971
Prudential Corp. PLC (insurance)... 9,120 76,709
Rank Group PLC (leisure &
tourism).......................... 5,210 38,829
Redland PLC (building materials &
components)....................... 1,616 10,135
Reed International PLC
(broadcasting & publishing)....... 5,410 101,978
Reuters Holdings PLC (broadcasting
& publishing)..................... 5,820 74,848
RMC Group PLC (building materials &
components)....................... 700 11,949
RTZ Corp. PLC Registered (metals-
nonferrous)....................... 4,143 $ 66,397
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
UNITED KINGDOM (Continued)
Sainsbury (J.) PLC
(merchandising)................... 4,930 32,734
Scottish Power PLC (utilities-
electrical & gas)................. 7,100 42,769
Thorn PLC (appliances & household
durables) (a)..................... 990 4,261
Unilever PLC (food & household
products)......................... 2,820 68,358
Vodafone Group PLC
(multi-industry).................. 3,995 16,852
-----------
2,539,042
-----------
Total Common Stocks
(Cost $30,655,302)................ 31,126,329
-----------
PREFERRED STOCK (0.1%)
AUSTRIA (0.1%)
Creditanstalt-Bankverein Vorzug AG
(banking)......................... 600 27,676
-----------
Total Preferred Stock
(Cost $35,245).................... 27,676
-----------
<CAPTION>
SHORT-TERM
INVESTMENT (4.1%)
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
COMMERCIAL PAPER (4.1%)
UNITED STATES (4.1%)
Ameritech Corp.
6.25%, due 1/2/97................. $1,420,000 1,419,753
-----------
Total Short-Term Investment
(Cost $1,419,753)................. 1,419,753
-----------
Total Investments
(Cost $32,110,300)(c)............. 94.4% 32,573,758 (d)
Cash and Other Assets,
Less Liabilities.................. 5.6 1,935,462
-----------
Net Assets......................... 100.0% $34,509,220
===========
</TABLE>
- ------------
(a) Non-income producing securities.
(b) Segregated as collateral for forward foreign currency contracts.
(c) The cost for Federal income tax purposes is $32,155,934.
(d) At December 31, 1996 net unrealized appreciation for securities was
$417,824, 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 $2,997,390 and aggregate gross
unrealized depreciation for all investments on which there was an excess of
cost over market value of $2,579,566.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
77
<PAGE> 78
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
The table below sets forth the diversification of International Equity Portfolio
investments by industry.
COMMON STOCKS,
PREFERRED STOCK &
SHORT-TERM INVESTMENT
<TABLE>
<CAPTION>
VALUE PERCENT +
------------------------
<S> <C> <C>
Aerospace & Military
Technology.................. $ 98,641 0.3%
Appliances & Household
Durables.................... 540,518 1.6
Automobiles................... 1,508,487 4.4
Banking....................... 4,565,756 13.2
Beverages & Tobacco........... 886,252 2.6
Broadcasting & Publishing..... 462,126 1.3
Building Materials &
Components.................. 422,833 1.2
Business & Public Services.... 626,444 1.8
Chemicals..................... 1,627,185 4.7
Construction & Housing........ 496,681 1.4
Data Processing &
Reproduction................ 112,907 0.3
Electrical & Electronics...... 1,205,986 3.5
Electronic Components &
Instruments................. 63,923 0.2
Energy Sources................ 3,003,374 8.7
Financial Services............ 741,130 2.1
Food & Household Products..... 746,203 2.2
Forest Products & Paper....... 229,387 0.7
Health & Personal Care........ 845,431 2.5
Industrial Components......... 535,725 1.6
Insurance..................... 1,494,594 4.3
Leisure & Tourism............. 215,798 0.6
Machinery & Engineering....... 1,320,015 3.8
Merchandising................. 993,380 2.9
Metals-Nonferrous............. 267,255 0.8
Metals-Steel.................. 398,234 1.2
Miscellaneous-Materials &
Commodities................. 262,420 0.8
Miscellaneous-Materials &
Components.................. 93,904 0.3
Multi-Industry................ 1,316,794 3.8
Real Estate................... 621,426 1.8
Recreation & Other Consumer
Goods....................... 265,634 0.8
Telecommunications............ 3,708,308 10.7
Textile & Apparel............. 50,508 0.1
Tire & Rubber................. 67,510 0.2
Transportation-Airlines....... 319,652 0.9
Transportation-Road & Rail.... 346,719 1.0
Transportation-Shipping....... 200,452 0.6
Utilities-Electrical & Gas.... 1,568,359 4.5
Wholesale & International
Trade....................... 343,807 1.0
----------- ---------
32,573,758 94.4
Cash and Other Assets, Less
Liabilities................. 1,935,462 5.6
----------- ---------
Net Assets.................... $34,509,220 100.0%
========== =========
</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.
78
<PAGE> 79
MAINSTAY VP SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $32,110,300)........ $ 32,573,758
Cash denominated in foreign currencies
(identified cost $1,715,056)......... 1,871,264
Cash................................... 178,118
Receivables:
Investment securities sold........... 716,800
Fund shares sold..................... 84,761
Dividends and interest............... 57,738
NYLIAC............................... 6,209
Unrealized net appreciation on forward
foreign currency contracts........... 1,046,426
Other assets........................... 19,096
Total assets..................... 36,554,170
LIABILITIES:
Payables:
Investment securities purchased...... 1,987,559
Adviser.............................. 17,148
Custodian............................ 10,384
Administrator........................ 3,137
Organization......................... 480
Directors............................ 13
Accrued expenses....................... 26,229
Total liabilities................ 2,044,950
Net assets applicable to outstanding
shares............................... $ 34,509,220
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares
authorized........................... $ 32,397
Additional paid-in capital............. 33,536,947
Accumulated distribution in excess of
net investment income................ (518,472)
Accumulated distribution in excess of
net
realized gain on investments......... (200,701)
Net unrealized appreciation on
investments.......................... 463,458
Net unrealized appreciation on
translation of assets and liabilities
in foreign currencies and forward
foreign currency contracts........... 1,195,591
Net assets applicable to outstanding
shares............................... $ 34,509,220
Shares of capital stock outstanding.... 3,239,740
Net asset value per share
outstanding.......................... $ 10.65
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 379,158
Interest............................. 108,380
------------
Total income..................... 487,538
------------
Expenses:
Advisory............................. 147,432
Administration....................... 49,144
Custodian............................ 46,423
Shareholder communication............ 41,184
Recordkeeping........................ 38,874
Professional......................... 22,956
Portfolio pricing.................... 20,302
Amortization of organization
expense............................ 3,741
Directors............................ 841
Miscellaneous........................ 735
------------
Total expenses before
reimbursement.................. 371,632
Expense reimbursement from
Administrator........................ (133,284)
------------
Net expenses..................... 238,348
------------
Net investment income.................. 249,190
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Security transactions................ (100,619)
Foreign currency transactions........ 858,716
------------
Net realized gain on investments and
foreign currency transactions........ 758,097
------------
Net change in unrealized appreciation
on investments:
Security transactions................ 319,371
Translation of assets and liabilities
in foreign currencies and forward
foreign currency contracts......... 1,159,064
------------
Net unrealized gain on investments and
foreign currencies................... 1,478,435
------------
Net realized and unrealized gain on
investments and foreign currency
transactions......................... 2,236,532
------------
Net increase in net assets resulting
from operations...................... $ 2,485,722
===========
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$52,784.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
79
<PAGE> 80
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1996
and the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1996 1995
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income......................................................... $ 249,190 $ 82,369
Net realized loss on investments.............................................. (100,619) (41,301)
Net realized gain on foreign currency transactions............................ 858,716 702,174
Net change in unrealized appreciation on investments.......................... 319,371 144,087
Net change in unrealized appreciation on translation of assets and liabilities
in foreign currencies and forward foreign currency contracts................. 1,159,064 36,527
------------ ------------
Net increase in net assets resulting from operations.......................... 2,485,722 923,856
------------ ------------
Dividends and distributions to shareholders:
From net investment income.................................................... (1,745,204) (82,369)
From net realized gain on investments and foreign currency transactions....... (44,794) (597,335)
------------ ------------
Total dividends and distributions to shareholders........................... (1,789,998) (679,704)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.............................................. 18,900,627 4,168,978
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions............................................................ 1,789,998 679,704
------------ ------------
20,690,625 4,848,682
Cost of shares redeemed....................................................... (1,507,839) (462,124)
------------ ------------
Increase in net assets derived from capital share transactions.............. 19,182,786 4,386,558
------------ ------------
Net increase in net assets.................................................. 19,878,510 4,630,710
NET ASSETS:
Beginning of period............................................................. 14,630,710 10,000,000
------------ ------------
End of period................................................................... $34,509,220 $14,630,710
============= =============
Accumulated distribution in excess of net investment income..................... $ (518,472) $ --
============= =============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
YEAR 1995 (a)
ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1996 1995
----------------------------
<S> <C> <C>
Net asset value at beginning of period............................................ $ 10.20 $ 10.00
------------ ------------
Net investment income............................................................. 0.44 0.64
Net realized and unrealized gain on investments................................... 0.06 0.01
Net realized and unrealized gain on foreign currency transactions................. 0.56 0.05
------------ ------------
Total from investment operations.................................................. 1.06 0.70
------------ ------------
Less dividends and distributions:
From net investment income...................................................... (0.60) (0.06)
From net realized gain on investments and foreign currency transactions......... (0.01) (0.44)
------------ ------------
Total dividends and distributions................................................. (0.61) (0.50)
------------ ------------
Net asset value at end of period.................................................. $ 10.65 $ 10.20
============= =============
Total investment return (b)....................................................... 10.54% 6.96%
Ratios (to average net assets)/Supplemental Data:
Net investment income........................................................... 1.01% 1.07% +
Net expenses.................................................................... 0.97% 0.97% +
Expenses (before reimbursement)................................................. 1.51% 2.51% +
Portfolio turnover rate........................................................... 16% 14%
Average commission rate paid...................................................... $ 0.0364 (c)
Net assets at end of period (in 000's)............................................ $ 34,509 $ 14,631
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after
September 1, 1995.
+ Annualized.
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.
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
LONG-TERM BONDS (40.2%)+
ASSET-BACKED SECURITIES (10.8%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
AIRPLANE LEASES (0.7%)
Aircraft Lease Portfolio
Securitization Series 1996-1
Class C
6.975%, due 6/15/06
(call date 1/15/97) (c)(e)...... $ 1,196,703 $ 1,197,074
Airplane Pass-Through Trust
Series 1 Class C
8.15%, due 3/15/19
(call date 1/1/97).............. 925,000 957,375
------------
2,154,449
------------
COMMERCIAL MORTGAGE LOANS (5.0%)
Asset Securitization Corp.
Series 1996-MD6 Class A1B
6.88%, due 11/13/26............. 2,125,000 2,133,627
Series 1996-D2 Class A1
6.92%, due 2/14/29.............. 863,066 862,255
Series 1996-D3 Class A1C
7.40%, due 10/13/26............. 1,050,000 1,075,263
Blackrock Capital Finance L.P.
Series 1996-C2 Class A
7.641%, due 11/15/26 (c)........ 809,202 819,827
Donaldson, Lufkin & Jenrette
Mortgage Acceptance Corp. Series
1996-CF2 Class A1A
6.86%, due 11/12/21 (c)......... 1,395,545 1,402,090
Federal Depository Insurance
Corp. Series 1996-C1 Class 1A
6.75%, due 7/25/26.............. 2,425,000 2,417,725
General Motors Acceptance Corp.
Commercial Mortgage Securities
Inc.
Series 1996-C1 Class A2A
6.79%, due 9/15/03.............. 1,300,000 1,302,028
Merrill Lynch Mortgage Investors,
Inc.
Series 1996-C2 Class A1
6.69%, due 11/21/28............. 1,046,501 1,047,484
Series 1996-C1 Class A1
7.15%, due 4/25/28.............. 1,266,803 1,287,389
Mortgage Capital Funding, Inc.
Series 1996-MC1 Class A2A
7.35%, due 7/15/05.............. 877,835 897,174
Nomura Asset Securities Corp.
Series 1996-MD5 Class A1B
7.12%, due 4/13/36.............. 1,050,000 1,060,500
Structured Asset Securities Corp.
Series 1996-CFL Class A1B
5.751%, due 2/25/28............. 506,616 503,292
Series 1996-2 Class A1
7.00%, due 8/25/26.............. 975,000 980,938
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
COMMERCIAL MORTGAGE LOANS
(Continued)
Wells Fargo Capital Markets
Apartment Financing
Series APT Class 1
6.56%, due 12/29/05 (c)......... $ 925,000 $ 917,193
------------
16,706,785
------------
CREDIT CARD RECEIVABLES (0.2%)
Standard Credit Card Master Trust
Series 1995-4 Class A
5.60%, due 2/15/00 (e).......... 725,000 725,225
------------
EQUIPMENT LOANS (1.0%)
Case Equipment Loan Trust Series
1995-B Class A3
6.15%, due 9/15/02.............. 1,050,000 1,052,299
Newcourt Receivables Asset Trust
Series 1996-3 Class A
6.24%, due 12/20/04............. 974,722 997,500
Series 1996-2 Class A
6.87%, due 6/20/04.............. 1,075,597 1,083,836
------------
3,133,635
------------
HOME EQUITY LOANS (1.5%)
Green Tree Financial Corp. Series
1996-10 Class A6
7.30%, due 11/15/28............. 1,275,000 1,252,292
Series 1996-9 Class A6
7.69%, due 1/15/28.............. 1,250,000 1,260,938
Series 1996-6 Class A6
7.95%, due 9/15/27.............. 1,550,000 1,591,168
Series 1996-8 Class A7
8.05%, due 10/15/27............. 850,000 873,910
------------
4,978,308
------------
RESIDENTIAL
MORTGAGE LOANS (2.4%)
Bear Stearns Mortgage
Securities Inc.
Series 1996-5 Class A2
10.00%, due 9/25/27............. 1,067,069 1,110,253
Series 1996-4 Class AI2
10.50%, due 9/25/27............. 1,009,351 1,058,557
Capstead Securities Corp. IV
Series 1992-1 Class G
8.75%, due 1/25/20.............. 1,750,000 1,783,915
Independent National Mortgage
Corp. Series 1996-D Class A2
7.00%, due 5/25/26.............. 2,050,000 2,042,641
Residential Accredit Loans, Inc.
Series 1996-QS4 Class AI2
11.00%, due 8/25/26............. 1,030,345 1,078,967
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
81
<PAGE> 82
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
ASSET-BACKED SECURITIES (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
RESIDENTIAL
MORTGAGE LOANS (Continued)
Residential Asset Securitization
Trust Series 1996-A2 Class A3
9.00%, due 6/25/26.............. $ 604,556 $ 618,914
Series 1996-A6 Class A10
9.00%, due 9/25/26.............. 429,093 437,138
------------
8,130,385
------------
Total Asset-Backed Securities
(Cost $35,735,238).............. 35,828,787
------------
BRADY BOND (0.4%)
EURO BOND (0.4%)
Poland-Global Registered Series
RSTA
3.25%, due 10/27/24
(call date 4/27/97) (e)......... 2,150,000 1,349,125
------------
Total Brady Bond
(Cost $1,211,382)............... 1,349,125
------------
CORPORATE BONDS (5.2%)
BANKS (2.6%)
BankBoston Capital Trust I
Guaranteed
8.25%, due 12/15/26
(call date 12/15/06) (c)........ 1,775,000 1,800,667
Bank Hawaii Honolulu Series A
8.25%, due 12/15/26
(call date 12/15/06) (c)........ 1,175,000 1,173,613
Capital One Bank
Medium-Term Senior Bank Notes
7.15%, due 9/15/06
(put date 9/15/99).............. 950,000 968,696
First USA Bank Wilmington,
Delaware Deposit Notes
6.25%, due 10/9/98.............. 775,000 773,628
Midland Bank PLC
Series 3M Seasoned
5.725%, due 6/29/49
(call date 6/17/97) (e)(h)...... 880,000 761,200
Regions Financial Corp.
7.75%, due 9/15/24
(put date 7/15/04).............. 1,125,000 1,204,313
Southtrust Bank
Birmingham, Alabama N A
Medium-Term Notes
7.69%, due 5/15/25
(put date 5/15/05).............. 1,000,000 1,066,370
Standard Chartered PLC
Series 4 Seasoned
6.088%, due 1/29/49
(call date 7/14/97) (e)(h)...... 970,000 808,737
------------
8,557,224
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
BROKERAGE (0.6%)
Lehman Brothers Holdings Inc.
7.375%, due 5/15/07
(put date 5/15/00).............. $ 600,000 $ 618,498
Merrill Lynch & Co., Inc.
Medium-Term Notes Series B
6.65%, due 1/15/99.............. 950,000 957,496
Salomon Inc.
6.70%, due 12/1/98.............. 525,000 527,940
------------
2,103,934
------------
FINANCE (1.7%)
Aetna Services Inc.
6.97%, due 8/15/36
(put date 6/15/04).............. 850,000 865,963
American Re Corp.
7.45%, due 12/15/26
(call date 1/1/97) (c).......... 825,000 823,969
Associates Corp. North America
7.75%, due 2/15/05
(put date 2/15/00).............. 1,450,000 1,539,320
Crestar Capital Trust I
Guaranteed
8.16%, due 12/15/26
(call date 12/15/06) (c)........ 1,225,000 1,219,475
Travelers/Aetna Property &
Casualty Corp.
6.75%, due 9/1/99............... 1,200,000 1,212,024
------------
5,660,751
------------
RETAIL (0.3%)
Sears Roebuck Acceptance Corp.
Medium-Term Notes Series 1
5.82%, due 12/7/98.............. 950,000 944,841
------------
Total Corporate Bonds
(Cost $17,234,081).............. 17,266,750
------------
U.S. GOVERNMENT &
FEDERAL AGENCIES (20.7%)
FEDERAL AGENCIES (1.0%)
Tennessee Valley Authority
5.98%, due 4/1/36
(put date 4/1/98)............... 1,800,000 1,824,336
6.235%, due 7/15/45
(put date 7/15/01).............. 1,335,000 1,337,310
------------
3,161,646
------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION GOLD (MORTGAGE PASS-
THROUGH SECURITY) (0.3%)
7.00%, due 12/1/01.............. 925,000 934,537
------------
</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>
U.S. GOVERNMENT &
FEDERAL AGENCIES (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (COLLATERALIZED
MORTGAGE OBLIGATION) (0.3%)
Series 1996-M7 Class A
6.521%, due 9/17/04............. $ 1,140,996 $ 1,137,790
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE PASS-
THROUGH SECURITIES) (7.1%)
6.00%, due 11/1/23.............. 1,527,726 1,426,514
6.00%, due 1/23/27 ARM TBA
(b)(g).......................... 2,600,000 2,587,000
6.47%, due 12/1/01.............. 1,070,000 1,063,366
6.52%, due 12/1/03.............. 950,000 939,683
6.525%, due 12/1/03............. 900,000 890,460
6.545%, due 1/14/27............. 800,000 781,400
6.595%, due 1/31/03 TBA (b)..... 975,000 968,341
6.625%, due 1/25/06 TBA (b)..... 725,000 712,080
6.87%, due 1/24/11 TBA (b)...... 1,085,000 1,083,752
7.00%, due 8/1/11-1/1/24........ 6,566,443 6,532,355
9.00%, due 1/5/05-8/1/26........ 6,247,780 6,592,655
------------
23,577,606
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION I (MORTGAGE
PASS-THROUGH SECURITIES) (3.9%)
6.50%, due 8/15/23-12/15/23..... 1,211,946 1,161,953
7.50%, due 11/15/25-12/15/25.... 2,498,494 2,500,443
8.00%, due 12/15/23............. 6,602,376 6,774,632
9.50%, due 12/15/17-5/15/22..... 2,460,963 2,680,640
------------
13,117,668
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION II (MORTGAGE
PASS-THROUGH SECURITIES) (1.0%)
6.50%, due 1/20/23-2/20/23
ARM (g)......................... 2,026,074 2,066,053
7.00%, due 11/20/21-11/20/22
ARM (g)......................... 1,142,187 1,166,126
------------
3,232,179
------------
UNITED STATES TREASURY BONDS
(2.8%)
6.25%, due 8/15/23.............. 2,150,000 2,015,625
6.50%, due 11/15/26............. 4,855,000 4,764,746
8.875%, due 8/15/17............. 775,000 957,249
11.25%, due 2/15/15............. 720,000 1,063,238
11.625%, due 11/15/04........... 345,000 455,507
------------
9,256,365
------------
UNITED STATES TREASURY NOTES
(4.3%)
5.625%, due 11/30/00............ 535,000 525,300
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
UNITED STATES TREASURY NOTES
(Continued)
6.375%, due 3/31/01............. $ 4,035,000 $ 4,062,115
6.50%, due 5/15/05.............. 200,000 201,344
7.75%, due 12/31/99............. 1,675,000 1,751,950
7.875%, due 11/15/04............ 1,575,000 1,718,719
8.125%, due 2/15/98 (d)......... 6,050,000 6,206,937
------------
14,466,365
------------
Total U.S. Government &
Federal Agencies
(Cost $68,763,074).............. 68,884,156
------------
YANKEE BONDS (3.1%)
City of Naples
7.52%, due 7/15/06.............. 1,000,000 1,034,300
Columbia Republic
7.25%, due 2/15/03.............. 625,000 605,219
8.66%, due 10/7/16 (c).......... 1,600,000 1,671,104
Enersis SA
7.40%, due 12/1/16.............. 850,000 845,512
Guangdong International Trust &
Investment Corp.
8.75%, due 10/24/16 (c)......... 1,700,000 1,751,595
Hero Asian BVI Ltd.
9.11%, due 10/15/01 (c)......... 600,000 627,984
Hydro-Quebec Series IO
8.05%, due 7/7/24
(put date 5/7/06)............... 800,000 879,192
Mexico-United Mexican States
7.563%, due 8/6/01
(call date 2/6/97) (c)(e)....... 900,000 902,250
Thai Farmers Bank PLC
8.25%, due 8/21/16 (c).......... 750,000 771,398
Wharf Capital International 1994
Ltd.
8.875%, due 11/1/04............. 1,225,000 1,313,420
------------
Total Yankee Bonds
(Cost $10,232,761).............. 10,401,974
------------
Total Long-Term Bonds
(Cost $133,176,536)............. 133,730,792
------------
<CAPTION>
COMMON STOCKS (58.0%)
SHARES
-----------
<S> <C> <C>
AUTO PARTS (0.5%)
Lear Seating Corp. (a)........... 52,400 1,788,150
------------
BANKS (1.4%)
NationsBank Corp. ............... 23,100 2,258,025
Wells Fargo & Co. ............... 9,100 2,454,725
------------
4,712,750
------------
</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
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
BROKERAGE (0.7%)
Schwab (Charles) Corp. .......... 67,700 $ 2,166,400
------------
BUILDINGS (0.5%)
Oakwood Homes Corp. ............. 68,400 1,564,650
------------
COMMERCIAL SERVICES (0.7%)
Service Corp. International...... 89,000 2,492,000
------------
COMPUTER SERVICES (0.4%)
SABRE Group Holdings Inc. Class
A .............................. 50,000 1,393,750
------------
COMPUTERS & OFFICE EQUIPMENT
(4.3%)
Alco Standard Corp. ............. 62,700 3,236,887
CompUSA, Inc. (a)................ 30,000 618,750
Danka Business Systems PLC ADR
(f) ............................ 44,800 1,584,800
Electronic Data Systems Corp. ... 35,000 1,513,750
Hewlett-Packard Co. ............. 52,400 2,633,100
Seagate Technology (a)........... 38,200 1,508,900
Sun Microsystems (a)............. 119,000 3,056,813
------------
14,153,000
------------
CONSUMER DURABLES (0.9%)
Black & Decker Corp. ............ 25,400 765,175
Harley-Davidson, Inc. ........... 47,700 2,241,900
------------
3,007,075
------------
CONSUMER FINANCIAL SERVICES
(0.8%)
First Data Corp. ................ 71,800 2,620,700
------------
CONSUMER SERVICES (0.5%)
CUC International, Inc. (a)...... 72,150 1,713,563
------------
DRUGS (4.0%)
Amgen, Inc. (a).................. 61,100 3,322,312
Elan Corp. PLC ADR (a)(f)........ 72,400 2,407,300
Genzyme Corp. (a)................ 50,000 1,087,500
Pharmacia & Upjohn, Inc. ........ 49,100 1,945,588
Schering-Plough Corp. ........... 45,800 2,965,550
Teva Pharmaceutical Industries
Ltd. ADR (f).................... 31,500 1,582,875
------------
13,311,125
------------
ELECTRONICS (0.7%)
Harman International Industries,
Inc. ........................... 21,000 1,168,125
Vishay Intertechnology, Inc.
(a)............................. 42,392 990,913
------------
2,159,038
------------
FINANCE (5.4%)
Equifax, Inc. ................... 42,100 1,289,313
Federal National Mortgage
Association..................... 59,800 2,227,550
Green Tree Financial Corp. ...... 122,000 4,712,250
Household International, Inc. ... 33,900 3,127,275
MGIC Investment Corp. ........... 38,700 2,941,200
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
FINANCE (Continued)
Travelers Group, Inc. ........... 82,400 $ 3,738,900
------------
18,036,488
------------
FINANCIAL SERVICES (2.9%)
Associates First Capital
Corp. .......................... 30,600 1,350,225
First USA, Inc. ................. 101,000 3,497,125
SunAmerica Inc. ................. 108,500 4,814,688
------------
9,662,038
------------
FOOD (0.3%)
Richfood Holdings, Inc. ......... 42,150 1,022,137
------------
HEALTH CARE (3.7%)
Cardinal Health, Inc. ........... 36,000 2,097,000
Columbia/HCA Healthcare Corp. ... 71,803 2,925,972
HealthCare COMPARE Corp. (a)..... 40,000 1,695,000
Humana Inc. (a).................. 52,200 998,325
PacifiCare Health Systems, Inc.
Class B (a)..................... 15,600 1,329,900
Sunrise Assisted Living, Inc. ... 30,200 841,825
United Healthcare Corp. ......... 53,400 2,403,000
------------
12,291,022
------------
HOSPITAL MANAGEMENT & SERVICES
(1.6%)
HEALTHSOUTH Corp. (a)............ 78,000 3,012,750
OrNda HealthCorp (a)............. 68,500 2,003,625
Unison Healthcare Corp. (a)...... 26,000 341,250
------------
5,357,625
------------
INDUSTRIAL (1.3%)
Mattel, Inc. .................... 55,400 1,537,350
Tyco International Ltd. ......... 53,700 2,839,388
------------
4,376,738
------------
INSURANCE (1.1%)
American International Group,
Inc. ........................... 33,750 3,653,437
------------
LEISURE (0.6%)
Mirage Resorts, Inc. (a)......... 86,400 1,868,400
------------
MACHINERY (0.4%)
U.S. Robotics Corp. (a).......... 18,000 1,296,000
------------
MEDICAL EQUIPMENT (3.9%)
Guidant Corp. ................... 60,000 3,420,000
Heartport, Inc. ................. 27,000 617,625
Johnson & Johnson................ 66,552 3,310,962
Medtronic, Inc. ................. 58,700 3,991,600
Waters Corp. (a)................. 56,800 1,725,300
------------
13,065,487
------------
OIL & GAS EXPLORATION (1.1%)
Abacan Resource Corp. (a)........ 235,000 2,041,563
</TABLE>
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.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-----------------------
<S> <C> <C>
OIL & GAS EXPLORATION (Continued)
Triton Energy Ltd. (a)........... 32,300 $ 1,566,550
------------
3,608,113
------------
OIL SERVICES (0.7%)
Tidewater, Inc. ................. 49,300 2,230,825
------------
RESTAURANTS & LODGING (2.1%)
HFS, Inc. (a).................... 94,100 5,622,475
Lone Star Steakhouse &
Saloon, Inc. (a)................ 51,000 1,364,250
------------
6,986,725
------------
RETAIL (6.1%)
AutoZone, Inc. (a)............... 56,400 1,551,000
Bed, Bath & Beyond, Inc. (a)..... 42,000 1,018,500
Gymboree Corp. (The) (a)......... 20,000 457,500
Home Depot, Inc. (The)........... 42,000 2,105,250
Kohl's Corp. (a)................. 66,200 2,598,350
Kroger Co. (a)................... 46,800 2,176,200
Lowe's Cos., Inc. ............... 72,000 2,556,000
Nike, Inc. Class B............... 66,000 3,943,500
Safeway Inc. (a)................. 70,800 3,026,700
Staples, Inc. (a)................ 45,500 821,844
------------
20,254,844
------------
SOFTWARE (2.0%)
Computer Associates
International, Inc. ............ 90,350 4,494,912
Microsoft Corp. (a).............. 27,600 2,280,450
------------
6,775,362
------------
TECHNOLOGY (6.1%)
Cisco Systems, Inc. (a).......... 49,100 3,123,987
IDT Corp. ....................... 110,000 1,210,000
Intel Corp. ..................... 32,500 4,255,469
Lam Research Corp. (a)........... 31,850 895,781
Linear Technology Corp. ......... 36,000 1,579,500
Oracle Corp. (a)................. 82,025 3,424,544
3Com Corp. (a)................... 79,200 5,811,300
------------
20,300,581
------------
TELECOMMUNICATION SERVICES (1.5%)
Lucent Technologies Inc. ........ 40,000 1,850,000
WorldCom, Inc. (a)............... 120,432 3,138,759
------------
4,988,759
------------
TEXTILE & APPAREL (1.0%)
Nine West Group Inc. (a)......... 47,900 2,221,362
Wolverine World Wide, Inc. ...... 42,000 1,218,000
------------
3,439,362
------------
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
TURNKEY & SOFTWARE SYSTEMS (0.8%)
Sterling Commerce, Inc. ......... 48,574 $ 1,712,234
Sterling Software, Inc. (a)...... 30,500 964,562
------------
2,676,796
------------
Total Common Stocks
(Cost $137,743,189)............. 192,972,940
------------
<CAPTION>
SHORT-TERM
INVESTMENTS (2.7%)
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
COMMERCIAL PAPER (1.9%)
American Express Credit Corp.
6.55%, due 1/2/97............... $ 6,480,000 6,480,000
------------
Total Commercial Paper
(Cost $6,480,000)............... 6,480,000
------------
FEDERAL AGENCY (0.8%)
Federal Home Loan Bank
Discount Corp.
6.40%, due 1/14/97 (d).......... 2,550,000 2,543,854
------------
Total Federal Agency
(Cost $2,546,249)............... 2,543,854
------------
Total Short-Term Investments
(Cost $9,026,249)............... 9,023,854
------------
Total Investments
(Cost $279,945,974)(i).......... 100.9% 335,727,586(j)
Liabilities in Excess of
Cash and Other Assets........... (0.9) (2,830,198)
----------- ------------
Net Assets....................... 100.0% $332,897,388
=========== ============
</TABLE>
- ------------
(a) Non-income producing securities.
(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) May be sold to institutional investors only.
(d) Segregated or partially segregated as collateral for TBA.
(e) Floating rate. Rate shown is the rate in effect at December 31, 1996.
(f) ADR--American Depository Receipt.
(g) ARM--Adjustable Rate Mortgage. Resets annually.
(h) Seasoned--a euro bond that trades in U.S. dollars and must be held for at
least 40 days before it can be sold.
(i) The cost for Federal income tax purposes is $280,040,805.
(j) At December 31, 1996 net unrealized appreciation was $55,686,781, 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 $60,095,740 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $4,408,959.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
85
<PAGE> 86
TOTAL RETURN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $279,945,974)....... $335,727,586
Cash................................... 17,041
Receivables:
Investment securities sold........... 1,941,934
Dividends and interest............... 1,440,971
Fund shares sold..................... 522,539
Other assets........................... 667
------------
Total assets..................... 339,650,738
------------
LIABILITIES:
Payables:
Investment securities purchased...... 6,499,750
Adviser.............................. 89,671
Administrator........................ 28,022
NYLIAC............................... 23,261
Custodian............................ 10,000
Directors............................ 133
Accrued expenses....................... 102,513
------------
Total liabilities................ 6,753,350
------------
Net assets applicable to outstanding
shares............................... $332,897,388
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 50 million shares
authorized........................... $ 228,608
Additional paid-in capital............. 280,161,085
Accumulated net realized loss on
investments.......................... (3,273,917)
Net unrealized appreciation on
investments.......................... 55,781,612
------------
Net assets applicable to outstanding
shares............................... $332,897,388
============
Shares of capital stock outstanding.... 22,860,799
============
Net asset value per share
outstanding.......................... $ 14.56
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 764,619
Interest............................. 7,771,480
------------
Total income..................... 8,536,099
------------
Expenses:
Advisory............................. 851,397
Administration....................... 532,123
Shareholder communication............ 198,021
Recordkeeping........................ 156,706
Professional......................... 67,220
Custodian............................ 44,863
Directors............................ 12,369
Miscellaneous........................ 15,984
------------
Total expenses before
reimbursement.................. 1,878,683
Expense reimbursement from
Administrator........................ (42,859)
------------
Net expenses..................... 1,835,824
------------
Net investment income.................. 6,700,275
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments....... 925,325
Net change in unrealized appreciation
on investments....................... 23,203,457
------------
Net realized and unrealized gain on
investments.......................... 24,128,782
------------
Net increase in net assets resulting
from operations...................... $ 30,829,057
===========
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $3,367.
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.
TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1996
and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income......................................................... $ 6,700,275 $ 4,619,451
Net realized gain on investments.............................................. 925,325 1,771,355
Net change in unrealized appreciation on investments.......................... 23,203,457 29,979,674
------------ ------------
Net increase in net assets resulting from operations.......................... 30,829,057 36,370,480
------------ ------------
Dividends to shareholders:
From net investment income.................................................... (6,719,788) (4,571,400)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.............................................. 114,153,151 52,019,281
Net asset value of shares issued to shareholders in reinvestment of
dividends.................................................................... 6,719,788 4,571,400
------------ ------------
120,872,939 56,590,681
Cost of shares redeemed....................................................... (6,978,226) (15,828,916)
------------ ------------
Increase in net assets derived from capital share transactions.............. 113,894,713 40,761,765
------------ ------------
Net increase in net assets.................................................. 138,003,982 72,560,845
NET ASSETS:
Beginning of year............................................................... 194,893,406 122,332,561
------------ ------------
End of year..................................................................... $332,897,388 $194,893,406
============= =============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1996 1995 1994 1993
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period.................. $ 13.26 $ 10.58 $ 11.32 $ 10.00
------------ ------------ ------------ ------------
Net investment income................................... 0.30 0.31 0.27 0.16
Net realized and unrealized gain (loss) on
investments........................................... 1.30 2.69 (0.72) 1.34
------------ ------------ ------------ ------------
Total from investment operations........................ 1.60 3.00 (0.45) 1.50
------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income............................ (0.30) (0.32) (0.29) (0.16)
In excess of net realized gain on investments......... -- -- -- (0.02)
------------ ------------ ------------ ------------
Total dividends and distributions....................... (0.30) (0.32) (0.29) (0.18)
------------ ------------ ------------ ------------
Net asset value at end of period........................ $ 14.56 $ 13.26 $ 10.58 $ 11.32
=========== =========== =========== =============
Total investment return (b)............................. 12.08% 28.33% (3.99%) 15.04%
Ratios (to average net assets)/Supplemental Data:
Net investment income................................. 2.52% 3.06% 3.50% 3.48% +
Net expenses.......................................... 0.69% 0.69% 0.69% 0.69% +
Expenses (before reimbursement)....................... 0.71% 0.81% 0.88% 1.07% +
Portfolio turnover rate................................. 175% 253% 297% 197%
Average commission rate paid............................ $ 0.0599 (c) (c) (c)
Net assets at end of period (in 000's).................. $ 332,897 $ 194,893 $ 122,333 $ 55,548
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after
September 1, 1995.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
87
<PAGE> 88
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
COMMON STOCKS (85.8%)+
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
AEROSPACE/DEFENSE ELECTRONICS
(2.7%)
Coltec Industries Inc. (a)........ 38,000 $ 717,250
Litton Industries, Inc. (a)....... 23,700 1,128,713
Newport News Shipbuilding Inc.
(a).............................. 3,040 45,600
Northrop Grumman Corp. ........... 17,000 1,406,750
------------
3,298,313
------------
AUTO MANUFACTURING (2.9%)
Ford Motor Co. ................... 64,900 2,068,687
General Motors Corp. ............. 26,000 1,449,500
------------
3,518,187
------------
AUTO PARTS (2.4%)
Echlin Inc. ...................... 44,000 1,391,500
Mark IV Industries, Inc. ......... 65,300 1,477,413
------------
2,868,913
------------
BANKS (6.4%)
Bankers Trust New York Corp. ..... 13,500 1,164,375
Boatmen's Bancshares, Inc. ....... 27,000 1,741,500
Chase Manhattan Corp. ............ 16,000 1,428,000
National City Corp. .............. 7,700 345,537
PNC Bank Corp. ................... 38,000 1,429,750
Wells Fargo & Co. ................ 6,000 1,618,500
------------
7,727,662
------------
BUILDING MATERIALS (1.2%)
Armstrong World Industries,
Inc. ............................ 21,300 1,480,350
------------
CAPITAL GOODS (2.7%)
Case Corp. ....................... 10,100 550,450
Xerox Corp. ...................... 51,200 2,694,400
------------
3,244,850
------------
CHEMICALS (8.7%)
Agrium Inc. ...................... 81,300 1,117,875
Arcadian Corp. ................... 38,800 1,028,200
Dow Chemical Co. ................. 23,600 1,849,650
FMC Corp. (a)..................... 10,700 750,337
Geon Co. (The).................... 49,600 973,400
Georgia Gulf Corp. ............... 36,800 989,000
IMC Global Inc. .................. 64,600 2,527,475
Lyondell Petrochemical Co. ....... 28,300 622,600
PPG Industries, Inc. ............. 1,900 106,638
Terra Industries Inc. ............ 31,300 461,675
------------
10,426,850
------------
COMPUTERS & OFFICE
EQUIPMENT (0.6%)
Gateway 2000, Inc. (a)............ 13,300 712,381
------------
CONGLOMERATES (2.7%)
American Standard Cos. Inc. (a)... 26,500 1,013,625
Tenneco Inc. ..................... 50,600 2,283,325
------------
3,296,950
------------
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
DOMESTIC OILS (4.0%)
Amerada Hess Corp. ............... 25,000 $ 1,446,875
Noble Affiliates, Inc. ........... 23,200 1,110,700
Parker & Parsley Petroleum Co. ... 13,400 492,450
Unocal Corp. ..................... 42,000 1,706,250
------------
4,756,275
------------
ELECTRICAL
EQUIPMENT (0.9%)
UCAR International Inc. (a)....... 30,000 1,128,750
------------
ENERGY (3.8%)
Coastal Corp. .................... 29,400 1,436,925
MAPCO Inc. ....................... 44,600 1,516,400
PanEnergy Corp. .................. 13,600 612,000
Seagull Energy Corp. (a).......... 42,800 941,600
------------
4,506,925
------------
FINANCE (1.1%)
Travelers Group Inc. ............. 28,066 1,273,495
------------
FOOD (1.7%)
Archer-Daniels-Midland Co. ....... 37,178 817,916
IBP, Inc. ........................ 50,800 1,231,900
------------
2,049,816
------------
FOOD, BEVERAGES & TOBACCO (6.0%)
American Brands, Inc. ............ 37,000 1,836,125
Philip Morris Cos., Inc. ......... 25,800 2,905,725
RJR Nabisco Holdings Corp. ....... 72,200 2,454,800
------------
7,196,650
------------
HEALTH CARE (5.2%)
Aetna Inc. ....................... 34,000 2,720,000
FHP International Corp. (a)....... 5,500 204,187
Humana Inc. (a)................... 102,300 1,956,488
WellPoint Health Networks Inc.
(a).............................. 40,700 1,399,062
------------
6,279,737
------------
HOME BUILDERS (0.9%)
Kaufman and Broad Home Corp. ..... 80,000 1,030,000
------------
HOUSEHOLD PRODUCTS (0.9%)
Premark International, Inc. ...... 50,200 1,116,950
------------
INSURANCE (5.1%)
Allstate Corp. (The).............. 34,000 1,967,750
American International Group,
Inc. ............................ 14,100 1,526,325
Chubb Corp. ...................... 49,200 2,644,500
------------
6,138,575
------------
INTERNATIONAL OIL (2.6%)
Elf Aquitaine ADR (b)............. 36,000 1,629,000
Occidental Petroleum Corp. ....... 65,600 1,533,400
------------
3,162,400
------------
</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.
88
<PAGE> 89
MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
OIL SERVICES (0.4%)
Union Pacific Resources Group,
Inc. ............................ 16,176 $ 473,148
------------
PAPER & FOREST PRODUCTS (2.6%)
Bowater Inc. ..................... 30,900 1,162,613
Chesapeake Corp. ................. 20,200 633,775
Rayonier Inc. .................... 13,800 529,575
Stone Container Corp. ............ 39,000 580,125
Temple-Inland Inc. ............... 5,000 270,625
------------
3,176,713
------------
RAILROADS (3.4%)
Conrail Inc. ..................... 15,310 1,525,259
Illinios Central Corp. ........... 45,150 1,444,800
Union Pacific Corp. .............. 19,100 1,148,387
------------
4,118,446
------------
RETAIL (3.4%)
Dillard Department Stores, Inc.
Class A ......................... 20,000 617,500
Federated Department Stores, Inc.
(a).............................. 29,200 996,450
Kroger Co. (a).................... 19,900 925,350
Penney (J.C.) Co. Inc. ........... 32,000 1,560,000
------------
4,099,300
------------
TECHNOLOGY (2.1%)
International Business Machines
Corp. ........................... 16,600 2,506,600
------------
TEXTILE & APPAREL (4.0%)
Burlington Industries, Inc. (a)... 51,000 561,000
Fruit of the Loom, Inc. Class A
(a).............................. 42,500 1,609,688
Reebok International Ltd. ........ 39,700 1,667,400
Spring Industries, Inc. Class
A ............................... 21,900 941,700
------------
4,779,788
------------
TIRE & RUBBER (1.6%)
Goodyear Tire & Rubber Co.
(The)............................ 36,200 1,859,775
------------
TRANSPORTATION (1.1%)
CSX Corp. ........................ 32,200 1,360,450
------------
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
UTILITIES--ELECTRIC (4.7%)
Entergy Corp. .................... 31,400 $ 871,350
Long Island Lighting Co. ......... 74,700 1,652,737
Niagara Mohawk Power Corp. (a).... 80,100 790,988
Pinnacle West Capital Corp. ...... 32,300 1,025,525
Unicom Corp. ..................... 49,000 1,329,125
------------
5,669,725
------------
Total Common Stocks
(Cost $90,162,294)............... 103,257,974
------------
SHORT-TERM
INVESTMENTS (13.6%)
<CAPTION>
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
COMMERCIAL PAPER (13.6%)
American Express Credit Corp.
6.30%, due 1/3/97................ $4,435,000 4,435,000
American General Finance Corp.
5.95%, due 1/2/97................ 6,687,000 6,687,000
Prudential Funding Corp.
5.60%, due 1/6/97................ 5,265,000 5,265,000
------------
Total Short-Term Investments
(Cost $16,387,000)............... 16,387,000
------------
Total Investments
(Cost $106,549,294) (c).......... 99.4% 119,644,974(d)
Cash and Other Assets,
Less Liabilities................. 0.6 769,914
---------- ------------
Net Assets........................ 100.0% $120,414,888
========== ============
</TABLE>
- ------------
(a) Non-income producing securities.
(b) ADR--American Depository Receipt.
(c) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(d) At December 31, 1996 net unrealized appreciation was $13,095,680, 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 $14,084,447 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $988,767.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
89
<PAGE> 90
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $106,549,294)....... $119,644,974
Cash................................... 136
Receivables:
Fund shares sold..................... 613,832
Dividends and interest............... 265,439
Other assets........................... 124
------------
Total assets..................... 120,524,505
------------
LIABILITIES:
Payables:
Adviser.............................. 35,066
NYLIAC............................... 24,968
Administrator........................ 9,741
Custodian............................ 3,500
Organization......................... 240
Directors............................ 39
Accrued expenses....................... 36,063
------------
Total liabilities................ 109,617
------------
Net assets applicable to outstanding
shares............................... $120,414,888
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares
authorized........................... $ 86,620
Additional paid-in capital............. 106,330,669
Accumulated undistributed net
investment income.................... 2,636
Accumulated undistributed net realized
gain on investments.................. 899,283
Net unrealized appreciation on
investments.......................... 13,095,680
------------
Net assets applicable to outstanding
shares............................... $120,414,888
============
Shares of capital stock outstanding.... 8,662,000
============
Net asset value per share
outstanding.......................... $ 13.90
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 1,410,854
Interest............................. 499,148
------------
Total income..................... 1,910,002
------------
Expenses:
Advisory............................. 242,719
Administration....................... 134,844
Shareholder communication............ 64,825
Recordkeeping........................ 37,425
Professional......................... 31,112
Custodian............................ 18,155
Directors............................ 2,386
Miscellaneous........................ 2,278
------------
Total expenses before
reimbursement.................. 533,744
Expense reimbursement from
Administrator........................ (41,564)
------------
Net expenses..................... 492,180
------------
Net investment income.................. 1,417,822
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments....... 2,468,445
Net change in unrealized appreciation
on investments....................... 11,576,673
------------
Net realized and unrealized gain on
investments.......................... 14,045,118
------------
Net increase in net assets resulting
from operations...................... $ 15,462,940
===========
</TABLE>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $7,472.
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.
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1996
and the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1996 1995
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income......................................................... $ 1,417,822 $ 196,798
Net realized gain on investments.............................................. 2,468,445 46,962
Net change in unrealized appreciation on investments.......................... 11,576,673 1,519,007
------------ ------------
Net increase in net assets resulting from operations.......................... 15,462,940 1,762,767
------------ ------------
Dividends and distributions to shareholders:
From net investment income.................................................... (1,415,317) (196,667)
From net realized gain on investments......................................... (1,616,124) --
------------ ------------
Total dividends and distributions to shareholders......................... (3,031,441) (196,667)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.............................................. 81,567,373 17,977,153
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions............................................................ 3,031,441 196,667
------------ ------------
84,598,814 18,173,820
Cost of shares redeemed....................................................... (1,044,875) (310,470)
------------ ------------
Increase in net assets derived from capital share transactions.............. 83,553,939 17,863,350
------------ ------------
Net increase in net assets.................................................. 95,985,438 19,429,450
NET ASSETS:
Beginning of period............................................................. 24,429,450 5,000,000
------------ ------------
End of period................................................................... $120,414,888 $24,429,450
============= =============
Accumulated undistributed net investment income................................. $ 2,636 $ 131
============= =============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
YEAR 1995 (a)
ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1996 1995
----------------------------
<S> <C> <C>
Net asset value at beginning of period............................................ $ 11.58 $ 10.00
------------ ------------
Net investment income............................................................. 0.17 0.10
Net realized and unrealized gain on investments................................... 2.52 1.58
------------ ------------
Total from investment operations.................................................. 2.69 1.68
------------ ------------
Less dividends and distributions:
From net investment income...................................................... (0.17) (0.10)
From net realized gain on investments........................................... (0.20) --
------------ ------------
Total dividends and distributions................................................. (0.37) (0.10)
------------ ------------
Net asset value at end of period.................................................. $ 13.90 $ 11.58
============= =============
Total investment return (b)....................................................... 23.22% 16.76%
Ratios (to average net assets)/Supplemental Data:
Net investment income........................................................... 2.10% 2.57% +
Net expenses.................................................................... 0.73% 0.73% +
Expenses (before reimbursement)................................................. 0.79% 1.45% +
Portfolio turnover rate........................................................... 41% 20%
Average commission rate paid...................................................... $ 0.0593 (c)
Net assets at end of period (in 000's)............................................ $ 120,415 $ 24,429
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after
September 1, 1995.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
91
<PAGE> 92
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
LONG-TERM BONDS (94.9%)+
CORPORATE BONDS (44.8%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
AUTO PARTS/EQUIPMENT (2.2%)
Borg-Warner Automotive, Inc.
7.00%, due 11/1/06.............. $ 5,000,000 $ 4,981,250
------------
BANKS (8.1%)
BankAmerica Corp.
7.75%, due 7/15/02.............. 4,000,000 4,185,000
First Union Corp.
9.45%, due 6/15/99.............. 5,000,000 5,350,000
Golden West Financial Corp.
10.25%, due 12/1/00............. 1,000,000 1,123,750
National Westminster Bancorp,
Inc.
9.375%, due 11/15/03 (c)........ 2,000,000 2,292,500
Republic New York Corp.
7.75%, due 5/15/09.............. 5,000,000 5,281,250
------------
18,232,500
------------
CONGLOMERATES--
DIVERSIFIED (1.0%)
Harcourt General, Inc.
9.50%, due 3/15/00.............. 2,000,000 2,162,500
------------
CONTAINERS (1.7%)
Federal Paper Board Co., Inc.
10.00%, due 4/15/11............. 3,100,000 3,847,875
------------
DATA PROCESSING (1.3%)
International Business
Machines Corp.
6.375%, due 6/15/00............. 3,000,000 2,992,500
------------
DIVERSIFIED UTILITIES (6.0%)
Consumers Power Co.
7.375%, due 9/15/23............. 7,000,000 6,623,750
Long Island Lighting Co.
8.75%, due 2/15/97 (a).......... 2,000,000 2,005,000
Niagara Mohawk Power Corp.
7.375%, due 8/1/03.............. 2,000,000 1,877,500
Public Service Co. of Colorado
6.00%, due 1/1/01............... 3,000,000 2,955,000
------------
13,461,250
------------
FINANCE (11.9%)
American General Finance Corp.
7.00%, due 10/1/97 (a).......... 7,000,000 7,059,780
Chrysler Financial Corp.
5.875%, due 2/7/01.............. 5,000,000 4,868,750
Ford Motor Credit Co.
7.00%, due 9/25/01.............. 5,000,000 5,081,250
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
FINANCE (Continued)
General Motors Acceptance Corp.
5.625%, due 2/15/01............. $ 6,000,000 $ 5,797,500
9.625%, due 12/15/01............ 1,000,000 1,122,500
Mellon Financial Co.
7.625%, due 11/15/99............ 3,000,000 3,108,750
------------
27,038,530
------------
FOOD (0.5%)
ConAgra, Inc.
9.875%, due 11/15/05............ 1,000,000 1,183,750
------------
LEISURE/AMUSEMENT (2.6%)
Walt Disney Co. (The)
6.75%, due 3/30/06.............. 6,000,000 5,955,000
------------
PAPER/PRODUCTS (2.2%)
Champion International Corp.
9.875%, due 6/1/00.............. 4,500,000 4,944,375
------------
RETAIL STORES (5.4%)
Price/Costco, Inc.
7.125%, due 6/15/05............. 5,000,000 5,000,000
Sears Roebuck & Co.
8.45%, due 11/1/98.............. 7,000,000 7,262,500
------------
12,262,500
------------
TELECOMMUNICATION
SERVICES (1.9%)
British Telecommunications PLC
9.375%, due 2/15/99 (c)......... 4,200,000 4,457,250
------------
Total Corporate Bonds
(Cost $98,630,193).............. 101,519,280
------------
U.S. GOVERNMENT & FEDERAL
AGENCIES (50.1%)
FEDERAL HOME LOAN
MORTGAGE CORPORATION (4.4%)
6.655%, due 5/20/99............. 10,000,000 10,007,000
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (6.7%)
4.95%, due 9/30/98.............. 10,000,000 9,827,600
8.70%, due 6/10/99.............. 5,000,000 5,291,300
------------
15,118,900
------------
</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>
U.S. GOVERNMENT &
FEDERAL AGENCIES (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
UNITED STATES TREASURY BONDS
(17.0%)
6.75%, due 8/15/26.............. $32,000,000 $ 32,264,000
10.75%, due 5/15/03............. 5,000,000 6,154,650
------------
38,418,650
------------
UNITED STATES TREASURY NOTES
(22.0%)
6.25%, due 2/15/03.............. 20,000,000 19,985,800
6.50%, due 10/15/06............. 5,000,000 5,025,000
7.125%, due 2/29/00............. 5,000,000 5,146,050
8.50%, due 11/15/00............. 18,200,000 19,657,274
------------
49,814,124
------------
Total U.S. Government &
Federal Agencies
(Cost $112,723,469)............. 113,358,674
------------
Total Long-Term Bonds
(Cost $211,353,662)............. 214,877,954
------------
<CAPTION>
SHORT-TERM
INVESTMENTS (3.6%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
COMMERCIAL PAPER (3.6%)
Associates Corp. of North America
5.23%, due on demand (b)........ 145,000 145,000
Duracell, Inc.
6.75%, due 1/2/97............... 5,115,000 5,114,041
General Electric Capital Corp.
5.90%, due 1/3/97............... 2,920,000 2,919,043
------------
Total Short-Term Investments
(Cost $8,178,084)............... 8,178,084
------------
Total Investments
(Cost $219,531,746) (d)......... $ 98.5% $223,056,038(e)
Cash and Other Assets,
Less Liabilities................ 1.5 3,318,848
------------
Net Assets....................... 100.0% $226,374,886
============
</TABLE>
- ------------
(a) Long-term securities maturing within the subsequent twelve month period.
(b) Adjustable rate. Rate shown is the rate in effect at December 31, 1996.
(c) Yankee bonds.
(d) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(e) At December 31, 1996 net unrealized appreciation was $3,524,292, 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 $4,789,524 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $1,265,232.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
93
<PAGE> 94
BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $219,531,746)....... $223,056,038
Cash................................... 4,111
Receivables:
Interest............................. 3,702,071
Fund shares sold..................... 99,148
Other assets........................... 670
------------
Total assets..................... 226,862,038
------------
LIABILITIES:
Payables:
Fund shares redeemed................. 201,787
Adviser.............................. 143,053
Administrator........................ 38,459
Directors............................ 98
Accrued expenses....................... 103,755
------------
Total liabilities................ 487,152
------------
Net assets applicable to outstanding
shares............................... $226,374,886
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares
authorized........................... $ 176,481
Additional paid-in capital............. 224,460,425
Accumulated net realized loss on
investments.......................... (1,786,312)
Net unrealized appreciation on
investments.......................... 3,524,292
------------
Net assets applicable to outstanding
shares............................... $226,374,886
============
Shares of capital stock outstanding.... 17,648,142
============
Net asset value per share
outstanding.......................... $ 12.83
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................. $ 15,704,812
------------
Expenses:
Advisory............................. 569,711
Administration....................... 455,769
Recordkeeping........................ 127,739
Shareholder communication............ 93,055
Professional......................... 52,075
Directors............................ 11,273
Portfolio pricing.................... 6,069
Miscellaneous........................ 6,161
------------
Total expenses................... 1,321,852
------------
Net investment income.................. 14,382,960
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investments....... 961,896
Net change in unrealized appreciation
on investments....................... (10,866,414)
------------
Net realized and unrealized loss on
investments.......................... (9,904,518)
------------
Net increase in net assets resulting
from operations...................... $ 4,478,442
===========
</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.
BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1996
and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............................................................. $ 14,382,960 $ 14,495,255
Net realized gain on investments.................................................. 961,896 4,716,932
Net change in unrealized appreciation (depreciation) on investments............... (10,866,414) 17,768,492
------------ ------------
Net increase in net assets resulting from operations.............................. 4,478,442 36,980,679
------------ ------------
Dividends to shareholders:
From net investment income........................................................ (14,405,743) (14,491,993)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................................................. 25,643,335 22,956,887
Net asset value of shares issued to shareholders in reinvestment of dividends..... 14,405,743 14,491,993
------------ ------------
40,049,078 37,448,880
Cost of shares redeemed........................................................... (38,777,335) (31,593,131)
------------ ------------
Increase in net assets derived from capital share transactions.................. 1,271,743 5,855,749
------------ ------------
Net increase (decrease) in net assets........................................... (8,655,558) 28,344,435
NET ASSETS:
Beginning of year................................................................... 235,030,444 206,686,009
------------ ------------
End of year......................................................................... $226,374,886 $235,030,444
=========== ===========
Accumulated undistributed net investment income..................................... $ -- $ 3,457
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1996 1995 1994 1993 1992
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year........ $ 13.42 $ 12.09 $ 13.43 $ 12.91 $ 12.77
------------ ------------ ------------ ------------ ------------
Net investment income....................... 0.87 0.88 0.88 0.95 0.92
Net realized and unrealized gain (loss) on
investments............................... (0.59) 1.33 (1.34) 0.53 0.13
------------ ------------ ------------ ------------ ------------
Total from investment operations............ 0.28 2.21 (0.46) 1.48 1.05
------------ ------------ ------------ ------------ ------------
Less dividends:
From net investment income................ (0.87) (0.88) (0.88) (0.96) (0.91)
------------ ------------ ------------ ------------ ------------
Net asset value at end of year.............. $ 12.83 $ 13.42 $ 12.09 $ 13.43 $ 12.91
=========== =========== =========== =========== ===========
Total investment return..................... 2.05% 18.31% (3.39%) 11.40% 8.26%
Ratios (to average net assets)/Supplemental
Data:
Net investment income..................... 6.31% 6.55% 6.53% 6.79% 7.54%
Net expenses.............................. 0.58% 0.62% 0.62%# 0.27%# 0.25%
Expenses (before reimbursement)........... 0.58% 0.91% 0.67%# 0.27%# 0.25%
Portfolio turnover rate..................... 103% 81% 88% 41% 10%
Net assets at end of year (in 000's)........ $ 226,375 $ 235,030 $ 206,686 $ 228,683 $ 203,947
</TABLE>
- ------------
# At the MainStay VP Series Fund, Inc.'s shareholders meeting on December 14,
1993, the shareholders voted to have the Bond Portfolio assume certain
administrative and operating expenses of the Fund previously borne by New
York Life.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
95
<PAGE> 96
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (94.5%)+
SHARES VALUE
----------------------
<S> <C> <C>
AEROSPACE/DEFENSE (6.0%)
Boeing Co. ....................... 60,000 $ 6,382,500
Coltec Industries Inc. (a)........ 370,000 6,983,750
Lockheed Martin Corp. ............ 61,200 5,599,800
Loral Space &
Communications Ltd. (a).......... 258,500 4,749,937
Northrop Grumman Corp. ........... 80,000 6,620,000
UNC Inc. (a)...................... 300,000 3,600,000
------------
33,935,987
------------
APPAREL MANUFACTURERS (1.0%)
Fruit of the Loom, Inc. Class A
(a).............................. 150,000 5,681,250
------------
BANKS (5.7%)
AmSouth Bancorp. ................. 62,400 3,018,600
Bank of New York Co., Inc.
(The)............................ 150,000 5,062,500
Bankers Trust New York Corp. ..... 75,000 6,468,750
Chase Manhattan Corp. ............ 93,600 8,353,800
Commerce Bancshares, Inc. ........ 78,277 3,620,311
Morgan (J. P.) & Co. Inc. ........ 60,000 5,857,500
------------
32,381,461
------------
BEVERAGES (1.0%)
Anheuser-Busch Cos., Inc. ........ 137,000 5,480,000
------------
BUILDING & MAINTENANCE (0.5%)
ADT Ltd. (a)...................... 125,000 2,859,375
------------
BUILDING PRODUCTS (1.0%)
Sherwin-Williams Co. (The)........ 100,000 5,600,000
------------
BUSINESS SERVICES (0.6%)
AccuStaff, Inc. (a)............... 150,000 3,168,750
------------
CHEMICALS (2.2%)
Praxair, Inc. .................... 100,000 4,612,500
Sealed Air Corp. (a).............. 182,500 7,596,562
------------
12,209,062
------------
COMMERCIAL SERVICES (0.9%)
Service Corp. International....... 190,000 5,320,000
------------
COMMUNICATIONS (1.9%)
Andrew Corp. (a).................. 45,000 2,387,812
Northern Telecom Ltd. ............ 77,500 4,795,313
Teleport Communications
Group Inc. Class A (a)........... 123,500 3,766,750
------------
10,949,875
------------
COMPUTERS & BUSINESS
EQUIPMENT (7.7%)
Computer Associates International,
Inc. ............................ 125,000 6,218,750
Electronic Data Systems Corp. .... 100,000 4,325,000
First Data Corp. ................. 150,060 5,477,190
</TABLE>
- ---
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
COMPUTERS & BUSINESS
EQUIPMENT (Continued)
FIserv, Inc. (a).................. 111,000 $ 4,079,250
Informix Corp. (a)................ 100,000 2,037,500
Intel Corp. ...................... 50,000 6,546,875
Microsoft Corp. (a)............... 40,000 3,305,000
Oracle Corp. (a).................. 110,000 4,592,500
Sungard Data Systems Inc. (a)..... 125,000 4,937,500
Zebra Technologies Corp. Class A
(a).............................. 75,000 1,753,125
------------
43,272,690
------------
DRUGS (4.6%)
American Home Products Corp. ..... 70,000 4,103,750
Amgen Inc. (a).................... 50,000 2,718,750
Genzyme Corp. (a)................. 120,000 2,610,000
Johnson & Johnson................. 60,000 2,985,000
Lilly (Eli) & Co. ................ 50,000 3,650,000
Pfizer Inc. ...................... 50,000 4,143,750
Warner-Lambert Co. ............... 80,000 6,000,000
------------
26,211,250
------------
ELECTRICAL (3.8%)
Emerson Electric Co. ............. 70,000 6,772,500
General Electric Co. ............. 100,000 9,887,500
Mark IV Industries, Inc. ......... 223,758 5,062,525
------------
21,722,525
------------
ELECTRONICS (2.7%)
Computer Products Inc. (a)........ 150,000 2,925,000
LSI Logic Corp. (a)............... 100,000 2,675,000
Teradyne, Inc. (a)................ 129,800 3,163,875
Texas Instruments, Inc. .......... 100,000 6,375,000
------------
15,138,875
------------
FINANCE (4.2%)
Federal Home Loan Mortgage
Corp. ........................... 40,000 4,405,000
Federal National Mortgage
Association...................... 160,000 5,960,000
Great Western Financial Corp. .... 175,000 5,075,000
Republic New York Corp. .......... 100,000 8,162,500
------------
23,602,500
------------
FOODS (3.2%)
Chiquita Brands International,
Inc. ............................ 168,000 2,142,000
Dole Food Co., Inc. .............. 145,000 4,911,875
Sara Lee Corp. ................... 144,000 5,364,000
Sysco Corp. ...................... 180,000 5,872,500
------------
18,290,375
------------
HEAVY INDUSTRIAL (0.4%)
U.S. Filter Corp. (a)............. 75,000 2,381,250
------------
HOSPITAL & MEDICAL SERVICES (5.4%)
Guidant Corp. .................... 110,000 6,270,000
HEALTHSOUTH Corp. (a)............. 70,100 2,707,613
Medtronic, Inc. .................. 70,000 4,760,000
</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>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------
<S> <C> <C>
HOSPITAL & MEDICAL SERVICES
(Continued)
NABI Inc. (a)..................... 245,000 $ 2,143,750
Orthodontic Centers
of America Inc. (a).............. 150,000 2,400,000
Quorum Health Group, Inc. (a)..... 100,000 2,975,000
Sybron International Corp. (a).... 165,000 5,445,000
U.S. Surgical Corp. .............. 99,600 3,921,750
------------
30,623,113
------------
HOUSEHOLD PRODUCTS (2.1%)
Colgate-Palmolive Co. ............ 65,000 5,996,250
Procter & Gamble Co. ............. 54,700 5,880,250
------------
11,876,500
------------
INSURANCE-PROPERTY & CASUALTY
(4.3%)
Allstate Corp. ................... 120,000 6,945,000
American International Group,
Inc. ............................ 70,000 7,577,500
Chubb Corp. ...................... 60,400 3,246,500
General Re Corp. ................. 40,000 6,310,000
------------
24,079,000
------------
LEISURE/AMUSEMENT (1.2%)
Harrah's Entertainment, Inc.
(a).............................. 82,000 1,629,750
International Game Technology..... 286,000 5,219,500
------------
6,849,250
------------
LODGING & RESTAURANTS (1.4%)
Landry's Seafood Restaurants, Inc.
(a).............................. 50,000 1,068,750
Marriott International, Inc. ..... 125,000 6,906,250
------------
7,975,000
------------
MACHINERY/CAPITAL GOODS (0.9%)
AGCO Corp. ....................... 169,800 4,860,525
------------
MANUFACTURING (1.3%)
AlliedSignal Inc. ................ 111,000 7,437,000
------------
MEDIA & INFORMATION
SERVICES (2.7%)
Cognizant Corp. .................. 175,000 5,775,000
Heritage Media Corp. (a).......... 260,000 2,925,000
Time Warner Inc. ................. 175,000 6,562,500
------------
15,262,500
------------
METALS (0.5%)
Titanium Metals Corp. (a)......... 80,000 2,630,000
------------
OIL & ENERGY SERVICES (10.9%)
Apache Corp. ..................... 160,000 5,660,000
Aquila Gas Pipeline Corp. ........ 107,800 1,711,325
Burlington Resources, Inc. ....... 100,000 5,037,500
Consolidated Natural Gas Co. ..... 85,000 4,696,250
Global Marine, Inc. (a)........... 200,000 4,125,000
Halliburton Co. .................. 85,000 5,121,250
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
OIL & ENERGY SERVICES (Continued)
Mobil Corp. ...................... 40,000 $ 4,890,000
Quaker State Corp. ............... 333,000 4,703,625
Schlumberger Ltd. ................ 60,000 5,992,500
Smith International, Inc. (a)..... 150,000 6,731,250
Tidewater Inc. ................... 125,000 5,656,250
Triton Energy Ltd. Class A (a).... 100,000 4,850,000
Union Pacific Resources Group,
Inc. ............................ 63,520 1,857,960
XCL Ltd. (a)...................... 1,316,800 246,900
------------
61,279,810
------------
PACKAGING (1.1%)
Crown Cork & Seal Co., Inc. ...... 110,000 5,981,250
------------
PAPER & FOREST PRODUCTS (1.9%)
Georgia-Pacific Corp. ............ 25,000 1,800,000
International Paper Co. .......... 62,600 2,527,475
Kimberly-Clark Corp. ............. 70,000 6,667,500
------------
10,994,975
------------
POLLUTION CONTROL (0.5%)
Philip Environmental, Inc. (a).... 200,000 2,900,000
------------
REAL ESTATE (2.3%)
Chelsea GCA Realty, Inc. ......... 96,300 3,334,388
First Industrial Realty Trust,
Inc. ............................ 175,000 5,315,625
Liberty Property Trust............ 166,500 4,287,375
------------
12,937,388
------------
RETAIL TRADE & MERCHANDISING
(6.7%)
American Stores Co. .............. 124,800 5,101,200
Consolidated Stores Corp. (a)..... 156,250 5,019,531
CVS Corp. ........................ 150,000 6,206,250
Kroger Co. (a).................... 148,000 6,882,000
Price/Costco, Inc. (a)............ 250,000 6,281,250
Smart & Final Inc. ............... 163,000 3,524,875
Wal-Mart Stores, Inc. ............ 200,000 4,575,000
------------
37,590,106
------------
TELECOMMUNICATIONS (0.3%)
ADC Telecommunications Inc. (a)... 50,000 1,556,250
------------
TRANSPORTATION (2.0%)
AMR Corp. (a)..................... 60,000 5,287,500
Union Pacific Corp. .............. 100,000 6,012,500
------------
11,300,000
------------
UTILITIES-ELECTRIC (0.8%)
CMS Energy Corp. ................. 135,000 4,539,375
------------
WASTE DISPOSAL (0.8%)
Republic Industries Inc. (a)...... 150,000 4,678,125
------------
Total Common Stocks
(Cost $426,782,343).............. 533,555,392
------------
</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
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (5.6%)
PRINCIPAL
AMOUNT VALUE
----------------------
<S> <C> <C>
COMMERCIAL PAPER (5.6%)
AlliedSignal Inc.
6.10%, due 1/3/97................ $7,000,000 $ 6,997,628
Aluminum Co. of America
5.45%, due 1/8/97................ 4,190,000 4,185,560
American Greetings Corp.
5.75%, due 1/2/97................ 3,985,000 3,984,363
Associates Corp. of North America
5.23%, due on demand (b)......... 160,000 160,000
Donnelley (R.R.) & Sons Co.
6.95%, due 1/2/97................ 6,000,000 5,998,842
General Electric Capital Corp.
5.90%, due 1/3/97................ 2,295,000 2,294,248
Potomac Electric Power Co.
6.00%, due 1/8/97................ 8,000,000 7,990,666
------------
Total Short-Term Investments
(Cost $31,611,307)............... 31,611,307
------------
Total Investments
(Cost $458,393,650) (c).......... 100.1% 565,166,699(d)
Liabilities In Excess of
Cash and Other Assets............ (0.1) (481,288)
--------- ------------
Net Assets........................ 100.0% $564,685,411
========= ============
</TABLE>
- ------------
(a) Non-income producing securities.
(b) Adjustable Rate. Rate shown is the rate in effect at December 31, 1996.
(c) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(d) At December 31, 1996 net unrealized appreciation was $106,773,049, 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 $116,308,390 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $9,535,341.
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.
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $458,393,650)....... $565,166,699
Receivables:
Dividends and interest............... 723,274
Fund shares sold..................... 718,170
Investment securities sold........... 702,352
Other assets........................... 1,355
------------
Total assets..................... 567,311,850
------------
LIABILITIES:
Payables:
Investment securities purchased...... 1,854,625
Adviser.............................. 346,063
Fund shares redeemed................. 175,927
Administrator........................ 47,571
NYLIAC............................... 47,571
Custodian............................ 3,622
Directors............................ 228
Accrued expenses....................... 150,832
------------
Total liabilities................ 2,626,439
------------
Net assets applicable to outstanding
shares............................... $564,685,411
===========
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 100 million shares
authorized........................... $ 303,080
Additional paid-in capital............. 457,458,315
Accumulated undistributed net realized
gain on investments.................. 150,967
Net unrealized appreciation on
investments.......................... 106,773,049
------------
Net assets applicable to outstanding
shares............................... $564,685,411
===========
Shares of capital stock outstanding.... 30,308,004
===========
Net asset value per share
outstanding.......................... $ 18.63
===========
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 6,340,368
Interest............................. 1,309,742
------------
Total income..................... 7,650,110
------------
Expenses:
Advisory............................. 1,233,329
Administration....................... 986,663
Recordkeeping........................ 283,024
Shareholder communication............ 211,872
Professional......................... 88,421
Directors............................ 23,546
Miscellaneous........................ 12,482
------------
Total expenses................... 2,839,337
------------
Net investment income.................. 4,810,773
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments....... 69,850,131
Net change in unrealized appreciation
on investments....................... 32,938,177
------------
Net realized and unrealized gain on
investments.......................... 102,788,308
------------
Net increase in net assets resulting
from operations...................... $107,599,081
===========
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $4,231.
</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
GROWTH EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1996
and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................................................. $ 4,810,773 $ 4,885,469
Net realized gain on investments.................................................. 69,850,131 34,444,510
Net change in unrealized appreciation on investments.............................. 32,938,177 56,914,338
------------ ------------
Net increase in net assets resulting from operations.............................. 107,599,081 96,244,317
------------ ------------
Dividends and distributions to shareholders:
From net investment income........................................................ (4,810,773) (4,897,272)
From net realized gain on investments............................................. (69,699,164) (34,471,675)
------------ ------------
Total dividends and distributions to shareholders............................. (74,509,937) (39,368,947)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................................................. 74,877,524 35,852,696
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions.................................................................... 74,509,937 39,368,947
------------ ------------
149,387,461 75,221,643
Cost of shares redeemed........................................................... (45,298,015) (34,751,127)
------------ ------------
Increase in net assets derived from capital share transactions.................. 104,089,446 40,470,516
------------ ------------
Net increase in net assets...................................................... 137,178,590 97,345,886
NET ASSETS:
Beginning of year................................................................... 427,506,821 330,160,935
------------ ------------
End of year......................................................................... $564,685,411 $427,506,821
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1996 1995 1994 1993 1992
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year........ $ 17.22 $ 14.69 $ 15.64 $ 15.53 $ 15.57
------------ ------------ ------------ ------------ ------------
Net investment income....................... 0.18 0.22 0.22 0.24 0.22
Net realized and unrealized gain (loss) on
investments............................... 4.06 4.06 (0.03) 1.88 1.72
------------ ------------ ------------ ------------ ------------
Total from investment operations............ 4.24 4.28 0.19 2.12 1.94
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income................ (0.18) (0.22) (0.22) (0.25) (0.22)
From net realized gain on investments..... (2.65) (1.53) (0.92) (1.76) (1.76)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions........... (2.83) (1.75) (1.14) (2.01) (1.98)
------------ ------------ ------------ ------------ ------------
Net asset value at end of year.............. $ 18.63 $ 17.22 $ 14.69 $ 15.64 $ 15.53
=========== =========== =========== =========== ===========
Total investment return..................... 24.50% 29.16% 1.20% 13.71% 12.42%
Ratios (to average net assets)/Supplemental
Data:
Net investment income..................... 0.98% 1.29% 1.41% 1.42% 1.50%
Net expenses.............................. 0.58% 0.62% 0.62%# 0.27%# 0.27%
Expenses (before reimbursement)........... 0.58% 0.91% 0.65%# 0.27%# 0.27%
Portfolio turnover rate..................... 104% 104% 108% 121% 82%
Average commission rate paid................ $ 0.0595 (a) (a) (a) (a)
Net assets at end of year (in 000's)........ $ 564,685 $ 427,507 $ 330,161 $ 319,196 $ 272,834
</TABLE>
- ------------
(a) Disclosure of amount required for fiscal years beginning on or after
September 1, 1995.
# At the MainStay VP Series Fund, Inc.'s shareholders meeting on December 14,
1993, the shareholders voted to have the Growth Equity Portfolio assume
certain administrative and operating expenses of the Fund previously borne
by New York Life.
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.
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (96.2%)+
SHARES VALUE
------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (2.0%)
Boeing Co. ..................... 13,719 $ 1,459,359
General Dynamics Corp. ......... 2,418 170,469
Lockheed Martin Corp. .......... 7,308 668,682
McDonnell Douglas Corp. ........ 8,196 524,544
Northrop Grumman Corp. ......... 2,190 181,222
Raytheon Co. ................... 9,079 436,927
Rockwell International Corp. ... 8,291 504,715
United Technologies Corp. ...... 9,345 616,770
------------
4,562,688
------------
AIRLINES (0.3%)
AMR Corp. (a)................... 3,457 304,648
Delta Air Lines, Inc. .......... 2,945 208,727
Southwest Airlines Co. ......... 5,506 121,820
USAir Group, Inc. (a)........... 2,312 54,043
------------
689,238
------------
ALUMINUM (0.4%)
Alcan Aluminum Ltd. ............ 8,632 290,251
Aluminum Co. of America......... 6,718 428,272
Reynolds Metals Co. ............ 2,418 136,315
------------
854,838
------------
AUTOMOBILES (1.8%)
Chrysler Corp. ................. 27,924 921,492
Ford Motor Co. ................. 45,305 1,444,097
General Motors Corp. ........... 28,882 1,610,171
------------
3,975,760
------------
AUTOPARTS--AFTER MARKET (0.3%)
Cooper Tire & Rubber Co. ....... 3,180 62,805
Echlin Inc. .................... 2,383 75,362
Genuine Parts Co. .............. 4,670 207,815
Goodyear Tire & Rubber Co. ..... 5,941 305,219
------------
651,201
------------
BEVERAGES--ALCOHOLIC (0.7%)
Anheuser-Busch Cos., Inc. ...... 19,023 760,920
Brown-Forman Corp. Class B...... 2,658 121,604
Coors (Adolph) Co. Class B...... 1,468 27,892
Seagram Co. Ltd. ............... 14,254 552,342
------------
1,462,758
------------
BEVERAGES--SOFT DRINKS (3.0%)
Coca-Cola Co. .................. 94,994 4,999,059
PepsiCo, Inc. .................. 59,271 1,733,677
------------
6,732,736
------------
BROADCAST/MEDIA (0.4%)
Comcast Corp. Class A........... 12,452 221,801
Tele-Communications TCI Group
Series A (a)................... 25,365 331,331
U.S. West Media Group (a)....... 23,762 439,597
------------
992,729
------------
BUILDING MATERIALS (0.2%)
Masco Corp. .................... 6,131 220,716
Owens-Corning Corp. ............ 1,998 85,165
Sherwin-Williams Co. ........... 3,230 180,880
------------
486,761
------------
</TABLE>
- ------------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
CHEMICALS (2.3%)
Air Products & Chemicals,
Inc. .......................... 4,294 $ 296,823
Dow Chemical Co. ............... 9,421 738,371
Du Pont (E.I.) De Nemours &
Co. ........................... 21,540 2,032,838
Eastman Chemical Co. ........... 3,115 172,104
Goodrich (B.F.) Co. ............ 2,046 82,863
Hercules, Inc. ................. 4,084 176,633
Monsanto Co. ................... 22,473 873,638
Praxair, Inc. .................. 5,890 271,676
Rohm & Haas Co. ................ 2,471 201,695
Union Carbide Corp. ............ 5,093 208,176
------------
5,054,817
------------
CHEMICALS--DIVERSIFIED (0.3%)
Avery Dennison Corp. ........... 4,110 145,391
Engelhard Corp. ................ 5,496 105,111
FMC Corp. (a)................... 1,450 101,681
PPG Industries Inc. ............ 7,135 400,452
------------
752,635
------------
CHEMICALS--SPECIALTY (0.3%)
Grace (W.R.) & Co. ............. 3,364 174,087
Great Lakes Chemical Corp. ..... 2,481 115,987
Morton International, Inc. ..... 5,405 220,254
Nalco Chemical Co. ............. 2,521 91,071
Sigma-Aldrich Corp. ............ 1,897 118,444
------------
719,843
------------
COMMUNICATION--EQUIPMENT
MANUFACTURERS (2.1%)
Andrew Corp. (a)................ 2,347 124,537
Bay Networks, Inc. (a).......... 7,217 150,655
Cabletron Systems, Inc. (a)..... 5,936 197,372
Cisco Systems, Inc. (a)......... 24,827 1,579,618
DSC Communications Corp. (a).... 4,408 78,793
General Instrument Corp. (a).... 5,206 112,580
Lucent Technologies Inc. ....... 24,416 1,129,240
Northern Telecom Ltd. .......... 9,874 610,954
Scientific-Atlanta, Inc. ....... 2,956 44,340
Tellabs, Inc. (a)............... 6,922 260,440
3Com Corp. (a).................. 6,437 472,315
------------
4,760,844
------------
COMPUTERS--SOFTWARE & SERVICES
(3.2%)
Autodesk, Inc. ................. 1,732 48,496
Automatic Data Processing,
Inc. .......................... 11,058 474,112
Ceridian Corp. (a).............. 2,629 106,475
Computer Associates
International, Inc. ........... 13,936 693,316
Computer Sciences Corp. (a)..... 2,838 233,071
First Data Corp. ............... 17,057 622,580
Microsoft Corp. (a)............. 45,599 3,767,617
Novell Inc. (a)................. 13,157 124,581
Oracle Corp. (a)................ 25,064 1,046,422
Shared Medical Systems Corp. ... 920 45,310
------------
7,161,980
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
101
<PAGE> 102
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
COMPUTER SYSTEMS (3.5%)
Amdahl Corp. (a)................ 4,529 $ 54,914
Apple Computer, Inc. (a)........ 4,693 97,967
Compaq Computer Corp. (a)....... 10,236 760,023
Data General Corp. (a).......... 1,474 21,373
Dell Computer Corp. (a)......... 6,870 364,969
Digital Equipment Corp. (a)..... 5,883 213,994
EMC Corp. (a)................... 8,777 290,738
Hewlett-Packard Co. ............ 38,966 1,958,042
Intergraph Corp. (a)............ 1,748 17,917
International Business Machines
Corp. ......................... 19,748 2,981,948
Seagate Technology (a).......... 9,584 378,568
Silicon Graphics Inc. (a)....... 6,691 170,620
Sun Microsystems (a)............ 14,103 362,271
Tandem Computers Inc. (a)....... 4,379 60,211
Unisys Corp. (a)................ 6,571 44,354
------------
7,777,909
------------
CONGLOMERATES (0.3%)
Tenneco, Inc. .................. 6,567 296,336
Textron Inc. ................... 3,100 292,175
------------
588,511
------------
CONTAINERS--METAL & GLASS (0.1%)
Ball Corp. ..................... 1,134 29,484
Crown Cork & Seal Co., Inc. .... 4,919 267,471
------------
296,955
------------
CONTAINERS--PAPER (0.1%)
Bemis Co., Inc. ................ 2,034 75,004
Stone Container Corp. .......... 3,708 55,157
Temple-Inland Inc. ............. 2,090 113,121
------------
243,282
------------
COSMETICS (0.8%)
Alberto-Culver Co. Class B...... 1,097 52,656
Avon Products, Inc. ............ 5,142 293,737
Gillette Co. ................... 17,035 1,324,471
International Flavors &
Fragrances Inc. ............... 4,270 192,150
------------
1,863,014
------------
DRUGS (4.0%)
Lilly (Eli) & Co. .............. 20,959 1,530,007
Merck & Co., Inc. .............. 46,061 3,650,334
Pfizer Inc. .................... 24,606 2,039,222
Pharmacia & Upjohn, Inc. ....... 19,435 770,112
Schering-Plough Corp. .......... 14,049 909,673
------------
8,899,348
------------
ELECTRIC POWER COMPANIES (2.8%)
American Electric Power Co.,
Inc. .......................... 7,133 293,345
Baltimore Gas & Electric Co. ... 5,626 150,495
Carolina Power & Light Co. ..... 5,845 213,342
Central & South West Corp. ..... 7,963 204,052
Cinergy Corp. .................. 6,063 202,353
Consolidated Edison Co. of New
York, Inc. .................... 8,986 262,840
Dominion Resources, Inc. ....... 6,748 259,798
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
ELECTRIC POWER
COMPANIES (Continued)
DTE Energy Co. ................. 5,499 $ 178,030
Duke Power Co. ................. 7,829 362,091
Edison International............ 16,567 329,269
Entergy Corp. .................. 8,689 241,120
FPL Group, Inc. ................ 6,975 320,850
General Public Utilities
Corp. ......................... 4,603 154,776
Houston Industries Inc. ........ 8,988 203,354
Niagara Mohawk Power Corp.
(a)............................ 5,574 55,043
Northern States Power Co. ...... 2,616 120,009
Ohio Edison Co. ................ 5,819 132,382
Pacific Gas & Electric Co. ..... 15,861 333,081
PacifiCorp...................... 11,184 229,272
PECO Energy Co. ................ 8,471 213,893
PP&L Resources, Inc. ........... 6,106 140,438
Public Service Enterprise Group
Inc. .......................... 9,317 253,888
Southern Co. (The).............. 25,672 580,829
Texas Utilities Co. ............ 8,616 351,102
Unicom Corp. ................... 8,237 223,429
Union Electric Co. ............. 3,929 151,267
------------
6,160,348
------------
ELECTRICAL EQUIPMENT (3.8%)
AMP Inc. ....................... 8,368 321,122
Emerson Electric Co. ........... 8,605 832,534
General Electric Co. ........... 62,843 6,213,602
General Signal Corp. ........... 1,880 80,370
Grainger (W.W.), Inc. .......... 1,928 154,722
Honeywell, Inc. ................ 4,888 321,386
Raychem Corp. .................. 1,685 135,010
Thomas & Betts Corp. ........... 2,016 89,460
Westinghouse Electric Corp. .... 15,903 316,072
------------
8,464,278
------------
ELECTRONIC--DEFENSE (0.0%) (b)
EG&G, Inc. ..................... 1,878 37,795
------------
ELECTRONIC-- INSTRUMENTATION
(0.1%)
Perkin-Elmer Corp. ............. 1,682 99,028
Tektronix, Inc. ................ 1,273 65,241
------------
164,269
------------
ELECTRONIC-- SEMICONDUCTORS
(3.1%)
Advanced Micro Devices, Inc.
(a)............................ 5,044 129,883
Applied Materials, Inc. (a)..... 6,838 245,741
Intel Corp. .................... 31,499 4,124,400
LSI Logic Corp. (a)............. 4,964 132,787
Micron Technology, Inc. ........ 7,956 231,718
Motorola, Inc. ................. 22,642 1,389,653
National Semiconductor Corp.
(a)............................ 5,160 125,775
Texas Instruments, Inc. ........ 7,241 461,614
------------
6,841,571
------------
ENGINEERING & CONSTRUCTION
(0.1%)
Fluor Corp. .................... 3,185 199,859
Foster Wheeler Corp. ........... 1,595 59,214
------------
259,073
------------
</TABLE>
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.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
ENTERTAINMENT (1.4%)
King World Productions, Inc.
(a)............................ 1,458 $ 53,764
Time Warner Inc. ............... 21,879 820,463
Viacom, Inc. Class B (a)........ 13,608 474,579
Walt Disney Co. (The)........... 25,914 1,804,262
------------
3,153,068
------------
FINANCIAL-- MISCELLANEOUS (2.2%)
American Express Co. ........... 18,176 1,026,944
American General Corp. ......... 7,899 322,872
Dean Witter, Discover & Co. .... 6,361 421,416
Federal Home Loan Mortgage
Corp. ......................... 6,891 758,871
Federal National Mortgage
Association.................... 41,727 1,554,331
Green Tree Financial Corp. ..... 5,281 203,979
MBIA Corp. ..................... 1,604 162,405
MBNA Corp. ..................... 8,517 353,455
Transamerica Corp. ............. 2,535 200,265
------------
5,004,538
------------
FOOD DISTRIBUTORS (0.2%)
Fleming Cos., Inc. ............. 1,461 25,202
Supervalu Inc. ................. 2,629 74,598
Sysco Corp. .................... 6,940 226,418
------------
326,218
------------
FOODS (2.8%)
Archer-Daniels-Midland Co. ..... 20,841 458,502
Campbell Soup Co. .............. 8,949 718,157
ConAgra, Inc. .................. 9,255 460,436
CPC International Inc. ......... 5,499 426,173
General Mills, Inc. ............ 6,033 382,341
Heinz (H.J.) Co. ............... 14,104 504,218
Hershey Foods Corp. ............ 5,830 255,063
Kellogg Co. .................... 8,066 529,331
Quaker Oats Co. ................ 5,143 196,077
Ralston-Ralston Purina Group.... 4,080 299,370
Sara Lee Corp. ................. 18,529 690,205
Unilever, N.V. ................. 6,159 1,079,365
Wrigley (Wm.) Jr. Co. .......... 4,468 251,325
------------
6,250,563
------------
GOLD (0.5%)
Barrick Gold Corp. ............. 13,667 392,926
Battle Mountain Gold Co. ....... 8,541 58,719
Echo Bay Mines Ltd. ............ 5,316 35,219
Homestake Mining Co. ........... 5,576 79,458
Newmont Mining Corp. ........... 3,803 170,184
Placer Dome Inc. ............... 9,155 199,121
Santa Fe Pacific Gold Corp. .... 4,983 76,614
------------
1,012,241
------------
HARDWARE & TOOLS (0.1%)
Black & Decker Corp. ........... 3,345 100,768
Snap-On, Inc. .................. 2,319 82,615
Stanley Works (The)............. 3,406 91,962
------------
275,345
------------
HEALTH CARE-- DIVERSIFIED (3.8%)
Abbott Laboratories............. 29,621 1,503,266
Allergan, Inc. ................. 2,449 87,246
American Home Products Corp. ... 24,262 1,422,360
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
HEALTH CARE--
DIVERSIFIED (Continued)
Bristol-Myers Squibb Co. ....... 19,200 $ 2,088,000
Johnson & Johnson............... 50,923 2,533,419
Mallinckrodt Group Inc. ........ 2,939 129,683
Warner-Lambert Co. ............. 10,332 774,900
------------
8,538,874
------------
HEALTH CARE--HMOs (0.2%)
Humana Inc. (a)................. 6,228 119,111
United Healthcare Corp. ........ 6,994 314,730
------------
433,841
------------
HEALTH CARE-- MISCELLANEOUS
(0.3%)
ALZA Corp. (a).................. 3,186 82,438
Amgen Inc. (a).................. 10,148 551,797
Beverly Enterprises, Inc. (a)... 3,696 47,124
Manor Care, Inc. ............... 2,403 64,881
------------
746,240
------------
HEAVY TRUCKS & PARTS (0.3%)
Cummins Engine Co., Inc. ....... 1,520 69,920
Dana Corp. ..................... 3,903 127,336
Eaton Corp. .................... 2,959 206,390
ITT Industries, Inc. ........... 4,495 110,128
Navistar International Corp.
(a)............................ 2,947 26,891
PACCAR Inc. .................... 1,441 97,988
------------
638,653
------------
HOMEBUILDING (0.0%) (b)
Centex Corp. ................... 1,115 41,952
Kaufman & Broad Home Corp. ..... 1,465 18,862
Pulte Corp. .................... 957 29,428
------------
90,242
------------
HOSPITAL MANAGEMENT (0.6%)
Columbia/HCA Healthcare
Corp. ......................... 25,582 1,042,466
Tenet Healthcare Corp. (a)...... 8,273 180,972
------------
1,223,438
------------
HOTEL--MOTEL (0.4%)
Harrah's Entertainment, Inc.
(a)............................ 3,961 78,725
Hilton Hotels Corp. ............ 9,391 245,340
ITT Corp. (a)................... 4,478 194,233
Marriott International Inc. .... 4,930 272,382
------------
790,680
------------
HOUSEHOLD--FURNISHINGS &
APPLIANCES (0.1%)
Armstrong World Industries,
Inc. .......................... 1,482 102,999
Maytag Corp. ................... 3,950 78,012
Whirlpool Corp. ................ 2,814 131,203
------------
312,214
------------
HOUSEHOLD PRODUCTS (2.0%)
Clorox Co. (The)................ 1,933 194,025
Colgate-Palmolive Co. .......... 5,652 521,397
Kimberly-Clark Corp. ........... 10,792 1,027,938
Procter & Gamble Co. (The)...... 26,203 2,816,822
------------
4,560,182
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
103
<PAGE> 104
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
HOUSEWARES (0.2%)
Newell Co. ..................... 6,034 $ 190,071
Rubbermaid Inc. ................ 5,735 130,471
Tupperware Corp. ............... 2,402 128,808
------------
449,350
------------
INSURANCE BROKERS (0.3%)
Alexander & Alexander
Services Inc. ................. 1,687 29,312
Aon Corp. ...................... 4,185 259,993
Marsh & McLennan Cos., Inc. .... 2,803 291,512
------------
580,817
------------
INVESTMENT BANK/ BROKERAGE
(0.5%)
Merrill Lynch & Co., Inc. ...... 6,435 524,452
Morgan Stanley Group Inc. ...... 5,893 336,638
Salomon Inc. ................... 4,011 189,018
------------
1,050,108
------------
LEISURE TIME (0.0%) (b)
Brunswick Corp. ................ 3,741 89,784
------------
LIFE INSURANCE (0.6%)
Aetna Inc. ..................... 5,760 460,800
Jefferson-Pilot Corp. .......... 2,742 155,266
Lincoln National Corp. ......... 4,031 211,628
Providian Corp. ................ 3,588 184,334
Torchmark Corp. ................ 2,685 135,592
UNUM Corp. ..................... 2,769 200,060
USLIFE Corp. ................... 1,321 43,923
------------
1,391,603
------------
MACHINE TOOLS (0.0%) (b)
Cincinnati Milacron Inc. ....... 1,478 32,331
Giddings & Lewis, Inc. ......... 1,300 16,738
------------
49,069
------------
MACHINERY--DIVERSIFIED (0.8%)
Briggs & Stratton Corp. ........ 1,131 49,764
Case Corp. ..................... 2,801 152,655
Caterpillar Inc. ............... 7,389 556,022
Cooper Industries Inc. ......... 4,147 174,692
Deere & Co. .................... 9,987 405,722
Harnischfeger Industries,
Inc. .......................... 1,780 85,663
Ingersoll-Rand Co. ............. 4,136 184,052
NACCO Industries, Inc. Class
A.............................. 349 18,671
Thermo Electron Corp. (a)....... 2,500 103,125
Timken Co. (The)................ 1,153 52,894
------------
1,783,260
------------
MAJOR REGIONAL BANKS (4.6%)
Banc One Corp. ................. 16,358 703,394
Bank of Boston Corp. ........... 5,795 372,329
Bank of New York Co., Inc.
(The).......................... 14,935 504,056
Barnett Banks, Inc. ............ 7,253 298,280
Boatmen's Bancshares, Inc. ..... 5,984 385,968
Comerica Inc. .................. 4,136 216,623
CoreStates Financial Corp. ..... 8,492 440,523
Fifth Third Bancorp............. 3,927 246,665
First Bank System, Inc. ........ 5,088 347,256
First Union Corp. .............. 10,584 783,216
Fleet Financial Group, Inc. .... 10,038 500,645
KeyCorp......................... 8,768 442,784
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
MAJOR REGIONAL BANKS (Continued)
Mellon Bank Corp. .............. 5,015 $ 356,065
National City Corp. ............ 8,410 377,399
NationsBank Corp. .............. 11,120 1,086,980
Norwest Corp. .................. 14,213 618,265
PNC Bank Corp. ................. 13,034 490,404
Republic New York Corp. ........ 2,086 170,270
SunTrust Banks, Inc. ........... 8,680 427,490
U.S. Bancorp.................... 5,858 263,244
Wachovia Corp. ................. 6,474 365,781
Wells Fargo & Co. .............. 3,546 956,533
------------
10,354,170
------------
MANUFACTURED HOUSING (0.0%) (b)
Fleetwood Enterprises Inc. ..... 1,588 43,670
------------
MANUFACTURING-- DIVERSIFIED
(1.0%)
AlliedSignal Inc. .............. 10,850 726,950
Crane Co. ...................... 1,708 49,547
Dover Corp. .................... 4,318 216,980
Illinois Tool Works Inc. ....... 4,728 377,649
Johnson Controls, Inc. ......... 1,631 135,169
Millipore Corp. ................ 1,731 71,620
Pall Corp. ..................... 4,347 110,849
Parker-Hannifin Corp. .......... 2,926 113,382
TRINOVA Corp. .................. 1,104 40,158
Tyco International Ltd. ........ 5,845 309,054
------------
2,151,358
------------
MEDICAL PRODUCTS (1.0%)
Bard (C.R.), Inc. .............. 2,200 61,600
Bausch & Lomb Inc. ............. 2,209 77,315
Baxter International Inc. ...... 10,397 426,277
Becton, Dickinson & Co. ........ 4,758 206,378
Biomet, Inc. ................... 4,355 65,869
Boston Scientific Corp. (a)..... 6,815 408,900
Guidant Corp. .................. 2,781 158,517
Medtronic, Inc. ................ 9,201 625,668
St. Jude Medical, Inc. (a)...... 3,055 130,219
United States Surgical Corp. ... 2,385 93,910
------------
2,254,653
------------
METALS--MISCELLANEOUS (0.3%)
ASARCO Inc. .................... 1,654 41,143
Cyprus Amax Minerals Co. ....... 3,513 82,116
Freeport-McMoRan Copper & Gold
Inc. Class B................... 7,460 222,868
Inco Ltd. ...................... 6,443 205,371
Phelps Dodge Corp. ............. 2,502 168,885
------------
720,383
------------
MISCELLANEOUS (1.4%)
AirTouch Communications, Inc.
(a)............................ 19,025 480,381
American Greetings Corp. Class
A.............................. 2,824 80,131
Corning Inc. ................... 8,830 408,388
Harcourt General, Inc. ......... 2,698 124,445
Harris Corp. ................... 1,499 102,869
Jostens, Inc. .................. 1,626 34,349
Minnesota Mining & Manufacturing
Co. ........................... 16,014 1,327,160
</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>
MISCELLANEOUS (Continued)
Pioneer Hi-Bred International,
Inc. .......................... 3,126 $ 218,820
TRW, Inc. ...................... 4,905 242,798
Whitman Corp. .................. 3,976 90,951
------------
3,110,292
------------
MONEY CENTER BANKS (2.8%)
BankAmerica Corp. .............. 13,749 1,371,463
Bankers Trust New York Corp. ... 3,041 262,286
Chase Manhattan Corp. .......... 16,702 1,490,653
Citicorp........................ 17,921 1,845,863
First Chicago Corp. ............ 12,100 650,375
Morgan (J.P.) & Co., Inc. ...... 7,158 698,800
------------
6,319,440
------------
MULTI--LINE INSURANCE (1.7%)
American International Group,
Inc. .......................... 17,988 1,947,201
CIGNA Corp. .................... 2,948 402,771
ITT Hartford Group, Inc. ....... 4,486 302,805
Travelers Group Inc. ........... 24,579 1,115,272
------------
3,768,049
------------
NATURAL GAS DISTRIBUTORS
& PIPELINES (0.9%)
Coastal Corp. .................. 3,980 194,522
Columbia Gas System, Inc. ...... 2,068 131,576
Consolidated Natural Gas Co. ... 3,576 197,574
Eastern Enterprises............. 773 27,345
Enron Corp. .................... 9,577 413,008
ENSERCH Corp. .................. 2,624 60,352
NICOR Inc. ..................... 1,909 68,247
NorAm Energy Corp. ............. 5,170 79,489
ONEOK Inc. ..................... 1,084 32,520
Pacific Enterprises............. 3,187 96,805
PanEnergy Corp. ................ 5,778 260,010
Peoples Energy Corp. ........... 1,316 44,580
Sonat, Inc. .................... 3,249 167,324
Williams Cos., Inc. (The)....... 5,952 223,200
------------
1,996,552
------------
OFFICE EQUIPMENT & SUPPLIES
(0.6%)
Alco Standard Corp. ............ 4,899 252,911
Moore Corp. Ltd. ............... 3,875 78,953
Pitney Bowes Inc. .............. 5,800 316,100
Xerox Corp. .................... 12,406 652,866
------------
1,300,830
------------
OIL & GAS DRILLING (0.1%)
Helmerich & Payne, Inc. ........ 946 49,310
Rowan Cos., Inc. (a)............ 3,213 72,694
------------
122,004
------------
OIL--EXPLORATION & PRODUCTION
(0.3%)
Burlington Resources Inc. ...... 4,809 242,253
Oryx Energy Co. (a)............. 4,034 99,842
Santa Fe Energy
Resources, Inc. (a)............ 3,406 47,258
Union Pacific Resources
Group, Inc. ................... 9,593 280,595
------------
669,948
------------
OIL--INTEGRATED DOMESTIC (1.3%)
Amerada Hess Corp. ............. 3,562 206,151
Ashland Inc. ................... 2,422 106,265
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
OIL--INTEGRATED
DOMESTIC (Continued)
Atlantic Richfield Co. ......... 6,168 $ 817,260
Kerr-McGee Corp. ............... 1,887 135,864
Louisiana Land &
Exploration Co. (The).......... 1,292 69,284
Occidental Petroleum Corp. ..... 12,521 292,678
Pennzoil Co. ................... 1,813 102,435
Phillips Petroleum Co. ......... 9,975 441,394
Sun Co., Inc. .................. 2,836 69,127
Unocal Corp. ................... 9,512 386,425
USX-Marathon Group.............. 10,932 261,001
------------
2,887,884
------------
OIL--INTEGRATED INTERNATIONAL
(6.3%)
Amoco Corp. .................... 19,068 1,534,974
Chevron Corp. .................. 24,947 1,621,555
Exxon Corp. .................... 47,561 4,660,978
Mobil Corp. .................... 15,044 1,839,129
Royal Dutch Petroleum Co. ...... 20,570 3,512,328
Texaco Inc. .................... 10,091 990,179
------------
14,159,143
------------
OIL--WELL EQUIPMENT & SERVICES
(0.8%)
Baker Hughes Inc. .............. 5,442 187,749
Dresser Industries, Inc. ....... 6,919 214,489
Halliburton Co. ................ 4,814 290,043
McDermott International,
Inc. .......................... 2,069 34,397
Schlumberger Ltd. .............. 9,360 934,830
Western Atlas Inc. (a).......... 2,026 143,593
------------
1,805,101
------------
PAPER & FOREST PRODUCTS (0.9%)
Boise Cascade Corp. ............ 1,821 57,817
Champion International Corp. ... 3,695 159,809
Georgia-Pacific Corp. .......... 3,527 253,944
International Paper Co. ........ 11,421 461,123
James River Corp. of Virginia... 3,210 106,331
Louisiana-Pacific Corp. ........ 4,139 87,436
Mead Corp. ..................... 2,058 119,621
Potlatch Corp. ................. 1,114 47,902
Union Camp Corp. ............... 2,637 125,917
Westvaco Corp. ................. 3,860 110,975
Weyerhaeuser Co. ............... 7,571 358,676
Willamette Industries, Inc. .... 2,082 144,959
------------
2,034,510
------------
PERSONAL LOANS (0.2%)
Beneficial Corp. ............... 2,052 130,045
Household International,
Inc. .......................... 3,727 343,816
------------
473,861
------------
PHOTOGRAPHY/IMAGING (0.5%)
Eastman Kodak Co. .............. 12,826 1,029,287
Polaroid Corp. ................. 1,725 75,037
------------
1,104,324
------------
POLLUTION CONTROL (0.4%)
Browning-Ferris Industries
Inc. .......................... 8,079 212,074
</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
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
POLLUTION CONTROL (Continued)
Laidlaw Inc. Class B............ 12,016 $ 138,184
WMX Technologies, Inc. ......... 18,523 604,313
------------
954,571
------------
PROPERTY--CASUALTY INSURANCE
(1.3%)
Allstate Corp. ................. 17,039 986,132
Chubb Corp. .................... 6,709 360,609
General Re Corp. ............... 3,165 499,279
Loews Corp. .................... 4,446 419,035
MGIC Investment Corp. .......... 2,244 170,544
SAFECO Corp. ................... 4,830 190,483
St. Paul Cos., Inc. (The)....... 3,176 186,193
USF&G Corp. .................... 4,571 95,420
------------
2,907,695
------------
PUBLISHING (0.1%)
McGraw-Hill Cos., Inc. (The).... 3,888 179,334
Meredith Corp. ................. 1,004 52,961
------------
232,295
------------
PUBLISHING--NEWSPAPER (0.5%)
Dow Jones & Co., Inc. .......... 3,750 127,031
Gannett Co., Inc. .............. 5,426 406,272
Knight-Ridder Inc. ............. 3,762 143,897
New York Times Co. (The) Class
A.............................. 3,720 141,360
Times Mirror Co. (The) Class
A.............................. 3,919 194,970
Tribune Co. .................... 2,320 182,990
------------
1,196,520
------------
RAILROADS (1.0%)
Burlington Northern
Santa Fe Corp. ................ 5,903 509,872
Conrail Inc. ................... 3,019 300,768
CSX Corp. ...................... 8,108 342,563
Norfolk Southern Corp. ......... 4,799 419,912
Union Pacific Corp. ............ 9,339 561,507
------------
2,134,622
------------
RESTAURANTS (0.6%)
Darden Restaurants, Inc. ....... 6,139 53,716
McDonald's Corp. ............... 26,732 1,209,623
Wendy's International, Inc. .... 4,877 99,979
------------
1,363,318
------------
RETAIL STORES--APPAREL (0.3%)
Charming Shoppes, Inc. (a)...... 3,956 20,027
Gap, Inc. (The)................. 11,021 332,008
Limited, Inc. (The)............. 10,307 189,391
TJX Cos., Inc. (The)............ 2,843 134,687
------------
676,113
------------
RETAIL STORES-- DEPARTMENT
(0.7%)
Dillard Department Stores, Inc.
Class A........................ 4,319 133,349
Federated Department Stores,
Inc. (a)....................... 7,947 271,191
May Department Stores Co. ...... 9,560 446,930
Mercantile Stores Co., Inc. .... 1,448 71,495
Nordstrom, Inc. ................ 3,051 108,120
Penney (J.C.) Co. Inc. ......... 8,588 418,665
------------
1,449,750
------------
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
RETAIL STORES--DRUG (0.3%)
Longs Drug Stores Corp. ........ 763 $ 37,483
Rite-Aid Corp. ................. 4,475 177,881
Walgreen Co. ................... 9,390 375,600
------------
590,964
------------
RETAIL STORES--FOOD CHAIN (0.5%)
Albertson's, Inc. .............. 9,618 342,641
American Stores Co. ............ 5,733 234,336
Giant Food, Inc. Class A........ 2,260 77,970
Great Atlantic & Pacific
Tea Co., Inc. (The)............ 1,471 46,888
Kroger Co. (a).................. 4,762 221,433
Winn-Dixie Stores, Inc. ........ 5,809 183,710
------------
1,106,978
------------
RETAIL STORES--GENERAL
MERCHANDISE (1.4%)
Dayton-Hudson Corp. ............ 8,381 328,954
Kmart Corp. (a)................. 18,414 191,045
Sears, Roebuck & Co. ........... 14,933 688,785
Wal-Mart Stores, Inc. .......... 87,663 2,005,291
------------
3,214,075
------------
RETAIL STORES--SPECIALTY (1.0%)
Autozone, Inc. (a).............. 2,600 71,500
Circuit City Stores, Inc. ...... 3,736 112,547
CVS Corp. ...................... 3,984 164,838
Home Depot, Inc. (The).......... 18,264 915,483
Lowe's Cos., Inc. .............. 6,589 233,909
Pep Boys-Manny, Moe & Jack...... 2,400 73,800
Price/Costco, Inc. (a).......... 7,518 188,890
Tandy Corp. .................... 2,281 100,364
Toys "R" Us, Inc. (a)........... 10,448 313,440
Woolworth Corp. (a)............. 5,075 111,016
------------
2,285,787
------------
SAVINGS & LOANS (0.2%)
Ahmanson (H.F.) & Co. .......... 4,003 130,097
Golden West Financial Corp. .... 2,246 141,779
Great Western Financial
Corp. ......................... 5,233 151,757
------------
423,633
------------
SHOES (0.3%)
Nike Inc. Class B............... 11,005 657,549
Reebok International Ltd. ...... 2,128 89,376
Stride Rite Corp. .............. 1,893 18,930
------------
765,855
------------
SPECIALIZED SERVICES (0.8%)
Block (H&R), Inc. .............. 3,964 114,956
Cognizant Corp. ................ 6,458 213,114
CUC International Inc. (a)...... 14,978 355,727
Dun & Bradstreet Corp. (The).... 6,452 153,235
Ecolab Inc. .................... 2,435 91,617
HFS Inc. (a).................... 4,783 285,784
Interpublic Group of Cos.,
Inc. .......................... 3,016 143,260
</TABLE>
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.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
SPECIALIZED SERVICES
(Continued)
National Service Industries,
Inc. .......................... 1,867 $ 69,779
Safety-Kleen Corp. ............. 2,231 36,533
Service Corp. International..... 8,939 250,292
------------
1,714,297
------------
SPECIALTY PRINTING (0.1%)
Deluxe Corp. ................... 3,172 103,883
Donnelley (R.R.) & Sons Co. .... 5,837 183,136
Harland (John H.) Co. .......... 1,150 37,950
------------
324,969
------------
STEEL (0.3%)
Allegheny Teledyne Inc. ........ 6,678 153,594
Armco Inc. (a).................. 4,097 16,900
Bethlehem Steel Corp. (a)....... 4,235 38,115
Inland Steel Industries Inc. ... 1,835 36,700
Nucor Corp. .................... 3,373 172,023
USX-U.S. Steel Group............ 3,245 101,812
Worthington Industries, Inc. ... 3,472 62,930
------------
582,074
------------
TELECOMMUNICATIONS--
LONG DISTANCE (2.1%)
AT&T Corp. ..................... 61,795 2,688,083
MCI Communications Corp. ....... 26,391 862,656
Sprint Corp. ................... 16,455 656,143
WorldCom, Inc. (a).............. 22,471 585,650
------------
4,792,532
------------
TELEPHONE (4.0%)
ALLTEL Corp. ................... 7,287 228,630
Ameritech Corp. ................ 21,136 1,281,370
Bell Atlantic Corp. ............ 16,698 1,081,196
BellSouth Corp. ................ 37,929 1,531,383
Frontier Corp. ................. 3,300 74,662
GTE Corp. ...................... 36,708 1,670,214
NYNEX Corp. .................... 16,726 804,939
Pacific Telesis Group........... 16,386 602,185
SBC Communications Inc. ........ 23,217 1,201,480
US West, Inc. .................. 18,139 584,983
------------
9,061,042
------------
TEXTILES--APPAREL MANUFACTURERS
(0.2%)
Fruit of the Loom, Inc.
Class A (a).................... 2,887 109,345
Liz Claiborne, Inc. ............ 2,827 109,193
Russell Corp. .................. 1,494 44,447
Springs Industries, Inc. Class
A.............................. 759 32,637
VF Corp. ....................... 2,429 163,957
------------
459,579
------------
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
TOBACCO (1.8%)
American Brands, Inc. .......... 6,503 $ 322,711
Philip Morris Cos., Inc. ....... 31,308 3,526,064
UST Inc. ....................... 7,209 233,391
------------
4,082,166
------------
TOYS (0.2%)
Hasbro Inc. .................... 3,344 129,998
Mattel, Inc. ................... 10,374 287,879
------------
417,877
------------
TRANSPORTATION-- MISCELLANEOUS
(0.1%)
Federal Express Corp. (a)....... 4,412 196,334
Ryder System, Inc. ............. 3,026 85,106
------------
281,440
------------
TRUCKERS (0.0%) (b)
Caliber System, Inc. ........... 1,501 28,894
------------
Total Common Stocks
(Cost $170,996,078)............ 215,528,727 (c)
------------
<CAPTION>
SHORT-TERM
INVESTMENTS (3.2%)
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
U.S. GOVERNMENT (3.2%)
United States Treasury Bills
4.85%, due 2/6/97 (d).......... $4,000,000 3,980,680
4.91%, due 1/30/97 (d)......... 2,100,000 2,091,890
4.95%, due 3/27/97 (d)......... 700,000 691,756
4.96%, due 4/3/97 (d).......... 400,000 394,782
------------
Total Short-Term Investments
(Cost $7,159,482).............. 7,159,108
------------
Total Investments
(Cost $178,155,560) (f)........ 99.4% 222,687,835 (g)
Cash and Other Assets,
Less Liabilities............... 0.6 1,256,712
--------- ------------
Net Assets...................... 100.0% $223,944,547
========= ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
107
<PAGE> 108
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996
<TABLE>
<CAPTION>
FUTURES CONTRACTS (0.1%)
CONTRACTS UNREALIZED
LONG DEPRECIATION
------------------------
<S> <C> <C>
Standard & Poor's 500
March 1997..................... 20 $ (128,945)
------------
Total Futures Contracts
(Settlement Value
$7,573,945).................. $ (128,945) (e)
============
</TABLE>
- ------------
(a) Non-income producing securities.
(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 99.6% of net assets.
(d) 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, 1996.
(f) The cost for Federal income tax purposes is $178,343,936.
(g) At December 31, 1996 net unrealized appreciation was $44,343,899, 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 $46,450,970 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,107,071.
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.
INDEXED EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $178,155,560)....... $222,687,835
Cash................................... 20,758
Receivables:
Investment securities sold........... 761,910
Fund shares sold..................... 753,407
Dividends and interest............... 333,536
Other assets........................... 313
------------
Total assets..................... 224,557,759
------------
LIABILITIES:
Payables:
Investment securities purchased...... 344,033
Administrator........................ 18,420
Adviser.............................. 18,420
NYLIAC............................... 15,757
Custodian............................ 11,048
Directors............................ 77
Accrued expenses....................... 61,437
Variation margin payable on futures
contracts............................ 144,020
------------
Total liabilities................ 613,212
------------
Net assets applicable to outstanding
shares............................... $223,944,547
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 50 million shares
authorized........................... $ 139,132
Additional paid-in capital............. 178,003,114
Accumulated undistributed net
investment income.................... 390
Accumulated undistributed net realized
gain on investments.................. 1,398,581
Net unrealized appreciation on
investments.......................... 44,403,330
------------
Net assets applicable to outstanding
shares............................... $223,944,547
============
Shares of capital stock outstanding.... 13,913,175
============
Net asset value per share
outstanding.......................... $ 16.10
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 2,901,801
Interest............................. 981,934
------------
Total income..................... 3,883,735
------------
Expenses:
Administration....................... 297,742
Advisory............................. 148,871
Shareholder communication............ 107,071
Recordkeeping........................ 82,739
Custodian............................ 52,218
Professional......................... 46,681
Directors............................ 6,428
Portfolio pricing.................... 3,800
Miscellaneous........................ 2,697
------------
Total expenses before
reimbursement.................. 748,247
Expense reimbursement from
Administrator........................ (48,553)
------------
Net expenses..................... 699,694
------------
Net investment income.................. 3,184,041
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain from:
Securities transactions.............. 1,148,053
Futures transactions................. 2,818,989
------------
Net realized gain on investments....... 3,967,042
------------
Net change in unrealized appreciation
(depreciation) on investments:
Securities transactions.............. 25,077,972
Futures transactions................. (457,795)
------------
Net unrealized gain on investments..... 24,620,177
------------
Net realized and unrealized gain on
investments.......................... 28,587,219
------------
Net increase in net assets resulting
from operations...................... $ 31,771,260
===========
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $28,866.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
109
<PAGE> 110
INDEXED EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1996
and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................................................. $ 3,184,041 $ 2,018,769
Net realized gain on investments.................................................. 3,967,042 3,180,447
Net change in unrealized appreciation on investments.............................. 24,620,177 19,351,538
------------ ------------
Net increase in net assets resulting from operations.............................. 31,771,260 24,550,754
------------ ------------
Dividends and distributions to shareholders:
From net investment income........................................................ (3,183,651) (2,044,642)
From net realized gain on investments............................................. (2,701,672) (2,898,925)
------------ ------------
Total dividends and distributions to shareholders............................. (5,885,323) (4,943,567)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................................................. 110,486,675 32,292,361
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions.................................................................... 5,885,323 4,943,567
------------ ------------
116,371,998 37,235,928
Cost of shares redeemed........................................................... (23,483,920) (14,837,036)
------------ ------------
Increase in net assets derived from capital share transactions.................. 92,888,078 22,398,892
------------ ------------
Net increase in net assets...................................................... 118,774,015 42,006,079
NET ASSETS:
Beginning of year................................................................... 105,170,532 63,164,453
------------ ------------
End of year......................................................................... $223,944,547 $105,170,532
=========== ===========
Accumulated undistributed net investment income..................................... $ 390 $ --
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1996 1995 1994 1993
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period.................. $ 13.53 $ 10.38 $ 10.58 $ 10.00
------------ ------------ ------------ ------------
Net investment income................................... 0.24 0.27 0.24 0.19
Net realized and unrealized gain (loss) on
investments........................................... 2.79 3.55 (0.15) 0.67
------------ ------------ ------------ ------------
Total from investment operations........................ 3.03 3.82 0.09 0.86
------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income............................ (0.24) (0.28) (0.24) (0.19)
From net realized gain on investments................. (0.22) (0.39) (0.05) (0.08)
In excess of net realized gain on investments......... -- -- -- (0.01)
------------ ------------ ------------ ------------
Total dividends and distributions....................... (0.46) (0.67) (0.29) (0.28)
------------ ------------ ------------ ------------
Net asset value at end of period........................ $ 16.10 $ 13.53 $ 10.38 $ 10.58
=========== =========== =========== =============
Total investment return (b)............................. 22.42% 36.89% 0.76% 8.53%
Ratios (to average net assets)/Supplemental Data:
Net investment income................................. 2.14% 2.52% 2.61% 2.54% +
Net expenses.......................................... 0.47% 0.47% 0.47% 0.47% +
Expenses (before reimbursement)....................... 0.50% 0.62% 0.68% 0.96% +
Portfolio turnover rate................................. 3% 5% 8% 7 %
Average commission rate paid............................ $ 0.0498 (c) (c) (c)
Net assets at end of period (in 000's).................. $ 223,945 $ 105,171 $ 63,164 $ 43,081
</TABLE>
- ------------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after
September 1, 1995.
+ Annualized.
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.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-- Organization and Business:
- --------------------------------------------------------------------------------
MainStay VP Series Fund, Inc. (formerly New York Life MFA Series Fund, Inc.)
(the "Company") was incorporated under Maryland law on June 3, 1983. The
Company is registered under the Investment Company Act of 1940, as amended,
("Investment Company Act") as an open-end diversified management investment
company. 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 "Funds") are separate portfolios
of the Company. Shares of the Funds 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
Funds to, among others, New York Life Insurance and Annuity Corporation's
LifeStages(SM) Annuity Separate Account. The Separate Account is used to fund
flexible premium retirement annuity policies.
The investment objectives for each of the Portfolios of the Company are as
follows:
Capital Appreciation: to seek long-term growth of capital.
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.
International Equity: to seek long-term growth of capital by investing in
a portfolio consisting primarily of non-U.S. equity securities.
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 (reflecting reinvestment of dividends) of
common stocks in the aggregate, as represented by the S&P 500.
- --------------------------------------------------------------------------------
NOTE 2--Significant Accounting Policies:
- --------------------------------------------------------------------------------
The following is a summary of significant accounting policies followed by
the Company:
(A)
VALUATION OF FUND SHARES. The net asset value per share of each Fund is
calculated on every day the New York Stock Exchange is open for trading, except
the day after Thanksgiving and Christmas Eve. Net asset value per share is
calculated as of the regular close of the New York Stock Exchange (normally 4:00
P.M., Eastern time) for each Fund by dividing the current market value
(amortized cost, in the case of Cash Management Portfolio) of the Fund's total
assets, less liabilities, by the total number of outstanding shares of that
Fund.
111
<PAGE> 112
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B)
SECURITIES VALUATION. Portfolio securities of Cash Management Portfolio are
valued at amortized cost, which approximates market value. This method involves
initially valuing an instrument at its cost and thereafter amortizing the
premium or accreting the discount to income over the life of the security.
Securities of each of the other Funds are stated at value determined (a) by
appraising common and preferred stocks which are traded on the New York Stock
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 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 if these prices
are deemed to be representative of market values at the regular close of
business of the New York Stock 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 New York Stock 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
New York Stock Exchange will not be reflected in the Funds' 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)
FORWARD CURRENCY CONTRACTS. A forward currency 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 International Equity Portfolio enters into forward foreign
currency exchange contracts in order to hedge its foreign currency denominated
investments and receivables and payables against adverse movements in future
foreign exchange rates.
The use of 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 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.
112
<PAGE> 113
MAINSTAY VP SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
Forward foreign currency contracts open at December 31, 1996:
<TABLE>
<CAPTION>
VALUE ON UNREALIZED
CONTRACT TRADE CURRENT APPRECIATION/
AMOUNT DATE VALUE (DEPRECIATION)
---------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
- -------------------------------
Australian Dollar, expiring 3/3/97.................. A$ 245,000 $ 198,205 $ 194,463 $ 3,742
Austrian Schilling, expiring 1/15/97................ AS 6,640,000 617,677 613,131 4,546
Deutsche Mark, expiring 1/6/97 - 6/20/97............ DM 13,705,150 9,098,719 8,947,439 151,280
French Franc, expiring 1/29/97 - 2/4/97............. FF 3,105,000 606,470 598,466 8,004
Italian Lira, expiring 1/23/97...................... IL 2,186,000,000 1,408,791 1,436,202 (27,411)
Japanese Yen, expiring 1/6/97 - 7/7/97.............. Y 1,322,300,000 12,344,340 11,498,841 845,499
Spanish Peseta, expiring 1/22/97.................... SP 101,150,000 781,946 777,135 4,811
-----------
990,471
-----------
FOREIGN CURRENCY BUY CONTRACTS
- ------------------------------
Australian Dollar, expiring 1/7/97.................. A $ 195,000 154,245 154,873 628
Deutsche Mark, expiring 1/22/97 - 2/5/97............ DM 5,305,761 3,478,379 3,449,101 (29,278)
Japanese Yen, expiring 1/6/97 - 2/5/97.............. Y 617,296,410 5,364,916 5,336,163 (28,753)
Pound Sterling, expiring 1/7/97 - 1/15/97........... L 742,605 1,157,152 1,270,510 113,358
-----------
55,955
-----------
Net Appreciation.................................... $ 1,046,426
===========
</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, 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 Portfolio invests in
stock index futures contracts to gain full exposure to changes in stock market
prices to fulfill its investment objective.
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 long 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.
(E)
REPURCHASE AGREEMENTS. At the time the Funds enter 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 Funds' 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. (Also see Note 5).
(F)
SECURITY TRANSACTIONS AND INVESTMENT INCOME. The Company 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
113
<PAGE> 114
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
losses from repayments of principal on mortgage 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 Funds are accreted on the constant yield method over the life of the
respective securities or, if applicable, over the period to the first date of
call.
(G)
FOREIGN CURRENCY INVESTING. The books and records of the Company 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 International Equity Portfolio 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 forward currency 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 Fund'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.
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.
INTERNATIONAL EQUITY PORTFOLIO
Foreign cash held at December 31, 1996:
<TABLE>
<CAPTION>
CURRENCY COST VALUE
------------------------------------------- --------- ---------
<S> <C> <C> <C> <C>
Australian Dollar A$ 410,260 $ 323,185 $ 325,870
Austrian Schilling AS 926 87 85
Belgian Franc BF 7,499 239 236
Danish Krone DK 1,647 279 279
Deutsche Mark DM 3,457 2,288 2,243
French Franc FF 5,742 1,104 1,105
Hong Kong Dollar HK 87,122 11,263 11,263
Italian Lira IL 3,822,527 2,521 2,515
Japanese Yen Y 3,020,783 26,664 26,024
Malaysian Ringgit MK 12,271 4,895 4,859
Netherland Guilder NG 1,140 654 659
Norwegian Krone NK 43,967 6,867 6,886
Pound Sterling L 863,340 1,323,286 1,477,436
Singapore Dollar S$ 14,010 9,929 10,016
Spanish Peseta SP 232,552 1,795 1,788
$1,715,056 $1,871,264
</TABLE>
(H)
MORTGAGE DOLLAR ROLLS. The Funds enter into mortgage dollar roll transactions
("MDRs") 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 Funds are
classified as purchase and sale transactions. The securities sold in connection
with the MDR are removed from the portfolio and a realized gain or loss is
recognized. The securities the Funds have agreed to acquire are included at
market value in the portfolio of investments and liability for such purchase
commitments is included as payables for investments purchased. The Funds
maintain a segregated account with the custodian containing securities from the
respective portfolios having a value not less than the repurchase price,
including
114
<PAGE> 115
MAINSTAY VP SERIES FUND, INC.
accrued interest. MDR transactions involve certain risks, including the risk
that the MBS returned to the Funds 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.
HIGH YIELD CORPORATE BOND PORTFOLIO
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 Fund does not have the right to demand that such securities be
registered. The Fund may not invest more than 10% of its net assets in illiquid
securities.
Restricted securities held at December 31, 1996:
<TABLE>
<CAPTION>
PRINCIPAL PERCENT
ACQUISITION AMOUNT/ 12/31/96 OF
SECURITY DATE SHARES COST VALUE NET ASSETS
- ------------------------------------------------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Cosmar Corp.
11.50%, due 12/4/97............................. 12/4/96 $1,800,000 $1,800,000 $1,800,000 0.9%
GPA Group, PLC
Preferred Stock................................. 3/6/96 1,000,000 328,750 440,000 0.2
National Tobacco Holding, LLC
13.50%, due 5/17/03
16.50%, beginning 6/1/01........................ 5/17/96 1,821,748 1,392,755 1,514,784 0.7
Preferred Interest.............................. 5/17/96 242,903 239,241 138,236 0.1
Redeemable Warrants expire 5/17/06.............. 5/17/96 79,410 0(a) 0(a) 0.0
Warrants expire 5/17/06......................... 5/17/96 617,283 428,993 617,283 0.3
--
---------- ---------- -------------
$4,189,739 $4,510,303 2.2%
=========== =========== =============
</TABLE>
- ----------
(a) Security has no value.
(J)
FEDERAL INCOME TAXES. Each of the Funds is treated as a separate entity for
Federal income tax purposes. The Company'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 Fund within the allowable time limits. Therefore, no Federal income tax
provision is required.
Investment income received by a Fund from foreign sources may be subject to
foreign income taxes withheld at the source.
(K)
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 Funds 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.
(L)
ORGANIZATION COSTS. Costs incurred in connection with the initial organization
and registration of a Portfolio of the Company are amortized over a maximum
period of 60 months beginning with the commencement of operations of the
respective Portfolio. Organization costs for Convertible Portfolio, paid by, and
reimbursable to, NYLIAC, totalled approximately $46,000. Such costs are being
amortized beginning with the commencement of operations on October 1, 1996.
115
<PAGE> 116
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Organization costs for High Yield Corporate Bond, International Equity and Value
Portfolios, paid by, and reimbursable to, NYLIAC, aggregated approximately
$33,500. Such costs have been fully amortized as of December 31, 1996.
Organization costs for Indexed Equity Portfolio, paid by, and reimbursable to,
NYLIAC, totalled approximately $50,700. Such costs have been fully amortized as
of December 31, 1996. 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.
All of the initial shares purchased by NYLIAC in Capital Appreciation, Cash
Management, Government and Total Return Portfolios were redeemed on February 21,
1995. All of the initial shares purchased by NYLIAC in Indexed Equity Portfolio
were redeemed between February 14, 1995 and February 21, 1996. (Also see Note 6
for further discussion of these redemptions).
(M)
EXPENSES. Expenses with respect to the Company are allocated to the individual
Funds in proportion to the net assets of the respective Funds when the expenses
are incurred except where allocations of direct expenses can otherwise fairly be
made.
(N)
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 Financial
Corporation ("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 Inc. and an indirect wholly-owned
subsidiary of New York Life Insurance Company ("New York Life"). New York Life
acts as investment adviser to Bond and Growth Equity Portfolios under an
Investment Advisory agreement. Monitor Capital Advisors Inc. ("Monitor") acts as
investment adviser to Indexed Equity Portfolio under an Investment Advisory
Agreement. Monitor is a registered investment adviser, a wholly-owned subsidiary
of NYLIFE Inc. and an indirect wholly-owned subsidiary of New York Life.
NYLIAC is Administrator for the Company.
The Company, on behalf of each Fund, 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 Fund as follows:
<TABLE>
<CAPTION>
ADVISER ADMINISTRATOR
------ -----------
<S> <C> <C>
Capital Appreciation Portfolio........................................................ .36% .20%
Cash Management Portfolio............................................................. .25% .20%
Convertible Portfolio................................................................. .36% .20%
Government Portfolio.................................................................. .30% .20%
High Yield Corporate Bond Portfolio................................................... .30% .20%
International Equity Portfolio........................................................ .60% .20%
Total Return Portfolio................................................................ .32% .20%
Value Portfolio....................................................................... .36% .20%
Bond Portfolio........................................................................ .25% .20%
Growth Equity Portfolio............................................................... .25% .20%
Indexed Equity Portfolio.............................................................. .10% .20%
</TABLE>
116
<PAGE> 117
MAINSTAY VP SERIES FUND, INC.
The Administrator has voluntarily agreed to assume the Funds' operating
expenses through December 31, 1996, which on an annualized basis exceed the
percentages indicated below.
<TABLE>
<S> <C>
Capital Appreciation Portfolio.......................................................................... .73%
Cash Management Portfolio............................................................................... .62%
Convertible Portfolio................................................................................... .73%
Government Portfolio.................................................................................... .67%
High Yield Corporate Bond Portfolio..................................................................... .67%
International Equity Portfolio.......................................................................... .97%
Total Return Portfolio.................................................................................. .69%
Value Portfolio......................................................................................... .73%
Bond Portfolio.......................................................................................... .62%
Growth Equity Portfolio................................................................................. .62%
Indexed Equity Portfolio................................................................................ .47%
</TABLE>
In connection with such expense limitation, the Administrator assumed
certain of the expenses of the Funds for the year ended December 31, 1996 as
shown on the Statement of Operations.
The Administrator has voluntarily agreed to assume the operating expenses of
Convertible, High Yield Corporate Bond, International Equity and Value
Portfolios through December 31, 1997.
(B)
DISTRIBUTOR. NYLIFE Distributors Inc. ("NYLIFE Distributors"), a wholly-owned
subsidiary of NYLIFE Inc. and an indirect wholly-owned subsidiary of New York
Life serves as the Company's distributor and principal underwriter (the
"Distributor") pursuant to a Distribution agreement. NYLIFE Distributors is not
obligated to sell any specific amount of the Company's shares, and receives no
compensation from the Company pursuant to the Distribution Agreement.
(C)
DIRECTORS FEES. Directors, other than those affiliated with New York Life,
MacKay-Shields, Monitor, NYLIFE Distributors or NYLIFE Securities, are paid an
annual fee of $16,000 and $750 for each Board meeting attended plus
reimbursement for travel and out-of-pocket expenses. The Company allocates this
expense in proportion to the net assets of the respective Funds.
117
<PAGE> 118
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D)
CAPITAL. At December 31, 1996 NYLIAC held shares of the following Portfolios
with net asset values as follows:
<TABLE>
<S> <C>
Convertible Portfolio.............................................................................. $10,266,001
High Yield Corporate Bond Portfolio................................................................ 11,611,661
International Equity Portfolio..................................................................... 10,654,896
Value Portfolio.................................................................................... 6,950,755
</TABLE>
These values represent 66.4%, 5.7%, 30.9% and 5.8%, respectively, of the net
assets of each respective Portfolio at year end.
(E)
RECORDKEEPING FEES. NYLIAC provides recordkeeping services for Cash Management,
Bond and Growth Equity Portfolios. For the four months ended April 30, 1996, the
Portfolios paid recordkeeping fees as follows:
<TABLE>
<S> <C>
Cash Management Portfolio............................................................................. $ 26,485
Bond Portfolio........................................................................................ 150,388
Growth Equity Portfolio............................................................................... 333,437
</TABLE>
Effective May 1, 1996, NYLIAC assumed responsibility for the payment of such
fees.
(F)
OTHER. Fees for the cost of legal services provided to the Company by the Office
of General Counsel of New York Life are charged to the Funds. For the year ended
December 31, 1996 these fees were as follows:
<TABLE>
<S> <C>
Capital Appreciation Portfolio......................................................................... $ 9,184
Cash Management Portfolio.............................................................................. 2,674
Convertible Portfolio.................................................................................. --
Government Portfolio................................................................................... 1,933
High Yield Corporate Bond Portfolio.................................................................... 2,367
International Equity Portfolio......................................................................... 582
Total Return Portfolio................................................................................. 6,785
Value Portfolio........................................................................................ 1,387
Bond Portfolio......................................................................................... 6,582
Growth Equity Portfolio................................................................................ 13,339
Indexed Equity Portfolio............................................................................... 3,618
</TABLE>
- --------------------------------------------------------------------------------
NOTE 4--Federal Income Tax:
- --------------------------------------------------------------------------------
At December 31, 1996, for Federal income tax purposes, capital loss
carryforwards, as shown in the table below, are 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 carryforwards 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 Funds intend
118
<PAGE> 119
MAINSTAY VP SERIES FUND, INC.
to elect, to the extent provided by regulations, to treat certain qualifying
capital losses that arose during the year ended December 31, 1996 as if they
arose on January 1, 1997.
<TABLE>
<CAPTION>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE THROUGH AMOUNT (000'S) DEFERRED (000'S)
---------------- ------------- --------------
<S> <C> <C> <C>
Capital Appreciation Portfolio.................................. 2002 $2,010
2003 3,133
------
$5,143 $2,008
====== ======
Cash Management Portfolio....................................... 2003 $ 1
2004 1
------
$ 2 $ 0
====== ======
Government Portfolio............................................ 2002 $3,261
2004 1,523
------
$4,784 $ 53
====== ======
International Equity Portfolio.................................. $ 0 $ 186
====== ======
Total Return Portfolio.......................................... 2002 $3,048 $ 131
====== ======
Bond Portfolio.................................................. 2002 $1,786 $ 0
====== ======
</TABLE>
Capital Appreciation Portfolio, International Equity Portfolio, Total Return
Portfolio and Bond Portfolio utilized $1,155,109, $23,549, $1,120,468 and
$961,896, respectively, of capital loss carryforwards during the current year.
- --------------------------------------------------------------------------------
NOTE 5--Financial Investments:
- --------------------------------------------------------------------------------
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.
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.
- --------------------------------------------------------------------------------
NOTE 6--Redemption by NYLIAC of Initial Investment:
- --------------------------------------------------------------------------------
On February 21, 1995, NYLIAC redeemed all of its initial investment in Capital
Appreciation, Cash Management, Government and Total Return Portfolios. In
connection with the redemption of the initial shares, NYLIAC reimbursed each of
the above listed Funds $28,042, which represented the unamortized deferred
organization expense of the respective Funds on the date of the redemption.
Additionally, between February 14, 1995 and February 21, 1996, NYLIAC redeemed
all of its initial investment in Indexed Equity Portfolio. NYLIAC reimbursed
Indexed Equity Portfolio $20,892 which represented the proportionate amount of
the unamortized deferred organization expense which the number of shares
redeemed bears to the total number of initial shares purchased between the dates
above.
119
<PAGE> 120
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 7--Purchases and Sales of Securities (in 000's):
- --------------------------------------------------------------------------------
During the year ended December 31, 1996, 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(A) PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES
===========================================================================
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Securities........................... $ -- $ -- $ 4,132 $ 1,582 $236,640 $ 212,920
All others........................................... 249,234 54,698 12,042 -- -- --
--------------------------------------------------------------------------
Total................................................ $249,234 $ 54,698 $ 16,174 $ 1,582 $236,640 $ 212,920
==========================================================================
</TABLE>
<TABLE>
<CAPTION>
GROWTH EQUITY INDEXED EQUITY
PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES
================================================
<S> <C> <C> <C> <C>
U.S. Government Securities........................... $ -- $ -- $ -- $ --
All others........................................... 509,811 490,842 102,680 4,134
-----------------------------------------------
Total................................................ $509,811 $ 490,842 $102,680 $ 4,134
===============================================
</TABLE>
- ------------
(a) For the period October 1, 1996 (Commencement of Operations) through December
31, 1996.
- --------------------------------------------------------------------------------
NOTE 8--Capital Share Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in capital shares throughout each year ended December 31, 1996 and
December 31, 1995 were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION CASH MANAGEMENT CONVERTIBLE
PORTFOLIO PORTFOLIO PORTFOLIO
1996 1995 1996 1995 1996(b)
==========================================================================
<S> <C> <C> <C> <C> <C>
Shares sold........................................... 12,007 6,644 237,105 128,846 494
Shares issued in reinvestment of dividends and
distributions....................................... 18 62 4,586 3,588 17
--------------------------------------------------------------------------
12,025 6,706 241,691 132,434 511
Shares redeemed....................................... 416 874 211,181 115,710 5
--------------------------------------------------------------------------
Net increase (decrease)............................... 11,609 5,832 30,510 16,724 506
==========================================================================
</TABLE>
<TABLE>
<CAPTION>
GROWTH EQUITY INDEXED EQUITY
1996PORTFOLIO 1995 1996 PORTFOLIO 1995
==================================================
<S> <C> <C> <C> <C>
Shares sold........................................... 3,863 2,118 7,431 2,580
Shares issued in reinvestment of dividends and
distributions....................................... 3,968 2,286 363 367
--------------------------------------------------
7,831 4,404 7,794 2,947
Shares redeemed....................................... 2,346 2,060 1,657 1,259
--------------------------------------------------
Net increase (decrease)............................... 5,485 2,344 6,137 1,688
==================================================
</TABLE>
- ------------
(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.
120
<PAGE> 121
MAINSTAY VP SERIES FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
CORPORATE BOND EQUITY TOTAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES
===================================================================================
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Securities.. $ 6,703 $ 1,073 $ -- $ -- $359,252 $ 352,045
All others.................. 212,917 109,938 21,127 3,507 203,966 92,741
-----------------------------------------------------------------------------------
Total....................... $219,620 $ 111,011 $ 21,127 $ 3,507 $563,218 $ 444,786
===================================================================================
<CAPTION>
VALUE BOND
PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES
================================================
<S> <C> <C> <C> <C>
U.S. Government Securities.. $ -- $ -- $155,916 $ 145,208
All others.................. 93,892 23,958 64,716 70,944
------------------------------------------------
Total....................... $ 93,892 $ 23,958 $220,632 $ 216,152
================================================
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
GOVERNMENT CORPORATE BOND EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
1996 1995 1996 1995 (a) 1996 1995 (a)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold...................................... 1,887 1,197 12,714 2,979 1,777 414
Shares issued in reinvestment of dividends and
distributions.................................. 479 448 1,061 167 168 67
-----------------------------------------------------------------------------
2,366 1,645 13,775 3,146 1,945 481
Shares redeemed.................................. 1,219 1,859 225 41 140 46
-----------------------------------------------------------------------------
Net increase (decrease).......................... 1,147 (214) 13,550 3,105 1,805 435
=============================================================================
<CAPTION>
TOTAL RETURN VALUE BOND
PORTFOLIO PORTFOLIO PORTFOLIO
1996 1995 1996 1995 (a) 1996 1995
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold...................................... 8,197 4,196 6,418 1,621 1,940 1,732
Shares issued in reinvestment of dividends and
distributions.................................. 459 345 217 17 1,117 1,080
----------------------------------------------------------------------------
8,656 4,541 6,635 1,638 3,057 2,812
Shares redeemed.................................. 494 1,404 83 28 2,923 2,397
----------------------------------------------------------------------------
Net increase (decrease).......................... 8,162 3,137 6,552 1,610 134 415
============================================================================
</TABLE>
121
<PAGE> 122
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, and Indexed
Equity Portfolio (separate portfolios constituting MainStay VP Series Fund,
Inc., formerly New York Life MFA Series Fund, Inc., hereafter referred to as the
"Fund") at December 31, 1996, and the results of each of their operations for
the period then ended, and the changes in each of their net assets and the
financial highlights for each of the periods indicated, in conformity with
generally accepted accounting principles. 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 generally accepted
auditing standards 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, 1996 by
correspondence with the custodians and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 19, 1997
122
<PAGE> 123
(THIS PAGE INTENTIONALLY LEFT BLANK)
123
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LIFESTAGES(SM) SEPARATE ACCOUNT
This is a Report for the general information of LifeStages(SM) policyowners. It
must be accompanied or preceded by a current prospectus if it is given to
anyone who is not an owner of LifeStages(SM) policy. This Report does not offer
for sale or solicit orders to purchase securities.
New York Life Insurance and Annuity Company
(A Delaware Corporation)
51 Madison Avenue
New York NY 10010
Issued by: New York Life Insurance and Annuity Corporation
Distributed by : NYLIFE Distributors Inc., Member NASD
[RECYCLE LOGO] Printed on recycled paper
18531 (297)
