<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
President's Letter.......................................... 3
Performance Summaries....................................... 4
NYLIAC Variable Annuity Separate Account-III
Financial Statements........................................ 9
Statement of Assets and Liabilities......................... 10
Statement of Operations..................................... 14
Statement of Changes in Total Equity........................ 18
Notes to Financial Statements............................... 24
MainStay VP Series Fund, Inc.
Chairman's Letter........................................... 42
Portfolio Managers' Comments................................ 43
Glossary.................................................... 76
Capital Appreciation Portfolio.............................. 80
Cash Management Portfolio................................... 84
Convertible Portfolio....................................... 89
Government Portfolio........................................ 95
High Yield Corporate Bond Portfolio......................... 99
International Equity Portfolio.............................. 110
Total Return Portfolio...................................... 117
Value Portfolio............................................. 125
Bond Portfolio.............................................. 129
Growth Equity Portfolio..................................... 133
Indexed Equity Portfolio.................................... 138
American Century Income & Growth Portfolio.................. 148
Dreyfus Large Company Value Portfolio....................... 155
Eagle Asset Management Growth Equity Portfolio.............. 159
Lord Abbett Developing Growth Portfolio..................... 163
Notes to Financial Statements............................... 169
The Semi-Annual Reports for the Portfolios listed below
follow:
Alger American Small Capitalization Portfolio
Calvert Social Balanced Portfolio
Fidelity Variable Insurance Products Fund II Contrafund(R)
Portfolio
Fidelity Variable Insurance Products Fund Equity-Income
Portfolio
Janus Aspen Series Balanced Portfolio and Janus Aspen Series
Worldwide Growth Portfolio
Morgan Stanley UIF Emerging Markets Equity Portfolio
MFS(R) Growth With Income Series Portfolio
MFS(R) Research Series Portfolio
T. Rowe Price Equity Income Portfolio
Van Eck Worldwide Hard Assets Portfolio
</TABLE>
1
<PAGE> 2
(THIS PAGE INTENTIONALLY LEFT BLANK)
2
<PAGE> 3
LETTER FROM THE PRESIDENT
--------------------------------------------------------------------------------
I am pleased to present the Semi-Annual Report for the six-month period ending
June 30, 2000. This report contains valuable information including current
performance data and separate account financial statements for each of the 26
investment divisions that are available within the variable annuity contracts
offered by New York Life Insurance and Annuity Corporation (NYLIAC). The book
also contains the following semi-annual reports:
MainStay VP Series Fund, Inc.
The Alger American Fund
Calvert Variable Series, Inc.
Fidelity Variable Insurance Products Fund II
Fidelity Variable Insurance Products Fund
Janus Aspen Series
MFS(R) Variable Insurance Trust(SM)
The Universal Institutional Funds, Inc.
T. Rowe Price Equity Series, Inc.
Van Eck Worldwide Insurance Trust
Variable annuities are viewed as an effective financial vehicle to help
Americans live comfortably during their retirement years. In addition to
providing a choice of investment divisions from an array of cash, bond and
equity sectors covering the United States and international markets, variable
annuities offer additional features and benefits including tax deferral, the
opportunity to elect an option of income payments for life, a guaranteed fixed
interest account, and a death benefit provision.
There are several elements contributing to the outstanding quality of NYLIAC
variable annuities. Among those are competitive product features including
Dollar Cost Averaging and Automatic Asset Reallocation options. In addition, our
products offer twenty-six investment divisions managed by several of the
industry's premier fund groups, including MacKay Shields LLC, Madison Square
Advisors LLC, Monitor Capital Advisors LLC, Eagle Asset Management, Fidelity
Investments, Dreyfus, Janus, T. Rowe Price, American Century, and MFS(R). Please
refer to the following pages for performance summaries(1).
New York Life Insurance and Annuity Corporation (NYLIAC) recorded $1.23 billion
in variable annuity premiums during the first half of 2000, representing an 8.8%
increase over the first half of 1999. There are many factors that contribute to
these impressive variable annuities sales results, including a solid group of
portfolio managers, and a competitive array of variable annuity product
offerings.
The Semi-Annual Report provides a great opportunity to review your investment
allocations within your NYLIAC variable annuity contract. The report contains
the following reference sources:
I. Performance Summaries
II. Financial Statements
III. Individual Portfolio Holdings
IV. Portfolio Manager Letters
As our Semi-Annual Report shows, we remain committed to being the soundest,
strongest and easiest company to do business with. We owe our financial strength
to you, our valued clients, who continue to place your trust in us. This
strength, in turn, allows us to keep our financial promises to you. Ultimately,
we are dedicated to one overriding purpose: to be there when our clients need
us.
Thank you for choosing New York Life as "The Company You Keep(R)".
/s/ FREDERICK J. SIEVERT
Frederick J. Sievert
President
New York Life Insurance and Annuity Corporation
(A Delaware Corporation)
(1) Past performance is not indicative of future results.
3
<PAGE> 4
MAINSTAY(R) PLUS VARIABLE ANNUITY
INVESTING IN NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
AVERAGE ANNUAL TOTAL RETURNS(1) FOR THE PERIODS ENDING JUNE 30, 2000
ASSUMING CONTRACT NOT SURRENDERED(2)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT SINCE
PORTFOLIO DIVISION SINCE INVESTMENT
INCEPTION INCEPTION 1 5 10 PORTFOLIO DIVISION
INVESTMENT DIVISIONS DATE DATE YTD YEAR YEARS YEARS INCEPTION INCEPTION(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MainStay VP Capital Appreciation 01/29/93 05/01/95 1.57% 17.67% 22.66% N/A 19.14% 23.15%
MainStay VP Cash Management(5) 01/29/93 05/01/95 2.16% 4.02% 3.74% N/A 3.28% 3.74%
MainStay VP Convertible 10/01/96 10/01/96 5.26% 25.10% N/A N/A 16.78% 16.78%
MainStay VP Government 01/29/93 05/01/95 3.70% 3.07% 4.33% N/A 4.30% 4.36%
MainStay VP High Yield Corporate Bond 05/01/95 05/01/95 1.25% 2.57% 9.58% N/A 9.54% 9.56%
MainStay VP International Equity 05/01/95 05/01/95 -9.51% 13.46% 11.89% N/A 10.33% 11.11%
MainStay VP Total Return 01/29/93 05/01/95 1.26% 12.01% 15.66% N/A 13.49% 16.08%
MainStay VP Value 05/01/95 05/01/95 -6.03% -11.17% 9.33% N/A 9.83% 9.53%
MainStay VP Bond 01/23/84 05/01/95 2.38% 2.03% 4.22% 6.04% 7.65% 4.16%
MainStay VP Growth Equity 01/23/84 05/01/95 1.57% 16.16% 22.68% 16.62% 13.67% 22.90%
MainStay VP Indexed Equity 01/29/93 05/01/95 -1.43% 5.35% 21.68% N/A 17.83% 21.76%
Alger American Small Capitalization 09/20/88 10/01/96 -0.71% 24.78% 14.43% 14.80% 18.22% 14.96%
American Century Income & Growth 05/01/98 05/01/98 -4.25% 2.23% N/A N/A 9.00% 9.00%
Calvert Social Balanced 09/02/86 05/01/95 2.01% 8.12% 13.34% 10.56% 9.88% 13.57%
Dreyfus Large Company Value 05/01/98 05/01/98 -3.86% -6.25% N/A N/A 1.41% 1.41%
Eagle Asset Management Growth Equity 05/01/98 05/01/98 11.85% 60.60% N/A N/A 41.73% 41.73%
Fidelity VIP II Contrafund(R) 01/03/95 10/01/96 -2.00% 8.70% 20.14% N/A 22.91% 20.49%
Fidelity VIP Equity-Income 10/09/86 10/01/96 -3.35% -9.44% 12.72% 13.09% 11.34% 10.99%
Janus Aspen Series Balanced 09/13/93 10/01/96 0.01% 12.34% 20.41% N/A 17.45% 21.09%
Janus Aspen Series Worldwide Growth 09/13/93 10/01/96 1.35% 46.80% 30.03% N/A 25.87% 29.26%
Lord Abbett Developing Growth 05/01/98 05/01/98 -12.51% 0.42% N/A N/A 1.85% 1.85%
MFS(R) Growth With Income Series 10/09/95 05/01/98 -0.18% -0.07% N/A N/A 17.18% 5.17%
MFS(R) Research Series 07/26/95 05/01/98 5.57% 19.48% N/A N/A 19.59% 17.89%
Morgan Stanley UIF Emerging Markets Equity 10/01/96 10/01/96 -5.91% 32.38% N/A N/A 8.17% 8.30%
T. Rowe Price Equity Income 03/31/94 05/01/98 -3.42% -11.47% 12.80% N/A 13.65% 0.02%
Van Eck Worldwide Hard Assets 09/01/89 05/01/98 3.20% 4.88% 0.18% 3.34% 2.54% -0.62%
</TABLE>
ASSUMING CONTRACT SURRENDERED(3)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT SINCE
PORTFOLIO DIVISION SINCE INVESTMENT
INCEPTION INCEPTION 1 5 10 PORTFOLIO DIVISION
INVESTMENT DIVISIONS DATE DATE YTD YEAR YEARS YEARS INCEPTION INCEPTION(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MainStay VP Capital Appreciation 01/29/93 05/01/95 -4.83% 10.67% 22.21% N/A 19.14% 22.82%
MainStay VP Cash Management(5) 01/29/93 05/01/95 -4.28% -2.54% 2.87% N/A 3.28% 3.06%
MainStay VP Convertible 10/01/96 10/01/96 -1.37% 18.10% N/A N/A 15.72% 15.72%
MainStay VP Government 01/29/93 05/01/95 -2.83% -3.42% 3.47% N/A 4.30% 3.69%
MainStay VP High Yield Corporate Bond 05/01/95 05/01/95 -5.13% -3.89% 8.88% N/A 9.01% 9.01%
MainStay VP International Equity 05/01/95 05/01/95 -15.21% 6.46% 11.24% N/A 9.81% 10.59%
MainStay VP Total Return 01/29/93 05/01/95 -5.12% 5.01% 15.10% N/A 13.49% 15.65%
MainStay VP Value 05/01/95 05/01/95 -11.95% -16.76% 8.62% N/A 9.30% 8.98%
MainStay VP Bond 01/23/84 05/01/95 -4.07% -4.40% 3.36% 6.04% 7.65% 3.48%
MainStay VP Growth Equity 01/23/84 05/01/95 -4.83% 9.16% 22.23% 16.62% 13.67% 22.55%
MainStay VP Indexed Equity 01/29/93 05/01/95 -7.64% -1.29% 21.22% N/A 17.83% 21.40%
Alger American Small Capitalization 09/20/88 10/01/96 -6.97% 17.78% 13.85% 14.80% 18.22% 13.85%
American Century Income & Growth 05/01/98 05/01/98 -10.28% -4.21% N/A N/A 6.03% 6.03%
Calvert Social Balanced 09/02/86 05/01/95 -4.42% 1.31% 12.73% 10.56% 9.88% 13.10%
Dreyfus Large Company Value 05/01/98 05/01/98 -9.92% -12.15% N/A N/A -1.59% -1.59%
Eagle Asset Management Growth Equity 05/01/98 05/01/98 4.85% 53.60% N/A N/A 39.57% 39.57%
Fidelity VIP II Contrafund(R)(2) 01/03/95 10/01/96 -8.17% 1.85% 19.66% N/A 22.62% 19.51%
Fidelity VIP Equity-Income 10/09/86 10/01/96 -9.44% -15.15% 12.09% 13.09% 11.34% 9.75%
Janus Aspen Series Balanced 09/13/93 10/01/96 -6.29% 5.34% 19.93% N/A 17.45% 20.13%
Janus Aspen Series Worldwide Growth 09/13/93 10/01/96 -5.03% 39.80% 29.68% N/A 25.87% 28.45%
Lord Abbett Developing Growth 05/01/98 05/01/98 -18.02% -5.91% N/A N/A -1.16% -1.16%
MFS(R) Growth With Income Series 10/09/95 05/01/98 -6.47% -6.37% N/A N/A 16.59% 1.91%
MFS(R) Research Series 07/26/95 05/01/98 -1.08% 12.48% N/A N/A 19.09% 14.96%
Morgan Stanley UIF Emerging Markets Equity 10/01/96 10/01/96 -11.83% 25.38% N/A N/A 6.86% 6.97%
T. Rowe Price Equity Income 03/31/94 05/01/98 -9.50% -17.04% 12.17% N/A 13.65% -3.06%
Van Eck Worldwide Hard Assets 09/01/89 05/01/98 -3.30% -1.73% -0.74% 3.34% 2.54% -3.78%
</TABLE>
4
<PAGE> 5
(1) The values shown are unaudited.
(2) Assumes no deduction for the contingent deferred sales charge.
(3) The maximum contingent sales charge for each premium payment is 7%,
declining to 4% by the sixth year after the initial premium payment has been
in the policy, with no charge thereafter.
Withdrawals may be taxable transactions, and prior to age 59 1/2 may be
subject to an IRS penalty.
(4) Performance is calculated as of the initial date a deposit was received in
the Investment Division.
(5) An investment in the MainStay VP Cash Management Portfolio is neither
insured nor guaranteed by the U.S. government and there can be no assurance
that the Portfolio will be able to maintain a stable net asset value.
Performance data shown represents past performance and is no guarantee of future
results. Due to current market volatility, current performance may be less than
the figures shown. The investment return and the accumulation value of your
policy will fluctuate so that a 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 and includes an
annualized Separate Account Fee of 1.40%. A policy service 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 or if
surrendered if the accumulation value is less than $20,000. The performance
shown, therefore, would be slightly lower if your policy's accumulation value is
less than $20,000.
Certain Portfolios existed prior to the date that they were added as an
Investment Division of the NYLIAC Variable Annuity Separate Account III. For
periods prior to May 1, 1995, when the MainStay VP Capital Appreciation,
MainStay VP Cash Management, MainStay VP Government, MainStay VP Total Return,
MainStay VP Bond, MainStay VP Growth Equity, MainStay VP Indexed Equity and
Calvert Social Balanced Investment Divisions commenced operations, for periods
prior to October 1, 1996, when the Alger American Small Capitalization, Fidelity
VIP II Contrafund, Fidelity VIP Equity-Income, Janus Aspen Series Balanced and
Janus Aspen Series Worldwide Growth Investment Divisions commenced operations,
and for periods prior to May 1, 1998, when the American Century Income & Growth,
Dreyfus Large Company Value, Eagle Asset Management Growth Equity, Lord Abbett
Developing Growth, MFS Growth With Income Series, MFS Research Series, T. Rowe
Price Equity Income and Van Eck Worldwide Hard Assets Investment Divisions
commenced operations, the performance of the Investment Divisions was derived
from the performance of the corresponding Portfolios, modified to reflect
Separate Account and Fund annual expenses as if the policy had been available
during the periods shown.
NYLIAC assumed a portion of the expenses of the MainStay VP Convertible and the
MainStay VP International Equity Investment Divisions until 12/31/98, until
12/31/97 for the MainStay VP High Yield Corporate Bond and MainStay VP Value
Investment Divisions and 12/31/96 for all other MainStay VP Investment
Divisions. In addition, Janus Capital Corporation has agreed to reduce the
advisory fee for the Janus Aspen Series Balanced and the Janus Aspen Series
Worldwide Growth Investment Divisions to the level of the corresponding Janus
retail mutual fund; and Morgan Stanley Dean Witter Investment Management Inc.
has voluntarily waived receipt of the advisory fee and agreed to reimburse the
Morgan Stanley UIF Emerging Markets Equity Portfolio to the extent that the
Total Fund Annual Expenses of the Portfolio exceeded 1.75%. Had these expenses
not been assumed or reduced, the total return for these Investment Divisions
would have been lower.
"LifeStages is a registered trademark of New York Life Insurance Company or its
affiliates. All other marks are the property of their respective owners."
5
<PAGE> 6
MAINSTAY ACCESS VARIABLE ANNUITY
INVESTING IN NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
AVERAGE ANNUAL TOTAL RETURNS(1) FOR THE PERIODS ENDING JUNE 30, 2000
ASSUMING CONTRACT NOT SURRENDERED(2)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT SINCE
PORTFOLIO DIVISION SINCE INVESTMENT
INCEPTION INCEPTION 1 5 10 PORTFOLIO DIVISION
INVESTMENT DIVISIONS DATE DATE YTD YEAR YEARS YEARS INCEPTION INCEPTION(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MainStay VP Capital Appreciation 01/29/93 03/13/00 1.50% 17.49% 22.47% N/A 18.96% 9.49%
MainStay VP Cash Management(5) 01/29/93 03/13/00 2.08% 3.86% 3.59% N/A 3.13% 0.30%
MainStay VP Convertible 10/01/96 03/13/00 5.18% 24.93% N/A N/A 16.62% 1.65%
MainStay VP Government 01/29/93 03/13/00 3.62% 2.92% 4.18% N/A 4.14% N/A
MainStay VP High Yield Corporate Bond 05/01/95 03/13/00 1.18% 2.42% 9.42% N/A 9.38% 1.45%
MainStay VP International Equity 05/01/95 03/13/00 -9.58% 13.29% 11.72% N/A 10.16% N/A
MainStay VP Total Return 01/29/93 03/13/00 1.18% 11.84% 15.49% N/A 13.33% -1.19%
MainStay VP Value 05/01/95 03/13/00 -6.10% -11.30% 9.17% N/A 9.67% -6.70%
MainStay VP Bond 01/23/84 03/13/00 2.30% 1.88% 4.07% 5.88% 7.49% 0.51%
MainStay VP Growth Equity 01/23/84 03/13/00 1.50% 15.98% 22.50% 16.45% 13.50% -0.03%
MainStay VP Indexed Equity 01/29/93 03/13/00 -1.50% 5.19% 21.49% N/A 17.65% 3.76%
Alger American Small Capitalization 09/20/88 03/13/00 -0.79% 24.59% 14.26% 14.63% 18.04% 18.44%
American Century Income & Growth 05/01/98 03/13/00 -4.32% 2.09% N/A N/A 8.86% 0.22%
Calvert Social Balanced 09/02/86 03/13/00 1.93% 7.96% 13.17% 10.40% 9.72% N/A
Dreyfus Large Company Value 05/01/98 03/13/00 -3.93% -6.38% N/A N/A 1.28% N/A
Eagle Asset Management Growth Equity 05/01/98 03/13/00 11.77% 60.38% N/A N/A 41.55% 19.91%
Fidelity VIP II Contrafund(R) 01/03/95 03/13/00 -2.07% 8.53% 19.96% N/A 22.73% 5.78%
Fidelity VIP Equity-Income 10/09/86 03/13/00 -3.42% -9.58% 12.55% 12.92% 11.17% -3.63%
Janus Aspen Series Balanced 09/13/93 03/13/00 -0.06% 12.18% 20.23% N/A 17.27% 6.34%
Janus Aspen Series Worldwide Growth 09/13/93 03/13/00 1.28% 46.58% 29.84% N/A 25.68% 11.75%
Lord Abbett Developing Growth 05/01/98 03/13/00 -12.58% 0.28% N/A N/A 1.72% N/A
MFS(R) Growth With Income Series 10/09/95 03/13/00 -0.26% -0.22% N/A N/A 17.00% -1.07%
MFS(R) Research Series 07/26/95 03/13/00 5.49% 19.31% N/A N/A 19.42% -0.24%
Morgan Stanley UIF Emerging Markets Equity 10/01/96 03/13/00 -5.98% 32.19% N/A N/A 7.34% N/A
T. Rowe Price Equity Income 03/31/94 03/13/00 -3.49% -11.60% 12.63% N/A 13.48% -3.95%
Van Eck Worldwide Hard Assets 09/01/89 03/13/00 3.12% 4.72% 0.03% 3.19% 2.38% N/A
</TABLE>
(1) The values shown are unaudited.
(2) Assumes no deduction for the contingent deferred sales charge.
(3) Withdrawals may be taxable transactions, and prior to age 59 1/2 may be
subject to an IRS penalty.
(4) Performance is calculated as of the initial date a deposit was received in
the Investment Division.
(5) An investment in the MainStay VP Cash Management Portfolio is neither
insured nor guaranteed by the U.S. government and there can be no assurance
that the Portfolio will be able to maintain a stable net asset value.
--------------------------------------------------------------------------------
Performance data shown represents past performance and no guarantee of future
results. Due to current market volatility, current performance may be less than
the figures shown. The investment return and the accumulation value of your
policy will fluctuate so that a 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 and includes an
annualized Separate Account Fee of 1.55%. The annual policy service fee is $40,
and is not included in these charges, but will be deducted each year on the
policy anniversary or if surrendered if the accumulation value is less than
$50,000. The performance shown, therefore, would be slightly lower if your
policy's accumulation value is less than $50,000.
Certain Portfolios existed prior to the date that they were added as an
Investment Division of the NYLIAC Variable Annuity Separate Account III. For
periods prior to May 1, 1995, when the MainStay VP Capital Appreciation,
MainStay VP Cash Management, MainStay VP Government, MainStay VP Total Return,
MainStay VP Bond, MainStay VP Growth Equity, MainStay VP Indexed Equity and
Calvert Social Balanced Investment Divisions commenced operations, for periods
prior to October 1, 1996, when the Alger American Small Capitalization, Fidelity
VIP II Contrafund(R), Fidelity VIP Equity-Income, Janus Aspen Series Balanced
and Janus Aspen Series Worldwide Growth Investment Divisions commenced
operations, and for periods prior to May 1, 1998, when the American Century
Income & Growth, Dreyfus Large Company Value, Eagle Asset Management Growth
Equity, Lord Abbett Developing Growth, MFS(R) Growth With Income Series, MFS(R)
6
<PAGE> 7
Research Series, T. Rowe Price Equity Income and Van Eck Worldwide Hard Assets
Investment Divisions commenced operations, the performance of the Investment
Divisions was derived from the performance of the corresponding Portfolios,
modified to reflect Separate Account and Fund annual expenses as if the policy
had been available during the periods shown.
NYLIAC assumed a portion of the expenses of the MainStay VP Convertible and the
MainStay VP International Equity Investment Divisions until 12/31/98, until
12/31/97 for the MainStay VP High Yield Corporate Bond and MainStay VP Value
Investment Divisions and 12/31/96 for all other MainStay VP Investment
Divisions. In addition, Janus Capital Corporation has agreed to reduce the
advisory fee for the Janus Aspen Series Balanced and the Janus Aspen Series
Worldwide Growth Investment Divisions to the level of the corresponding Janus
retail mutual fund; and Morgan Stanley Dean Witter Investment Management Inc.
has voluntarily waived receipt of the advisory fee and agreed to reimburse the
Morgan Stanley UIF Emerging Markets Equity Portfolio to the extent that the
Total Fund Annual Expenses of the Portfolio exceeded 1.75%. Had these expenses
not been assumed or reduced, the total return for these Investment Divisions
would have been lower.
"LifeStages is a registered trademark of New York Life Insurance Company or its
affiliates. All other marks are the property of their respective owners."
7
<PAGE> 8
(THIS PAGE INTENTIONALLY LEFT BLANK)
8
<PAGE> 9
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
SERIES I POLICIES: LifeStages Variable Annuity
LifeStages Flexible Premium Variable
Annuity
MainStay Plus Variable Annuity
SERIES II POLICIES: LifeStages Access Variable Annuity
MainStay Access Variable Annuity
</TABLE>
9
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE
------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment at net asset value............................. $787,059,038 $180,121,968 $113,913,347
LIABILITIES:
Liability to New York Life Insurance and Annuity
Corporation for mortality and expense risk charges...... 2,409,896 711,675 332,359
------------ ------------ ------------
Total equity.......................................... $784,649,142 $179,410,293 $113,580,988
============ ============ ============
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
Series I Policies....................................... $784,523,582 $179,218,375 $ 95,060,343
Series II Policies...................................... 125,560 191,918 629,207
Equity of New York Life Insurance and
Annuity Corporation..................................... -- -- 17,891,438
------------ ------------ ------------
Total equity.......................................... $784,649,142 $179,410,293 $113,580,988
============ ============ ============
Series I accumulation unit value........................ $ 29.00 $ 1.21 $ 17.89
============ ============ ============
Series II accumulation unit value....................... $ 10.95 $ 1.00 $ 10.17
============ ============ ============
Identified Cost of Investment............................... $633,121,845 $180,122,134 $107,531,758
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AMERICAN DREYFUS
MAINSTAY VP CENTURY LARGE
INDEXED INCOME COMPANY
EQUITY & GROWTH VALUE
------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment at net asset value............................. $787,472,885 $ 60,190,222 $ 29,655,173
LIABILITIES:
Liability to New York Life Insurance and Annuity
Corporation for mortality and expense risk charges...... 2,543,127 193,920 95,035
------------ ------------ ------------
Total equity.......................................... $784,929,758 $ 59,996,302 $ 29,560,138
============ ============ ============
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
Series I Policies....................................... $784,264,895 $ 47,935,287 $ 19,252,459
Series II Policies...................................... 664,863 5,211 --
Equity of New York Life Insurance and
Annuity Corporation..................................... -- 12,055,804 10,307,679
------------ ------------ ------------
Total equity.......................................... $784,929,758 $ 59,996,302 $ 29,560,138
============ ============ ============
Series I accumulation unit value........................ $ 27.21 $ 12.06 $ 10.31
============ ============ ============
Series II accumulation unit value....................... $ 10.38 $ 10.02 $ 10.00
============ ============ ============
Identified Cost of Investment............................... $647,015,180 $ 54,112,771 $ 28,780,421
============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
10
<PAGE> 11
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP
MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH
GOVERNMENT CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 45,870,380 $405,980,167 $ 24,963,570 $340,026,394 $141,436,404 $ 80,097,233 $398,997,645
158,213 1,395,861 77,405 1,087,782 493,929 276,217 1,241,471
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 45,712,167 $404,584,306 $ 24,886,165 $338,938,612 $140,942,475 $ 79,821,016 $397,756,174
============ ============ ============ ============ ============ ============ ============
$ 45,712,167 $404,370,848 $ 24,886,165 $338,427,209 $140,910,195 $ 79,798,505 $397,168,293
-- 213,458 -- 511,403 32,280 22,511 587,881
-- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 45,712,167 $404,584,306 $ 24,886,165 $338,938,612 $140,942,475 $ 79,821,016 $397,756,174
============ ============ ============ ============ ============ ============ ============
$ 12.43 $ 15.91 $ 17.09 $ 21.36 $ 15.89 $ 12.30 $ 28.47
============ ============ ============ ============ ============ ============ ============
$ 10.00 $ 10.14 $ 10.00 $ 9.88 $ 9.33 $ 10.05 $ 10.00
============ ============ ============ ============ ============ ============ ============
$ 46,913,072 $438,747,544 $ 23,007,946 $281,726,751 $155,732,347 $ 84,786,471 $339,760,332
============ ============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET LORD ALGER
MANAGEMENT ABBETT AMERICAN CALVERT FIDELITY FIDELITY JANUS ASPEN
GROWTH DEVELOPING SMALL SOCIAL VIP II VIP SERIES
EQUITY GROWTH CAPITALIZATION BALANCED CONTRAFUND(R) EQUITY-INCOME BALANCED
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$138,022,759 $ 35,690,971 $111,824,198 $ 23,931,239 $310,325,711 $132,831,831 $522,894,434
373,986 103,219 299,224 74,420 938,579 448,212 1,596,061
------------ ------------ ------------ ------------ ------------ ------------ ------------
$137,648,773 $ 35,587,752 $111,524,974 $ 23,856,819 $309,387,132 $132,383,619 $521,298,373
============ ============ ============ ============ ============ ============ ============
$116,275,050 $ 25,181,677 $111,001,290 $ 23,856,194 $309,262,721 $132,343,728 $521,025,495
60,264 -- 523,684 625 124,411 39,891 272,878
21,313,459 10,406,075 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
$137,648,773 $ 35,587,752 $111,524,974 $ 23,856,819 $309,387,132 $132,383,619 $521,298,373
============ ============ ============ ============ ============ ============ ============
$ 21.31 $ 10.41 $ 16.81 $ 19.10 $ 20.03 $ 14.72 $ 20.40
============ ============ ============ ============ ============ ============ ============
$ 11.99 $ 10.00 $ 11.84 $ 10.00 $ 10.58 $ 9.64 $ 10.63
============ ============ ============ ============ ============ ============ ============
$117,438,845 $ 36,249,882 $140,383,070 $ 23,226,561 $292,115,664 $140,749,190 $487,905,997
============ ============ ============ ============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
11
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
As of June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
JANUS ASPEN MFS(R)
SERIES GROWTH
WORLDWIDE WITH MFS(R)
GROWTH INCOME SERIES RESEARCH SERIES
---------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment at net asset value....................... $528,899,338 $ 24,738,676 $ 32,252,340
LIABILITIES:
Liability to New York Life Insurance and Annuity
Corporation for mortality and expense risk
charges........................................... 1,534,357 77,861 82,613
------------ ------------ ------------
Total equity.................................... $527,364,981 $ 24,660,815 $ 32,169,727
============ ============ ============
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
Series I Policies................................. $527,186,685 $ 24,658,836 $ 32,129,785
Series II Policies................................ 178,296 1,979 39,942
------------ ------------ ------------
Total equity.................................... $527,364,981 $ 24,660,815 $ 32,169,727
============ ============ ============
Series I accumulation unit value.................. $ 26.07 $ 11.10 $ 13.99
============ ============ ============
Series II accumulation unit value................. $ 11.17 $ 9.89 $ 9.98
============ ============ ============
Identified Cost of Investment......................... $414,995,570 $ 23,679,984 $ 30,333,469
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MORGAN STANLEY T. ROWE VAN ECK
UIF PRICE WORLDWIDE
EMERGING MARKETS EQUITY HARD
EQUITY INCOME ASSETS
--------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment at net asset value....................... $ 41,378,585 $ 30,465,347 $ 2,690,045
LIABILITIES:
Liability to New York Life Insurance and Annuity
Corporation for mortality and expense risk
charges........................................... 117,852 101,519 8,266
------------ ------------ ------------
Total equity.................................... $ 41,260,733 $ 30,363,828 $ 2,681,779
============ ============ ============
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
Series I Policies................................. $ 41,260,733 $ 30,352,664 $ 2,681,779
Series II Policies................................ -- 11,164 --
------------ ------------ ------------
Total equity.................................... $ 41,260,733 $ 30,363,828 $ 2,681,779
============ ============ ============
Series I accumulation unit value.................. $ 13.43 $ 10.00 $ 9.87
============ ============ ============
Series II accumulation unit value................. $ 10.00 $ 9.60 $ 10.00
============ ============ ============
Identified Cost of Investment......................... $ 38,382,386 $ 32,937,577 $ 2,567,143
============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
12
<PAGE> 13
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
(THIS PAGE INTENTIONALLY LEFT BLANK)
13
<PAGE> 14
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE
---------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income........................................... $ -- $ 6,002,655 $ --
Mortality and expense risk charges........................ (4,932,258) (1,481,062) (607,406)
------------- ------------- -------------
Net investment income (loss).......................... (4,932,258) 4,521,593 (607,406)
------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments......................... 20,510,127 271,943,683 558,674
Cost of investments sold.................................. (10,349,479) (271,942,612) (445,636)
------------- ------------- -------------
Net realized gain (loss) on investments............... 10,160,648 1,071 113,038
Realized gain distribution received....................... 36,209,531 -- 4,689,911
Change in unrealized appreciation (depreciation) on
investments............................................. (28,234,870) (155) (374,782)
------------- ------------- -------------
Net gain (loss) on investments........................ 18,135,309 916 4,428,167
------------- ------------- -------------
Increase (decrease) attributable to mortality and expense
risks assumed by New York Life Insurance and Annuity
Corporation and retained by the Separate Account........ 161,386 (17,454) (1,800)
------------- ------------- -------------
Net increase (decrease) in total equity resulting from
operations.......................................... $ 13,364,437 $ 4,505,055 $ 3,818,961
============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
AMERICAN DREYFUS
MAINSTAY VP CENTURY LARGE
INDEXED INCOME COMPANY
EQUITY & GROWTH VALUE
---------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income........................................... $ -- $ -- $ --
Mortality and expense risk charges........................ (5,060,579) (382,034) (194,129)
------------- ------------- -------------
Net investment income (loss).......................... (5,060,579) (382,034) (194,129)
------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments......................... 8,327,669 632,732 1,156,708
Cost of investments sold.................................. (4,286,396) (522,469) (1,099,061)
------------- ------------- -------------
Net realized gain (loss) on investments............... 4,041,273 110,263 57,647
Realized gain distribution received....................... 1,827,025 88,250 --
Change in unrealized appreciation (depreciation) on
investments............................................. (9,555,560) (1,980,179) (978,462)
------------- ------------- -------------
Net gain (loss) on investments........................ (3,687,262) (1,781,666) (920,815)
------------- ------------- -------------
Increase (decrease) attributable to mortality and expense
risks assumed by New York Life Insurance and Annuity
Corporation and retained by the Separate Account........ 142,193 13,176 6,305
------------- ------------- -------------
Net increase (decrease) in total equity resulting from
operations.......................................... $ (8,605,648) $ (2,150,524) $ (1,108,639)
============= ============= =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
14
<PAGE> 15
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP
MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH
GOVERNMENT CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 9,391 $ 112,815 $ -- $ 25,902 $ 2,126 $ -- $ --
(334,277) (2,776,498) (161,970) (2,211,838) (1,031,933) (548,905) (2,480,997)
------------- ------------- ------------- ------------- ------------- ------------- -------------
(324,886) (2,663,683) (161,970) (2,185,936) (1,029,807) (548,905) (2,480,997)
------------- ------------- ------------- ------------- ------------- ------------- -------------
19,261,479 20,463,934 3,510,228 3,017,800 17,844,627 8,092,682 2,419,234
(20,526,489) (21,677,843) (2,643,015) (1,843,982) (16,449,770) (8,639,345) (1,676,498)
------------- ------------- ------------- ------------- ------------- ------------- -------------
(1,265,010) (1,213,909) 867,213 1,173,818 1,394,857 (546,663) 742,736
-- 18,304 392,548 15,560,770 -- -- --
3,249,795 8,806,794 (3,360,036) (10,005,002) (10,502,161) 2,960,291 8,198,217
------------- ------------- ------------- ------------- ------------- ------------- -------------
1,984,785 7,611,189 (2,100,275) 6,729,586 (9,107,304) 2,413,628 8,940,953
------------- ------------- ------------- ------------- ------------- ------------- -------------
(7,231) (20,599) 8,644 44,082 48,928 (8,870) 79,327
------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 1,652,668 $ 4,926,907 $ (2,253,601) $ 4,587,732 $ (10,088,183) $ 1,855,853 $ 6,539,283
============= ============= ============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET LORD ALGER
MANAGEMENT ABBETT AMERICAN CALVERT FIDELITY FIDELITY JANUS ASPEN
GROWTH DEVELOPING SMALL SOCIAL VIP II VIP SERIES
EQUITY GROWTH CAPITALIZATION BALANCED CONTRAFUND(R) EQUITY-INCOME BALANCED
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ -- $ -- $ -- $ -- $ 887,194 $ 2,145,377 $ 3,890,932
(627,635) (244,364) (570,723) (141,371) (1,924,414) (877,232) (3,011,396)
------------- ------------- ------------- ------------- ------------- ------------- -------------
(627,635) (244,364) (570,723) (141,371) (1,037,220) 1,268,145 879,536
------------- ------------- ------------- ------------- ------------- ------------- -------------
1,861,719 2,467,089 36,296,984 481,423 3,005,166 10,153,958 491,369
(910,683) (2,076,884) (34,606,957) (445,921) (1,970,971) (9,309,162) (301,192)
------------- ------------- ------------- ------------- ------------- ------------- -------------
951,036 390,205 1,690,027 35,502 1,034,195 844,796 190,177
5,198,423 943,626 34,726,123 -- 32,205,119 8,082,585 29,121,095
4,337,930 (5,572,151) (39,028,939) 619,530 (37,648,407) (14,211,595) (29,878,393)
------------- ------------- ------------- ------------- ------------- ------------- -------------
10,487,389 (4,238,320) (2,612,789) 655,032 (4,409,093) (5,284,214) (567,121)
------------- ------------- ------------- ------------- ------------- ------------- -------------
(5,108) 20,352 29,352 861 64,676 21,836 30,584
------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 9,854,646 $ (4,462,332) $ (3,154,160) $ 514,522 $ (5,381,637) $ (3,994,233) $ 342,999
============= ============= ============= ============= ============= ============= =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
15
<PAGE> 16
STATEMENT OF OPERATIONS (CONTINUED)
For the six months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
JANUS ASPEN MFS(R)
SERIES GROWTH MFS(R)
WORLDWIDE WITH RESEARCH
GROWTH INCOME SERIES SERIES
-------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income................................. $ 648,930 $ 100,777 $ 8,185
Mortality and expense risk charges.............. (3,065,907) (147,425) (139,536)
----------- ----------- -----------
Net investment income (loss)................ (2,416,977) (46,648) (131,351)
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments............... 894,158 806,111 117,709
Cost of investments sold........................ (490,992) (698,187) (100,541)
----------- ----------- -----------
Net realized gain (loss) on investments..... 403,166 107,924 17,168
Realized gain distribution received............. 6,876,742 182,991 1,404,903
Change in unrealized appreciation (depreciation)
on investments................................ (6,352,101) (173,211) (187,979)
----------- ----------- -----------
Net gain (loss) on investments.............. 927,807 117,704 1,234,092
----------- ----------- -----------
Increase (decrease) attributable to mortality
and expense risks assumed by New York Life
Insurance and Annuity Corporation and retained
by the Separate Account....................... 93,438 2,432 1,268
----------- ----------- -----------
Net increase (decrease) in total equity
resulting from operations................. $(1,395,732) $ 73,488 $ 1,104,009
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MORGAN STANLEY T. ROWE VAN ECK
UIF PRICE WORLDWIDE
EMERGING MARKETS EQUITY HARD
EQUITY INCOME ASSETS
-------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income................................. $ -- $ 288,666 $ 22,998
Mortality and expense risk charges.............. (241,899) (189,037) (15,522)
----------- ----------- -----------
Net investment income (loss)................ (241,899) 99,629 7,476
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments............... 4,703,630 1,564,489 481,498
Cost of investments sold........................ (3,972,129) (1,619,948) (449,242)
----------- ----------- -----------
Net realized gain (loss) on investments..... 731,501 (55,459) 32,256
Realized gain distribution received............. -- 465,024 --
Change in unrealized appreciation (depreciation)
on investments................................ (3,503,531) (1,346,542) 30,391
----------- ----------- -----------
Net gain (loss) on investments.............. (2,772,030) (936,977) 62,647
----------- ----------- -----------
Increase (decrease) attributable to mortality
and expense risks assumed by New York Life
Insurance and Annuity Corporation and retained
by the Separate Account....................... 11,954 4,262 40
----------- ----------- -----------
Net increase (decrease) in total equity
resulting from operations................. $(3,001,975) $ (833,086) $ 70,163
=========== =========== ===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
16
<PAGE> 17
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
(THIS PAGE INTENTIONALLY LEFT BLANK)
17
<PAGE> 18
STATEMENT OF CHANGES IN TOTAL EQUITY
For the six months ended June 30, 2000
and the year ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL APPRECIATION CASH MANAGEMENT
------------------------------- -------------------------------
2000 1999 2000 1999
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN TOTAL EQUITY:
Operations:
Net investment income (loss)..................... $ (4,932,258) $ (6,801,527) $ 4,521,593 $ 6,317,777
Net realized gain (loss) on investments.......... 10,160,648 31,662,959 1,071 (610)
Realized gain distribution received.............. 36,209,531 24,098,794 -- 77
Change in unrealized appreciation (depreciation)
on investments................................. (28,234,870) 68,925,559 (155) 453
Increase (decrease) attributable to mortality and
expense risks assumed by New York Life
Insurance and Annuity Corporation and retained
by the Separate Account........................ 161,386 (300,890) (17,454) (20,754)
-------------- -------------- -------------- --------------
Net increase (decrease) in total equity
resulting from operations.................... 13,364,437 117,584,895 4,505,055 6,296,943
-------------- -------------- -------------- --------------
Contributions and (Withdrawals):
Policyowners' premium payments................... 43,305,016 34,382,497 621,017,900 1,155,909,385
Policyowners' surrenders......................... (17,060,672) (18,700,983) (11,239,384) (11,574,989)
Policyowners' annuity and death benefits......... (2,146,975) (2,652,375) (1,102,895) (1,882,423)
Net transfers from (to) Fixed Account............ 5,337,837 1,385,445 (3,610,788) (7,387,762)
Transfers between Investment Divisions........... 84,520,589 157,351,663 (724,402,194) (968,197,144)
-------------- -------------- -------------- --------------
Net contributions and (withdrawals)............ 113,955,795 171,766,247 (119,337,361) 166,867,067
-------------- -------------- -------------- --------------
Increase (decrease) in total equity.......... 127,320,232 289,351,142 (114,832,306) 173,164,010
TOTAL EQUITY:
Beginning of period.............................. 657,328,910 367,977,768 294,242,599 121,078,589
-------------- -------------- -------------- --------------
End of period.................................... $ 784,649,142 $ 657,328,910 $ 179,410,293 $ 294,242,599
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
INTERNATIONAL EQUITY TOTAL RETURN
------------------------------- -------------------------------
2000 1999 2000 1999
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN TOTAL EQUITY:
Operations:
Net investment income (loss)..................... $ (161,970) $ (175,102) $ (2,185,936) $ 1,528,260
Net realized gain (loss) on investments.......... 867,213 804,225 1,173,818 2,683,778
Realized gain distribution received.............. 392,548 462,134 15,560,770 8,277,954
Change in unrealized appreciation (depreciation)
on investments................................. (3,360,036) 3,535,130 (10,005,002) 26,859,289
Increase (decrease) attributable to mortality and
expense risks assumed by New York Life
Insurance and Annuity Corporation and retained
by the Separate Account........................ 8,644 (11,646) 44,082 (106,692)
-------------- -------------- -------------- --------------
Net increase (decrease) in total equity
resulting from operations.................... (2,253,601) 4,614,741 4,587,732 39,242,589
-------------- -------------- -------------- --------------
Contributions and (Withdrawals):
Policyowners' premium payments................... 1,413,602 1,111,621 13,025,913 14,574,035
Policyowners' surrenders......................... (713,311) (487,657) (8,053,495) (9,356,112)
Policyowners' annuity and death benefits......... (36,862) (112,067) (1,065,189) (1,640,052)
Net transfers from (to) Fixed Account............ 234,026 179,080 2,068,136 (207,261)
Transfers between Investment Divisions........... 3,513,672 2,287,180 22,397,576 59,847,100
-------------- -------------- -------------- --------------
Net contributions and (withdrawals)............ 4,411,127 2,978,157 28,372,941 63,217,710
-------------- -------------- -------------- --------------
Increase (decrease) in total equity.......... 2,157,526 7,592,898 32,960,673 102,460,299
TOTAL EQUITY:
Beginning of period.............................. 22,728,639 15,135,741 305,977,939 203,517,640
-------------- -------------- -------------- --------------
End of period.................................... $ 24,886,165 $ 22,728,639 $ 338,938,612 $ 305,977,939
============== ============== ============== ==============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
18
<PAGE> 19
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
<TABLE>
<CAPTION>
MAINSTAY VP
MAINSTAY VP MAINSTAY VP HIGH YIELD
CONVERTIBLE GOVERNMENT CORPORATE BOND
------------------------------- ------------------------------- -------------------------------
2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ (607,406) $ 1,509,545 $ (324,886) $ 2,376,269 $ (2,663,683) $ 40,092,949
113,038 480,348 (1,265,010) 170,114 (1,213,909) 701,768
4,689,911 6,416,144 -- -- 18,304 7,725,965
(374,782) 8,269,879 3,249,795 (4,154,780) 8,806,794 (12,128,579)
(1,800) (41,855) (7,231) 1,610 (20,599) (117,590)
-------------- -------------- -------------- -------------- -------------- --------------
3,818,961 16,634,061 1,652,668 (1,606,787) 4,926,907 36,274,513
-------------- -------------- -------------- -------------- -------------- --------------
11,598,777 2,620,934 1,336,709 3,472,181 13,961,834 20,962,012
(1,368,085) (1,292,532) (2,023,322) (2,236,959) (12,585,674) (17,095,230)
(358,039) (166,083) (192,755) (239,141) (2,460,230) (3,256,960)
1,397,907 366,068 612,741 (223,529) 514,235 (606,163)
33,457,187 8,760,834 (15,674,983) 21,161,456 (765,508) 54,594,175
-------------- -------------- -------------- -------------- -------------- --------------
44,727,747 10,289,221 (15,941,610) 21,934,008 (1,335,343) 54,597,834
-------------- -------------- -------------- -------------- -------------- --------------
48,546,708 26,923,282 (14,288,942) 20,327,221 3,591,564 90,872,347
65,034,280 38,110,998 60,001,109 39,673,888 400,992,742 310,120,395
-------------- -------------- -------------- -------------- -------------- --------------
$ 113,580,988 $ 65,034,280 $ 45,712,167 $ 60,001,109 $ 404,584,306 $ 400,992,742
============== ============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP
VALUE BOND GROWTH EQUITY
------------------------------- ------------------------------- -------------------------------
2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ (1,029,807) $ (267,183) $ (548,905) $ 3,927,240 $ (2,480,997) $ (1,602,606)
1,394,857 3,098,267 (546,663) 1,261 742,736 2,567,721
-- -- -- 6,418 -- 27,931,332
(10,502,161) 7,362,393 2,960,291 (6,083,539) 8,198,217 34,621,533
48,928 (20,443) (8,870) 1,926 79,327 (173,616)
-------------- -------------- -------------- -------------- -------------- --------------
(10,088,183) 10,173,034 1,855,853 (2,146,694) 6,539,283 63,344,364
-------------- -------------- -------------- -------------- -------------- --------------
4,142,566 6,471,643 2,195,944 5,568,019 23,810,459 16,960,756
(4,996,932) (6,675,519) (2,353,747) (3,545,674) (7,453,947) (7,639,866)
(760,956) (912,254) (592,321) (681,286) (817,505) (1,074,648)
468,554 (65,568) 1,027,444 325,965 3,314,904 1,537,864
(13,219,905) (1,237,019) (4,872,716) 21,251,994 55,090,283 63,978,954
-------------- -------------- -------------- -------------- -------------- --------------
(14,366,673) (2,418,717) (4,595,396) 22,919,018 73,944,194 73,763,060
-------------- -------------- -------------- -------------- -------------- --------------
(24,454,856) 7,754,317 (2,739,543) 20,772,324 80,483,477 137,107,424
165,397,331 157,643,014 82,560,559 61,788,235 317,272,697 180,165,273
-------------- -------------- -------------- -------------- -------------- --------------
$ 140,942,475 $ 165,397,331 $ 79,821,016 $ 82,560,559 $ 397,756,174 $ 317,272,697
============== ============== ============== ============== ============== ==============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
19
<PAGE> 20
STATEMENT OF CHANGES IN TOTAL EQUITY (CONTINUED)
For the six months ended June 30, 2000
and the year ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
MAINSTAY VP AMERICAN CENTURY
INDEXED EQUITY INCOME & GROWTH
----------------------------- -----------------------------
2000 1999 2000 1999
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN TOTAL EQUITY:
Operations:
Net investment income (loss)..................... $ (5,060,579) $ (1,261,919) $ (382,034) $ (180,410)
Net realized gain (loss) on investments.......... 4,041,273 26,734,785 110,263 250,616
Realized gain distribution received.............. 1,827,025 9,223,306 88,250 --
Change in unrealized appreciation (depreciation)
on investments................................. (9,555,560) 61,187,782 (1,980,179) 5,818,304
Increase (decrease) attributable to mortality and
expense risks assumed by New York Life
Insurance and Annuity Corporation and retained
by the Separate Account........................ 142,193 (248,381) 13,176 (16,085)
------------- ------------- ------------- -------------
Net increase (decrease) in total equity
resulting from operations.................... (8,605,648) 95,635,573 (2,150,524) 5,872,425
------------- ------------- ------------- -------------
Contributions and (Withdrawals):
Policyowners' premium payments................... 38,179,831 39,131,214 3,550,117 4,260,261
Policyowners' surrenders......................... (16,556,273) (19,102,715) (892,361) (868,297)
Policyowners' annuity and death benefits......... (2,800,983) (2,992,825) (96,842) (152,200)
Net transfers from (to) Fixed Account............ 11,752,636 4,837,916 2,285,673 1,482,006
Transfers between Investment Divisions........... 78,259,519 159,603,918 6,972,736 15,165,095
------------- ------------- ------------- -------------
Net contributions and (withdrawals)............ 108,834,730 181,477,508 11,819,323 19,886,865
------------- ------------- ------------- -------------
Increase (decrease) in total equity.......... 100,229,082 277,113,081 9,668,799 25,759,290
TOTAL EQUITY:
Beginning of period.............................. 684,700,676 407,587,595 50,327,503 24,568,213
------------- ------------- ------------- -------------
End of period.................................... $ 784,929,758 $ 684,700,676 $ 59,996,302 $ 50,327,503
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
CALVERT FIDELITY
SOCIAL VIP II
BALANCED CONTRAFUND(R)
----------------------------- -----------------------------
2000 1999 2000 1999
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN TOTAL EQUITY:
Operations:
Net investment income (loss)..................... $ (141,371) $ 210,667 $ (1,037,220) $ (1,828,463)
Net realized gain (loss) on investments.......... 35,502 204,424 1,034,195 2,493,353
Realized gain distribution received.............. -- 1,370,648 32,205,119 4,369,968
Change in unrealized appreciation (depreciation)
on investments................................. 619,530 (239,125) (37,648,407) 33,698,949
Increase (decrease) attributable to mortality and
expense risks assumed by New York Life
Insurance and Annuity Corporation and retained
by the Separate Account........................ 861 (3,911) 64,676 (98,601)
------------- ------------- ------------- -------------
Net increase (decrease) in total equity
resulting from operations.................... 514,522 1,542,703 (5,381,637) 38,635,206
------------- ------------- ------------- -------------
Contributions and (Withdrawals):
Policyowners' premium payments................... 1,404,401 1,218,283 21,952,492 21,562,788
Policyowners' surrenders......................... (462,753) (389,555) (6,203,919) (5,721,665)
Policyowners' annuity and death benefits......... (47,751) (44,732) (509,470) (603,445)
Net transfers from (to) Fixed Account............ 516,927 383,374 11,318,031 4,530,876
Transfers between Investment Divisions........... 3,444,232 5,730,352 42,906,276 69,788,898
------------- ------------- ------------- -------------
Net contributions and (withdrawals)............ 4,855,056 6,897,722 69,463,410 89,557,452
------------- ------------- ------------- -------------
Increase (decrease) in total equity.......... 5,369,578 8,440,425 64,081,773 128,192,658
TOTAL EQUITY:
Beginning of period.............................. 18,487,241 10,046,816 245,305,359 117,112,701
------------- ------------- ------------- -------------
End of period.................................... $ 23,856,819 $ 18,487,241 $ 309,387,132 $ 245,305,359
============= ============= ============= =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
20
<PAGE> 21
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
<TABLE>
<CAPTION>
DREYFUS EAGLE ASSET LORD ALGER
LARGE MANAGEMENT ABBETT AMERICAN
COMPANY GROWTH DEVELOPING SMALL
VALUE EQUITY GROWTH CAPITALIZATION
----------------------------- ----------------------------- ----------------------------- -----------------------------
2000 1999 2000 1999 2000 1999 2000 1999
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (194,129) $ (102,852) $ (627,635) $ (351,819) $ (244,364) $ 198,772 $ (570,723) $ (431,695)
57,647 77,286 951,036 324,711 390,205 (33,340) 1,690,027 2,334,162
-- -- 5,198,423 2,447,031 943,626 -- 34,726,123 3,276,996
(978,462) 1,098,415 4,337,930 13,826,296 (5,572,151) 5,050,045 (39,028,939) 8,718,638
6,305 (3,398) (5,108) (39,596) 20,352 (16,473) 29,352 (35,455)
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
(1,108,639) 1,069,451 9,854,646 16,206,623 (4,462,332) 5,199,004 (3,154,160) 13,862,646
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
1,229,199 1,282,654 16,911,051 3,625,755 1,855,193 1,634,924 13,240,200 3,509,225
(471,202) (439,054) (1,135,132) (382,671) (584,323) (385,998) (1,580,244) (977,668)
(39,513) (36,081) (89,765) (28,061) (7,001) (50) (219,771) (159,596)
1,082,844 835,237 3,718,033 1,113,574 852,579 566,892 4,478,963 1,235,110
3,166,123 6,389,989 56,374,906 15,046,226 10,861,891 5,707,840 46,900,002 11,588,412
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
4,967,451 8,032,745 75,779,093 19,374,823 12,978,339 7,523,608 62,819,150 15,195,483
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
3,858,812 9,102,196 85,633,739 35,581,446 8,516,007 12,722,612 59,664,990 29,058,129
25,701,326 16,599,130 52,015,034 16,433,588 27,071,745 14,349,133 51,859,984 22,801,855
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 29,560,138 $ 25,701,326 $ 137,648,773 $ 52,015,034 $ 35,587,752 $ 27,071,745 $ 111,524,974 $ 51,859,984
============= ============= ============= ============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN MFS(R)
FIDELITY JANUS ASPEN SERIES GROWTH
VIP SERIES WORLDWIDE WITH
EQUITY-INCOME BALANCED GROWTH INCOME SERIES
----------------------------- ----------------------------- ----------------------------- -----------------------------
2000 1999 2000 1999 2000 1999 2000 1999
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1,268,145 $ (175,571) $ 879,536 $ 2,832,210 $ (2,416,977) $ (2,256,400) $ (46,648) $ (130,173)
844,796 580,522 190,177 805,452 403,166 11,604,159 107,924 15,261
8,082,585 2,866,449 29,121,095 -- 6,876,742 -- 182,991 32,955
(14,211,595) 473,073 (29,878,393) 46,892,559 (6,352,101) 102,746,265 (173,211) 812,574
21,836 (11,677) 30,584 (137,780) 93,438 (268,363) 2,432 (1,900)
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
(3,994,233) 3,732,796 342,999 50,392,441 (1,395,732) 111,825,661 73,488 728,717
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
7,200,794 8,723,485 48,050,028 30,725,045 50,316,593 18,445,442 1,946,258 2,753,891
(3,385,185) (3,848,099) (9,609,633) (7,304,738) (8,748,500) (6,629,373) (422,157) (336,762)
(358,343) (702,180) (1,155,318) (1,244,078) (955,419) (866,431) (165,520) (33,617)
3,763,696 2,023,538 16,994,673 9,244,304 12,440,517 4,588,132 1,328,844 1,403,061
5,174,948 29,068,136 128,551,044 151,576,991 146,013,628 77,716,412 3,167,533 9,619,218
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
12,395,910 35,264,880 182,830,794 182,997,524 199,066,819 93,254,182 5,854,958 13,405,791
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
8,401,677 38,997,676 183,173,793 233,389,965 197,671,087 205,079,843 5,928,446 14,134,508
123,981,942 84,984,266 338,124,580 104,734,615 329,693,894 124,614,051 18,732,369 4,597,861
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 132,383,619 $ 123,981,942 $ 521,298,373 $ 338,124,580 $ 527,364,981 $ 329,693,894 $ 24,660,815 $ 18,732,369
============= ============= ============= ============= ============= ============= ============= =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
21
<PAGE> 22
STATEMENT OF CHANGES IN TOTAL EQUITY (CONTINUED)
For the six months ended June 30, 2000
and the year ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
MORGAN STANLEY
UIF
MFS(R) EMERGING MARKETS
RESEARCH SERIES EQUITY
----------------------------- -----------------------------
2000 1999 2000 1999
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN TOTAL EQUITY:
Operations:
Net investment income (loss)..................... $ (131,351) $ (83,450) $ (241,899) $ (155,055)
Net realized gain (loss) on investments.......... 17,168 179,884 731,501 (312,006)
Realized gain distribution received.............. 1,404,903 47,348 -- --
Change in unrealized appreciation (depreciation)
on investments................................. (187,979) 1,849,509 (3,503,531) 9,467,305
Increase (decrease) attributable to mortality and
expense risks assumed by New York Life
Insurance and Annuity Corporation and retained
by the Separate Account........................ 1,268 (4,115) 11,954 (19,162)
------------- ------------- ------------- -------------
Net increase (decrease) in total equity
resulting from operations.................... 1,104,009 1,989,176 (3,001,975) 8,981,082
------------- ------------- ------------- -------------
Contributions and (Withdrawals):
Policyowners' premium payments................... 5,395,515 2,836,575 5,345,039 1,600,831
Policyowners' surrenders......................... (385,643) (170,420) (762,918) (638,716)
Policyowners' annuity and death benefits......... (40,354) (1,713) (72,829) (42,089)
Net transfers from (to) Fixed Account............ 2,113,445 1,448,410 963,739 537,872
Transfers between Investment Divisions........... 10,746,889 4,404,982 15,112,806 7,021,890
------------- ------------- ------------- -------------
Net contributions and (withdrawals)............ 17,829,852 8,517,834 20,585,837 8,479,788
------------- ------------- ------------- -------------
Increase (decrease) in total equity.......... 18,933,861 10,507,010 17,583,862 17,460,870
TOTAL EQUITY:
Beginning of period.............................. 13,235,866 2,728,856 23,676,871 6,216,001
------------- ------------- ------------- -------------
End of period.................................... $ 32,169,727 $ 13,235,866 $ 41,260,733 $ 23,676,871
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
T. ROWE VAN ECK
PRICE WORLDWIDE
EQUITY HARD
INCOME ASSETS
----------------------------- -----------------------------
2000 1999 2000 1999
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN TOTAL EQUITY:
Operations:
Net investment income (loss)..................... $ 99,629 $ 124,598 $ 7,476 $ (9,489)
Net realized gain (loss) on investments.......... (55,459) 256,614 32,256 104,879
Realized gain distribution received.............. 465,024 998,267 -- --
Change in unrealized appreciation (depreciation)
on investments................................. (1,346,542) (1,375,827) 30,391 90,024
Increase (decrease) attributable to mortality and
expense risks assumed by New York Life
Insurance and Annuity Corporation and retained
by the Separate Account........................ 4,262 (251) 40 (472)
------------- ------------- ------------- -------------
Net increase (decrease) in total equity
resulting from operations.................... (833,086) 3,401 70,163 184,942
------------- ------------- ------------- -------------
Contributions and (Withdrawals):
Policyowners' premium payments................... 2,412,564 2,744,823 260,874 320,055
Policyowners' surrenders......................... (776,768) (751,362) (59,122) (25,725)
Policyowners' annuity and death benefits......... (58,016) (66,820) (5,605) --
Net transfers from (to) Fixed Account............ 1,810,026 1,185,381 6,183 (76,098)
Transfers between Investment Divisions........... 3,085,097 11,526,859 343,763 1,238,541
------------- ------------- ------------- -------------
Net contributions and (withdrawals)............ 6,472,903 14,638,881 546,093 1,456,773
------------- ------------- ------------- -------------
Increase (decrease) in total equity.......... 5,639,817 14,642,282 616,256 1,641,715
TOTAL EQUITY:
Beginning of period.............................. 24,724,011 10,081,729 2,065,523 423,808
------------- ------------- ------------- -------------
End of period.................................... $ 30,363,828 $ 24,724,011 $ 2,681,779 $ 2,065,523
============= ============= ============= =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
22
<PAGE> 23
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
(THIS PAGE INTENTIONALLY LEFT BLANK)
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-- Organization and Accounting Policies:
--------------------------------------------------------------------------------
NYLIAC Variable Annuity Separate Account-III ("Separate Account" formerly,
"LifeStages Annuity Separate Account") was established on November 30, 1994,
under Delaware law by New York Life Insurance and Annuity Corporation
("NYLIAC"), a wholly-owned subsidiary of New York Life Insurance Company. The
Separate Account funds Series I policies (LifeStages Variable Annuity,
LifeStages Flexible Premium Variable Annuity and MainStay Plus Variable
Annuity) and Series II policies (LifeStages Access Variable Annuity and
MainStay Access Variable Annuity). This account was established to receive and
invest premium payments under Non-Qualified and Tax Qualified Flexible Premium
Variable Retirement Annuity Policies issued by NYLIAC. 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., certain banking and financial institutions which have entered
into selling agreements with NYLIAC and registered representatives of
unaffiliated broker-dealers. NYLIFE Securities Inc. is a wholly-owned
subsidiary of NYLIFE LLC and NYLIFE Distributors Inc. is a wholly-owned
subsidiary of New York Life Investment Management Holdings LLC ("NYLIM"), both
of which are wholly-owned subsidiaries 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 Calvert Variable Series, Inc. (formerly, "Acacia
Capital Corporation"), the Fidelity Variable Insurance Products Fund II, the
Fidelity Variable Insurance Products Fund, the Janus Aspen Series, the MFS(R)
Variable Insurance Trust, the Universal Institutional Funds, Inc. (formerly,
"Morgan Stanley Dean Witter Universal Funds, Inc."), the T. Rowe Price Equity
Series, Inc., and the Van Eck Worldwide Insurance Trust (collectively, "Funds").
These assets are clearly identified and distinguished from the other assets and
liabilities of NYLIAC. These assets are the property of NYLIAC; however, the
portion of the assets attributable to the policies will not be charged with
liabilities arising out of any other business NYLIAC may conduct. The Fixed
Account represents the general assets of NYLIAC. NYLIAC's Fixed Account may be
charged with liabilities arising out of other business NYLIAC may conduct.
New York Life Insurance Company, MacKay Shields LLC, Madison Square Advisors
LLC and Monitor Capital Advisors LLC provide investment advisory services to the
MainStay VP Series Funds for a fee. MacKay Shields LLC, Madison Square Advisors
LLC and Monitor Capital Advisors LLC are wholly-owned subsidiaries of NYLIM.
The Separate Account offers twenty-six variable Investment Divisions, with
their respective fund portfolios, for Policyowners to invest premium payments.
The following Investment Divisions are available for all Series I and Series II
policies: MainStay VP Capital Appreciation, MainStay VP Cash Management,
MainStay VP Convertible, MainStay VP Government, MainStay VP High Yield
Corporate Bond, MainStay VP International Equity, MainStay VP Total Return,
MainStay VP Value, MainStay VP Bond, MainStay VP Growth Equity, MainStay VP
Indexed Equity, Alger American Small Capitalization, Calvert Social Balanced
(formerly, "Calvert Socially Responsible"), Fidelity VIP II Contrafund(R),
Fidelity VIP Equity-Income, Janus Aspen Series Balanced, Janus Aspen Series
Worldwide Growth, Morgan Stanley UIF Emerging Markets Equity (formerly, "Morgan
Stanley Dean Witter Emerging Markets Equity"), American Century Income & Growth,
Dreyfus Large Company Value, Eagle Asset Management Growth Equity, Lord Abbett
Developing Growth, MFS(R) Growth With Income Series, MFS(R) Research Series, T.
Rowe Price Equity Income, and Van Eck Worldwide Hard Assets. Each Investment
Division of the Separate Account will invest exclusively in the corresponding
eligible portfolio.
For LifeStages Variable Annuity and MainStay Plus Variable Annuity policies
initial premiums are allocated to the Fixed Account within two Business Days
after receipt. In states where approved, initial premiums are also allocated to
the Investment Divisions within two Business Days after receipt. Otherwise,
initial premium payments are allocated to the MainStay VP Cash Management
Investment Division until 15 days after the policy is issued. For LifeStages
Flexible Premium Variable Annuity, LifeStages Access Variable Annuity and
MainStay Access Variable Annuity policies, initial premium payments are
allocated to the Investment Divisions and/or the Fixed Account within two
Business Days after receipt. For all policies, subsequent premium payments are
allocated to the Investment Divisions at the close of the Business Day they are
received. In addition, for all policies, the Policyowner has the option to
transfer amounts between the Investment Divisions of the Separate Account and
the Fixed Account of NYLIAC.
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.
24
<PAGE> 25
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
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.
25
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2--Investments (in 000's):
--------------------------------------------------------------------------------
At June 30, 2000, the investments of the Separate Account are as follows:
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE
----------------------------------------------------
<S> <C> <C> <C>
Number of shares......................................... 21,887 180,123 8,905
Identified cost*......................................... $633,122 $180,122 $107,532
</TABLE>
<TABLE>
<CAPTION>
AMERICAN DREYFUS
MAINSTAY VP CENTURY LARGE
INDEXED INCOME COMPANY
EQUITY & GROWTH VALUE
--------------------------------------------------
<S> <C> <C> <C>
Number of shares......................................... 26,077 4,906 2,826
Identified cost*......................................... $647,015 $ 54,113 $ 28,780
</TABLE>
* The cost stated also represents the aggregate cost for Federal income tax
purposes.
Investment activity for the six months ended June 30, 2000, was as follows:
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP
APPRECIATION MANAGEMENT CONVERTIBLE
----------------------------------------------------
<S> <C> <C> <C>
Purchases................................................ $166,039 $156,923 $ 49,485
Proceeds from sales...................................... 20,510 271,944 559
</TABLE>
<TABLE>
<CAPTION>
AMERICAN DREYFUS
MAINSTAY VP CENTURY LARGE
INDEXED INCOME COMPANY
EQUITY & GROWTH VALUE
--------------------------------------------------
<S> <C> <C> <C>
Purchases................................................ $114,256 $ 12,196 $ 5,943
Proceeds from sales...................................... 8,328 633 1,157
</TABLE>
26
<PAGE> 27
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP
MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH
GOVERNMENT CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
4,595 37,249 1,800 15,670 9,968 6,346 14,045
$ 46,913 $438,748 $ 23,008 $281,727 $155,732 $ 84,786 $339,760
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET LORD ALGER
MANAGEMENT ABBETT AMERICAN CALVERT FIDELITY FIDELITY JANUS ASPEN
GROWTH DEVELOPING SMALL SOCIAL VIP II VIP SERIES
EQUITY GROWTH CAPITALIZATION BALANCED CONTRAFUND(R) EQUITY-INCOME BALANCED
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6,936 3,486 3,466 10,741 12,369 5,798 19,867
$117,439 $ 36,250 $140,383 $ 23,227 $292,116 $140,749 $487,906
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP
MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH
GOVERNMENT CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 2,937 $ 16,471 $ 8,158 $ 44,820 $ 2,400 $ 2,926 $ 74,100
19,261 20,464 3,510 3,018 17,845 8,093 2,419
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET LORD ALGER
MANAGEMENT ABBETT AMERICAN CALVERT FIDELITY FIDELITY JANUS ASPEN
GROWTH DEVELOPING SMALL SOCIAL VIP II VIP SERIES
EQUITY GROWTH CAPITALIZATION BALANCED CONTRAFUND(R) EQUITY-INCOME BALANCED
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 82,419 $ 16,185 $133,432 $ 5,209 $103,807 $ 31,952 $213,852
1,862 2,467 36,297 481 3,005 10,154 491
</TABLE>
27
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2--Investments (in 000's) (Continued):
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JANUS ASPEN MFS(R)
SERIES GROWTH
WORLDWIDE WITH MFS(R)
GROWTH INCOME SERIES RESEARCH SERIES
---------------------------------------------------------------
<S> <C> <C> <C>
Number of shares................................ 11,012 1,170 1,388
Identified cost*................................ $414,996 $ 23,680 $ 30,333
</TABLE>
<TABLE>
<CAPTION>
MORGAN STANLEY
UIF T. ROWE VAN ECK
EMERGING PRICE WORLDWIDE
MARKETS EQUITY HARD
EQUITY INCOME ASSETS
---------------------------------------------------------------
<S> <C> <C> <C>
Number of shares................................ 3,139 1,719 239
Identified cost*................................ $ 38,382 $ 32,938 $ 2,567
</TABLE>
* The cost stated also represents the aggregate cost for Federal income tax
purposes.
<TABLE>
<CAPTION>
JANUS ASPEN MFS(R)
SERIES GROWTH
WORLDWIDE WITH MFS(R)
GROWTH INCOME SERIES RESEARCH SERIES
---------------------------------------------------------------
<S> <C> <C> <C>
Purchases....................................... $204,959 $ 6,817 $ 19,264
Proceeds from sales............................. 894 806 118
</TABLE>
<TABLE>
<CAPTION>
MORGAN STANLEY
UIF T. ROWE VAN ECK
EMERGING PRICE WORLDWIDE
MARKETS EQUITY HARD
EQUITY INCOME ASSETS
---------------------------------------------------------------
<S> <C> <C> <C>
Purchases....................................... $ 25,102 $ 8,627 $ 1,037
Proceeds from sales............................. 4,704 1,564 481
</TABLE>
28
<PAGE> 29
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
NOTE 3--Mortality and Expense Risk Charges:
--------------------------------------------------------------------------------
The Separate Account is charged for administrative services provided and the
mortality and expense risks assumed by NYLIAC. For LifeStages Variable Annuity,
LifeStages Flexible Premium Variable Annuity, MainStay Plus Variable Annuity
these charges are made daily at an annual rate of 1.40% of the daily net asset
value of each Investment Division. For LifeStages Access Variable Annuity and
MainStay Access Variable Annuity these charges are made daily at an annual rate
of 1.55% of the daily net asset value of each Investment Division. The amounts
of these charges retained in the Investment Divisions represent funds of
NYLIAC. Accordingly, NYLIAC participates in the results of each Investment
Division ratably with the Policyowners.
--------------------------------------------------------------------------------
NOTE 4 --Distribution of Net Income:
--------------------------------------------------------------------------------
The Separate Account does not expect to declare dividends to Policyowners from
accumulated net investment income and realized gains. The income and gains are
distributed to Policyowners as part of withdrawals of amounts (in the form of
surrenders, death benefits, transfers, or annuity payments) in excess of the
net premium payments.
29
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 5--Unit Transactions (in 000's):
--------------------------------------------------------------------------------
Transactions in accumulation units for the six months ended June 30, 2000 and
the year ended December 31, 1999, were as follows:
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL APPRECIATION CASH MANAGEMENT
--------------------------- ---------------------------
2000(a) 1999 2000(a) 1999
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
SERIES I POLICIES
Units issued on premium payments....................... 1,521 1,403 519,857 994,277
Units redeemed on surrenders........................... (600) (761) (9,412) (9,939)
Units redeemed on annuity and death benefits........... (75) (109) (918) (1,624)
Units issued (redeemed) on net transfers from (to)
Fixed Account........................................ 188 51 (3,021) (6,353)
Units issued (redeemed) on transfers between Investment
Divisions............................................ 2,995 6,500 (606,955) (833,417)
-------- -------- -------- --------
Net increase (decrease).............................. 4,029 7,084 (100,449) 142,944
Units outstanding, beginning of period................. 23,024 15,940 248,786 105,842
-------- -------- -------- --------
Units outstanding, end of period....................... 27,053 23,024 148,337 248,786
======== ======== ======== ========
SERIES II POLICIES
Units issued on premium payments....................... 11 -- 191 --
Units redeemed on surrenders........................... -- -- -- --
Units redeemed on annuity and death benefits........... -- -- -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account........................................ -- -- -- --
Units issued (redeemed) on transfers between Investment
Divisions............................................ -- -- -- --
-------- -------- -------- --------
Net increase (decrease).............................. 11 -- 191 --
Units outstanding, beginning of period................. -- -- -- --
-------- -------- -------- --------
Units outstanding, end of period....................... 11 -- 191 --
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
INTERNATIONAL EQUITY TOTAL RETURN
--------------------------- ---------------------------
2000(a) 1999 2000(a) 1999
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
SERIES I POLICIES
Units issued on premium payments....................... 80 71 597 771
Units redeemed on surrenders........................... (40) (31) (384) (492)
Units redeemed on annuity and death benefits........... (2) (7) (51) (86)
Units issued (redeemed) on net transfers from (to)
Fixed Account........................................ 13 11 99 (15)
Units issued (redeemed) on transfers between Investment
Divisions............................................ 201 148 1,077 3,195
-------- -------- -------- --------
Net increase (decrease).............................. 252 192 1,338 3,373
Units outstanding, beginning of period................. 1,204 1,012 14,509 11,136
-------- -------- -------- --------
Units outstanding, end of period....................... 1,456 1,204 15,847 14,509
======== ======== ======== ========
SERIES II POLICIES
Units issued on premium payments....................... -- -- 52 --
Units redeemed on surrenders........................... -- -- -- --
Units redeemed on annuity and death benefits........... -- -- -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account........................................ -- -- -- --
Units issued (redeemed) on transfers between Investment
Divisions............................................ -- -- -- --
-------- -------- -------- --------
Net increase (decrease).............................. -- -- 52 --
Units outstanding, beginning of period................. -- -- -- --
-------- -------- -------- --------
Units outstanding, end of period....................... -- -- 52 --
======== ======== ======== ========
</TABLE>
(a) For Series II policies, represents the period March 13, 2000 (Commencement
of Operations) through June 30, 2000.
30
<PAGE> 31
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP
MAINSTAY VP MAINSTAY VP HIGH YIELD
CONVERTIBLE GOVERNMENT CORPORATE BOND
------------------- ------------------- -------------------
2000(a) 1999 2000(a) 1999 2000(a) 1999
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
622 178 110 287 871 1,369
(77) (92) (167) (184) (797) (1,120)
(21) (11) (16) (20) (155) (213)
79 22 50 (19) 32 (40)
1,884 590 (1,306) 1,736 (47) 3,553
-------- -------- -------- -------- -------- --------
2,487 687 (1,329) 1,800 (96) 3,549
3,826 3,139 5,008 3,208 25,509 21,960
-------- -------- -------- -------- -------- --------
6,313 3,826 3,679 5,008 25,413 25,509
======== ======== ======== ======== ======== ========
62 -- -- -- 21 --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-------- -------- -------- -------- -------- --------
62 -- -- -- 21 --
-- -- -- -- -- --
-------- -------- -------- -------- -------- --------
62 -- -- -- 21 --
======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP MAINSTAY VP
VALUE BOND GROWTH EQUITY
------------------- ------------------- -------------------
2000(a) 1999 2000(a) 1999 2000(a) 1999
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
255 385 180 458 825 711
(313) (400) (195) (292) (266) (319)
(47) (54) (49) (56) (29) (45)
29 (5) 85 28 119 63
(837) (148) (405) 1,740 1,983 2,672
-------- -------- -------- -------- -------- --------
(913) (222) (384) 1,878 2,632 3,082
9,782 10,004 6,871 4,993 11,321 8,239
-------- -------- -------- -------- -------- --------
8,869 9,782 6,487 6,871 13,953 11,321
======== ======== ======== ======== ======== ========
3 -- 2 -- 59 --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-------- -------- -------- -------- -------- --------
3 -- 2 -- 59 --
-- -- -- -- -- --
-------- -------- -------- -------- -------- --------
3 -- 2 -- 59 --
======== ======== ======== ======== ======== ========
</TABLE>
31
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 5--Unit Transactions (in 000's) (Continued):
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP AMERICAN CENTURY
INDEXED EQUITY INCOME & GROWTH
------------------- -------------------
2000(a) 1999 2000(a) 1999
-----------------------------------------
<S> <C> <C> <C> <C>
SERIES I POLICIES
Units issued on premium payments................... 1,394 1,556 293 370
Units redeemed on surrenders....................... (617) (763) (74) (75)
Units redeemed on annuity and death benefits....... (105) (120) (8) (14)
Units issued (redeemed) on net transfers from (to)
Fixed Account.................................... 439 188 189 127
Units issued (redeemed) on transfers between
Investment Divisions............................. 2,907 6,369 579 1,326
-------- -------- -------- --------
Net increase (decrease).......................... 4,018 7,230 979 1,734
Units outstanding, beginning of period............. 24,805 17,575 3,997 2,263
-------- -------- -------- --------
Units outstanding, end of period................... 28,823 24,805 4,976 3,997
======== ======== ======== ========
SERIES II POLICIES
Units issued on premium payments................... 64 -- 1 --
Units redeemed on surrenders....................... -- -- -- --
Units redeemed on annuity and death benefits....... -- -- -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account.................................... -- -- -- --
Units issued (redeemed) on transfers between
Investment Divisions............................. -- -- -- --
-------- -------- -------- --------
Net increase (decrease).......................... 64 -- 1 --
Units outstanding, beginning of period............. -- -- -- --
-------- -------- -------- --------
Units outstanding, end of period................... 64 -- 1 --
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
CALVERT FIDELITY
SOCIAL VIP II
BALANCED CONTRAFUND(R)
------------------- -------------------
2000(a) 1999 2000(a) 1999
-----------------------------------------
<S> <C> <C> <C> <C>
SERIES I POLICIES
Units issued on premium payments................... 76 69 1,083 1,197
Units redeemed on surrenders....................... (25) (22) (308) (318)
Units redeemed on annuity and death benefits....... (3) (3) (25) (34)
Units issued (redeemed) on net transfers from (to)
Fixed Account.................................... 28 22 562 248
Units issued (redeemed) on transfers between
Investment Divisions............................. 186 327 2,126 3,889
-------- -------- -------- --------
Net increase (decrease).......................... 262 393 3,438 4,982
Units outstanding, beginning of period............. 987 594 12,004 7,022
-------- -------- -------- --------
Units outstanding, end of period................... 1,249 987 15,442 12,004
======== ======== ======== ========
SERIES II POLICIES
Units issued on premium payments................... -- -- 12 --
Units redeemed on surrenders....................... -- -- -- --
Units redeemed on annuity and death benefits....... -- -- -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account.................................... -- -- -- --
Units issued (redeemed) on transfers between
Investment Divisions............................. -- -- -- --
-------- -------- -------- --------
Net increase (decrease).......................... -- -- 12 --
Units outstanding, beginning of period............. -- -- -- --
-------- -------- -------- --------
Units outstanding, end of period................... -- -- 12 --
======== ======== ======== ========
</TABLE>
(a) For Series II policies, represents the period March 13, 2000 (Commencement
of Operations) through June 30, 2000.
32
<PAGE> 33
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EAGLE ASSET
DREYFUS LARGE MANAGEMENT LORD ABBETT ALGER AMERICAN
COMPANY VALUE GROWTH EQUITY DEVELOPING GROWTH SMALL CAPITALIZATION
------------------- ------------------- ------------------- ---------------------
2000(a) 1999 2000(a) 1999 2000(a) 1999 2000(a) 1999
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
115 123 827 247 172 164 756 263
(46) (43) (57) (27) (53) (39) (93) (74)
(4) (3) (4) (2) (1) -- (13) (13)
103 80 184 76 76 55 269 90
303 611 2,775 1,028 950 523 2,620 893
-------- -------- -------- -------- -------- -------- -------- --------
471 768 3,725 1,322 1,144 703 3,539 1,159
2,397 1,629 2,730 1,408 2,276 1,573 3,063 1,904
-------- -------- -------- -------- -------- -------- -------- --------
2,868 2,397 6,455 2,730 3,420 2,276 6,602 3,063
======== ======== ======== ======== ======== ======== ======== ========
-- -- 5 -- -- -- 44 --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
-- -- 5 -- -- -- 44 --
-- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
-- -- 5 -- -- -- 44 --
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN
FIDELITY JANUS ASPEN SERIES
VIP SERIES WORLDWIDE MFS(R) GROWTH WITH
EQUITY-INCOME BALANCED GROWTH INCOME SERIES
------------------- ------------------- ------------------- -------------------
2000(a) 1999 2000(a) 1999 2000(a) 1999 2000(a) 1999
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
490 571 2,341 1,688 1,882 986 178 255
(231) (252) (472) (403) (326) (353) (39) (31)
(24) (46) (57) (69) (35) (49) (15) (3)
260 131 834 504 466 233 122 132
355 1,885 6,316 8,437 5,416 4,144 291 897
-------- -------- -------- -------- -------- -------- -------- --------
850 2,289 8,962 10,157 7,403 4,961 537 1,250
8,139 5,850 16,575 6,418 12,816 7,855 1,685 435
-------- -------- -------- -------- -------- -------- -------- --------
8,989 8,139 25,537 16,575 20,219 12,816 2,222 1,685
======== ======== ======== ======== ======== ======== ======== ========
4 -- 26 -- 16 -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
4 -- 26 -- 16 -- -- --
-- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
4 -- 26 -- 16 -- -- --
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
33
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 5--Unit Transactions (in 000's) (Continued):
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MORGAN STANLEY
UIF
MFS(R) RESEARCH EMERGING
SERIES MARKETS EQUITY
------------------- -------------------
2000(a) 1999 2000(a) 1999
-----------------------------------------
<S> <C> <C> <C> <C>
SERIES I POLICIES
Units issued on premium payments................... 390 252 378 156
Units redeemed on surrenders....................... (28) (14) (54) (61)
Units redeemed on annuity and death benefits....... (3) -- (5) (4)
Units issued (redeemed) on net transfers from (to)
Fixed Account.................................... 156 125 68 51
Units issued (redeemed) on transfers between
Investment Divisions............................. 782 384 1,027 676
-------- -------- -------- --------
Net increase (decrease).......................... 1,297 747 1,414 818
Units outstanding, beginning of period............. 999 252 1,659 841
-------- -------- -------- --------
Units outstanding, end of period................... 2,296 999 3,073 1,659
======== ======== ======== ========
SERIES II POLICIES
Units issued on premium payments................... 4 -- -- --
Units redeemed on surrenders....................... -- -- -- --
Units redeemed on annuity and death benefits....... -- -- -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account.................................... -- -- -- --
Units issued (redeemed) on transfers between
Investment Divisions............................. -- -- -- --
-------- -------- -------- --------
Net increase (decrease).......................... 4 -- -- --
Units outstanding, beginning of period............. -- -- -- --
-------- -------- -------- --------
Units outstanding, end of period................... 4 -- -- --
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
T. ROWE PRICE VAN ECK WORLDWIDE
EQUITY INCOME HARD ASSETS
------------------- -------------------
2000(a) 1999 2000(a) 1999
-----------------------------------------
<S> <C> <C> <C> <C>
SERIES I POLICIES
Units issued on premium payments................... 241 262 27 36
Units redeemed on surrenders....................... (80) (71) (6) (3)
Units redeemed on annuity and death benefits....... (6) (6) (1) --
Units issued (redeemed) on net transfers from (to)
Fixed Account.................................... 183 112 1 (8)
Units issued (redeemed) on transfers between
Investment Divisions............................. 309 1,095 35 138
-------- -------- -------- --------
Net increase (decrease).......................... 647 1,392 56 163
Units outstanding, beginning of period............. 2,387 995 216 53
-------- -------- -------- --------
Units outstanding, end of period................... 3,034 2,387 272 216
======== ======== ======== ========
SERIES II POLICIES
Units issued on premium payments................... 1 -- -- --
Units redeemed on surrenders....................... -- -- -- --
Units redeemed on annuity and death benefits....... -- -- -- --
Units issued (redeemed) on net transfers from (to)
Fixed Account.................................... -- -- -- --
Units issued (redeemed) on transfers between
Investment Divisions............................. -- -- -- --
-------- -------- -------- --------
Net increase (decrease).......................... 1 -- -- --
Units outstanding, beginning of period............. -- -- -- --
-------- -------- -------- --------
Units outstanding, end of period................... 1 -- -- --
======== ======== ======== ========
</TABLE>
(a) For Series II policies, represents the period March 13, 2000 (Commencement
of Operations) through June 30, 2000.
34
<PAGE> 35
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
(THIS PAGE INTENTIONALLY LEFT BLANK)
35
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 6--Selected Per Unit Data+:
--------------------------------------------------------------------------------
The following table presents selected per accumulation unit income and capital
changes (for an accumulation unit outstanding throughout each period) with
respect to each Investment Division of the Separate Account:
<TABLE>
<CAPTION>
MAINSTAY VP
CAPITAL APPRECIATION
---------------------------------------------------------
2000(d) 1999 1998 1997 1996 1995(a)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SERIES I POLICIES
Unit value, beginning of period......................... $28.55 $23.09 $16.95 $13.92 $11.89 $10.00
Net investment income (loss)............................ (0.20) (0.34) (0.25) (0.22) (0.17) 0.06
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 0.65 5.80 6.39 3.25 2.20 1.83
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $29.00 $28.55 $23.09 $16.95 $13.92 $11.89
====== ====== ====== ====== ====== ======
SERIES II POLICIES
Unit value, beginning of period......................... $10.00 $ -- $ -- $ -- $ -- $ --
Net investment income (loss)............................ (0.02) -- -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 0.97 -- -- -- -- --
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $10.95 $ -- $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP
GOVERNMENT
---------------------------------------------------------
2000(d) 1999 1998 1997 1996 1995(a)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SERIES I POLICIES
Unit value, beginning of period......................... $11.98 $12.37 $11.51 $10.66 $10.57 $10.00
Net investment income (loss)............................ (0.08) 0.53 0.70 0.69 0.86 2.49
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 0.53 (0.92) 0.16 0.16 (0.77) (1.92)
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $12.43 $11.98 $12.37 $11.51 $10.66 $10.57
====== ====== ====== ====== ====== ======
SERIES II POLICIES
Unit value, beginning of period......................... $10.00 $ -- $ -- $ -- $ -- $ --
Net investment income (loss)............................ -- -- -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... -- -- -- -- -- --
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $10.00 $ -- $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP
TOTAL RETURN
---------------------------------------------------------
2000(d) 1999 1998 1997 1996 1995(a)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SERIES I POLICIES
Unit value, beginning of period......................... $21.09 $18.28 $14.58 $12.55 $11.36 $10.00
Net investment income (loss)............................ (0.14) 0.11 0.17 0.17 0.27 0.79
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 0.41 2.70 3.53 1.86 0.92 0.57
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $21.36 $21.09 $18.28 $14.58 $12.55 $11.36
====== ====== ====== ====== ====== ======
SERIES II POLICIES
Unit value, beginning of period......................... $10.00 $ -- $ -- $ -- $ -- $ --
Net investment income (loss)............................ -- -- -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... (0.12) -- -- -- -- --
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $ 9.88 $ -- $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ======
</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.
(c) For the period May 1, 1998 (Commencement of Operations) through December 31,
1998.
(d) For Series II policies, represents the period March 13, 2000 (Commencement
of Operations) through June 30, 2000.
36
<PAGE> 37
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CASH MANAGEMENT CONVERTIBLE
--------------------------------------------------------- -----------------------------------------------
2000(d) 1999 1998 1997 1996 1995(a) 2000(d) 1999 1998 1997 1996(b)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1.18 $ 1.14 $ 1.10 $ 1.06 $ 1.03 $ 1.00 $17.00 $12.14 $11.78 $10.35 $10.00
0.02 0.04 0.04 0.04 0.04 0.02 (0.12) 0.45 0.49 0.38 0.08
0.01 -- -- -- (0.01) 0.01 1.01 4.41 (0.13) 1.05 0.27
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$ 1.21 $ 1.18 $ 1.14 $ 1.10 $ 1.06 $ 1.03 $17.89 $17.00 $12.14 $11.78 $10.35
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$ 1.00 $ -- $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ --
0.01 -- -- -- -- -- (0.01) -- -- -- --
(0.01) -- -- -- -- -- 0.18 -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$ 1.00 $ -- $ -- $ -- $ -- $ -- $10.17 $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP
HIGH YIELD MAINSTAY VP
CORPORATE BOND INTERNATIONAL EQUITY
--------------------------------------------------------- ---------------------------------------------------------
2000(d) 1999 1998 1997 1996 1995(a) 2000(d) 1999 1998 1997 1996 1995(a)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$15.72 $14.12 $13.95 $12.52 $10.83 $10.00 $18.88 $14.95 $12.32 $11.88 $10.90 $10.00
(0.11) 1.69 1.31 1.05 1.02 1.15 (0.12) (0.16) 0.16 0.90 0.87 1.36
0.30 (0.09) (1.14) 0.38 0.67 (0.32) (1.67) 4.09 2.47 (0.46) 0.11 (0.46)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$15.91 $15.72 $14.12 $13.95 $12.52 $10.83 $17.09 $18.88 $14.95 $12.32 $11.88 $10.90
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ -- $ --
(0.04) -- -- -- -- -- -- -- -- -- -- --
0.18 -- -- -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$10.14 $ -- $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
VALUE BOND
--------------------------------------------------------- ---------------------------------------------------------
2000(d) 1999 1998 1997 1996 1995(a) 2000(d) 1999 1998 1997 1996 1995(a)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$16.91 $15.76 $16.67 $13.76 $11.32 $10.00 $12.02 $12.37 $11.50 $10.64 $10.57 $10.00
(0.11) (0.03) 0.04 0.07 0.11 0.20 (0.08) 0.63 0.80 0.76 0.99 2.16
(0.91) 1.18 (0.95) 2.84 2.33 1.12 0.36 (0.98) 0.07 0.10 (0.92) (1.59)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$15.89 $16.91 $15.76 $16.67 $13.76 $11.32 $12.30 $12.02 $12.37 $11.50 $10.64 $10.57
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ -- $ --
(0.02) -- -- -- -- -- (0.01) -- -- -- -- --
(0.65) -- -- -- -- -- 0.06 -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$ 9.33 $ -- $ -- $ -- $ -- $ -- $10.05 $ -- $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
37
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 6--Selected Per Unit Data+ (Continued):
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP
GROWTH EQUITY
---------------------------------------------------------
2000(d) 1999 1998 1997 1996 1995(a)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SERIES I POLICIES
Unit value, beginning of period......................... $28.02 $21.87 $17.52 $14.01 $11.42 $10.00
Net investment income (loss)............................ (0.20) (0.16) (0.07) (0.06) 0.05 0.35
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 0.65 6.31 4.42 3.57 2.54 1.07
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $28.47 $28.02 $21.87 $17.52 $14.01 $11.42
====== ====== ====== ====== ====== ======
SERIES II POLICIES
Unit value, beginning of period......................... $10.00 $ -- $ -- $ -- $ -- $ --
Net investment income (loss)............................ (0.01) -- -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 0.01 -- -- -- -- --
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $10.00 $ -- $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET LORD
MANAGEMENT ABBETT
GROWTH DEVELOPING
EQUITY GROWTH
--------------------------- ---------------------------
2000(d) 1999 1998(c) 2000(d) 1999 1998(c)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SERIES I POLICIES
Unit value, beginning of period......................... $19.06 $11.68 $10.00 $11.89 $ 9.12 $10.00
Net investment income (loss)............................ (0.14) (0.19) (0.09) (0.08) 0.10 (0.08)
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 2.39 7.57 1.77 (1.40) 2.67 (0.80)
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $21.31 $19.06 $11.68 $10.41 $11.89 $ 9.12
====== ====== ====== ====== ====== ======
SERIES II POLICIES
Unit value, beginning of period......................... $10.00 $ -- $ -- $10.00 $ -- $ --
Net investment income (loss)............................ (0.03) -- -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 2.02 -- -- -- -- --
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $11.99 $ -- $ -- $10.00 $ -- $ --
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
VIP II
CONTRAFUND(R)
-----------------------------------------------
2000(d) 1999 1998 1997 1996(b)
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
SERIES I POLICIES
Unit value, beginning of period......................... $20.44 $16.68 $13.01 $10.63 $10.00
Net investment income (loss)............................ (0.08) (0.19) (0.14) (0.14) (0.03)
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... (0.33) 3.95 3.81 2.52 0.66
------ ------ ------ ------ ------
Unit value, end of period............................... $20.03 $20.44 $16.68 $13.01 $10.63
====== ====== ====== ====== ======
SERIES II POLICIES
Unit value, beginning of period......................... $10.00 $ -- $ -- $ -- $ --
Net investment income (loss)............................ (0.03) -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions).... 0.61 -- -- -- --
------ ------ ------ ------ ------
Unit value, end of period............................... $10.58 $ -- $ -- $ -- $ --
====== ====== ====== ====== ======
</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.
(c) For the period May 1, 1998 (Commencement of Operations) through December 31,
1998.
(d) For Series II policies, represents the period March 13, 2000 (Commencement
of Operations) through June 30, 2000.
38
<PAGE> 39
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINSTAY VP AMERICAN CENTURY INCOME DREYFUS LARGE COMPANY
INDEXED EQUITY & GROWTH VALUE
--------------------------------------------------------- --------------------------- ---------------------------
2000(d) 1999 1998 1997 1996 1995(a) 2000(d) 1999 1998(c) 2000(d) 1999 1998(c)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$27.60 $23.19 $18.30 $13.97 $11.58 $10.00 $12.59 $10.86 $10.00 $10.72 $10.19 $10.00
(0.19) (0.06) -- 0.09 0.21 0.62 (0.08) (0.06) (0.02) (0.07) (0.05) (0.03)
(0.20) 4.47 4.89 4.24 2.18 0.96 (0.45) 1.79 0.88 (0.34) 0.58 0.22
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$27.21 $27.60 $23.19 $18.30 $13.97 $11.58 $12.06 $12.59 $10.86 $10.31 $10.72 $10.19
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $10.00 $ -- $ --
(0.01) -- -- -- -- -- -- -- -- -- -- --
0.39 -- -- -- -- -- 0.02 -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$10.38 $ -- $ -- $ -- $ -- $ -- $10.02 $ -- $ -- $10.00 $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
ALGER
AMERICAN CALVERT
SMALL SOCIAL
CAPITALIZATION BALANCED
----------------------------------------------- ---------------------------------------------------------
2000(d) 1999 1998 1997 1996(b) 2000(d) 1999 1998 1997 1996 1995(a)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$16.93 $11.97 $10.51 $ 9.57 $10.00 $18.72 $16.92 $14.76 $12.46 $11.22 $10.00
(0.12) (0.18) (0.15) (0.14) (0.02) (0.13) 0.27 0.29 0.31 0.35 1.60
-- 5.14 1.61 1.08 (0.41) 0.51 1.53 1.87 1.99 0.89 (0.38)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$16.81 $16.93 $11.97 $10.51 $ 9.57 $19.10 $18.72 $16.92 $14.76 $12.46 $11.22
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ -- $ --
(0.01) -- -- -- -- -- -- -- -- -- --
1.85 -- -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$11.84 $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
FIDELITY JANUS ASPEN
VIP SERIES
EQUITY-INCOME BALANCED
----------------------------------------------- -----------------------------------------------
2000(d) 1999 1998 1997 1996(b) 2000(d) 1999 1998 1997 1996(b)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$15.23 $14.53 $13.20 $10.45 $10.00 $20.40 $16.32 $12.32 $10.24 $10.00
0.15 (0.03) (0.08) (0.13) (0.02) 0.04 0.25 0.42 0.28 0.17
(0.66) 0.73 1.41 2.88 0.47 (0.04) 3.83 3.58 1.80 0.07
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$14.72 $15.23 $14.53 $13.20 $10.45 $20.40 $20.40 $16.32 $12.32 $10.24
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $ -- $ -- $10.00 $ -- $ -- $ -- $ --
(0.01) -- -- -- -- 0.19 -- -- -- --
(0.35) -- -- -- -- 0.44 -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$ 9.64 $ -- $ -- $ -- $ -- $10.63 $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
39
<PAGE> 40
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 6--Selected Per Unit Data+ (Continued):
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JANUS ASPEN
SERIES
WORLDWIDE
GROWTH
-----------------------------------------------
2000(d) 1999 1998 1997 1996(b)
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
SERIES I POLICIES
Unit value, beginning of period......................... $25.73 $15.86 $12.48 $10.36 $10.00
Net investment income (loss)............................ (0.15) (0.23) 0.20 (0.03) 0.08
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions)... 0.49 10.10 3.18 2.15 0.28
------ ------ ------ ------ ------
Unit value, end of period............................... $26.07 $25.73 $15.86 $12.48 $10.36
====== ====== ====== ====== ======
SERIES II POLICIES
Unit value, beginning of period......................... $10.00 $ -- $ -- $ -- $ --
Net investment income (loss)............................ -- -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions)... 1.17 -- -- -- --
------ ------ ------ ------ ------
Unit value, end of period............................... $11.17 $ -- $ -- $ -- $ --
====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
T. ROWE VAN ECK
PRICE WORLDWIDE
EQUITY HARD
INCOME ASSETS
--------------------------- ---------------------------
2000(d) 1999 1998(c) 2000(d) 1999 1998(c)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SERIES I POLICIES
Unit value, beginning of period......................... $10.36 $10.13 $10.00 $ 9.57 $ 8.02 $10.00
Net investment income (loss)............................ 0.04 0.07 0.08 0.03 (0.07) (0.06)
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions)... (0.40) 0.16 0.05 0.27 1.62 (1.92)
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $10.00 $10.36 $10.13 $ 9.87 $ 9.57 $ 8.02
====== ====== ====== ====== ====== ======
SERIES II POLICIES
Unit value, beginning of period......................... $10.00 $ -- $ -- $10.00 $ -- $ --
Net investment income (loss)............................ 0.03 -- -- -- -- --
Net realized and unrealized gains (losses) on security
transactions and realized gain distributions received
(includes the effect of capital share transactions)... (0.43) -- -- -- -- --
------ ------ ------ ------ ------ ------
Unit value, end of period............................... $ 9.60 $ -- $ -- $10.00 $ -- $ --
====== ====== ====== ====== ====== ======
</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.
(c) For the period May 1, 1998 (Commencement of Operations) through December 31,
1998.
(d) For Series II policies, represents the period March 13, 2000 (Commencement
of Operations) through June 30, 2000.
40
<PAGE> 41
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS(R) MORGAN STANLEY
GROWTH UIF
WITH MFS(R) EMERGING MARKETS
INCOME SERIES RESEARCH SERIES EQUITY
--------------------------- --------------------------- -----------------------------------------------
2000(d) 1999 1998(c) 2000(d) 1999 1998(c) 2000(d) 1999 1998 1997 1996(b)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$11.12 $10.57 $10.00 $13.25 $10.83 $10.00 $14.27 $ 7.40 $ 9.89 $10.00 $10.00
(0.02) (0.12) (0.07) (0.09) (0.15) (0.07) (0.10) (0.13) (0.08) (0.05) 0.02
-- 0.67 0.64 0.83 2.57 0.90 (0.74) 7.00 (2.41) (0.06) (0.02)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$11.10 $11.12 $10.57 $13.99 $13.25 $10.83 $13.43 $14.27 $ 7.40 $ 9.89 $10.00
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$10.00 $ -- $ -- $10.00 $ -- $ -- $10.00 $ -- $ -- $ -- $ --
(0.02) -- -- (0.02) -- -- -- -- -- -- --
(0.09) -- -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$ 9.89 $ -- $ -- $ 9.98 $ -- $ -- $10.00 $ -- $ -- $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
41
<PAGE> 42
--------------------------------------------------------------------------------
To Policyowners:
The assets of NYLIAC Variable Annuity Separate Account-I, NYLIAC Variable
Annuity Separate Account-II, NYLIAC Variable Annuity Separate Account-III,
NYLIAC Variable Universal Life Separate Account-I, NYLIAC Corporate Sponsored
Variable Universal Life Separate Account-I, New York Life Insurance and Annuity
Corporation MFA Separate Account-I, New York Life Insurance and Annuity
Corporation MFA Separate Account-II and New York Life Insurance and Annuity
Corporation VLI Separate Account are invested in shares of MainStay VP Series
Fund, Inc.
In addition, the assets of NYLIAC Variable Annuity Separate Account-III, NYLIAC
Variable Universal Life Account-I may be invested in shares of the Alger
American Fund, the Calvert Variable Series, Inc., the Fidelity Variable
Insurance Products Fund, the Fidelity Variable Insurance Products Fund-II, the
Janus Aspen Series, MFS(R) Variable Insurance Trust(SM), The Universal
Institutional Funds, Inc., the T. Rowe Price Equity Series Inc., and Van Eck
Worldwide Insurance Trust, which are not affiliated with the MainStay VP Series
Fund Inc. or NYLIAC and any of its subsidiaries.
At the Annual Meeting of the Board of Directors of the fund held on November 16,
1999, executive officers of the Fund were elected. On May 17, 2000, a dividend
distribution was paid to NYLIAC Variable Annuity Separate Account-I, NYLIAC
Variable Annuity Separate Account-II, NYLIAC Variable Annuity Separate
Account-III, NYLIAC Variable Universal Life Separate Account-I, NYLIAC Corporate
Sponsored Variable Universal Life Separate Account-I, New York Life Insurance
and Annuity Corporation MFA Separate Account-I, New York Life Insurance and
Annuity Corporation MFA Separate Account-II and New York Life Insurance and
Annuity Corporation VLI Separate Account as the sole shareholders of record of
MainStay VP Series Fund, Inc.
The financial information included herein as of June 30, 2000, and for the
period then ended, is taken from the records of the Fund without examination by
independent accountants who do not express an opinion thereon.
/s/ RICHARD M. KERMAN JR.
Chairman of the Board
and Chief Executive Officer
MAINSTAY VP SERIES FUND, INC.
42
<PAGE> 43
MAINSTAY VP CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The stock market's modest declines over the first half of 2000 masked the
volatility investors experienced along the way. Most technology and
telecommunications stocks advanced rapidly in the first quarter, peaking in mid-
March, only to drop precipitously in April and May and recover strongly in June.
Early in the year, many investors feared that an aggressive Federal Reserve
would derail the U.S. economy's extended growth, but by the end of the reporting
period many observers believed that Federal Reserve tightening was starting to
wind down. The six interest-rate hikes we've seen since June 1999 have made
definite impressions on the economy -- with slower sales, weaker employment
growth, and moderating consumer confidence.
Whether the Federal Reserve has successfully orchestrated a "soft landing" for
the economy remains to be seen. We will closely monitor second-quarter earnings
reports and corporate managers' comments on their company's future prospects as
we seek to gauge the velocity of a possible earnings slowdown.
PERFORMANCE REVIEW
For the six month period ended June 30, 2000, MainStay VP Capital Appreciation
Portfolio returned 2.28%, excluding all sales charges. The Portfolio
underperformed the 3.24% return of the average Lipper(1) Variable Products
Capital Appreciation Portfolio. The most notable sector in the first half of
2000 was clearly technology, which accounted for some of the Portfolio's best-
and worst-performing stocks. Corning, a fiber-optic manufacturer, benefited from
the changing telecommunications infrastructure and was the Portfolio's best-
performing holding, climbing more than 100% through the end of June in an
otherwise difficult market. Other strong performers included EMC, First Data,
Intel, and Oracle.
Unfortunately, gains in these issues were not enough to offset losses in other
technology holdings -- including Motorola, due to concerns about slower growth
in its cell-phone business; Microsoft, which declined precipitously following an
antitrust ruling that may break up the company; and Compuware, whose
information-technology business remained under pressure. Fortunately, we sold
the Portfolio's position in Compuware at a sizeable gain in the first quarter.
The company has since missed its projections several times. The Portfolio
remains overweighted in technology, given the sector's robust earnings outlook,
and the performance of the Portfolio's technology holdings helped it outperform
the S&P 500(R)(2) which returned -0.42% during the reporting period.
A SEARCH FOR SAFE HAVENS
Turbulence in the technology sector led investors to look for safe havens, and
in the second quarter of 2000, that meant health care stocks. Pharmaceuticals
emerged from the political cloud surrounding Medicare drug coverage and possible
price controls, as recent proposals appear to be less severe. This, combined
with the completion of the human genome project, drew attention to the biotech
sector. Schering-Plough, Merck, Genentech, and Amgen began the year largely
overshadowed by technology-stock advances, but were among the Portfolio's
best-performing holdings during the second quarter.
We increased the Portfolio's exposure to this group with new purchases of
Allergan, Baxter, Bristol-Meyers, and IVAX, all of which contributed positively
to the Portfolio's performance. The Portfolio's underweighted position in
traditional pharmaceutical stocks, however, detracted from performance as drug
stocks recorded outstanding advances from early March through the end of June.
OTHER SECTORS
After declining in the first quarter, financial stocks recovered in the second,
but gave back most of their gains in June when a few regional banks faced
credit-quality issues. A stagnant IPO calendar didn't help brokerage-related
stocks such as Goldman Sachs, but if Fed tightening slows or stops, these stocks
may be poised for gains. AIG, Providian, and Citigroup recorded market-beating
gains in the second quarter and were positive contributors to the Portfolio's
performance. Year-to-date, the group has had a neutral impact on performance.
Consumer cyclical stocks suffered severely from slowing retail sales, moderating
employment growth, soaring fuel prices, and higher mortgage rates, causing
almost all of the Portfolio's holdings in this sector to decline sharply.
Circuit City and Home Depot were among the worst performers, but may now be
selling at a discount. On a brighter note, Kohl's advanced on its successful
entry into the New York market. The Portfolio took some profits in Circuit City,
Home Depot, and Kohl's to reduce exposure to this out-of-favor group. We also
eliminated the Portfolio's holdings in Cendant, IMS Health, and Carnival, all of
which posed earnings risks. The Portfolio's overweighted position in this sector
detracted from performance for the six-month reporting period.
43
<PAGE> 44
Among media stocks, Viacom gained 20% in the second quarter, following its
merger with CBS, and Time Warner outpaced the market on a pending merger with
AOL. Nevertheless, other media stocks suffered as "dot.com fever" gave way to
concerns about whether advertising revenues could be sustained. Clear Channel
and AMFM declined on radio-industry worries. We took some profits in this sector
and eliminated the Portfolio's position in Comcast at a loss for the Portfolio
when cash flow failed to grow at the rates we expected.
PURCHASES AND SALES
New purchases for the Portfolio during the reporting period included Cypress
Semiconductor, Nokia, Tellabs, Enron, Applied Materials, Analog Devices,
Household International, Medimmune, and Protein Design Labs. The Portfolio also
purchased a small position in EDS, but later sold it at a modest loss, after the
company surprised the market by missing anticipated earnings.
Significant sales during the first half of 2000 included Global Crossing,
Honeywell, Dollar General, Interpublic Group, Johnson & Johnson, America Online,
and Cardinal Health.
LOOKING AHEAD
Given the strong fundamental growth drivers in place for the economy, we remain
optimistic about the outlook for growth equities -- although our view remains
tempered by the potential for rising interest rates. Even so, we believe that
companies that can deliver consistently strong revenue and earnings-per-share
growth will remain attractive to investors.
Whatever the markets may bring, the Portfolio will continue to seek long-term
growth of capital. Dividend income, if any, will remain an incidental
consideration.
Rudolph C. Carryl
Edmund C. Spelman
Portfolio Managers
MacKay Shields LLC
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) "Standard and Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)"
are registered trademarks of The McGraw-Hill Companies, Inc. The product is
not sponsored, endorsed, sold or promoted by Standard & Poor's Corporation.
The S&P 500(R) is an unmanaged index considered generally representative of
the U.S. stock market. Results assume the reinvestment of all income and
capital gains distributions. An investment cannot be made directly into an
index.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
44
<PAGE> 45
MAINSTAY VP CASH MANAGEMENT PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Like most other Y2K fears, money-market liquidity concerns proved to be for
naught, as the new century rolled in without a hitch. During the six months
ended June 30, 2000, two major factors combined to push yields on short-term
money market securities significantly higher -- the ongoing strength of the U.S.
economy and three successive tightening moves by the Federal Reserve.
Consumer spending was strong through the first half of 2000, and unemployment
reached its lowest level in almost thirty years. At the same time, productivity
improvements and competitive pressures held prices steady, keeping inflation
benign. Nominal GDP, however, continued to surge, pushing the first quarter
annualized growth rate to 5.5%, following a 7.3% annualized growth rate in the
fourth quarter of 1999.
The Federal Reserve continued to take a hard stance against inflation and argued
that extremely tight labor markets and enhanced productivity could not
indefinitely support the pace of the economy. Following its cumulative 0.75%
rate increase in 1999, the Federal Reserve raised the targeted federal funds
rate by 0.25% on February 2 and again on March 21. Stronger economic numbers in
April led policymakers to believe that inflation was accelerating and the
economy was not slowing. Abandoning its gradualistic approach, the Federal
Reserve tightened more aggressively with a 0.50% move on May 16, boosting the
targeted federal funds rate to 6.50%.
In response to a more aggressive Federal Reserve, the Treasury yield curve
became significantly inverted for the first time since 1990. This means that
longer-term maturities were yielding less than shorter-term maturities. With
increased budget surpluses projected over the next ten years, the government
reduced new Treasury issuance and began buying back outstanding U.S. Treasury
securities. These factors also contributed to the inversion of the Treasury
yield curve.
At its June meeting, the Federal Reserve refrained from raising interest rates,
as a number of economic reports showed an economy slowing from its torrid pace.
The debate now centers on whether the observed slowdown will be transient or
sustainable. In June, the two-year Treasury note rallied, with yields falling by
0.30% on expectations that the Federal Reserve had accomplished its task.
STRONG RELATIVE PERFORMANCE
For the seven-day period ended June 30, 2000, the MainStay VP Cash Management
Portfolio provided an effective yield of 6.38% and a current yield of 6.19%. For
the six months ended June 30, 2000 the Portfolio returned 2.83%, exceeding the
2.80% return of the average Lipper(1) Variable Products Money Market Portfolio.
STRATEGIC MATURITY AND SECTOR POSITIONING
During the first half of the year, we maintained the average maturity of the
portfolio at a substantially shorter position than the average money-market
fund. This strategy proved effective in a rising interest rate environment. As
of June 30, 2000, the Portfolio's average maturity stood at 39 days.
Portfolio performance also benefited from our investment in higher yielding
asset-backed commercial paper and one-year maturity floating-rate securities.
While past performance is no guarantee of future results, in times of economic
uncertainty, floating-rate notes have historically outperformed other
money-market securities, as their coupon rates tend to correspond to market
levels much sooner than fixed-rate investments.
HIGH CREDIT QUALITY
The Portfolio's investments throughout the semi-annual period centered on
floating-rate notes, bank certificates of deposit (CDs), commercial paper, and
asset-backed commercial paper. By industry, the Portfolio mainly invested in
securities of banks and bank holding companies, as well as finance, insurance,
brokerage, telecommunications, and industrial companies. We closely followed the
Portfolio's disciplined investment process by purchasing only high-quality
instruments throughout the reporting period. All of the securities purchased for
the portfolio were rated A-1/P-1 or higher. These are first-tier
securities -- or generally those money-market instruments in the highest rating
category. The Portfolio was not invested in any second-tier securities nor did
it invest in split-rated issues (those rated in the highest rating category by
one credit rating agency and in the second-highest rating category by another).
The Portfolio's concentration on the highest quality securities helped manage
portfolio risk.
LOOKING AHEAD
Economic indicators announced late in the semi-annual period were a little
weaker than those reported in prior months. The market is responding to a weaker
National Purchasing Manager's report and a cooler labor market,
45
<PAGE> 46
as reported in weekly jobless claims. However, we believe that the current
slowdown in U.S. economic growth is temporary and that growth may pick up again.
Since labor is still in short supply, we believe that inflation risks remain.
Thus, while softer economic numbers may allow the Federal Reserve to stay on
hold for a couple of months, we are not convinced that it has completed its
cycle of interest-rate increases. In our view, the Federal Reserve will likely
resume tightening later in the summer.
To prepare for this possibility, we intend to maintain the Portfolio's
shorter-than-benchmark average-maturity position for the near term. We also
intend to remain focused on quality, as the Portfolio seeks as high a level of
current income as is considered consistent with the preservation of capital and
liquidity.
MacKay Shields LLC
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
Though an investment in a money market portfolio is generally considered to be
protected from market risk, this investment is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Portfolio seeks to preserve the value of your investment, it is
possible to lose money by investing in this Portfolio.
Total returns for the Portfolio shown indicate past performance and are not
indicative of future results. Investment return and principal value will
fluctuate so that shares, upon redemption, may be worth more or less than their
original cost. These results do not reflect any deduction of sales charges,
mortality and expense charges, contract charges, or administrative charges.
Please refer to the Performance Summary for returns reflective of these charges.
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MAINSTAY VP CONVERTIBLE PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
During the first half of 2000, three distinct market trends emerged. First, from
the beginning of the year until mid-March, the NASDAQ(1) continued a surge that
began in October 1999. Valuations for speculative issues rose to excessive
levels while many companies outside the technology arena lagged. Next, ongoing
tightening by the Federal Reserve burst the valuation bubble and the NASDAQ
declined from mid-March until about Memorial Day. Finally, with signs that the
economy was slowing, many investors concluded that the Federal Reserve
tightening was nearing an end. This led to the third market phase, as the market
rose again.
PERFORMANCE REVIEW
For the six months ended June 30, 2000, MainStay VP Convertible Portfolio
returned 5.99%, outperforming the 3.57% return of the Credit Suisse First Boston
Convertible Securities Index(2) and the -0.42% return of the S&P 500(R)(3).
Consistent application of the Portfolio's investment disciplines was largely
responsible for its outperformance during the reporting period.
STRONG PERFORMERS
Two companies that helped were Amdocs and Calpine. Amdocs provides billing
software for telephone companies, to help them with more complex products and
billing arrangements. With the growth of new telephone internet services, Amdocs
comprehensive solutions to software upgrade needs helped the convertible
preferred stock rise 96% during the first half of 2000. Calpine, an independent
power producer, is taking advantage of electric utility deregulation to build
low-cost power plants in areas with substantial power needs. The value of
Calpine's services has been demonstrated by the number of power outages in the
last few years -- leading the value of the company's convertible preferred stock
to increase by 46% during the semi-annual reporting period.
Our decision to overweight the Portfolio in energy and oil service companies
also contributed to its positive performance. It has been our ongoing belief
that a potential natural gas shortage, combined with high oil prices, would lead
to increased oil and gas drilling -- and recently, BP Amoco announced increases
in its drilling budget. Oil and gas companies that paid insufficient attention
to exploration and production over the last few years are now playing "catch
up." After the Asian financial crisis, global economic growth slowed and demand
for oil faltered. Now that the world economy is well on the road to recovery,
oil and gas are in short supply -- a dynamic that bodes well for drilling and
oil service companies.
Several companies issued convertibles early in the year when their stocks were
at speculative highs. As the market subsequently declined, many of these issues
followed their underlying stocks to considerably lower valuations. The
Portfolio's outperformance in large measure was due to our decision to pass on
these deals.
STRATEGIC BUYING OPPORTUNITIES
Throughout the first six months of 2000, much of the Portfolio's success came
from seeking opportunities amid market volatility. As just one example, working
with our high-yield group we purchased the convertible bond of Efficient
Networks. The company supplies customer-premise equipment for DSL services,
which provide a way for small businesses and individuals to enjoy high-speed
Internet access. The stock reached ridiculously high valuations early in the
year and corrected significantly in March and April. We took advantage of the
correction to buy the bonds at $66 with a yield of 15%. Buying Efficient bonds
at this price greatly limited the Portfolio's downside risk while providing
exposure to a company that was well positioned to take advantage of the strong
DSL market. Since we purchased the bonds for the Portfolio their price has risen
12%.
WEAKER PERFORMERS
Despite the Portfolio's strong performance, not all of its securities were
winners during the first half of the year. Two of the Portfolio's most
disappointing holdings were Rhythms NetConnections and Network Plus. Rhythms is
a DSL provider. Unfortunately, some of the company's competitors announced
disappointing results and Rhythms' stock declined in sympathy. While progress in
adding subscribers has been slower than anticipated, we believe the problem lies
in the Regional Bell Operating Companies' slow provisioning of customers rather
than lack of demand. For this reason, the Portfolio continues to hold its
position.
Network Plus is a phone company focusing on the Northeast. In the midst of a
weak market, the company announced that expenses would be higher than expected,
causing the stock to decline precipitously. Given the company's powerful sales
force, strong customer service operation, and efficient billing systems, we
believe Network Plus may be an excellent takeover target -- particularly in a
field littered with companies that have good network assets, but poor sales and
weak back-office operations. Since missing estimates has been common
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in the industry over the last year, rather than being discouraged, we have added
to the Portfolio's Network Plus position.
LOOKING AHEAD
We will continue to seek opportune times to purchase securities we believe have
attractive risk/reward profiles. We will also take profits when we believe
valuations and fundamentals make such action advisable.
The convertible market continues to offer exposure to sectors of the market that
have strong growth prospects, primarily technology and telecom. Yet many
convertible securities offer downside protection(4) potential, which may help
mute the price volatility we expect in the months ahead.
Whatever the markets may bring, the Portfolio will continue to seek capital
appreciation together with current income.
Edmund C. Spelman
Thomas Wynn
Portfolio Managers
MacKay Shields LLC
(1) The "NASDAQ Composite Index" is an unmanaged market-value weighted index
that measures all NASDAQ domestic and non-U.S. based common stocks listed on
the NASDAQ Stock Market and includes over 5,000 companies. Each company's
security affects the Index in proportion to its market value. The market
value, the last sale price multiplied by total shares outstanding, is
calculated throughout the trading day and is related to the total value of
the Index. An investment cannot be made directly into an index.
(2) The Credit Suisse First Boston Convertible Securities Index generally
includes 250-300 issues -- convertibles must have a minimum issue size of
$50 million; bonds and preferred stocks must be rated B- or better by S&P;
and preferreds must have a minimum of 500,000 shares outstanding. Eurobonds
are also included if they are issued by U.S.-domiciled companies, rated B-
or higher by S&P, and have an issue size greater than $100 million.
(3) "Standard and Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)"
are registered trademarks of The McGraw-Hill Companies, Inc. The product is
not sponsored, endorsed, sold or promoted by Standard & Poor's Corporation
and Standard & Poor's makes no representation regarding the advisability of
purchasing the product. The S&P 500(R) is an unmanaged index considered
generally representative of the U.S. stock market. Results assume the
reinvestment of all income and capital gains distributions.
(4) Convertibles offer downside protection because of the nature of the
security. The bond-like characteristics of convertibles give a downside
cushion in a falling market.
Certain of the Portfolio's investments have speculative characteristics.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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MAINSTAY VP GOVERNMENT PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The rapid pace of economic expansion in the first quarter of 2000 gave way to a
slowing economy in the second quarter. As a series of Federal Reserve
interest-rate hikes worked their way into the economy, consumer spending finally
slowed to below the rate of personal income growth. These first tentative signs
of a slowing economy, however, did not stop the Federal Reserve from raising
interest rates by 25 basis points in both February and March and another 50
basis points in May. While bond prices generally decline when interest rates
rise, the government's decision to use a portion of its surplus to repurchase
Treasury securities helped to stabilize prices during the first half of 2000.
Ongoing increases in short-term rates took their toll on the short end of the
yield curve, but the Federal Reserve's decision to leave rates unchanged in June
2000 caused the prices of short-term securities to rise. Longer-term securities,
on the other hand, reacted in the opposite manner, as investors' appetite for
risk increased. As corporate bonds and agency securities reached nearly
record-wide yield spreads relative to Treasuries, many investors moved out of
long-term Treasuries, seeking to profit as yield spreads narrowed.
PERFORMANCE REVIEW
For the six months ended June 30, 2000, MainStay VP Government Portfolio
returned 4.43%. The Portfolio outperformed the 4.28% return of the average
Lipper(1) Variable Products General U.S. Government Portfolio, but
underperformed the Lehman Brothers Government Index(2) return of 4.97%. The
Portfolio benefited from its strategy of shortening duration through April then
starting to increase duration in May.
U.S. TREASURY AND AGENCY SECURITIES
During the first quarter of 2000, the Portfolio had little exposure to
high-coupon, long-dated Treasuries, which tended to perform well as the
government continued to repurchase Treasury securities. Recognizing the
potential in these securities, we increased the Portfolio's exposure to them in
the second quarter of 2000, with a positive impact on performance.
The Portfolio's yield curve positioning did not materially impact performance
during the reporting period. During the second quarter, we positioned the
Portfolio with a bias for steepening, which helped performance in June, but hurt
performance earlier in April and May.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
For most of the first half of 2000, the Portfolio remained largely neutral in
its weightings of collateralized securities. We did, however, decide to
overweight the Portfolio in mortgage-backed bonds issued by the Government
National Mortgage Association, which are backed by the full faith and credit of
the U.S. government,(3) versus those issued by the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation. This positioning
proved positive during the first five months of 2000, but detracted from
performance in June when the market became less risk averse. Even so, the net
impact for the six-month period was positive for the Portfolio. The Portfolio
also purchased FNMA 8.5% coupon bonds, seeking to take advantage of their low
trading price relative to the rest of the market. The securities had a positive
impact on the Portfolio's performance.
At the short end of the yield curve, the Portfolio is now overweighted in
high-quality asset-backed securities and collateralized mortgage-backed
securities, which are providing incremental yields of 75 to 100 basis points
while helping to maintain the overall credit quality of the portfolio. The
Portfolio's short-term securities also include floating-rate notes, which we
purchased seeking to capture attractive yield spreads and rising interest rates
while protecting principal.
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LOOKING AHEAD
The fundamental question facing the market during the second half of 2000 will
be whether an economic slowdown can be sustained. If economic activity
accelerates, we may see another Federal Reserve tightening move. But even if the
economy slows, we don't anticipate Federal Reserve easing over the near term.
Since the Treasury may continue to buy back debt regardless of economic
activity, we expect the yield curve to remain inverted for the foreseeable
future. We are likely to reduce our underweighting in agency paper, and we will
look for opportunities to add exposure to mortgage-backed and asset-backed
bonds.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek a high level of current income, consistent with safety of principal.
Gary Goodenough
Joseph Portera
Portfolio Managers
MacKay Shields LLC
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) The Lehman Brothers Government Index is an unmanaged index comprised of U.S.
Government and Agency issues as well as investment-grade fixed rate debt
securities. Results assume the reinvestment of all income and capital gains
distributions. An investment cannot be made directly into an index.
(3) While some securities in the Portfolio may carry government backing or
guaranteed payment of interest and principal, shares of the Portfolio are
not guaranteed and prices will fluctuate so that when shares are sold, they
may be worth more or less than their original cost.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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MAINSTAY VP HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
During the first half of 2000, the biggest drivers in the high-yield market were
rising interest rates, rising high-yield default rates, and poor liquidity.
During the reporting period, the Federal Reserve increased the targeted federal
funds rate by 25 basis points on February 2 and again March 21, then by 50 basis
points on May 16, 2000. Rising interest rates had a negative impact on
high-yield returns.
During the six-month reporting period, default rates rose above historical
levels, reaching 5% of the market on an annualized basis. The combination of
rising interest rates and above-average defaults sparked investors to pull money
out of the high-yield market, with five of six months showing net redemptions
from mutual funds pursuing high current yields.
PERFORMANCE REVIEW
For the six months ended June 30, 2000, MainStay VP High Yield Corporate Bond
Portfolio returned 1.96%. The Portfolio outperformed the -1.15% return of the
average Lipper(1) Variable Products High Current Yield Portfolio and the -0.48%
return of the Credit Suisse First Boston High Yield Index(2) for the same
period.
The Portfolio's strong relative performance during the reporting period was
largely due to careful credit analysis. Amid difficult market conditions and net
redemptions for the asset class, there were fewer positive credit events in the
high-yield market than in the first six months of 1999.
The Portfolio managed its duration closely within the range of major high-yield
benchmarks to avoid imbedding an implicit interest-rate bet in the Portfolio.
This strategy had a slightly negative impact on the Portfolio, since securities
rated BB,(3) which tend to have longer duration, outperformed securities rated
B,(4) which were overweighted during the reporting period. While higher-quality
securities outperformed, the Portfolio benefited from higher yields among
single-B credits, and we believe they may enhance performance in later periods.
TOP-PERFORMING SECURITIES
Many of the Portfolio's top-performing securities had declined in the second
half of 1999 and rebounded during the first half of 2000. IPC Magazines
benefited as investors became more confident that operating momentum was
improving and that the firm might be acquired by an investment-grade buyer. UIH
Australia, the Portfolio's largest position at the end of the reporting period,
contributed positively to performance as many investors concluded that the bonds
will be called in mid-2001. Cirrus Logic convertibles also contributed
positively to performance, as the stock and bonds both rallied on a stronger
earnings outlook and news that the company was actively repurchasing its bonds.
SIGNIFICANT PURCHASES AND SALES
During the reporting period, the Portfolio increased its cable exposure by
purchasing Charter Communications, Adelphia Communications, and Cablevision SA
as spreads widened. We moved to a market-weighted position in the telecom and
internet software and services sectors, by purchasing Exodus Communications,
Crown Castle, PSINet, and Nextel Communications bonds. Following the sharp
decline in the NASDAQ Composite Index,(5) the Portfolio bought several "busted
converts" -- or convertibles whose underlying stock had fallen to a point where
the convertible feature was virtually valueless. As the NASDAQ rebounded, we
sold the securities with a positive impact on performance. We continue to hold
Internet Capital Group and Digital Island bonds, both of which yield more than
15% and have strong asset coverage.
We cut our position in the theatre sector, selling Loews Cineplex and United
Artist bonds during the first half, with a negative impact on the Portfolio's
performance. While both credits appeared to have adequate asset coverage,
continued capital expansion and a tough operating environment caused us to
reassess our valuation methodology. Although each of these sales had a negative
impact on the Portfolio's performance, by the end of the reporting period all of
these issues were trading below the Portfolio's sale prices. As a result, we
believe the sales were timely and beneficial.
SECTOR WEIGHTINGS
In terms of sector weightings, the Portfolio closed the first half of the year
positioned much the way it started. There were no major changes in our exposure
to countries as the Portfolio's emerging-market exposure remained low and its
European exposure reflected a market weighting.
During the reporting period, the Portfolio did increase its weighting in
telecommunications. This sector has seen a marked decline during the year, as
several telecom credits have missed earnings, run out of liquidity, or issued
new securities, causing spreads to widen. Seeking to take advantage of low
valuations and the possibility of
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positive events in a rapidly consolidating industry, the Portfolio has moved
from an underweighted position to a market weight in the telecommunications
sector. The Portfolio remains focused on companies with strong asset coverage,
unique assets, and solid management.
As of the end of June 2000, the Portfolio remained overweighted in healthcare,
utilities, real estate, and financials. These sectors offer what we believe to
be attractive default-adjusted spreads and may perform well in a slowing
economy. The Portfolio remains underweighted in economically sensitive
industries, including automotive, steel, housing, paper, and energy. While we
maintain a positive view of the energy sector, during the reporting period, we
did not believe valuations justified giving the sector a market weighting.
LOOKING AHEAD
During the first half of 2000, high-yield spreads widened from 573 basis points
over Treasuries to 728 basis points. At current yields, we believe the market is
attractive, since investors are receiving a 120% premium over ten-year
Treasuries. In particular, we believe the lower-quality portion of the market
offers the best value, as spreads on securities rated B are substantially wider
than spreads on BB-rated bonds.
While default rates impact returns and have received considerable negative
press, we believe that the market has already priced in higher default rates
than most analysts are forecasting. Given yields of 13% and higher, we believe
the asset class should perform well even with a high default rate -- and
particularly well if the Federal Reserve is nearing the end of its moves to
raise interest rates.
If the U.S. economy experiences anything other than a soft landing, our outlook
would change. We believe that higher default rates would cause high-yield
securities to underperform. In our view, a significant increase in inflation
would also threaten the high-yield market, causing Treasury yields to widen
substantially. Although we view these scenarios as unlikely, if they were to
occur, we would probably seek to upgrade the quality of the portfolio, since
higher-quality issues would be likely to outperform.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek maximum 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 ratings agencies, with capital appreciation as a
secondary objective.
Donald Morgan
Portfolio Manager
MacKay Shields LLC
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) The Credit Suisse First Boston High Yield Index is a market-weighted index
that includes publicly traded bonds rated below BBB by Standard & Poor's and
Baa by Moody's. The index assumes reinvestment of all distributions and
interest payments and does not take into account brokerage fees or taxes.
Securities in the Portfolio will not precisely match those in the index, and
so, performance of the Portfolio will differ. An investment cannot be made
directly into an index.
(3) Debt rated BB by Standard & Poor's is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions, which could
lead to the obligor's inadequate capacity to meet its financial commitment
on the obligation.
(4) Debt rated B by Standard & Poor's is more vulnerable to nonpayment than
obligations rated BB, but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or
economic conditions will likely impair the obligor's capacity or willingness
to meet its financial commitment on the obligation. Ratings may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.
(5) The NASDAQ Composite Index is an unmanaged, market-value weighted index that
measures all NASDAQ domestic and non-U.S. based common stocks listed on the
NASDAQ Stock Market and includes over 5,000 companies. Each company's
security affects the Index in proportion to its market value. The market
value, the last sale price multiplied by total shares outstanding, is
calculated throughout the trading day and is related to the total value of
the Index.
High-yield securities run greater risks of price fluctuations, loss of principal
and interest, default or bankruptcy by the issuer, and other risks, which is why
these securities are considered speculative.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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MAINSTAY VP INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
During the six months ended June 30, 2000, international equities were highly
volatile and the U.S. dollar remained strong against most other currencies.
Canada (+25.75%) was the best-performing international market in local currency
terms, followed by Sweden (+12.49%), France (+10.87%), Australia (+9.32%), and
Denmark (+8.81%). Laggards included Singapore (-19.74%), Ireland (-14.04%), Hong
Kong (-12.81%), Belgium (-12.20%), and New Zealand (-7.67%), all in local terms.
Among the larger markets, Japan, Germany, and the U.K. posted negative returns
in both U.S. dollar and local currency terms. Three smaller markets -- Norway,
Portugal, and Switzerland -- had positive returns in their local currencies, but
negative results in U.S. dollars.
During the first half of the year, European companies and economies continued to
restructure, Japan sought to benefit from a fiscal stimulus package,
telecommunications and information technology companies vied for market
dominance, and oil and natural resources companies pursued ways to profit from
growing world demand.
PERFORMANCE REVIEW
For the six months ended June 30, 2000, MainStay VP International Equity
Portfolio returned -8.87%, underperforming both the -3.59% average Lipper(1)
Variable Products International Portfolio return and the -4.06% Morgan Stanley
Capital International EAFE Index.(2)
The Portfolio's absence from the best-performing international market and heavy
weightings in Japan, the U.K., and Ireland may account for the Portfolio's
underperformance. Exposure to foreign currencies, especially the euro, also had
a negative impact on the Portfolio's results.
EUROPEAN HOLDINGS
European markets provided mixed results, with Denmark, Finland, France, Italy,
the Netherlands, and Sweden providing positive returns in U.S. dollar terms.
Other markets provided negative results for U.S. investors, with Germany and
Ireland posting double-digit losses in the second quarter in both U.S. dollar
and local currency terms. Although Norway provided positive returns in local
currency terms in both the first and second quarters, when translated into U.S.
dollars, results for the six-month period were negative.
During the reporting period, signs of improving growth emerged in the euro zone.
Higher oil prices and weakness in the euro have raised inflation concerns,
although actual inflation has remained moderate.
In Europe, the Portfolio continues to favor Finland, Ireland, and Portugal,
where economic growth prospects remain strong. Finland continues to benefit from
strengths in natural resources and telecommunications and the Portfolio's
Finnish investments had a positive impact on performance during the semi-annual
period. Swedish and French stocks also provided positive returns for U.S.
investors, as French companies continued to benefit from strategic acquisitions
and restructurings, seeking to maximize potential opportunities now that
European Monetary Union is underway.
Strong European stocks included Finnish telecommunications giant Nokia Oyj,
which was the Portfolio's largest holding at the end of June and contributed
positively to performance, returning +18.77% in local terms for the semi-annual
period. Schering AG, a German pharmaceutical manufacturer, benefited from its
broad range of products and the market's preference for more defensive names as
technology stocks corrected. The Portfolio's investment in Schering AG returned
+44.88% in local terms during the reporting period.
Cement and building-materials manufacturer CRH PLC should continue to benefit
from the rapidly growing Irish economy and from infrastructure spending in the
12 countries where it operates. While the stock returned a disappointing -11.68%
in local terms over the semi-annual period, it outperformed the Irish stock
market as a whole.
Throughout the U.K., rising interest rates reduced profit expectations, causing
equity returns to drop significantly. The Portfolio's substantial allocation to
U.K. equities detracted from performance during the reporting period, but we
believe that when monetary tightening slows, performance should improve. Among
the Portfolio's U.K. holdings, Cable & Wireless PLC is a global provider of
telecommunications, with a broad range of products and services. The company's
outstanding earnings growth projections helped it substantially outperform the
-10.77% return of the EAFE telecom sector to provide the Portfolio with a +6.67%
return in local currency terms during the first half of the year. The
Portfolio's holdings in BP Amoco PLC also outperformed in a declining market,
returning +1.84% in local currency terms during the reporting period. The
company, which
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has operations in more than 70 nations, benefited from higher oil prices, strong
earnings-growth prospects, and rising demand.
A less successful U.K. holding was Vodafone AirTouch PLC, which provides mobile
telecommunications services and returned -12.96% in local terms for the
semi-annual period. Although the company is the world's largest wireless
operator, the company's earnings prospects were hurt by rising interest rates
and questions about financing third-generation wireless (3G) spectrum licenses.
ASIAN MARKETS
Despite the initial promise of Japan's economic recovery and fiscal stimulus
package, our decision to overweight Japanese equities early in the year had a
negative impact on performance for the semi-annual period, and in the second
quarter, we returned the Portfolio to a neutral Japanese weighting versus the
EAFE Index.
Despite disappointing short-term returns, Japan holds much promise if its
companies can work through the restructuring process. The Portfolio continues to
favor telecommunications companies and major corporations, such as Sony Corp.,
NEC Corp., and TDK, whose technology-related products are exported worldwide.
Unfortunately, the Portfolio's overweighted position in Sony Corp. detracted
from performance during the semi-annual period, when the stock returned -34.65%
in local currency terms, despite ongoing restructuring efforts and new business
policies designed to create value for shareholders.
Concerns over further monetary tightening in major industrialized countries
caused Southeast Asian markets to rank among the world's worst-performing
markets for the six months ended June 30, 2000. Fortunately, the Portfolio was
underweighted in Hong Kong and neutral in Singapore, which together accounted
for less than two percent of the Portfolio's assets at the end of the reporting
period.
In Australia, the Portfolio focused on the natural resources and telecom
sectors, with a positive impact on Portfolio performance. Australian holdings
included Broken Hill Proprietary Ltd., a diversified resource company that
benefits as global growth moves commodity prices higher. Cable & Wireless Optus,
another Portfolio holding, is the number two telecom provider, and performed
well over the six-month reporting period as investors speculated on
consolidation prospects within the industry.
CURRENCY OUTLOOK
Exposure to foreign currencies detracted from the Portfolio's performance
throughout most of the reporting period. Although the U.S. dollar pared back
some of its gains against the euro at the end of June, the euro's improvement
was too little and too late to significantly affect Portfolio results.
The fact that income securities outperformed equities in the second quarter may
help erode some of the fascination international investors have had with the
U.S. dollar. The Portfolio remains positioned for a rally in foreign currencies
versus the U.S. dollar, and we believe the euro is particularly due for
improvement.
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LOOKING AHEAD
We expect the Japanese economic recovery to continue, moving stock prices
higher, despite volatility along the way. We are encouraged by continued GDP
growth, low unemployment, and improving labor market conditions in Europe.
Whatever happens with the markets, interest rates, and currencies, the Portfolio
will continue to seek to provide long-term growth of capital commensurate with
an acceptable level of risk by investing in a portfolio consisting primarily of
non-U.S. equity securities, with current income as a secondary objective.
Joseph Portera
Maureen McFarland
Portfolio Managers
MacKay Shields LLC
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) Morgan Stanley Capital International EAFE Index 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.
Investments in foreign securities may be subject to greater risks than domestic
investments. These risks include currency fluctuations, changes in U.S. or
foreign tax or currency laws, and changes in monetary policies and economic and
political conditions in foreign countries.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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MAINSTAY VP TOTAL RETURN PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The stock market's modest declines over the first half of 2000 masked the
volatility investors experienced along the way. Most technology and
telecommunications stocks advanced rapidly in the first quarter, peaking in mid-
March, only to drop precipitously in April and May and recover strongly in June.
Early in the year, many investors feared that an aggressive Federal Reserve
would derail the U.S. economy's extended growth, but by the end of the reporting
period many observers believed that Fed tightening was starting to wind down.
The six interest-rate hikes we've seen since June 1999 have made a definite
impression on the economy -- with slower sales, weaker employment growth, and
moderating consumer confidence.
While bond prices generally decline when interest rates rise, the government's
decision to use a portion of its surplus to repurchase Treasury securities
helped to stabilize long-term bond prices during the first half of 2000.
The increases in short-term rates took their toll on the short end of the yield
curve, but the Federal Reserve's decision to leave rates unchanged in June 2000
caused the prices of short-term debt securities to rise. Longer-term securities,
on the other hand, reacted in the opposite manner, as investors' appetite for
risk increased. As corporate bonds and agency securities reached nearly
record-wide yield spreads relative to Treasuries, many investors moved out of
long-term Treasuries, seeking to profit as yield spreads narrowed.
PERFORMANCE REVIEW
For the six month period ended June 30, 2000, MainStay VP Total Return Portfolio
returned 1.97%. The Portfolio outperformed both the 1.26% return of the average
Lipper(1) Variable Products Balanced Portfolio and the -0.42% S&P 500(R)(2)
Index. Better-than-market equity results and outstanding performance in the bond
portion of the Portfolio helped account for the Portfolio's outperforming its
peers.
EQUITY RESULTS
In the equity portion of the Portfolio, several technology stocks were among the
best- and worst-performing holdings. Corning benefited from fiber optic demand,
climbing more than 100% through the end of June. Other strong performers
included EMC Corp., Intel, and Oracle.
Weaker technology holdings included Motorola, Microsoft, and Compuware, all of
which declined during the six-month period. A timely Compuware sale was positive
for the Portfolio, as it produced a gain and the company has since missed
earnings projections. The Portfolio remains overweighted in technology, given
the sector's robust earnings outlook.
Health care stocks performed well during the six-month reporting period, with
pharmaceuticals staging a strong comeback as the completion of the human genome
project drew attention to the biotech sector. Schering-Plough, Merck, and Amgen
began the year largely overshadowed by technology-stock advances, but were among
the best-performing holdings during the second quarter.
We increased exposure to this group with new purchases of Allergan, Baxter,
Bristol Meyers, and IVAX, all of which contributed positively to the Portfolio's
performance. Underweighting traditional pharmaceutical stocks detracted from
performance as the drug sector advanced from early March through the end of
June.
Among financial stocks, AIG, Providian, and Citigroup recorded market-beating
gains in the second quarter and were positive contributors to the Portfolio's
performance. Year-to-date, however, the group has had a neutral impact on
performance.
The Portfolio's overweighted position in consumer cyclical stocks hurt
performance as the sector's fundamentals weakened. Circuit City and Home Depot
were among the worst performers, but Kohl's advanced on a successful entry into
the New York market. The Portfolio took some profits in each of these names and
eliminated its holdings in Cendant, IMS Health, and Carnival Corp.
Among media stocks, Viacom gained 20% in the second quarter, following its
merger with CBS, and Time Warner outpaced the market on a pending merger with
AOL. As "dot.com fever" waned and concerns over sustainable advertising revenues
rose, Clear Channel and AMFM declined. We took some profits in this sector and
eliminated the Portfolio's position in Comcast at a loss.
New equity purchases for the Portfolio included Cypress Semiconductor, Nokia,
Tellabs, Enron, Applied Materials, Analog Devices, and Household International,
among others. Significant equity sales included Global Crossing, Honeywell,
Dollar General, Interpublic Group, Johnson & Johnson, America Online, and
Cardinal Health.
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BOND RESULTS
The bond portion of the Portfolio benefited by shortening duration through April
then starting to increase duration in May. During the first quarter of 2000, the
Portfolio had little exposure to high-coupon, long-dated Treasuries, which
tended to perform well as the government continued to repurchase bonds.
Recognizing the potential in these securities, we increased our exposure to them
in the second quarter of 2000, with a positive impact on performance.
The Portfolio's yield curve positioning did not materially impact performance
during the reporting period. During the second quarter, we positioned the
Portfolio with a bias for steepening, which hurt performance in April and May,
but helped in June.
With Treasury securities outperforming in the early months of 2000, the
Portfolio held practically no agency securities. This was consistent with
general market sentiment until June, when the Federal Reserve's inaction
triggered a sudden surge of interest in agency securities, which pushed prices
higher and caused yield spreads to contract in the agency market. Unfortunately,
the Portfolio was not positioned to take advantage of this market shift.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
For most of the first half of 2000, the Portfolio remained largely neutral in
its weightings of collateralized securities. We did, however, decide to
overweight the Portfolio in securities issued by the Government National
Mortgage Association, which are backed by the full faith and credit of the U.S.
government,(3) versus those issued by the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation. This positioning proved positive
during the first five months of 2000, but detracted from performance in June
when the market became less risk averse. Even so, the net impact for the
six-month period was positive. The Portfolio also purchased FNMA 8.5% coupon
bonds, seeking to take advantage of their low trading price relative to the rest
of the market. The securities had a positive impact on the Portfolio's
performance.
At the short end of the yield curve, the Portfolio is now overweighted in
high-quality asset-backed securities and collateralized mortgage-backed
securities, which are providing incremental yields of 75 to 100 basis points
while helping to maintain the overall credit quality of the portfolio. The
Portfolio's short-term securities also include floating-rate notes, which we
purchased seeking to capture attractive yield spreads and rising interest rates
while protecting principal.
LOOKING AHEAD
The fundamental question facing both the stock and bond markets will be whether
an economic slowdown can be sustained. If economic activity accelerates, we may
see another Federal Reserve tightening move, which would most likely be negative
for both stocks and long-term bonds. But even if the economy continues to slow,
we don't anticipate Federal Reserve easing over the near term.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek to realize current income consistent with reasonable opportunity for future
growth of capital and income.
Rudolph C. Carryl
Edmund C. Spelman
Gary Goodenough
Christopher Harms
Portfolio Managers
MacKay Shields LLC
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) "Standard and Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)"
are registered trademarks of The McGraw-Hill Companies, Inc. The product is
not sponsored, endorsed, sold or promoted by Standard & Poor's Corporation.
The S&P 500 is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(3) While some securities in the Fund's portfolio may carry government backing
or guaranteed payment of interest and principal, shares of the Fund are not
guaranteed and prices will fluctuate so that when shares are sold, they may
be worth more or less than their original cost.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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MAINSTAY VP VALUE PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The equity markets began 2000 in much the same way they ended 1999, with a
narrow group of growth stocks and technology issues rising sharply. By the
middle of March, however, there was a clear shift in leadership, with the
technology-laden NASDAQ Composite Index(1) undergoing a dramatic correction, as
Microsoft faced a widely publicized antitrust decision.
At its worst point on May 24, the NASDAQ Index was down 41% from its March 10
high. During this period, the IPO calendar for new technology, media, and
telecommunications issues all but dried up and real cash earnings became an
increasingly important concern for investors who had formerly been more
interested in emerging technologies or Internet-related plays. In April and May,
value stocks outperformed most other investment styles. June brought a rotation
back into many technology issues, with value-oriented stocks lagging during the
month.
PERFORMANCE REVIEW
For the six months ended June 30, 2000, the MainStay VP Value Portfolio returned
-5.38%. The Portfolio underperformed the average Lipper(2) Variable Products
Growth and Income Portfolio return of -1.13%, the S&P 500(R)(3) Index of -0.42%
and the Russell 1000 Value Index(4) of -4.23%.
Setbacks in the Portfolio's basic materials, consumer cyclicals, and capital
goods holdings were among the reasons why the Portfolio underperformed during
the first six months of 2000.
SECTOR HIGHLIGHTS
The Portfolio's best performing sectors for the first half were energy and
utilities. The Portfolio's energy holdings far outpaced those of the Russell
1000 Value Index. Four major contributors included Noble Affiliates (+74%),
Coastal Corp. (+72%), Union Pacific Resources (+74%), and Valero Energy (+61%).
All four were major beneficiaries of rising oil and natural gas prices, while
Union Pacific Resources also agreed to an acquisition by a competitor, Anadarko
Petroleum.
The Portfolio's overweighted position in the utility sector also proved timely
and contributed positively to results. The Portfolio's position in Dynegy, a
Houston-based energy concern, was up 96%. Another positive contributor to
Portfolio performance was El Paso Energy (+32%), a natural gas company that
continued to rise after its acquisition of Coastal Corp. was announced. We took
advantage of the rise in El Paso Energy's share price and sold the entire
position. But we elected to maintain the Portfolio's position in Coastal Corp.,
which will convert to El Paso Energy shares when the deal closes. The merged
company should benefit from higher natural gas prices and merger-related cost
savings.
The Portfolio's holdings in basic materials, consumer cyclicals, and capital
goods generally had negative results. The performance of the Portfolio's market
weighting in the consumer cyclical group was further hurt by unfortunate stock
selection. One of the worst performing securities was Office Depot (-43%), which
suffered after announcing lower-than-expected results. We believe that the
reaction has been exaggerated and that the share prices at the end of the
reporting period made the stock an attractive opportunity.
We reorganized a number of the Portfolio's consumer cyclical holdings during the
first half of the year to reduce the impact from higher interest rates or
slowing retail sales. We sold our position in Dana Corp. at a loss to remove
exposure to the slowing automotive, replacement parts, and heavy-duty truck
industries. The Portfolio also sold its position in Federated Department Stores,
anticipating slower retail sales and difficulties integrating a recent
acquisition. Both sales proved prudent, as the stocks have since moved lower. We
also sold the Portfolio's position in Shaw Industries, a carpet manufacturer,
since we expect the housing market to soften. We used the proceeds from these
sales to initiate positions in companies that we believe have better prospects
and may be attractively priced. Eastman Kodak is an example. The global film
manufacturer is a leading participant in the burgeoning digital camera and
processing markets. From the Portfolio's purchase through the end of June, the
position rose 4%.
The Portfolio also overweighted basic materials during the reporting period, but
its holdings were hurt early in the year when the market fixated on technology
stocks and the negative implications of rising interest rates. The Fund's paper
stocks, which had solid returns in the fourth quarter of 1999, gave a lot back
in the first half due to deteriorating industry fundamentals. We sold the
Portfolio's position in Smurfit-Stone Container from February through June and
its Georgia-Pacific holdings from April through June. While both stocks were
sold at a loss for the year, their later declines showed that the sales were
good for the Portfolio. Deteriorating steel industry fundamentals hurt our
position in USX-U.S. Steel Group and we sold in the midst of an extended
decline.
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Proceeds from these sales were used to initiate positions in a variety of
companies including Pitney Bowes, a major manufacturer of mailing equipment, and
Fort James Corp., a manufacturer of paper-based consumer products. We believe
the inherent value of these companies is considerably higher than the prices we
paid.
Capital goods stocks also hurt the Portfolio's returns during the first half of
2000 and being overweighted in the sector did not help matters. The biggest
negative impact came from Honeywell (-41%), which announced delays in its merger
with AlliedSignal. Since we expect a quick resolution to the difficulties, we
have maintained our position. On a positive note, in February and March, the
Portfolio made timely purchases of General Dynamics, a large defense contractor,
and shares have since appreciated approximately 34%.
OTHER MAJOR PURCHASES AND SALES
During the first half of 2000, we made several other changes to the Portfolio
holdings. In telecommunications, we sold our position in Nippon Telephone and
Telegraph when it hit our price target. We used the proceeds to initiate a
position in CenturyTel, a Louisiana-based local, data, and wireless phone
company, at prices we believe were attractive.
In the consumer sector, we sold the Portfolio's entire position in Newell
Rubbermaid on a negative announcement regarding fourth-quarter 1999 results. The
proceeds were used to purchase a new position in Ralston Purina Group at what we
believe were attractive prices. In addition to pet foods, Ralston Purina is well
known for its Energizer batteries. The position has since appreciated in value
and helped the Portfolio's performance.
We sold our position in United Healthcare after the HMO hit our price target.
The proceeds were used to initiate positions in Tenet Healthcare, which is a
hospital company, and Abbott Labs, a medical products and pharmaceutical
manufacturer. From purchase through the end of the first half, Tenet has
appreciated 13% and Abbott Labs has increased 35%.
In technology, we sold the Portfolio's remaining position in Adaptec and
significantly reduced its position in Seagate Technology after both stocks
reached our price targets. Following the Adaptec sale, the share price dropped
dramatically, underscoring the timeliness of our decision. We initiated a
position in Compuware, a software and services concern, at what we took to be an
attractive price, only to have the company report less-than-expected results.
The shares declined approximately 40% from our purchase price, and we
subsequently sold the Portfolio's entire position. Another disappointing
purchase was Unisys, a global information services and hardware provider. Unisys
also reported less-than-expected results due to soft post-Y2K computer spending,
and the shares dropped roughly 50%. We believe that the market has overreacted
to this announcement and that as of June 30, 2000, the shares represented
exceptional value for a company with a solid core business and good end-market
growth prospects. We continue to hold Unisys in the Portfolio. We used a similar
negative announcement by Electronic Data Systems to initiate a position in this
global information technology company at what we believe was an attractive
price.
LOOKING AHEAD
We remain committed to value investing and confident in our investment process.
With market enthusiasm for many technology and emerging-growth companies
somewhat shaken in recent months, we believe that our disciplined value approach
may result in superior long-term returns with lower volatility. Continued global
economic strength, powered by reemerging Asian and Latin American economies and
stable growth in Europe and the U.S., should have positive effects on the
revenue and earnings prospects of many of the Portfolio's larger holdings. We
anticipate double-digit gains for many energy stocks in 2000. At the same time,
low valuations in many consumer staples and healthcare companies have created
opportunities not seen in more than ten years.
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For these reasons, we anticipate increasing the Portfolio's positions in these
groups. We will also continue to seek opportunities in the technology sector
when the fundamentals and valuations meet our strict investment criteria. Given
our belief that interest rates may yet rise further, the Portfolio may remain
underweighted in consumer-related and financial sectors relative to its
benchmark.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek to realize maximum long-term total return from a combination of capital
growth and income.
Richard A. Rosen
Portfolio Manager
MacKay Shields LLC
(1) The NASDAQ Composite Index is an unmanaged, market-value weighted index that
measures all NASDAQ domestic and non-U.S. based common stocks listed on the
NASDAQ Stock Market and includes over 5,000 companies. Each company's
security affects the Index in proportion to its market value. The market
value, the last sale price multiplied by total shares outstanding, is
calculated throughout the trading day and is related to the total value of
the Index. And investment cannot be made directly into an index.
(2) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(3) "Standard and Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)"
are registered trademarks of The McGraw-Hill Companies, Inc. The product is
not sponsored, endorsed, sold or promoted by Standard & Poor's Corporation.
The S&P 500 is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(4) The Russell 1000(R) Index is an unmanaged index that measures the
performance of the 1,000 largest companies in the Russell 3000(R)Index,
which, in turn, is an unmanaged index that includes the 3,000 largest U.S.
companies based on total market capitalization. The Russell 1000 Value Index
measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth rates. Total returns
reflect reinvestment of all dividends and capital gains. An investment
cannot be made directly into an index.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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MAINSTAY VP BOND PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
As the year began, the Federal Reserve Bank was in a restrictive mode. During
the first quarter, the Federal Funds target was raised 50 basis points. The
expectation of continued Fed tightening moves put pressure on the short end of
the yield curve. The long end of the curve improved significantly as investors
anticipated a reduction in outstanding long-term U.S. Treasury debt. These
counteracting forces caused the yield curve to invert during the first quarter.
In May the Fed raised short-term rates an additional 50 basis points, continuing
its restrictive policy. As the first half of the year drew to a close, market
participants began anticipating the possibility of a soft landing for the U.S.
economy. The expectation of slower economic growth altered the market's
near-term perception of Federal Reserve policy from restrictive to neutral. This
change in market sentiment caused the yield curve to shift during the second
quarter. The inversion of the yield curve became less pronounced.
PERFORMANCE/MARKET REVIEW
For the six months ended June 30, 2000, the MainStay VP Bond Portfolio had a
return of 3.09%, compared to the average portfolio in its Lipper(1) peer group
(Corporate Debt A Rated), which returned 3.23%. Market risk was limited by
maintaining a relatively neutral duration posture throughout the first half of
the year. Credit risk was limited by maintaining an average quality of the
investments in the Portfolio of at least AA(2) throughout the first half of the
year.
Expectations of a restrictive Federal Reserve Bank and reduced long-term U.S.
Treasury debt assisted in putting pressure on the shape of the yield curve in
the first half of 2000. During the first six months of the year, the Fed
tightened three times, raising the Federal Funds target to 6.50%. The
commencement of the U.S. Treasury's buy-back program along with reduced supply
in long U.S. Treasury debt caused the thirty-year U.S. Treasury bond to rally 58
basis points in the first half of 2000. At the beginning of the year the
Treasury curve was positively sloped with the thirty-year bond yielding 24 basis
points more than the two-year note. By mid-year, the two-year note yielded 46
basis points more than the thirty-year bond.
PORTFOLIO STRATEGY
During the first half of the year, the Portfolio experienced negative cash flow.
Most of the Portfolio's cash needs were met by liquidations in U.S. Treasury and
Agency securities. The Government sector afforded the Portfolio the best
execution in a volatile market environment. The net effect of our activity
reduced the Portfolio's allocation to the Government sector slightly. We also
increased the Portfolio's cash allocation marginally. This action provides
additional liquidity, as negative cash flow within the Portfolio persists.
Within the Corporate sector, we increased our concentration in higher-quality
assets. The spread relationship of certain higher-quality assets have widened a
comparable amount to weaker credits. If the spreads of these securities compress
in a similar fashion, the higher-quality assets afford the Portfolio greater
liquidity and less credit risk, along with similar total return characteristics.
The Portfolio's overall structure continues to be consistent with our long term
conservative approach to management. We will continue to monitor trends in the
market and make the appropriate Portfolio adjustments.
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LOOKING AHEAD
If economic statistics continue their recent trend suggesting a slowdown, we
could see the Federal Reserve Bank shift from a restrictive to a neutral mode.
We view current corporate spread levels as a long-term investment opportunity.
However, with pressure on equity prices the specter of shareholder enhancement
activity looms over the corporate bond market. With this in mind, all corporate
security investment decisions will consider the perils of event risk.
Albert R. Corapi, Jr.
Donald F. Serek
Portfolio Managers
Madison Square Advisors, Inc.
(1) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
(2) Debt rated AA by Standard & Poor's differs from the highest rated issues
only in small degree.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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MAINSTAY VP GROWTH EQUITY PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The U.S. equity market struggled during the first six months of 2000, with the
S&P 500(R)(1) turning in a virtually flat return of -0.42%.
Among the most significant factors influencing the U.S. equity market during
this semi-annual period were the Federal Reserve Board's moves to slow the
economy through incremental increases in the targeted federal funds rate. The
Fed's aggressive tightening posture dampened equity returns, despite robust
growth in gross domestic product and corporate profits. As the first half of
2000 came to an end, it became apparent that the rising cost of capital brought
about by six Fed tightenings in twelve months had begun to impact certain
segments of the economy. On the positive side, Federal Reserve action has
lowered prices among many speculative stocks that had reached excessive
valuations.
PERFORMANCE REVIEW
For the six months ended June 30, 2000, the MainStay VP Growth Equity Portfolio
returned 2.28%. This outperformed the S&P 500(R) return of -0.42% but
underperformed the average Lipper(2) Variable Products Growth Portfolio return
of 3.29%.
The Portfolio's performance benefited from a neutral weighting in most sectors
throughout much of the first half of 2000. While the uncertainty surrounding
rising interest rates made it difficult to emphasize any particular sector, this
environment enabled us to participate in two of the best performing sectors for
the semi-annual period, health care and utilities. More importantly, our stock
selection within the technology and financial service sectors enhanced the
Portfolio's overall performance.
STRATEGIC STYLE ALLOCATION AND STOCK SELECTION
The Portfolio entered 2000 with a bias toward stocks with strong revenue growth.
When the valuations of some of the Portfolio's growth-oriented holdings exceeded
our expectations early in the first quarter, however, we lowered exposure to
these stocks. Given the Federal Reserve's resolve to slow the economy, we
slightly shifted our focus toward companies with historically consistent
earnings growth in periods of decelerating corporate earnings and that were
still trading well below the valuation of the overall market. For example, we
maintained a market weighting in the technology sector through the first half of
the year, believing that technology should continue to produce superior relative
earnings gains. However, we shifted our emphasis within the sector toward less
cyclical companies. We also maintained some exposure to value stocks, but again,
lowered the Portfolio's exposure to cyclical stocks during the semi-annual
period.
During the first six months of 2000, one of the Portfolio's best-performing
holdings was Advanced Micro Devices (+166%), a semiconductor manufacturer that
benefited from wide acceptance of its new products. Another strong performer for
the Portfolio was ADC Telecommunications (+131%), a communications-equipment
provider that has benefited from demand for broadband connectivity. Coastal
(+72%), a natural-gas utility in the process of merging with El Paso Energy
Corp., capitalized on the upward move in natural gas prices. Finally, two of the
Portfolio's pharmaceutical holdings, Eli Lilly (+51%) and Pfizer, Inc. (+48%),
performed well primarily due to strong new product pipelines.
The most important purchase we made for the Portfolio during the first half of
the year was Corning (+105%), a fiber-optics manufacturer that has benefited
from explosive growth in the fiber-optics industry. Another strong performer and
new purchase was Convergys Corp. (+51%). Convergys, a billing and customer
service provider for the telecommunications industry, has benefited from the
worldwide growth in wireless communications and its own high-quality customer
support.
Two of the worst performing stocks in the Portfolio were Microsoft (-31%) and
QUALCOMM (-65%), both in the technology sector. Microsoft, the world's largest
software company, suffered from the much-publicized court ruling to split the
company into two separate entities. We sold our Microsoft position in May for a
tax loss, but repurchased it in June when we believed its valuation made the
stock attractive again. QUALCOMM, a digital communications products company and
a top-performing stock in 1999, suffered from difficult year-over-year earnings
comparisons. Another poor performer for the Portfolio was Cendant (-47%), a
franchisor and direct marketing company. Interestingly, Cendant actually
exceeded earnings expectations in the first half of 2000, making it difficult to
assess why the stock has declined. We continue to hold both QUALCOMM and Cendant
in the Portfolio, as we believe both are attractively valued and have strong
upside potential.
Early in the year, we sold the Portfolio's holdings in Yahoo! and America
Online, two of the largest Internet companies. Both stocks subsequently
underperformed. While these two companies continue to have profitable
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businesses, we believed their valuations were excessive and symptomatic of
speculative trading among Internet stocks.
LOOKING AHEAD
We maintain a positive outlook for the second half of 2000, as we believe that
the Federal Reserve's interest-rate tightening cycle may be nearly complete.
Even though the Fed's recent actions should result in slower economic growth, a
more benign interest-rate environment would, in our view, be favorable for U.S.
equities. We also believe that companies that are able to demonstrate strong
earnings growth independent of general economic conditions should outperform.
The fact that the U.S. equity market has historically performed well during
presidential election years is another reason for optimism.
We will remain attentive to valuations as we search for attractive growth stocks
trading at discounts to their true potential. No matter where the markets may
move, the Portfolio will continue to seek long-term growth of capital, with
income as a secondary consideration.
James Agostisi
Patricia S. Rossi
Portfolio Managers
Madison Square Advisors LLC
(1) "Standard and Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)"
are registered trademarks of The McGraw-Hill Companies, Inc. The product is
not sponsored, endorsed, sold or promoted by Standard & Poor's Corporation.
The S&P 500 is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(2) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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MAINSTAY VP INDEXED EQUITY PORTFOLIO
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
The S&P 500 Composite Stock Price Index(R)(1) declined 0.42% in the first six
months of 2000, posting its first semi-annual loss since 1994. The equity market
remained extremely narrow throughout, but, interestingly, Microsoft alone
accounted for the entirety of the Index decline during the period. S&P 500(R)
growth stocks continued to outperform value stocks over the six months.
For the most part, the year began well as Y2K problems failed to materialize. As
the technology-laden NASDAQ Composite Index(2) rose in January and February, the
S&P 500(R) Index declined, only to recover and peak in March -- rising 9.78% for
the month, the highest monthly gain in nine years. The sell-off that ensued in
late March and carried into April may have been triggered by the Justice
Department's ruling in the Microsoft antitrust case, but probably reflected
deeper economic concerns.
Leading indicators pointed to economic growth rates that many investors feared
would be difficult to sustain and might pose a threat of higher inflation.
Interest-rate hikes by the Federal Reserve of 25 basis points in both February
and March, followed by a 50 basis-point increase in May, seemed to validate
these concerns. The S&P 500(R) Index fell almost 10% from March 24 through May
23, before partially recovering in June on the heels of more promising economic
news. Employment numbers and other indicators suggested that economic growth was
slowing. Concerns about corporate earnings and profit growth in a slowing
economic environment persisted.
PERFORMANCE REVIEW
For the six months ended June 30, 2000, the MainStay VP Indexed Equity Portfolio
returned -0.74%. This underperformed the -0.60% return of the average Lipper(3)
Variable Products S&P 500(R) Index Objective Portfolio and the -0.42% S&P 500(R)
Index over the same period. Investors should expect the Portfolio to lag the
Index, since the Portfolio incurs expenses that a hypothetical index investment
does not.
KEY SECTORS AND SECURITIES
Only four sectors -- health care, energy, utilities, and
technology -- outperformed the S&P 500(R) Index during the reporting period.
Health care, energy, and utilities are traditionally defensive sectors, which
did well while investors closely monitored any signals from the Federal Reserve.
Within the Portfolio holdings in the technology sector, several companies
figured prominently in lists of the best performers, while others appeared on
lists of the worst performers. For example, Scientific-Atlanta (+167.9%), a
maker of cable set-top boxes, benefited from strong demand for its product, as
did Advanced Micro Devices (+167.0%), which produces semiconductors for consumer
PCs. "New Economy" bellwethers Intel (+62.4%), Oracle (+50.0%), and Cisco
Systems (+18.7%) also performed well -- and because of their higher weightings
in the Index, these issues had an even greater impact on the performance of the
S&P 500(R) over the reporting period than stocks with considerably higher
returns.
The five worst performers during the reporting period, in terms of total return,
were all technology issues -- Novell (-76.8%), Compuware Corp. (-72.2%), Citrix
Systems (-69.2%), QUALCOMM (-65.9%), and Parametric Technology (-59.4%).
Although Microsoft Corp. (-31.5%) substantially outperformed QUALCOMM in terms
of total return, Microsoft's 3.4% weighting in the Index as of June 30, 2000,
made it the strongest negative contributor to Index performance during the
reporting period. QUALCOMM was second, with Proctor & Gamble (-47.8%), AT&T
(-37.7%), and America Online (-30.1%) rounding out the five worst-performing
stocks with both weightings and returns taken into account.
Outside of technology, Nabisco Group (+144.1%) was a top performer, with the
run-up in its price resulting from a bidding war that was eventually won by
Philip Morris. Pfizer (+48.0%), a major pharmaceutical company, was also among
the best performers in the Index.
In anticipation of a Fed-induced slowdown, economically-sensitive sectors, such
as basic materials and consumer cyclicals, were among the worst-performing
segments of the market, both in terms of total return and in terms of impact
with sector weightings taken into account. Communication services also performed
poorly on both measures during the semi-annual period.
Corporate activity was significant. Thus, Index turnover was higher than in the
previous period, with almost 30 changes to the Index. Collectively, however,
these additions and deletions accounted for less than 5% of the total Index
capitalization.
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LOOKING AHEAD
We believe that at the end of June, the environment for U.S. equity investors
appeared less hostile than it had been in previous months. Daily volatility had
subsided from the very high levels witnessed earlier this spring. The Federal
Reserve Board appears capable of successfully engineering a "soft landing" for
the U.S. economy, and stock valuations are generally below their previous highs.
In our view, someone comfortable with investing in the U.S. stock market last
December should be even more comfortable investing today.
Of course, as index investors, we do not evaluate or respond to changing
economic and market conditions or concern ourselves with market psychology.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek to provide investment results that correspond to the total return
performance (and reflect reinvestment of dividends) of publicly traded common
stocks represented by the S&P 500(R) Index.
Jefferson C. Boyce
Stephen B. Killian
Portfolio Managers
Monitor Capital Advisors LLC
(1) "Standard and Poor's 500 Composite Stock Price Index(R)" and "S&P 500(R)"
are registered trademarks of The McGraw-Hill Companies, Inc. and have been
licensed for use by Monitor Capital Advisors, LLC. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. 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. An investment cannot be made directly into an index.
(2) "NASDAQ Composite Index" is an unmanaged, market-value weighted index that
measures all NASDAQ domestic and non-U.S. based common stocks listed on the
NASDAQ Stock Market and includes over 5,000 companies. Each company's
security affects the Index in proportion to its market value. The market
value, the last sale price multiplied by total shares outstanding, is
calculated throughout the trading day and is related to the total value of
the Index. An investment cannot be made directly into an index.
(3) The Lipper Variable Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies.
Its rankings are based on total returns with capital gains and dividends
reinvested. Results do not reflect any deduction of sales charges.
Unlike other portfolios that generally seek to beat market averages, often with
unpredictable results, index portfolios seek to match the return of their
respective indexes.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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AMERICAN CENTURY INCOME & GROWTH PORTFOLIO(1)
MARKET AND PORTFOLIO OVERVIEW
Most of the major stock indexes fell during the first half of 2000. Volatility
was one of the most significant factors affecting the market. From January until
about mid-March, stocks soared, with "New Economy" companies -- especially
semiconductor and biotechnology firms -- leading the way.
Then sentiment shifted dramatically -- fears about inflation, the economy, and
further interest rate hikes by the Federal Reserve, as well as growing
uncertainty about the sustainability of many New Economy companies, sent growth
and technology stocks plunging from mid-March to late May 2000. During this
time, a long-awaited rally among value stocks materialized as investors fled to
the safety of companies with relatively stable earnings and lower price/earnings
(P/E) ratios.
In June 2000, investors cautiously moved back into growth stocks, and the market
rebounded. The NASDAQ Composite Index(2), home to many technology companies,
surged ahead for the month.
Style leadership changed hands many times during the period ending June 30,
2000. Overall, large-cap growth companies outperformed large-cap value stocks,
while small- and mid-cap stocks had better returns than their large-cap brethren
did.
PERFORMANCE REVIEW
The American Century Income & Growth Portfolio trailed its performance
benchmark, the S&P 500 Index(R)(3). For the six-month period ended June 30,
2000, the Portfolio posted a -3.58% return, compared with the -0.42% return of
the S&P 500(R). The Portfolio also fell short of the -1.13% return of the
average Lipper Variable Products Growth and Income Portfolio(4).
A slight bias toward value stocks contributed to the Portfolio's
underperformance relative to the S&P 500(R), but this was offset partially by
the positive contributions of a smaller market capitalization than the index.
Ultimately, stock selection was the primary explanation for the Portfolio's
underperformance relative to both the benchmark and the peer group.
Technology stocks -- especially computer hardware and semiconductor
companies -- were among the biggest contributors to the Portfolio's return.
However, stock selection within this sector generally hurt performance relative
to the S&P 500(R). Although stock selection in the computer software and
aerospace industries enhanced relative performance, selection among computer
hardware, electrical equipment, and semiconductor companies were a drag on
performance relative to the Index.
Energy stocks, which benefited from a recovery in oil and natural gas prices,
also contributed positively to absolute fund returns but fell short on a
relative basis because of stock selection.
On a more positive note, the largest contribution to both absolute and relative
performance for the period came from the health care sector, especially the drug
and medical products industries. The relatively stable earnings of the large
drug companies attracted investors during the flight from technology issues.
The telecommunications sector was the largest negative contributor to the
Portfolio's return. Shares of companies in the telephone and wireless
telecommunications industries struggled in the first half of the year. In
particular, long-distance carriers and broadband service providers in the
telephone industry suffered during the rotation out of technology. Despite the
rough sailing, however, the Portfolio's stock selection among telephone
companies proved favorable for performance relative to the S&P 500(R).
PORTFOLIO MANAGEMENT DECISIONS
An overweighted position in Pfizer, which returned 50% during the first half of
2000, was one of the top contributors to Portfolio return. The company completed
its acquisition of Warner-Lambert, creating the world's largest pharmaceuticals
company. In a volatile market environment, the large drug stocks were considered
a safety play for investors as they rotated out of technology stocks. Pfizer
also benefited from expectations that the drug sector would retain its steady
profit growth even if the economy's expansion slowed.
Corning, a maker of glass used in fiber-optic telecommunications networks, was a
top performer in absolute terms. Corning announced it would beat profit targets
on rising sales -- the company is growing as fast as it possibly can and still
has a backlog of orders for its products. In addition, fiber-optics shares
rallied on speculation about consolidation in the sector. The Portfolio holds an
overweighted position in this company.
In both absolute and portfolio-impact terms, QUALCOMM was one of the Portfolio's
worst performers, declining significantly during the period. The company makes
chips for cellular phones and developed the dominant mobile phone technology.
The stock had a huge run-up in 1999, but this year QUALCOMM said
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that it expects lower sales in South Korea, its largest market. That led Wall
Street analysts to cut earnings forecasts, and the market trounced the stock.
Microsoft, which also declined, was one of the Portfolio's largest holdings and
had the biggest negative impact on performance. The potential break-up of the
company as a result of its antitrust trial weighed heavily on its stock price.
However, it's worth noting that the Portfolio was underweighted in Microsoft
throughout the period ending June 30, 2000.
The Portfolio does not make any big bets on sectors or industries, and its
individual portfolio weightings relative to the index are typically no greater
than +/-1%.
In terms of overweighted positions that have a significant impact, the
management team increased the Portfolio's overweighting in Pfizer, a
pharmaceuticals company that recently completed an acquisition of
Warner-Lambert, and decreased the Portfolio's overweighting in Chase Manhattan
Bank.
SECTOR WEIGHTING CHANGES
No major shifts in the Portfolio's sector weightings occurred during the period.
The Portfolio's management team maintained its "industry-neutral"
approach -- over a year ago, the management team took steps to reduce the
Portfolio's industry over- and underweights relative to the S&P 500(R). The idea
was to reduce the volatility of the portfolio's share price relative to that of
the Index while placing more emphasis on individual stock selection.
The Portfolio's industry-neutral approach means there are no significant sector
over- or underweights. The largest sector overweight as of June 30 was in
financials (about 60 basis points more than the S&P 500), while the largest
sector underweight was in technology (about 77 basis points less than the
benchmark).
LOOKING AHEAD
The performance of the stock and bond markets during the second half of 2000
will hinge on how successful the Federal Reserve is in achieving a "soft
landing" -- slowing the economy to a moderate, sustainable growth rate while
keeping a lid on inflation.
So far, the economy has remained healthy, but the Fed has raised short-term
interest rates six times in the past year, and we're finally starting to see
some evidence that higher rates are slowing the economy.
If the Fed pulls this off successfully, as it did in 1995, it would be positive
for the stock market. If unsuccessful -- either by failing to stay ahead of the
inflation curve or tightening the screws too hard, causing a recession -- stocks
could weaken along with corporate earnings.
We wouldn't be surprised to see a continuation of the day-to-day volatility
that's become a regular occurrence, especially during the first six months of
2000. Even with the recent market pullback, investors are reacting to any
news -- good or bad -- in swift and dramatic fashion. We'll probably see more of
this behavior going forward.
American Century Income & Growth Portfolio maintains a structured, disciplined
investment approach, using quantitative computer models for both stock selection
and portfolio construction. The Portfolio incorporates both growth and value
measures (with a slight tilt toward value) into stock selection to seek
consistent long-term performance.
John Schniedwind
Kurt Borgwardt
Portfolio Managers
American Century Investment Management, Inc.
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(1) American Century Income & Growth Portfolio is a Portfolio of the MainStay VP
Series Fund, Inc.. American Century Investment Management, Inc. serves as
sub-advisor to this Portfolio.
(2) "NASDAQ Composite Index" is an unmanaged index and is considered generally
representative of the U.S. small capitalization stock market.
(3) "Standard & Poor's 500 Composite Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc.. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(4) The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of
insurance companies. Its rankings are based on total returns with capital
gains and dividends reinvested. Results do not reflect any deduction of
sales charges.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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DREYFUS LARGE COMPANY VALUE PORTFOLIO(1)
MARKET AND PORTFOLIO OVERVIEW
During the Portfolio's semi-annual period ended June 30, 2000, the stock market
exhibited significant volatility in the performance of both investment styles
and economic sectors. The early part of the period witnessed unprecedented
appreciation in the technology sector, to extreme levels of valuation and
speculation, leaving the rest of the market behind. About ten weeks of a severe
correction in technology stock prices followed. At the same time, interest rate
sensitive securities, primarily in the financial and utility sectors,
experienced significant appreciation. Technology stocks then rebounded during
the last six weeks of the period, as the interest rate sensitive sectors
declined.
The Dreyfus Large Company Value Portfolio fell -3.19% during the semi-annual
period. The Portfolio's benchmark, the Russell 1000 Value Index(R)(2), fell
-4.23%. This favorable comparison is attributable to positive contributions from
both sector allocation (emphasizing the better performing economic sectors of
the market) and security selection (selecting the better performing securities
within each sector).
PORTFOLIO MANAGEMENT DECISIONS
The major Portfolio management decisions during the semi-annual period were
related to security selection and the resulting economic sector overweights and
underweights. Primarily, we are "bottom-up" investors, concentrating most of our
energy on security selection. We do, however, spread security selection across
the economic spectrum, and control exposure to economic sectors, verifying that
any over or under exposure coincides with our macro outlook. This balanced
approach resulted in a favorable performance comparison for the period, since
the volatility of the overall market was significant, and excessive attempts to
follow recent market trends would have been disastrous. Instead, the spreading
of the Portfolio across economic sectors maintained exposure to the better
performing securities.
The best performing security in the Portfolio during the semi-annual period was
Nabisco Group Holdings, in terms of its total return. This company owns a
majority of Nabisco Holdings, the food company and another Portfolio holding.
Nabisco Holdings received a takeover proposal from Philip Morris during the
period, while Nabisco Group Holdings received a takeover proposal from RJ
Reynolds. Both stocks were bought in the Portfolio primarily on speculation that
these takeovers were likely. Some shares of Nabisco Group Holdings were sold
after the takeover announcement, but a significant position remained in the
Portfolio at the end of the period.
The poorest performing security in the Portfolio during the semi-annual period
was Unisys, in terms of its total return. This technology services, primarily
consulting, company was purchased during the period and held at June 30. The
stock was a reasonable performer during the period until June 29th when a weak
earnings report for the second quarter was pre-announced. This earnings weakness
was primarily due to order delays, not order cancellations, so the security was
not sold, given its depressed valuation and in anticipation of a rebound.
There were numerous purchases during the period, many of these either adjusting
the relative weights of existing security holdings, or investing the cash
additions made to the Portfolio. The most significant purchases in terms of
contribution to return during the period were the Nabisco Group Holdings and
Nabisco Holdings buys. Both food company stocks appreciated significantly, as
detailed above.
The most significant sale during the period may have been Georgia Pacific, which
was sold on January 12 at $48.64 per share. On July 17, the stock was trading at
$25.88. This paper and forest products company was sold largely because of its
exposure to the forest products sector which we believed might experience weak
results due to a slowing new housing market. Avoiding this loss was a favorable
decision.
SECTOR WEIGHTING CHANGES
Changes in sector weights during the period included reducing technology
exposure while increasing financial, utility and health care exposure near the
middle of the period, followed by increasing technology sector exposure near the
end of the period. This six-month period was noted for its dramatic swings in
economic sector preference, and these sector changes in the Portfolio benefited
performance. The changes were made primarily based on an on-going assessment of
market preferences and improving company fundamentals at each point in time.
The best performing economic sector in the Portfolio on a relative basis was
utilities, where security selection was extremely favorable due to emphasis on
the natural gas and pipeline industry. Other sectors with favorable returns
included communication services, capital goods, consumer cyclicals, consumer
staples and health care.
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The poorest performing economic sector in the Portfolio on a relative basis was
energy, where larger and more stable integrated companies were emphasized and
the volatile energy services sector was not. Unfortunately, energy service was
the stronger performer during the period. Financials and basic materials were
also underperformers on a relative basis.
Significant overweights (greater than 10% versus the benchmark index) at the end
of the period were the basic material, communication service, health care,
technology and utility sectors.
Significant underweights (greater than 10% versus the benchmark index) at the
end of the period were the capital goods, consumer cyclicals, consumer staples
and transportation sectors.
LOOKING AHEAD
The Dreyfus Large Company Value Portfolio specializes in value stocks with
market capitalizations greater than $900 million. Our strategy is to have
exposure to every economic sector. The Portfolio is engineered to seek to
provide low volatility of returns relative to the benchmark index. Most
investment professionals equate low volatility of returns with low risk.
The value style of investing has generally been out-of-favor for a number of
years. Currently, the valuation gap between growth stocks and value stocks is at
or near an historic extreme. Events that might spark a resurgence of value stock
performance include a sustained decline in interest rates, a correction in the
unprecedented valuations of technology stocks, or a period of general economic
weakness. Regardless of the timing for value investing to reassert itself,
prudence argues for investors to maintain well-diversified portfolios across all
investment disciplines. This guidance is particularly important today when the
valuations of technology stocks are at or near unprecedented levels. Investment
performance usually occurs in unpredictable and concentrated periods of time. It
is important for investors to have portfolio diversification when these changes
in investment style preferences occur.
We see value in all economic sectors of the stock market.
Timothy M. Ghriskey
Portfolio Manager
The Dreyfus Corporation
(1) Dreyfus Large Company Value Portfolio is a Portfolio of the MainStay VP
Series Fund, Inc.. The Dreyfus Corporation serves as sub-advisor to this
Portfolio. The investment objectives and policies may be similar to those of
other funds/portfolios managed or advised by Dreyfus. However, the
investment result of the portfolio may be higher or lower than, and may not
be comparable to, any other Dreyfus fund/portfolio.
(2) Russell 1000 Value Index(R) measure the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
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EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO(1)
MARKET AND PORTFOLIO OVERVIEW
The overriding factor affecting the U.S. equity markets during the first half of
2000 was the continued strength in the U.S. economy and the Federal Reserve's
efforts to prevent inflation by raising interest rates. The rising interest rate
environment made the markets particularly volatile during the first half of the
year. With such volatility, however, comes opportunity for those investors who
know how to trade, have a strong fundamental understanding of the companies
whose stocks they own and have strong constitutions.
Rising interest rates are generally not good for equities as investors begin to
view fixed income investments as more attractive investment alternatives. Not
surprisingly, the S&P 500 Index(R)(2) fell 0.42% for the first half of the year.
The rising interest rates also impacted some sectors more negatively than
others. Old Economy stocks, which tend to be more capital intensive, suffered
because their funding costs increased which put pressure on margins. During
March and April we also finally started to see some of the New Economy stocks,
particularly some of the "dot-coms", sell off as investors began to refocus on
valuations.
For the six months ending June 30, 2000, the Portfolio returned 12.64% which
handily beat the -0.42% return of the S&P 500 Index(R) and the 4.23% return of
the Russell 1000 Growth Index(R)(3). At Eagle we focus on seeking to provide
investors with strong, long-term, risk adjusted returns. We believe that our
focus on controlling risk has been a major reason that we have outperformed our
benchmarks and many of our peers. We seek to control risk through careful stock
selection and by taking a disciplined approach to our industry exposures. As
part of this risk control strategy, the Portfolio consists primarily of
large-cap, blue chip, "sleep-well-at-night" companies. While this investment
philosophy may not be as aggressive on the upside, it is in difficult markets
such as those just witnessed where we have seen its inherent value.
PORTFOLIO MANAGEMENT DECISIONS
Heading into the first half of the year, the Portfolio was overweighted in
semiconductors and wireless telecommunications companies, which significantly
benefited our relative performance. We believe that we are still in the
relatively early stages of the ongoing build out of the Internet and
telecommunications infrastructures. Consumer demand for all things digital like
cameras, telephones, DVD players, games; etc. has created a tremendous
opportunity for well-positioned semiconductor companies. Similarly, current
voice and data demands are simply too much for our existing copper-based
telecommunications infrastructure. Thus, we also expect the leaders in optics
and other wireless technologies to see significant future growth.
Heading into the first half of the year we were somewhat underweighted in
financials which helped our relative performance. We were underweighted in
financials, because we saw continued growth in the U.S. economy and expected
that a rising interest rate environment would be detrimental to banks, brokers
and other financial service companies.
Heading into the first half of the year we were also somewhat underweighted in
the energy sector which negatively impacted our performance. We did not expect
the price of oil to rise above $30 a barrel and thus missed out on some of the
appreciation in the energy sector.
Some of those stocks that had a significant positive impact on Portfolio
performance during the first two quarters include:
Cisco Systems, Intel, Nortel, EMC, Microchip Technology, Sycamore Networks,
LSI Logic, E-Tek Dynamics, JDS Uniphase, National Semiconductor, Convergys,
Pfizer and Johnson & Johnson.
Some of those stocks that had a significant negative impact on Portfolio
performance during the first two quarters include:
America Online, Microsoft, KLA-Tencor, Cadence Design Systems, Home Depot
and Wal-Mart. Microsoft remains a key holding for us in spite of the
negative news from its antitrust trial. We anticipate that Microsoft will
benefit from an improvement in its business in the back half of 2000. This
improvement, in addition to its product transition, leads us to believe
that Microsoft will remain a major player in the computer and Internet
markets regardless of the outcome of the antitrust case. We continue to
believe that AOL will be a global powerhouse in the mid- to long-term.
While AOL's growth will be maturing, its primary advantage continues to be
supplying entertainment content to a very large base of customers. The
merger with Time Warner, if approved, should also improve AOL's ability to
attract customers.
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SIGNIFICANT PURCHASES AND SALES
Some of the more significant purchases during the first half of the year were:
DELL COMPUTER -- We continued to add to our Dell position. We believe Dell
will be a major beneficiary of the PC upgrade cycle likely to follow
Microsoft's Windows 2000 release in the second half of 2000. We also like
the fact that Dell has expanded its server and services businesses.
NOKIA -- We established a new position in Nokia which we view as one of the
leading beneficiaries in the global explosion of wireless devices,
particularly cell phones.
TARGET -- We established a new position in Target which we view as one of
the premier players in the discount retail segment. Their push into the
northeastern United States has gone well, and they have a very strong niche
as a discounter that also appeals to the higher end customer.
Some of the more significant sales during the first half of the year were:
MCI WORLDCOM -- We sold our remaining position in MCI Worldcom early in the
year because, despite its efforts to expand into more profitable businesses
(i.e. Uunet), it was still being viewed by the markets as a long distance
company with shrinking margins.
ELECTRONIC DATA SYSTEMS -- We liquidated our position in EDS following the
company's first quarter warning of weaker than expected top-line growth. We
understood this revenue warning to imply that EDS was losing sales to
smaller, cutting edge niche service firms.
SECTOR WEIGHTING CHANGES
We are an active equity manager and are willing to overweight or underweight a
particular sector based on our view of the fundamentals of the companies in that
sector. We will have zero weightings in certain sectors if we see no compelling
reason to invest in companies in a sector. Throughout the first half of 2000, we
have underweighted the sectors of the S&P 500 Index(R) that follow: basic
materials, capital goods, communication services, consumer staples, energy,
financials, transportation and utilities. These sectors are not traditional
growth sectors and we do not see the same earnings visibility from companies in
these sectors as we do in companies in the health care and technology sectors
where we are presently overweight.
We have not made any significant changes to our sector weightings over the first
half of the year, although our technology exposure has increased. With rising
interest rates constraining the earnings of many companies in the financial
sector and the Medicare reimbursement issue still looming over the
pharmaceutical industry, we continue to see the greatest earnings momentum
coming from technology companies -- semiconductor and telecommunications
companies in particular.
LOOKING AHEAD
Although we still expect market volatility until the Federal Reserve is finished
raising interest rates, we believe the long-term outlook for the U.S. equity
markets is still very favorable. Corporate earnings remain strong and should
continue to be strong as the economies of our overseas trading partners improve.
Since earnings tend to drive stock valuations, sustained earnings growth is very
positive for the U.S. equity markets. In addition, the rate increases engineered
by the Federal Reserve appear to be having the desired effect, as recent data
suggests that the U.S. economy is slowing down to a more sustainable level of
growth. A stable to declining interest rate environment has historically been
favorable for equities and growth stocks in particular. The principal risk to
our rather optimistic outlook would be a reemergence of significant inflation
which would cause the Federal Reserve to tighten rates several more times before
the end of the year.
Ashi Parikh
Portfolio Manager
Eagle Asset Management, Inc.
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(1) Eagle Asset Management Growth Equity Portfolio is a Portfolio of the
MainStay VP Series Fund, Inc.. Eagle Asset Management, Inc. serves as
sub-advisor to this Portfolio.
(2) "Standard & Poor's 500 Composite Price Index(R)" and "S&P 500(R)" are
registered trademarks of The McGraw-Hill Companies, Inc.. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation. The
S&P 500(R) is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
(3) Russell 1000 Growth Index(R) measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
74
<PAGE> 75
LORD ABBETT DEVELOPING GROWTH PORTFOLIO(1)
MARKET AND PORTFOLIO OVERVIEW
Volatility and a slowdown in trading volume characterized the small cap market
in the second quarter of 2000, hurting the performance of many small companies
during this time.
During April and May, the performance of the technology-heavy Russell 2000(R)
Index(2) dropped substantially as investors in small company stocks generally
continued to show intolerance for any earnings shortfall or reported company
problem, no matter how slight. In addition, uncertainty around the Federal
Reserve's activities and their potential influence on the economy, led investors
to retreat from the stocks of companies that had previously led the small
company market's performance (e.g., technology, Internet). Instead, they sought
safety in the stocks of more established firms that exhibited earnings history
and other strong fundamentals. In June, the picture changed once again, and the
Russell 2000 Index, led primarily by the performance of the stocks of technology
and biotechnology companies, came storming back.
However, approximately 60% of the stocks currently in the Russell 2000(R) Index
have market capitalizations (defined as a stock's price per share multiplied by
the number of shares outstanding, commonly known as market cap) of $1.2 billion
or above. As dictated by the Portfolio's buy discipline (companies purchased in
the Portfolio must have market caps of $1.2 billion or less at the time of
initial purchase), companies of this size are ineligible for purchase in the
Lord Abbett Developing Growth Portfolio. In addition to size, many of the
Russell's top-performing companies do not possess the fundamental
characteristics, such as earnings history and reasonable valuations that are in
keeping with our investment philosophy.
During the market's down period in April and May, we took the opportunity to
make select additions to the Portfolio from across many industries, in companies
where we believed the fundamentals and prices were attractive. The Portfolio's
performance kept pace with the Index through May, due to our relatively minimal
exposure to faltering technology issues. However, in June, the resurgence of
investors' enthusiasm, especially for the stocks of biotechnology companies,
hurt the Portfolio's performance, as our exposure to these companies was
minimal. For the six-month period ended June 30, 2000, the Portfolio fell
-11.90%, compared with the 3.04% return of the Russell 2000(R) Index for the
same period.
LOOKING AHEAD
As we move into the second half of the year, we believe the volatility in the
market is likely to continue in the short-term and liquidity and earnings
shortfalls will continue to be concerns for small company investors. However,
once the market begins to slow, we believe we will begin to see many smaller
companies experience some growth. Regardless of market conditions, we will
continue to execute our disciplined investment approach, remaining focused on
finding what we believe to be the highest quality companies possible for the
Portfolio.
Stephen J. McGruder
Team Leader & Portfolio Manager
Lord, Abbett & Co.
(1) Lord Abbett Developing Growth Portfolio is a Portfolio of the MainStay VP
Series Fund, Inc. Lord, Abbett & Co. serves as sub-advisor to this
Portfolio.
(2) The Russell 2000(R) Index measures the performance of the 2,000 smallest
companies in the Russell 3000 Index, which represents approximately 8% of
the total market capitalization of the Russell 3000 Index. The Index is
unmanaged and not available for direct investment.
The Portfolio is actively managed and subject to change.
The Lord Abbett Developing Growth Portfolio invests in stocks of developing
companies, which involve greater risks and are generally, more volatile than
investments in mature companies. The Portfolio may invest up to 10% of net
assets in foreign securities. Securities markets of foreign countries in which
the Portfolio may invest generally are not subject to the same degree of
regulations and may be more volatile and less liquid than the major U.S.
markets. Foreign investments may also be subject to currency exposure. These and
other risks are more fully described in the prospectus.
There can be no assurance that the Portfolio will meet its investment objective.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns for the Portfolio
shown indicate past performance and are not indicative of future results.
Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. These results do
not reflect any deduction of sales charges, mortality and expense charges,
contract charges, or administrative charges. Please refer to the Performance
Summary for returns reflective of these charges.
75
<PAGE> 76
GLOSSARY
AGENCY SECURITIES: Bonds issued by government-sponsored agencies and federally
related institutions.
ALLOCATION: An investment technique that diversifies a portfolio among
different types of assets such as stocks, bonds, cash equivalents, precious
metals, real estate and collectibles.
ANTITRUST LAW: Any law that encourages competition by limiting unfair business
practices and curbing monopolies' power.
ASSET BACKED SECURITIES: Securities backed by loan paper, receivables, or an
anticipated income stream from the sale of merchandise or services. The
securities are generally originated by banks, credit card companies, or other
providers of credit and often "enhanced" by a bank letter of credit or by
insurance from an institution other than the issuer.
BASIS POINTS: One hundredth of one percent in the yield of an investment, i.e.,
100 basis points equals 1%.
BLUE CHIP: Stocks of companies known for their long-established record of
earning profits and paying dividends. Blue chips tend to be large, stable and
well known.
CAPITAL INTENSIVE: Requiring large investments in capital assets to provide an
acceptable return on investment.
COLLATERALIZED SECURITIES: Securities that require some kind of collateral,
i.e., cash or assets.
COMMON STOCKS: Equity securities representing shares of ownership in a company
and usually carrying voting rights and earning dividends. Dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.
CONVERTIBLE SECURITIES: Preferred stocks or bonds that pay a fixed dividend or
interest payment and are convertible into common stock at a specified price or
conversion ratio.
CORRECTION: A downward movement in the price of an individual stock, bond,
commodity, index or the stock market as a whole.
COUPON RATE: The stated interest rate on a bond when first issued. A $1,000
bond with a coupon of 6% will pay $60 a year until its maturity. However, the
actual dividend yield from a bond on the secondary market can vary greatly from
the coupon rate because the bond can sell above or below its face value.
CYCLICALS: A security or stock that tends to rise quickly with economic upturns
and fall quickly when the economy slows. Examples are housing, steel,
automobiles, and paper. Noncyclical industries, such as food, insurance, and
pharmaceuticals, are likely to have more consistent performance regardless of
economic changes.
DEFENSIVE: Stocks with investment returns that do not tend to decline as much
as the market in general in times when stock prices are falling. These include
companies with earnings that tend to grow despite the business cycle, such as
food and drug firms, or companies that pay relatively high dividends like
utilities.
DISCIPLINED: An investment strategy that follows specific guidelines,
procedures and rules in making decisions.
EURO: The Euro became the official unit of currency of the European Union on
January 1, 1999. It is currently used in 11 of the member states and has a fixed
conversion rate against their national currencies. It is currently used only for
"paper transactions" and will not be in circulation until 2002.
FEDERAL FUNDS RATE: The interest rate that banks charge each other for the use
of federal funds. This rate is used for overnight loans to banks that need more
cash to meet bank reserve requirements. It changes daily and is the most
sensitive indicator of general interest rate trends. The rate is not set
directly by the Federal Reserve, but fluctuates in response to changes in supply
and demand for funds.
FEDERAL RESERVE BOARD (THE FED): The seven member governing board of the
Federal Reserve System, which is the central bank of the United States. The
Board sets policies on reserve requirements, bank regulations, sets the discount
rate, tightens or loosens the availability of credit in the economy and
regulates the purchase of securities on margin.
FEDERAL RESERVE BANK: The central bank of the U.S. that sets monetary value.
The Federal Reserve oversees money supply, interest rates and credit with the
goal of keeping the U.S. economy and currency stable. Governed by a seven-member
board, the system includes 12 regional Federal Reserve Banks, 25 branches and
all national and state banks that are part of the system. Also called the Fed.
76
<PAGE> 77
FIXED-RATE INVESTMENTS: A security that pays a fixed rate of return. This
usually refers to government, corporate or municipal bonds, which pay a fixed
rate of interest until the bonds mature, and to preferred stock, paying a fixed
dividend.
FLOATING RATE SECURITY: Debt instrument with a variable interest rate. They
provide protection against rising interest rates, but pay lower yields than
fixed rate notes of the same maturity. Also known as a floater.
FUNDAMENTAL ANALYSIS: Fundamental analysis asserts that a stock's price is
determined by the future course of its earnings and dividends. The fundamental
analyst tries to determine what the intrinsic value of a stock's underlying
business is by looking at its financial statements and its competitive position
within its industry. Also called "bottom-up" investing.
HIGH-COUPON: A bond that pays a high interest rate.
IPO: Initial Public Offering. The first time a company issues stock to the
public, also known as "going public". They are frequently offered by young,
growing companies who need to seek outside equity capital in the public market.
IPOs can offer the possibility of large gains, coupled with very high risk.
LARGE-CAP: A share of a large publicly traded corporation, typically with a
total market capitalization of greater than $5 billion. (Also called large-cap
stocks, large caps and blue chips.) Because of their size, large caps tend to
grow more slowly than small-cap stocks, but they also tend to be much more
stable.
LIQUIDITY: Securities are said to be liquid when they can be easily bought or
sold in large volume without substantially affecting their price. Some
securities, such as private placements or stocks that have few shares
outstanding are considered illiquid either because there are few market
participants interested in buying or selling the securities or because purchases
and sales may cause wide price swings.
LOCAL CURRENCY TERMS: Returns expressed in local currency terms show what
investors using that currency would have earned, without any adjustment for
differences in currency values. Returns expressed in U.S. dollar terms reflect
any differences in the relative value of the local currency and the U.S. dollar.
LONG-TERM: Treasury bonds with maturities of more than 10 years; corporate
bonds with maturities more than 15 years. Long-term bonds pay higher yields but
have greater inflation and credit risk.
MARKET CAPITALIZATION: The total market value of a company or stock. Market
capitalization is calculated by multiplying the number of outstanding shares by
their current market price. Investors generally divide the U.S. market into
three basic market caps: large-cap, mid-cap and small-cap.
MONEY MARKET: A type of mutual fund that invests in stable, short-term
securities. Money-market funds are easily convertible into cash and usually
maintain an unchanged value of $1 a share, but they are not insured by the
federal government.
MORTGAGE-BACKED SECURITIES: Securities representing interests in "pools" of
mortgages in which principal and interest payments by the holders of underlying
fixed-or adjustable-rate mortgages are, in effect, "passed through" to investors
(net of fees paid to the issuer or guarantor of the securities).
NEW ECONOMY: The recent growth in the economy which is sustained by technology
and the internet.
OVERWEIGHT/UNDERWEIGHT: The proportion of a portfolio allocated to a specific
security, market sector or country, i.e., a portfolio is said to be overweighed
in a sector or country when that portion of the portfolio is greater than the
sector's general relationship to the market as a whole or the country's total
equities relative to the international equity markets as a whole.
P/E RATIO: Price-to-earnings ratio. The price of a stock divided by its
earnings per share.
POSITION: An investor's stake in a particular security or market.
TIGHTEN/LOOSEN/EASE: When the Federal Reserve Board moves to raise interest
rates, it is said to be "tightening" or making borrowing more expensive. When it
moves to lower rates, it is said to be "loosening", "easing" or making borrowing
more affordable.
TOTAL RETURN: The performance of an investment with all income and capital
gains reinvested.
U.S. TREASURY DEBT: Debt incurred by the U.S. Treasury by way of selling U.S.
Treasury bonds to the public.
VALUE-ORIENTED, VALUE INVESTING, VALUE APPROACH: A style of investing which
looks for companies that have been overlooked or undervalued by the market, but
with underlying sound fundamentals. Value investors
77
<PAGE> 78
typically buy stocks with high dividend yields, or ones that trade at a low
price-to-earnings ratio (P/E) or low price-to-book ratio (P/B).
VOLATILITY: Fluctuations in the price of securities or markets, up or down,
over a short period of time.
YANKEE BONDS: Dollar-denominated bonds sold in the U.S. by foreign companies or
government entities.
YIELD: The income per share (or current value of a security) paid to investors
over a specified period of time. It is expressed as a percentage of the cost of
the security, generally obtained by dividing the current market price for a
stock or bond into the annual dividend or interest payment. As the price of a
stock or bond declines, its yield rises. Mutual fund yields are expressed as a
percentage of the fund's current price per share.
YIELD CURVE: This is a graph showing the yields for bonds of different
maturities. When interest rates available from various short-, intermediate-,
and long-term securities are plotted on a graph, the resulting line is known as
a yield curve.
78
<PAGE> 79
MAINSTAY VP SERIES FUND, INC.
OFFICERS AND DIRECTORS
Richard M. Kernan, Jr., Chairman,
Chief Executive Officer and Director
Anne F. Pollack, President,
Chief Administrative Officer and Director
Michael J. Drabb, Director
Jill Feinberg, Director
Daniel Herrick, Director
Robert D. Rock, Director and Vice President
Roman L. Weil, Director
John Weisser, Director
John A. Flanagan, Treasurer
Joseph McBrien, Secretary
Richard D. Levy, Controller
INVESTMENT ADVISERS
MacKay Shields LLC
Madison Square Advisors LLC
Monitor Capital Advisors LLC
New York Life Insurance Company
ADMINISTRATOR
New York Life Insurance and Annuity Corporation
CUSTODIANS
The Bank of New York
The Chase Manhattan Bank, N.A.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
The financial information included herein is taken from the records of the Funds
without examination by the Funds' independent accountants, who do not express an
opinion thereon.
79
<PAGE> 80
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (97.4%)+
SHARES VALUE
----------------------------
<S> <C> <C>
BIOTECHNOLOGY (2.5%)
Genentech, Inc. (a)............. 227,000 $ 39,044,000
Protein Design Labs, Inc. (a)... 65,000 10,721,951
--------------
49,765,951
--------------
BROADCAST/MEDIA (3.5%)
AMFM Inc. (a)................... 365,200 25,198,800
Clear Channel Communications,
Inc. (a)....................... 283,700 21,277,500
Fox Entertainment Group, Inc.
Class A (a).................... 300,000 9,112,500
USA Networks, Inc. (a).......... 689,200 14,903,950
--------------
70,492,750
--------------
COMMUNICATIONS--EQUIPMENT (13.2%)
Cisco Systems, Inc. (a)......... 1,187,300 75,467,756
Corning Inc. ................... 334,500 90,273,188
JDS Uniphase Corp. (a).......... 208,000 24,934,000
Lucent Technologies Inc. ....... 355,800 21,081,150
Nokia OYJ PLC ADR (b)........... 352,000 17,578,000
Tellabs, Inc. (a)............... 509,200 34,848,375
--------------
264,182,469
--------------
COMPUTER SOFTWARE & SERVICES (6.9%)
First Data Corp. ............... 230,600 11,443,525
Microsoft Corp. (a)............. 724,200 57,936,000
Oracle Corp. (a)................ 807,000 67,838,438
--------------
137,217,963
--------------
COMPUTER SYSTEMS (7.4%)
EMC Corp. (a)................... 1,019,200 78,414,700
Sun Microsystems, Inc. (a)...... 771,000 70,112,812
--------------
148,527,512
--------------
ELECTRIC POWER COMPANIES (2.6%)
AES Corp. (The) (a)............. 1,148,600 52,404,875
--------------
ELECTRICAL EQUIPMENT (1.7%)
General Electric Co. ........... 642,000 34,026,000
--------------
ELECTRONICS--SEMICONDUCTORS (11.1%)
Analog Devices, Inc. (a)........ 229,000 17,404,000
Applied Materials, Inc. (a)..... 218,200 19,774,375
Cypress Semiconductor Corp.
(a)............................ 307,000 12,970,750
Intel Corp. .................... 555,400 74,250,038
Flextronics International Ltd.
(a)............................ 43,700 3,001,644
Motorola, Inc. ................. 1,079,700 31,378,781
Texas Instruments Inc. ......... 923,600 63,439,775
--------------
222,219,363
--------------
ENTERTAINMENT (4.2%)
Time Warner Inc. ............... 462,500 35,150,000
Viacom Inc. Class B (a)......... 716,859 48,880,823
--------------
84,030,823
--------------
FINANCE (2.3%)
Citigroup Inc. ................. 774,872 46,686,038
--------------
HEALTH CARE--DRUGS (5.4%)
Andrx Corp. (a)................. 107,000 6,839,643
</TABLE>
<TABLE>
SHARES VALUE
<CAPTION>
----------------------------
<S> <C> <C>
HEALTH CARE--DRUGS (Continued)
Celgene Corp. (a)............... 264,600 $ 15,578,325
IVAX Corp. (a).................. 245,000 10,167,500
Merck & Co., Inc. .............. 536,900 41,139,963
Schering-Plough Corp. .......... 681,500 34,415,750
--------------
108,141,181
--------------
HEALTH CARE--MEDICAL PRODUCTS (4.6%)
Baxter International Inc. ...... 281,500 19,792,969
Guidant Corp. (a)............... 473,200 23,423,400
Medtronic, Inc. ................ 792,800 39,491,350
PE Corp-PE Biosystems Group..... 150,000 9,881,250
--------------
92,588,969
--------------
HEALTH CARE--MISCELLANEOUS (3.8%)
Allergan, Inc. ................. 69,200 5,155,400
Amgen Inc. (a).................. 503,400 35,363,850
Bristol-Myers Squibb Co. ....... 373,700 21,768,025
MedImmune, Inc. (a)............. 186,000 13,764,000
--------------
76,051,275
--------------
HOUSEHOLD PRODUCTS (1.9%)
Colgate-Palmolive Co. .......... 650,400 38,942,700
--------------
INSURANCE (3.2%)
American International Group,
Inc. .......................... 346,828 40,752,290
Marsh & McLennan Cos., Inc. .... 220,300 23,007,581
--------------
63,759,871
--------------
INVESTMENT BANK/BROKERAGE (1.1%)
Goldman Sachs Group, Inc.
(The).......................... 222,400 21,100,200
--------------
LEISURE TIME (2.4%)
Harley-Davidson, Inc. .......... 1,252,100 48,205,850
--------------
MANUFACTURING (2.6%)
Tyco International Ltd. ........ 1,084,000 51,354,500
--------------
NATURAL GAS DISTRIBUTORS & PIPELINES (1.5%)
Enron Corp. .................... 471,000 30,379,500
--------------
PERSONAL LOANS (1.9%)
Household International,
Inc. .......................... 292,000 12,136,250
Providian Financial Corp. ...... 275,300 24,777,000
--------------
36,913,250
--------------
RETAIL (8.2%)
Bed Bath & Beyond Inc. (a)...... 521,600 18,908,000
Circuit City Stores-Circuit City
Group.......................... 622,300 20,652,581
CVS Corp. ...................... 341,900 13,676,000
Home Depot, Inc. (The).......... 710,650 35,488,084
Kohl's Corp. (a)................ 1,058,000 58,851,250
Staples, Inc. (a)............... 1,102,200 16,946,325
--------------
164,522,240
--------------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
80
<PAGE> 81
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
SPECIALIZED SERVICES (1.2%)
Omnicom Group Inc............... 265,000 $ 23,601,562
--------------
TELECOMMUNICATIONS (3.0%)
Dobson Communications Corp.
Class A (a).................... 75,000 1,443,750
FLAG Telecom Holdings Ltd.
(a)............................ 222,000 3,302,250
Hanaro Telecom Inc. ADR
(a)(b)......................... 100,000 706,250
Nextel Communications Inc. Class
A (a).......................... 194,000 11,870,375
WorldCom, Inc. (a).............. 916,082 42,025,262
--------------
59,347,887
--------------
TELEPHONE (1.2%)
ALLTEL Corp..................... 400,600 24,812,163
--------------
Total Common Stocks
(Cost $1,172,070,925).......... 1,949,274,892
--------------
<CAPTION>
SHORT-TERM INVESTMENTS (2.6%)
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
COMMERCIAL PAPER (2.6%)
Ford Motor Credit Co.
6.55%, due 7/7/00.............. $14,250,000 14,234,413
General Electric Capital Corp.
6.81%, due 7/6/00.............. 17,500,000 17,483,438
Goldman Sachs Group, Inc. (The)
6.95%, due 7/3/00.............. 9,790,000 9,786,219
Prudential Funding Corp.
6.56%, due 7/5/00.............. $10,000,000 9,992,698
--------------
Total Short-Term Investments
(Cost $51,496,768)............. 51,496,768
--------------
Total Investments
(Cost $1,223,567,693) (c)...... 100.0% 2,000,771,660(d)
Cash and Other Assets, Less
Liabilities.................... 0.0(e) 596,453
----------- --------------
Net Assets...................... 100.0% $2,001,368,113
=========== ==============
</TABLE>
------------
(a) Non-income producing security.
(b) ADR--American Depository Receipt.
(c) The cost stated also represents the aggregate cost for federal income tax
purposes.
(d) At June 30, 2000, net unrealized appreciation was $777,203,967, 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 $806,733,742 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $29,529,775.
(e) Less than one tenth of a percent.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
81
<PAGE> 82
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $1,223,567,693)..... $2,000,771,660
Cash................................... 2,367
Receivables:
Investment securities sold........... 13,944,757
Dividends............................ 527,443
Fund shares sold..................... 137,345
--------------
Total assets................... 2,015,383,572
--------------
LIABILITIES:
Payables:
Investment securities purchased...... 9,784,330
Fund shares redeemed................. 2,664,404
Adviser.............................. 578,573
Administrator........................ 321,429
Custodian............................ 55,926
Directors............................ 1,232
Accrued expenses....................... 609,565
--------------
Total liabilities.............. 14,015,459
--------------
Net assets applicable to outstanding
shares............................... $2,001,368,113
==============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share)
200 million shares authorized........ $ 556,546
Additional paid-in capital............. 1,217,487,299
Accumulated net investment loss........ (1,608,709)
Accumulated undistributed net realized
gain on investments.................. 7,729,010
Net unrealized appreciation
on investments....................... 777,203,967
--------------
Net assets applicable to outstanding
shares............................... $2,001,368,113
==============
Shares of capital stock outstanding.... 55,654,600
==============
Net asset value per share
outstanding.......................... $ 35.96
==============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 3,052,716
Interest................................ 1,223,491
-----------
Total income...................... 4,276,207
-----------
Expenses:
Advisory................................ 3,383,344
Administration.......................... 1,879,636
Shareholder communication............... 428,342
Custodian............................... 72,631
Professional............................ 56,558
Directors............................... 31,382
Miscellaneous........................... 33,023
-----------
Total expenses.................... 5,884,916
-----------
Net investment loss....................... (1,608,709)
-----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments.......... 7,729,010
Net change in unrealized appreciation
on investments.......................... 38,741,499
-----------
Net realized and unrealized gain
on investments.......................... 46,470,509
-----------
Net increase in net assets resulting
from operations......................... $44,861,800
===========
</TABLE>
------------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$10,119.
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.
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment loss....................................... $ (1,608,709) $ (672,540)
Net realized gain on investments.......................... 7,729,010 162,072,973
Net change in unrealized appreciation on investments...... 38,741,499 198,709,054
-------------- --------------
Net increase in net assets resulting from operations...... 44,861,800 360,109,487
-------------- --------------
Dividends and distributions to shareholders:
From net realized gain on investments..................... (94,020,022) (67,701,570)
-------------- --------------
Total dividends and distributions to shareholders....... (94,020,022) (67,701,570)
-------------- --------------
Capital share transactions:
Net proceeds from sale of shares.......................... 207,929,010 522,943,112
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 94,020,022 67,701,570
-------------- --------------
301,949,032 590,644,682
Cost of shares redeemed................................... (99,936,672) (271,402,974)
-------------- --------------
Increase in net assets derived from capital share
transactions............................................ 202,012,360 319,241,708
-------------- --------------
Net increase in net assets.................................. 152,854,138 611,649,625
NET ASSETS:
Beginning of period......................................... 1,848,513,975 1,236,864,350
-------------- --------------
End of period............................................... $2,001,368,113 $1,848,513,975
============== ==============
Accumulated net investment loss at end of period............ $ (1,608,709) $ --
============== ==============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
2000* 1999 1998 1997 1996 1995
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period....... $ 36.98 $ 30.61 $ 22.39 $ 18.39 $ 15.49 $ 11.45
---------- ---------- ---------- -------- -------- --------
Net investment income (loss)................. (0.03)(a) (0.02)(a) 0.03 0.00(b) 0.01 0.06
Net realized and unrealized gain on
investments................................ 0.81 7.79 8.51 4.31 2.90 4.04
---------- ---------- ---------- -------- -------- --------
Total from investment operations............. 0.78 7.77 8.54 4.31 2.91 4.10
---------- ---------- ---------- -------- -------- --------
Less dividends and distributions:
From net investment income................. -- -- (0.03) (0.00)(b) (0.01) (0.06)
From net realized gain
on investments........................... (1.80) (1.40) (0.29) (0.31) -- --
---------- ---------- ---------- -------- -------- --------
Total dividends and distributions............ (1.80) (1.40) (0.32) (0.31) (0.01) (0.06)
---------- ---------- ---------- -------- -------- --------
Net asset value at end of period............. $ 35.96 $ 36.98 $ 30.61 $ 22.39 $ 18.39 $ 15.49
========== ========== ========== ======== ======== ========
Total investment return...................... 2.28%(d) 25.41% 38.14% 23.49% 18.75% 35.78%
Ratios (to average net assets)/
Supplemental Data:
Net investment income (loss)............... (0.17%)+ (0.05%) 0.11% 0.00%(c) 0.09% 0.57%
Net expenses............................... 0.63%+ 0.62% 0.64% 0.65% 0.73% 0.73%
Expenses (before reimbursement)............ 0.63%+ 0.62% 0.64% 0.65% 0.75% 0.90%
Portfolio turnover rate...................... 21% 37% 27% 34% 16% 35%
Net assets at end of period (in 000's)....... $2,001,368 $1,848,514 $1,236,864 $763,079 $503,622 $244,536
</TABLE>
------------
(a) Per share data based on average shares outstanding during the period.
(b) Less than one cent per share.
(c) Less than one-hundredth of a percent.
(d) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
83
<PAGE> 84
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (100.2%)+
PRINCIPAL AMORTIZED
AMOUNT COST
-------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES (2.6%)
Chevy Chase Auto Receivables Trust
Series 2000-1 Class A1
6.87%, due 7/12/01 (c)........... $3,000,000 $ 3,000,000
CNH Equipment Trust
Series 2000-A Class A1
6.18%, due 4/9/01 (c)............ 2,206,498 2,206,498
Ford Credit Auto Owner Trust
Series 2000-C Class A1
6.62%, due 10/15/00 (c).......... 3,000,000 3,000,000
------------
8,206,498
------------
BANK NOTES (3.6%)
Bank of North America
6.90%, due 12/6/00 (b)(c)........ 4,000,000 4,002,463
First Union National Bank
6.70%, due 5/4/01 (b)(c)......... 4,000,000 4,002,564
6.96%, due 11/13/00 (b)(c)....... 3,000,000 3,002,450
------------
11,007,477
------------
CERTIFICATES OF DEPOSIT (7.1%)
Bayerische Landesbank New York
6.58%, due 12/15/00 (b)(c)....... 3,000,000 2,999,530
British Telecommunications PLC
6.62%, due 2/27/01 (b)(c)........ 4,000,000 4,000,000
Commerzbank AG New York
6.60%, due 4/26/01 (b)(c)........ 4,000,000 3,999,043
Lloyds Banks PLC New York
5.65%, due 7/17/00 (c)........... 3,000,000 2,999,956
UBS AG Stamford Connecticut
6.24%, due 12/6/00 (c)........... 5,000,000 4,999,570
Westdeutsche Landesbank New York
6.57%, due 3/23/01 (b)(c)........ 3,000,000 2,998,919
------------
21,997,018
------------
COMMERCIAL PAPER (73.9%)
Alliance & Leicester PLC
6.58%, due 8/22/00 (a)........... 3,000,000 2,972,583
Allianz of America Finance Corp.
6.55%, due 8/8/00 (a)............ 4,000,000 3,973,800
6.57%, due 7/6/00 (a)............ 3,000,000 2,998,358
6.60%, due 8/22/00 (a)........... 2,000,000 1,981,667
6.62%, due 9/11/00 (a)........... 3,000,000 2,961,383
American Express Credit Corp.
6.53%, due 7/20/00............... 3,000,000 2,990,749
6.54%, due 8/9/00................ 3,000,000 2,979,835
6.56%, due 7/24/00............... 3,000,000 2,988,520
American General Finance Corp.
6.55%, due 7/28/00............... 3,000,000 2,986,354
6.58%, due 7/13/00............... 3,000,000 2,994,517
Associates Corp. of North America
6.53%, due 7/19/00............... 2,000,000 1,994,196
Associates First Capital Corp.
6.52%, due 7/5/00................ 3,000,000 2,998,913
6.55%, due 7/10/00 - 7/17/00..... 6,000,000 5,988,537
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
-------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Atlantis One Funding Corp.
6.56%, due 8/3/00................ $3,000,000 $ 2,983,053
6.58%, due 8/18/00............... 3,000,000 2,974,777
AT&T Corp.
6.52%, due 8/21/00............... 3,000,000 2,973,377
BCI Funding Corp.
6.53%, due 7/7/00................ 3,200,000 3,197,678
6.58%, due 9/5/00................ 3,000,000 2,964,907
Bell Atlantic Financial Services
6.55%, due 7/19/00............... 3,000,000 2,991,267
6.56%, due 7/24/00............... 4,000,000 3,984,693
BellSouth Telecommunications Inc.
6.50%, due 7/10/00............... 5,000,000 4,993,681
6.52%, due 8/2/00................ 3,000,000 2,983,700
British Telecommunications PLC
6.10%, due 9/6/00................ 3,000,000 2,966,958
Cregem North America Inc.
6.53%, due 8/14/00............... 3,000,000 2,977,145
6.54%, due 7/3/00................ 3,000,000 3,000,000
6.58%, due 9/11/00............... 2,900,000 2,862,896
Deutsche Bank New York
6.54%, due 8/17/00 - 8/25/00..... 7,000,000 6,938,415
Dresdner Finance Inc.
6.56%, due 7/25/00............... 4,000,000 3,983,964
Edison International
6.60%, due 7/5/00 (a)............ 3,000,000 2,998,900
Ford Motor Credit Co.
6.54%, due 7/11/00 - 8/18/00..... 5,600,000 5,573,913
6.55%, due 7/7/00................ 3,000,000 2,997,817
Formosa Plastics Corp. USA
6.22%, due 8/14/00............... 3,000,000 2,978,230
Franklin Resources Inc.
6.62%, due 9/6/00 (a)............ 3,000,000 2,964,142
General Electric Capital Corp.
6.22%, due 1/2/01 (b)(c)......... 2,000,000 1,999,501
6.54%, due 8/11/00............... 4,000,000 3,971,660
6.60%, due 9/8/00................ 2,000,000 1,975,433
Goldman Sachs Group L.P. (The)
6.25%, due 7/10/00............... 4,000,000 3,995,139
6.58%, due 7/6/00 - 7/27/00...... 6,000,000 5,985,195
Halifax PLC
6.54%, due 8/29/00............... 4,000,000 3,958,580
6.60%, due 9/6/00................ 3,000,000 2,964,250
Idaho Power Co.
6.52%, due 7/13/00............... 4,000,000 3,992,756
KFW International Finance Inc.
6.55%, due 7/10/00............... 3,000,000 2,996,179
Lloyds Banks PLC
6.58%, due 9/8/00................ 3,000,000 2,963,262
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
84
<PAGE> 85
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (CONTINUED)
PRINCIPAL AMORTIZED
AMOUNT COST
-------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Merrill Lynch & Co. Inc.
6.57%, due 7/12/00............... $3,000,000 $ 2,995,073
6.58%, due 8/10/00............... 3,000,000 2,979,163
Morgan Stanley Dean Witter & Co.
6.58%, due 7/26/00............... 3,000,000 2,987,388
National Rural Utilities
Cooperative Finance Corp.
6.10%, due 9/12/00............... 3,000,000 2,963,908
Nationwide Building Society
6.59%, due 9/6/00................ 3,000,000 2,964,304
Petrobras International Finance
Co.
6.53%, due 7/21/00............... 3,000,000 2,990,205
Portland General Electric
6.65%, due 8/3/00................ 3,600,000 3,579,385
Prudential Funding Corp.
6.55%, due 7/18/00............... 4,000,000 3,989,083
Quebec (Province of)
6.57%, due 9/8/00................ 4,000,000 3,951,090
Rabobank Netherland N.V.
6.55%, due 7/5/00................ 3,000,000 2,998,908
Receivables Capital Corp.
6.58%, due 7/11/00 (a)........... 3,600,000 3,594,736
Rio Tinto America Inc.
6.55%, due 8/18/00 (a)........... 3,000,000 2,974,892
6.60%, due 9/14/00 (a)........... 3,500,000 3,453,158
Salomon Smith Barney Holdings Inc.
6.25%, due 7/12/00............... 4,000,000 3,993,750
6.56%, due 7/31/00-8/2/00........ 7,000,000 6,962,826
San Paolo U.S. Financial Co.
6.55%, due 8/1/00................ 3,000,000 2,984,170
6.56%, due 7/18/00............... 4,000,000 3,989,066
SBC Communications Inc.
6.53%, due 8/4/00 (a)............ 3,000,000 2,982,587
6.55%, due 7/19/00 (a)........... 4,000,000 3,988,356
UBS Finance LLC
6.44%, due 9/5/00................ 3,000,000 2,964,800
Unifunding Inc.
6.59%, due 9/18/00............... 3,000,000 2,957,715
Wells Fargo & Co.
6.60%, due 7/3/00................ 3,000,000 3,000,000
Wood Street Funding Corp.
6.60%, due 7/14/00 (a)........... 3,000,000 2,993,950
6.61%, due 7/17/00 (a)........... 3,000,000 2,992,288
------------
228,131,681
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------
<S> <C> <C>
CORPORATE BONDS (2.3%)
AT&T Corp.
6.24%, due 7/13/00 (a)(b)(c)..... $3,000,000 $ 2,999,967
6.68%, due 8/7/00 (a)(b)(c)...... 4,000,000 3,999,968
------------
6,999,935
------------
MEDIUM-TERM NOTES (10.7%)
Abbey National Treasury Services
6.55%, due 6/15/01 (b)(c)........ 3,000,000 2,998,046
Bank of America Corp.
6.96%, due 2/9/01 (b)(c)......... 3,000,000 3,004,137
IBM Credit Corp.
5.898%, due 8/7/00 (c)........... 3,000,000 2,999,911
Merrill Lynch & Co. Inc.
6.89%, due 5/21/01 (b)(c)........ 2,000,000 2,001,936
Morgan (J.P.) & Co. Inc.
6.38%, due 7/6/00 (b)(c)......... 3,000,000 2,999,979
Morgan Stanley Dean Witter & Co.
6.23%, due 3/13/01 (b)(c)........ 3,000,000 3,001,454
6.36%, due 4/16/01 (b)(c)........ 3,000,000 3,002,823
National Rural Utilities
Cooperative Finance Corp.
6.29%, due 7/14/00 (b)(c)........ 4,000,000 3,999,942
Prudential Funding Corp.
6.85%, due 12/21/00 (b)(c)....... 4,000,000 4,000,587
Xerox Corp.
5.64%, due 7/14/00 (c)........... 2,000,000 1,999,974
Wells Fargo & Co.
6.71%, due 7/16/01 (b)(c)........ 3,000,000 2,999,364
------------
33,008,153
------------
Total Short-Term Investments
(Amortized Cost $309,350,762)
(d).............................. 100.2% 309,350,762
Liabilities in Excess of Cash and
Other Assets..................... (0.2) (761,881)
--------- ------------
Net Assets........................ 100.0% $308,588,881
========= ============
</TABLE>
------------
(a) May be sold to institutional investors only.
(b) Floating rate. Rate shown is the rate in effect at June 30, 2000.
(c) Interest bearing security.
(d) The cost stated also represents the aggregate cost for federal income tax
purposes.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
85
<PAGE> 86
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
The table below sets forth the diversification of Cash
Management Portfolio investments by industry.
INDUSTRY
DIVERSIFICATION
<TABLE>
<CAPTION>
AMORTIZED
COST PERCENT+
------------------------
<S> <C> <C>
Auto Leases................. $ 14,571,729 4.7%
Banks #..................... 86,882,311 28.1
Chemicals--Specialty........ 2,978,230 1.0
Computer Systems............ 2,999,911 1.0
Diversified Financial
Services.................. 19,892,648 6.4
Electric Power Companies.... 6,578,285 2.1
Finance..................... 26,868,360 8.7
Foreign Government.......... 3,951,090 1.3
Insurance................... 19,904,877 6.4
Investment Bank/Brokerage... 40,904,726 13.2
Metals--Miscellaneous....... 6,428,050 2.1
Office Equipment &
Supplies.................. 1,999,974 0.6
Oil--Intergrated
International............. 2,990,205 1.0
Special Purpose Finance..... 29,543,057 9.6
Telecommunication--Long
Distance.................. 6,999,935 2.3
Telecommunication
Services.................. 2,973,377 1.0
Telephone................... 28,891,241 9.4
Utilities--Electric......... 3,992,756 1.3
----------- --------
309,350,762 100.2
Liabilities in Excess of
Cash and Other Assets..... (761,881) (0.2)
----------- --------
Net Assets.................. $308,588,881 100.0%
=========== ========
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
# The Portfolio will invest more than 25% of the market value of its total
assets in the securities of banks and bank holding companies, including
certificates of deposit, bankers' acceptances and securities guaranteed by
banks and bank holding companies.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
86
<PAGE> 87
MAINSTAY VP SERIES FUND, INC.
CASH MANAGEMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(amortized cost $309,350,762).......... $309,350,762
Cash..................................... 67,967
Receivables:
Fund shares sold....................... 13,198,739
Investment securities sold............. 5,900,000
Interest receivable.................... 1,071,526
------------
Total assets..................... 329,588,994
------------
LIABILITIES:
Payables:
Investment securities purchased........ 18,446,590
Fund shares redeemed................... 590,268
Adviser................................ 68,983
Administrator.......................... 55,186
Custodian.............................. 18,706
Directors.............................. 1,394
Accrued expenses......................... 136,386
Dividend payable......................... 1,682,600
------------
Total liabilities................ 21,000,113
------------
Net assets applicable to outstanding
shares................................. $308,588,881
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
700 million shares authorized.......... $ 3,085,901
Additional paid-in capital............... 305,501,700
Accumulated net realized gain on
investments............................ 1,280
------------
Net assets applicable to outstanding
shares................................. $308,588,881
============
Shares of capital stock outstanding...... 308,590,100
============
Net asset value per share outstanding.... $ 1.00
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 10,732,270
------------
Expenses:
Advisory............................... 435,680
Administration......................... 348,544
Shareholder communication.............. 83,145
Professional........................... 24,925
Custodian.............................. 22,336
Directors.............................. 7,591
Miscellaneous.......................... 7,102
------------
Total expenses................... 929,323
------------
Net investment income.................... 9,802,947
------------
REALIZED GAIN ON INVESTMENTS:
Net realized gain on investments......... 1,310
------------
Net increase in net assets resulting from
operations............................. $ 9,804,257
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
87
<PAGE> 88
CASH MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 9,802,947 $ 15,498,879
Net realized gain (loss) on investments................... 1,310 (30)
------------- -------------
Net increase in net assets resulting from operations...... 9,804,257 15,498,849
------------- -------------
Dividends and distributions to shareholders:
From net investment income................................ (9,802,947) (15,498,879)
From net realized gain on investments..................... -- (141)
------------- -------------
Total dividends and distributions to shareholders....... (9,802,947) (15,499,020)
------------- -------------
Capital share transactions:
Net proceeds from sale of shares.......................... 528,996,329 977,607,004
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 8,121,986 16,403,044
------------- -------------
537,118,315 994,010,048
Cost of shares redeemed................................... (683,000,974) (771,091,687)
------------- -------------
Increase (decrease) in net assets derived from capital
share transactions...................................... (145,882,659) 222,918,361
------------- -------------
Net increase (decrease) in net assets....................... (145,881,349) 222,918,190
NET ASSETS:
Beginning of period......................................... 454,470,230 231,552,040
------------- -------------
End of period............................................... $ 308,588,881 $ 454,470,230
============= =============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
2000* 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------ ------------
Net investment income........ 0.03 0.05 0.05 0.05 0.05 0.05
------------ ------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
From net investment
income................... (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
From net realized gain on
investments.............. -- (0.00)(a) (0.00)(a) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions.............. (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value at end of
period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============ ============ ============
Total investment return...... 2.83%(b) 4.84% 5.18% 5.25% 4.95% 5.59%
Ratios (to average net
assets)/ Supplemental Data:
Net investment income...... 5.68%+ 4.79% 5.05% 5.13% 4.92% 5.44%
Net expenses............... 0.54%+ 0.51% 0.54% 0.54% 0.62% 0.62%
Expenses (before
reimbursement)........... 0.54%+ 0.51% 0.54% 0.54% 0.64% 0.94%
Net assets at end of period
(in 000's)................. $ 308,589 $ 454,470 $ 231,552 $ 140,782 $ 118,347 $ 87,839
</TABLE>
------------
(a) Less than one cent per share.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
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.
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
CONVERTIBLE SECURITIES (80.0%)+
CONVERTIBLE BONDS (57.0%)
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
ADVERTISING & MARKETING SERVICES (2.5%)
Getty Images, Inc.
5.00%, due 3/15/07 (b)........... $2,500,000 $ 2,068,750
Lamar Advertising Co.
5.25%, due 9/15/06............... 1,500,000 1,670,625
------------
3,739,375
------------
AUTO PARTS & EQUIPMENT (0.7%)
MascoTech, Inc.
4.50%, due 12/15/03.............. 1,500,000 1,125,000
------------
BANKS (1.5%)
European Bank for Reconstruction &
Development
0.75%, due 7/2/01 (c)............ 1,250,000 1,315,625
Mitsubishi Bank Ltd. International
Finance (Bermuda) Trust
3.00%, due 11/30/02.............. 1,000,000 1,033,750
------------
2,349,375
------------
BROADCAST/MEDIA (2.2%)
Clear Channel Communications, Inc.
1.50%, due 12/1/02............... 300,000 294,000
2.625%, due 4/1/03............... 750,000 972,187
News America Holdings, Inc.
(zero coupon), due 3/11/13 (d)... 850,000 941,910
Rogers Communications, Inc.
2.00%, due 11/26/05 (e).......... 1,100,000 1,090,375
------------
3,298,472
------------
COMMUNICATIONS--EQUIPMENT (4.3%)
ANTEC Corp.
4.50%, due 5/15/03............... 500,000 887,500
Aspect Communications Corp.
(zero coupon), due 8/10/18....... 5,250,000 2,152,500
Comverse Technology, Inc.
4.50%, due 7/1/05................ 800,000 3,487,000
------------
6,527,000
------------
COMPUTER SOFTWARE & SERVICES (4.0%)
Network Associates, Inc.
(zero coupon), due 2/13/18....... 5,000,000 1,781,250
Safeguard Scientifics, Inc.
5.00%, due 6/15/06............... 250,000 363,750
Siebel Systems, Inc.
5.50%, due 9/15/06............... 400,000 1,444,000
Veritas Software Corp.
1.856%, due 8/13/06.............. 800,000 2,517,000
------------
6,106,000
------------
COMPUTERS--HARDWARE (0.6%)
Acer, Inc.
(zero coupon), due 2/1/05 (b).... 1,000,000 963,750
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
ELECTRICAL EQUIPMENT (2.5%)
ASE Test Ltd.
1.00%, due 7/1/04 (b)............ $1,250,000 $ 1,589,063
1.00%, due 7/1/04 (c)............ 250,000 317,813
Solectron Corp.
(zero coupon), due 1/27/19....... 1,000,000 678,750
(zero coupon), due 5/8/20........ 2,000,000 1,270,000
------------
3,855,626
------------
ELECTRONICS--COMPONENTS (7.6%)
Burr-Brown Corp.
4.25%, due 2/15/07 (b)........... 2,000,000 3,365,000
Cypress Semiconductor Corp.
4.00%, due 2/1/05................ 2,300,000 2,670,875
SCI Systems, Inc.
3.00%, due 3/15/07............... 2,000,000 1,960,000
Semtech Corp.
4.50%, due 2/1/07 (b)............ 1,500,000 1,638,750
Vitesse Semiconductor Corp.
4.00%, due 3/15/05 (b)........... 2,000,000 1,855,000
------------
11,489,625
------------
ELECTRONICS--SEMICONDUCTORS (8.0%)
Adaptec, Inc.
4.75%, due 2/1/04................ 1,000,000 843,750
Advanced Energy Industries, Inc.
5.25%, due 11/15/06.............. 575,000 779,844
Amkor Technology, Inc.
5.00%, due 3/15/07 (b)........... 1,000,000 911,250
Integrated Process Equipment Corp.
6.25%, due 9/15/04............... 1,000,000 791,250
Kulicke & Soffa Industries, Inc.
4.75%, due 12/15/06.............. 1,250,000 1,814,063
Lam Research Corp.
5.00%, due 9/1/02................ 500,000 694,375
LSI Logic Corp.
4.25%, due 3/15/04............... 475,000 1,647,062
Lattice Semiconductor Corp.
4.75%, due 11/1/06............... 1,400,000 2,532,250
Photronics, Inc.
6.00%, due 6/1/04................ 1,000,000 1,140,000
S3, Incorporated
5.75%, due 10/1/03............... 1,000,000 962,500
------------
12,116,344
------------
FINANCE (0.1%)
Belgelec Finance S.A.
1.50%, due 8/4/04................ E 167,640 176,496
------------
FINANCIAL--MISCELLANEOUS (1.0%)
Morgan Stanley Dean Witter & Co.
(zero coupon), due 10/19/06...... $ 500,000 1,456,875
------------
FINANCIAL SERVICES (0.8%)
Berkshire Hathaway, Inc.
1.00%, due 12/2/01............... 455,000 1,235,894
------------
GOLD & PRECIOUS METALS MINING (0.2%)
Coeur d'Alene Mines Corp.
7.25%, due 10/31/05.............. 700,000 318,500
------------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
89
<PAGE> 90
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
CONVERTIBLE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
HEALTH CARE-DRUGS (0.5%)
Roche Holdings AG
Series DTC
(zero coupon), due 4/20/10
(b)(d)........................... $1,500,000 $ 789,375
------------
INTERNET SOFTWARE & SERVICES (5.0%)
Critical Path, Inc.
5.75%, due 4/1/05 (b)............ 1,000,000 833,750
Digital Island, Inc.
6.00%, due 2/15/05............... 1,000,000 718,750
Internet Capital Group, Inc.
5.50%, due 12/21/04.............. 3,000,000 1,961,250
Juniper Networks, Inc.
4.75%, due 3/15/07............... 1,750,000 1,942,500
USinternetworking, Inc.
7.00%, due 11/1/04............... 1,500,000 2,107,500
------------
7,563,750
------------
INVESTMENT BANK/BROKERAGE (2.2%)
Lehman Brothers Holdings Inc.
0.25%, due 7/8/03................ 1,500,000 1,507,500
Merrill Lynch & Co., Inc.
0.25%, due 5/10/06............... 1,200,000 1,261,500
1.00%, due 7/20/06............... 850,000 643,875
------------
3,412,875
------------
MANUFACTURING--DIVERSIFIED (0.7%)
Mark IV Industries, Inc.
4.75%, due 11/1/04............... 1,100,000 1,021,625
------------
OIL & GAS (0.6%)
Devon Energy Corp.
4.90%, due 8/15/08............... 1,000,000 958,750
------------
POLLUTION CONTROL (1.2%)
Waste Management, Inc.
4.00%, due 2/1/02................ 2,000,000 1,872,500
------------
REAL ESTATE INVESTMENT/MANAGEMENT(0.8%)
Pinnacle Holdings, Inc.
5.50%, due 9/15/07 (b)........... 1,250,000 1,120,312
Macerich Co. (The)
7.25%, due 12/15/02 (c).......... 135,000 120,488
------------
1,240,800
------------
RETAIL STORES--SPECIALTY (0.5%)
Office Depot, Inc.
(zero coupon), due 11/1/08 (d)... 1,000,000 710,000
------------
SPECIALIZED SERVICES (0.6%)
CUC International, Inc.
3.00%, due 2/15/02............... 1,000,000 910,000
------------
SPECIALTY PRINTING (0.4%)
World Color Press, Inc.
6.00%, due 10/1/07............... 575,000 615,250
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
TELECOMMUNICATIONS (5.8%)
Allied Riser Communications Corp.
7.50%, due 6/15/07 (b)........... $2,000,000 $ 2,010,000
Efficient Networks, Inc.
5.00%, due 3/15/05 (b)........... 4,750,000 3,562,500
Fullerton Global Corp.
(zero coupon), due 4/2/03 (c).... 1,000,000 1,013,750
Global TeleSystems, Inc.
5.75%, due 7/1/10 (c)............ 1,150,000 667,000
ITC Deltacom, Inc.
4.50%, due 5/15/06............... 1,500,000 1,518,750
------------
8,772,000
------------
TELECOMMUNICATIONS--LONG DISTANCE (1.4%)
Nextel Communications, Inc.
5.25%, due 1/15/10............... 2,100,000 2,121,000
------------
TELEPHONE (1.3%)
Bell Atlantic Financial Services,
Inc.
4.25%, due 9/15/05 (b)........... 850,000 1,102,875
5.75%, due 4/1/03................ 850,000 833,000
------------
1,935,875
------------
Total Convertible Bonds
(Cost $82,572,788)............... 86,682,132
------------
<CAPTION>
PREFERRED STOCKS (23.0%)
SHARES
----------
<S> <C> <C>
AEROSPACE/DEFENSE (2.1%)
Titan Capital Trust
5.75% (b)........................ 59,000 3,252,375
------------
AUTO PARTS & EQUIPMENT(0.3%)
Tower Automotive Capital Trust
6.75%............................ 15,000 472,500
------------
BROADCAST/MEDIA (2.1%)
Comcast Corp.
3.35%............................ 11,000 1,254,000
Cox Communications, Inc.
7.00%............................ 17,000 1,044,438
Entercom Communications Capital
Trust
6.25%............................ 14,500 902,625
------------
3,201,063
------------
CONSUMER SERVICES (0.2%)
Carriage Services Capital Trust
7.00%............................ 15,000 360,000
------------
ELECTRIC POWER COMPANIES (1.5%)
AES Trust III
6.75%............................ 6,000 432,750
AES Trust VII
6.00% (b)........................ 30,000 1,773,750
------------
2,206,500
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
90
<PAGE> 91
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
PREFERRED STOCKS (CONTINUED)
SHARES VALUE
-------------------------
<S> <C> <C>
FOOD (1.4%)
Chiquita Brands International,
Inc.
$3.75, Series B.................. 11,000 $ 213,469
Suiza Capital Trust II
5.50%............................ 52,000 1,976,000
------------
2,189,469
------------
FOOD & HEALTH CARE DISTRIBUTORS (0.4%)
Owens & Minor Trust I
5.375%, Series A (f)............. 15,000 648,750
------------
INDEPENDENT POWER PRODUCERS (0.9%)
Calpine Capital Trust
5.50% (b)........................ 20,000 1,432,500
------------
INSURANCE (0.5%)
PLC Capital Trust II
6.50%............................ 15,000 686,250
------------
INSURANCE--PROPERTY & CASUALTY (1.2%)
ACE Ltd.
8.25%............................ 30,000 1,876,875
------------
INTERNET SOFTWARE & SERVICES (0.6%)
Rhythms NetConnections, Inc.
6.75% (b)........................ 20,000 910,000
------------
MACHINERY--DIVERSIFIED (0.3%)
Ingersoll-Rand Co.
6.75%............................ 19,000 387,125
------------
NATURAL GAS DISTRIBUTORS &
PIPELINES (1.7%)
Coastal Corp. (The)
6.625%........................... 40,000 1,400,000
El Paso Energy Capital Trust I
4.75%............................ 19,000 1,223,125
------------
2,623,125
------------
OIL & GAS (0.5%)
Valero Energy Corp.
7.75% (g)........................ 29,000 772,125
------------
OIL & GAS--DRILLING (1.1%)
Weatherford International, Inc.
5.00%............................ 37,000 1,678,875
------------
OIL & GAS--EXPLORATION &
PRODUCTION (0.2%)
Unocal Capital Trust
6.25%............................ 5,000 229,375
------------
PAPER & FOREST PRODUCTS (0.9%)
Georgia-Pacific Corp.
7.50%............................ 20,000 640,000
International Paper Co.
5.25%............................ 20,000 752,500
------------
1,392,500
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
PUBLISHING--NEWSPAPER (0.3%)
Tribune Co.
6.25%............................ 23,000 $ 385,250
------------
RAILROADS (0.6%)
Union Pacific Capital Trust
6.25%............................ 25,000 965,625
------------
REAL ESTATE (2.0%)
General Growth Properties, Inc.
7.25% (h)(i1).................... 85,000 1,848,750
Glenborough Realty Trust, Inc.
7.75% Series A................... 65,000 1,121,250
------------
2,970,000
------------
SPECIALIZED SERVICES (0.7%)
Cendant Corp.
7.50%............................ 50,000 1,087,500
------------
TELECOMMUNICATIONS (1.7%)
Alliant Energy Corp.
7.25% (b)(j)..................... 5,000 348,750
DECS Trust V
7.25%............................ 27,000 882,562
Qwest Trends Trust
5.75% (b)........................ 17,500 1,419,687
------------
2,650,999
------------
TELECOMMUNICATIONS--LONG
DISTANCE (1.3%)
Global Crossing Ltd.
6.375%........................... 6,275 1,128,716
Network Plus Corp.
7.50% (i3)....................... 25,000 778,125
------------
1,906,841
------------
TELEPHONE (0.5%)
Viatel Financing Trust I
7.75% (b)........................ 20,000 765,000
------------
Total Convertible Preferred Stocks
(Cost $35,396,169)............... 35,050,622
------------
Total Convertible Securities
(Cost $117,968,957)............... 121,732,754
------------
<CAPTION>
COMMON STOCKS (9.4%)
<S> <C> <C>
COMMUNICATIONS--EQUIPMENT (0.2%)
QUALCOMM, Inc. (a)................ 4,000 240,000
------------
COMPUTER SOFTWARE & SERVICES (0.2%)
America Online, Inc. (a).......... 2,000 105,500
Comdisco, Inc..................... 10,000 223,125
------------
328,625
------------
COMPUTER SYSTEMS (0.2%)
Unisys Corp. (a).................. 25,000 364,063
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
91
<PAGE> 92
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-------------------------
<S> <C> <C>
ELECTRONICS--COMPONENTS (1.8%)
Integrated Device Technology, Inc.
(a).............................. 25,000 $ 1,496,875
Microsemi Corp. (a)............... 35,000 1,187,812
------------
2,684,687
------------
ELECTRONICS--SEMICONDUCTORS (2.3%)
Helix Technology Corp............. 32,000 1,248,000
Trikon Technologies, Inc. (a)..... 70,000 1,330,000
S3, Incorporated (a).............. 35,000 516,250
Xicor, Inc. (a)................... 60,000 401,250
------------
3,495,500
------------
FINANCIAL--MISCELLANEOUS (1.0%)
American General Corp............. 25,830 1,575,654
------------
HEALTH CARE--DRUGS (0.7%)
Merck & Co., Inc.................. 13,000 996,125
------------
INTERNET SOFTWARE & SERVICES (0.9%)
Descartes Systems Group, Inc.
(a).............................. 13,000 399,750
VeriSign, Inc. (a)................ 5,000 882,500
------------
1,282,250
------------
IRON & STEEL (0.1%)
AK Steel Holding Corp............. 25,000 200,000
------------
OIL & GAS--EXPLORATION &
PRODUCTION (0.3%)
Burlington Resources, Inc......... 12,000 459,000
------------
OIL--INTEGRATED DOMESTIC (0.3%)
EOG Resources, Inc................ 13,400 448,900
------------
RETAIL STORES--FOOD CHAINS (0.6%)
Kroger Co. (a).................... 43,000 948,688
------------
TELECOMMUNICATIONS (0.5%)
Digital Lightwave, Inc. (a)....... 5,000 502,500
Intermedia Communications, Inc.
(a).............................. 10,000 297,500
------------
800,000
------------
TELECOMMUNICATIONS--CELLULAR/
WIRELESS (0.3%)
United States Cellular Corp.
(a).............................. 8,000 501,000
------------
Total Common Stocks
(Cost $15,165,083)............... 14,324,492
------------
<CAPTION>
PREFERRED STOCK (0.1%)
<S> <C> <C>
METALS--MISCELLANEOUS (0.1%)
Freeport-McMoRan Copper & Gold, Inc.
7.00% Series Silver (i2)(k)...... 15,000 180,000
------------
Total Preferred Stock
(Cost $255,750)................. 180,000
------------
<CAPTION>
SHORT-TERM INVESTMENTS (9.4%)
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
COMMERCIAL PAPER (9.4%)
American Express Credit Corp.
6.88%, due 7/3/00................ $2,915,000 $ 2,913,885
Deutsche Bank Financial, Inc.
6.55%, due 7/11/00............... 3,000,000 2,994,545
Goldman Sachs Group L.P.
6.92%, due 7/5/00................ 3,000,000 2,997,693
Salomon Smith Barney Holdings,
Inc.
6.53%, due 7/18/00............... 2,400,000 2,395,613
6.57%, due 7/11/00............... 3,000,000 2,990,712
------------
Total Short-Term Investments
(Cost $14,292,448)............... 14,292,448
------------
Total Investments
(Cost $147,682,238)(l)........... 98.9% 150,529,694(m)
Cash and Other Assets, Less
Liabilities...................... 1.1 1,597,001
---------- ------------
Net Assets........................ 100.0% $152,126,695
========== ============
</TABLE>
------------
(a) Non-income producing securities.
(b) May be sold to institutional investors only.
(c) Eurobond--bond denominated in U.S. dollars or other currencies and sold to
investors outside the country whose currency is used.
(d) LYON--Liquid Yield Option Note: callable, zero coupon securities priced at
a deep discount from par. They include a "put" feature that enables holders
to redeem them at a specific date, at a specific price. Put prices reflect
fixed interest rates, and therefore increase over time.
(e) Yankee bond.
(f) TECONS--Term Convertible Security.
(g) PEPS--Premium Equity Participating Security.
(h) PIERS--Preferred Income Equity Redeemable Stock.
(i1) Depository Shares--each share represents 0.025 shares of 7.25% Preferred
Income Equity Redeemable Stock, Series A.
(i2) Depository Shares--each share represents 0.025 shares of silver denominated
preferred stock.
(i3) Depository Shares--each share represents 0.10 shares of Series A cumulative
convertible preferred stock.
(j) PHONES--Participation Hybird Option Note Exchangeable Security.
(k) Dividend equals U.S. dollar equivalent of 0.04125 oz. of silver per share.
(l) The cost for federal income tax purposes is $148,003,456.
(m) At June 30, 2000 net unrealized appreciation was $2,526,238, based on cost
for federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $13,811,756 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $11,285,518.
(E) Security denominated in Euro.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
92
<PAGE> 93
MAINSTAY VP SERIES FUND, INC.
CONVERTIBLE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $147,682,238)......... $150,529,694
Cash..................................... 1,214,551
Receivables:
Investment securities sold............. 11,386,390
Dividends and interest................. 851,529
Fund shares sold....................... 330,363
------------
Total assets..................... 164,312,527
------------
LIABILITIES:
Payables:
Investment securities purchased........ 12,048,947
Adviser................................ 42,740
Administrator.......................... 23,745
Custodian.............................. 11,274
Fund shares redeemed................... 5,982
Accrued expenses......................... 53,144
------------
Total liabilities................ 12,185,832
------------
Net assets applicable to outstanding
shares................................. $152,126,695
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized... $ 118,915
Additional paid-in capital............... 141,027,830
Accumulated undistributed net investment
income................................. 2,224,668
Accumulated undistributed net realized
gain on investments.................... 5,972,801
Accumulated undistributed net realized
loss on foreign currency
transactions........................... (64,811)
Net unrealized appreciation on
investments and translation of other
assets and liabilities in foreign
currencies............................. 2,847,292
------------
Net assets applicable to outstanding
shares................................. $152,126,695
============
Shares of capital stock outstanding...... 11,891,525
============
Net asset value per share outstanding.... $ 12.79
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 1,659,773
Dividends.............................. 951,711
------------
Total income..................... 2,611,484
------------
Expenses:
Advisory............................... 217,216
Administration......................... 120,675
Professional........................... 20,160
Shareholder communication.............. 12,839
Portfolio pricing...................... 4,771
Directors.............................. 1,661
Custodian.............................. 1,123
Miscellaneous.......................... 8,371
------------
Total expenses................... 386,816
------------
Net investment income.................... 2,224,668
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Security transactions.................. 7,044,758
Foreign currency transactions.......... (64,811)
------------
Net realized gain on investments and
foreign currency transactions.......... 6,979,947
------------
Net change in unrealized appreciation on
investments and translation of other
assets and liabilities in foreign
currencies............................. (2,943,753)
------------
Net realized and unrealized gain on
investments............................ 4,036,194
------------
Net increase in net assets resulting from
operations............................. $ 6,260,862
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
93
<PAGE> 94
CONVERTIBLE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 2,224,668 $ 3,160,215
Net realized gain on investments and translation of other
assets and liabilities in foreign currencies............ 6,979,947 14,242,503
Net change in unrealized appreciation (depreciation) on
investments............................................. (2,943,753) 8,272,791
------------ ------------
Net increase in net assets resulting from operations...... 6,260,862 25,675,509
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ -- (3,154,675)
From net realized gain on investments..................... (6,389,454) (9,351,685)
------------ ------------
Total dividends and distributions to shareholders....... (6,389,454) (12,506,360)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 53,090,453 17,996,240
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 6,389,454 12,506,360
------------ ------------
59,479,907 30,502,600
Cost of shares redeemed................................... (2,058,274) (6,548,819)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 57,421,633 23,953,781
------------ ------------
Net increase in net assets.................................. 57,293,041 37,122,930
NET ASSETS:
Beginning of period......................................... 94,833,654 57,710,724
------------ ------------
End of period............................................... $152,126,695 $ 94,833,654
============ ============
Accumulated undistributed net investment income at end of
period.................................................... $ 2,224,668 $ --
============ ============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
OCTOBER 1,
SIX MONTHS 1996 (a)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31,
2000* 1999 1998 1997 1996
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of
period................................ $ 12.68 $ 10.33 $ 10.76 $ 10.27 $ 10.00
------------ ------------ ------------ ------------ ------------
Net investment income................... 0.19 0.49 0.51 0.44 0.10
Net realized and unrealized gain (loss)
on investments........................ 0.54 3.81 (0.02) 1.12 0.29
------------ ------------ ------------ ------------ ------------
Total from investment operations........ 0.73 4.30 0.49 1.56 0.39
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income............ -- (0.49) (0.52) (0.44) (0.10)
From net realized gain on
investments......................... (0.62) (1.46) (0.40) (0.63) (0.02)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions....... (0.62) (1.95) (0.92) (1.07) (0.12)
------------ ------------ ------------ ------------ ------------
Net asset value at end of period........ $ 12.79 $ 12.68 $ 10.33 $ 10.76 $ 10.27
============ ============ ============ ============ ============
Total investment return................. 5.99%(b) 41.98% 4.49% 15.43% 3.89%(b)
Ratios (to average net assets)/
Supplemental Data:
Net investment income................. 3.68%+ 4.52% 5.19% 5.13% 5.14%+
Net expenses.......................... 0.64%+ 0.71% 0.72% 0.73% 0.73%+
Expenses (before reimbursement)....... 0.64%+ 0.71% 0.72% 0.78% 1.46%+
Portfolio turnover rate................. 78% 264% 209% 217% 15%
Net assets at end of period (in
000's)................................ $ 152,127 $ 94,834 $ 57,711 $ 39,768 $ 15,464
</TABLE>
------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
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.
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
LONG-TERM BONDS (96.7%)+
ASSET-BACKED SECURITIES (4.1%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
AIRPLANE LEASES (0.5%)
AerCo Ltd.
Series 1X Class A1
6.8413%, due 7/15/23 (c)........ $ 575,000 $ 574,885
------------
AUTO LEASES (0.8%)
Ford Credit Auto Owner Trust
Series 2000-B Class A3
6.97%, due 4/15/03.............. 905,000 903,000
------------
EQUIPMENT LOANS (2.4%)
Case Equipment Loan Trust Series
1999-A Class A4
5.77%, due 8/15/05.............. 1,360,000 1,321,743
CNH Case Equipment Trust Series
2000-A Class B
7.32%, due 2/15/07.............. 1,060,469 1,055,856
Newcourt Equipment Trust
Securities Series 1998-1 Class
A3
5.24%, due 12/20/02............. 254,530 251,331
------------
2,628,930
------------
HOME EQUITY LOANS (0.4%)
Southern Pacific Secured Assets
Corp.
Series 1997-1 Class A1
6.81%, due 4/25/27 (c).......... 423,346 423,092
------------
Total Asset-Backed Securities
(Cost $4,578,516)............... 4,529,907
------------
MORTGAGE-BACKED SECURITIES (1.9%)
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) (1.9%)
GMAC Commercial Mortgage
Securities, Inc.
Series 1998-C2 Class A2
6.42%, due 5/15/35.............. 970,000 907,823
Merrill Lynch Mortgage Investors,
Inc.
Series 1995-C2 Class A1
6.985%, due 6/15/21 (c)......... 315,265 310,668
Salomon Brothers Mortgage
Securities VII
Series 2000-C1 Class A1
7.46%, due 11/18/08............. 915,000 916,089
------------
Total Mortgage-Backed Securities
(Cost $2,140,524)............... 2,134,580
------------
<CAPTION>
U.S. GOVERNMENT & FEDERAL AGENCIES (90.7%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (5.0%)
5.375%, due 3/15/02 (d)......... $ 2,630,000 $ 2,566,038
5.625%, due 3/15/01............. 3,000,000 2,975,790
------------
5,541,828
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE PASS-
THROUGH SECURITIES) (29.6%)
6.50%, due 4/1/29 (b)........... 1,835,721 1,731,323
7.00%, due 11/1/29 (b).......... 4,944,072 4,772,562
7.50%, due 10/1/29 (b).......... 9,767,092 9,626,739
7.50%, due 7/17/30 TBA (a)...... 14,180,000 13,976,233
8.50%, due 7/17/30 TBA (a)...... 2,425,000 2,470,469
------------
32,577,326
------------
GOVERNMENT NATIONAL MORTAGE
ASSOCIATION I
(MORTGAGE PASS-THROUGH
SECURITIES) (10.8%)
6.50%, due 7/15/28 - 5/15/29.... 7,119,084 6,763,131
6.50%, due 8/23/30 TBA (a)...... 1,235,000 1,171,706
7.00%, due 7/24/30 TBA (a)...... 4,090,000 3,974,989
------------
11,909,826
------------
UNITED STATES TREASURY BONDS
(28.1%)
6.25%, due 8/15/23 - 5/15/30
(d)............................. 3,835,000 3,946,263
7.50%, due 11/15/16............. 1,745,000 1,965,306
8.75%, due 8/15/20 (d).......... 5,910,000 7,598,014
8.875%, due 8/15/17 (d)......... 1,435,000 1,829,180
11.25%, due 2/15/15 (d)......... 4,070,000 5,990,511
11.625%, due 11/15/02 (d)....... 3,250,000 3,607,500
12.00%, due 8/15/13 (d)......... 4,480,000 6,048,000
------------
30,984,774
------------
UNITED STATES TREASURY NOTES
(17.2%)
5.875%, due 11/30/01 (d)........ 14,825,000 14,704,473
6.25%, due 2/28/02.............. 1,280,000 1,275,597
6.50%, due 2/15/10.............. 2,875,000 2,973,383
------------
18,953,453
------------
Total U.S. Government &
Federal Agencies
(Cost $98,988,825).............. 99,967,207
------------
Total Long-Term Bonds
(Cost $105,707,865)............. 106,631,694
------------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
95
<PAGE> 96
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (21.5%)
FEDERAL AGENCIES (21.5%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL HOME LOAN BANK
(DISCOUNT NOTE) (6.1%)
6.39%, due 7/7/00............... $ 4,540,000 $ 4,535,151
6.48%, due 7/3/00............... 2,250,000 2,249,190
------------
6,784,341
------------
FEDERAL MORTGAGE CORP.
(DISCOUNT NOTE) (8.3%)
6.41%, due 7/11/00.............. 4,800,000 4,791,424
6.42%, due 7/5/00............... 4,310,000 4,306,921
------------
9,098,345
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (DISCOUNT NOTE)
(7.1%)
6.39%, due 7/25/00 (b).......... 3,855,000 3,838,508
6.41%, due 7/20/00 (b).......... 4,020,000 4,006,359
------------
7,844,867
------------
Total Short-Term Investments
(Cost $23,727,553).............. 23,727,553
------------
Total Investments
(Cost $129,435,418) (e)......... 118.2% 130,359,247(f)
Liabilities in Excess of
Cash and Other Assets........... (18.2) (20,066,052)
=========== ============
Net Assets....................... 100.0% $110,293,195
=========== ============
</TABLE>
------------
(a) 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.
(b) Segregated as collateral for TBA.
(c) Floating rate. Rate shown is the rate in effect at June 30, 2000.
(d) Represent securities out on loan or portion which is out on loan. (See Note
2J)
(e) The cost for federal income tax purpose is $129,526,388.
(f) At June 30, 2000 gross unrealized appreciation was $832,859, 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 $1,440,420 and aggregated gross unrealized
depreciation for all investments on which there was excess of cost over
market value of $607,561.
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.
GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $129,435,418)......... $130,359,247
Collateral held for securities loaned, at
value (Note 2J)........................ 27,760,914
Cash..................................... 56,939
Receivables:
Investment securities sold............. 2,412,311
Interest............................... 1,170,409
Fund shares sold....................... 34
------------
Total assets..................... 161,759,854
------------
LIABILITIES:
Securities lending collateral (Note
2J).................................... 27,760,914
Payables:
Investment securities purchased........ 23,365,894
Fund shares redeemed................... 215,956
Adviser................................ 27,136
Administrator.......................... 18,090
Custodian.............................. 12,848
Directors.............................. 678
Accrued expenses......................... 65,143
------------
Total liabilities................ 51,466,659
------------
Net assets applicable to outstanding
shares................................. $110,293,195
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized... $ 110,492
Additional paid-in capital............... 117,251,120
Accumulated undistributed net investment
income................................. 3,760,845
Accumulated net realized loss on
investments............................ (11,753,090)
Net unrealized appreciation on
investments............................ 923,828
------------
Net assets applicable to outstanding
shares................................. $110,293,195
============
Shares of capital stock outstanding...... 11,049,157
============
Net asset value per share outstanding.... $ 9.98
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 4,156,039
------------
Expenses:
Advisory............................... 189,506
Administration......................... 126,337
Shareholder communication.............. 28,493
Professional........................... 21,219
Custodian.............................. 13,124
Directors.............................. 2,874
Portfolio pricing...................... 875
Miscellaneous.......................... 12,766
------------
Total expenses................... 395,194
------------
Net investment income.................... 3,760,845
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments......... (2,851,591)
Net change in unrealized depreciation on
investments............................ 4,154,531
------------
Net realized and unrealized gain on
investments............................ 1,302,940
------------
Net increase in net assets resulting from
operations............................. $ 5,063,785
============
</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
GOVERNMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 3,760,845 $ 8,874,838
Net realized (loss) on investments........................ (2,851,591) (7,818,364)
Net change in unrealized appreciation (depreciation) on
investments............................................. 4,154,531 (3,728,048)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. 5,063,785 (2,671,574)
------------ ------------
Dividends to shareholders:
From net investment income................................ (23,532) (8,915,009)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 5,882,734 80,144,368
Net asset value of shares issued to shareholders in
reinvestment of dividends............................... 23,532 8,915,009
------------ ------------
5,906,266 89,059,377
Cost of shares redeemed................................... (71,708,221) (25,438,791)
------------ ------------
Increase (decrease) in net assets derived from capital
share transactions...................................... (65,801,955) 63,620,586
------------ ------------
Net increase (decrease) in net assets....................... (60,761,702) 52,034,003
NET ASSETS:
Beginning of period......................................... 171,054,897 119,020,894
------------ ------------
End of period............................................... $110,293,195 $171,054,897
============ ============
Accumulated undistributed net investment income at end of
period.................................................... $ 3,760,845 $ 23,532
============ ============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
2000* 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period.................. $ 9.56 $ 10.27 $ 9.83 $ 9.59 $ 10.01 $ 9.21
------------ ------------ ------------ ------------ ------------ ------------
Net investment income........ 0.34 0.53 0.45 0.67 0.65 0.75
Net realized and unrealized
gain (loss) on
investments................ 0.08 (0.71) 0.44 0.24 (0.42) 0.80
------------ ------------ ------------ ------------ ------------ ------------
Total from investment
operations................. 0.42 (0.18) 0.89 0.91 0.23 1.55
------------ ------------ ------------ ------------ ------------ ------------
Less dividends:
From net investment
income................... -- (0.53) (0.45) (0.67) (0.65) (0.75)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value at end of
period..................... $ 9.98 $ 9.56 $ 10.27 $ 9.83 $ 9.59 $ 10.01
============ ============ ============ ============ ============ ============
Total investment return...... 4.43%(a) (1.74%) 9.00% 9.48% 2.28% 16.72%
Ratios (to average net
assets)/Supplemental Data:
Net investment income...... 5.95%+ 5.47% 5.50% 6.71% 6.66% 7.80%
Net expenses............... 0.63%+ 0.59% 0.63% 0.63% 0.67% 0.67%
Expenses (before
reimbursement)........... 0.63%+ 0.59% 0.63% 0.63% 0.71% 0.82%
Portfolio turnover rate...... 191% 328% 405% 345% 304% 592%
Net assets at end of period
(in 000's)................. $ 110,293 $ 171,055 $ 119,021 $ 73,755 $ 73,123 $ 64,812
</TABLE>
------------
(a) Total return is not annualized.
+ Annualized.
* Unaudited.
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.
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
LONG-TERM BONDS (86.7%)+
ASSET-BACKED SECURITIES (1.5%)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
ELECTRIC POWER COMPANIES (1.4%)
AES Eastern Energy, L.P.
Pass-Through Certificates
Series 1999-A
9.00%, due 1/2/17.............. $ 9,615,000 $ 9,360,395
------------
ENTERTAINMENT (0.1%)
United Artists Theatre Co.
Pass-Through Certificates
Series 95-A
9.30%, due 7/1/15.............. 1,514,906 1,009,882
------------
Total Asset-Backed Securities
(Cost $10,655,957)............. 10,370,277
------------
CONVERTIBLE BONDS (4.2%)
BEVERAGES--SOFT DRINKS (0.4%)
Triarc Companies, Inc.
(zero coupon), due 2/9/18...... 10,550,000 2,624,313
------------
ELECTRONICS--COMPONENTS (0.6%)
Cirrus Logic, Inc.
6.00%, due 12/15/03............ 4,357,000 3,866,838
------------
GOLD & PRECIOUS METAL MINING (1.0%)
Agnico-Eagle Mines Ltd. 3.50%,
due 1/27/04 (d)................ 2,615,000 1,748,781
TVX Gold, Inc. 5.00%, due
3/28/02........................ 7,390,000 5,246,900
------------
6,995,681
------------
HOTEL/MOTEL (0.1%)
Hilton Hotels Corp.
5.00%, due 5/15/06............. 1,090,000 862,463
------------
INTERNET SOFTWARE & SERVICES (0.6%)
Digital Island, Inc. 6.00%, due
2/15/05........................ 3,070,000 2,206,563
Internet Capital Group, Inc.
5.50%, due 12/21/04............ 2,960,000 1,935,100
------------
4,141,663
------------
TELECOMMUNICATIONS (0.7%)
Efficient Networks, Inc. 5.00%,
due 3/15/05 (c)................ 1,240,000 930,000
Premiere Technologies, Inc.
5.75%, due 7/1/04.............. 3,165,000 1,982,081
Technology Resources Industries
Berhad
(zero coupon), due 10/31/04
(e)............................ 1,540,000 1,617,000
------------
4,529,081
------------
</TABLE>
<TABLE>
PRINCIPAL
AMOUNT VALUE
----------------------------
<CAPTION>
LONG-TERM BONDS (86.7%)+
ASSET-BACKED SECURITIES (1.5%)
<S> <C> <C>
TELECOMMUNICATIONS--CELLULAR/WIRELESS (0.8%)
Metro Pacific Capital Ltd.
2.50%, due 4/11/03 (f)......... $ 4,965,000 $ 5,256,455
------------
Total Convertible Bonds (Cost
$27,167,441)................... 28,276,494
------------
CORPORATE BONDS (60.1%)
AEROSPACE/DEFENSE (0.6%)
Pacific Aerospace & Electronics,
Inc. 11.25%, due 8/1/05........ 7,160,000 4,009,600
------------
ALUMINUM (0.1%)
Commonwealth Aluminum Corp.
10.75%, due 10/1/06............ 385,000 369,600
------------
AUTO PARTS & EQUIPMENT (0.5%)
Gentek, Inc. 11.00%, due
8/1/09......................... 3,505,000 3,548,813
------------
BANKS (1.0%)
B.F. Saul Real Estate
Investment Trust Series B
9.75%, due 4/1/08.............. 7,685,000 6,628,312
------------
BROADCAST/MEDIA (1.9%)
CD Radio, Inc.
(zero coupon), due 12/1/07
15.00%, beginning 12/1/02...... 8,965,000 5,110,050
14.50%, due 5/15/09............ 3,440,000 3,164,800
Radio Unica Corp.
(zero coupon), due 8/1/06
11.75%, beginning 8/1/02....... 2,213,000 1,427,385
Young America Corp.
Series B
11.625%, due 2/15/06........... 4,640,000 2,929,000
------------
12,631,235
------------
CABLE TV (7.9%)
@Entertainment, Inc.
Series B
(zero coupon), due 7/15/08
14.50%, beginning 7/15/03...... 7,500,000 4,725,000
Adelphia Communications Corp.
Series B
8.375%, due 2/1/08............. 4,035,000 3,565,931
9.375%, due 11/15/09........... 205,000 189,625
Series B
9.875%, due 3/1/07............. 1,140,000 1,091,550
Cablevision S.A.
13.75%, due 4/30/07 (c)........ 4,260,000 3,961,800
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
99
<PAGE> 100
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
CABLE TV (Continued)
Charter Communications Holdings, L.L.C.
(zero coupon), due 4/1/11
9.92%, beginning 4/1/04........ $ 1,000,000 $ 567,500
(zero coupon), due 1/15/10
11.75%, beginning 1/15/05...... 12,100,000 6,881,875
10.00%, due 4/1/09............. 5,100,000 4,921,500
Diamond Cable Communications,
PLC
13.25%, due 9/30/04............ 1,445,000 1,519,056
Supercanal Holdings S.A.
11.50%, due 5/15/05 (c)(e)..... 590,000 253,700
Telewest Communications, PLC
9.875%, due 2/1/10 (c)......... 3,345,000 3,110,850
UIH Australia/Pacific, Inc.
Series B
(zero coupon), due 5/15/06
14.00%, beginning 5/15/01...... 24,480,000 22,521,600
Series D
(zero coupon), due 5/15/06
14.00%, beginning 5/15/01...... 40,000 36,800
------------
53,346,787
------------
CHEMICALS (0.3%)
Agriculture Minerals &
Chemicals, Inc.
10.75%, due 9/30/03............ 3,215,000 1,920,963
------------
CHEMICALS--SPECIALTY (0.4%)
General Chemical Industrial
Products, Inc.
10.625%, due 5/1/09............ 1,040,000 904,800
Sovereign Specialty Chemicals,
Inc.
11.875%, due 3/15/10........... 1,965,000 2,021,494
------------
2,926,294
------------
COMMERCIAL SERVICES SPECIALIZED (0.9%)
APCOA, Inc.
9.25%, due 3/15/08............. 1,950,000 684,938
Building One Services Corp.
10.50%, due 5/1/09............. 6,265,000 5,325,250
------------
6,010,188
------------
CONSTRUCTION & HOUSING (0.1%)
Iron Age Corp.
9.875%, due 5/1/08............. 550,000 363,000
------------
CONSUMER PRODUCTS (0.2%)
Selmer Co., Inc.
11.00%, due 5/15/05............ 1,235,000 1,272,050
------------
COSMETICS/PERSONAL CARE (0.8%)
Jafra Cosmetics International,
Inc.
11.75%, due 5/1/08............. 5,385,000 5,169,600
------------
ELECTRIC POWER COMPANIES (3.4%)
CMS Energy Corp.
8.00%, due 7/1/01.............. 4,800,000 4,726,646
8.375%, due 7/1/03............. 3,000,000 2,900,229
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
ELECTRIC POWER COMPANIES (Continued)
CMS Energy Corp. &
Atlantic Methanol Capital Co.
Series A-1
10.875%, due 12/15/04 (c)...... $ 3,545,000 $ 3,500,687
ESI Tractebel Acquisition Corp.
Series B
7.99%, due 12/30/11............ 2,825,000 2,501,057
PSEG Energy Holdings, Inc.
10.00%, due 10/1/09 (c)(g)..... 5,870,000 6,159,913
Western Resources, Inc.
6.25%, due 8/15/03 (h)......... 1,935,000 1,678,396
6.875%, due 8/1/04............. 2,150,000 1,885,636
------------
23,352,564
------------
ELECTRONICS--COMPONENTS (0.2%)
Flextronics International Ltd.
9.875%, due 7/1/10 (c)......... 1,140,000 1,148,550
------------
ELECTRONICS--SEMICONDUCTORS (0.2%)
Micron Technology, Inc.
6.50%, due 9/30/05 (c)......... 2,000,000 1,660,000
------------
ENGINEERING & CONSTRUCTION (0.2%)
Traffic Stream (BVI)
Infrastructure Ltd.
14.25%, due 5/1/06 (c)(e)...... 3,350,000 1,541,000
------------
ENTERTAINMENT (2.1%)
Alliance Entertainment Corp.
Series B
11.25%, due 7/15/05 (e)(i)..... 5,835,000 584
Hollywood Entertainment Corp.
Series B
10.625%, due 8/15/04........... 7,475,000 6,409,812
Marvel Enterprises, Inc.
12.00%, due 6/15/09............ 6,855,000 5,484,000
Sports Club Company, Inc. (The)
Series B
11.375%, due 3/15/06........... 1,100,000 1,023,000
Town Sports International, Inc.
Series B
9.75%, due 10/15/04............ 1,600,000 1,520,000
------------
14,437,396
------------
FINANCE (0.6%)
ASAT Finance L.L.C.
12.50%, due 11/1/06 (c)(m1).... 1,530 1,958,400
ContiFinancial Corp.
7.50%, due 3/15/02 (e)......... 1,595,000 191,400
8.375%, due 8/15/03 (e)........ 1,990,000 238,800
Windsor Woodmount Black Hawk
13.00%, due 3/15/05 (c)(m2).... 1,500 1,503,750
------------
3,892,350
------------
</TABLE>
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.
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
FINANCIAL--MISCELLANEOUS (0.2%)
Pacific & Atlantic (Holdings)
Inc.
10.50%, due 12/31/07 (c)(j).... $ 2,552,737 $ 1,582,697
------------
FOOD & HEALTH CARE DISTRIBUTORS (0.5%)
Bergen Brunswig Corp.
7.375%, due 1/15/03............ 3,745,000 3,239,249
------------
FOOD & HOUSEHOLD PRODUCTS (0.1%)
Colorado Prime Corp.
12.50%, due 5/1/04............. 6,430,000 924,312
------------
GAMING, LOTTERY & PARI-MUTUELS (3.4%)
El Comandante Capital Corp.
11.75%, due 12/15/03........... 891,000 784,080
Hollywood Park, Inc.
9.25%, due 2/15/07............. 1,775,000 1,766,125
9.50%, due 8/1/07.............. 2,667,000 2,653,665
Jazz Casino Co., L.L.C.
6.046%, due 11/15/09 (i)(k).... 106,637 18,128
Las Vegas Sands, Inc. &
Venetian Casino Resort, L.L.C.
12.25%, due 11/15/04........... 2,705,000 2,732,050
Louisiana Casino Cruises, Inc.
Series B
11.00%, due 12/1/05............ 2,875,000 2,961,250
Mandalay Resort Group
7.625%, due 7/15/13............ 1,505,000 1,234,100
Penn National Gaming, Inc.
10.625%, due 12/15/04.......... 7,560,000 8,240,400
President Casinos, Inc.
12.00%, due 9/15/01
(c)(e)(l)...................... 1,180,000 944,000
13.00%, due 9/15/01 (e)........ 2,348,000 1,127,040
Station Casinos, Inc.
9.875%, due 7/1/10 (c)......... 670,000 679,648
------------
23,140,486
------------
HEALTH CARE--DRUGS (0.4%)
MedPartners, Inc.
7.375%, due 10/1/06............ 2,995,000 2,500,825
------------
HEALTH CARE--HOSPITAL
MANAGEMENT (1.6%)
HCA - The Healthcare Corp.
7.50%, due 11/15/95............ 10,270,000 7,727,887
Magellan Health Services, Inc.
9.00%, due 2/15/08............. 5,545,000 2,800,225
------------
10,528,112
------------
HEALTH CARE--MANAGED CARE (1.3%)
Abbey Healthcare Group, Inc.
9.50%, due 11/1/02............. 5,290,000 5,157,750
Team Health, Inc.
Series B
12.00%, due 3/15/09............ 4,660,000 3,914,400
------------
9,072,150
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
HEALTH CARE--MEDICAL PRODUCTS (0.6%)
Alaris Medical, Inc.
(zero coupon), due 8/1/08
11.125%, beginning 8/1/03...... $ 5,895,000 $ 898,987
DJ Orthopedics L.L.C.
12.625%, due 6/15/09........... 3,150,000 2,992,500
------------
3,891,487
------------
HEALTH CARE--SERVICES (1.3%)
Medaphis Corp.
Series B
9.50%, due 2/15/05............. 11,145,000 8,916,000
------------
HOMEBUILDING (0.7%)
Amatek Industries Pty Ltd.
14.50%, due 2/15/09 (f)(j)..... 4,856,155 4,589,067
14.50%, due 2/15/09
(c)(f)(j).................... 580 548
------------
4,589,615
------------
HOSPITALS/NURSING HOMES/HEALTH CARE (0.6%)
Fountain View, Inc.
Series B
11.25%, due 4/15/08............ 2,480,000 620,000
Harborside Healthcare Corp.
(zero coupon), due 8/1/08
11.00%, beginning 8/1/03....... 15,625,000 2,812,500
MultiCare Companies, Inc. (The)
9.00%, due 8/1/07 (e).......... 6,935,000 416,100
------------
3,848,600
------------
HOTEL/MOTEL (1.0%)
Florida Panthers Holdings, Inc.
9.875%, due 4/15/09............ 4,340,000 4,068,750
Starwood Hotels & Resorts
Worldwide, Inc.
7.375%, due 11/15/15........... 2,980,000 2,510,903
------------
6,579,653
------------
INDUSTRIAL COMPONENTS (1.2%)
Cellco Finance N.V.
12.75%, due 8/1/05 (c)......... 3,060,000 3,190,050
Morris Materials Handling, Inc.
9.50%, due 4/1/08 (e)(i)....... 2,500,000 325,000
Thermadyne Holdings Corp.
(zero coupon), due 6/1/08
12.50%, beginning 6/1/03....... 11,110,000 3,999,600
Woods Equipment Co.
Series B
12.00%, due 7/15/09............ 745,000 663,981
------------
8,178,631
------------
INSURANCE--MULTI-LINE (0.3%)
Willis Corroon Group, PLC
9.00%, due 2/1/09.............. 2,605,000 2,188,200
------------
</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
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
INTERNET SOFTWARE & SERVICES (1.5%)
Exodus Communications, Inc.
11.25%, due 7/1/08............. $ 3,290,000 $ 3,257,100
11.625%, due 7/15/10 (c)....... 3,515,000 3,545,756
PSInet, Inc.
11.00%, due 8/1/09............. 1,600,000 1,480,000
11.50%, due 11/1/08............ 2,145,000 2,016,300
------------
10,299,156
------------
LEISURE TIME (1.2%)
Bally Total Fitness Holding
Corp.
Series D
9.875%, due 10/15/07........... 5,055,000 4,574,775
International Game Technology
7.875%, due 5/15/04............ 840,000 806,400
8.375%, due 5/15/09............ 3,140,000 2,967,300
------------
8,348,475
------------
MACHINERY--DIVERSIFIED (0.5%)
Generac Portable Products L.L.C.
11.25%, due 7/1/06............. 1,465,000 1,245,250
Harnischfeger Industries, Inc.
7.25%, due 12/15/25 (e)(i)..... 5,380,000 2,044,400
------------
3,289,650
------------
MANUFACTURING--SPECIALIZED (0.4%)
Desa International, Inc.
9.875%, due 12/15/07........... 3,245,000 2,596,000
------------
OIL--INTEGRATED DOMESTIC (0.3%)
Queens Sand Resources, Inc.
12.50%, due 7/1/08............. 4,705,000 1,793,781
------------
OIL & GAS--EXPLORATION &
PRODUCTION (0.2%)
Petro Stopping Centers Holdings
L.P.
Series B
(zero coupon), due 8/1/08
15.00%, beginning 8/1/04....... 4,314,000 1,639,320
------------
OIL & GAS--WELL EQUIPMENT &
SERVICES (0.7%)
Michael Petroleum Corp.
Series B
11.50%, due 4/1/05 (e)(i)...... 6,780,000 3,390,000
RBF Finance Co.
Series B
11.375%, due 3/15/09........... 1,545,000 1,676,325
------------
5,066,325
------------
PAPER & FOREST PRODUCTS (0.2%)
Pope & Talbot, Inc.
8.375%, due 6/1/13............. 1,700,000 1,547,000
------------
PUBLISHING (0.2%)
General Media, Inc.
10.625%, due 12/31/00.......... 2,104,000 1,683,200
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
REAL ESTATE (1.5%)
Crescent Real Estate Equities
L.P.
7.50%, due 9/15/07............. $ 12,590,000 $ 10,205,932
------------
REAL ESTATE--INVESTMENT/ MANAGEMENT (2.0%)
CB Richard Ellis Services, Inc.
8.875%, due 6/1/06............. 7,025,000 5,971,250
LNR Property Corp.
Series B
9.375%, due 3/15/08............ 4,585,000 3,966,025
10.50%, due 1/15/09............ 1,480,000 1,354,200
Pinnacle Holdings, Inc.
(zero coupon), due 3/15/08
10.00%, beginning 3/15/03...... 2,915,000 2,011,350
------------
13,302,825
------------
RESTAURANTS (2.5%)
Advantica Restaurant Group, Inc.
11.25%, due 1/15/08............ 8,495,000 5,691,650
Avado Brands, Inc.
11.75%, due 6/15/09............ 2,090,000 1,060,675
CKE Restaurants, Inc.
9.125%, due 5/1/09............. 3,340,000 2,237,800
FRI-MRD Corp.
14.00%, due 1/24/02 (c)(f)..... 3,000,000 2,955,000
15.00%, due 1/24/02 (c)(l)..... 5,400,000 5,292,000
------------
17,237,125
------------
RETAIL--SPECIALTY (0.1%)
Musicland Group, Inc.
9.00%, due 6/15/03............. 475,000 429,875
------------
SPECIALTY PRINTING (0.1%)
Sullivan Graphics, Inc.
12.75%, due 8/1/05............. 745,000 756,175
------------
TECHNOLOGY (0.8%)
Electronic Retailing Systems
International, Inc.
13.25%, due 2/1/04 (e)......... 8,115,000 1,704,150
Knowles Electronics Holdings,
Inc.
13.125%, due 10/15/09 (c)...... 4,630,000 3,981,800
------------
5,685,950
------------
TELECOMMUNICATIONS (9.7%)
Cherokee International, L.L.C.
Series B
10.50%, due 5/1/09............. 770,000 664,125
Colo.com
13.875%, due 3/15/10 (c)(m3)... 3,125 3,359,375
HighwayMaster Communications,
Inc.
Series B
13.75%, due 9/15/05............ 7,360,000 3,532,800
ICG Holdings, Inc.
(zero coupon), due 5/1/06
12.50%, beginning 5/1/01....... 2,605,000 2,155,638
</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>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
------------------------------
<S> <C> <C>
TELECOMMUNICATIONS (Continued)
ICG Services, Inc.
(zero coupon), due 5/1/08
9.875%, beginning 5/1/03....... $ 8,205,000 $ 4,184,550
(zero coupon), due 2/15/08
10.00%, beginning 2/15/03...... 7,000,000 3,640,000
ICO Global Communications
Holdings Ltd.
15.00%, due 8/1/05 (e)(i)...... 4,050,000 2,349,000
15.00%, due 8/1/05
(e)(i)(m4)................... 2,490 1,444,200
IMPSAT Fiber Networks, Inc.
13.75%, due 2/15/05 (c)........ 5,150,000 4,583,500
Loral Space & Communications
Ltd.
9.50%, due 1/15/06............. 1,190,000 862,750
NATG Holdings L.L.C. &
Orius Corp.
12.75%, due 2/1/10 (c)......... 6,945,000 7,153,350
NTL, Inc.
Series A
12.75%, due 4/15/05............ 8,465,000 8,613,137
Orion Network Systems, Inc.
(zero coupon), due 1/15/07
12.50%, beginning 1/15/02...... 10,940,000 4,485,400
PageMart Nationwide, Inc.
15.00%, due 2/1/05............. 3,650,000 3,494,875
RCN Corp.
Series B
(zero coupon), due 2/15/08
9.80%, beginning 2/15/03....... 1,625,000 926,250
(zero coupon), due 10/15/07
11.125%, beginning 10/15/02.... 5,710,000 3,568,750
10.125%, due 1/15/10........... 3,700,000 3,080,250
T/SF Communications Corp.
Series B
10.375%, due 11/1/07........... 3,290,000 3,059,700
Telehub Communications Corp.
(zero coupon), due 7/31/05
13.875%, beginning 7/31/01..... 7,950,000 1,590,000
360networks, Inc.
13.00%, due 5/1/08 (c)......... 1,380,000 1,380,000
Williams Communications Group,
Inc.
10.875%, due 10/1/09........... 1,655,000 1,617,763
------------
65,745,413
------------
TELECOMMUNICATIONS--CELLULAR/ WIRELESS (1.9%)
Centennial Cellular Corp.
10.75%, due 12/15/08........... 3,425,000 3,326,531
Crown Castle International Corp.
9.00%, due 5/15/11............. 1,715,000 1,582,088
10.75%, due 8/1/11............. 1,680,000 1,703,100
Nextel International, Inc.
(zero coupon), due 4/15/08
12.125%, beginning 4/15/03..... 3,705,000 2,408,250
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------
<S> <C> <C>
TELECOMMUNICATIONS--CELLULAR/ WIRELESS
(Continued)
PageMart Wireless, Inc.
(zero coupon), due 2/1/08
11.25%, beginning 2/1/03....... $ 5,000,000 $ 2,150,000
Ubiquitel Operating Co.
(zero coupon), due 4/15/10
14.00%, beginning 4/15/05
(c)(m5)........................ 2,510 1,452,663
------------
12,622,632
------------
TELECOMMUNICATIONS--LONG DISTANCE (0.3%)
Nextel Communications, Inc.
9.375%, due 11/15/09........... 2,155,000 2,058,025
------------
TEXTILE--APPAREL MANUFACTURING (0.2%)
St. John Knits International,
Inc.
12.50%, due 7/1/09............. 1,650,000 1,571,625
------------
TOBACCO (0.7%)
Standard Commercial Corp.
8.875%, due 8/1/05............. 6,065,000 4,852,000
------------
UTILITIES--GAS (0.5%)
Navigator Gas Transport, PLC
10.50%, due 6/30/07 (c)........ 7,885,000 3,154,000
------------
Total Corporate Bonds
(Cost $464,351,383)............ 407,292,803
------------
FOREIGN BONDS (5.4%)
BROADCAST/MEDIA (0.1%)
Central European Media
Enterprises Ltd.
Series BR
8.125%, due 8/15/04............ DM 2,930,000 569,196
------------
CABLE TV (0.2%)
United Pan-Europe Communications
N.V.
Series B
10.875%, due 11/1/07........... E 1,295,000 1,112,591
------------
PUBLISHING (3.0%)
IPC Magazines Group, PLC
(zero coupon), due 3/15/08
10.75%, beginning 3/15/03...... L 4,645,000 4,202,306
9.625%, due 3/15/08............ 4,340,000 5,680,292
Regional Independent Media Group
(zero coupon), due 7/1/08
12.875%, beginning 7/1/03...... 6,375,000 7,531,881
TDL Infomedia Group Ltd.
12.125%, due 10/15/09.......... E 2,160,000 3,343,577
------------
20,758,056
------------
</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
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
FOREIGN BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
TELECOMMUNICATIONS (2.1%)
Global TeleSystems Group, Inc.
11.00%, due 12/1/09............ E 4,870,000 $ 3,798,617
Level 3 Communications, Inc.
10.75%, due 3/15/08 (c)........ 2,875,000 2,631,951
11.25%, due 3/15/10 (c)........ 475,000 433,842
NTL, Inc.
9.875%, due 11/15/09........... 2,940,000 2,493,049
Tele1 Europe B.V.
13.00%, due 5/15/09............ 1,685,000 1,620,445
Versatel Telecom International
N.V.
11.25%, due 3/30/10 (c)........ 3,755,000 3,370,245
------------
14,348,149
------------
Total Foreign Bonds
(Cost $40,716,416)............. 36,787,992
------------
LOAN ASSIGNMENTS & PARTICIPATIONS (2.2%)
ENTERTAINMENT (0.4%)
Affinity Group, Inc.
Bank debt, Tranche B
10.2738%, due 6/30/06
(h)(l)(n)...................... $ 1,165,589 1,153,933
Euro Disneyland S.N.C.
Phase 1, Bank debt
Tranche A
5.4292%, due 11/30/06
(h)(l)(n)...................... FF 8,335,084 962,273
Tranche D
5.4051%, due 11/30/06
(h)(l)(n)...................... 2,917,918 336,869
------------
2,453,075
------------
HOSPITALS/NURSING HOMES/HEALTH CARE (0.5%)
Genesis Health Ventures, Inc.
Bank debt, Revolver
10.25%, due 9/30/03
(e)(h)(l)...................... $ 478,165 294,550
Bank debt, Term Loan B
10.25%, due 9/30/04
(e)(h)(l)...................... 1,528,721 940,163
Bank debt, Term Loan C
10.50%, due 6/1/05 (e)(h)(l)... 1,521,224 935,552
Multicare Companies, Inc. (The)
Bank debt, Revolver
10.75%, due 9/30/03
(e)(h)(l)...................... 256,247 143,499
Bank debt, Term Loan B
10.75%, due 9/30/04
(e)(h)(l)...................... 1,359,466 761,301
Bank debt, Term Loan C
11.00%, due 6/1/05 (e)(h)(l)... 450,838 252,469
------------
3,327,534
------------
RAILROADS (1.3%)
Eurotunnel
Bank debt, Tier One
7.03%, due 12/31/12
(h)(l)(n)...................... L 7,500,000 8,983,991
------------
Total Loan Assignments &
Participations
(Cost $16,206,401)............. 14,764,600
------------
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT (0.2%)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
UNITED STATES TREASURY BONDS (0.2%)
5.25%, due 2/15/29............. $ 1,730,000 $ 1,535,375
------------
Total U.S. Government
(Cost $1,600,503).............. 1,535,375
------------
YANKEE BONDS (13.1%)
AIR FREIGHT (0.3%)
Pegasus Shipping (Hellas) Ltd.
Series A
11.875%, due 11/15/04 (c)(e)... 1,790,000 608,600
11.875%, due 11/15/04 (e)...... 5,010,000 1,703,400
------------
2,312,000
------------
BROADCAST/MEDIA (0.6%)
Central European Media
Enterprises Ltd.
9.375%, due 8/15/04............ 3,490,000 1,256,400
Rogers Communications, Inc.
8.875%, due 7/15/07............ 735,000 720,300
TV Azteca S.A. de C.V.
Series B
10.50%, due 2/15/07............ 2,125,000 1,907,188
------------
3,883,888
------------
CABLE TV (3.9%)
Rogers Cablesystems Ltd.
Series B
10.00%, due 3/15/05............ 2,210,000 2,259,725
10.125%, due 9/1/12............ 1,915,000 1,958,088
11.00%, due 12/1/15 (g)........ 1,400,000 1,512,000
United Pan-Europe Communications
N.V.
Series B
(zero coupon), due 8/1/09
12.50%, beginning 8/1/04....... 6,285,000 3,158,212
(zero coupon), due 11/1/09
13.375%, beginning 11/1/04..... 10,560,000 5,121,600
(zero coupon), due 2/1/10
13.75%, beginning 2/1/05....... 9,010,000 4,234,700
10.875%, due 11/1/07........... 1,350,000 1,215,000
10.875%, due 8/1/09............ 8,300,000 7,221,000
------------
26,680,325
------------
CHEMICALS (0.7%)
Octel Developments, PLC
10.00%, due 5/1/06............. 5,205,000 4,762,575
------------
CONSUMER PRODUCTS (0.0%)(b)
Semi-Tech Corp.
(zero coupon), due 8/15/03
11.50%, beginning 8/15/00
(e)(i)......................... 8,965,000 67,237
------------
FINANCIAL--DIVERSIFIED (0.3%)
Tembec Finance Corp.
9.875%, due 9/30/05............ 2,025,000 2,035,125
------------
</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>
YANKEE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
GOLD & PRECIOUS METALS
MINING (1.0%)
Echo Bay Mines Ltd.
12.00%, due 4/1/27............. $ 5,145,000 $ 3,074,138
Great Central Mines Ltd.
8.875%, due 4/1/08............. 3,898,000 3,157,380
------------
6,231,518
------------
HOTEL/MOTEL (0.1%)
Sun International Hotels Ltd.
9.00%, due 3/15/07............. 825,000 768,281
------------
METALS--MISCELLANEOUS (0.2%)
Glencore Nickel Pty Ltd.
9.00%, due 12/1/14............. 1,945,000 1,614,350
------------
PAPER & FOREST PRODUCTS (0.5%)
Doman Industries Ltd.
12.00%, due 7/1/04............. 3,400,000 3,400,000
------------
REAL ESTATE--INVESTMENT/
MANAGEMENT (1.0%)
Intrawest Corp.
10.50%, due 2/1/10............. 6,605,000 6,737,100
------------
STEEL (0.3%)
Algoma Steel, Inc.
12.375%, due 7/15/05........... 2,310,000 2,009,700
------------
TELECOMMUNICATIONS (1.3%)
Colt Telecom Group PLC
(zero coupon), due 12/15/06
12.00%, beginning 12/15/01..... 2,720,000 2,397,000
Flag Telecom Holdings Ltd.
11.625%, due 3/30/10........... 1,765,000 1,712,050
GlobeNet Communications
Group Ltd.
Series B
13.00%, due 7/15/07............ 2,500,000 2,521,875
Hermes Europe Railtel B.V.
11.50%, due 8/15/07............ 2,850,000 2,436,750
------------
9,067,675
------------
TELECOMMUNICATIONS--CELLULAR/ WIRELESS (1.2%)
Millicom International Cellular,
S.A.
(zero coupon), due 6/1/06
13.50%, beginning 6/1/01....... 9,254,000 7,865,900
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
TELECOMMUNICATIONS--
LONG DISTANCE (0.7%)
Call-Net Enterprises, Inc.
(zero coupon), due 8/15/08
8.94%, beginning 8/15/03....... $ 225,000 $ 87,750
(zero coupon), due 8/15/07
9.27%, beginning 8/15/02....... 3,370,000 1,583,900
(zero coupon), due 5/15/09
10.80%, beginning 5/15/04...... 2,805,000 1,009,800
9.375%, due 5/15/09............ 2,855,000 1,755,825
------------
4,437,275
------------
TRANSPORTATION--SHIPPING (1.0%)
Ermis Maritime Holdings Ltd.
12.50%, due 3/15/06 (e)........ 9,830,500 2,457,625
Sea Containers Ltd.
Series B
7.875%, due 2/15/08............ 375,000 236,250
10.50%, due 7/1/03............. 1,170,000 982,800
10.75%, due 10/15/06........... 4,185,000 3,138,750
------------
6,815,425
------------
Total Yankee Bonds
(Cost $103,749,777)............ 88,688,374
------------
Total Long-Term Bonds
(Cost $664,447,878)............ 587,715,915
------------
<CAPTION>
COMMON STOCKS (2.7%)
SHARES
-------------
<S> <C> <C>
CHEMICALS (0.2%)
Millennium Chemicals Inc........ 90,065 1,531,105
------------
FINANCE (0.1%)
AMC Financial, Inc. (a)......... 195,912 587,736
------------
GOLD & PRECIOUS METALS MINING (0.2%)
Placer Dome Inc................. 167,575 1,602,436
------------
HEALTH & PERSONAL CARE (0.0%) (b)
General Healthcare Group Ltd.
(a)(o)......................... 572 25,978
------------
HEALTH CARE--SERVICES (0.4%)
Apria Healthcare Group Inc.
(a)............................ 216,215 2,648,634
------------
HOTEL/MOTEL (0.4%)
Harrah's Entertainment Inc.
(a)............................ 122,500 2,564,844
------------
PAPER & FOREST PRODUCTS (0.3%)
Abitibi-Consolidated Inc. (p)... 184,370 1,728,469
------------
REAL ESTATE (0.1%)
Metropolis Realty Trust, Inc.... 56,290 619,190
------------
</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
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
STEEL (0.1%)
USX-U.S. Steel Group............ 45,040 $ 836,055
------------
TECHNOLOGY (0.2%)
Metawave Communications Corp.
(a)(c)(l)(q)................... 51,420 1,372,271
------------
TELECOMMUNICATION (0.5%)
ICO Global Communications
Holdings Ltd.
Class A (a)(l)................. 167,465 3,500,019
------------
TELECOMMUNICATIONS--CELLULAR/ WIRELESS (0.0%)
(b)
International Wireless
Communications Holdings, Inc.
(a)............................ 375,879 60,141
------------
TELECOMMUNICATIONS--LONG DISTANCE (0.2%)
Call-Net Enterprises, Inc.
Series B (a)(p)................ 439,525 1,038,224
------------
TEXTILE--APPAREL MANUFACTURING (0.0%) (b)
Hosiery Corp. of Amereica, Inc.
(a)............................ 500 20,000
------------
Total Common Stocks
(Cost $25,340,591)............. 18,135,102
------------
PREFERRED STOCKS (5.1%)
BROADCAST/MEDIA (1.2%)
Paxson Communications Corp.
12.50% (k)..................... 8,221 8,220,830
------------
CHEMICALS--SPECIALTY (0.4%)
Hercules Trust II
6.50% (m6)..................... 5,030 2,735,063
------------
EQUIPMENT LOANS (0.4%)
AerFi Group, PLC (a)(l)......... 4,750,000 2,470,000
------------
FINANCIAL--MISCELLANEOUS (0.1%)
Pacific & Atlantic (Holdings)
Inc.
7.50%, Class A (k)(l).......... 153,164 880,693
------------
FINANCIAL SERVICES (0.3%)
North Atlantic Trading Co.
12.00% (k)..................... 93,638 1,966,402
------------
HOSPITALS/NURSING HOMES/
HEALTH CARE (0.1%)
Harborside Healthcare Corp.
13.50% (k)..................... 6,902 552,160
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
OIL & GAS--WELL EQUIPMENT & SERVICES (0.9%)
R&B Falcon Corp.
13.875% (k).................... 5,481 $ 6,193,880
------------
PAPER & FOREST PRODUCTS (0.3%)
Paperboard Industries International, Inc.
5.00%, Class A (c)(l)(p)....... 145,000 2,256,908
------------
TELECOMMUNICATIONS (0.3%)
ICG Holdings, Inc.
14.25% (k)..................... 2,419 2,098,483
------------
TELECOMMUNICATIONS--LONG DISTANCE (1.1%)
Nextel Communications, Inc.
13.00%, Series D (k)........... 7,050 7,543,500
------------
Total Preferred Stocks
(Cost $34,667,492)............. 34,917,919
------------
WARRANTS (0.1%)
FINANCIAL SERVICES (0.0%) (b)
North Atlantic Trading Co.
expire 6/15/07 (a)(c).......... 74 1
------------
FOOD & HOUSEHOLD PRODUCTS (0.0%) (b)
Colorado Prime Corp.
expire 12/31/03 (a)(c)......... 5,210 52
------------
GAMING, LOTTERY & PARI-MUTUELS (0.0%) (b)
Isle of Capri Casinos, Inc.
expire 5/3/01 (a).............. 1,249 13
------------
HOMEBUILDING (0.1%)
Amatek Industries Pty Ltd.
Common Rights (a).............. 3,125 156
Preferred Rights (a)........... 740,721 370,361
------------
370,517
------------
OIL & GAS--WELL EQUIPMENT & SERVICES (0.0%) (b)
Petro Stopping Centers Holdings
L.P. (a)(c).................... 4,314 215,700
------------
PUBLISHING (0.0%) (b)
General Media, Inc.
expire 12/21/03 (a)(c)......... 900 9
------------
TELECOMMUNICATIONS--CELLULAR/ WIRELESS (0.0%)
(b)
Occidente y Caribe Celular, S.A.
expire 3/15/04 (a)(c).......... 10,680 160,200
------------
</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>
WARRANTS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
TELECOMMUNICATIONS (0.0%) (b)
Telehub Communications Corp.
expire 7/31/05 (a)(c).......... 6,465 $ 65
------------
Total Warrants
(Cost $514,681)................ 746,557
------------
<CAPTION>
SHORT-TERM INVESTMENTS (4.4%)
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
COMMERCIAL PAPER (4.3%)
Deutsche Bank Financial, Inc.
6.54%, due 7/17/00............. $ 6,000,000 5,982,509
Ford Motor Credit Co.
6.55%, due 7/7/00.............. 1,850,000 1,847,976
Prudential Funding Corp.
6.52%, due 7/6/00.............. 6,000,000 5,994,535
6.54%, due 7/7/00.............. 6,000,000 5,993,452
Salomon Smith Barney
Holdings, Inc.
6.54%, due 7/21/00............. 4,200,000 4,184,695
UBS Finance Delaware L.L.C.
6.54%, due 7/20/00............. 5,000,000 4,982,707
------------
Total Commercial Paper
(Cost $28,985,875)............. 28,985,874
------------
SHORT-TERM LOAN ASSIGNMENT (0.1%)
TEXTILES--HOME FURNISHINGS (0.1%)
Synthetic Industries, Inc.
Bridge Loan
14.00%, due 12/14/00 (h)(l).... 665,000 638,400
------------
Total Short-Term Loan Assignment
(Cost $662,823)................ 638,400
------------
Total Short-Term Investments
(Cost $29,648,698)............. 29,624,274
------------
Total Investments
(Cost $754,619,340) (r)........ 99.0% 671,139,767(s)
Cash and Other Assets,
Less Liabilities............... 1.0 7,102,599
------------- ------------
Net Assets...................... 100.0% $678,242,366
============= ============
</TABLE>
------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) Yankee Bond
(e) Issue in default.
(f) Eurobond--Bond denominated in U.S. dollars or other currencies and sold to
investors outside the country whose currency is used.
(g) Partially segregated as collateral for forward contracts.
(h) Floating rate. Rate shown is the rate in effect at June 30, 2000.
(i) Issuer in bankruptcy.
(j) CIK ("Cash in Kind")--interest payment is made with cash or additional
securities.
(k) PIK ("Payment in Kind")--interest or dividend payment is made with
additional securities.
(l) Restricted security.
(m1) 1,530 Units--Each unit reflects $1,000 principal amount of 12.50% Senior
Notes plus 1 warrant to acquire 2.3944 shares of ASAT Holding Corp. common
stock at $18.60 per share at a future date.
(m2) 1,500 Units--Each unit reflects $1,000 principal amount of 13.00% Notes
plus 1 warrant to acquire common stock at $0.01 per share at a future date.
(m3) 3,125 Units--Each unit reflects $1,000 principal amount of 13.875% Senior
Notes plus 1 warrant to acquire 19.9718 shares of common stock at $0.01 per
share at a future date.
(m4) 2,490 Units--Each unit reflects $1,000 principal amount of 15.00% Senior
Notes plus 1 warrant to acquire 19.85 shares of common stock at $13.20 per
share at a future date.
(m5) 2,510 Units--Each unit reflects $1,000 principal amount of zero coupon, due
4/15/10 14.00%, beginning 4/15/05 Senior Discounted Notes plus 1 warrant to
acquire 5.965 shares of common stock at $22.74 per share at a future date.
(m6) 5,030 Units--Each unit consists of 1 Preferred Share plus 1 warrant to
acquire 23.4192 shares of common stock at $42.70 per share at a future
date.
(n) Multiple tranche facilities.
(o) British security.
(p) Canadian security.
(q) Illiquid security.
(r) The cost for federal income tax purposes is $754,947,077.
(s) At June 30, 2000 net unrealized depreciation was $83,807,310, 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 $18,713,985 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $102,521,295.
DM Security denominated in Deutsche Mark.
E Security denominated in Euro.
FF Security denominated in French Franc.
L Security denominated in Pound Sterling.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
107
<PAGE> 108
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $754,619,340)......... $671,139,767
Cash..................................... 2,695,754
Deposit with Broker
(identified cost $6,574)............... 3,854
Receivables:
Dividends and interest................. 16,795,086
Fund shares sold....................... 74,023
Unrealized appreciation on foreign
currency forward contracts............. 3,795
------------
Total assets..................... 690,712,279
------------
LIABILITIES:
Payables:
Investment securities purchased........ 11,107,535
Adviser................................ 164,655
Shareholder communication.............. 141,909
Administrator.......................... 109,770
Fund shares redeemed................... 30,668
Custodian.............................. 23,131
Directors.............................. 1,136
Accrued expenses......................... 51,910
Unrealized depreciation on foreign
currency forward contracts............. 839,199
------------
Total liabilities................ 12,469,913
------------
Net assets applicable to outstanding
shares................................. $678,242,366
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized... $ 622,291
Additional paid-in capital............... 726,120,085
Accumulated undistributed net investment
income................................. 35,834,013
Accumulated undistributed net realized
loss on investments.................... (3,438,121)
Accumulated undistributed net realized
gain on foreign currency
transactions........................... 3,479,146
Net unrealized depreciation on
investments............................ (83,482,293)
Net unrealized depreciation on
translation of other assets and
liabilities in foreign currencies
and foreign currency forward
contracts.............................. (892,755)
------------
Net assets applicable to outstanding
shares................................. $678,242,366
============
Shares of capital stock outstanding...... 62,229,102
============
Net asset value per share outstanding.... $ 10.90
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 38,425,744
Dividends (a).......................... 2,500,207
------------
Total income..................... 40,925,951
------------
Expenses:
Advisory............................... 1,008,813
Administration......................... 672,542
Shareholder communication.............. 98,970
Professional........................... 60,027
Custodian.............................. 27,766
Directors.............................. 11,679
Portfolio pricing...................... 3,808
Miscellaneous.......................... 79,350
------------
Total expenses................... 1,962,955
------------
Net investment income.................... 38,962,996
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Security transactions.................. (2,586,619)
Foreign currency transactions.......... 3,479,146
------------
Net realized gain on investments and
foreign currency transactions.......... 892,527
------------
Net change in unrealized appreciation
(depreciation) on:
Security transactions.................. (25,137,104)
Translation of other assets and
liabilities in foreign currencies
and foreign currency forward
contracts............................ (1,454,225)
------------
Net unrealized loss on investments and
foreign currency transactions.......... (26,591,329)
------------
Net realized and unrealized loss on
investments and foreign currency
transactions........................... (25,698,802)
------------
Net increase in net assets resulting from
operations............................. $ 13,264,194
============
</TABLE>
------------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$18,318.
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.
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
---------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income...................................... $ 38,962,996 $ 72,530,284
Net realized gain on investments and foreign currency
transactions............................................. 892,527 21,542,008
Net change in unrealized appreciation (depreciation) on
investments and foreign currency transactions............ (26,591,329) (20,007,709)
------------ ------------
Net increase in net assets resulting from operations....... 13,264,194 74,064,583
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................. (189,617) (73,662,076)
From net realized gain on investments...................... (30,766) (12,344,416)
In excess of net investment income......................... -- (3,350,338)
In excess of net realized gain on investments.............. -- (820,736)
------------ ------------
Total dividends and distributions to shareholders........ (220,383) (90,177,566)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares........................... 23,036,887 84,828,143
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions.............. 220,383 90,177,566
------------ ------------
23,257,270 175,005,709
Cost of shares redeemed.................................... (43,015,196) (43,749,083)
------------ ------------
Increase (decrease) in net assets derived from capital
share transactions....................................... (19,757,926) 131,256,626
------------ ------------
Net increase (decrease) in net assets....................... (6,714,115) 115,143,643
NET ASSETS:
Beginning of period......................................... 684,956,481 569,812,838
------------ ------------
End of period............................................... $678,242,366 $684,956,481
============ ============
Accumulated undistributed net investment income/(excess
distribution) at end of period............................. $ 35,834,013 $ (3,350,338)
============ ============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
SIX MONTHS 1995 (a)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31,
2000* 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of
period........................... $ 10.69 $ 10.92 $ 11.73 $ 11.61 $ 10.55 $ 10.00
------------ ------------ ------------ ------------ ------------ ------------
Net investment income............. 0.63 1.31 1.08 0.85 0.59 0.37
Net realized and unrealized gain
(loss) on investments............ (0.45) 0.07 (0.76) 0.65 1.22 0.61
Net realized and unrealized gain
(loss) on foreign currency
transactions..................... 0.03 0.01 (0.00)(b) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total from investment
operations....................... 0.21 1.39 0.32 1.50 1.81 0.98
------------ ------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income....... (0.00)(b) (1.32) (1.09) (0.84) (0.59) (0.37)
From net realized gain on
investments.................... (0.00)(b) (0.23) (0.04) (0.54) (0.16) (0.04)
In excess of net investment
income......................... -- (0.06) -- -- -- --
In excess of net realized gain on
investments.................... -- (0.01) -- -- -- (0.02)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions.................... (0.00)(b) (1.62) (1.13) (1.38) (0.75) (0.43)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value at end of
period........................... $ 10.90 $ 10.69 $ 10.92 $ 11.73 $ 11.61 $ 10.55
============ ============ ============ ============ ============ ============
Total investment return........... 1.96%(c) 12.84% 2.66% 13.03% 17.16% 10.06%(c)
Ratios (to average net assets)/
Supplemental Data:
Net investment income............ 11.59%+ 11.33% 9.93% 8.84% 8.59% 10.02%+
Net expenses..................... 0.58%+ 0.57% 0.58% 0.59% 0.67% 0.67%+
Expenses (before
reimbursement)................. 0.58%+ 0.57% 0.58% 0.59% 0.71% 1.25%+
Portfolio turnover rate........... 31% 93% 151% 153% 149% 95%
Net assets at end of period (in
000's)........................... $ 678,242 $ 684,956 $ 569,813 $ 424,567 $ 205,001 $ 43,314
</TABLE>
------------
(a) Commencement of Operations.
(b) Less than one cent per share.
(c) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
109
<PAGE> 110
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (92.9%)+
SHARES VALUE
------------------------
<S> <C> <C>
AUSTRALIA (2.5%)
Broken Hill Proprietary Co., Ltd.
(energy sources).................. 19,475 $ 230,932
Cable & Wireless Optus, Ltd.
(telecommunications) (a).......... 98,766 295,309
Commonwealth Bank of Australia
(banking)......................... 7,293 121,246
National Australia Bank, Ltd.
(banking)......................... 16,870 282,571
News Corp., (The) (broadcasting &
publishing)....................... 49,635 685,419
Securenet, Ltd. (business & public
services) (a)..................... 30,480 168,727
-----------
1,784,204
-----------
BELGIUM (1.1%)
Electrabel, S.A.
(utilities-electrical & gas)...... 960 238,254
Fortis AG (insurance).............. 11,930 348,571
Solvay, S.A. Class A (chemicals)... 2,560 173,008
-----------
759,833
-----------
DENMARK (0.2%)
Tele Danmark AS Class B
(telecommunications).............. 1,877 126,863
-----------
FINLAND (3.7%)
Comptel Oyj (telecommunications)... 1,960 39,644
Nokia Oyj Class A (electrical &
electronics) (c).................. 43,865 2,247,514
Outokumpu Oyj
(metals-nonferrous)............... 17,630 169,001
UPM-Kymmene Oyj (forest products &
paper)............................ 7,480 186,428
-----------
2,642,587
-----------
FRANCE (9.3%)
Air Liquide, S.A. (chemicals)...... 1,386 181,489
AXA, S.A. (insurance).............. 2,274 359,676
Carrefour, S.A. (merchandising).... 6,948 476,880
Compagnie Generale d'Industrie et
de Participations, S.A.
(multi-industry).................. 4,700 200,941
Elf Aquitaine, S.A. (energy
sources).......................... 1 206
France Telecom, S.A.
(telecommunications).............. 5,880 825,192
Groupe Danone, S.A. (food &
household products)............... 2,064 275,018
Lafarge, S.A. (building materials &
components)....................... 1,182 92,231
L'Oreal, S.A. (health & personal
care)............................. 807 701,645
Pernod-Ricard, S.A. (beverages &
tobacco).......................... 1,800 98,352
Pinault-Printemps-Redoute, S.A.
(merchandising)................... 827 184,475
PSA Peugeot Citroen
(automobiles)..................... 1,714 345,366
Renault, S.A. (automobiles)........ 3,230 147,383
Rhodia, S.A. (chemicals)........... 10,000 168,713
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
FRANCE (Continued)
Schneider, S.A. (electrical &
electronics)...................... 2,039 $ 142,684
Scor, S.A. (insurance)............. 4,720 206,366
Societe Generale, S.A. Class A
(banking)......................... 3,004 181,417
Suez Lyonnaise des Eaux, S.A.
(business & public services)...... 1,540 270,890
Suez Lyonnaise des Eaux, S.A. Strip
(business & public services)
(d)............................... 1,540 15
Thomson CSF, S.A. (aerospace &
military technology) (a).......... 3,762 148,794
Total Fina Elf, S.A. Class B
(energy sources).................. 6,175 950,646
Total Fina Elf, S.A. Strip (energy
sources) (d)...................... 2,070 20
Vivendi, S.A. (business & public
services)......................... 7,276 644,816
-----------
6,603,215
-----------
GERMANY (9.5%)
Allianz AG Registered
(insurance)....................... 1,314 478,647
Bayer AG (chemicals)............... 8,651 338,348
Biodata Information Technology AG
(business & public services)
(a)............................... 100 32,592
DaimlerChrysler AG (automobiles)... 5,208 274,331
Deutsche Bank AG (banking)......... 3,940 326,322
Deutsche Telekom AG
(telecommunications).............. 12,615 720,726
Dresdner Bank AG (banking)......... 6,215 258,564
E.on AG (utilities-electrical &
gas).............................. 11,582 570,677
Epcos AG (electronic components &
instruments) (a).................. 3,300 333,420
Infinion Technologies AG
(electronic components &
instruments)...................... 1,300 103,433
Karstadt AG (merchandising)........ 5,540 148,167
Metro AG (merchandising)........... 3,667 129,359
Muenchener Rueckversicherungs-
Gesellschaft AG Registered
(insurance) (a)................... 482 153,630
RWE AG (utilities-electrical & gas)
(a)............................... 6,399 215,919
SAP AG (business & public
services)......................... 2,496 374,451
Schering AG (health & personal
care)............................. 13,869 771,098
Siemens AG (electrical &
electronics)...................... 7,710 1,164,049
T-Online International AG (business
& public services) (a)............ 8,970 291,923
-----------
6,685,656
-----------
GREECE (0.5%)
Hellenic Telecommunications
Organization S.A.
(telecommunications).............. 30,400 370,500
-----------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
110
<PAGE> 111
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
HONG KONG (0.6%)
Cheung Kong (Holdings) Ltd. (real
estate)........................... 31,000 $ 342,994
China Unicom Ltd.
(telecommunications).............. 20,000 42,462
Sino-I.com Ltd. (business & public
services) (a)..................... 395,000 17,988
-----------
403,444
-----------
IRELAND (2.3%)
Allied Irish Banks PLC (banking)... 31,555 283,429
CRH PLC (building materials &
components)....................... 28,903 523,650
Eircom PLC (telecommunications)
(a)............................... 64,220 172,371
Elan Corp. PLC (health & personal
care) (a)......................... 7,537 352,939
Fyffes PLC (food & household
products)......................... 91,326 94,549
Smurfit (Jefferson) Group PLC
(forest products & paper)......... 129,658 223,722
-----------
1,650,660
-----------
ITALY (3.2%)
Assicurazioni Generali S.p.A.
(insurance)....................... 5,542 190,721
Banca Intesa S.p.A. (banking)...... 38,854 174,681
ENI S.p.A. (energy sources)........ 86,051 499,054
Italcementi S.p.A. (building
materials & components)........... 26,400 249,274
Telecom Italia S.p.A.
(telecommunications).............. 21,467 296,326
Telecom Italia Mobile S.p.A.
(telecommunications).............. 60,547 621,030
Unicredito Italiano S.p.A.
(banking)......................... 43,987 211,251
-----------
2,242,337
-----------
JAPAN (26.0%)
Ajinomoto Co., Inc. (food &
household products)............... 26,000 334,187
Bank of Tokyo-Mitsubishi, Ltd.
(banking)......................... 34,000 411,629
Bridgestone Corp. (industrial
components)....................... 5,000 106,088
Canon, Inc. (data processing &
reproduction)..................... 5,000 249,506
Fuji Bank (banking)................ 27,000 205,673
Fujitsu, Ltd. (data processing &
reproduction)..................... 18,000 624,333
Hitachi, Ltd. (electrical &
electronics)...................... 19,000 274,741
Honda Motor Co., Ltd.
(automobiles)..................... 12,000 409,417
Industrial Bank of Japan, Ltd.
(The) (banking)................... 49,000 372,332
Ito-Yokado Co., Ltd.
(merchandising)................... 9,000 542,676
Japan Airlines Co., Ltd.
(transportation-airlines)......... 86,000 327,553
Japan Telecommunication Co., Ltd.
(telecommunications).............. 7 304,322
Matsushita Electric Industrial Co.,
Ltd. (appliances & household
durables)......................... 8,000 207,922
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
JAPAN (Continued)
Mitsubishi Electric Corp.
(electrical & electronics)........ 54,000 $ 585,886
Mitsubishi Estate Co., Ltd. (real
estate)........................... 13,000 153,333
Mitsubishi Heavy Industries, Ltd.
(machinery & engineering)......... 34,000 151,027
Mitsui Fudosan Co., Ltd. (real
estate)........................... 13,000 141,293
NEC Corp. (electrical &
electronics)...................... 24,000 755,324
Nikko Securities Co., Ltd.
(financial services).............. 38,000 377,095
Nippon Mitsubishi Oil Corp. (energy
sources).......................... 37,000 169,948
Nippon Steel Corp.
(metals-steel).................... 58,000 122,239
Nippon Telegraph & Telephone Corp.
(telecommunications).............. 86 1,146,028
NKK Corp. (metals-steel) (a)....... 406,000 260,923
NTT Data Corp. (business & public
services)......................... 56 576,889
NTT DoCoMo, Inc.
(telecommunications).............. 19 515,363
OKI Electric Industries Co., Ltd.
(electrical & electronics) (a).... 51,000 397,651
Olympus Optical Co., Ltd.
(electronic components &
instruments)...................... 11,000 197,630
Oracle Corp. (business & public
services)......................... 1,800 656,372
Pioneer Electronic Corp.
(appliances & household
durables)......................... 6,000 234,196
Rohm Co., Ltd. (electronic
components & instruments)......... 2,000 585,962
Sharp Corp. (appliances & household
durables)......................... 7,000 124,044
Softbank Corp. (business & public
services)......................... 3,084 419,715
Sony Corp. (appliances & household
durables)......................... 12,700 1,188,274
Sumitomo Bank, Ltd. (banking)...... 22,000 270,299
Sumitomo Electric Industries, Ltd.
(industrial components)........... 7,000 120,273
Sumitomo Forestry Co., Ltd.
(building materials &
components)....................... 19,000 128,033
Sumitomo Marine & Fire Insurance
Co., Ltd. (insurance)............. 82,000 478,164
Takeda Chemical Industries, Ltd.
(health & personal care).......... 8,000 526,232
TDK Corp. (electronic components &
instruments)...................... 2,000 288,067
Tokio Marine & Fire Insurance Co.,
Ltd. (insurance).................. 48,000 555,265
Tokyo Electric Power Co., Inc.
(utilities-electrical & gas)...... 4,100 100,166
Tokyo Seimitsu Co., Ltd.
(electronic components &
instruments)...................... 4,100 550,237
Toshiba Corp. (electrical &
electronics)...................... 44,000 497,765
Tostem Corp. (building materials &
components)....................... 7,000 114,452
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
111
<PAGE> 112
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
<S> <C> <C>
JAPAN (Continued)
Toyota Motor Corp. (automobiles)... 24,000 $ 1,095,560
Trans Cosmos, Inc. (business &
public services).................. 400 60,184
Yamanouchi Pharmaceutical Co., Ltd.
(health & personal care).......... 8,000 437,770
-----------
18,352,038
-----------
LUXEMBOURG (0.1%)
Carrier 1 International, S.A.
(telecommunications).............. 900 50,902
-----------
NETHERLANDS (4.2%)
ABN AMRO Holding N.V. (banking).... 13,301 327,173
Akzo Nobel N.V. (chemicals)........ 3,302 140,856
Heineken N.V. (beverages &
tobacco).......................... 3,742 228,676
ING Groep N.V. (financial
services)......................... 7,286 494,492
Koninklijke KPN N.V.
(telecommunications).............. 4,556 204,611
Koninklijke (Royal) Philips
Electronics N.V. (appliance &
household durables)............... 16,440 778,512
Royal Dutch Petroleum Co. (energy
sources).......................... 9,209 574,685
TNT Post Group N.V. (business &
public services).................. 3,486 94,402
Wolters Kluwer CVA N.V.
(broadcasting & publishing)....... 3,312 88,579
-----------
2,931,986
-----------
NEW ZEALAND (0.1%)
Contact Energy Ltd.
(utilities-electrical & gas)...... 69,450 93,187
-----------
NORWAY (0.0%) (b)
Stepstone ASA (business & public
services)......................... 3,700 12,250
-----------
PORTUGAL (2.0%)
Banco Comercial Portugues, S.A.
Registered (banking).............. 66,590 347,890
Banco Espirito Santo, S.A.
(banking)......................... 15,450 380,626
Electricidade de Portugal, S.A.
(utilities-electrical & gas)...... 8,736 159,279
Portugal Telecom, S.A. Registered
(telecommunications).............. 21,395 241,188
Sonae SGPS, S.A. (forest products &
paper)............................ 154,680 272,828
-----------
1,401,811
-----------
SINGAPORE (0.8%)
Singapore Press Holdings Ltd.
(broadcasting & publishing)....... 36,000 562,175
-----------
SPAIN (3.4%)
Acciona, S.A. (machinery &
engineering)...................... 5,830 222,986
Acerinox, S.A. (metals-steel)...... 4,900 142,323
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
SPAIN (Continued)
Banco Bilbao Vizcaya, S.A.
Registered (banking).............. 21,560 $ 323,444
Banco Santander Central Hispano,
S.A. (banking).................... 34,572 366,204
Endesa, S.A. (utilities-electrical
& gas)............................ 10,743 208,951
Gas Natural SDG, S.A. (utilities-
electrical & gas)................. 4,611 83,098
Grupo Prisa, S.A. (broadcasting &
publishing)....................... 1,000 23,294
Iberdrola, S.A.
(utilities-electrical & gas)...... 10,722 138,754
Repsol, S.A. (energy sources)...... 10,998 219,815
Telefonica, S.A.
(telecommunications) (a).......... 29,370 633,466
Terra Networks, S.A. (business &
public services) (a).............. 1,400 51,056
-----------
2,413,391
-----------
SWEDEN (1.6%)
AstraZeneca AB Series A (health &
personal care).................... 6,104 285,331
ForeningsSparbanken AB (banking)... 7,474 109,924
Hennes & Mauritz AB Series B
(merchandising)................... 5,568 116,807
Nordic Baltic Holding AB
(banking)......................... 27,672 202,131
Skandia Forsakrings AB
(insurance)....................... 11,134 295,772
Svenska Handelsbanken Series A
(banking)......................... 8,685 126,745
-----------
1,136,710
-----------
SWITZERLAND (4.8%)
Credit Suisse Group Registered
(banking)......................... 2,131 425,256
Givaudan S.A. Registered (food &
household products)............... 56 17,099
Nestle S.A. Registered (food &
household products)............... 373 748,936
Novartis AG Registered (health &
personal care).................... 275 436,996
Roche Holdings AG Genusscheine
(health & personal care).......... 56 546,879
Schweizerische Rueckversicherungs
Gesellschaft Registered
(insurance)....................... 138 282,178
UBS AG Registered (banking)........ 4,850 712,840
Zurich Allied AG Registered
(insurance)....................... 414 205,205
-----------
3,375,389
-----------
UNITED KINGDOM (16.7%)
Abbey National PLC (banking)....... 17,788 212,740
Allied Zurich PLC (insurance)...... 8,426 99,688
Bae Systems PLC (aerospace &
military technology).............. 18,371 114,584
Barclays PLC (banking)............. 21,153 526,143
Bass PLC (leisure & tourism)....... 38,109 428,658
BG PLC (utilities-electrical &
gas).............................. 43,513 281,281
Boots Co. PLC (merchandising)...... 14,397 109,631
BP Amoco PLC (energy sources)...... 81,192 779,286
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
112
<PAGE> 113
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-------------------------
<S> <C> <C>
UNITED KINGDOM (Continued)
British Airways PLC
(transportation-airlines)......... 35,003 $ 201,365
British Telecommunications PLC
(telecommunications).............. 22,855 295,484
Cable & Wireless PLC
(telecommunications).............. 42,533 720,527
Carlton Communications PLC (leisure
& tourism)........................ 38,990 501,726
CGNU PLC (insurance)............... 10,637 177,136
Diageo PLC (beverages & tobacco)... 45,286 406,549
EMI Group PLC (recreation & other
consumer goods)................... 42,613 387,068
Granada Group PLC (leisure &
tourism).......................... 25,130 251,091
Great Universal Stores PLC (The)
(merchandising)................... 17,980 115,684
Imperial Chemical Industries PLC
(chemicals)....................... 47,070 373,752
Jazztel PLC (telecommunications)
(a)............................... 1,904 49,980
Kingfisher PLC (merchandising)..... 60,327 549,341
Lloyds TSB Group PLC (banking)..... 70,126 662,457
Marconi PLC (telecommunications)... 42,845 557,818
National Power PLC
(utilities-electrical & gas)...... 17,268 110,057
Prudential Corp. PLC (insurance)... 19,463 285,220
Reed International PLC
(broadcasting & publishing)....... 17,406 151,517
Rio Tinto PLC Registered (metals-
nonferrous)....................... 18,714 305,974
Royal Bank of Scotland Group PLC
(banking)......................... 34,474 577,220
Sainsbury (J.) PLC
(merchandising)................... 16,234 73,729
Scottish Power PLC
(utilities-electrical & gas)...... 9,826 83,303
SmithKline Beecham PLC (health &
personal care).................... 55,882 731,783
Tesco PLC (merchandising).......... 65,295 203,136
Unilever PLC (food & household
products)......................... 34,257 207,445
Vodafone AirTouch PLC
(telecommunications).............. 303,846 1,228,172
-----------
11,759,545
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
UNITED STATES (0.3%)
Global Telesystems Group, Inc.
(telecommunications) (a).......... 17,100 $ 206,269
-----------
Total Common Stocks (Cost
$56,639,184)...................... 65,564,952
-----------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (6.3%)
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
COMMERCIAL PAPER (6.3%)
UNITED STATES (6.3%)
American Express Credit Corp.
(financial services)
6.88%, due 7/3/00................. $3,000,000 2,998,853
AT&T Corp. (telecommunications)
6.53%, due 7/10/00................ 1,500,000 1,497,546
-----------
Total Short-Term Investments Cost
($4,496,399)...................... 4,496,399
-----------
Total Investments (Cost
$61,135,583) (e).................. 99.2% 70,061,351(f)
Cash and Other Assets, Less
Liabilities....................... 0.8 537,357
---------- -----------
Net Assets......................... 100.0% $70,598,708
========== ===========
</TABLE>
------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) Segregated as collateral for forward foreign currency contracts.
(d) Strip securities represent a secondary class of shares traded in the
foreign market.
(e) The cost for federal income tax purposes is $61,357,810.
(f) At June 30, 2000 net unrealized appreciation for securities was $8,703,541,
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 $14,510,088 and aggregate gross
unrealized depreciation for all investments on which there was an excess of
cost over market value of $5,806,547.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
113
<PAGE> 114
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
The table below sets forth the diversification of International Equity Portfolio
investments by industry.
INDUSTRY
DIVERSIFICATION
<TABLE>
<CAPTION>
VALUE PERCENT +
------------------------
<S> <C> <C>
Aerospace & Military
Technology.................. $ 263,378 0.4%
Appliances & Household
Durables.................... 2,532,948 3.6
Automobiles................... 2,272,057 3.2
Banking....................... 8,400,206 11.9
Beverages & Tobacco........... 733,577 1.0
Broadcasting & Publishing..... 1,510,983 2.1
Building Materials &
Components.................. 1,107,640 1.6
Business & Public Services.... 3,672,273 5.2
Chemicals..................... 1,376,166 2.0
Data Processing &
Reproduction................ 873,840 1.2
Electrical & Electronics...... 6,065,615 8.6
Electronic Components &
Instruments................. 2,058,748 2.9
Energy Sources................ 3,424,592 4.9
Financial Services............ 3,870,440 5.5
Food & Household Products..... 1,677,233 2.4
Forest Products & Paper....... 410,150 0.6
Health & Personal Care........ 4,790,673 6.8
Industrial Components......... 226,361 0.3
Insurance..................... 4,116,239 5.8
Leisure & Tourism............. 1,181,474 1.7
Machinery & Engineering....... 374,013 0.5
Merchandising................. 2,922,713 4.1
Metals-Nonferrous............. 474,975 0.7
Metals-Steel.................. 525,486 0.7
Multi-Industry................ 200,941 0.3
Real Estate................... 637,619 0.9
Recreation & Other Consumer
Goods....................... 387,068 0.5
Telecommunications............ 11,162,099 15.8
Transportation-Airlines....... 528,917 0.8
Utilities-Electrical & Gas.... 2,282,927 3.2
----------- ------
70,061,351 99.2
Cash and Other Assets,
Less Liabilities............ 537,357 0.8
----------- ------
Net Assets.................... $70,598,708 100.0%
=========== ======
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
114
<PAGE> 115
MAINSTAY VP SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $61,135,583).......... $ 70,061,351
Cash denominated in foreign currencies
(identified cost $835,719)............. 838,899
Cash..................................... 132,918
Receivables:
Investment securities sold............. 3,252,560
Dividends and interest................. 209,953
Fund shares sold....................... 5,419
Unrealized appreciation on foreign
currency forward contracts............. 121,919
------------
Total assets..................... 74,623,019
------------
LIABILITIES:
Payables:
Investment securities purchased........ 3,744,563
Fund shares redeemed................... 168,851
Adviser................................ 34,661
Custodian.............................. 20,944
Shareholder communication.............. 16,607
Administrator.......................... 11,554
Accrued expenses......................... 18,775
Unrealized depreciation on foreign
currency forward contracts............. 8,356
------------
Total liabilities................ 4,024,311
------------
Net assets applicable to outstanding
shares................................. $ 70,598,708
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized... $ 50,891
Additional paid-in capital............... 58,214,731
Accumulated distribution in excess of net
investment income...................... (162,294)
Accumulated net realized gain on
investments............................ 3,171,437
Accumulated net realized gain on foreign
currency transactions.................. 298,722
Net unrealized appreciation on
investments............................ 8,925,768
Net unrealized appreciation on
translation of other assets and
liabilities in foreign currencies and
foreign currency forward contracts..... 99,453
------------
Net assets applicable to outstanding
shares................................. $ 70,598,708
============
Shares of capital stock outstanding...... 5,089,140
============
Net asset value per share outstanding.... $ 13.87
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).......................... $ 582,958
Interest............................... 47,708
------------
Total income..................... 630,666
------------
Expenses:
Advisory............................... 208,010
Administration......................... 69,337
Custodian.............................. 25,483
Professional........................... 20,741
Shareholder communication.............. 11,363
Portfolio pricing...................... 10,834
Directors.............................. 1,231
Miscellaneous.......................... 5,674
------------
Total expenses................... 352,673
------------
Net investment income.................... 277,993
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Security transactions.................. 3,328,164
Option transactions.................... (122,267)
Foreign currency transactions.......... 298,722
------------
Net realized gain on investments and
foreign currency transactions.......... 3,504,619
------------
Net change in unrealized appreciation on:
Security transactions.................. (10,318,073)
Translation of other assets and
liabilities in foreign currencies and
foreign currency forward contracts... 78,898
------------
Net unrealized loss on investments and
foreign currency transactions.......... (10,239,175)
------------
Net realized and unrealized loss on
investments and foreign currency
transactions........................... (6,734,556)
------------
Net decrease in net assets resulting from
operations............................. $ (6,456,563)
============
</TABLE>
------------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$85,061.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
115
<PAGE> 116
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income...................................... $ 277,993 $ 421,381
Net realized gain on investments and foreign currency
transactions............................................. 3,504,619 3,142,289
Net change in unrealized appreciation (depreciation) on
investments and foreign currency transactions............ (10,239,175) 12,095,402
----------- -----------
Net increase (decrease) in net assets resulting from
operations............................................... (6,456,563) 15,659,072
----------- -----------
Dividends and distributions to shareholders:
From net realized gain on investments and foreign currency
transactions............................................. (1,138,876) (1,467,137)
In excess of net investment income......................... -- (232,996)
----------- -----------
Total dividends and distributions to shareholders........ (1,138,876) (1,700,133)
----------- -----------
Capital share transactions:
Net proceeds from sale of shares........................... 12,847,126 26,647,460
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions.............. 1,138,876 1,700,133
----------- -----------
13,986,002 28,347,593
Cost of shares redeemed.................................... (8,131,165) (7,973,405)
----------- -----------
Increase in net assets derived from capital share
transactions............................................. 5,854,837 20,374,188
----------- -----------
Net increase (decrease) in net assets....................... (1,740,602) 34,333,127
NET ASSETS:
Beginning of period......................................... 72,339,310 38,006,183
----------- -----------
End of period............................................... $70,598,708 $72,339,310
=========== ===========
Accumulated distribution in excess of net investment income
at end of period........................................... $ (162,294) $ (440,287)
=========== ===========
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
SIX MONTHS 1995 (a)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31,
2000* 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of
period........................... $ 15.48 $ 12.40 $ 10.31 $ 10.65 $ 10.20 $ 10.00
------------ ------------ ------------ ------------ ------------ ------------
Net investment income............. 0.06 0.11 0.23 1.06 0.44 0.64
Net realized and unrealized gain
(loss) on investments............ (1.52) 3.46 2.20 0.27 0.06 0.01
Net realized and unrealized gain
(loss) on foreign currency
transactions..................... 0.08 (0.12) (0.05) (0.78) 0.56 0.05
------------ ------------ ------------ ------------ ------------ ------------
Total from investment
operations....................... (1.38) 3.45 2.38 0.55 1.06 0.70
------------ ------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
From net investment income....... -- -- (0.23) (0.89) (0.60) (0.06)
From net realized gain on
investments and foreign
currency transactions.......... (0.23) (0.32) -- -- (0.01) (0.44)
In excess of net investment
income......................... -- (0.05) (0.06) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions.................... (0.23) (0.37) (0.29) (0.89) (0.61) (0.50)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value at end of
period........................... $ 13.87 $ 15.48 $ 12.40 $ 10.31 $ 10.65 $ 10.20
============ ============ ============ ============ ============ ============
Total investment return........... (8.87%)(b) 28.06% 23.11% 5.17% 10.54% 6.96%(b)
Ratios (to average net assets)/
Supplemental Data:
Net investment income............ 0.80%+ 0.78% 1.13% 1.25% 1.01% 1.07%+
Net expenses..................... 1.02%+ 1.07% 0.97% 0.97% 0.97% 0.97%+
Expenses (before
reimbursement)................. 1.02%+ 1.07% 1.17% 1.25% 1.51% 2.51%+
Portfolio turnover rate........... 15% 37% 57% 61% 16% 14%
Net assets at end of period (in
000's)........................... $ 70,599 $ 72,339 $ 38,006 $ 30,272 $ 34,509 $ 14,631
</TABLE>
------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
116
<PAGE> 117
MAINSTAY VP SERIES FUND, INC.
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
LONG-TERM BONDS (29.8%)+
ASSET-BACKED SECURITIES (3.2%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
AIRLINES (0.4%)
America West Airlines, Inc.
Pass-Through Certificates Series
1996-1 Class C
6.86%, due 7/2/04............... $ 1,078,764 $ 1,053,132
Atlas Air, Inc.
Pass-Through Certificates Series
1999-1C
8.77%, due 1/2/11............... 311,023 307,210
Series 2000-1 Class C
9.702%, due 1/2/10 (c).......... 1,885,000 1,890,636
Northwest Airlines Inc.
Pass-Through Certificates Series
1999-3 Class B
9.485%, due 4/1/15.............. 255,000 251,999
------------
3,502,977
------------
AIRPLANE LEASES (0.5%)
AerCo Ltd.
Series 1X Class A1
6.8413%, due 7/15/23 (f)........ 1,245,000 1,244,751
Morgan Stanley Aircraft Finance
Series 2 Class A3
7.1713%, due 3/15/02 (c)(f)..... 3,000,000 3,003,000
------------
4,247,751
------------
AUTO LEASES (0.3%)
Premier Auto Trust
Series 1999-1 Class A3
5.69%, due 11/8/02.............. 2,890,000 2,854,164
------------
AUTOMOBILES (0.3%)
DaimlerChrysler Auto Trust Series
2000-B Class A3
7.53%, due 5/10/04.............. 2,580,000 2,595,119
------------
CONSUMER SERVICES (0.2%)
Arran One Ltd.
Series 2000-A Class B
7.15%, due 3/15/03 (f).......... 2,050,000 2,049,590
------------
ELECTRIC POWER COMPANIES (0.8%)
AES Eastern Energy Corp.
Pass-Through Certificates Series
1999-A
9.00%, due 1/2/17............... 430,000 418,614
Boston Edison Corp.
Series 1999-1 Class A2
6.45%, due 9/15/05.............. 1,935,000 1,901,873
PECO Energy Transition Trust
Series 2000-A Class A2
7.30%, due 9/1/02............... 1,530,000 1,530,474
West Penn Funding L.L.C.
Series 1999-A Class A4
6.98%, due 6/25/08.............. 2,250,000 2,191,163
------------
6,042,124
------------
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM BONDS (29.8%)+
ASSET-BACKED SECURITIES (3.2%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
EQUIPMENT LOANS (0.5%)
Case Equipment Loan Trust Series
1999-A Class A4
5.77%, due 8/15/05.............. $ 1,790,000 $ 1,739,647
Series 2000-A Class B
7.32%, due 2/15/07.............. 2,024,531 2,015,724
Newcourt Equipment Trust
Securities
Series 1998-1 Class A3
5.24%, due 12/20/02............. 422,148 416,841
------------
4,172,212
------------
LEISURE TIME (0.2%)
Harley Davidson Eaglemark
Motorcycle Trust
Series 1999-1 Class A2
5.52%, due 2/15/05.............. 1,450,000 1,410,546
------------
Total Asset-Backed Securities
(Cost $27,041,093).............. 26,874,483
------------
CORPORATE BONDS (6.8%)
BANKS--MAJOR REGIONAL (0.1%)
Wells Fargo Co.
7.20%, due 5/1/03............... 1,410,000 1,405,164
------------
BANKS--MONEY CENTER (0.3%)
Chase Manhattan Corp.
7.875%, due 6/15/10............. 860,000 860,404
First Union National Bank
7.875%, due 2/15/10............. 1,210,000 1,192,140
------------
2,052,544
------------
BEVERAGES--ALCOHOLIC (0.2%)
Canandaigua Brands, Inc.
8.625%, due 8/1/06.............. 305,000 301,188
Seagram, Joseph E. & Sons, Inc.
5.79%, due 4/15/01.............. 905,000 892,583
------------
1,193,771
------------
BROADCAST/MEDIA (0.3%)
Turner Broadcasting Systems Inc.
8.375%, due 7/1/13.............. 2,100,000 2,148,027
------------
CABLE TV (0.0%) (b)
CSC Holdings, Inc.
7.625%, due 7/15/18............. 200,000 179,380
------------
CHEMICALS (0.0%) (b)
Georgia Gulf Corp.
10.375%, due 11/1/07............ 125,000 130,000
Sterling Chemicals Inc.
Series B
12.375%, due 7/15/06............ 125,000 126,875
------------
256,875
------------
COMMERCIAL SERVICE SPECIALIZED (0.1%)
Hertz Corp.
8.25%, due 6/1/05............... 975,000 993,545
------------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
117
<PAGE> 118
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
COMPUTER SYSTEMS (0.0%) (b)
Unisys Corp.
11.75%, due 10/15/04............ $ 330,000 $ 351,450
------------
CONSUMER FINANCE (0.4%)
Ford Motor Credit Corp.
7.375%, due 10/28/09............ 2,390,000 2,314,524
General Motors Acceptance Corp.
6.85%, due 6/17/04.............. 1,085,000 1,061,108
------------
3,375,632
------------
ELECTRIC POWER COMPANIES (0.5%)
CMS Energy & Atlantic Methanol
Capital Co.
10.875%, due 12/15/04 (c)....... 315,000 311,062
ESI Tractebel Acquisition Corp.
7.99%, due 12/30/11............. 445,000 393,972
National Rural Utilities
Cooperative Finance Corp.
6.20%, due, 2/1/08.............. 1,025,000 945,850
7.375%, due 2/10/03............. 2,075,000 2,081,931
PSEG Energy Holdings, Inc.
10.00%, due 10/1/09 (c)......... 260,000 272,841
Western Resources, Inc.
6.25%, due 8/15/18.............. 80,000 69,391
6.875%, due 8/1/04.............. 155,000 135,941
------------
4,210,988
------------
ELECTRICAL EQUIPMENT (0.3%)
Emerson Electric Co.
7.875%, due 6/1/05.............. 2,440,000 2,508,491
------------
ELECTRONICS--COMPONENTS (0.0%) (b)
Flextronics International Ltd.
9.875%, due 7/1/10 (c).......... 200,000 201,500
------------
ENERGY SOURCES (0.1%)
Caithness Coso Funding Corp.
Series B
9.05%, due 12/15/09............. 425,000 419,687
------------
FINANCE (0.3%)
General Electric Capital Corp.
7.00%, due 2/3/03............... 2,390,000 2,377,261
------------
FINANCIAL SERVICES (0.1%)
Sears Roebuck Acceptance Corp.
Medium-Term Note Series IV
6.36%, due 12/4/01.............. 1,165,000 1,146,954
------------
FINANCIAL--MISCELLANEOUS (0.3%)
Morgan Stanley Dean Witter & Co
7.375%, due 4/15/03............. 2,900,000 2,898,666
------------
FOOD (0.0%) (b)
Smithfield Foods Inc.
7.625%, due 2/15/08............. 140,000 125,300
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FOREIGN GOVERNMENTS (0.4%)
United Mexican States
9.875%, due 2/1/10.............. $ 3,085,000 $ 3,216,113
------------
HEALTHCARE--HOSPITAL MANAGEMENT (0.1%)
Columbia/HCA Healthcare Corp.
7.50%, due 11/15/95............. 380,000 285,939
Tenet Health Care Corp.
8.00%, due 1/15/05.............. 275,000 264,000
------------
549,939
------------
HOMEBUILDING (0.0%) (b)
Standard Pacific Corp.
8.50%, due 4/1/09............... 180,000 162,000
------------
HOTEL/MOTEL (0.1%)
Felcor Suites L.P.
7.625%, due 10/1/07............. 245,000 212,896
Hilton Hotels Corp.
7.50%, due 12/15/17............. 155,000 130,006
Starwood Hotels & Resorts
Worldwide, Inc.
7.375%, due 11/15/15............ 300,000 252,776
------------
595,678
------------
INDUSTRIAL COMPONENT (0.2%)
Tenaska Georgia Partners L.P.
9.50%, due 2/1/30 (c)........... 2,000,000 2,027,140
------------
INSURANCE--MULTI-LINE (0.0%) (b)
Willis Corroon Group PLC
9.00%, due 2/1/09............... 260,000 218,400
------------
INVESTMENT BANK/BROKERAGE (0.6%)
Donaldson, Lufkin & Jenrette Inc.
6.50%, due 6/1/08............... 1,710,000 1,545,276
Labranche & Co., Inc.
9.50%, due 8/15/04.............. 320,000 307,200
Lehman Brothers Holding Inc.
8.25%, due 6/15/07.............. 2,440,000 2,440,293
------------
4,292,769
------------
LEISURE TIME (0.0%) (b)
Park Place Entertainment Corp.
9.375%, due 2/15/07............. 240,000 240,000
------------
MACHINERY--DIVERSIFIED (0.1%)
Deere & Co.
8.10%, due 5/15/30.............. 980,000 988,908
------------
MANUFACTURING--DIVERSIFIED (0.0%) (b)
Mark IV Industries, Inc.
7.50%, due 9/1/07............... 215,000 164,513
------------
OIL & GAS--EXPLORATION & PRODUCTION (0.0%) (b)
Ocean Energy Inc.
8.375%, due 7/1/08.............. 345,000 334,650
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
118
<PAGE> 119
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
OIL & GAS--WELL EQUIPMENT SERVICES (0.1%)
R & B Falcon Corp.
Series B
6.95%, due 4/15/08.............. $ 430,000 $ 367,650
RBF Finance Co.
11.375%, due 3/15/09............ 60,000 65,100
------------
432,750
------------
PAPER & FOREST PRODUCTS (0.1%)
Pope & Talbot Inc.
8.375%, due 6/1/13.............. 475,000 432,250
------------
PUBLISHING--NEWSPAPER (0.0%) (b)
Hollinger International
Publishing Inc.
9.25%, due 3/15/07.............. 330,000 325,050
------------
REAL ESTATE (0.3%)
Crescent Real Estate Equities Co.
7.50%, due 9/15/07.............. 460,000 372,893
United Dominion Realty Trust
8.625%, due 3/15/03............. 2,160,000 2,163,521
------------
2,536,414
------------
REAL ESTATE INVESTMENT TRUST (0.5%)
American Health Properties, Inc.
7.05%, due 1/15/02.............. 3,745,000 3,651,862
GS Escrow Corp.
7.125%, due 8/1/05.............. 220,000 196,348
Hospitality Properties Trust
7.00%, due 3/1/08............... 220,000 190,448
------------
4,038,658
------------
RESIDENTIAL MORTGAGE LOAN (0.3%)
Abbey National PLC
7.95%, due 10/26/29............. 2,620,000 2,590,761
------------
RETAIL STORES--DEPARTMENT (0.1%)
May Department Stores Co.
8.75%, due 5/15/29.............. 665,000 713,791
------------
RETAIL STORES--GENERAL MERCHANDISE (0.1%)
Kmart Corp.
7.95%, due 2/1/23............... 80,000 63,216
8.375%, due 7/1/22.............. 180,000 150,064
Wal-Mart Stores, Inc.
6.875%, due 8/10/09............. 920,000 899,199
------------
1,112,479
------------
SHIPPING (0.1%)
Newport News Shipbuilding, Inc.
8.625%, due 12/1/06............. 615,000 605,775
------------
TELECOMMUNICATIONS (0.1%)
Price Communications Wireless
Inc.
Series B
9.125%, due 12/15/06............ 570,000 575,700
Williams Communications Group
Inc.
10.875%, due 10/1/09............ 190,000 185,725
------------
761,425
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATIONS--CELLULAR/ WIRELESS (0.0%)
(b)
Mastec Inc.
7.75%, due 2/1/08............... $ 210,000 $ 193,200
------------
TELECOMMUNICATIONS--LONG DISTANCE (0.3%)
WorldCom, Inc.
8.25%, due 5/15/10.............. 2,400,000 2,460,192
------------
TELEPHONE (0.3%)
Deutsche Telekom International
Finance BV
8.25%, due 6/15/30.............. 2,235,000 2,269,821
------------
TOBACCO (0.0%) (b)
Standard Commercial Tobacco Corp.
8.875%, due 8/1/05.............. 210,000 168,000
------------
Total Corporate Bonds
(Cost $57,703,689).............. 57,275,911
------------
MORTGAGE-BACKED SECURITIES (0.9%)
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) (0.9%)
GMAC Commercial Mortgage
Securities Inc.
Series 1998-C2 Class A2
6.42%, due 5/15/35.............. 770,000 720,643
Merrill Lynch Mortgage Investors,
Inc.
Series 1995-C2 Class A1
6.803%, due 6/15/21 (f)......... 828,459 816,380
Salomon Brothers Mortgage
Securities VII
Series 2000-FL1 Class A
6.9413%, due 4/5/01 (c)(f)...... 2,165,134 2,165,784
Series 2000-C1 Class A1
7.46%, due 11/18/08............. 2,055,000 2,057,445
Starwood Asset Receivables Trust
Series 2000-1 Class A
6.9513%, due 9/25/22 (c)(f)..... 1,670,693 1,672,030
------------
Total Mortgage-Backed Securities
(Cost $7,440,759)............... 7,432,282
------------
U.S. GOVERNMENT & FEDERAL AGENCIES (17.7%)
FEDERAL NATIONAL MORTGAGE ASSOCIATION (1.2%)
5.125%, due 2/13/04 (g)......... 10,950,000 10,291,029
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
119
<PAGE> 120
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) (5.1%)
6.50%, due 12/1/27-4/1/29....... $13,701,977 $ 12,933,636
7.50%, due 10/1/29 (e).......... 12,575,739 12,395,025
7.50%, due 7/17/30 TBA (d)...... 14,535,000 14,326,132
8.50%, due 7/17/30 TBA (d)...... 3,000,000 3,056,250
------------
42,711,043
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION I
(MORTGAGE PASS-THROUGH SECURITIES) (4.2%)
6.50%, due 7/15/28-5/15/29
(e)........................... 21,231,182 20,169,623
6.50%, due 8/23/30 TBA (d)...... 2,540,000 2,409,825
7.00%, due 7/24/30 TBA (d)...... 8,850,000 8,601,138
7.50%, due 12/15/23-11/25/28
(e)........................... 4,315,724 4,288,101
------------
35,468,687
------------
UNITED STATES TREASURY BONDS (6.0%)
6.00%, due 2/15/26 (g).......... 180,000 176,260
6.25%, due 8/15/23-5/15/30
(g)........................... 20,420,000 20,908,745
8.75%, due 8/15/20 (g).......... 2,735,000 3,516,171
8.875%, due 8/15/17............. 1,550,000 1,975,770
10.375%, due 11/15/09........... 1,500,000 1,717,740
11.25%, due 2/15/15 (g)......... 7,420,000 10,921,275
11.625%, due 11/15/02 (g)....... 6,150,000 6,826,500
12.00%, due 8/15/13............. 3,775,000 5,096,250
------------
51,138,711
------------
UNITED STATES TREASURY NOTES (1.2%)
5.25%, due 8/15/03 (g).......... 1,985,000 1,924,199
5.875%, due 11/30/01............ 2,970,000 2,945,854
7.00%, due 7/15/06 (g).......... 5,070,000 5,252,165
------------
10,122,218
------------
Total U.S. Government & Federal
Agencies
(Cost $149,821,268)............. 149,731,688
------------
YANKEE BONDS (1.2%)
BANKS--MONEY CENTER (0.1%)
Barclays Bank PLC
7.40%, due 12/15/09............. 1,035,000 1,008,494
------------
BROADCAST/MEDIA (0.0%) (b)
Rogers Communications, Inc.
8.875%, due 7/15/07............. 245,000 240,100
------------
CABLE TV (0.0%) (b)
Rogers Cablesystem, Ltd.
10.125%, due 9/1/12............. 90,000 92,025
------------
ENTERTAINMENT (0.0%) (b)
Imax Corp.
7.875%, due 12/1/05............. 275,000 248,875
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FINANCIAL--DIVERSIFIED (0.0%) (b)
Tembec Finance Corp.
9.875%, due 9/30/05............. $ 160,000 $ 160,800
------------
GOLD & PRECIOUS METAL MINING (0.1%)
Great Central Mines, Ltd.
8.875%, due 4/1/08.............. 415,000 336,150
------------
MANUFACTURING--DIVERSIFIED (0.3%)
Tyco International Ltd.
6.25%, due 6/15/03.............. 2,670,000 2,547,420
------------
METALS--MISCELLANEOUS (0.0% ) (b)
Glencore Nickel Property Ltd.
9.00%, due 12/1/14.............. 220,000 182,600
------------
OIL--INTEGRATED DOMESTIC (0.0%) (b)
Husky Oil, Ltd.
8.90%, due 8/15/28.............. 30,000 28,227
------------
OIL & GAS--WELL EQUIPMENT SERVICES (0.3%)
Petroleum Geo-Services ASA
7.425%, due 3/20/02 (f)......... 2,800,000 2,796,920
------------
TELECOMMUNICATIONS (0.3%)
British Telecommunications PLC
6.6238%, due 2/27/01 (f)........ 2,475,000 2,474,752
------------
TRANSPORTATION--SHIPPING (0.1%)
Sea Containers Ltd.
7.875%, due 2/15/08............. 180,000 113,400
10.75%, due 10/15/06............ 280,000 210,000
Stena AB
10.50%, due 12/15/05............ 280,000 274,400
------------
597,800
------------
Total Yankee Bonds
(Cost $10,909,111).............. 10,714,163
------------
Total Long-Term Bonds
(Cost $252,915,920)............. 252,028,527
------------
<CAPTION>
COMMON STOCKS (67.5%)
SHARES
-----------
<S> <C> <C>
BIOTECHNOLOGY (1.0%)
Genentech, Inc. (a).............. 50,000 8,600,000
------------
BROADCAST/MEDIA (2.2%)
AMFM Inc. (a).................... 114,000 7,866,000
Clear Channel Communications,
Inc. (a)........................ 83,100 6,232,500
USA Networks, Inc. (a)........... 210,200 4,545,575
------------
18,644,075
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
120
<PAGE> 121
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
<S> <C> <C>
COMMUNICATIONS--EQUIPMENT (9.1%)
Cisco Systems, Inc. (a).......... 349,400 $ 22,208,738
Corning Inc. .................... 104,400 28,174,950
JDS Uniphase Corp. (a)........... 36,000 4,315,500
Lucent Technologies Inc. ........ 109,000 6,458,250
Nokia Corp. ..................... 105,200 5,253,425
Tellabs, Inc (a)................. 154,300 10,559,906
------------
76,970,769
------------
COMPUTER SOFTWARE & SERVICES (4.6%)
First Data Corp. ................ 70,400 3,493,600
Microsoft Corp. (a).............. 190,300 15,224,000
Oracle Corp. (a)................. 237,610 19,974,091
------------
38,691,691
------------
COMPUTER SYSTEMS (5.3%)
EMC Corp. (a).................... 300,800 23,142,800
Sun Microsystems, Inc. (a)....... 234,700 21,343,031
------------
44,485,831
------------
ELECTRICAL EQUIPMENT (1.2%)
General Electric Co. ............ 192,600 10,207,800
------------
ELECTRONICS--COMPONENTS (0.4%)
Cypress Semiconductor Corp.
(a)............................. 89,800 3,794,050
------------
ELECTRONICS--SEMICONDUCTORS (7.3%)
Analog Devices, Inc. (a)......... 68,400 5,198,400
Applied Materials Inc. (a)....... 59,600 5,401,250
Intel Corp. ..................... 166,800 22,299,075
Motorola, Inc. .................. 319,200 9,276,750
Texas Instruments Inc. .......... 281,600 19,342,400
------------
61,517,875
------------
ENTERTAINMENT (3.0%)
Time Warner Inc. ................ 137,700 10,465,200
Viacom Inc. Class B (a).......... 212,551 14,493,321
------------
24,958,521
------------
FINANCIAL--MISCELLANEOUS (1.8%)
Citigroup Inc. .................. 248,350 14,963,088
------------
HEALTH CARE--DIVERSIFIED (0.9%)
Allergan, Inc. .................. 20,100 1,497,450
Bristol-Myers Squibb Co. ........ 110,900 6,459,925
------------
7,957,375
------------
HEALTH CARE--DRUGS (3.3%)
Andrx Corp. (a).................. 31,500 2,013,540
Ivax Corp. (a)................... 71,900 2,983,850
Merck & Co., Inc................. 159,200 12,198,700
Schering-Plough Corp. ........... 216,300 10,923,150
------------
28,119,240
------------
HEALTH CARE MEDICAL PRODUCT (3.3%)
Baxter International Inc. (a).... 83,300 5,857,031
Guidant Corp. (a)(g)............. 140,800 6,969,600
Medtronic, Inc. ................. 243,200 12,114,400
PE Corp-PE Biosystems Group...... 44,000 2,898,500
------------
27,839,531
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
HEALTH CARE--MISCELLANEOUS (1.7%)
Amgen Inc. (a)................... 151,300 $ 10,628,825
Medimmune, Inc. (a).............. 45,000 3,330,000
------------
13,958,825
------------
HOUSEHOLD PRODUCTS (1.4%)
Colgate-Palmolive Co. ........... 204,400 12,238,450
------------
INSURANCE BROKERS (0.7%)
Marsh & Mclennan Cos., Inc. ..... 59,700 6,234,919
------------
INSURANCE--MULTI-LINE (1.4%)
American International Group,
Inc. ........................... 101,830 11,964,989
------------
INVESTMENT BANK/BROKERAGE (0.7%)
Goldman Sachs Group Inc. ........ 65,200 6,185,850
------------
LEISURE TIME (1.7%)
Harley-Davidson, Inc. ........... 377,700 14,541,450
------------
MANUFACTURING--DIVERSIFIED (1.9%)
Tyco International Ltd. ......... 346,000 16,391,750
------------
MISCELLANEOUS (1.9%)
AES Corp. (a).................... 340,600 15,539,875
------------
NATURAL GAS DISTRIBUTORS & PIPELINES (1.1%)
Enron Corp. ..................... 139,500 8,997,750
------------
PERSONAL LOANS (1.4%)
Household International, Inc. ... 86,200 3,582,688
Providian Financial Corp. ....... 89,250 8,032,500
------------
11,615,188
------------
RETAIL STORES--DEPARTMENT (2.1%)
Kohl's Corp. (a)................. 323,400 17,989,125
------------
RETAIL STORES SPECIALTY (3.9%)
Bed Bath & Beyond, Inc. (a)...... 173,800 6,300,250
Circuit City Stores-Circuit City
Group........................... 195,300 6,481,518
CVS Corp. ....................... 107,700 4,308,000
Home Depot, Inc. (The)........... 210,300 10,501,856
Staples, Inc. (a)................ 350,750 5,392,781
------------
32,984,405
------------
SPECIALIZED SERVICES (1.3%)
Omnicom Group, Inc. ............. 78,700 7,009,219
Young & Rubicam, Inc. ........... 75,500 4,317,656
------------
11,326,875
------------
TELECOMMUNICATIONS--LONG DISTANCE (1.5%)
WorldCom, Inc. (a)............... 270,648 12,415,977
------------
TELECOMMUNICATION SERVICES (0.5%)
Nextel Communications, Inc. Class
A (a)........................... 60,000 3,671,250
Flag Telecom Holdings Ltd.
(a) ............................ 38,000 565,250
------------
4,236,500
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
121
<PAGE> 122
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
<S> <C> <C>
TELEPHONE (0.9%)
Alltel Corp. (g)................. 125,200 $ 7,754,575
------------
Total Common Stocks
(Cost $327,058,962)............. 571,126,349
------------
PREFERRED STOCKS (0.1%)
ENTERTAINMENT (0.0%) (b)
Time Warner Capital I
8.875%, 12/31/25................ 7,700 186,244
------------
PAPER & FOREST PRODUCTS (0.1%)
Paperboard Industries
International, Inc.
5.00%, Series A (c)(h)(i)....... 15,000 233,473
------------
Total Preferred Stocks
(Cost $448,227)................. 419,717
------------
<CAPTION>
SHORT-TERM INVESTMENTS (5.3%)
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
COMMERCIAL PAPER (5.3%)
American Express Credit Corp.
6.88% due 7/3/00................ $ 5,060,000 5,058,066
Associates Corp. of North America
6.53% due 7/19/20 (e)........... 6,665,000 6,643,191
Ford Motor Credit Corp.
6.53% due 7/24/00 (e)........... 5,000,000 4,979,057
Goldman Sachs Group L.P.
6.54% due 7/10/00............... 2,000,000 1,996,716
6.92% due 7/5/00................ 9,000,000 8,993,079
Lloyds TSB Bank PLC
6.51% due 7/12/00............... 5,000,000 4,990,020
Salomon Smith Barney, Inc.
6.53% due 7/18/00............... 4,000,000 3,987,616
6.54% due 7/21/00............... 5,000,000 4,981,780
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (5.3%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Societe Generale North America
Inc.
6.53% due 7/5/00................ $ 3,500,000 $ 3,497,449
------------
Total Short-Term Investments
(Cost $45,126,974).............. 45,126,974
------------
Total Investments
(Cost $625,550,083) (j)......... 102.7% 868,701,567(k)
Liabilities in Excess of
Cash and Other Assets........... (2.7) (23,109,564)
---------- ------------
Net Assets....................... 100.0% $845,592,003
---------- ------------
---------- ------------
</TABLE>
------------
(a) Non-income producing securities.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) 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.
(e) Segregated as collateral for TBA.
(f) Floating rate. Rate shown is the rate in effect at June 30, 2000.
(g) Represent securities out on loan or a portion which is out on loan. (See
Note 2J)
(h) Restricted security
(i) Canadian security
(j) The cost for federal income tax purposes is $625,644,683.
(k) At June 30, 2000 net unrealized appreciation was $243,056,884, based on cost
for federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $253,512,563 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $10,455,679.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
122
<PAGE> 123
MAINSTAY VP SERIES FUND, INC.
TOTAL RETURN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $625,550,083)......... $868,701,567
Collateral held for securities loaned, at
value (Note 2J)........................ 59,201,524
Receivables:
Investment securities sold............. 17,859,438
Dividends and interest................. 3,607,442
Fund shares sold....................... 143,567
------------
Total assets..................... 949,513,538
------------
LIABILITIES:
Securities lending collateral (Note
2J).................................... 59,201,524
Payables:
Investment securities purchased........ 44,071,676
Adviser................................ 218,908
Administrator.......................... 136,818
Custodian.............................. 47,200
Fund shares redeemed................... 6,667
Directors.............................. 907
Accrued expenses......................... 237,835
------------
Total liabilities................ 103,921,535
------------
Net assets applicable to outstanding
shares................................. $845,592,003
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized... $ 389,676
Additional paid-in capital............... 585,344,725
Accumulated undistributed net investment
income................................. 7,910,937
Accumulated undistributed net realized
gain on investments.................... 8,795,181
Net unrealized appreciation on
investments............................ 243,151,484
------------
Net assets applicable to outstanding
shares................................. $845,592,003
============
Shares of capital stock outstanding...... 38,967,613
============
Net asset value per share outstanding.... $ 21.70
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 9,226,246
Dividends(a)........................... 1,089,784
------------
Total income..................... 10,316,030
------------
Expenses:
Advisory............................... 1,304,442
Administration......................... 815,276
Shareholder communication.............. 151,339
Custodian.............................. 55,179
Professional........................... 35,045
Directors.............................. 13,966
Portfolio pricing...................... 3,977
Miscellaneous.......................... 25,852
------------
Total expenses................... 2,405,076
------------
Net investment income.................... 7,910,954
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investments......... 9,238,718
Net change in unrealized appreciation on
investments............................ (728,937)
------------
Net realized and unrealized gain on
investments............................ 8,509,781
------------
Net increase in net assets resulting from
operations............................. $ 16,420,735
============
</TABLE>
------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $4,099.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
123
<PAGE> 124
TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 7,910,954 $ 13,431,612
Net realized gain on investments.......................... 9,238,718 60,286,739
Net change in unrealized appreciation on investments...... (728,937) 44,347,068
------------ ------------
Net increase in net assets resulting from operations...... 16,420,735 118,065,419
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ (65,539) (13,520,480)
From net realized gain on investments..................... (39,372,213) (22,287,175)
------------ ------------
Total dividends and distributions to shareholders....... (39,437,752) (35,807,655)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 35,960,132 93,597,950
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 39,437,752 35,807,655
------------ ------------
75,397,884 129,405,605
Cost of shares redeemed................................... (28,320,013) (34,493,505)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 47,077,871 94,912,100
------------ ------------
Net increase in net assets.................................. 24,060,854 177,169,864
NET ASSETS:
Beginning of period......................................... 821,531,149 644,361,285
------------ ------------
End of period............................................... $845,592,003 $821,531,149
============ ============
Accumulated undistributed net investment income at end of
period.................................................... $ 7,910,937 $ 65,522
============ ============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
2000* 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period................... $ 22.36 $ 19.99 $ 16.47 $ 14.56 $ 13.26 $ 10.58
------------ ------------ ------------ ------------ ------------ ------------
Net investment income......... 0.20 0.39 0.38 0.37 0.30 0.31
Net realized and unrealized
gain on investments......... 0.16 3.00 4.07 2.21 1.30 2.69
------------ ------------ ------------ ------------ ------------ ------------
Total from investment
operations.................. 0.36 3.39 4.45 2.58 1.60 3.00
------------ ------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
From net investment
income.................... (0.00)(a) (0.39) (0.38) (0.36) (0.30) (0.32)
From net realized gain on
investments............... (1.02) (0.63) (0.55) (0.31) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions............... (1.02) (1.02) (0.93) (0.67) (0.30) (0.32)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value at end of
period...................... $ 21.70 $ 22.36 $ 19.99 $ 16.47 $ 14.56 $ 13.26
============ ============ ============ ============ ============ ============
Total investment return....... 1.97%(b) 17.02% 27.13% 17.79% 12.08% 28.33%
Ratios (to average net
assets)/ Supplemental Data:
Net investment income....... 1.94%+ 1.88% 2.20% 2.46% 2.52% 3.06%
Net expenses................ 0.59%+ 0.58% 0.60% 0.60% 0.69% 0.69%
Expenses (before
reimbursement)............ 0.59%+ 0.58% 0.60% 0.60% 0.71% 0.81%
Portfolio turnover rate....... 76% 133% 158% 125% 175% 253%
Net assets at end of period
(in 000's).................. $ 845,592 $ 821,531 $ 644,361 $ 446,624 $ 332,897 $ 194,893
</TABLE>
------------
(a) Less than one cent per share.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
124
<PAGE> 125
MAINSTAY VP SERIES FUND, INC.
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (95.3%)+
SHARES VALUE
--------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (1.6%)
General Dynamics Corp............ 53,000 $ 2,769,250
Raytheon Co. Class A............. 29,900 581,181
Raytheon Co. Class B............. 62,100 1,195,425
------------
4,545,856
------------
ALUMINUM (1.6%)
Alcoa Inc........................ 151,228 4,385,612
------------
BANKS (7.8%)
Chase Manhattan Corp. (The)...... 138,750 6,391,172
FleetBoston Financial Corp....... 215,130 7,314,420
Washington Mutual, Inc........... 287,600 8,304,450
------------
22,010,042
------------
CHEMICALS (2.6%)
Air Products and Chemicals,
Inc............................. 174,200 5,367,537
Geon Co. (The)................... 49,600 917,600
IMC Global Inc................... 90,800 1,180,400
------------
7,465,537
------------
COMPUTER SOFTWARE & SERVICES (0.6%)
Electronic Data Systems Corp..... 40,500 1,670,625
------------
COMPUTER SYSTEMS (2.5%)
Seagate Technology, Inc. (a)..... 51,800 2,849,000
Unisys Corp. (a)................. 295,100 4,297,394
------------
7,146,394
------------
CONSUMER PRODUCTS (1.5%)
Dial Corp. (The)................. 131,600 1,365,350
Energizer Holdings, Inc. (a)..... 158,966 2,901,129
------------
4,266,479
------------
CONTAINERS (1.1%)
Temple-Inland Inc................ 71,000 2,982,000
------------
ELECTRIC POWER COMPANIES (3.7%)
DTE Energy Co.................... 98,200 3,001,238
Energy East Corp................. 142,600 2,718,312
Niagara Mohawk Holdings, Inc.
(a)............................. 347,700 4,846,069
------------
10,565,619
------------
ENGINEERING & CONSTRUCTION (1.0%)
Fluor Corp....................... 87,700 2,773,513
------------
FINANCE (8.3%)
American General Corp............ 169,500 10,339,500
AXA Financial, Inc............... 149,900 5,096,600
Citigroup Inc.................... 106,123 6,393,911
Franklin Resources, Inc.......... 53,100 1,612,912
------------
23,442,923
------------
FOOD (5.1%)
ConAgra, Inc..................... 205,400 3,915,438
Heinz (H.J.) Co.................. 138,400 6,055,000
Ralston-Ralston Purina Group..... 231,000 4,605,562
------------
14,576,000
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
HEALTH CARE -- MEDICAL PRODUCTS (1.4%)
Becton, Dickinson & Co........... 137,700 $ 3,950,269
------------
HEALTH CARE -- MISCELLANEOUS (4.9%)
Abbott Laboratories.............. 109,700 4,888,506
Health Management Associates,
Inc. Class A (a)................ 256,000 3,344,000
Manor Care, Inc. (a)............. 87,300 611,100
Tenet Healthcare Corp. (a)....... 186,200 5,027,400
------------
13,871,006
------------
HOTEL/MOTEL (1.3%)
Harrah's Entertainment,
Inc.(a)......................... 174,500 3,653,594
------------
HOUSEHOLD PRODUCTS (5.0%)
Clorox Co. (The)................. 112,800 5,054,850
Fort James Corp.................. 126,000 2,913,750
Kimberly-Clark Corp.............. 109,000 6,253,875
------------
14,222,475
------------
INSURANCE (4.2%)
Allstate Corp. (The)............. 140,500 3,126,125
Lincoln National Corp............ 77,000 2,781,625
MGIC Investment Corp............. 133,200 6,060,600
------------
11,968,350
------------
INVESTMENT BANK/BROKERAGE (1.1%)
Goldman Sachs Group, Inc.
(The)........................... 33,600 3,187,800
------------
MACHINERY (1.5%)
Ingersoll-Rand Co................ 103,800 4,177,950
------------
MANUFACTURING (5.2%)
American Standard Cos. Inc.
(a)............................. 232,200 9,520,200
Honeywell International Inc...... 155,050 5,223,247
------------
14,743,447
------------
NATURAL GAS DISTRIBUTORS &
PIPELINES (4.6%)
Coastal Corp. (The).............. 158,400 9,642,600
Dynegy Inc. Class A.............. 49,900 3,408,794
------------
13,051,394
------------
OFFICE EQUIPMENT & SUPPLIES (1.5%)
Pitney Bowes Inc................. 104,100 4,164,000
------------
OIL & GAS SERVICES (9.0%)
Burlington Resources Inc......... 126,100 4,823,325
Noble Affiliates, Inc............ 76,200 2,838,450
Union Pacific Resources Group
Inc............................. 215,200 4,734,400
Unocal Corp...................... 225,300 7,463,063
Valero Energy Corp............... 181,200 5,753,100
------------
25,612,338
------------
OIL-INTEGRATED DOMESTIC (3.9%)
Sunoco, Inc...................... 147,800 4,350,863
Tosco Corp....................... 237,300 6,718,556
------------
11,069,419
------------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
125
<PAGE> 126
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
<S> <C> <C>
OIL-INTEGRATED
INTERNATIONAL (2.1%)
Texaco Inc....................... 114,000 $ 6,070,500
------------
PAPER & FOREST PRODUCTS (1.0%)
International Paper Co........... 98,100 2,924,606
------------
PHOTOGRAPHY/IMAGING (1.3%)
Eastman Kodak Co................. 63,300 3,766,350
------------
RETAIL (1.7%)
Office Depot, Inc. (a)........... 790,000 4,937,500
------------
TELECOMMUNICATIONS (3.1%)
AT&T Corp........................ 171,300 5,417,363
WorldCom, Inc. (a)............... 71,500 3,280,062
------------
8,697,425
------------
TELEPHONE (3.6%)
Bell Atlantic Corp............... 86,800 4,410,525
CenturyTel, Inc.................. 198,900 5,718,375
------------
10,128,900
------------
TOYS (1.5%)
Hasbro, Inc...................... 285,300 4,297,331
------------
Total Common Stocks
(Cost $275,002,341)............. 270,325,254
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (4.3%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
COMMERCIAL PAPER (4.3%)
American Express Credit Corp.
6.88%, due 7/3/00............... $ 1,170,000 $ 1,169,553
Deutsche Bank Financial Inc.
6.54%, due 7/17/00.............. 5,000,000 4,985,424
Goldman Sachs Group Inc. (The)
6.54%, due 7/25/00.............. 4,650,000 4,629,682
Prudential Funding Corp.
6.54%, due 7/6/00............... 1,260,000 1,258,852
------------
Total Short-Term Investments
(Cost $12,043,511).............. 12,043,511
------------
Total Investments
(Cost $287,045,852) (b)......... 99.6% 282,368,765(c)
Cash and Other Assets,
Less Liabilities................ 0.4 1,188,316
---------- ------------
Net Assets....................... 100.0% $283,557,081
========== ============
</TABLE>
------------
(a) Non-income producing security.
(b) The cost stated also represents the aggregate cost for federal income tax
purposes.
(c) At June 30, 2000 net unrealized depreciation was $4,677,087, 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 $24,007,017 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $28,684,104.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
126
<PAGE> 127
MAINSTAY VP SERIES FUND, INC.
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $287,045,852)......... $282,368,765
Cash..................................... 2,708
Receivables:
Investment securities sold............. 5,553,375
Dividends.............................. 448,726
Fund shares sold....................... 105,756
------------
Total assets..................... 288,479,330
------------
LIABILITIES:
Payables:
Investment securities purchased........ 4,393,599
Fund shares redeemed................... 262,861
Shareholder communication.............. 89,601
Adviser................................ 89,007
Administrator.......................... 49,449
Custodian.............................. 13,899
Directors.............................. 641
Accrued expenses......................... 23,192
------------
Total liabilities................ 4,922,249
------------
Net assets applicable to outstanding
shares................................. $283,557,081
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized... $ 199,840
Additional paid-in capital............... 290,986,843
Accumulated undistributed net investment
income................................. 1,816,976
Accumulated net realized loss on
investments............................ (4,977,261)
Accumulated net realized gain on foreign
currency forward contract.............. 207,770
Net unrealized depreciation on
investments............................ (4,677,087)
------------
Net assets applicable to outstanding
shares................................. $283,557,081
============
Shares of capital stock outstanding...... 19,984,040
============
Net asset value per share outstanding.... $ 14.19
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends(a)........................... $ 2,557,083
Interest............................... 211,484
------------
Total income..................... 2,768,567
------------
Expenses:
Advisory............................... 534,182
Administration......................... 296,768
Shareholder communication.............. 64,857
Professional........................... 22,424
Custodian.............................. 16,604
Directors.............................. 5,506
Miscellaneous.......................... 9,763
------------
Total expenses................... 950,104
------------
Net investment income.................... 1,818,463
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
FORWARD CONTRACT TRANSACTIONS:
Net realized gain from:
Security transactions.................. 3,211,651
Foreign currency forward contract
transactions......................... 207,770
------------
Net realized gain on investments and
foreign currency forward contract
transactions........................... 3,419,421
------------
Net change in unrealized appreciation
(depreciation) on investments:
Security transactions.................. (23,559,371)
Foreign currency forward contract...... 41,023
------------
Net unrealized loss on investments and
foreign currency forward contract
transactions........................... (23,518,348)
------------
Net realized and unrealized loss on
investments and foreign currency
forward contract transactions.......... (20,098,927)
------------
Net decrease in net assets resulting from
operations............................. $(18,280,464)
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
127
<PAGE> 128
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
---------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 1,818,463 $ 4,329,033
Net realized gain (loss) on investments and foreign
currency forward contract............................... 3,419,421 (7,352,043)
Net change in unrealized appreciation (depreciation) on
investments and foreign currency forward contract....... (23,518,348) 28,938,860
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (18,280,464) 25,915,850
------------ ------------
Dividends to shareholders:
From net investment income................................ (4,274) (4,091,047)
------------ ------------
Total dividends to shareholders......................... (4,274) (4,091,047)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 6,392,180 29,009,373
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 4,274 4,091,047
------------ ------------
6,396,454 33,100,420
Cost of shares redeemed................................... (36,027,688) (43,195,183)
------------ ------------
Decrease in net assets derived from capital share
transactions............................................ (29,631,234) (10,094,763)
------------ ------------
Net increase (decrease) in net assets....................... (47,915,972) 11,730,040
NET ASSETS:
Beginning of period......................................... 331,473,053 319,743,013
------------ ------------
End of period............................................... $283,557,081 $331,473,053
============ ============
Accumulated undistributed net investment income at end of
period.................................................... $ 1,816,976 $ 2,787
============ ============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
2000* 1999 1998 1997
--------------- -----------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning
of period.................. $ 15.00 $ 13.96 $ 16.09 $ 13.90
------------ ------------ ------------ ------------
Net investment income........ 0.09 0.20 0.24 0.21
Net realized and unrealized
gain (loss) on
investments................ (0.90) 1.03 (0.90) 2.94
------------ ------------ ------------ ------------
Total from investment
operations................. (0.81) 1.23 (0.66) 3.15
------------ ------------ ------------ ------------
Less dividends and
distributions:
From net investment
income................... (0.00)(c) (0.19) (0.24) (0.21)
From net realized gain on
investments.............. -- -- (1.23) (0.75)
------------ ------------ ------------ ------------
Total dividends and
distributions.............. (0.00) (0.19) (1.47) (0.96)
------------ ------------ ------------ ------------
Net asset value at end of
period..................... $ 14.19 $ 15.00 $ 13.96 $ 16.09
============ ============ ============ ============
Total investment return...... (5.38%)(b) 8.80% (4.14%) 22.89%
Ratios (to average net assets)/
Supplemental Data:
Net investment income....... 1.23%+ 1.30% 1.60% 1.78%
Net expenses................ 0.64%+ 0.63% 0.65% 0.65%
Expenses (before
reimbursement)............ 0.64%+ 0.63% 0.65% 0.65%
Portfolio turnover rate....... 48% 74% 69% 48%
Net assets at end of period (in
000's)...................... $ 283,557 $ 331,473 $ 319,743 $ 264,179
<CAPTION>
MAY 1,
1995 (a)
THROUGH
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 (loss) 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...... 23.22% 16.76%(b)
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%
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) Less than one cent per share.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
128
<PAGE> 129
MAINSTAY VP SERIES FUND, INC.
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
LONG-TERM BONDS (95.9%)+
CORPORATE BONDS (53.1%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
AUTOMOBILES (1.9%)
DaimlerChrysler North America
Holding Corp.
7.20%, due 9/1/09............... $ 5,000,000 $ 4,831,250
------------
BANKS--MAJOR REGIONAL (3.8%)
Fleet National Bank
5.75%, due 1/15/09.............. 5,000,000 4,362,500
Popular Inc.
6.20%, due 4/30/01.............. 5,000,000 4,937,500
------------
9,300,000
------------
BANKS--MONEY CENTER (1.6%)
Bank of America Corp.
7.75%, due 7/15/02.............. 4,000,000 4,025,000
------------
BANKS--SAVINGS & LOANS (0.4%)
Golden West Financial Corp.
10.25%, due 12/1/00 (a)......... 1,000,000 1,012,500
------------
BEVERAGE--SOFT DRINKS (2.5%)
Pepsi Bottling Group, Inc.
7.00%, due 3/1/29............... 7,000,000 6,282,500
------------
BROADCAST/MEDIA (1.7%)
News America Inc.
7.125%, due 4/8/28.............. 5,000,000 4,206,250
------------
CABLE TV (1.8%)
CSC Holdings Inc.
7.25%, due 7/15/08.............. 5,000,000 4,637,500
------------
CHEMICALS (0.8%)
Rohm & Haas Co.
6.95%, due 7/15/04.............. 2,000,000 1,987,500
------------
ELECTRIC POWER COMPANIES (5.2%)
Cleveland Electric Illuminating
Co.
7.88%, due 11/1/17.............. 5,000,000 4,775,000
Commonwealth Edison Co.
6.95%, due 7/15/18.............. 5,000,000 4,506,250
Niagara Mohawk Power Corp.
7.125%, due 7/1/01.............. 3,780,489 3,761,586
------------
13,042,836
------------
FINANCIAL--MISCELLANEOUS (20.5%)
CIT Group Inc.
6.50%, due 6/14/02.............. 3,000,000 2,940,000
7.125%, due 10/15/04............ 2,000,000 1,942,500
Finova Capital Corp.
7.25%, due 11/8/04.............. 5,000,000 4,406,250
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM BONDS (95.9%)+
CORPORATE BONDS (53.1%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FINANCIAL--MISCELLANEOUS (Continued)
Ford Motor Credit Corp.
7.375%, due 10/28/09............ $ 5,000,000 $ 4,842,100
7.50%, due 3/15/05.............. 5,000,000 4,975,000
General Electric Capital Corp.
7.25%, due 5/3/04............... 8,000,000 8,010,000
General Motors Acceptance Corp.
5.625%, due 2/15/01............. 6,000,000 5,947,500
Household Finance Corp.
7.875%, due 3/1/07.............. 7,000,000 6,965,000
John Deere Capital Corp.
5.35%, due 10/23/01............. 5,000,000 4,875,000
Norwest Financial, Inc.
6.85%, due 7/15/09.............. 7,000,000 6,580,000
------------
51,483,350
------------
OIL--INTEGRATED DOMESTIC (2.5%)
Phillips Petroleum Co.
8.50%, due 5/25/05.............. 6,000,000 6,210,000
------------
RAILROADS (5.4%)
CSX Corp.
7.05%, due 5/1/02............... 7,000,000 6,921,250
Norfolk Southern Corp.
7.80%, due 5/15/27.............. 7,000,000 6,728,750
------------
13,650,000
------------
RETAIL STORES--GENERAL
MERCHANDISE (1.9%)
Wal-Mart Stores, Inc.
6.875%, due 8/10/09............. 5,000,000 4,886,950
------------
TELECOMMUNICATIONS--
LONG DISTANCE (1.1%)
Sprint Capital Corp.
6.90%, due 5/1/19............... 3,000,000 2,662,500
------------
TELEPHONE (2.0%)
Deutsche Telekom International
Finance
8.25%, due 6/15/30.............. 5,000,000 5,077,900
------------
Total Corporate Bonds
(Cost $138,377,242)............. 133,296,036
------------
U.S. GOVERNMENT &
FEDERAL AGENCIES (42.8%)
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (2.7%)
5.91%, due 8/25/03.............. 7,000,000 6,766,410
------------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
129
<PAGE> 130
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE
PASS-THROUGH SECURITIES) (26.8%)
5.125%, due 2/15/04............. $12,000,000 $ 11,277,840
6.00%, due 2/1/14-10/1/28. ..... 12,512,108 11,581,513
6.50%, due 11/1/09-6/1/29....... 17,073,680 16,181,075
7.00%, due 2/1/27-1/1/28........ 14,474,740 13,968,125
7.50%, due 7/1/28 .............. 4,225,006 4,162,940
8.00%, due 5/1/25-12/1/29....... 10,168,488 10,209,773
------------
67,381,266
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION I
(MORTGAGE PASS-THROUGH
SECURITY) (0.6%)
9.00%, due 4/15/26.............. 1,469,444 1,519,037
------------
UNITED STATES TREASURY
BONDS (5.4%)
6.125%, due 8/15/29............. 9,000,000 9,097,830
7.125%, due 2/15/23............. 4,000,000 4,437,480
------------
13,535,310
------------
UNITED STATES TREASURY
NOTES (7.3%)
6.50%, due 8/15/05-2/15/10...... 18,000,000 18,379,960
------------
Total U.S. Government &
Federal Agencies
(Cost $110,228,912)............. 107,581,983
------------
Total Long-Term Bonds
(Cost $248,606,154)............. 240,878,019
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
SHORT-TERM INVESTMENTS (4.7%)
<S> <C> <C>
COMMERCIAL PAPER (4.7%)
Associates Corp. of North America
5.07%, due on demand (b)........ $ 3,470,000 $ 3,470,000
Goldman Sachs Group L.P.
6.88%, due 7/06/00.............. 2,312,000 2,309,790
Nestle Finance Co.
6.72%, due 7/07/00.............. 6,068,000 6,061,201
------------
Total Short-Term Investments
(Cost $11,840,991).............. 11,840,991
------------
Total Investments
(Cost $260,447,145) (c)......... 100.6% 252,719,010(d)
Liabilities in Excess of
Cash and Other Assets........... (0.6) (1,459,007)
----------- ------------
Net Assets....................... 100.0% $251,260,003
=========== ============
</TABLE>
------------
(a) Long-term security maturing within the subsequent twelve month period.
(b) Adjustable rate. Rate shown is the rate in effect at June 30, 2000.
(c) The cost stated also represents the aggregate cost for federal income tax
purposes.
(d) At June 30, 2000, net unrealized depreciation was $7,728,135, 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 $824,205 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $8,552,340.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
130
<PAGE> 131
MAINSTAY VP SERIES FUND, INC.
BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $260,447,145)......... $252,719,010
Cash..................................... 1,245
Receivables:
Investment securities sold............. 5,269,070
Interest............................... 4,107,461
Fund shares sold....................... 25,414
------------
Total assets..................... 262,122,200
------------
LIABILITIES:
Payables:
Investment securities purchased........ 10,414,108
Fund shares redeemed................... 270,566
Shareholder communication.............. 55,747
Advisor................................ 51,376
Administrator.......................... 41,101
Directors.............................. 663
Accrued expenses......................... 28,636
------------
Total liabilities................ 10,862,197
------------
Net assets applicable to outstanding
shares................................. $251,260,003
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized... $ 199,076
Additional paid-in capital............... 257,560,328
Accumulated undistributed net investment
income................................. 8,344,824
Accumulated net realized loss on
investments............................ (7,116,090)
Net unrealized depreciation on
investments............................ (7,728,135)
------------
Net assets applicable to outstanding
shares................................. $251,260,003
============
Shares of capital stock outstanding...... 19,907,493
============
Net asset value per share outstanding.... $ 12.62
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 9,007,943
------------
Expenses:
Advisory............................... 325,458
Administration......................... 260,366
Shareholder communication.............. 36,374
Professional........................... 23,491
Directors.............................. 4,877
Portfolio pricing...................... 4,132
Miscellaneous.......................... 8,421
------------
Total expenses................... 663,119
------------
Net investment income.................... 8,344,824
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments......... (3,664,807)
Net change in unrealized depreciation on
investments............................ 3,121,604
------------
Net realized and unrealized loss on
investments............................ (543,203)
------------
Net increase in net assets resulting from
operations............................. $ 7,801,621
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
131
<PAGE> 132
BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
---------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 8,344,824 $ 17,141,455
Net realized loss on investments.......................... (3,664,807) (3,386,687)
Net change in unrealized appreciation (depreciation) on
investments............................................. 3,121,604 (18,241,917)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. 7,801,621 (4,487,149)
------------ ------------
Dividends and distributions to shareholders:
From net investment income................................ -- (17,287,214)
From net realized gain on investments..................... -- (25,226)
------------ ------------
Total dividends and distributions to shareholders....... -- (17,312,440)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.......................... 5,423,028 59,285,805
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. -- 17,312,440
------------ ------------
5,423,028 76,598,245
Cost of shares redeemed................................... (49,325,768) (44,829,765)
------------ ------------
Increase (decrease) in net assets derived from capital
share transactions...................................... (43,902,740) 31,768,480
------------ ------------
Net increase (decrease) in net assets....................... (36,101,119) 9,968,891
NET ASSETS:
Beginning of period......................................... 287,361,122 277,392,231
------------ ------------
End of period............................................... $251,260,003 $287,361,122
============ ============
Accumulated undistributed net investment income at end of
period.................................................... $ 8,344,824 $ --
============ ============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
2000* 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period.................. $ 12.24 $ 13.23 $ 13.14 $ 12.83 $ 13.42 $ 12.09
------------ ------------ ------------ ------------ ------------ ------------
Net investment income........ 0.42 0.78 0.74 0.88 0.87 0.88
Net realized and unrealized
gain (loss) on
investments................ (0.04) (0.99) 0.46 0.35 (0.59) 1.33
------------ ------------ ------------ ------------ ------------ ------------
Total from investment
operations................. 0.38 (0.21) 1.20 1.23 0.28 2.21
------------ ------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
From net investment
income................... -- (0.78) (0.74) (0.88) (0.87) (0.88)
From net realized gain on
investments.............. -- (0.00)(a) (0.37) (0.04) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions.............. -- (0.78) (1.11) (0.92) (0.87) (0.88)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value at end of
period..................... $ 12.62 $ 12.24 $ 13.23 $ 13.14 $ 12.83 $ 13.42
============ ============ ============ ============ ============ ============
Total investment return...... 3.09%(b) (1.53%) 9.12% 9.65% 2.05% 18.31%
Ratios (to average net
assets)/Supplemental Data:
Net investment income...... 6.41%+ 5.86% 5.86% 6.42% 6.31% 6.55%
Net expenses............... 0.51%+ 0.50% 0.52% 0.50% 0.58% 0.62%
Expenses (before
reimbursement)........... 0.51%+ 0.50% 0.52% 0.50% 0.58% 0.91%
Portfolio turnover rate...... 36% 161% 206% 187% 103% 81%
Net assets at end of period
(in 000's)................. $ 251,260 $ 287,361 $ 277,392 $ 228,949 $ 226,375 $ 235,030
</TABLE>
------------
(a) Less than one cent per share.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
132
<PAGE> 133
MAINSTAY VP SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (96.8%)+
SHARES VALUE
----------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (1.1%)
Boeing Co. (The)................ 360,000 $ 15,052,500
--------------
ALUMINUM (0.7%)
Alcoa Inc. ..................... 350,000 10,150,000
--------------
BANKS (2.0%)
Bank of New York Co., Inc.
(The).......................... 370,000 17,205,000
Chase Manhattan Corp. (The)..... 240,000 11,055,000
--------------
28,260,000
--------------
BEVERAGES--ALCOHOLIC (1.1%)
Anheuser-Busch Cos., Inc. ...... 195,000 14,564,062
--------------
BEVERAGES--SOFT DRINKS (0.6%)
Coca-Cola Co. (The)............. 150,000 8,615,625
--------------
BIOTECHNOLOGY (0.9%)
Genentech, Inc. (a)............. 68,000 11,696,000
--------------
BROADCAST/MEDIA (2.8%)
AMFM Inc. (a)................... 100,578 6,939,882
Comcast Corp. Special Class A
(a)............................ 292,500 11,846,250
MediaOne Group Inc. (a)......... 180,000 11,957,850
USA Networks, Inc. (a).......... 394,000 8,520,250
--------------
39,264,232
--------------
CHEMICALS (1.2%)
Eastman Chemical Co. ........... 117,500 5,610,625
Praxair, Inc. .................. 125,000 4,679,687
Rohm & Haas Co. ................ 163,600 5,644,200
--------------
15,934,512
--------------
COMMUNICATIONS--EQUIPMENT (13.5%)
ADC Telecommunications, Inc.
(a)............................ 292,500 24,533,437
Andrew Corp. (a)................ 440,000 14,767,500
Cisco Systems, Inc. (a)......... 490,000 31,145,625
Corning Inc. ................... 85,000 22,939,375
Hughes Electronics Corp. (a).... 160,000 14,040,000
JDS Uniphase Corp. (a).......... 85,000 10,189,375
Nokia Corp. ADR (b)............. 300,000 14,981,250
Nortel Networks Corp. .......... 400,000 27,300,000
QUALCOMM Inc. (a)............... 134,000 8,040,000
Tellabs, Inc. (a)............... 299,000 20,462,813
--------------
188,399,375
--------------
COMPUTER SOFTWARE & SERVICES (5.3%)
ACNielsen Corp. (a)............. 230,000 5,060,000
Comdisco, Inc. ................. 325,000 7,251,562
First Data Corp. ............... 63,000 3,126,375
Keane, Inc. (a)................. 388,000 8,390,500
Microsoft Corp. (a)............. 180,000 14,400,000
Oracle Corp. (a)................ 179,000 15,047,188
SunGard Data Systems Inc. (a)... 425,000 13,175,000
Symantec Corp. (a).............. 150,000 8,090,625
--------------
74,541,250
--------------
</TABLE>
<TABLE>
<CAPTION>
COMPUTER SOFTWARE & SERVICES (Continued)
SHARES VALUE
----------------------------
<S> <C> <C>
COMPUTER SYSTEMS (5.1%)
Compaq Computer Corp. .......... 522,000 $ 13,343,625
EMC Corp. (a)................... 310,000 23,850,625
International Business Machines
Corp. ......................... 125,000 13,695,312
Sun Microsystems, Inc. (a)...... 230,000 20,915,625
--------------
71,805,187
--------------
COMPUTERS--NETWORKING (0.5%)
Sycamore Networks, Inc. (a)..... 60,000 6,622,500
--------------
COSMETICS/PERSONAL CARE (1.3%)
Avon Products, Inc. ............ 400,000 17,800,000
--------------
ELECTRIC POWER COMPANIES (0.4%)
Duke Energy Corp. .............. 100,000 5,637,500
--------------
ELECTRICAL EQUIPMENT (2.4%)
General Electric Co. ........... 630,000 33,390,000
--------------
ELECTRONICS--COMPONENTS (2.1%)
SCI Systems, Inc. (a)........... 300,000 11,756,250
SPX Corp. (a)................... 150,000 18,140,625
--------------
29,896,875
--------------
ELECTRONICS--SEMICONDUCTORS (7.5%)
Advanced Micro Devices, Inc.
(a)............................ 200,000 15,450,000
Applied Materials, Inc. (a)..... 149,300 13,530,312
Intel Corp. .................... 175,000 23,395,312
National Semiconductor Corp.
(a)............................ 225,000 12,768,750
Novellus Systems, Inc. (a)...... 193,000 10,916,563
Rambus Inc. (a)................. 80,000 8,240,000
Texas Instruments Inc. ......... 292,000 20,056,750
--------------
104,357,687
--------------
ENTERTAINMENT (3.4%)
Time Warner Inc. ............... 200,000 15,200,000
Viacom Inc. Class B (a)......... 260,400 17,756,025
Walt Disney Co. (The)........... 365,000 14,166,562
--------------
47,122,587
--------------
FINANCE (3.1%)
American Express Co. ........... 270,000 14,073,750
Citigroup Inc. ................. 237,000 14,279,250
Morgan Stanley Dean Witter &
Co. ........................... 184,000 15,318,000
--------------
43,671,000
--------------
FOOD & HEALTH CARE DISTRIBUTORS (1.1%)
SYSCO Corp. .................... 360,000 15,165,000
--------------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
133
<PAGE> 134
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
HEALTH CARE--DRUGS (5.1%)
Lilly (Eli) & Co. .............. 200,000 $ 19,975,000
Pfizer Inc. .................... 624,937 29,997,000
Pharmacia Corp. ................ 349,300 18,054,443
SmithKline Beecham PLC ADR (b).. 49,700 3,239,819
--------------
71,266,262
--------------
HEALTH CARE--MEDICAL PRODUCTS (2.8%)
Guidant Corp. (a)............... 225,000 11,137,500
Medtronic, Inc. ................ 315,800 15,730,787
Stryker Corp. (a)............... 184,000 8,050,000
Sybron International Corp.
(a)............................ 240,000 4,755,000
--------------
39,673,287
--------------
HEALTH CARE--MISCELLANEOUS (2.6%)
Amgen Inc. (a).................. 260,000 18,265,000
Johnson & Johnson............... 180,000 18,337,500
--------------
36,602,500
--------------
INSURANCE (4.8%)
ACE Ltd. ....................... 475,000 13,300,000
American International Group,
Inc. .......................... 180,750 21,238,125
Marsh & McLennan Cos., Inc. .... 135,000 14,099,063
Radian Group Inc. .............. 124,000 6,417,000
St. Paul Cos., Inc. (The)....... 351,000 11,977,875
--------------
67,032,063
--------------
INTERNET SOFTWARE & SERVICES (1.2%)
Alteon Websystems, Inc. (a)..... 70,000 7,004,375
Genuity Inc. (a)................ 1,063,800 9,740,472
--------------
16,744,847
--------------
INVESTMENT BANK/BROKERAGE (1.0%)
Merrill Lynch & Co., Inc. ...... 124,500 14,317,500
--------------
MANUFACTURING (1.1%)
Tyco International Ltd. ........ 325,000 15,396,875
--------------
NATURAL GAS DISTRIBUTORS & PIPELINES (2.9%)
Coastal Corp. (The)............. 280,000 17,045,000
Enron Corp. .................... 190,000 12,255,000
Williams Cos., Inc. (The)....... 275,000 11,464,063
--------------
40,764,063
--------------
OIL & GAS SERVICES (1.0%)
Schlumberger Ltd. .............. 185,000 13,805,625
--------------
OIL--INTEGRATED DOMESTIC (0.6%)
Tosco Corp. .................... 300,000 8,493,750
--------------
OIL--INTEGRATED INTERNATIONAL (2.3%)
BP Amoco PLC ADR (b)............ 61,500 3,478,594
Chevron Corp. .................. 170,000 14,418,125
Exxon Mobil Corp. .............. 184,821 14,508,448
--------------
32,405,167
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
REAL ESTATE INVESTMENT/MANAGEMENT (1.1%)
First Industrial Realty Trust,
Inc. .......................... 350,000 $ 10,325,000
Liberty Property Trust.......... 166,500 4,318,594
--------------
14,643,594
--------------
RETAIL (5.3%)
CVS Corp. ...................... 354,000 14,160,000
Kroger Co. (The) (a)............ 540,000 11,913,750
RadioShack Corp. ............... 37,100 1,757,613
Target Corp. ................... 200,000 11,600,000
Walgreen Co. ................... 535,000 17,220,313
Wal-Mart Stores, Inc. .......... 300,000 17,287,500
--------------
73,939,176
--------------
SPECIALIZED SERVICES (1.6%)
Cendant Corp. (a)............... 700,000 9,800,000
Convergys Corp. (a)............. 250,000 12,968,750
--------------
22,768,750
--------------
TELECOMMUNICATIONS (3.2%)
Allegiance Telecom, Inc. (a).... 150,000 9,600,000
Dobson Communications Corp.
(a)............................ 135,000 2,598,750
Sprint Corp. (FON Group)........ 333,600 17,013,600
Sprint Corp. (PCS Group) (a).... 110,000 6,545,000
Time Warner Telecom Inc. Class A
(a)............................ 22,500 1,448,438
Western Wireless Corp. Class A
(a)............................ 146,000 7,957,000
--------------
45,162,788
--------------
TELEPHONE (3.9%)
ALLTEL Corp. ................... 175,000 10,839,063
Bell Atlantic Corp. ............ 200,000 10,162,500
GTE Corp. ...................... 30,000 1,867,500
Qwest Communications
International Inc. (a) (c)..... 400,000 19,875,000
SBC Communications Inc. ........ 271,096 11,724,902
--------------
54,468,965
--------------
TEXTILES (0.2%)
WestPoint Stevens Inc. ......... 260,000 2,892,500
--------------
Total Common Stocks (cost
$927,149,038).................. 1,352,323,604
--------------
<CAPTION>
SHORT-TERM INVESTMENTS (3.6%)
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
COMMERCIAL PAPER (3.6%)
Associates Corp. of North
America
6.20%, due on demand (d)....... $10,917,000 10,917,000
Budget Funding Corp.
6.90%, due 7/05/00............. 8,956,000 8,949,127
Goldman Sachs Group Inc.
6.95%, due 7/03/00............. 19,820,000 19,812,346
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
134
<PAGE> 135
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Nordstrom Inc.
6.65%, due 7/11/00............. $10,010,000 $ 9,991,496
--------------
Total Short-Term Investments
(Cost $49,669,969)............. 49,669,969
--------------
Total Investments (Cost
$976,819,007) (e).............. 100.4% 1,401,993,573(f)
Liabilities in Excess of Cash
and Other Assets............... (0.4) (4,711,516)
----------- --------------
Net Assets...................... 100.0% $1,397,282,057
=========== ==============
</TABLE>
------------
(a) Non-income producing security.
(b) ADR--American Depository Receipt.
(c) Represents security out on loan. (See Note 2J)
(d) Adjustable rate. Rate shown is the rate in effect at June 30, 2000.
(e) The cost for federal income tax purposes is $976,624,050.
(f) At June 30, 2000 net unrealized appreciation was $425,369,523, 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 $463,098,329 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $37,728,806.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
135
<PAGE> 136
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $976,819,007)....... $1,401,993,573
Collateral held for securities loaned
at value (Note 2J)................... 19,812,346
Cash................................... 330
Receivables:
Investment securities sold........... 66,356,275
Dividends and interest............... 834,410
Fund shares sold..................... 275,364
--------------
Total assets................... 1,489,272,298
--------------
LIABILITIES:
Securities lending collateral (Note
2J).................................. 19,812,346
Payables:
Investment securities purchased...... 70,920,003
Fund shares redeemed................. 432,064
Adviser.............................. 287,284
Shareholder communication............ 274,147
Administrator........................ 229,827
Custodian............................ 1,119
Directors............................ 868
Accrued expenses....................... 32,583
--------------
Total liabilities.............. 91,990,241
--------------
Net assets applicable to outstanding
shares............................... $1,397,282,057
==============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares
authorized........................... $ 491,843
Additional paid-in capital............. 906,493,600
Accumulated undistributed net
investment income.................... 3,920,254
Accumulated undistributed net realized
gain on investments.................. 61,201,794
Net unrealized appreciation on
investments.......................... 425,174,566
--------------
Net assets applicable to outstanding
shares............................... $1,397,282,057
==============
Shares of capital stock outstanding.... 49,184,335
==============
Net asset value per share
outstanding.......................... $ 28.41
==============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 5,686,436
Interest............................. 1,540,770
--------------
Total income................... 7,227,206
--------------
Expenses:
Advisory............................. 1,678,426
Administration....................... 1,342,740
Shareholder communication............ 190,990
Professional......................... 45,235
Directors............................ 22,215
Miscellaneous........................ 27,346
--------------
Total expenses................. 3,306,952
--------------
Net investment income.................. 3,920,254
--------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments....... 61,006,837
Net change in unrealized appreciation
on investments....................... (33,615,909)
--------------
Net realized and unrealized gain on
investments.......................... 27,390,928
--------------
Net increase in net assets resulting
from operations...................... $ 31,311,182
==============
------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $46,659.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
136
<PAGE> 137
MAINSTAY VP SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 3,920,254 $ 6,930,558
Net realized gain on investments.......................... 61,006,837 116,289,799
Net change in unrealized appreciation on investments...... (33,615,909) 175,477,844
-------------- --------------
Net increase in net assets resulting from operations...... 31,311,182 298,698,201
-------------- --------------
Dividends and distributions to shareholders:
From net investment income................................ -- (6,931,381)
From net realized gain on investments..................... -- (116,319,036)
-------------- --------------
Total dividends and distributions to shareholders....... -- (123,250,417)
-------------- --------------
Capital share transactions:
Net proceeds from sale of shares.......................... 136,803,698 163,123,595
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. -- 123,250,417
-------------- --------------
136,803,698 286,374,012
Cost of shares redeemed................................... (83,738,301) (145,652,758)
-------------- --------------
Increase in net assets derived from capital share
transactions............................................ 53,065,397 140,721,254
-------------- --------------
Net increase in net assets.................................. 84,376,579 316,169,038
NET ASSETS:
Beginning of period......................................... 1,312,905,478 996,736,440
-------------- --------------
End of period............................................... $1,397,282,057 $1,312,905,478
============== ==============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
2000* 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period.................. $ 27.78 $ 23.62 $ 20.31 $ 18.63 $ 17.22 $ 14.69
------------ ------------ ------------ ------------ ------------ ------------
Net investment income........ 0.08 0.16 0.19 0.16 0.18 0.22
Net realized and unrealized
gain on investments........ 0.55 6.89 5.21 4.74 4.06 4.06
------------ ------------ ------------ ------------ ------------ ------------
Total from investment
operations................. 0.63 7.05 5.40 4.90 4.24 4.28
------------ ------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
From net investment
income................... -- (0.16) (0.19) (0.16) (0.18) (0.22)
From net realized gain
on investments........... -- (2.73) (1.90) (3.06) (2.65) (1.53)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions.............. -- (2.89) (2.09) (3.22) (2.83) (1.75)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value at end of
period..................... $ 28.41 $ 27.78 $ 23.62 $ 20.31 $ 18.63 $ 17.22
============ ============ ============ ============ ============ ============
Total investment return...... 2.28%(a) 29.96% 26.59% 26.75% 24.50% 29.16%
Ratios (to average net
assets)/Supplemental Data:
Net investment income...... 0.58%+ 0.63% 0.84% 0.80% 0.98% 1.29%
Net expenses............... 0.52%+ 0.49% 0.51% 0.50% 0.58% 0.62%
Expenses (before
reimbursement)........... 0.52%+ 0.49% 0.51% 0.50% 0.58% 0.91%
Portfolio turnover rate...... 37% 71% 69% 103% 104% 104%
Net assets at end of period
(in 000's)................. $ 1,397,282 $ 1,312,905 $ 996,736 $ 759,054 $ 564,685 $ 427,507
</TABLE>
------------
(a) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
137
<PAGE> 138
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (97.1%)+
SHARES VALUE
----------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (0.8%)
Boeing Co. (The)................ 110,267 $ 4,610,539
General Dynamics Corp. ......... 25,383 1,326,262
Goodrich (B.F.) Co. (The)....... 14,026 477,761
Lockheed Martin Corp. .......... 50,308 1,248,267
Northrop Grumman Corp. ......... 8,720 577,700
Raytheon Co. Class B............ 42,926 826,325
Rockwell International Corp. ... 24,468 770,742
United Technologies Corp. ...... 60,284 3,549,221
--------------
13,386,817
--------------
AIRLINES (0.2%)
AMR Corp. (a)................... 19,465 514,606
Delta Air Lines, Inc. .......... 15,513 784,376
Southwest Airlines Co. ......... 64,173 1,215,276
US Airways Group, Inc. (a)...... 9,384 365,976
--------------
2,880,234
--------------
ALUMINUM (0.2%)
Alcan Aluminum Ltd. ............ 28,779 892,149
Alcoa Inc. ..................... 109,062 3,162,798
--------------
4,054,947
--------------
AUTO PARTS & EQUIPMENT (0.1%)
Cooper Tire & Rubber Co. ....... 9,664 107,512
Delphi Automotive Systems
Corp. ......................... 71,832 1,046,053
Genuine Parts Co. .............. 22,880 457,600
Goodyear Tire & Rubber Co.
(The).......................... 19,855 397,100
Visteon Corp. (a)............... 16,477 199,794
--------------
2,208,059
--------------
AUTOMOBILES (0.6%)
Ford Motor Co. ................. 153,344 6,593,792
General Motors Corp. ........... 67,586 3,924,212
--------------
10,518,004
--------------
BANKS--MAJOR REGIONAL (2.9%)
AmSouth Bancorp................. 49,886 785,704
Bank of New York Co., Inc.
(The).......................... 93,356 4,341,054
Bank One Corp. ................. 145,741 3,871,245
BB&T Corp. ..................... 43,875 1,047,516
Comerica Inc. .................. 19,906 893,282
Fifth Third Bancorp............. 38,450 2,431,962
Firstar Corp. .................. 123,771 2,606,927
FleetBoston Financial Corp. .... 113,810 3,869,540
Huntington Bancshares Inc. ..... 28,884 456,728
KeyCorp......................... 57,169 1,007,604
Mellon Financial Corp. ......... 62,004 2,259,271
National City Corp. ............ 78,730 1,343,331
Northern Trust Corp. ........... 28,448 1,850,898
Old Kent Financial Corp. ....... 16,380 438,165
PNC Financial Services Group,
Inc. (The)..................... 37,316 1,749,188
Regions Financial Corp. ........ 28,516 566,755
SouthTrust Corp. ............... 21,283 481,528
State Street Corp. ............. 20,370 2,160,493
Summit Bancorp.................. 21,988 541,454
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
BANKS--MAJOR REGIONAL (Continued)
SunTrust Banks, Inc. ........... 38,205 $ 1,745,491
Synovus Financial Corp. ........ 34,670 611,059
Union Planters Corp. ........... 18,114 506,060
U.S. Bancorp.................... 92,904 1,788,402
Wachovia Corp. ................. 25,859 1,402,851
Wells Fargo Co. ................ 203,394 7,881,517
--------------
46,638,025
--------------
BANKS--MONEY CENTER (1.3%)
Bank of America Corp. .......... 210,264 9,041,352
Chase Manhattan Corp. (The)..... 157,164 7,239,367
First Union Corp. .............. 125,459 3,112,951
Morgan (J.P.) & Co., Inc. ...... 20,510 2,258,664
--------------
21,652,334
--------------
BANKS--SAVINGS & LOANS (0.2%)
Charter One Financial, Inc. .... 26,000 598,000
Golden West Financial Corp. .... 20,528 837,799
Washington Mutual, Inc. ........ 69,153 1,996,793
--------------
3,432,592
--------------
BEVERAGES--ALCOHOLIC (0.3%)
Anheuser-Busch Cos., Inc. ...... 57,047 4,260,698
Brown-Forman Corp.
Class B........................ 8,674 466,227
Coors (Adolph) Co.
Class B........................ 4,722 285,681
--------------
5,012,606
--------------
BEVERAGES--SOFT DRINKS (1.6%)
Coca-Cola Co. (The) (c)......... 312,447 17,946,175
Coca-Cola Enterprises Inc. ..... 54,104 882,571
PepsiCo, Inc. .................. 181,982 8,086,825
--------------
26,915,571
--------------
BROADCAST/MEDIA (0.8%)
Clear Channel Communications,
Inc. (a)....................... 42,424 3,181,800
Comcast Corp. Special Class A
(a)............................ 113,338 4,590,189
MediaOne Group Inc. (a)......... 77,192 5,128,058
--------------
12,900,047
--------------
BUILDING MATERIALS (0.1%)
Masco Corp. .................... 56,350 1,017,822
Owens Corning................... 7,014 64,880
Sherwin-Williams Co. (The)...... 21,628 458,243
Vulcan Materials Co. ........... 12,800 546,400
--------------
2,087,345
--------------
CHEMICALS (0.8%)
Air Products & Chemicals,
Inc. .......................... 29,308 903,053
Dow Chemical Co. (The).......... 84,237 2,542,904
Du Pont (E.I.) De Nemours &
Co. ........................... 132,770 5,808,688
Eastman Chemical Co. ........... 10,100 482,275
Hercules Inc. .................. 12,916 181,631
Praxair, Inc. .................. 20,082 751,820
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
138
<PAGE> 139
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
CHEMICALS (Continued)
Rohm & Haas Co. ................ 27,086 $ 934,467
Union Carbide Corp. ............ 16,844 833,778
--------------
12,438,616
--------------
CHEMICALS--DIVERSIFIED (0.1%)
Avery Dennison Corp. ........... 14,490 972,641
Engelhard Corp. ................ 16,005 273,085
FMC Corp. (a)................... 3,937 228,346
PPG Industries, Inc. ........... 22,072 978,066
--------------
2,452,138
--------------
CHEMICALS--SPECIALTY (0.0%) (b)
Grace (W.R.) & Co. (a).......... 8,937 108,361
Great Lakes Chemical Corp. ..... 7,371 232,187
Sigma-Aldrich Corp. ............ 12,846 375,745
--------------
716,293
--------------
COMMUNICATIONS--EQUIPMENT MANUFACTURERS
(8.3%)
ADC Telecommunications, Inc.
(a)............................ 38,100 3,195,637
Andrew Corp. (a)................ 10,293 345,459
Cabletron Systems, Inc. (a)..... 23,347 589,512
Cisco Systems, Inc. (a)......... 868,128 55,180,386
Comverse Technology, Inc. (a)... 19,400 1,804,200
Corning Inc. ................... 34,995 9,444,276
Lucent Technologies Inc. ....... 400,308 23,718,249
Network Appliance, Inc. (a)..... 38,600 3,107,300
Nortel Networks Corp. .......... 366,096 24,986,052
QUALCOMM Inc. (a)............... 93,600 5,616,000
Scientific-Atlanta, Inc. ....... 19,986 1,488,957
Tellabs, Inc. (a)............... 51,124 3,498,799
3Com Corp. (a).................. 43,778 2,522,707
--------------
135,497,534
--------------
COMPUTER SOFTWARE & SERVICES (8.7%)
Adobe Systems Inc. ............. 15,078 1,960,140
America Online, Inc. (a)........ 287,392 15,159,928
Autodesk, Inc. ................. 7,527 261,093
Automatic Data Processing,
Inc. .......................... 79,978 4,283,822
BMC Software, Inc. (a).......... 30,203 1,101,938
Ceridian Corp. (a).............. 18,329 441,042
Citrix Systems, Inc. (a)........ 22,400 424,200
Computer Associates
International, Inc. ........... 74,632 3,820,225
Computer Sciences Corp. (a)..... 21,140 1,578,894
Compuware Corp. (a)............. 46,719 484,710
Electronic Data Systems
Corp. ......................... 59,846 2,468,647
Equifax Inc. ................... 18,411 483,289
First Data Corp. ............... 53,218 2,640,943
Microsoft Corp. (a)(c).......... 660,404 52,832,320
Novell, Inc. (a)................ 42,308 391,349
Oracle Corp. (a)................ 358,398 30,127,832
Parametric Technology Corp.
(a)............................ 35,164 386,804
Paychex, Inc. .................. 46,977 1,973,034
PeopleSoft, Inc. (a)............ 32,327 541,477
Sabre Holdings Corp. (a)........ 16,471 469,423
Sapient Corp. (a)............... 7,700 823,419
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
COMPUTER SOFTWARE & SERVICES (Continued)
Shared Medical Systems Corp. ... 3,299 $ 240,621
Siebel Systems, Inc. (a)........ 24,400 3,990,925
VERITAS Software Corp. (a)...... 49,600 5,605,574
Yahoo! Inc. (a)................. 66,800 8,274,850
--------------
140,766,499
--------------
COMPUTER SYSTEMS (6.6%)
Apple Computer, Inc. (a)........ 40,770 2,135,329
Compaq Computer Corp. .......... 214,918 5,493,841
Dell Computer Corp. (a)......... 325,679 16,060,046
EMC Corp. (a)................... 258,086 19,856,492
Gateway, Inc. (a)............... 40,132 2,277,491
Hewlett-Packard Co. ............ 126,231 15,763,096
International Business Machines
Corp. ......................... 223,354 24,471,223
Lexmark International Group,
Inc. (a)....................... 16,400 1,102,900
NCR Corp. (a)................... 12,200 475,037
Seagate Technology, Inc. (a).... 27,443 1,509,365
Silicon Graphics, Inc. (a)...... 8,091 30,341
Sun Microsystems, Inc. (a)...... 200,288 18,213,690
Unisys Corp. (a)................ 38,849 565,739
--------------
107,954,590
--------------
CONGLOMERATES (0.1%)
Textron Inc. ................... 19,149 1,040,030
--------------
CONTAINERS--METAL & GLASS (0.0%) (b)
Ball Corp. ..................... 3,807 122,538
Crown Cork & Seal Co., Inc. .... 15,687 235,305
Owens-Illinois, Inc. (a)........ 19,871 232,242
--------------
590,085
--------------
CONTAINERS--PAPER (0.0%) (b)
Bemis Co., Inc. ................ 6,820 229,323
Pactiv Corp. (a)................ 21,790 171,596
Temple-Inland Inc. ............. 7,160 300,720
--------------
701,639
--------------
COSMETICS/PERSONAL CARE (0.4%)
Alberto-Culver Co. Class B...... 7,169 219,103
Avon Products, Inc. ............ 30,793 1,370,288
Gillette Co. (The).............. 131,844 4,606,300
International Flavors &
Fragrances Inc. ............... 13,498 407,471
--------------
6,603,162
--------------
ELECTRIC POWER COMPANIES (1.5%)
Ameren Corp. ................... 17,543 592,076
American Electric Power Co.,
Inc. .......................... 40,811 1,209,026
Cinergy Corp. .................. 20,172 513,125
CMS Energy Corp. ............... 14,900 329,662
Consolidated Edison, Inc. ...... 28,377 840,669
Constellation Energy Group,
Inc. .......................... 19,059 620,609
CP&L Energy, Inc. .............. 20,265 647,213
Dominion Resources, Inc. ....... 30,179 1,293,925
DTE Energy Co. ................. 18,461 564,214
Duke Energy Corp. .............. 46,376 2,614,447
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
139
<PAGE> 140
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
ELECTRIC POWER COMPANIES (Continued)
Edison International............ 44,313 $ 908,417
Entergy Corp. .................. 30,691 834,412
FirstEnergy Corp. .............. 29,941 699,871
Florida Progress Corp. ......... 12,500 585,938
FPL Group, Inc. ................ 22,783 1,127,758
GPU, Inc. ...................... 16,045 434,218
New Century Energies Inc. ...... 14,647 439,410
Niagara Mohawk Holdings Inc.
(a)............................ 23,812 331,880
Northern States Power Co. ...... 19,524 394,141
PECO Energy Co. ................ 21,364 861,236
PG&E Corp. ..................... 48,979 1,206,108
Pinnacle West Capital Corp. .... 10,600 359,075
PPL Corp. ...................... 19,967 438,026
Public Service Enterprise Group
Inc. .......................... 28,071 971,958
Reliant Energy, Inc. ........... 37,756 1,116,162
Southern Co. (The).............. 81,846 1,908,035
TXU Corp. ...................... 33,305 982,497
Unicom Corp. ................... 22,462 868,999
--------------
23,693,107
--------------
ELECTRICAL EQUIPMENT (4.7%)
American Power Conversion Corp.
(a)............................ 24,500 999,906
Cooper Industries, Inc. ........ 12,062 392,769
Emerson Electric Co. ........... 53,851 3,251,254
General Electric Co. (c)........ 1,245,944 66,035,032
Grainger (W.W.), Inc. .......... 11,874 365,868
Molex Inc. ..................... 24,625 1,185,078
Sanmina Corp. (a)............... 16,800 1,436,400
Solectron Corp. (a)............. 75,478 3,160,641
Thomas & Betts Corp. ........... 7,228 138,236
--------------
76,965,184
--------------
ELECTRONICS--DEFENSE (0.0%) (b)
PerkinElmer, Inc. .............. 5,752 380,351
--------------
ELECTRONICS--INSTRUMENTATION (0.3%)
Agilent Technologies, Inc.
(a)............................ 57,525 4,242,469
Tektronix, Inc. ................ 6,011 444,814
--------------
4,687,283
--------------
ELECTRONICS--SEMICONDUCTORS (7.3%)
Adaptec, Inc. (a)............... 12,800 291,200
Advanced Micro Devices, Inc.
(a)............................ 18,694 1,444,112
Altera Corp. (a)................ 25,300 2,579,019
Analog Devices, Inc. (a)........ 44,300 3,366,800
Applied Materials, Inc. (a)..... 97,146 8,803,856
Broadcom Corp. (a).............. 6,494 1,421,780
Conexant Systems, Inc. (a)...... 27,200 1,322,600
Intel Corp. .................... 422,820 56,525,749
KLA-Tencor Corp. (a)............ 23,256 1,361,930
Linear Technology Corp. ........ 39,300 2,512,744
LSI Logic Corp. (a)............. 37,964 2,054,801
Maxim Integrated Products, Inc.
(a)............................ 35,200 2,391,400
Micron Technology, Inc. (a)..... 68,476 6,030,168
MIPS Technologies, Inc. (a)..... 1,121 43,168
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------------
<S> <C> <C>
ELECTRONICS--SEMICONDUCTORS (Continued)
Motorola, Inc. ................. 265,775 $ 7,724,086
National Semiconductor Corp.
(a)............................ 21,403 1,214,620
Novellus Systems, Inc. (a)...... 16,500 933,281
Teradyne, Inc. (a).............. 21,800 1,602,300
Texas Instruments Inc. ......... 206,952 14,215,015
Xilinx, Inc. (a)................ 40,300 3,327,269
--------------
119,165,898
--------------
ENGINEERING & CONSTRUCTION (0.0%) (b)
Fluor Corp. .................... 9,662 305,561
--------------
ENTERTAINMENT (2.4%)
Seagram Co. Ltd. (The).......... 54,718 3,173,644
Time Warner Inc. ............... 163,222 12,404,872
Viacom Inc. Class B (a)......... 192,511 13,126,844
Walt Disney Co. (The)........... 261,356 10,143,880
--------------
38,849,240
--------------
FINANCIAL--MISCELLANEOUS (4.2%)
AFLAC Inc. ..................... 34,000 1,561,875
American Express Co. ........... 168,668 8,791,819
American General Corp. ......... 32,073 1,956,453
Associates First Capital Corp.
Class A........................ 92,767 2,069,864
Citigroup Inc. ................. 426,115 25,673,429
Fannie Mae...................... 127,137 6,634,962
Franklin Resources Inc. ........ 31,719 963,465
Freddie Mac..................... 88,604 3,588,462
MBIA Inc. ...................... 12,746 614,198
MBNA Corp. ..................... 102,297 2,774,806
Morgan Stanley Dean Witter &
Co. ........................... 142,916 11,897,757
Price (T. Rowe) Associates,
Inc. .......................... 16,100 684,250
SLM Holding Corp. .............. 20,683 774,320
--------------
67,985,660
--------------
FOOD (1.3%)
Bestfoods....................... 35,664 2,469,732
Campbell Soup Co. .............. 55,548 1,617,836
ConAgra, Inc. .................. 62,296 1,187,518
General Mills, Inc. ............ 36,830 1,408,747
Heinz (H.J.) Co. ............... 45,759 2,001,956
Hershey Foods Corp. ............ 17,791 866,199
Kellogg Co. .................... 51,660 1,536,885
Nabisco Group Holdings Corp. ... 41,347 1,072,438
Quaker Oats Co. (The)........... 17,041 1,280,205
Ralston-Ralston Purina Group.... 38,705 771,681
Sara Lee Corp. ................. 112,611 2,174,800
Unilever N.V. .................. 72,767 3,128,981
Wrigley (Wm.) Jr. Co. .......... 14,845 1,190,383
--------------
20,707,361
--------------
FOOD & HEALTH CARE DISTRIBUTORS (0.3%)
Cardinal Health, Inc. .......... 34,671 2,565,654
McKesson HBOC, Inc. ............ 35,515 743,596
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
140
<PAGE> 141
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
FOOD & HEALTH CARE DISTRIBUTORS (Continued)
SUPERVALU Inc. ................. 15,539 $ 296,212
SYSCO Corp. .................... 42,201 1,777,717
--------------
5,383,179
--------------
GOLD & PRECIOUS METALS MINING (0.1%)
Barrick Gold Corp. ............. 49,737 904,592
Homestake Mining Co. ........... 33,102 227,576
Newmont Mining Corp. ........... 21,345 461,586
Placer Dome Inc. ............... 41,416 396,040
--------------
1,989,794
--------------
HARDWARE & TOOLS (0.1%)
Black & Decker Corp. (The)...... 11,050 434,403
Snap-on Inc. ................... 8,427 224,369
Stanley Works (The)............. 11,392 270,560
--------------
929,332
--------------
HEALTH CARE--DIVERSIFIED (3.2%)
Abbott Laboratories............. 193,911 8,641,159
Allergan, Inc. ................. 17,228 1,283,486
American Home Products Corp. ... 164,616 9,671,190
Bristol-Myers Squibb Co. ....... 249,042 14,506,696
Johnson & Johnson............... 175,610 17,890,269
Mallinckrodt Inc. .............. 8,904 386,768
--------------
52,379,568
--------------
HEALTH CARE--DRUGS (5.7%)
Lilly (Eli) & Co. .............. 138,646 13,847,269
Merck & Co., Inc. .............. 290,346 22,247,762
Pfizer Inc. .................... 789,023 37,873,104
Pharmacia Corp. ................ 158,894 8,212,834
Schering-Plough Corp. .......... 184,857 9,335,279
Watson Pharmaceuticals, Inc.
(a)............................ 12,100 650,375
--------------
92,166,623
--------------
HEALTH CARE--HMOs (0.2%)
Aetna Inc. ..................... 17,865 1,146,710
Humana Inc. (a)................. 21,345 104,057
UnitedHealth Group Inc. (a)..... 20,499 1,757,789
Wellpoint Health Networks Inc.
(a)............................ 8,600 622,962
--------------
3,631,518
--------------
HEALTH CARE--HOSPITAL MANAGEMENT (0.2%)
HCA-The Healthcare Co. ......... 72,353 2,197,722
Tenet Healthcare Corp. (a)...... 39,589 1,068,903
--------------
3,266,625
--------------
HEALTH CARE--MEDICAL PRODUCTS (1.1%)
Bard (C.R.), Inc. .............. 6,596 317,433
Bausch & Lomb Inc. ............. 7,252 561,123
Baxter International Inc. ...... 37,132 2,610,844
Becton, Dickinson & Co. ........ 31,956 916,738
Biomet, Inc. ................... 14,403 553,615
Boston Scientific Corp. (a)..... 50,664 1,111,442
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
HEALTH CARE--MEDICAL PRODUCTS (Continued)
Guidant Corp. (a)............... 38,563 $ 1,908,868
Medtronic, Inc. ................ 151,760 7,559,545
PE Corp.-PE Biosystems Group.... 26,132 1,721,445
St. Jude Medical, Inc. (a)...... 10,724 491,964
--------------
17,753,017
--------------
HEALTH CARE--MISCELLANEOUS (0.9%)
ALZA Corp. (a).................. 12,917 763,718
Amgen Inc. (a).................. 130,340 9,156,385
Biogen, Inc. (a)................ 19,100 1,231,950
HEALTHSOUTH Corp. (a)........... 52,609 378,127
Manor Care, Inc. (a)............ 14,155 99,085
MedImmune, Inc. (a)............. 26,300 1,946,200
Quintiles Transnational Corp.
(a)............................ 14,600 206,225
--------------
13,781,690
--------------
HEAVY DUTY TRUCKS & PARTS (0.1%)
Cummins Engine Co., Inc. ....... 5,295 144,289
Dana Corp. ..................... 21,236 449,938
Eaton Corp. .................... 9,212 617,204
ITT Industries, Inc. ........... 11,190 339,896
Navistar International Corp.
(a)............................ 8,284 257,322
PACCAR Inc. .................... 10,028 397,986
--------------
2,206,635
--------------
HOMEBUILDING (0.0%) (b)
Centex Corp. ................... 7,558 177,613
Kaufman & Broad Home Corp. ..... 5,285 104,709
Pulte Corp. .................... 5,517 119,305
--------------
401,627
--------------
HOTEL/MOTEL (0.2%)
Carnival Corp. ................. 78,233 1,525,544
Harrah's Entertainment, Inc.
(a)............................ 16,285 340,967
Hilton Hotels Corp. ............ 46,304 434,106
Marriott International, Inc.
Class A........................ 31,360 1,130,920
--------------
3,431,537
--------------
HOUSEHOLD--FURNISHINGS & APPLIANCES (0.1%)
Armstrong Holdings, Inc. ....... 5,144 78,767
Leggett & Platt, Inc. .......... 25,500 420,750
Maytag Corp. ................... 11,226 413,959
Whirlpool Corp. ................ 9,595 447,367
--------------
1,360,843
--------------
HOUSEHOLD PRODUCTS (1.2%)
Clorox Co. (The)................ 30,226 1,354,503
Colgate-Palmolive Co. .......... 72,832 4,360,816
Fort James Corp. ............... 28,123 650,344
Kimberly-Clark Corp. ........... 70,476 4,043,561
Procter & Gamble Co. (The)...... 165,077 9,450,658
--------------
19,859,882
--------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
141
<PAGE> 142
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
HOUSEWARES (0.1%)
Fortune Brands, Inc. ........... 21,313 $ 491,531
Newell Rubbermaid Inc. ......... 35,973 926,305
Tupperware Corp. ............... 7,245 159,390
--------------
1,577,226
--------------
INSURANCE BROKERS (0.3%)
Aon Corp. ...................... 32,690 1,015,433
Marsh & McLennan Cos., Inc. .... 33,856 3,535,836
--------------
4,551,269
--------------
INSURANCE--LIFE (0.2%)
Conseco, Inc. .................. 41,267 402,353
Jefferson-Pilot Corp. .......... 13,506 762,245
Lincoln National Corp. ......... 25,646 926,462
Torchmark Corp. ................ 16,932 418,009
UNUMProvident Corp. ............ 30,509 612,087
--------------
3,121,156
--------------
INSURANCE--MULTI-LINE (1.6%)
American International Group,
Inc. .......................... 194,555 22,860,213
CIGNA Corp. .................... 20,574 1,923,669
Hartford Financial Services
Group, Inc. (The).............. 27,082 1,514,899
--------------
26,298,781
--------------
INSURANCE--PROPERTY & CASUALTY (0.5%)
Allstate Corp. (The)............ 93,967 2,090,766
Chubb Corp. (The)............... 22,404 1,377,846
Cincinnati Financial Corp. ..... 20,787 653,491
Loews Corp. .................... 12,441 746,460
MGIC Investment Corp. .......... 13,955 634,952
Progressive Corp. (The)......... 9,301 688,274
SAFECO Corp. ................... 17,212 342,089
St. Paul Cos., Inc. (The)....... 26,793 914,311
--------------
7,448,189
--------------
INVESTMENT BANK/BROKERAGE (0.9%)
Bear Stearns Cos., Inc. (The)... 15,538 646,769
Lehman Brothers Holdings
Inc. .......................... 15,058 1,423,922
Merrill Lynch & Co., Inc. ...... 46,943 5,398,445
Paine Webber Group Inc. ........ 18,500 841,750
Schwab (Charles) Corp. (The).... 169,753 5,707,945
--------------
14,018,831
--------------
LEISURE TIME (0.1%)
Brunswick Corp. ................ 11,783 195,156
Harley-Davidson, Inc. .......... 38,400 1,478,400
--------------
1,673,556
--------------
MACHINERY--DIVERSIFIED (0.3%)
Briggs & Stratton Corp. ........ 2,988 102,339
Caterpillar Inc. ............... 44,853 1,519,396
Deere & Co. .................... 29,634 1,096,458
Ingersoll-Rand Co. ............. 21,233 854,628
Thermo Electron Corp. (a)....... 20,035 421,987
Timken Co. (The)................ 7,754 144,418
--------------
4,139,226
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
MANUFACTURING--DIVERSIFIED (1.2%)
Crane Co. ...................... 8,022 $ 195,035
Danaher Corp. .................. 18,091 894,374
Dover Corp. .................... 25,857 1,048,825
Honeywell International Inc. ... 100,753 3,394,117
Illinois Tool Works Inc. ....... 37,898 2,160,186
Johnson Controls, Inc. ......... 10,867 557,613
Millipore Corp. ................ 5,675 427,753
Pall Corp. ..................... 15,961 295,278
Parker-Hannifin Corp. .......... 13,955 477,959
Sealed Air Corp. (a)............ 10,636 557,060
Tyco International Ltd. ........ 213,150 10,097,981
--------------
20,106,181
--------------
METALS--MINING (0.1%)
Freeport-McMoRan Copper & Gold
Inc. Class B (a)............... 20,873 193,075
Inco Ltd. (a)................... 24,570 377,764
Phelps Dodge Corp. ............. 9,916 368,751
--------------
939,590
--------------
MISCELLANEOUS (0.5%)
AES Corp. (The) (a)............. 52,472 2,394,035
American Greetings Corp. Class
A.............................. 8,599 163,381
Archer-Daniels-Midland Co. ..... 78,758 772,813
Minnesota Mining & Manufacturing
Co. ........................... 50,619 4,176,067
TRW, Inc. ...................... 15,295 663,421
--------------
8,169,717
--------------
NATURAL GAS DISTRIBUTORS & PIPELINES (0.8%)
Coastal Corp. (The)............. 27,222 1,657,139
Columbia Energy Group........... 10,501 689,128
Eastern Enterprises............. 2,978 187,614
El Paso Energy Corp. ........... 29,258 1,490,330
Enron Corp. .................... 90,220 5,819,190
NICOR Inc. ..................... 6,136 200,187
ONEOK, Inc. .................... 3,662 94,983
Peoples Energy Corp. ........... 4,567 147,857
Sempra Energy................... 25,772 438,124
Williams Cos., Inc. (The)....... 55,081 2,296,189
--------------
13,020,741
--------------
OFFICE EQUIPMENT & SUPPLIES (0.2%)
Pitney Bowes Inc. .............. 34,248 1,369,920
Xerox Corp. .................... 84,392 1,751,134
--------------
3,121,054
--------------
OIL & GAS DRILLING (0.0%) (b)
Rowan Cos., Inc. (a)............ 10,622 322,643
--------------
OIL & GAS--EXPLORATION & PRODUCTION (0.3%)
Anadarko Petroleum Corp. ....... 15,535 766,070
Apache Corp. ................... 14,191 834,608
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
142
<PAGE> 143
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
OIL & GAS--EXPLORATION & PRODUCTION
(Continued)
Burlington Resources Inc. ...... 27,197 $ 1,040,285
Union Pacific Resources Group,
Inc. .......................... 32,079 705,738
Unocal Corp. ................... 31,011 1,027,240
--------------
4,373,941
--------------
OIL & WELL--EQUIPMENT & SERVICES (0.7%)
Baker Hughes Inc. .............. 41,804 1,337,728
Halliburton Co. ................ 56,149 2,649,531
McDermott International,
Inc. .......................... 7,608 67,045
Schlumberger Ltd. .............. 69,830 5,211,064
Transocean Sedco Forex Inc. .... 26,386 1,410,002
--------------
10,675,370
--------------
OIL--INTEGRATED DOMESTIC (0.5%)
Amerada Hess Corp. ............. 11,609 716,856
Ashland Inc. ................... 9,255 324,503
Conoco Inc. Class B............. 79,561 1,954,217
Kerr-McGee Corp. ............... 12,135 715,206
Occidental Petroleum Corp. ..... 44,539 938,103
Phillips Petroleum Co. ......... 32,107 1,627,424
Sunoco Inc. .................... 11,511 338,855
Tosco Corp. .................... 19,300 546,431
USX-Marathon Group.............. 39,403 987,538
--------------
8,149,133
--------------
OIL--INTEGRATED INTERNATIONAL (3.8%)
Chevron Corp. .................. 82,291 6,979,306
Exxon Mobil Corp. .............. 438,354 34,410,789
Royal Dutch Petroleum Co. ADR
(d)............................ 270,740 16,667,431
Texaco Inc. .................... 70,185 3,737,351
--------------
61,794,877
--------------
PAPER & FOREST PRODUCTS (0.3%)
Boise Cascade Corp. ............ 7,107 183,894
Georgia-Pacific Group........... 21,818 572,723
International Paper Co. ........ 60,975 1,817,840
Louisiana-Pacific Corp. ........ 13,713 149,129
Mead Corp. (The)................ 12,888 325,422
Potlatch Corp. ................. 3,704 122,695
Westvaco Corp. ................. 12,787 317,277
Weyerhaeuser Co. ............... 29,977 1,289,011
Willamette Industries, Inc. .... 14,144 385,424
--------------
5,163,415
--------------
PERSONAL LOANS (0.4%)
Capital One Financial Corp. .... 25,126 1,121,248
Countrywide Credit Industries,
Inc. .......................... 14,423 437,197
Household International,
Inc. .......................... 61,100 2,539,469
Providian Financial Corp. ...... 18,088 1,627,920
--------------
5,725,834
--------------
PHOTOGRAPHY/IMAGING (0.2%)
Eastman Kodak Co. .............. 40,142 2,388,449
Polaroid Corp. ................. 5,538 100,030
--------------
2,488,479
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
POLLUTION CONTROL (0.1%)
Allied Waste Industries, Inc.
(a)............................ 23,900 $ 239,000
Waste Management, Inc. ......... 77,824 1,478,656
--------------
1,717,656
--------------
PUBLISHING (0.1%)
Harcourt General Inc. .......... 9,234 502,099
McGraw-Hill Cos., Inc. (The).... 25,139 1,357,506
Meredith Corp. ................. 6,595 222,581
--------------
2,082,186
--------------
PUBLISHING--NEWSPAPERS (0.3%)
Dow Jones & Co., Inc. .......... 11,494 841,936
Gannett Co., Inc. .............. 33,674 2,014,126
Knight-Ridder, Inc. ............ 10,289 547,246
New York Times Co. (The) Class
A.............................. 22,359 883,180
Tribune Co. .................... 30,224 1,057,840
--------------
5,344,328
--------------
RAILROADS (0.3%)
Burlington Northern Santa Fe
Corp. ......................... 54,071 1,240,253
CSX Corp. ...................... 27,723 587,381
Kansas City Southern Industries,
Inc. .......................... 14,100 1,250,494
Norfolk Southern Corp. ......... 48,515 721,661
Union Pacific Corp. ............ 31,631 1,176,278
--------------
4,976,067
--------------
RESTAURANTS (0.5%)
Darden Restaurants, Inc. ....... 16,603 269,799
McDonald's Corp. ............... 168,716 5,557,083
Starbucks Corp. (a)............. 23,200 885,950
Tricon Global Restaurants, Inc.
(a)............................ 19,584 553,248
Wendy's International, Inc. .... 15,746 280,476
--------------
7,546,556
--------------
RETAIL STORES--APPAREL (0.3%)
Gap, Inc. (The)................. 107,377 3,355,531
Limited, Inc. (The)............. 54,500 1,178,563
TJX Cos., Inc. (The)............ 40,828 765,525
--------------
5,299,619
--------------
RETAIL STORES--DEPARTMENT (0.3%)
Dillard's, Inc. Class A......... 13,363 163,697
Federated Department Stores,
Inc. (a)....................... 26,550 896,063
Kohl's Corp. (a)................ 41,724 2,320,897
May Department Stores Co.
(The).......................... 42,607 1,022,568
Nordstrom, Inc. ................ 17,953 433,116
Penney (J.C.) Co., Inc. ........ 33,516 617,951
--------------
5,454,292
--------------
RETAIL STORES--DRUGS (0.3%)
Longs Drug Stores Corp. ........ 4,995 108,641
Rite Aid Corp. ................. 32,951 216,241
Walgreen Co. ................... 127,172 4,093,349
--------------
4,418,231
--------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
143
<PAGE> 144
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
<S> <C> <C>
RETAIL STORES--FOOD (0.5%)
Albertson's, Inc. .............. 53,684 $ 1,784,993
Great Atlantic & Pacific Tea
Co., Inc. (The)................ 4,901 81,479
Kroger Co. (The) (a)............ 105,192 2,320,798
Safeway Inc. (a)................ 62,702 2,829,428
Winn-Dixie Stores, Inc. ........ 18,898 270,478
--------------
7,287,176
--------------
RETAIL STORES--GENERAL MERCHANDISE (2.3%)
Kmart Corp. (a)................. 62,879 428,363
Sears, Roebuck & Co. ........... 44,510 1,452,139
Target Corp. ................... 56,328 3,267,024
Wal-Mart Stores, Inc. .......... 562,694 32,425,242
--------------
37,572,768
--------------
RETAIL STORES--SPECIALTY (1.7%)
AutoZone, Inc. (a).............. 19,137 421,014
Bed Bath & Beyond Inc. (a)...... 16,700 605,375
Best Buy Co. Inc. (a)........... 26,000 1,644,500
Circuit City Stores-Circuit City
Group.......................... 25,606 849,799
Consolidated Stores Corp. (a)... 14,074 168,888
Costco Wholesale Corp. (a)...... 56,172 1,853,676
CVS Corp. ...................... 49,736 1,989,440
Dollar General Corp. ........... 42,197 822,842
Home Depot, Inc. (The).......... 292,125 14,587,992
Lowe's Cos., Inc. .............. 48,537 1,993,051
Office Depot, Inc. (a).......... 41,800 261,250
RadioShack Corp. ............... 24,906 1,179,922
Staples Inc. (a)................ 59,886 920,747
Tiffany & Co. .................. 9,300 627,750
Toys "R" Us, Inc. (a)........... 31,083 452,646
--------------
28,378,892
--------------
SHOES (0.1%)
NIKE, Inc. Class B.............. 35,502 1,413,423
Reebok International Ltd. (a)... 7,104 113,220
--------------
1,526,643
--------------
SPECIALIZED SERVICES (0.5%)
Block (H&R), Inc. .............. 12,495 404,526
Cendant Corp. (a)............... 93,014 1,302,196
Convergys Corp (a).............. 19,400 1,006,375
Dun & Bradstreet Corp. (The).... 20,776 594,713
Ecolab Inc. .................... 16,506 644,766
IMS Health Inc. ................ 40,317 725,706
Interpublic Group of Cos., Inc.
(The).......................... 35,566 1,529,338
National Service Industries,
Inc. .......................... 5,202 101,439
Omnicom Group Inc. ............. 22,839 2,034,098
Young & Rubicam Inc. ........... 8,600 491,812
--------------
8,834,969
--------------
SPECIALTY PRINTING (0.0%) (b)
Deluxe Corp. ................... 9,825 231,501
Donnelley (R.R.) & Sons Co. .... 16,234 366,280
--------------
597,781
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------------
<S> <C> <C>
STEEL (0.1%)
Allegheny Technologies Inc. .... 12,221 $ 219,978
Bethlehem Steel Corp. (a)....... 16,600 59,138
Nucor Corp. .................... 11,199 371,667
USX-U.S. Steel Group............ 11,286 209,496
Worthington Industries, Inc. ... 11,779 123,679
--------------
983,958
--------------
TELECOMMUNICATIONS--LONG DISTANCE (3.1%)
AT&T Corp. ..................... 405,227 12,815,304
Global Crossing Ltd. (a)........ 98,945 2,603,491
Nextel Communications, Inc.
Class A (a).................... 92,070 5,633,533
Sprint Corp. (FON Group)........ 110,246 5,622,546
Sprint Corp. (PCS Group) (a).... 109,322 6,504,659
WorldCom, Inc. (a).............. 360,494 16,537,662
--------------
49,717,195
--------------
TELEPHONE (3.6%)
ALLTEL Corp. ................... 39,897 2,471,120
Bell Atlantic Corp. ............ 195,128 9,914,942
BellSouth Corp. ................ 237,539 10,125,100
CenturyTel, Inc. ............... 17,650 507,438
GTE Corp. ...................... 121,541 7,565,927
Qwest Communications
International Inc. (a)......... 81,000 4,024,687
SBC Communications Inc. ........ 433,432 18,745,934
US West Inc. ................... 64,181 5,503,521
--------------
58,858,669
--------------
TEXTILES--APPAREL MANUFACTURERS (0.1%)
Liz Claiborne, Inc. ............ 7,991 281,683
Russell Corp. .................. 4,335 86,700
Springs Industries, Inc. Class
A.............................. 2,194 70,619
V.F. Corp. ..................... 15,169 361,212
--------------
800,214
--------------
TOBACCO (0.5%)
Philip Morris Cos. Inc. ........ 288,709 7,668,833
UST Inc. ....................... 21,610 317,397
--------------
7,986,230
--------------
TOYS (0.1%)
Hasbro, Inc. ................... 24,959 375,945
Mattel, Inc. ................... 53,236 702,050
--------------
1,077,995
--------------
TRANSPORTATION--MISCELLANEOUS (0.1%)
FedEx Corp. (a)................. 36,222 1,376,436
Ryder System, Inc. ............. 8,145 154,246
--------------
1,530,682
--------------
Total Common Stocks (Cost
$1,131,965,495)................ 1,580,599,998(e)
--------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
144
<PAGE> 145
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (3.0%)
PRINCIPAL
AMOUNT VALUE
----------------------------
<S> <C> <C>
COMMERCIAL PAPER (1.9%)
Allergan Inc.
6.65%, due 8/11/00 (c)......... $ 4,650,000 $ 4,614,704
Consolidated Natural Gas Co.
6.70%, due 7/05/00 (c)......... 4,300,000 4,296,794
Hitachi Credit America Corp.
6.60%, due 7/19/00 (c)......... 4,300,000 4,285,779
National Fuel Gas Co.
6.60%, due 7/05/00 (c)......... 15,400,000 15,388,675
6.73%, due 8/01/00 (c)......... 1,600,000 1,590,721
--------------
Total Commercial Paper (Cost
$30,176,673)................... 30,176,673
--------------
U.S. GOVERNMENT (1.1%)
United States Treasury Bills
5.68%, due 10/05/00 (c)........ 15,400,000 15,165,989
5.72%, due 10/12/00 (c)........ 3,000,000 2,950,825
--------------
Total U.S. Government (Cost
$18,116,814)................... 18,116,814
--------------
Total Short-Term Investments
(Cost $48,293,487)............. 48,293,487
--------------
Total Investments (Cost
$1,180,258,982) (f)............ 100.1% 1,628,893,485(g)
Liabilities in Excess of
Cash and Other Assets.......... (0.1) (885,541)
----------- --------------
Net Assets...................... 100.0% $1,628,007,944
=========== ==============
<CAPTION>
FUTURES CONTRACTS (0.0%) (b)
UNREALIZED
CONTRACTS APPRECIATION
LONG (DEPRECIATION)(h)
-------------------------------
<S> <C> <C>
Standard & Poor's 500 Index
September 2000................. 128 $ (540,971)
September 2000 (Mini).......... 1 435
--------------
Total Futures Contracts
(Settlement Value $47,052,605)
(e)............................ $ (540,536)
==============
-----------------------------------------------------------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) Segregated as collateral for futures contracts.
(d) ADR--American Depository Receipt.
(e) The combined market value of common stocks and settlement
value of Standard & Poor's 500 Index futures contracts
represents 100% of net assets.
(f) The cost for federal income tax purposes is $1,180,832,788.
(g) At June 30, 2000 net unrealized appreciation was
$448,060,697, 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 $541,476,277 and aggregate gross
unrealized depreciation for all investments on which there
was an excess of cost over market value of $93,415,580.
(h) Represents the difference between the value of the contracts
at the time they were opened and the value at June 30, 2000.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
145
<PAGE> 146
INDEXED EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $1,180,258,982)..... $1,628,893,485
Cash................................... 16,017
Receivables:
Fund shares sold..................... 3,097,043
Investment securities sold........... 2,314,651
Dividends and interest............... 1,346,981
--------------
Total assets................... 1,635,668,177
--------------
LIABILITIES:
Payables:
Investment securities purchased...... 6,247,325
Fund shares redeemed................. 421,103
Shareholder communication............ 406,465
Administrator........................ 266,081
Adviser.............................. 133,040
Custodian............................ 62,629
Directors............................ 1,211
Accrued expenses....................... 42,635
Variation margin payable on futures
contracts............................ 79,744
--------------
Total liabilities.............. 7,660,233
--------------
Net assets applicable to outstanding
shares............................... $1,628,007,944
==============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares
authorized........................... $ 539,106
Additional paid-in capital............. 1,161,287,228
Accumulated undistributed net
investment income.................... 7,172,730
Accumulated undistributed net realized
gain on investments.................. 10,914,913
Net unrealized appreciation on
investments and futures
transactions......................... 448,093,967
--------------
Net assets applicable to outstanding
shares............................... $1,628,007,944
==============
Shares of capital stock outstanding.... 53,910,606
==============
Net asset value per share
outstanding.......................... $ 30.20
==============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 8,552,160
Interest............................. 1,435,546
--------------
Total income................... 9,987,706
--------------
Expenses:
Administration....................... 1,540,657
Advisory............................. 770,328
Shareholder communication............ 305,925
Custodian............................ 80,373
Professional......................... 49,804
Directors............................ 25,811
Miscellaneous........................ 42,078
--------------
Total expenses................. 2,814,976
--------------
Net investment income.................. 7,172,730
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain from:
Security transactions................ 12,421,686
Futures transactions................. 135,519
--------------
Net realized gain on investments....... 12,557,205
--------------
Net change in unrealized appreciation
on investments:
Security transactions................ (26,795,212)
Futures transactions................. (1,609,022)
--------------
Net unrealized loss on investments..... (28,404,234)
--------------
Net realized and unrealized loss on
investments.......................... (15,847,029)
--------------
Net decrease in net assets resulting
from operations...................... $ (8,674,299)
==============
------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $46,850.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
146
<PAGE> 147
MAINSTAY VP SERIES FUND, INC.
INDEXED EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 7,172,730 $ 13,731,691
Net realized gain on investments.......................... 12,557,205 16,594,368
Net change in unrealized appreciation on investments and
futures transactions.................................... (28,404,234) 201,712,756
-------------- --------------
Net increase (decrease) in net assets resulting from
operations.............................................. (8,674,299) 232,038,815
-------------- --------------
Dividends and distributions to shareholders:
From net investment income................................ -- (13,732,796)
From net realized gain on investments..................... (3,821,318) (20,997,595)
-------------- --------------
Total dividends and distributions to shareholders....... (3,821,318) (34,730,391)
-------------- --------------
Capital share transactions:
Net proceeds from sale of shares.......................... 305,811,082 664,113,898
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 3,821,318 34,730,391
-------------- --------------
309,632,400 698,844,289
Cost of shares redeemed................................... (190,213,392) (321,853,120)
-------------- --------------
Increase in net assets derived from capital share
transactions............................................ 119,419,008 376,991,169
-------------- --------------
Net increase in net assets.................................. 106,923,391 574,299,593
NET ASSETS:
Beginning of period......................................... 1,521,084,553 946,784,960
-------------- --------------
End of period............................................... $1,628,007,944 $1,521,084,553
============== ==============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
2000* 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period................... $ 30.50 $ 25.89 $ 20.58 $ 16.10 $ 13.53 $ 10.38
------------ ------------ ------------ ------------ ------------ ------------
Net investment income......... 0.13 0.28 0.26 0.27 0.24 0.27
Net realized and unrealized
gain (loss) on
investments................. (0.36) 5.06 5.58 4.99 2.79 3.55
------------ ------------ ------------ ------------ ------------ ------------
Total from investment
operations.................. (0.23) 5.34 5.84 5.26 3.03 3.82
------------ ------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
From net investment
income.................... -- (0.28) (0.26) (0.27) (0.24) (0.28)
From net realized gain
on investments............ (0.07) (0.45) (0.27) (0.51) (0.22) (0.39)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions............... (0.07) (0.73) (0.53) (0.78) (0.46) (0.67)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value at end of
period...................... $ 30.20 $ 30.50 $ 25.89 $ 20.58 $ 16.10 $ 13.53
============ ============ ============ ============ ============ ============
Total investment return....... (0.74%)(a) 20.70% 28.49% 32.84% 22.42% 36.89%
Ratios (to average net assets)/
Supplemental Data:
Net investment income....... 0.93%+ 1.13% 1.30% 1.75% 2.14% 2.52%
Net expenses................ 0.37%+ 0.36% 0.38% 0.39% 0.47% 0.47%
Expenses (before
reimbursement)............ 0.37%+ 0.36% 0.38% 0.39% 0.50% 0.62%
Portfolio turnover rate....... 2% 3% 4% 5% 3% 5%
Net assets at end of period
(in 000's).................. $ 1,628,008 $ 1,521,085 $ 946,785 $ 496,772 $ 223,945 $ 105,171
</TABLE>
------------
(a) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
147
<PAGE> 148
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS (98.6%)+
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
ADVERTISING & MARKETING SERVICES (0.3%)
TMP Worldwide Inc. (a)............ 1,200 $ 88,575
True North Communications Inc. ... 3,400 149,600
-----------
238,175
-----------
AEROSPACE/DEFENSE (1.5%)
Boeing Co. (The).................. 10,100 422,306
Northrop Grumman Corp. ........... 9,000 596,250
Rockwell International Corp. ..... 2,100 66,150
-----------
1,084,706
-----------
AIRLINES (0.1%)
AMR Corp. (a)..................... 800 21,150
Delta Air Lines, Inc. ............ 700 35,394
-----------
56,544
-----------
ALUMINUM (0.1%)
Alcan Aluminum Ltd. .............. 2,000 62,000
Alcoa Inc. ....................... 400 11,600
-----------
73,600
-----------
AUTO PARTS & EQUIPMENT (0.0%)(b)
Visteon Corp. (a)................. 1,689 20,480
-----------
AUTOMOBILES (1.1%)
Ford Motor Co. ................... 12,900 554,700
General Motors Corp. ............. 4,900 284,506
-----------
839,206
-----------
BANKS (3.7%)
Bank of America Corp. ............ 21,200 911,600
Chase Manhattan Corp. (The) (e)... 12,950 596,510
City National Corp. .............. 400 14,200
First Union Corp. ................ 2,500 62,031
FleetBoston Financial Corp. ...... 24,500 833,000
PNC Financial Services Group...... 2,400 112,500
Silicon Valley Bancshares (a)..... 2,800 119,350
UnionBanCal Corp. ................ 6,800 126,225
-----------
2,775,416
-----------
BEVERAGES (0.9%)
Anheuser-Busch Companies, Inc. ... 3,700 276,344
Coca-Cola Co. (The)............... 700 40,206
PepsiCo, Inc. .................... 8,400 373,275
-----------
689,825
-----------
BROADCAST/MEDIA (0.8%)
Comcast Corp. Special Class A
(a).............................. 8,800 356,400
Hispanic Broadcasting Corp. (a)... 1,000 33,125
MediaOne Group, Inc. (a).......... 2,800 186,011
-----------
575,536
-----------
BUILDING MATERIALS (0.3%)
Sherwin-Williams Co. (The)........ 6,900 146,194
USG Corp. ........................ 1,700 51,637
-----------
197,831
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
CHEMICALS (0.9%)
Dow Chemical Co. (The)............ 17,700 $ 534,319
Du Pont (E.I.) De Nemours &
Co. ............................. 1,000 43,750
Engelhard Corp. .................. 3,900 66,543
-----------
644,612
-----------
COMMERCIAL SERVICES (0.5%)
Galileo International, Inc. ...... 1,500 31,312
Hertz Corp. (The) Class A......... 4,700 131,894
Manpower Inc. .................... 1,300 41,600
Viad Corp. ....................... 5,900 160,775
-----------
365,581
-----------
COMMUNICATIONS--EQUIPMENT (6.2%)
Cabletron Systems, Inc. (a)....... 1,100 27,775
Cisco Systems, Inc. (a)........... 39,600 2,517,075
Corning, Inc. .................... 1,400 377,825
Lucent Technologies Inc. ......... 1,500 88,875
Network Appliance, Inc. (a)....... 1,700 136,850
Nokia Corp. ADR (c)............... 700 34,956
Nortel Networks Corp. ............ 14,400 982,800
QUALCOMM, Inc. (a)................ 4,400 264,000
Scientific-Atlanta, Inc. ......... 2,700 201,150
-----------
4,631,306
-----------
COMPUTER SOFTWARE & SERVICES (7.9%)
Adobe Systems Inc. ............... 900 117,000
Advanced Digital Information Corp.
(a).............................. 1,500 23,906
America Online, Inc. (a)(e)....... 13,600 717,400
Automatic Data Processing,
Inc. ............................ 800 42,850
BEA Systems, Inc. (a)............. 300 14,831
Computer Associates International,
Inc. ............................ 4,500 230,344
Electronic Data Systems Corp. .... 6,500 268,125
MarchFirst, Inc. (a).............. 6,900 125,925
Microsoft Corp. (a)............... 26,800 2,144,000
Oracle Corp. (a).................. 17,000 1,429,063
Pixar, Inc. (a)................... 1,500 52,875
Siebel Systems, Inc. (a).......... 600 98,137
Sybase, Inc. (a).................. 2,300 52,900
VERITAS Software Corp. (a)........ 1,700 192,127
Yahoo! Inc. (a)................... 3,000 371,625
-----------
5,881,108
-----------
COMPUTER SYSTEMS (6.0%)
Apple Computer, Inc. (a).......... 8,600 450,425
Compaq Computer Corp. ............ 400 10,225
Dell Computer Corp. (a)........... 12,800 631,200
EMC Corp. (a)..................... 7,600 584,725
Gateway, Inc. (a)................. 600 34,050
Hewlett-Packard Co. .............. 6,600 824,175
International Business Machines
Corp. ........................... 8,300 909,369
SanDisk Corp. (a)................. 700 42,831
Seagate Technology, Inc. (a)...... 700 38,500
Sun Microsystems, Inc. (a)........ 10,400 945,750
-----------
4,471,250
-----------
</TABLE>
-----------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
148
<PAGE> 149
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------
<S> <C> <C>
CONSUMER FINANCE (0.2%)
AmeriCredit Corp. (a)............. 1,000 $ 17,000
Metris Companies Inc. ............ 5,400 135,675
-----------
152,675
-----------
CONSUMER PRODUCTS (0.0%)(b)
Church & Dwight Co., Inc. ........ 1,600 28,800
-----------
CONTAINERS (0.3%)
Ball Corp. ....................... 2,400 77,250
Temple-Inland Inc. ............... 3,000 126,000
-----------
203,250
-----------
COSMETICS/PERSONAL CARE (0.2%)
Alberto-Culver Co. Class B........ 600 18,337
Avon Products, Inc. .............. 1,500 66,750
International Flavors & Fragrances
Inc. ............................ 1,800 54,337
-----------
139,424
-----------
ELECTRIC POWER COMPANIES (2.5%)
Ameren Corp. ..................... 2,700 91,125
Calpine Corp. (a)................. 1,200 78,900
Conectiv Inc. Class A............. 300 7,312
Consolidated Edison, Inc. ........ 200 5,925
Constellation Energy Group,
Inc. ............................ 1,100 35,819
Duke Energy Corp. ................ 3,300 186,037
Edison International.............. 2,500 51,250
GPU, Inc. ........................ 4,200 113,662
Minnesota Power, Inc. ............ 5,500 95,219
PG&E Corp. ....................... 9,600 236,400
PPL Corp. ........................ 900 19,744
Public Service Enterprise Group,
Inc. ............................ 8,300 287,388
Reliant Energy, Inc. ............. 14,600 431,613
TXU Corp. ........................ 3,900 115,050
Unicom Corp. ..................... 3,500 135,406
-----------
1,890,850
-----------
ELECTRICAL EQUIPMENT (4.6%)
Cooper Industries, Inc. .......... 1,800 58,613
General Electric Co. (e).......... 59,100 3,132,300
KEMET Corp. (a)................... 7,000 175,438
Sensormatic Electronics Corp.
(a).............................. 3,400 53,763
Technitrol, Inc. ................. 100 9,687
-----------
3,429,801
-----------
ELECTRONICS--COMPONENTS (0.7%)
AVX Corp. ........................ 4,800 110,100
Cypress Semiconductor Corp. (a)... 1,500 63,375
Integrated Device Technology, Inc.
(a).............................. 4,000 239,500
Vishay Intertechnology, Inc.
(a).............................. 3,800 144,163
-----------
557,138
-----------
ELECTRONICS--DEFENSE (0.1%)
PerkinElmer, Inc. ................ 1,100 72,738
-----------
ELECTRONICS--INSTRUMENTATION (0.4%)
Agilent Technologies Inc. (a)..... 1,879 138,577
Credence Systems Corp. (a)........ 3,100 171,081
-----------
309,658
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
ELECTRONICS--SEMICONDUCTORS (6.6%)
Adaptec, Inc. (a)................. 2,500 $ 56,875
Advanced Energy Industries, Inc.
(a).............................. 541 31,885
Advanced Micro Devices, Inc.
(a).............................. 1,400 108,150
Analog Devices, Inc. (a).......... 2,000 152,000
Applied Materials, Inc. (a)....... 5,600 507,500
Conexant Systems, Inc. (a)........ 1,900 92,387
Intel Corp. ...................... 17,200 2,299,425
International Rectifier Corp.
(a).............................. 800 44,800
KLA-Tencor Corp. (a).............. 3,400 199,113
Kulicke & Soffa Industries, Inc.
(a).............................. 3,200 190,000
Lam Research Corp. (a)............ 3,500 131,250
LTX Corp. (a)..................... 1,700 59,394
Motorola, Inc. ................... 9,400 273,188
National Semiconductor Corp.
(a).............................. 1,400 79,450
Teradyne, Inc. (a)................ 2,500 183,750
Texas Instruments Inc. ........... 6,700 460,206
Varian Semiconductor Equipment
(a).............................. 200 12,562
-----------
4,881,935
-----------
ENGINEERING & CONSTRUCTION (0.1%)
Dycom Industries, Inc. (a)........ 900 41,400
-----------
ENTERTAINMENT (1.7%)
Time Warner Inc. ................. 2,500 190,000
Viacom Inc. Class B (a)........... 3,100 211,381
Walt Disney Co. (The)............. 21,700 842,231
-----------
1,243,612
-----------
FINANCE (5.2%)
Ambac Financial Group, Inc. ...... 2,800 153,475
American General Corp. ........... 300 18,300
AXA Financial, Inc. .............. 600 20,400
Citigroup Inc. ................... 30,500 1,837,625
Fannie Mae........................ 11,700 610,594
GreenPoint Financial Corp. ....... 6,500 121,875
MBNA Corp. ....................... 1,700 46,112
Morgan Stanley Dean Witter &
Co. ............................. 10,400 865,800
PMI Group, Inc. (The)............. 4,500 213,750
-----------
3,887,931
-----------
FOOD (2.0%)
Archer-Daniels-Midland Co. ....... 1,000 9,812
Bestfoods......................... 300 20,775
ConAgra, Inc. .................... 22,200 423,188
Heinz (H.J.) Co. ................. 400 17,500
Hormel Foods Corp. ............... 2,400 40,350
IBP, Inc. ........................ 5,600 86,450
Keebler Foods Co. ................ 1,600 59,400
Kellogg Co. ...................... 4,600 136,850
Quaker Oats Co. (The)............. 7,600 570,950
Ralston-Ralston Purina Co. ....... 3,500 69,781
Unilever N.V. .................... 1,100 47,300
-----------
1,482,356
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
149
<PAGE> 150
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
FOOD & HEALTH CARE DISTRIBUTORS (0.6%)
Cardinal Health Inc. ............. 800 $ 59,200
SUPERVALU INC. ................... 17,900 341,219
SYSCO Corp. ...................... 700 29,487
-----------
429,906
-----------
GOLD & PRECIOUS METALS MINING (0.1%)
Barrick Gold Corp. ............... 2,900 52,744
Placer Dome Inc. ................. 3,500 33,468
-----------
86,212
-----------
HARDWARE & TOOLS (0.1%)
Stanley Works (The)............... 2,600 61,750
-----------
HEALTH CARE--DRUGS (6.8%)
Andrx Corp. (a)................... 300 19,177
Elan Corp. ADR (a)(c)............. 1,000 48,437
Jones Pharma Inc. ................ 2,500 99,844
Lilly (Eli) and Co. .............. 4,600 459,425
Merck & Co., Inc. ................ 16,600 1,271,975
Pfizer Inc. ...................... 50,200 2,409,600
Schering-Plough Corp. ............ 15,000 757,500
-----------
5,065,958
-----------
HEALTH CARE--HMOs (0.4%)
UnitedHealth Group Inc. .......... 3,500 300,125
-----------
HEALTH CARE--MEDICAL PRODUCTS (0.9%)
Bard (C.R.) Inc. ................. 2,700 129,937
Bausch & Lomb Inc. ............... 3,300 255,338
Baxter International Inc. ........ 2,600 182,812
Beckman Coulter Inc. ............. 400 23,350
Cytyc Corp. (a)................... 1,000 53,375
-----------
644,812
-----------
HEALTH CARE--MISCELLANEOUS (3.4%)
Allergan, Inc. ................... 1,200 89,400
Bristol-Myers Squibb Co. ......... 12,600 733,950
Johnson & Johnson................. 12,700 1,293,813
Mallinckrodt Inc. ................ 6,700 291,031
Oxford Health Plans, Inc. (a)..... 4,900 116,681
PacifiCare Health Systems, Inc.
(a).............................. 500 30,094
-----------
2,554,969
-----------
HEAVY DUTY TRUCKS (0.8%)
Cummins Engine Co., Inc. ......... 7,500 204,375
Eaton Corp. ...................... 3,600 241,200
ITT Industries, Inc. ............. 2,300 69,862
PACCAR Inc. ...................... 1,800 71,438
-----------
586,875
-----------
HOMEBUILDING (0.0%)(b)
Centex Corp. ..................... 400 9,400
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
HOUSEHOLD--FURNISHINGS & APPLIANCES (0.3%)
Whirlpool Corp. .................. 4,100 $ 191,163
-----------
HOUSEHOLD PRODUCTS (0.9%)
Colgate-Palmolive Co. ............ 4,100 245,487
Procter & Gamble Co. (The)........ 6,800 389,300
-----------
634,787
-----------
HOUSEWARES (0.3%)
Fortune Brands, Inc. ............. 1,300 29,981
Tupperware Corp. ................. 8,800 193,600
-----------
223,581
-----------
INSURANCE (2.6%)
American International Group,
Inc. ............................ 2,000 235,000
CIGNA Corp. ...................... 6,300 589,050
Gallagher (Arthur J.) & Co. ...... 2,000 84,000
Hartford Financial Services
Group, Inc. (The)................ 300 16,781
Lincoln National Corp. ........... 12,500 451,563
Marsh & McLennan Companies,
Inc. ............................ 900 93,994
MetLife, Inc. (a)................. 3,800 80,037
MGIC Investment Corp. ............ 3,400 154,700
Radian Group Inc. ................ 4,200 217,350
Torchmark Corp. .................. 400 9,875
-----------
1,932,350
-----------
INTERNET SOFTWARE & SERVICES (0.0%)(b)
InfoSpace, Inc. (a)............... 300 16,575
Proxicom, Inc. (a)................ 300 14,363
-----------
30,938
-----------
INVESTMENT BANK/BROKERAGE (0.7%)
Lehman Brothers Holdings Inc. .... 3,200 302,600
Merrill Lynch & Co., Inc. ........ 1,600 184,000
-----------
486,600
-----------
LEISURE TIME (0.1%)
Anchor Gaming (a)................. 400 19,175
Brunswick Corp. .................. 5,600 92,750
-----------
111,925
-----------
MACHINERY (0.2%)
Asyst Technologies, Inc. (a)...... 2,100 71,925
Briggs & Stratton Corp. .......... 2,300 78,775
Caterpillar Inc. ................. 800 27,100
-----------
177,800
-----------
MANUFACTURING (2.0%)
Diebold, Inc. .................... 2,400 66,900
Dover Corp. ...................... 10,500 425,906
Illinois Tool Works Inc. ......... 2,500 142,500
Johnson Controls, Inc. ........... 700 35,919
Minnesota Mining and Manufacturing
Co. ............................. 5,600 462,000
Pall Corp. ....................... 5,800 107,300
Tyco International Ltd. .......... 5,800 274,775
-----------
1,515,300
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
150
<PAGE> 151
MAINSTAY VP SERIES FUND, INC.
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------
<S> <C> <C>
NATURAL GAS DISTRIBUTORS & PIPELINES (0.1%)
KeySpan Corp. .................... 1,700 $ 52,275
Sempra Energy..................... 2,600 44,200
-----------
96,475
-----------
OFFICE EQUIPMENT & SUPPLIES (0.2%)
Pitney Bowes Inc. ................ 3,100 124,000
Xerox Corp. ...................... 1,100 22,825
-----------
146,825
-----------
OIL & GAS SERVICES (1.1%)
BJ Services Co. (a)............... 2,200 137,500
ENSCO International Inc. ......... 1,200 42,975
Noble Drilling Corp. (a).......... 1,500 61,781
Tidewater Inc. ................... 4,000 144,000
Ultramar Diamond Shamrock
Corp. ........................... 16,000 397,000
-----------
783,256
-----------
OIL--INTEGRATED DOMESTIC (2.3%)
Amerada Hess Corp. ............... 1,000 61,750
Kerr-McGee Corp. ................. 12,900 760,294
Occidental Petroleum Corp. ....... 37,700 794,056
Phillips Petroleum Co. ........... 2,300 116,581
-----------
1,732,681
-----------
OIL--INTEGRATED INTERNATIONAL (3.5%)
Chevron Corp. .................... 9,600 814,200
Exxon Mobil Corp. ................ 15,500 1,216,750
Royal Dutch Petroleum Co. ........ 8,800 541,750
Texaco Inc. ...................... 1,000 53,250
-----------
2,625,950
-----------
PAPER & FOREST PRODUCTS (0.5%)
International Paper Co. .......... 4,383 130,666
Westvaco Corp. ................... 4,600 114,137
Weyerhaeuser Co. ................. 3,300 141,900
-----------
386,703
-----------
PERSONAL LOANS (0.1%)
Providian Financial Corp. ........ 1,200 108,000
-----------
PHOTOGRAPHY/IMAGING (0.3%)
Eastman Kodak Co. ................ 3,000 178,500
Electronics for Imaging, Inc.
(a).............................. 1,200 30,375
-----------
208,875
-----------
PUBLISHING--NEWSPAPER (0.6%)
Gannett Co., Inc. ................ 2,800 167,475
Knight-Ridder, Inc. .............. 1,400 74,463
Tribune Co. ...................... 6,200 217,000
-----------
458,938
-----------
RAILROADS (0.1%)
Burlington Northern Santa Fe
Corp. ........................... 2,600 59,637
Union Pacific Corp. .............. 1,200 44,625
-----------
104,262
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
REAL ESTATE INVESTMENT/
MANAGEMENT (0.2%)
CarrAmerica Realty Corp. ......... 4,400 $ 116,600
Spieker Properties, Inc. ......... 700 33,075
-----------
149,675
-----------
RESTAURANTS (0.4%)
Brinker International, Inc. (a)... 1,600 46,800
Darden Restaurants, Inc. ......... 7,500 121,875
Tricon Global Restaurants, Inc.
(a).............................. 3,500 98,875
-----------
267,550
-----------
RETAIL (5.4%)
Best Buy Co., Inc. (a)............ 1,500 94,875
Circuit City Stores-Circuit City
Group............................ 3,400 112,838
Federated Department Stores, Inc.
(a).............................. 11,400 384,750
Great Atlantic & Pacific
Tea Co., Inc. (The).............. 2,200 36,575
Home Depot, Inc. (The)............ 12,200 609,238
Insight Enterprises Inc. (a)...... 200 11,862
Limited, Inc. (The)............... 13,000 281,125
Lowe's Companies, Inc. ........... 2,400 98,550
Michaels Stores Inc. (a).......... 1,600 73,300
RadioShack Corp. ................. 900 42,637
Safeway Inc. (a).................. 2,500 112,813
Sears, Roebuck & Co. ............. 25,000 815,625
Talbots, Inc. (The)............... 1,400 76,912
Tiffany & Co. .................... 1,800 121,500
Wal-Mart Stores, Inc. ............ 16,900 973,863
Zale Corp. (a).................... 4,200 153,300
-----------
3,999,763
-----------
SHOES (0.0%)(b)
Reebok International Ltd. (a)..... 1,000 15,938
-----------
SPECIALIZED SERVICES (0.4%)
Block (H&R), Inc. ................ 1,700 55,038
Diamond Technology Partners, Inc.
(a).............................. 400 35,200
Dun & Bradstreet Corp. (The)...... 500 14,312
National Service Industries,
Inc. ............................ 5,100 99,450
Omnicom Group Inc. ............... 800 71,250
-----------
275,250
-----------
SPECIALTY PRINTING (0.2%)
Deluxe Corp. ..................... 7,100 167,294
-----------
STEEL (0.2%)
Nucor Corp. ...................... 2,300 76,331
USX-U.S. Steel Group.............. 600 11,138
Worthington Industries, Inc. ..... 3,800 39,900
-----------
127,369
-----------
TELECOMMUNICATIONS (2.7%)
AT&T Corp. (e).................... 12,800 404,800
MasTec, Inc. (a).................. 400 15,275
Nextel Communications, Inc. Class
A (a)............................ 5,300 324,294
Sprint Corp. (FON Group).......... 8,700 443,700
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
151
<PAGE> 152
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
----------------------
<S> <C> <C>
TELECOMMUNICATIONS (Continued)
Sprint Corp. (PCS Group) (a)...... 3,100 $ 184,450
WorldCom, Inc. (a)................ 14,700 674,362
-----------
2,046,881
-----------
TELEPHONE (4.4%)
ALLTEL Corp. ..................... 1,600 99,100
Bell Atlantic Corp. (e)........... 13,100 665,644
BellSouth Corp. .................. 20,600 878,075
GTE Corp. ........................ 6,900 429,525
SBC Communications Inc. (e)....... 20,500 886,625
Telephone and Data Systems,
Inc. ............................ 400 40,100
US West, Inc. .................... 3,000 257,250
-----------
3,256,319
-----------
TEXTILES--APPAREL MANUFACTURERS (0.1%)
Liz Claiborne, Inc. .............. 2,400 84,600
-----------
TOBACCO (0.6%)
Philip Morris Companies, Inc. .... 12,400 329,375
UST Inc. ......................... 5,700 83,719
-----------
413,094
-----------
TRANSPORTATION (0.1%)
FedEx Corp. (a)................... 900 34,200
United Parcel Service, Inc. Class
B................................ 500 29,500
-----------
63,700
-----------
Total Common Stocks (Cost
$66,634,380)..................... 73,430,593(d)
-----------
</TABLE>
SHORT-TERM
INVESTMENT (1.4%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
TIME DEPOSIT (1.4%)
Bank of New York Cayman
5.75%, due 7/3/00................ $997,000 997,000
-----------
Total Short-Term Investment
(Cost $997,000).................. 997,000
-----------
Total Investments
(Cost $67,631,380)(g)............ 100.0% 74,427,593(h)
Cash and Other Assets
Less Liabilities................. 0.0(b) 17,835
--------- -----------
Net Assets........................ 100.0% $74,445,428
========= ===========
</TABLE>
<TABLE>
<CAPTION>
FUTURES CONTRACTS (0.0%)(B)
CONTRACTS UNREALIZED
LONG DEPRECIATION
---------------------------
<S> <C> <C>
Standard & Poor's 500
September 2000................... 2 $ (9,665)
-----------
Total Futures Contracts
(Settlement Value $734,050)(d)... $ (9,665)
===========
</TABLE>
------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) ADR--American Depository Receipt.
(d) The combined market value of common stocks and settlement value of Standard
& Poor's 500 Index futures contracts represents 99.6% of net assets.
(e) Segregated or partially segregated as collateral for futures contracts.
(f) Represents the difference between the value of the contracts at the time
they were opened and the value at June 30, 2000.
(g) The cost for federal income tax purposes is $67,714,411.
(h) At June 30, 2000 net unrealized appreciation was $6,713,182, 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 $11,590,541 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $4,877,359.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
152
<PAGE> 153
MAINSTAY VP SERIES FUND, INC.
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $67,631,380)........... $74,427,593
Cash...................................... 5,490
Receivables:
Investment securities sold.............. 1,890,130
Dividends and interest.................. 90,216
Fund shares sold........................ 63,949
Unamortized organization expense.......... 12,116
-----------
Total assets...................... 76,489,494
-----------
LIABILITIES:
Payables:
Investment securities purchased......... 1,946,673
Adviser................................. 30,562
Custodian............................... 21,490
Administrator........................... 12,225
Fund shares redeemed.................... 294
Accrued expenses.......................... 31,272
Variation margin payable on futures
contracts............................... 1,550
-----------
Total liabilities................. 2,044,066
-----------
Net assets applicable to outstanding
shares.................................. $74,445,428
===========
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized.... $ 60,680
Additional paid-in capital................ 66,290,092
Accumulated undistributed net investment
income.................................. 237,191
Accumulated net realized gain on
investments............................. 1,070,917
Net unrealized appreciation on
investments............................. 6,786,548
-----------
Net assets applicable to outstanding
shares.................................. $74,445,428
===========
Shares of capital stock outstanding....... 6,067,988
===========
Net asset value per share outstanding..... $ 12.27
===========
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 484,590
Interest................................ 52,329
-----------
Total income...................... 536,919
-----------
Expenses
Advisory................................ 171,119
Administration.......................... 68,447
Custodian............................... 26,477
Professional............................ 12,926
Shareholder communication............... 10,927
Amortization of organization expense.... 2,135
Directors............................... 1,099
Miscellaneous........................... 6,598
-----------
Total expenses.................... 299,728
-----------
Net investment income..................... 237,191
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) from:
Securities transactions................. 1,245,974
Futures transactions.................... (33,715)
-----------
Net realized gain on investments.......... 1,212,259
-----------
Net change in unrealized appreciation on
investments:
Securities transactions................. (3,687,481)
Futures transactions.................... (24,418)
-----------
Net unrealized loss on investments........ (3,711,899)
-----------
Net realized and unrealized loss on
investments............................. (2,499,640)
-----------
Net decrease in net assets resulting from
operations.............................. $(2,262,449)
===========
------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $1,341.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
153
<PAGE> 154
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-----------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 237,191 $ 407,097
Net realized gain on investments.......................... 1,212,259 353,322
Net change in unrealized appreciation on investments...... (3,711,899) 7,361,287
----------- -----------
Net increase (decrease) in net assets resulting from
operations.............................................. (2,262,449) 8,121,706
----------- -----------
Dividends and distributions to shareholders:
From net investment income................................ -- (412,175)
From net realized gain on investments..................... (109,499) --
----------- -----------
Total dividends and distributions to shareholders........... (109,499) (412,175)
----------- -----------
Capital share transactions:
Net proceeds from sale of shares.......................... 14,541,544 29,305,680
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 109,499 412,175
----------- -----------
14,651,043 29,717,855
Cost of shares redeemed................................... (1,975,946) (3,452,393)
----------- -----------
Increase in net assets derived from capital share
transactions............................................ 12,675,097 26,265,462
----------- -----------
Net increase in net assets.................................. 10,303,149 33,974,993
NET ASSETS:
Beginning of period......................................... 64,142,279 30,167,286
----------- -----------
End of period............................................... $74,445,428 $64,142,279
=========== ===========
Accumulated undistributed net investment income at end of
period.................................................... $ 237,191 $ --
=========== ===========
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
SIX MONTHS 1998 (a)
ENDED YEAR ENDED THROUGH
JUNE 30, DECEMBER 31, DECEMBER 31,
2000* 1999 1998
-------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period...................... $ 12.74 $ 10.91 $ 10.00
------------ ------------ ------------
Net investment income....................................... 0.04 0.08 0.05
Net realized and unrealized gain (loss) on investments...... (0.49) 1.83 0.91
------------ ------------ ------------
Total from investment operations............................ (0.45) 1.91 0.96
------------ ------------ ------------
Less dividends and distributions:
From net investment income................................ -- (0.08) (0.05)
From net realized gain on investments..................... (0.02) -- --
------------ ------------ ------------
Total dividends and distributions........................... (0.02) (0.08) (0.05)
------------ ------------ ------------
Net asset value at end of period............................ $ 12.27 $ 12.74 $ 10.91
============ ============ ============
Total investment return..................................... (3.58%)(b) 17.59% 9.60%(b)
Ratios (to average net assets)/Supplemental Data:
Net investment income..................................... 0.69%+ 0.89% 1.20%+
Net expenses.............................................. 0.88%+ 0.85% 0.85%+
Expenses (before reimbursement)........................... 0.88%+ 0.92% 1.30%+
Portfolio turnover rate..................................... 31% 51% 34%
Net assets at end of period (in 000's)...................... $ 74,445 $ 64,142 $ 30,167
</TABLE>
------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
154
<PAGE> 155
MAINSTAY VP SERIES FUND, INC.
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS (95.2%)+
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
AEROSPACE/DEFENSE (0.7%)
Boeing Co. (The)................... 5,900 $ 246,694
-----------
ALUMINUM (0.9%)
Alcoa Inc. ........................ 11,000 319,000
-----------
AUTO PARTS & EQUIPMENT (0.0%)(b)
Visteon Corp. ..................... 1,047 12,701
-----------
AUTOMOBILES (1.6%)
Ford Motor Co. .................... 8,000 344,000
General Motors Corp. .............. 3,934 228,418
-----------
572,418
-----------
BANKS (12.6%)
Bank of America Corp. ............. 17,500 752,500
Bank of New York Co., Inc. (The)... 13,600 632,400
Bank One Corp. .................... 6,200 164,688
Chase Manhattan Corp. (The)........ 9,900 456,019
First Union Corp. ................. 20,700 513,619
FleetBoston Financial Corp. ....... 19,500 663,000
Morgan (J.P.) & Co., Inc. ......... 5,300 583,662
Wells Fargo & Co. ................. 18,100 701,375
-----------
4,467,263
-----------
BEVERAGES (1.1%)
PepsiCo, Inc. ..................... 8,900 395,494
-----------
BROADCAST/MEDIA (2.0%)
AT&T Corp.-Liberty Media Group
Class A (a)....................... 22,800 552,900
MediaOne Group, Inc. (a)........... 2,500 166,081
-----------
718,981
-----------
CHEMICALS (3.3%)
Dow Chemical Co. (The)............. 5,700 172,069
Du Pont (E.I.) De Nemours & Co. ... 6,200 271,250
Eastman Chemical Co. .............. 8,100 386,775
Union Carbide Corp. ............... 6,900 341,550
-----------
1,171,644
-----------
COMPUTER SOFTWARE & SERVICES (0.9%)
Computer Associates International,
Inc. ............................. 5,000 255,937
Electronic Data Systems Corp. ..... 1,700 70,125
-----------
326,062
-----------
COMPUTER SYSTEMS (4.2%)
Apple Computer, Inc. (a)........... 2,200 115,225
Compaq Computer Corp. ............. 13,100 334,869
Hewlett-Packard Co. ............... 1,500 187,312
International Business Machines
Corp. ............................ 6,300 690,244
Unisys Corp. (a)................... 10,800 157,275
-----------
1,484,925
-----------
COMPUTERS-PERIPHERALS (0.5%)
Xircom, Inc. (a)................... 3,500 166,250
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
ELECTRIC POWER COMPANIES (1.3%)
AES Corp. (The) (a)................ 6,800 $ 310,250
Duke Energy Corp. ................. 2,700 152,212
-----------
462,462
-----------
ELECTRICAL EQUIPMENT (1.1%)
Emerson Electric Co. .............. 6,300 380,362
-----------
ELECTRONICS-INSTRUMENTATION (0.1%)
Agilent Technologies, Inc. (a)..... 533 39,309
-----------
ELECTRONICS-SEMICONDUCTORS (1.7%)
Micron Technology, Inc. (a)........ 3,800 334,638
Motorola, Inc. .................... 9,400 273,187
-----------
607,825
-----------
ENTERTAINMENT (3.4%)
Viacom Inc. Class B (a)............ 6,200 422,762
Walt Disney Co. (The).............. 20,300 787,894
-----------
1,210,656
-----------
FINANCE (10.9%)
American Express Co. .............. 6,700 349,237
American General Corp. ............ 1,900 115,900
Associates First Capital Corp.
Class A........................... 27,900 622,519
Citigroup Inc. .................... 27,600 1,662,900
Fannie Mae......................... 3,700 193,094
Freddie Mac........................ 4,800 194,400
Morgan Stanley Dean Witter &
Co. .............................. 8,400 699,300
-----------
3,837,350
-----------
FOOD (0.9%)
Nabisco Group Holdings Corp. ...... 12,700 329,406
-----------
HEALTH CARE-DRUGS (4.9%)
Pharmacia Corp. ................... 4,403 227,580
Schering-Plough Corp. ............. 9,900 499,950
Teva Pharmaceutical Industries Ltd.
ADR (c)........................... 7,000 388,063
Watson Pharmaceuticals, Inc. (a)... 11,600 623,500
-----------
1,739,093
-----------
HEALTH CARE-MISCELLANEOUS (3.3%)
American Home Products Corp. ...... 9,600 564,000
HCA-The Healthcare Co. ............ 20,000 607,500
-----------
1,171,500
-----------
INSURANCE (3.8%)
American International Group,
Inc. ............................. 8,372 983,710
Lincoln National Corp. ............ 4,700 169,788
XL Capital Ltd. Class A............ 3,500 189,437
-----------
1,342,935
-----------
INVESTMENT BANK/BROKERAGE (2.0%)
Goldman Sachs Group, Inc. (The).... 2,000 189,750
Merrill Lynch & Co., Inc. ......... 4,400 506,000
-----------
695,750
-----------
MACHINERY (0.3%)
Caterpillar Inc. .................. 2,700 91,462
-----------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
155
<PAGE> 156
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
MANUFACTURING (2.2%)
Honeywell International Inc. ...... 3,875 $ 130,539
Minnesota Mining & Manufacturing
Co. .............................. 2,800 231,000
Tyco International Ltd. ........... 8,600 407,425
-----------
768,964
-----------
NATURAL GAS DISTRIBUTORS & PIPELINES (4.5%)
Coastal Corp. (The)................ 7,200 438,300
Dynegy Inc. Class A................ 11,900 812,919
Enron Corp. ....................... 5,200 335,400
-----------
1,586,619
-----------
OIL-INTEGRATED DOMESTIC (0.3%)
Conoco Inc. Class B................ 4,266 104,784
-----------
OIL-INTEGRATED INTERNATIONAL (7.7%)
BP Amoco PLC ADR (c)............... 6,368 360,190
Chevron Corp. ..................... 2,000 169,625
Exxon Mobil Corp. ................. 25,341 1,989,269
Texaco Inc. ....................... 4,000 213,000
-----------
2,732,084
-----------
OIL & GAS SERVICES (2.8%)
Burlington Resources Inc. ......... 7,700 294,525
Cooper Cameron Corp. (a)........... 5,400 356,400
Santa Fe International Corp. ...... 9,100 317,931
-----------
968,856
-----------
PAPER & FOREST PRODUCTS (0.3%)
International Paper Co. ........... 3,000 89,438
-----------
SPECIALIZED SERVICES (0.3%)
Cendant Corp. (a).................. 8,100 113,400
-----------
TELECOMMUNICATIONS (4.2%)
AT&T Corp. ........................ 22,250 703,656
Sprint Corp. (FON Group)........... 5,000 255,000
Sprint Corp. (PCS Group)(a)........ 4,800 285,600
WorldCom, Inc. (a)................. 5,450 250,019
-----------
1,494,275
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
TELEPHONE (9.5%)
Bell Atlantic Corp. (a)............ 3,700 $ 188,006
BellSouth Corp. ................... 13,600 579,700
GTE Corp. ......................... 13,100 815,475
SBC Communications Inc. ........... 20,765 898,086
US West, Inc. ..................... 10,200 874,650
-----------
3,355,917
-----------
TOBACCO (1.9%)
Philip Morris Companies Inc. ...... 24,500 650,781
-----------
Total Common Stocks (Cost
$33,305,460)...................... 33,654,660
-----------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENT (4.8%)
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
FEDERAL AGENCY (4.8%)
Federal Home Loan Bank 6.57%, due
7/3/00............................ $1,693,000 1,692,382
-----------
Total Short-Term Investment (Cost
$1,692,382)....................... 1,692,382
-----------
Total Investments (Cost
$34,997,842)(d)................... 100.0% 35,347,042(e)
Liabilities in Excess of Cash and
Other Assets...................... 0.0(b) (13,842)
--------- ---------
Net Assets......................... 100.0% $35,333,200
========= =========
</TABLE>
------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) ADR--American Depository Receipt.
(d) The cost for federal income tax purposes is $35,054,796.
(e) At June 30, 2000 net unrealized appreciation was $292,246, 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 $3,055,109 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,762,863.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
156
<PAGE> 157
MAINSTAY VP SERIES FUND, INC.
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $34,997,842)........... $35,347,042
Cash...................................... 875
Receivables:
Investment securities sold.............. 1,650,000
Dividends and interest.................. 51,400
Fund shares sold........................ 39,507
Unamortized organization expense.......... 12,116
-----------
Total assets...................... 37,100,940
-----------
LIABILITIES:
Payables:
Investment securities purchased......... 1,716,801
Adviser................................. 17,815
Custodian............................... 6,352
Administrator........................... 5,938
Accrued expenses.......................... 20,834
-----------
Total liabilities................. 1,767,740
-----------
Net assets applicable to outstanding
shares.................................. $35,333,200
===========
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized.... $ 33,668
Additional paid-in capital................ 34,134,594
Accumulated undistributed net investment
income.................................. 142,481
Accumulated net realized gain on
investments............................. 673,257
Net unrealized appreciation on
investments............................. 349,200
-----------
Net assets applicable to outstanding
shares.................................. $35,333,200
===========
Shares of capital stock outstanding....... 3,366,798
===========
Net asset value per share outstanding..... $ 10.49
===========
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 268,333
Interest................................ 36,597
-----------
Total income...................... 304,930
-----------
Expenses:
Advisory................................ 99,225
Administration.......................... 33,075
Professional............................ 10,445
Custodian............................... 7,778
Shareholder communication............... 3,195
Amortization of organization expense.... 2,135
Portfolio pricing....................... 1,387
Directors............................... 522
Miscellaneous........................... 4,687
-----------
Total expenses.................... 162,449
-----------
Net investment income..................... 142,481
-----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on investments.......... 1,742,315
Net change in unrealized appreciation on
investments............................. (2,967,559)
-----------
Net realized and unrealized loss on
investments............................. (1,225,244)
-----------
Net decrease in net assets resulting from
operations.............................. $(1,082,763)
===========
------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $884.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
157
<PAGE> 158
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-----------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 142,481 $ 223,945
Net realized gain on investments.......................... 1,742,315 100,967
Net change in unrealized appreciation on investments...... (2,967,559) 1,272,936
----------- -----------
Net increase (decrease) in net assets resulting from
operations.............................................. (1,082,763) 1,597,848
----------- -----------
Dividends to shareholders:
From net investment income................................ -- (228,939)
----------- -----------
Capital share transactions:
Net proceeds from sale of shares.......................... 7,568,703 12,066,656
Net asset value of shares issued to shareholders in
reinvestment of dividends............................... -- 228,939
----------- -----------
7,568,703 12,295,595
Cost of shares redeemed................................... (1,760,815) (1,974,875)
----------- -----------
Increase in net assets derived from capital share
transactions............................................ 5,807,888 10,320,720
----------- -----------
Net increase in net assets.................................. 4,725,125 11,689,629
NET ASSETS:
Beginning of period......................................... 30,608,075 18,918,446
----------- -----------
End of period............................................... $35,333,200 $30,608,075
=========== ===========
Accumulated undistributed net investment income at end of
period.................................................... $ 142,481 $ --
=========== ===========
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
SIX MONTHS 1998 (a)
ENDED YEAR ENDED THROUGH
JUNE 30, DECEMBER 31, DECEMBER 31,
2000* 1999 1998
-------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period...................... $ 10.84 $ 10.23 $ 10.00
------------ ------------ ------------
Net investment income....................................... 0.04 0.08 0.05
Net realized and unrealized gain (loss) on investments...... (0.39) 0.61 0.23
------------ ------------ ------------
Total from investment operations............................ (0.35) 0.69 0.28
------------ ------------ ------------
Less dividends:
From net investment income................................ -- (0.08) (0.05)
------------ ------------ ------------
Net asset value at end of period............................ $ 10.49 $ 10.84 $ 10.23
============ ============ ============
Total investment return..................................... (3.19%)(b) 6.73% 2.83%(b)
Ratios (to average net assets)/Supplemental Data:
Net investment income..................................... 0.86%+ 0.90% 1.02%+
Net expenses.............................................. 0.98%+ 0.95% 0.95%+
Expenses (before reimbursement)........................... 0.98%+ 1.00% 1.39%+
Portfolio turnover rate..................................... 71% 121% 98%
Net assets at end of period (in 000's)...................... $ 35,333 $ 30,608 $ 18,918
</TABLE>
------------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
158
<PAGE> 159
MAINSTAY VP SERIES FUND, INC.
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS (95.7%)+
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
BIOTECHNOLOGY (0.8%)
Genentech, Inc. (a).............. 8,300 $ 1,427,600
------------
BROADCAST/MEDIA (4.1%)
AMFM Inc. (a).................... 59,550 4,108,950
Charter Communications, Inc.
Class A (a)..................... 77,600 1,275,550
Comcast Corp.
Special Class A (a)............. 52,500 2,126,250
------------
7,510,750
------------
COMMUNICATIONS--EQUIPMENT (16.3%)
Cisco Systems, Inc. (a).......... 136,100 8,650,856
JDS Uniphase Corp. (a)........... 25,150 3,014,856
Lucent Technologies Inc. ........ 97,100 5,753,175
Nokia Corp. ADR (b).............. 107,800 5,383,263
Nortel Networks Corp. ........... 105,750 7,217,438
------------
30,019,588
------------
COMPUTER SOFTWARE & SERVICES (12.7%)
America Online, Inc. (a)......... 100,500 5,301,375
Extreme Networks, Inc. (a)....... 7,250 764,875
Microsoft Corp. (a).............. 180,000 14,400,000
VERITAS Software Corp. (a)....... 13,700 1,548,314
Virage Inc. (a).................. 16,250 293,516
Yahoo! Inc. (a).................. 7,700 953,837
------------
23,261,917
------------
COMPUTER SYSTEMS (12.7%)
Dell Computer Corp. (a).......... 233,400 11,509,538
EMC Corp. (a).................... 73,100 5,624,131
Gateway, Inc. (a)................ 42,700 2,423,225
Handspring, Inc. (a)............. 41,000 1,107,000
Sun Microsystems, Inc. (a)....... 29,700 2,700,844
------------
23,364,738
------------
COMPUTERS--NETWORKING (2.1%)
Foundry Networks, Inc. (a)....... 3,000 331,500
Sycamore Networks, Inc. (a)...... 31,850 3,515,444
------------
3,846,944
------------
COMPUTERS--PERIPHERALS (0.4%)
Integrated Circuit Systems, Inc.
(a)............................. 41,900 717,537
------------
ELECTRICAL EQUIPMENT (0.7%)
General Electric Co. ............ 24,400 1,293,200
------------
ELECTRONICS--COMPONENTS (2.1%)
Gemstar International Group
(a)............................. 23,250 1,428,785
Interlink Electronics, Inc.
(a)............................. 8,125 340,234
SCG Holding Corp. (a)............ 91,150 1,993,906
------------
3,762,925
------------
ELECTRONICS--SEMICONDUCTORS (9.6%)
Applied Materials, Inc. (a)...... 17,000 1,540,625
Applied Micro Circuits Corp.
(a)............................. 12,200 1,204,750
Broadcom Corp. Class A (a)....... 3,200 700,600
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
ELECTRONICS--SEMICONDUCTORS (Continued)
E-Tek Dynamics, Inc. (a)......... 5,500 $ 1,450,969
Intel Corp. ..................... 74,700 9,986,456
LSI Logic Corp. (a).............. 29,450 1,593,981
National Semiconductor Corp.
(a)............................. 19,050 1,081,088
------------
17,558,469
------------
FINANCE (5.9%)
American Express Co. ............ 47,900 2,496,788
Citigroup Inc. .................. 34,900 2,102,725
Morgan Stanley Dean Witter &
Co. ............................ 34,250 2,851,312
NASDAQ-100 Index Tracking Stock
(a)(c).......................... 37,200 3,466,575
------------
10,917,400
------------
HEALTH CARE--DRUGS (3.9%)
Merck & Co., Inc. ............... 29,650 2,271,931
Pfizer Inc. ..................... 76,250 3,660,000
Schering-Plough Corp. ........... 24,950 1,259,975
------------
7,191,906
------------
HEALTH CARE--MEDICAL PRODUCTS (3.2%)
Baxter International Inc. ....... 21,100 1,483,594
Guidant Corp. (a)................ 38,350 1,898,325
Medtronic, Inc. ................. 32,800 1,633,850
PE Corp.-PE Biosystems Group..... 13,650 899,194
------------
5,914,963
------------
HEALTH CARE--MISCELLANEOUS (1.6%)
American Home Products Corp. .... 9,850 578,687
Johnson & Johnson................ 22,700 2,312,563
------------
2,891,250
------------
INSURANCE (1.3%)
American International Group,
Inc. ........................... 20,875 2,452,812
------------
INTERNET SOFTWARE & SERVICES (0.7%)
AsiaInfo Holdings, Inc. (a)...... 1,000 44,687
Centillium Communications, Inc.
(a)............................. 6,800 469,200
Juniper Networks Inc. (a)........ 6,000 873,375
------------
1,387,262
------------
INVESTMENT BANK/BROKERAGE (2.5%)
Charles Schwab Corp. (The)....... 58,100 1,953,612
Goldman Sachs Group, Inc.
(The)........................... 28,900 2,741,888
------------
4,695,500
------------
NATURAL GAS DISTRIBUTORS & PIPELINES (0.7%)
Enron Corp. ..................... 19,250 1,241,625
------------
OIL & GAS SERVICES (1.2%)
Cooper Cameron Corp. (a)......... 13,450 887,700
Smith International, Inc. (a).... 9,350 680,797
Weatherford International, Inc.
(a)............................. 14,350 571,309
------------
2,139,806
------------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
159
<PAGE> 160
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------
<S> <C> <C>
PERSONAL LOANS (1.1%)
Providian Financial Corp. ....... 23,300 $ 2,097,000
------------
RETAIL (9.4%)
Costco Wholesale Corp. (a)....... 86,950 2,869,350
Home Depot, Inc. (The)........... 126,400 6,312,100
Target Corp. .................... 24,000 1,392,000
Wal-Mart Stores, Inc. ........... 115,200 6,638,400
------------
17,211,850
------------
SPECIALIZED SERVICES (0.8%)
Omnicom Group Inc. .............. 17,000 1,514,063
------------
TELECOMMUNICATIONS (1.9%)
Accelerated Networks, Inc. (a)... 6,800 286,875
Adelphia Communications Corp.
Class A (a)..................... 35,700 1,673,437
CIENA Corp. (a).................. 3,000 498,000
EchoStar Communications Corp.
Class A (a)..................... 29,000 960,173
------------
3,418,485
------------
Total Common Stocks
(Cost $162,651,018)............. 175,837,590
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENT (5.9%)
PRINCIPAL
AMOUNT VALUE
-----------------------
<S> <C> <C>
TIME DEPOSIT (5.9%)
Bank of New York Cayman
5.75%, due 7/3/00............... $10,822,000 $ 10,822,000
------------
Total Short-Term Investment
(Cost $10,822,000).............. 10,822,000
------------
Total Investments
(Cost $173,473,018)(d).......... 101.6% 186,659,590(e)
Liabilities in Excess of
Cash and Other Assets........... (1.6) (2,904,347)
----------- ------------
Net Assets....................... 100.0% $183,755,243
=========== ============
</TABLE>
------------
(a) Non-income producing security.
(b) ADR--American Depository Receipt.
(c) Unit Investment Trust -- represents ownership of the NASDAQ -- 100 Trust
established to accumulate and hold a portfolio of the equity securities that
comprise the NASDAQ -- 100 Index.
(d) The cost for federal income tax purposes is $173,557,088.
(e) At June 30, 2000 net unrealized appreciation was $13,102,502, 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 $15,235,608 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,133,106.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
160
<PAGE> 161
MAINSTAY VP SERIES FUND, INC.
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $173,473,018)......... $186,659,590
Cash..................................... 127,560
Receivables:
Investment securities sold............. 13,846,801
Fund shares sold....................... 1,055,231
Dividends and interest................. 21,415
Unamortized organization expense......... 12,116
------------
Total assets..................... 201,722,713
------------
LIABILITIES:
Payables:
Investment securities purchased........ 17,835,033
Adviser................................ 68,630
Administrator.......................... 27,452
Custodian.............................. 11,042
Accrued expenses......................... 25,313
------------
Total liabilities................ 17,967,470
------------
Net assets applicable to outstanding
shares................................. $183,755,243
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized... $ 92,348
Additional paid-in capital............... 157,149,905
Accumulated net investment loss.......... (124,278)
Accumulated net realized gain on
investments............................ 13,450,696
Net unrealized appreciation on
investments............................ 13,186,572
------------
Net assets applicable to outstanding
shares................................. $183,755,243
============
Shares of capital stock outstanding...... 9,234,791
============
Net asset value per share outstanding.... $ 19.90
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 194,994
Dividends (a).......................... 132,096
------------
Total income..................... 327,090
------------
Expenses:
Advisory............................... 291,260
Administration......................... 116,504
Custodian.............................. 13,848
Professional........................... 11,482
Shareholder communication.............. 8,088
Amortization of organization expense... 2,135
Directors.............................. 1,192
Miscellaneous.......................... 6,859
------------
Total expenses................... 451,368
------------
Net investment loss...................... (124,278)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investments......... 13,554,454
Net change in unrealized appreciation on
investments............................ (40,672)
------------
Net realized and unrealized gain on
investments............................ 13,513,782
------------
Net increase in net assets resulting from
operations............................. $ 13,389,504
============
------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $1,825.
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
161
<PAGE> 162
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment loss....................................... $ (124,278) $ (12,120)
Net realized gain on investments.......................... 13,554,454 11,073,031
Net change in unrealized appreciation on investments...... (40,672) 9,293,252
------------ -----------
Net increase in net assets resulting from operations...... 13,389,504 20,354,163
------------ -----------
Dividends and distributions to shareholders:
From net investment income................................ -- (831)
From net realized gain on investments..................... (6,859,023) (3,052,873)
------------ -----------
Total dividends and distributions to shareholders....... (6,859,023) (3,053,704)
------------ -----------
Capital share transactions:
Net proceeds from sale of shares.......................... 109,806,044 29,117,491
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 6,859,023 3,053,704
------------ -----------
116,665,067 32,171,195
Cost of shares redeemed................................... (4,529,055) (2,849,878)
------------ -----------
Increase in net assets derived from capital share
transactions............................................ 112,136,012 29,321,317
------------ -----------
Net increase in net assets.................................. 118,666,493 46,621,776
NET ASSETS:
Beginning of period......................................... 65,088,750 18,466,974
------------ -----------
End of period............................................... $183,755,243 $65,088,750
============ ===========
Accumulated net investment loss at end of period............ $ (124,278) $ --
============ ===========
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
SIX MONTHS 1998 (a)
ENDED YEAR ENDED THROUGH
JUNE 30, DECEMBER 31, DECEMBER 31,
2000* 1999 1998
--------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period...................... $ 18.55 $ 11.78 $ 10.00
------------ ------------ ------------
Net investment income (loss)................................ (0.02)(b) (0.01)(b) 0.01
Net realized and unrealized gain on investments............. 2.29 7.71 1.78
------------ ------------ ------------
Total from investment operations............................ 2.27 7.70 1.79
------------ ------------ ------------
Less dividends and distributions:
From net investment income................................ -- (0.00)(c) (0.01)
From net realized gain on investments..................... (0.92) (0.93) --
------------ ------------ ------------
Total dividends and distributions........................... (0.92) (0.93) (0.01)
------------ ------------ ------------
Net asset value at end of period............................ $ 19.90 $ 18.55 $ 11.78
============ ============ ============
Total investment return..................................... 12.64%(d) 65.50% 17.85%(d)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss).............................. (0.21%)+ (0.04%) 0.11%+
Net expenses.............................................. 0.78%+ 0.85% 0.85%+
Expenses (before reimbursement)........................... 0.78%+ 0.87% 1.28%+
Portfolio turnover rate..................................... 169% 203% 31%
Net assets at end of period (in 000's)...................... $ 183,755 $ 65,089 $ 18,467
</TABLE>
------------
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Less than one cent per share.
(d) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
162
<PAGE> 163
MAINSTAY VP SERIES FUND, INC.
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS (95.8%)+
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
ADVERTISING & MARKETING SERVICES (2.1%)
Acxiom Corp. (a)................... 20,800 $ 566,800
ValueVision International, Inc.
Class A (a)....................... 13,000 312,000
-----------
878,800
-----------
AEROSPACE/DEFENSE (1.5%)
Armor Holdings, Inc. (a)........... 19,000 247,000
Orbital Sciences Corp. (a)......... 34,600 421,688
-----------
668,688
-----------
AIRLINES (1.3%)
Frontier Airlines, Inc. (a)........ 14,600 208,963
SkyWest, Inc. ..................... 9,400 348,387
-----------
557,350
-----------
BIOTECHNOLOGY (0.8%)
Corixa Corp. (a)................... 7,600 326,325
-----------
BROADCAST/MEDIA (0.5%)
Regent Communications, Inc. (a).... 16,000 137,501
Salem Communications Corp. Class A
(a)............................... 9,600 89,100
-----------
226,601
-----------
BUILDING MATERIALS (0.5%)
Elcor Corp. ....................... 10,500 241,500
-----------
CHEMICALS (2.5%)
Albany Molecular Research, Inc.
(a)............................... 3,800 206,863
H.B. Fuller Co. ................... 2,500 113,906
OM Group, Inc. .................... 16,500 726,000
-----------
1,046,769
-----------
COMMERCIAL & CONSUMER SERVICES (4.1%)
CheckFree Holdings Corp. (a)....... 4,700 242,344
G&K Services, Inc. Class A......... 13,500 338,344
Iron Mountain Inc. (a)............. 15,700 533,800
McGrath Rentcorp................... 6,600 112,200
MemberWorks Inc. (a)............... 7,100 238,737
Modis Professional Services, Inc.
(a)............................... 11,100 98,513
Pegasus Solutions, Inc. (a)........ 16,800 182,700
-----------
1,746,638
-----------
COMMUNICATIONS--EQUIPMENT (7.7%)
ADC Telecommunications, Inc. (a)... 1,677 140,658
Cable Design Technologies Corp.
(a)............................... 8,700 291,450
CellStar Corp. (a)................. 48,400 134,615
EMS Technologies, Inc. (a)......... 3,920 70,560
Netro Corp. (a).................... 2,000 114,750
Plantronics, Inc. (a).............. 16,200 1,871,100
Sawtek Inc. (a).................... 11,600 667,725
-----------
3,290,858
-----------
COMPUTER SOFTWARE & SERVICES (10.6%)
Advanced Digital Information Corp.
(a)............................... 29,000 462,188
Cambridge Technology Partners, Inc.
(a)............................... 45,500 396,705
Dendrite International, Inc. (a)... 7,150 238,184
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
COMPUTER SOFTWARE & SERVICES (Continued)
eLoyalty Corp. (a)................. 6,700 $ 85,425
ePresence, Inc. (a)................ 2,700 19,575
Exchange Applications, Inc. (a).... 6,600 175,725
iGate Capital Corp. (a)............ 20,000 275,000
IMRglobal Corp. (a)................ 5,400 70,538
InfoCure Corp. (a)................. 7,700 43,312
Landmark Systems Corp. (a)......... 10,700 64,200
Manhattan Associates, Inc. (a)..... 6,600 165,000
Manugistics Group, Inc. (a)........ 4,300 201,025
MarchFirst, Inc. (a)............... 10,466 191,005
Optio Software, Inc. (a)........... 4,700 28,127
Phoenix Technologies Ltd. (a)...... 8,400 137,025
Project Software & Development,
Inc. (a).......................... 4,800 86,400
RadiSys Corp. (a).................. 14,850 842,737
RAVISENT Technologies Inc. (a)..... 8,900 62,856
S1 Corp. (a)....................... 16,300 379,994
Sykes Enterprises, Inc. (a)........ 17,200 221,450
THQ Inc. (a)....................... 7,700 93,844
3Do Co. (The) (a).................. 10,500 82,360
Verity, Inc. (a)................... 4,600 174,800
-----------
4,497,475
-----------
COMPUTER SYSTEMS (0.4%)
CIBER, Inc. (a).................... 9,400 124,550
Technology Solutions Co. (a)....... 6,700 41,456
-----------
166,006
-----------
COMPUTERS--HARDWARE (0.7%)
National Instruments Corp. (a)..... 6,700 292,287
-----------
COMPUTERS--NETWORKING (0.2%)
FVC.COM, Inc. (a).................. 9,500 73,625
-----------
COMPUTERS--PERIPHERALS (2.2%)
InFocus Corp. (a).................. 7,900 254,281
MICROS Systems, Inc. (a)........... 11,300 209,756
MicroTouch Systems, Inc. (a)....... 8,100 69,863
ScanSoft, Inc. (a)................. 16,949 47,669
Xircom, Inc. (a)................... 7,100 337,250
-----------
918,819
-----------
COSMETICS/PERSONAL CARE (0.6%)
Steiner Leisure Ltd. (a)........... 10,900 246,612
-----------
DATA PROCESSING SERVICES (1.8%)
MedQuist Inc. (a).................. 6,200 210,800
National Computer Systems, Inc. ... 11,700 576,225
-----------
787,025
-----------
ELECTRIC POWER COMPANIES (0.3%)
Independent Energy Holdings PLC ADR
(a)(b)............................ 13,000 108,063
-----------
</TABLE>
------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
163
<PAGE> 164
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
ELECTRICAL EQUIPMENT (3.6%)
Artesyn Technologies, Inc. (a)..... 11,100 $ 308,719
SLI, Inc. ......................... 18,100 219,462
Technitrol, Inc. .................. 5,900 571,563
Three-Five Systems, Inc. (a)....... 7,250 427,750
-----------
1,527,494
-----------
ELECTRONICS--COMPONENTS (2.2%)
Ampex Corp. Class A (a)............ 19,000 32,062
Moog Inc. Class A.................. 4,000 105,500
NVIDIA Corp. (a)................... 9,600 610,200
Pioneer-Standard Electronics,
Inc. ............................. 3,900 57,525
Rudolph Technologies, Inc. (a)..... 1,200 46,500
Universal Electronics Inc. (a)..... 3,000 73,688
-----------
925,475
-----------
ELECTRONICS--INSTRUMENTATION (3.5%)
Analogic Corp. .................... 5,500 220,000
Coherent, Inc. (a)................. 9,700 813,587
LeCroy Corp. (a)................... 8,400 82,950
Meade Instruments Corp. (a)........ 7,000 175,875
SonoSite, Inc. (a)................. 7,100 204,569
-----------
1,496,981
-----------
ELECTRONICS--SEMICONDUCTORS (0.6%)
American Xtal Technology, Inc.
(a)............................... 3,200 138,400
Helix Technology Corp. ............ 1,600 62,400
Therma-Wave, Inc. (a).............. 1,600 35,700
-----------
236,500
-----------
EMPLOYMENT SERVICES (1.1%)
CDI Corp. (a)...................... 5,100 103,913
Labor Ready, Inc. (a).............. 9,250 61,281
On Assignment, Inc. (a)............ 9,500 289,750
-----------
454,944
-----------
ENTERTAINMENT (0.2%)
Activision, Inc. (a)............... 10,100 65,650
Cinar Corp. Class B (a)(c)......... 7,400 39,442
-----------
105,092
-----------
FINANCE (0.7%)
Federal Agricultural Mortgage Corp.
Class C (a)....................... 10,000 145,625
NCO Group, Inc. (a)................ 6,700 154,937
-----------
300,562
-----------
FOOD (0.6%)
Horizon Organic Holding Corp.
(a)............................... 6,600 70,125
Smithfield Foods, Inc. (a)......... 5,900 165,569
-----------
235,694
-----------
GOLD & PRECIOUS METALS MINING (1.3%)
Stillwater Mining Co. (a).......... 19,450 542,169
-----------
HEALTH CARE--DRUGS (3.7%)
Barr Laboratories, Inc. (a)........ 4,050 181,491
ICOS Corp. (a)..................... 11,500 506,000
ILEX Oncology, Inc. (a)............ 3,900 137,475
Kos Pharmaceuticals, Inc. (a)...... 4,100 65,856
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
HEALTH CARE--DRUGS (Continued)
Maxim Pharmaceuticals, Inc. (a).... 3,300 $ 169,538
Noven Pharmaceuticals, Inc. (a).... 4,500 135,281
PathoGenesis Corp. (a)............. 12,400 322,400
Twinlab Corp. (a).................. 7,600 48,450
-----------
1,566,491
-----------
HEALTH CARE--MEDICAL PRODUCTS (2.3%)
Arrow International, Inc. ......... 10,700 358,450
ATS Medical, Inc. (a).............. 19,300 282,263
Orthofix International N.V. (a).... 10,500 187,687
Theragenics Corp. (a).............. 16,000 137,000
-----------
965,400
-----------
HEALTH CARE--MISCELLANEOUS (2.3%)
Advance Paradigm, Inc. (a)......... 11,000 225,500
Apria Healthcare Group Inc. (a).... 17,500 214,375
First Consulting Group, Inc. (a)... 5,900 32,819
Hanger Orthopedic Group, Inc.
(a)............................... 14,300 70,606
Hooper Holmes, Inc. ............... 29,500 236,000
Matria Healthcare, Inc. (a)........ 31,900 146,542
Pharmaceutical Product
Development, Inc. (a)............. 3,200 67,200
-----------
993,042
-----------
HOMEBUILDING (0.3%)
Crossmann Communities, Inc. (a).... 8,900 146,850
-----------
INTERNET SOFTWARE & SERVICES (3.1%)
Alloy Online, Inc. (a)............. 8,300 93,375
Corillian Corp. (a)................ 3,700 61,513
Cyberian Outpost, Inc. (a)......... 10,800 51,975
CyberSource Corp. (a).............. 5,500 75,969
eCollege.com (a)................... 11,200 49,000
eMerge Interactive, Inc. (a)....... 7,400 132,737
Etinuum, Inc. (a).................. 5,300 29,813
Fatbrain.com, Inc. (a)............. 8,900 58,685
Lionbridge Technologies, Inc.
(a)............................... 8,500 82,875
Multex.com, Inc. (a)............... 6,600 166,237
NBC Internet, Inc. (a)............. 300 3,750
Netopia, Inc. (a).................. 3,600 144,900
Primus Knowledge Solutions, Inc.
(a)............................... 2,600 117,000
Proxicom, Inc. (a)................. 2,400 114,900
Switchboard Inc. (a)............... 8,100 81,000
Vicinity Corp. (a)................. 2,800 54,950
-----------
1,318,679
-----------
LEISURE TIME (1.3%)
American Classic Voyages Co. (a)... 8,800 181,500
Bally Total Fitness Holding Corp.
(a)............................... 7,400 187,775
Championship Auto Racing
Teams, Inc. (a)................... 7,300 186,150
-----------
555,425
-----------
MACHINERY (0.4%)
Semitool, Inc. (a)................. 10,800 186,975
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
164
<PAGE> 165
MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
MANUFACTURING (1.4%)
Dionex Corp. (a)................... 2,300 $ 61,525
Flow International Corp. (a)....... 9,700 97,000
Identix Inc. (a)................... 4,200 65,888
Ionics, Inc. (a)................... 5,500 168,437
Matthews International Corp. Class
A................................. 7,100 205,900
-----------
598,750
-----------
OIL & GAS SERVICES (6.3%)
Core Laboratories N.V. (a)......... 20,300 588,700
Evergreen Resources, Inc. (a)...... 11,200 331,800
EXCO Resources, Inc. (a)........... 7,900 79,000
Louis Dreyfus Natural Gas Corp.
(a)............................... 15,400 482,212
Seitel, Inc. (a)................... 10,300 83,688
Stone Energy Corp. (a)............. 6,400 382,400
Superior Energy Services, Inc.
(a)............................... 12,900 133,838
TransMontaigne Inc. (a)............ 18,600 113,925
Vintage Petroleum, Inc. ........... 22,200 500,887
-----------
2,696,450
-----------
RAILROADS (0.4%)
RailWorks Corp. (a)................ 10,100 82,062
Wabtec Corp. ...................... 8,415 87,306
-----------
169,368
-----------
REAL ESTATE INVESTMENT/ MANAGEMENT (0.4%)
Catellus Development Corp. (a)..... 4,600 69,000
Healthcare Realty Trust Inc. ...... 5,100 87,019
-----------
156,019
-----------
RESTAURANTS (0.6%)
CEC Entertainment, Inc. (a)........ 4,800 123,000
P.F. Changs China Bistro, Inc.
(a)............................... 4,800 153,300
-----------
276,300
-----------
RETAIL (8.6%)
Ames Department Stores, Inc. (a)... 8,000 62,000
AnnTaylor Stores Corp. (a)......... 18,800 622,750
Children's Place Retail Stores,
Inc. (The) (a).................... 14,300 293,150
Cost Plus, Inc. (a)................ 4,725 135,548
Cutter & Buck Inc. (a)............. 7,500 59,531
Insight Enterprises, Inc. (a)...... 9,200 545,675
Kenneth Cole Productions, Inc.
Class A (a)....................... 7,100 284,000
MSC Industrial Direct Co., Inc.
Class A (a)....................... 19,700 412,469
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
RETAIL (Continued)
Pacific Sunwear of California, Inc.
(a)............................... 18,650 $ 349,688
Shoe Carnival, Inc. (a)............ 11,600 72,500
Tarrant Apparel Group (a).......... 14,700 131,381
Tuesday Morning Corp. (a).......... 6,800 71,400
Whole Foods Market, Inc. (a)....... 11,800 487,487
Wild Oats Markets, Inc. (a)........ 9,000 113,063
Zany Brainy, Inc. (a).............. 14,200 37,275
-----------
3,677,917
-----------
RETAIL--INTERNET (0.1%)
iGo Corp. (a)...................... 12,300 47,662
-----------
SHOES (2.2%)
Timberland Co. (The) Class A (a)... 11,100 786,019
Vans, Inc. (a)..................... 10,400 152,100
-----------
938,119
-----------
SPECIALIZED SERVICES (4.0%)
Aegis Communications Group, Inc.
(a)............................... 60,000 60,600
Butler International, Inc. ........ 6,750 57,375
Cornell Companies, Inc. (a)........ 11,000 88,000
Corporate Executive Board Co. (The)
(a)............................... 9,500 568,813
Diamond Technology Partners Inc.
(a)............................... 5,950 523,600
Healthcare Services Group, Inc.
(a)............................... 12,200 54,900
Jupiter Communications, Inc. (a)... 5,800 133,400
Renaissance Worldwide, Inc. (a).... 27,800 43,437
Student Advantage, Inc. (a)........ 24,500 179,156
-----------
1,709,281
-----------
TELECOMMUNICATIONS (5.1%)
Clearnet Communications, Inc. Class
A (a)............................. 13,800 383,165
Comtech Telecommunications Corp.
(a)............................... 8,300 136,950
GST Telecommunications, Inc.
(a)(c)............................ 10,100 4,419
Lightbridge, Inc. (a).............. 7,900 188,613
MGC Communications, Inc. (a)....... 6,300 377,606
TALK.com Inc. (a).................. 26,000 151,125
TeleTech Holdings, Inc. (a)........ 29,300 910,131
-----------
2,152,009
-----------
TELEPHONE (0.3%)
Boston Communications Group, Inc.
(a)............................... 9,900 138,600
-----------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
165
<PAGE> 166
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
---------------------
<S> <C> <C>
TEXTILES (1.4%)
Quiksilver, Inc. (a)............... 22,200 $ 345,487
Tropical Sportswear International
Corp. (a)......................... 14,800 259,000
-----------
604,487
-----------
Total Common Stocks (Cost
$40,605,378)...................... 40,796,176
-----------
<CAPTION>
SHORT-TERM INVESTMENT (4.3%)
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
TIME DEPOSIT (4.3%)
Bank of New York Cayman 5.75%, due
7/3/00............................ $1,835,000 1,835,000
-----------
Total Short-Term Investment (Cost
$1,835,000)....................... 1,835,000
-----------
Total Investments (Cost
$42,440,378)(d)................... 100.1% 42,631,176(e)
Liabilities in Excess of Cash and
Other Assets...................... (0.1) (32,969)
--------- ---------
Net Assets......................... 100.0% $42,598,207
========= =========
</TABLE>
------------
(a) Non-income producing security.
(b) ADR--American Depository Receipt.
(c) Fair valued security.
(d) The cost for federal income tax purposes is $42,447,499.
(e) At June 30, 2000 net unrealized appreciation was $183,677, 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 $8,566,762 and aggregate gross unrealized depreciation
for all investments on which there was an excess of cost over market value
of $8,383,085.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
166
<PAGE> 167
MAINSTAY VP SERIES FUND, INC.
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value
(identified cost $42,440,378)........... $42,631,176
Cash...................................... 4,199
Receivables:
Investment securities sold.............. 1,813,376
Fund shares sold........................ 30,392
Dividends and interest.................. 1,720
Unamortized organization expense.......... 12,116
-----------
Total assets...................... 44,492,979
-----------
LIABILITIES:
Payables:
Investment securities purchased......... 1,835,930
Adviser................................. 20,404
Custodian............................... 9,735
Administrator........................... 6,801
Shareholder communication............... 6,084
Fund shares redeemed.................... 658
Accrued expenses.......................... 15,160
-----------
Total liabilities................. 1,894,772
-----------
Net assets applicable to outstanding
shares.................................. $42,598,207
===========
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per
share) 200 million shares authorized.... $ 41,605
Additional paid-in capital................ 43,025,968
Accumulated net investment loss........... (96,218)
Accumulated net realized loss on
investments............................. (563,946)
Net unrealized appreciation on
investments............................. 190,798
-----------
Net assets applicable to outstanding
shares.................................. $42,598,207
===========
Shares of capital stock outstanding....... 4,160,468
===========
Net asset value per share outstanding..... $ 10.24
===========
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C>
Income:
Interest................................ $ 84,555
Dividends............................... 23,373
-----------
Total income...................... 107,928
-----------
Expenses:
Advisory................................ 124,566
Administration.......................... 41,522
Custodian............................... 13,725
Professional............................ 10,514
Shareholder communication............... 5,048
Amortization of organization expense.... 2,135
Portfolio pricing....................... 1,387
Directors............................... 563
Miscellaneous........................... 4,686
-----------
Total expenses.................... 204,146
-----------
Net investment loss....................... (96,218)
-----------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS:
Net realized loss on investments.......... (557,592)
Net change in unrealized appreciation on
investments............................. (4,449,181)
-----------
Net realized and unrealized loss on
investments............................. (5,006,773)
-----------
Net decrease in net assets resulting from
operations.............................. $(5,102,991)
===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
167
<PAGE> 168
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 (Unaudited)
and the year ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
-------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment loss....................................... $ (96,218) $ (113,921)
Net realized gain (loss) on investments................... (557,592) 2,297,084
Net change in unrealized appreciation on investments...... (4,449,181) 4,073,226
----------- -----------
Net increase (decrease) in net assets resulting from
operations.............................................. (5,102,991) 6,256,389
----------- -----------
Distribution to shareholders:
From net realized gain on investments..................... (1,129,645) (535,006)
----------- -----------
Capital share transactions:
Net proceeds from sale of shares.......................... 18,488,661 14,691,410
Net asset value of shares issued to shareholders in
reinvestment of distributions........................... 1,129,645 535,006
----------- -----------
19,618,306 15,226,416
Cost of shares redeemed................................... (2,887,473) (4,715,163)
----------- -----------
Increase in net assets derived from capital share
transactions............................................ 16,730,833 10,511,253
----------- -----------
Net increase in net assets.................................. 10,498,197 16,232,636
NET ASSETS:
Beginning of period......................................... 32,100,010 15,867,374
----------- -----------
End of period............................................... $42,598,207 $32,100,010
=========== ===========
Accumulated net investment loss at end of period............ $ (96,218) $ --
=========== ===========
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1,
SIX MONTHS 1998 (a)
ENDED YEAR ENDED THROUGH
JUNE 30, DECEMBER 31, DECEMBER 31,
2000* 1999 1998
----------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period...................... $ 11.94 $ 9.21 $ 10.00
------- ------- -------
Net investment loss......................................... (0.03)(b) (0.05)(b) (0.01)
Net realized and unrealized gain (loss) on investments...... (1.39) 2.81 (0.78)
------- ------- -------
Total from investment operations............................ (1.42) 2.76 (0.79)
------- ------- -------
Less distributions:
From net realized gain on investments..................... (0.28) (0.03) --
------- ------- -------
Net asset value at end of period............................ $ 10.24 $ 11.94 $ 9.21
======= ======= =======
Total investment return..................................... (11.90%)(c) 32.19% (7.90%)(c)
Ratios (to average net assets)/Supplemental Data:
Net investment loss....................................... (0.46%)+ (0.54%) (0.35%)+
Net expenses.............................................. 0.98%+ 0.95% 0.95% +
Expenses (before reimbursement)........................... 0.98%+ 1.04% 1.50% +
Portfolio turnover rate..................................... 23% 59% 12%
Net assets at end of period (in 000's)...................... $42,598 $32,100 $15,867
</TABLE>
------------
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
168
<PAGE> 169
MAINSTAY VP SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-- Organization and Business:
--------------------------------------------------------------------------------
MainStay VP Series Fund, Inc. (the "Fund") was incorporated under Maryland law
on June 3, 1983. The Fund is registered under the Investment Company Act of
1940, as amended ("Investment Company Act"), as an open-end diversified
management investment company. American Century Income & Growth, Dreyfus Large
Company Value, Eagle Asset Management Growth Equity and Lord Abbett Developing
Growth Portfolios, which commenced operations on May 1, 1998, Convertible
Portfolio, which commenced operations on October 1, 1996, High Yield Corporate
Bond, International Equity and Value Portfolios, which commenced operations on
May 1, 1995, Capital Appreciation, Cash Management, Government, Total Return and
Indexed Equity Portfolios, which commenced operations on January 29, 1993 and
Bond and Growth Equity Portfolios, which commenced operations on January 23,
1984, (the "Portfolios"; each separately a "Portfolio") are separate Portfolios
of the Fund. Shares of the Portfolios are currently offered only to New York
Life Insurance and Annuity Corporation ("NYLIAC"), a wholly owned subsidiary of
New York Life Insurance Company ("New York Life"). NYLIAC allocates shares of
the Portfolios to, among others, NYLIAC Variable Annuity Separate Account-III
("Separate Account"). The Separate Account is used to fund flexible premium
deferred variable annuity policies.
The investment objectives for each of the Portfolios of the Fund are as follows:
Capital Appreciation: to seek long-term growth of capital. Dividend income, if
any, is an incidental consideration.
Cash Management: to seek as high a level of current income as is considered
consistent with the preservation of capital and liquidity.
Convertible: to seek capital appreciation together with current income.
Government: to seek a high level of current income, consistent with safety of
principal.
High Yield Corporate Bond: to maximize current income through investment in a
diversified portfolio of high yield, high risk debt securities which are
ordinarily in the lower rating categories of recognized rating agencies (that
is, rated Baa to B by Moody's or BBB to B by S&P). Capital appreciation is a
secondary objective.
International Equity: to seek long-term growth of capital by investing in a
portfolio consisting primarily of non-U.S. equity securities. Current income is
a secondary objective.
Total Return: to realize current income consistent with reasonable opportunity
for future growth of capital and income.
Value: to realize maximum long-term total return from a combination of capital
growth and income.
Bond: to seek the highest income over the long term consistent with
preservation of principal.
Growth Equity: to seek long-term growth of capital, with income as a secondary
consideration.
Indexed Equity: to seek to provide investment results that correspond to the
total return performance (and reflect reinvestment of dividends) of publicly
traded common stocks represented by the S&P 500 Index.
American Century Income & Growth: to seek dividend growth, current income and
capital appreciation.
Dreyfus Large Company Value: capital appreciation.
Eagle Asset Management Growth Equity: to seek growth through long-term capital
appreciation.
Lord Abbett Developing Growth: to seek long-term growth of capital through a
diversified and actively-managed portfolio consisting of developing growth
companies, many of which are traded over the counter.
High Yield Corporate Bond Portfolio invests primarily in high yield bonds. These
bonds may involve special risks in addition to the risks associated with
investments in higher rated debt securities. High yield bonds may be regarded as
predominantly speculative with respect to the issuer's continuing ability to
meet principal and interest payments. Moreover, such securities may, under
certain circumstances, be less liquid than higher rated debt securities.
169
<PAGE> 170
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
There are certain risks involved in investing in foreign securities that are
different from the usual risks inherent in domestic instruments. These risks
include difficulties in receiving or interpreting financial and economic
information, possible imposition of taxes, higher brokerage and custodian fees,
possible currency exchange controls or other government restrictions, including
possible seizure or nationalization of foreign deposits or assets. Foreign
securities may also be less liquid and more volatile than U.S. securities. There
may also be difficulty in invoking legal protections across borders. In
addition, investment in emerging market countries presents risks in greater
degree than those presented by investment in foreign issuers in countries with
developed securities markets and more advanced regulatory systems.
--------------------------------------------------------------------------------
NOTE 2--Significant Accounting Policies:
--------------------------------------------------------------------------------
The following is a summary of significant accounting policies followed by the
Fund:
(A)
VALUATION OF FUND SHARES. The net asset value per share of each Portfolio is
calculated on each day the New York Stock Exchange (the "Exchange") is open for
trading as of the close of regular trading on the Exchange. The net asset value
per share is calculated for each Portfolio by dividing the current market value
(amortized cost, in the case of Cash Management Portfolio) of the Portfolio's
total assets, less liabilities, by the total number of outstanding shares of
that Portfolio. Each Portfolio's net asset value will fluctuate, and although
the Cash Management Portfolio seeks to preserve the value of your investment of
$1.00 per share, an investor could lose money by investing in any Portfolio. An
investment in the Cash Management Portfolio is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
(B)
SECURITIES VALUATION. Portfolio securities of Cash Management Portfolio are
valued at amortized cost, which approximates market value. The amortized cost
method involves valuing a security at its cost on the date of purchase and
thereafter assuming a constant amortization to maturity of the difference
between such cost and the value on maturity date.
Securities of each of the other Portfolios are stated at value determined (a) by
appraising common and preferred stocks which are traded on the Exchange at the
last sale price on that day or, if no sale occurs, at the mean between the
closing bid and asked prices, (b) by appraising common and preferred stocks
traded on other United States national securities exchanges or foreign
securities exchanges as nearly as possible in the manner described in (a) by
reference to their principal exchange, including the National Association of
Securities Dealers National Market System, (c) by appraising over-the-counter
securities quoted on the National Association of Securities Dealers NASDAQ
system (but not listed on the National Market System) at the bid price supplied
through such system, (d) by appraising over-the-counter securities not quoted on
the National Association of Securities Dealers NASDAQ system and securities
listed or traded on certain foreign exchanges whose operations are similar to
the U.S. over-the-counter market, at prices supplied by the pricing agent or
brokers selected by the Adviser (see Note 3) if these prices are deemed to be
representative of market values at the regular close of business of the
Exchange, (e) by appraising debt securities at prices supplied by a pricing
agent selected by the Adviser, whose prices reflect broker/dealer supplied
valuations and electronic data processing techniques if those prices are deemed
by the Adviser to be representative of market values at the regular close of
business of the Exchange, (f) by appraising options and futures contracts at the
last sale price on the market where such options or futures contracts are
principally traded, and (g) by appraising all other securities and other assets,
including debt securities for which prices are supplied by a pricing agent but
are not deemed by the Adviser to be representative of market values, but
excluding money market instruments with a remaining maturity of sixty days or
less and including restricted securities and securities for which no market
quotations are available, at fair value in accordance with procedures approved
by the Directors. Short-term securities which mature in more than 60 days are
valued at current market quotations. Short-term securities which mature in 60
days or less are valued at amortized cost if their term to maturity at purchase
was 60 days or less, or by amortizing the difference between market value on the
61st day prior to maturity and value on maturity date if their original term to
maturity at purchase exceeded 60 days.
170
<PAGE> 171
MAINSTAY VP SERIES FUND, INC.
Events affecting the values of certain portfolio securities that occur between
the close of trading on the principal market for such securities (foreign
exchanges and over-the-counter markets) and the regular close of the Exchange
will not be reflected in the Portfolios' calculations of net asset values unless
the Adviser believes that the particular event would materially affect net asset
value, in which case an adjustment may be made.
(C)
FOREIGN CURRENCY FORWARD CONTRACTS. A foreign currency forward contract is an
agreement to buy or sell currencies of different countries on a specified future
date at a specified rate. During the period the forward contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking to market" such contract on a daily basis to reflect the
market value of the contract at the end of each day's trading. When the forward
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
the Portfolio's basis in the contract. The High Yield Corporate Bond,
International Equity and Value Portfolios enter into foreign currency forward
contracts primarily in order to hedge their foreign currency denominated
investments and receivables and payables against adverse movements in future
foreign exchange rates.
The use of foreign currency forward contracts involves, to varying degrees,
elements of market risk in excess of the amount recognized in the statement of
assets and liabilities. The contract amount reflects the extent of the
Portfolio's involvement in these financial instruments. Risks arise from the
possible movements in the foreign exchange rates underlying these instruments.
The unrealized appreciation (depreciation) on forward contracts reflects the
Portfolio's exposure at period-end to credit loss in the event of a
counterparty's failure to perform its obligations.
HIGH YIELD CORPORATE BOND PORTFOLIO
Foreign currency forward contracts open at June 30, 2000:
<TABLE>
<CAPTION>
CONTRACT CONTRACT UNREALIZED
AMOUNT AMOUNT APPRECIATION/
SOLD PURCHASED (DEPRECIATION)
----------- ----------- --------------
<S> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
------------------------------------------------------------
Euro vs. U.S. Dollar, expiring 9/7/00....................... E14,960,000 $14,188,363 $(214,768)
Pound Sterling vs. U.S. Dollar, expiring 8/31/00............ L16,372,500 $24,190,860 (624,431)
</TABLE>
<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNT AMOUNT
PURCHASED SOLD
----------- -----------
<S> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
------------------------------------------------------------
Pound Sterling vs. U.S. Dollar, expiring 8/31/00............ L 332,392 $ 500,000 3,795
---------
Net unrealized depreciation on foreign currency forward
contracts................................................. $(835,404)
=========
</TABLE>
171
<PAGE> 172
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
INTERNATIONAL EQUITY PORTFOLIO
Foreign currency forward contracts open at June 30, 2000:
<TABLE>
<CAPTION>
CONTRACT CONTRACT UNREALIZED
AMOUNT AMOUNT APPRECIATION/
SOLD PURCHASED (DEPRECIATION)
-------- --------- --------------
<S> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
------------------------------------------------------------
Pound Sterling vs. Euro, expiring 8/4/00.................... L920,000 E1,564,945 $ 109,886
Pound Sterling vs. U.S. Dollar, expiring 8/4/00............. L830,000 $1,249,067 (8,356)
</TABLE>
<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNT AMOUNT
PURCHASED SOLD
--------- --------
<S> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
------------------------------------------------------------
Pound Sterling vs. U.S. Dollar, expiring 8/4/00............. L922,000 $1,384,767 12,033
---------
Net unrealized appreciation on foreign currency forward
contracts................................................. $ 113,563
=========
</TABLE>
(D)
CONCENTRATION. At June 30, 2000, substantially all of the International Equity
Portfolio's net assets consisted of securities of issuers which are denominated
in foreign currencies. Changes in currency exchange rates will affect the value
of and investment income from such securities.
As of June 30, 2000, the International Equity Portfolio invested approximately
26.0% of its net assets in issuers in Japan. The issuer's abilities to meet
their obligations may be affected by economic or political developments in
Japan.
Substantially all of the International Equity Portfolio's net assets consist of
securities which are generally subject to greater price volatility, limited
capitalization and liquidity, and higher rates of inflation than securities of
companies based in the United States. In addition, issuers of certain securities
may be subject to substantial governmental involvement in the economy and
social, economic and political uncertainty.
(E)
FUTURES CONTRACTS. A futures contract is an agreement to purchase or sell a
specified quantity of an underlying instrument at a specified future date and
price, or to make or receive a cash payment based on the value of a securities
index. During the period the futures contract is open, changes in the value of
the contract are recognized as unrealized gains or losses by "marking to market"
such contract on a daily basis to reflect the market value of the contract at
the end of each day's trading. The Portfolio agrees to receive from or pay to
the broker an amount of cash equal to the daily fluctuation in the value of the
contract. Such receipts or payments are known as "variation margin". When the
futures contract is closed, the Portfolio records a realized gain or loss equal
to the difference between the proceeds from (or cost of) the closing transaction
and the Portfolio's basis in the contract. The Indexed Equity and American
Century Income & Growth Portfolios invest in stock index futures contracts to
gain full exposure to changes in stock market prices to fulfill their investment
objectives.
The use of futures contracts involves, to varying degrees, elements of market
risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts and variation margin reflect the
extent of the Portfolio's involvement in open futures positions. Risks arise
from the possible imperfect correlation in movements in the price of futures
contracts and the underlying hedged assets, and the possible inability of
counterparties to meet the terms of their contracts. However, the Portfolio's
activities in futures contracts are conducted through regulated exchanges which
minimize counterparty credit risks.
172
<PAGE> 173
MAINSTAY VP SERIES FUND, INC.
(F)
REPURCHASE AGREEMENTS. At the time a Portfolio enters into a repurchase
agreement, the value of the underlying security, including accrued interest,
will be equal to or exceed the value of the repurchase agreement and, in the
case of repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement. The
underlying securities for all repurchase agreements are held in a segregated
account of the respective Portfolio's custodian. In the case of repurchase
agreements exceeding one day, the market value of the underlying securities are
monitored by the Adviser by pricing them daily.
Each Portfolio may enter into repurchase agreements to earn income. In the event
of the bankruptcy of the seller or the failure of the seller to repurchase the
securities as agreed, a Portfolio could suffer losses, including loss of
interest on or principal of the security and costs associated with delay and
enforcement of the repurchase agreement.
(G)
SECURITY TRANSACTIONS AND INVESTMENT INCOME. The Fund records security
transactions on the trade date. Realized gains and losses on security
transactions are determined using the identified cost method and include gains
and losses from repayments of principal on mortgage related and other
asset-backed securities. Dividend income is recognized on the ex-dividend date
and interest income is accrued daily except when collection is not expected.
Discounts on securities purchased for all Portfolios are accreted on the
constant yield method over the life of the respective securities or, if
applicable, over the period to the first call date. Premiums on securities
purchased are not amortized for any Portfolio except Cash Management Portfolio
which amortizes the premium on the constant yield method over the life of the
respective securities.
(H)
FOREIGN CURRENCY TRANSACTIONS. The books and records of the Fund are recorded in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the
mean between the buying and selling rates last quoted by any major U.S. bank at
the following dates:
(i) market value of investment securities, other assets and
liabilities--at the valuation date,
(ii) purchases and sales of investment securities, income and
expenses--at the date of such transactions.
The assets and liabilities of Convertible, High Yield Corporate Bond and
International Equity Portfolios are presented at the exchange rates and market
values at the close of the period. The changes in net assets arising from
fluctuations in exchange rates and the changes in net assets resulting from
changes in market prices are not separately presented. However, gains and losses
from certain foreign currency transactions are treated as ordinary income for
federal income tax purposes.
Net realized gain (loss) on foreign currency transactions represents net gains
and losses on foreign currency forward contracts, net currency gains or losses
realized as a result of differences between the amounts of securities sale
proceeds or purchase cost, dividends, interest and withholding taxes recorded on
the Portfolio's books and the U.S. dollar equivalent amount actually received or
paid. Net currency gains or losses from valuing foreign currency denominated
assets and liabilities, other than investments, at period-end exchange rates are
reflected in unrealized foreign exchange gains (losses).
173
<PAGE> 174
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
INTERNATIONAL EQUITY PORTFOLIO
Foreign currency held at June 30, 2000:
<TABLE>
<CAPTION>
CURRENCY COST VALUE
----------------------------------------- -------- --------
<S> <C> <C> <C> <C>
Australian Dollar A$ 11,523 $ 6,995 $ 6,919
Canadian Dollar C$ 2 1 1
Danish Krone DK 14,093 1,778 1,811
Euro E 806,486 770,575 773,095
Japanese Yen Y 1,164,976 11,075 11,010
New Zealand Dollar N$ 11,213 5,710 5,279
Norwegian Krone NK 66 8 8
Pound Sterling L (556) (835) (841)
Singapore Dollar S$ 5,364 3,118 3,102
Swedish Krona SK 60,359 6,817 6,882
Swiss Franc CF 51,438 30,477 31,633
-------- --------
$835,719 $838,899
======== ========
</TABLE>
(I)
MORTGAGE DOLLAR ROLLS. Certain of the Portfolios may enter into mortgage dollar
roll ("MDR") transactions in which they sell mortgage-backed securities ("MBS")
from their portfolio to a counterparty from whom they simultaneously agree to
buy a similar security on a delayed delivery basis. The MDR transactions of the
Portfolios are classified as purchase and sale transactions. The securities sold
in connection with the MDRs are removed from the portfolio and a realized gain
or loss is recognized. The securities the Portfolios have agreed to acquire are
included at market value in the portfolio of investments and liabilities for
such purchase commitments are included as payables for investments purchased.
The Portfolios maintain a segregated account with the custodian containing
securities from the respective portfolios having a value not less than the
repurchase price, including accrued interest. MDR transactions involve certain
risks, including the risk that the MBS returned to the Portfolios at the end of
the roll, while substantially similar, could be inferior to what was initially
sold to the counterparty.
(J)
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. The High Yield
Corporate Bond and Total Return Portfolios do not have the right to demand that
such securities be registered. Disposal of these securities may involve
time-consuming negotiations and expenses, and prompt sale at an acceptable price
may be difficult.
174
<PAGE> 175
MAINSTAY VP SERIES FUND, INC.
HIGH YIELD CORPORATE BOND PORTFOLIO
Restricted securities held at June 30, 2000:
<TABLE>
<CAPTION>
PRINCIPAL PERCENT
ACQUISITION AMOUNT/ 6/30/00 OF
SECURITY DATE(S) SHARES COST VALUE NET ASSETS
-------- ------------------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
AerFi Group, PLC
Preferred Stock....................... 3/7/96-11/20/97 4,750,000 $ 2,353,175 $ 2,470,000 0.4%
Affinity Group, Inc.
Bank debt, Tranche B
10.2738%, due 6/30/06................. 12/17/98 $ 1,165,589 1,165,589 1,153,933 0.2
Euro Disneyland S.N.C.
Phase 1, Bank debt
Tranche A
5.4292%, due 11/30/06................. 7/21//99-1/28/00 FF 8,335,084 949,367 962,273 0.2
Tranche D
5.4051%, due 11/30/06................. 7/12/99-1/28/00 2,917,918 336,537 336,869 0.0(a)
Eurotunnel
Bank debt, Tier One
7.03%, due 12/31/12................... 5/12/99 L 7,500,000 9,964,322 8,983,991 1.3
FRI-MRD Corp.
14.00%, due 1/24/02................... 10/30/98 $ 3,000,000 3,013,930 2,955,000 0.4
15.00%, due 1/24/02................... 8/12/97-4/3/98 5,400,000 5,368,741 5,292,000 0.8
Genesis Health Ventures, Inc.
Bank debt, Revolver
10.25%, due 9/30/03................... 2/15/00 478,165 296,250 294,550 0.0(a)
Bank debt, Term Loan B
10.25%, due 9/30/04................... 2/25/00 1,528,721 1,049,369 940,163 0.2
Bank debt, Term Loan C
10.50%, due 6/1/05.................... 2/25/00 1,521,224 1,042,982 935,552 0.2
ICO Global Communications
Holdings Ltd.
Class A, Common Stock................. 5/15/00 167,465 3,500,019 3,500,019 0.5
Metawave Communications Corp.
Common Stock (b)...................... 4/28/98-5/2/00 51,420 0(c) 1,372,272 0.2
Multicare Companies, Inc. (The)
Bank debt, Revolver
10.75%, due 9/30/03................... 2/15/00 256,247 157,659 143,499 0.0(a)
Bank debt, Term Loan B
10.75%, due 9/30/04................... 2/25/00 1,359,466 934,783 761,301 0.1
Bank debt, Term Loan C
11.00%, due 6/1/05.................... 2/25/00 450,838 309,543 252,469 0.0(a)
Paperboard Industries International,
Inc.
Preferred Stock
5.00%, Class A........................ 5/4/98 145,000 2,413,129 2,256,908 0.3
President Casinos, Inc.
12.00%, due 9/15/01................... 12/3/98 1,180,000 1,180,000 944,000 0.1
Synthetic Industries, Inc.
Bridge Loan
14.00%, due 12/14/00.................. 12/17/99-3/27/00 665,000 662,823 638,400 0.1
----------- ----------- ----
$34,698,218 $34,193,199 5.0%
=========== =========== ====
</TABLE>
---------------
(a) Less than one tenth of a percent.
(b) Illiquid security.
(c) This common stock has no cost.
FF - French Franc
L - Pound Sterling
175
<PAGE> 176
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
TOTAL RETURN PORTFOLIO
Restricted security held at June 30, 2000:
<TABLE>
<CAPTION>
PERCENT
ACQUISITION 6/30/00 OF
SECURITY DATE SHARES COST VALUE NET ASSETS
-------- ------------------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Paperboard Industries International,
Inc. Preferred Stock, 5.00%, Class
A..................................... 5/4/98 15,000 $ 249,634 $ 233,473 0.1%
=========== =========== ====
</TABLE>
(K)
SECURITIES LENDING. The Portfolios may lend their securities to broker-dealers
and financial institutions. The loans are secured by collateral (cash or
securities) at least equal at all times to the market value of the securities
loaned. The Portfolios may bear the risk of delay in recovery of, or loss of
rights in, the securities loaned should the borrower of the securities
experience financial difficulty. The Portfolios receive compensation for lending
their securities in the form of fees or they retain a portion of interest on the
investment of any cash received as collateral. The Portfolios also continue to
receive interest and dividends on the securities loaned, and any gain or loss in
the market price of the securities loaned that may occur during the term of the
loan will be for the account of the Portfolios.
At June 30, 2000, Government, Total Return and Growth Equity Portfolios had
portfolio securities on loan with a market value of $27,015,719, $57,684,166 and
$19,875,000, respectively, to broker-dealers and government securities dealers.
Cash collateral received by Government, Total Return and Growth Equity
Portfolios is invested in investment grade commercial paper, or other securities
in accordance with the Portfolios Securities Lending Procedures. Such
investments are included as an asset, and the obligation to return the cash
collateral is recorded as a liability in the Statement of Assets and
Liabilities. While the Portfolios invest cash collateral in investment grade
securities or other "high quality" investment vehicles, the Portfolios bear the
risk that liability for the collateral may exceed the value of the investment.
Non-cash collateral received and held by Government and Total Return Portfolios
in the form of U.S. Government obligations, had a value of $305,650 and
$518,395, respectively, as of June 30, 2000.
Net income earned for securities lending transactions amounted to $66,672,
$76,918 and $123,799 net of broker fees and rebates, for the Government, Total
Return and Growth Equity Portfolios, respectively, for the six months ended June
30, 2000, which is included as interest income on the Statement of Operations.
176
<PAGE> 177
MAINSTAY VP SERIES FUND, INC.
GOVERNMENT PORTFOLIO
Investments made with cash collateral at June 30, 2000:
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
CASH & CASH EQUIVALENTS
AIM Institutional Funds Group............................... 1,494,855 $ 1,494,855
Cash with Security Lending Agent............................ 2,715
-----------
1,497,570
-----------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
SHORT-TERM COMMERCIAL PAPER
Autobahn Funding Corp.
6.65%, due 7/5/00......................................... $ 6,079,000 6,074,522
First Express Funding Corp.
6.96%, due 7/6/00......................................... 2,515,000 2,512,572
-----------
8,587,094
-----------
REPURCHASE AGREEMENTS
Credit Suisse First Boston Corp.
7.17%, due 7/3/00
(Collateralized by
$368,183 Commonwealth Edison Co.
7.375%, due 9/15/02 Market Value $368,183
$2,239,818 Millennium America, Inc.
7.00%, due 11/15/06 Market Value $2,239,818
$3,140,826 Penney (JC) Co., Inc.
7.95%, due 4/1/17 Market Value $3,140,826).............. 5,581,250 5,581,250
Morgan (J.P.) Securities, Inc.
6.95%, due 7/3/00
(Collateralized by
$6,399,751 Morgan JP & Co., Inc.
6.61625%, due 3/16/01 Market Value $6,399,751).......... 6,095,000 6,095,000
Prudential Securities, Inc.
7.25%, due 7/3/00
(Collateralized by
$1,102,717 Advanta Mortgage Loan Trust
Series 1994-4 Class A2
8.92%, due 1/25/26 Market Value $1,102,717
$997,940 MBNA Corp.
7.06188%, due 6/21/01 Market Value $998,948
$1,353,300 News America Holdings, Inc.
9.50%, due 7/15/24 Market Value $1,407,781
$379,511 Union Acceptance Corp.
6.45%, due 7/9/03 Market Value $379,511
$2,291,014 U.S. Treasury Bond
5.50%, due 8/15/28 Market Value $2,342,285)............. 6,000,000 6,000,000
-----------
17,676,250
-----------
Total investments made with cash collateral................. $27,760,914
===========
</TABLE>
Non-cash collateral received and held by the Portfolio at June 30, 2000:
<TABLE>
VALUE
-----------
<S> <C> <C>
United States Treasury Bonds
6.25%, due 8/15/23........................................ 170,000 $ 175,100
6.875%, due 8/15/25....................................... 40,000 44,537
8.125%, due 5/15/21....................................... 70,000 86,013
-----------
Total non-cash collateral................................... $ 305,650
===========
Total collateral............................................ $28,066,564
===========
</TABLE>
177
<PAGE> 178
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
TOTAL RETURN PORTFOLIO
Investments made with cash collateral at June 30, 2000:
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
CASH & CASH EQUIVALENTS
AIM Institutional Funds Group
6.73%, due 12/29/00....................................... 2,010,312 $ 2,010,312
Cash with Security Lending Agent............................ 27,556
-----------
2,037,868
-----------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
SHORT-TERM COMMERCIAL PAPER
Aesop Funding Corp.
7.06%, due 7/5/00......................................... $ 3,870,000 3,866,969
Asset One Securization Corp.
6.93%, due 7/6/00......................................... 6,300,000 6,293,945
Autobahn Funding Corp.
6.65%, due 7/5/00......................................... 1,715,000 1,713,737
Black Forest Corp.
6.77%, due 7/10/00........................................ 5,410,000 5,400,871
Washington Gas Light Co.
7.10%, due 7/3/00......................................... 4,730,000 4,728,134
-----------
22,003,656
-----------
REPURCHASE AGREEMENTS
Morgan (J.P.) Securities Inc.
6.95%, due 7/3/00
(Collateralized by
$2,009,679 American General Finance Corp.
6.375%, due 3/1/03 Market Value $2,053,052
$1,842,492 Caterpillar Financial Services Inc.
Medium-Term Notes, Series F
6.51%, due 6/5/02 Market Value $1,872,533
$1,692,416 Morgan (J.P.) Securities Inc.
6.6163%, due 3/16/01 Market Value $1,692,416
$25,000,000 Transamerica Finance Corp.
6.6963%, due 3/16/01 Market Value $25,000,000).......... 29,160,000 29,160,000
Prudential Securities Inc.
7.25%, due 7/3/00
Collateralized by
$1,366,792 General Electric Capital Mortgage Services Inc.
7.45%, due 10/25/29 Market Value $1,366,792
$1,111,517 General Electric Capital Mortgage Services Inc.
8.25%, due 9/25/26 Market Value $1,111,517
$19,479 Granite Funding L.L.C.
6.65%, due 12/1/01 Market Value $19,479
$998,720 Texas Utilities Corp.
7.315%, due 6/25/01 Market Value $998,720
$2,633,518 U.S. Treasury Bond
5.50%, due 8/15/28 Market Value $2,692,454)............. 6,000,000 6,000,000
-----------
35,160,000
-----------
Total investments made with cash collateral................. $59,201,524
===========
</TABLE>
178
<PAGE> 179
MAINSTAY VP SERIES FUND, INC.
Non-cash collateral received and held by the Portfolio at June 30, 2000:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- -----------
<S> <C> <C>
United States Treasury Bonds
6.00%, due 2/15/26........................................ $ 90,000 $ 90,028
6.125%, due 11/15/27...................................... 50,000 50,250
6.25%, due 8/15/23........................................ 270,000 278,100
6.375%, due 8/15/27....................................... 95,000 100,017
-----------
Total non-cash collateral................................... $ 518,395
===========
Total collateral............................................ $59,719,919
===========
</TABLE>
GROWTH EQUITY PORTFOLIO
Investments made with cash collateral at June 30, 2000:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
SHORT-TERM COMMERCIAL PAPER
Goldman Sachs Group Inc.
6.95%, due 7/3/00......................................... $19,820,000 $19,812,346
===========
</TABLE>
(L)
COMMITMENTS AND CONTINGENCIES. As of June 30, 2000, High Yield Corporate Bond
Portfolio had unfunded loan commitments pursuant to the following loan
agreements:
<TABLE>
<CAPTION>
UNFUNDED
BORROWER COMMITMENT
-------- ----------
<S> <C>
Genesis Health Ventures, Inc. .............................. $3,085
Multicare Companies, Inc. (The)............................. 3,489
------
$6,574
======
</TABLE>
(M)
PURCHASED AND WRITTEN OPTIONS. International Equity Portfolio may write covered
call and put options on its portfolio securities or foreign currencies. Premiums
are received and are recorded as liabilities. The liabilities are subsequently
adjusted to reflect the current value of the options written. Premiums received
from writing options which expire are treated as realized gains. Premiums
received from writing options which are exercised or are canceled in closing
purchase transactions are added to the proceeds or netted against the amount
paid on the transaction to determine the realized gain or loss. By writing a
covered call option, a Portfolio foregoes in exchange for the premium the
opportunity for capital appreciation above the exercise price should the market
price of the underlying security or foreign currency increase. By writing a
covered put option, a Portfolio, in exchange for the premium, accepts the risk
of a decline in the market value of the underlying security or foreign currency
below the exercise price.
The Portfolio may purchase call and put options on its portfolio securities or
foreign currencies. The Portfolio may purchase call options to protect against
an increase in the price of the security or foreign currency it anticipates
purchasing. The Portfolio may purchase put options on its securities or foreign
currencies to protect against a decline in the value of the security or foreign
currency or to close out covered written put positions. Risks may arise from an
imperfect correlation between the change in market value of the securities or
foreign currencies held by the Portfolio and the prices of options relating to
the securities or foreign currencies purchased or sold by the Portfolio and from
the possible lack of a liquid secondary market for an option. The maximum
exposure to loss for any purchased option is limited to the premium initially
paid for the option.
179
<PAGE> 180
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(N)
LOAN PARTICIPATIONS. High Yield Corporate Bond Portfolio invests in Loan
Participations. When the Portfolio purchases a Participation, the Portfolio
typically enters into a contractual relationship with the lender or third party
selling such Participation ("Selling Participant"), but not with the Borrower.
As a result, the Portfolio assumes the credit risk of the Borrower, the Selling
Participant and any other persons interpositioned between the Portfolio and the
Borrower ("Intermediate Participants"). The Portfolio may not directly benefit
from the collateral supporting the Senior Loan in which it has purchased the
Participation.
(O)
FEDERAL INCOME TAXES. Each of the Portfolios is treated as a separate entity for
federal income tax purposes. The Fund's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of the taxable income to the shareholders of
each Portfolio within the allowable time limits. Therefore, no federal income
tax provision is required.
Investment income received by a Portfolio from foreign sources may be subject to
foreign income taxes withheld at the source.
(P)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are
recorded on the ex-dividend date. For Cash Management Portfolio, dividends are
declared daily and paid monthly. Each of the other Portfolios intends to declare
and pay, as a dividend, substantially all of their net investment income and net
realized gains no less frequently than once a year. Income dividends and capital
gain distributions are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax differences" are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax basis
treatment; temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for federal tax purposes are reported
as dividends in excess of net investment income or distributions in excess of
net realized capital gains.
(Q)
ORGANIZATION COSTS. Costs incurred in connection with the initial organization
and registration of American Century Income & Growth, Dreyfus Large Company
Value, Eagle Asset Management Growth Equity and Lord Abbett Developing Growth
Portfolios of the Fund are amortized over a maximum period of 60 months
beginning with the commencement of operations of the respective Portfolios on
May 1, 1998. Organization costs for American Century Income & Growth, Dreyfus
Large Company Value, Eagle Asset Management Growth Equity and Lord Abbett
Developing Growth Portfolios, paid by, and reimbursable to, NYLIAC, aggregated
approximately $86,000. 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.
(R)
EXPENSES. Expenses with respect to the Fund are allocated to the individual
Portfolios in proportion to the net assets of the respective Portfolios when the
expenses are incurred except when direct allocations of expenses can be made.
180
<PAGE> 181
MAINSTAY VP SERIES FUND, INC.
(S)
USE OF ESTIMATES. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
--------------------------------------------------------------------------------
NOTE 3--Fees and Related Party Policies:
--------------------------------------------------------------------------------
(A)
INVESTMENT ADVISORY AND ADMINISTRATION FEES. MacKay Shields LLC ("MacKay
Shields") acts as investment adviser to Capital Appreciation, Cash Management,
Convertible, Government, High Yield Corporate Bond, International Equity, Total
Return and Value Portfolios under an Investment Advisory Agreement. MacKay
Shields is a registered investment adviser and an indirect wholly-owned
subsidiary of New York Life. As of May 1, 1999, Madison Square Advisors LLC
("Madison Square Advisors") acts as investment adviser to Bond and Growth Equity
Portfolios under an Investment Advisory Agreement. Madison Square Advisors is a
registered investment adviser and an indirect subsidiary of New York Life. Prior
to May 1, 1999, New York Life acted as investment adviser to the Bond and Growth
Equity Portfolios and was replaced by Madison Square Advisors under a
Substitution Agreement. The substitution had no effect on investment personnel,
investment strategies or fees of the Portfolios. Monitor Capital Advisors LLC
("Monitor") acts as investment adviser to Indexed Equity Portfolio under an
Investment Advisory Agreement. Monitor is a registered investment adviser and an
indirect wholly-owned subsidiary of New York Life. New York Life acts as
investment adviser to American Century Income & Growth, Dreyfus Large Company
Value, Eagle Asset Management Growth Equity and Lord Abbett Developing Growth
Portfolios under an Investment Advisory Agreement. New York Life selects and
employs Subadvisors for some of the Portfolios. American Century Investment
Management, Inc. serves as Subadvisor to the American Century Income & Growth
Portfolio; The Dreyfus Corporation serves as Subadvisor to the Dreyfus Large
Company Value Portfolio; Eagle Asset Management, Inc. serves as Subadvisor to
the Eagle Asset Management Growth Equity Portfolio; and Lord, Abbett & Co.
serves as Subadvisor to the Lord Abbett Developing Growth Portfolio.
NYLIAC is Administrator for the Fund.
The Fund, on behalf of each Portfolio, pays the Advisers and Administrator a
monthly fee for the services performed and the facilities furnished at an
approximate annual rate of the average daily net assets of each Portfolio as
follows:
<TABLE>
<CAPTION>
ADVISER ADMINISTRATOR
------- -------------
<S> <C> <C>
Capital Appreciation Portfolio.............................. 0.36% 0.20%
Cash Management Portfolio................................... 0.25% 0.20%
Convertible Portfolio....................................... 0.36% 0.20%
Government Portfolio........................................ 0.30% 0.20%
High Yield Corporate Bond Portfolio......................... 0.30% 0.20%
International Equity Portfolio.............................. 0.60% 0.20%
Total Return Portfolio...................................... 0.32% 0.20%
Value Portfolio............................................. 0.36% 0.20%
Bond Portfolio.............................................. 0.25% 0.20%
Growth Equity Portfolio..................................... 0.25% 0.20%
Indexed Equity Portfolio.................................... 0.10% 0.20%
American Century Income & Growth Portfolio.................. 0.50% 0.20%
Dreyfus Large Company Value Portfolio....................... 0.60% 0.20%
Eagle Asset Management Growth Equity Portfolio.............. 0.50% 0.20%
Lord Abbett Developing Growth Portfolio..................... 0.60% 0.20%
</TABLE>
181
<PAGE> 182
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(B)
DISTRIBUTOR. NYLIFE Distributors Inc. ("NYLIFE Distributors"), an indirect
wholly-owned subsidiary of New York Life, serves as the Fund's distributor and
principal underwriter (the "Distributor") pursuant to a Distribution agreement.
NYLIFE Distributors is not obligated to sell any specific amount of the Fund's
shares, and receives no compensation from the Fund pursuant to the Distribution
Agreement.
(C)
DIRECTORS FEES. Directors, other than those affiliated with New York Life,
MacKay Shields, Monitor or NYLIFE Distributors, are paid an annual fee of
$35,000, and $1,500 for each Board meeting and each Committee meeting attended
plus reimbursement for travel and out-of-pocket expenses. The Fund allocates
this expense in proportion to the net assets of the respective Portfolios.
(D)
CAPITAL. At June 30, 2000 NYLIAC was the beneficial owner of shares of the
following Portfolios with net asset values as follows:
<TABLE>
<S> <C>
Convertible Portfolio....................................... $12,792,236
American Century Income & Growth Portfolio.................. 12,268,551
Dreyfus Large Company Value Portfolio....................... 10,494,600
Eagle Asset Management Growth Equity Portfolio.............. 19,898,149
Lord Abbett Developing Growth Portfolio..................... 10,238,803
</TABLE>
These values represent 8.41%, 16.48%, 29.70%, 10.83% and 24.04%, respectively,
of the net assets of each respective Portfolio at June 30, 2000.
(E)
OTHER. Fees for the cost of legal services provided to the Fund by the Office of
General Counsel of New York Life are charged to the Portfolios. For the six
months ended June 30, 2000 these fees, in the following amounts, were included
in Professional fees shown on the Statement of Operations:
<TABLE>
<S> <C>
Capital Appreciation Portfolio.............................. $17,846
Cash Management Portfolio................................... 3,593
Convertible Portfolio....................................... 1,045
Government Portfolio........................................ 1,281
High Yield Corporate Bond Portfolio......................... 6,253
International Equity Portfolio.............................. 669
Total Return Portfolio...................................... 7,743
Value Portfolio............................................. 2,886
Bond Portfolio.............................................. 2,500
Growth Equity Portfolio..................................... 12,658
Indexed Equity Portfolio.................................... 14,558
American Century Income & Growth Portfolio.................. 636
Dreyfus Large Company Value Portfolio....................... 305
Eagle Asset Management Growth Equity Portfolio.............. 960
Lord Abbett Developing Growth Portfolio..................... 372
</TABLE>
182
<PAGE> 183
MAINSTAY VP SERIES FUND, INC.
NOTE 4--Federal Income Tax:
--------------------------------------------------------------------------------
At December 31, 1999, for federal income tax purposes, capital loss
carryforwards, as shown in the table below, were available to the extent
provided by regulations to offset future realized gains of each respective
Portfolio through the years indicated. To the extent that these loss
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 Portfolios intend to elect, to the extent
provided by regulations, to treat certain qualifying capital losses that arose
during the year after October 31, 1999 as if they arose on January 1, 2000.
<TABLE>
<CAPTION>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE THROUGH AMOUNT (000'S) DEFERRED (000'S)
----------------- -------------- ----------------
<S> <C> <C> <C>
Convertible Portfolio....................................... $ 0 $ 752
====== ======
Government Portfolio........................................ 2004 $ 812
2007 7,885
------
$8,697 $ 64
====== ======
High Yield Corporate Bond Portfolio......................... $ 0 $ 518
====== ======
Value Portfolio............................................. 2007 $6,295 $1,894
====== ======
Bond Portfolio.............................................. 2007 $3,451 $ 0
====== ======
Dreyfus Large Company Value Portfolio....................... 2006 $ 929 $ 80
====== ======
</TABLE>
International Equity Portfolio intends to elect to treat for federal income tax
purposes approximately $216,269 of qualifying foreign exchange losses that arose
during the year after October 31, 1999 as if they arose on January 1, 2000. High
Yield Corporate Bond, International Equity, American Century Income & Growth,
Dreyfus Large Company Value, Eagle Asset Management Growth Equity and Lord
Abbett Developing Growth Portfolios utilized $4,315,968, $427,458, $220,843,
$220,233, $1,027,856 and $268,493, respectively, of capital loss carryforwards
during the year ended December 31, 1999.
--------------------------------------------------------------------------------
NOTE 5--Line of Credit:
--------------------------------------------------------------------------------
Capital Appreciation, Convertible, Government, High Yield Corporate Bond,
International Equity, Total Return, Value, Bond, Growth Equity, Indexed Equity,
American Century Income & Growth, Dreyfus Large Company Value, Eagle Asset
Management Growth Equity and Lord Abbett Developing Growth Portfolios
participate in a line of credit of $375,000,000 with a syndicate of banks in
order to secure a source of funds for temporary purposes to meet unanticipated
or excessive shareholder redemption requests. The Portfolios pay a commitment
fee, at an annual rate of 0.075% of the average commitment amount, regardless of
usage to The Bank of New York, which acts as agent to the syndicate. Such
commitment fees are allocated amongst the Portfolios based upon net assets and
other factors. Interest on any revolving credit loan is charged based upon the
Federal Funds Advances rate. There were no borrowings on this line of credit
during the six months ended June 30, 2000.
183
<PAGE> 184
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 6--Purchases and Sales of Securities (in 000's):
--------------------------------------------------------------------------------
During the six month period ended June 30, 2000, purchases and sales of
securities, other than securities subject to repurchase transactions and
short-term securities, were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION CONVERTIBLE GOVERNMENT
PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Securities......................... $ -- $ -- $ -- $ -- $216,469 $236,923
All others......................................... 511,682 383,943 133,504 86,177 4,909 21,303
------------------------------------------------------------------
Total.............................................. $511,682 $383,943 $133,504 $86,177 $221,378 $258,226
==================================================================
</TABLE>
<TABLE>
<CAPTION>
AMERICAN CENTURY
GROWTH EQUITY INDEXED EQUITY INCOME & GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Securities......................... $ -- $ -- $ -- $ -- $ -- $ --
All others......................................... 576,910 484,895 152,938 29,495 34,581 21,022
------------------------------------------------------------------
Total.............................................. $576,910 $484,895 $152,938 $29,495 $ 34,581 $ 21,022
==================================================================
</TABLE>
--------------------------------------------------------------------------------
NOTE 7--Capital Share Transactions (in 000's):
--------------------------------------------------------------------------------
Transactions in capital shares for the six month period ended June 30, 2000 and
the year ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION CASH MANAGEMENT CONVERTIBLE
PORTFOLIO PORTFOLIO PORTFOLIO
2000 1999 2000 1999 2000 1999
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold........................................ 2,701 16,051 528,998 977,614 4,052 1,452
Shares issued in reinvestment of dividends and
distributions.................................... 5,739 1,843 8,122 16,403 519 1,003
-----------------------------------------------------------------
8,440 17,894 537,120 994,017 4,571 2,455
Shares redeemed.................................... (2,774) (8,310) (683,003) (771,097) (157) (561)
-----------------------------------------------------------------
Net increase (decrease)............................ 5,666 9,584 (145,883) 222,920 4,414 1,894
=================================================================
</TABLE>
<TABLE>
<CAPTION>
AMERICAN CENTURY
GROWTH EQUITY INDEXED EQUITY INCOME & GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
2000 1999 2000 1999 2000 1999
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold........................................ 4,936 6,274 10,279 23,660 1,187 2,537
Shares issued in reinvestment of dividends and
distributions.................................... -- 4,477 127 1,162 8 32
---------------------------------------------------------------
4,936 10,751 10,406 24,822 1,195 2,569
Shares redeemed.................................... (3,021) (5,689) (6,375) (11,515) (161) (301)
---------------------------------------------------------------
Net increase....................................... 1,915 5,062 4,031 13,307 1,034 2,268
===============================================================
</TABLE>
------------
(a) Less than one thousand shares.
184
<PAGE> 185
MAINSTAY VP SERIES FUND, INC.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
CORPORATE BOND EQUITY TOTAL RETURN VALUE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ -- $ -- $ -- $ -- $386,191 $399,451 $ -- $ -- $36,827 $ 53,738
238,306 192,299 11,738 9,880 237,978 207,871 138,556 166,667 54,903 81,418
--------------------------------------------------------------------------------------------------------------------
$238,306 $192,299 $ 11,738 $ 9,880 $624,169 $607,322 $138,556 $166,667 $91,730 $135,156
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET
DREYFUS MANAGEMENT LORD ABBETT
LARGE COMPANY VALUE GROWTH EQUITY DEVELOPING GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ -- $ -- $ -- $ -- $ -- $ --
27,489 22,514 291,550 191,425 27,828 8,871
----------------------------------------------------------------------
$ 27,489 $ 22,514 $291,550 $191,425 $ 27,828 $ 8,871
======================================================================
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
GOVERNMENT CORPORATE BOND EQUITY TOTAL RETURN VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
2000 1999 2000 1999 2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
604 7,883 2,138 7,140 900 2,099 1,642 4,537 440 1,885
2 931 21 8,441 84 115 1,870 1,617 --(a) 276
---------------------------------------------------------------------------------------------------------------
606 8,814 2,159 15,581 984 2,214 3,512 6,154 440 2,161
(7,448) (2,516) (3,987) (3,708) (567) (607) (1,285) (1,649) (2,561) (2,967)
---------------------------------------------------------------------------------------------------------------
(6,842) 6,298 (1,828) 11,873 417 1,607 2,227 4,505 (2,121) (806)
===============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
BOND
PORTFOLIO
2000 1999
------------------------
<S> <C>
437 4,522
-- 1,412
------------------------
437 5,934
(4,002) (3,431)
------------------------
(3,565) 2,503
========================
</TABLE>
<TABLE>
<CAPTION>
EAGLE ASSET
DREYFUS MANAGEMENT LORD ABBETT
LARGE COMPANY VALUE GROWTH EQUITY DEVELOPING GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
709 1,141 5,582 1,987 1,608 1,396
-- 21 375 167 110 45
---------------------------------------------------------------------------------
709 1,162 5,957 2,154 1,718 1,441
(166) (187) (230) (214) (246) (476)
---------------------------------------------------------------------------------
543 975 5,727 1,940 1,472 965
=================================================================================
</TABLE>
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