-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R0AtT0EIRK3lwX2v8NQizCNqHnwYBKWK72hiBa1EHOsQzr5vwwgntACpZ3FezkVm tY4u9KmyeIPz/NzdNBTXnQ== /in/edgar/work/20000906/0000950123-00-008306/0000950123-00-008306.txt : 20000922 0000950123-00-008306.hdr.sgml : 20000922 ACCESSION NUMBER: 0000950123-00-008306 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000906 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW YORK LIFE INS & ANNUITY CORP VAR UNIV LIFE SEP ACC I CENTRAL INDEX KEY: 0000906982 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 133044743 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07798 FILM NUMBER: 717303 BUSINESS ADDRESS: STREET 1: 51 MADISON AVE 10TH FL STREET 2: C/O NEW YORK LIFE INSURANCE & ANNUITY CO CITY: NEW YORK STATE: NY ZIP: 10010 BUSINESS PHONE: 2125765066 MAIL ADDRESS: STREET 1: 51 MADISON AVENUE STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10011 N-30D 1 y37559n-30d.txt NYLIFE VUL 1 TABLE OF CONTENTS President's Letter.......................................... 2 Performance Summaries....................................... 4 NYLIAC Variable Universal Life Separate Account-I Statement of Assets and Liabilities......................... 6 Statement of Operations..................................... 8 Statement of Changes in Total Equity........................ 10 Notes to Financial Statements............................... 15 MainStay VP Series Fund, Inc. Chairman's Letter........................................... 30 Portfolio Managers' Comments................................ 31 Glossary.................................................... 63 Capital Appreciation Portfolio.............................. 68 Cash Management Portfolio................................... 72 Convertible Portfolio....................................... 77 Government Portfolio........................................ 83 High Yield Corporate Bond Portfolio......................... 87 International Equity Portfolio.............................. 98 Total Return Portfolio...................................... 105 Value Portfolio............................................. 113 Bond Portfolio.............................................. 117 Growth Equity Portfolio..................................... 121 Indexed Equity Portfolio.................................... 126 American Century Income & Growth Portfolio.................. 136 Dreyfus Large Company Value Portfolio....................... 143 Eagle Asset Management Growth Equity Portfolio.............. 147 Notes to Financial Statements............................... 151 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 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 T. Rowe Price Equity Income Portfolio
1 2 LETTER FROM THE PRESIDENT - -------------------------------------------------------------------------------- TO THE OWNERS OF NYLIAC VARIABLE UNIVERSAL LIFE, NYLIAC VARIABLE UNIVERSAL LIFE 2000 AND NYLIAC SURVIVORSHIP VARIABLE UNIVERSAL LIFE POLICIES: I am pleased to present the NYLIAC Variable Universal Life (VUL), Variable Universal Life 2000 (VUL 2000) and Survivorship Variable Universal Life (SVUL) Semi-Annual Report for the six-month period ending June 30, 2000. NYLIAC Variable Universal Life Separate Account-I serves as the Separate Account for the NYLIAC VUL, VUL 2000 and SVUL policies. This Semi-Annual Report contains valuable information, such as mid-year performance data and Separate Account financial statements for each of the 22 Investment Divisions in this Separate Account. This 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 The Universal Institutional Funds, Inc. T. Rowe Price Equity Series, Inc. LIFE INSURANCE PROTECTION WITH A VARIETY OF INVESTMENT OPTIONS As part of your long-term financial plan, your NYLIAC variable universal life insurance policy offers life insurance protection with a variety of investment options. The 22 investment divisions are managed by several of today's premier fund management firms, including: MacKay Shields, Fidelity Investments, Dreyfus, Janus, T. Rowe Price and American Century. As of May 19, 2000 all 22 investment divisions, previously available only with our newest product (VUL 2000), became available with all three variable life products, enabling every policyowner to take advantage of new investment opportunities. (Please refer to the appropriate product Prospectus for complete descriptions of the Investment Divisions.) This extensive selection of diversified investment offerings allows you to customize your fund selection to suit your individual investment style. As a New York Life variable life insurance policyowner, you can benefit from the experience and professional management of leading investment advisors who work on your behalf. As always, your financial well-being is our goal. The following is a brief overview of the economic conditions that may have affected the performance of the Investment Divisions during the first two quarters of 2000. ECONOMIC ENVIRONMENT MID-YEAR REVIEW Despite continuing market turbulence over the first six months of 2000, both large- and small-capitalization stocks ended the period relatively close to where they began. As the millennium fervor subsided, large-cap stocks drifted downward and the market focused on smaller technology issues through the beginning of March. By mid-March, however, the directions of the two markets had shifted, with large-cap stocks improving and NASDAQ issues beginning an extended decline. Throughout the first half of 2000, rising interest rates, surprising inflation reports, landmark antitrust decisions, and continuing competitive pressures helped shape results for domestic and international investors. After some of the most spectacular daily gains and losses on record, overall results for the six-month period tended to be less remarkable. A strong U.S. dollar weakened most international returns. The real Gross Domestic Product (GDP) grew by 5.2% in the first half of 2000 and unemployment went down one percentage point to 4.0%, the lowest rate in ten years. To slow the rate of U.S. economic growth and keep inflation in check, the Federal Reserve increased the targeted federal funds rate by 25 basis points in both February and March and by 50 basis points in May. The net impact on bond investors was negative, although the government's initiative to repurchase Treasury securities helped reduce supply and stabilize government-bond prices. With mounting evidence that economic growth may be slowing, the Federal Reserve failed to take any rate action at the end of June, which may have a positive impact in the months ahead. FUNDING YOUR VARIABLE LIFE INSURANCE POLICY During market periods such as this, one can appreciate the flexibility of your variable universal life insurance policy. One of the most attractive features of the variable universal policies is the ability, within limits, to create your own payment schedule, indicating the amount and frequency of premium payments you intend to make. The policy's fees and charges are deducted from the cash value, and your life insurance coverage remains in effect as long as your cash surrender value is sufficient to cover these deductions. To help optimize potential investment results for the future, you may be able to increase your planned premium payments or make 2 3 additional unplanned premium payments. (Note: Higher premium funding may maximize the policy's investment potential and reduce the likelihood that your policy could terminate due to lower than anticipated investment performance.) Your registered representative can assist you in evaluating the effect(s) of different premium funding options so that you can make an informed choice. NYLIAC VUL SEPARATE ACCOUNT-I PERFORMANCE During the volatile six-month period ending June 30, 2000, VUL 2000 policies realized positive investment returns in 12 of the 22 Investment Divisions. VUL and SVUL policies experienced positive investment returns in 11 of the 22 Investment Divisions. (Please refer to the performance summaries on the following pages for details on the policies' Investment Divisions and their returns.(1)) We owe our financial strength to you, our valued clients, who continue to place your trust in us. Our financial strength, in turn, allows us to keep our financial promises to you. Ultimately, we are dedicated to one overriding purpose: to be there when our clients need us. Thank you for making us "The Company You Keep(R)". /s/ FREDERICK J. SIEVERT Frederick J. Sievert President New York Life Insurance and Annuity Corporation (A Delaware Corporation) (1) Past performance is not indicative of future results. 3 4 NYLIAC VARIABLE UNIVERSAL LIFE 2000 PERFORMANCE SUMMARY AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDING JUNE 30, 2000(2) - --------------------------------------------------------------------------------
INVESTMENT SINCE DIVISION INVESTMENT INCEPTION YEAR TO 1 3 5 10 DIVISION INVESTMENT DIVISION DATE(1) DATE YEAR YEARS YEARS YEARS INCEPTION Alger American Small Capitalization 09/20/88 -0.26% 25.90% 21.79% 15.46% 15.84% 19.29% Calvert Social Balanced 09/02/86 2.46% 9.09% 12.80% 14.35% 11.56% 10.87% Fidelity VIP II Contrafund(R) 01/03/95 -1.56% 9.67% 20.43% 21.22% N/A 24.01% Fidelity VIP Equity-Income 10/09/86 -2.91% -8.63% 7.80% 13.73% 14.11% 12.34% Janus Aspen Series Balanced 09/13/93 0.46% 13.35% 22.45% 21.49% N/A 18.50% Janus Aspen Series Worldwide Growth 09/13/93 1.81% 48.12% 29.86% 31.19% N/A 27.00% MAINSTAY VP SERIES FUNDS: American Century Income & Growth 05/01/98 -3.82% 3.16% N/A N/A N/A 9.99% Bond 01/23/84 2.84% 2.95% 5.24% 5.16% 7.00% 8.62% Capital Appreciation 01/29/93 2.03% 18.73% 24.06% 23.76% N/A 20.21% Cash Management(3) 01/29/93 2.62% 4.95% 4.69% 4.67% N/A 4.21% Convertible 10/01/96 5.73% 26.24% 19.02% N/A N/A 17.84% Dreyfus Large Company Value 05/01/98 -3.43% -5.39% N/A N/A N/A 2.33% Eagle Asset Management Growth Equity 05/01/98 12.36% 62.06% N/A N/A N/A 43.02% Government 01/29/93 4.17% 4.00% 5.58% 5.27% N/A 5.23% Growth Equity 01/23/84 2.03% 17.20% 22.56% 23.78% 17.67% 14.69% High Yield Corporate Bond 05/01/95 1.71% 3.49% 7.16% 10.56% N/A 10.53% Indexed Equity 01/29/93 -0.98% 6.30% 18.71% 22.77% N/A 18.89% International Equity 05/01/95 -9.10% 14.48% 10.35% 12.89% N/A 11.32% Total Return 01/29/93 1.71% 13.01% 17.32% 16.70% N/A 14.51% Value 05/01/95 -5.61% -10.37% 2.35% 10.31% N/A 10.81% Morgan Stanley UIF Emerging Markets Equity 10/01/96 -5.48% 33.58% 4.17% N/A N/A 8.46% T. Rowe Price Equity Income 03/31/94 -2.99% -10.67% 6.52% 13.81% N/A 14.67%
(1)The Inception Date of each Investment Division varies, as shown by the dates above. VUL 2000 was first offered on 9/28/99. For the period from the Inception Date, until product introduction, the performance summary assumes that the VUL 2000 policy was available, which it was not. (2)The values shown are unaudited. (3)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. - -------------------------------------------------------------------------------- Past performance 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 your contract, when surrendered, may be worth more or less than the original cost. Performance reflects the percentage change for the period shown with capital gains and dividends reinvested. Performance reflects the deduction of the policy's current mortality and expense risk charge (separate account charge) of (0.50%) and total fund operating expenses. However, it does not reflect the policy fees or charges. These include the cost of insurance, surrender charges, monthly contract charges, separate account administrative charges, sales expense charges, and state and federal tax charges. Had these expenses been deducted, total returns would have been lower. NYLIAC assumed a portion of the expenses of the MainStay VP Convertible and the MainStay VP International Equity Investment Divisions until 12/31/98. This expense limitation was in effect until 12/31/97 for the MainStay VP High Yield Corporate Bond and MainStay VP Value Investment Divisions, and until 12/31/96 for all other MainStay VP Investment Divisions. In addition, Janus Capital Corporation has agreed to reduce the advisory fee for the Janus Aspen Series Balanced and the Janus Aspen Series Worldwide Growth Investment Divisions to the level of the corresponding Janus retail mutual fund and Morgan Stanley Dean Witter Investment Management Inc. has voluntarily waived receipt of the advisory fee and agreed to reimburse the Morgan Stanley UIF Emerging Markets Equity Portfolio to the extent that the Total Fund Annual Expenses of the Portfolio exceed 1.75%. Had these expenses not been assumed or reduced, the total returns for these Investment Divisions would have been lower. 4 5 NYLIAC VARIABLE UNIVERSAL LIFE AND SURVIVORSHIP VARIABLE UNIVERSAL LIFE PERFORMANCE SUMMARY AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDING JUNE 30, 2000(5) - --------------------------------------------------------------------------------
INVESTMENT SINCE DIVISION INVESTMENT INCEPTION YEAR TO 1 3 5 10 DIVISION INVESTMENT DIVISION DATE(4) DATE YEAR YEARS YEARS YEARS INCEPTION Alger American Small Capitalization 10/21/96 -0.36% 25.65% 21.54% N/A N/A 16.16% Calvert Social Balanced 11/12/96 2.36% 8.87% 12.57% N/A N/A 13.09% Fidelity VIP II Contrafund(R) 10/21/96 -1.66% 9.45% 20.18% N/A N/A 20.74% Fidelity VIP Equity-Income 10/21/96 -3.01% -8.81% 7.58% N/A N/A 11.58% Janus Aspen Series Balanced 10/21/96 0.36% 13.12% 22.20% N/A N/A 21.80% Janus Aspen Series Worldwide Growth 10/18/96 1.71% 47.82% 29.60% N/A N/A 30.14% MAINSTAY VP SERIES FUNDS: American Century Income & Growth 05/25/00 N/A N/A N/A N/A N/A 1.86% Bond 06/16/94 2.74% 2.74% 5.02% 4.94% N/A 5.78% Capital Appreciation 12/23/93 1.93% 18.49% 23.80% 23.50% N/A 20.07% Cash Management(6) 12/06/93 2.51% 4.73% 4.47% 4.46% N/A 4.27% Convertible 10/15/96 5.62% 25.98% 18.78% N/A N/A 17.60% Dreyfus Large Company Value 06/15/00 N/A N/A N/A N/A N/A N/A Eagle Asset Management Growth Equity 05/23/00 N/A N/A N/A N/A N/A 16.18% Government 12/16/93 4.07% 3.79% 5.36% 5.05% N/A 4.96% Growth Equity 06/07/94 1.93% 16.96% 22.31% 23.52% N/A 22.02% High Yield Corporate Bond 05/01/95 1.58% 3.28% 6.94% 10.34% N/A 10.30% Indexed Equity 01/03/94 -1.08% 6.08% 18.46% 22.51% N/A 21.22% International Equity 05/01/95 -9.19% 14.25% 10.12% 12.66% N/A 11.09% Total Return 12/17/93 1.62% 12.78% 17.08% 16.46% N/A 14.32% Value 05/01/95 -5.71% -10.55% 2.14% 10.08% N/A 10.59% Morgan Stanley UIF Emerging Markets Equity 10/21/96 -5.58% 33.31% 3.96% N/A N/A 9.06% T. Rowe Price Equity Income 06/12/00 N/A N/A N/A N/A N/A N/A
(4)Performance is calculated as of the date money was first received in each Investment Division of the NYLIAC Variable Universal Life Separate Account I. For periods prior to June 5, 1998, when the NYLIAC Survivorship Variable Universal Life Insurance Policy became available, performance assumes that these Policies were available and that the Investment Divisions were offered under the NYLIAC Survivorship Variable Universal Life Policies, which they were not. (5)The values shown are unaudited. (6)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. - -------------------------------------------------------------------------------- Past performance 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 your contract, when surrendered, may be worth more or less than the original cost. Performance reflects the percentage change for the period shown with capital gains and dividends reinvested. Performance reflects the deduction of the policy's current mortality and expense risk charge (0.60%), the administration fee (0.10%) and the total fund operating expenses. However, it does not reflect the policy fees or charges. These include the cost of insurance, surrender charges, monthly contract charge, sales expense charge, the charge per $1,000 of initial face amount (applicable to NYLIAC SVUL Policies only) and state and federal tax charges. Had these expenses been deducted, total returns would have been lower. NYLIAC assumed a portion of the expenses of the MainStay VP Convertible and the MainStay VP International Equity Investment Divisions until 12/31/98. This expense limitation was in effect until 12/31/97 for the MainStay VP High Yield Corporate Bond and MainStay VP Value Investment Divisions, and until 12/31/96 for all other MainStay VP Investment Divisions. In addition, Janus Capital Corporation has agreed to reduce the advisory fee for the Janus Aspen Series Balanced and the Janus Aspen Series Worldwide Growth Investment Divisions to the level of the corresponding Janus retail mutual fund and Morgan Stanley Dean Witter Investment Management Inc. has voluntarily waived receipt of the advisory fee and agreed to reimburse the Morgan Stanley UIF Emerging Markets Equity Portfolio to the extent that the Total Fund Annual Expenses of the Portfolio exceed 1.75%. Had these expenses not been assumed or reduced, the total returns for these Investment Divisions would have been lower. 5 6 STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited)
MAINSTAY VP MAINSTAY VP CAPITAL CASH MAINSTAY VP MAINSTAY VP APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT ---------------------------------------------------------------- ASSETS: Investment at net asset value.................. $259,965,164 $ 24,570,814 $ 5,457,113 $ 3,784,853 LIABILITIES: Liability to New York Life Insurance and Annuity Corporation for mortality and expense risk charges................................. 402,131 50,911 7,593 6,520 ------------ ------------ ------------ ------------ Total equity............................... $259,563,033 $ 24,519,903 $ 5,449,520 $ 3,778,333 ============ ============ ============ ============ TOTAL EQUITY REPRESENTED BY: Equity of Policyowners: VUL and SVUL policies........................ $251,702,404 $ 23,107,565 $ 4,438,839 $ 3,705,337 VUL 2000 policies............................ 7,860,629 1,412,338 1,010,681 72,996 ------------ ------------ ------------ ------------ Total equity............................... $259,563,033 $ 24,519,903 $ 5,449,520 $ 3,778,333 ============ ============ ============ ============ VUL and SVUL variable accumulation unit value...................................... $ 32.99 $ 1.32 $ 18.25 $ 13.73 ============ ============ ============ ============ VUL 2000 variable accumulation unit value.... $ 12.36 $ 1.03 $ 12.71 $ 10.47 ============ ============ ============ ============ Identified Cost of Investment.................... $245,818,177 $ 24,570,813 $ 5,147,429 $ 3,809,689 ============ ============ ============ ============
AMERICAN ALGER CENTURY DREYFUS LARGE EAGLE ASSET AMERICAN INCOME & COMPANY MANAGEMENT SMALL GROWTH VALUE GROWTH EQUITY CAPITALIZATION ---------------------------------------------------------------- ASSETS: Investment at net asset value.................. $ 516,264 $ 193,131 $ 1,356,822 $ 18,463,411 LIABILITIES: Liability to New York Life Insurance and Annuity Corporation for mortality and expense risk charges................................. 434 178 880 28,814 ------------ ------------ ------------ ------------ Total equity............................... $ 515,830 $ 192,953 $ 1,355,942 $ 18,434,597 ============ ============ ============ ============ TOTAL EQUITY REPRESENTED BY: Equity of Policyowners: VUL and SVUL policies........................ $ 188,174 $ 5,107 $ 264,126 $ 16,296,391 VUL 2000 policies............................ 327,656 187,846 1,091,816 2,138,206 ------------ ------------ ------------ ------------ Total equity............................... $ 515,830 $ 192,953 $ 1,355,942 $ 18,434,597 ============ ============ ============ ============ VUL and SVUL variable accumulation unit value...................................... $ 10.19 $ 9.44 $ 11.62 $ 17.40 ============ ============ ============ ============ VUL 2000 variable accumulation unit value.... $ 10.52 $ 9.98 $ 15.62 $ 13.03 ============ ============ ============ ============ Identified Cost of Investment.................... $ 513,102 $ 197,172 $ 1,304,548 $ 17,956,818 ============ ============ ============ ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 6 7 NYLIAC VUL SEPARATE ACCOUNT-I
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY ----------------------------------------------------------------------------------------------------------------- $ 28,183,751 $ 6,562,181 $ 50,291,239 $ 27,628,629 $ 7,891,952 $ 74,319,428 $141,814,725 47,758 10,397 81,207 46,858 13,429 114,573 214,440 ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 28,135,993 $ 6,551,784 $ 50,210,032 $ 27,581,771 $ 7,878,523 $ 74,204,855 $141,600,285 ============ ============ ============ ============ ============ ============ ============ $ 27,413,079 $ 6,310,619 $ 49,324,282 $ 27,187,607 $ 7,746,646 $ 70,902,209 $133,242,119 722,914 241,165 885,750 394,164 131,877 3,302,646 8,358,166 ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 28,135,993 $ 6,551,784 $ 50,210,032 $ 27,581,771 $ 7,878,523 $ 74,204,855 $141,600,285 ============ ============ ============ ============ ============ ============ ============ $ 16.61 $ 17.23 $ 24.00 $ 16.83 $ 14.05 $ 33.48 $ 34.90 ============ ============ ============ ============ ============ ============ ============ $ 10.53 $ 10.51 $ 11.64 $ 9.98 $ 10.30 $ 12.50 $ 11.35 ============ ============ ============ ============ ============ ============ ============ $ 30,089,007 $ 6,353,100 $ 39,666,502 $ 29,369,031 $ 8,212,372 $ 69,671,015 $140,527,731 ============ ============ ============ ============ ============ ============ ============
JANUS ASPEN MORGAN STANLEY CALVERT FIDELITY FIDELITY JANUS ASPEN SERIES UIF T. ROWE SOCIAL VIP II VIP SERIES WORLDWIDE EMERGING MARKETS PRICE BALANCED CONTRAFUND(R) EQUITY-INCOME BALANCED GROWTH EQUITY EQUITY INCOME ----------------------------------------------------------------------------------------------------------------- $ 1,414,369 $ 44,929,642 $ 14,123,054 $ 34,670,510 $ 73,652,324 $ 8,957,228 $ 276,236 1,948 66,771 24,960 50,520 106,937 12,398 277 ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 1,412,421 $ 44,862,871 $ 14,098,094 $ 34,619,990 $ 73,545,387 $ 8,944,830 $ 275,959 ============ ============ ============ ============ ============ ============ ============ $ 1,239,471 $ 41,366,602 $ 13,154,890 $ 28,432,950 $ 66,583,290 $ 8,025,500 $ 8,951 172,950 3,496,269 943,204 6,187,040 6,962,097 919,330 267,008 ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 1,412,421 $ 44,862,871 $ 14,098,094 $ 34,619,990 $ 73,545,387 $ 8,944,830 $ 275,959 ============ ============ ============ ============ ============ ============ ============ $ 15.64 $ 20.07 $ 14.99 $ 20.73 $ 26.53 $ 13.78 $ 9.50 ============ ============ ============ ============ ============ ============ ============ $ 10.99 $ 11.66 $ 10.27 $ 11.62 $ 14.36 $ 14.05 $ 9.54 ============ ============ ============ ============ ============ ============ ============ $ 1,374,862 $ 44,735,751 $ 14,392,046 $ 32,724,172 $ 69,244,014 $ 7,320,006 $ 282,604 ============ ============ ============ ============ ============ ============ ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 7 8 STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited)
MAINSTAY VP MAINSTAY VP CAPITAL CASH MAINSTAY VP MAINSTAY VP APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT ---------------------------------------------------------------- INVESTMENT INCOME (LOSS): Dividend income................................ $ -- $ 771,058 $ -- $ 786 Mortality and expense risk charges............. (850,542) (93,633) (14,525) (12,589) ------------- ------------- ------------- ------------- Net investment income (loss)............... (850,542) 677,425 (14,525) (11,803) ------------- ------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS): Proceeds from sale of investments.............. 48,673,672 348,544,047 105,225 843,762 Cost of investments sold....................... (40,627,750) (348,543,991) (93,940) (924,036) ------------- ------------- ------------- ------------- Net realized gain (loss) on investments.... 8,045,922 56 11,285 (80,274) Realized gain distribution received............ 12,134,495 -- 218,280 -- Change in unrealized appreciation (depreciation) on investments................ (14,723,016) -- 6,684 238,503 ------------- ------------- ------------- ------------- Net gain (loss) on investments............. 5,457,401 56 236,249 158,229 ------------- ------------- ------------- ------------- Increase (decrease) attributable to mortality and expense risks assumed by New York Life Insurance and Annuity Corporation and retained by the Separate Account............. 30,286 (1,029) (30) (261) ------------- ------------- ------------- ------------- Net increase (decrease) in total equity resulting from operations................ $ 4,637,145 $ 676,452 $ 221,694 $ 146,165 ============= ============= ============= =============
AMERICAN ALGER CENTURY DREYFUS LARGE EAGLE ASSET AMERICAN INCOME & COMPANY MANAGEMENT SMALL GROWTH VALUE GROWTH EQUITY CAPITALIZATION ---------------------------------------------------------------- INVESTMENT INCOME (LOSS): Dividend income................................ $ -- $ -- $ -- $ -- Mortality and expense risk charges............. (605) (270) (1,231) (68,904) ------------- ------------- ------------- ------------- Net investment income (loss)............... (605) (270) (1,231) (68,904) ------------- ------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS): Proceeds from sale of investments.............. 11,325 2,976 29,911 388,465,150 Cost of investments sold....................... (11,562) (3,029) (25,210) (393,232,050) ------------- ------------- ------------- ------------- Net realized gain (loss) on investments.... (237) (53) 4,701 (4,766,900) Realized gain distribution received............ 405 -- 29,570 5,671,947 Change in unrealized appreciation (depreciation) on investments................ 2,142 (4,239) 49,776 71,867 ------------- ------------- ------------- ------------- Net gain (loss) on investments............. 2,310 (4,292) 84,047 976,914 ------------- ------------- ------------- ------------- Increase (decrease) attributable to mortality and expense risks assumed by New York Life Insurance and Annuity Corporation and retained by the Separate Account............. 3 5 (30) 5,543 ------------- ------------- ------------- ------------- Net increase (decrease) in total equity resulting from operations................ $ 1,708 $ (4,557) $ 82,786 $ 913,553 ============= ============= ============= =============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 8 9 NYLIAC VUL SEPARATE ACCOUNT-I
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY ----------------------------------------------------------------------------------------------------------------- $ 7,782 $ -- $ 3,872 $ 408 $ -- $ -- $ -- (93,546) (22,031) (168,010) (94,678) (25,946) (235,246) (429,446) ------------- ------------- ------------- ------------- ------------- ------------- ------------- (85,764) (22,031) (164,138) (94,270) (25,946) (235,246) (429,446) ------------- ------------- ------------- ------------- ------------- ------------- ------------- 1,199,997 3,093,447 1,883,514 1,451,795 427,469 23,339,121 162,158,893 (1,334,681) (2,698,907) (1,014,355) (1,294,419) (465,853) (17,301,137) (156,219,670) ------------- ------------- ------------- ------------- ------------- ------------- ------------- (134,684) 394,540 869,159 157,376 (38,384) 6,037,984 5,939,223 1,263 106,758 2,325,829 -- -- -- 306,713 649,641 (1,044,634) (2,234,040) (1,750,895) 272,286 (4,561,546) (5,831,115) ------------- ------------- ------------- ------------- ------------- ------------- ------------- 516,220 (543,336) 960,948 (1,593,519) 233,902 1,476,438 414,821 ------------- ------------- ------------- ------------- ------------- ------------- ------------- (689) 1,206 3,477 4,097 (417) 8,140 12,408 ------------- ------------- ------------- ------------- ------------- ------------- ------------- $ 429,767 $ (564,161) $ 800,287 $ (1,683,692) $ 207,539 $ 1,249,332 $ (2,217) ============= ============= ============= ============= ============= ============= =============
JANUS ASPEN MORGAN STANLEY CALVERT FIDELITY FIDELITY JANUS ASPEN SERIES UIF T. ROWE SOCIAL VIP II VIP SERIES WORLDWIDE EMERGING MARKETS PRICE BALANCED CONTRAFUND(R) EQUITY-INCOME BALANCED GROWTH EQUITY EQUITY INCOME ----------------------------------------------------------------------------------------------------------------- $ -- $ 134,244 $ 221,583 $ 257,696 $ 90,439 $ -- $ 2,288 (3,746) (140,318) (47,000) (97,489) (223,682) (28,120) (443) ------------- ------------- ------------- ------------- ------------- ------------- ------------- (3,746) (6,074) 174,583 160,207 (133,243) (28,120) 1,845 ------------- ------------- ------------- ------------- ------------- ------------- ------------- 50,608 9,319,547 49,713,471 199,254 13,772,936 1,214,698 46,048 (52,570) (6,570,538) (49,936,100) (131,542) (11,908,018) (864,856) (48,665) ------------- ------------- ------------- ------------- ------------- ------------- ------------- (1,962) 2,749,009 (222,629) 67,712 1,864,918 349,842 (2,617) -- 4,873,050 834,803 1,928,693 958,384 -- 3,126 41,986 (8,229,105) (752,787) (2,023,170) (1,965,443) (830,879) (4,818) ------------- ------------- ------------- ------------- ------------- ------------- ------------- 40,024 (607,046) (140,613) (26,765) 857,859 (481,037) (4,309) ------------- ------------- ------------- ------------- ------------- ------------- ------------- 27 4,792 1,162 1,052 7,083 1,518 -- ------------- ------------- ------------- ------------- ------------- ------------- ------------- $ 36,305 $ (608,328) $ 35,132 $ 134,494 $ 731,699 $ (507,639) $ (2,464) ============= ============= ============= ============= ============= ============= =============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 9 10 STATEMENT OF CHANGES IN TOTAL EQUITY For the six months ended June 30, 2000 and the year ended December 31, 1999 (Unaudited)
MAINSTAY VP MAINSTAY VP CAPITAL APPRECIATION CASH MANAGEMENT ------------------------------ ------------------------------ 2000 1999 2000 1999 ------------------------------------------------------------- INCREASE (DECREASE) IN TOTAL EQUITY: Operations: Net investment income (loss).................. $ (850,542) $ (1,325,374) $ 677,425 $ 883,422 Net realized gain (loss) on investments....... 8,045,922 47,122,361 56 (123) Realized gain distribution received........... 12,134,495 9,212,178 -- 8 Change in unrealized appreciation (depreciation) on investments............... (14,723,016) (9,158,970) -- 107 Increase (decrease) attributable to mortality and expense risks assumed by New York Life Insurance and Annuity Corporation and retained by the Separate Account............ 30,286 (57,448) (1,029) (1,253) ------------ ------------ ------------ ------------ Net increase (decrease) in total equity resulting from operations........................... 4,637,145 45,792,747 676,452 882,161 ------------ ------------ ------------ ------------ Contributions and (Withdrawals): Policyowners' premium payments................ 30,521,803 55,159,677 13,275,156 64,486,957 Cost of insurance............................. (12,963,952) (18,814,467) (953,633) (2,584,763) Policyowners' surrenders...................... (6,526,228) (8,083,942) (273,132) (491,187) Net transfers from (to) Fixed Account......... 460,500 (4,927,532) 1,790,496 (381,185) Transfers between Investment Divisions........ (4,217,105) 15,795,045 (12,712,823) (53,599,684) Policyowners' death benefits.................. (179,725) (227,269) (608) (188) ------------ ------------ ------------ ------------ Net contributions and (withdrawals)......... 7,095,293 38,901,512 1,125,456 7,429,950 ------------ ------------ ------------ ------------ Increase (decrease) in total equity....... 11,732,438 84,694,259 1,801,908 8,312,111 TOTAL EQUITY: Beginning of period........................... 247,830,595 163,136,336 22,717,995 14,405,884 ------------ ------------ ------------ ------------ End of period................................. $259,563,033 $247,830,595 $ 24,519,903 $ 22,717,995 ============ ============ ============ ============
MAINSTAY VP MAINSTAY VP INTERNATIONAL EQUITY TOTAL RETURN ------------------------------ ------------------------------ 2000 1999 2000 1999 ------------------------------------------------------------- INCREASE (DECREASE) IN TOTAL EQUITY: Operations: Net investment income (loss).................. $ (22,031) $ (14,858) $ (164,138) $ 517,293 Net realized gain (loss) on investments....... 394,540 92,808 869,159 937,588 Realized gain distribution received........... 106,758 133,262 2,325,829 1,305,271 Change in unrealized appreciation (depreciation) on investments............... (1,044,634) 1,140,110 (2,234,040) 3,737,718 Increase (decrease) attributable to mortality and expense risks assumed by New York Life Insurance and Annuity Corporation and retained by the Separate Account............ 1,206 (1,636) 3,477 (8,421) ------------ ------------ ------------ ------------ Net increase (decrease) in total equity resulting from operations........................... (564,161) 1,349,686 800,287 6,489,449 ------------ ------------ ------------ ------------ Contributions and (Withdrawals): Policyowners' premium payments................ 792,940 1,598,744 5,466,637 10,858,597 Cost of insurance............................. (331,188) (503,092) (2,455,421) (3,741,166) Policyowners' surrenders...................... (104,653) (162,868) (1,125,308) (1,584,812) Net transfers from (to) Fixed Account......... 24,857 (187,961) (148,099) (909,132) Transfers between Investment Divisions........ 212,640 328,106 (580,809) 1,510,064 Policyowners' death benefits.................. (3,715) (86,667) (25,053) (29,909) ------------ ------------ ------------ ------------ Net contributions and (withdrawals)......... 590,881 986,262 1,131,947 6,103,642 ------------ ------------ ------------ ------------ Increase (decrease) in total equity....... 26,720 2,335,948 1,932,234 12,593,091 TOTAL EQUITY: Beginning of period........................... 6,525,064 4,189,116 48,277,798 35,684,707 ------------ ------------ ------------ ------------ End of period................................. $ 6,551,784 $ 6,525,064 $ 50,210,032 $ 48,277,798 ============ ============ ============ ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 10 11 NYLIAC VUL SEPARATE ACCOUNT-I
MAINSTAY VP MAINSTAY VP MAINSTAY VP HIGH YIELD CONVERTIBLE GOVERNMENT CORPORATE BOND ------------------------------ ------------------------------ ------------------------------ 2000 1999 2000 1999 2000 1999 ------------------------------------------------------------------------------------------------------ $ (14,525) $ 95,918 $ (11,803) $ 162,161 $ (85,764) $ 2,758,881 11,285 25,744 (80,274) 8,370 (134,684) 22,103 218,280 333,649 -- -- 1,263 499,619 6,684 406,847 238,503 (259,370) 649,641 (818,497) (30) (1,036) (261) 47 (689) (3,665) ------------ ------------ ------------ ------------ ------------ ------------ 221,694 861,122 146,165 (88,792) 429,767 2,458,441 ------------ ------------ ------------ ------------ ------------ ------------ 853,450 867,144 530,605 1,020,933 4,525,299 8,302,753 (263,927) (271,355) (200,436) (338,961) (1,543,432) (2,619,979) (42,855) (86,364) (61,275) (132,107) (528,321) (944,952) 708,218 (11,682) (279) (38,557) 110,364 (456,296) 604,600 250,099 (200,838) (307,986) (617,599) 412,072 (4,868) (739) (276) (367) (176,200) (18,566) ------------ ------------ ------------ ------------ ------------ ------------ 1,854,618 747,103 67,501 202,955 1,770,111 4,675,032 ------------ ------------ ------------ ------------ ------------ ------------ 2,076,312 1,608,225 213,666 114,163 2,199,878 7,133,473 3,373,208 1,764,983 3,564,667 3,450,504 25,936,115 18,802,642 ------------ ------------ ------------ ------------ ------------ ------------ $ 5,449,520 $ 3,373,208 $ 3,778,333 $ 3,564,667 $ 28,135,993 $ 25,936,115 ============ ============ ============ ============ ============ ============
MAINSTAY VP MAINSTAY VP MAINSTAY VP VALUE BOND GROWTH EQUITY ------------------------------ ------------------------------ ------------------------------ 2000 1999 2000 1999 2000 1999 ------------------------------------------------------------------------------------------------------ $ (94,270) $ 171,820 $ (25,946) $ 383,540 $ (235,246) $ (1,623) 157,376 287,850 (38,384) 6,868 6,037,984 3,383,146 -- -- -- 553 -- 5,714,804 (1,750,895) 1,329,416 272,286 (531,346) (4,561,546) 4,351,297 4,097 (1,483) (417) 71 8,140 (18,194) ------------ ------------ ------------ ------------ ------------ ------------ (1,683,692) 1,787,603 207,539 (140,314) 1,249,332 13,429,430 ------------ ------------ ------------ ------------ ------------ ------------ 4,628,317 9,785,258 1,141,462 2,187,714 9,530,437 15,546,512 (1,617,461) (3,051,256) (401,672) (693,353) (3,592,792) (5,033,902) (642,523) (1,034,284) (130,874) (278,012) (1,146,271) (1,962,772) (171,924) (470,194) 28,021 (106,081) 1,365,435 (995,672) (1,182,366) (339,100) (87,630) 244,474 2,549,932 3,855,951 (9,248) (111,844) (902) (7,364) (14,732) (49,043) ------------ ------------ ------------ ------------ ------------ ------------ 1,004,795 4,778,580 548,405 1,347,378 8,692,009 11,361,074 ------------ ------------ ------------ ------------ ------------ ------------ (678,897) 6,566,183 755,944 1,207,064 9,941,341 24,790,504 28,260,668 21,694,485 7,122,579 5,915,515 64,263,514 39,473,010 ------------ ------------ ------------ ------------ ------------ ------------ $ 27,581,771 $ 28,260,668 $ 7,878,523 $ 7,122,579 $ 74,204,855 $ 64,263,514 ============ ============ ============ ============ ============ ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 11 12 STATEMENT OF CHANGES IN TOTAL EQUITY (CONTINUED) For the six months ended June 30, 2000 and the year ended December 31, 1999 (Unaudited)
MAINSTAY VP AMERICAN CENTURY INDEXED EQUITY INCOME & GROWTH ------------------------------ ------------------------------ 2000 1999 2000 1999(a) ------------------------------------------------------------------ INCREASE (DECREASE) IN TOTAL EQUITY: Operations: Net investment income (loss).................. $ (429,446) $ 468,914 $ (605) $ 203 Net realized gain (loss) on investments....... 5,939,223 13,641,421 (237) 141 Realized gain distribution received........... 306,713 1,618,939 405 -- Change in unrealized appreciation (depreciation) on investments............... (5,831,115) 734,879 2,142 1,020 Increase (decrease) attributable to mortality and expense risks assumed by New York Life Insurance and Annuity Corporation and retained by the Separate Account............ 12,408 (21,057) 3 (1) ------------ ------------ ------------ ------------ Net increase (decrease) in total equity resulting from operations................. (2,217) 16,443,096 1,708 1,363 ------------ ------------ ------------ ------------ Contributions and (Withdrawals): Policyowners' premium payments................ 21,679,472 38,307,020 140,181 9,386 Cost of insurance............................. (7,769,439) (11,332,970) (32,019) (1,571) Policyowners' surrenders...................... (2,159,656) (3,449,613) (382) -- Net transfers from (to) Fixed Account......... 2,837,325 (1,221,342) 183,220 26,125 Transfers between Investment Divisions........ 6,285,257 8,893,653 187,232 587 Policyowners' death benefits.................. (155,603) (69,949) -- -- ------------ ------------ ------------ ------------ Net contributions and (withdrawals)......... 20,717,356 31,126,799 478,232 34,527 ------------ ------------ ------------ ------------ Increase (decrease) in total equity....... 20,715,139 47,569,895 479,940 35,890 TOTAL EQUITY: Beginning of period........................... 120,885,146 73,315,251 35,890 -- ------------ ------------ ------------ ------------ End of period................................. $141,600,285 $120,885,146 $ 515,830 $ 35,890 ============ ============ ============ ============
FIDELITY FIDELITY VIP II VIP CONTRAFUND(R) EQUITY-INCOME ------------------------------ ------------------------------ 2000 1999 2000 1999 ------------------------------------------------------------------ INCREASE (DECREASE) IN TOTAL EQUITY: Operations: Net investment income (loss).................. $ (6,074) $ (84,841) $ 174,583 $ 55,999 Net realized gain (loss) on investments....... 2,749,009 282,507 (222,629) 112,501 Realized gain distribution received........... 4,873,050 668,643 834,803 288,230 Change in unrealized appreciation (depreciation) on investments............... (8,229,105) 5,142,920 (752,787) (219) Increase (decrease) attributable to mortality and expense risks assumed by New York Life Insurance and Annuity Corporation and retained by the Separate Account............ 4,792 (7,286) 1,162 (603) ------------ ------------ ------------ ------------ Net increase (decrease) in total equity resulting from operations................. (608,328) 6,001,943 35,132 455,908 ------------ ------------ ------------ ------------ Contributions and (Withdrawals): Policyowners' premium payments................ 8,848,728 13,026,887 4,183,790 4,956,313 Cost of insurance............................. (2,830,321) (3,705,244) (866,777) (1,482,147) Policyowners' surrenders...................... (670,777) (667,893) (167,294) (286,960) Net transfers from (to) Fixed Account......... 1,650,111 (343,741) 397,159 53,981 Transfers between Investment Divisions........ 1,018,868 5,534,689 (2,578,176) 1,108,674 Policyowners' death benefits.................. (25,928) (52,911) (333) (17,479) ------------ ------------ ------------ ------------ Net contributions and (withdrawals)......... 7,990,681 13,791,787 968,369 4,332,382 ------------ ------------ ------------ ------------ Increase (decrease) in total equity....... 7,382,353 19,793,730 1,003,501 4,788,290 TOTAL EQUITY: Beginning of period........................... 37,480,518 17,686,788 13,094,593 8,306,303 ------------ ------------ ------------ ------------ End of period................................. $ 44,862,871 $ 37,480,518 $ 14,098,094 $ 13,094,593 ============ ============ ============ ============
(a) For the period September 28, 1999 (Commencement of Operations) through December 31, 1999. The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 12 13 NYLIAC VUL SEPARATE ACCOUNT-I
EAGLE ASSET DREYFUS LARGE MANAGEMENT ALGER AMERICAN CALVERT COMPANY VALUE GROWTH EQUITY SMALL CAPITALIZATION SOCIAL BALANCED --------------------------- --------------------------- --------------------------- --------------------------- 2000 1999(a) 2000 1999(a) 2000 1999 2000 1999 --------------------------------------------------------------------------------------------------------------------- $ (270) $ 148 $ (1,231) $ (12) $ (68,904) $ (64,998) $ (3,746) $ 16,486 (53) 27 4,701 594 (4,766,900) 3,730,021 (1,962) 3,818 -- -- 29,570 1,080 5,671,947 735,842 -- 73,487 (4,239) 198 49,776 2,499 71,867 212,328 41,986 (346) 5 -- (30) (1) 5,543 (5,174) 27 (106) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (4,557) 373 82,786 4,160 913,553 4,608,019 36,305 93,339 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 78,968 7,985 316,875 3,878 2,467,741 3,734,375 226,084 316,514 (22,827) (1,534) (66,479) (1,165) (837,152) (1,014,165) (84,223) (111,360) (291) (657) (399) -- (243,178) (171,665) (13,233) (35,089) 111,840 14,857 649,575 128,805 3,203,558 (94,044) 140,828 (5,479) 8,796 -- 237,906 -- (3,790,946) 4,697,824 115,019 283,964 -- -- -- -- (1,829) (30,619) -- -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 176,486 20,651 1,137,478 131,518 798,194 7,121,706 384,475 448,550 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 171,929 21,024 1,220,264 135,678 1,711,747 11,729,725 420,780 541,889 21,024 -- 135,678 -- 16,722,850 4,993,125 991,641 449,752 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 192,953 $ 21,024 $ 1,355,942 $ 135,678 $ 18,434,597 $ 16,722,850 $ 1,412,421 $ 991,641 ============ ============ ============ ============ ============ ============ ============ ============
JANUS ASPEN MORGAN STANLEY JANUS ASPEN SERIES UIF T. ROWE SERIES WORLDWIDE EMERGING MARKETS PRICE BALANCED GROWTH EQUITY EQUITY INCOME --------------------------- --------------------------- --------------------------- --------------------------- 2000 1999 2000 1999 2000 1999 2000 1999(a) --------------------------------------------------------------------------------------------------------------------- $ 160,207 $ 284,180 $ (133,243) $ (167,493) $ (28,120) $ (24,065) $ 1,845 $ 246 67,712 179,941 1,864,918 15,667,315 349,842 (179,309) (2,617) 11 1,928,693 -- 958,384 -- -- -- 3,126 1,944 (2,023,170) 3,014,831 (1,965,443) 4,604,576 (830,879) 3,006,590 (4,818) (1,551) 1,052 (4,490) 7,083 (22,883) 1,518 (3,019) -- -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 134,494 3,474,462 731,699 20,081,515 (507,639) 2,800,197 (2,464) 650 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 7,117,354 7,857,797 10,709,285 13,190,861 1,327,520 1,501,600 86,793 7,374 (2,228,341) (1,990,257) (3,762,497) (3,974,595) (474,859) (407,571) (28,042) (1,890) (384,295) (263,420) (977,181) (850,986) (124,075) (108,494) (347) (654) 3,635,220 542,842 4,070,205 (145,095) 400,501 (94,620) 125,054 79,512 2,911,938 7,429,452 9,756,397 4,014,635 1,614,714 803,924 9,973 -- (2,598) (11,226) (43,714) (46,785) -- (18,592) -- -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 11,049,278 13,565,188 19,752,495 12,188,035 2,743,801 1,676,247 193,431 84,342 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 11,183,772 17,039,650 20,484,194 32,269,550 2,236,162 4,476,444 190,967 84,992 23,436,218 6,396,568 53,061,193 20,791,643 6,708,668 2,232,224 84,992 -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 34,619,990 $ 23,436,218 $ 73,545,387 $ 53,061,193 $ 8,944,830 $ 6,708,668 $ 275,959 $ 84,992 ============ ============ ============ ============ ============ ============ ============ ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 13 14 (THIS PAGE INTENTIONALLY LEFT BLANK) 14 15 NYLIAC VUL SEPARATE ACCOUNT-I NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE 1-- Organization and Accounting Policies: - -------------------------------------------------------------------------------- NYLIAC Variable Universal Life Separate Account-I ("VUL Separate Account-I") was established on June 4, 1993, under Delaware law by New York Life Insurance and Annuity Corporation ("NYLIAC"), a wholly-owned subsidiary of New York Life Insurance Company. The VUL Separate Account-I funds Flexible Premium Variable Life Insurance policies ("VUL policies"), Survivorship Variable Universal Life policies ("SVUL policies"), and Flexible Premium Variable Universal Life policies ("VUL 2000 policies"). VUL, SVUL, and VUL 2000 policies were first offered on June 4, 1993, June 5, 1998, and September 28, 1999, respectively. All three policies are designed for individuals who seek lifetime insurance protection and flexibility with respect to premium payments and death benefits. In addition, SVUL policies offer life insurance protection on two insureds. These policies are distributed by NYLIFE Distributors Inc. and sold by registered representatives of NYLIFE Securities Inc. and by registered representatives of broker-dealers who have entered into dealer agreements with NYLIFE Distributors Inc. NYLIFE Securities Inc., 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. VUL Separate Account-I is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. The assets of VUL Separate Account-I are invested in the shares of the MainStay VP Series Fund, Inc., (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 Universal Institutional Funds, Inc. (formerly, "Morgan Stanley Dean Witter Universal Funds, Inc."), and the T. Rowe Price Equity Series, Inc. (collectively, "Funds"). These assets are clearly identified and distinguished from the other assets and liabilities of 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. VUL Separate Account-I offers twenty-two variable Investment Divisions, with their respective fund portfolios, for Policyowners to invest premium payments. The following Investment Divisions are available for VUL, SVUL and VUL 2000 policies: MainStay VP Capital Appreciation, MainStay VP Cash Management, MainStay VP Convertible, MainStay VP Government, MainStay VP High Yield Corporate Bond, MainStay VP International Equity, MainStay VP Total Return, MainStay VP Value, MainStay VP Bond, MainStay VP Growth Equity, MainStay VP Indexed Equity, American Century Income and Growth, Dreyfus Large Company Value, Eagle Asset Management Growth 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") and T. Rowe Price Equity Income. Each Investment Division of VUL Separate Account-I will invest exclusively in the corresponding eligible portfolio. For VUL and SVUL policies, initial premium payments received are allocated to the MainStay VP Cash Management Investment Division until 20 days (10 days in New York) after the policy issue date. For VUL 2000 policies, initial premium payments received are allocated to the General Account of NYLIAC until 20 days (10 days in New York) after the policy issue date. Thereafter, premium payments will be allocated to the Investment Divisions of VUL Separate Account-I in accordance with the Policyowner's instructions. In addition, the Policyowner has the option to transfer amounts between the Investment Divisions of VUL Separate Account-I and the Fixed Account of NYLIAC. No Federal income tax is payable on investment income or capital gains of VUL Separate Account-I under current Federal income tax law. Security Valuation--The investments are valued at the net asset value of shares of the respective Fund portfolios. Security Transactions--Realized gains and losses from security transactions are reported on the identified cost basis. Security transactions are accounted for as of the date the securities are purchased or sold (trade date). Distributions Received--Dividend income and capital gain distributions are recorded on the ex-dividend date and reinvested in the corresponding portfolio. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. 15 16 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 2--Investments (in 000's): - -------------------------------------------------------------------------------- At June 30, 2000, the investments of VUL Separate Account-I are as follows:
MAINSTAY VP MAINSTAY VP CAPITAL CASH MAINSTAY VP MAINSTAY VP APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT -------------------------------------------------------------------- Number of shares........................... 7,229 24,571 427 379 Identified cost*........................... $245,818 $ 24,571 $5,147 $ 3,810
AMERICAN ALGER CENTURY DREYFUS LARGE EAGLE ASSET AMERICAN INCOME & COMPANY MANAGEMENT SMALL GROWTH VALUE GROWTH EQUITY CAPITALIZATION -------------------------------------------------------------------- Number of shares........................... 42 18 68 572 Identified cost*........................... $ 513 $ 197 $1,305 $ 17,957
* 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:
MAINSTAY VP MAINSTAY VP CAPITAL CASH MAINSTAY VP MAINSTAY VP APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT -------------------------------------------------------------------- Purchases.................................. $ 67,065 $350,352 $2,166 $ 900 Proceeds from sales........................ 48,674 348,544 105 844
AMERICAN ALGER CENTURY DREYFUS LARGE EAGLE ASSET AMERICAN INCOME & COMPANY MANAGEMENT SMALL GROWTH VALUE GROWTH EQUITY CAPITALIZATION -------------------------------------------------------------------- Purchases.................................. $ 490 $ 179 $1,197 $394,874 Proceeds from sales........................ 11 3 30 388,465
16 17 NYLIAC VUL SEPARATE ACCOUNT-I - --------------------------------------------------------------------------------
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY ------------------------------------------------------------------------------------------------------------- 2,586 473 2,318 1,947 625 2,616 4,696 $30,089 $ 6,353 $39,667 $29,369 $ 8,212 $69,671 $140,528
JANUS ASPEN MORGAN STANLEY CALVERT FIDELITY FIDELITY JANUS ASPEN SERIES UIF T. ROWE SOCIAL VIP II VIP SERIES WORLDWIDE EMERGING MARKETS PRICE BALANCED CONTRAFUND(R) EQUITY-INCOME BALANCED GROWTH EQUITY EQUITY INCOME ------------------------------------------------------------------------------------------------------------- 635 1,791 616 1,317 1,533 680 16 $ 1,375 $44,736 $14,392 $32,724 $69,244 $ 7,320 $ 283
MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP HIGH YIELD INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY ------------------------------------------------------------------------------------------------------------- $ 2,888 $ 3,769 $ 5,178 $ 2,365 $ 951 $31,806 $182,777 1,200 3,093 1,884 1,452 427 23,339 162,159
JANUS ASPEN MORGAN STANLEY CALVERT FIDELITY FIDELITY JANUS ASPEN SERIES UIF T. ROWE SOCIAL VIP II VIP SERIES WORLDWIDE EMERGING MARKETS PRICE BALANCED CONTRAFUND(R) EQUITY-INCOME BALANCED GROWTH EQUITY EQUITY INCOME ------------------------------------------------------------------------------------------------------------- $ 432 $22,188 $51,696 $13,352 $34,372 $ 3,933 $ 245 51 9,320 49,713 199 13,773 1,215 46
17 18 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 3--Mortality and Expense Risk Charges: - -------------------------------------------------------------------------------- VUL Separate Account-I is charged for administrative services provided and the mortality and expense risks assumed by NYLIAC. For VUL and SVUL policies, these charges are made daily at an annual rate of .70% of the daily net asset value of each Investment Division. NYLIAC may increase these charges in the future up to a maximum annual rate of 1.00%. For VUL 2000 policies, the mortality and expense risk charge is made daily at an annual rate of .50% of the daily net asset value of each Investment Division. NYLIAC may increase this charge to a maximum annual rate of .80%. 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. For VUL 2000 policies, an administrative charge is assessed at the policy level based on the cash value in the Separate Account as follows: .20% if less than $10,000; .15% if $10,000 to $19,999.99; .10% if $20,000 to $29,999.99; .05% if $30,000 to $49,999.99; 0% if $50,000 or more. NYLIAC may increase the administrative charge in the future up to an annual maximum rate of .20% of the Separate Account cash value. - -------------------------------------------------------------------------------- NOTE 4 --Distribution of Net Income: - -------------------------------------------------------------------------------- VUL Separate Account-I does not expect to declare dividends to Policyowners from accumulated net investment income and realized gains. The income and gains are distributed to Policyowners as part of withdrawals of amounts (in the form of surrenders, death benefits or transfers) in excess of the net premium payments. 18 19 NYLIAC VUL SEPARATE ACCOUNT-I (THIS PAGE INTENTIONALLY LEFT BLANK) 19 20 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:
MAINSTAY VP MAINSTAY VP CAPITAL APPRECIATION CASH MANAGEMENT --------------------- ----------------- 2000 1999(a) 2000 1999(a) ----------------------------------------- VUL AND SVUL POLICIES Units issued on premium payments....... 869 1,998 9,595 51,235 Units redeemed on cost of insurance.... (383) (687) (668) (2,039) Units redeemed on surrenders........... (203) (293) (209) (390) Units issued (redeemed) on net transfers from (to) Fixed Account.... (88) (242) 164 (646) Units issued (redeemed) on transfers between Investment Divisions......... (190) 585 (8,809) (42,359) Units redeemed on death benefits....... (6) (8) -- -- ------- ------- ------- ------- Net increase (decrease).............. (1) 1,353 73 5,801 Units outstanding, beginning of period............................... 7,630 6,277 17,483 11,682 ------- ------- ------- ------- Units outstanding, end of period....... 7,629 7,630 17,556 17,483 ======= ======= ======= ======= VUL 2000 POLICIES Units issued on premium payments....... 224 13 867 27 Units redeemed on cost of insurance.... (56) (3) (84) (22) Units redeemed on surrenders........... (1) -- (1) -- Units issued (redeemed) on net transfers from (to) Fixed Account.... 389 56 1,893 427 Units issued (redeemed) on transfers between Investment Divisions......... 10 4 (1,578) (164) ------- ------- ------- ------- Net increase (decrease).............. 566 70 1,097 268 Units outstanding, beginning of period............................... 70 -- 268 -- ------- ------- ------- ------- Units outstanding, end of period....... 636 70 1,365 268 ======= ======= ======= =======
MAINSTAY VP MAINSTAY VP INTERNATIONAL EQUITY TOTAL RETURN --------------------- ----------------- 2000 1999(a) 2000 1999(a) ----------------------------------------- VUL AND SVUL POLICIES Units issued on premium payments....... 41 102 222 513 Units redeemed on cost of insurance.... (18) (32) (102) (178) Units redeemed on surrenders........... (6) (10) (48) (75) Units issued (redeemed) on net transfers from (to) Fixed Account.... (3) (17) (25) (61) Units issued (redeemed) on transfers between Investment Divisions......... 9 25 (31) 86 Units redeemed on death benefits....... -- (6) (1) (1) ------- ------- ------- ------- Net increase (decrease).............. 23 62 15 284 Units outstanding, beginning of period............................... 343 281 2,040 1,756 ------- ------- ------- ------- Units outstanding, end of period....... 366 343 2,055 2,040 ======= ======= ======= ======= VUL 2000 POLICIES Units issued on premium payments....... 6 -- 23 1 Units redeemed on cost of insurance.... (2) -- (7) -- Units redeemed on surrenders........... -- -- -- -- Units issued (redeemed) on net transfers from (to) Fixed Account.... 10 1 50 8 Units issued (redeemed) on transfers between Investment Divisions......... 8 -- 1 -- ------- ------- ------- ------- Net increase (decrease).............. 22 1 67 9 Units outstanding, beginning of period............................... 1 -- 9 -- ------- ------- ------- ------- Units outstanding, end of period....... 23 1 76 9 ======= ======= ======= =======
(a) For VUL 2000 policies, represents the period September 28, 1999 (Commencement of Operations) through December 31, 1999. 20 21 NYLIAC VUL SEPARATE ACCOUNT-I - --------------------------------------------------------------------------------
MAINSTAY VP MAINSTAY VP MAINSTAY VP HIGH YIELD CONVERTIBLE GOVERNMENT CORPORATE BOND ----------------- ----------------- ----------------- 2000 1999(a) 2000 1999(a) 2000 1999(a) --------------------------------------------------------- 35 59 38 77 261 524 (11) (19) (15) (25) (90) (166) (2) (6) (5) (10) (32) (59) -- (3) (2) (5) (16) (37) 31 15 (16) (22) (42) 31 -- -- -- -- (11) (1) ------- ------- ------- ------- ------- ------- 53 46 -- 15 70 292 190 144 270 255 1,581 1,289 ------- ------- ------- ------- ------- ------- 243 190 270 270 1,651 1,581 ======= ======= ======= ======= ======= ======= 18 1 3 -- 23 1 (5) -- (1) -- (5) -- -- -- -- -- -- -- 57 3 3 1 42 8 2 3 1 -- -- -- ------- ------- ------- ------- ------- ------- 72 7 6 1 60 9 7 -- 1 -- 9 -- ------- ------- ------- ------- ------- ------- 79 7 7 1 69 9 ======= ======= ======= ======= ======= =======
MAINSTAY VP MAINSTAY VP MAINSTAY VP VALUE BOND GROWTH EQUITY ----------------- ----------------- ----------------- 2000 1999(a) 2000 1999(a) 2000 1999(a) --------------------------------------------------------- 264 556 78 157 259 558 (92) (173) (28) (50) (101) (182) (37) (58) (10) (20) (35) (70) (15) (39) (4) (11) (16) (50) (82) (14) (5) 21 64 142 (1) (7) -- -- -- (2) ------- ------- ------- ------- ------- ------- 37 265 31 97 171 396 1,578 1,313 520 423 1,947 1,551 ------- ------- ------- ------- ------- ------- 1,615 1,578 551 520 2,118 1,947 ======= ======= ======= ======= ======= ======= 14 2 6 -- 85 5 (4) -- (1) -- (23) (1) -- -- -- -- (1) -- 15 6 9 1 170 22 7 -- (2) -- 7 -- ------- ------- ------- ------- ------- ------- 32 8 12 1 238 26 8 -- 1 -- 26 -- ------- ------- ------- ------- ------- ------- 40 8 13 1 264 26 ======= ======= ======= ======= ======= =======
21 22 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 5--Unit Transactions (in 000's) (Continued): - --------------------------------------------------------------------------------
MAINSTAY VP AMERICAN CENTURY INDEXED EQUITY INCOME & GROWTH ----------------- ----------------- 2000 1999(a) 2000(b) 1999(a) ------------------------------------- VUL AND SVUL POLICIES Units issued on premium payments....... 565 1,172 -- -- Units redeemed on cost of insurance.... (207) (356) -- -- Units redeemed on surrenders........... (62) (108) -- -- Units issued (redeemed) on net transfers from (to) Fixed Account.... (20) (101) -- -- Units issued (redeemed) on transfers between Investment Divisions......... 178 273 18 -- Units redeemed on death benefits....... (5) (2) -- -- ------- ------- ------- ------- Net increase (decrease).............. 449 878 18 -- Units outstanding, beginning of period............................... 3,369 2,491 -- -- ------- ------- ------- ------- Units outstanding, end of period....... 3,818 3,369 18 -- ======= ======= ======= ======= VUL 2000 POLICIES Units issued on premium payments....... 209 80 13 1 Units redeemed on cost of insurance.... (59) (4) (3) -- Units redeemed on surrenders........... (1) -- -- -- Units issued (redeemed) on net transfers from (to) Fixed Account.... 336 97 18 2 Units issued (redeemed) on transfers between Investment Divisions......... 75 3 -- -- ------- ------- ------- ------- Net increase (decrease).............. 560 176 28 3 Units outstanding, beginning of period............................... 176 -- 3 -- ------- ------- ------- ------- Units outstanding, end of period....... 736 176 31 3 ======= ======= ======= =======
FIDELITY FIDELITY VIP II VIP CONTRAFUND(R) EQUITY-INCOME ----------------- ----------------- 2000 1999(a) 2000 1999(a) ------------------------------------- VUL AND SVUL POLICIES Units issued on premium payments......... 379 723 262 320 Units redeemed on cost of insurance...... (124) (207) (53) (95) Units redeemed on surrenders............. (33) (37) (11) (18) Units issued (redeemed) on net transfers from (to) Fixed Account................ (12) (41) 1 (11) Units issued (redeemed) on transfers between Investment Divisions........... 38 310 (155) 71 Units redeemed on death benefits......... (1) (3) -- (1) ------- ------- ------- ------- Net increase (decrease)................ 247 745 44 266 Units outstanding, beginning of period... 1,814 1,069 833 567 ------- ------- ------- ------- Units outstanding, end of period......... 2,061 1,814 877 833 ======= ======= ======= ======= VUL 2000 POLICIES Units issued on premium payments......... 107 9 28 2 Units redeemed on cost of insurance...... (28) (2) (8) (1) Units redeemed on surrenders............. (1) -- -- -- Units issued (redeemed) on net transfers from (to) Fixed Account................ 173 33 49 20 Units issued (redeemed) on transfers between Investment Divisions........... 9 -- 2 -- ------- ------- ------- ------- Net increase (decrease)................ 260 40 71 21 Units outstanding, beginning of period... 40 -- 21 -- ------- ------- ------- ------- Units outstanding, end of period......... 300 40 92 21 ======= ======= ======= =======
(a) For VUL 2000 policies, represents the period September 28, 1999 (Commencement of Operations) through December 31, 1999. (b) For VUL/SVUL policies, represents the period May 19, 2000 (Commencement of Operations) through June 30, 2000. 22 23 NYLIAC VUL SEPARATE ACCOUNT-I - --------------------------------------------------------------------------------
ALGER DREYFUS LARGE EAGLE ASSET AMERICAN COMPANY MANAGEMENT SMALL CALVERT VALUE GROWTH EQUITY CAPITALIZATION SOCIAL BALANCED ----------------- ----------------- ----------------- ----------------- 2000(b) 1999(a) 2000(b) 1999(a) 2000 1999(a) 2000 1999(a) ----------------------------------------------------------------------------- -- -- 3 -- 120 272 12 22 -- -- -- -- (40) (77) (5) (8) -- -- -- -- (13) (13) (1) (2) -- -- -- -- 93 (11) 2 (1) 1 -- 20 -- (177) 379 7 20 -- -- -- -- -- (3) -- -- ------- ------- ------- ------- ------- ------- ------- ------- 1 -- 23 -- (17) 547 15 31 -- -- -- -- 954 407 64 33 ------- ------- ------- ------- ------- ------- ------- ------- 1 -- 23 -- 937 954 79 64 ======= ======= ======= ======= ======= ======= ======= ======= 8 1 19 -- 41 1 4 -- (2) -- (4) -- (11) -- (1) -- -- -- -- -- -- -- -- -- 11 1 44 10 124 3 12 1 -- -- 1 -- 5 1 -- -- ------- ------- ------- ------- ------- ------- ------- ------- 17 2 60 10 159 5 15 1 2 -- 10 -- 5 -- 1 -- ------- ------- ------- ------- ------- ------- ------- ------- 19 2 70 10 164 5 16 1 ======= ======= ======= ======= ======= ======= ======= =======
JANUS ASPEN MORGAN STANLEY JANUS ASPEN SERIES UIF T. ROWE SERIES WORLDWIDE EMERGING MARKETS PRICE BALANCED GROWTH EQUITY EQUITY INCOME ----------------- ----------------- ----------------- ----------------- 2000 1999(a) 2000 1999(a) 2000 1999(a) 2000(b) 1999(a) ----------------------------------------------------------------------------- 252 425 324 710 67 156 -- -- (84) (108) (120) (218) (26) (42) -- -- (18) (14) (36) (45) (9) (11) -- -- (3) (8) (14) (37) (22) (14) -- -- 133 407 348 300 116 72 1 -- -- -- (2) (2) -- (2) -- -- ------- ------- ------- ------- ------- ------- ------- ------- 280 702 500 708 126 159 1 -- 1,092 390 2,010 1,302 456 297 -- -- ------- ------- ------- ------- ------- ------- ------- ------- 1,372 1,092 2,510 2,010 582 456 1 -- ======= ======= ======= ======= ======= ======= ======= ======= 167 12 141 7 25 1 9 1 (43) (2) (37) (1) (7) -- (3) -- (1) -- (1) -- -- -- -- -- 330 64 329 39 40 3 13 8 2 3 8 -- 3 -- -- -- ------- ------- ------- ------- ------- ------- ------- ------- 455 77 440 45 61 4 19 9 77 -- 45 -- 4 -- 9 -- ------- ------- ------- ------- ------- ------- ------- ------- 532 77 485 45 65 4 28 9 ======= ======= ======= ======= ======= ======= ======= =======
23 24 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 VUL Separate Account-I:
MAINSTAY VP CAPITAL APPRECIATION --------------------------------------------------------- 2000 1999(c) 1998 1997 1996 1995 --------------------------------------------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $32.37 $25.99 $18.95 $15.45 $13.10 $ 9.72 Net investment income (loss)............................... (0.11) (0.19) (0.12) (0.12) (0.09) -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.73 6.57 7.16 3.62 2.44 3.38 ------ ------ ------ ------ ------ ------ Unit value, end of period.................................. $32.99 $32.37 $25.99 $18.95 $15.45 $13.10 ====== ====== ====== ====== ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $12.12 $10.00 $ -- $ -- $ -- $ -- Net investment income (loss)............................... (0.03) (0.01) -- -- -- -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.27 2.13 -- -- -- -- ------ ------ ------ ------ ------ ------ Unit value, end of period.................................. $12.36 $12.12 $ -- $ -- $ -- $ -- ====== ====== ====== ====== ====== ======
MAINSTAY VP GOVERNMENT --------------------------------------------------------- 2000 1999(c) 1998 1997 1996 1995 --------------------------------------------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $13.19 $13.52 $12.49 $11.49 $11.31 $ 9.76 Net investment income (loss)............................... (0.04) 0.60 0.71 0.71 0.76 0.93 Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.58 (0.93) 0.32 0.29 (0.58) 0.62 ------ ------ ------ ------ ------ ------ Unit value, end of period.................................. $13.73 $13.19 $13.52 $12.49 $11.49 $11.31 ====== ====== ====== ====== ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $10.05 $10.00 $ -- $ -- $ -- $ -- Net investment income (loss)............................... (0.02) 1.04 -- -- -- -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.44 (0.99) -- -- -- -- ------ ------ ------ ------ ------ ------ Unit value, end of period.................................. $10.47 $10.05 $ -- $ -- $ -- $ -- ====== ====== ====== ====== ====== ======
MAINSTAY VP TOTAL RETURN --------------------------------------------------------- 2000 1999(c) 1998 1997 1996 1995 --------------------------------------------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $23.62 $20.32 $16.10 $13.76 $12.37 $ 9.70 Net investment income (loss)............................... (0.08) 0.27 0.27 0.26 0.26 0.32 Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.46 3.03 3.95 2.08 1.13 2.35 ------ ------ ------ ------ ------ ------ Unit value, end of period.................................. $24.00 $23.62 $20.32 $16.10 $13.76 $12.37 ====== ====== ====== ====== ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $11.44 $10.00 $ -- $ -- $ -- $ -- Net investment income (loss)............................... (0.03) 0.31 -- -- -- -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.23 1.13 -- -- -- -- ------ ------ ------ ------ ------ ------ Unit value, end of period.................................. $11.64 $11.44 $ -- $ -- $ -- $ -- ====== ====== ====== ====== ====== ======
+ 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 VUL 2000 policies, represents the period September 28, 1999 (Commencement of Operations) through December 31, 1999. 24 25 NYLIAC VUL SEPARATE ACCOUNT-I - --------------------------------------------------------------------------------
MAINSTAY VP MAINSTAY VP CASH MANAGEMENT CONVERTIBLE --------------------------------------------------------- ----------------------------------------------- 2000 1999(c) 1998 1997 1996 1995 2000 1999(c) 1998 1997 1996(b) ----------------------------------------------------------------------------------------------------------- $ 1.28 $ 1.23 $ 1.18 $ 1.13 $ 1.08 $ 1.03 $17.28 $12.26 $11.81 $10.31 $10.00 0.03 0.06 0.05 0.05 0.04 0.05 (0.06) 0.56 0.68 0.64 0.16 0.01 (0.01) -- -- 0.01 -- 1.03 4.46 (0.23) 0.86 0.15 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $ 1.32 $ 1.28 $ 1.23 $ 1.18 $ 1.13 $ 1.08 $18.25 $17.28 $12.26 $11.81 $10.31 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== $ 1.01 $ 1.00 $ -- $ -- $ -- $ -- $12.02 $10.00 $ -- $ -- $ -- 0.03 0.01 -- -- -- -- (0.03) 0.95 -- -- -- (0.01) -- -- -- -- -- 0.72 1.07 -- -- -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $ 1.03 $ 1.01 $ -- $ -- $ -- $ -- $12.71 $12.02 $ -- $ -- $ -- ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
MAINSTAY VP MAINSTAY VP HIGH YIELD INTERNATIONAL CORPORATE BOND EQUITY --------------------------------------------------------- --------------------------------------------------------- 2000 1999(c) 1998 1997 1996 1995(a) 2000 1999(c) 1998 1997 1996 1995(a) ----------------------------------------------------------------------------------------------------------------- $16.35 $14.58 $14.31 $12.75 $10.95 $10.00 $18.97 $14.92 $12.20 $11.69 $10.65 $10.00 (0.05) 1.90 1.46 0.67 0.61 0.36 (0.06) (0.05) 0.26 0.33 0.58 0.46 0.31 (0.13) (1.19) 0.89 1.19 0.59 (1.68) 4.10 2.46 0.18 0.46 0.19 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $16.61 $16.35 $14.58 $14.31 $12.75 $10.95 $17.23 $18.97 $14.92 $12.20 $11.69 $10.65 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== $10.36 $10.00 $ -- $ -- $ -- $ -- $11.56 $10.00 $ -- $ -- $ -- $ -- (0.02) 2.31 -- -- -- -- (0.03) (0.01) -- -- -- -- 0.19 (1.95) -- -- -- -- (1.02) 1.57 -- -- -- -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $10.53 $10.36 $ -- $ -- $ -- $ -- $10.51 $11.56 $ -- $ -- $ -- $ -- ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
MAINSTAY VP MAINSTAY VP VALUE BOND --------------------------------------------------------- --------------------------------------------------------- 2000 1999(c) 1998 1997 1996 1995(a) 2000 1999(c) 1998 1997 1996 1995 ----------------------------------------------------------------------------------------------------------------- $17.85 $16.52 $17.35 $14.22 $11.62 $10.00 $13.68 $13.99 $12.91 $11.85 $11.70 $ 9.96 (0.06) 0.12 0.18 0.12 0.12 0.05 (0.05) 0.80 0.72 0.80 0.92 1.03 (0.96) 1.21 (1.01) 3.01 2.48 1.57 0.42 (1.11) 0.36 0.26 (0.77) 0.71 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $16.83 $17.85 $16.52 $17.35 $14.22 $11.62 $14.05 $13.68 $13.99 $12.91 $11.85 $11.70 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== $10.57 $10.00 $ -- $ -- $ -- $ -- $10.01 $10.00 $ -- $ -- $ -- $ -- (0.02) 0.22 -- -- -- -- (0.02) 1.71 -- -- -- -- (0.57) 0.35 -- -- -- -- 0.31 (1.70) -- -- -- -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $ 9.98 $10.57 $ -- $ -- $ -- $ -- $10.30 $10.01 $ -- $ -- $ -- $ -- ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
25 26 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 6--Selected Per Unit Data+ (Continued): - --------------------------------------------------------------------------------
MAINSTAY VP GROWTH EQUITY --------------------------------------------------------- 2000 1999(b) 1998 1997 1996 1995 --------------------------------------------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $32.85 $25.45 $20.25 $16.09 $13.01 $10.14 Net investment income (loss)............................... (0.11) -- 0.06 0.04 0.08 0.17 Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.74 7.40 5.14 4.12 3.00 2.70 ------ ------ ------ ------ ------ ------ Unit value, end of period.................................. $33.48 $32.85 $25.45 $20.25 $16.09 $13.01 ====== ====== ====== ====== ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $12.25 $10.00 $ -- $ -- $ -- $ -- Net investment income (loss)............................... (0.03) 0.12 -- -- -- -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.28 2.13 -- -- -- -- ------ ------ ------ ------ ------ ------ Unit value, end of period.................................. $12.50 $12.25 $ -- $ -- $ -- $ -- ====== ====== ====== ====== ====== ======
EAGLE ASSET DREYFUS LARGE MANAGEMENT COMPANY VALUE GROWTH EQUITY ----------------- ----------------- 2000(c) 1999(b) 2000(c) 1999(b) ------------------------------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $10.00 $ -- $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)...... (0.56) -- 1.62 -- ------ ------ ------ ------ Unit value, end of period.................................. $ 9.44 $ -- $11.62 $ -- ====== ====== ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $10.34 $10.00 $13.90 $10.00 Net investment income (loss)............................... (0.03) 0.16 (0.04) -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... (0.33) 0.18 1.76 3.90 ------ ------ ------ ------ Unit value, end of period.................................. $ 9.98 $10.34 $15.62 $13.90 ====== ====== ====== ======
FIDELITY VIP II CONTRAFUND(R) ----------------------------------------------- 2000 1999(b) 1998 1997 1996(a) ----------------------------------------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $20.41 $16.54 $12.81 $10.39 $10.00 Net investment income (loss)............................... -- (0.06) (0.04) (0.06) (0.01) Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... (0.34) 3.93 3.77 2.48 0.40 ------ ------ ------ ------ ------ Unit value, end of period.................................. $20.07 $20.41 $16.54 $12.81 $10.39 ====== ====== ====== ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $11.84 $10.00 $ -- $ -- $ -- Net investment income (loss)............................... (0.01) (0.01) -- -- -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... (0.17) 1.85 -- -- -- ------ ------ ------ ------ ------ Unit value, end of period.................................. $11.66 $11.84 $ -- $ -- $ -- ====== ====== ====== ====== ======
+ Per unit data based on average monthly units outstanding during the period. (a) For the period October 1, 1996 (Commencement of Operations) through December 31, 1996. (b) For VUL 2000 policies, represents the period September 28, 1999 (Commencement of Operations) through December 31, 1999. (c) For VUL/SVUL policies, represents the period May 19, 2000 (Commencement of Operations) through June 30, 2000. 26 27 NYLIAC VUL SEPARATE ACCOUNT-I - --------------------------------------------------------------------------------
MAINSTAY VP AMERICAN CENTURY INDEXED EQUITY INCOME & GROWTH --------------------------------------------------------- ----------------- 2000 1999(b) 1998 1997 1996 1995 2000(c) 1999(b) ----------------------------------------------------------------------------- $35.28 $29.44 $23.07 $17.49 $14.39 $10.58 $10.00 $ -- (0.12) 0.16 0.17 0.22 0.24 0.34 (0.01) -- (0.26) 5.68 6.20 5.36 2.86 3.47 0.20 -- ------ ------ ------ ------ ------ ------ ------ ------ $34.90 $35.28 $29.44 $23.07 $17.49 $14.39 $10.19 $ -- ====== ====== ====== ====== ====== ====== ====== ====== $11.47 $10.00 $ -- $ -- $ -- $ -- $10.93 $10.00 (0.03) 0.22 -- -- -- -- (0.03) 0.11 (0.09) 1.25 -- -- -- -- (0.38) 0.82 ------ ------ ------ ------ ------ ------ ------ ------ $11.35 $11.47 $ -- $ -- $ -- $ -- $10.52 $10.93 ====== ====== ====== ====== ====== ====== ====== ======
ALGER AMERICAN CALVERT SMALL CAPITALIZATION SOCIAL BALANCED ----------------------------------------------- ----------------------------------------------- 2000 1999(b) 1998 1997 1996(a) 2000 1999(b) 1998 1997 1996(a) ------------------------------------------------------------------------------------------------- $17.46 $12.26 $10.69 $ 9.66 $10.00 $15.28 $13.71 $11.88 $ 9.96 $10.00 (0.06) (0.10) (0.11) (0.07) (0.01) (0.05) 0.33 0.36 0.40 0.21 -- 5.30 1.68 1.10 (0.33) 0.41 1.24 1.47 1.52 (0.25) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $17.40 $17.46 $12.26 $10.69 $ 9.66 $15.64 $15.28 $13.71 $11.88 $ 9.96 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== $13.06 $10.00 $ -- $ -- $ -- $10.72 $10.00 $ -- $ -- $ -- (0.04) (0.02) -- -- -- (0.02) 0.61 -- -- -- 0.01 3.08 -- -- -- 0.29 0.11 -- -- -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $13.03 $13.06 $ -- $ -- $ -- $10.99 $10.72 $ -- $ -- $ -- ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
FIDELITY VIP EQUITY-INCOME JANUS ASPEN SERIES BALANCED ----------------------------------------------- ----------------------------------------------- 2000 1999(b) 1998 1997 1996(a) 2000 1999(b) 1998 1997 1996(a) ------------------------------------------------------------------------------------------------- $15.46 $14.64 $13.21 $10.38 $10.00 $20.66 $16.41 $12.31 $10.15 $10.00 0.20 0.08 0.02 (0.04) (0.01) 0.10 0.39 0.52 0.35 0.17 (0.67) 0.74 1.41 2.87 0.39 (0.03) 3.86 3.58 1.81 (0.02) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $14.99 $15.46 $14.64 $13.21 $10.38 $20.73 $20.66 $16.41 $12.31 $10.15 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== $10.58 $10.00 $ -- $ -- $ -- $11.57 $10.00 $ -- $ -- $ -- 0.09 (0.01) -- -- -- 0.14 0.21 -- -- -- (0.40) 0.59 -- -- -- (0.09) 1.36 -- -- -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ $10.27 $10.58 $ -- $ -- $ -- $11.62 $11.57 $ -- $ -- $ -- ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
27 28 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 6--Selected Per Unit Data+ (Continued): - --------------------------------------------------------------------------------
Janus Aspen Series Worldwide Growth ----------------------------------------------- 2000 1999(b) 1998 1997 1996(a) ----------------------------------------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $26.09 $15.97 $12.48 $10.29 $10.00 Net investment income (loss)............................... (0.06) (0.10) 0.29 0.06 0.09 Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... 0.50 10.22 3.20 2.13 0.20 ------ ------ ------ ------ ------ Unit value, end of period.................................. $26.53 $26.09 $15.97 $12.48 $10.29 ====== ====== ====== ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $14.11 $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)...... 0.25 4.12 -- -- -- ------ ------ ------ ------ ------ Unit value, end of period.................................. $14.36 $14.11 $ -- $ -- $ -- ====== ====== ====== ====== ======
MORGAN STANLEY UIF EMERGING MARKETS EQUITY ----------------------------------------------- 2000 1999(b) 1998 1997 1996(a) ----------------------------------------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $14.59 $ 7.51 $ 9.97 $10.01 $10.00 Net investment income (loss)............................... (0.05) (0.07) (0.01) 0.06 0.02 Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... (0.76) 7.15 (2.45) (0.10) (0.01) ------ ------ ------ ------ ------ Unit value, end of period.................................. $13.78 $14.59 $ 7.51 $ 9.97 $10.01 ====== ====== ====== ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $14.86 $10.00 $ -- $ -- $ -- Net investment (income) loss............................... (0.03) (0.01) -- -- -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... (0.78) 4.87 -- -- -- ------ ------ ------ ------ ------ Unit value, end of period.................................. $14.05 $14.86 $ -- $ -- $ -- ====== ====== ====== ====== ======
T. ROWE PRICE EQUITY INCOME ----------------- 2000(c) 1999(b) ----------------- VUL AND SVUL POLICIES Unit value, beginning of period............................ $10.00 $ -- Net investment income (loss)............................... 0.04 -- Net realized and unrealized gains (losses) on security transactions and realized gain distributions received (includes the effect of capital share transactions)...... (0.54) -- ------ ------ Unit value, end of period.................................. $ 9.50 $ -- ====== ====== VUL 2000 POLICIES Unit value, beginning of period............................ $ 9.83 $10.00 Net investment income (loss)............................... 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)...... (0.39) (0.25) ------ ------ Unit value, end of period.................................. $ 9.54 $ 9.83 ====== ======
+ Per unit data based on average monthly units outstanding during the period. (a) For the period October 1, 1996 (Commencement of Operations) through December 31, 1996. (b) For VUL 2000 policies, represents the period September 28, 1999 (Commencement of Operations) through December 31, 1999. (c) For VUL/SVUL policies, represents the period May 19, 2000 (Commencement of Operations) through June 30, 2000. 28 29 (THIS PAGE INTENTIONALLY LEFT BLANK) 29 30 - -------------------------------------------------------------------------------- To Policyowners: The assets of NYLIAC Variable Annuity Separate Account-I, NYLIAC Variable Annuity Separate Account-II, NYLIAC Variable Annuity Separate Account-III, NYLIAC Variable Universal Life Separate Account-I, NYLIAC Corporate Sponsored Variable Universal Life Separate Account-I, New York Life Insurance and Annuity Corporation MFA Separate Account-I, New York Life Insurance and Annuity Corporation MFA Separate Account-II and New York Life Insurance and Annuity Corporation VLI Separate Account are invested in shares of MainStay VP Series Fund, Inc. In addition, the assets of NYLIAC Variable Annuity Separate Account-I, NYLIAC Variable Annuity Separate Account-II, NYLIAC Variable Annuity Separate Account-III, NYLIAC Variable Universal Life Account-I and NYLIAC Corporate Sponsored Variable Universal Life Separate Account-I may be invested in shares of the Alger American Fund, the Calvert Variable Series, Inc., 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. 30 31 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. 31 32 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. 32 33 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, 33 34 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. 34 35 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 35 36 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. 36 37 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. 37 38 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. 38 39 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 39 40 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. 40 41 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 41 42 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. 42 43 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. 43 44 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. 44 45 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. 45 46 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. 46 47 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. 47 48 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. 48 49 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. 49 50 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 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) 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. 50 51 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 51 52 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. 52 53 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. 53 54 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. 54 55 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 55 56 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. 56 57 (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. 57 58 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. 58 59 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. 59 60 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. 60 61 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. 61 62 (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. 62 63 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. 63 64 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 64 65 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. 65 66 (THIS PAGE INTENTIONALLY LEFT BLANK) 66 67 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. 67 68 CAPITAL APPRECIATION PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
COMMON STOCKS (97.4%)+ SHARES VALUE ------------------------ 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 --------------
SHARES VALUE ---------------------------- HEALTH CARE--DRUGS (5.4%) Andrx Corp. (a)................. 107,000 6,839,643 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 - ------------ + 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. 68 69 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------------- 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 --------------
SHORT-TERM INVESTMENTS (2.6%) PRINCIPAL AMOUNT ----------- 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
PRINCIPAL AMOUNT VALUE ------------------------ COMMERCIAL PAPER (Continued) 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 =========== ==============
- ------------ (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. 69 70 CAPITAL APPRECIATION PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ==============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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 ===========
- ------- (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. 70 71 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
2000 1999 ---------------------------- 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 -------------- -------------- Distributions to shareholders: From net realized gain on investments..................... (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) $ -- ============== ==============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31 2000* 1999 1998 1997 1996 1995 ------------------------------------------------------------------ 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
- ------------ (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. 71 72 CASH MANAGEMENT PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
SHORT-TERM INVESTMENTS (100.2%)+ PRINCIPAL AMORTIZED AMOUNT COST ---------------------- 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
PRINCIPAL AMORTIZED AMOUNT COST ---------------------- 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 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
- ------------ + Percentages indicated are based on Portfolio net assets. The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 72 73 MAINSTAY VP SERIES FUND, INC.
SHORT-TERM INVESTMENTS (CONTINUED) PRINCIPAL AMORTIZED AMOUNT COST ---------------------- 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 ------------
PRINCIPAL AMORTIZED AMOUNT COST ----------------------
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 ========= ==========
- ------------ (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. 73 74 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
AMORTIZED COST PERCENT+ ------------------------ 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% =========== ========
- ------------ + 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' accept-ances 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. 74 75 MAINSTAY VP SERIES FUND, INC. CASH MANAGEMENT PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited)
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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited)
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 ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 75 76 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
2000 1999 -------------------------- 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 ============= =============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31 2000* 1999 1998 1997 1996 1995 ---------------------------------------------------------------------------------- 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
- ------------ (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. 76 77 MAINSTAY VP SERIES FUND, INC. CONVERTIBLE PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
CONVERTIBLE SECURITIES (80.0%)+ CONVERTIBLE BONDS (57.0%) PRINCIPAL AMOUNT VALUE ---------------------- 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 ------------
PRINCIPAL AMOUNT VALUE ---------------------- 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 ------------
- ------------ + 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. 77 78 CONVERTIBLE PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
CONVERTIBLE BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ---------------------- 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 ------------
PRINCIPAL AMOUNT VALUE ---------------------- 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 ------------ PREFERRED STOCKS (23.0%) SHARES ---------- 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 78 79 MAINSTAY VP SERIES FUND, INC.
PREFERRED STOCKS (CONTINUED) SHARES VALUE ------------------------- 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 ------------
SHARES VALUE ------------------------- 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 ------------
COMMON STOCKS (9.4%)
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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 79 80 CONVERTIBLE PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------- 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 ------------ PREFERRED STOCK (0.1%) 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 ------------ SHORT-TERM INVESTMENTS (9.4%) PRINCIPAL AMOUNT VALUE ------------------------- 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 ========== ============
- ------------ (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. 80 81 MAINSTAY VP SERIES FUND, INC. CONVERTIBLE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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 ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 81 82 CONVERTIBLE PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS For the six months ended June 30, 2000 (Unaudited) and the year ended December 31, 1999
2000 1999 ------------------------- 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 $ -- ============ ============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
OCTOBER 1, SIX MONTHS 1996 (a) ENDED THROUGH JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31, 2000* 1999 1998 1997 1996 ----------------------------------------------------------------------- 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
- ------------ (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. 82 83 MAINSTAY VP SERIES FUND, INC. GOVERNMENT PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
LONG-TERM BONDS (96.7%)+ ASSET-BACKED SECURITIES (4.1%) PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------ U.S. GOVERNMENT & FEDERAL AGENCIES (90.7%) PRINCIPAL AMOUNT VALUE -------------------------- 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 ------------
- ------------ + 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. 83 84 GOVERNMENT PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
SHORT-TERM INVESTMENTS (21.5%) FEDERAL AGENCIES (21.5%) PRINCIPAL AMOUNT VALUE -------------------------- 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 ========== ==========
- ------------ (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. 84 85 MAINSTAY VP SERIES FUND, INC. GOVERNMENT PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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 ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 85 86 GOVERNMENT PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS For the six months ended June 30, 2000 (Unaudited) and the year ended December 31, 1999
2000 1999 ------------------------- 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 ============ ============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31 2000* 1999 1998 1997 1996 1995 ------------------------------------------------------------------------------------------ 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................... (0.00)(a) (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%(b) (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
- ------------ (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. 86 87 MAINSTAY VP SERIES FUND, INC. HIGH YIELD CORPORATE BOND PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
LONG-TERM BONDS (86.7%)+ ASSET-BACKED SECURITIES (1.5%) PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------ PRINCIPAL AMOUNT VALUE ------------------------ 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
- ------------ + Percentages indicated are based on Portfolio net assets. The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 87 88 HIGH YIELD CORPORATE BOND PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
CORPORATE BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ------------------------ 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 PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 88 89 MAINSTAY VP SERIES FUND, INC.
CORPORATE BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------ PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 89 90 HIGH YIELD CORPORATE BOND PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
CORPORATE BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------ PRINCIPAL AMOUNT VALUE ------------------------ 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
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 90 91 MAINSTAY VP SERIES FUND, INC.
CORPORATE BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ------------------------ 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 PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 91 92 HIGH YIELD CORPORATE BOND PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
FOREIGN BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------ PRINCIPAL AMOUNT VALUE ------------------------ U.S. GOVERNMENT (0.2%) 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 92 93 MAINSTAY VP SERIES FUND, INC.
YANKEE BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------ PRINCIPAL AMOUNT VALUE ------------------------ 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 ------------ COMMON STOCKS (2.7%) SHARES ------------- 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 93 94 HIGH YIELD CORPORATE BOND PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ------------------------ 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 ------------ SHARES VALUE ------------------------ 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 94 95 MAINSTAY VP SERIES FUND, INC.
WARRANTS (CONTINUED) SHARES VALUE ------------------------ TELECOMMUNICATIONS (0.0%) (b) Telehub Communications Corp. expire 7/31/05 (a)(c).......... 6,465 $ 65 ------------ Total Warrants (Cost $514,681)................ 746,557 ------------ SHORT-TERM INVESTMENTS (4.4%) PRINCIPAL AMOUNT ------------- 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 ============= ============
- ------------ (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. 95 96 HIGH YIELD CORPORATE BOND PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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 ============
- ------------ (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. 96 97 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
2000 1999 ----------------------- 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) ============ ============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
MAY 1, SIX MONTHS 1995 (a) ENDED THROUGH JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31, 2000* 1999 1998 1997 1996 1995 ------------------------------------------------------------------------------------------ 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
- ------------ (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. 97 98 INTERNATIONAL EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
COMMON STOCKS (92.9%)+ SHARES VALUE --------------------- 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 INTERNATIONAL EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
SHARES VALUE --------------------- FRANCE (9.3%) (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 -----------
- ------------ + 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. 98 99 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------- 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
SHARES VALUE --------------------- 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
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 99 100 INTERNATIONAL EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------- 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
SHARES VALUE --------------------- 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
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 100 101 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------- 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 ----------- SHARES VALUE ---------------------- UNITED STATES (0.3%) Global Telesystems Group, Inc. (telecommunications) (a).......... 17,100 $ 206,269 ----------- Total Common Stocks (Cost $56,639,184)...................... 65,564,952 -----------
SHORT-TERM INVESTMENTS (6.3%) PRINCIPAL AMOUNT ---------- 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 ========== ===========
- ------------ (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. 101 102 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
VALUE PERCENT + ------------------------ 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% =========== ======
- ------------ + 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. 102 103 MAINSTAY VP SERIES FUND, INC. INTERNATIONAL EQUITY PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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) ============
- ------------ (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. 103 104 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
2000 1999 ---------------------- 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) =========== ===========
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
MAY 1, SIX MONTHS 1995 (a) ENDED THROUGH JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31, 2000* 1999 1998 1997 1996 1995 ------------------------------------------------------------------------------- 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
- ------------ (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. 104 105 MAINSTAY VP SERIES FUND, INC. TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
LONG-TERM BONDS (29.8%)+ ASSET-BACKED SECURITIES (3.2%) PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------ PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------
- ------------ + 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. 105 106 TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
CORPORATE BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------ PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 106 107 MAINSTAY VP SERIES FUND, INC.
CORPORATE BONDS (CONTINUED) PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------ PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 107 108 TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED) PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------ PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------ COMMON STOCKS (67.5%) SHARES ----------- 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 108 109 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ----------------------- 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 ------------ SHARES VALUE ----------------------- 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 ------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 109 110 TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ----------------------- 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 ------------ SHORT-TERM INVESTMENTS (5.3%) PRINCIPAL AMOUNT ----------- 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 SHORT-TERM INVESTMENTS (5.3%) PRINCIPAL AMOUNT ----------- 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 ========== ==========
- ------------ (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. 110 111 MAINSTAY VP SERIES FUND, INC. TOTAL RETURN PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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 ============
- ------------ (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. 111 112 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
2000 1999 ------------------------- 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 ============ ============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31 2000* 1999 1998 1997 1996 1995 ------------------------------------------------------------------------------------------ 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
- ------------ (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. 112 113 MAINSTAY VP SERIES FUND, INC. VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
COMMON STOCKS (95.3%)+ SHARES VALUE ----------------------- 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 ------------ SHARES VALUE ----------------------- 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 ------------
- ------------ + 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. 113 114 VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ----------------------- 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 ------------ SHORT-TERM INVESTMENTS (4.3%) 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 ========== ============
- ------------ (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. 114 115 MAINSTAY VP SERIES FUND, INC. VALUE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) INVESTMENT INCOME: Income: Dividends.............................. $ 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) ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 115 116 VALUE PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS For the six months ended June 30, 2000 (Unaudited) and the year ended December 31, 1999
2000 1999 ------------------------- 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 ============ ============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
MAY 1, SIX MONTHS 1995 (a) ENDED THROUGH JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31, 2000* 1999 1998 1997 1996 1995 ---------------------------------------------------------------------------------------- Net asset value at beginning of period.................. $ 15.00 $ 13.96 $ 16.09 $ 13.90 $ 11.58 $ 10.00 ------------ ------------ ------------ ------------ ------------ ------------ Net investment income........ 0.09 0.20 0.24 0.21 0.17 0.10 Net realized and unrealized gain (loss) on investments................ (0.90) 1.03 (0.90) 2.94 2.52 1.58 ------------ ------------ ------------ ------------ ------------ ------------ Total from investment operations................. (0.81) 1.23 (0.66) 3.15 2.69 1.68 ------------ ------------ ------------ ------------ ------------ ------------ Less dividends and distributions: From net investment income................... (0.00)(c) (0.19) (0.24) (0.21) (0.17) (0.10) From net realized gain on investments.............. -- -- (1.23) (0.75) (0.20) -- ------------ ------------ ------------ ------------ ------------ ------------ Total dividends and distributions.............. (0.00) (0.19) (1.47) (0.96) (0.37) (0.10) ------------ ------------ ------------ ------------ ------------ ------------ Net asset value at end of period..................... $ 14.19 $ 15.00 $ 13.96 $ 16.09 $ 13.90 $ 11.58 ============ ============ ============ ============ ============ ============ Total investment return...... (5.38%)(b) 8.80% (4.14%) 22.89% 23.22% 16.76%(b)
Ratios (to average net assets)/ Supplemental Data: Net investment income....... 1.23%+ 1.30% 1.60% 1.78% 2.10% 2.57%+ Net expenses................ 0.64%+ 0.63% 0.65% 0.65% 0.73% 0.73%+ Expenses (before reimbursement)............ 0.64%+ 0.63% 0.65% 0.65% 0.79% 1.45%+ Portfolio turnover rate....... 48% 74% 69% 48% 41% 20% Net assets at end of period (in 000's)...................... $ 283,557 $ 331,473 $ 319,743 $ 264,179 $ 120,415 $ 24,429
- ------------ (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. 116 117 MAINSTAY VP SERIES FUND, INC. BOND PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
LONG-TERM BONDS (95.9%)+ CORPORATE BONDS (53.1%) PRINCIPAL AMOUNT VALUE ----------------------- 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 LONG-TERM BONDS (95.9%)+ CORPORATE BONDS (53.1%) PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------
- ------------ + 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. 117 118 BOND PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED) PRINCIPAL AMOUNT VALUE ----------------------- 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 ------------ SHORT-TERM INVESTMENTS (4.7%) 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 ========== ============
- ------------ (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. 118 119 MAINSTAY VP SERIES FUND, INC. BOND PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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 ============
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 119 120 BOND PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS For the six months ended June 30, 2000 (Unaudited) and the year ended December 31, 1999
2000 1999 --------------------------- 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 $ -- ============ ============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31 2000* 1999 1998 1997 1996 1995 ---------------------------------------------------------------------------------------- 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
- ------------ (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. 120 121 MAINSTAY VP SERIES FUND, INC. GROWTH EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
COMMON STOCKS (96.8%)+ SHARES VALUE ------------------------ 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 -------------- SHARES VALUE ------------------------ 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 --------------
- ------------ + 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. 121 122 GROWTH EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ------------------------- 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 -------------- SHARES VALUE ------------------------- 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 -------------- SHORT-TERM INVESTMENTS (3.6%) PRINCIPAL AMOUNT ----------- 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
- ------------ + 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. 122 123 MAINSTAY VP SERIES FUND, INC.
SHORT-TERM INVESTMENTS (CONTINUED) PRINCIPAL AMOUNT VALUE ------------------------ 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 =========== ==============
- ------------ (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. 123 124 GROWTH EQUITY PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ==============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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.
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 124 125 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
2000 1999 ------------------------------- 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 ============== ==============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31 2000* 1999 1998 1997 1996 1995 ---------------------------------------------------------------------------------- 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
- ------------ (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. 125 126 INDEXED EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
COMMON STOCKS (97.1%)+ SHARES VALUE ------------------------ 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 SHARES VALUE ------------------------ 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
- ------------ + 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. 126 127 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------------- 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
SHARES VALUE ---------------------------- 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
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 127 128 INDEXED EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------------- 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
SHARES VALUE ---------------------------- 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
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 128 129 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------------- 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
SHARES VALUE ---------------------------- 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 --------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 129 130 INDEXED EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------------- 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 --------------
SHARES VALUE ---------------------------- 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
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 130 131 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------------- 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 --------------
SHARES VALUE ---------------------------- 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 --------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 131 132 INDEXED EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------------- 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 --------------
SHARES VALUE ---------------------------- 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) --------------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 132 133 MAINSTAY VP SERIES FUND, INC.
SHORT-TERM INVESTMENTS (3.0%) PRINCIPAL AMOUNT VALUE ---------------------------- 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 =========== ============== FUTURES CONTRACTS (0.0%) (b) UNREALIZED CONTRACTS APPRECIATION LONG (DEPRECIATION)(h) ------------------------------- 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. The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 133 134 INDEXED EQUITY PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ==============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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. The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 134 135 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
2000 1999 ------------------------------- 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 ============== ==============
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31 2000* 1999 1998 1997 1996 1995 ---------------------------------------------------------------------------------------- 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
- ------------ (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. 135 136 AMERICAN CENTURY INCOME & GROWTH PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
COMMON STOCKS (98.6%)+ SHARES VALUE ---------------------- 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 -----------
SHARES VALUE ---------------------- 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 -----------
- ------------ + 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. 136 137 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------- 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 -----------
SHARES VALUE ---------------------- 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 -----------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 137 138 AMERICAN CENTURY INCOME & GROWTH PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------- 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 -----------
SHARES VALUE ---------------------- 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 -----------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 138 139 MAINSTAY VP SERIES FUND, INC.
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------- 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 -----------
SHARES VALUE ---------------------- 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
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 139 140 AMERICAN CENTURY INCOME & GROWTH PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE ---------------------- 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) ----------- SHORT-TERM INVESTMENT (1.4%) PRINCIPAL AMOUNT --------- 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 ========= =========== FUTURES CONTRACTS (0.0%)(b) CONTRACTS UNREALIZED LONG DEPRECIATION(f) --------------------------- Standard & Poor's 500 September 2000................... 2 $ (9,665) ----------- Total Futures Contracts (Settlement Value $734,050)(d)... $ (9,665) ===========
- ------------ (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. 140 141 MAINSTAY VP SERIES FUND, INC. AMERICAN CENTURY INCOME & GROWTH PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ===========
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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. The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 141 142 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
2000 1999 ----------------------- 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 $ -- =========== ===========
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
MAY 1, SIX MONTHS 1998 (a) ENDED YEAR ENDED THROUGH JUNE 30, DECEMBER 31, DECEMBER 31, 2000* 1999 1998 ------------------------------------------- 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
- ------------ (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. 142 143 MAINSTAY VP SERIES FUND, INC. DREYFUS LARGE COMPANY VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
COMMON STOCKS (95.2%)+ SHARES VALUE ------------------------ 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 -----------
- ------------ + Percentages indicated are based on Portfolio net assets.
SHARES VALUE ------------------------ 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 -----------
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 143 144 DREYFUS LARGE COMPANY VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE -------------------------- 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 ----------- TELEPHONE (9.5%) Bell Atlantic Corp. (a)............ 3,700 188,006 BellSouth Corp. ................... 13,600 579,700
SHARES VALUE -------------------------- TELEPHONE (Continued) 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 ----------- SHORT-TERM INVESTMENT (4.8%) PRINCIPAL AMOUNT --------- 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 ========= ===========
- ------------ (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. 144 145 MAINSTAY VP SERIES FUND, INC. DREYFUS LARGE COMPANY VALUE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ===========
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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. The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 145 146 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
2000 1999 ------------------------- 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 $ -- =========== ===========
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
MAY 1, SIX MONTHS 1998 (a) ENDED YEAR ENDED THROUGH JUNE 30, DECEMBER 31, DECEMBER 31, 2000* 1999 1998 ------------------------------------------- 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
- ------------ (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. 146 147 MAINSTAY VP SERIES FUND, INC. EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (Unaudited)
COMMON STOCKS (95.7%)+ SHARES VALUE -------------------------- 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
SHARES VALUE -------------------------- 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 ------------
- ------------ + 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. 147 148 EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) June 30, 2000 (Unaudited)
COMMON STOCKS (CONTINUED) SHARES VALUE -------------------------- 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 ------------
SHORT-TERM INVESTMENT (5.9%) PRINCIPAL AMOUNT VALUE -------------------------- 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 =========== ============
- ------------ (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. 148 149 MAINSTAY VP SERIES FUND, INC. EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2000 (Unaudited) 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 ============
STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited) 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. The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements. 149 150 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
2000 1999 -------------------------- 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) $ -- ============ ===========
- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (Selected Per Share Data and Ratios)
MAY 1, SIX MONTHS 1998 (a) ENDED YEAR ENDED THROUGH JUNE 30, DECEMBER 31, DECEMBER 31, 2000* 1999 1998 -------------------------------------------- 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
- ------------ (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. 150 151 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 and Eagle Asset Management Growth Equity Portfolios, which commenced operations on May 1, 1998, Convertible Portfolio, which commenced operations on October 1, 1996, High Yield Corporate Bond, International Equity and Value Portfolios, which commenced operations on May 1, 1995, Capital Appreciation, Cash Management, Government, Total Return and Indexed Equity Portfolios, which commenced operations on January 29, 1993 and Bond and Growth Equity Portfolios, which commenced operations on January 23, 1984, (the "Portfolios"; each separately a "Portfolio") are separate Portfolios of the Fund. Shares of the Portfolios are currently offered only to New York Life Insurance and Annuity Corporation ("NYLIAC"), a wholly owned subsidiary of New York Life Insurance Company ("New York Life"). NYLIAC allocates shares of the Portfolios to, among others, NYLIAC Variable Universal Life Separate Account-I (the "Separate Account"). The Separate Account is used to fund flexible premium variable life insurance and survivorship variable life insurance policies. The investment objectives for each of the Portfolios of the Fund are as follows: Capital Appreciation: to seek long-term growth of capital. Dividend income, if any, is an incidental consideration. Cash Management: to seek as high a level of current income as is considered consistent with the preservation of capital and liquidity. Convertible: to seek capital appreciation together with current income. Government: to seek a high level of current income, consistent with safety of principal. High Yield Corporate Bond: to maximize current income through investment in a diversified portfolio of high yield, high risk debt securities which are ordinarily in the lower rating categories of recognized rating agencies (that is, rated Baa to B by Moody's or BBB to B by S&P). Capital appreciation is a secondary objective. International Equity: to seek long-term growth of capital by investing in a portfolio consisting primarily of non-U.S. equity securities. Current income is a secondary objective. Total Return: to realize current income consistent with reasonable opportunity for future growth of capital and income. Value: to realize maximum long-term total return from a combination of capital growth and income. Bond: to seek the highest income over the long term consistent with preservation of principal. Growth Equity: to seek long-term growth of capital, with income as a secondary consideration. Indexed Equity: to seek to provide investment results that correspond to the total return performance (and reflect reinvestment of dividends) of publicly traded common stocks represented by the S&P 500 Index. American Century Income & Growth: to seek dividend growth, current income and capital appreciation. Dreyfus Large Company Value: capital appreciation. Eagle Asset Management Growth Equity: to seek growth through long-term capital appreciation. High Yield Corporate Bond Portfolio invests primarily in high yield bonds. These bonds may involve special risks in addition to the risks associated with 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. 151 152 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. 152 153 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:
CONTRACT CONTRACT UNREALIZED AMOUNT AMOUNT APPRECIATION/ SOLD PURCHASED (DEPRECIATION) -------- --------- -------------- 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)
CONTRACT CONTRACT AMOUNT AMOUNT PURCHASED SOLD --------- -------- FOREIGN CURRENCY BUY CONTRACTS - ------------------------------------------------------------ Pound Sterling vs. U.S. Dollar, expiring 8/31/00............ L332,392 $500,000 3,795 --------- Net unrealized depreciation on foreign currency forward contracts................................................. $(835,404) =========
153 154 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) INTERNATIONAL EQUITY PORTFOLIO Foreign currency forward contracts open at June 30, 2000:
CONTRACT CONTRACT UNREALIZED AMOUNT AMOUNT APPRECIATION/ SOLD PURCHASED (DEPRECIATION) -------- --------- -------------- 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)
CONTRACT CONTRACT AMOUNT AMOUNT PURCHASED SOLD --------- -------- 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 ========
(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. 154 155 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). 155 156 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) INTERNATIONAL EQUITY PORTFOLIO Foreign currency held at June 30, 2000:
CURRENCY COST VALUE - ----------------------------------------- -------- -------- 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 ======== ========
(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. 156 157 MAINSTAY VP SERIES FUND, INC. HIGH YIELD CORPORATE BOND PORTFOLIO Restricted securities held at June 30, 2000:
PRINCIPAL PERCENT ACQUISITION AMOUNT/ 6/30/00 OF SECURITY DATE(S) SHARES COST VALUE NET ASSETS -------- ------------------- ------------ ----------- ----------- ---------- 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% =========== =========== ====
- --------------- (a) Less than one tenth of a percent. (b) Illiquid security. (c) This common stock has no cost. FF-- French Franc L-- Pound Sterling
157 158 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) TOTAL RETURN PORTFOLIO Restricted security held at June 30, 2000:
PERCENT ACQUISITION 6/30/00 OF SECURITY DATE SHARES COST VALUE NET ASSETS -------- ------------------- ------------ ----------- ----------- ---------- Paperboard Industries International, Inc. Preferred Stock, 5.00%, Class A..................................... 5/4/98 15,000 $ 249,634 $ 233,473 0.1% =========== =========== ====
(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. 158 159 MAINSTAY VP SERIES FUND, INC. GOVERNMENT PORTFOLIO Investments made with cash collateral at June 30, 2000:
SHARES VALUE ---------- ----------- CASH & CASH EQUIVALENTS AIM Institutional Funds Group............................... 1,494,855 $ 1,494,855 Cash with Security Lending Agent............................ 2,715 ----------- 1,497,570 ----------- PRINCIPAL AMOUNT ---------- 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 =========== Non-cash collateral received and held by the Portfolio at June 30, 2000: VALUE ----------- 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 ===========
159 160 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) TOTAL RETURN PORTFOLIO Investments made with cash collateral at June 30, 2000:
SHARES VALUE ----------- ----------- 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 ----------- PRINCIPAL AMOUNT ----------- 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 ===========
160 161 MAINSTAY VP SERIES FUND, INC. Non-cash collateral received and held by the Portfolio at June 30, 2000:
PRINCIPAL AMOUNT VALUE ----------- ----------- 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 ===========
GROWTH EQUITY PORTFOLIO Investments made with cash collateral at June 30, 2000:
PRINCIPAL AMOUNT VALUE ----------- ----------- SHORT-TERM COMMERCIAL PAPER Goldman Sachs Group Inc. 6.95%, due 7/3/00......................................... $19,820,000 $19,812,346 ===========
(L) COMMITMENTS AND CONTINGENCIES. As of June 30, 2000, High Yield Corporate Bond Portfolio had unfunded loan commitments pursuant to the following loan agreements:
UNFUNDED BORROWER COMMITMENT - -------- ---------- Genesis Health Ventures, Inc. .............................. $3,085 Multicare Companies, Inc. (The)............................. 3,489 ------ $6,574 ======
(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. 161 162 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 and Eagle Asset Management Growth Equity Portfolios of the Fund are amortized over a maximum period of 60 months beginning with the commencement of operations of the respective Portfolios on May 1, 1998. Organization costs for American Century Income & Growth, Dreyfus Large Company Value and Eagle Asset Management Growth Equity Portfolios, paid by, and reimbursable to, NYLIAC, aggregated approximately $64,500. In the event that any of the initial shares purchased by NYLIAC are redeemed, proceeds of such redemption will be reduced by the proportionate amount of the unamortized deferred organizational expenses which the number of shares redeemed bears to the total number of initial shares purchased. (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. 162 163 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 and Eagle Asset Management Growth Equity Portfolios under an Investment Advisory Agreement. New York Life selects and employs Subadvisors for some of the Portfolios. American Century Investment Management, Inc. serves as Subadvisor to the American Century Income & Growth Portfolio; The Dreyfus Corporation serves as Subadvisor to the Dreyfus Large Company Value Portfolio; and Eagle Asset Management, Inc. serves as Subadvisor to the Eagle Asset Management Growth Equity Portfolio. NYLIAC is Administrator for the Fund. The Fund, on behalf of each Portfolio, pays the Advisers and Administrator a monthly fee for the services performed and the facilities furnished at an approximate annual rate of the average daily net assets of each Portfolio as follows:
ADVISER ADMINISTRATOR ------- ------------- 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%
163 164 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: 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
These values represent 8.41%, 16.48%, 29.70% and 10.83%, 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: 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
164 165 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.
CAPITAL LOSS CAPITAL LOSS AVAILABLE THROUGH AMOUNT (000'S) DEFERRED (000'S) ----------------- -------------- ---------------- 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 ====== ======
International Equity Portfolio intends to elect to treat for federal income tax purposes approximately $216,269 of qualifying foreign exchange losses that arose during the year after October 31, 1999 as if they arose on January 1, 2000. High Yield Corporate Bond, International Equity, American Century Income & Growth, Dreyfus Large Company Value and Eagle Asset Management Growth Equity Portfolios utilized $4,315,968, $427,458, $220,843, $220,233 and $1,027,856, respectively, of capital loss carryforwards during the 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 and Eagle Asset Management Growth Equity Portfolios participate in a line of credit of $375,000,000 with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive shareholder redemption requests. The Portfolios pay a commitment fee, at an annual rate of 0.075% of the average commitment amount, regardless of usage to The Bank of New York, which acts as agent to the syndicate. Such commitment fees are allocated amongst the Portfolios based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate. There were no borrowings on this line of credit during the six months ended June 30, 2000. 165 166 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:
CAPITAL APPRECIATION CONVERTIBLE GOVERNMENT PORTFOLIO PORTFOLIO PORTFOLIO PURCHASES SALES PURCHASES SALES PURCHASES SALES ------------------------------------------------------------------ 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 ==================================================================
AMERICAN CENTURY GROWTH EQUITY INDEXED EQUITY INCOME & GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PURCHASES SALES PURCHASES SALES PURCHASES SALES ------------------------------------------------------------------ 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 ==================================================================
- -------------------------------------------------------------------------------- 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:
CAPITAL APPRECIATION CASH MANAGEMENT CONVERTIBLE PORTFOLIO PORTFOLIO PORTFOLIO 2000 1999 2000 1999 2000 1999 ------------------------------------------------------------------ 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 ==================================================================
AMERICAN CENTURY GROWTH EQUITY INDEXED EQUITY INCOME & GROWTH PORTFOLIO PORTFOLIO PORTFOLIO 2000 1999 2000 1999 2000 1999 ---------------------------------------------------------------- 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 ================================================================
- --------------- (a) Less than one thousand shares. 166 167 MAINSTAY VP SERIES FUND, INC. - --------------------------------------------------------------------------------
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 - -------------------------------------------------------------------------------------------------------------------- $ -- $ -- $ -- $ -- $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 ====================================================================================================================
EAGLE ASSET DREYFUS MANAGEMENT LARGE COMPANY VALUE GROWTH EQUITY PORTFOLIO PORTFOLIO PURCHASES SALES PURCHASES SALES - ----------------------------------------------- $ -- $ -- $ -- $ -- 27,489 22,514 291,550 191,425 - ----------------------------------------------- $ 27,489 $ 22,514 $291,550 $191,425 ===============================================
- -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
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 - --------------------------------------------------------------------------------------------------------------- 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) =============================================================================================================== BOND PORTFOLIO 2000 1999 - ------------------------ 437 4,522 -- 1,412 - ------------------------ 437 5,934 (4,002) (3,431) - ------------------------ (3,565) 2,503 ========================
EAGLE ASSET DREYFUS MANAGEMENT LARGE COMPANY VALUE GROWTH EQUITY PORTFOLIO PORTFOLIO 2000 1999 2000 1999 - ------------------------------------------------------ 709 1,141 5,582 1,987 -- 21 375 167 - ------------------------------------------------------ 709 1,162 5,957 2,154 (166) (187) (230) (214) - ------------------------------------------------------ 543 975 5,727 1,940 ======================================================
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