UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-03833
MAINSTAY VP SERIES FUND, INC.
(Exact name of Registrant as specified in charter)
51 Madison Avenue, New York, NY 10010
(Address of principal executive offices) (Zip code)
Robert Anselmi, Esq.
51 Madison Avenue
New York, New York 10010
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 576-7000
Date of fiscal year end: 12/31
Date of reporting period: 12/31/03
This amendment is being filed on behalf of MainStay VP Series Fund, Inc. on
Form N-CSR to amend the dates on the Signature Page, 302 Certification Page and
906 Certification Page to reflect today's date, March 10, 2004.
Letter from the Chairman
- --------------------------------------------------------------------------------
For most investors, 2003 was an outstanding year. Despite a rocky start and
volatility along the way, the stock market provided strong overall performance,
with smaller companies generally outperforming larger ones. The bond market also
provided positive overall returns, with the strongest results among high-yield
corporate bonds and emerging-market debt. Most international stock and bond
markets also provided positive results in 2003.
Early in the year, economic uncertainty and geopolitical tensions pushed
domestic stock prices lower. In mid-March, however, the stock market reversed
course and climbed for the rest of the year on a relatively steady path.
Several factors contributed to the stock market's advance. Investors responded
favorably to the pace and results of military action in Iraq. The Federal
Reserve remained accommodative, lowering the targeted federal funds rate to 1.0%
in June. Fiscal policy remained stimulative, with Congress approving lower tax
rates on capital gains and corporate dividends. As the year progressed, the
labor markets improved, output expanded, deflation concerns abated, and
inflation remained in check.
While rising markets may tend to improve investor confidence, we believe that
optimism is no substitute for a sound investment strategy. The MainStay VP
Series Fund, Inc., consists of 19 Portfolios (the Portfolios). Each of the
Portfolios pursues its objective with an investment process that is consistently
applied in all market environments. As markets shift and financial circumstances
change, this consistent approach may help policyholders make better decisions
about where and how they want to invest to pursue their long-term goals.
The reports that follow describe the market conditions and management decisions
that affected the Portfolios in 2003. If you have any questions about your
investments or the information in this report, your registered investment
professional will be pleased to assist you.
Sincerely,
/s/ Gary E. Wendlandt
Gary E. Wendlandt
Chairman of the Board
and Chief Executive Officer
MainStay VP Series Fund, Inc.
January 2004
M-1
DEFINITION OF INDICES
THE INFORMATION BELOW IS AN EXPLANATION OF THE VARIOUS INDICES AND REFERENCES
COMMONLY CITED THROUGHOUT THE PORTFOLIO MANAGER COMMENTARIES (PAGES M-5 THROUGH
M-65) IMMEDIATELY FOLLOWING THIS SECTION. PLEASE USE THIS AS A REFERENCE.
PLEASE NOTE THAT AN INVESTMENT CANNOT BE MADE DIRECTLY INTO AN INDEX OR AVERAGE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. RESULTS FOR SECURITIES
INDICES ASSUME REINVESTMENT OF ALL INCOME AND CAPITAL GAINS.
Securities in each Portfolio will not precisely match those in the Index, and as
a result, performance of the Portfolio will differ.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of the rate of inflation.
CREDIT SUISSE FIRST BOSTON(TM) CONVERTIBLE SECURITIES INDEX is an unmanaged
index that generally includes 250-300 issues. Convertibles must have a minimum
issue size of $50 million; bonds and preferreds must be rated B- or better by
Standard & Poor's; 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 Standard & Poor's, and have an issue size
greater than $100 million.
CREDIT SUISSE FIRST BOSTON(TM) HIGH YIELD INDEX is an unmanaged 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.
DOW JONES INDUSTRIAL AVERAGE (DJIA) is a trademark of, and the property of, Dow
Jones and Co., Inc. The Dow Jones Industrial Average is a price-weighted average
of 30 actively traded blue chip stocks, primarily industrials, but also
including financial, leisure, and other service-oriented firms.
ISM MANUFACTURING INDEX is used as an indication of whether the economy is
expanding or contracting.
LEHMAN BROTHERS(R) AGGREGATE BOND INDEX (the "Aggregate Index") is an unmanaged
index that includes the following other unmanaged Lehman Brothers(R) indices:
the Government Index, the Corporate Index, the Mortgage-Backed Securities Index,
and the Asset-Backed Securities Index. To qualify for inclusion in the Aggregate
Index, securities must be investment-grade quality or higher, have at least one
year to maturity, and have an outstanding par value of at least $150 million.
LEHMAN BROTHERS(R) GOVERNMENT BOND INDEX is an unmanaged index comprised of U.S.
government and agency issues as well as investment-grade fixed-rate debt
securities.
LEHMAN BROTHERS(R) U.S. CREDIT BOND INDEX is an unmanaged index that measures
the performance of all publicly issued U.S. corporate and specified foreign
debentures and secured notes that meet the specified maturity, liquidity, and
quality requirements. To qualify, bonds must be SEC-registered.
LIPPER INC. is an independent fund performance monitor. Results are based on
total return with all dividend and capital gain distributions reinvested.
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 dividends and capital gains reinvested.
Results do not reflect any deduction of sales charges.
THE MERRILL LYNCH ALL INVESTMENT GRADE U.S. CONVERTIBLES INDEX is an unmanaged
index consisting of investment-grade U.S. dollar denominated nonsynthetic
convertible securities of companies that have a significant U.S. footprint and
are not currently bankrupt. Issues must be sold into the U.S. market, publicly
traded in the United States, rated by Moody's and/or S&P, have a market value
greater than $50 million at issuance, and be convertible into U.S. dollar
denominated common stock, ADRs, or cash equivalents.
THE MERRILL LYNCH ALL SPECULATIVE GRADE U.S. CONVERTIBLES INDEX is an unmanaged
index consisting of speculative-grade U.S. dollar denominated nonsynthetic
convertible securities of companies that have a significant U.S. footprint and
are not currently bankrupt. Issues must be sold into the U.S. market, publicly
traded in the United States, rated by Moody's and/or S&P, have a market value
greater than $50 million at issuance, and be convertible into U.S. dollar
denominated common stock, ADRs, or cash equivalents.
MERRILL LYNCH CORPORATE AND GOVERNMENT MASTER INDEX is an unmanaged index
consisting of issues of the U.S. government and agencies as well as
investment-grade corporate securities.
M-2
MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA, AND FAR EAST
INDEX--THE MSCI EAFE(R) INDEX--is an unmanaged free float-adjusted
market-capitalization index that is designed to measure developed-market equity
performance, excluding the United States and Canada. As of December 2003, the
MSCI EAFE(R) Index consisted of the following 21 developed-market country
indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece,
Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway,
Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
NASDAQ(R) 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.
RUSSELL 1000(R) INDEX is an unmanaged index that measures the performance of the
1,000 largest companies in the Russell 3000(R) Index based on total market
capitalization. The Index does not reflect fees or expenses.
RUSSELL 1000(R) GROWTH INDEX is an unmanaged index that measures the performance
of those Russell 1000(R) companies with higher price-to-book ratios and higher
forecasted growth values. The Index does not reflect fees or expenses.
RUSSELL 1000(R) VALUE INDEX is an unmanaged index that measures the performance
of those Russell 1000(R) companies with lower price-to-book ratios and lower
forecasted growth values. The Index does not reflect fees or expenses.
RUSSELL 2000(R) INDEX is an unmanaged index that measures the performance of the
2,000 smallest companies in the Russell 3000(R) Index. The Index does not
reflect fees or expenses.
RUSSELL 2000(R) GROWTH INDEX is an unmanaged index that measures the performance
of those Russell 2000(R) companies with higher price-to-book ratios and higher
forecasted growth values. The Index does not reflect fees or expenses.
RUSSELL 2000(R) VALUE INDEX is an unmanaged index that measures the performance
of those Russell 2000(R) companies with lower price-to-book ratios and lower
forecasted growth values. The Index does not reflect fees or expenses.
RUSSELL 2500(TM) GROWTH INDEX is an unmanaged index that measures the
performance of those Russell 2500(TM) companies with higher price-to-book ratios
and higher forecasted growth values. The Russell 2500(TM) Index measures the
performance of the 2,500 smallest companies in the Russell 3000(R) Index. The
Index does not reflect fees or expenses.
RUSSELL 3000(R) INDEX is an unmanaged index that measures the performance of the
3,000 largest U.S. companies based on total market capitalization. The index
does not reflect fees or expenses.
RUSSELL MIDCAP(R) INDEX is an unmanaged index that measures the performance of
the 800 smallest companies of the Russell 1000(R) Index. The Index does not
reflect fees or expenses.
RUSSELL MIDCAP(R) GROWTH INDEX is an unmanaged index that measures the
performance of those Russell Midcap(R) companies with higher price-to-book
ratios and high forecasted growth values. The stocks are also members of the
Russell 1000(R) Growth Index. The Index does not reflect fees or expenses.
RUSSELL MIDCAP(R) VALUE INDEX is an unmanaged index that measures the
performance of those Russell Midcap(R) companies with lower price-to-book ratios
and lower forecasted growth values. The stocks are also members of the Russell
1000(R) Value Index. The Index does not reflect fees or expenses.
S&P 500/BARRA VALUE(R) INDEX is an unmanaged capitalization-weighted index of
all stocks in the S&P 500(R) Index that have higher book-to-price ratios. It is
designed so that approximately 50% of the market capitalization of the S&P
500(R) Index is in the S&P 500/Barra Value(R) Index.
S&P MIDCAP 400(R) INDEX is an unmanaged market-value weighted index that
consists of 400 domestic common stocks chosen for market size, liquidity, and
industry-group representation and is generally considered representative of the
market for domestic midcap stocks. Results assume reinvestment of all income and
capital gains.
STANDARD AND POOR'S 500 COMPOSITE STOCK PRICE INDEX(R) AND S&P 500(R) INDEX are
registered trademarks of The McGraw-Hill Companies, Inc. The product is not
sponsored, endorsed, sold, or promoted by Standard
M-3
& Poor's Corporation. The S&P 500(R) Index is an unmanaged index and is widely
regarded as the standard for measuring large-cap U.S. stock-market performance.
TOTAL RETURN COMPOSITE INDEX is an unmanaged index that is comprised of the
Russell 1000(R) Growth Index and the Lehman Brothers(R) Aggregate Bond Index,
weighted 60%/40%, respectively.
M-4
MAINSTAY VP BOND PORTFOLIO
MARKET OVERVIEW
The year began with the market focused on a number of key risks, any of which
could have derailed the rally in credit assets that began in October 2002.
Anemic domestic and global economic growth and the potential for war in Iraq
were among the leading concerns. With the recent history of corporate
malfeasance, the omnipresent threat of terrorism, and the uncertain scope of the
SARS epidemic, there were several reasons for concern about whether the rally in
spreads would continue.
Policy-makers hoped to stave off these challenges with accommodative monetary
and fiscal policies. The Federal Open Market Committee reduced the targeted
federal funds rate to 1%, its lowest level ever. Tax cuts were implemented and
then accelerated in one of the largest tax packages ever delivered. Projections
suggest that recent tax cuts may have added nearly one percent to U.S. real
gross domestic product in each of 2002 and 2003.
Over the course of 2003, the primary risks facing the market all seemed to be
handled with ease. Major combat operations in Iraq ended quickly, and coalition
forces began to police and rebuild the country. SARS and corporate malfeasance
had limited lasting impact on the markets. As for terrorism, another year passed
without a major incident on American soil, though the threat of future problems
remains.
The corporate-bond market benefited from a fortuitous combination of improving
fundamentals--including better balance-sheet liquidity and debt-reduction
programs--and favorable technical factors. As a result, we saw the best
performance of investment-grade credit on record, with the Lehman Brothers U.S.
Credit Bond Index* delivering 553 basis points of excess return.
Lower-credit-quality securities led the way, as the dogs of 2002 became the
stars of 2003. The strongest performers in 2003 were airlines (1190 basis points
of excess return), wireless telecommunications (1145 basis points), media (1062
basis points), and autos (975 basis points). The worst-performing sectors
included supranationals (84 basis points) and supermarkets (127 basis points),
both of which still provided positive excess returns, despite lagging the rest
of the credit sector.
PORTFOLIO REVIEW
For the 12 months ended December 31, 2003, the MainStay VP Bond Portfolio
(initial class of shares) returned 4.52%. The Portfolio underperformed the 4.71%
return of the average Lipper* Variable Products Corporate Debt A Rated Portfolio
over the same period. The Portfolio also underperformed the 4.54% return of the
Merrill Lynch Corporate and Government Master Index* for the 12 months ended
December 31, 2003.
The primary factors that influenced the performance of the Portfolio included
the duration of the Portfolio, asset allocation, corporate sector allocation,
and credit quality. During 2003, the VP Bond Portfolio maintained a fairly
neutral duration relative to its peer group. We define "neutral" as plus or
minus one-quarter of a year.
The Portfolio's allocation to corporate bonds remained stable throughout the
year. We started 2003 with approximately 47% of the Portfolio's dollar duration
in corporate bonds and ended the year with approximately 45%. During the year,
we gradually increased the Portfolio's exposure to mortgage-backed securities at
the expense of Treasuries. We started the year with approximately 17% of the
Portfolio's dollar duration in mortgage-backed securities and ended the year at
37%. The Portfolio's allocation to Treasuries decreased from 24% to 12% over the
same period.
As we entered 2003, the Portfolio's largest corporate-sector allocations based
on dollar duration were to bank & finance, electric utilities, consumer
products, automotive, and telecommunications. At year-end, the Portfolio's
largest allocations were to bank & finance, telecommunications, electric
utilities, automotive, and media bonds. The credit quality of the portfolio was
relatively stable throughout the year. On a market-value basis, as of December
31, 2003, 57% of the Portfolio was rated AAA(1) (up from 52% at the end of
2002),
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-5
8% of the Portfolio was rated AA (approximately unchanged), 19% of the Portfolio
was rated A (down from 21%), 15% of the Portfolio was rated BBB (down from 16%
at year-end 2003). At year-end 2003, less than 2% of the Portfolio was rated
below BBB (down slightly from 2.5% at the end of the previous year).
MARKET OUTLOOK
All signs seem to suggest that the 2003 recovery may continue well into 2004.
Our expectation is that the economy will meet or exceed the consensus growth
forecast for the year. The credit market is likely to be a primary beneficiary
of such growth, as credit fundamentals should continue to improve, without any
impact on the strong technicals that characterized 2003. We expect that the
primary risks in 2004 will be similar to those in 2003--namely geopolitics,
terrorism, and event risk.
As in 2003, we expect the cheapest third and fourth quartiles of the credit
spectrum to lead the market in the year ahead. As we enter the next leg of the
credit cycle, a period of improving credit fundamentals and stabilizing credit
ratings, lower-quality credit should continue to do well. Our challenge in 2004
will be to identify credits that have garnered only a temporary reprieve from
further credit degradation.
Donald F. Serek
Thomas Volpe, Jr.
Portfolio Managers
New York Life Investment Management LLC
M-6
$10,000 INVESTED IN THE
MAINSTAY VP BOND PORTFOLIO
ON 1/23/84 VERSUS MERRILL LYNCH CORPORATE AND
GOVERNMENT MASTER INDEX, LEHMAN BROTHERS AGGREGATE
BOND INDEX AND THE CONSUMER PRICE INDEX*
(MAINSTAY VP BOND PORTFOLIO LINE GRAPH)
<Table>
<Caption>
MERRILL LYNCH
CORPORATE AND
GOVERNMENT MASTER LEHMAN BROTHERS
VP BOND PORTFOLIO INDEX CONSUMER PRICE INDEX AGGREGATE BOND INDEX
----------------- ----------------- -------------------- --------------------
1/23/84 10000.00 10000.00 10000.00 10000.00
1984 11028.00 11422.00 10365.00 11282.00
1985 13370.40 13583.00 10758.90 13776.00
1986 15532.30 15706.10 10877.20 15879.00
1987 17637.00 16035.90 11359.10 16316.00
1988 17390.00 17273.90 11861.10 17603.00
1989 19396.90 19714.70 12412.70 20160.00
1990 20948.60 21388.40 13171.10 21967.00
1991 24390.50 24787.10 13574.10 25482.00
1992 26373.40 26690.70 13967.80 27368.00
1993 29380.00 29642.70 14351.90 30037.00
1994 28384.00 28673.40 14735.10 29160.00
1995 33581.10 34138.50 15065.20 34548.00
1996 34269.50 35132.00 15563.80 35802.00
1997 37576.50 38567.90 15828.40 39258.00
1998 42243.00 41004.00 16083.00 42669.00
1999 40376.00 41377.00 16514.00 42318.00
2000 44341.00 46322.00 17072.00 47238.00
2001 49271.00 50862.00 17365.00 51227.00
2002 54011.00 56427.00 17784.00 56480.00
2003 56455.00 58981.00 18119.00 58798.00
</Table>
One Year: 4.52% Three Years: 7.73% Five Years: 6.22% 10 Years: 6.56%
Since Inception: 9.06% (1/23/84)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. Debt rated AAA has the highest rating assigned by Standard & Poor's, and in
the opinion of Standard & Poor's, the obligor's capacity to meet its
financial commitment on the obligation is extremely strong. Debt rated AA by
Standard & Poor's is deemed by Standard and Poor's to differ from the
highest-rated issues only in small degree. In the opinion of Standard &
Poor's, the obligor's capacity to meet its financial commitment on the
obligation is very strong. Debt rated A by Standard & Poor's is deemed by
Standard & Poor's to be somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher-rated
categories. In the opinion of Standard & Poor's, however, the obligor's
capacity to meet its financial commitment on the obligation is still strong.
Debt rated BBB by Standard & Poor's is deemed by Standard & Poor's to exhibit
adequate protection parameters. It is the opinion of Standard & Poor's,
however, that adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation than would be the case for debt in higher-rated
categories. When applied to Portfolio holdings, ratings are based solely on
the creditworthiness of the bonds in the Portfolio and are not meant to
represent the security or safety of the Portfolio itself.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-7
MAINSTAY VP CAPITAL APPRECIATION PORTFOLIO
MARKET OVERVIEW
While 2003 presented several challenges to equity investors, it proved to be a
rewarding year for those who were patient. Early in the year, investors had to
endure significant market volatility leading up to the war in Iraq. As soon as
this conflict began, however, investors shifted their focus back to the
burgeoning economic recovery.
While most economic indicators remained depressed during the early months of
2003, after the war got underway, these indicators began to show early signs of
improvement. As we moved into the second half of the year, it became
increasingly evident that most major economic indicators were turning
consistently positive. This welcome turnaround helped to push the equity market
higher.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Capital Appreciation
Portfolio (initial class of shares) returned 26.99%. The Portfolio
underperformed the 28.37% return of the average Lipper* Variable Products
Large-Cap Growth Portfolio over the same period. The Portfolio also
underperformed the 29.75% return of the Russell 1000(R) Growth Index* and
underperformed the 28.68% return of the S&P 500(R) Index* for the 12 months
ended December 31, 2003.
After making minor weighting adjustments in response to the heightened level of
stock-specific risk that affected the Portfolio in the first quarter, the
Portfolio's investment results and competitive rankings showed steady
improvement.
STRONG AND WEAK PERFORMERS
The Portfolio's information technology holdings posted the strongest returns for
the year, rising 56.2% versus a 47.9% gain for the information technology stocks
in the Russell 1000(R) Growth Index. Among the Portfolio's largest holdings,
VERITAS Software stood out as the top performer, gaining 137%(1) in 2003. The
company is a leading provider of enterprise storage products, which proved to be
one of the hottest subsectors of the information technology market during the
year. Other top-performing information technology stocks in the Portfolio
included Intel (+106%), Cisco Systems (+85%), Texas Instruments (+97%), and
Electronic Arts (+92%).
The Portfolio's industrial holdings gained 29.4% versus a 31.7% gain for related
stocks in the Index. Cendant, the Portfolio's top-performing industrial stock,
rose 113% during the year on strong sales trends in the company's real estate
business. United Technologies, Danaher, and Illinois Tool Works all rose more
than 30% for the year, fueled by rising investor confidence in an economic
recovery. The only two industrial holdings that showed poor performance during
the year were General Dynamics and Lockheed Martin, both of which were
eliminated from the Portfolio.
Although basic materials stocks represent a small percentage of the Portfolio's
net assets, holdings in this sector delivered strong absolute returns in 2003,
rising 30.3% within the Portfolio and 47.1% within the Index. The Portfolio's
two holdings in this sector included Praxair, which rose more than 34% for the
year, and Air Products & Chemicals, which rose more than 26%. Praxair's
performance was driven by rising optimism that the company's earnings growth
will increase as the economy recovers.
The Portfolio's financial holdings rose 23.1% during the year, roughly in line
with the 23.8% increase for this sector within the Index. American Express,
Morgan Stanley, and Citigroup ranked as the Portfolio's top-three financial
performers in 2003, each rising roughly 35%. Since the end of March, American
Express has rallied on the belief that the company's travel business and
credit-card operations will benefit from an economic rebound. Morgan Stanley
rallied along with the stock market, as its business is closely tied to
equity-market performance. Citigroup rose on the view that commercial-lending
activity will likely increase with a rebound in the economy. BB&T was the
biggest detractor among the Portfolio's financial holdings
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-8
and was sold during the year. The stock declined as a result of net interest
margin compression and soft loan growth.
For the year, the Portfolio's health care holdings rose 17.2% versus a 18.9%
gain for related stocks in the Russell 1000(R) Growth Index. Two of the
Portfolio's biggest winners were Genentech (+182%) and Boston Scientific (+73%).
Genentech, in particular, had a stunning rise in May, after the company released
positive data from a first-line colorectal-cancer trial for its new drug,
Avastin. Boston Scientific experienced strong gains thanks to the promising
market potential of its new drug-eluting stent. Johnson & Johnson and Tenet
Healthcare were the two biggest health care laggards in 2003. Johnson & Johnson
was weighed down by competitive concerns in its core business.
The Portfolio's consumer discretionary holdings rose 17.0% versus 36.7% for
related stocks in the Index. The Portfolio's consumer staples holdings advanced
11.2% compared to a 14.7% rise in consumer staples stocks in the Index. The
Portfolio's top-performing consumer discretionary stocks included Lowe's (+48%),
Omnicom Group (+37%), and Target (+29%). The Portfolio's only consumer
discretionary stock that declined during 2003 was Kohl's (-19.7%). Among the
Portfolio's consumer staples positions, Kraft Foods proved to be a dramatic
underperformer, which prompted us to sell the stock. The biggest consumer
staples gainer was SYSCO (+27%).
While energy stocks represented only 2.6% of the Portfolio's holdings, the
Portfolio's energy stocks advanced 1.2% for the year versus a 15.3% increase for
the energy stocks in the Index. All of the Portfolio's energy holdings are in
the oil-field services area, since we believe that high oil prices and the
recent decline in Iraqi oil-production levels will prompt domestic producers to
step up their exploration and production efforts. While this trend has yet to
emerge in earnest, we continue to believe that it's only a matter of time.
SECTOR WEIGHTINGS
A few adjustments were made to the Portfolio during 2003. The Portfolio added to
its health care, consumer discretionary, and information technology holdings and
reduced its weighting in the consumer staples, financials, and energy sectors.
The Portfolio ended the year overweighted in consumer discretionary and
materials stocks relative to the Russell 1000(R) Growth Index and only slightly
overweighted in energy stocks. Underweighted sectors at the end of 2003 included
consumer staples, health care, industrials, and telecommunication services. The
Portfolio was slightly underweighted in financials and utilities and held a
market weight in the information technology sector.
LOOKING AHEAD
As we enter 2004, the market seems poised to gain further ground, largely
because of positive economic news and strong earnings reports. Going forward, we
see very few factors that threaten to derail the recent rally in stocks,
although we will continue to carefully monitor interest-rate trends and stock
valuations.
Recent gross domestic product figures were encouraging and recent indications
suggest that the long-awaited recovery in the job market is beginning to
materialize, albeit slowly. If these trends continue, they should be good news
for stocks. As always, we will continue to invest in high-quality growth
companies with strong growth prospects.
Whatever the markets or the economy 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
M-9
$10,000 INVESTED IN THE
MAINSTAY VP CAPITAL APPRECIATION PORTFOLIO
ON 1/29/93 VERSUS S&P 500(R) INDEX, RUSSELL 1000(R) GROWTH INDEX,
AND THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP CAPITAL RUSSELL 1000(R)
APPRECIATION PORTFOLIO S&P 500(R) INDEX CONSUMER PRICE INDEX GROWTH INDEX
---------------------- ---------------- -------------------- ---------------
1/29/93 10000 10000 10000 10000
1993 12054 11007 10275 10406
1994 11526 11149 10549.3 10679
1995 15650 15338.8 10785.6 14649
1996 18584.4 18857.5 11142.6 18037
1997 22950 25148 11332 23536
1998 31703 32336 11515 32646
1999 39759 39139 11823 43471
2000 35497 35578 12223 33723
2001 27255 31112 12416 26835
2002 18852 24244 12717 19353
2003 23941 31190 12955 25110
</Table>
One Year: 26.99% Three Years: -12.30% Five Years: -5.46% 10 Years: 7.10%
Since Inception: 8.32% (1/29/93)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. Performance percentages for Portfolio holdings reflect the total-return
performance of the indicated securities or sector holdings for the 12 months
ended December 31, 2003, or for the portion of the reporting period such
securities or sector holdings were held in the Portfolio, if shorter. Due to
purchases and sales, the performance of Portfolio holdings may differ from
the performance of the securities or sectors themselves.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-10
MAINSTAY VP CASH MANAGEMENT PORTFOLIO
MARKET OVERVIEW
During the first few months of 2003, diplomatic and military developments
related to Iraq had a major influence on the financial markets. Equities and
fixed-income investments both experienced huge swings in performance as the
crisis unfolded. Financial conditions improved during the second quarter as
major combat operations in Iraq came to a conclusion. Oil prices declined and
consumer confidence rebounded sharply. Equity markets recovered from their March
lows, and yield spreads between corporate bonds and U.S. Treasuries narrowed.
In May of 2003, the Federal Reserve adopted a new approach by separately
assessing economic-growth prospects and the inflation outlook. Until then, the
Federal Open Market Committee had issued a one-dimensional risk assessment. By
adopting a two-dimensional approach, the Committee attempted to convey that
higher economic growth in the future would not necessarily entail an immediate
tightening of monetary policy.
The Federal Open Market Committee's press release in May highlighted the
probability, though minor, of "an unwelcome substantial fall in inflation" from
a level that was already low. Following this release, interest rates dropped
sharply across the money-market yield curve. As the June meeting approached,
rates continued to fall, as various Federal Reserve members spoke of the need to
act preemptively to prevent the economy from slipping into a deflationary mode.
On June 25, 2003, the Federal Open Market Committee lowered the targeted federal
funds rate by 0.25% to a low 1.00%.
The decline in interest rates sparked a significant wave of mortgage refinancing
in the spring and summer months. During that time, the federal government added
fiscal stimulus to the economy in the form of tax cuts. Largely supported by
this monetary and fiscal stimulus, consumer spending remained strong in 2003.
Despite a poor labor market, real gross domestic product rose at a seasonally
adjusted annual rate of 8.2% in the third quarter of 2003. Real GDP growth
slowed to 4.0% in the fourth quarter, according to advance estimates by the
Bureau of Economic Analysis.
Overall, the yield on the three-month U.S. Treasury bill fell from 1.20% at
year-end 2002 to 0.93% on December 31, 2003, while three-month LIBOR (London
InterBank Offered Rate) declined from 1.38% to 1.15% over the same period.
PERFORMANCE REVIEW
For the seven-day period ended December 31, 2003, MainStay VP Cash Management
Portfolio (initial class of shares) provided a current yield of 0.59%(1) and an
effective yield of 0.59%. For the 12 months ended December 31, 2003, the
Portfolio returned 0.67%. The Portfolio outperformed the 0.64% return of the
average Lipper* Variable Products Money Market Portfolio over the same period.
STRATEGIC POSITIONING
During 2003, the Portfolio's assets were invested in securities issued by the
U.S. Treasury and government-sponsored entities, as well as in high-quality
instruments issued by finance, insurance, and brokerage companies, industrial
enterprises, banks, and bank holding companies.
All 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. At year-end 2003, the Portfolio's
duration was longer than the average of its peers.
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-11
LOOKING AHEAD
In December, the Federal Open Market Committee changed its assessment of the
inflation outlook by stating that the upside and downside risks to inflation
were almost equal. The FOMC has emphasized that monetary policy will remain
accommodative until the Federal Reserve perceives that the current slack in the
economy has diminished. Given the low capacity-utilization rate and the
uncertain labor market, we believe that it may take several quarters of
above-trend economic growth to convince the Federal Reserve that deflationary
pressures have fully abated and that raising the targeted federal funds rate
would be in the best interest of the economy.
While capital spending and inventories are expected to make positive
contributions to gross domestic product growth in the near term, the labor
market will have a major influence on the strength of consumer spending. Thanks
to the federal tax cuts, disposable income has grown much faster than personal
income, and the growth in disposable income helped maintain strong consumer
spending in the second half of 2003. In our opinion, however, spending cannot
outstrip gains in personal income for long. If strong income growth is not
forthcoming from the labor market, we believe that spending will slow.
At least for the time being, we intend to maintain the Portfolio's
longer-than-average duration. As the market continues to look for signs of a
sustainable economic recovery, we also intend to remain focused on high-quality,
liquid investments. Whatever the markets or the economy may bring, the Portfolio
will continue to seek a high level of current income while preserving capital
and maintaining liquidity.
Claude Athaide, Ph.D., CFA
Portfolio Manager
MacKay Shields LLC
1. The 7-day current yield more accurately reflects the portfolio's return than
the annualized return.
While some securities in the Portfolio may carry government backing or
guaranteed payment of interest and principal, an investment in the Portfolio is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. Although the Portfolio seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose money by investing in
the Portfolio.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-12
MAINSTAY VP CONVERTIBLE PORTFOLIO
MARKET OVERVIEW
The beginning of 2003 presented a number of challenges for equity investors. In
addition to facing the volatility associated with military action in Iraq,
investors had to contend with a constant stream of mixed economic indicators,
which added to the volatility and uncertainty of the stock market.
Although initial signs of an economic recovery began to take shape toward the
end of 2002, stocks declined through much of the first quarter of 2003. After
the stock market reached its year-to-date low in mid-March, stocks rallied
sharply. When major combat operations were concluded, the stock market began to
anticipate an economic recovery, and stocks continued to rise through the end of
the year.
In June 2003, the Federal Reserve lowered the targeted federal funds rate by 25
basis points to 1.0%, a four-decade low. This was the Fed's thirteenth easing
move since the beginning of 2001. Real gross domestic product grew at a modest
pace in the first quarter of 2003, somewhat faster in the second, and quite
rapidly in the third. According to the Bureau of Economic Analysis, real gross
domestic product grew at a seasonally adjusted annual rate of 8.2% in the third
quarter of 2003, its fastest pace since the fourth quarter of 1983.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Convertible Portfolio
(initial class of shares) returned 22.23%. The Portfolio underperformed the
26.71% return of the average Lipper* Convertible Securities Portfolio over the
same period. The Portfolio underperformed the 27.99% return of the Credit Suisse
First Boston(TM) Convertible Securities Index* for the 12 months ended December
31, 2003.
STRONG PERFORMERS
The Portfolio had an eclectic group of strong-performing securities during the
year. Many were direct beneficiaries of the improving economy. Truck
manufacturer Navistar International performed well as signs of an upturn in
demand for heavy- and medium-duty trucks continued to emerge. Construction and
agricultural machinery company Caterpillar also contributed positively to
performance. Since Caterpillar sells construction equipment, the company's
fortunes are closely tied to the level of economic activity. If the economic
recovery continues, construction activity should pick up and Caterpillar's
earnings could improve dramatically. If the stimulus from tax cuts wears off and
the economy falters, Caterpillar's stock may decline, but the bond aspect of the
convertible may limit the Portfolio's downside.
A number of strong performers for the 12-month reporting period were in the
information technology sector. In particular, the Portfolio benefited from its
overweighted positions among semiconductor companies that provide back-end test
and assembly services. One holding in particular, ASE Test, does not make
semicon-ductors but does benefit from higher semiconductor unit volume. ASE
Test, as its name implies, tests semi-conductors before they are sent to
customers. The driving force behind improving operating performance for these
companies is increasing demand for semiconductors. If the economy improves,
semiconductor unit production should increase. With the Federal Reserve cutting
rates in November 2002 and June 2003, the market anticipated an economic
recovery and pushed these stocks higher. Other semiconductor stocks that
benefited during 2003 were Fairchild Semiconductor International and Cypress
Semiconductor.
Generic drugmaker Teva Pharmaceutical Industries was another strong contributor
to performance. Major pharmaceutical firms continue to struggle with earnings
problems and depressed stock prices, as their substantial revenue streams tend
to fall sharply when their drugs come off patent. Teva Pharmaceutical
Industries, a leader among generic-drug companies, benefited as the company's
generic drugs continued to receive FDA approvals, which led to strong earnings
and a rising stock price.
Airline and travel stocks were very weak in 2002 as a result of the geopolitical
environment and SARS. Consequently, the slightest improvement in the economy led
to strong results for many stocks in these areas. The Portfolio's winners for
2003 included Continental Airlines, as well as Cendant, a company with exposure
to the travel industry through interests in travel agencies, hotels, and
rental-car businesses.
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-13
Despite a weak holiday shopping season at the end of 2002, The Gap performed
well in 2003. The Gap had lost its customer base, and it struggled to identify
who its customers would be. With increased cash on the company's balance sheet
and implementation of a "back to basics" strategy, The Gap's stock appreciated
and enhanced the Portfolio's results.
WEAK PERFORMERS
While the Portfolio had a few laggards, its underperformance relative to its
peers stemmed from an underweighted position among speculative-grade
convertibles. During 2003, the Merrill Lynch All Investment Grade U.S.
Convertible Index* rose 12.39%, while the Merrill Lynch All Speculative Grade
U.S. Convertible Index* gained 41.98%. We believe that the strongest case to be
made for investing in convertibles is that they offer asymmetry of returns.
Stocks go up and stocks go down. The attraction of convertibles is that they may
participate more on the upside than they do on the downside. Our strategy to
capture this asymmetry of returns is to invest in securities that are not too
equity sensitive and not too bond sensitive. Instead, we seek convertibles that
we believe will participate in a good portion of the stock's rise, while
participating to a lesser degree in the stock's decline. To assure that the
Portfolio's convertibles will provide risk management on the downside, we invest
in better-quality corporate credits, which are usually investment-grade
companies. With the tremendous outperformance of the speculative-grade index,
however, our strategy hurt the Portfolio's relative performance over the
reporting period. Nevertheless, over the long term, we believe that our strategy
will allow us to capture the value convertibles offer and enable the Portfolio
to post solid risk-adjusted returns.
The Portfolio did have some individual holdings with disappointing results.
Tenet Healthcare was the largest underperformer for the period. We purchased the
stock after it had dropped precipitously. We believed that Tenet Healthcare
offered an attractive risk/reward trade-off, as it generated substantial free
cash flow, which we expected would be deployed to buy back stock. Although Tenet
Healthcare did nothing illegal, the FBI began a fraud investigation, and the
situation escalated when HMOs tried to renegotiate their contracts with Tenet
Healthcare on more favorable terms. After having sold a portion of the
Portfolio's position in November 2002, we sold the remainder of the position at
a loss in June 2003.
Another health care name that showed poor performance was Johnson & Johnson, a
manufacturer of health care products. The company held up nicely relative to the
Index in early 2003, but lagged later in the year.
New York Stock Exchange firm Labranche also detracted from the Portfolio's
performance, since disap-pointing earnings caused the company's stock price to
decline. The Pepsi Bottling Group, a manufacturer, seller, and distributor of
Pepsi-Cola beverages, also took a toll on performance, as cold drinks suffered
from unseasonably cold spring weather. We sold the Portfolio's position in The
Pepsi Bottling Group in May.
LOOKING AHEAD
While 2003 was a strong year, it began from a very depressed base. As the
economy continues to recover, the stock market should benefit, but since we are
starting 2004 with higher stock prices, the returns that we saw in 2003 are
unlikely to be repeated. At year-end, we perceived a lot of opportunity in the
convertible marketplace. We continue to look for convertibles that have
favorable risk/reward profiles. Brinker International, a restaurant company
whose major brand is Chili's, is a case in point. Although the company
experienced weak sales because of forces that we view as temporary, we believe
that the company should do better as the economy improves. Since Brinker
International has a large amount of free cash flow, we are confident that
principal and interest on the bonds will be paid. If the economy continues to
recover, Brinker International's stock may rally and the convertible may
participate. If the economy weakens, the stock may underperform, but the bonds
will be repaid in full. In either case, the convertible may benefit the
Portfolio.
The market has continued to gain ground on positive economic news, and recent
gross domestic product figures suggest that more good news may lie ahead. The
Portfolio remains fully invested, and we believe that convertible securities may
offer an attractive combination of upside potential and downside risk
management. Since convertibles also have a fixed-income component, they may
offer a measure of downside protection should the market decline.
M-14
Whatever the markets or the economy may bring, the Portfolio will continue to
seek capital appreciation together with current income.
Edward Silverstein
Edmund C. Spelman
Thomas Wynn
Portfolio Managers
MacKay Shields LLC
M-15
$10,000 INVESTED IN THE
MAINSTAY VP CONVERTIBLE PORTFOLIO
ON 10/1/96 VERSUS CREDIT SUISSE(TM) FIRST BOSTON
CONVERTIBLE SECURITIES INDEX AND
THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
CREDIT SUISSE(TM) FIRST
BOSTON CONVERTIBLE
VP CONVERTIBLE PORTFOLIO SECURITIES INDEX CONSUMER PRICE INDEX
------------------------ ----------------------- --------------------
10/1/96 10000 10000 10000
1996 10389 10243 10082
1997 11992 11948 10222
1998 12530 13342 10386
1999 17791 17812 10665
2000 16898 16715 11025
2001 16530 15739 11236
2002 15222 14450 11514
2003 18606 18507 11731
</Table>
One Year: 22.23% Three Years: 3.26% Five Years: 8.23%
Since Inception: 8.94% (10/1/96)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
Certain of the Portfolio's investments have speculative characteristics.
High-yield securities ("junk bonds") are generally considered speculative
because they present a greater risk of loss than higher-quality debt securities
and may be subject to greater price volatility.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-16
MAINSTAY VP EQUITY INCOME PORTFOLIO
MARKET OVERVIEW
The U.S. economy and the stock market entered 2003 under great duress. The war
on terror appeared likely to turn into a ground war in at least two locales.
Concern over excessive white-collar greed was commonplace among investors.
Corporate-debt defaults were on the rise, with new scandals to accompany them.
Although the stock market tumbled in the opening months of the year, in
mid-March, equities started to recover, and they continued to advance through
the end of 2003. The market responded favorably to the pace and brevity of major
combat operations in Iraq. Congress passed a substantial tax-relief bill, and in
late May, President Bush signed it into law. The Federal Reserve remained
accommodative, and in June, the Federal Open Market Committee reduced the
targeted federal funds rate by 25 basis points to a low 1.0%. Although gross
domestic product was meager in the first quarter and only slightly better in the
second, according to the Bureau of Economic Analysis, third-quarter real GDP
rose at a seasonally adjusted annual rate of 8.2%, its fastest pace since late
1983.
After rising in the first half of the year, unemployment figures seemed to
improve in the second half. As the economy showed renewed signs of strength,
productivity increased and output expanded, all of which was good news for
equity investors.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Equity Income Portfolio
(initial class of shares) returned 28.97%. The Portfolio outperformed the 26.81%
return of the average Lipper* Variable Products Equity Income Portfolio over the
same period. The Portfolio underperformed the 30.03% return of the Russell
1000(R) Value Index* and the 38.07% return of the Russell Midcap(R) Value Index*
for the 12 months ended December 31, 2003.
STRATEGIC POSITIONING
Early in 2003, we began buying shares of economically sensitive companies for
the Portfolio. We firmly believed that with sufficient time, aggressive fiscal
and monetary policy would lead to improvements in the U.S. economy. It was our
belief that the industrials and materials sectors were well represented by
companies with low valuations, improving fundamentals, and catalysts for timely
realization of upside potential. Later, we found similar characteristics in the
energy sector.
In the industrials sector, the Portfolio's holdings worked out well, with
particularly strong results from Navistar International and Cummins. The
Portfolio held an overweighted position in the industrials sector and enjoyed
superior stock selection relative to the Russell Midcap(R) Value Index.
Although the Portfolio's holdings in the materials sector--primarily among paper
companies--and in the energy sector have yet to outperform, our analysis
continues to find significant value in select companies in these sectors. In our
view, these companies have enjoyed strong improvement in operating conditions
without the stock price movement one might expect. We believe that the materials
and energy sectors should both benefit from a weaker dollar, and during the
year, we increased the Portfolio's commitment to both sectors.
In 2003, we were able to find relatively little value in the financials sector
and have generally underweighted financial stocks. This positioning--combined
with strong stock selection--added significant value to the Portfolio in 2003.
The Portfolio was less successful with its underweighted position in the rapidly
rising information technology sector. In 2003, the average information
technology stock in the Russell Midcap(R) Value Index appreciated by over 75%.
Underweighting the sector proved to be one of the Portfolio's most costly
positioning decisions
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-17
during the year. Although we have continuously reexamined our stance, we
continue to believe that few if any information technology companies provide
significant value opportunities.
To us, there is more to value than a substantial drop in stock price. In the
information technology sector, we found few discount valuations, few companies
with improving fundamentals, and few catalysts for value creation. Since our
value disciplines have not changed, the Portfolio continues to have little
exposure to the information technology sector.
Finally, underexposure to the consumer discretionary sector negatively impacted
performance during the year. We believe that most consumer stocks are at the
high end of their historic valuation ranges, which makes them particularly
unattractive within our investment process. We also find it difficult to
envision a broadly based driver for improved consumer spending in light of
recent trends in interest rates, consumer finances, and the labor market.
LOOKING AHEAD
We remain optimistic about the global economy and our investment style. We will
continue to selectively overweight undervalued cyclical sectors of the market
that we believe offer compelling emerging supply-and-demand characteristics.
As always, we continue to search for and hold stocks that we believe offer a
combination of undervaluation, improving fundamentals, strengthening earnings
trends, large discounts to private market value, active restructuring programs,
and high dividend yields.
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
appreciation and income.
Richard A. Rosen
Michael C. Sheridan
Portfolio Managers
MacKay Shields LLC
M-18
$10,000 INVESTED IN THE
MAINSTAY VP EQUITY INCOME PORTFOLIO
ON 7/2/01 VERSUS RUSSELL 1000(R) VALUE INDEX, RUSSELL MIDCAP(R)
VALUE INDEX, AND THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP EQUITY INCOME RUSSELL 1000(R) VALUE RUSSELL MIDCAP(R)
PORTFOLIO INDEX CONSUMER PRICE INDEX VALUE INDEX
---------------- --------------------- -------------------- -----------------
7/2/01 10000 10000 10000 10000
2001 9897 9561 9966 9909
2002 8455 8077 10215 8953
2003 10904 10503 10399 12362
</Table>
One Year: 28.97% Since Inception: 3.52% (7/2/01)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-19
MAINSTAY VP GOVERNMENT PORTFOLIO
MARKET OVERVIEW
As 2003 got underway, many homeowners moved to refinance their mortgages and
lower their monthly costs. The resulting "found money" helped to keep the
economy on track while three key economic drivers--business confidence, capital
spending, and hiring--remained virtually absent.
Real gross domestic product grew at a modest annual rate of 2.0% in the first
quarter and 3.1% in the second quarter of 2003. During the first half of the
year, turbulence in the Treasury market echoed conflicting viewpoints regarding
the economy, geopolitical tensions, falling energy prices, a weaker dollar, and
accommodative monetary and fiscal policies. In May, Federal Reserve warnings
about deflation risk triggered a dramatic Treasury rally. In mid-June, the
10-year Treasury yield reached an exceedingly low 3.1%. On June 25, 2003, the
Federal Open Market Committee lowered the targeted federal funds rate by 25
basis points to a low 1.0%, but the market was disappointed with the size of the
move, and interest rates rose to more familiar levels. Although volatility
persisted, economic data improved. In the third quarter, real gross domestic
product grew at a seasonally adjusted annual rate of 8.2%, the fastest pace
since late 1983.
Over the course of 2003, the yields on Treasury notes and bonds rose slightly,
with the five-year note rising from 2.7% at the end of 2002 to 3.2% at the end
of 2003 and the 30-year bond rising from 4.8% to 5.1% over the same period.
Elsewhere in the bond market, investors dramatically increased their appetite
for risk when they realized that the corporate malfeasance of 2002 had generated
excessive bond repricing. Corporate bonds, especially high-yield securities,
were strong performers as the economic outlook improved in the second half of
2003.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, the MainStay VP Government Portfolio
(initial class of shares) returned 1.88%. The Portfolio underperformed the 2.32%
return of the average Lipper* Variable Products General U.S. Government
Portfolio over the same period. The Portfolio also underperformed the 2.36%
return of the Lehman Brothers(R) Government Bond Index* for 2003.
CORE POSITIONING
During 2003, we reorganized the Portfolio's Treasury holdings to increase
exposure to intermediate maturities by combining cash with sale proceeds from
some bonds with maturities of 20 years or longer. The reposi-tioning tempered
the Portfolio's earlier bias toward a flatter yield curve, since flattening
appeared less likely as the fiscal deficit increased and the economy gradually
improved. The Portfolio also took profits on Treasury inflation-protected
securities and used the proceeds to buy conventional Treasury notes with similar
maturities.
We reduced the Portfolio to a neutral position in agency debentures as the
sector approached fair value. While Congress was calling for greater
investment-portfolio scrutiny at housing government-sponsored entities (such as
Fannie Mae, Freddie Mac, and the Federal Home Loan Bank), accounting
irregularities were uncovered at Freddie Mac. Despite these risks, however, we
did not underweight the sector, since a strong housing market helped increase
revenues. The proceeds of the Portfolio's agency sales were redeployed in
asset-backed securities, including auto loan/lease securitizations and bonds
collateralized by electric utility tariffs.
During 2003, we increased the Portfolio's commitment to residential
mortgage-backed securities to improve Portfolio yield. We emphasized
lower-coupon securities and fifteen-year term loans that we felt had modest
prepayment risk. For a brief period in the summer, we underweighted residential
mortgage-backed securities on concerns about call risk. When interest rates rose
in August, however, we reestablished the Portfolio's position using
mortgage-backed securities that had 5.5% and 6.0% coupons and were trading at a
price
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-20
slightly above market value. These mortgage-backed bonds are on the prepayment
cusp, and we expect them to perform well as interest rates rise and prepayments
taper off.
We lightened the Portfolio's commitment to commercial mortgage-backed
securities, believing that investors were not being adequately compensated for
risk. We used the sale proceeds to buy corporate bonds issued by banks, electric
utilities, and REITs, which helped preserve the Portfolio's exposure to regional
economies.
DURATION POSITIONING
We typically keep the Portfolio's duration close to that of the Lipper universe.
From time to time, however, we tactically repositioned the Portfolio's duration
(within a range of 5% shorter or longer than neutral) to take advantage of
emerging interest-rate trends. Several of these modest adjustments proved
profitable, but our decision to lengthen the Portfolio's duration in June
detracted from performance when interest rates unexpectedly rose.
LOOKING AHEAD
At year-end, the Portfolio was positioned for higher Treasury yields, lower
volatility, contained inflation, and narrowing yield spreads between Treasuries
and government-related sectors, such as agency debentures and mortgage-backed
securities. Spread tightening has been supported by foreign investors seeking
U.S. dollar denominated assets with stable and secure cash flows.
The Portfolio's modestly overweighted position in mortgage-backed securities
reflects the sector's attractive incremental yield. As the pace of mortgage
refinancing slows, limited new supply of mortgage debt should be met by solid
investor demand. With supply and demand in balance, we think that the sector's
healthy yield advantage to Treasuries may provide a valuable cushion if interest
rates rise.
Our flexibility to invest a portion of the Portfolio in non-government-related
securities--namely, asset-backed securities and corporate bonds--enhanced
results during the reporting period. We believe that these sectors should
continue to offer favorable total-return opportunities going forward, although
results may be weaker than in 2003.
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
M-21
$10,000 INVESTED IN THE
MAINSTAY VP GOVERNMENT PORTFOLIO
ON 1/29/93 VERSUS LEHMAN BROTHERS(R) GOVERNMENT BOND INDEX
AND THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
LEHMAN BROTHERS(R)
VP GOVERNMENT PORTFOLIO GOVERNMENT BOND INDEX CONSUMER PRICE INDEX
----------------------- --------------------- --------------------
1/29/93 10000.00 10000.00 10000.00
1993 10563.00 10914.00 10275.00
1994 10368.60 10546.20 10549.30
1995 12102.30 12480.40 10785.60
1996 12378.20 12826.10 11142.60
1997 13552.00 14056.00 11332.00
1998 14771.00 15441.00 11515.00
1999 14514.00 15096.00 11823.00
2000 16288.00 17095.00 12223.00
2001 17369.00 18198.00 12416.00
2002 19079.00 20284.00 12717.00
2003 19439.00 20769.00 12955.00
</Table>
One Year: 1.88% Three Years: 6.07% Five Years: 5.65% 10 Years: 6.29%
Since Inception: 6.27% (1/29/93)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
While some securities in the Portfolio may carry government backing or
guaranteed payment of interest and principal, shares of the Portfolio are not
guaranteed, their prices will fluctuate, and shares, when sold, may be worth
more or less than their original cost.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-22
MAINSTAY VP GROWTH EQUITY PORTFOLIO
MARKET OVERVIEW
The U.S. equity market provided strong returns for the 12 months ended December
31, 2003. Equity gains were broadly based, with every sector ending the 12-month
period in positive territory. Based on Russell indices,* growth stocks
outperformed value stocks among small- and mid-capitalization companies, while
the reverse held true for large-caps. Smaller-capitalization stocks generally
outperformed larger-capitalization issues.
The year 2003 started off slowly, with the uncertainty of a war with Iraq
hanging over both the U.S. economy and the domestic equity market. As coalition
troops assembled in Kuwait in mid-March, the market began to rise, and equities
rebounded sharply as it became increasingly evident that the military conflict
would be resolved quickly. Further support for the stock market came in late
June, when the Federal Reserve lowered the targeted federal funds rate by 25
basis points to a low 1.0%. Fiscal policy also contributed to the economy when
Congress passed a highly stimulative tax bill that reduced tax rates on
corporate dividends. Stock prices continued to climb through the remainder of
the year.
The U.S. economy showed considerable improvement over the course of 2003.
According to the Bureau of Economic Analysis, real gross domestic product grew
at a seasonally adjusted annual rate of 2.0% in the first quarter and 3.1% in
the second quarter. In the third quarter, the rate rose to 8.2%, the fastest GDP
growth since late 1983. Most of the United States' foreign trading partners have
also seen economic improvements. This, in turn, has helped strengthen U.S.
corporate earnings.
Cyclical sectors, such as information technology and consumer discretionary, led
U.S. equity-market performance in 2003. Less-cyclical sectors, such as
telecommunication services and health care, lagged on a relative basis.
Interestingly, growth expectations prompted by monetary and fiscal stimulus had
a stronger impact on the relative returns of lower-quality stocks, which helped
them outperform higher-quality issues in 2003.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Growth Equity Portfolio
(initial class of shares) returned 26.37%. The Portfolio underperformed the
26.43% return of the average Lipper* Variable Products Large-Cap Core Portfolio
over the same period. The Portfolio also underperformed the 29.89% return of the
Russell 1000(R) Index* and the 28.68% return of the S&P 500(R) Index* for 2003.
During the first half of the year, the Portfolio's relative performance was
negatively impacted by a core orientation toward higher-quality companies with
steady earnings and strong balance sheets. We shifted the Portfolio to a
slightly more aggressive stance during the second half of the year, which
improved the Portfolio's relative performance.
STRATEGY AND SECTOR ALLOCATION
At the end of 2003, the Portfolio had a cyclical orientation, with overweighted
positions in the information technology and industrials sectors. Our decision
was based primarily on our positive view of the U.S. economy through early 2004.
Since many of the Portfolio's holdings in these two sectors have high exposure
to international markets, the Portfolio benefited from the strengthening global
economic environment and the weak U.S. dollar.
The Portfolio had an overweighted position in the health care sector, but little
exposure to the pharmaceutical industry. Within the health care sector, we
focused on companies with superior earnings-growth prospects based on new
products or services. We continue to believe that the health care sector should
benefit from an aging U.S. population, but we are carefully monitoring potential
governmental restrictions in certain subindustries.
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-23
At the end of 2003, the Portfolio held underweighted positions in the consumer
staples, energy, and telecommunication services sectors, each for different
reasons. Growth of the consumer staples sector historically lags the broader
equity market during improving earnings cycles. We expect commodity prices in
the energy sector to moderate from the high levels we saw last winter. The
telecommunication services sector has faced an increasingly difficult
competitive pricing environment in the last few years.
STRONG AND WEAK PERFORMERS
Intel (+106%)(1) and Applied Materials (+72%) were strong performers for the
Portfolio during the year, as earnings expectations at both of these
semiconductor companies increased with the improving economy. Medical supplies
company Boston Scientific (+72%) provided strong returns because investors
expect new-product approvals to provide a significant boost to the company's
earnings in 2004. Cisco Systems (+84%), the large networking and communications
product company, benefited from the improving economy and from the expectation
of increased business spending for the company's products next year. Regional
bank, US Bancorp (+45%) was a strong performer as it successfully integrated
several acquisitions and saw its earnings expand.
Since the strength of the U.S. equity market was broadly based, only a few
stocks in the Portfolio provided disappointing results. Defense contractor
Lockheed Martin (-20%) was one of the Portfolio's weakest holdings. Even though
the company's operating performance was positive, the stock declined on
consensus expectations that earnings would be lower in 2004.
SIGNIFICANT PURCHASES AND SALES
One of the Portfolio's best-performing new purchases was wireless communications
provider Nextel Communications (+112%). Investors reacted favorably to the
company's improving cash flow generation from operations. We also added copper
producer Phelps Dodge (+94%), which benefited from improved copper pricing as
global economic growth began to recover. Regional bank PNC Financial Services
Group (+27%) was another new purchase that performed well during the portion of
the reporting period it was held in the Portfolio. The company's share price
rose as a result of a merger late in the reporting period, and the transaction
helped raise valuations for several regional banks.
Most of the Portfolio's sales were based not on declining absolute returns but
rather on underperformance relative to an otherwise strong equity market. Our
decision to sell the Portfolio's position in consumer-products manufacturer
Newell Rubbermaid proved beneficial. The stock declined 20% after the
Portfolio's sale date, as the company suffered from a significant earnings
disappointment and from a reduction in the level of expected future earnings.
LOOKING AHEAD
Positive economic news may have helped support the U.S. equity market in 2003,
but we believe that much of this news has already been discounted in many equity
sectors. We also believe that lofty forward earnings multiples may leave equity
valuations highly susceptible to changes in interest rates. Since we expect
interest rates to remain low for some time, however, we believe that the next
market advance will likely depend on continued improvement in corporate
earnings. In our view, the U.S. equity market may see increased volatility and
more selective successes.
We consider it rather ironic that over the last year, companies that don't pay
dividends outperformed those that do pay them, especially given the recent
reduction in tax rates on corporate dividends. We expect this trend to reverse
as later-cycle stocks, which tend to be higher-quality dividend-paying
companies, assume market leadership in a maturing economic recovery. We also see
opportunity potential in companies with sizable exposure to international
markets. In light of the projected fiscal deficit, we anticipate little upside
in the value of the U.S. dollar.
No matter what the economy or the markets may bring, the Portfolio will continue
to seek long-term growth of capital, with income as a secondary consideration.
James Agostisi
Patricia S. Rossi
Portfolio Managers
New York Life Investment Management LLC
M-24
$10,000 INVESTED IN THE
MAINSTAY VP GROWTH EQUITY PORTFOLIO
ON 1/23/84 VERSUS S&P(R) 500 INDEX, RUSSELL 1000(R) INDEX,
AND THE CONSUMER PRICE INDEX*
(LINE CHART)
<Table>
<Caption>
VP GROWTH EQUITY
PORTFOLIO S&P 500(R) INDEX RUSSELL 1000(R) INDEX CONSUMER PRICE INDEX
---------------- ---------------- --------------------- --------------------
1/23/84 10000.00 10000.00 10000.00 10000.00
1984 9824.00 10755.00 10649.00 10365.00
1985 12162.10 14199.80 14085.00 10758.90
1986 12648.60 16833.90 16602.00 10877.20
1987 13035.60 17712.60 17088.00 11359.10
1988 14791.50 20691.90 20036.00 11861.10
1989 18632.90 27216.00 26133.00 12421.70
1990 17535.40 26350.60 25033.00 13171.10
1991 23472.90 34405.90 33303.00 13574.10
1992 26423.50 37051.80 36278.00 13967.80
1993 30046.10 40753.20 39790.00 14351.90
1994 30406.70 41278.90 40125.00 14735.10
1995 39273.30 56791.50 55279.00 15065.20
1996 48895.20 69829.60 67688.00 15563.80
1997 61975.00 93111.00 89925.00 15828.00
1998 78454.00 119723.00 114225.00 16083.00
1999 101959.00 144912.00 138112.00 16514.00
2000 98553.00 131725.00 127354.00 17072.00
2001 81737.00 115245.00 111499.00 17365.00
2002 61914.00 88613.00 87357.00 17784.00
2003 78241.00 113963.00 113468.00 18119.00
</Table>
<Table>
One Year: 26.37% Three Years: -7.41% Five Years: -0.06% 10 Years: 10.04% Since Inception: 10.86% (1/23/84)
</Table>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. Percentages reflect the total-return performance of the indicated securities
for the 12 months ended December 31, 2003, or for the portion of the
reporting period such securities were held in the Fund, if shorter. Due to
purchases and sales, the performance of Fund holdings may differ from the
performance of the securities themselves.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-25
MAINSTAY VP HIGH YIELD CORPORATE BOND PORTFOLIO
MARKET OVERVIEW
High-yield bonds showed very strong performance in 2003, continuing a rally that
began in the fourth quarter of 2002. High-yield bond spreads were at
historically wide levels at the beginning of 2003, and they contracted over the
course of the year. The default rate, a key driver of high-yield returns, also
declined during 2003. Contracting spreads and declining default rates translated
into meaningful price appreciation for high-yield bonds.
The positive performance of high-yield bonds was fueled by significant inflows
into the asset class, which brought technical momentum to the market. New
issuance of high-yield securities was very strong, supported by continuing
demand throughout the year.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, the MainStay VP High Yield Corporate
Bond Portfolio (initial class of shares) returned 36.37%. The Portfolio
outperformed the 23.87% return of the average Lipper* Variable Products High
Current Yield Portfolio over the same period. The Portfolio also outperformed
the 27.94% return of the Credit Suisse First Boston(TM) High Yield Index* for
the 12 months ended December 31, 2003.
PORTFOLIO MANAGEMENT DECISIONS
In 2003, lower-quality credits consistently and significantly outperformed their
higher-quality peers. Over the course of the year, we shifted the Portfolio's
risk profile from one that was split between higher-rated high-yield issues and
much-riskier credits to one that emphasized high-yield credits in the
middle-to-upper range. This reduced the Portfolio's emphasis on higher-risk
securities and improved overall credit quality. By the end of 2003, the market's
upward climb resulted in cash levels that were higher than usual, since
attractive buying opportunities were limited and we felt that the new-issue
market was overheated. Recently, the Portfolio has experienced higher-than-usual
tenders from bond issuers, which has also added to the level of cash. The
Portfolio's strong relative performance was primarily the result of sector
weightings and credit events.
SECTOR WEIGHTS AND IMPACT
For the year, the best-performing portions of the high-yield market were
wireless telecommunication services, utilities, and cable. All industries
provided double-digit gains. The worst-performing areas were consumer
nondurables, gaming--new jurisdiction, and food & drug. The Portfolio was
underweighted in the food & drug and consumer nondurable areas all year, which
strengthened performance.
Many of the top-performing securities in the Portfolio were issued by cellular
companies. Top-performing wireless telecommunication services companies in the
Portfolio included Nextel International, Millicom International, and US Unwired.
The wireless telecommunication services industry performed well this year, as
leveraged companies found liquidity in the credit markets. US Unwired is selling
assets to enhance its liquidity. Nextel International, which completed a
reorganization at the end of 2002, was the top performer for the Portfolio
during the year. As of November 24, 2003, wireless and local telephone companies
had to provide number portability, which is likely to raise the cost of
acquiring and retaining customers.
Beginning in the second quarter, investors overcame their concerns about Qwest's
unaudited financial statements and the company's lack of a wireless affiliate.
Investors were encouraged that the company reduced its debt burden through asset
sales (Dex Directory) and a debt exchange, and they appreciated the monopoly
value of Qwest's underlying Regional Bell Operating Company (the former US
West). Qwest reported third-quarter results in November and noted that it
planned to tender $2.25 billion in outstanding bonds--a move that could save the
company about $100 million in interest expense annually.
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-26
Utility companies posted excellent gains during the year, outperforming the
benchmark in three out of four quarters. As the largest portion of the
benchmark, utilities have had a significant weight in the Portfolio throughout
the year. Mirant Americas Generation filed Chapter 11 in mid-July. The company,
which is a subsidiary of Mirant Corp., was facing a short-term liquidity crisis.
Bondholders viewed the filing as a positive event, and their bonds appreciated
following the news.
Favorable high-yield market conditions allowed Calpine to complete a large debt
offering in July. Proceeds from the substantial new offering and announced asset
sales have increased the company's liquidity and have allowed it to fund
expansion plans and repay some short-term debt. Most of the Portfolio's energy
holdings are in the gas-pipeline area, which we believe to be a stable business.
As merchant power companies faced difficulties in 2003, gas pipelines proved to
be valuable assets and were sold to higher-quality companies. Gas-pipeline
companies held in the Portfolio include ANR Pipeline, El Paso, Tennessee Gas
Pipeline, PG&E, and Williams. We initiated investments in several gas-pipeline
companies during the first half of 2003.
Cable companies that were among the Portfolio's top performers included Adelphia
and United Pan-Europe, each of which is reorganizing after a bankruptcy. In
United Pan-Europe's reorganization, bondholders received equity in UGC Europe.
In December, UnitedGlobalCom acquired all shares of UGC Europe.
A number of cable companies reported strong earnings in the fourth quarter of
2003, which helped improve expectations for the industry. This represented a
distinct turnaround from earlier in the year, when investors were pessimistic
about cable prospects. After a sharp sell-off in early 2003 (when difficulties
at Adelphia Communications and Charter raised general cash-flow concerns), the
asset value of cable systems, the expected free cash flow, and credit
improvement brought investors back to the industry in the second quarter.
While most cable companies were trading at high-yield levels early in 2003, at
the end of the year, yields on cable-company bonds were comparable to those of
investment-grade issues. As a result, many cable companies no longer fit our
investment process. At the end of 2003, the Portfolio continued to hold
FrontierVision, Quebecor Media, and Rogers Cablesystems.
Performance by Algoma Steel and AK Steel was lackluster in the first half of
2003. Investors reacted positively to a bank-line approval for Algoma in the
third quarter, which has improved the company's liquidity. Metals-related
credits rose to the top of the Portfolio in the fourth quarter. AK Steel, Algoma
Steel, Allegheny, and United States Steel were all among the top performers in
the last three months of 2003. Metals-related credits performed well as many
basic commodities, including steel, exhibited meaningful strength. We believe
this makes sense given the increase in North American manufacturing. The weaker
U.S. dollar and strong end-user demand in Asia have reduced the threat of
low-priced imported steel and have made the Bush administration's removal of
protective tariffs in November something of a nonevent.
In the first quarter of 2003, airline-industry performance was abysmal amid the
pressure of war, financial difficulties, and union negotiations. The industry
revived in the second quarter as the war with Iraq wound down and union
negotiations were finalized. Investors returned to the industry as summer
bookings began to grow. The Portfolio continues to be overweighted in the
industry. At the end of 2003, the Portfolio held Continental Airlines, Delta
Airlines, and Northwest Airlines.
We were disappointed with the negative performance of a few of the Portfolio's
holdings. Investments in Lumbermens Mutual, Ormet Corporation, and General
Chemical detracted from the Portfolio's performance during 2003.
LOOKING AHEAD
Our view of the high-yield market remains constructive. Low real interest rates,
significant federal stimulus, and continuing improvements in the world's
financial markets all provide positive potential for the economy. New issuance
continues, and inflows have strengthened.
M-27
In the recent lending environment, the average high-yield company has been able
to dramatically repair its balance sheet, which has lowered the likelihood of
defaults going forward. With declining default rates, we believe the high-yield
market will begin 2004 at an attractive yield-spread premium relative to U.S.
Treasury bonds.
Donald E. Morgan
J. Matthew Philo
Portfolio Managers
MacKay Shields LLC
M-28
$10,000 INVESTED IN THE
MAINSTAY VP HIGH YIELD CORPORATE BOND PORTFOLIO
ON 5/1/95 VERSUS CREDIT SUISSE FIRST BOSTON(TM) HIGH YIELD INDEX
AND THE CONSUMER PRICE INDEX*
[LINE GRAPH]
<Table>
<Caption>
HIGH YIELD CORPORATE BOND CREDIT SUISSE FIRST BOSTON
PORTFOLIO (TM) HIGH YIELD INDEX CONSUMER PRICE INDEX
------------------------- -------------------------- --------------------
5/1/95 10000.00 10000.00 10000.00
1995 10968.00 11006.00 10102.00
1996 12329.00 12894.60 10436.40
1997 13885.00 14574.80 10613.80
1998 13966.00 14962.00 10785.00
1999 16884.00 14424.00 11074.00
2000 15893.00 13721.00 11448.00
2001 16675.00 14467.00 11672.00
2002 17017.00 17592.00 11961.00
2003 23207.00 19084.00 12187.00
</Table>
One Year: 36.37% Three Years: 13.45% Five Years: 9.17%
Since Inception: 10.19% (5/1/95)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
High-yield securities ("junk bonds") are generally considered speculative
because they present a greater risk of loss than higher-quality debt securities
and may be subject to greater price volatility.
Foreign securities may be subject to greater risks than U.S. investments,
including currency fluctuations, less-liquid trading markets, greater price
volatility, political and economic instability, less publicly available
information, and changes in tax or currency laws or monetary policy. These risks
are likely to be greater in emerging markets than in developed markets.
The Portfolio may invest in derivatives, which may increase the volatility of
the Portfolio's net asset value and may result in a loss to the Portfolio.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-29
MAINSTAY VP INDEXED EQUITY PORTFOLIO
MARKET OVERVIEW
Investors were pleased with U.S. stock market performance in 2003, as stocks
rose for the first year since 1999. Although smaller stocks generally
outperformed larger issues, the S&P 500(R) Index* provided its best performance
since 1997.
There has been a marked change in investor sentiment since the end of the bear
market. Investors who were hopeful that the market would eventually turn around
are now beginning to wonder how long stocks can continue to rise.
Several factors contributed to the economic recovery, including exceedingly low
interest rates, recent tax cuts, a weaker dollar, low inventories, and
improvements in the labor outlook. These and other industry-specific factors
have helped exporters, stimulated business investment, increased factory orders,
and prompted strong industrial-sector growth. The ISM Manufacturing Index,*
which tracks the outlook for manufacturers, reached a 20-year high in November
2003.
To properly understand the scope of the stock market's recovery, by of the end
of 2003, the Dow Jones Industrial Average* had risen 43.1% from its low on
October 9, 2002, and the technology-laden Nasdaq Composite Index* was up 80.4%
from its low on the same day.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, the MainStay VP Indexed Equity
Portfolio (initial class of shares) returned 28.19%. The Portfolio outperformed
the 28.01% return of the average Lipper* Variable Products S&P 500 Index
Objective Portfolio over the same period. The Portfolio underperformed the
28.68% return of the S&P 500(R) Index for 2003. Since the Portfolio incurs
actual expenses that a hypothetical index does not, there will be times when the
Portfolio lags the Index.
STRONG INDUSTRIES
Based on total returns alone, the best-performing industries in the S&P 500(R)
Index during 2003 were Internet software & services (+176.27%), Internet &
catalog retail (+90.47%), communications equipment (+78.42%), wireless
telecommunication services (+77.72%), and metals & mining (+76.54%). Because of
their higher weightings in the Index, however, some industries with lower total
returns were among the five top contributors to the overall performance of the
S&P 500(R) Index. Taking both weightings and total returns into consideration,
the leading industry was communications equipment (+78.42%), followed by
multiline retail (+33.04%), industrial conglomerates (+31.72%), oil & gas
(+23.07%), and computers & peripherals (+30.73%).
STRONG COMPANIES
For the 12 months ended December 31, 2003, the best-performing company in the
S&P 500(R) Index based on total returns alone was Avaya (+428.16%), followed by
Williams (+265.92%), Dynegy (+262.71%), PMC-Sierra (+261.51%), and Novell
(+215.27%). As impressive as these returns may be, the five stocks with the
greatest positive impact on the performance of the S&P 500(R) Index all had
higher weightings and lower total returns. Taking both weightings and total
returns into account, the company with the greatest positive impact on the Index
for 2003 was Intel (+106.62%), followed by Cisco Systems (+84.96%), Citigroup
(+41.58%), General Electric (+30.75%), and ExxonMobil (+20.64%).
WEAK INDUSTRIES
Based solely on total returns, the worst-performing industries in the Index for
the reporting period were trading companies & distributors (-8.07%), diversified
telecommunication services (-4.31%), leisure equipment & products (+0.45%), food
products (+6.32%), and pharmaceuticals (+6.44%). Due to its higher
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-30
Index weighting, diversified telecommunication services (-4.31%) had the
greatest negative impact on the total return of the Index for 2003 when
weightings and total returns were taken into account. This industry was followed
by trading companies & distributors (-8.07%), leisure equipment & products
(+0.45%), distributors (+7.79%), and airlines (+7.21%).
WEAK COMPANIES
In 2003, the worst-performing S&P 500(R) company based on total return alone was
food retailer Winn-Dixie Stores (-33.69%), followed by Eastman Kodak (-23.77%),
Newell Rubbermaid (-22.39%), Kohl's (-19.68%), and Schering-Plough (-19.10%).
Taking both weightings and total returns into account, Merck (-11.24%) made the
greatest negative contribution to the performance of the Index, followed by
Schering-Plough (-19.10%), Verizon Communications (-5.60%), AT&T (-18.84%), and
Kohl's (-19.68%).
INDEX ADJUSTMENTS
The Portfolio seeks to track the performance and weightings of stocks in the S&P
500 Index. The Index itself, however, may change from time to time as companies
merge, divest units, face financial difficulties, or add to their market
capitalization. Standard & Poor's may also occasionally adjust the Index to
better reflect the companies that it believes are most representative of the
makeup of our economy. During 2003, there were nine companies deleted from the
Index and nine companies added to it.
The additions included AutoNation, Apartment Investment & Management, McCormick,
Symantec, Federated Investors, ProLogis, Medco Health Solutions, Express
Scripts, and Biogen IDEC. Deletions from the Index included Rational Software,
AMR, HealthSouth, Household International, Pharmacia, Mirant, McDermott
International, Quintiles Transnational, and Biogen.
HealthSouth was deleted from the Index on the heels of an investigation into a
massive accounting scandal and allegations of fraud. The government has accused
HealthSouth and a group of its former officers of deliberately overstating
earnings by $2.5 billion over several years. AMR, the parent company of American
Airlines, was deleted from the Index when AMR faced the threat of bankruptcy as
a sluggish economy, the war in Iraq, and the threat of SARS took a toll on air
travel. Recent labor concessions have helped AMR avoid bankruptcy. Biogen and
IDEC merged on November 12, 2003, to form Biogen IDEC.
LOOKING AHEAD
Some market observers maintain that the annual rate of 8.2% gross domestic
product growth seen in the third quarter of 2003 will be difficult to sustain.
In addition, at year-end 2003, the S&P 500(R) Index was trading at 27 times its
companies' earnings for the past 12 months. While past performance is no
indication of future results, the historical average has been about 16 times the
previous years' earnings. It therefore appears that investors may already be
factoring strong corporate performance amid global stability into their
investment decisions. If these conditions do not persist, however, stocks may
pay the price.
The 2003 rally was led by technology stocks, the very ones that fell the most
during the recent downturn. Higher-quality stocks outperformed at the end of the
year, but it remains to be seen what the future may hold. The relative absence
of negative corporate preannouncements, the Federal Reserve's willingness to
remain accommodative, and positive expectations for GDP growth may continue to
foster optimism among investors.
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
New York Life Investment Management LLC
M-31
$10,000 INVESTED IN THE
MAINSTAY VP INDEXED EQUITY PORTFOLIO
ON 1/29/93 VERSUS S&P 500(R) INDEX AND
THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP INDEXED EQUITY PORTFOLIO S&P 500(R) INDEX CONSUMER PRICE INDEX
--------------------------- ---------------- --------------------
1/29/93 10000.00 10000.00 10000.00
1993 10853.00 11008.00 10275.00
1994 10935.50 11149.00 10549.30
1995 14969.60 15338.80 10785.60
1996 18325.80 18857.50 11142.60
1997 24344.00 25148.00 11332.00
1998 31280.00 32336.00 11515.00
1999 37754.00 39139.00 11823.00
2000 34236.00 35578.00 12223.00
2001 30084.00 31112.00 12416.00
2002 23401.00 24244.00 12717.00
2003 29998.00 31190.00 12955.00
</Table>
One Year: 28.19% Three Years: -4.30% Five Years: -0.83% 10 Years: 10.70%
Since Inception: 10.57% (1/29/93)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
The Portfolio may invest in derivatives, which may increase the volatility of
the Portfolio's net asset value and may result in a loss to the Portfolio.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-32
MAINSTAY VP INTERNATIONAL EQUITY PORTFOLIO
MARKET OVERVIEW
In 2003, international stock markets generally provided strong performance in
both U.S. dollar and local currency terms. Overall, the global markets surged in
tandem since March of 2003, as some economic data suggested that the worst might
be over and that a recovery might be just around the corner.
In Europe, business expectations improved, but activity and demand provided no
discernible signs of recovery. Business-sentiment indicators rose moderately,
but consumer confidence remains stuck at low levels.
Foreign currencies, particularly the euro and Japanese yen, gained considerably
against the U.S. dollar over the course of 2003.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, the MainStay VP International Equity
Portfolio (initial class of shares) returned 30.00%. The Portfolio
underperformed the 35.41% return of the average Lipper* Variable Products
International Portfolio over the same period. The Portfolio also underperformed
the 38.59% return of the Morgan Stanley Capital International EAFE(R) Index* for
2003.
The Portfolio's underperformance resulted from its underweighted positions in
high-beta sectors such as technology and insurance. Beta is a measure of
relative volatility, and high-beta sectors or companies are those that tend to
be more volatile than the market as a whole. Although high-beta companies
performed well in 2003, all of the companies in the Portfolio continued to show
strong operational results.
STRATEGIC POSITIONING
The Portfolio uses a bottom-up, stock-by-stock selection process to select
securities. This process often leads us to out-of-favor companies with quality
brands. The Portfolio's country, sector, and market-capitalization weightings
were the result of individual stock selection and do not reflect predetermined
target allocations. The Portfolio's bottom-up selection process has resulted in
overweighted positions in the consumer staples and utilities sectors and
underweighted positions in telecommunication services, health care, energy, and
basic materials. Generally speaking, we find more compelling investment
potential in Europe. As a result, the portfolio is underweighted in Japanese
stocks relative to the MSC1 EAFE(R) Index. The Portfolio continued to seek
profit from affluence trends and new technologies as well as from corporate
restructuring and turnaround plans.
STRONG AND WEAK PERFORMERS
Among the leading contributors to performance in 2003 was Deutsche Boerse. This
company provides a securities-exchange platform through the German Exchange,
derivatives trading on the Eurex, and clearing services through its subsidiary
Clearstream. As the markets have risen and volume has increased in equities and
derivatives, Deutsche Boerse continued to surprise the market operationally.
Despite some uncertainty surrounding debate over a new European Union investment
directive, we believe the new directive will not adversely affect the company.
Another positive contributor was Iberdrola, a Spanish utility. The company is in
the middle of a five-year investment plan that involves divesting noncore assets
and reinvesting in cleaner, more efficient electricity generation to satisfy
faster-than-average growth in demand. Midway through the refocus, the company
appears to be well on its way to becoming the cleanest and most profitable
utility in Europe. Due to its superior performance, the company increased its
dividend more than analysts expected.
A third positive contributor, Synthes-Stratec develops, manufactures, and sells
products used in orthopedic trauma surgery. In August 2003, the company
announced an acquisition of closely held Mathys. A new-
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, UPON REDEMPTION, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. These results do not reflect any
deduction of sales changes, mortality and expense charges, contract charges, or
administrative charges. Please refer to the Performance Summary for your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-33
product rollout cycle should allow the company to grow earnings at a high
double-digit rate in the foreseeable future.
Another large holding, Canon, the well-known copier and printer company, has
surprised analysts by continuing to perform well in a relatively challenging
environment.
One stock that detracted substantially from performance for the Portfolio's
fiscal year was Rentokil Initial. Rentokil offers services such as hygiene,
security, and pest control. Fundamentally the firm continues to do well,
although the stock underperformed when investors rotated out of defensive
issues. First-half earnings rose 7.6%, and the company stated that it expects
good underlying organic growth in sales and profits that would allow a
share-buyback program to continue.
Another stock that detracted from performance during the reporting period was
Hongkong Electric, the generator and supplier of electricity in Hong Kong. The
company is a fully regulated monopoly with a 5.5% dividend yield. The
underperformance resulted from uncertainty regarding rate tariffs in an upcoming
regulatory review. We believe that the risk-adjusted returns remain attractive,
and the Portfolio continues to own the stock.
We initiated a new position in Man Group, a leading global provider of
alternative investment products and solutions as well as one of the world's
largest futures brokers.
We reduced the Portfolio's position in Nintendo, a manufacturer and marketer of
home-use games, including Gamecube and Gameboy systems. The company was unable
to meet sales expectations for the current generation of the in-home game system
Gamecube. The Portfolio sold its position in FANUC, the Japanese manufacturer of
factory automation systems, as the company's stock reached our price target.
LOOKING AHEAD
While the world economy has improved, we believe that a large portion of the
market already reflects the change. We remain concerned that in a number of
industries, valuations may have surpassed what is justified by the magnitude of
the recovery in the world economy or in earnings. We take a cautious view and
remain underweighted in high-beta areas such as media and information
technology.
As always, we remain alert for selective opportunities in stocks and continue to
take advantage of sell-offs to accumulate positions in solid franchises that are
undergoing temporary difficulty. Whatever the markets or the world economy may
bring, the Portfolio will continue to seek long-term growth of capital by
investing in a portfolio consisting primarily of non-U.S. equity securities.
Rupal Bhansali
Portfolio Manager
MacKay Shields LLC
M-34
$10,000 INVESTED IN THE
MAINSTAY VP INTERNATIONAL EQUITY PORTFOLIO
ON 5/1/95 VERSUS MSCI EAFE(R) INDEX AND
THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP INTERNATIONAL EQUITY
PORTFOLIO MSCI EAFE(R) INDEX CONSUMER PRICE INDEX
----------------------- ------------------ --------------------
5/1/95 10000.00 10000.00 10000.00
1995 10696.00 10520.00 10102.00
1996 11823.40 11189.00 10436.40
1997 12435.00 11388.00 10614.00
1998 15308.00 13666.00 10785.00
1999 19604.00 17350.00 11074.00
2000 16063.00 14892.00 11448.00
2001 13810.00 11667.00 11672.00
2002 13200.00 9806.00 11961.00
2003 17160.00 13590.00 12187.00
</Table>
One Year: 30.00% Three Years: 2.23% Five Years: 2.31%
Since Inception: 6.42% (5/1/95)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
Foreign securities may be subject to greater risks than U.S. investments,
including currency fluctuations, less-liquid trading markets, greater price
volatility, political and economic instability, less publicly available
information, and changes in U.S. or foreign tax or currency laws or monetary
policy. These risks are likely to be greater in emerging markets than in
developed markets.
The Portfolio may invest in derivatives, which may increase the volatility of
the Portfolio's net asset value and may result in a loss to the Portfolio.
Due to its trading strategies, the Portfolio may experience a portfolio turnover
rate of more than 100%.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-35
MAINSTAY VP MID CAP CORE PORTFOLIO
MARKET OVERVIEW
The equity market showed strong overall performance in 2003, reversing the
downward trend that had characterized the stock market for the previous three
years. Small-cap stocks performed significantly better in 2003 than their large-
and mid-cap counterparts, as investors returned to stocks with an appetite for
smaller-capitalization high-beta issues, or those with greater relative
volatility than the market as a whole.
The Russell 2000(R) Index,* a gauge of small-cap stocks, posted an impressive
gain of 47.25% while the Russell Midcap(R) Index,* a barometer of mid-cap
stocks, trailed with a return of 40.06% for 2003. The Russell 1000(R) Index,* a
measure of large-cap stocks, was not as strong in comparison, with a return of
29.89% for the year.
PORTFOLIO REVIEW
For the 12 months ended December 31, 2003, MainStay VP Mid Cap Core Portfolio
(initial class of shares) returned 35.43%. The Portfolio outperformed the 35.05%
return of the average Lipper* Variable Products Mid-Cap Core Portfolio over the
same period. The Portfolio underperformed the 40.06% return of the Russell
Midcap(R) Index for the 12 months ended December 31, 2003.
ALLOCATION DECISIONS AND SECTOR SPECIFICS
In the first few months of the year, the Portfolio was defensively positioned in
a tenuous economic environment that included significant global instability. As
the year progressed and economic indicators steadily improved, however, the
Portfolio gradually shifted to a more-aggressive stance by assuming an
overweighted position in the information technology and consumer discretionary
sectors relative to the Russell Midcap Index.
The largest positive contribution to the Portfolio's return in 2003 came from
holdings in the industrials sector. The Portfolio's overweighted position in
PACCAR--a major truck manufacturer whose brands include Peterbilt and
Kenworth--contributed positively to the Portfolio's results. Investors continue
to believe that PACCAR will benefit from an expected increase in demand in the
North American Class 8 truck market as well as from the recent improvement in
industry orders for Class 7 trucks.
The Portfolio's underweighted position in office services and supplies company
Avery Dennison also contributed positively to performance. The company suffered
a relatively weak year and made a negative preannouncement for third-quarter
earnings because of faltering business conditions and continued pricing
pressures.
The Portfolio's overweighted position in Career Education, which operates
several for-profit colleges, contributed positively to return. The company
benefited handsomely during the recent job downturn, as more and more members of
the labor force sought to increase their education while waiting for economic
conditions to improve.
The largest negative contributions to the Portfolio's performance came from the
information technology and consumer discretionary sectors. Within the
information technology sector, the Portfolio's underweighted positions in
Network Associates and VERITAS Software had a negative impact on the Portfolio,
as these and other relatively speculative issues surged back from their
bargain-basement valuations. Network Associates, a data storage company, saw a
dramatic rise in profits, and the company's stock was one of the hottest in
2003. The company also successfully expanded its product mix and diversified its
customer base to strengthen fundamentals and reduce risk exposure.
Within the consumer discretionary sector, the Portfolio's overweighted position
in troubled department-store chain J.C. Penney proved to be a significant
detractor from return when third-quarter earnings were hurt by the company's
wholly owned Eckerd's drugstore operations. The drugstore chain continues to
suffer as
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-36
retailers such as Wal-Mart Stores and Target continue to siphon away Eckerd's
nonpharmacy sales. J.C. Penney's crucial 2003 holiday sales results were
favorable, with same-store sales climbing 4.3%, but Eckerd's sales fell further
than expected, which may cause Eckerd's fourth-quarter operating profits to drop
by as much as 50% to 60%. J.C. Penney is currently exploring its options and is
considering selling or spinning off the Eckerd's chain.
The Portfolio's overweighted position in Eastman Kodak also hurt the Portfolio's
returns, since the troubled photography company continued to suffer as a result
of declining demand in its traditional film business. Eastman Kodak has
announced plans to stop making cameras that use the Advanced Photo System
format. It will also discontinue manufacturing reloadable 35-millimeter cameras
for the United States, Canada, and Western Europe. Camera makers typically make
little profit, if any, on hardware but rely on strong margins on supplies such
as film and paper, which need to be replaced frequently. Eastman Kodak intends
to focus instead on the high-growth digital-product market, such as medical
imaging systems.
LOOKING AHEAD
The Portfolio will continue to use a quantitative approach and proprietary model
to seek promising mid-cap stocks without regard to market psychology or other
subjective factors. The model focuses on value, earnings, and behavioral
characteristics in the market, and ranks stocks based on the financial strength
of the issuer and the potential for strong, long-term earnings growth.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek long-term growth of capital.
Harvey Fram
Stephen B. Killian
Portfolio Managers
New York Life Investment Management LLC
M-37
$10,000 INVESTED IN THE
MAINSTAY VP MID CAP CORE PORTFOLIO
ON 7/2/01 VERSUS RUSSELL MIDCAP(R) INDEX AND
THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP MID CAP CORE PORTFOLIO RUSSELL MID CAP(R) INDEX CONSUMER PRICE INDEX
------------------------- ------------------------ --------------------
7/2/01 10000.00 10000.00 10000.00
2001 9414.00 9626.00 9966.00
2002 8197.00 8068.00 10215.00
2003 11102.00 11300.00 10399.00
</Table>
One Year: 35.43% Since Inception: 4.26% (7/2/01)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
The investor should note that portfolios that invest in companies with market
capitalizations below $10 billion involve additional risks. The securities of
these companies may be more volatile and less liquid than the securities of
larger companies.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-38
MAINSTAY VP MID CAP GROWTH PORTFOLIO
MARKET OVERVIEW
The year 2003 presented several challenges to equity investors. Not only did
they have to endure the volatility associated with military action in Iraq, but
they also had to contend with a constant stream of mixed economic indicators,
which added to market volatility and uncertainty.
Looking back, early signs of an economic recovery began to take shape toward the
end of 2002, but these indicators declined through much of the first quarter of
2003. After the stock market reached its year-to-date low in mid-March, stocks
rallied sharply through the end of the year in anticipation of a robust economic
rebound.
In June 2003, the Federal Reserve lowered the targeted federal funds rate by 25
basis points to 1.0%, a four-decade low. This was the Fed's thirteenth easing
move since the beginning of 2001. Real gross domestic product grew at a modest
pace in the first quarter of 2003, somewhat faster in the second, and quite
rapidly in the third. According to the Bureau of Economic Analysis, real gross
domestic product grew at a seasonally adjusted annual rate of 8.2% in the third
quarter of 2003, the fastest growth since late 1983.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Mid Cap Growth Portfolio
(initial class of shares) returned 44.78%. The Portfolio outperformed the 36.14%
return of the average Lipper* Variable Products Mid-Cap Growth Portfolio. The
Portfolio underperformed the 46.31% return of the Russell 2500(TM) Growth Index*
and outperformed the S&P MidCap 400(R) Index* return of 35.62% for the 12 months
ended December 31, 2003.
STRONG AND WEAK PERFORMERS
In 2003, many of the Portfolio's best-performing stocks were in the consumer
discretionary sector. Since consumer income and spending remained at healthy
levels, the Portfolio benefited from its investments in key consumer-related
areas such as housing and retail.
The most significant contributors to Portfolio results were homebuilding
companies D.R. Horton and Lennar. Other notable performers included luxury goods
manufacturer and retailer Coach; audio and video equipment maker Harman
International Industries; homebuilders M.D.C. Holdings, KB HOME, and Centex; and
retailer Chico's FAS. Each of these stocks posted double- or triple-digit gains
for 2003.
Continued positive trends in the housing market, including historically low
mortgage rates, rising household formation, and a favorable pricing environment,
bolstered the financial results of homebuilding companies. Coach was the
beneficiary of strong performance in handbags and small leather-goods. Harman
International Industries' stock rose as the company set sales and earnings
records. Harman International's advances were partly attributable to the
successful creation of audio products for high-end automakers Mercedes-Benz,
BMW, Porsche, and Audi.
The Portfolio's holdings in the financials sector also aided performance during
the period. Low interest rates, a rising equity market, and strong demand for
mortgages benefited many banks and financial-services organizations. Notable
performers in the Portfolio included Capital One Financial, New York Community
Bancorp, and UCBH Holdings.
The Portfolio's position in the information technology sector adversely affected
relative performance during 2003. Many of the Portfolio's stocks in the sector
posted positive absolute returns for the year. Within the sector as a whole,
however, many of the best-performing stocks had little if any profit to back
their performance and were trading at values that we felt were high. The
Portfolio's relative performance was particularly hurt by our decision not to
emphasize these types of companies. The Portfolio's largest positive contributor
to performance in the information technology sector was Semtech. Other strong
performers included communication services provider UTStarcom, computer
peripherals provider Avocent, and software and programming firm Symantec.
Detractors within the information technology sector included Tech Data, The
BISYS Group, Cabot Microelectronics, and SERENA Software--all of which were
eliminated from the portfolio.
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-39
The Portfolio's health care holdings also detracted considerably from relative
performance. Not only did the Portfolio hold an overweighted position in this
underperforming sector, but our stock selection also proved detrimental. The
largest negative contributors were pharmaceutical drugmakers Biovail and
MedImmune and health care facilities providers Accredo Health, Triad Hospitals,
and Universal Health Services. Although the sector was a net detractor from
performance, a few health care stocks enhanced the Portfolio's results. Among
them were medical equipment maker Cooper and managed health care players
Coventry Health Care and Mid Atlantic Medical Services.
SECTOR WEIGHTINGS
During 2003, the Portfolio added to its information technology, financial, and
industrial holdings and reduced its weighting in consumer discretionary and
energy stocks. As of December 31, 2003, the Portfolio was significantly
overweighted in the consumer discretionary sector and slightly overweighted in
industrials relative to the Russell 2500(TM) Growth Index. Underweighted sectors
at year-end 2003 included energy, materials, consumer staples, and
telecommunication services. The Portfolio was slightly underweighted in
information technology and utilities and held a market weight in the financials
and health care sectors.
LOOKING AHEAD
As we enter 2004, the market seems poised to gain further ground, largely on
positive economic news and strong earnings reports. Going forward, we see very
few factors that threaten to derail the recent rally in stocks, although we will
continue to closely monitor interest-rate trends and stock valuations.
Third-quarter gross domestic product figures were very encouraging and recent
indications suggest that the long-awaited recovery in the job market is
beginning to materialize, albeit slowly. If these trends continue, they should
be good news for stocks. As always, we will continue to invest in high-quality
growth companies with strong growth prospects.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek long-term growth of capital.
Rudolph C. Carryl
Edmund C. Spelman
Portfolio Managers
MacKay Shields LLC
M-40
$10,000 INVESTED IN THE
MAINSTAY VP MID CAP GROWTH PORTFOLIO
ON 7/2/01 VERSUS S&P MIDCAP 400(R) INDEX,
RUSSELL 2500(TM) GROWTH INDEX, AND
THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP MID CAP GROWTH S&P MIDCAP 400(R) RUSSELL 2500(TM)
PORTFOLIO INDEX GROWTH INDEX CONSUMER PRICE INDEX
----------------- ----------------- ---------------- --------------------
07/02/01 10000 10000 10000 10000
2001 9157 9844 9181 9966
2002 6538 8416 6510 10215
2003 9466 11413 9525 10399
</Table>
One Year: 44.78% Since Inception: -2.17% (7/2/01)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
The investor should note that portfolios that invest in companies with market
capitalizations below $10 billion involve additional risks. The securities of
these companies may be more volatile and less liquid than the securities of
larger companies.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-41
MAINSTAY VP SMALL CAP GROWTH PORTFOLIO
MARKET OVERVIEW
As years go, 2003 was a strong period for equity investors, with most major
market indices rising 25% or more. The year began on a weak note, as economic
uncertainty and growing concern about the possibility of war in Iraq caused
equities to decline through early March. Beginning in mid-March, however,
equities rebounded and continued to climb throughout the rest of the year.
The rally was fueled by a variety of forces, including tax cuts and declining
interest rates in the second quarter. Positive economic developments helped
sustain the market's advance in the second half of 2003. Orders and productivity
improved strongly. In the third quarter, real gross domestic product rose at a
seasonally adjusted annual rate of 8.2%, the fastest growth since late 1983. By
year-end 2003, even the employment outlook began to improve. Small-cap stocks
dramatically outperformed large-caps during the year, and according to Russell
data,* within the small-cap universe, growth stocks outperformed their value
counterparts.
PERFORMANCE REVIEW
For the year ended December 31, 2003, MainStay VP Small Cap Growth Portfolio
returned 41.69%. The Portfolio underperformed the 41.73% return of the average
Lipper* Variable Products Small-Cap Growth Portfolio over the same period. The
Portfolio also underperformed the 48.54% return of the Russell 2000(R) Growth
Index* and the 47.25% return of the Russell 2000(R) Index* for the 12 months
ended December 31, 2003.
The Portfolio's underperformance relative to the Russell 2000(R) Growth Index
was mainly attributable to adverse stock selection in the information technology
and health care sectors. Much of the benchmark's return in these sectors was
fueled by speculative micro-cap stocks, many of which advanced despite being
unprofitable. With less exposure to these types of issues, the Portfolio's
information technology and health care holdings lagged on a relative basis. From
a sector standpoint, the Portfolio benefited from an underweighted position in
financial stocks and an overweighted position in the industrials sector, but was
hurt by overweighted positions in the materials and telecommunication services
sectors.
STRONG AND WEAK PERFORMERS
Although the Portfolio's information technology holdings generated strong
absolute returns, the sector was the biggest detractor from the Portfolio's
relative performance.
Several of the Portfolio's strongest performers were semiconductor
manufacturers. Among the leaders were Fairchild Semiconductor International and
Integrated Circuit Systems, flat-panel display equipment manufacturer Applied
Films, and software providers Business Objects and Altiris. Disappointing
results at display manufacturer Planar Systems, security-systems provider
Internet Security Systems, and software supplier Neoware Systems detracted from
the Portfolio's performance.
The second-biggest detractor from the Portfolio's relative performance was the
health care sector, although this sector also generated a strong absolute
return. The Portfolio's top health care performers included health maintenance
organizations Coventry Health Care and Mid Atlantic Medical Services,
generic-drug manufacturer Taro Pharmaceutical Industries, hospice provider
Odyssey Healthcare, and veterinary-hospital and laboratory-service company VCA
Antech. Earnings disappointments at LifePoint Hospitals and Charles River
Laboratories International and a product-approval delay at CV Therapeutics
resulted in poor performance for these Portfolio holdings.
The energy sector also detracted from performance because of the Portfolio's
emphasis on oil service companies, which tended to lag behind exploration and
production companies. In particular, disappointing earnings results at W-H
Energy Services hurt the Portfolio's performance in the energy sector.
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-42
The major positive contributor to the Portfolio's performance was the consumer
discretionary sector. Top-performing Portfolio holdings in this sector included
Netflix (+396.73%),(1) an online subscription service for DVD rentals; Harman
International Industries, a manufacturer of high-end audio systems for cars and
homes; homebuilders Ryland Group and M.D.C. Holdings; recreational vehicle
manufacturer Winnebago Industries; and specialty retailers Hot Topic and Hibbett
Sporting Goods.
The financials sector also contributed positively to the Portfolio's
performance, helped by an underweighted sector position and by strong results at
Jefferies Group, a brokerage firm; UCBH Holdings, a regional bank focusing on
Chinese-American clients; and Doral Financial, a savings and loan company based
in Puerto Rico.
The industrials sector made a modest positive contribution to the Portfolio's
results. Good performance from education services companies Education Management
and Corinthian Colleges, database provider Corporate Executive Board, and
truck-trailer manufacturer Wabash National more than offset weak performance
from defense-electronics manufacturer DRS Technologies and waste-management
company Waste Connections.
STRATEGIC POSITIONING
During the second quarter of 2003, we took steps to position the Portfolio less
defensively and to increase the weighting of more economically sensitive issues.
At the end of 2003, the Portfolio was overweighted in the consumer discretionary
and information technology sectors and underweighted in the financials sector.
We sought to position the Portfolio in favor of the likelihood of a global
economic recovery. As always, we favor stocks of high-quality companies with
good intermediate- and longer-term growth prospects.
LOOKING AHEAD
As 2004 begins, the U.S. equity market has maintained its positive direction. We
believe that the key to sustained equity-market gains lies in further
improvement in the U.S. economy and in corporate profits. We intend to continue
to invest in high-quality companies in major sectors that are poised for further
growth. Whatever the markets or the economy may bring, the Portfolio will
continue to seek long-term capital appreciation by investing primarily in
securities of small-cap companies with above-average growth prospects.
Rudolph C. Carryl
Edmund C. Spelman
Portfolio Managers
MacKay Shields LLC
M-43
$10,000 INVESTED IN THE
MAINSTAY VP SMALL CAP GROWTH PORTFOLIO
ON 7/2/01 VERSUS RUSSELL 2000(R) INDEX, RUSSELL 2000(R) GROWTH INDEX,
AND THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP SMALL CAP GROWTH RUSSELL 2000(R)
PORTFOLIO RUSSELL 2000(R) INDEX CONSUMER PRICE INDEX GROWTH INDEX
------------------- --------------------- -------------------- ---------------
7/2/01 10000.00 10000.00 10000.00 10000.00
2001 9548.00 9591.00 9966.00 9074.00
2002 7027.00 7627.00 10215.00 6328.00
2003 9956.00 11231.00 10399.00 9400.00
</Table>
One Year: 41.69% Since Inception: -0.18% (7/2/01)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. Performance percentages for Portfolio holdings reflect total-return
performance of the indicated securities for the 12 months ended December 31,
2003, or for the portion of the reporting period such securities were held in
the Portfolio, if shorter. Due to purchases and sales, the performance of
Portfolio holdings may differ from the performance of the securities
themselves.
Stocks of small companies may be subject to higher price volatility,
significantly lower trading volumes, and greater spreads between bid and ask
prices than stocks of larger companies. Small companies may be more vulnerable
to adverse business or market developments than mid- or large-capitalization
companies.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-44
MAINSTAY VP TOTAL RETURN PORTFOLIO
MARKET OVERVIEW
While 2003 presented several challenges to stock and bond investors, it proved
to be a rewarding year for those who were patient. Early in the year, equity
investors had to endure significant market volatility leading up to the war in
Iraq. As soon as the conflict began, however, the investment focus shifted back
to the burgeoning economic recovery.
Unfortunately, three key economic drivers--business confidence, capital
spending, and hiring--remained virtually absent through much of the year. Real
gross domestic product grew at a modest annual rate of 2.0% in the first quarter
and 3.1% in the second quarter of 2003. Low interest rates prompted a boom in
mortgage refinancing, and consumers spent their "found money," which helped
sustain the economy during the first half of 2003. In May, however, Federal
Reserve concerns about possible deflation risk resulted in a Treasury rally. In
June, the Federal Open Market Committee lowered the targeted federal funds rate
to a low 1.0%. After bond yields dipped to exceedingly low levels in June, they
rose to more familiar levels for the remainder of the year.
In the third quarter, real gross domestic product rose by a seasonally adjusted
annual rate of 8.2%, its fastest growth since the fourth quarter of 1983.
Corporate earnings remained relatively strong, unemployment dropped from its
peak in June, and the stock market continued to advance as economic indicators
turned increasingly positive. Indeed, stocks advanced relatively steadily from
mid-March through the end of 2003, ending the year with a positive return for
the first calendar year since 1999. High-yield bonds and emerging-market debt
also provided strong returns when investors' appetite for risk gradually
increased as the year progressed.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Total Return Portfolio
(initial class of shares) returned 19.68%. The Portfolio outperformed the 18.97%
return of the average Lipper* Variable Products Balanced Portfolio over the same
period. The Portfolio outperformed the 19.04% return of the Portfolio's Total
Return Composite Index* but underperformed the 28.68% return of the S&P 500(R)
Index* for the 12 months ended December 31, 2003.
EQUITY RESULTS
In the equity portion of the Portfolio, information technology holdings posted
the strongest returns for the year, rising 56.2% versus a 47.9% gain for the
information technology stocks in the Russell 1000(R) Growth Index.* Among the
Portfolio's largest equity holdings, VERITAS Software (+137%),(1) a provider of
enterprise storage products, stood out as the best performer in 2003. Other
top-performing information technology stocks in the Portfolio included Intel
(+106%), Cisco Systems (+85%), Texas Instruments (+97%), and Electronic Arts
(+92%).
The Portfolio's industrial equity holdings gained 29.4% versus a 31.7% gain for
related stocks in the Index. Cendant, the Portfolio's top-performing industrial
stock, rose 113% during the year on strong sales trends in the company's real
estate business. United Technologies, Danaher, and Illinois Tool Works all rose
more than 30% for the year, fueled by rising investor confidence in an economic
recovery. The only two industrial holdings that showed poor performance during
the year were General Dynamics and Lockheed Martin, both of which were
eliminated from the Portfolio.
Although basic materials stocks represent a small percentage of net assets in
the equity portion of the Portfolio, holdings in this sector delivered strong
absolute returns in 2003, rising 30.3% within the Portfolio and 47.1% within the
Index. The Portfolio's two equity holdings in this sector included Praxair,
which rose more than 34% for the year, and Air Products & Chemicals, which rose
more than 26%. Praxair's perform-
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-45
ance was driven by rising optimism that the company's earnings growth will
increase as the economy recovers.
The Portfolio's equity holdings in the financials sector rose 23.1% during the
year, roughly in line with the 23.8% increase for this sector within the Index.
American Express, Morgan Stanley, and Citigroup ranked as the Portfolio's
top-three equity performers in the financials sector in 2003, each rising
roughly 35%. Since the end of March, American Express has rallied on the belief
that the company's travel business and credit-card operations will benefit from
an economic rebound. Morgan Stanley rallied along with the stock market, since
its business is closely tied to equity-market performance. Citigroup rose on the
view that commercial-lending activity will likely increase with a rebound in the
economy. BB&T was the biggest detractor among the financial holdings in the
equity portion of the Portfolio, and the stock was sold during the year. The
shares declined as a result of net interest margin compression and soft loan
growth.
For the year, the health care holdings in the equity portion of the Portfolio
rose 17.2% versus a 18.9% gain for related stocks in the Russell 1000(R) Growth
Index. Two of the Portfolio's biggest equity winners were Genentech (+182%) and
Boston Scientific (+73%). Genentech, in particular, had a stunning rise in May,
after the company released positive data from a first-line colorectal-cancer
trial for its new drug, Avastin. Boston Scientific experienced strong gains
thanks to the promising market potential of its new drug-eluting stent. Johnson
& Johnson and Tenet Healthcare were the two biggest health care laggards in the
equity portion of the Portfolio in 2003. Johnson & Johnson was weighed down by
competitive concerns in its core business.
The Portfolio's consumer discretionary stock holdings rose 17.0% versus 36.7%
for related stocks in the Index. Consumer staples holdings in the equity portion
of the Portfolio advanced 11.2% compared to a 14.7% rise in consumer staples
stocks in the Index. The Portfolio's top-performing consumer discretionary
stocks included Lowe's (+48%), Omnicom Group (+37%), and Target (+29%). The
Portfolio's only consumer discretionary stock that declined during 2003 was
Kohl's (-19.7%). Among the Portfolio's consumer staples equity positions, Kraft
Foods proved to be a dramatic underperformer, which prompted us to sell the
stock. The biggest consumer staples equity gainer was SYSCO (+27%).
While energy stocks represented only 2.6% of net assets in the equity portion of
the Portfolio, the Portfolio's energy stocks advanced 1.2% for the year versus a
15.3% increase for the energy stocks in the Index. All of the Portfolio's equity
energy holdings are in the oil-field services area, since we believe that high
oil prices and the recent decline in Iraqi oil-production levels will prompt
domestic producers to step up their exploration and production efforts. While
this trend has yet to emerge in earnest, we continue to believe that it's only a
matter of time.
During 2003, the equity portion of the Portfolio added to its health care,
consumer discretionary, and information technology holdings and reduced its
weighting in the consumer staples, financials, and energy sectors. The equity
portion of the Portfolio ended the year overweighted in consumer discretionary
and materials stocks relative to the Russell 1000(R) Growth Index and only
slightly overweighted in energy stocks. Underweighted equity sectors at the end
of 2003 included consumer staples, health care, industrials, and
telecommunication services. The equity portion of the Portfolio was slightly
underweighted in financials and utilities and held a market weight in the
information technology sector.
BOND RESULTS
The bond portion of the Portfolio ended 2003 invested 12% in Treasuries, 4% in
agency securities, 34% in residential mortgage-backed securities issued by
government-sponsored and government related enterprises, 5% in asset-backed
securities, 30% in investment-grade corporate bonds, 13% in high-yield corporate
bonds, and 2% in cash equivalents. Relative to its benchmark, the Lehman
Brothers(R) Aggregate Bond Index,* the bond portion of the Portfolio ended 2003
with overweighted positions in investment-grade and high-yield corporate bonds,
asset-backed securities, and cash and with underweighted positions in
Treasuries, agencies, and mortgage-backed securities.
We like asset-backed securities--particularly auto loan/lease securitizations
and bonds collateralized by electric utility tariffs--for their high credit
quality and their potential yield advantages relative to Treasuries. We
underweighted the bond portion of the Portfolio in agency debentures and
commercial mortgage-backed securities, based on our assessment of relative
value. Congress was calling for tighter scrutiny at housing government-sponsored
entities such as Fannie Mae, Freddie Mac, and the Federal Home Loan Bank.
Accounting irregularities at Freddie Mac raised additional concerns. When it
came to commercial mortgage-backed securities, we believed that investors were
not being adequately compensated for risk.
M-46
Over the course of the year, we reduced exposure to cash and mortgage-backed
securities to increase exposure to investment-grade and high-yield corporate
bonds, agency debentures, and Treasuries. The rebalancing tempered an earlier
bias toward a flatter Treasury yield curve, since flattening appeared less
likely as the fiscal deficit increased and the economy gradually improved. The
purchases lengthened duration in the bond portion of the Portfolio, to track
market flows as new supplies of Treasuries and residential mortgage-backed
securities replaced older, shorter-maturity debt in the marketplace.
During the reporting period, we increased exposure to corporate bonds rated BBB
and BB(2) to capitalize on total return opportunities in the corporate-bond
universe. In the fall of 2002, we believed that corporate bonds were oversold
and anticipated that spreads would tighten relative to Treasuries. Our analysis
was based on several emerging trends, including increased emphasis on fiscal
discipline and balance-sheet strength, slower new issuance as hiring stalled,
longer replacement cycles, broader use of corporate bonds as substitutes for
stocks, and higher levels of investable cash. We used various subsectors to
increase the Portfolio's weighting in corporate bonds, including real estate
investment trusts, or REITs. The portfolio's BBB REIT purchases recovered
exposure to commercial real estate that had been lost when we sold commercial
mortgage-backed securities.
For a brief period in the summer, we reduced the Portfolio's exposure to
residential mortgage-backed securities on concerns about call risk. When
interest rates rose in August, however, we reestablished the Portfolio's
position using mortgage-backed securities that had 5.5% and 6.0% coupons and
were trading at a price slightly above par. These mortgage-backed bonds are on
the prepayment cusp, and we expect them to perform well as interest rates rise
and prepayments taper off.
We typically keep the duration of the bond portion of the Portfolio close to
that of the benchmark. From time to time, however, we tactically repositioned
the Portfolio's duration (within a range of 5% shorter or longer than neutral)
to take advantage of emerging interest-rate trends. Several of these modest
adjustments proved profitable, but lengthening the Portfolio's duration in June
detracted from performance when interest rates unexpectedly rose.
Overall, the bond portion of the Portfolio outperformed the Lehman Brothers
Aggregate Bond Index by a substantial margin. Among the strategies that helped
relative performance were emphasizing credit risk rather than interest-rate
risk, accepting exposure to moderate- and lower-quality corporate bonds, using
asset-backed securities for high-quality yield and relative value, emphasizing
lower-coupon mortgage-backed securities, maintaining a presence in U.S. dollar
denominated emerging-market sovereign and industrial credits, and shifting
duration tactically throughout the year.
The Portfolio's success among moderate- and lower-rated credits came from broad
diversification, favorable risk/reward characteristics, and our avoidance of
negative company-specific events. We emphasized infrastructure areas such as
telecommunication services, power generators, cable, and environmental services.
Many of the Portfolio's lower-rated credits provided strong returns.
LOOKING AHEAD
As we enter 2004, the market seems poised to gain further ground, largely on
positive economic news and strong earnings reports. Going forward, we see very
few factors that threaten to derail the recent rally in stocks, although we will
continue to carefully monitor interest-rate trends and stock valuations.
Recent gross domestic product figures have been encouraging, and we have seen
indications that the long-awaited recovery in the job market is beginning to
materialize, albeit slowly. If these trends continue, it should prove to be good
news for stocks.
We believe that the bond market may also benefit as the economy strengthens. We
anticipate tighter spreads, higher interest rates, and lower volatility and have
positioned the Portfolio accordingly. We prefer credit risk to interest-rate
risk as a source of performance and believe that high-yield bonds may do well in
a market that looks favorable for stocks. Even so, we may selectively pare the
Portfolio's high-yield exposure in the coming months where we believe valuations
may be too high.
M-47
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
Gary Goodenough
Christopher Harms
Edmund C. Spelman
Portfolio Managers
MacKay Shields LLC
M-48
$10,000 INVESTED IN THE
MAINSTAY VP TOTAL RETURN PORTFOLIO ON 1/29/93
VERSUS S&P 500(R) INDEX, TOTAL RETURN COMPOSITE INDEX,
AND THE CONSUMER PRICE INDEX*
[MAINSTAY VP TOTAL RETURN PORTFOLIO LINE CHART]
<Table>
<Caption>
VP TOTAL RETURN TOTAL RETURN
PORTFOLIO S&P 500(R) INDEX CONSUMER PRICE INDEX COMPOSITE INDEX
--------------- ---------------- -------------------- ---------------
1/29/93 10000.00 10000.00 10000.00 10000.00
1993 11504.00 11007.00 10275.00 10559.00
1994 11045.00 11149.00 10549.30 10606.00
1995 14174.00 15338.80 10785.60 13730.00
1996 15886.30 18857.50 11142.60 15808.00
1997 18712.00 25148.00 11332.00 19298.00
1998 23789.00 32336.00 11515.00 24467.00
1999 27838.00 39139.00 11823.00 29067.00
2000 26624.00 35578.00 12223.00 26301.00
2001 23778.00 31112.00 12416.00 24000.00
2002 19839.00 24244.00 12717.00 20684.00
2003 23742.00 31190.00 12955.00 24623.00
</Table>
One Year: 19.68% Three Years: -3.75% Five Years: -0.04% 10 Years: 7.51%
Since Inception: 8.23% (1/29/93)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. Performance percentages for Portfolio holdings reflect the total-return
performance of the indicated securities or sector holdings for the 12 months
ended December 31, 2003, or for the portion of the reporting period such
securities or sector holdings were held in the Portfolio, if shorter. Due to
purchases and sales, the performance of Portfolio holdings may differ from
the performance of the securities or sectors themselves.
2. Debt rated BBB by Standard & Poor's is deemed by Standard & Poor's to exhibit
adequate protection parameters. It is the opinion of Standard & Poor's,
however, that adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation than would be the case for debt in higher-rated
categories. Debt rated BB by Standard & Poor's is deemed by Standard & Poor's
to be less vulnerable to nonpayment than other speculative issues. In the
opinion of Standard & Poor's, however, debt rated BB 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. When applied to Portfolio holdings,
ratings are based solely on the creditworthiness of the bonds in the
Portfolio and are not meant to represent the security or safety of the
Portfolio itself.
The Portfolio may invest in derivatives, which may increase the volatility of
the Portfolio's net asset value and may result in a loss to the Portfolio.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-49
MAINSTAY VP VALUE PORTFOLIO
MARKET OVERVIEW
The equity markets enjoyed very strong performance in 2003, in a welcome
turnaround from the previous three years. In the first part of the year, the
market declined because of geopolitical uncertainty and the possibility of a war
in Iraq. At the same time, employment and consumer-sentiment trends began to
weaken, and stocks surrendered most of their late-2002 gains. Investors became
increasingly concerned that the economy might take another recessionary turn and
that growth in corporate profits might not materialize.
In mid-March, however, a number of forces helped turn investor sentiment
decidedly positive, and equities posted strong gains throughout the remainder of
the year. Investors found relief in the pace and progress of the war in Iraq,
interest-rate policy remained accommodative, a tax cut provided fiscal stimulus,
most equity valuations were reasonable, and a weakening U.S. dollar provided
potential benefits for U.S. exporters and companies traditionally subject to
import competition.
The equity rally appeared justified by a solid recovery in the economy and in
corporate earnings. Real gross domestic product rose 2.0% in the first quarter
of 2003, 3.1% in the second quarter, 8.2% in the third quarter, and according to
advance estimates from the Bureau of Economic Analysis, 4.0% in the fourth
quarter. Operating earnings for companies in the S&P 500(R) Index* grew 11% in
the second quarter of 2003, an estimated 22% in the third quarter, and an
estimated 25% in the fourth quarter.(1) In light of equity-market advances,
investors must now weigh these positive trends against higher stock valuations,
a weaker U.S. dollar (which could put upward pressure on interest rates), and a
geopolitical landscape that remains unpredictable.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Value Portfolio (initial
class of shares) returned 27.37%. The Portfolio underperformed the 28.50% return
of the average Lipper* Variable Products Large-Cap Value Portfolio over the same
period. The Portfolio also underperformed the 30.03% return of the Russell
1000(R) Value Index* and the 28.68% return of the S&P 500(R) Index for the 12
months ended December 31, 2003.
STRONG AND WEAK PERFORMERS
Good stock selection within the industrials and materials sectors was a major
positive contributor to the Portfolio's performance. Shares of truck
manufacturer Navistar International advanced 97.00%(2) as signs of a recovery in
the heavy-duty truck market emerged. Investors were attracted to Navistar
International's low-end valuation and significant earnings leverage to such a
recovery. Shares of electrical-components maker Cooper Industries rose 63.99%,
helped by a cyclical recovery in the company's end-markets and by strong free
cash flow. Firming aluminum prices drove the shares of Alcoa up 70.93% in 2003.
The Portfolio's holdings in the semiconductor equipment & products industry
performed well as demand for microprocessors rebounded while pricing held firm.
We took advantage of low valuations in Advanced Micro Devices and Intel. The
price of Advanced Micro Devices shares rose 130.65% as optimism surrounding the
launch of a new high-performance chip grew. The improving semiconductor cycle
also benefited Intel, which saw its stock price rise 89.99% from the beginning
of the year through the time we sold the Portfolio's entire position in October.
Intel shares had reached our price target.
Also within the technology sector, shares of Apple Computer detracted from the
Portfolio's performance. The stock declined from the beginning of the year until
we sold the Portfolio's position in mid-April. We were concerned about published
reports that Apple Computer was interested in buying a large music
company--reports that the company would not refute. Our concern was that a large
acquisition outside the company's area of core competence would present
considerable downside risk. No deal has yet been announced, and Apple Computer
shares have risen since the Portfolio sold its position.
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-50
Within the financials sector, FleetBoston Financial was up 88.13%, helped by an
acquisition bid from Bank of America in October. The Portfolio's
capital-markets-sensitive holdings rebounded with the rally in the equity
markets. Merrill Lynch led the way with a 56.75% gain, Goldman Sachs Group was
up 46.30%, and Citigroup rose 41.58%.
The consumer discretionary sector as a whole proved to be the biggest detractor
from performance in 2003. Shares of McDonald's suffered from a series of
earnings-shortfall announcements and store closings. In February, after we
determined that the company's fundamentals had deteriorated, we sold the
Portfolio's entire position in the stock. McDonald's shares were down from the
beginning of the year through the time of our last sale.
A shifting competitive landscape continues to impact the Portfolio's
telecommunication services sector holdings. Rural telecommunications company
ALLTEL (-5.78%) and local telecommunications providers Verizon Communications
(-5.60%) and SBC Communications (+1.74%) were underperformers. Cash flow remains
strong and dividend yields are high for the local incumbent carriers. We have,
however, tilted the Portfolio's holdings in this sector to an underweighted
position given our view that a new round of competitive pressure is likely to
come from cable operators in the form of voice services.
SECTOR WEIGHTINGS
At the end of December 2003, the Portfolio was overweighted relative to the
Russell 1000(R) Value Index in the industrials, materials, and energy sectors
and underweighted in the consumer discretionary, financials, telecommunication
services, and utilities sectors.
LOOKING AHEAD
Improving economic and employment trends continue to be the main drivers of the
stock market. Corporate earnings growth has also been steadily improving, but we
believe that assumptions about continued good growth may already be embedded in
most stock prices. Investors have been willing to give stocks the benefit of the
doubt, but continued economic growth and higher employment will need to be
maintained if the market is to sustain its current rally well into 2004. Recent
economic trends have been very favorable for our investment discipline and have
led us to many names that we believe will benefit from increased economic
activity. We still find many attractive stocks in the industrials, materials,
and energy sectors that we believe may benefit from a stronger industrial
economy.
Many companies in the industrials and materials sectors have spent much of the
past few years restructuring their manufacturing facilities, reducing their
break-even levels, and positioning themselves for what some believe to be an
inevitable economic recovery. Companies that took this bold action should
experience unprecedented efficiency and profitability once overall demand
rebounds. We also have a favorable view of the energy markets and equities that
should benefit from the tightening supply of oil and natural gas. Despite the
favorable outlook, many stocks in these sectors still command valuations at the
lower end of their historical ranges. We have taken meaningful positions in the
shares of such companies and believe that they may offer excellent prospects for
capital appreciation over the next 12 to 18 months.
We continue to believe that when the mortgage-refinancing boom begins to wane,
incremental consumer-spending trends may weaken as a result of stretched
consumer balance sheets. For these reasons, the Portfolio is underweighted in
many consumer discretionary and consumer-lending stocks. We are also concerned
that improved commercial-loan growth could be offset by very low historical net
interest margins and low investment yields at many banks, and the Portfolio
continues to underweight the commercial banks industry. The Portfolio's
weighting in information technology has diminished through 2003, as the sector
rallied and many holdings reached our price targets. We will continue to use our
disciplined value-investing approach to seize opportunities in quality companies
with value-enhancing attributes when they arise.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek maximum long-term total return from a combination of capital growth and
income.
Richard A. Rosen
Portfolio Manager
MacKay Shields LLC
M-51
$10,000 INVESTED IN THE
MAINSTAY VP VALUE PORTFOLIO
ON 5/1/95 VERSUS S&P 500(R) INDEX*, RUSSELL 1000(R)
VALUE INDEX, AND THE CONSUMER PRICE INDEX*
[MAINSTAY VP VALUE PORTFOLIO LINE GRAPH]
<Table>
<Caption>
RUSSELL 1000(R) VALUE
VP VALUE PORTFOLIO S&P 500(R) INDEX INDEX CONSUMER PRICE INDEX
------------------ ---------------- --------------------- --------------------
5/1/95 10000.00 10000.00 10000.00 10000.00
1995 11676.00 12179.00 12246.00 10138.00
1996 14387.20 14972.90 14896.00 10481.00
1997 17680.00 19968.00 20138.00 10659.00
1998 16948.00 25675.00 23285.00 10830.00
1999 18440.00 31077.00 24996.00 11120.00
2000 20817.00 28249.00 26749.00 11502.00
2001 20902.00 24897.00 25254.00 11680.00
2002 16501.00 19400.00 21334.00 11963.00
2003 21017.00 24954.00 27741.00 12187.00
</Table>
One Year: 27.37% Three Years: 0.32% Five Years: 4.40%
Since Inception: 8.94% (5/1/95)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. Source: International Strategy & Investment.
2. Performance percentages for Portfolio holdings reflect the price performance
of the indicated securities for the 12 months ended December 31, 2003, or for
the portion of the reporting period shares were held in the Portfolio, if
shorter. Percentages do not reflect the impact of dividends received, if any.
Due to purchases and sales, the performance of Portfolio holdings may differ
from that of the securities themselves.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-52
MAINSTAY VP AMERICAN CENTURY INCOME & GROWTH PORTFOLIO(1)
MARKET OVERVIEW
Although the U.S. economy got off to a slow start in 2003, conditions improved
significantly over the course of the year. Growth picked up dramatically in the
third quarter, partly as a result of low interest rates and tax cuts.
The U.S. stock market staged an impressive rally in 2003 after stumbling in the
first quarter. Value-oriented stocks generally outperformed growth shares, while
stocks of small- and medium-sized companies advanced more than shares of large
companies. Financials, technology, and consumer cyclicals accounted for the
majority of the positive return of the S&P 500(R) Index,* but every economic
sector in the Index posted gains for the year. In 2003, stocks reversed an
extended downward trend, providing the first positive calendar-year returns for
major U.S. indices since 1999.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP American Century Income &
Growth Portfolio (initial class of shares) returned 28.69%. The Portfolio
underperformed the 31.55% return of the average Lipper* Variable Products
Multi-Cap Value Portfolio over the same period. The Portfolio slightly
outperformed the 28.68% return of the S&P 500(R) Index for the 12 months ended
December 31, 2003.
PORTFOLIO POSITIONING
Our risk evaluation and sector weightings are positioned relative to the S&P
500(R) Index, so the same sectors that drove the Index higher--financials,
technology, and consumer cyclicals--also helped the Portfolio post a solid
absolute return. In terms of relative performance, stock selection worked best
in the consumer cyclicals and energy sectors. The Portfolio's value orientation
helped during the year, but there were a couple of disappointments. The
Portfolio's consumer services and technology stocks gained less than
sector-related stocks in the Index. In addition, we held a slightly overweighted
position in telecommunication services because the sector offered relatively
high dividend yields and low valuations. But telecommunication services stocks
lagged, which detracted from the Portfolio's performance.
Taking a closer look, stock selection added the most value in the consumer
cyclicals sector. Indeed, the Portfolio's top two stock picks--Ford Motor and
Federated Department Stores--were both consumer cyclical issues. These stocks
were both purchased at relatively inexpensive valuations, and each was bid up
when investors saw improvement in underlying business fundamentals. The
Portfolio also held overweighted positions in several homebuilders--Centex, KB
HOME, NVR, and Ryland Group. These companies performed relatively well, as
demand for housing remained solid. In addition, the Portfolio held an
underweighted position in Wal-Mart Stores relative to the Index. That helped
because the retailer's stock significantly lagged several other stocks in its
industry. On the downside, the Portfolio held an overweighted position in J.C.
Penney, whose shares struggled during the year. The Portfolio's solid relative
performance in consumer cyclicals was offset by stock selection in the consumer
services sector. One of the Portfolio's consumer services holdings, Eastman
Kodak, missed its earnings target and cut its dividend, sending its shares
lower. Restaurants such as McDonald's, Starbucks, and Yum! Brands outperformed,
but the Portfolio did not hold any of these stocks. Although the Portfolio's
consumer services stocks posted a positive overall return, they advanced less
than the benchmark.
Energy stocks also posted solid returns, as oil prices remained stubbornly high.
Two of the Portfolio's refining stocks, Marathon Oil and Sunoco, outperformed
their peers, which helped strengthen the Portfolio's performance relative to the
benchmark. Overweighted positions in ChevronTexaco and Occidental Petroleum also
helped the Portfolio's performance.
Technology stocks rallied more than any other sector, as business spending
returned after a long hiatus. The Portfolio's technology holdings posted solid
absolute returns but slightly lagged the Index, largely because we
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-53
entirely avoided or underweighted some of the biggest gainers in technology,
such as eBay, Yahoo!, Cisco Systems, EMC, Motorola, Corning, and Lucent
Technologies. Even after plummeting for the last three years, these stocks
appeared much too expensive for our investment process. Nevertheless, investors
flocked back to these names in 2003, pushing them to large gains.
LOOKING AHEAD
Add it all up, and the Portfolio basically matched the performance of its
benchmark in 2003. Going forward, we will continue to apply our investment
process to select attractively valued stocks.
Whatever the market or the economy may bring, the Portfolio will continue to
seek dividend growth, current income, and capital appreciation.
Kurt Borgwardt
Vivienne Hsu
John Schniedwind
Portfolio Managers
American Century Investment Management, Inc.
M-54
$10,000 INVESTED IN THE
MAINSTAY VP AMERICAN CENTURY INCOME & GROWTH PORTFOLIO
ON 5/1/98 VERSUS S&P 500(R) INDEX AND
THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP AMERICAN CENTURY
INCOME & GROWTH PORFOLIO S&P 500(R) INDEX CONSUMER PRICE INDEX
------------------------ ---------------- --------------------
5/1/98 10000.00 10000.00 10000.00
1998 10960.00 11171.00 10084.00
1999 12888.00 13521.00 10388.00
2000 11505.00 12291.00 10739.00
2001 10527.00 10832.00 10917.00
2002 8472.00 8439.00 11195.00
2003 10903.00 10857.00 11406.00
</Table>
One Year: 28.69% Three Years: -1.78% Five Years: -0.10%
Since Inception: 1.54% (5/1/98)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. The MainStay VP American Century Income & Growth Portfolio is a Portfolio of
the MainStay VP Series Fund, Inc. American Century Investment Management,
Inc., serves as Sub-Adviser to this Portfolio.
The stocks mentioned may or may not be current portfolio holdings and their
mention is not intended to serve as investment advice.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-55
MAINSTAY VP DREYFUS LARGE COMPANY VALUE PORTFOLIO(1)
MARKET OVERVIEW
After three consecutive years of negative returns, U.S. equities staged a
significant rebound in 2003. The S&P 500(R) Index* returned 28.68%, the Dow
Jones Industrial Average* returned 28.28% and the Nasdaq(R) Composite Index*
advanced 50.01% over the course of the year.
Investors were pleased by the tax stimulus and the Federal Reserve's
accommodative monetary policy but angered by the mutual-fund scandal and the air
of mistrust surrounding the financial services industry. The dollar declined
more than 16% against the euro and raised the real concern of inflation and more
expensive imported goods. Throughout the year, the markets were also influenced
by geopolitical turmoil related to the conflict in Iraq. The war began on March
20, major combat operations were concluded on May 1, and Saddam Hussein
surrendered on December 12, 2003.
In the United States, the housing market and consumer spending both remained
robust throughout the year, while the Federal Reserve maintained an
accommodative and watchful monetary policy. Despite several significant
challenges to investor confidence during 2003, the U.S. equity markets proved to
be "the little engine that could." Early in the fourth quarter, corporate profit
margins and free cash flow were at record highs. By year-end, anticipation of a
stronger job market was mounting as companies geared up for order demand in
2004.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Dreyfus Large Company
Value Portfolio (initial class of shares) returned 27.95%. The Portfolio
underperformed the 28.50% return of the average Lipper* Variable Products Large
Cap Value Portfolio over the same period. The Portfolio also underperformed the
31.79% return of the S&P 500/Barra Value(R) Index* for the 12 months ended
December 31, 2003.
PORTFOLIO POSITIONING
During the months of April and May, the Portfolio weighting in economically
sensitive stocks was increased. The shift to cyclical stocks was based on the
belief that these issues were inexpensive relative to their normalized earnings
power and might experience strong operating leverage as the economy
strengthened. New positions added to the Portfolio during this period included
Deere, Corning, Eaton, and Viacom. Existing holdings in Automatic Data
Processing, Goldman Sachs Group, Morgan Stanley, Koninklijke Philips
Electronics, and Intel were increased during this period. The Portfolio's
performance improved significantly following these actions.
STRONG AND WEAK PERFORMERS
The best-performing stocks during the reporting period were Citigroup, Deere,
Intel, McDonald's, and Koninklijke Philips Electronics. The Portfolio continues
to hold all of these positions. Citigroup is a global leader in a broad range of
financial services and has benefited from the rebound in capital-markets
activity. The strong performance of Deere, a leading manufacturer of
agricultural and construction equipment, reflects a pickup in orders that was
driven by the recovering global economy. The stock price of leading microchip
manufacturer Intel rebounded strongly during the first half of 2003, as
investors looked forward to improvements in the economy. McDonald's operates a
global chain of fast-food operations. Its restructuring continues to bear fruit
and has reinvigorated the company's domestic sales growth. Koninklijke Philips
Electronics is a diversified global consumer electronics firm. The stock price
rose more than 50% in 2003, primarily because of strength in semiconductor and
consumer-electronics equipment. The company's stock was also helped by the
weakening dollar.
The Portfolio's five worst-performing securities were Nokia, AT&T, American
International Group, Schering-Plough, and SBC Communications. The positions in
AT&T and Schering-Plough were liquidated on concerns that the companies'
earnings power would continue to erode. The position in Nokia was
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-56
increased, and the Portfolio continues to hold the positions in American
International Group and SBC Communications.
SIGNIFICANT PURCHASES AND SALES
Purchases made during the first half included Corning, Deere, and Eaton. Corning
is a diversified manufacturer with products ranging from liquid crystal displays
to optical fiber used by telecommunication services providers. The stock was
purchased in the spring based on attractive valuation and strength in the
company's liquid crystal display business. Deere manufactures agricultural and
construction equipment and has benefited from the strengthening economy. Eaton
manufactures a range of industrial products, including hydraulic products,
engine components, and electrical control equipment. The stock is attractively
valued relative to the company's normalized earnings power, and Eaton should
experience strong operating leverage during an economic recovery.
In the first half of 2003, the Portfolio sold positions in Freddie Mac,
McGraw-Hill, and Mylan Laboratories. Freddie Mac was sold because of concerns
about the complexity of the company's interest-rate hedging strategies.
McGraw-Hill, an information services provider, and Mylan Laboratories, a
generic-drug manufacturer, were both sold because their stocks reached high
valuation levels.
WEIGHTING CHANGES
The S&P 500/Barra Value(R) Index is the benchmark for the Portfolio. During
2003, the Portfolio increased exposure in the capital goods and technology
sectors and reduced exposure in the health care and consumer nondurable sectors.
The increased weighting in the capital goods sector occurred primarily in the
months of April and May, when positions in Corning, Deere, Eaton, and Xerox were
established. These names were added because they demonstrated attractive
normalized valuations in the face of an improving economy. The increased
weighting in the technology sector was the result of increasing the position in
Intel in April and adding Automatic Data Processing to the Portfolio in the
spring. The logic for these additions was similar to that used in the capital
goods sector, since these stocks were attractively valued based on their
normalized earnings power.
The reduction in the Portfolio's health care weighting reflected the liquidation
of positions in Schering-Plough, Mylan Laboratories, and Guidant.
Schering-Plough was sold because of deteriorating fundamentals and weakening
earnings power. High valuations precipitated the sales of Mylan Laboratories and
Guidant. The Portfolio's positions in Coca-Cola and Gillette were sold based on
valuation, and the sales reduced the Portfolio's weighting among consumer
nondurables.
At the end of the reporting period, the Portfolio was significantly overweighted
relative to the S&P 500/ Barra Value(R) Index in capital goods, technology, and
health care and significantly underweighted in financial services and utilities.
The Portfolio was overweighted in capital goods to participate in an economic
recovery and overweighted in health care to reflect strong value identified in
the pharmaceuticals industry through holdings in Pfizer and Johnson & Johnson.
Although the financial services sector was underweighted relative to the S&P
500/Barra Value(R) Index, at 32% of net assets, financial services holdings
represented the largest absolute sector weighting in the Portfolio at year-end.
The Portfolio was underweighted in the utilities sector based on tepid
valuations in the electric utilities segment and concerns that interest rates
might rise during the next 12 months. Historically, rising interest rates have
tended to have a negative impact on the performance of utility stocks.
LOOKING AHEAD
The Portfolio invests primarily in large-cap companies that are considered
undervalued based on traditional measures, such as price-to-earnings ratios.
When choosing stocks, we use a "bottom-up" stock selection approach, focusing on
individual companies, rather than a "top-down" approach that forecasts market
trends. We also focus on a company's relative value, financial strength, sales
and earnings momentum, and likely catalysts that could ignite the stock price.
M-57
As of year-end 2003, the Portfolio benefited from higher levels of economic
growth. During the first half of 2003, the Portfolio made a number of purchases
that appeared likely to benefit from stronger economic activity. These additions
are in keeping with the Portfolio's strategy of investing in large,
value-oriented companies that, in our opinion, have a catalyst in place to
generate capital appreciation. For a growing number of companies, that catalyst
currently is an improving economy and its potentially positive impact on
profitability.
Valerie J. Sill
Portfolio Manager
The Dreyfus Corporation
M-58
$10,000 INVESTED IN THE
MAINSTAY VP DREYFUS LARGE COMPANY VALUE PORTFOLIO
ON 5/1/98 VERSUS S&P 500/BARRA VALUE(R) INDEX
AND THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP DREYFUS LARGE COMPANY S&P 500/BARRA VALUE(R)
VALUE PORTFOLIO INDEX CONSUMER PRICE INDEX
------------------------ ---------------------- --------------------
5/1/98 10000 10000 10000
1998 10283 10160 10084
1999 10975 11452 10388
2000 11698 12149 10739
2001 11171 10726 10917
2002 8618 8490 11195
2003 11026 11188 11406
</Table>
One Year: 27.95% Three Years: -1.95% Five Years: 1.40%
Since Inception: 1.74% (5/1/98)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. The MainStay VP Dreyfus Large Company Value Portfolio is a Portfolio of the
MainStay VP Series Fund, Inc. The Dreyfus Corporation serves as Sub-Adviser
to this Portfolio.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-59
MAINSTAY VP EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO(1)
MARKET OVERVIEW
In 2003, the U.S. economy began to show signs of a rebound. As the year
progressed, it appeared that monetary and fiscal stimuli were setting the stage
for a sustainable recovery. In May, the president signed major tax cuts into
law. In June, the Federal Open Market Committee lowered the targeted federal
funds rate to 1.0%, its lowest rate in history.
Reduced borrowing costs allowed corporations to spend money on capital equipment
and new projects. The dollar continued to weaken, and economies outside the
United States began to recover. U.S. multinational companies that generate
revenues and profits overseas received a near-term competitive advantage from
the currency translation.
Increased government spending also aided the recovery, pumping more money into
the economy. Tax cuts and an improving employment picture helped maintain
consumer spending over the course of the year, which, in turn, helped fuel the
recovery. On the corporate level, increased productivity led to profit growth.
PORTFOLIO REVIEW
For the 12 months ended December 31, 2003, MainStay VP Eagle Asset Management
Growth Equity Portfolio (initial class of shares) returned 28.05%. The Portfolio
outperformed the 26.43% return of the average Lipper* Variable Products
Large-Cap Core Portfolio over the same period. The Portfolio underperformed the
29.75% return of the Russell 1000(R) Growth Index* and the 28.68% return of the
S&P 500(R) Index* for the 12 months ended December 31, 2003.
Most of the underperformance came in the second quarter, when the Portfolio was
positioned defensively while we waited for convincing signs that the
long-anticipated economic recovery had begun. As the year progressed and the
evidence mounted, the Portfolio's performance relative to its benchmark
improved. Over the course of the year, we repositioned the Portfolio to
capitalize on a strengthening economy.
The Portfolio benefited from good security selection in the media and
diversified financials industry groups, overweighted positions in diversified
financials and semiconductors & semiconductor equipment, and an underweighted
position in the food, beverage & tobacco industry group. Poor security selection
detracted from the Portfolio's performance in the pharmaceuticals &
biotechnology industry group in particular and to a lesser degree in the capital
goods and the software & services industry groups.
PORTFOLIO MANAGEMENT DECISIONS
A few of the key contributors to the Portfolio's strong showing in the
diversified financials industry group were Lehman Brothers Holdings and Goldman
Sachs Group. While there is some concern about the potential earnings power of
such companies in a rising interest-rate environment, we believe that both of
these companies will continue to perform well as the economy strengthens and
activity in the capital markets continues to improve. Although not quite as
impressive, Citigroup was also a strong performer in 2003, and the stock remains
attractive to us because of the company's product breadth and impressive
geographic footprint.
Some of the Portfolio's stronger-performing media holdings included Lamar
Advertising, Univision Communications, and Walt Disney, all of which were big
beneficiaries of the improved advertising environment.
As the year progressed, information technology companies began to beat earnings
expectations because of improved sales and better margins. To capitalize on this
trend, we added to the Portfolio's exposure in the semiconductors &
semiconductor equipment industry group during the year with holdings such as
Agilent Technologies, Lam Research, and Fairchild Semiconductor International.
We also sold holdings in some
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-60
slower-growing companies, such as Texas Instruments. The newly added companies
were all positive contributors to the Portfolio's performance for 2003, as were
existing holdings such as Intel and Taiwan Semiconductor manufacturing. One
significant disappointment in the semiconductors & semiconductor equipment
industry group, however, was LSI Logic, which suffered from poor execution and
missed earnings expectations.
The Portfolio was hit particularly hard by poor showings in pharmaceutical &
biotechnology holdings MedImmune, Johnson & Johnson, and Merck. Many of the
larger pharmaceutical companies such as Merck and Johnson & Johnson suffered
from concerns about product pipelines and from uncertainty surrounding the
Medicare prescription-drug bill. MedImmune suffered because sales of its nasally
inhaled FluMist flu vaccine fell far short of expectations. Now that Congress
has enacted Medicare drug-reimbursement legislation and has removed much of the
uncertainty, large pharmaceutical companies are trading at compelling valuations
on an historic basis. We believe this industry group shows strong promise in
2004.
Capital goods was another area in which the Portfolio's relative performance
lagged. The Portfolio was negatively impacted by an underweighted position in
strong-performing giant General Electric and by poor results from Lockheed
Martin, SPX, and Raytheon. A disappointing performance by Intuit hurt the
Portfolio's results in the software & services industry group.
WEIGHTING CHANGES
During the year, we tried to add exposure to stocks and industries that we
believed were well positioned to benefit from a recovering economy. We also sold
holdings that might not grow as fast in such an environ-ment. The most
significant Portfolio moves in 2003 included decreasing the consumer staples
sector weightings in industry groups such as food, beverage & tobacco and food &
staples retailing while adding to the consumer discretionary sector weightings
in industries such as media and hotels, restaurants & leisure. We also brought
the Portfolio's financial sector position in line with the benchmark while
overweighting the information technology sector, particularly in the
semiconductors & semiconductor equipment industry group.
LOOKING AHEAD
U.S. economic fundamentals are improving and we believe that the stimulus from
tax cuts, from increased government spending, and from low interest rates may
continue to strengthen corporate growth. The majority of companies in which the
Portfolio invests have a unique combination of operating leverage and
capital-spending discipline. We believe this combination will enable the
companies to produce strong earnings growth in 2004.
We will continue to position the Portfolio with a bias toward industries in the
information technology and consumer discretionary sectors that we believe are
well positioned to capitalize on an improving economic environment. Whatever the
markets or the economy may bring, the Portfolio will continue to seek growth
through long-term capital appreciation.
Ashi Parikh
Portfolio Manager
Eagle Asset Management, Inc.
M-61
$10,000 INVESTED IN THE
MAINSTAY VP EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO
ON 5/1/98 VERSUS S&P 500(R) INDEX, RUSSELL 1000(R) GROWTH INDEX,
AND THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP EAGLE ASSET
MANAGEMENT GROWTH RUSSELL 1000(R)
EQUITY PORTFOLIO S&P 500(R) INDEX CONSUMER PRICE INDEX GROWTH INDEX
----------------- ---------------- -------------------- ---------------
5/1/98 10000 10000 10000 10000
1998 11785 11171 10084 11881
1999 19504 13521 10388 15821
2000 17560 12291 10739 12273
2001 14653 10832 10917 9766
2002 10520 8439 11195 7043
2003 13471 10857 11406 9138
</Table>
One Year: 28.05% Three Years: -8.46% Five Years: 2.71%
Since Inception: 5.39% (5/1/98)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. The MainStay VP Eagle Asset Management Growth Equity Portfolio is a Portfolio
of the MainStay VP Series Fund, Inc. Eagle Asset Management, Inc., serves as
Sub-Adviser to this Portfolio.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-62
MAINSTAY VP LORD ABBETT DEVELOPING GROWTH PORTFOLIO(1)
MARKET OVERVIEW
During 2003, the stock market rebounded strongly from the lows reached during
the recent three-year bear market. Most equity indices saw sharp gains, with
returns for the year greater than 25%. Smaller and more-speculative stocks
generally outperformed larger companies, a trend that was reflected in the
performance of the Portfolio's principal benchmark, the Russell 2000(R) Growth
Index.*
The Dow Jones Industrial Average* rose 28.28% during the year, and the S&P
500(R) Index* returned 28.68% over the same period. In contrast, the Russell
2000(R) Index,* which tracks smaller-capitalization companies, returned 47.25%,
and the technology-laden Nasdaq(R) Composite Index* rose 50.01%.
PERFORMANCE REVIEW
For the 12 months ended December 31, 2003, MainStay VP Lord Abbett Developing
Growth Portfolio (initial class of shares) returned 38.49%. The Portfolio
underperformed the 41.73% return of the average Lipper* Variable Products
Small-Cap Growth Portfolio over the same period. The Portfolio outperformed the
28.68% return of the S&P 500(R) Index but underperformed the 48.54% return of
the Russell 2000(R) Growth Index for the 12 months ended December 31, 2003.
During 2003, the strongest gains came from smaller, more-speculative companies.
Within the Russell 2000(R) Growth Index, companies with capitalizations under
$500 million returned 63%, while companies without any earnings returned an
aggregate gain of nearly 72%. This was perhaps the most significant factor
influencing the Portfolio's relative performance in 2003.
The Portfolio's investment process focuses on profitable, growing companies,
which we believe offer valuable long-term investment potential. As of December
31, 2003, less than 10% of the Portfolio was invested in companies that were not
generating profits, based on trailing 12-month earnings, compared with 28% of
the holdings of the Russell 2000(R) Growth Index. Given the stark divergence in
performance of profitable and unprofitable companies in 2003, our investment
focus clearly affected performance relative to the Portfolio's benchmark and its
peer group.
SECTOR WEIGHTINGS AND WEIGHTING CHANGES
As the year progressed, we reduced the Portfolio's exposure to more-conservative
growth stocks and increased its exposure to more-cyclical holdings. We
substantially reduced the Portfolio's weighting in the consumer discretionary
sector, from 22.4% of net assets to 13.9%. We also reduced the Portfolio's
health care sector weighting from 26.2% to 20.8%. Although these sectors had
provided good returns for the Portfolio, in part because of price appreciation,
going forward, we expect these areas to have lower returns than other equity
sectors. During 2003, we substantially increased the Portfolio's weighting in
the information technology sector, from 21.1% of net assets to 35.5%. We believe
that information technology companies should continue to benefit from an
expanding economy.
The Portfolio's most significantly overweighted positions relative to the
Russell 2000(R) Growth Index were in the industrials and information technology
sectors. In the industrials sector, the Portfolio focused the bulk of its
attention on companies in the commercial services & supplies industry. We
believe that this industry is leveraged to take advantage of a cyclical economic
recovery and an expected increase in capital goods investment. Within the
information technology sector, the Portfolio's most significantly overweighted
position was in the software industry.
The Portfolio's most significantly underweighted position relative to the
Russell 2000(R) Growth Index continued to be in the financials sector. While we
have added to certain economically sensitive financial positions, we do not
believe that the interest-rate environment will be particularly beneficial for
financial stocks in the foreseeable future.
- ------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
M-63
LOOKING AHEAD
We do not expect gains in 2004 to rival those of 2003, but we believe that
market strength may continue. Many stocks participated in the market rally of
2003, with the market experiencing some of the best advance-decline statistics
in the past 50 years. As of year-end, economic expansion was continuing while
interest rates remained relatively stable. Although past performance is no
guarantee of future results, 2004 is a presidential election year, and in the
past, election years have tended to provide a cyclical boost to equity markets.
Whatever the markets or the economy may bring, the Portfolio will continue to
seek long-term growth of capital through a diversified and actively managed
portfolio consisting of developing growth companies, many of which are traded
over the counter.
F. Thomas O'Halloran
Partner, Portfolio Manager
Lord, Abbett & Co. LLC
M-64
$10,000 INVESTED IN THE
MAINSTAY VP LORD ABBETT DEVELOPING GROWTH PORTFOLIO
ON 5/1/98 VERSUS S&P 500(R) INDEX, RUSSELL 2000(R) GROWTH INDEX,
AND THE CONSUMER PRICE INDEX*
[LINE CHART]
<Table>
<Caption>
VP LORD ABBETT
DEVELOPING GROWTH RUSSELL 2000(R)
PORTFOLIO S&P 500(R) INDEX CONSUMER PRICE INDEX GROWTH INDEX
----------------- ---------------- -------------------- ---------------
5/1/98 10000 10000 10000 10000
1998 9210 11171 10084 8993
1999 12175 13522 10388 12868
2000 9852 12291 10739 9982
2001 9129 10830 10917 9061
2002 6484 8437 11195 6319
2003 8979 10857 11406 9386
</Table>
One Year: 38.49% Three Years: -3.05% Five Years: -0.51%
Since Inception: -1.88% (5/1/98)
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY,
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT UPON REDEMPTION, SHARES 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 your policy
to see returns reflective of these charges. For more-current performance, please
contact the Service Center provided in your prospectus.
1. MainStay VP Lord Abbett Developing Growth Portfolio is a Portfolio of
MainStay VP Series Fund, Inc. Lord, Abbett & Co. LLC serves as Sub-Adviser to
this Portfolio.
The views of the Lord, Abbett & Co. LLC, the Portfolio's subadviser, and the
Portfolio's holdings described in this report are as of December 31, 2003; these
views and holdings may have changed subsequent to this date. Information
provided in this report should not be considered a recommendation to purchase or
sell securities. The Portfolio is not insured by the FDIC, is not a deposit or
other obligation of, or guaranteed by banks, and is subject to investment risks,
including loss of principal amount invested. For a more detailed discussion of
the risks associated with the Portfolio, see the Portfolio's prospectus.
Stocks of small companies may be subject to higher price volatility,
significantly lower trading volumes, and greater spreads between bid and ask
prices, than stocks of larger companies. Small companies may be more vulnerable
to adverse business or market developments than mid- or large-capitalization
companies.
The preceding information has not been audited.
Not all investment divisions are available under all policies.
* Please refer to pages M-2 through M-4 for additional explanations and
disclosure regarding the Portfolios, their benchmark indices, and other
indices, averages, and service providers mentioned in the reports.
M-65
MAINSTAY VP SERIES FUND, INC. -- DIRECTORS AND OFFICERS
The following are the Directors and Officers of MainStay VP Series Fund, Inc.,
together with a brief description of their principal occupations during the past
five years.
Each Director serves until his/her successor is elected and qualified or until
his/her resignation, death or removal. Officers serve a term of one year and are
elected annually by the Directors.
The business address of each Director and Officer is 51 Madison Avenue, New
York, New York 10010.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
POSITION(S) HELD IN FUND
WITH FUND AND COMPLEX OTHER
LENGTH OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
NAME AND DATE OF BIRTH SERVED DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS*
- -----------------------------------------------------------------------------------------------------------------------
GARY E. WENDLANDT Chairman and Chief Chief Executive Officer, Chairman 42 None
10/8/50 Executive Officer and Manager, New York Life
since 2002 and Investment Management LLC (including
Director since predecessor advisory organizations)
2001 and New York Life Investment
Management Holdings LLC; Executive
Vice President, New York Life
Insurance Company; Executive Vice
President and Manager, NYLIFE LLC;
Manager, NYLIFE Distributors LLC;
Chairman, McMorgan & Company LLC;
Manager, MacKay Shields LLC;
Executive Vice President, New York
Life Insurance and Annuity
Corporation; Chairman and Trustee,
The MainStay Funds (23 portfolios);
Executive Vice President and Chief
Investment Officer, MassMutual Life
Insurance Company (1993 to 1999).
- -----------------------------------------------------------------------------------------------------------------------
ANNE F. POLLACK President since Senior Vice President and Chief 19 None
11/7/55 1990 and Director Investment Officer, New York Life
since 1989 Insurance Company; Senior Vice
President, Chief Investment Officer
and Manager, NYLIFE LLC; Senior Vice
President and Director, New York
Life Insurance and Annuity
Corporation and NYLIFE Insurance
Company of Arizona; Senior Vice
President, Chief Investment Officer
and Manager, New York Life
International, LLC; Director, NYLIFE
Securities Inc.
- -----------------------------------------------------------------------------------------------------------------------
ROBERT D. ROCK Vice President Senior Vice President, New York Life 19 None
12/16/54 since 1985 and Insurance Company; Senior Vice
Director since President, Chief Investment Officer
1984 and Director, New York Life
Insurance and Annuity Corporation
and NYLIFE Insurance Company of
Arizona; Senior Vice President and
Manager, NYLIFE Distributors LLC;
Senior Vice President, NYLIFE
Securities Inc.
- -----------------------------------------------------------------------------------------------------------------------
</Table>
* Certain Directors are considered to be interested persons of the Company
within the meaning of the 1940 Act because of their affiliation with New York
Life Insurance Company, New York Life Insurance and Annuity Corporation, NYLIFE
LLC, New York Life Investment Management LLC, MacKay Shields LLC, McMorgan &
Company LLC, Eclipse Funds, Eclipse Funds Inc., The MainStay Funds, NYLIFE
Securities Inc. and/or NYLIFE Distributors LLC, as described in detail in the
column "Principal Occupation(s) During Past 5 Years."
M-66
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
POSITION(S) HELD IN FUND
WITH FUND AND COMPLEX OTHER
LENGTH OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
NAME AND DATE OF BIRTH SERVED DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------
NON-INTERESTED
DIRECTORS
- -----------------------------------------------------------------------------------------------------------------------
MICHAEL J. DRABB Director since Retired. Executive Vice President, 19 Director, MONY
10/4/33 1994 O'Brien Asset Management (1993 to Series Fund (7
1999). portfolios), Inc.;
Director, New York
Life Settlement
Corporation.
- -----------------------------------------------------------------------------------------------------------------------
JILL FEINBERG Director since President, Jill Feinberg & Company, 19 Director, New York
4/14/54 1995 Inc. (special events and meeting Life Settlement
planning firm). Corporation
- -----------------------------------------------------------------------------------------------------------------------
DANIEL HERRICK Director since Retired. Treasurer and Executive 19 None
12/1/20 1983 Officer, National Gallery of Art
(1985 to 1995).
- -----------------------------------------------------------------------------------------------------------------------
ROMAN L. WEIL Director since V. Duane Rath Professor of 19 None
5/22/40 1994 Accounting, Graduate School of
Business, University of Chicago;
President, Roman L. Weil Associates,
Inc. (consulting firm).
- -----------------------------------------------------------------------------------------------------------------------
JOHN A. WEISSER , JR. Director since Retired. Managing Director of 19 None
10/22/41 1997 Salomon Brothers, Inc. (1981 to
1995).
- -----------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT
DIRECTORS
- -----------------------------------------------------------------------------------------------------------------------
THEODORE A. MATHAS Executive Vice Executive Vice President and Co-Head N/A None
4/4/67 President since of Life & Annuity (as of January 1,
2002 2004) and Senior Vice President and
Chief Operating Officer for Life &
Annuity (1998 to December 2003), New
York Life Insurance Company;
Executive Vice President and
Director, New York Life Insurance
and Annuity Corporation and NYLIFE
Insurance Company of Arizona;
Director, NYLIFE Securities Inc.
- -----------------------------------------------------------------------------------------------------------------------
PATRICK J. FARRELL Treasurer, Chief Managing Director, New York Life N/A None
9/27/59 Financial and Investment Management LLC (including
Accounting Officer predecessor advisory organizations);
since 2001 Vice President, Treasurer, Chief
Financial and Accounting Officer,
The MainStay Funds; Treasurer, Chief
Financial and Accounting Officer,
Eclipse Funds Inc. and Eclipse
Funds; Chief Financial Officer and
Assistant Treasurer, McMorgan Funds.
- -----------------------------------------------------------------------------------------------------------------------
</Table>
M-67
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
POSITION(S) HELD IN FUND
WITH FUND AND COMPLEX OTHER
LENGTH OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
NAME AND DATE OF BIRTH SERVED DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------
ROBERT A. ANSELMI Secretary since Senior Managing Director, General N/A None
10/19/46 2001 Counsel and Secretary, New York Life
Investment Management LLC (including
predecessor advisory organizations);
Secretary, New York Life Investment
Management Holdings LLC; Senior Vice
President, New York Life Insurance
Company; Vice President and
Secretary, McMorgan & Company LLC;
Secretary, NYLIFE Distributors LLC;
Secretary, The MainStay Funds,
Eclipse Funds Inc. and Eclipse
Funds; Managing Director and Senior
Counsel, Lehman Brothers Inc.,
(October 1998 to December 1999);
General Counsel and Managing
Director, JP Morgan Investment
Management Inc. (1986 to September
1998).
- -----------------------------------------------------------------------------------------------------------------------
RICHARD W. ZUCCARO Tax Vice President Vice President, New York Life N/A None
12/12/49 since 1991 Insurance Company; Vice President,
New York Life Insurance and Annuity
Corporation, NYLIFE Insurance
Company of Arizona, NYLIFE LLC,
NYLIFE Securities Inc. and NYLIFE
Distributors LLC; Tax Vice
President, New York Life
International, LLC; Tax Vice
President, Eclipse Funds, Eclipse
Funds Inc. and The MainStay Funds.
- -----------------------------------------------------------------------------------------------------------------------
</Table>
M-68
MAINSTAY VP SERIES FUND, INC.
DIRECTORS AND OFFICERS*
Gary E. Wendlandt, Chairman,
Chief Executive Officer and Director
Anne F. Pollack, President and Director
Michael J. Drabb, Director
Jill Feinberg, Director
Daniel Herrick, Director
Robert D. Rock, Director and Vice President
Roman L. Weil, Director
John A. Weisser, Jr., Director
Theodore A. Mathas, Executive Vice President
Patrick J. Farrell, Treasurer, Chief Financial and
Accounting Officer
Robert A. Anselmi, Secretary
Richard W. Zuccaro, Tax Vice President
INVESTMENT ADVISER
New York Life Investment Management LLC
SUB-ADVISERS
MacKay Shields LLC**
American Century Investment Management, Inc.
The Dreyfus Corporation
Eagle Asset Management, Inc.
Lord, Abbett & Co. LLC
ADMINISTRATOR
New York Life Investment Management LLC
DISTRIBUTOR
NYLIFE Distributors LLC
CUSTODIANS
The Bank of New York
JP Morgan Chase & Co.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
LEGAL COUNSEL
Dechert LLP
* As of December 31, 2003.
** An affiliate of New York Life Investment Management LLC.
Some Portfolios may not be available in all products.
M-69
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
LONG-TERM BONDS (96.7%)+
CORPORATE BONDS (36.0%)
PRINCIPAL
AMOUNT VALUE
--------------------------
AEROSPACE & DEFENSE (0.4%)
General Dynamics Corp.
3.00%, due 5/15/08.............. $ 2,000,000 $ 1,952,730
------------
AUTOMOBILES (2.7%)
DaimlerChrysler North America
Holdings, Inc.
7.20%, due 9/1/09............... 5,000,000 5,583,880
8.00%, due 6/15/10.............. 1,000,000 1,145,229
Ford Motor Co.
6.63%, due 2/15/28.............. 5,000,000 4,603,380
General Motors Corp.
8.38%, due 7/15/33.............. 2,000,000 2,321,626
------------
13,654,115
------------
BEVERAGES (0.8%)
Coca-Cola Enterprises, Inc.
8.50%, due 2/1/22............... 3,000,000 3,883,314
------------
CAPITAL MARKETS (1.7%)
FPL Group Capital, Inc.
3.25%, due 4/11/06.............. 2,000,000 2,034,934
Goldman Sachs Group, Inc. (The)
5.25%, due 10/15/13............. 1,000,000 1,009,604
5.70%, due 9/1/12............... 1,000,000 1,050,952
J.P. Morgan Chase & Co.
6.63%, due 3/15/12.............. 2,000,000 2,234,222
Morgan Stanley Dean Witter & Co.
6.75%, due 4/15/11.............. 2,000,000 2,262,840
------------
8,592,552
------------
COMMERCIAL BANKS (3.5%)
Bank of America Corp.
5.25%, due 12/1/15.............. 3,000,000 2,992,452
7.80%, due 2/15/10.............. 2,000,000 2,378,404
Bank One Corp.
4.13%, due 9/1/07............... 2,000,000 2,065,448
Deutsche Bank Financial LLC
5.38%, due 3/2/15............... 2,000,000 2,028,944
First Chicago NBD Corp.
6.13%, due 2/15/06.............. 1,750,000 1,879,113
Fleet National Bank
5.75%, due 1/15/09.............. 5,000,000 5,453,805
National City Corp.
3.20%, due 4/1/08............... 1,000,000 987,470
------------
17,785,636
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
CONSUMER FINANCE (3.4%)
Aristar, Inc.
6.88%, due 5/15/11.............. $ 3,500,000 $ 4,018,277
American General Finance Corp.
Series G
5.38%, due 9/1/09............... 3,000,000 3,203,367
Capital One Bank
Series BNKT
6.88%, due 2/1/06............... 1,000,000 1,081,798
Ford Motor Credit Co.
6.25%, due 2/16/06.............. 1,000,000 1,034,205
General Motors Acceptance Corp.
6.85%, due 6/17/04.............. 3,000,000 3,070,671
Household Finance Corp.
4.75%, due 7/15/13.............. 2,500,000 2,431,484
MBNA America Bank
5.38%, due 1/15/08.............. 2,000,000 2,126,500
------------
16,966,302
------------
DIVERSIFIED FINANCIAL SERVICES (4.7%)
Associates Corp. of North America
6.95%, due 11/1/18.............. 5,000,000 5,745,970
Boeing Capital Corp.
5.75%, due 2/15/07.............. 3,000,000 3,240,003
CIT Group, Inc.
7.13%, due 10/15/04............. 2,000,000 2,086,142
7.75%, due 4/2/12............... 2,000,000 2,362,880
Mellon Funding Corp.
6.40%, due 5/14/11.............. 1,125,000 1,261,900
National Rural Utilities
Cooperative Finance Corp.
3.88%, due 2/15/08.............. 5,000,000 5,062,885
Wells Fargo Financial, Inc.
6.85%, due 7/15/09.............. 4,000,000 4,583,804
------------
24,343,584
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (2.6%)
AT&T Corp.
6.00%, due 3/15/09.............. 925,000 996,959
Bell Atlantic Pennsylvania, Inc.
8.35%, due 12/15/30............. 1,500,000 1,871,126
Sprint Capital Corp.
6.90%, due 5/1/19............... 1,000,000 1,021,539
7.13%, due 1/30/06.............. 1,000,000 1,081,868
8.38%, due 3/15/12.............. 1,000,000 1,167,800
Verizon New England, Inc.
6.50%, due 9/15/11.............. 5,000,000 5,509,460
WorldCom, Inc.--WorldCom Group
6.50%, due 5/15/04 (a).......... 5,000,000 1,675,000
------------
13,323,752
------------
ELECTRIC UTILITIES (3.4%)
CenterPoint Energy Houston
Electric LLC
5.75%, due 1/15/14 (b).......... 2,000,000 2,088,264
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-70
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
ELECTRIC UTILITIES (Continued)
Cleveland Electric Illuminating
Co.
5.65%, due 12/15/13 (b)......... $ 3,000,000 $ 2,952,873
Commonwealth Edison Co.
Series 98
6.15%, due 3/15/12.............. 4,775,000 5,209,659
DTE Energy Co.
6.45%, due 6/1/06............... 1,000,000 1,080,940
Pepco Holdings, Inc.
3.75%, due 2/15/06.............. 1,000,000 1,018,813
Progress Energy, Inc.
6.50%, due 7/15/12.............. 2,000,000 2,213,540
6.13%, due 9/15/33.............. 2,000,000 2,055,596
Public Service Co. of New Mexico
4.40%, due 9/15/08.............. 500,000 506,318
------------
17,126,003
------------
FOOD & STAPLES RETAILING (1.6%)
Delhaize America, Inc.
7.38%, due 4/15/06.............. 2,500,000 2,687,500
Safeway, Inc.
4.80%, due 7/16/07.............. 2,000,000 2,075,864
SUPERVALU, Inc.
7.50%, due 5/15/12.............. 3,000,000 3,407,859
------------
8,171,223
------------
FOOD PRODUCTS (1.1%)
Kellogg Co.
Series B
6.60%, due 4/1/11............... 2,000,000 2,241,384
Unilever Capital Corp.
7.13%, due 11/1/10.............. 3,000,000 3,487,806
------------
5,729,190
------------
INSURANCE (0.6%)
Berkshire Hathaway, Inc.
4.63%, due 10/15/13 (b)......... 2,000,000 1,966,410
MetLife, Inc.
5.38%, due 12/15/12............. 1,000,000 1,029,708
------------
2,996,118
------------
MEDIA (2.0%)
CSC Holdings, Inc.
7.25%, due 7/15/08.............. 1,500,000 1,560,000
TCI Communications, Inc.
7.13%, due 2/15/28.............. 3,305,000 3,584,230
Time Warner, Inc.
6.63%, due 5/15/29.............. 2,500,000 2,569,200
Walt Disney Co. (The)
Series B
6.75%, due 3/30/06.............. 2,000,000 2,175,292
------------
9,888,722
------------
MULTILINE RETAIL (0.5%)
Target Corp.
7.50%, due 8/15/10.............. 2,025,000 2,401,312
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
MULTI-UTILITIES & UNREGULATED POWER (1.5%)
Consolidated Edison Co. of New
York
5.88%, due 4/1/33............... $ 1,000,000 $ 1,013,225
Consumers Energy Co.
6.00%, due 2/15/14 (b).......... 1,000,000 1,042,042
Public Service Co. of Colorado
Series 15
5.50%, due 4/4/14............... 2,000,000 2,079,520
Union Electric Co.
5.25%, due 9/1/12............... 3,500,000 3,607,727
------------
7,742,514
------------
PAPER & FOREST PRODUCTS (0.3%)
Weyerhaeuser Co.
7.38%, due 3/15/32.............. 1,500,000 1,630,953
------------
PHARMACEUTICALS (1.5%)
Abbott Laboratories
5.63%, due 7/1/06............... 3,000,000 3,235,914
Wyeth
6.50%, due 2/1/34............... 4,000,000 4,090,116
------------
7,326,030
------------
REAL ESTATE (0.8%)
Avalonbay Communities, Inc.
6.63%, due 9/15/11.............. 1,000,000 1,107,345
Regency Centers LP
7.95%, due 1/15/11.............. 2,000,000 2,354,712
Rouse Co. (The)
8.00%, due 4/30/09.............. 500,000 586,291
------------
4,048,348
------------
ROAD & RAIL (1.4%)
CSX Corp.
5.50%, due 8/1/13............... 2,000,000 2,047,734
Norfolk Southern Corp.
7.80%, due 5/15/27.............. 4,000,000 4,804,220
------------
6,851,954
------------
THRIFTS & MORTGAGE FINANCE (1.1%)
General Electric Capital Corp.
6.00%, due 6/15/12.............. 5,000,000 5,422,265
------------
WIRELESS TELECOMMUNICATION SERVICES (0.4%)
AT&T Wireless Services, Inc.
8.75%, due 3/1/31............... 1,500,000 1,850,744
------------
Total Corporate Bonds (Cost
$176,262,062)................... 181,687,361
------------
FOREIGN CORPORATE BONDS (8.2%)
COMMERCIAL BANKS (0.6%)
Royal Bank of Scotland Group PLC
5.00%, due 10/1/14.............. 3,000,000 2,972,724
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-71
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
FOREIGN CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (2.0%)
British Telecommunications PLC
8.38%, due 12/15/10............. $ 3,000,000 $ 3,650,628
Deutsche Telekom International
Finance BV
9.25%, due 6/1/32............... 2,000,000 2,744,278
Koninklijke (Royal) KPN N.V.
8.38%, due 10/1/30.............. 2,000,000 2,535,430
Telecom Italia Capital
6.38%, due 11/15/33 (b)......... 1,000,000 1,005,634
------------
9,935,970
------------
FOREIGN GOVERNMENTS (4.8%)
Province of British Columbia
4.63%, due 10/3/06.............. 5,000,000 5,270,835
Province of Manitoba
2.75%, due 1/17/06.............. 4,000,000 4,028,280
Province of New Brunswick
3.50%, due 10/23/07............. 3,000,000 3,051,849
Province of Ontario
5.50%, due 10/1/08.............. 6,000,000 6,517,836
Province of Quebec
5.00%, due 7/17/09.............. 2,000,000 2,114,078
Republic of Italy
2.50%, due 3/31/06.............. 3,000,000 3,008,316
------------
23,991,194
------------
OIL & GAS (0.4%)
Conoco Funding Co.
6.35%, due 10/15/11............. 2,000,000 2,242,316
------------
WIRELESS TELECOMMUNICATION SERVICES (0.4%)
Vodafone Group PLC
6.25%, due 11/30/32............. 2,000,000 2,039,820
------------
Total Foreign Corporate Bonds
(Cost $39,888,832).............. 41,182,024
------------
GENERAL OBLIGATION BOND (0.4%)
EDUCATION (0.4%)
Oregon State Taxable Pension
5.89%, due 6/1/27............... 2,000,000 2,062,040
------------
Total General Obligation Bond
(Cost $2,000,000)............... 2,062,040
------------
U.S. GOVERNMENT &
FEDERAL AGENCIES (52.1%)
FEDERAL HOME LOAN BANK (3.0%)
3.00%, due 8/15/05.............. 5,000,000 5,100,795
3.25%, due 8/15/05.............. 5,000,000 5,123,090
3.75%, due 8/15/07.............. 5,000,000 5,116,620
------------
15,340,505
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION (MORTGAGE
PASS-THROUGH SECURITIES) (12.1%)
4.50%, due 2/15/19 TBA (c)...... $ 5,000,000 $ 4,998,440
5.50%, due 5/1/33-1/15/34....... 34,765,694 35,196,294
6.00%, due 7/1/17-1/1/33........ 10,345,684 10,732,653
6.50%, due 7/1/17-9/1/32........ 4,188,887 4,397,398
7.00%, due 1/1/33............... 5,408,379 5,722,443
------------
61,047,228
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (6.0%)
2.38%, due 3/17/06.............. 16,000,000 16,004,896
5.13%, due 2/13/04.............. 12,000,000 12,054,504
5.25%, due 8/1/12............... 2,000,000 2,050,762
------------
30,110,162
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE
PASS-THROUGH SECURITIES) (15.3%)
4.50%, due 5/1/18............... 6,965,066 6,981,051
5.00%, due 1/1/18-5/1/33........ 18,239,521 18,463,472
5.50%, due 5/1/16-12/1/33....... 27,106,951 27,554,342
6.00%, due 2/1/14-4/1/33........ 10,615,059 11,002,324
6.50%, due 11/1/09-12/1/31...... 8,168,945 8,561,483
7.00%, due 2/1/27-4/1/31........ 2,493,821 2,644,804
7.50%, due 7/1/28............... 629,357 673,702
8.00%, due 5/1/25-12/1/29....... 1,354,469 1,472,132
------------
77,353,310
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE
PASS-THROUGH SECURITIES) (4.1%)
5.00%, due 5/15/33-11/15/33..... 4,999,502 4,959,196
5.50%, due 3/15/33-4/15/33...... 4,999,241 5,087,668
6.00%, due 2/15/32.............. 2,761,882 2,873,349
6.50%, due 4/15/32-6/15/32...... 6,474,052 6,825,548
7.00%, due 7/15/31.............. 689,202 734,748
9.00%, due 4/15/26.............. 347,283 387,061
------------
20,867,570
------------
UNITED STATES TREASURY BONDS (0.6%)
5.38%, due 2/15/31.............. 1,000,000 1,042,852
7.13%, due 2/15/23.............. 1,500,000 1,872,129
------------
2,914,981
------------
UNITED STATES TREASURY NOTES (11.0%)
1.63%, due 1/31/05-4/30/05...... 18,000,000 18,068,747
1.75%, due 12/31/04............. 17,000,000 17,085,663
2.00%, due 5/15/06.............. 5,000,000 5,000,975
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-72
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
U.S. GOVERNMENT &
FEDERAL AGENCIES (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
UNITED STATES TREASURY NOTES (Continued)
2.13%, due 8/31/04.............. $ 7,000,000 $ 7,047,852
3.00%, due 2/29/04.............. 4,000,000 4,012,812
3.25%, due 5/31/04.............. 4,000,000 4,036,720
------------
55,252,769
------------
Total U.S. Government & Federal
Agencies
(Cost $261,042,279)............. 262,886,525
------------
Total Long-Term Investments
(Cost $479,193,173)............. 487,817,950
------------
SHORT-TERM INVESTMENTS (5.5%)
COMMERCIAL PAPER (3.3%)
Citigroup Global Markets
Holdings, Inc.
1.05%, due 1/9/04(d)............ 5,000,000 4,998,833
ING America Insurance Holdings
1.07%, due 1/12/04(d)........... 5,000,000 4,998,364
Inter-American Development Bank
1.04%, due 1/5/04(d)............ 7,000,000 6,999,191
------------
Total Commercial Paper
(Cost $16,996,388).............. 16,996,388
------------
FEDERAL AGENCY (0.1%)
Federal Home Loan Mortgage
Corporation 1.01%, due 1/9/04... 480,000 479,892
------------
Total Federal Agency
(Cost $479,892)................. 479,892
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
U.S. GOVERNMENT (2.1%)
United States Treasury Bill
0.61%, due 1/2/04(d)............ $10,521,000 $ 10,520,825
------------
Total U.S. Government
(Cost $10,520,825).............. 10,520,825
------------
Total Short-Term Investments
(Cost $27,997,105).............. 27,997,105
------------
Total Investments
(Cost $507,190,278)(e).......... 102.2% 515,815,055(f)
Liabilities in Excess of
Cash and Other Assets........... (2.2) (11,179,483)
----------- ------------
Net Assets....................... 100.0% $504,635,572
=========== ============
</Table>
- ------------
(a) Issue in default.
(b) May be sold to institutional investors only.
(c) 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.
(d) Segregated as collateral for TBA.
(e) The cost stated also represents the aggregate cost for federal income tax
purposes.
(f) At December 31, 2003 net unrealized appreciation was $8,624,777, 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 $13,002,321 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $4,377,544.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-73
BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $507,190,278)......... $515,815,055
Cash..................................... 940
Receivables:
Interest............................... 4,911,246
Investment securities sold............. 1,298,576
Fund shares sold....................... 322,277
------------
Total assets..................... 522,348,094
------------
LIABILITIES:
Payables:
Investment securities purchased........ 16,994,043
Fund shares redeemed................... 406,922
Adviser................................ 107,113
Administrator.......................... 85,690
Shareholder communication.............. 68,362
NYLIFE Distributors.................... 3,556
Accrued expenses......................... 46,836
------------
Total liabilities................ 17,712,522
------------
Net assets............................... $504,635,572
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 361,722
Service Class.......................... 14,631
Additional paid-in capital............... 495,634,442
Net unrealized appreciation on
investments............................ 8,624,777
------------
Net assets............................... $504,635,572
============
Initial Class
Net assets applicable to outstanding
shares............................... $485,032,551
============
Shares of capital stock outstanding.... 36,172,197
============
Net asset value per share
outstanding.......................... $ 13.41
============
Service Class
Net assets applicable to outstanding
shares............................... $ 19,603,021
============
Shares of capital stock outstanding.... 1,463,080
============
Net asset value per share
outstanding.......................... $ 13.40
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Interest............................... $ 22,245,300
------------
Expenses:
Advisory............................... 1,299,431
Administration......................... 1,039,545
Shareholder communication.............. 216,739
Professional........................... 139,186
Directors.............................. 27,852
Portfolio pricing...................... 14,338
Service................................ 12,080
Miscellaneous.......................... 47,635
------------
Total expenses................... 2,796,806
------------
Net investment income.................... 19,448,494
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments......... 13,627,665
Net change in unrealized appreciation on
investments............................ (10,541,500)
------------
Net realized and unrealized gain on
investments............................ 3,086,165
------------
Net increase in net assets resulting from
operations............................. $ 22,534,659
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-74
MAINSTAY VP SERIES FUND, INC.
BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
---------------------------
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 19,448,494 $ 20,207,058
Net realized gain on investments.......................... 13,627,665 6,170,417
Net change in unrealized appreciation on investments...... (10,541,500) 11,948,215
------------ ------------
Net increase in net assets resulting from operations...... 22,534,659 38,325,690
------------ ------------
Dividends and distributions to shareholders:
From net investment income:
Initial Class........................................... (19,902,818) (20,660,496)
Service Class........................................... (768,712) --
From net realized gain on investments:
Initial Class........................................... (11,892,619) (206,736)
Service Class........................................... (466,633) --
------------ ------------
Total dividends and distributions to shareholders..... (33,030,782) (20,867,232)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 77,278,859 124,748,902
Service Class........................................... 19,885,771 --
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions:
Initial Class........................................... 31,795,437 20,867,232
Service Class........................................... 1,235,344 --
------------ ------------
130,195,411 145,616,134
Cost of shares redeemed:
Initial Class........................................... (96,297,101) (54,317,370)
Service Class........................................... (506,395) --
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 33,391,915 91,298,764
------------ ------------
Net increase in net assets.................................. 22,895,792 108,757,222
NET ASSETS:
Beginning of year........................................... 481,739,780 372,982,558
------------ ------------
End of year................................................. $504,635,572 $481,739,780
============ ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
---------------------------------------------------- -------------
JUNE 4,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
-----------------------------------------------------------------------
Net asset value at beginning of
period............................. $ 13.73 $ 13.11 $ 12.59 $ 12.24 $ 13.23 $ 14.33
-------- -------- -------- -------- -------- --------
Net investment income................ 0.52(b) 0.60 0.65 0.85 0.78 0.28(b)
Net realized and unrealized gain
(loss) on investments.............. 0.10 0.64 0.52 0.35 (0.99) (0.28)
-------- -------- -------- -------- -------- --------
Total from investment operations..... 0.62 1.24 1.17 1.20 (0.21) (0.00)(c)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income......... (0.59) (0.61) (0.65) (0.85) (0.78) (0.58)
From net realized gain on
investments...................... (0.35) (0.01) -- -- (0.00)(c) (0.35)
-------- -------- -------- -------- -------- --------
Total dividends and distributions.... (0.94) (0.62) (0.65) (0.85) (0.78) (0.93)
-------- -------- -------- -------- -------- --------
Net asset value at end of period..... $ 13.41 $ 13.73 $ 13.11 $ 12.59 $ 12.24 $ 13.40
======== ======== ======== ======== ======== ========
Total investment return.............. 4.52% 9.48% 9.27% 9.82% (1.53%) 0.00%(d)(e)
Ratios (to average net assets)/
Supplemental Data:
Net investment income.............. 3.75% 4.93% 5.66% 6.37% 5.86% 3.50%+(f)
Expenses........................... 0.54% 0.52% 0.52% 0.51% 0.50% 0.79%+
Portfolio turnover rate.............. 149% 76% 54% 58% 161% 149%
Net assets at end of period (in
000's)............................. $485,033 $481,740 $372,983 $257,573 $287,361 $ 19,603
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares during the period.
(c) Less than one cent per share.
(d) Total Return is not annualized.
(e) Less than one tenth of a percent.
(f) Represents income earned for the year by the Initial Class
shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-75
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (99.3%)+
SHARES VALUE
----------------------------
AEROSPACE & DEFENSE (1.7%)
United Technologies Corp. ...... 182,200 $ 17,267,094
---------------
AIR FREIGHT & LOGISTICS (1.6%)
FedEx Corp. .................... 239,200 16,146,000
---------------
AUTOMOBILES (1.9%)
Harley-Davidson, Inc. .......... 401,800 19,097,554
---------------
BEVERAGES (2.3%)
Coca-Cola Co. (The)............. 217,500 11,038,125
PepsiCo, Inc. .................. 268,100 12,498,822
---------------
23,536,947
---------------
BIOTECHNOLOGY (2.2%)
Amgen, Inc. (a)................. 264,400 16,339,920
Genentech, Inc. (a)............. 73,000 6,830,610
---------------
23,170,530
---------------
CAPITAL MARKETS (1.7%)
Morgan Stanley.................. 297,000 17,187,390
---------------
CHEMICALS (2.8%)
Air Products & Chemicals,
Inc. .......................... 247,000 13,049,010
Praxair, Inc. .................. 403,400 15,409,880
---------------
28,458,890
---------------
COMMERCIAL BANKS (1.0%)
Fifth Third Bancorp. ........... 170,100 10,052,910
---------------
COMMERCIAL SERVICES & SUPPLIES (1.6%)
Cendant Corp. (a)............... 726,300 16,174,701
---------------
COMMUNICATIONS EQUIPMENT (2.0%)
Cisco Systems, Inc. (a)......... 862,700 20,954,983
---------------
COMPUTERS & PERIPHERALS (4.9%)
Dell, Inc. (a).................. 474,600 16,117,416
Hewlett-Packard Co. ............ 776,400 17,833,908
International Business Machines
Corp. ......................... 177,600 16,459,968
---------------
50,411,292
---------------
CONSUMER FINANCE (2.0%)
American Express Co. ........... 427,600 20,623,148
---------------
DIVERSIFIED FINANCIAL SERVICES (1.6%)
Citigroup, Inc. ................ 336,262 16,322,158
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (1.3%)
Agilent Technologies, Inc.
(a)............................ 473,100 13,833,444
---------------
<Caption>
SHARES VALUE
----------------------------
ENERGY EQUIPMENT & SERVICES (1.6%)
Baker Hughes, Inc. ............. 174,400 $ 5,608,704
BJ Services Co. (a)............. 181,200 6,505,080
Weatherford International Ltd.
(a)............................ 131,900 4,748,400
---------------
16,862,184
---------------
FOOD & STAPLES RETAILING (4.5%)
Sysco Corp. .................... 426,500 15,878,595
Walgreen Co. ................... 439,400 15,985,372
Wal-Mart Stores, Inc. .......... 263,900 13,999,895
---------------
45,863,862
---------------
HEALTH CARE EQUIPMENT & SUPPLIES (3.8%)
Baxter International, Inc. ..... 313,300 9,561,916
Boston Scientific Corp. (a)..... 431,400 15,858,264
Medtronic, Inc. ................ 283,200 13,766,352
---------------
39,186,532
---------------
HEALTH CARE PROVIDERS & SERVICES (8.5%)
Cardinal Health, Inc. .......... 247,000 15,106,520
Caremark Rx, Inc. (a)(c)........ 594,700 15,063,751
HCA, Inc. ...................... 378,500 16,260,360
UnitedHealth Group, Inc. ....... 401,800 23,376,724
WellPoint Health Networks, Inc.
(a)............................ 183,800 17,826,762
---------------
87,634,117
---------------
HOTELS, RESTAURANTS & LEISURE (1.3%)
International Game Technology... 365,000 13,030,500
---------------
HOUSEHOLD DURABLES (1.2%)
Lennar Corp.
Class A (c).................... 131,700 12,643,200
---------------
HOUSEHOLD PRODUCTS (1.2%)
Colgate-Palmolive Co. .......... 248,100 12,417,405
---------------
INDUSTRIAL CONGLOMERATES (1.6%)
General Electric Co. ........... 517,700 16,038,346
---------------
INSURANCE (1.3%)
Marsh & McLennan Cos., Inc. .... 290,700 13,921,623
---------------
INTERNET & CATALOG RETAIL (1.5%)
InterActiveCorp. (a)............ 458,200 15,546,726
---------------
IT SERVICES (1.5%)
First Data Corp. ............... 384,000 15,778,560
---------------
MACHINERY (4.7%)
Danaher Corp. .................. 182,400 16,735,200
Dover Corp. .................... 367,900 14,624,025
Illinois Tool Works, Inc. ...... 199,600 16,748,436
---------------
48,107,661
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-76
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
MEDIA (6.4%)
Clear Channel Communications,
Inc. .......................... 376,388 $ 17,626,250
Gannett Co., Inc. .............. 148,700 13,258,092
Omnicom Group, Inc. ............ 206,100 17,998,713
Viacom, Inc.
Class B........................ 374,759 16,631,804
---------------
65,514,859
---------------
MULTILINE RETAIL (2.5%)
Kohl's Corp. (a)................ 271,700 12,210,198
Target Corp. ................... 361,900 13,896,960
---------------
26,107,158
---------------
PHARMACEUTICALS (6.7%)
Forest Laboratories, Inc. (a)... 249,900 15,443,820
Johnson & Johnson............... 336,100 17,362,926
Pfizer, Inc. ................... 586,800 20,731,644
Teva Pharmaceutical Industries
Ltd. ADR (c)(d)................ 266,900 15,135,899
---------------
68,674,289
---------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (9.2%)
Analog Devices, Inc. (a)........ 347,200 15,849,680
Applied Materials, Inc. (a)..... 592,500 13,301,625
Intel Corp. .................... 614,100 19,774,020
KLA-Tencor Corp. (a)............ 193,300 11,340,911
Maxim Integrated Products,
Inc. .......................... 310,600 15,467,880
Texas Instruments, Inc. ........ 628,500 18,465,330
---------------
94,199,446
---------------
SOFTWARE (8.5%)
Electronic Arts, Inc. (a)....... 325,200 15,538,056
Microsoft Corp. ................ 736,800 20,291,472
Oracle Corp. (a)................ 1,298,800 17,144,160
Symantec Corp. (a).............. 455,400 15,779,610
VERITAS Software Corp. (a)...... 491,700 18,271,572
---------------
87,024,870
---------------
SPECIALTY RETAIL (4.7%)
Bed Bath & Beyond, Inc. (a)..... 390,200 16,915,170
Lowe's Cos., Inc. .............. 275,900 15,282,101
TJX Cos., Inc. (The)............ 724,700 15,979,635
---------------
48,176,906
---------------
Total Common Stocks (Cost
$907,699,551).................. 1,019,965,285
---------------
<Caption>
SHORT-TERM INVESTMENTS (2.3%)
PRINCIPAL
AMOUNT VALUE
----------------------------
COMMERCIAL PAPER (0.4%)
Neptune Funding Corp.
1.019%, due 1/2/04 (e)......... $ 259,993 $ 259,993
Rabobank UAS Financial Corp.
0.94%, due 1/2/04.............. 3,935,000 3,934,897
---------------
Total Commercial Paper
(Cost $4,194,890).............. 4,194,890
---------------
<Caption>
SHARES
----------
INVESTMENT COMPANIES (0.4%)
AIM Institutional Funds Group
0.99% (e)(f)................... 308,803 308,803
Merrill Lynch Premier
Institutional Fund 1.05% (f)... 3,330,000 3,330,000
---------------
Total Investment Companies (Cost
$3,638,803).................... 3,638,803
---------------
<Caption>
PRINCIPAL
AMOUNT
----------
MASTER NOTE (0.0%)(b)
Banc of America Securities LLC
1.125%, due 1/2/04 (e)......... $ 40,000 40,000
---------------
Total Master Note
(Cost $40,000)................. 40,000
---------------
REPURCHASE AGREEMENTS (1.5%)
Banc One Capital Markets, Inc.
1.1099%, dated 12/31/03 due
1/2/04 (e)
Proceeds at Maturity $1,000,061
(Collateralized by Various
Bonds with a Principal Amount
of $1,020,472 and a Market
Value of $1,020,000)........... 1,000,000 1,000,000
Countrywide Securities Corp.
1.08%, dated 12/31/03 due
1/2/04 (e)
Proceeds at Maturity $7,612,450
(Collateralized by Various
Bonds with a Principal Amount
of $9,847,112 and a Market
Value of $7,885,772)........... 7,612,000 7,612,000
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-77
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
SHORT-TERM INVESTMENTS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
----------------------------
REPURCHASE AGREEMENTS (Continued)
Merrill Lynch & Co., Inc.
1.08%, dated 12/31/03 due
1/2/04 (e)
Proceeds at Maturity $6,968,412
(Collateralized by Various
Bonds with a Principal Amount
of $6,436,152 and a Market
Value of $7,122,445)........... $6,968,000 $ 6,968,000
---------------
Total Repurchase Agreements
(Cost $15,580,000)............. 15,580,000
---------------
Total Short-Term Investments
(Cost $23,453,693)............. 23,453,693
---------------
Total Investments
(Cost $931,153,244) (g)........ 101.6% 1,043,418,978(h)
Liabilities in Excess of
Cash and Other Assets.......... (1.6) (16,298,761)
---------- ---------------
Net Assets...................... 100.0% $ 1,027,120,217
========== ===============
</Table>
- ------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) Represents a security, or a portion thereof, which is out on loan.
(d) ADR-American Depositary Receipt.
(e) Represents a security, or a portion thereof, purchased with cash collateral
received for securities on loan.
(f) Floating rate. Rate shown in effect at December 31, 2003.
(g) The cost for federal income tax purposes is $932,448,605.
(h) At December 31, 2003 net unrealized appreciation was $110,970,373, 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 $147,638,344 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $36,667,971.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-78
MAINSTAY VP SERIES FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $931,153,244)
including $15,389,820 market value of
securities loaned.................... $1,043,418,978
Cash................................... 1,612
Deposit with broker for securities
loaned............................... 3,000
Receivables:
Investment securities sold........... 2,623,751
Dividends and interest............... 955,035
Fund shares sold..................... 239,208
--------------
Total assets................... 1,047,241,584
--------------
LIABILITIES:
Securities lending collateral.......... 16,191,796
Payables:
Investment securities purchased...... 2,955,641
Adviser.............................. 307,037
Fund shares redeemed................. 261,847
Administrator........................ 170,576
Shareholder communication............ 169,750
Custodian............................ 13,545
NYLIFE Distributors.................. 2,841
Accrued expenses....................... 48,334
--------------
Total liabilities.............. 20,121,367
--------------
Net assets............................. $1,027,120,217
==============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class........................ $ 488,729
Service Class........................ 7,535
Additional paid-in capital............. 1,152,397,295
Accumulated undistributed net
investment income.................... 639
Accumulated net realized loss on
investments.......................... (238,039,715)
Net unrealized appreciation
on investments....................... 112,265,734
--------------
Net assets............................. $1,027,120,217
==============
Initial Class
Net assets applicable to outstanding
shares............................. $1,011,537,898
==============
Shares of capital stock
outstanding........................ 48,872,947
==============
Net asset value per share
outstanding........................ $ 20.70
==============
Service Class
Net assets applicable to outstanding
shares............................. $ 15,582,319
==============
Shares of capital stock
outstanding........................ 753,472
==============
Net asset value per share
outstanding........................ $ 20.68
==============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a)........................ $ 7,624,244
Interest............................. 28,467
Income from securities
loaned -- net...................... 8,266
--------------
Total income................... 7,660,977
--------------
Expenses:
Advisory............................. 3,244,984
Administration....................... 1,802,769
Shareholder communication............ 446,017
Professional......................... 166,883
Custodian............................ 75,271
Directors............................ 44,970
Service.............................. 8,680
Miscellaneous........................ 36,924
--------------
Total expenses................. 5,826,498
--------------
Net investment income.................. 1,834,479
--------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investments....... (18,610,933)
Net change in unrealized depreciation
on investments....................... 234,800,097
--------------
Net realized and unrealized gain on
investments.......................... 216,189,164
--------------
Net increase in net assets resulting
from operations...................... $ 218,023,643
==============
</Table>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $3,934.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-79
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
-------------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 1,834,479 $ 1,162,905
Net realized loss on investments and written option
transactions............................................ (18,610,933) (98,494,643)
Net change in unrealized appreciation (depreciation) on
investments............................................. 234,800,097 (308,110,791)
-------------- --------------
Net increase (decrease) in net assets resulting from
operations.............................................. 218,023,643 (405,442,529)
-------------- --------------
Dividends to shareholders:
From net investment income:
Initial Class........................................... (1,999,649) (1,004,039)
Service Class........................................... (18,614) --
-------------- --------------
Total dividends to shareholders....................... (2,018,263) (1,004,039)
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 41,724,882 196,384,127
Service Class........................................... 14,725,797 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class........................................... 1,999,649 1,004,039
Service Class........................................... 18,614 --
-------------- --------------
58,468,942 197,388,166
Cost of shares redeemed:
Initial Class........................................... (89,669,709) (294,330,589)
Service Class........................................... (94,205) --
-------------- --------------
Decrease in net assets derived from capital share
transactions............................................ (31,294,972) (96,942,423)
-------------- --------------
Net increase (decrease) in net assets....................... 184,710,408 (503,388,991)
NET ASSETS:
Beginning of year........................................... 842,409,809 1,345,798,800
-------------- --------------
End of year................................................. $1,027,120,217 $ 842,409,809
============== ==============
Accumulated undistributed net investment income at end of
year...................................................... $ 639 $ 178,224
============== ==============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
----------------------------------------------------------------- -------------
JUNE 5,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
------------------------------------------------------------------------------------
Net asset value at beginning of
period............................. $ 16.33 $ 23.64 $ 30.81 $ 36.98 $ 30.61 $ 18.43
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss)......... 0.04(b) 0.02 0.02 (0.05)(b) (0.02)(b) 0.01(b)
Net realized and unrealized gain
(loss) on investments.............. 4.37 (7.31) (7.17) (3.73) 7.79 2.27
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations..... 4.41 (7.29) (7.15) (3.78) 7.77 2.28
---------- ---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
From net investment income......... (0.04) (0.02) (0.02) -- -- (0.03)
From net realized gain on
investments...................... -- -- -- (2.39) (1.40) --
---------- ---------- ---------- ---------- ---------- ----------
Total dividends and distributions.... (0.04) (0.02) (0.02) (2.39) (1.40) (0.03)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period..... $ 20.70 $ 16.33 $ 23.64 $ 30.81 $ 36.98 $ 20.68
========== ========== ========== ========== ========== ==========
Total investment return.............. 26.99% (30.83%) (23.22%) (10.72%) 25.41% 12.36%(c)
Ratios (to average net assets)/
Supplemental Data:
Net investment income (loss)....... 0.20% 0.11% 0.09% (0.15%) (0.05%) (0.05%)+(d)
Expenses........................... 0.64% 0.64% 0.63% 0.63% 0.62% 0.89%+
Portfolio turnover rate.............. 26% 72% 46% 33% 37% 26%
Net assets at end of period (in
000's)............................. $1,011,538 $ 842,410 $1,345,799 $1,813,776 $1,848,514 $ 15,582
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during
the period.
(c) Total return is not annualized.
(d) Represents income earned for the year by the Initial Class
shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-80
MAINSTAY VP SERIES FUND, INC.
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
SHORT-TERM INVESTMENTS (99.8%)+
PRINCIPAL AMORTIZED
AMOUNT COST
--------------------------
BANK NOTES (2.9%)
Bank One Corp.
Chicago, Illinois
1.37%, due 5/10/04 (b)(c)....... $ 3,500,000 $ 3,502,872
1.44%, due 5/7/04 (c)........... 4,000,000 4,004,414
Bayerische Landesbank N.Y.
5.00%, due 7/20/04 (c).......... 3,000,000 3,060,120
------------
10,567,406
------------
CERTIFICATES OF DEPOSIT (2.0%)
(Yankee Certificates of Deposit)
Barclays Bank PLC NY
1.10%, due 11/8/04 (b)(c)....... 3,000,000 2,999,226
UBS AG Stamford CT
1.24%, due 3/17/04 (c).......... 4,000,000 4,001,162
------------
7,000,388
------------
COMMERCIAL PAPER (35.3%)
Abbey Express Credit Corp.
1.14%, due 5/14/04.............. 3,000,000 2,987,326
ABN-Amro North America Finance,
Inc.
1.06%, due 3/11/04.............. 3,000,000 2,993,817
American Express Credit Corp.
1.06%, due 3/23/04.............. 3,000,000 2,992,757
American General Finance Corp.
1.04%, due 3/25/04.............. 3,500,000 3,491,507
ANZ (DE), Inc.
1.08%, due 1/12/04.............. 3,900,000 3,898,713
Atlantis One Funding Corp.
1.14%, due 1/28/04 (a).......... 3,400,000 3,397,093
Barclays U.S. Funding Corp.
1.08%, due 1/12/04.............. 4,000,000 3,998,680
BP Amoco Capital PLC
1.03%, due 3/26/04.............. 2,125,000 2,119,832
Dexia Delaware LLC
1.06%, due 1/7/04............... 3,000,000 2,999,470
European Investment Bank
1.06%, due 2/2/04-2/10/04....... 6,575,000 6,568,310
General Electric Capital Co.
1.06%, due 4/14/04.............. 3,200,000 3,190,201
Goldman Sachs Group, Inc.
0.92%, due 2/6/04............... 3,025,000 3,022,217
1.10%, due 5/24/04.............. 3,650,000 3,633,940
1.15%, due 5/17/04.............. 1,150,000 1,144,967
HBOS Treasury Services
1.09%, due 2/23/04.............. 5,500,000 5,491,174
ING U.S. Funding LLC
1.07%, due 3/17/04.............. 3,000,000 2,993,223
1.09%, due 3/10/04.............. 4,000,000 3,991,643
KfW International Finance, Inc.
1.06%, due 1/23/04 (a).......... 4,150,000 4,147,312
1.08%, due 3/9/04 (a)........... 1,225,000 1,222,501
Lloyds Bank PLC
1.07%, due 2/26/04.............. 4,100,000 4,093,176
</Table>
<Table>
<Caption>
PRINCIPAL AMORTIZED
AMOUNT COST
--------------------------
COMMERCIAL PAPER (Continued)
Merrill Lynch & Co., Inc.
6.00%, due 11/15/04............. $ 2,750,000 $ 2,855,169
Nationwide Building Society
1.06%, due 3/31/04.............. 3,000,000 2,991,825
Prudential Funding LLC
1.10%, due 3/22/04.............. 4,000,000 3,990,100
Quebec Province
1.13%, due 3/29/04.............. 2,650,000 2,642,680
1.20%, due 6/7/04............... 3,100,000 3,083,673
Rabobank USA Financial Corp.
1.07%, due 1/30/04.............. 4,750,000 4,745,906
1.08%, due 4/22/04.............. 3,000,000 2,989,920
Receivables Capital Corp.
1.08%, due 1/13/04 (a).......... 3,000,000 2,998,920
San Paolo IMI US Financial
1.08%, due 3/16/04.............. 3,000,000 2,993,281
Santander Hispano Finance
1.10%, due 4/13/04.............. 3,000,000 2,990,558
Shell Finance (U.K.) PLC
1.05%, due 3/9/04............... 3,400,000 3,393,257
1.08%, due 3/16/04.............. 4,100,000 4,090,775
Societe Generale N.A., Inc.
1.08%, due 2/10/04.............. 3,500,000 3,495,800
1.09%, due 3/15/04.............. 3,000,000 2,993,309
Svenska Handelsbanken AB
1.08%, due 2/11/04-2/17/04...... 5,150,000 5,143,081
Swiss Re Financial Products
1.10%, due 2/13/04 (a).......... 3,725,000 3,720,106
UBS Finance Delaware LLC
1.08%, due 2/25/04.............. 3,700,000 3,693,895
------------
127,190,114
------------
CORPORATE BONDS (9.0%)
Abbott Laboratories
5.125%, due 7/1/04 (c).......... 4,000,000 4,074,296
Bank of Amercia Corp.
6.625%, due 6/15/04 (c)......... 3,752,000 3,844,240
J.P. Morgan Chase & Co.
5.75%, due 4/15/04 (c).......... 5,288,000 5,356,607
Metropolitan Life Insurance Co.
Series EXL
1.15%, due 4/28/04 (a)(b)(c).... 4,000,000 4,000,000
Morgan Stanley Dean Witter & Co.
5.625%, due 1/20/04 (c)......... 4,000,000 4,009,490
Wachovia Corp.
5.625%, due 6/15/04 (c)......... 5,774,000 5,919,605
Wells Fargo & Co.
6.625%, due 7/15/04 (c)......... 5,000,000 5,143,397
------------
32,347,635
------------
MEDIUM-TERM NOTES (5.6%)
American Express Credit Corp.
Series B
1.20%, due 3/5/08 (b)(c)........ 4,000,000 4,000,000
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-81
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
SHORT-TERM INVESTMENTS (CONTINUED)
<Caption>
PRINCIPAL AMORTIZED
AMOUNT COST
--------------------------
MEDIUM-TERM NOTES (Continued)
General Electric Capital Co.
Series A
1.27%, due 5/7/04 (b)(c)........ $ 4,000,000 $ 4,001,807
Merrill Lynch & Co. Series B
5.88%, due 1/15/04 (c).......... 6,000,000 6,010,882
Morgan Stanley Dean Witter & Co.
1.46%, due 2/2/04 (b)(c)........ 1,200,000 1,200,351
Series C
1.48%, due 5/11/04 (b)(c)....... 5,000,000 5,005,770
------------
20,218,810
------------
U.S. GOVERNMENT & FEDERAL AGENCIES (41.4%)
Federal Home Loan Banks
(Discount Notes)
1.04%, due 1/14/04-1/21/04...... 6,975,000 6,971,572
1.07%, due 3/26/04.............. 3,500,000 3,491,158
1.08%, due 3/19/04.............. 4,000,000 3,990,640
1.12%, due 4/28/04.............. 4,325,000 4,309,122
1.13%, due 4/23/04-5/19/04...... 7,000,000 6,972,781
1.14%, due 4/30/04.............. 2,200,000 2,191,640
Federal Home Loan Mortgage Corporation
(Discount Notes)
1.04%, due 3/4/04............... 3,450,000 3,443,721
1.05%, due 4/16/04.............. 2,775,000 2,766,421
1.06%, due 3/1/04-4/5/04........ 8,275,000 8,255,450
1.08%, due 2/10/04-5/13/04...... 13,750,000 13,719,468
1.12%, due 3/12/04.............. 4,000,000 3,991,164
Federal National Mortgage
Association (Discount Notes)
1.04%, due 4/6/04............... 2,900,000 2,891,957
1.05%, due 1/29/04-3/24/04...... 6,225,000 6,214,623
1.08%, due 3/8/04-4/30/04....... 6,325,000 6,306,046
1.10%, due 3/3/04-4/21/04....... 12,000,000 11,968,110
1.11%, due 1/28/04.............. 3,500,000 3,497,086
1.12%, due 2/4/04-2/6/04........ 11,250,000 11,237,770
1.13%, due 5/5/04............... 4,000,000 3,984,306
1.17%, due 5/26/04.............. 1,175,000 1,169,425
1.18%, due 6/2/04............... 3,850,000 3,830,692
1.27%, due 9/13/04.............. 3,400,000 3,369,246
</Table>
<Table>
<Caption>
PRINCIPAL AMORTIZED
AMOUNT COST
--------------------------
U.S. GOVERNMENT & FEDERAL AGENCIES (Continued)
United States Treasury Bills
(Discount Notes)
0.95%, due 1/15/04.............. $ 6,350,000 $ 6,347,654
0.96%, due 1/8/04............... 3,600,000 3,599,327
0.98%, due 3/18/04.............. 4,750,000 4,740,043
1.01%, due 1/22/04-2/5/04....... 11,500,000 11,491,265
1.02%, due 2/12/04-5/27/04...... 8,200,000 8,181,944
------------
148,932,631
------------
<Caption>
SHARES VALUE
----------------------
INVESTMENT COMPANY (3.6%)
Merrill Lynch Premier
Institutional Fund 1.05% (b).... 12,840,725 12,840,725
------------
Total Short-Term Investments
(Amortized Cost $359,097,709)
(d)............................. 99.8% 359,097,709
Cash and Other Assets
Less Liabilities................ 0.2 876,744
----------- ------------
Net Assets....................... 100.0% $359,974,453
=========== ============
</Table>
- ------------
(a) May be sold to institutional investors only.
(b) Floating rate. Rate shown is the rate in effect at December 31, 2003.
(c) Coupon 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.
M-82
MAINSTAY VP SERIES FUND, INC.
The table below sets forth the diversification of Cash Management Portfolio
investments by industry.
INDUSTRY DIVERSIFICATION
<Table>
<Caption>
AMORTIZED
COST PERCENT+
------------------------
Banks #........................ $110,304,494 30.6%
Consumer Financial Services.... 3,720,106 1.0
Finance........................ 22,705,529 6.4
Foreign Government............. 5,726,353 1.6
Diversified Manufacturing
Services..................... 7,192,008 2.0
Health Technology.............. 4,074,296 1.1
Insurance...................... 7,990,100 2.2
Investment Bank/Brokerage...... 20,018,127 5.6
Investment Company *........... 12,840,725 3.6
Special Purpose Finance........ 15,593,340 4.3
U.S. Government &
Federal Agencies............. 148,932,631 41.4
------------ ------
359,097,709 99.8
Cash and Other Assets, Less
Liabilities.................. 876,744 0.2
------------ ------
Net Assets..................... $359,974,453 100.0%
============ ======
</Table>
- ------------
+ Percentages indicated are based on Portfolio net assets.
# The Portfolio will invest more than 25% of the market value of its total
assets in the securities of banks and bank holding companies, including
certificates of deposit, bankers' acceptances and securities guaranteed by
banks and bank holding companies.
* Merrill Lynch Premier Institutional Fund is valued at market value.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-83
CASH MANAGEMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(amortized cost $359,097,709).......... $359,097,709
Cash..................................... 10,535
Receivables:
Fund shares sold....................... 989,009
Interest............................... 795,505
------------
Total assets..................... 360,892,758
------------
LIABILITIES:
Payables:
Fund shares redeemed................... 640,731
Adviser................................ 76,369
Shareholder communication.............. 67,071
Administrator.......................... 61,095
Custodian.............................. 6,053
Accrued expenses......................... 30,497
Dividend payable......................... 36,489
------------
Total liabilities................ 918,305
------------
Net assets............................... $359,974,453
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 700 million shares authorized... $ 3,599,735
Additional paid-in capital............... 356,369,930
Accumulated undistributed net realized
gain on investments.................... 4,788
------------
Net assets applicable to outstanding
shares................................. $359,974,453
============
Shares of capital stock outstanding...... 359,973,529
============
Net asset value per share outstanding.... $ 1.00
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Interest............................... $ 5,478,759
------------
Expenses:
Advisory............................... 1,120,556
Administration......................... 896,445
Shareholder communication.............. 256,232
Professional........................... 106,220
Custodian.............................. 41,598
Directors.............................. 25,763
Miscellaneous.......................... 17,399
------------
Total expenses................... 2,464,213
------------
Net investment income.................... 3,014,546
------------
REALIZED GAIN ON INVESTMENTS:
Net realized gain on investments......... 5,686
------------
Net increase in net assets resulting from
operations............................. $ 3,020,232
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-84
MAINSTAY VP SERIES FUND, INC.
CASH MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
---------------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 3,014,546 $ 6,525,769
Net realized gain on investments.......................... 5,686 26,823
--------------- ---------------
Net increase in net assets resulting from operations...... 3,020,232 6,552,592
--------------- ---------------
Dividends and distributions to shareholders:
From net investment income................................ (3,014,546) (6,525,769)
From net realized gain on investments..................... (27,721) (2,664)
--------------- ---------------
Total dividends and distributions to shareholders....... (3,042,267) (6,528,433)
--------------- ---------------
Capital share transactions:
Net proceeds from sale of shares.......................... 939,340,790 1,790,830,476
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions............. 3,042,267 6,528,190
--------------- ---------------
942,383,057 1,797,358,666
Cost of shares redeemed................................... (1,100,734,862) (1,760,205,751)
--------------- ---------------
Increase (decrease) in net assets derived from capital
share transactions...................................... (158,351,805) 37,152,915
--------------- ---------------
Net increase (decrease) in net assets....................... (158,373,840) 37,177,074
NET ASSETS:
Beginning of year........................................... 518,348,293 481,171,219
--------------- ---------------
End of year................................................. $ 359,974,453 $ 518,348,293
=============== ===============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
YEAR ENDED DECEMBER 31
2003 2002 2001 2000 1999
----------------------------------------------------------------
Net asset value at beginning of year.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Net investment income................................. 0.01 0.01 0.04 0.06 0.05
Net realized gain on investments...................... 0.00(a) 0.00(a) 0.00(a) -- 0.00(a)
-------- -------- -------- -------- --------
Total from investment operations...................... 0.01 0.01 0.04 0.06 0.05
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income.......................... (0.01) (0.01) (0.04) (0.06) (0.05)
From net realized gain on investments............... (0.00)(a) (0.00)(a) (0.00)(a) -- (0.00)(a)
-------- -------- -------- -------- --------
Total dividends and distributions..................... (0.01) (0.01) (0.04) (0.06) (0.05)
-------- -------- -------- -------- --------
Net asset value at end of year........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total investment return............................... 0.67% 1.36% 3.84% 6.06% 4.84%
Ratios (to average net assets)/Supplemental Data:
Net investment income............................... 0.67% 1.33% 3.57% 5.87% 4.79%
Expenses............................................ 0.55% 0.55% 0.54% 0.52% 0.51%
Net assets at end of year (in 000's).................. $359,974 $518,348 $481,171 $305,915 $454,470
</Table>
- ------------
<Table>
(a) Less than one cent per share.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-85
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
CONVERTIBLE SECURITIES (80.7%)+
CONVERTIBLE BONDS (59.4%)
PRINCIPAL
AMOUNT VALUE
----------------------
AIRLINES (1.6%)
AirTran Holdings, Inc.
7.00%, due 7/1/23................ $ 205,000 $ 316,725
Alaska Air Group, Inc.
3.67%, due 3/21/23 (d)........... 2,230,000 2,844,655
Delta Air Lines, Inc.
8.00%, due 6/3/23................ 2,045,000 1,863,506
------------
5,024,886
------------
BIOTECHNOLOGY (2.3%)
Genzyme Corp.
3.00%, due 5/15/21 (e)........... 2,375,000 2,416,562
Invitrogen Corp.
2.00%, due 8/1/23 (c)............ 1,935,000 2,413,913
2.25%, due 12/15/06.............. 2,330,000 2,461,062
------------
7,291,537
------------
BUILDING PRODUCTS (0.5%)
Masco Corp.
(zero coupon), due 7/20/31....... 3,215,000 1,430,675
------------
CAPITAL MARKETS (4.7%)
Affiliated Managers Group, Inc.
(zero coupon), due 5/7/21 (f).... 1,870,000 1,832,600
JMH Finance Ltd.
4.75%, due 9/6/07 (c)............ 1,705,000 1,805,169
Legg Mason, Inc.
(zero coupon), due 6/6/31 (f).... 3,340,000 2,137,600
Lehman Brothers Holdings, Inc.
Series DIA (Diamonds Trust)
0.25%, due 10/2/07 (g)........... 1,900,000 2,185,000
Merrill Lynch & Co., Inc.
(zero coupon), due 3/13/32
(d)(f)......................... 1,000,000 1,036,300
Series SPY (SPDR Trust)
1.125%, due 4/4/10 (c)(g)........ 2,120,000 2,301,260
UBS AG Stamford Connecticut Branch
Series NDQ (Nasdaq 100 Index)
0.25%, due 4/14/08 (c)(g)........ 1,200,000 1,108,500
Series SPX (S&P 500 Index)
1.00%, due 4/12/06 (c)(g)........ 2,500,000 2,453,125
------------
14,859,554
------------
CHEMICALS (1.0%)
Merrill Lynch & Co., Inc.
Series DOW (Dow Chemical Co.,
The)
0.25%, due 5/17/10 (c)(g)........ 2,830,000 3,268,650
------------
COMMERCIAL SERVICES & SUPPLIES (1.7%)
Cendant Corp.
(zero coupon), due 2/13/21....... 4,915,000 3,710,825
Waste Connections, Inc.
5.50%, due 4/15/06............... 405,000 438,919
World Color Press, Inc.
6.00%, due 10/1/07............... 1,325,000 1,382,969
------------
5,532,713
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-------------------------
COMMUNICATIONS EQUIPMENT (2.3%)
Brocade Communications Systems,
Inc.
2.00%, due 1/1/07................ $1,745,000 $ 1,581,406
CIENA Corp.
3.75%, due 2/1/08................ 3,245,000 3,001,625
Comverse Technology, Inc.
1.50%, due 12/1/05 (e)........... 1,575,000 1,535,625
Extreme Networks, Inc.
3.50%, due 12/1/06............... 955,000 913,219
Juniper Networks, Inc.
4.75%, due 3/15/07............... 340,000 348,500
------------
7,380,375
------------
CONSUMER FINANCE (0.2%)
Providian Financial Corp.
4.00%, due 5/15/08 (e)........... 640,000 742,400
------------
DIVERSIFIED FINANCIAL SERVICES (0.8%)
Verizon Global Funding Corp.
(zero coupon), due 5/15/21....... 4,270,000 2,599,362
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.1%)
At Home Corp.
4.75%, due 12/15/06 (h).......... 2,335,418 338,636
------------
ELECTRICAL EQUIPMENT (0.1%)
SCI Systems, Inc.
3.00%, due 3/15/07............... 330,000 313,500
------------
ELECTRONIC EQUIPMENT &
INSTRUMENTS (0.1%)
Artesyn Technologies, Inc.
5.50%, due 8/15/10............... 340,000 463,250
------------
ENERGY EQUIPMENT & SERVICES (7.2%)
BJ Services Co.
0.3954%, due 4/24/22 (e)......... 8,290,000 6,828,887
Cooper Cameron Corp.
1.75%, due 5/17/21............... 2,415,000 2,375,756
Halliburton Co.
3.125%, due 7/15/23 (c).......... 1,635,000 1,702,444
Lehman Brothers Holdings, Inc.
Series HAL (Halliburton Co.)
0.25%, due 9/25/10 (g)........... 5,365,000 5,525,950
Nabors Industries, Ltd.
(zero coupon), due 2/5/21........ 2,140,000 1,399,025
Pride International, Inc.
2.50%, due 3/1/07................ 3,995,000 4,953,800
------------
22,785,862
------------
FOOD & STAPLES RETAILING (1.3%)
Lehman Brothers Holdings, Inc.
Series KR (Kroger Co.)
0.625%, due 12/11/07 (g)......... 480,000 472,200
SUPERVALU, Inc.
(zero coupon), due 11/2/31 (f)... 10,335,000 3,488,062
------------
3,960,262
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-86
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CONVERTIBLE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-------------------------
FOOD PRODUCTS (1.2%)
General Mills, Inc.
(zero coupon), due 10/28/22...... $1,510,000 $ 1,064,550
Nestle Holding, Inc.
Series WW
3.00%, due 5/9/05................ 2,270,000 2,610,500
------------
3,675,050
------------
HEALTH CARE EQUIPMENT &
SUPPLIES (2.6%)
ALZA Corp.
(zero coupon), due 7/28/20....... 2,035,000 1,483,006
Fisher Scientific International,
Inc.
2.50%, due 10/1/23 (c)........... 3,155,000 3,592,756
Medtronic, Inc.
1.25%, due 9/15/21 (e)........... 3,140,000 3,230,275
------------
8,306,037
------------
HEALTH CARE PROVIDERS &
SERVICES (2.1%)
Beverly Enterprises, Inc.
2.75%, due 11/1/33............... 1,615,000 2,285,225
Province Healthcare Co.
4.50%, due 11/20/05.............. 770,000 779,625
Quest Diagnostics, Inc.
1.75%, due 11/30/21.............. 2,700,000 2,784,375
Universal Health Services, Inc.
0.426%, due 6/23/20.............. 1,270,000 842,963
------------
6,692,188
------------
HOTELS, RESTAURANTS & LEISURE (2.6%)
Brinker International, Inc.
(zero coupon), due 10/10/21...... 4,215,000 2,860,931
Goldman Sachs Group, Inc. (The)
Series MCD (McDonald's Corp.)
(zero coupon), due 8/27/09 (g)... 1,960,000 1,898,750
GTECH Holdings Corp.
1.75%, due 12/15/21.............. 770,000 1,422,575
International Game Technology
(zero coupon), due 1/29/33....... 1,815,000 1,454,269
Mandalay Resort Group
1.92%, due 3/21/33 (d)........... 540,000 596,025
------------
8,232,550
------------
HOUSEHOLD DURABLES (0.1%)
Fleetwood Enterprises, Inc.
5.00%, due 12/15/23 (c).......... 315,000 367,369
------------
HOUSEHOLD PRODUCTS (1.1%)
Merrill Lynch & Co., Inc.
Series PG (Proctor & Gamble Co.,
The)
0.40%, due 4/15/10 (c)(g)........ 3,245,000 3,374,800
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-------------------------
INDUSTRIAL CONGLOMERATES (2.8%)
Tyco International Group S.A.
Series A
2.75%, due 1/15/18............... $2,645,000 $ 3,388,906
Series B
3.125%, due 1/15/23.............. 3,900,000 5,352,750
------------
8,741,656
------------
INSURANCE (3.4%)
American International Group, Inc.
0.50%, due 5/15/07............... 3,140,000 2,951,600
Citigroup Global Markets Holdings,
Inc.
Series MET (MetLife, Inc.)
0.50%, due 10/6/10 (g)........... 4,000,000 4,235,000
USF&G Corp.
(zero coupon), due 3/3/09........ 930,000 745,163
XL Capital Ltd.
(zero coupon), due 5/23/21....... 4,485,000 2,887,219
------------
10,818,982
------------
IT SERVICES (0.4%)
DST Systems, Inc.
Series A
4.125%, due 8/15/23 (c).......... 985,000 1,179,538
------------
MACHINERY (4.1%)
AGCO Corp.
1.75%, due 12/31/33 (c).......... 675,000 755,156
Danaher Corp.
(zero coupon), due 1/22/21 (f)... 1,230,000 857,925
Lehman Brothers Holdings, Inc.
Series CAT (Caterpillar, Inc.)
0.25%, due 5/13/10 (g)........... 1,235,000 1,696,581
Navistar Financial Corp.
4.75%, due 4/1/09................ 3,020,000 3,250,275
Navistar International Corp.
2.50%, due 12/15/07.............. 1,945,000 2,961,262
SPX Corp.
(zero coupon), due 2/6/21 (f).... 2,935,000 2,010,475
Wabash National Corp.
3.25%, due 8/1/08 (c)............ 745,000 1,300,956
------------
12,832,630
------------
MEDIA (5.2%)
Adelphia Communications Corp.
3.25%, due 5/1/21 (h)............ 730,000 326,675
Interpublic Group of Cos., Inc.
(The) 4.50%, due 3/15/23......... 465,000 712,613
Lamar Advertising Co.
2.875%, due 12/31/10 (e)......... 3,375,000 3,476,250
Lehman Brothers, Inc.
Series VIA (Viacom, Inc.)
0.25%, due 9/30/10 (g)........... 4,050,000 4,282,875
Liberty Media Corp.
0.75%, due 3/30/23............... 1,040,000 1,227,200
3.25%, due 3/15/31............... 300,000 312,000
Merrill Lynch & Co., Inc.
Series TWX (Time Warner, Inc.)
0.25%, due 5/10/06 (g)........... 800,000 761,000
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-87
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
CONVERTIBLE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-------------------------
MEDIA (Continued)
News America, Inc.
(zero coupon), due 2/28/21
(e)(f)......................... $4,385,000 $ 2,510,412
Omnicom Group, Inc.
(zero coupon), due 2/7/31 (f).... 2,095,000 2,129,044
Regal Entertainment Group
3.75%, due 5/15/08 (c)........... 570,000 644,100
------------
16,382,169
------------
METALS & MINING (0.2%)
Placer Dome, Inc.
2.75%, due 10/15/23 (c).......... 545,000 654,681
------------
MULTI-UTILITIES & UNREGULATED
POWER (0.6%)
Reliant Resources, Inc.
5.00%, due 8/15/10 (c)........... 1,540,000 1,753,675
------------
OIL & GAS (0.5%)
Citigroup Global Markets Holdings,
Inc.
Series XOI (American Stock
Exchange Oil Index)
0.25%, due 2/18/10 (g)........... 1,245,000 1,477,815
------------
PAPER & FOREST PRODUCTS (2.8%)
International Paper Co.
(zero coupon), due 6/20/21....... 3,055,000 1,691,706
Lehman Brothers Holdings, Inc.
Series IP (International Paper
Co.)
0.25%, due 5/8/10 (g)............ 4,440,000 5,039,400
Merrill Lynch & Co., Inc.
Series MWV (MeadWestvaco Corp.)
0.25%, due 7/28/10 (g)........... 1,880,000 2,110,300
------------
8,841,406
------------
PHARMACEUTICALS (1.7%)
Citigroup Global Markets Holdings,
Inc.
Series K (Citigroup
Pharmaceutical Basket)
0.75%, due 7/20/09 (g)........... 1,370,000 1,519,193
Roche Holdings, Inc.
(zero coupon), due 1/19/15
(c)(f)......................... 2,040,000 1,670,250
Teva Pharmaceutical Finance N.V.
0.75%, due 8/15/21............... 1,670,000 2,246,150
------------
5,435,593
------------
ROAD & RAIL (0.9%)
Citigroup Global Markets Holdings,
Inc.
Series UNP (Union Pacific Corp.)
0.25%, due 5/12/10 (g)........... 1,380,000 1,386,900
Goldman Sachs Group, Inc. (The)
Series BNI (Burlington Northern
Santa Fe Corp.)
1.00%, due 10/30/07 (g).......... 1,450,000 1,477,188
------------
2,864,088
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (2.0%)
Agere Systems, Inc.
6.50%, due 12/15/09.............. $ 385,000 $ 529,375
Brooks Automation, Inc.
4.75%, due 6/1/08................ 370,000 371,850
ChipPAC, Inc.
2.50%, due 6/1/08................ 2,210,000 2,781,837
Fairchild Semiconductor
International, Inc.
5.00%, due 11/1/08............... 1,650,000 1,823,250
Micron Technology, Inc.
2.50%, due 2/1/10................ 395,000 524,363
Skyworks Solutions, Inc.
4.75%, due 11/15/07.............. 185,000 229,400
------------
6,260,075
------------
SOFTWARE (0.2%)
Mercury Interactive Corp.
(zero coupon), due 5/1/08........ 500,000 576,250
------------
SPECIALTY RETAIL (0.4%)
Gap, Inc. (The)
5.75%, due 3/15/09............... 790,000 1,215,613
------------
TRANSPORTATION INFRASTRUCTURE (0.6%)
Morgan Stanley
Series CNI (Canadian National
Railway Co.)
(zero coupon), due 5/30/10 (g)... 1,730,000 1,936,562
------------
Total Convertible Bonds
(Cost $175,441,910).............. 187,610,389
------------
<Caption>
CONVERTIBLE PREFERRED STOCKS (21.3%)
SHARES
----------
AEROSPACE & DEFENSE (0.9%)
Northrop Grumman Corp.
7.25% (i)........................ 28,100 2,913,970
------------
AIRLINES (0.3%)
Continental Air Finance Trust II
6.00%............................ 32,800 952,118
------------
AUTOMOBILES (3.0%)
Ford Motor Co. Capital Trust II
6.50%............................ 53,400 2,982,390
General Motors Corp.
5.25%, Series B.................. 41,500 1,115,105
6.25%, Series C.................. 164,400 5,310,120
------------
9,407,615
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-88
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
SHARES VALUE
----------------------
CAPITAL MARKETS (1.7%)
Affiliated Managers Group, Inc.
6.00%............................ 73,500 $ 1,783,845
DECS Trust IX
6.75%, Series LAB................ 42,270 591,357
Gabelli Asset Management, Inc.
6.95%............................ 64,000 1,680,000
State Street Corp.
6.75%............................ 5,600 1,360,688
------------
5,415,890
------------
COMMERCIAL SERVICES & SUPPLIES (0.9%)
Cendant Corp.
7.75% (e)........................ 55,400 2,773,324
------------
COMMUNICATIONS EQUIPMENT (1.0%)
Corning, Inc.
7.00%, Series C.................. 1,450 783,181
Lucent Technologies Capital
Trust I
7.75%............................ 2,195 2,332,188
------------
3,115,369
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.5%)
CenturyTel, Inc.
6.875%........................... 59,400 1,603,800
------------
ELECTRIC UTILITIES (1.9%)
Dominion Resources, Inc.
9.50% (j)........................ 23,600 1,351,100
FPL Group, Inc.
8.00%............................ 39,100 2,208,759
PPL Capital Funding Trust I
7.75% (k)........................ 110,100 2,427,705
------------
5,987,564
------------
HEALTH CARE PROVIDERS &
SERVICES (0.1%)
Anthem, Inc.
5.00%............................ 2,600 229,398
------------
INSURANCE (4.0%)
Chubb Corp. (The)
7.00%............................ 47,900 1,380,478
Hartford Financial Services
Group, Inc. (The)
6.00%............................ 19,000 1,123,280
7.00%............................ 46,000 2,790,360
Prudential Financial, Inc.
6.75%............................ 60,100 3,912,510
Travelers Property Casualty Corp.
4.50%............................ 135,700 3,324,650
------------
12,531,278
------------
IT SERVICES (0.1%)
Electronic Data Systems Corp.
7.875%........................... 9,175 210,383
------------
</Table>
<Table>
SHARES VALUE
----------------------
<Caption>
MACHINERY (0.7%)
Cummins Capital Trust I
7.00%............................ 36,710 $ 2,312,730
------------
MEDIA (0.9%)
Adelphia Communications Corp.
7.50%, Series F (h).............. 29,800 46,190
Comcast Corp.
2.00% (l)........................ 8,500 335,750
Equity Securities Trust I
6.50%, Series CVC................ 11,400 284,658
Equity Securities Trust II
6.25%, Series CVC................ 60,400 1,555,300
Interpublic Group of Cos., Inc.
(The) 5.375%, Series A........... 11,100 636,585
------------
2,858,483
------------
MULTI-UTILITIES & UNREGULATED
POWER (0.4%)
Calpine Capital Trust
5.75% (e)........................ 23,000 1,118,375
------------
OFFICE ELECTRONICS (0.5%)
Xerox Corp.
6.25%............................ 12,000 1,557,000
------------
OIL & GAS (1.5%)
Chesapeake Energy Corp.
5.00%............................ 9,200 1,020,050
6.00%............................ 13,300 1,007,475
Kerr-McGee Corp.
5.50%............................ 57,000 2,844,300
------------
4,871,825
------------
PAPER & FOREST PRODUCTS (1.3%)
Boise Cascade Corp.
7.50% (m)........................ 58,410 2,990,008
International Paper Capital Trust
5.25% (e)........................ 20,800 1,055,600
------------
4,045,608
------------
REAL ESTATE (0.5%)
Glenborough Realty Trust, Inc.
7.75%, Series A.................. 65,000 1,592,500
------------
SPECIALTY RETAIL (0.1%)
Toys "R" Us, Inc.
6.25%............................ 7,500 299,625
------------
THRIFTS & MORTGAGE FINANCE (0.7%)
PMI Group, Inc. (The)
5.875%........................... 90,300 2,324,322
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-89
CONVERTIBLE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
SHARES VALUE
----------------------
WIRELESS TELECOMMUNICATION
SERVICES (0.3%)
Nextel Communications, Inc.
(zero coupon).................... 1,900 $ 1,154,963
------------
Total Convertible Preferred Stocks
(Cost $59,684,582)............... 67,276,140
------------
Total Convertible Securities
(Cost $235,126,492).............. 254,886,529
------------
COMMON STOCKS (13.4%)
CAPITAL MARKETS (3.6%)
Bank of New York Co., Inc.
(The)............................ 56,200 1,861,344
DIAMONDS Trust
Series I (e)..................... 26,200 2,739,734
Merrill Lynch & Co., Inc.......... 57,300 3,360,645
Nasdaq-100 Shares (a)(n).......... 41,100 1,498,506
S&P 500 Depositary Receipt
(e)(n)........................... 16,800 1,869,504
------------
11,329,733
------------
COMMERCIAL SERVICES & SUPPLIES (0.5%)
Moore Wallace, Inc. (a)........... 50,000 936,500
Quebecor World, Inc............... 26,200 539,458
------------
1,475,958
------------
COMMUNICATIONS EQUIPMENT (0.6%)
Cisco Systems, Inc. (a)........... 29,200 709,268
Motorola, Inc..................... 63,700 896,259
Tekelec, Inc. (a)................. 5,000 77,750
Tellabs, Inc. (a)................. 21,200 178,716
------------
1,861,993
------------
COMPUTERS & PERIPHERALS (0.2%)
EMC Corp. (a)(e).................. 40,500 523,260
------------
CONSTRUCTION & ENGINEERING (0.0%)(b)
McDermott International,
Inc. (a)......................... 10,800 129,060
------------
CONTAINERS & PACKAGING (1.6%)
Smurfit-Stone Container
Corp. (a)........................ 279,800 5,195,886
------------
DIVERSIFIED FINANCIAL SERVICES (0.7%)
Citigroup, Inc.................... 42,574 2,066,542
------------
ENERGY EQUIPMENT & SERVICES (1.0%)
Halliburton Co.................... 65,000 1,690,000
Superior Energy Services,
Inc. (a)......................... 32,400 304,560
Tidewater, Inc.................... 12,700 379,476
Transocean, Inc. (a).............. 37,300 895,573
------------
3,269,609
------------
HOTELS, RESTAURANTS & LEISURE (0.8%)
Brinker International, Inc. (a)... 72,100 2,390,836
FHC Delaware, Inc. (a)(o)......... 6,624 66
------------
2,390,902
------------
</Table>
<Table>
<Caption>
SHARES VALUE
----------------------
INTERNET SOFTWARE & SERVICES (0.1%)
Interwoven, Inc. (a).............. 21,975 $ 277,764
------------
MEDIA (0.6%)
Clear Channel Communications,
Inc.............................. 34,800 1,629,684
Time Warner, Inc. (a)............. 20,400 366,996
------------
1,996,680
------------
PAPER & FOREST PRODUCTS (1.7%)
Bowater, Inc...................... 98,500 4,561,535
International Paper Co............ 14,800 638,028
------------
5,199,563
------------
REAL ESTATE (0.1%)
FelCor Lodging Trust, Inc. (a).... 40,900 453,172
------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (0.7%)
ASE Test Ltd. (a)................. 114,000 1,706,580
Fairchild Semiconductor
International, Inc.
Class A (a).................... 7,000 174,790
Taiwan Semiconductor
Manufacturing Co. Ltd.
ADR (a)(p)..................... 39,204 401,449
------------
2,282,819
------------
SOFTWARE (1.1%)
Microsoft Corp.................... 72,200 1,988,388
Oracle Corp. (a).................. 81,700 1,078,440
Quest Software, Inc. (a).......... 27,100 384,820
------------
3,451,648
------------
SPECIALTY RETAIL (0.1%)
Limited Brands.................... 17,300 311,919
------------
WIRELESS TELECOMMUNICATION
SERVICES (0.0%)(b)
AT&T Wireless Services,
Inc. (a)......................... 14,481 115,703
------------
Total Common Stocks
(Cost $34,792,106)............... 42,332,211
------------
<Caption>
SHORT-TERM INVESTMENTS (12.1%)
PRINCIPAL
AMOUNT
----------
COMMERCIAL PAPER (2.8%)
Federal National Mortgage
Association 0.85%, due 1/2/04.... $3,835,000 3,834,909
Neptune Funding Corp.
1.01%, due 1/2/04 (q)............ 1,500,000 1,499,958
UBS Finance Delaware LLC
0.95%, due 1/2/04................ 3,505,000 3,504,908
------------
Total Commercial Paper
(Cost $8,839,775)................ 8,839,775
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-90
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
SHORT-TERM INVESTMENTS (CONTINUED)
SHARES VALUE
-------------------------
INVESTMENT COMPANIES (4.0%)
AIM Institutional Funds Group
0.99% (d)(q)..................... 243,702 $ 243,702
Merrill Lynch Premier
Institutional Fund 1.05% (d)..... 12,221,460 12,221,460
------------
Total Investment Companies
(Cost $12,465,162)............... 12,465,162
------------
PRINCIPAL
AMOUNT
----------
MASTER NOTE (0.4%)
Banc of America Securities, LLC
1.125%, due 1/2/04 (q)........... $1,300,000 1,300,000
------------
Total Master Note
(Cost $1,300,000)................ 1,300,000
------------
REPURCHASE AGREEMENTS (4.9%)
Banc One Capital Markets, Inc.
1.1099%, dated 12/31/03 due
1/2/04 (q)
Proceeds at Maturity $500,030
(Collateralized by Various Bonds
with a Principal Amount of
$510,236 and a Market Value of
$510,000)........................ 500,000 500,000
Countrywide Securities Corp.
1.08%, dated 12/31/03 due 1/2/04
(q)
Proceeds at Maturity $9,534,564
(Collateralized by Various Bonds
with a Principal Amount of
$2,333,468 and a Market Value of
$9,876,898)...................... 9,534,000 9,534,000
Merrill Lynch & Co., Inc.
1.08%, dated 12/31/03 due
1/2/04 (q)
Proceeds at Maturity $5,586,331
(Collateralized by Various Bonds
with a Principal Amount of
$5,159,636 and a Market Value of
$5,709,813)...................... 5,586,000 5,586,000
------------
Total Repurchase Agreements
(Cost $15,620,000)............... 15,620,000
------------
Total Short-Term Investments
(Cost $38,224,937)............... 38,224,937
------------
Total Investments
(Cost $308,143,535) (r).......... 106.2% 335,443,677(s)
Liabilities in Excess of
Cash and Other Assets............ (6.2) (19,728,423)
---------- ------------
Net Assets........................ 100.0% $315,715,254
========== ============
</Table>
- ------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c)May be sold to institutional investors only.
(d) Floating rate. Rate shown is the rate in effect at December 31, 2003.
(e) Represents a security, or a portion there of, which is out on loan.
(f) 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.
(g) Synthetic Convertible-An equity-linked security whose value is based upon
the value of an underlying instrument (underlying instrument disclosed
parenthetically).
(h) Issuer in default.
(i) Equity Units-Each unit reflects 1 Senior Note plus 1 purchase contract to
acquire shares of common stock at $100.00 by November 16, 2004.
(j) PIES Units (Premium Income Equity Security Units)-Each unit reflects a
Senior Note plus 1 purchase contract to acquire shares of common stock at
$50.00 by November 16, 2004.
(k) PEPS Units (Premium Equity Participating Security Units)-Each unit reflects
a Trust Preferred Security plus 1 purchase contract to acquire shares of
common stock at $25.00 by May 18, 2004.
(l) ZONES-Zero-premium Option Note Exchangeable Security.
(m) Equity Units-Each unit reflects 1 share of a preferred security of Boise
Cascade Trust I plus 1 purchase contract to acquire shares of common stock
at a price based on the average trading price by December 16, 2004.
(n) Exchange Traded Fund-Represents a basket of securities that are traded on an
exchange.
(o) Fair valued security.
(p) ADR-American Depositary Receipt.
(q) Represents a security, or a portion thereof, purchased with cash collateral
received for securities on loan.
(r) The cost for federal income tax purposes is $310,106,739.
(s) At December 31, 2003 net unrealized appreciation was $25,336,938, 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 $29,380,965 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $4,044,027.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-91
CONVERTIBLE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $308,143,535)
including $18,181,610 market value of
securities loaned...................... $335,443,677
Cash..................................... 2,231
Receivables:
Investment securities sold............. 1,840,433
Dividends and interest................. 935,105
Fund shares sold....................... 415,605
------------
Total assets..................... 338,637,051
------------
LIABILITIES:
Securities lending collateral............ 18,663,660
Payables:
Investment securities purchased........ 3,998,427
Adviser................................ 93,021
Administrator.......................... 51,678
Fund shares redeemed................... 24,496
Custodian.............................. 4,239
NYLIFE Distributors.................... 600
Accrued expenses......................... 85,676
------------
Total liabilities................ 22,921,797
------------
Net assets............................... $315,715,254
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 269,950
Service Class.......................... 21,900
Additional paid-in capital............... 324,664,787
Accumulated undistributed net
investment income...................... 265,840
Accumulated net realized loss
on investments......................... (36,807,365)
Net unrealized appreciation
on investments......................... 27,300,142
------------
Net assets............................... $315,715,254
============
Initial Class
Net assets applicable to outstanding
shares............................... $292,043,052
============
Shares of capital stock outstanding.... 26,995,017
============
Net asset value per share
outstanding.......................... $ 10.82
============
Service Class
Net assets applicable to outstanding
shares............................... $ 23,672,202
============
Shares of capital stock outstanding.... 2,190,024
============
Net asset value per share
outstanding.......................... $ 10.81
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Interest............................... $ 4,426,305
Dividends (a).......................... 3,874,321
Income from securities loaned--net..... 19,283
------------
Total income..................... 8,319,909
------------
Expenses:
Advisory............................... 885,729
Administration......................... 492,072
Shareholder communication.............. 116,511
Professional........................... 82,179
Custodian.............................. 31,005
Directors.............................. 13,752
Service................................ 12,441
Portfolio pricing...................... 11,751
Miscellaneous.......................... 15,081
------------
Total expenses................... 1,660,521
------------
Net investment income.................... 6,659,388
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments......... 1,934,390
Net change in unrealized depreciation on
investments............................ 42,603,775
------------
Net realized and unrealized gain on
investments............................ 44,538,165
------------
Net increase in net assets resulting from
operations............................. $ 51,197,553
============
</Table>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $2,970.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-92
MAINSTAY VP SERIES FUND, INC.
CONVERTIBLE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
---------------------------
INCREASE IN NET ASSETS:
Operations:
Net investment income...................................... $ 6,659,388 $ 6,038,409
Net realized gain (loss) on investments, written option and
foreign currency transactions............................ 1,934,390 (15,677,031)
Net change in unrealized depreciation on investments and
foreign currency transactions............................ 42,603,775 (7,870,584)
------------ ------------
Net increase (decrease) in net assets resulting from
operations............................................... 51,197,553 (17,509,206)
------------ ------------
Dividends to shareholders:
From net investment income:
Initial Class............................................ (6,059,293) (5,857,037)
Service Class............................................ (454,004) --
------------ ------------
Total dividends to shareholders (6,513,297) (5,857,037)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class............................................ 56,086,647 44,006,635
Service Class............................................ 22,609,558 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class............................................ 6,059,293 5,857,037
Service Class............................................ 454,004 --
------------ ------------
85,209,502 49,863,672
Cost of shares redeemed:
Initial Class............................................ (18,089,291) (24,798,470)
Service Class............................................ (352,627) --
------------ ------------
Increase in net assets derived from capital share
transactions............................................. 66,767,584 25,065,202
------------ ------------
Net increase in net assets.................................. 111,451,840 1,698,959
NET ASSETS:
Beginning of year........................................... 204,263,414 202,564,455
------------ ------------
End of year................................................. $315,715,254 $204,263,414
============ ============
Accumulated undistributed net investment income at end of
year....................................................... $ 265,840 $ 97,955
============ ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
------------------------------------------------------- -------------
JUNE 5,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003*
-----------------------------------------------------------------------
Net asset value at beginning of
period.............................. $ 9,04 $ 10.11 $ 10.71 $ 12.68 $ 10.33 $ 9.95
-------- -------- -------- -------- -------- --------
Net investment income................ 0.27(b) 0.28 0.36(c) 0.42 0.49 0.14(b)
Net realized and unrealized gain
(loss) on investments............... 1.74 (1.08) (0.58)(c) (1.00) 3.81 0.94
-------- -------- -------- -------- -------- --------
Total from investment operations..... 2.01 (0.80) (0.22) (0.58) 4.30 1.08
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income.......... (0.23) (0.27) (0.38) (0.42) (0.49) (0.22)
From net realized gain on
investments....................... -- -- -- (0.97) (1.46) --
-------- -------- -------- -------- -------- --------
Total dividends and distributions.... (0.23) (0.27) (0.38) (1.39) (1.95) (0.22)
-------- -------- -------- -------- -------- --------
Net asset value at end of period..... $ 10.82 $ 9.04 $ 10.11 $ 10.71 $ 12.68 $ 10.81
======== ======== ======== ======== ======== ========
Total investment return.............. 22.23% (7.91%) (2.18%) (5.02%) 41.98% 10.84%(d)
Ratios (to average net
assets)/Supplemental Data:
Net investment income............... 2.71% 2.97% 3.86%(c) 4.25% 4.52% 2.46%+(f)
Expenses............................ 0.67% 0.67% 0.67% 0.66% 0.71% 0.92%+
Portfolio turnover rate.............. 76% 95% 171% 183% 264% 76%
Net assets at end of period (in
000's).............................. $292,043 $204,263 $202,564 $168,085 $ 94,834 $ 23,672
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during
the period.
(c) As required, effective January 1, 2001, the Portfolio has
adopted the provisions of the AICPA Audit and Accounting
Guide for Investment Companies and began amortizing premium
on debt securities. The effect of this change for the year
ended December 31, 2001 is shown below. Per share ratios and
supplemental data for periods prior to January 1, 2001 have
not been restated to reflect this change in presentation.
</Table>
<Table>
Decrease net investment income...................... $(0.00)(e)
Increase net realized and unrealized gains and
losses............................................. 0.00(e)
Decrease ratio of net investment income............. (0.11%)
</Table>
<Table>
(d) Total return is not annualized.
(e) Less than one cent per share.
(f) Represents income earned for the year by the Initial Class
shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-93
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCK (90.4%)+
SHARES VALUE
------------------------
AEROSPACE & DEFENSE (1.2%)
Raytheon Co. ................... 62,500 $ 1,877,500
------------
AUTO COMPONENTS (1.2%)
Delphi Corp. ................... 187,000 1,909,270
------------
CHEMICALS (4.4%)
Air Products & Chemicals,
Inc. .......................... 12,650 668,300
Arch Chemicals, Inc. ........... 97,300 2,496,718
Crompton Corp. ................. 170,800 1,224,636
IMC Global, Inc. (a)............ 11,600 115,188
Imperial Chemicals
Industries PLC ADR (b)......... 107,700 1,542,264
Olin Corp. ..................... 50,275 1,008,517
------------
7,055,623
------------
COMMERCIAL BANKS (5.5%)
BB&T Corp. ..................... 20,600 795,984
Compass Bancshares, Inc. ....... 71,470 2,809,486
Hibernia Corp.
Class A........................ 35,197 827,481
Marshall & Ilsley Corp. ........ 25,473 974,342
PNC Financial Services Group,
Inc. (The)..................... 7,300 399,529
SouthTrust Corp. ............... 91,159 2,983,634
------------
8,790,456
------------
COMMERCIAL SERVICES & SUPPLIES (3.2%)
Imagistics International, Inc.
(a)............................ 4,836 181,350
Pitney Bowes, Inc. ............. 122,700 4,984,074
------------
5,165,424
------------
COMMUNICATIONS EQUIPMENT (0.3%)
Tellabs, Inc. (a)............... 48,200 406,326
------------
CONTAINERS & PACKAGING (7.5%)
Smurfit-Stone Container Corp.
(a)............................ 205,100 3,808,707
Temple-Inland, Inc. ............ 129,300 8,103,231
------------
11,911,938
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.9%)
ALLTEL Corp. ................... 30,900 1,439,322
------------
ELECTRIC UTILITIES (5.1%)
DTE Energy Co. ................. 58,900 2,320,660
Entergy Corp. .................. 36,300 2,073,819
PG&E Corp. (a).................. 28,994 805,163
PPL Corp. ...................... 67,900 2,970,625
------------
8,170,267
------------
ENERGY EQUIPMENT & SERVICES (10.6%)
ENSCO International, Inc. ...... 199,000 5,406,830
Pride International, Inc. (a)... 110,900 2,067,176
</Table>
<Table>
SHARES VALUE
<Caption>
------------------------
ENERGY EQUIPMENT & SERVICES (Continued)
Rowan Cos., Inc. (a)............ 256,200 $ 5,936,154
Transocean, Inc. (a)............ 142,700 3,426,227
------------
16,836,387
------------
FOOD & STAPLES RETAILING (0.9%)
Safeway, Inc. (a)............... 63,500 1,391,285
------------
HEALTH CARE PROVIDERS & SERVICES (1.0%)
Apria Healthcare Group, Inc.
(a)............................ 53,500 1,523,145
------------
HOTELS, RESTAURANTS & LEISURE (1.3%)
Yum! Brands, Inc. (a)........... 59,800 2,057,120
------------
HOUSEHOLD DURABLES (1.0%)
Fortune Brands, Inc. ........... 23,150 1,654,994
------------
INSURANCE (2.8%)
Axis Capital Holdings, Ltd. .... 4,600 134,688
Hartford Financial Services
Group, Inc. (The).............. 55,900 3,299,777
St. Paul Cos., Inc. (The)....... 24,700 979,355
------------
4,413,820
------------
IT SERVICES (1.0%)
Computer Sciences Corp. (a)..... 37,300 1,649,779
------------
LEISURE EQUIPMENT & PRODUCTS (1.2%)
Callaway Golf Co. .............. 114,800 1,934,380
------------
MACHINERY (10.7%)
AGCO Corp. (a).................. 151,700 3,055,238
Cummins, Inc. .................. 102,000 4,991,880
Ingersoll-Rand Co. Class A...... 9,900 672,012
Navistar International Corp.
(a)............................ 173,780 8,322,324
Timken Co. (The)................ 6,200 124,372
------------
17,165,826
------------
MULTI-UTILITIES & UNREGULATED POWER (0.7%)
Constellation Energy Group,
Inc. .......................... 30,100 1,178,716
------------
OIL & GAS (9.5%)
Burlington Resources, Inc. ..... 24,500 1,356,810
Kerr-McGee Corp. ............... 125,200 5,820,548
Premcor, Inc. (a)............... 99,100 2,576,600
Unocal Corp. ................... 56,500 2,080,895
Valero Energy Corp. ............ 71,000 3,290,140
------------
15,124,993
------------
PAPER & FOREST PRODUCTS (10.8%)
Boise Cascade Corp. ............ 139,300 4,577,398
Bowater, Inc. .................. 138,410 6,409,767
MeadWestvaco Corp. ............. 209,251 6,225,217
------------
17,212,382
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-94
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
REAL ESTATE (1.7%)
Highwoods Properties, Inc. ..... 62,500 $ 1,587,500
Mack-Cali Realty Corp. ......... 27,260 1,134,561
------------
2,722,061
------------
ROAD & RAIL (3.6%)
Burlington Northern Santa Fe
Corp. ......................... 129,700 4,195,795
CSX Corp. ...................... 41,000 1,473,540
------------
5,669,335
------------
SOFTWARE (0.5%)
BMC Software, Inc. ............. 41,400 772,110
------------
SPECIALTY RETAIL (1.2%)
Limited Brands.................. 40,000 721,200
Payless ShoeSource, Inc. (a).... 88,500 1,185,900
------------
1,907,100
------------
THRIFTS & MORTGAGE FINANCE (2.6%)
PMI Group, Inc. (The)........... 41,300 1,537,599
Sovereign Bancorp, Inc. ........ 106,941 2,539,849
------------
4,077,448
------------
Total Common Stocks
(Cost $124,505,090)............ 144,017,007
------------
</Table>
<Table>
<Caption>
SHORT-TERM INVESTMENTS (9.4%)
PRINCIPAL
AMOUNT VALUE
-------------------------
COMMERCIAL PAPER (1.4%)
Rabobank USA Financial Corp.
0.94%, due 1/2/04.............. $2,275,000 $ 2,274,941
------------
Total Commercial Paper
Cost $2,274,941)............... 2,274,941
------------
FEDERAL AGENCIES (3.6%)
Federal Home Loan Bank
0.95%, due 1/7/04.............. 2,060,000 2,059,674
Federal National Mortgage
Association
0.85%, due 1/2/04.............. 2,240,000 2,239,947
0.97%, due 1/6/04.............. 1,475,000 1,474,801
------------
Total Federal Agencies
(Cost $5,774,422).............. 5,774,422
------------
<Caption>
SHARES
----------
INVESTMENT COMPANY (4.4%)
Merrill Lynch Premier
Institutional Fund 1.05% (c)... 6,953,467 6,953,467
------------
Total Investment Company
(Cost $6,953,467).............. 6,953,467
------------
Total Short-Term Investments
(Cost $15,002,830)............. 15,002,830
------------
Total Investments
(Cost $139,507,920) (d)........ 99.8% 159,019,837(e)
Cash and Other Assets
Less Liabilities............... 0.2 240,516
---------- ------------
Net Assets...................... 100.0% $159,260,353
========== ============
- ----------
(a) Non-income producing security.
(b) ADR-American Depositary Receipt.
(c) Floating rate. Rate shown is the rate in effect at
December 31, 2003.
(d) The cost for federal income tax purposes is
$139,663,208.
(e) At December 31, 2003 net unrealized appreciation was
$19,356,629, 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 $20,707,951 and
aggregate gross unrealized depreciation for all
investments on which there was an excess of cost over
market value of $1,351,322.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-95
EQUITY INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $139,507,920)......... $159,019,837
Cash..................................... 2,006
Receivables:
Dividends.............................. 298,893
Fund shares sold....................... 137,576
------------
Total assets..................... 159,458,312
------------
LIABILITIES:
Payables:
Manager................................ 89,669
Fund shares redeemed................... 60,332
Shareholder communication.............. 21,669
Custodian.............................. 3,958
NYLIFE Distributors.................... 3,057
Accrued expenses......................... 19,274
------------
Total liabilities................ 197,959
------------
Net assets............................... $159,260,353
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 133,235
Service Class.......................... 16,339
Additional paid-in capital............... 142,257,406
Accumulated net realized loss on
investments............................ (2,658,544)
Net unrealized appreciation on
investments............................ 19,511,917
------------
Net assets............................... $159,260,353
============
Initial Class
Net assets applicable to outstanding
shares............................... $141,876,688
============
Shares of capital stock outstanding.... 13,323,456
============
Net asset value per share
outstanding.......................... $ 10.65
============
Service Class
Net assets applicable to outstanding
shares............................... $ 17,383,665
============
Shares of capital stock outstanding.... 1,633,884
============
Net asset value per share
outstanding.......................... $ 10.64
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a).......................... $ 2,197,626
Interest............................... 64,543
------------
Total income..................... 2,262,169
------------
Expenses:
Manager................................ 770,062
Shareholder communication.............. 58,382
Professional........................... 50,156
Custodian.............................. 23,077
Service................................ 8,901
Directors.............................. 7,250
Portfolio pricing...................... 5,464
Miscellaneous.......................... 13,587
------------
Total expenses................... 936,879
------------
Net investment income.................... 1,325,290
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments......... 3,939,121
Net change in unrealized depreciation on
investments............................ 26,168,345
------------
Net realized and unrealized gain on
investments............................ 30,107,466
------------
Net increase in net assets resulting from
operations............................. $ 31,432,756
============
</Table>
- ------------
<Table>
(a) Dividends recorded net of foreign withholding taxes
in the amount of $2,567.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-96
MAINSTAY VP SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
---------------------------
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 1,325,290 $ 859,033
Net realized gain (loss) on investments................... 3,939,121 (6,547,488)
Net change in unrealized appreciation (depreciation) on
investments............................................. 26,168,345 (7,438,567)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. 31,432,756 (13,127,022)
------------ ------------
Dividends to shareholders:
From net investment income:
Initial Class........................................... (1,207,211) (851,845)
Service Class........................................... (135,516) --
------------ ------------
Total dividends to Shareholders....................... (1,342,727) (851,845)
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 36,089,827 74,957,405
Service Class........................................... 15,944,392 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class........................................... 1,207,211 851,845
Service Class........................................... 135,516 --
------------ ------------
53,376,946 75,809,250
Cost of shares redeemed:
Initial Class........................................... (8,465,482) (7,259,641)
Service Class........................................... (133,110) --
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 44,778,354 68,549,609
------------ ------------
Net increase in net assets.................................. 74,868,383 54,570,742
NET ASSETS:
Beginning of year........................................... 84,391,970 29,821,228
------------ ------------
End of year................................................. $159,260,353 $ 84,391,970
============ ============
Accumulated undistributed net investment income at end of
year...................................................... $ -- $ 14,555
============ ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
------------------------------------------------ -------------
JULY 2, JUNE 5,
YEAR YEAR 2001(A) 2003(A)
ENDED ENDED THROUGH THROUGH
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2002 2001 2003
-------------------------------------------------------------------
Net asset value at beginning of period........ $ 8.33 $ 9.85 $ 10.00 $ 9.18
-------- -------- -------- --------
Net investment income......................... 0.11(b) 0.09 0.05 0.05(b)
Net realized and unrealized gain (loss) on
investments................................. 2.30 (1.52) (0.15) 1.50
-------- -------- -------- --------
Total from investment operations.............. 2.41 (1.43) (0.10) 1.55
-------- -------- -------- --------
Less dividends:
From net investment income.................. (0.09) (0.09) (0.05) (0.09)
-------- -------- -------- --------
Net asset value at end of period.............. $ 10.65 $ 8.33 $ 9.85 $ 10.64
======== ======== ======== ========
Total investment return....................... 28.97% (14.57%) (1.03%)(c) 16.89%(c)
Ratios (to average net assets)/Supplemental
Data:
Net investment income....................... 1.21% 1.39% 1.60%+ 0.96%+(d)
Net expenses................................ 0.84% 0.89% 0.89%+ 1.09%+
Expenses (before reimbursement)............. 0.84% 0.92% 1.29%+ 1.09%+
Portfolio turnover rate....................... 34% 46% 21% 34%
Net assets at end of period (in 000's)........ $141,877 $ 84,392 $ 29,821 $ 17,384
</Table>
- ------------
<Table>
(a) Commencement of Operations.
Per share data based on average shares outstanding during
(b) the period.
(c) Total return is not annualized.
Represents income earned for the year by the Initial Class
(d) shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-97
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
LONG-TERM BONDS (98.8%)+
ASSET-BACKED SECURITIES (5.8%)
PRINCIPAL
AMOUNT VALUE
-----------------------
CONSUMER FINANCE (2.6%)
BMW Vehicle Owner Trust
Series A3 Class 2003-A
1.94%, due 2/25/07.............. $ 2,440,000 $ 2,445,951
Harley-Davidson Motorcycle Trust
Series 2002-1 Class A2
4.50%, due 1/15/10.............. 3,430,000 3,543,509
Volkswagen Auto Loan Enhanced
Trust
Series 2003-2 Class A3
2.27%, due 10/22/07............. 3,530,000 3,535,122
-------------
9,524,582
-------------
CONSUMER LOANS (0.5%)
Atlantic City Electric Transition
Funding LLC
Series 2002-1 Class A4
5.55%, due 10/20/23............. 1,650,000 1,679,926
-------------
DIVERSIFIED FINANCIAL SERVICES (1.6%)
Capital One Master Trust
Series 2001-5 Class A
5.30%, due 6/15/09.............. 1,350,000 1,436,063
DaimlerChrysler Auto Trust
Series 2001-D Class A3
3.15%, due 11/6/05.............. 1,591,649 1,600,899
Massachusetts RRB Special Purpose
Trust
Series 2001-1 Class A
6.53%, due 6/1/13............... 2,787,861 3,100,626
-------------
6,137,588
-------------
MULTI-UTILITIES & UNREGULATED POWER (0.4%)
Public Service of New Hampshire
Funding LLC
Series 2002-1 Class A
4.58%, due 2/1/08............... 1,568,519 1,641,094
-------------
THRIFTS & MORTGAGE FINANCE (0.7%)
Vanderbilt Mortgage Finance
Series 1999-B Class 1A4
6.55%, due 4/7/18............... 2,425,000 2,516,245
-------------
Total Asset-Backed Securities
(Cost $20,980,444).............. 21,499,435
-------------
CORPORATE BONDS (3.9%)
COMMERCIAL BANKS (0.5%)
Bank of America Corp.
5.13%, due 11/15/14............. 1,960,000 1,955,033
-------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------
CONSUMER FINANCE (0.7%)
Ford Motor Credit Co.
7.00%, due 10/1/13.............. $ 2,050,000 $ 2,162,092
General Motors Acceptance Corp.
6.88%, due 8/28/12.............. 330,000 355,023
-------------
2,517,115
-------------
MEDIA (1.0%)
Comcast Cable Communications,
Inc.
8.88%, due 5/1/17............... 2,250,000 2,894,605
Tele-Communications, Inc.
10.13%, due 4/15/22............. 645,000 911,323
-------------
3,805,928
-------------
MULTI-UTILITIES & UNREGULATED POWER (0.8%)
Consumers Energy Co.
4.80%, due 2/17/09 (a).......... 2,730,000 2,790,530
-------------
OTHER REVENUE (0.3%)
Harris County Texas Industrial
Development Corp. Solid Waste
5.68%, due 3/1/23............... 1,280,000 1,301,542
-------------
REAL ESTATE (0.6%)
HRPT Properties Trust
6.40%, due 2/15/15.............. 2,300,000 2,416,477
-------------
Total Corporate Bonds
(Cost $14,499,679).............. 14,786,625
-------------
MORTGAGE-BACKED SECURITY (0.7%)
COMMERCIAL MORTGAGE LOANS (COLLATERALIZED
MORTGAGE OBLIGATIONS) (0.7%)
Fannie Mae Grantor Trust
Series 2003-T1 Class B
4.49%, due 11/25/12............. 2,660,000 2,654,084
-------------
Total Mortgage-Backed Security
(Cost $2,660,000)............... 2,654,084
-------------
<Caption>
U.S. GOVERNMENT &
FEDERAL AGENCIES (88.4%)
FEDERAL HOME LOAN MORTGAGE
CORPORATION (2.5%)
6.00%, due 12/17/18............. 2,135,000 2,120,172
6.25%, due 3/5/12............... 4,100,000 4,400,063
7.75%, due 6/7/17............... 2,700,000 2,768,785
-------------
9,289,020
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-98
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
U.S. GOVERNMENT &
FEDERAL AGENCIES (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
---------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) (9.3%)
5.00%, due 6/1/33-8/1/33........ $16,685,415 $ 16,478,360
5.50%, due 1/1/33 (d)........... 17,834,960 18,059,538
-------------
34,537,898
-------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (5.7%)
5.25%, due 4/15/07-8/1/12....... 12,460,000 13,110,722
5.50%, due 5/2/06............... 5,330,000 5,701,975
6.25%, due 2/1/11............... 2,340,000 2,586,762
-------------
21,399,459
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) (37.1%)
4.00%, due 9/1/2018............. 8,175,424 7,977,023
4.50%, due 7/1/18-11/1/2018
(c)............................. 31,095,103 31,166,466
5.00%, due 11/1/2017-10/1/33.... 19,625,966 19,855,547
5.50%, due 12/1/16-11/1/33
(d)............................. 29,385,693 30,114,095
6.00%, due 12/1/16-3/1/33 (d)... 24,039,605 24,877,969
6.00%, due 1/14/34 TBA (b)...... 4,350,000 4,495,455
6.50%, due 10/1/31-7/1/32....... 3,214,621 3,362,280
7.00%, due 10/1/32-7/1/33 (d)... 7,889,573 8,353,952
7.50%, due 1/1/30-8/1/31 (d).... 7,858,057 8,405,613
-------------
138,608,400
-------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (MORTGAGE PASS-THROUGH
SECURITIES) (5.2%)
6.00%, due 8/15/32-10/15/32
(d)............................. 8,702,246 9,052,112
6.50%, due 7/15/28-7/15/32...... 6,349,313 6,696,402
7.50%, due 12/15/28-3/15/32
(d)............................. 3,474,170 3,730,345
-------------
19,478,859
-------------
HVIDE VAN OMMEREN TANKERS LLC (1.4%) (f)
Series I
7.54%, due 12/14/23............. 2,502,000 2,614,540
Series II
7.54%, due 12/14/23............. 2,501,000 2,613,495
-------------
5,228,035
-------------
OVERSEAS PRIVATE INVESTMENT
CORPORATION (0.8%)(f)
Series 1996-494-B
Zero coupon, due 8/14/06........ 2,880,000 3,060,870
-------------
UNITED STATES TREASURY BONDS (12.5%)
5.38%, due 2/15/31 (c).......... 8,940,000 9,323,097
6.25%, due 8/15/23-5/15/30
(c)............................. 13,200,000 15,149,216
6.88%, due 8/15/25 (c).......... 12,985,000 15,884,810
8.75%, due 8/15/20 (c).......... 4,265,000 6,098,950
-------------
46,456,073
-------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
---------------------------
UNITED STATES TREASURY NOTES (13.9%)
3.00%, due 2/15/08 (c).......... $20,280,000 $ 20,374,261
4.38%, due 5/15/07 (c).......... 11,195,000 11,854,889
4.63%, due 5/15/06.............. 1,630,000 1,727,546
4.88%, due 2/15/12.............. 2,255,000 2,388,185
5.75%, due 8/15/10 (c).......... 1,750,000 1,962,188
6.00%, due 8/15/09 (c).......... 11,830,000 13,399,782
-------------
51,706,851
-------------
Total U.S. Government &
Federal Agencies
(Cost $327,791,081)............. 329,765,465
-------------
Total Long-Term Bonds
(Cost $365,931,204)............. 368,705,609
-------------
<Caption>
SHORT-TERM INVESTMENTS (30.2%)
ASSET-BACKED SECURITY (4.0%)
Chase USA Master Trust
Series 19997-2 Class A
1.21%, due 5/15/08 (e).......... 15,000,000 15,000,573
-------------
Total Asset-Backed Security
(Cost $15,000,573).............. 15,000,573
-------------
COMMERCIAL PAPER (4.1%)
Neptune Funding Discount CP
1.0139%, due 1/2/04 (e)......... 15,280,000 15,279,576
-------------
Total Commercial Paper
(Cost $15,279,576).............. 15,279,576
-------------
FEDERAL AGENCY (0.7%)
Federal Home Loan Bank
(Discounted Note)
0.62%, due 1/2/04............... 2,530,000 2,529,956
-------------
Total Federal Agency
(Cost $2,529,956)............... 2,529,956
-------------
INVESTMENT COMPANY (0.6%)
AIM Institutional Funds Group
0.99%, due 1/2/04 (e)........... 2,047,418 2,047,418
-------------
Total Investment Company
(Cost $2,047,418)............... 2,047,418
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-99
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
SHORT-TERM INVESTMENTS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
-----------------------
MASTER NOTE (1.2%)
Bank of America LLC
1.125%, due 1/2/04 (e).......... $ 4,523,000 $ 4,523,000
-------------
Total Master Note
(Cost $4,523,000)............... 4,523,000
-------------
REPURCHASE AGREEMENTS (19.6%)
Banc One Capital Markets, Inc.
1.1249%, dated 12/31/03 due
1/2/04 (e)
Proceeds at Maturity $17,500,588
(Collateralized by Various Bonds
with a Principal Amount of
$17,868,257 and a Market Value
of $17,850,001)................. 17,500,000 17,500,000
-------------
Countrywide Securities Corp.
1.0800%, dated 12/31/03 due
1/2/04 (e)
Proceeds at Maturity $3,484,105
(Collateralized by Various Bonds
with a Principal Amount of
$4,507,007 and a Market Value of
$3,609,305)..................... 3,484,000 3,484,000
-------------
Lehman Brothers Inc.
1.0499%, dated 12/31/03 due
1/2/04 (e)
Proceeds at Maturity $17,500,510
(Collateralized by Various Bonds
with a Principal Amount of
$86,153,220 and a Market Value
of $17,744,031)................. 17,500,000 17,500,000
-------------
Merrill Lynch Pierce Fenner &
Smith, Inc.
1.0800%, dated 12/31/03 due
1/2/04 (e)
Proceeds at Maturity $16,939,508
(Collateralized by Various Bonds
with a Principal Amount of
$15,646,092 and a Market Value
of $17,314,809)................. 16,939,000 16,939,000
-------------
</Table>
<Table>
PRINCIPAL
AMOUNT VALUE
-----------------------
<Caption>
REPURCHASE AGREEMENTS (Continued)
Morgan Stanley & Co., Inc.
1.0499%, dated 12/31/03 due
1/2/04 (e)
Proceeds at Maturity $17,477,510
(Collateralized by Various Bonds
with a Principal Amount of
$18,027,494 and a Market Value
of $18,279,151)................. $17,477,000 $ 17,477,000
-------------
Total Repurchase Agreements
(Cost $72,900,000).............. 72,900,000
-------------
Total Short-Term Investment
(Cost $112,280,523)............. 112,280,523
-------------
Total Investments
(Cost $478,211,727) (g)......... 129.0% 480,986,132(h)
Liabilities in Excess of
Cash and Other Assets........... (29.0) (108,133,350)
----------- -------------
Net Assets....................... 100.0 $ 372,852,782
=========== =============
</Table>
- ------------
(a) May be sold to institutional investors only.
(b) TBA: Securities purchased on a forward commitment basis with an approximate
principal amount and maturity date. The actual principal amount and maturity
date will be determined upon settlement.
(c) Represents securities out on loan or a portion of which is out on loan.
(d) Segregated as collateral for TBA.
(e) Represents security or a portion thereof, purchased with cash collateral
received for securities on loan.
(f) United States Government Guaranteed Security.
(g) The cost for federal income tax purpose is $478,578,732.
(h) At December 31, 2003 net unrealized appreciation was $2,407,400, 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 $5,321,804 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,914,404.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-100
MAINSTAY VP SERIES FUND, INC.
GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost
$478,211,727)--including $107,322,263
market value of securities loaned...... $480,986,132
Cash..................................... 1,039
Receivables:
Investment securities sold............. 3,698,975
Interest............................... 3,092,899
Fund shares sold....................... 142,865
------------
Total assets..................... 487,921,910
------------
LIABILITIES:
Securities lending collateral............ 109,750,567
Payables:
Investment securities purchased........ 4,445,836
Fund shares redeemed................... 605,000
Adviser................................ 96,149
Administrator.......................... 64,100
Shareholder communication.............. 61,261
Custodian.............................. 7,491
NYLIFE Distributors.................... 2,522
Accrued expenses......................... 36,202
------------
Total liabilities................ 115,069,128
------------
Net assets............................... $372,852,782
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 334,944
Service Class.......................... 12,612
Additional paid-in capital............... 372,291,682
Distributions in excess of net investment
income................................. (20,222)
Accumulated net realized loss on
investments............................ (2,540,639)
Net unrealized appreciation on
investments............................ 2,774,405
------------
Net assets............................... $372,852,782
============
Initial Class............................
Net assets applicable to outstanding
shares............................... $359,331,820
============
Shares of capital stock outstanding.... 33,494,425
============
Net asset value per share
outstanding.......................... $ 10.73
============
Service Class............................
Net assets applicable to outstanding
shares............................... $ 13,520,962
============
Shares of capital stock outstanding.... 1,261,246
============
Net asset value per share
outstanding.......................... $ 10.72
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Interest............................... $ 17,278,941
Income from Securities loaned--net..... 169,788
------------
Total Income..................... 17,448,729
------------
Expenses:
Advisory............................... 1,361,795
Administration......................... 907,864
Shareholder communication.............. 216,287
Professional........................... 109,390
Custodian.............................. 53,282
Directors.............................. 25,067
Portfolio pricing...................... 9,712
Service................................ 9,089
Miscellaneous.......................... 16,204
------------
Total expenses................... 2,708,690
------------
Net investment income.................... 14,740,039
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investments......... 3,618,862
Net change in unrealized appreciation on
investments............................ (11,082,191)
------------
Net realized and unrealized loss on
investments............................ (7,463,329)
------------
Net increase in net assets resulting from
operations............................. $ 7,276,710
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-101
GOVERNMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
---------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 14,740,039 $ 11,608,328
Net realized gain on investments.......................... 3,618,862 3,739,202
Net change in unrealized appreciation on investments...... (11,082,191) 12,081,416
------------ ------------
Net increase in net assets resulting from operations...... 7,276,710 27,428,946
------------ ------------
Dividends to shareholders:
From net investment income:
Initial Class........................................... (16,889,280) (11,959,057)
Service Class........................................... (608,313) --
------------ ------------
Total dividends to shareholders....................... (17,497,593) (11,959,057)
============ ============
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 102,859,265 217,582,363
Service Class........................................... 14,071,403 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class........................................... 16,889,280 11,959,057
Service Class........................................... 608,313 --
------------ ------------
134,428,261 229,541,420
Cost of shares redeemed:
Initial Class........................................... (183,509,906) (35,582,297)
Service Class........................................... (660,551) --
------------ ------------
Increase (decrease) in net assets derived from capital
share transactions...................................... (49,742,196) 193,959,123
------------ ------------
Net increase (decrease) in net assets....................... (59,963,079) 209,429,012
NET ASSETS:
Beginning of year........................................... 432,815,861 223,386,849
------------ ------------
End of year................................................. $372,852,782 $432,815,861
============ ============
Accumulated undistributed (distributions in excess of) net
investment income at end of year.......................... $ (20,222) $ 101,792
============ ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
---------------------------------------------------------- -------------
JUNE 4,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
--------------------------------------------------------------------------
Net asset value at beginning of period..... $ 11.05 $ 10.35 $ 10.11 $ 9.56 $ 10.27 $ 11.42
-------- -------- -------- -------- -------- --------
Net investment income...................... 0.36(b) 0.31 0.42(c) 0.62 0.53 0.21(b)
Net realized and unrealized gain (loss) on
investments.............................. (0.15) 0.71 0.25(c) 0.55 (0.71) (0.39)
-------- -------- -------- -------- -------- --------
Total from investment operations........... 0.21 1.02 0.67 1.17 (0.18) (0.18)
-------- -------- -------- -------- -------- --------
Less dividends:
From net investment income............... (0.53) (0.32) (0.43) (0.62) (0.53) (0.52)
-------- -------- -------- -------- -------- --------
Net asset value at end of period........... $ 10.73 $ 11.05 $ 10.35 $ 10.11 $ 9.56 $ 10.72
======== ======== ======== ======== ======== ========
Total investment return.................... 1.88% 9.85% 6.64% 12.22% (1.74%) (1.63%)(d)
Ratios (to average net assets)/Supplemental
Data:
Net investment income.................... 3.25% 3.94% 5.01%(c) 6.29% 5.47% 3.00%+(e)
Expenses................................. 0.59% 0.59% 0.60% 0.60% 0.59% 0.84%+
Portfolio turnover rate.................... 106% 146% 137% 311% 328% 106%
Net assets at end of period (in 000's)..... $359,332 $432,816 $223,387 $130,390 $171,055 $ 13,521
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during
the period.
(c) As required, effective January 1, 2001, the Portfolio has
adopted the provisions of the AICPA Audit and Accounting
Guide for Investment Companies and began amortizing premium
on debt securities. The effect of this change for the year
ended December 31, 2001 is shown below. Per share ratios and
supplemental data for periods prior to January 1, 2001 have
not been restated to reflect this change in presentation.
</Table>
<Table>
Decrease net investment income....................... $(0.04)
Increase net realized and unrealized gains and
losses.............................................. 0.04
Decrease ratio of net investment income.............. (0.39%)
</Table>
<Table>
(d) Total Return is not annualized.
(e) Represents income earned for the year by the Initial Class
shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-102
MAINSTAY VP SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (98.9%)+
SHARES VALUE
-----------------------
AEROSPACE & DEFENSE (2.9%)
Empresa Brasileira de Aeronautica
S.A. ADR (b).................... 201,600 $ 7,062,048
Northrop Grumman Corp............ 86,200 8,240,720
United Technologies Corp......... 103,600 9,818,172
------------
25,120,940
------------
BEVERAGES (2.0%)
Anheuser-Busch Cos., Inc......... 156,300 8,233,884
Coca-Cola Co. (The).............. 179,200 9,094,400
------------
17,328,284
------------
BIOTECHNOLOGY (4.2%)
Amgen, Inc. (a).................. 139,200 8,602,560
Chiron Corp. (a)................. 189,100 10,776,809
Genzyme Corp. (a)................ 213,900 10,553,826
Gilead Sciences, Inc. (a)........ 73,800 4,290,732
Invitrogen Corp. (a)............. 38,000 2,660,000
------------
36,883,927
------------
CAPITAL MARKETS (5.3%)
Bank of New York Co., Inc.
(The)........................... 269,600 8,929,152
Franklin Resources, Inc.......... 187,500 9,761,250
Goldman Sachs Group, Inc.
(The)........................... 134,400 13,269,312
Morgan Stanley................... 244,800 14,166,576
------------
46,126,290
------------
CHEMICALS (2.1%)
E.I. du Pont de Nemours & Co..... 95,000 4,359,550
Eastman Chemical Co.............. 118,500 4,684,305
PPG Industries, Inc.............. 147,100 9,417,342
------------
18,461,197
------------
COMMERCIAL BANKS (5.0%)
Bank of America Corp............. 102,100 8,211,903
Bank One Corp.................... 203,200 9,263,888
PNC Financial Services
Group, Inc. (The)............... 159,200 8,713,016
U.S. Bancorp..................... 347,000 10,333,660
Wells Fargo & Co................. 125,000 7,361,250
------------
43,883,717
------------
COMMUNICATIONS EQUIPMENT (3.1%)
Avaya, Inc. (a).................. 592,100 7,661,774
Cisco Systems, Inc. (a).......... 514,200 12,489,918
Nokia Corp. ADR (b).............. 416,800 7,085,600
------------
27,237,292
------------
COMPUTERS & PERIPHERALS (4.5%)
Dell, Inc. (a)................... 423,300 14,375,268
EMC Corp. (a).................... 687,300 8,879,916
Hewlett-Packard Co............... 373,600 8,581,592
International Business Machines
Corp............................ 85,800 7,951,944
------------
39,788,720
------------
</Table>
<Table>
SHARES VALUE
<Caption>
-----------------------
CONSUMER FINANCE (2.0%)
American Express Co.............. 191,700 $ 9,245,691
MBNA Corp........................ 338,400 8,409,240
------------
17,654,931
------------
CONTAINERS & PACKAGING (0.5%)
Smurfit-Stone Container Corp.
(a)............................. 247,800 4,601,646
------------
DIVERSIFIED FINANCIAL SERVICES (2.3%)
Citigroup, Inc................... 410,184 19,910,331
------------
ELECTRIC UTILITIES (3.0%)
Dominion Resources, Inc.......... 122,600 7,825,558
Exelon Corp...................... 136,500 9,058,140
Southern Co. (The)............... 301,400 9,117,350
------------
26,001,048
------------
ELECTRICAL EQUIPMENT (0.8%)
Emerson Electric Co.............. 102,500 6,636,875
------------
ENERGY EQUIPMENT & SERVICES (0.4%)
ENSCO International, Inc......... 116,700 3,170,739
------------
FOOD & STAPLES RETAILING (1.3%)
Wal-Mart Stores, Inc............. 207,700 11,018,485
------------
HEALTH CARE EQUIPMENT & SUPPLIES (6.1%)
Alcon, Inc....................... 145,400 8,802,516
Boston Scientific Corp. (a)...... 453,800 16,681,688
Guidant Corp..................... 175,300 10,553,060
Stryker Corp..................... 83,200 7,072,832
Zimmer Holdings, Inc. (a)........ 151,800 10,686,720
------------
53,796,816
------------
HEALTH CARE PROVIDERS & SERVICES (2.8%)
Aetna, Inc....................... 75,800 5,122,564
Anthem, Inc. (a)................. 121,700 9,127,500
WellPoint Health Networks, Inc.
(a)............................. 105,000 10,183,950
------------
24,434,014
------------
HOTELS, RESTAURANTS & LEISURE (3.0%)
International Game Technology.... 296,500 10,585,050
McDonald's Corp.................. 330,200 8,198,866
Starwood Hotels & Resorts
Worldwide, Inc.................. 207,800 7,474,566
------------
26,258,482
------------
HOUSEHOLD PRODUCTS (1.4%)
Procter & Gamble Co. (The)....... 122,300 12,215,324
------------
INDUSTRIAL CONGLOMERATES (5.1%)
3M Co............................ 210,800 17,924,324
General Electric Co.............. 589,000 18,247,220
Textron, Inc..................... 145,000 8,273,700
------------
44,445,244
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-103
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-----------------------
INSURANCE (3.4%)
ACE, Ltd......................... 218,200 $ 9,037,844
Allstate Corp. (The)............. 294,200 12,656,484
Travelers Property Casualty Corp.
Class A......................... 459,200 7,705,376
------------
29,399,704
------------
INTERNET & CATALOG RETAIL (0.9%)
eBay, Inc. (a)................... 120,400 7,776,636
------------
IT SERVICES (0.9%)
SunGard Data Systems, Inc. (a)... 295,500 8,188,305
------------
MACHINERY (2.3%)
Eaton Corp....................... 87,600 9,459,048
Illinois Tool Works, Inc......... 125,300 10,513,923
------------
19,972,971
------------
MEDIA (4.6%)
Clear Channel Communications,
Inc............................. 220,800 10,340,064
Comcast Corp. Class A (a)........ 198,200 6,514,834
Time Warner, Inc. (a)............ 549,600 9,887,304
Tribune Co....................... 86,600 4,468,560
Viacom, Inc. Class B............. 202,600 8,991,388
------------
40,202,150
------------
METALS & MINING (1.3%)
Phelps Dodge Corp. (a)........... 148,900 11,329,801
------------
MULTILINE RETAIL (1.0%)
Target Corp...................... 221,800 8,517,120
------------
OIL & GAS (3.2%)
ConocoPhillips................... 163,900 10,746,923
Devon Energy Corp................ 144,300 8,262,618
ExxonMobil Corp.................. 225,000 9,225,000
------------
28,234,541
------------
PERSONAL PRODUCTS (1.4%)
Avon Products, Inc............... 184,500 12,451,905
------------
PHARMACEUTICALS (3.8%)
Abbott Laboratories.............. 232,600 10,839,160
Mylan Laboratories, Inc.......... 185,500 4,685,730
Pfizer, Inc...................... 264,100 9,330,653
Teva Pharmaceutical Industries
Ltd. ADR (b).................... 151,300 8,580,223
------------
33,435,766
------------
</Table>
<Table>
SHARES VALUE
<Caption>
-----------------------
REAL ESTATE (2.2%)
Equity Office Properties Trust... 242,000 $ 6,933,300
Equity Residential............... 278,118 8,207,262
ProLogis......................... 137,600 4,415,584
------------
19,556,146
------------
ROAD & RAIL (1.1%)
Canadian National Railway Co..... 154,400 9,770,432
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (6.6%)
Applied Materials, Inc. (a)...... 509,500 11,438,275
Intel Corp....................... 477,500 15,375,500
Micron Technology, Inc. (a)...... 815,400 10,983,438
Teradyne, Inc. (a)............... 406,400 10,342,880
Texas Instruments, Inc........... 332,700 9,774,726
------------
57,914,819
------------
SOFTWARE (4.8%)
BEA Systems, Inc. (a)............ 502,200 6,177,060
Mercury Interactive Corp. (a).... 133,400 6,488,576
Microsoft Corp................... 520,500 14,334,570
SAP AG ADR (b)................... 193,800 8,054,328
VERITAS Software Corp. (a)....... 197,900 7,353,964
------------
42,408,498
------------
SPECIALTY RETAIL (1.6%)
Home Depot, Inc. (The)........... 227,600 8,077,524
TJX Cos., Inc. (The)............. 271,200 5,979,960
------------
14,057,484
------------
TEXTILES, APPAREL & LUXURY GOODS (1.1%)
NIKE, Inc. Class B............... 136,400 9,337,944
------------
WIRELESS TELECOMMUNICATION SERVICES (0.9%)
Nextel Communications, Inc.
Class A (a)..................... 270,700 7,595,842
------------
Total Common Stocks
(Cost $728,395,218)............. 865,124,366
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-104
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
SHORT-TERM INVESTMENTS (1.0%)
PRINCIPAL
AMOUNT VALUE
-----------------------
U.S. GOVERNMENT & FEDERAL AGENCY (1.0%)
Inter-American Development Bank
1.04%, due 1/5/04............... $ 3,000,000 $ 2,999,653
United States Treasury Bill
0.60%, due 1/2/04............... 5,766,000 5,765,904
------------
Total Short-Term Investments
(Cost $8,765,557)............... 8,765,557
------------
Total Investments
(Cost $737,160,775) (c)......... 99.9% 873,889,923(d)
Cash and Other Assets,
Less Liabilities................ 0.1 629,199
----------- ------------
Net Assets....................... 100.0% $874,519,122
=========== ============
</Table>
- ------------
(a) Non-income producing security.
(b) ADR-American Depositary Receipt.
(c) The cost for federal income tax purposes is $738,430,737.
(d) At December 31, 2003 net unrealized appreciation was $135,459,186, 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 $146,271,034 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $10,811,848.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-105
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $737,160,775)........ $ 873,889,923
Cash.................................... 129,344
Receivables:
Dividends............................. 1,062,407
Fund shares sold...................... 133,452
-------------
Total assets.................... 875,215,126
-------------
LIABILITIES:
Payables:
Fund shares redeemed.................. 215,532
Adviser............................... 180,452
Administrator......................... 144,362
Shareholder communication............. 108,353
Custodian............................. 3,382
NYLIFE Distributors................... 1,831
Accrued expenses........................ 42,092
-------------
Total liabilities............... 696,004
-------------
Net assets.............................. $ 874,519,122
=============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class......................... $ 460,966
Service Class......................... 5,415
Additional paid-in capital.............. 910,585,390
Accumulated net realized loss on
investments........................... (173,261,797)
Net unrealized appreciation on
investments........................... 136,729,148
-------------
Net assets.............................. $ 874,519,122
=============
Initial Class
Net assets applicable to outstanding
shares.............................. $ 864,373,000
=============
Shares of capital stock outstanding... 46,096,563
=============
Net asset value per share
outstanding......................... $ 18.75
=============
Service Class
Net assets applicable to outstanding
shares.............................. $ 10,146,122
=============
Shares of capital stock outstanding... 541,503
=============
Net asset value per share
outstanding......................... $ 18.74
=============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a)......................... $ 11,805,030
Interest.............................. 277,804
-------------
Total income.................... 12,082,834
-------------
Expenses:
Advisory.............................. 1,919,245
Administration........................ 1,535,396
Shareholder communication............. 289,658
Professional.......................... 147,943
Directors............................. 38,989
Custodian............................. 18,567
Service............................... 5,695
Miscellaneous......................... 39,385
-------------
Total expenses.................. 3,994,878
-------------
Net investment income................... 8,087,956
-------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments........ 18,759,322
Net change in unrealized depreciation on
investments........................... 156,761,390
-------------
Net realized and unrealized gain on
investments........................... 175,520,712
-------------
Net increase in net assets resulting
from operations....................... $ 183,608,668
=============
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $47,575.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-106
MAINSTAY VP SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
-----------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 8,087,956 $ 7,920,580
Net realized gain (loss) on investments................... 18,759,322 (155,774,962)
Net change in unrealized appreciation (depreciation) on
investments............................................. 156,761,390 (104,374,143)
------------ --------------
Net increase (decrease) in net assets resulting from
operations.............................................. 183,608,668 (252,228,525)
------------ --------------
Dividends to shareholders:
From net investment income:
Initial Class........................................... (8,089,391) (7,833,561)
Service Class........................................... (85,863) --
------------ --------------
Total dividends to shareholders....................... (8,175,254) (7,833,561)
------------ --------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 29,371,935 57,067,004
Service Class........................................... 9,527,499 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class........................................... 8,089,391 7,833,561
Service Class........................................... 85,863 --
------------ --------------
47,074,688 64,900,565
Cost of shares redeemed:
Initial Class........................................... (79,528,644) (132,984,013)
Service Class........................................... (146,680) --
------------ --------------
Decrease in net assets derived from capital share
transactions............................................ (32,600,636) (68,083,448)
------------ --------------
Net increase (decrease) in net assets....................... 142,832,778 (328,145,534)
NET ASSETS:
Beginning of year........................................... 731,686,344 1,059,831,878
------------ --------------
End of year................................................. $874,519,122 $ 731,686,344
============ ==============
Accumulated undistributed net investment income at end of
year...................................................... $ -- $ 87,019
============ ==============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
------------------------------------------------------------- -------------
JUNE 5,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
-----------------------------------------------------------------------------
Net asset value at beginning of period... $ 14.98 $ 19.99 $ 24.28 $ 27.78 $ 23.62 $ 16.45
-------- -------- ---------- ---------- ---------- -------
Net investment income.................... 0.17(b) 0.16 0.14 0.15 0.16 0.07(b)
Net realized and unrealized gain (loss)
on investments......................... 3.78 (5.01) (4.29) (1.06) 6.89 2.38
-------- -------- ---------- ---------- ---------- -------
Total from investment operations......... 3.95 (4.85) (4.15) (0.91) 7.05 2.45
-------- -------- ---------- ---------- ---------- -------
Less dividends and distributions:
From net investment income............. (0.18) (0.16) (0.14) (0.15) (0.16) (0.16)
From net realized gain on
investments.......................... -- -- -- (2.44) (2.73) --
-------- -------- ---------- ---------- ---------- -------
Total dividends and distributions........ (0.18) (0.16) (0.14) (2.59) (2.89) (0.16)
-------- -------- ---------- ---------- ---------- -------
Net asset value at end of period......... $ 18.75 $ 14.98 $ 19.99 $ 24.28 $ 27.78 $ 18.74
======== ======== ========== ========== ========== =======
Total investment return.................. 26.37% (24.25%) (17.09%) (3.34%) 29.96% 14.93%(c)
Ratios (to average net assets)/
Supplemental Data:
Net investment income.................. 1.05% 0.89% 0.66% 0.55% 0.63% 0.80%+(d)
Expenses............................... 0.52% 0.51% 0.50% 0.50% 0.49% 0.77%+
Portfolio turnover rate.................. 72% 120% 93% 77% 71% 72%
Net assets at end of period (in 000's)... $864,373 $731,686 $1,059,832 $1,331,634 $1,312,905 $10,146
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during
the period.
(c) Total return is not annualized.
(d) Represents income earned for the year by the Initial Class
shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-107
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
LONG-TERM BONDS (82.5%)+
ASSET-BACKED SECURITIES (2.4%)
PRINCIPAL
AMOUNT VALUE
-----------------------------
AIRLINES (0.6%)
Continental Airlines, Inc.
Pass-Through Certificates
Series A
7.875%, due 7/2/18............ $ 6,455,000 $ 6,492,891
Northwest Airlines, Inc.
Pass-Through Certificates
Series 1996-1
8.97%, due 1/2/15............. 1,229,114 840,702
---------------
7,333,593
---------------
MEDIA (0.1%)
United Artists Theatre Circuit,
Inc.
Pass-Through Certificates
Series 1995-A
9.30%, due 7/1/15 (d)......... 1,578,618 1,562,832
---------------
MULTILINE RETAIL (0.1%)
Kmart Corp.
Pass-Through Certificates
Series 1995-K3
8.54%, due 1/2/15 (e)......... 810,471 397,131
---------------
MULTI-UTILITIES & UNREGULATED POWER (1.6%)
AES Eastern Energy L.P.
Pass-Through Certificates
Series 1999-A
9.00%, due 1/2/17 (f)......... 8,508,694 9,411,806
Calpine Gilroy, L.P.
10.00%, due 9/30/14 (g)....... 5,408,558 5,408,558
Tiverton/Rumford Power
Associates Ltd., L.P.
Pass-Through Certificates
9.00%, due 7/15/18 (c)........ 5,545,000 4,602,350
---------------
19,422,714
---------------
Total Asset-Backed Securities
(Cost $28,450,680)............ 28,716,270
---------------
CONVERTIBLE BONDS (5.1%)
AIRLINES (0.1%)
Delta Air Lines, Inc.
8.00%, due 6/3/23............. 1,900,000 1,731,375
---------------
COMMUNICATIONS EQUIPMENT (1.2%)
CIENA Corp.
3.75%, due 2/1/08............. 4,355,000 4,028,375
Nortel Networks Corp.
4.25%, due 9/1/08............. 7,295,000 6,939,369
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
COMMUNICATIONS EQUIPMENT (Continued)
Riverstone Networks, Inc.
3.75%, due 12/1/06 (c)........ $ 3,235,000 $ 3,105,600
---------------
14,073,344
---------------
CONSUMER FINANCE (0.1%)
Providian Financial Corp.
3.25%, due 8/15/05............ 950,000 904,875
---------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.8%)
At Home Corp.
0.5246%, due 12/28/18 (e)..... 1,869,975 158,948
4.75%, due 12/15/06 (e)....... 9,032,054 1,309,648
COLT Telecom Group PLC
2.00%, due 3/29/06 (c)........ E 2,075,000 2,826,687
2.00%, due 12/16/06 (c)....... 1,600,000 2,199,795
2.00%, due 4/3/07 (c)......... 2,415,000 3,289,854
Premiere Technologies, Inc.
5.75%, due 7/1/04............. $ 387,000 385,065
---------------
10,169,997
---------------
ELECTRICAL EQUIPMENT (0.0%)(b)
Cherokee International LLC
12.00%, due 11/1/08
(g)(h)(i)................... 770,000 308,000
---------------
HEALTH CARE PROVIDERS & SERVICES (0.9%)
Laboratory Corp. of America
Holdings
(zero coupon), due 9/11/21
(j)........................... 7,640,000 5,472,150
Lincare Holdings, Inc.
3.00%, due 6/15/33 (j)........ 4,040,000 4,045,050
Province Healthcare Co.
4.25%, due 10/10/08........... 1,485,000 1,472,006
---------------
10,989,206
---------------
INSURANCE (0.1%)
Loews Corp.
3.125%, due 9/15/07........... 810,000 782,662
---------------
MEDIA (0.2%)
Adelphia Communications Corp.
6.00%, due 2/15/06 (e)........ 4,455,000 1,993,612
---------------
METALS & MINING (0.1%)
Algoma Steel, Inc.
1.00%, due 12/31/30 (d)(k).... 833,000 749,700
---------------
PHARMACEUTICALS (0.3%)
ICN Pharmaceuticals, Inc.
6.50%, due 7/15/08............ 3,475,000 3,687,844
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-108
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CONVERTIBLE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
PHARMACEUTICALS (Continued)
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (1.3%)
Atmel Corp.
(zero coupon), due 5/23/21.... $ 6,975,000 $ 3,016,688
LSI Logic Corp.
4.00%, due 11/1/06............ 10,355,000 10,173,787
Vitesse Semiconductor Corp.
4.00%, due 3/15/05 (j)........ 2,460,000 2,447,700
---------------
15,638,175
---------------
Total Convertible Bonds
(Cost $55,874,741)............ 61,028,790
---------------
CORPORATE BONDS (59.1%)
AEROSPACE & DEFENSE (1.0%)
BE Aerospace, Inc.
Series B
8.00%, due 3/1/08............. 460,000 431,250
8.50%, due 10/1/10 (c)........ 470,000 504,075
Series B
8.875%, due 5/1/11 (j)........ 2,685,000 2,517,187
K & F Industries, Inc.
Series B
9.625%, due 12/15/10.......... 3,310,000 3,711,338
Sequa Corp.
Series B
8.875%, due 4/1/08............ 2,275,000 2,468,375
9.00%, due 8/1/09............. 1,700,000 1,874,250
---------------
11,506,475
---------------
AIRLINES (2.0%)
AMR Corp.
9.00%, due 8/1/12 (j)......... 2,130,000 1,810,500
Delta Air Lines, Inc.
Series C
6.65%, due 3/15/04............ 3,280,000 3,280,000
7.70%, due 15/15/05 (j)....... 2,690,000 2,538,687
8.30%, due 12/15/29........... 5,910,000 3,907,988
Series A
9.25%, due 12/27/07 (d)....... 2,270,000 1,949,362
9.25%, due 3/15/22............ 1,000,000 721,250
Northwest Airlines, Inc.
8.375%, due 3/15/04........... 1,825,000 1,834,125
8.52%, due 4/7/04............. 2,155,000 2,165,775
8.875%, due 6/1/06............ 1,200,000 1,089,000
9.875%, due 3/15/07........... 4,680,000 4,258,800
---------------
23,555,487
---------------
AUTO COMPONENTS (1.3%)
ArvinMeritor, Inc.
8.75%, due 3/1/12............. 2,060,000 2,358,700
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
AUTO COMPONENTS (Continued)
Dana Corp.
7.00%, due 3/1/29............. $ 2,010,000 $ 1,997,437
9.00%, due 8/15/11............ 2,260,000 2,723,300
Goodyear Tire & Rubber Co.
(The)
6.625%, due 12/1/06 (j)....... 4,280,000 4,162,300
8.50%, due 3/15/07 (j)........ 1,380,000 1,355,850
Tenneco Automotive, Inc.
Series B
10.25%, due 7/15/13........... 2,070,000 2,354,625
---------------
14,952,212
---------------
AUTOMOBILES (0.4%)
General Motors Corp.
8.375%, due 7/15/33........... 3,765,000 4,370,461
---------------
BUILDING PRODUCTS (1.0%)
Dayton Superior Corp.
10.75%, due 9/15/08 (c)....... 2,765,000 2,834,125
Interline Brands, Inc.
11.50%, due 5/15/11........... 3,405,000 3,754,012
Jacuzzi Brands, Inc.
9.625%, due 7/1/10 (c)........ 4,600,000 5,060,000
Werner Holdings Co., Inc.
Series A
10.00%, due 11/15/07.......... 380,000 220,400
---------------
11,868,537
---------------
CHEMICALS (2.6%)
Equistar Chemicals, L.P.
7.55%, due 2/15/26............ 2,400,000 2,088,000
10.125%, due 9/1/08........... 1,755,000 1,921,725
10.625%, due 5/1/11........... 2,430,000 2,685,150
10.625%, due 5/1/11 (c)....... 1,970,000 2,176,850
General Chemical Industrial
Products, Inc.
10.625%, due 5/1/09 (e)....... 1,040,000 187,200
Lyondell Chemical Co.
9.50%, due 12/15/08 (j)....... 1,905,000 1,990,725
Series A
9.625%, due 5/1/07............ 2,665,000 2,824,900
10.50%, due 6/1/13............ 3,125,000 3,406,250
Millennium America, Inc.
7.625%, due 11/15/26 (j)...... 3,150,000 2,929,500
Sovereign Specialty Chemicals,
Inc.
11.875%, due 3/15/10.......... 2,667,000 2,667,000
Terra Capital, Inc.
12.875%, due 10/15/08......... 6,855,000 8,088,900
---------------
30,966,200
---------------
COMMERCIAL SERVICES & SUPPLIES (1.0%)
American Color Graphics, Inc.
10.00%, due 6/15/10 (c)....... 4,180,000 4,284,500
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-109
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
COMMERCIAL SERVICES & SUPPLIES (Continued)
El Comandante Capital Corp.
11.75%, due 12/15/03 (d)(e)... $ 891,000 $ 445,500
Phoenix Color Corp.
10.375%, due 2/1/09........... 3,065,000 2,731,681
Protection One Alarm
Monitoring, Inc.
7.375%, due 8/15/05........... 4,225,000 3,887,000
---------------
11,348,681
---------------
COMMUNICATIONS EQUIPMENT (1.8%)
Avaya, Inc.
11.125%, due 4/1/09........... 6,165,000 7,213,050
Lucent Technologies, Inc.
5.50%, due 11/15/08 (j)....... 3,545,000 3,296,850
6.45%, due 3/15/29............ 5,770,000 4,536,662
7.25%, due 7/15/06 (j)........ 6,635,000 6,734,525
---------------
21,781,087
---------------
CONSTRUCTION & ENGINEERING (1.3%)
Amsted Industries, Inc.
10.25%, due 10/15/11 (c)...... 4,625,000 5,110,625
Shaw Group, Inc. (The)
10.75%, due 3/15/10 (c)(j).... 3,945,000 4,181,700
URS Corp.
11.50%, due 9/15/09........... 4,510,000 5,101,937
Series B
12.25%, due 5/1/09............ 880,000 940,500
---------------
15,334,762
---------------
CONTAINERS & PACKAGING (1.5%)
Applied Extrusion Technologies,
Inc.
Series B
10.75%, due 7/1/11............ 4,425,000 3,672,750
Owens-Brockway Glass
Container, Inc.
7.75%, due 5/15/11............ 2,060,000 2,211,925
8.25%, due 5/15/13............ 1,200,000 1,288,500
8.875%, due 2/15/09........... 5,715,000 6,265,069
Owens-Illinois, Inc.
7.80%, due 5/15/18............ 2,265,000 2,341,443
Tekni-Plex, Inc.
8.75%, due 11/15/13 (c)....... 1,825,000 1,902,562
---------------
17,682,249
---------------
DIVERSIFIED FINANCIALS (2.3%)
Caithness Coso Funding Corp.
Series B
9.05%, due 12/15/09........... 4,909,005 5,326,270
Calpine Construction
Finance Corp.
9.75%, due 8/26/11 (c)........ 3,295,000 3,430,919
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
DIVERSIFIED FINANCIALS (Continued)
Dollar Financial Group, Inc.
9.75%, due 11/15/11 (c)....... $ 1,930,000 $ 1,997,550
ESI Tractebel Acquisition Corp.
Series B
7.99%, due 12/30/11........... 2,596,000 2,738,780
FINOVA Group, Inc. (The)
7.50%, due 11/15/09........... 6,470,000 3,882,000
IPC Acquisition Corp.
11.50%, due 12/15/09.......... 5,305,000 5,782,450
UCAR Finance, Inc.
10.25%, due 2/15/12........... 4,300,000 4,945,000
---------------
28,102,969
---------------
DIVERSIFIED TELECOMMUNICATION SERVICES (3.1%)
COLO.COM
13.875%, due
3/15/10
(c)(d)(e)(i)(l)(m).......... 3,125 31,250
Mountain States Telephone &
Telegraph Co.
7.375%, due 5/1/30 (d)........ 2,485,000 2,485,000
Qwest Communications
International, Inc.
Series B
7.50%, due 11/1/08............ 1,970,000 2,024,175
Qwest Corp.
8.875%, due 3/15/12 (c)....... 4,525,000 5,192,438
Qwest Services Corp.
13.00%, due 12/15/07 (c)...... 3,346,000 3,931,550
13.50%, due 12/15/10 (c)...... 11,037,000 13,409,955
14.00%, due 12/15/14 (c)...... 36,000 45,810
TSI Telecommunication Services,
Inc.
Series B
12.75%, due 2/1/09............ 4,835,000 5,306,412
U.S. West Communications, Inc.
5.625%, due 11/15/08.......... 300,000 297,000
7.20%, due 11/1/04............ 1,565,000 1,600,212
7.25%, due 9/15/25............ 920,000 920,000
8.875%, due 6/1/31............ 2,115,000 2,220,750
---------------
37,464,552
---------------
ELECTRIC UTILITIES (2.2%)
Cedar Brakes II LLC
9.875%, due 9/1/13............ 9,666,866 10,416,048
Mirant Americas Generation LLC
7.20%, due 10/1/08 (e)........ 4,515,000 3,815,175
8.50%, due 10/1/21 (e)........ 1,940,000 1,639,300
9.125%, due 5/1/31 (e)........ 945,000 798,525
PG&E Corp.
6.875%, due 7/15/08 (c)....... 6,000,000 6,495,000
TECO Energy, Inc.
7.20%, due 5/1/11 (j)......... 2,790,000 2,901,600
---------------
26,065,648
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-110
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
ELECTRIC UTILITIES (Continued)
ELECTRICAL EQUIPMENT (0.7%)
Knowles Electronics Holdings,
Inc.
13.125%, due 10/15/09......... $ 5,510,000 $ 5,544,438
Sensus Metering Systems, Inc.
8.625%, due 12/15/13 (c)...... 805,000 826,131
Thomas & Betts Corp.
6.625%, due 5/7/08............ 2,270,000 2,343,775
---------------
8,714,344
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1%)
ON Semiconductor Corp.
13.00%, due 5/15/08........... 1,365,000 1,586,812
---------------
ENERGY EQUIPMENT & SERVICES (1.1%)
El Paso Natural Gas Co.
7.50%, due 11/15/26........... 735,000 698,250
Series A
7.625%, due 8/1/10............ 3,625,000 3,724,687
Grant Prideco, Inc.
9.00%, due 12/15/09........... 1,000,000 1,120,000
Series B
9.625%, due 12/1/07........... 365,000 402,413
Halliburton Co.
5.625%, due 12/1/08........... 1,380,000 1,459,368
Parker Drilling Co.
9.625%, due 10/1/13 (c)....... 4,400,000 4,576,000
Series B
10.125%, due 11/15/09 (j)..... 1,070,000 1,134,200
---------------
13,114,918
---------------
FOOD PRODUCTS (1.1%)
Chiquita Brands International,
Inc.
10.56%, due 3/15/09........... 3,192,000 3,535,140
Seminis, Inc.
10.25%, due 10/1/13 (c)....... 1,815,000 1,951,125
Swift & Co.
10.125%, due 10/1/09.......... 1,750,000 1,855,000
12.50%, due 1/1/10 (c)........ 5,405,000 5,783,350
---------------
13,124,615
---------------
GAS UTILITIES (1.4%)
ANR Pipelines, Inc.
9.625%, due 11/1/21........... 4,270,000 5,075,962
Southern Natural Gas Co.
7.35%, due 2/15/31............ 1,100,000 1,086,250
Star Gas Partners L.P.
10.25%, due 2/15/13........... 4,050,000 4,414,500
Transcontinental Gas PipeLine
Corp.
Series B
7.00%, due 8/15/11............ 2,230,000 2,374,950
7.25%, due 12/1/26............ 3,025,000 3,100,625
Series B
8.875%, due 7/15/12........... 1,075,000 1,271,188
---------------
17,323,475
---------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.8%)
dj Orthopedics, LLC
12.625%, due 6/15/09.......... $ 3,384,000 $ 3,773,160
Fisher Scientific
International, Inc.
8.125%, due 5/1/12............ 5,120,000 5,491,200
---------------
9,264,360
---------------
HEALTH CARE PROVIDERS & SERVICES (3.3%)
AmeriPath, Inc.
10.50%, due 4/1/13............ 2,005,000 2,135,325
Ardent Health Services, Inc.
10.00%, due 8/15/13 (c)....... 1,010,000 1,100,900
Caremark Rx, Inc.
7.375%, due 10/1/06........... 4,440,000 4,773,000
Columbia/HCA Healthcare Corp.
7.50%, due 11/15/95........... 10,270,000 9,836,041
Express Scripts, Inc.
9.625%, due 6/15/09........... 820,000 881,500
National Nephrology Associates,
Inc.
9.00%, due 11/1/11 (c)........ 1,525,000 1,597,437
QuadraMed Corp.
10.00%, due 4/1/08 (c)(n)..... 3,110,668 2,706,281
Quintiles Transnational Corp.
10.00%, due 10/1/13 (c)....... 8,215,000 8,872,200
Team Health, Inc.
Series B
12.00%, due 3/15/09........... 2,300,000 2,484,000
Tenet Healthcare Corp.
6.875%, due 11/15/31.......... 2,225,000 1,991,375
Triad Hospitals, Inc.
Series B
8.75%, due 5/1/09............. 2,794,000 3,027,997
---------------
39,406,056
---------------
HOTELS, RESTAURANTS & LEISURE (2.8%)
Gaylord Entertainment Co.
8.00%, due 11/15/13 (c)....... 1,065,000 1,123,575
Hilton Hotels Corp.
7.625%, due 5/15/08........... 2,707,000 3,011,537
8.25%, due 2/15/11............ 540,000 622,350
Jacobs Entertainment Co.
11.875%, due 2/1/09........... 1,765,000 1,976,800
MGM Mirage, Inc.
8.375%, due 2/1/11 (j)........ 2,420,000 2,740,650
Mirage Resorts, Inc.
7.25%, due 10/15/06........... 2,335,000 2,515,962
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-111
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
HOTELS, RESTAURANTS & LEISURE (Continued)
Park Place Entertainment Corp.
7.875%, due 12/15/05.......... $ 1,550,000 $ 1,660,437
8.875%, due 9/15/08........... 3,000,000 3,397,500
9.375%, due 2/15/07........... 875,000 990,938
President Casinos, Inc.
12.00%, due 9/15/04
(c)(d)(e)(i)................ 895,000 626,500
13.00%, due 9/15/04
(d)(e)(i)................... 1,752,000 832,200
Starwood Hotels & Resorts
Worldwide, Inc.
7.375%, due 11/15/15.......... 4,300,000 4,601,000
Vail Resorts, Inc.
8.75%, due 5/15/09............ 3,050,000 3,217,750
Venetian Casino Resort LLC
11.00%, due 6/15/10........... 4,035,000 4,680,600
Wheeling Island Gaming, Inc.
10.125%, due 12/15/09......... 1,250,000 1,325,000
---------------
33,322,799
---------------
HOUSEHOLD DURABLES (0.1%)
Foamex L.P.
10.75%, due 4/1/09............ 740,000 704,850
---------------
INSURANCE (0.8%)
Crum & Forster Holding Corp.
10.375%, due 6/15/13 (c)...... 4,200,000 4,667,250
Fremont General Corp.
Series B
7.875%, due 3/17/09........... 4,845,000 4,778,381
Lumbermens Mutual Casualty Co.
8.45%, due 12/1/97 (c)(e)..... 555,000 19,425
9.15%, due 7/1/26 (c)(e)...... 12,235,000 428,225
---------------
9,893,281
---------------
INTERNET SOFTWARE & SERVICES (0.2%)
Globix Corp.
11.00%, due 5/1/08
(c)(d)(h)................... 2,254,994 1,984,395
---------------
IT SERVICES (0.3%)
Unisys Corp.
7.25%, due 1/15/05............ 705,000 730,566
8.125%, due 6/1/06............ 2,525,000 2,727,000
---------------
3,457,566
---------------
MACHINERY (0.7%)
Mark IV Industries, Inc.
7.50%, due 9/1/07............. 7,850,000 6,790,250
Titan Wheel International, Inc.
8.75%, due 4/1/07 (j)......... 1,750,000 1,347,500
---------------
8,137,750
---------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
MEDIA (5.6%)
@Entertainment, Inc.
Series B
14.50%, due 7/15/08 (d)(e).... $ 7,500,000 $ 2,709,375
Adelphia Communications Corp.
Series B
9.25%, due 10/1/04 (e)........ 390,000 362,700
9.375%, due 11/15/09 (e)...... 2,265,000 2,140,425
10.25%, due 11/1/06 (e)....... 3,285,000 3,055,050
10.25%, due 6/15/11 (e)....... 6,425,000 6,071,625
Emmis Communications Corp.
(zero coupon), due 3/15/11
12.50%, beginning 3/15/06..... 3,355,000 3,107,569
FrontierVision Holdings, L.P.
11.00%, due 10/15/06 (e)...... 5,475,000 5,858,250
11.875%, due 9/15/07 (e)...... 2,750,000 2,915,000
Series B
11.875%, due 9/15/07 (e)...... 1,650,000 1,749,000
Garden State Newspapers, Inc.
8.625%, due 7/1/11............ 1,925,000 2,045,312
Hollinger Participation Trust
12.125%, due 11/15/10
(c)(h)........................ 3,791,834 4,502,803
Jones Intercable, Inc.
8.875%, due 4/1/07............ 3,040,000 3,151,468
Medianews Group, Inc.
6.875%, due 10/1/13 (c)....... 1,615,000 1,643,262
Morris Publishing Group, Inc.
7.00%, due 8/1/13 (c)......... 4,820,000 4,892,300
Paxson Communications Corp.
(zero coupon), due 1/15/09
12.25%, beginning 1/15/06..... 10,250,000 8,994,375
Radio One, Inc.
Series B
8.875%, due 7/1/11............ 2,675,000 2,949,188
Radio Unica Corp.
11.75%, due 8/1/06 (e)........ 4,758,000 3,199,755
Vertis, Inc.
9.75%, due 4/1/09............. 3,880,000 4,214,650
Young Broadcasting, Inc.
8.50%, due 12/15/08 (c)....... 780,000 838,500
Ziff Davis Media, Inc.
Series B
13.00%, due 8/12/09........... 2,424,638 2,306,437
---------------
66,707,044
---------------
METALS & MINING (1.7%)
AK Steel Corp.
7.75%, due 6/15/12............ 5,920,000 5,061,600
Allegheny Ludlum Corp.
6.95%, due 12/15/25........... 3,470,000 2,949,500
8.375%, due 12/15/11.......... 1,390,000 1,362,200
Commonwealth Industries, Inc.
10.75%, due 10/1/06........... 5,175,000 5,278,500
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-112
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
METALS & MINING (Continued)
Ormet Corp.
11.00%, due 8/15/08 (c)(e).... $ 2,465,000 $ 640,900
United States Steel LLC
9.75%, due 5/15/10............ 770,000 866,250
10.75%, due 8/1/08............ 3,980,000 4,656,600
---------------
20,815,550
---------------
MULTI-UTILITIES & UNREGULATED POWER (3.2%)
AES Corp. (The)
9.00%, due 5/15/15 (c)........ 5,525,000 6,243,250
10.00%, due 12/15/05 (c)...... 3,307,045 3,364,919
Calpine Corp.
7.625%, due 4/15/06 (j)....... 2,220,000 1,964,700
7.75%, due 4/15/09 (j)........ 1,790,000 1,378,300
8.25%, due 8/15/05 (j)........ 765,000 740,137
8.50%, due 7/15/10 (c)(j)..... 7,270,000 7,088,250
8.50%, due 2/15/11 (j)........ 2,515,000 1,989,994
8.75%, due 7/15/07 (j)........ 1,380,000 1,131,600
NRG Energy, Inc.
8.00%, due 12/15/13 (c)....... 3,135,000 3,295,669
PG&E National Energy Group,
Inc.
10.375%, due 5/16/11 (e)...... 8,105,000 5,673,500
Reliant Resources, Inc.
9.25%, due 7/15/10 (c)........ 1,535,000 1,627,100
Salton Sea Funding Corp.
Series B
7.37%, due 5/30/05............ 817,578 844,149
Westar Energy, Inc.
6.875%, due 8/1/04............ 900,000 913,500
7.125%, due 8/1/09............ 855,000 895,689
7.875%, due 5/1/07............ 1,205,000 1,346,587
---------------
38,497,344
---------------
OFFICE ELECTRONICS (0.2%)
Xerox Corp.
9.75%, due 1/15/09 (j)........ 2,440,000 2,854,800
---------------
OIL & GAS (5.2%)
Comstock Resources, Inc.
11.25%, due 5/1/07............ 2,680,000 2,881,000
Dynegy Holdings, Inc.
9.875%, due 7/15/10 (c)....... 4,760,000 5,355,000
10.125%, due 7/15/13 (c)...... 1,500,000 1,725,000
El Paso Corp.
6.95%, due 12/15/07 (j)....... 1,005,000 966,056
7.80%, due 8/1/31............. 1,145,000 974,681
El Paso Production Holding Co.
7.75%, due 6/1/13 (c)......... 9,440,000 9,298,400
Energy Corporation of America
Series A
9.50%, due 5/15/07............ 4,200,000 3,360,000
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
OIL & GAS (Continued)
Gemstone Investors Ltd.
7.71%, due 10/31/04 (c)....... $ 700,000 $ 707,000
Gulfterra Energy Partners L.P.
10.625%, due 12/1/12.......... 2,504,000 3,104,960
Newfield Exploration Co.
7.625%, due 3/1/11............ 345,000 384,675
8.375%, due 8/15/12........... 340,000 380,800
Northwest Pipelines Corp.
7.125%, due 12/1/25........... 4,180,000 4,232,250
PG&E Gas Transmission
Northwest Corp.
7.10%, due 6/1/05............. 4,630,000 4,687,875
Plains Exploration & Production
Co.
Series B
8.75%, due 7/1/12............. 3,310,000 3,636,863
Tennessee Gas Pipeline Co.
7.00%, due 3/15/27............ 1,855,000 1,924,562
7.00%, due 10/15/28........... 4,025,000 3,823,750
7.50%, due 4/1/17............. 1,820,000 1,879,150
7.625%, due 4/1/37............ 1,325,000 1,305,125
8.375%, due 6/15/32........... 1,400,000 1,485,750
Vintage Petroleum, Inc.
8.25%, due 5/1/12............. 7,205,000 7,835,437
Westport Resources Corp.
8.25%, due 11/1/11............ 2,395,000 2,634,500
8.25%, due 11/1/11 (c)........ 111,000 122,100
---------------
62,704,934
---------------
PAPER & FOREST PRODUCTS (2.4%)
Bowater, Inc.
9.00%, due 8/1/09 (j)......... 2,205,000 2,446,031
Georgia-Pacific Corp.
7.25%, due 6/1/28............. 3,375,000 3,235,781
7.375%, due 12/1/25........... 1,310,000 1,272,338
7.75%, due 11/15/29........... 4,005,000 3,994,987
8.00%, due 1/15/24 (c)........ 5,330,000 5,436,600
8.875%, due 2/1/10............ 1,180,000 1,345,200
8.875%, due 5/15/31........... 4,450,000 4,895,000
9.375%, due 2/1/13............ 1,600,000 1,840,000
Louisiana-Pacific Corp.
10.875%, due 11/15/08......... 560,000 666,400
Pope & Talbot, Inc.
8.375%, due 6/1/13............ 3,740,000 3,730,650
---------------
28,862,987
---------------
PERSONAL PRODUCTS (0.2%)
Herbalife International, Inc.
11.75%, due 7/15/10........... 2,585,000 3,011,525
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-113
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
PHARMACEUTICALS (0.1%)
Valeant Pharmaceuticals
International
7.00%, due 12/15/11 (c)....... $ 865,000 $ 890,950
---------------
REAL ESTATE (1.8%)
CB Richard Ellis Services, Inc.
11.25%, due 6/15/11........... 5,290,000 5,977,700
CBRE Escrow, Inc.
9.75%, due 5/15/10 (c)........ 3,225,000 3,579,750
Crescent Real Estate Equities
L.P.
7.50%, due 9/15/07............ 6,920,000 7,231,400
OMEGA Healthcare Investors,
Inc.
6.95%, due 8/1/07............. 2,270,000 2,252,975
Senior Housing Properties Trust
8.625%, due 1/15/12........... 2,750,000 2,997,500
---------------
22,039,325
---------------
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT (0.6%)
Micron Technology, Inc.
6.50%, due 9/30/05
(c)(d)(g)................... 7,000,000 6,965,000
---------------
SPECIALTY RETAIL (0.9%)
Gap, Inc. (The)
6.90%, due 9/15/07 (j)........ 1,720,000 1,898,450
Rent-Way, Inc.
11.875%, due 6/15/10 (c)...... 4,560,000 5,084,400
Stratus Technologies, Inc.
10.375%, due 12/1/08 (c)...... 3,215,000 3,411,919
---------------
10,394,769
---------------
TEXTILES, APPAREL & LUXURY GOODS (0.2%)
Levi Strauss & Co.
7.00%, due 11/1/06 (j)........ 2,920,000 1,876,100
---------------
TOBACCO (0.9%)
Commonwealth Brands, Inc.
9.75%, due 4/15/08 (c)........ 5,635,000 6,198,500
10.625%, due 9/1/08 (c)....... 3,110,000 3,421,000
Standard Commercial
Tobacco Co., Inc.
8.875%, due 8/1/05............ 891,000 907,706
---------------
10,527,206
---------------
TRANSPORTATION INFRASTRUCTURE (0.1%)
Great Lakes Dredge & Dock Corp.
7.75%, due 12/15/13 (c)....... 790,000 812,712
---------------
WIRELESS TELECOMMUNICATION SERVICES (1.1%)
Alamosa (Delaware), Inc.
(zero coupon), due 7/31/09
12.00%, beginning 7/31/05..... 6,010,000 5,409,000
11.00%, due 7/31/10........... 513,000 556,605
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
WIRELESS TELECOMMUNICATION SERVICES (Continued)
Loral CyberStar, Inc.
10.00%, due 7/15/06 (e)....... $ 5,773,000 $ 4,272,020
US Unwired, Inc.
Series B
(zero coupon), due 11/1/09
13.375%, beginning 11/1/04.... 4,830,000 3,501,750
---------------
13,739,375
---------------
Total Corporate Bonds
(Cost $652,981,814)........... 705,734,162
---------------
FOREIGN CORPORATE BONDS (8.5%)
COMMERCIAL SERVICES & SUPPLIES (0.7%)
Quebecor Media, Inc.
(zero coupon), due 7/15/11
13.75%, beginning 7/15/06..... 7,850,000 6,917,813
11.125%, due 7/15/11.......... 955,000 1,105,412
---------------
8,023,225
---------------
COMMUNICATIONS EQUIPMENT (0.9%)
Marconi Corp. PLC
8.00%, due 4/30/08............ 2,559,184 2,610,368
10.00%, due 10/31/08.......... 397,472 437,219
Nortel Networks Ltd.
6.125%, due 2/15/06........... 7,680,000 7,776,000
---------------
10,823,587
---------------
CONSTRUCTION & ENGINEERING (0.3%)
J. Ray McDermott, S.A.
11.00%, due 12/15/13 (c)...... 3,565,000 3,743,250
---------------
CONTAINERS & PACKAGING (1.0%)
Crown Euro Holdings S.A.
9.50%, due 3/1/11............. 6,295,000 7,129,088
10.875%, due 3/1/13........... 4,280,000 5,034,350
---------------
12,163,438
---------------
FOOD & STAPLES RETAILING (0.0%) (b)
Parmalat Finance Corp. BV
6.25%, due 2/7/05 (e)......... E 790,000 179,364
---------------
FOOD PRODUCTS (0.6%)
Burns Philip Capital Property
Ltd.
9.50%, due 11/15/10 (c)....... $ 1,545,000 1,676,325
10.75%, due 2/15/11 (c)....... 4,785,000 5,215,650
---------------
6,891,975
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-114
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
FOREIGN CORPORATE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
MARINE (0.3%)
Navigator Gas Transport PLC
10.50%, due 6/30/07
(c)(d)(e)................... $ 7,885,000 $ 3,311,700
---------------
MEDIA (2.6%)
CanWest Media, Inc.
Series B
7.625%, due 4/15/13........... 820,000 897,900
Hollinger, Inc.
11.875%, due 3/1/11 (c)....... 2,870,000 3,117,538
Shaw Communications, Inc.
7.50%, due 11/20/13........... C$5,470,000 4,281,520
Sun Media Corp.
7.625%, due 2/15/13........... $ 2,330,000 2,493,100
TDL Infomedia Group Ltd.
12.125%, due 10/15/09......... L 2,160,000 4,272,733
Telenet Communications N.V.
9.00%, due 12/15/13 (c)....... E 2,125,000 2,760,781
Telenet Group Holding N.V.
(zero coupon), due 6/15/14
11.50%, beginning 12/15/08
(c)......................... $ 4,380,000 2,759,400
Vivendi Universal S.A.
6.25%, due 7/15/08 (c)........ 1,400,000 1,482,250
9.25%, due 4/15/10 (c)........ 7,605,000 9,011,925
---------------
31,077,147
---------------
MULTI-UTILITIES & UNREGULATED POWER (0.5%)
Calpine Canada Energy Finance
ULC
8.50%, due 5/1/08............. 7,960,000 6,348,100
---------------
OIL & GAS (0.2%)
Baytex Energy Ltd.
9.625%, due 7/15/10........... 2,040,000 2,152,200
---------------
PAPER & FOREST PRODUCTS (0.1%)
Tembec Industries, Inc.
7.75%, due 3/15/12............ 1,005,000 999,975
---------------
PERSONAL PRODUCTS (0.3%)
Jafra Cosmetics International,
Inc.
10.75%, due 5/15/11........... 3,560,000 3,907,100
---------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
ROAD & RAIL (0.4%)
Grupo Transportacion
Ferroviaria Mexicana, S.A. de
C.V.
12.50%, due 6/15/12........... $ 4,005,000 $ 4,565,700
---------------
WIRELESS TELECOMMUNICATION SERVICES (0.6%)
Millicom International Cellular
S.A.
11.00%, due 6/1/06 (c)........ 2,820,000 2,975,100
Nextel International, Inc.
(zero coupon), due 11/1/09
13.00%, beginning 11/1/04
(d)......................... 4,035,420 4,116,128
---------------
7,091,228
---------------
Total Foreign Corporate Bonds
(Cost $93,876,890)............ 101,277,989
---------------
<Caption>
LOAN ASSIGNMENTS &
PARTICIPATIONS (1.8%)
DIVERSIFIED TELECOMMUNICATION SERVICES (0.4%)
GT Group Telecom Services Corp.
Bank debt, Term Loan A
6.5625%, due
6/30/08 (d)(e)(g)(i)(o)..... 3,225,213 323
Bank debt, Term Loan B
6.625%, due
6/30/08 (d)(e)(g)(i)(o)..... 2,304,787 230
Qwest Corp.
Bank debt, Term Loan
6.95%, due 6/30/10
(d)(g)(o)................... 4,250,000 4,354,125
Qwest Services Corp.
Bank debt, Revolver
4.62%, due 5/3/05 (d)(g)(o)... 55,898 55,647
---------------
4,410,325
---------------
INSURANCE (0.3%)
Conseco, Inc.
Bank debt, Term Loan A
7.25%, due 9/10/10
(d)(g)(o)................... 2,692,308 2,692,308
Bank debt, Term Loan B
9.50%, due 9/10/10
(d)(g)(o)................... 807,692 811,394
---------------
3,503,702
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-115
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
LOAN ASSIGNMENTS & PARTICIPATIONS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
MULTI-UTILITIES & UNREGULATED POWER (1.1%)
Mirant Corp.
Bank debt, Revolver
5.00%, due 7/15/05
(d)(e)(g)(o)................ $ 657,323 $ 511,068
NRG Energy, Inc.
Bank debt, Term Loan B
5.50%, due 6/23/10
(d)(g)(o)................... 2,375,000 2,422,500
Credit Link Deposit
1.07%, due 6/23/10
(d)(g)(o)................... 625,000 637,500
Pacific Gas & Electric Co.
Bank debt, Revolver
8.375%, due 12/30/06
(d)(g)(o)................... 9,875,000 9,924,375
---------------
13,495,443
---------------
Total Loan Assignments &
Participations
(Cost $22,701,449)............ 21,409,470
---------------
<Caption>
MORTGAGE-BACKED SECURITIES (0.1%)
COMMERCIAL MORTGAGE LOANS (COLLATERALIZED MORTGAGE
OBLIGATIONS) (0.1%)
Commercial Trust I
Series 1993-KA Class A2
7.625%, due 12/15/13 (e)...... 1,105,676 221,135
Debit Securitized Lease Trust
Series 1993-K1 Class A1
6.66%, due 8/15/10............ 975,674 565,891
Series 1994-K1 Class A1
7.60%, due 8/15/07............ 313,934 182,082
Series 1994-K1 Class A2
8.375%, due 8/15/15........... 751,051 428,099
Series 1994-K1 Class A3
8.55%, due 8/15/19............ 678,595 386,799
---------------
Total Mortgage-Backed
Securities
(Cost $2,356,377)............. 1,784,006
---------------
<Caption>
MUNICIPAL BONDS (0.5%)
IOWA (0.2%)
Tobacco Settlement Authority
5.30%, due 6/1/25............. 1,400,000 1,210,468
5.60%, due 6/1/35............. 825,000 691,895
---------------
1,902,363
---------------
NEW JERSEY (0.2%)
Tobacco Settlement Financing
Corp.
6.00%, due 6/1/37............. 340,000 304,055
6.25%, due 6/1/43............. 2,720,000 2,495,899
---------------
2,799,954
---------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
RHODE ISLAND (0.1%)
Tobacco Settlement Financing
Corp.
6.25%, due 6/1/42............. $ 980,000 $ 888,733
---------------
Total Municipal Bonds
(Cost $4,956,045)............. 5,591,050
---------------
<Caption>
U.S. GOVERNMENT BOND (1.2%)
UNITED STATES TREASURY BOND (1.2%)
5.375%, due 2/15/31 (j)....... 13,875,000 14,469,572
---------------
Total U.S. Government Bond
(Cost $14,254,218)............ 14,469,572
---------------
<Caption>
YANKEE BONDS (3.8%)(K)
CONTAINERS & PACKING (0.4%)
Crown Cork & Seal Finance PLC
7.00%, due 12/15/06 (j)....... 4,925,000 5,035,812
---------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.3%)
Call-Net Enterprises, Inc.
10.625%, due 12/31/08......... 3,101,171 3,089,542
---------------
ENERGY EQUIPMENT & SERVICES (0.4%)
Petroleum Geo-Services ASA
8.00%, due 11/5/06............ 1,050,691 1,061,198
10.00%, due 11/5/10........... 3,135,054 3,354,508
---------------
4,415,706
---------------
INSURANCE (0.3%)
Fairfax Financial Holdings Ltd.
7.375%, due 4/15/18........... 740,000 673,400
8.30%, due 4/15/26............ 3,810,000 3,524,250
---------------
4,197,650
---------------
MARINE (0.3%)
Sea Containers Ltd., Series B
7.875%, due 2/15/08........... 1,060,000 1,044,100
10.75%, due 10/15/06 (j)...... 2,995,000 3,069,875
---------------
4,113,975
---------------
MEDIA (0.5%)
Rogers Cablesystem, Ltd.
Series B
10.00%, due 3/15/05........... 2,210,000 2,370,225
11.00%, due 12/1/15........... 3,045,000 3,516,975
---------------
5,887,200
---------------
METALS & MINING (0.4%)
Algoma Steel, Inc.
11.00%, due 12/31/09 (d)...... 5,063,000 4,961,740
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-116
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
YANKEE BONDS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
PAPER & FOREST PRODUCTS (0.8%)
Abitibi-Consolidated, Inc.
8.55%, due 8/1/10............. $ 995,000 $ 1,108,032
8.85%, due 8/1/30............. 3,000,000 3,243,078
Doman Industries Ltd.
12.00%, due 7/1/04 (e)........ 4,880,000 5,124,000
---------------
9,475,110
---------------
ROAD & RAIL (0.1%)
Grupo Transportacion
Ferroviaria Mexicana, S.A. de
C.V.
11.75%, due 6/15/09........... 935,000 960,712
---------------
WIRELESS TELECOMMUNICATION SERVICES (0.3%)
Rogers Cantel, Inc.
9.75%, due 6/1/16............. 2,560,000 3,084,800
---------------
Total Yankee Bonds
(Cost $38,905,287)............ 45,222,247
---------------
Total Long-Term Bonds
(Cost $914,357,501)........... 985,233,556
---------------
COMMON STOCKS (3.5%)
SHARES
-----------
COMMERCIAL SERVICES &
SUPPLIES (0.0%)(b)
Colorado Prime Corp.
(a)(d)(g)(i).................. 64,130 641
---------------
COMMUNICATIONS EQUIPMENT (0.3%)
Marconi Corp. PLC (a)(p)(q).... 161,525 3,270,881
---------------
CONTAINERS & PACKAGING (0.1%)
Owens-Illinois, Inc. (a)....... 130,500 1,551,645
---------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.1%)
Call-Net Enterprises, Inc.
(a)........................... 149,036 506,723
Call-Net Enterprises, Inc.
Series B (a)(r)............... 21,976 85,880
ICO Global Communications
Holdings Ltd. (a)(d).......... 728,403 367,843
---------------
960,446
---------------
ENERGY EQUIPMENT & SERVICES (0.2%)
Petroleum Geo-
Services ASA (a)(q)........... 59,439 2,184,383
---------------
HEALTH CARE PROVIDERS & SERVICES (0.5%)
Apria Healthcare Group, Inc.
(a)........................... 225,065 6,407,601
Fountain View, Inc.
(a)(d)(g)(i).................. 1,690 17
---------------
6,407,618
---------------
INTERNET SOFTWARE & SERVICES (0.1%)
Globix Corp. (a)(d)(g)(i)...... 236,469 709,407
---------------
</Table>
<Table>
SHARES VALUE
-------------------------
MACHINERY (0.3%)
Joy Global, Inc. (a)........... 14,265 $ 373,030
Morris Material
Handling, Inc. (a)(d)(g)(i)... 9,371 49,666
Thermadyne Holdings Corp.
(a)(d)........................ 272,057 3,346,301
---------------
3,768,997
---------------
MEDIA (1.1%)
UnitedGlobalCom, Inc. (a)...... 1,623,980 13,771,354
---------------
METALS & MINING (0.2%)
Algoma Steel, Inc. (a)(r)...... 310,865 1,695,955
Neenah Foundry Co.
(a)(c)(d)(g).................. 739,786 369,893
---------------
2,065,848
---------------
PAPER & FOREST PRODUCTS (0.2%)
Abitibi-Consolidated, Inc.
(r)........................... 286,870 2,326,516
---------------
WIRELESS TELECOMMUNICATION SERVICES (0.4%)
Minorplanet Systems USA, Inc.
(a)........................... 234,004 435,247
NEON
Communications, Inc.
(a)(d)(g)(i).................. 367,044 458,805
NII Holdings, Inc. (a)(d)...... 58,722 4,382,423
---------------
5,276,475
---------------
Total Common Stocks
(Cost $43,284,933)............ 42,294,211
---------------
<Caption>
CONVERTIBLE PREFERRED STOCKS (0.3%)
DIVERSIFIED FINANCIALS (0.0%)(b)
Pacific & Atlantic (Holdings),
Inc.
7.50%, Class A (d)(g)(h)(i)... 7,115 71
---------------
WIRELESS TELECOMMUNICATION SERVICES (0.3%)
Alamosa Holdings, Inc.
7.50%, Series B............... 8,352 2,881,440
NEON Communications, Inc.
12.00% (a)(d)(g)(h)(i)........ 39,998 449,978
---------------
3,331,418
---------------
Total Convertible Preferred
Stocks
(Cost $2,730,699)............. 3,331,489
---------------
PREFERRED STOCKS (1.2%)
COMMERCIAL SERVICES & SUPPLIES (0.0%)(b)
Colorado Prime Corp.
(a)(d)(g)(i).................. 1,509 393,836
---------------
MEDIA (0.1%)
Paxson Communications Corp.
13.25% (h).................... 44 404,064
Ziff Davis Media, Inc.
10.00%, Series E-1 (a)(d)..... 674 14,828
---------------
418,892
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-117
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
PREFERRED STOCKS (CONTINUED)
SHARES VALUE
-----------------------------
REAL ESTATE (0.9%)
Sovereign Real Estate
Investment Corp.
12.00%, Class A (c)........... 7,155 $ 10,696,725
---------------
WIRELESS TELECOMMUNICATION SERVICES (0.2%)
Rural Cellular Corp.
11.375%, Series B (h)......... 2,858 2,229,045
---------------
Total Preferred Stocks
(Cost $14,133,071)............ 13,738,498
---------------
<Caption>
WARRANTS (0.1%)
DIVERSIFIED FINANCIALS (0.0%)(b)
ASAT Finance LLC
Strike Price $18.60
Expire 11/1/06 (a)(c)(d)...... 1,530 1,530
---------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.0%)(b)
ICO Global Communications
Holdings Ltd.
Strike Price $60.00
Expire 5/16/06 (a)(d)......... 98,787 988
---------------
HEALTH CARE PROVIDERS & SERVICES (0.1%)
QuadraMed Corp.
Strike Price $0.01
Expire 4/1/08 (a)(c).......... 486,384 1,215,960
---------------
MEDIA (0.0%)(b)
Ono Finance PLC
Strike Price $0.01
Expire 2/15/11 (a)(c)(d)...... 7,855 79
Ziff Davis Media, Inc.
Strike Price $0.001
Expire 8/12/12 (a)(c)......... 123,640 1,236
---------------
1,315
---------------
METALS & MINING (0.0%)(b)
Neenah Foundry Co.
Strike Price $0.01
Expire 10/7/13 (a)(c)(d)(g)... 744,004 364,562
---------------
TOBACCO (0.0%)(b)
North Atlantic Trading Co.
Strike Price $0.01
Expire 6/15/07 (a)(c)(d)(i)... 74 1
---------------
</Table>
<Table>
SHARES VALUE
-----------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.0%)(b)
NEON Communications, Inc.
Strike Price $0.01
Expire 12/2/12 (a)(d)(g)(i)... 367,044 $ 3,670
Class A
Strike Price $0.01
Expire 12/2/12 (a)(d)(g)(i)... 200,064 250,080
Redeemable Preferred
Strike Price $0.01
Expire 12/2/12 (a)(d)(g)(i)... 240,062 2,401
Occidente y Caribe Celular,
S.A.
Strike Price $1.00
Expire 3/15/04 (a)(c)(d)(i)... 10,680 107
Ubiquitel Operating Co.
Strike Price $22.74
Expire 4/15/10 (a)(c)(d)...... 2,510 25
---------------
256,283
---------------
Total Warrants
(Cost $1,700,679)............. 1,840,639
---------------
<Caption>
SHORT-TERM INVESTMENTS (16.7%)
PRINCIPAL
AMOUNT
-----------
COMMERCIAL PAPER (6.7%)
American Express Credit Corp.
1.02%, due 1/6/04............. $15,000,000 14,997,875
Federal Home Loan Bank
0.92%, due 1/21/04............ 13,980,000 13,972,854
0.95%, due 1/7/04............. 5,000,000 4,999,208
Federal National Mortgage
Association
0.97%, due 1/6/04............. 2,030,000 2,029,726
Freddie Mac Discount Note
1.02%, due 1/15/04............ 24,960,000 24,950,098
Merrill Lynch & Co., Inc.
1.04%, due 1/5/04............. 13,590,000 13,588,429
Neptune Funding Corp.
1.01%, due 1/2/04 (s)......... 3,429,905 3,429,905
UBS Finance Delaware LLC
0.96%, due 1/2/04............. 1,860,000 1,859,950
---------------
Total Commercial Paper
(Cost $79,828,045)............ 79,828,045
---------------
SHARES
-----------
INVESTMENT COMPANIES (4.3%)
AIM Institutional Funds
Group 0.99% (o)(s)............ 309,436 309,436
Merrill Lynch Premier
Institutional Fund 1.05%
(o)............................ 51,309,979 51,309,979
---------------
Total Investment Companies
(Cost $51,619,415)............ 51,619,415
---------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-118
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
SHORT-TERM INVESTMENTS (CONTINUED)
<Caption>
PRINCIPAL
AMOUNT VALUE
-----------------------------
INVESTMENT COMPANIES (Continued)
MASTER NOTE (1.1%)
Banc of America Securities LLC
1.125%, due 1/2/04 (s)........ $12,890,000 $ 12,890,000
---------------
Total Master Note
(Cost $12,890,000)............ 12,890,000
---------------
REPURCHASE AGREEMENTS (4.3%)
Banc One Capital Markets, Inc.
1.1099%, dated 12/31/03
due 1/2/04 (s) Proceeds at
Maturity $1,000,061
(Collateralized by Various
Bonds with a Principal Amount
of $1,020,472 and a Market
Value of $1,020,000).......... 1,000,000 1,000,000
Countrywide Securities Corp.
1.08%, dated 12/31/03 due
1/2/04 (s) Proceeds at
Maturity $32,674,928
(Collateralized by Various
Bonds with a Principal Amount
of $42,266,773 and a Market
Value of $33,848,111)......... 32,673,000 32,673,000
Merrill Lynch & Co.
1.08%, dated 12/31/03 due
1/2/04 (s) Proceeds at
Maturity $17,945,059
(Collateralized by Various
Bonds with a Principal Amount
of $16,574,383 and a Market
Value of $18,341,727)......... 17,944,000 17,944,000
---------------
Total Repurchase Agreements
(Cost $51,617,000)............ 51,617,000
---------------
SHORT-TERM LOAN ASSIGNMENTS &
PARTICIPATIONS (0.3%)
BUILDING PRODUCTS (0.2%)
Owens Corning, Inc.
Bank debt, Revolver
3.62%, due 12/31/04
(d)(e)(g)(o)................ 4,051,541 2,876,594
---------------
MULTI-UTILITIES & UNREGULATED POWER (0.1%)
Mirant Corp.
Bank debt, Revolver
4.75%, due 7/15/04
(d)(e)(g)(o)................ 1,480,000 854,700
---------------
Total Short-Term Loan
Assignments & Participations
(Cost $3,969,009)............. 3,731,294
---------------
Total Short-Term Investments
(Cost $199,923,469)........... 199,685,754
---------------
</Table>
<Table>
<Caption>
VALUE
---------------
Total Investments
(Cost $1,176,130,352) (t)..... 104.3% $ 1,246,124,147(u)
Liabilities in Excess of
Cash and Other Assets......... (4.3) (51,750,024)
----------- ---------------
Net Assets..................... 100.0% $ 1,194,374,123
=========== ===============
</Table>
- ------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) Illiquid security.
(e) Issue in default.
(f) Partially segregated for unfunded loan commitments.
(g) Restricted security. (See Note 4)
(h) PIK ("Payment in Kind")--Interest or dividend payment is made with
additional securities.
(i) Fair valued security.
(j) Represents a security, or a portion thereof, which is out on loan.
(k) Yankee bond--Dollar-denominated bonds issued in the United States by
foreign banks and corporations.
(l) Issuer in bankruptcy.
(m) 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.
(n) CIK ("Cash in Kind")--Interest payment is made with cash or additional
securities.
(o) Floating rate. Rate shown is the rate in effect at December 31, 2003.
(p) British security.
(q) ADR- American Depositary Receipt.
(r) Canadian security.
(s) Represents a security, or a portion thereof, purchased with cash collateral
received for securities on loan.
(t) The cost for federal income tax purposes is $1,184,101,155.
(u) At December 31, 2003 net unrealized appreciation was $62,022,992, 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 $110,621,471 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $48,598,479.
The following abbreviations are used in the above portfolio:
E --Euro
L --Pound Sterling
C$--Canadian Dollar.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-119
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $1,176,130,352)
including $65,633,824 market value of
securities loaned.................... $1,246,124,147
Cash denominated in foreign currencies
(identified cost $17)................ 18
Cash................................... 150,736
Receivables:
Dividends and interest............... 17,282,633
Fund shares sold..................... 952,989
Investment securities sold........... 1,987
--------------
Total assets................... 1,264,512,510
--------------
LIABILITIES:
Securities lending collateral.......... 68,246,341
Payables:
Investment securities purchased...... 957,075
Adviser.............................. 295,751
Administrator........................ 197,167
Shareholder communication............ 159,083
Professional......................... 148,960
Fund shares redeemed................. 94,100
Custodian............................ 17,792
NYLIFE Distributors.................. 14,174
Accrued expenses....................... 7,944
--------------
Total liabilities.............. 70,138,387
--------------
Net assets............................. $1,194,374,123
==============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 300 million shares authorized
Initial Class........................ $ 1,185,172
Service Class........................ 84,708
Additional paid-in capital............. 1,285,891,746
Accumulated distributions in excess of
net investment income................ (4,324,838)
Accumulated net realized loss on
investments.......................... (158,476,416)
Net unrealized appreciation on
investments.......................... 69,993,795
Net unrealized appreciation on
translation of other assets and
liabilities in
foreign currencies................... 19,956
--------------
Net assets............................. $1,194,374,123
==============
Initial Class
Net assets applicable to outstanding
shares............................. $1,114,766,403
==============
Shares of capital stock
outstanding........................ 118,517,243
==============
Net asset value per share
outstanding........................ $ 9.41
==============
Service Class
Net assets applicable to outstanding
shares............................. $ 79,607,720
==============
Shares of capital stock
outstanding........................ 8,470,832
==============
Net asset value per share
outstanding........................ $ 9.40
==============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Interest............................... $ 81,774,147
Dividends (a).......................... 1,904,934
Income from securities loaned-net...... 74,783
------------
Total income..................... 83,753,864
------------
Expenses:
Advisory............................... 2,759,638
Administration......................... 1,839,759
Shareholder communication.............. 432,382
Professional........................... 276,423
Custodian.............................. 94,148
Directors.............................. 44,623
Service................................ 43,402
Portfolio pricing...................... 34,752
Miscellaneous.......................... 25,799
------------
Total expenses................... 5,550,926
------------
Net investment income.................... 78,202,938
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Security transactions.................. (67,304,260)
Foreign currency transactions.......... 351,206
------------
Net realized loss on investments and
foreign currency transactions.......... (66,953,054)
------------
Net change in unrealized depreciation on:
Security transactions.................. 267,483,103
Translation of other assets and
liabilities in
foreign currencies and foreign
currency forward contracts........... 169,569
------------
Net unrealized gain on investments and
foreign currency transactions.......... 267,652,672
------------
Net realized and unrealized gain on
investments and foreign currency
transactions........................... 200,699,618
------------
Net increase in net assets resulting from
operations............................. $278,902,556
============
</Table>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$19,275.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-120
MAINSTAY VP SERIES FUND, INC.
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
------------------------------
INCREASE IN NET ASSETS:
Operations:
Net investment income...................................... $ 78,202,938 $ 71,967,885
Net realized loss on investments and foreign currency
transactions............................................. (66,953,054) (34,068,623)
Net change in unrealized appreciation (depreciation) on
investments and foreign currency transactions............ 267,652,672 (25,899,116)
-------------- -------------
Net increase in net assets resulting from operations....... 278,902,556 12,000,146
-------------- -------------
Dividends to shareholders:
From net investment income:
Initial Class............................................ (73,734,344) (72,711,244)
Service Class............................................ (5,027,950) --
-------------- -------------
Total dividends to shareholders........................ (78,762,294) (72,711,244)
-------------- -------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class............................................ 247,591,043 133,523,722
Service Class............................................ 76,651,823 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class............................................ 73,734,344 72,711,244
Service Class............................................ 5,027,950 --
-------------- -------------
403,005,160 206,234,966
Cost of shares redeemed:
Initial Class............................................ (103,653,652) (133,761,876)
Service Class............................................ (1,617,935) --
-------------- -------------
Increase in net assets derived from capital share
transactions............................................. 297,733,573 72,473,090
-------------- -------------
Net increase in net assets.................................. 497,873,835 11,761,992
NET ASSETS:
Beginning of year........................................... 696,500,288 684,738,296
-------------- -------------
End of year................................................. $1,194,374,123 $ 696,500,288
============== =============
Accumulated distributions in excess of net investment income
at end of year............................................. $ (4,324,838) $ (4,158,921)
============== =============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
-------------------------------------------------------------- -------------
JUNE 4,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
------------------------------------------------------------------------------
Net asset value at beginning of period........... $ 7.39 $ 8.09 $ 8.72 $ 10.69 $ 10.92 $ 8.69
---------- -------- -------- -------- -------- --------
Net investment income............................ 0.75(b) 0.85 1.05(c) 1.32 1.31 0.44(b)
Net realized and unrealized gain (loss) on
investments..................................... 1.93 (0.67) (0.64)(c) (1.96) 0.07 0.92
Net realized and unrealized gain (loss) on
foreign currency transactions................... 0.01 (0.02) 0.01 0.02 0.01 0.00(d)
---------- -------- -------- -------- -------- --------
Total from investment operations................. 2.69 0.16 0.42 (0.62) 1.39 1.36
---------- -------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income...................... (0.67) (0.86) (1.05) (1.35) (1.38) (0.65)
From net realized gain on investments........... -- -- -- (0.00)(d) (0.24) --
---------- -------- -------- -------- -------- --------
Total dividends and distributions................ (0.67) (0.86) (1.05) (1.35) (1.62) (0.65)
---------- -------- -------- -------- -------- --------
Net asset value at end of period................. $ 9.41 $ 7.39 $ 8.09 $ 8.72 $ 10.69 $ 9.40
========== ======== ======== ======== ======== ========
Total investment return.......................... 36.37% 2.05% 4.91% (5.87%) 12.84% 15.66%(e)
Ratios (to average net assets)/Supplemental Data:
Net investment income........................... 8.51% 10.44% 11.61%(c) 12.10% 11.33% 8.26%+(f)
Expenses........................................ 0.60% 0.60% 0.58% 0.60% 0.57% 0.85%+
Portfolio turnover rate.......................... 43% 49% 56% 64% 93% 43%
Net assets at end of period (in 000's)........... $1,114,766 $696,500 $684,738 $616,807 $684,956 $ 79,608
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during
the period.
(c) As required, effective January 1, 2001, the Portfolio has
adopted the provisions of the AICPA Audit and Accounting
Guide for Investment Companies and began amortizing premium
on debt securities. The effect of this change for the year
ended December 31, 2001 is shown below. Per share ratios and
supplemental data for periods prior to January 1, 2001 have
not been restated to reflect this change in presentation.
</Table>
<Table>
Decrease net investment income.............................. $(0.00)(b)
Increase net realized and unrealized gains and losses....... 0.00(b)
Decrease ratio of net investment income..................... (0.03%)
</Table>
<Table>
(d) Less than one cent per share.
(e) Total return is not annualized.
(f) Represents income earned for the year by the Initial Class
shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-121
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (97.9%)+
SHARES VALUE
----------------------------
AEROSPACE & DEFENSE (1.8%)
Boeing Co. (The)................ 102,425 $ 4,316,190
General Dynamics Corp. ......... 24,031 2,172,162
Goodrich Corp. ................. 14,241 422,815
Honeywell International,
Inc. .......................... 104,720 3,500,790
Lockheed Martin Corp. .......... 54,915 2,822,631
Northrop Grumman Corp. ......... 22,235 2,125,666
Raytheon Co. ................... 50,171 1,507,137
Rockwell Collins, Inc. ......... 21,771 653,783
United Technologies Corp. ...... 57,095 5,410,893
--------------
22,932,067
--------------
AIR FREIGHT & LOGISTICS (1.0%)
FedEx Corp. .................... 36,434 2,459,295
Ryder System, Inc. ............. 7,679 262,238
United Parcel Service, Inc.
Class B........................ 137,100 10,220,805
--------------
12,942,338
--------------
AIRLINES (0.1%)
Delta Air Lines, Inc. .......... 15,077 178,059
Southwest Airlines Co. ......... 95,362 1,539,143
--------------
1,717,202
--------------
AUTO COMPONENTS (0.2%)
Cooper Tire & Rubber Co. ....... 9,066 193,831
Dana Corp. ..................... 18,133 332,741
Delphi Corp. ................... 68,305 697,394
Goodyear Tire & Rubber Co. (The)
(a)............................ 20,219 158,921
Johnson Controls, Inc. ......... 10,828 1,257,348
Visteon Corp. .................. 16,720 174,055
--------------
2,814,290
--------------
AUTOMOBILES (0.7%)
Ford Motor Co. ................. 223,136 3,570,176
General Motors Corp. ........... 68,228 3,643,375
Harley-Davidson, Inc. .......... 36,877 1,752,764
--------------
8,966,315
--------------
BEVERAGES (2.6%)
Adolph Coors Co. Class B........ 4,419 247,906
Anheuser-Busch Cos., Inc. ...... 99,157 5,223,591
Brown-Forman Corp. Class B...... 7,387 690,315
Coca-Cola Co. (The) (c)......... 298,349 15,141,212
Coca-Cola Enterprises, Inc. .... 55,228 1,207,836
Pepsi Bottling Group, Inc.
(The).......................... 32,610 788,510
PepsiCo, Inc. .................. 208,996 9,743,393
--------------
33,042,763
--------------
BIOTECHNOLOGY (1.1%)
Amgen, Inc. (a)................. 157,129 9,710,572
Biogen Idec, Inc. (a)........... 39,816 1,464,433
Chiron Corp. (a)................ 22,786 1,298,574
Genzyme Corp. (a)............... 27,100 1,337,114
MedImmune, Inc. (a)............. 30,715 780,161
--------------
14,590,854
--------------
</Table>
<Table>
<Caption>
SHARES VALUE
----------------------------
BUILDING PRODUCTS (0.2%)
American Standard Cos., Inc.
(a)............................ 8,800 $ 886,160
Masco Corp. .................... 57,166 1,566,920
--------------
2,453,080
--------------
CAPITAL MARKETS (3.6%)
Bank of New York Co., Inc.
(The).......................... 93,862 3,108,709
Bear Stearns Cos., Inc. (The)... 12,155 971,792
Charles Schwab Corp. (The)...... 163,969 1,941,393
Federated Investors, Inc. Class
B.............................. 13,200 387,552
Franklin Resources, Inc......... 30,550 1,590,433
Goldman Sachs Group, Inc.
(The).......................... 57,700 5,696,721
J.P. Morgan Chase & Co. ........ 248,031 9,110,179
Janus Capital Group, Inc. ...... 29,210 479,336
Lehman Brothers Holdings,
Inc. .......................... 33,025 2,550,191
Mellon Financial Corp. ......... 52,428 1,683,463
Merrill Lynch & Co., Inc. ...... 114,732 6,729,032
Morgan Stanley.................. 131,800 7,627,266
Northern Trust Corp. ........... 27,039 1,255,150
State Street Corp. ............. 40,448 2,106,532
T.Rowe Price Group, Inc. ....... 14,960 709,254
--------------
45,947,003
--------------
CHEMICALS (1.5%)
Air Products & Chemicals,
Inc. .......................... 27,789 1,468,093
Dow Chemical Co. (The).......... 111,822 4,648,440
E.I. du Pont de Nemours &
Co. ........................... 121,427 5,572,285
Eastman Chemical Co. ........... 9,490 375,140
Ecolab, Inc. ................... 31,714 868,012
Engelhard Corp. ................ 15,542 465,483
Great Lakes Chemical Corp. ..... 6,233 169,475
Hercules, Inc. (a).............. 13,120 160,064
International Flavors &
Fragrances, Inc. .............. 11,542 403,047
Monsanto Co. ................... 31,994 920,787
PPG Industries, Inc. ........... 20,713 1,326,046
Praxair, Inc. .................. 39,678 1,515,700
Rohm & Haas Co. ................ 27,085 1,156,800
Sigma-Aldrich Corp. ............ 8,643 494,207
--------------
19,543,579
--------------
COMMERCIAL BANKS (6.2%)
AmSouth Bancorp. ............... 43,388 1,063,006
Bank of America Corp. .......... 180,850 14,545,765
Bank One Corp. ................. 136,045 6,202,292
BB&T Corp. ..................... 66,585 2,572,844
Charter One Financial, Inc. .... 27,587 953,131
Comerica, Inc. ................. 21,370 1,198,002
Fifth Third Bancorp. ........... 69,467 4,105,500
First Tennessee National
Corp. ......................... 15,300 674,730
FleetBoston Financial Corp. .... 128,084 5,590,867
Huntington Bancshares, Inc. .... 27,737 624,083
KeyCorp......................... 51,215 1,501,624
Marshall & Ilsley Corp. ........ 27,750 1,061,437
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-122
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
COMMERCIAL BANKS (Continued)
National City Corp. ............ 74,810 $ 2,539,051
North Fork Bancorp, Inc. ....... 18,500 748,695
PNC Financial Services Group,
Inc. (The)..................... 33,828 1,851,406
Regions Financial Corp. ........ 27,082 1,007,450
SouthTrust Corp. ............... 41,031 1,342,945
SunTrust Banks, Inc. ........... 34,219 2,446,658
Synovus Financial Corp. ........ 36,767 1,063,302
U.S. Bancorp.................... 234,606 6,986,567
Union Planters Corp. ........... 22,902 721,184
Wachovia Corp. ................. 161,171 7,508,957
Wells Fargo & Co. .............. 205,899 12,125,392
Zions Bancorp................... 10,911 669,172
--------------
79,104,060
--------------
COMMERCIAL SERVICES & SUPPLIES (1.0%)
Allied Waste Industries, Inc.
(a)............................ 38,961 540,779
Apollo Group, Inc. Class A
(a)............................ 21,400 1,455,200
Avery Dennison Corp. ........... 13,389 750,052
Cendant Corp. (a)............... 123,430 2,748,786
Cintas Corp. ................... 20,763 1,040,849
Deluxe Corp. ................... 6,636 274,266
Donnelley (R.R.) & Sons Co. .... 13,925 419,839
Equifax, Inc. .................. 17,417 426,717
H&R Block, Inc. ................ 21,793 1,206,678
Monster Worldwide, Inc. (a)..... 13,467 295,735
Pitney Bowes, Inc. ............. 28,487 1,157,142
Robert Half International, Inc.
(a)............................ 20,727 483,768
Waste Management, Inc. ......... 70,810 2,095,976
--------------
12,895,787
--------------
COMMUNICATIONS EQUIPMENT (2.9%)
ADC Telecommunications, Inc.
(a)............................ 97,948 290,906
Andrew Corp. (a)................ 18,571 213,752
Avaya, Inc. (a)................. 50,723 656,356
CIENA Corp. (a)................. 57,563 382,218
Cisco Systems, Inc. (a)......... 839,598 20,393,835
Comverse Technology, Inc. (a)... 22,947 403,638
Corning, Inc. (a)............... 162,125 1,690,964
JDS Uniphase Corp. (a).......... 174,720 637,728
Lucent Technologies, Inc. (a)... 505,472 1,435,540
Motorola, Inc. ................. 282,961 3,981,261
QLogic Corp. (a)................ 11,548 595,877
QUALCOMM, Inc. ................. 97,513 5,258,876
Scientific-Atlanta, Inc. ....... 18,138 495,167
Tellabs, Inc. (a)............... 50,311 424,122
--------------
36,860,240
--------------
COMPUTERS & PERIPHERALS (3.7%)
Apple Computer, Inc. (a)........ 44,163 943,763
Dell, Inc. (a).................. 311,957 10,594,060
EMC Corp. (a)................... 292,327 3,776,865
</Table>
<Table>
<Caption>
SHARES VALUE
----------------------------
COMPUTERS & PERIPHERALS (Continued)
Gateway, Inc. (a)............... 39,553 $ 181,944
Hewlett-Packard Co. ............ 371,900 8,542,543
International Business
Machines Corp. ................ 209,406 19,407,748
Lexmark International, Inc.
(a)............................ 15,548 1,222,695
NCR Corp. (a)................... 11,737 455,395
Network Appliance, Inc. (a)..... 41,591 853,863
Silicon Graphics, Inc. (a)...... 63 86
Sun Microsystems, Inc. (a)...... 393,514 1,766,878
--------------
47,745,840
--------------
CONSTRUCTION & ENGINEERING (0.0%)(b)
Fluor Corp...................... 9,837 389,939
--------------
CONSTRUCTION MATERIALS (0.1%)
Vulcan Materials Co. ........... 12,424 591,010
--------------
CONSUMER FINANCE (1.2%)
American Express Co. ........... 156,777 7,561,355
Capital One Financial Corp. .... 28,082 1,721,146
MBNA Corp. ..................... 155,562 3,865,716
Providian Financial Corp. (a)... 35,298 410,869
SLM Corp. ...................... 54,923 2,069,498
--------------
15,628,584
--------------
CONTAINERS & PACKAGING (0.2%)
Ball Corp. ..................... 6,966 414,965
Bemis Co., Inc. ................ 6,477 323,850
Pactiv Corp. (a)................ 19,356 462,608
Sealed Air Corp. (a)............ 10,208 552,661
Temple-Inland, Inc. ............ 6,625 415,189
--------------
2,169,273
--------------
DISTRIBUTORS (0.1%)
Genuine Parts Co. .............. 21,313 707,592
--------------
DIVERSIFIED FINANCIAL SERVICES (2.6%)
Citigroup, Inc. ................ 627,402 30,454,093
Moody's Corp. .................. 18,058 1,093,412
Principal Financial Group (The)
(a)............................ 39,450 1,304,611
--------------
32,852,116
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES (2.8%)
ALLTEL Corp. ................... 37,942 1,767,338
AT&T Corp. ..................... 95,926 1,947,298
BellSouth Corp. ................ 225,016 6,367,953
CenturyTel, Inc. ............... 17,464 569,676
Citizens Communications Co.
(a)............................ 33,672 418,206
Qwest Communications
International, Inc. (a)........ 215,248 929,871
SBC Communications, Inc. ....... 402,889 10,503,316
Sprint Corp. (FON Group)........ 109,826 1,803,343
Verizon Communications, Inc. ... 335,622 11,773,620
--------------
36,080,621
--------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-123
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
ELECTRIC UTILITIES (2.1%)
Allegheny Energy, Inc. (a)...... 15,528 $ 198,137
Ameren Corp. ................... 19,469 895,574
American Electric Power Co.,
Inc. .......................... 48,083 1,467,012
CenterPoint Energy, Inc. ....... 37,339 361,815
Cinergy Corp. .................. 21,688 841,711
CMS Energy Corp. (a)............ 16,714 142,403
Consolidated Edison, Inc. ...... 27,249 1,171,980
Dominion Resources, Inc. ....... 39,386 2,514,009
DTE Energy Co. ................. 20,461 806,163
Edison International (a)........ 39,825 873,362
Entergy Corp. .................. 27,594 1,576,445
Exelon Corp. ................... 39,639 2,630,444
FirstEnergy Corp. .............. 39,700 1,397,440
FPL Group, Inc. ................ 22,306 1,459,259
PG&E Corp. (a).................. 49,824 1,383,613
Pinnacle West Capital Corp. .... 11,069 442,981
PPL Corp. ...................... 21,767 952,306
Progress Energy, Inc. .......... 29,447 1,332,771
Public Service Enterprise
Group, Inc. ................... 28,618 1,253,469
Southern Co. (The).............. 88,308 2,671,317
TECO Energy, Inc. .............. 22,821 328,851
TXU Corp. ...................... 39,407 934,734
Xcel Energy, Inc. .............. 48,685 826,671
--------------
26,462,467
--------------
ELECTRICAL EQUIPMENT (0.4%)
American Power Conversion
Corp. ......................... 23,968 586,018
Cooper Industries, Ltd. Class
A.............................. 11,307 655,014
Emerson Electric Co. ........... 51,280 3,320,380
Power-One, Inc. (a)............. 9,385 101,640
Rockwell Automation, Inc. ...... 22,671 807,088
Thomas & Betts Corp. (a)........ 7,369 168,676
--------------
5,638,816
--------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.5%)
Agilent Technologies, Inc.
(a)............................ 57,571 1,683,376
Jabil Circuit, Inc. (a)......... 24,143 683,247
Molex, Inc. .................... 23,293 812,693
PerkinElmer, Inc. .............. 15,427 263,339
Sanmina-SCI Corp. (a)........... 62,290 785,477
Solectron Corp. (a)............. 101,359 599,032
Symbol Technologies, Inc. ...... 27,765 468,951
Tektronix, Inc. ................ 10,369 327,660
Thermo Electron Corp. (a)....... 19,938 502,437
Waters Corp. (a)................ 15,150 502,374
--------------
6,628,586
--------------
ENERGY EQUIPMENT & SERVICES (0.8%)
Baker Hughes, Inc. ............. 40,780 1,311,485
BJ Services Co. (a)............. 19,300 692,870
Halliburton Co. ................ 53,310 1,386,060
Nabors Industries, Ltd. (a)..... 17,800 738,700
</Table>
<Table>
<Caption>
SHARES VALUE
----------------------------
ENERGY EQUIPMENT & SERVICES (Continued)
Noble Corp. (a)................. 16,429 $ 587,829
Rowan Cos., Inc. (a)............ 11,465 265,644
Schlumberger Ltd. .............. 71,065 3,888,677
Transocean, Inc. (a)............ 39,075 938,191
--------------
9,809,456
--------------
FOOD & STAPLES RETAILING (3.4%)
Albertson's, Inc. .............. 44,866 1,016,215
Costco Wholesale Corp. (a)...... 55,539 2,064,940
CVS Corp. ...................... 47,961 1,732,351
Kroger Co. (The) (a)............ 91,410 1,691,999
Safeway, Inc. (a)............... 54,015 1,183,469
SUPERVALU, Inc. ................ 16,377 468,219
Sysco Corp. .................... 79,158 2,947,052
Walgreen Co. ................... 124,786 4,539,715
Wal-Mart Stores, Inc. .......... 526,395 27,925,255
Winn-Dixie Stores, Inc. ........ 18,613 185,199
--------------
43,754,414
--------------
FOOD PRODUCTS (1.2%)
Archer-Daniels-Midland Co. ..... 78,957 1,201,726
Campbell Soup Co. .............. 50,164 1,344,395
ConAgra Foods, Inc. ............ 65,523 1,729,152
General Mills, Inc. ............ 45,150 2,045,295
H.J. Heinz Co. ................. 43,004 1,566,636
Hershey Foods Corp. ............ 15,867 1,221,600
Kellogg Co. .................... 49,653 1,890,786
McCormick & Co., Inc. .......... 17,000 511,700
Sara Lee Corp. ................. 96,203 2,088,567
Wm. Wrigley Jr. Co. ............ 27,374 1,538,693
--------------
15,138,550
--------------
GAS UTILITIES (0.3%)
KeySpan Corp. .................. 19,120 703,616
Kinder Morgan, Inc. ............ 14,888 879,881
Nicor, Inc. .................... 5,413 184,258
NiSource, Inc. ................. 32,221 706,929
Peoples Energy Corp. ........... 4,470 187,919
Sempra Energy................... 27,207 817,842
--------------
3,480,445
--------------
HEALTH CARE EQUIPMENT & SUPPLIES (1.9%)
Applera Corp. Applied Biosystems
Group.......................... 25,454 527,152
Bausch & Lomb, Inc. ............ 6,506 337,661
Baxter International, Inc. ..... 74,240 2,265,805
Becton, Dickinson & Co. ........ 31,044 1,277,150
Biomet, Inc. ................... 31,172 1,134,972
Boston Scientific Corp. (a)..... 100,156 3,681,735
C.R. Bard, Inc. ................ 6,358 516,588
Guidant Corp. .................. 37,528 2,259,186
Medtronic, Inc. ................ 147,449 7,167,496
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-124
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (Continued)
Millipore Corp. (a)............. 5,745 $ 247,322
St. Jude Medical, Inc. (a)...... 20,778 1,274,730
Stryker Corp. .................. 24,265 2,062,768
Zimmer Holdings, Inc. (a)....... 29,416 2,070,886
--------------
24,823,451
--------------
HEALTH CARE PROVIDERS & SERVICES (1.8%)
Aetna, Inc. .................... 18,674 1,261,989
AmerisourceBergen Corp. ........ 13,385 751,568
Anthem, Inc. (a)................ 16,873 1,265,475
Cardinal Health, Inc. .......... 52,679 3,221,848
CIGNA Corp. .................... 17,075 981,812
Express Scripts, Inc. (a)....... 9,600 637,728
HCA, Inc. ...................... 60,822 2,612,913
Health Management
Associates, Inc. Class A....... 29,200 700,800
Humana, Inc. (a)................ 19,879 454,235
IMS Health, Inc. ............... 28,987 720,617
Manor Care, Inc. ............... 10,973 379,337
McKesson Corp. ................. 35,537 1,142,870
Medco Health Solutions, Inc.
(a)............................ 32,996 1,121,534
Quest Diagnostics, Inc. ........ 12,800 935,808
Tenet Healthcare Corp. (a)...... 56,832 912,154
UnitedHealth Group, Inc. ....... 71,474 4,158,357
WellPoint Health Networks, Inc.
(a)............................ 18,452 1,789,659
--------------
23,048,704
--------------
HOTELS, RESTAURANTS & LEISURE (1.2%)
Carnival Corp. ................. 76,739 3,048,840
Darden Restaurants, Inc. ....... 20,026 421,347
Harrah's Entertainment, Inc. ... 13,364 665,126
Hilton Hotels Corp. ............ 45,997 787,939
International Game Technology... 42,020 1,500,114
Marriott International, Inc.
Class A........................ 28,587 1,320,719
McDonald's Corp. ............... 154,931 3,846,937
Starbucks Corp. (a)............. 47,650 1,575,309
Starwood Hotels & Resorts
Worldwide, Inc. ............... 24,545 882,884
Wendy's International, Inc. .... 14,136 554,697
Yum! Brands, Inc. (a)........... 36,064 1,240,602
--------------
15,844,514
--------------
HOUSEHOLD DURABLES (0.5%)
American Greetings Corp. Class A
(a)............................ 8,026 175,529
Black & Decker Corp. (The)...... 9,528 469,921
Centex Corp. ................... 7,496 806,944
Fortune Brands, Inc. ........... 17,700 1,265,373
KB HOME......................... 5,761 417,788
Leggett & Platt, Inc. .......... 23,465 507,548
Maytag Corp. ................... 9,620 267,917
Newell Rubbermaid, Inc. ........ 33,696 767,258
Pulte Homes, Inc. .............. 7,415 694,192
</Table>
<Table>
<Caption>
SHARES VALUE
----------------------------
HOUSEHOLD DURABLES (Continued)
Snap-on, Inc. .................. 7,071 $ 227,969
Stanley Works (The)............. 10,361 392,371
Tupperware Corp. ............... 7,086 122,871
Whirlpool Corp. ................ 8,314 604,012
--------------
6,719,693
--------------
HOUSEHOLD PRODUCTS (1.9%)
Clorox Co. (The)................ 25,679 1,246,972
Colgate-Palmolive Co. .......... 65,528 3,279,676
Kimberly-Clark Corp. ........... 61,429 3,629,840
Procter & Gamble Co. (The)...... 157,866 15,767,656
--------------
23,924,144
--------------
INDUSTRIAL CONGLOMERATES (4.2%)
3M Co. ......................... 95,274 8,101,148
General Electric Co. (c)........ 1,221,160 37,831,537
Textron, Inc. .................. 16,667 951,019
Tyco International Ltd. ........ 243,197 6,444,721
--------------
53,328,425
--------------
INSURANCE (4.5%)
ACE, Ltd. ...................... 33,500 1,387,570
AFLAC, Inc. .................... 62,577 2,264,036
Allstate Corp. (The)............ 85,708 3,687,158
Ambac Financial Group, Inc. .... 12,911 895,894
American International Group,
Inc. .......................... 317,184 21,022,955
Aon Corp. ...................... 38,063 911,228
Chubb Corp. (The)............... 22,825 1,554,383
Cincinnati Financial Corp. ..... 19,749 827,088
Hartford Financial Services
Group, Inc. (The).............. 34,210 2,019,416
Jefferson-Pilot Corp. .......... 17,500 886,375
John Hancock Financial
Services, Inc. ................ 35,158 1,318,425
Lincoln National Corp. ......... 21,642 873,688
Loews Corp. .................... 22,645 1,119,795
Marsh & McLennan Cos., Inc. .... 64,908 3,108,444
MBIA, Inc. ..................... 17,763 1,052,103
MetLife, Inc. .................. 92,590 3,117,505
Progressive Corp. (The)......... 26,594 2,222,992
Prudential Financial, Inc. ..... 65,516 2,736,603
SAFECO Corp. ................... 16,964 660,409
St. Paul Cos., Inc. (The)....... 27,616 1,094,974
Torchmark Corp. ................ 13,792 628,088
Travelers Property Casualty
Corp. Class B.................. 122,275 2,075,007
UnumProvident Corp. ............ 35,150 554,316
XL Capital Ltd. Class A......... 16,671 1,292,836
--------------
57,311,288
--------------
INTERNET & CATALOG RETAIL (0.4%)
eBay, Inc. (a).................. 78,600 5,076,774
--------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-125
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
INTERNET SOFTWARE & SERVICES (0.3%)
Yahoo!, Inc. (a)................ 80,085 $ 3,617,439
--------------
IT SERVICES (1.2%)
Automatic Data Processing,
Inc. .......................... 72,792 2,883,291
Computer Sciences Corp. (a)..... 22,880 1,011,982
Concord EFS, Inc. (a)........... 56,689 841,265
Convergys Corp. (a)............. 17,946 313,337
Electronic Data Systems
Corp. ......................... 58,269 1,429,921
First Data Corp. ............... 88,714 3,645,258
Fiserv, Inc. (a)................ 23,517 929,157
Paychex, Inc. .................. 45,857 1,705,880
Sabre Holdings Corp. ........... 17,401 375,688
SunGard Data Systems, Inc.
(a)............................ 34,600 958,766
Unisys Corp. (a)................ 39,977 593,659
--------------
14,688,204
--------------
LEISURE EQUIPMENT & PRODUCTS (0.2%)
Brunswick Corp. ................ 10,944 348,347
Eastman Kodak Co. .............. 34,974 897,783
Hasbro, Inc. ................... 21,189 450,902
Mattel, Inc. ................... 53,452 1,030,020
--------------
2,727,052
--------------
MACHINERY (1.4%)
Caterpillar, Inc. .............. 42,018 3,488,334
Crane Co. ...................... 7,261 223,203
Cummins, Inc. .................. 5,084 248,811
Danaher Corp. .................. 18,601 1,706,642
Deere & Co. .................... 29,293 1,905,510
Dover Corp. .................... 24,703 981,944
Eaton Corp. .................... 9,226 996,223
Illinois Tool Works, Inc. ...... 37,465 3,143,688
Ingersoll-Rand Co. Class A...... 21,056 1,429,281
ITT Industries, Inc. ........... 11,150 827,442
Navistar International Corp.
(a)............................ 8,322 398,541
PACCAR, Inc. ................... 14,178 1,206,831
Pall Corp. ..................... 15,026 403,148
Parker-Hannifin Corp. .......... 14,435 858,883
--------------
17,818,481
--------------
MEDIA (4.0%)
Clear Channel
Communications, Inc. .......... 74,916 3,508,316
Comcast Corp. Class A (a)....... 274,123 9,010,423
Dow Jones & Co., Inc. .......... 9,961 496,556
Gannett Co., Inc. .............. 32,851 2,928,995
Interpublic Group of Cos., Inc.
(The) (a)...................... 50,390 786,084
Knight-Ridder, Inc. ............ 9,790 757,452
McGraw-Hill Cos., Inc. (The).... 23,207 1,622,634
Meredith Corp. ................. 6,060 295,789
New York Times Co. (The) Class
A.............................. 18,433 880,913
Omnicom Group, Inc. ............ 23,115 2,018,633
Time Warner, Inc. (a)........... 549,560 9,886,584
</Table>
<Table>
<Caption>
SHARES VALUE
----------------------------
MEDIA (Continued)
Tribune Co. .................... 38,170 $ 1,969,572
Univision Communications, Inc.
Class A (a).................... 39,257 1,558,110
Viacom, Inc. Class B............ 212,849 9,446,239
Walt Disney Co. (The)........... 249,046 5,810,243
--------------
50,976,543
--------------
METALS & MINING (0.8%)
Alcoa, Inc. .................... 105,313 4,001,894
Allegheny Technologies, Inc. ... 10,703 141,494
Freeport-McMoRan Copper &
Gold, Inc. Class B............. 20,491 863,286
Newmont Mining Corp. ........... 52,600 2,556,886
Nucor Corp. .................... 9,588 536,928
Phelps Dodge Corp. (a).......... 10,801 821,848
United States Steel Corp. ...... 12,544 439,291
Worthington Industries, Inc. ... 10,447 188,359
--------------
9,549,986
--------------
MULTILINE RETAIL (1.0%)
Big Lots, Inc. (a).............. 14,261 202,649
Dillard's, Inc. Class A......... 10,148 167,036
Dollar General Corp. ........... 40,693 854,146
Family Dollar Stores, Inc. ..... 20,941 751,363
Federated Department Stores,
Inc. .......................... 22,621 1,066,128
J.C. Penney Co., Inc. Holding
Co. ........................... 32,797 861,905
Kohl's Corp. (a)................ 41,413 1,861,100
May Department Stores Co.
(The).......................... 35,189 1,022,944
Nordstrom, Inc. ................ 16,577 568,591
Sears, Roebuck and Co. ......... 30,877 1,404,595
Target Corp. ................... 110,898 4,258,483
--------------
13,018,940
--------------
MULTI-UTILITIES & UNREGULATED POWER (0.4%)
AES Corp. (The) (a)............. 75,104 708,982
Calpine Corp. (a)............... 46,647 224,372
Constellation Energy Group,
Inc. .......................... 20,183 790,366
Duke Energy Corp. .............. 110,069 2,250,911
Dynegy, Inc. Class A (a)........ 44,305 189,625
El Paso Corp. .................. 72,824 596,429
Williams Cos., Inc. (The)....... 63,110 619,740
--------------
5,380,425
--------------
OFFICE ELECTRONICS (0.1%)
Xerox Corp. (a)................. 96,389 1,330,168
--------------
OIL & GAS (4.9%)
Amerada Hess Corp. ............. 10,865 577,692
Anadarko Petroleum Corp. ....... 30,343 1,547,796
Apache Corp. ................... 19,739 1,600,833
Ashland, Inc. .................. 8,265 364,156
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-126
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------------------------
OIL & GAS (Continued)
Burlington Resources, Inc. ..... 24,630 $ 1,364,009
ChevronTexaco Corp. ............ 130,033 11,233,551
ConocoPhillips.................. 82,685 5,421,655
Devon Energy Corp. ............. 28,044 1,605,800
EOG Resources, Inc. ............ 14,186 654,968
ExxonMobil Corp. ............... 803,919 32,960,679
Kerr-McGee Corp. ............... 12,250 569,503
Marathon Oil Corp. ............. 38,166 1,262,913
Occidental Petroleum Corp. ..... 46,627 1,969,524
Sunoco, Inc. ................... 9,385 480,043
Unocal Corp. ................... 31,547 1,161,876
--------------
62,774,998
--------------
PAPER & FOREST PRODUCTS (0.5%)
Boise Cascade Corp. ............ 10,351 340,134
Georgia-Pacific Corp. .......... 30,526 936,232
International Paper Co. ........ 58,355 2,515,684
Louisiana-Pacific Corp. (a)..... 12,728 227,577
MeadWestvaco Corp. ............. 24,457 727,596
Weyerhaeuser Co. ............... 26,699 1,708,736
--------------
6,455,959
--------------
PERSONAL PRODUCTS (0.5%)
Alberto-Culver Co. Class B...... 7,213 454,996
Avon Products, Inc. ............ 28,748 1,940,202
Gillette Co. (The).............. 123,067 4,520,251
--------------
6,915,449
--------------
PHARMACEUTICALS (8.1%)
Abbott Laboratories............. 190,284 8,867,234
Allergan, Inc. ................. 15,769 1,211,217
Bristol-Myers Squibb Co. ....... 236,071 6,751,631
Forest Laboratories, Inc. (a)... 44,336 2,739,965
Johnson & Johnson............... 360,581 18,627,614
King Pharmaceuticals, Inc.
(a)............................ 29,428 449,071
Lilly (Eli) & Co. .............. 136,790 9,620,441
Merck & Co., Inc. .............. 270,725 12,507,495
Pfizer, Inc. ................... 928,194 32,793,094
Schering-Plough Corp. .......... 178,966 3,112,219
Watson Pharmaceuticals, Inc.
(a)............................ 13,004 598,184
Wyeth........................... 162,124 6,882,164
--------------
104,160,329
--------------
REAL ESTATE (0.4%)
Apartment Investment &
Management Co. Class A......... 11,500 396,750
Equity Office Properties
Trust.......................... 48,521 1,390,127
Equity Residential.............. 33,100 976,781
Plum Creek Timber Co., Inc. .... 22,600 688,170
ProLogis........................ 21,900 702,771
Simon Property Group, Inc. ..... 23,400 1,084,356
--------------
5,238,955
--------------
</Table>
<Table>
<Caption>
SHARES VALUE
----------------------------
ROAD & RAIL (0.4%)
Burlington Northern Santa Fe
Corp. ......................... 45,310 $ 1,465,779
CSX Corp. ...................... 26,049 936,201
Norfolk Southern Corp. ......... 47,564 1,124,889
Union Pacific Corp. ............ 30,955 2,150,753
--------------
5,677,622
--------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (4.1%)
Advanced Micro Devices, Inc.
(a)............................ 41,981 625,517
Altera Corp. (a)................ 46,668 1,059,364
Analog Devices, Inc. (a)........ 44,514 2,032,064
Applied Materials, Inc. (a)..... 201,850 4,531,533
Applied Micro Circuits Corp.
(a)............................ 37,496 224,226
Broadcom Corp. Class A (a)...... 36,278 1,236,717
Intel Corp. .................... 794,418 25,580,260
KLA-Tencor Corp. (a)............ 23,652 1,387,663
Linear Technology Corp. ........ 38,231 1,608,378
LSI Logic Corp. (a)............. 45,783 406,095
Maxim Integrated Products,
Inc. .......................... 39,505 1,967,349
Micron Technology, Inc. (a)..... 74,384 1,001,952
National Semiconductor Corp.
(a)............................ 22,242 876,557
Novellus Systems, Inc. (a)...... 18,186 764,721
NVIDIA Corp. (a)................ 19,300 448,725
PMC-Sierra, Inc. (a)............ 20,577 414,627
Teradyne, Inc. (a).............. 22,925 583,441
Texas Instruments, Inc. ........ 210,805 6,193,451
Xilinx, Inc. (a)................ 41,287 1,599,458
--------------
52,542,098
--------------
SOFTWARE (4.6%)
Adobe Systems, Inc. ............ 28,207 1,108,535
Autodesk, Inc. ................. 13,476 331,240
BMC Software, Inc. (a).......... 28,443 530,462
Citrix Systems, Inc. (a)........ 19,848 420,976
Computer Associates
International, Inc. ........... 70,471 1,926,677
Compuware Corp. (a)............. 46,210 279,108
Electronic Arts, Inc. (a)....... 36,022 1,721,131
Intuit, Inc. (a)................ 24,226 1,281,798
Mercury Interactive Corp. (a)... 10,371 504,445
Microsoft Corp. (c)............. 1,315,036 36,216,092
Novell, Inc. (a)................ 45,254 476,072
Oracle Corp. (a)................ 637,455 8,414,406
Parametric Technology Corp.
(a)............................ 32,262 127,112
PeopleSoft, Inc. (a)............ 45,706 1,042,097
Siebel Systems, Inc. (a)........ 59,211 821,257
Symantec Corp. (a).............. 36,900 1,278,585
VERITAS Software Corp. (a)...... 51,889 1,928,195
--------------
58,408,188
--------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-127
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
<Caption>
SHARES VALUE
----------------------------
SPECIALTY RETAIL (2.4%)
AutoNation, Inc. (a)............ 33,496 $ 615,321
AutoZone, Inc. (a).............. 10,817 921,717
Bed Bath & Beyond, Inc. (a)..... 35,901 1,556,308
Best Buy Co., Inc. (a).......... 39,287 2,052,353
Circuit City Stores, Inc. ...... 25,333 256,623
Gap, Inc. (The)................. 108,812 2,525,527
Home Depot, Inc. (The).......... 276,722 9,820,864
Limited Brands.................. 63,936 1,152,766
Lowe's Cos., Inc. .............. 95,169 5,271,411
Office Depot, Inc. (a).......... 37,690 629,800
RadioShack Corp. ............... 20,601 632,039
Sherwin-Williams Co. (The)...... 17,910 622,193
Staples, Inc. (a)............... 59,538 1,625,387
Tiffany & Co. .................. 17,702 800,130
TJX Cos., Inc. (The)............ 62,232 1,372,216
Toys "R" Us, Inc. (a)........... 25,959 328,122
--------------
30,182,777
--------------
TEXTILES, APPAREL & LUXURY GOODS (0.3%)
Jones Apparel Group, Inc. ...... 15,600 549,588
Liz Claiborne, Inc. ............ 12,992 460,696
NIKE, Inc. Class B.............. 32,260 2,208,520
Reebok International Ltd. ...... 7,241 284,716
V.F. Corp. ..................... 13,168 569,384
--------------
4,072,904
--------------
THRIFTS & MORTGAGE FINANCE (1.8%)
Countrywide Financial Corp. .... 22,087 1,675,273
Fannie Mae...................... 118,126 8,866,538
Freddie Mac..................... 84,722 4,940,987
Golden West Financial Corp. .... 18,494 1,908,396
MGIC Investment Corp. .......... 12,062 686,810
Washington Mutual, Inc. ........ 109,431 4,390,372
--------------
22,468,376
--------------
TOBACCO (1.2%)
Altria Group, Inc. ............. 247,067 13,445,386
R.J. Reynolds Tobacco
Holdings, Inc. ................ 10,300 598,945
UST, Inc. ...................... 20,464 730,360
--------------
14,774,691
--------------
TRADING COMPANIES & DISTRIBUTORS (0.0%)(b)
Grainger (W.W.), Inc. .......... 11,113 526,645
--------------
WIRELESS TELECOMMUNICATION SERVICES (0.6%)
AT&T Wireless Services, Inc.
(a)............................ 330,472 2,640,471
Nextel Communications, Inc.
Class A (a).................... 133,777 3,753,783
Sprint Corp. (PCS Group) (a).... 125,307 704,225
--------------
7,098,479
--------------
Total Common Stocks
(Cost $1,150,152,350).......... 1,251,368,988(d)
--------------
SHORT-TERM INVESTMENTS (5.9%)
PRINCIPAL
AMOUNT VALUE
----------------------------
-----------
COMMERCIAL PAPER (4.7%)
7-Eleven, Inc.
1.05%, due 1/21/04 (c)......... $ 1,600,000 1,599,066
American Honda Finance Corp.
1.02%, due 1/22/04 (c)......... 1,300,000 1,299,226
Countrywide Home Loans, Inc.
1.05%, due 1/30/04 (c)......... 600,000 599,492
1.12%, due 1/22/04 (c)......... 8,500,000 8,494,444
FPL Fuels, Inc.
1.08%, due 1/15/04 (c)......... 500,000 499,790
Grainger (W.W.), Inc.
1.01%, due 1/28/04 (c)......... 1,100,000 1,099,167
HBOS Treasury Services PLC
1.08%, due 2/11/04 (c)......... 2,400,000 2,397,046
Hitachi Credit America Corp.
1.02%, due 1/27/04 (c)......... 3,900,000 3,897,127
Mitsubishi Motors Credit of
America, Inc.
1.20%, due 1/12/04 (c)......... 9,100,000 9,096,660
New Jersey Natural Gas Co.
1.06%, due 1/15/04 (c)......... 2,200,000 2,199,093
Nordea North America, Inc.
1.07%, due 1/14/04 (c)......... 3,600,000 3,598,608
1.08%, due 1/9/04 (c).......... 900,000 899,784
Peoples Gas Light & Coke Co.
1.08%, due 1/12/04 (c)......... 6,900,000 6,897,686
Province of Quebec
1.02%, due 1/23/04 (c)......... 2,400,000 2,398,504
Public Service Co. of North
Carolina, Inc.
1.10%, due 1/20/04 (c)......... 4,500,000 4,497,359
Schering-Plough Corp.
1.19%, due 1/5/04 (c).......... 1,400,000 1,399,815
Yorkshire Building Society
1.10%, due 1/7/04 (c).......... 10,000,000 9,998,173
--------------
Total Commercial Paper
(Cost $60,871,040)............. 60,871,040
--------------
U.S. GOVERNMENT (1.2%)
United States Treasury Bills
0.94%, due 4/15/04 (c)......... 4,400,000 4,388,432
0.95%, due 4/8/04 (c).......... 10,800,000 10,773,465
--------------
Total U.S. Government
(Cost $15,161,048)............. 15,161,897
--------------
Total Short-Term Investments
(Cost $76,032,088)............. 76,032,937
--------------
Total Investments
(Cost $1,226,184,438) (e)...... 103.8% 1,327,401,925(f)
Liabilities in excess of Cash
and Other Assets............... (3.8) (48,549,599)
----------- --------------
Net Assets...................... 100.0% $1,278,852,326
=========== ==============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-128
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
FUTURES CONTRACTS (0.1%)
CONTRACTS UNREALIZED
LONG APPRECIATION(G)
-----------------------------
Standard & Poor's 500 Index
March 2004..................... 92 $ 861,536
Mini March 2004................ 1 149
--------------
Total Futures Contracts
(Settlement Value $25,599,330)
(d)............................ $ 861,685
==============
- ---------------------------------------------------------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) Segregated as collateral for futures contracts.
(d) The combined market value of common stocks and settlement
value of Standard & Poor's 500 Index futures contracts
represents 99.9% of net assets.
(e) The cost for federal income tax purposes is $1,237,220,045.
(f) At December 31, 2003 net unrealized appreciation was
$90,181,880, 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 $262,659,806 and aggregate gross
unrealized depreciation for all investments on which there
was an excess of cost over market value of $172,477,926.
(g) Represents the difference between the value of the
contracts at the time they were opened and the value at
December 31, 2003.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-129
INDEXED EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $1,226,184,438)..... $1,327,401,925
Cash................................... 73,748
Receivables:
Dividends and interest............... 1,626,033
Fund shares sold..................... 496,959
Variation margin on futures
contracts.......................... 69,315
--------------
Total assets................... 1,329,667,980
--------------
LIABILITIES:
Payables:
Investment securities purchased...... 49,975,979
Fund shares redeemed................. 243,719
Administrator........................ 209,825
Shareholder communication............ 187,420
Adviser.............................. 104,912
Custodian............................ 24,055
NYLIFE Distributors.................. 6,956
Accrued expenses....................... 62,788
--------------
Total liabilities.............. 50,815,654
--------------
Net assets............................. $1,278,852,326
==============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class........................ $ 553,264
Service Class........................ 17,620
Additional paid-in capital............. 1,269,327,636
Accumulated net realized loss on
investments.......................... (93,125,366)
Net unrealized appreciation on
investments and futures
transactions......................... 102,079,172
--------------
Net assets............................. $1,278,852,326
==============
Initial Class
Net assets applicable to outstanding
shares............................. $1,239,412,404
==============
Shares of capital stock
outstanding........................ 55,326,448
==============
Net asset value per share
outstanding........................ $ 22.40
==============
Service Class
Net assets applicable to outstanding
shares............................. $ 39,439,922
==============
Shares of capital stock
outstanding........................ 1,762,001
==============
Net asset value per share
outstanding........................ $ 22.38
==============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends............................ $ 18,916,536
Interest............................. 302,949
--------------
Total income................... 19,219,485
--------------
Expenses:
Administration....................... 2,149,159
Advisory............................. 1,074,579
Shareholder communication............ 512,500
Professional......................... 197,211
Custodian............................ 133,124
Directors............................ 52,964
Service.............................. 20,938
Miscellaneous........................ 50,188
--------------
Total expenses................. 4,190,663
--------------
Net investment income.................. 15,028,822
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) from:
Security transactions................ (24,925,798)
Futures transactions................. 6,384,321
--------------
Net realized loss on investments....... (18,541,477)
--------------
Net change in unrealized depreciation
on:
Security transactions................ 276,061,048
Futures transactions................. 1,085,657
--------------
Net unrealized gain on investments..... 277,146,705
--------------
Net realized and unrealized gain on
investments.......................... 258,605,228
--------------
Net increase in net assets resulting
from operations...................... $ 273,634,050
==============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-130
MAINSTAY VP SERIES FUND, INC.
INDEXED EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
-------------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income...................................... $ 15,028,822 $ 14,239,981
Net realized loss on investments and futures
transactions............................................. (18,541,477) (73,794,666)
Net change in unrealized appreciation (depreciation) on
investments and futures transactions..................... 277,146,705 (238,852,892)
-------------- --------------
Net increase (decrease) in net assets resulting from
operations............................................... 273,634,050 (298,407,577)
-------------- --------------
Dividends and distributions to shareholders:
From net investment income:
Initial Class............................................ (14,545,804) (14,142,657)
Service Class............................................ (428,723) --
From net realized gain on investments:
Initial Class............................................ -- (3,728,362)
Return of capital:
Initial Class............................................ (111,649) --
Service Class............................................ (3,291) --
-------------- --------------
Total dividends and distributions to shareholders...... (15,089,467) (17,871,019)
-------------- --------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class............................................ 84,842,598 254,794,424
Service Class............................................ 36,816,399 --
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions:
Initial Class............................................ 14,657,453 17,871,019
Service Class............................................ 432,014 --
-------------- --------------
136,748,464 272,665,443
Cost of shares redeemed:
Initial Class............................................ (93,551,369) (306,020,919)
Service Class............................................ (195,773) --
-------------- --------------
Increase (decrease) in net assets derived from capital
share transactions....................................... 43,001,322 (33,355,476)
-------------- --------------
Net increase (decrease) in net assets....................... 301,545,905 (349,634,072)
NET ASSETS:
Beginning of year........................................... 977,306,421 1,326,940,493
-------------- --------------
End of year................................................. $1,278,852,326 $ 977,306,421
============== ==============
Accumulated undistributed net investment income at end of
year....................................................... $ -- $ 68,970
============== ==============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
------------------------------------------------------------- -------------
JUNE 5,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
-----------------------------------------------------------------------------
Net asset value at beginning of period..... $ 17.68 $ 23.14 $ 26.88 $ 30.50 $ 25.89 $ 19.95
---------- -------- ---------- ---------- ---------- -------
Net investment income...................... 0.27(b) 0.26 0.25 0.27 0.28 0.12(b)
Net realized and unrealized gain (loss) on
investments............................... 4.72 (5.40) (3.49) (3.10) 5.06 2.56
---------- -------- ---------- ---------- ---------- -------
Total from investment operations........... 4.99 (5.14) (3.24) (2.83) 5.34 2.68
---------- -------- ---------- ---------- ---------- -------
Less dividends and distributions:
From net investment income................ (0.27) (0.26) (0.25) (0.27) (0.28) (0.25)
From net realized gain on investments..... -- (0.06) (0.25) (0.52) (0.45) --
Return of capital......................... (0.00)(c) -- -- -- -- (0.00)(c)
---------- -------- ---------- ---------- ---------- -------
Total dividends and distributions.......... (0.27) (0.32) (0.50) (0.79) (0.73) (0.25)
---------- -------- ---------- ---------- ---------- -------
Net asset value at end of period........... $ 22.40 $ 17.68 $ 23.14 $ 26.88 $ 30.50 $ 22.38
========== ======== ========== ========== ========== =======
Total investment return.................... 28.19% (22.21%) (12.11%) (9.32%) 20.70% 13.50%(d)
Ratios (to average net assets)/ Supplemental Data:
Net investment income..................... 1.40% 1.25% 1.01% 0.94% 1.13% 1.15%+(e)
Expenses.................................. 0.39% 0.38% 0.37% 0.37% 0.36% 0.64%+
Portfolio turnover rate.................... 3% 5% 4% 6% 3% 3%
Net assets at end of period (in 000's)..... $1,239,412 $977,306 $1,326,940 $1,527,577 $1,521,085 $39,440
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during
the period.
(c) Less than one cent per share.
(d) Total return is not annualized.
(e) Represents income earned for the year by the Initial Class
shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-131
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (91.7%)+
SHARES VALUE
--------------------------
AUSTRALIA (0.4%)
Australian Gas Light Co. Ltd.
(energy sources)................ 29,000 $ 245,376
Cochlear Ltd. (health & personal
care)........................... 10,200 164,924
------------
410,300
------------
BELGIUM (1.8%)
Electrabel, S.A.
(utilities-electrical & gas).... 6,019 1,891,944
------------
BERMUDA (1.7%)
XL Capital Ltd. Class A
(insurance)..................... 23,300 1,806,915
------------
DENMARK (2.0%)
Danske Bank A/S (banking)........ 90,845 2,131,410
------------
FINLAND (0.5%)
Nokia Corp. ADR
(telecommunications) (b)........ 27,700 470,900
------------
FRANCE (2.3%)
BNP Paribas, S.A. (banking)...... 25,394 1,598,974
Dexia, S.A. (business &
public services)................ 45,600 783,965
------------
2,382,939
------------
GERMANY (8.7%)
BASF AG (chemicals).............. 5,000 282,227
Bayerische Motoren Werke AG
(automobiles)................... 74,179 3,457,254
Deutsche Boerse AG
(financial services)............ 61,430 3,370,587
Schering AG (health & personal
care)........................... 40,551 2,054,145
------------
9,164,213
------------
HONG KONG (2.5%)
Hongkong Electric Holdings, Ltd.
(utilities-electrical & gas).... 658,700 2,604,731
------------
INDIA (0.8%)
ITC, Ltd. GDR (beverages &
tobacco) (a)(c)................. 40,900 882,589
------------
IRELAND (3.7%)
Allied Irish Banks PLC
(banking)....................... 19,300 307,709
Anglo Irish Bank Corp. PLC
(banking)....................... 27,100 427,624
Bank of Ireland (banking)........ 183,120 2,494,568
iShares DJ Euro STOXX 50 Index
Fund (financial services) (f)... 21,400 749,053
------------
3,978,954
------------
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------------
ITALY (4.9%)
Eni S.p.A. (energy sources)...... 59,500 $ 1,122,753
Eni S.p.A. ADR (energy sources)
(b)............................. 2,500 237,450
Riunione Adriatica di Sicurta
S.p.A. (insurance).............. 27,300 464,871
Snam Rete Gas S.p.A.
(utilities-electrical & gas).... 693,875 2,940,738
Telecom Italia Mobile S.p.A.
(telecommunications)............ 72,500 394,141
------------
5,159,953
------------
JAPAN (10.1%)
Canon, Inc. (data processing &
reproduction)................... 46,000 2,141,831
Canon, Inc. ADR (data processing
& reproduction) (b)............. 30,511 1,453,544
FANUC, Ltd. (electronic
components & instruments)....... 4,600 275,562
Keyence Corp. (electronic
components & instruments)....... 2,400 505,888
Murata Manufacturing Co., Ltd.
(electronic components &
instruments).................... 10,800 583,484
Nintendo Co., Ltd. (recreation &
other consumer goods)........... 10,600 989,083
Nitto Denko Corp. (chemicals).... 10,700 569,096
NTT DoCoMo, Inc.
(telecommunications)............ 226 512,438
Secom Co., Ltd. (business &
public services)................ 20,500 765,139
Seven-Eleven Japan Co., Ltd.
(recreation other consumer
goods).......................... 9,500 288,094
Takeda Chemical Industries, Ltd.
(health & personal care)........ 63,700 2,526,127
------------
10,610,286
------------
NETHERLANDS (11.1%)
Euronext N.V. (financial
services)....................... 103,431 2,618,387
Reed Elsevier N.V.
(broadcasting & publishing)..... 162,255 2,015,905
Royal Dutch Petroleum Co. (NY
Shares) (oil & gas) (e)......... 64,200 3,363,438
TPG N.V. (business & public
services)....................... 154,142 3,610,511
------------
11,608,241
------------
SINGAPORE (0.8%)
Venture Corp., Ltd. (electrical &
electronics).................... 69,900 823,176
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-132
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
SPAIN (5.3%)
Banco Popular Espanol, S.A.
(banking) (g)................... 57,466 $ 3,428,530
Iberdrola, S.A.
(utilities-electrical & gas)
(g)............................. 81,061 1,602,200
Indra Sistemas, S.A. (business &
public services)................ 44,000 564,429
------------
5,595,159
------------
SWEDEN (1.4%)
Autoliv, Inc. (automobiles)...... 12,900 485,685
Sandvik AB (machinery &
engineering).................... 21,460 739,661
Svenska Handelsbanken Series A
(banking)....................... 11,900 243,117
------------
1,468,463
------------
SWITZERLAND (10.9%)
Credit Suisse Group ADR (banking)
(b)............................. 18,800 683,004
Nestle, S.A. Registered (food &
household products)............. 14,671 3,665,526
Novartis AG ADR (pharmaceuticals)
(b)............................. 35,400 1,624,506
Novartis AG Registered (health &
personal care).................. 26,680 1,211,305
Syngenta AG (chemicals).......... 7,700 518,626
Synthes-Stratec, Inc. (health &
personal care).................. 700 692,784
UBS AG Registered (banking)...... 37,163 2,545,143
UBS AG Registered (NY Shares)
(banking) (e)................... 6,405 435,476
------------
11,376,370
------------
UNITED KINGDOM (21.2%)
BP PLC ADR (oil & gas) (b)....... 11,100 547,785
Capita Group PLC (business &
public services)................ 53,900 233,986
Diageo PLC (beverages &
tobacco)........................ 267,829 3,526,387
Diageo Capital PLC ADR (beverages
& tobacco) (b).................. 6,100 322,446
Exel PLC
(transportation-shipping)....... 127,262 1,685,855
Lloyds TSB Group PLC (banking)... 349,657 2,801,077
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------------
UNITED KINGDOM (Continued)
Lloyds TSB Group PLC ADR
(banking) (b)(g)................ 22,303 $ 725,963
Man Group PLC (financial
services)....................... 39,600 1,036,412
Provident Financial PLC
(financial services)............ 88,200 1,024,715
Reckitt Benckiser PLC (food &
household products)............. 130,462 2,956,701
Rentokil Initial PLC (business &
public services)................ 825,687 2,808,399
Scottish & Southern Energy PLC
(utilities-electrical & gas).... 20,760 249,739
Tesco PLC (merchandising)........ 931,308 4,292,994
------------
22,212,459
------------
UNITED STATES (1.6%)
iShares MSCI Japan Index Fund
(financial services) (f)........ 32,500 313,300
iShares MSCI United Kingdom
(financial services) (f)(g)..... 89,300 1,391,294
------------
1,704,594
------------
Total Common Stocks (Cost
$79,076,441).................... 96,283,596
------------
PREFERRED STOCK (2.8%)
GERMANY (2.8%)
Porsche AG
E1.53 (automobiles) (l)......... 4,890 2,892,794
------------
Total Preferred Stock (Cost
$1,847,160)..................... 2,892,794
------------
WARRANTS (0.5%)
IRELAND (0.5%)
Ryanair Holdings PLC
Strike Price E0.000001
Expire 3/21/08
(transportation-airlines)
(a)(d)(l)....................... 58,604 497,927
------------
Total Warrants
(Cost $407,629)................. 497,927
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-133
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
SHORT-TERM INVESTMENTS (10.8%)
PRINCIPAL
AMOUNT VALUE
--------------------------
COMMERCIAL PAPER (3.6%)
UNITED STATES (3.6%)
Neptune Funding Corp.
1.0139%, due 1/2/04
(financial services) (h)........ $ 1,090,000 $ 1,089,970
Rabobank USA Financial Corp.
0.94%, due 1/2/04
(financial services)............ 2,625,000 2,624,931
------------
Total Commercial Paper (Cost
$3,714,901)..................... 3,714,901
------------
<Caption>
SHARES
-----------
INVESTMENT COMPANIES (1.8%)
UNITED STATES (1.8%)
AIM Institutional Funds Group
0.99% (financial services)
(h)(i).......................... 99,752 99,752
Merrill Lynch Premier
Institutional Fund
1.05% (financial services)
(i)............................. 1,806,932 1,806,932
------------
Total Investment Companies (Cost
$1,906,684)..................... 1,906,684
------------
<Caption>
PRINCIPAL
AMOUNT
-----------
MASTER NOTE (1.0%)
UNITED STATES (1.0%)
Banc of America Securities LLC
1.125%, due 1/2/04 (h).......... $ 1,000,000 1,000,000
------------
Total Master Note
(Cost $1,000,000)............... 1,000,000
------------
REPURCHASE AGREEMENTS (4.4%)
UNITED STATES (4.4%)
Countrywide Securities Corp.
1.08%, dated 12/31/03
due 1/2/04
Proceeds at Maturity $4,050,246
(financial services) (h)
(Collaterized by Various Bonds
with a Principal Amount of
$5,239,201 and a Market Value of
$4,195,661)..................... 4,050,000 4,050,000
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
REPURCHASE AGREEMENTS (Continued)
UNITED STATES (Continued)
Lehman Brothers, Inc.
1.0499%, dated 12/31/03
due 1/2/04
Proceeds at Maturity $500,029
(financial services) (h)
(Collaterized by Various Bonds
with a Principal Amount of
$472,634 and a Market Value of
$509,944)....................... $ 500,000 $ 500,000
Merrill Lynch Pierce Fenner &
Smith, Inc.
1.08%, dated 12/31/03
due 1/2/04
Proceeds at Maturity $111,007
(financial services) (h)
(Collaterized by Various Bonds
with a Principal Amount of
$102,528 and a Market Value of
$113,460)....................... 111,000 111,000
------------
Total Repurchase Agreements (Cost
$4,661,000)..................... 4,661,000
------------
Total Short-Term Investments
(Cost $11,282,585).............. 11,282,585
------------
Total Investments (Cost
$92,613,815) (j)................ 105.8% 110,956,902(k)
Liabilities in Excess of
Cash and Other Assets........... (5.8) (6,056,588)
----------- ------------
Net Assets....................... 100.0% $104,900,314
=========== ============
- ----------
(a) May be sold to institutional investors only.
(b) ADR--American Depositary Receipt.
(c) GDR--Global Depositary Receipt.
(d) Non-income producing security.
(e) Security primarily trades on the New York Stock Exchange.
(f) Exchange Traded Fund--represents a basket of securities
that are traded on an exchange.
(g) Represents securities out on loan or a portion which is
out on loan.
(h) Represents security or a portion thereof, purchased with
cash collateral received for securities on loan.
(i) Floating rate. Rate shown is the rate in effect at
December 31, 2003.
(j) The cost for federal income tax purposes is $93,013,628.
(k) At December 31, 2003 net unrealized appreciation was
$17,943,274 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 $18,007,549 and
aggregate gross unrealized depreciation for all
investments on which there was an excess of cost over
market value of $64,275.
(l) The following abbreviation is used in the above
portfolio:
E--Euro
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-134
MAINSTAY VP SERIES FUND, INC.
The table below sets forth the diversification of International Equity Portfolio
investments by industry.
INDUSTRY DIVERSIFICATION
<Table>
<Caption>
VALUE PERCENT+
------------------------
Automobiles.................... $ 6,835,733 6.5%
Banking........................ 17,822,595 17.0
Beverages & Tobacco............ 4,731,422 4.5
Broadcasting & Publishing...... 2,015,905 1.9
Business & Public Services..... 8,766,429 8.4
Chemicals...................... 1,369,949 1.3
Data Processing &
Reproduction................. 3,595,375 3.4
Electrical & Electronics....... 823,176 0.8
Electronic Components &
Instruments.................. 1,364,934 1.3
Energy Sources................. 1,605,579 1.5
Financial Services............. 21,786,333 20.8
Food & Household Products...... 6,622,227 6.3
Health & Personal Care......... 6,649,285 6.3
Insurance...................... 2,271,786 2.2
Machinery & Engineering........ 739,661 0.7
Merchandising.................. 4,292,994 4.1
Oil & Gas...................... 3,911,223 3.7
Pharmaceuticals................ 1,624,506 1.6
Recreation & Other Consumer
Goods........................ 1,277,177 1.2
Telecommunications............. 1,377,479 1.3
Transportation-Airlines........ 497,927 0.5
Transportation-Shipping........ 1,685,855 1.6
Utilities-Electrical & Gas..... 9,289,352 8.9
------------ ------
110,956,902 105.8
Liabilities in Excess of
Cash and Other Assets........ (6,056,588) (5.8)
------------ ------
Net Assets..................... $104,900,314 100.0%
============ ======
</Table>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-135
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $92,613,815) --
including $6,589,479 market value of
securities loaned...................... $110,956,902
Cash denominated in foreign currencies
(identified cost $1,801,682)........... 1,841,091
Cash..................................... 560
Receivables:
Dividends and interest................. 238,027
Fund shares sold....................... 129,190
------------
Total assets..................... 113,165,770
------------
LIABILITIES:
Payables:
Securities lending collateral.......... 6,850,722
Investment securities purchased........ 1,291,067
Adviser................................ 50,192
Administrator.......................... 16,731
Custodian.............................. 11,460
NYLIFE Distributors.................... 1,573
Fund shares redeemed................... 360
Accrued expenses......................... 43,351
------------
Total liabilities................ 8,265,456
------------
Net assets............................... $104,900,314
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 78,938
Service Class.......................... 7,546
Additional paid-in capital............... 93,345,779
Accumulated undistributed net investment
income................................. 222,036
Accumulated net realized loss on
investments............................ (7,154,091)
Net unrealized appreciation on
investments............................ 18,343,087
Net unrealized appreciation on
translation of other assets and
liabilities in foreign currencies...... 57,019
------------
Net assets............................... $104,900,314
============
Initial Class
Net assets applicable to outstanding
shares............................... $ 95,754,335
============
Shares of capital stock outstanding.... 7,893,823
============
Net asset value per share
outstanding.......................... $ 12.13
============
Service Class
Net assets applicable to outstanding
shares............................... $ 9,145,979
============
Shares of capital stock outstanding.... 754,620
============
Net asset value per share
outstanding.......................... $ 12.12
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 2,037,542
Interest................................ 28,068
Income from securities loaned -- net.... 2,109
-----------
Total income...................... 2,067,719
-----------
Expenses:
Advisory................................ 458,478
Administration.......................... 152,826
Custodian............................... 68,854
Professional............................ 52,680
Shareholder communication............... 41,243
Portfolio pricing....................... 22,422
Directors............................... 5,729
Service................................. 4,403
Miscellaneous........................... 17,798
-----------
Total expenses.................... 824,433
-----------
Net investment income..................... 1,243,286
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain from:
Security transactions................... 3,934,058
Foreign currency transactions........... 623,269
-----------
Net realized gain on investments and
foreign currency transactions........... 4,557,327
-----------
Net increase from payment by affiliate for
loss on the disposal of investment in
violation of restrictions............... 3,437
-----------
Net change in unrealized appreciation on:
Security transactions................... 17,678,655
Translation of other assets and
liabilities in foreign currencies..... (54,244)
-----------
Net unrealized gain on investments and
foreign currency transactions........... 17,624,411
-----------
Net realized and unrealized gain on
investments and foreign currency
transactions............................ 22,185,175
-----------
Net increase in net assets resulting from
operations.............................. $23,428,461
===========
</Table>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$224,445.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-136
MAINSTAY VP SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
-------------------------
INCREASE IN NET ASSETS:
Operations:
Net investment income...................................... $ 1,243,286 $ 641,499
Net realized gain (loss) on investments and foreign
currency transactions.................................... 4,557,327 (2,007,676)
Net increase from payment by affiliate for loss on the
disposal of investment in violation of restrictions...... 3,437 --
Net change in unrealized appreciation (depreciation) on
investments and foreign currency transactions............ 17,624,411 (624,816)
------------- -------------
Net increase (decrease) in net assets resulting from
operations............................................... 23,428,461 (1,990,993)
------------- -------------
Dividends to shareholders:
From net investment income:
Initial Class............................................ (1,509,712) (878,798)
Service Class............................................ (134,807) --
------------- -------------
Total dividends to shareholders........................ (1,644,519) (878,798)
------------- -------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class............................................ 208,175,989 203,047,936
Service Class............................................ 8,308,006 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class............................................ 1,509,712 878,798
Service Class............................................ 134,807 --
------------- -------------
218,128,514 203,926,734
Cost of shares redeemed:
Initial Class............................................ (196,725,788) (194,808,009)
Service Class............................................ (49,827) --
------------- -------------
Increase in net assets derived from capital share
transactions............................................. 21,352,899 9,118,725
------------- -------------
Net increase in net assets.................................. 43,136,841 6,248,934
NET ASSETS:
Beginning of year........................................... 61,763,473 55,514,539
------------- -------------
End of year................................................. $ 104,900,314 $ 61,763,473
============= =============
Accumulated undistributed net investment income at end of
year....................................................... $ 222,036 $ --
============= =============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
---------------------------------------------------------- -------------
JUNE 5,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
--------------------------------------------------------------------------
Net asset value at beginning of period............... $ 9.48 $ 10.06 $ 11.90 $ 15.48 $ 12.40 $ 10.40
------- ------- ------- ------- ------- -------
Net investment income................................ 0.17(b) 0.11 0.11(b) 0.07(b) 0.11 0.00(b)
Net realized and unrealized gain (loss) on
investments......................................... 2.61 (0.63) (1.78) (2.97) 3.46 1.85
Net realized and unrealized gain (loss) on foreign
currency transactions............................... 0.06 0.08 (0.00)(c) 0.12 (0.12) 0.06
------- ------- ------- ------- ------- -------
Total from investment operations..................... 2.84 (0.44) (1.67) (2.78) 3.45 1.91
------- ------- ------- ------- ------- -------
Less dividends and distributions:
From net investment income.......................... (0.19) (0.14) (0.14) (0.09) (0.05) (0.19)
From net realized gain on investments............... -- -- (0.03) (0.71) (0.32) --
------- ------- ------- ------- ------- -------
Total dividends and distributions.................... (0.19) (0.14) (0.17) (0.80) (0.37) (0.19)
------- ------- ------- ------- ------- -------
Net asset value at end of period..................... $ 12.13 $ 9.48 $ 10.06 $ 11.90 $ 15.48 $ 12.12
======= ======= ======= ======= ======= =======
Total investment return.............................. 30.00% (4.41%) (14.02%) (18.06%) 28.06% 18.31%(d)
Ratios (to average net assets)/Supplemental Data:
Net investment income............................... 1.67% 1.06% 1.04% 0.53% 0.78% 1.42%+(e)
Net expenses........................................ 1.07% 1.11% 1.12% 1.01% 1.07% 1.32%+
Portfolio turnover rate.............................. 105% 102% 130% 28% 37% 105%
Net assets at end of period (in 000's)............... $95,754 $61,763 $55,515 $65,429 $72,339 $ 9,146
</Table>
- ------------
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Less than one cent per share.
(d) Total return is not annualized.
(e) Represents income earned for the year by the Initial Class shares less
service fee of 0.25%.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-137
MID CAP CORE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (99.5%)+
SHARES VALUE
--------------------
AEROSPACE & DEFENSE (0.2%)
Goodrich Corp. ....................... 226 $ 6,710
Precision Castparts Corp. ............ 337 15,303
Rockwell Collins, Inc. ............... 3,941 118,348
United Defense Industries, Inc. (a)... 534 17,024
-----------
157,385
-----------
AIR FREIGHT & LOGISTICS (1.1%)
C.H. Robinson Worldwide, Inc. ........ 4,442 168,396
CNF, Inc. ............................ 4,173 141,465
Expeditors International of
Washington, Inc. .................... 4,479 168,679
J.B. Hunt Transport Services, Inc.
(a).................................. 3,876 104,691
Ryder System, Inc. ................... 4,108 140,288
-----------
723,519
-----------
AIRLINES (0.2%)
JetBlue Airways Corp. (a)............. 4,134 109,634
-----------
AUTO COMPONENTS (1.8%)
American Axle & Manufacturing
Holdings, Inc. (a)................... 1,319 53,314
ArvinMeritor, Inc. ................... 1,383 33,358
Autoliv, Inc. ........................ 584 21,988
BorgWarner, Inc. ..................... 1,833 155,933
Dana Corp. ........................... 916 16,809
Johnson Controls, Inc. ............... 5,197 603,476
Lear Corp. ........................... 4,465 273,838
-----------
1,158,716
-----------
BEVERAGES (0.2%)
Adolph Coors Co. Class B.............. 2,192 122,971
PepsiAmericas, Inc. .................. 1,287 22,033
-----------
145,004
-----------
BIOTECHNOLOGY (1.0%)
Affymetrix, Inc. (a).................. 5,001 123,075
Biogen Idec, Inc. (a)................. 4,596 169,041
Celgene Corp. (a)..................... 2,007 90,355
Human Genome Sciences, Inc. (a)....... 3,208 42,506
IDEXX Laboratories, Inc. (a).......... 1,987 91,958
ImClone Systems, Inc. (a)............. 2,526 100,181
Invitrogen Corp. (a).................. 109 7,630
Millennium Pharmaceuticals, Inc.
(a).................................. 592 11,053
-----------
635,799
-----------
BUILDING PRODUCTS (0.5%)
American Standard Cos., Inc. (a)...... 2,846 286,592
-----------
CAPITAL MARKETS (2.4%)
A.G. Edwards, Inc. ................... 5,378 194,845
Ameritrade Holding Corp. (a).......... 939 13,212
E*TRADE Financial Corp. (a)........... 2,072 26,211
Federated Investors, Inc. Class B..... 5,806 170,464
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------
CAPITAL MARKETS (Continued)
Friedman, Billings, Ramsey Group, Inc.
Class A.............................. 267 $ 6,162
Jefferies Group, Inc. ................ 92 3,038
Legg Mason, Inc. ..................... 3,187 245,973
Northern Trust Corp. ................. 4,206 195,242
S&P MidCap 400 Index-MidCap SPDR
Trust, Series 1 (c).................. 2,832 298,493
S&P 500 Index-SPDR Trust, Series 1
(c).................................. 2,626 292,221
T.Rowe Price Group, Inc. ............. 2,300 109,043
-----------
1,554,904
-----------
CHEMICALS (1.7%)
Airgas, Inc. ......................... 680 14,606
Cabot Corp. .......................... 1,145 36,457
Cytec Industries, Inc. (a)............ 1,895 72,749
Engelhard Corp. ...................... 5,639 168,888
Monsanto Co. ......................... 18,651 536,776
PPG Industries, Inc. ................. 823 52,688
RPM International, Inc. .............. 2,809 46,236
Scotts Co. (The) Class A (a).......... 1,816 107,435
Sigma-Aldrich Corp. .................. 1,016 58,095
-----------
1,093,930
-----------
COMMERCIAL BANKS (3.2%)
BancorpSouth, Inc. ................... 1,887 44,760
Banknorth Group, Inc. ................ 7,997 260,142
Colonial BancGroup, Inc. (The)........ 3,017 52,254
Compass Bancshares, Inc. ............. 3,091 121,507
First BanCorp. ....................... 832 32,906
First Midwest Bancorp, Inc. .......... 1,133 36,720
First Tennessee National Corp. ....... 3,852 169,873
FirstMerit Corp. ..................... 1,920 51,782
Hibernia Corp. Class A................ 3,476 81,721
Hudson United Bancorp. ............... 1,111 41,051
Marshall & Ilsley Corp. .............. 10,489 401,204
North Fork Bancorporation, Inc. ...... 3,466 140,269
Regions Financial Corp. .............. 4,567 169,892
SouthTrust Corp. ..................... 6,356 208,032
United Bankshares, Inc. .............. 3,198 99,778
Whitney Holding Corp. ................ 475 19,470
Zions Bancorp. ....................... 2,237 137,195
-----------
2,068,556
-----------
COMMERCIAL SERVICES & SUPPLIES (3.6%)
Allied Waste Industries, Inc. (a)..... 3,834 53,216
ARAMARK Corp. Class B................. 3,470 95,147
Avery Dennison Corp. ................. 3,052 170,973
Career Education Corp. (a)............ 2,382 95,447
ChoicePoint, Inc. (a)................. 4,422 168,434
Deluxe Corp. ......................... 4,092 169,122
Education Management Corp. (a)........ 1,572 48,795
H&R Block, Inc. ...................... 8,590 475,628
Herman Miller, Inc. .................. 3,580 86,887
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-138
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------
COMMERCIAL SERVICES & SUPPLIES (Continued)
Hewitt Associates, Inc. Class A (a)... 1,481 $ 44,282
HON INDUSTRIES, Inc................... 4,146 179,605
IKON Office Solutions, Inc............ 3,201 37,964
ITT Educational Services, Inc. (a).... 3,016 141,661
Monster Worldwide, Inc. (a)........... 2,436 53,495
Moore Wallace, Inc. (a)............... 11,969 224,179
Republic Services, Inc. .............. 6,727 172,413
University of Phoenix Online (a)...... 1,051 72,445
Viad Corp. ........................... 1,641 41,025
-----------
2,330,718
-----------
COMMUNICATIONS EQUIPMENT (3.2%)
ADTRAN, Inc. ......................... 1,942 60,202
Advanced Fibre Communications, Inc.
(a).................................. 2,121 42,738
Avaya, Inc. (a)....................... 28,846 373,267
Brocade Communications Systems, Inc.
(a).................................. 21,737 125,640
Corning, Inc. (a)..................... 48,288 503,644
Foundry Networks, Inc. (a)............ 639 17,483
Harris Corp. ......................... 3,270 124,097
InterDigital Communications Corp.
(a).................................. 4,728 97,586
Juniper Networks, Inc. (a)............ 15,520 289,914
McDATA Corp. Class A (a).............. 8,747 83,359
Polycom, Inc. (a)..................... 2,396 46,770
Scientific-Atlanta, Inc. ............. 10,011 273,300
-----------
2,038,000
-----------
COMPUTERS & PERIPHERALS (2.7%)
Apple Computer, Inc. (a).............. 17,382 371,453
Diebold, Inc. ........................ 1,758 94,703
Imation Corp. ........................ 3,029 106,469
Lexmark International, Inc. (a)....... 2,162 170,020
Maxtor Corp. (a)...................... 14,014 155,555
NCR Corp. (a)......................... 347 13,464
Network Appliance, Inc. (a)........... 20,649 423,924
SanDisk Corp. (a)..................... 2,996 183,175
Storage Technology Corp. (a).......... 2,647 68,160
Western Digital Corp. (a)............. 9,750 114,953
-----------
1,701,876
-----------
CONSTRUCTION MATERIALS (0.8%)
Florida Rock Industries, Inc. ........ 1,002 54,960
Lafarge North America, Inc. .......... 596 24,150
Martin Marietta Materials, Inc. ...... 2,297 107,890
Vulcan Materials Co. ................. 6,572 312,630
-----------
499,630
-----------
CONSUMER FINANCE (0.4%)
AmeriCredit Corp. (a)................. 584 9,303
Providian Financial Corp. (a)......... 18,817 219,030
-----------
228,333
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------
CONTAINERS & PACKAGING (0.7%)
Aptargroup, Inc. ..................... 662 $ 25,818
Sealed Air Corp. (a).................. 6,020 325,923
Temple-Inland, Inc. .................. 1,029 64,487
-----------
416,228
-----------
DIVERSIFIED FINANCIAL SERVICES (0.8%)
Chicago Mercantile Exchange (The)..... 214 15,485
CIT Group, Inc. ...................... 14,124 507,758
Instinet Group, Inc. (a).............. 3,016 15,532
-----------
538,775
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.8%)
CenturyTel, Inc. ..................... 5,204 169,754
Citizens Communications Co. (a)....... 12,314 152,940
Level 3 Communications, Inc. (a)...... 30,122 171,695
NTL, Inc. (a)......................... 270 18,833
-----------
513,222
-----------
ELECTRIC UTILITIES (5.7%)
Alliant Energy Corp. ................. 7,707 191,904
Ameren Corp. ......................... 11,497 528,862
CenterPoint Energy, Inc. ............. 19,343 187,434
DPL, Inc. ............................ 9,024 188,421
Duquesne Light Holdings, Inc. ........ 1,651 30,279
Edison International.................. 19,514 427,942
Great Plains Energy, Inc. ............ 4,933 156,968
Northeast Utilities................... 8,740 176,286
NSTAR................................. 1,175 56,988
OGE Energy Corp. ..................... 5,585 135,101
PG&E Corp. (a)........................ 2,181 60,566
Pinnacle West Capital Corp. .......... 474 18,969
PPL Corp. ............................ 2,040 89,250
Public Service Enterprise Group,
Inc. ................................ 8,279 362,620
Puget Energy, Inc. ................... 7,099 168,743
Texas Genco Holdings, Inc. ........... 91 2,958
TXU Corp. ............................ 15,863 376,270
Wisconsin Energy Corp. ............... 2,258 75,530
Xcel Energy, Inc. .................... 26,147 443,976
-----------
3,679,067
-----------
ELECTRICAL EQUIPMENT (0.9%)
Hubbell, Inc. Class A................. 1,616 67,985
Hubbell, Inc. Class B................. 1,947 85,863
Rockwell Automation, Inc. ............ 11,354 404,202
-----------
558,050
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS (1.8%)
Arrow Electronics, Inc. (a)........... 4,444 102,834
Avnet, Inc. (a)....................... 8,524 184,630
AVX Corp. ............................ 101 1,679
CDW Corp. ............................ 1,441 83,232
Molex, Inc. .......................... 358 12,491
Molex, Inc. Class A................... 8,802 258,427
PerkinElmer, Inc. .................... 7,694 131,337
Sanmina-SCI Corp. (a)................. 3,144 39,646
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-139
MID CAP CORE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
<Caption>
SHARES VALUE
--------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (Continued)
Solectron Corp. (a)................... 55,911 $ 330,434
Tektronix, Inc. ...................... 148 4,677
Vishay Intertechnology, Inc. (a)...... 641 14,679
-----------
1,164,066
-----------
ENERGY EQUIPMENT & SERVICES (0.0%)(b)
FMC Technologies, Inc. (a)............ 1,088 25,350
-----------
FOOD & STAPLES RETAILING (0.7%)
Rite Aid Corp. (a).................... 30,986 187,155
Safeway, Inc. (a)..................... 10,522 230,537
SUPERVALU, Inc. ...................... 824 23,558
Whole Foods Market, Inc. ............. 88 5,907
-----------
447,157
-----------
FOOD PRODUCTS (1.6%)
Dean Foods Co. (a).................... 5,099 167,604
Hershey Foods Corp. .................. 6,315 486,192
J.M. Smucker Co. (The)................ 1,237 56,024
Lancaster Colony Corp. ............... 603 27,231
Smithfield Foods, Inc. (a)............ 7,041 145,749
Tyson Foods, Inc. Class A............. 9,698 128,402
-----------
1,011,202
-----------
GAS UTILITIES (1.0%)
AGL Resources, Inc. .................. 3,113 90,588
Kinder Morgan, Inc. .................. 379 22,399
NiSource, Inc. ....................... 17,185 377,039
Peoples Energy Corp. ................. 898 37,752
Sempra Energy......................... 4,407 132,474
-----------
660,252
-----------
HEALTH CARE EQUIPMENT & SUPPLIES (2.2%)
Apogent Technologies, Inc. (a)........ 4,233 97,528
Bausch & Lomb, Inc. .................. 2,361 122,536
Beckman Coulter, Inc. ................ 4,187 212,825
Biomet, Inc. ......................... 4,714 171,637
Bio-Rad Laboratories, Inc. Class A
(a).................................. 748 43,137
Edwards Lifesciences Corp. (a)........ 5,179 155,784
Fisher Scientific International, Inc.
(a).................................. 1,774 73,390
Hillenbrand Industries, Inc. ......... 3,614 224,285
Respironics, Inc. (a)................. 1,567 70,656
STERIS Corp. (a)...................... 5,909 133,543
Varian Medical Systems, Inc. (a)...... 1,699 117,401
-----------
1,422,722
-----------
HEALTH CARE PROVIDERS & SERVICES (5.6%)
AdvancePCS (a)........................ 5,119 269,567
Aetna, Inc. .......................... 3,447 232,948
Andrx Group (a)....................... 138 3,318
CIGNA Corp. .......................... 6,587 378,753
Coventry Health Care, Inc. (a)........ 284 18,315
DaVita, Inc. (a)...................... 4,140 161,460
Express Scripts, Inc. (a)............. 2,058 136,713
First Health Group Corp. (a).......... 7,630 148,480
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------
HEALTH CARE PROVIDERS & SERVICES (Continued)
Health Net, Inc. (a).................. 5,001 $ 163,533
Humana, Inc. (a)...................... 997 22,781
IMS Health, Inc. ..................... 11,716 291,260
Lincare Holdings, Inc. (a)............ 5,599 168,138
Manor Care, Inc. ..................... 6,423 222,043
McKesson Corp. ....................... 12,095 388,975
Mid Atlantic Medical Services, Inc.
(a).................................. 1,159 75,103
PacifiCare Health Systems, Inc. (a)... 2,596 175,490
Patterson Dental Co. (a).............. 1,474 94,572
Pharmaceutical Product Development,
Inc. (a)............................. 4,096 110,469
Renal Care Group, Inc. (a)............ 2,267 93,400
Service Corp. International (a)....... 1,844 9,939
Triad Hospitals, Inc. (a)............. 1,660 55,228
Universal Health Services, Inc. Class
B.................................... 2,690 144,507
WebMD Corp. (a)....................... 19,033 171,107
WellChoice, Inc. (a).................. 1,595 55,028
-----------
3,591,127
-----------
HOTELS, RESTAURANTS & LEISURE (4.0%)
Brinker International, Inc. (a)....... 5,159 171,072
CBRL Group, Inc. ..................... 2,383 91,174
Darden Restaurants, Inc. ............. 8,047 169,309
GTECH Holdings Corp. ................. 1,319 65,277
Harrah's Entertainment, Inc. ......... 2,427 120,792
Hilton Hotels Corp. .................. 16,637 284,992
International Game Technology......... 13,031 465,207
International Speedway Corp. Class
A.................................... 750 33,495
Mandalay Resort Group................. 2,211 98,876
MGM Mirage (a)........................ 3,351 126,031
Park Place Entertainment Corp. (a).... 11,941 129,321
Starwood Hotels & Resorts Worldwide,
Inc. ................................ 13,567 488,005
Station Casinos, Inc. ................ 890 27,261
Wendy's International, Inc. .......... 2,508 98,414
Yum! Brands, Inc. (a)................. 6,300 216,720
-----------
2,585,946
-----------
HOUSEHOLD DURABLES (3.7%)
Black & Decker Corp. (The)............ 1,716 84,633
Centex Corp. ......................... 1,366 147,050
D.R. Horton, Inc. .................... 2,628 113,687
Fortune Brands, Inc. ................. 9,513 680,084
Harman International Industries,
Inc. ................................ 317 23,452
KB HOME............................... 1,858 134,742
Lennar Corp. Class A.................. 1,295 124,320
Mohawk Industries, Inc. (a)........... 2,466 173,952
Newell Rubbermaid, Inc. .............. 7,476 170,229
NVR, Inc. (a)......................... 272 126,752
Ryland Group, Inc. (The).............. 1,784 158,134
Snap-on, Inc. ........................ 1,131 36,463
Stanley Works (The)................... 1,384 52,412
Whirlpool Corp. ...................... 4,705 341,818
-----------
2,367,728
-----------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-140
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------
HOUSEHOLD PRODUCTS (0.0%)(b)
Dial Corp. (The)...................... 751 $ 21,381
-----------
INDUSTRIAL CONGLOMERATES (0.3%)
Alleghany Corp. (a)................... 74 16,465
ALLETE, Inc. ......................... 1,905 58,293
Carlisle Cos., Inc. .................. 1,423 86,604
Textron, Inc. ........................ 462 26,362
-----------
187,724
-----------
INSURANCE (4.9%)
Ambac Financial Group, Inc. .......... 4,037 280,127
Aon Corp. ............................ 6,337 151,708
Cincinnati Financial Corp. ........... 3,388 141,889
Erie Indemnity Co. Class A............ 634 26,869
Fidelity National Financial, Inc. .... 7,331 284,296
First American Corp. ................. 3,113 92,674
Gallagher (Arthur J.) & Co. .......... 1,992 64,720
HCC Insurance Holdings, Inc. ......... 3,090 98,262
Lincoln National Corp. (a)............ 12,658 511,003
Loews Corp. .......................... 2,526 124,911
Markel Corp. (a)...................... 682 172,894
Mercury General Corp. ................ 1,279 59,537
Nationwide Financial Services, Inc.
Class A.............................. 2,133 70,517
Odyssey Re Holdings Corp. ............ 515 11,613
Old Republic International Corp. ..... 12,903 327,220
Protective Life Corp. ................ 1,176 39,796
Reinsurance Group of America, Inc. ... 851 32,891
StanCorp Financial Group, Inc. ....... 643 40,432
Torchmark Corp. ...................... 6,718 305,938
Transatlantic Holdings, Inc. ......... 982 79,346
Unitrin, Inc. ........................ 280 11,595
UnumProvident Corp. .................. 6,360 100,297
W. R. Berkley Corp. .................. 3,491 122,010
Wesco Financial Corp. ................ 69 24,288
-----------
3,174,833
-----------
INTERNET SOFTWARE & SERVICES (0.4%)
DoubleClick, Inc. (a)................. 2,648 27,063
VeriSign, Inc. (a).................... 14,474 235,926
-----------
262,989
-----------
IT SERVICES (1.9%)
Acxiom Corp. (a)...................... 3,004 55,784
Alliance Data Systems Corp. (a)....... 741 20,511
BISYS Group, Inc. (The) (a)........... 9,582 142,580
Certegy, Inc.......................... 1,221 40,049
Cognizant Technology Solutions Corp.
(a).................................. 1,360 62,070
Computer Sciences Corp. (a)........... 8,358 369,674
Convergys Corp. (a)................... 10,560 184,378
DST Systems, Inc. (a)................. 51 2,130
Electronic Data Systems Corp.......... 8,524 209,179
Unisys Corp. (a)...................... 7,432 110,365
-----------
1,196,720
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------
LEISURE EQUIPMENT & PRODUCTS (1.2%)
Brunswick Corp........................ 5,806 $ 184,805
Hasbro, Inc........................... 9,942 211,566
Leapfrog Enterprises, Inc. (a)........ 1,556 41,281
Marvel Enterprises, Inc. (a).......... 1,291 37,581
Mattel, Inc........................... 8,855 170,636
Polaris Industries, Inc............... 1,554 137,653
-----------
783,522
-----------
MACHINERY (3.1%)
Cummins, Inc.......................... 214 10,473
Donaldson Co., Inc.................... 951 56,261
Eaton Corp............................ 5,312 573,590
Graco, Inc............................ 1,135 45,514
Harsco Corp........................... 788 34,530
Navistar International Corp. (a)...... 118 5,651
PACCAR, Inc........................... 7,206 613,375
Parker-Hannifin Corp.................. 5,488 326,536
SPX Corp. (a)......................... 5,568 327,454
-----------
1,993,384
-----------
MEDIA (1.0%)
Belo Corp. Class A.................... 1,386 39,279
Cablevision Systems New York
Group Class A (a).................... 1,825 42,687
Cox Radio, Inc. Class A (a)........... 748 18,872
Getty Images, Inc. (a)................ 70 3,509
Harte-Hanks, Inc...................... 4,865 105,814
Interactive Data Corp. (a)............ 3,021 50,028
McClatchy Co. (The) Class A........... 391 26,901
PanAmSat Corp. (a).................... 1,278 27,554
Regal Entertainment Group Class A..... 1,975 40,527
UnitedGlobalCom, Inc. Class A (a)..... 523 4,435
Washington Post Co. (The) Class B..... 212 167,777
Wiley (John) & Sons, Inc. Class A..... 4,082 106,254
XM Satellite Radio Holdings, Inc.
Class A (a).......................... 631 16,633
-----------
650,270
-----------
METALS & MINING (0.8%)
CONSOL Energy, Inc.................... 1,013 26,237
Freeport-McMoRan Copper &
Gold, Inc. Class B................... 8,883 374,241
Peabody Energy Corp................... 1,530 63,816
Phelps Dodge Corp. (a)................ 336 25,566
United States Steel Corp.............. 198 6,934
Worthington Industries, Inc........... 1,489 26,847
-----------
523,641
-----------
MULTILINE RETAIL (4.2%)
Big Lots, Inc. (a).................... 2,905 41,280
Dollar General Corp. ................. 20,363 427,419
Federated Department Stores, Inc. .... 12,824 604,395
J.C. Penney Co., Inc. Holding Co. .... 12,610 331,391
May Department Stores Co. (The)....... 8,056 234,188
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-141
MID CAP CORE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------
MULTILINE RETAIL (Continued)
Neiman Marcus Group Inc. (The) Class A
(a).................................. 497 $ 26,674
Neiman Marcus Group Inc. (The) Class B
(a).................................. 2,041 102,050
Nordstrom, Inc. Holding Co. .......... 4,426 151,812
Saks, Inc. (a)........................ 8,968 134,879
Sears, Roebuck and Co. ............... 14,618 664,973
-----------
2,719,061
-----------
MULTI-UTILITIES & UNREGULATED POWER (2.2%)
AES Corp. (The) (a)................... 2,581 24,365
Constellation Energy Group, Inc. ..... 11,794 461,853
Dynegy, Inc. Class A (a).............. 12,227 52,332
Energy East Corp. .................... 6,841 153,238
MDU Resources Group, Inc. ............ 5,477 130,407
National Fuel Gas Co. ................ 2,853 69,727
Questar Corp. ........................ 4,072 143,131
Reliant Resources, Inc. (a)........... 516 3,798
SCANA Corp. .......................... 5,005 171,421
Vectren Corp. ........................ 6,342 156,330
Williams Cos., Inc. (The)............. 3,190 31,326
-----------
1,397,928
-----------
OFFICE ELECTRONICS (1.1%)
Xerox Corp. (a)....................... 49,527 683,473
-----------
OIL & GAS (3.4%)
Amerada Hess Corp. ................... 3,329 177,003
Ashland, Inc. ........................ 1,510 66,531
Kerr-McGee Corp. ..................... 2,456 114,179
Marathon Oil Corp. ................... 19,992 661,535
Murphy Oil Corp. ..................... 1,858 121,346
Newfield Exploration Co. (a).......... 779 34,697
Noble Energy, Inc. ................... 2,337 103,833
Pogo Producing Co. ................... 2,870 138,621
Sunoco, Inc. ......................... 3,601 184,191
Unocal Corp. ......................... 11,582 426,565
Valero Energy Corp. .................. 2,782 128,918
-----------
2,157,419
-----------
PAPER & FOREST PRODUCTS (0.4%)
Boise Cascade Corp. .................. 2,372 77,944
Georgia-Pacific Corp. ................ 1,543 47,324
Rayonier, Inc. ....................... 3,521 146,157
-----------
271,425
-----------
PERSONAL PRODUCTS (0.6%)
Alberto-Culver Co. Class B............ 2,017 127,232
Estee Lauder Cos., Inc. (The) Class
A.................................... 7,293 286,323
-----------
413,555
-----------
PHARMACEUTICALS (1.6%)
Allergan, Inc. ....................... 2,226 170,979
American Pharmaceutical Partners, Inc.
(a).................................. 1,301 43,714
Endo Pharmaceuticals Holdings, Inc.
(a).................................. 2,333 44,934
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------
PHARMACEUTICALS (Continued)
IVAX Corp. (a)........................ 294 $ 7,021
Mylan Laboratories, Inc. ............. 18,647 471,023
Pharmaceutical Resources, Inc. (a).... 1,639 106,781
Sepracor, Inc. (a).................... 1,948 46,616
Valeant Pharmaceuticals
International........................ 432 10,865
Watson Pharmaceuticals, Inc. (a)...... 2,076 95,496
-----------
997,429
-----------
REAL ESTATE (5.1%)
AMB Property Corp..................... 3,501 115,113
Apartment Investment &
Management Co. Class A............... 4,886 168,567
Archstone-Smith Trust................. 4,432 124,007
Arden Realty, Inc..................... 4,052 122,938
Boston Properties, Inc................ 1,535 73,972
Camden Property Trust................. 2,327 103,086
CarrAmerica Realty Corp............... 2,257 67,213
CBL & Associates Properties, Inc...... 1,028 58,082
Cousins Properties, Inc............... 2,495 76,347
Crescent Real Estate Equities Co...... 1,729 29,618
Developers Diversified Realty Corp.... 3,342 112,191
Equity Residential.................... 9,613 283,680
Forest City Enterprises, Inc. Class
A.................................... 643 30,549
General Growth Properties, Inc........ 4,686 130,037
Liberty Property Trust................ 433 16,844
LNR Property Corp..................... 917 45,401
Macerich Co. (The).................... 1,277 56,826
Mack-Cali Realty Corp................. 2,835 117,993
New Plan Excel Realty Trust........... 5,162 127,347
Pan Pacific Retail Properties, Inc.... 989 47,126
Public Storage, Inc................... 7,114 308,676
Realty Income Corp.................... 3,189 127,560
Regency Centers Corp.................. 1,233 49,135
Rouse Co. (The)....................... 5,512 259,064
Simon Property Group, Inc............. 5,705 264,370
Trizec Properties, Inc................ 503 7,746
United Dominion Realty Trust, Inc..... 3,333 63,994
Vornado Realty Trust.................. 5,722 313,279
-----------
3,300,761
-----------
ROAD & RAIL (0.6%)
CSX Corp.............................. 4,729 169,960
Norfolk Southern Corp................. 8,183 193,528
Swift Transportation Co., Inc. (a).... 2,329 48,956
-----------
412,444
-----------
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT (4.5%)
Agere Systems, Inc. Class B (a)....... 36,994 107,283
Altera Corp. (a)...................... 16,514 374,868
Amkor Technology, Inc. (a)............ 6,520 118,729
Atmel Corp. (a)....................... 29,320 176,213
Broadcom Corp. Class A (a)............ 8,638 294,469
Cree, Inc. (a)........................ 6,229 110,191
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-142
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT (Continued)
Cypress Semiconductor Corp. (a)....... 8,627 $ 184,273
Fairchild Semiconductor
International, Inc. (a).............. 4,347 108,545
International Rectifier Corp. (a)..... 4,575 226,051
Lam Research Corp. (a)................ 8,750 282,625
LSI Logic Corp. (a)................... 17,507 155,287
MEMC Electronic Materials, Inc (a).... 1,855 17,845
National Semiconductor Corp. (a)...... 13,015 512,921
NVIDIA Corp. (a)...................... 318 7,393
PMC-Sierra, Inc. (a).................. 2,622 52,833
Rambus, Inc. (a)...................... 930 28,551
Teradyne, Inc. (a).................... 4,091 104,116
-----------
2,862,193
-----------
SOFTWARE (2.6%)
Autodesk, Inc......................... 2,468 60,663
BMC Software, Inc. (a)................ 5,163 96,290
Cadence Design Systems, Inc. (a)...... 19,056 342,627
Citrix Systems, Inc. (a).............. 8,122 172,268
Compuware Corp. (a)................... 14,299 86,366
FactSet Research Systems, Inc......... 1,642 62,741
Fair Isaac Corp....................... 3,401 167,193
Jack Henry & Associates, Inc. ........ 3,137 64,559
Macromedia, Inc. (a).................. 2,591 46,223
Novell, Inc. (a)...................... 1,565 16,464
PeopleSoft, Inc. (a).................. 830 18,924
Red Hat, Inc. (a)..................... 505 9,479
Symantec Corp. (a).................... 12,666 438,877
Synopsys, Inc. (a).................... 3,325 112,252
-----------
1,694,926
-----------
SPECIALTY RETAIL (3.6%)
Abercrombie & Fitch Co. Class A (a)... 5,063 125,107
Advanced Auto Parts, Inc. (a)......... 1,728 140,659
AutoNation, Inc. (a).................. 8,563 157,302
Barnes & Noble, Inc. (a).............. 2,030 66,685
Blockbuster, Inc. Class A............. 859 15,419
Borders Group, Inc. .................. 4,339 95,111
CarMax, Inc. (a)...................... 2,568 79,428
Claire's Stores, Inc. ................ 5,693 107,256
Foot Locker, Inc. .................... 875 20,519
PETsMART, Inc. ....................... 2,041 48,576
Pier 1 Imports, Inc. ................. 2,187 47,808
RadioShack Corp. ..................... 12,012 368,528
Regis Corp. .......................... 958 37,860
Rent-A-Center, Inc. (a)............... 3,452 103,146
Ross Stores, Inc. .................... 7,590 200,604
Sherwin-Williams Co. (The)............ 2,295 79,728
Staples, Inc. (a)..................... 17,266 471,362
Weight Watchers International, Inc.
(a).................................. 3,580 137,365
-----------
2,302,463
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------
TEXTILES, APPAREL & LUXURY GOODS (0.8%)
Coach, Inc. (a)....................... 12,954 $ 489,013
Timberland Co. (The) Class A (a)...... 443 23,067
-----------
512,080
-----------
THRIFTS & MORTGAGE FINANCE (1.6%)
Astoria Financial Corp. .............. 3,600 133,920
Doral Financial Corp. ................ 5,421 174,990
Downey Financial Corp. ............... 468 23,072
Independence Community Bank Corp. .... 1,207 43,416
New York Community Bancorp, Inc. ..... 6,904 262,697
Radian Group, Inc. ................... 4,593 223,909
Sovereign Bancorp, Inc. .............. 5,901 140,149
Washington Federal, Inc. ............. 1,292 36,693
-----------
1,038,846
-----------
TOBACCO (0.1%)
Loews Corp. Carolina Group............ 974 24,584
R.J. Reynolds Tobacco Holdings,
Inc. ................................ 162 9,420
-----------
34,004
-----------
TRADING COMPANIES & DISTRIBUTORS (0.3%)
Grainger (W.W.), Inc. ................ 3,615 171,315
MSC Industrial Direct Co., Inc. Class
A.................................... 864 23,760
-----------
195,075
-----------
WIRELESS TELECOMMUNICATION SERVICES (0.7%)
American Tower Corp. Class A (a)...... 13,181 142,618
Crown Castle International Corp.
(a).................................. 5,974 65,893
Sprint Corp. (PCS Group) (a).......... 33,955 190,827
Telephone & Data Systems, Inc. ....... 1,111 69,493
-----------
468,831
-----------
Total Investments
(Cost $55,826,887) (d)............... 99.5% 63,969,865(e)
Cash and Other Assets,
Less Liabilities..................... 0.5 311,472
------ -----------
Net Assets............................ 100.0% $64,281,337
====== ===========
</Table>
- ------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) Exchange Traded Fund-represents a basket of securities that are traded on
an exchange.
(d) The cost for federal income tax purposes is $55,942,479.
(e) At December 31, 2003 net unrealized appreciation was $8,027,386, based on
cost for federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $8,444,331 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $416,945.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-143
MID CAP CORE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $55,826,887)........... $63,969,865
Receivables:
Investment securities sold.............. 18,855,730
Fund shares sold........................ 161,642
Dividends............................... 86,019
-----------
Total assets...................... 83,073,256
-----------
LIABILITIES:
Payables:
Investment securities purchased......... 18,137,779
Due to Custodian........................ 593,486
Manager................................. 34,075
NYLIFE Distributors..................... 1,579
Fund shares redeemed.................... 886
Accrued expenses.......................... 24,114
-----------
Total liabilities................. 18,791,919
-----------
Net assets................................ $64,281,337
===========
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class........................... $ 50,271
Service Class........................... 8,117
Additional paid-in capital................ 55,536,661
Accumulated undistributed net investment
income.................................. 5,931
Accumulated net realized gain on
investments............................. 537,379
Net unrealized appreciation on
investments............................. 8,142,978
-----------
Net assets................................ $64,281,337
===========
Initial Class
Net assets applicable to outstanding
shares................................ $55,351,499
===========
Shares of capital stock outstanding..... 5,027,149
===========
Net asset value per share outstanding... $ 11.01
===========
Service Class
Net assets applicable to outstanding
shares................................ $ 8,929,838
===========
Shares of capital stock outstanding..... 811,743
===========
Net asset value per share outstanding... $ 11.00
===========
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 632,319
Interest................................ 343
-----------
Total income...................... 632,662
-----------
Expenses:
Manager................................. 348,251
Custodian............................... 48,990
Professional............................ 36,996
Shareholder communication............... 21,462
Portfolio pricing....................... 11,967
Service................................. 4,740
Directors............................... 4,133
Miscellaneous........................... 12,634
-----------
Total expenses before
reimbursement................... 489,173
Expense reimbursement from Manager...... (82,921)
-----------
Net expenses...................... 406,252
-----------
Net investment income..................... 226,410
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments.......... 4,508,079
Net change in unrealized depreciation on
investments............................. 8,591,738
-----------
Net realized and unrealized gain on
investments............................. 13,099,817
-----------
Net increase in net assets resulting from
operations.............................. $13,326,227
===========
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $477.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-144
MAINSTAY VP SERIES FUND, INC.
MID CAP CORE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
-------------------------
INCREASE IN NET ASSETS:
Operations:
Net investment income...................................... $ 226,410 $ 82,865
Net realized gain (loss) on investments.................... 4,508,079 (3,169,241)
Net change in unrealized appreciation (depreciation) on
investments.............................................. 8,591,738 (761,643)
----------- -----------
Net increase (decrease) in net assets resulting from
operations............................................... 13,326,227 (3,848,019)
----------- -----------
Dividends to shareholders:
From net investment income:
Initial Class............................................ (198,571) (83,863)
Service Class............................................ (26,563) --
----------- -----------
Total dividends to shareholders........................ (225,134) (83,863)
----------- -----------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class............................................ 18,988,558 23,003,819
Service Class............................................ 8,285,865 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class............................................ 198,571 83,863
Service Class............................................ 26,563 --
----------- -----------
27,499,557 23,087,682
Cost of shares redeemed:
Initial Class............................................ (4,197,983) (3,960,991)
Service Class............................................ (57,250) --
----------- -----------
Increase in net assets derived from capital share
transactions............................................. 23,244,324 19,126,691
----------- -----------
Net increase in net assets.................................. 36,345,417 15,194,809
NET ASSETS:
Beginning of year........................................... 27,935,920 12,741,111
----------- -----------
End of year................................................. $64,281,337 $27,935,920
=========== ===========
Accumulated undistributed net investment income at end of
year....................................................... $ 5,931 $ 1,772
=========== ===========
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
------------------------------------------------ -------------
JULY 2, JUNE 5,
YEAR YEAR 2001(A) 2003(A)
ENDED ENDED THROUGH THROUGH
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2002 2001 2003
--------------------------------------------------------------
Net asset value at beginning of period............ $ 8.16 $ 9.40 $ 10.00 $ 9.28
------- ------- ------- -------
Net investment income............................. 0.05(b) 0.02 0.02 0.03(b)
Net realized and unrealized gain (loss) on
investments...................................... 2.84 (1.24) (0.60) 1.72
------- ------- ------- -------
Total from investment operations.................. 2.89 (1.22) (0.58) 1.75
------- ------- ------- -------
Less dividends:
From net investment income....................... (0.04) (0.02) (0.02) (0.03)
------- ------- ------- -------
Net asset value at end of period.................. $ 11.01 $ 8.16 $ 9.40 $ 11.00
======= ======= ======= =======
Total investment return........................... 35.43% (12.92%) (5.86%)(c) 18.89%(c)
Ratios (to average net assets)/Supplemental Data:
Net investment income............................ 0.55% 0.39% 0.44%+ 0.30%+(d)
Net expenses..................................... 0.98% 0.98% 0.98%+ 1.23%+
Expenses (before reimbursement).................. 1.18% 1.34% 1.84%+ 1.43%+
Portfolio turnover rate........................... 202% 217% 74% 202%
Net assets at end of period (in 000's)............ $55,351 $27,936 $12,741 $ 8,930
</Table>
- ------------
<Table>
(a) Commencement of Operations.
Per share data based on average shares outstanding during
(b) the period.
(c) Total return is not annualized.
Represents income earned for the year by the Initial Class
(d) shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-145
MID CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (98.8%)+
SHARES VALUE
-------------------------
AEROSPACE & DEFENSE (4.7%)
Alliant Techsystems, Inc. (a)..... 20,000 $ 1,155,200
Empresa Brasileira de
Aeronautica S.A. ADR (b)......... 42,300 1,481,769
L-3 Communications Holdings, Inc.
(a).............................. 21,800 1,119,648
United Defense Industries, Inc.
(a).............................. 29,000 924,520
------------
4,681,137
------------
AIRLINES (2.8%)
JetBlue Airways Corp. (a)......... 38,550 1,022,346
Ryanair Holdings PLC ADR (a)(b)... 21,400 1,083,696
SkyWest, Inc...................... 41,200 746,544
------------
2,852,586
------------
AUTOMOBILES (1.6%)
Winnebago Industries, Inc......... 24,000 1,650,000
------------
BIOTECHNOLOGY (1.0%)
Gilead Sciences, Inc. (a)......... 18,000 1,046,520
------------
CAPITAL MARKETS (1.5%)
E*TRADE Financial Corp. (a)....... 120,000 1,518,000
------------
COMMERCIAL BANKS (2.0%)
UCBH Holdings, Inc................ 25,600 997,632
Westcorp.......................... 27,600 1,008,780
------------
2,006,412
------------
COMMERCIAL SERVICES & SUPPLIES (2.9%)
Apollo Group, Inc. Class A (a).... 13,600 924,800
Career Education Corp. (a)........ 27,000 1,081,890
Education Management Corp. (a).... 29,400 912,576
------------
2,919,266
------------
COMMUNICATIONS EQUIPMENT (4.2%)
Avocent Corp. (a)................. 28,500 1,040,820
Emulex Corp. (a).................. 42,100 1,123,228
QLogic Corp. (a).................. 21,800 1,124,880
UTStarcom, Inc. (a)............... 24,900 923,043
------------
4,211,971
------------
COMPUTERS & PERIPHERALS (1.2%)
Storage Technology Corp. (a)...... 46,200 1,189,650
------------
CONSTRUCTION & ENGINEERING (2.1%)
Fluor Corp........................ 22,700 899,828
Jacobs Engineering Group, Inc.
(a).............................. 24,300 1,166,643
------------
2,066,471
------------
CONSUMER FINANCE (2.3%)
Capital One Financial Corp........ 21,200 1,299,348
Providian Financial Corp. (a)..... 91,000 1,059,240
------------
2,358,588
------------
</Table>
<Table>
<Caption>
SHARES VALUE
-------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (3.3%)
Amphenol Corp. Class A (a)........ 14,200 $ 907,806
CDW Corp.......................... 18,300 1,057,008
Garmin Ltd........................ 25,300 1,378,344
------------
3,343,158
------------
HEALTH CARE EQUIPMENT &
SUPPLIES (2.6%)
Cooper Cos., Inc. (The)........... 19,500 919,035
Cytyc Corp. (a)................... 72,400 996,224
St. Jude Medical, Inc. (a)........ 12,200 748,470
------------
2,663,729
------------
HEALTH CARE PROVIDERS &
SERVICES (14.0%)
AdvancePCS (a).................... 7,400 389,684
AmerisourceBergen Corp............ 15,900 892,785
Anthem, Inc. (a).................. 24,623 1,846,725
Caremark Rx, Inc. (a)............. 32,400 820,692
Coventry Health Care, Inc. (a).... 30,000 1,934,700
Health Management Associates, Inc.
Class A.......................... 42,300 1,015,200
Henry Schein, Inc. (a)............ 14,700 993,426
Mid Atlantic Medical Services,
Inc. (a)......................... 27,000 1,749,600
Oxford Health Plans, Inc. (a)..... 36,800 1,600,800
Patterson Dental Co. (a).......... 12,300 789,168
Pharmaceutical Product
Development, Inc. (a)............ 32,700 881,919
Quest Diagnostics, Inc. (a)....... 15,500 1,133,205
------------
14,047,904
------------
HOUSEHOLD DURABLES (12.8%)
Centex Corp....................... 13,300 1,431,745
D.R. Horton, Inc.................. 38,500 1,665,510
Harman International Industries,
Inc.............................. 22,100 1,634,958
Hovnanian Enterprises, Inc. Class
A (a)............................ 16,000 1,392,960
KB HOME........................... 24,000 1,740,480
Lennar Corp. Class A.............. 16,800 1,612,800
Lennar Corp. Class B.............. 1,020 93,228
M.D.C. Holdings, Inc.............. 19,600 1,264,200
Ryland Group, Inc. (The).......... 10,500 930,720
Toro Co. (The).................... 23,700 1,099,680
------------
12,866,281
------------
IT SERVICES (2.6%)
Acxiom Corp. (a).................. 72,500 1,346,325
Affiliated Computer Services, Inc.
Class A (a)...................... 23,200 1,263,472
------------
2,609,797
------------
LEISURE EQUIPMENT & PRODUCTS (1.0%)
Brunswick Corp.................... 32,200 1,024,926
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-146
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-------------------------
MACHINERY (2.2%)
Oshkosh Truck Corp................ 17,400 $ 887,922
SPX Corp. (a)..................... 22,000 1,293,820
------------
2,181,742
------------
METALS & MINING (0.2%)
International Steel Group, Inc.
(a).............................. 4,400 171,380
------------
MULTILINE RETAIL (0.7%)
Fred's, Inc....................... 21,850 676,913
------------
PHARMACEUTICALS (4.3%)
American Pharmaceutical Partners,
Inc. (a)......................... 33,950 1,140,720
Barr Laboratories, Inc. (a)....... 15,300 1,177,335
Endo Pharmaceuticals Holdings,
Inc. (a)......................... 48,000 924,480
Eon Labs, Inc. (a)................ 20,400 1,039,380
------------
4,281,915
------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (6.9%)
ATI Technologies, Inc. (a)........ 61,400 928,368
Altera Corp. (a).................. 44,600 1,012,420
Integrated Circuit Systems, Inc.
(a).............................. 33,400 951,566
Novellus Systems, Inc. (a)........ 26,600 1,118,530
NVIDIA Corp. (a).................. 45,400 1,055,550
Semtech Corp. (a)................. 40,300 916,019
Silicon Laboratories, Inc. (a).... 23,200 1,002,704
------------
6,985,157
------------
SOFTWARE (7.3%)
Activision, Inc. (a).............. 56,200 1,022,840
Amdocs Ltd. (a)................... 50,000 1,124,000
</Table>
<Table>
<Caption>
SHARES VALUE
-------------------------
SOFTWARE (Continued)
Autodesk, Inc..................... 39,400 $ 968,452
FactSet Research Systems, Inc..... 30,400 1,161,584
Siebel Systems, Inc. (a).......... 70,200 973,674
Symantec Corp. (a)................ 33,200 1,150,380
Synopsys, Inc. (a)................ 29,000 979,040
------------
7,379,970
------------
SPECIALTY RETAIL (6.0%)
AutoZone, Inc. (a)................ 15,100 1,286,671
Chico's FAS, Inc. (a)............. 42,000 1,551,900
Claire's Stores, Inc.............. 69,800 1,315,032
Michaels Stores, Inc.............. 23,800 1,051,960
Pier 1 Imports, Inc............... 37,600 821,936
------------
6,027,499
------------
TEXTILES, APPAREL & LUXURY GOODS (3.3%)
Coach, Inc. (a)................... 39,000 1,472,250
Columbia Sportsware Co. (a)....... 20,200 1,100,900
Liz Claiborne, Inc................ 22,400 794,304
------------
3,367,454
------------
THRIFTS & MORTGAGE FINANCE (5.3%)
Doral Financial Corp.............. 34,950 1,128,186
IndyMac Bancorp, Inc.............. 34,300 1,021,797
New Century Financial Corp........ 35,100 1,392,417
New York Community Bancorp,
Inc.............................. 47,500 1,807,375
------------
5,349,775
------------
Total Common Stocks
(Cost $80,368,235)............... 99,478,201
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-147
MID CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
SHORT-TERM INVESTMENTS (2.6%)
PRINCIPAL
AMOUNT VALUE
-------------------------
COMMERCIAL PAPER (1.6%)
UBS Finance Delaware LLC
0.96%, due 1/2/04................ $1,575,000 $ 1,574,958
------------
Total Commercial Paper
(Cost $1,574,958)................ 1,574,958
------------
<Caption>
SHARES
----------
INVESTMENT COMPANY (1.0%)
Merrill Lynch Premier
Institutional Fund
1.05% (c)........................ 1,000,000 1,000,000
------------
Total Investment Company
(Cost $1,000,000)................ 1,000,000
------------
Total Short-Term Investments
(Cost $2,574,958)................ 2,574,958
------------
Total Investments
(Cost $82,943,193) (d)........... 101.4% 102,053,159(e)
Liabilities in Excess of
Cash and Other Assets............ (1.4) (1,430,427)
---------- ------------
Net Assets........................ 100.0% $100,622,732
========== ============
</Table>
- ------------
(a) Non-income producing security.
(b) ADR-American Depositary Receipt.
(c) Floating rate. Rate shown is the rate in effect at December 31, 2003.
(d) The cost for federal income tax purposes is $83,133,918.
(e) At December 31, 2003 net unrealized appreciation was $18,919,241, 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 $19,526,945 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $607,704.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-148
MAINSTAY VP SERIES FUND, INC.
MID CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $82,943,193).......... $102,053,159
Cash..................................... 3,634
Receivables:
Fund shares sold....................... 242,496
Dividends.............................. 21,856
------------
Total assets..................... 102,321,145
------------
LIABILITIES:
Payables:
Investment securities purchased........ 1,592,597
Manager................................ 60,123
Fund shares redeemed................... 8,915
Custodian.............................. 3,924
NYLIFE Distributors.................... 2,950
Accrued expenses......................... 29,904
------------
Total liabilities................ 1,698,413
------------
Net assets............................... $100,622,732
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 88,569
Service Class.......................... 17,753
Additional paid-in capital............... 89,578,286
Accumulated net realized loss on
investments............................ (8,171,842)
Net unrealized appreciation on
investments............................ 19,109,966
------------
Net assets............................... $100,622,732
============
Initial Class
Net assets applicable to outstanding
shares............................... $ 83,839,476
============
Shares of capital stock outstanding.... 8,856,850
============
Net asset value per share
outstanding.......................... $ 9.47
============
Service Class
Net assets applicable to outstanding
shares............................... $ 16,783,256
============
Shares of capital stock outstanding.... 1,775,328
============
Net asset value per share
outstanding.......................... $ 9.45
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a).......................... $ 180,819
Interest............................... 9,978
------------
Total income..................... 190,797
------------
Expenses:
Manager................................ 364,486
Professional........................... 39,688
Shareholder communication.............. 26,124
Custodian.............................. 16,916
Service................................ 8,417
Portfolio pricing...................... 5,890
Directors.............................. 4,238
Miscellaneous.......................... 12,628
------------
Net expenses..................... 478,387
------------
Net investment loss...................... (287,590)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments......... (1,945,913)
Net change in unrealized depreciation
on investments......................... 20,457,689
------------
Net realized and unrealized gain on
investments............................ 18,511,776
------------
Net increase in net assets resulting from
operations............................. $ 18,224,186
============
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $290.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-149
MID CAP GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
--------------------------
INCREASE IN NET ASSETS:
Operations:
Net investment loss....................................... $ (287,590) $ (132,025)
Net realized loss on investments.......................... (1,945,913) (4,999,639)
Net change in unrealized appreciation (depreciation) on
investments............................................. 20,457,689 (1,935,693)
------------ -----------
Net increase (decrease) in net assets resulting from
operations.............................................. 18,224,186 (7,067,357)
------------ -----------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 47,169,766 18,745,557
Service Class........................................... 16,117,063 --
Cost of shares redeemed:
Initial Class........................................... (3,683,456) (2,415,281)
Service Class........................................... (435,043) --
------------ -----------
Increase in net assets derived from capital share
transactions............................................ 59,168,330 16,330,276
------------ -----------
Net increase in net assets.................................. 77,392,516 9,262,919
NET ASSETS:
Beginning of year........................................... 23,230,216 13,967,297
------------ -----------
End of year................................................. $100,622,732 $23,230,216
============ ===========
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
------------------------------------------------ -------------
JULY 2, JUNE 5,
YEAR YEAR 2001(A) 2003(A)
ENDED ENDED THROUGH THROUGH
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2002 2001 2003
--------------------------------------------------------------
Net asset value at beginning of period......... $ 6.54 $ 9.16 $ 10.00 $ 7.77
------- ------- ------- -------
Net investment loss (b)........................ (0.04) (0.05) (0.02) (0.03)
Net realized and unrealized gain (loss) on
investments.................................. 2.97 (2.57) (0.82) 1.71
------- ------- ------- -------
Total from investment operations............... 2.93 (2.62) (0.84) 1.68
------- ------- ------- -------
Net asset value at end of period............... $ 9.47 $ 6.54 $ 9.16 $ 9.45
======= ======= ======= =======
Total investment return........................ 44.78% (28.59%) (8.43%)(c) 21.71%(c)
Ratios (to average net assets)/Supplemental
Data:
Net investment loss.......................... (0.57%) (0.67%) (0.41%)+ (0.82%)+(d)
Net expenses................................. 0.97% 0.97% 0.97%+ 1.22%+
Expenses (before reimbursement).............. 0.97% 1.10% 1.79%+ 1.22%+
Portfolio turnover rate........................ 38% 163% 57% 38%
Net assets at end of period (in 000's)......... $83,839 $23,230 $13,967 $16,783
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Total return is not annualized.
(d) Represents income earned for the year by the Initial Class shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-150
MAINSTAY VP SERIES FUND, INC.
SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (95.0%)+
SHARES VALUE
-------------------------
AIRLINES (1.7%)
Mesa Air Group, Inc. (a).......... 63,800 $ 798,776
SkyWest, Inc...................... 52,000 942,240
------------
1,741,016
------------
AUTOMOBILES (1.3%)
Winnebago Industries, Inc......... 20,100 1,381,875
------------
BIOTECHNOLOGY (3.8%)
Alkermes, Inc. (a)................ 40,100 541,350
ILEX Oncology, Inc. (a)........... 32,700 694,875
NPS Pharmaceuticals, Inc. (a)..... 23,400 719,316
Neurocrine Biosciences,
Inc. (a)......................... 12,500 681,750
OSI Pharmaceuticals, Inc. (a)..... 16,000 515,360
Telik, Inc. (a)................... 20,300 467,103
XOMA Ltd. (a)..................... 51,400 339,240
------------
3,958,994
------------
CAPITAL MARKETS (2.1%)
Affiliated Managers Group,
Inc. (a)......................... 14,400 1,002,096
Jefferies Group, Inc.............. 35,500 1,172,210
------------
2,174,306
------------
COMMERCIAL BANKS (3.9%)
Southwest Bancorp. of Texas,
Inc.............................. 21,300 827,505
UCBH Holdings, Inc................ 29,900 1,165,203
Westcorp.......................... 26,600 972,230
Wintrust Financial Corp........... 24,200 1,091,420
------------
4,056,358
------------
COMMERCIAL SERVICES & SUPPLIES (3.1%)
Corinthian Colleges, Inc. (a)..... 9,800 544,488
Corporate Executive Board Co.
(The) (a)........................ 20,200 942,734
Education Management Corp. (a).... 28,200 875,328
Kroll, Inc. (a)................... 32,100 834,600
------------
3,197,150
------------
COMMUNICATIONS EQUIPMENT (4.3%)
Aspect Communications Corp. (a)... 55,700 877,832
Avocent Corp. (a)................. 32,400 1,183,248
Inter-Tel, Inc.................... 33,800 844,324
Ixia (a).......................... 62,100 726,570
NetScreen Technologies,
Inc. (a)......................... 36,200 895,950
------------
4,527,924
------------
COMPUTERS & PERIPHERALS (2.4%)
Applied Films Corp. (a)........... 40,900 1,350,518
Neoware Systems, Inc. (a)......... 41,800 572,660
SimpleTech, Inc. (a).............. 103,300 620,833
------------
2,544,011
------------
</Table>
<Table>
<Caption>
SHARES VALUE
-------------------------
ELECTRICAL EQUIPMENT (1.2%)
Roper Industries, Inc............. 25,100 $ 1,236,426
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (6.1%)
Amphenol Corp. Class A (a)........ 20,100 1,284,993
FLIR Systems, Inc. (a)............ 34,900 1,273,850
Global Imaging Systems,
Inc. (a)......................... 44,800 1,422,400
ScanSource, Inc. (a).............. 27,200 1,240,864
Trimble Navigation Ltd. (a)....... 30,600 1,139,544
------------
6,361,651
------------
ENERGY EQUIPMENT & SERVICES (1.2%)
Key Energy Services, Inc. (a)..... 55,900 576,329
Superior Energy Services,
Inc. (a)......................... 66,400 624,160
------------
1,200,489
------------
HEALTH CARE EQUIPMENT & SUPPLIES (2.1%)
Cytyc Corp. (a)................... 47,600 654,976
Respironics, Inc. (a)............. 15,600 703,404
Wilson Greatbatch Technologies,
Inc. (a)......................... 20,300 858,081
------------
2,216,461
------------
HEALTH CARE PROVIDERS & SERVICES (5.5%)
AdvancePCS (a).................... 8,300 437,078
Coventry Health Care, Inc. (a).... 20,700 1,334,943
Henry Schein, Inc. (a)............ 12,000 810,960
Mid Atlantic Medical Services,
Inc. (a)......................... 14,800 959,040
Odyssey Healthcare, Inc. (a)...... 34,800 1,018,248
VCA Antech, Inc. (a).............. 38,400 1,189,632
------------
5,749,901
------------
HOTELS, RESTAURANTS & LEISURE
(3.6%)
P.F. Chang's China Bistro,
Inc. (a)......................... 19,300 981,984
Panera Bread Co. Class A (a)...... 26,100 1,031,733
Station Casinos, Inc. (a)......... 34,800 1,065,924
WMS Industries, Inc. (a).......... 25,500 668,100
------------
3,747,741
------------
HOUSEHOLD DURABLES (7.0%)
Harman International Industries,
Inc.............................. 18,000 1,331,640
Hovnanian Enterprises, Inc.
Class A (a)...................... 19,300 1,680,258
M.D.C. Holdings, Inc.............. 24,964 1,610,178
Ryland Group, Inc. (The).......... 19,300 1,710,752
Yankee Candle Co., Inc.
(The) (a)........................ 36,700 1,003,011
------------
7,335,839
------------
INTERNET & CATALOG RETAIL (1.3%)
Netflix, Inc. (a)................. 24,100 1,318,029
------------
INTERNET SOFTWARE & SERVICES (2.3%)
Digitas, Inc. (a)................. 122,800 $ 1,144,496
RADWARE Ltd. (a).................. 47,300 1,288,925
------------
2,433,421
------------
IT SERVICES (1.2%)
BISYS Group, Inc. (The) (a)....... 30,500 453,840
CACI International, Inc.
Class A (a)...................... 15,900 773,058
------------
1,226,898
------------
</Table>
- ------------
+ Percentages indicated are based on Portfolio net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-151
SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-------------------------
MACHINERY (4.0%)
Actuant Corp. Class A (a)......... 28,800 $ 1,042,560
CLARCOR, Inc...................... 19,800 873,180
Cummins, Inc...................... 20,000 978,800
Wabash National Corp. (a)......... 45,000 1,318,500
------------
4,213,040
------------
MEDIA (1.0%)
Radio One, Inc. Class D (a)....... 55,200 1,065,360
------------
MULTILINE RETAIL (0.7%)
Fred's, Inc....................... 25,000 774,500
------------
OIL & GAS (0.9%)
Evergreen Resources, Inc. (a)..... 28,900 939,539
------------
PHARMACEUTICALS (4.8%)
Able Laboratories, Inc. (a)....... 19,800 357,786
American Pharmaceutical
Partners, Inc. (a)............... 29,050 976,080
K-V Pharmaceutical Co. Class
A(a)............................. 28,400 724,200
Medicis Pharmaceutical Corp. Class
A................................ 13,900 991,070
MGI Pharma, Inc. (a).............. 14,400 592,560
Taro Pharmaceutical Industries
Ltd. (a)......................... 21,700 1,399,650
------------
5,041,346
------------
ROAD & RAIL (0.6%)
Werner Enterprises, Inc........... 30,675 597,856
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (12.0%)
Advanced Energy Industries, Inc.
(a).............................. 41,100 1,070,655
AMIS Holdings, Inc. (a)........... 37,300 681,844
Artisan Components, Inc. (a)...... 29,700 608,850
ATMI, Inc. (a).................... 31,800 735,852
August Technology Corp. (a)....... 46,100 855,155
Brooks Automation, Inc. (a)....... 40,900 988,553
Cymer, Inc. (a)................... 26,600 1,228,654
Fairchild Semiconductor
International, Inc. (a).......... 60,400 1,508,188
Integrated Circuit Systems, Inc.
(a).............................. 32,100 914,529
MKS Instruments, Inc. (a)......... 35,300 1,023,700
Rudolph Technologies, Inc. (a).... 41,800 1,025,772
Sigmatel, Inc. (a)................ 37,400 923,032
Tessera Technologies, Inc. (a).... 52,000 978,120
------------
12,542,904
------------
SOFTWARE (6.1%)
Altiris, Inc. (a)................. 44,800 1,634,304
Business Objects S.A. ADR (a)
(b).............................. 35,200 1,220,384
</Table>
<Table>
<Caption>
SHARES VALUE
-------------------------
SOFTWARE (Continued)
Manhattan Associates, Inc. (a).... 29,300 $ 809,852
MICROS Systems, Inc. (a).......... 20,500 888,880
Progress Software Corp. (a)....... 46,300 947,298
SERENA Software, Inc. (a)......... 50,100 919,335
------------
6,420,053
------------
SPECIALTY RETAIL (7.0%)
A.C. Moore Arts & Crafts, Inc.
(a).............................. 23,300 448,758
Advanced Auto Parts, Inc. (a)..... 10,100 822,140
Guitar Center, Inc. (a)........... 28,000 912,240
Hibbett Sporting Goods, Inc.
(a).............................. 36,000 1,072,800
Hot Topic, Inc. (a)............... 37,800 1,113,588
PETCO Animal Supplies, Inc. (a)... 30,900 940,905
Select Comfort Corp. (a).......... 38,500 953,260
Sharper Image Corp. (a)........... 31,600 1,031,740
------------
7,295,431
------------
TEXTILES, APPAREL & LUXURY GOODS (0.8%)
Fossil, Inc. (a).................. 31,700 887,917
------------
THRIFTS & MORTGAGE FINANCE (0.9%)
Dime Community Bancshares......... 30,100 925,876
------------
TRADING COMPANIES & DISTRIBUTORS (1.1%)
MSC Industrial Direct Co., Inc.
Class A.......................... 40,900 1,124,750
------------
WIRELESS TELECOMMUNICATION SERVICES (1.0%)
Wireless Facilities, Inc. (a)..... 68,300 1,014,938
------------
Total Common Stocks
(Cost $78,258,831)............... 99,252,000
------------
<Caption>
SHORT-TERM INVESTMENTS (6.1%)
PRINCIPAL
AMOUNT
----------
COMMERCIAL PAPER (3.5%)
Federal National Mortgage
Association 0.85%, due 1/2/04.... $2,225,000 2,224,948
Rabobank USA Financial Corp.
0.94%, due 1/2/04................ 1,400,000 1,399,963
------------
Total Commercial Paper
(Cost $3,624,911)................ 3,624,911
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-152
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
SHORT-TERM INVESTMENTS (CONTINUED)
SHARES VALUE
-------------------------
INVESTMENT COMPANY (2.6%)
Merrill Lynch Premier
Institutional Fund
1.05% (c)........................ 2,722,908 $ 2,722,908
------------
Total Investment Company
(Cost $2,722,908)................ 2,722,908
------------
Total Short-Term Investments
(Cost $6,347,819)................ 6,347,819
------------
Total Investments
(Cost $84,606,650) (d)........... 101.1% 105,599,819(e)
Liabilities in Excess of
Cash and Other Assets............ (1.1) (1,116,599)
---------- ------------
Net Assets........................ 100.0% $104,483,220
========== ============
</Table>
- ------------
(a) Non-income producing security.
(b) ADR--American Depositary Receipt.
(c) Floating rate. Rate shown is the rate in effect at December 31, 2003.
(d) The cost for federal income tax purposes is $84,805,100.
(e) At December 31, 2003 net unrealized appreciation was $20,794,719, based on
cost for federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $21,985,165 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $1,190,446.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-153
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $84,606,650).......... $105,599,819
Cash..................................... 2,883
Receivables:
Fund shares sold....................... 316,661
Dividends.............................. 9,392
------------
Total assets..................... 105,928,755
------------
LIABILITIES:
Payables:
Investment securities purchased........ 1,346,375
Manager................................ 59,850
Shareholder communication.............. 15,208
Custodian.............................. 5,371
NYLIFE Distributors.................... 2,526
Accrued expenses......................... 16,205
------------
Total liabilities................ 1,445,535
------------
Net assets............................... $104,483,220
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 90,483
Service Class.......................... 14,482
Additional paid-in capital............... 90,980,712
Accumulated net realized loss on
investments............................ (7,595,626)
Net unrealized appreciation on
investments............................ 20,993,169
------------
Net assets............................... $104,483,220
============
Initial Class
Net assets applicable to outstanding
shares............................... $ 90,085,373
============
Shares of capital stock outstanding.... 9,048,323
============
Net asset value per share
outstanding.......................... $ 9.96
============
Service Class
Net assets applicable to outstanding
shares............................... $ 14,397,847
============
Shares of capital stock outstanding.... 1,448,181
============
Net asset value per share
outstanding.......................... $ 9.94
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a).......................... $ 111,118
Interest............................... 16,831
------------
Total income..................... 127,949
------------
Expenses:
Manager................................ 580,404
Professional........................... 41,101
Shareholder communication.............. 33,089
Custodian.............................. 26,947
Service................................ 7,066
Portfolio pricing...................... 5,900
Directors.............................. 4,756
Miscellaneous.......................... 12,789
------------
Total expenses before
reimbursement.................. 712,052
Expense reimbursement from Manager..... (153,602)
------------
Net expenses..................... 558,450
------------
Net investment loss...................... (430,501)
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments......... 1,057,811
Net change in unrealized appreciation on
investments............................ 20,848,719
------------
Net realized and unrealized gain on
investments............................ 21,906,530
------------
Net increase in net assets resulting from
operations............................. $ 21,476,029
============
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $322.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-154
MAINSTAY VP SERIES FUND, INC.
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
--------------------------
INCREASE IN NET ASSETS:
Operations:
Net investment loss....................................... $ (430,501) $ (194,989)
Net realized gain (loss) on investments................... 1,057,811 (7,258,511)
Net change in unrealized appreciation on investments...... 20,848,719 (1,482,269)
------------ -----------
Net increase (decrease) in net assets resulting from
operations.............................................. 21,476,029 (8,935,769)
------------ -----------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 42,064,068 27,782,452
Service Class........................................... 14,434,170 --
Cost of shares redeemed:
Initial Class........................................... (6,768,740) (4,913,217)
Service Class........................................... (1,090,450) --
------------ -----------
Increase in net assets derived from capital share
transactions............................................ 48,639,048 22,869,235
------------ -----------
Net increase in net assets.................................. 70,115,077 13,933,466
NET ASSETS:
Beginning of year........................................... 34,368,143 20,434,677
------------ -----------
End of year................................................. $104,483,220 $34,368,143
============ ===========
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
------------------------------------------------ -------------
JULY 2, JUNE 5,
YEAR YEAR 2001(A) 2003(A)
ENDED ENDED THROUGH THROUGH
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2002 2001 2003
--------------------------------------------------------------
Net asset value at beginning of period........ $ 7.03 $ 9.55 $ 10.00 $ 8.06
------- ------- ------- -------
Net investment loss (b)....................... (0.06) (0.05) (0.02) (0.04)
Net realized and unrealized gain (loss) on
investments................................. 2.99 (2.47) (0.43) 1.92
------- ------- ------- -------
Total from investment operations.............. 2.93 (2.52) (0.45) 1.88
------- ------- ------- -------
Net asset value at end of period.............. $ 9.96 $ 7.03 $ 9.55 $ 9.94
======= ======= ======= =======
Total investment return....................... 41.69% (26.41%) (4.52%)(c) 23.37%(c)
Ratios (to average net assets)/ Supplemental
Data:
Net investment loss......................... (0.73%) (0.68%) (0.50%)+ (0.98%)+
Net expenses................................ 0.95% 0.95% 0.95%+ 1.20%+
Expenses (before reimbursement)............. 1.21% 1.29% 1.96%+ 1.46%+
Portfolio turnover rate....................... 65% 126% 55% 65%
Net assets at end of period (in 000's)........ $90,085 $34,368 $20,435 $14,398
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Total return is not annualized.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-155
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
LONG-TERM BONDS (32.4%)+
ASSET-BACKED SECURITIES (1.8%)
PRINCIPAL
AMOUNT VALUE
--------------------------
AIRLINES (0.1%)
Continental Airlines, Inc.
Pass-Through Certificates
Series 971B
7.461%, due 10/1/14............. $ 221,714 $ 193,760
Northwest Airlines, Inc.
Pass-Through Certificates Series
2001-1 Class C
7.626%, due 10/1/11............. 254,628 216,203
------------
409,963
------------
CONSUMER FINANCE (0.7%)
BMW Vehicle Owner Trust
Class 2003-A Series A3
1.94%, due 2/25/07.............. 875,000 877,134
Consumers Funding LLC
Series 2001-1 Class A6
5.76%, due 10/20/16............. 1,610,000 1,729,137
Volkswagen Auto Loan Enhanced
Trust
Series 2003-2 Class A3
2.27%, due 10/22/07............. 1,390,000 1,392,017
------------
3,998,288
------------
CONSUMER LOANS (0.1%)
Atlantic City Electric Transition
Funding LLC
Series 2002-1 Class A4
5.55%, due 10/20/23............. 850,000 865,416
------------
DIVERSIFIED FINANCIAL SERVICES (0.4%)
Capital One Master Trust
Series 2001-5 Class A
5.30%, due 6/15/09.............. 480,000 510,600
DaimlerChrysler Auto Trust
Series 2001-D Class A3
3.15%, due 11/6/05.............. 1,699,557 1,709,435
------------
2,220,035
------------
MULTI-UTILITIES & UNREGULATED POWER (0.4%)
AES Eastern Energy LP
Pass-Through Certificates
Series 1999-A
9.00%, due 1/2/17............... 353,078 390,554
Public Service of New Hampshire
Funding LLC
Pass-Through Certificates
Series 2002-1 Class A
4.58%, due 2/1/10............... 1,568,519 1,641,094
Tiverton/Rumford Power
Associates Ltd., L.P.
Pass-Through Certificates
9.00%, due 7/15/18 (c).......... 375,000 311,250
------------
2,342,898
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
THRIFTS & MORTGAGE FINANCE (0.1%)
Vanderbilt Mortgage Finance
Series 1999-B Class 1A4
6.545%, due 4/7/18.............. $ 500,000 $ 518,814
------------
Total Asset-Backed Securities
(Cost $10,126,006).............. 10,355,414
------------
<Caption>
CONVERTIBLE BONDS (0.0%)(B)
HEALTH CARE PROVIDERS & SERVICES (0.0%)(b)
Lincare Holdings, Inc.
3.00%, due 6/15/33.............. 90,000 90,112
------------
INSURANCE (0.0%)(b)
Loews Corp.
3.125%, due 9/15/07............. 20,000 19,325
------------
Total Convertible Bonds
(Cost $108,814)................. 109,437
------------
<Caption>
CORPORATE BONDS (11.6%)
AEROSPACE & DEFENSE (0.2%)
General Dynamics Corp.
4.50%, due 8/15/10.............. 565,000 577,472
Sequa Corp.
Series B
8.875%, due 4/1/08.............. 340,000 368,900
------------
946,372
------------
AIRLINES (0.0%)(b)
Delta Air Lines, Inc.
Series C
6.65%, due 3/15/04.............. 85,000 85,000
8.30%, due 12/15/29............. 330,000 218,213
------------
303,213
------------
AUTO COMPONENTS (0.1%)
ArvinMeritor, Inc.
6.625%, due 6/15/07............. 110,000 115,500
Dana Corp.
9.00%, due 8/15/11.............. 225,000 271,125
------------
386,625
------------
AUTOMOBILES (0.2%)
DaimlerChrysler North America
Holdings, Inc.
6.50%, due 11/15/13............. 250,000 263,353
General Motors Corp.
8.375%, due 7/15/33............. 665,000 771,941
------------
1,035,294
------------
BEVERAGES (0.2%)
Miller Brewing Co.
4.25%, due 8/15/08 (c).......... 775,000 785,333
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-156
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
CAPITAL MARKETS (0.8%)
Bear Stearns Cos., Inc. (The)
4.00%, due 1/31/08.............. $ 580,000 $ 590,749
Goldman Sachs Group, Inc. (The)
4.75%, due 7/15/13.............. 225,000 219,278
5.25%, due 10/15/13............. 1,525,000 1,539,646
Morgan Stanley
3.625%, due 4/1/08.............. 2,205,000 2,208,116
------------
4,557,789
------------
CHEMICALS (0.5%)
Equistar Chemicals L.P.
7.55%, due 2/15/26.............. 275,000 239,250
10.625%, due 5/1/11............. 140,000 154,700
FMC Corp.
10.25%, due 11/1/09............. 200,000 234,000
Lyondell Chemical Co.
9.50%, due 12/15/08............. 315,000 329,175
Millennium America, Inc.
7.625%, due 11/15/26............ 535,000 497,550
Scotts Co. (The) 6.625%, due
11/15/13 (c).................... 915,000 940,163
Terra Capital, Inc.
12.875%, due 10/15/08........... 215,000 253,700
------------
2,648,538
------------
COMMERCIAL BANKS (0.3%)
BankBoston North America
7.00%, due 9/15/07.............. 610,000 690,247
FleetBoston Financial Corp.
3.85%, due 2/15/08.............. 485,000 493,006
PNC Funding Corp.
5.25%, due 11/15/15............. 560,000 554,953
------------
1,738,206
------------
COMMERCIAL SERVICES & SUPPLIES (0.0%)(b)
Moore North America Finance, Inc.
7.875%, due 1/15/11 (c)......... 155,000 175,538
------------
COMMUNICATIONS EQUIPMENT (0.0%)(b)
Motorola, Inc.
6.75%, due 2/1/06............... 100,000 107,728
------------
CONSTRUCTION MATERIALS (0.1%)
CRH America, Inc.
5.30%, due 10/15/13............. 690,000 696,208
------------
CONSUMER FINANCE (0.9%)
Capital One Bank
4.875%, due 5/15/08............. 645,000 663,804
5.75%, due 9/15/10.............. 340,000 359,662
Ford Motor Credit Co.
5.80%, due 1/12/09.............. 805,000 829,032
7.00%, due 10/1/13.............. 1,261,000 1,329,950
General Motors Acceptance Corp.
6.875%, due 8/28/12............. 475,000 511,017
Household Finance Corp.
6.75%, due 5/15/11.............. 385,000 433,411
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
CONSUMER FINANCE (Continued)
John Deere Capital Corp
3.90%, due 1/15/08.............. $ 415,000 $ 421,754
MBNA Corp.
6.25%, due 1/17/07.............. 295,000 321,164
------------
4,869,794
------------
CONTAINERS & PACKAGING (0.2%)
Owens-Brockway Glass Container,
Inc.
7.75%, due 5/15/11.............. 235,000 252,331
8.875%, due 2/15/09............. 170,000 186,363
Rock-Tenn Co.
8.20%, due 8/15/11.............. 530,000 628,925
------------
1,067,619
------------
DIVERSIFIED FINANCIAL SERVICES (0.2%)
J Paul Getty Trust 5.875%, due
10/1/33......................... 435,000 430,580
NiSource Finance Corp.
5.40%, due 7/15/14.............. 420,000 425,249
------------
855,829
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (1.2%)
Citizens Communications Co.
9.00%, due 8/15/31.............. 1,265,000 1,476,036
Intermedia Communications, Inc.
Series B
8.875%, due 11/1/07 (d)......... 755,000 656,850
11.25%, due 7/15/07 (d)......... 965,000 825,075
Qwest Capital Funding, Inc.
5.875%, due 8/3/04.............. 1,460,000 1,463,650
Qwest Corp.
5.625%, due 11/15/08............ 10,000 9,900
7.125%, due 11/15/43............ 80,000 77,600
7.20%, due 11/1/04.............. 405,000 414,113
7.25%, due 9/15/25.............. 130,000 130,000
8.875%, due 3/15/12 (c)......... 125,000 143,438
WorldCom, Inc.- WorldCom Group
8.25%, due 5/15/31 (d).......... 4,180,000 1,400,300
------------
6,596,962
------------
ELECTRIC UTILITIES (0.3%)
Cedar Brakes II LLC
9.875%, due 9/1/13.............. 261,772 282,059
CenterPoint Energy, Inc.
5.875%, due 6/1/08 (c).......... 300,000 312,526
7.25%, due 9/1/10 (c)........... 460,000 497,989
Southern California Edison Co.
8.00%, due 1/15/07.............. 215,000 245,906
TECO Energy, Inc.
7.00%, due 5/1/12............... 130,000 133,900
7.20%, due 5/1/11............... 95,000 98,800
------------
1,571,180
------------
ELECTRICAL EQUIPMENT (0.2%)
Emerson Electric Co.
6.00%, due 8/15/32.............. 520,000 530,005
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-157
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
ELECTRICAL EQUIPMENT (Continued)
Thomas & Betts Corp.
6.625%, due 5/7/08.............. $ 35,000 $ 36,137
7.25%, due 6/1/13............... 180,000 185,400
8.25%, due 1/15/04.............. 225,000 225,000
------------
976,542
------------
ENERGY EQUIPMENT & SERVICES (0.2%)
Entergy-Koch, LP
3.65%, due 8/20/06 (c).......... 1,005,000 1,012,935
Halliburton Co.
8.75%, due 2/15/21.............. 225,000 280,829
------------
1,293,764
------------
FOOD & STAPLES RETAILING (0.4%)
Safeway, Inc.
4.125%, due 11/1/08............. 330,000 328,555
6.15%, due 3/1/06............... 675,000 722,243
Wal-Mart Stores, Inc.
4.55%, due 5/1/13............... 1,055,000 1,042,059
------------
2,092,857
------------
FOOD PRODUCTS (0.1%)
Cargill, Inc.
5.00%, due 11/15/13 (c)......... 580,000 576,181
Smithfield Foods, Inc.
7.625%, due 2/15/08............. 140,000 141,400
------------
717,581
------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.0%)(b)
Apogent Technologies, Inc.
6.50%, due 5/15/13.............. 250,000 260,625
------------
HEALTH CARE PROVIDERS & SERVICES (0.6%)
Caremark Rx, Inc.
7.375%, due 10/1/06............. 480,000 516,000
HCA, Inc.
7.50%, due 11/15/95............. 145,000 138,873
8.36%, due 4/15/24.............. 80,000 89,887
8.75%, due 9/1/10............... 245,000 291,730
Highmark, Inc.
6.80%, due 8/15/13 (c).......... 835,000 907,172
Manor Care, Inc.
6.25%, due 5/1/13............... 235,000 247,631
8.00%, due 3/1/08............... 280,000 316,400
McKesson Corp.
7.65%, due 3/1/27............... 300,000 349,772
Medco Health Solutions, Inc.
7.25%, due 8/15/13.............. 310,000 338,195
Service Corp. International
6.50%, due 3/15/08.............. 35,000 35,963
7.20%, due 6/1/06............... 115,000 119,600
Tenet Healthcare Corp.
6.50%, due 6/1/12............... 105,000 100,669
6.875%, due 11/15/31............ 155,000 138,725
------------
3,590,617
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
HOTELS, RESTAURANTS & LEISURE (0.4%)
Chumash Casino & Resort
Enterprise 9.00%, due 7/15/10
(c)............................. $ 110,000 $ 121,550
Harrah's Operating Co., Inc.
8.00%, due 2/1/11............... 205,000 240,807
ITT Corp.
7.375%, due 11/15/15............ 295,000 315,650
Mandalay Resort Group 7.00%, due
11/15/36........................ 105,000 111,300
MGM Mirage, Inc.
7.25%, due 10/15/06............. 35,000 37,713
8.375%, due 2/1/11.............. 130,000 147,225
Mohegan Tribal Gaming Authorities
6.375%, due 7/15/09............. 185,000 191,013
Park Place Entertainment Corp.
8.125%, due 5/15/11............. 175,000 196,219
Station Casinos, Inc.
8.375%, due 2/15/08............. 155,000 166,044
Yum! Brands, Inc.
7.65%, due 5/15/08.............. 495,000 561,825
------------
2,089,346
------------
HOUSEHOLD PRODUCTS (0.0%)(b)
Fort James Corp.
6.625%, due 9/15/04............. 75,000 76,500
------------
INSURANCE (0.4%)
Crum & Forster Holdings Corp.
10.375%, due 6/15/13 (c)........ 115,000 127,794
Fund American Cos., Inc.
5.875%, due 5/15/13............. 905,000 915,970
Marsh & McLennan Cos., Inc.
7.125%, due 6/15/09............. 1,150,000 1,325,305
------------
2,369,069
------------
IT SERVICES (0.0%)(b)
Unisys Corp.
6.875%, due 3/15/10............. 115,000 124,488
------------
LEISURE EQUIPMENT & PRODUCTS (0.0%)(b)
Hasbro, Inc.
5.60%, due 11/1/05.............. 85,000 88,931
------------
MACHINERY (0.2%)
Cummins, Inc.
6.45%, due 3/1/05............... 115,000 119,025
Deere & Co.
7.85%, due 5/15/10.............. 830,000 1,002,915
Navistar International Corp.
Series B
9.375%, due 6/1/06.............. 205,000 226,268
------------
1,348,208
------------
MEDIA (1.0%)
Continental Cablevision, Inc.
8.875%, due 9/15/05............. 110,000 121,389
9.50%, due 8/1/13............... 160,000 184,817
Houghton Mifflin Co.
7.20%, due 3/15/11.............. 110,000 118,113
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-158
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
MEDIA (Continued)
Jones Intercable, Inc.
8.875%, due 4/1/07.............. $ 125,000 $ 129,583
Liberty Media Corp.
3.50%, due 9/25/06.............. 240,000 241,199
Morris Publishing Group LLC
7.00%, due 8/1/13 (c)........... 190,000 192,850
News America, Inc.
7.25%, due 5/18/18.............. 400,000 454,166
Tele-Communications, Inc.
9.80%, due 2/1/12............... 265,000 345,678
10.125%, due 4/15/22............ 220,000 310,839
Time Warner Cos., Inc.
8.05%, due 1/15/16.............. 510,000 605,271
Time Warner Entertainment Co. LP
10.15%, due 5/1/12.............. 2,210,000 2,949,251
------------
5,653,156
------------
METALS & MINING (0.2%)
Allegheny Ludlum Corp.
6.95%, due 12/15/25............. 305,000 259,250
Peabody Energy Corp.
Series B
6.875%, due 3/15/13............. 435,000 458,925
United States Steel LLC
10.75%, due 8/1/08.............. 270,000 315,900
------------
1,034,075
------------
MULTILINE RETAIL (0.3%)
Target Corp.
6.35%, due 11/1/32.............. 1,350,000 1,418,094
8.60%, due 1/15/12.............. 370,000 460,510
------------
1,878,604
------------
MULTI-UTILITIES & UNREGULATED POWER (0.4%)
Consumers Energy Co.
6.25%, due 9/15/06.............. 240,000 259,142
PSE&G Power LLC
6.875%, due 4/15/06............. 1,575,000 1,717,055
Westar Energy, Inc.
7.125%, due 8/1/09.............. 320,000 335,229
7.875%, due 5/1/07.............. 220,000 245,850
------------
2,557,276
------------
OIL & GAS (0.7%)
Chesapeake Energy Corp.
7.50%, due 9/15/13.............. 115,000 124,488
7.75%, due 1/15/15.............. 170,000 184,450
El Paso Corp.
7.80%, due 8/1/31............... 50,000 42,563
Forest Oil Corp.
8.00%, due 12/15/11............. 220,000 240,350
Gulfterra Energy Partners, L.P.
10.625%, due 12/1/12............ 211,000 261,640
Newfield Exploration Co.
8.375%, due 8/15/12............. 170,000 190,400
Pogo Producing Co.
8.25%, due 4/15/11.............. 170,000 189,550
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
OIL & GAS (Continued)
Tesoro Petroleum Corp.
8.00%, due 4/15/08.............. $ 285,000 $ 302,812
Tosco Corp.
8.125%, due 2/15/30............. 1,505,000 1,919,236
Vintage Petroleum, Inc.
8.25%, due 5/1/12............... 290,000 315,375
Westport Resources Corp.
8.25%, due 11/1/11.............. 170,000 187,000
------------
3,957,864
------------
PAPER & FOREST PRODUCTS (0.3%)
Bowater, Inc.
9.00%, due 8/1/09............... 240,000 266,234
Georgia-Pacific Corp.
7.25%, due 6/1/28............... 165,000 158,194
8.00%, due 1/15/24 (c).......... 120,000 122,400
8.875%, due 2/1/10-5/15/31...... 180,000 200,200
9.375%, due 2/1/13.............. 245,000 281,750
Louisiana-Pacific Corp.
10.875%, due 11/15/08........... 110,000 130,900
Pope & Talbot, Inc.
8.375%, due 6/1/13.............. 475,000 473,812
------------
1,633,490
------------
PERSONAL PRODUCTS (0.1%)
Estee Lauder Cos., Inc.
5.75%, due 10/15/33............. 370,000 364,759
------------
PHARMACEUTICALS (0.3%)
Schering-Plough Corp.
5.30%, due 12/1/13.............. 45,000 45,785
Valeant Pharmaceuticals International
7.00%, due 12/15/11 (c)......... 20,000 20,600
Wyeth
5.50%, due 2/1/14............... 1,410,000 1,426,095
6.50%, due 2/1/34............... 315,000 322,097
------------
1,814,577
------------
REAL ESTATE (0.3%)
HRPT Properties Trust
5.75%, due 2/15/14.............. 855,000 857,319
Healthcare Realty Trust, Inc.
8.125%, due 5/1/11.............. 260,000 297,737
Hospitality Properties Trust
7.00%, due 3/1/08............... 175,000 186,782
iStar Financial, Inc.
6.00%, due 12/15/10............. 360,000 367,199
------------
1,709,037
------------
THRIFTS & MORTGAGE FINANCE (0.2%)
Washington Mutual, Inc.
4.00%, due 1/15/09.............. 925,000 926,606
5.625%, due 1/15/07............. 350,000 377,217
------------
1,303,823
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-159
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
CORPORATE BONDS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
--------------------------
TOBACCO (0.0%)(b)
Standard Commercial Corp.
8.875%, due 8/1/05.............. $ 177,000 $ 180,318
------------
WIRELESS TELECOMMUNICATION SERVICES (0.1%)
AT&T Wireless Services, Inc.
8.75%, due 3/1/31............... 510,000 629,252
------------
Total Corporate Bonds
(Cost $64,936,889).............. 66,086,987
------------
FOREIGN BONDS (1.6%)
BEVERAGES (0.3%)
CIA Brasileira de Bebida
10.50%, due 12/15/11............ 1,140,000 1,328,100
Coca-Cola HBC Finance BV
5.125%, due 9/17/13 (c)......... 245,000 245,631
------------
1,573,731
------------
COMMERCIAL BANKS (0.0%)(b)
HSBC Holding PLC
5.25%, due 12/12/12............. 90,000 92,165
------------
COMMERCIAL SERVICES & SUPPLIES (0.2%)
Hutchison Whamp International
Ltd.
5.45%, due 11/24/10 (c)......... 1,000,000 1,014,307
------------
CONTAINERS & PACKAGING (0.0%)(b)
Norampac, Inc.
6.75%, due 6/1/13............... 205,000 213,713
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.1%)
Telefonos de Mexico, S.A. de C.V.
4.50%, due 11/19/08 (c)......... 325,000 325,494
8.25%, due 1/26/06.............. 350,000 385,903
------------
711,397
------------
ELECTRIC UTILITIES (0.1%)
SP POWERASSETS Ltd.
5.00%, due 10/22/13 (c)......... 360,000 361,913
------------
FOREIGN GOVERNMENTS (0.3%)
Province of Quebec
5.00%, due 7/17/09.............. 920,000 972,476
Russian Federation
5.00%, due 3/31/30.............. 655,000 627,981
United Mexican States
4.625%, due 10/8/08............. 95,000 96,188
6.625%, due 3/3/15.............. 280,000 289,800
------------
1,986,445
------------
INDUSTRIAL CONGLOMERATES (0.1%)
Stena AB
9.625%, due 12/1/12............. 315,000 355,163
------------
MEDIA (0.1%)
Vivendi Universal S.A.
6.25%, due 7/15/08 (c).......... 370,000 391,738
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
METALS & MINING (0.1%)
Codelco, Inc.
5.50%, due 10/15/13 (c)......... $ 475,000 $ 482,024
Inco Ltd.
5.70%, due 10/15/15............. 330,000 333,338
------------
815,362
------------
PAPER & FOREST PRODUCTS (0.1%)
Abitibi-Consolidated, Inc.
8.55%, due 8/1/10............... 200,000 222,720
Norske Skog Canada Ltd.
Series D
8.625%, due 6/15/11............. 135,000 141,750
Tembec Industries, Inc.
8.50%, due 2/1/11............... 195,000 201,825
------------
566,295
------------
ROAD & RAIL (0.0%)(b)
Grupo Transportacion Ferroviaria
Mexicana, S.A. de C.V.
12.50%, due 6/15/12............. 115,000 131,100
------------
TRANSPORTATION INFRASTRUCTURE (0.2%)
PSA Corp. Ltd.
7.125%, due 8/1/05 (c).......... 900,000 973,616
------------
Total Foreign Bonds
(Cost $8,660,996)............... 9,186,945
------------
<Caption>
MUNICIPAL BONDS (0.1%)
NEW JERSEY (0.0%)(b)
Tobacco Settlement Financing
Corp.
6.00%, due 6/1/37............... 10,000 8,943
6.25%, due 6/1/43............... 65,000 59,645
6.375%, due 6/1/32.............. 10,000 9,592
6.75%, due 6/1/39............... 30,000 29,573
------------
107,753
------------
RHODE ISLAND (0.0%)(b)
Tobacco Settlement Financing
Corp.
Series A
6.25%, due 6/1/42............... 60,000 54,412
------------
TEXAS (0.1%)
Harris County Texas Industrial
Development Corp. Solid Waste
5.68%, due 3/1/23............... 395,000 401,647
------------
Total Municipal Bonds
(Cost $538,717)................. 563,812
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-160
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
TEXAS (Continued)
MORTGAGE-BACKED SECURITIES (0.4%)
PRINCIPAL
AMOUNT VALUE
--------------------------
COMMERCIAL MORTGAGE LOANS (COLLATERALIZED
MORTGAGE OBLIGATIONS) (0.4%)
Fanniemae Grantor Trust Series
2003-T1 Class B
4.491%, due 11/25/12............ $ 2,060,000 $ 2,055,419
------------
Total Mortgage-Backed Securities
(Cost $2,031,524)............... 2,055,419
------------
U.S. GOVERNMENT &
FEDERAL AGENCIES (16.5%)
FEDERAL HOME LOAN MORTGAGE CORPORATION (MORTGAGE PASS-THROUGH
SECURITIES) (0.2%)
5.00%, due 8/1/33............... 879,775 868,858
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (1.4%)
4.625%, due 5/1/13.............. 870,000 846,696
4.75%, due 1/2/07............... 3,115,000 3,280,977
5.25%, due 8/1/12............... 2,300,000 2,358,376
5.50%, due 5/2/06............... 1,155,000 1,235,606
6.25%, due 2/1/11............... 435,000 480,872
------------
8,202,527
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (MORTGAGE PASS-THROUGH
SECURITIES) (9.7%)
4.00%, due 9/1/18 (f)........... 2,336,538 2,279,835
4.50%, due 4/1/18-11/1/18 (f)... 9,431,023 9,452,668
5.50%, due 1/14/34-3/15//34 TBA
(e)........................... 6,715,000 6,774,463
5.50%, due 1/1/17-11/1/33 (f)... 15,533,871 15,914,690
6.00%, due 1/14/34 TBA (e)...... 5,710,000 5,900,931
6.00%, due 5/1/29-1/14/34 (f)... 6,390,592 6,611,582
6.50%, due 6/1/31-10/1/31 (f)... 3,417,786 3,574,614
7.00%, due 2/1/32-4/1/32 (f).... 2,216,043 2,346,427
7.50%, due 8/1/31 (f)........... 2,226,704 2,379,580
------------
55,234,790
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (MORTGAGE
PASS-THROUGH SECURITIES) (1.2%)
6.00%, due 4/15/29-8/15/32
(f)........................... 4,580,674 4,764,855
7.50%, due 12/15/23-12/15/28.... 2,080,265 2,237,686
------------
7,002,541
------------
UNITED STATES TREASURY BONDS (0.9%)
5.375%, due 2/15/31............. 465,000 484,926
6.25%, due 8/15/23-5/15/30...... 480,000 552,353
6.875%, due 8/15/25 (g)......... 980,000 1,198,854
7.50%, due 11/15/16............. 1,760,000 2,240,700
8.75%, due 8/15/20.............. 580,000 829,400
------------
5,306,233
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
UNITED STATES TREASURY NOTES (3.1%)
3.00%, due 2/15/08 (g).......... $ 4,185,000 $ 4,204,452
4.375%, due 5/15/07 (g)......... 2,400,000 2,541,468
4.625%, due 5/15/06 (g)......... 3,010,000 3,190,130
4.875%, due 2/15/12............. 670,000 709,572
5.75%, due 11/15/05-8/15/10
(g)........................... 4,120,000 4,503,697
6.00%, due 8/15/09.............. 2,040,000 2,310,698
------------
17,460,017
------------
Total U.S. Government & Federal
Agencies
(Cost $92,392,344).............. 94,074,966
------------
<Caption>
YANKEE BONDS (0.4%) (H)
INSURANCE (0.2%)
Montpelier Re Holdings Ltd.
6.125%, due 8/15/13............. 955,000 972,104
------------
MARINE (0.0%)(b)
Sea Containers Ltd.
Series B
10.75%, due 10/15/06............ 90,000 92,250
------------
MEDIA (0.0%) (b)
Rogers Cablesystem, Ltd.
11.00%, due 12/1/15............. 210,000 242,550
------------
OIL & GAS (0.1%)
Husky Oil, Ltd.
8.90%, due 8/15/28.............. 425,000 490,875
------------
PAPER & FOREST PRODUCTS (0.1%)
Abitibi-Consolidated, Inc.
6.95%, due 12/15/06............. 395,000 413,559
------------
Total Yankee Bonds
(Cost $2,132,538)............... 2,211,338
------------
Total Long-Term Bonds
(Cost $180,927,828)............. 184,644,318
------------
COMMON STOCKS (65.9%)
SHARES
-----------
AEROSPACE & DEFENSE (1.1%)
United Technologies Corp......... 67,400 6,387,498
------------
AIR FREIGHT & LOGISTICS (1.0%)
FedEx Corp. ..................... 88,300 5,960,250
------------
AUTOMOBILES (1.2%)
Harley-Davidson, Inc. ........... 148,200 7,043,946
------------
BEVERAGES (1.5%)
Coca-Cola Co. (The).............. 80,200 4,070,150
PepsiCo, Inc..................... 95,800 4,466,196
------------
8,536,346
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-161
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
BIOTECHNOLOGY (1.5%)
Amgen, Inc. (a).................. 97,800 $ 6,044,040
Genentech, Inc. (a).............. 27,000 2,526,390
------------
8,570,430
------------
CAPITAL MARKETS (1.1%)
Morgan Stanley................... 109,500 6,336,765
------------
CHEMICALS (1.8%)
Air Products & Chemicals, Inc.... 91,300 4,823,379
Praxair, Inc..................... 149,200 5,699,440
------------
10,522,819
------------
COMMERCIAL BANKS (0.7%)
Fifth Third Bancorp.............. 62,800 3,711,480
------------
COMMERCIAL SERVICES & SUPPLIES (1.1%)
Cendant Corp. (a)................ 268,600 5,981,722
------------
COMMUNICATIONS EQUIPMENT (1.4%)
Cisco Systems, Inc. (a).......... 319,000 7,748,510
------------
COMPUTERS & PERIPHERALS (3.3%)
Dell, Inc. (a)................... 175,500 5,959,980
Hewlett-Packard Co............... 286,300 6,576,311
International Business Machines
Corp............................ 65,600 6,079,808
------------
18,616,099
------------
CONSUMER FINANCE (1.3%)
American Express Co.............. 157,900 7,615,517
------------
DIVERSIFIED FINANCIAL SERVICES (1.1%)
Citigroup, Inc................... 124,033 6,020,562
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.9%)
Agilent Technologies, Inc. (a)... 174,600 5,105,304
------------
ENERGY EQUIPMENT & SERVICES (1.1%)
Baker Hughes, Inc................ 64,300 2,067,888
BJ Services Co. (a).............. 66,900 2,401,710
Weatherford International Ltd.
(a)............................. 48,700 1,753,200
------------
6,222,798
------------
FOOD & STAPLES RETAILING (3.0%)
Sysco Corp....................... 157,300 5,856,279
Walgreen Co...................... 162,200 5,900,836
Wal-Mart Stores, Inc............. 97,300 5,161,765
------------
16,918,880
------------
HEALTH CARE EQUIPMENT & SUPPLIES (2.5%)
Baxter International, Inc........ 115,500 3,525,060
Boston Scientific Corp. (a)...... 159,200 5,852,192
Medtronic, Inc................... 103,800 5,045,718
------------
14,422,970
------------
HEALTH CARE PROVIDERS & SERVICES (5.7%)
Cardinal Health, Inc............. 91,100 5,571,676
Caremark Rx, Inc. (a)............ 219,900 5,570,067
HCA, Inc......................... 139,600 5,997,216
UnitedHealth Group, Inc.......... 144,800 8,424,464
WellPoint Health Networks, Inc.
(a)............................. 67,800 6,575,922
------------
32,139,345
------------
HOTELS, RESTAURANTS & LEISURE (0.9%)
International Game Technology.... 135,000 4,819,500
------------
</Table>
<Table>
SHARES VALUE
--------------------------
<Caption>
HOUSEHOLD DURABLES (0.8%)
Lennar Corp. Class A............. 48,700 $ 4,675,200
------------
HOUSEHOLD PRODUCTS (0.8%)
Colgate-Palmolive Co............. 93,900 4,699,695
------------
INDUSTRIAL CONGLOMERATES (1.0%)
General Electric Co.............. 191,100 5,920,278
------------
INSURANCE (0.9%)
Marsh & McLennan Cos., Inc....... 107,200 5,133,808
------------
INTERNET & CATALOG RETAIL (1.0%)
InterActive Corp. (a)............ 169,400 5,747,742
------------
IT SERVICES (1.0%)
First Data Corp.................. 141,700 5,822,453
------------
MACHINERY (3.1%)
Danaher Corp..................... 67,400 6,183,950
Dover Corp....................... 136,000 5,406,000
Illinois Tool Works, Inc......... 73,800 6,192,558
------------
17,782,508
------------
MEDIA (4.2%)
Clear Channel Communications,
Inc............................. 138,860 6,502,814
Gannett Co., Inc................. 54,900 4,894,884
Omnicom Group, Inc............... 76,100 6,645,813
Viacom, Inc. Class B............. 138,151 6,131,141
------------
24,174,652
------------
MULTILINE RETAIL (1.7%)
Kohl's Corp. (a)................. 100,200 4,502,988
Target Corp...................... 133,500 5,126,400
------------
9,629,388
------------
PHARMACEUTICALS (4.4%)
Forest Laboratories, Inc. (a).... 91,200 5,636,160
Johnson & Johnson................ 123,300 6,369,678
Pfizer, Inc...................... 215,200 7,603,016
Teva Pharmaceutical Industries
Ltd. (g)(i)..................... 98,700 5,597,277
------------
25,206,131
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
(6.1%)
Analog Devices, Inc.............. 128,400 5,861,460
Applied Materials, Inc. (a)...... 218,200 4,898,590
Intel Corp....................... 226,500 7,293,300
KLA-Tencor Corp. (a)............. 71,400 4,189,038
Maxim Integrated Products,
Inc............................. 114,900 5,722,020
Texas Instruments, Inc........... 231,800 6,810,284
------------
34,774,692
------------
SOFTWARE (5.6%)
Electronic Arts, Inc. (a)........ 120,000 5,733,600
Microsoft Corp................... 272,500 7,504,650
Oracle Corp. (a)................. 478,320 6,313,824
Symantec Corp. (a)............... 168,000 5,821,200
VERITAS Software Corp. (a)....... 181,400 6,740,824
------------
32,114,098
------------
SPECIALTY RETAIL (3.1%)
Bed Bath & Beyond, Inc. (a)...... 144,100 6,246,735
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-162
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
SPECIALTY RETAIL (Continued)
Lowe's Cos., Inc................. 101,700 $ 5,633,163
TJX Cos., Inc. (The)............. 267,400 5,896,170
------------
17,776,068
------------
Total Common Stocks
(Cost $330,023,307)............. 376,137,454
------------
PRINCIPAL
AMOUNT
-----------
SHORT-TERM INVESTMENTS (5.8%)
COMMERCIAL PAPER (2.0%)
Federal Home Loan Bank
0.95%, due 1/7/04............... $ 3,130,000 3,129,504
Federal National Mortgage
Association 0.97%, due 1/6/04... 2,930,000 2,929,605
Rabobank USA Financial Corp.
0.94%, due 1/2/04............... 5,490,000 5,489,857
------------
Total Commercial Paper
(Cost $11,548,966).............. 11,548,966
------------
SHARES
-----------
INVESTMENT COMPANIES (1.5%)
AIM Institutional Funds Group
0.99% (j)(k).................... 374,703 374,703
Merrill Lynch Premier
Institutional Fund 1.05% (j).... 8,314,163 8,314,163
------------
Total Investment Companies
(Cost $8,688,866)............... 8,688,866
------------
PRINCIPAL
AMOUNT
-----------
MASTER NOTE (0.1%)
Banc of America Securities LLC
1.13%, due 1/2/04 (k)........... $ 470,000 $ 470,000
------------
Total Master Note
(Cost $470,000)................. 470,000
------------
REPURCHASE AGREEMENTS (2.2%)
Countrywide Securities Corp.
1.08%, dated 12/31/03 due 1/2/04
Proceeds at Maturity
$8,420,498 (k)
(Collateralized by Various Bonds
with a Principal Amount of
$10,892,356 and a market value
of $8,722,832)................ 8,420,000 8,420,000
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
--------------------------
Merrill Lynch Pierce Fenner &
Smith, Inc.
1.08%, dated 12/31/03
due 1/2/04
Proceeds at Maturity
$3,806,225 (k)
(Collateralized by Various Bonds
with a Principal Amount of
$3,515,498 and a market value of
$3,890,360)..................... $ 3,806,000 $ 3,806,000
------------
Total Repurchase Agreements
(Cost $12,226,000).............. 12,226,000
------------
Total Short-Term Investments
(Cost $32,933,832).............. 32,933,832
------------
Total Investments
(Cost $543,884,967) (l)......... 104.1% 593,715,604(m)
Liabilities in Excess of Cash and
Other Assets.................... (4.1) (23,418,454)
----------- ------------
Net Assets....................... 100.0% $570,297,150
=========== ============
</Table>
- ------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) Issue in default.
(e) 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.
(f) Segregated or partially segregated as collateral for TBA.
(g) Represent securities out on loan or a portion which is out on loan. (See
Note 2)
(h) Yankee Bond--Dollar denominated bonds issued in the United States by foreign
banks and corporations.
(i) ADR-American Depository Receipt
(j) Floating rate. Rate shown is the rate in effect at December 31, 2003.
(k) Represents security, or portion thereof, purchased with cash collateral
received for securities on loan.
(l) The cost for federal income tax purposes is $545,952,332.
(m) At December 31, 2003, net unrealized appreciation was $47,763,272 based on
cost for federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $60,637,523 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $12,874,251.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-163
TOTAL RETURN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost
$543,884,967)--including $12,687,240
market value of securities loaned..... $ 593,715,604
Cash.................................... 4,220
Receivables:
Investment securities sold............ 3,797,010
Dividends and interest................ 2,312,991
Fund shares sold...................... 203,009
-------------
Total assets.................... 600,032,834
-------------
LIABILITIES:
Securities lending collateral........... 13,070,703
Payables:
Investment securities purchased....... 15,928,811
Fund shares redeemed.................. 345,789
Adviser............................... 152,522
Administrator......................... 95,326
Custodian............................. 10,746
NYLIFE Distributors................... 2,170
Directors............................. 659
Accrued expenses........................ 128,958
-------------
Total liabilities............... 29,735,684
-------------
Net assets.............................. $ 570,297,150
=============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class......................... $ 350,293
Service Class......................... 7,610
Additional paid-in capital.............. 556,251,922
Accumulated undistributed net investment
income................................ 179,771
Accumulated net realized loss on
investments........................... (36,333,490)
Accumulated net realized gain on foreign
currency transactions................. 10,407
Net unrealized appreciation on
investments........................... 49,830,637
-------------
Net assets.............................. $ 570,297,150
=============
Initial Class
Net assets applicable to outstanding
shares.............................. $ 558,181,011
=============
Shares of capital stock outstanding... 35,029,317
=============
Net asset value per share
outstanding......................... $ 15.93
=============
Service Class
Net assets applicable to outstanding
shares.............................. $ 12,116,139
=============
Shares of capital stock outstanding... 761,013
=============
Net asset value per share
outstanding......................... $ 15.92
=============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Interest.............................. $ 10,056,693
Dividends (a)......................... 2,833,044
Income from securities loaned-- net... 45,728
-------------
Total income.................... 12,935,465
-------------
Expenses:
Advisory.............................. 1,663,166
Administration........................ 1,039,479
Shareholder communication............. 222,851
Professional.......................... 131,714
Custodian............................. 61,808
Directors............................. 27,300
Portfolio pricing..................... 26,857
Service............................... 6,161
Miscellaneous......................... 18,878
-------------
Total expenses.................. 3,198,214
-------------
Net investment income................... 9,737,251
-------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain from:
Security transactions................. 466,582
Foreign currency transactions......... 10,407
-------------
Net realized gain on investments and
foreign currency transactions......... 476,989
-------------
Net change in unrealized depreciation on
investments........................... 83,514,759
-------------
Net realized and unrealized gain on
investments and foreign currency
transactions.......................... 83,991,748
-------------
Net increase in net assets resulting
from operations....................... $ 93,728,999
=============
</Table>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $2,088.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-164
MAINSTAY VP SERIES FUND, INC.
TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
----------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income...................................... $ 9,737,251 $ 13,340,182
Net realized gain (loss) on investments and foreign
currency transactions.................................... 476,989 (25,138,566)
Net change in unrealized appreciation (depreciation) on
investments.............................................. 83,514,759 (99,334,006)
------------ -------------
Net increase (decrease) in net assets resulting from
operations............................................... 93,728,999 (111,132,390)
------------ -------------
Dividends to shareholders:
From net investment income:
Initial Class............................................ (9,713,495) (13,531,061)
Service Class............................................ (196,299) --
------------ -------------
Total dividends to shareholders (9,909,794) (13,531,061)
------------ -------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class............................................ 24,764,458 26,285,236
Service Class............................................ 11,837,704 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class............................................ 9,713,495 13,531,061
Service Class............................................ 196,299 --
------------ -------------
46,511,956 39,816,297
Cost of shares redeemed:
Initial Class............................................ (58,273,096) (95,821,950)
Service Class............................................ (245,380) --
------------ -------------
Decrease in net assets derived from capital share
transactions............................................. (12,006,520) (56,005,653)
------------ -------------
Net increase (decrease) in net assets....................... 71,812,685 (180,669,104)
NET ASSETS:
Beginning of year........................................... 498,484,465 679,153,569
------------ -------------
End of year................................................. $570,297,150 $ 498,484,465
============ =============
Accumulated undistributed net investment income at end of
year....................................................... $ 179,771 $ 116,830
============ =============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
----------------------------------------------------------------- -------------
JUNE 4,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
---------------------------------------------------------------------------------
Net asset value at beginning of period.... $ 13.55 $ 16.69 $ 19.21 $ 22.36 $ 19.99 $ 14.79
-------- -------- -------- -------- -------- -------
Net investment income..................... 0.27(c) 0.37 0.44(b) 0.43 0.39 0.14(c)
Net realized and unrealized gain (loss) on
investments.............................. 2.39 (3.13) (2.49)(b) (1.36) 3.00 1.26
-------- -------- -------- -------- -------- -------
Total from investment operations.......... 2.66 (2.76) (2.05) (0.93) 3.39 1.40
-------- -------- -------- -------- -------- -------
Less dividends and distributions:
From net investment income............... (0.28) (0.38) (0.44) (0.43) (0.39) (0.27)
From net realized gain on investments.... -- -- (0.03) (1.79) (0.63) --
-------- -------- -------- -------- -------- -------
Total dividends and distributions......... (0.28) (0.38) (0.47) (2.22) (1.02) (0.27)
-------- -------- -------- -------- -------- -------
Net asset value at end of period.......... $ 15.93 $ 13.55 $ 16.69 $ 19.21 $ 22.36 $ 15.92
======== ======== ======== ======== ======== =======
Total investment return................... 19.68% (16.57%) (10.69%) (4.36%) 17.02% 9.47%(d)
Ratios (to average net
assets)/Supplemental Data:
Net investment income.................... 1.87% 2.28% 2.42%(b) 2.05% 1.88% 1.62%+(e)
Expenses................................. 0.61% 0.61% 0.59% 0.59% 0.58% 0.86%+
Portfolio turnover rate................... 69% 101% 125% 120% 133% 69%
Net assets at end of period (in 000's).... $558,181 $498,484 $679,154 $805,862 $821,531 $12,116
</Table>
- ------------
(a) Commencement of Operations.
(b) As required, effective January 1, 2001, the Portfolio has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment
Companies and began amortizing premium on debt securities. The effect of
this change for the year ended December 31, 2001 is shown below. Per share
ratios and supplemental data for periods prior to January 1, 2001 have not
been restated to reflect this change in presentation.
<Table>
Decrease net investment income.............................. $(0.02)
Increase net realized and unrealized gains and losses....... 0.02
Decrease ratio of net investment income..................... (0.12%)
</Table>
(c) Per share data based on average shares outstanding during the period.
(d) Total return is not annualized.
(e) Represents income earned for the year by the Initial Class shares less
service fee of 0.25%.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-165
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (91.0%)+
SHARES VALUE
--------------------------
AEROSPACE & DEFENSE (4.8%)
Boeing Co. (The)................. 141,200 $ 5,950,168
Northrop Grumman Corp............ 76,000 7,265,600
Raytheon Co...................... 256,400 7,702,256
------------
20,918,024
------------
BUILDING PRODUCTS (1.2%)
American Standard Cos., Inc.
(a)............................. 52,000 5,236,400
------------
CAPITAL MARKETS (5.7%)
Goldman Sachs Group, Inc.
(The)........................... 83,700 8,263,701
iShares (c)...................... 167,100 9,753,627
Merrill Lynch & Co., Inc......... 114,300 6,703,695
------------
24,721,023
------------
COMMERCIAL BANKS (9.4%)
Bank of America Corp............. 132,200 10,632,846
Bank One Corp.................... 127,800 5,826,402
FleetBoston Financial Corp....... 172,730 7,539,665
PNC Financial Services
Group, Inc. (The)............... 154,000 8,428,420
Wachovia Corp.................... 182,100 8,484,039
------------
40,911,372
------------
COMMUNICATIONS EQUIPMENT (0.9%)
Motorola, Inc.................... 269,700 3,794,679
------------
COMPUTERS & PERIPHERALS (2.0%)
International Business Machines
Corp............................ 95,900 8,888,012
------------
CONTAINERS & PACKAGING (2.6%)
Smurfit-Stone Container Corp.
(a)............................. 596,600 11,078,862
------------
DIVERSIFIED FINANCIALS (3.4%)
Citigroup, Inc................... 304,197 14,765,722
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (4.4%)
ALLTEL Corp...................... 119,500 5,566,310
BellSouth Corp................... 175,100 4,955,330
SBC Communications, Inc.......... 87,700 2,286,339
Verizon Communications, Inc...... 180,200 6,321,416
------------
19,129,395
------------
ELECTRIC UTILITIES (0.6%)
FirstEnergy Corp................. 68,500 2,411,200
------------
ELECTRICAL EQUIPMENT (2.6%)
Cooper Industries, Ltd. Class
A............................... 192,600 11,157,318
------------
ENERGY EQUIPMENT & SERVICES (0.5%)
Transocean, Inc. (a)............. 86,900 2,086,469
------------
FOOD & STAPLES RETAILING (4.5%)
CVS Corp......................... 273,100 9,864,372
Kroger Co. (The) (a)............. 513,900 9,512,289
------------
19,376,661
------------
</Table>
<Table>
<Caption>
SHARES VALUE
--------------------------
FOOD PRODUCTS (1.1%)
Kraft Foods, Inc. Class A........ 154,600 $ 4,981,212
------------
HEALTH CARE PROVIDERS & SERVICES (2.0%)
HCA, Inc......................... 197,800 8,497,488
------------
HOUSEHOLD PRODUCTS (0.6%)
Kimberly-Clark Corp.............. 41,900 2,475,871
------------
INSURANCE (8.7%)
Allstate Corp. (The)............. 175,100 7,532,802
American International Group,
Inc............................. 34,600 2,293,288
Hartford Financial Services
Group, Inc. (The)............... 173,800 10,259,414
Marsh & McLennan Cos., Inc....... 45,700 2,188,573
Prudential Financial, Inc........ 160,200 6,691,554
Travelers Property Casualty Corp.
Class B......................... 507,869 8,618,537
------------
37,584,168
------------
IT SERVICES (2.5%)
Computer Sciences Corp. (a)...... 245,600 10,862,888
------------
MACHINERY (3.9%)
Navistar International Corp.
(a)............................. 350,100 16,766,289
------------
METALS & MINING (2.6%)
Alcoa, Inc....................... 301,828 11,469,464
------------
MULTILINE RETAIL (0.5%)
Target Corp...................... 51,100 1,962,240
------------
OIL & GAS (11.0%)
ChevronTexaco Corp............... 141,643 12,236,539
ConocoPhillips................... 201,800 13,232,026
ExxonMobil Corp.................. 327,200 13,415,200
Kerr-McGee Corp.................. 186,500 8,670,385
Valero Energy Corp............... 7,800 361,452
------------
47,915,602
------------
PAPER & FOREST PRODUCTS (6.2%)
Bowater, Inc..................... 242,100 11,211,651
International Paper Co........... 265,500 11,445,705
MeadWestvaco Corp................ 147,020 4,373,845
------------
27,031,201
------------
PHARMACEUTICALS (4.0%)
Bristol-Myers Squibb Co.......... 216,600 6,194,760
Merck & Co., Inc................. 240,800 11,124,960
------------
17,319,720
------------
ROAD & RAIL (1.5%)
Burlington Northern Santa Fe
Corp............................ 202,000 6,534,700
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (0.8%)
Advanced Micro Devices, Inc.
(a)............................. 248,100 3,696,690
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-166
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
--------------------------
SPECIALTY RETAIL (1.7%)
Gap, Inc. (The).................. 323,700 $ 7,513,077
------------
THRIFTS & MORTGAGE FINANCE (1.3%)
Washington Mutual, Inc........... 137,500 5,516,500
------------
Total Common Stocks
(Cost $340,757,655)............. 394,602,247
------------
CONVERTIBLE PREFERRED STOCKS (2.4%)
OIL & GAS (2.4%)
Goldman Sachs Group, Inc. (The)
3.0625%, Series VLO (Valero
Energy Corp.) (d)............... 78,600 3,468,225
3.125%, Series BSKT (Goldman Oil
& Gas Basket) (d)............... 15,000 1,556,250
3.25%, Series BSKT (Goldman Oil
& Gas Basket) (d)............... 18,556 2,034,201
4.25% Series BSKT (Goldman Oil &
Gas Basket) (d)................. 32,400 3,507,300
------------
10,565,976
------------
Total Convertible Preferred
Stocks (Cost $9,698,838)........ 10,565,976
------------
PURCHASED CALL OPTIONS (0.1%)
NUMBER OF
CONTRACTS
(e)
-----------
ENERGY EQUIPMENT & SERVICES (0.1%)
ENSCO International, Inc.
Strike Price $24.00
Expire 3/19/04 (a)(f)........... 796 302,530
Strike Price $25.00
Expire 3/20/04 (a)(f)........... 478 136,230
------------
438,760
------------
FOOD & STAPLES RETAILING (0.0%)(b)
Kroger Co. (The)
Strike Price $20.00
Expire 4/17/04 (a)(f)........... 188 9,870
------------
Total Purchased Call Options
(Cost $452,743)................. 448,630
------------
PURCHASED PUT OPTION (0.0%)(B)
AEROSPACE & DEFENSE (0.0%)(b)
Boeing Co. (The)
Strike Price $37.50
Expire 1/17/04 (a)(f)........... 635 6,350
------------
Total Purchased Put Option (Cost
$64,389)........................ 6,350
------------
SHORT-TERM INVESTMENTS (6.6%)
PRINCIPAL
AMOUNT VALUE
--------------------------
COMMERCIAL PAPER (6.6%)
American Express Credit Corp.
1.02%, due 1/6/04............... $ 8,000,000 $ 7,998,866
Federal Home Loan Bank
0.92%, due 1/21/04.............. 10,465,000 10,459,651
Federal National Mortgage
Association
0.85%, due 1/2/04............... 600,000 599,986
0.97%, due 1/6/04............... 5,035,000 5,034,322
UBS Finance Delaware LLC
0.96%, due 1/2/04............... 4,595,000 4,594,877
------------
28,687,702
------------
Total Short-Term Investments
(Cost $28,687,702).............. 28,687,702
------------
Total Investments
(Cost $379,661,327) (g)......... 100.1% 434,310,905(h)
Liabilities in Excess of
Cash & Other Assets............. (0.1) (294,739)
----------- ------------
Net Assets....................... 100.0% $434,016,166
=========== ============
WRITTEN CALL OPTION (-0.0%)(b)
NUMBER OF
CONTRACTS
(e)
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (-0.0%)(b)
Advanced Micro Devices, Inc.
Strike Price $19.00
Expire 1/17/04 (a)(f)........... (638) $ (3,190)
------------
Total Written Call Option
(Premium ($62,202))............. $ (3,190)
============
</Table>
- ------------
(a) Non-income producing security.
(b) Less than one tenth of a percent.
(c) Exchange Traded Fund--Represents a basket of securities that are traded on
an exchange.
(d) Synthetic Convertible--An equity linked security whose value is based upon
the value of an underlying instrument (underlying instrument disclosed
parenthetically).
(e) One contract relates to 100 shares.
(f) Options can be exercised into the underlying common stock.
(g) The cost for federal income tax purposes is $381,624,239.
(h) At December 31, 2003 net unrealized appreciation was $52,686,666, 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 $54,880,463 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,193,797.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-167
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $379,661,327)......... $434,310,905
Cash..................................... 1,281
Receivables:
Dividends.............................. 687,821
Fund shares sold....................... 234,408
Other assets............................. 371
------------
Total assets..................... 435,234,786
------------
LIABILITIES:
Written call options, at value (premium
received $62,202)...................... 3,190
Payables:
Investment securities purchased........ 852,302
Adviser................................ 127,771
Administrator.......................... 70,984
Shareholder communication.............. 63,685
Fund shares redeemed................... 61,172
Custodian.............................. 2,705
NYLIFE Distributors.................... 624
Accrued expenses......................... 36,187
------------
Total liabilities................ 1,218,620
------------
Net assets............................... $434,016,166
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 280,092
Service Class.......................... 10,052
Additional paid-in capital............... 435,907,018
Accumulated undistributed net investment
income................................. 622
Accumulated net realized loss on
investments and written option
transactions........................... (56,890,208)
Net unrealized appreciation on
investments and written option
transactions........................... 54,708,590
------------
Net assets............................... $434,016,166
============
Initial Class
Net assets applicable to outstanding
shares............................... $418,992,256
============
Shares of capital stock outstanding.... 28,009,212
============
Net asset value per share
outstanding.......................... $ 14.96
============
Service Class
Net assets applicable to outstanding
shares............................... $ 15,023,910
============
Shares of capital stock outstanding.... 1,005,189
============
Net asset value per share
outstanding.......................... $ 14.95
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends.............................. $ 7,868,856
Interest............................... 231,424
------------
Total income..................... 8,100,280
------------
Expenses:
Advisory............................... 1,294,710
Administration......................... 719,283
Shareholder communication.............. 176,248
Professional........................... 88,230
Custodian.............................. 38,891
Directors.............................. 19,255
Service................................ 7,850
Miscellaneous.......................... 20,804
------------
Total expenses................... 2,365,271
------------
Net investment income.................... 5,735,009
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND WRITTEN OPTION
TRANSACTIONS:
Net realized gain (loss) from:
Security transactions.................. (5,276,651)
Written option transactions............ 263,351
------------
Net realized loss on investments......... (5,013,300)
------------
Net change in unrealized appreciation
(depreciation) on:
Security transactions.................. 90,277,184
Written option transactions............ 21,042
------------
Net unrealized gain on investments and
written option transactions............ 90,298,226
------------
Net realized and unrealized gain on
investments and written option
transactions........................... 85,284,926
------------
Net increase in net assets resulting from
operations............................. $ 91,019,935
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-168
MAINSTAY VP SERIES FUND, INC.
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
-------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 5,735,009 $ 5,380,361
Net realized loss on investments and written option
transactions............................................ (5,013,300) (47,707,481)
Net change in unrealized appreciation (depreciation) on
investments and written option transactions............. 90,298,226 (48,796,159)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. 91,019,935 (91,123,279)
------------ ------------
Dividends and distributions to shareholders:
From net investment income:
Initial Class........................................... (5,659,716) (5,328,561)
Service Class........................................... (186,298) --
From net realized gain on investments:
Initial Class........................................... -- (597,495)
------------ ------------
Total dividends and distributions to shareholders..... (5,846,014) (5,926,056)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 30,675,066 57,977,617
Service Class........................................... 13,819,659 --
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions:
Initial Class........................................... 5,659,716 5,926,056
Service Class........................................... 186,298 --
------------ ------------
50,340,739 63,903,673
Cost of shares redeemed:
Initial Class........................................... (33,249,110) (39,195,622)
Service Class........................................... (82,177) --
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 17,009,452 24,708,051
------------ ------------
Net increase (decrease) in net assets....................... 102,183,373 (72,341,284)
NET ASSETS:
Beginning of year........................................... 331,832,793 404,174,077
------------ ------------
End of year................................................. $434,016,166 $331,832,793
============ ============
Accumulated undistributed net investment income at end of
year...................................................... $ 622 $ 111,627
============ ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
---------------------------------------------------- -------------
JUNE 4,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
--------------------------------------------------------------------
Net asset value at beginning of period.... $ 11.91 $ 15.35 $ 16.21 $ 15.00 $ 13.96 $ 12.81
-------- -------- -------- -------- -------- --------
Net investment income..................... 0.21(b) 0.20 0.23 0.20 0.20 0.10(b)
Net realized and unrealized gain (loss) on
investments............................. 3.04 (3.43) (0.15) 1.73 1.03 2.23
-------- -------- -------- -------- -------- --------
Total from investment operations.......... 3.25 (3.23) 0.08 1.93 1.23 2.33
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income.............. (0.20) (0.19) (0.23) (0.21) (0.19) (0.19)
From net realized gain on investments... -- (0.02) (0.71) (0.51) -- --
-------- -------- -------- -------- -------- --------
Total dividends and distributions......... (0.20) (0.21) (0.94) (0.72) (0.19) (0.19)
-------- -------- -------- -------- -------- --------
Net asset value at end of period.......... $ 14.96 $ 11.91 $ 15.35 $ 16.21 $ 15.00 $ 14.95
======== ======== ======== ======== ======== ========
Total investment return................... 27.37% (21.05%) 0.40% 12.89% 8.80% 18.14%(c)
Ratios (to average net
assets)/Supplemental Data:
Net investment income................... 1.60% 1.43% 1.53% 1.33% 1.30% 1.35%+(d)
Expenses................................ 0.66% 0.65% 0.64% 0.64% 0.63% 0.91%+
Portfolio turnover rate................... 62% 64% 70% 90% 74% 62%
Net assets at end of period (in 000's).... $418,992 $331,833 $404,174 $338,596 $331,473 $ 15,024
</Table>
- ------------
<Table>
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during
the period.
(c) Total return is not annualized.
(d) Represents income earned for the year by the Initial Class
shares less service fee of 0.25%.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-169
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (99.0%)+
SHARES VALUE
---------------------
AEROSPACE & DEFENSE (0.2%)
General Dynamics Corp. ............... 165 $ 14,914
Honeywell International, Inc. ........ 729 24,371
United Technologies Corp. ............ 1,166 110,502
-----------
149,787
-----------
AIR FREIGHT & LOGISTICS (1.0%)
FedEx Corp. .......................... 2,014 135,945
United Parcel Service, Inc. Class B... 7,663 571,277
-----------
707,222
-----------
AIRLINES (0.2%)
Delta Air Lines, Inc. ................ 1,500 17,715
Southwest Airlines Co. ............... 6,124 98,841
-----------
116,556
-----------
AUTO COMPONENTS (0.1%)
American Axle & Manufacturing
Holdings, Inc. (a)................... 1,269 51,293
-----------
AUTOMOBILES (2.4%)
Ford Motor Co. ....................... 108,031 1,728,496
General Motors Corp. ................. 275 14,685
-----------
1,743,181
-----------
BEVERAGES (0.3%)
Adolph Coors Co. Class B.............. 4,140 232,254
PepsiCo, Inc. ........................ 407 18,974
-----------
251,228
-----------
BIOTECHNOLOGY (1.0%)
Amgen, Inc. (a)....................... 12,227 755,629
Invitrogen Corp. (a).................. 213 14,910
-----------
770,539
-----------
CAPITAL MARKETS (3.9%)
J.P. Morgan Chase & Co. .............. 48,244 1,772,002
Lehman Brothers Holdings, Inc. ....... 282 21,776
Merrill Lynch & Co., Inc. ............ 10,579 620,458
Morgan Stanley........................ 7,862 454,974
-----------
2,869,210
-----------
CHEMICALS (1.8%)
Engelhard Corp. ...................... 722 21,624
Monsanto Co. ......................... 41,964 1,207,724
RPM International, Inc. .............. 5,771 94,991
-----------
1,324,339
-----------
COMMERCIAL BANKS (6.9%)
Bank of America Corp. ................ 37,501 3,016,205
Bank One Corp. ....................... 228 10,395
First Tennessee National Corp. ....... 2,369 104,473
FleetBoston Financial Corp. .......... 7,289 318,165
PNC Financial Services Group, Inc.
(The)................................ 4,704 257,450
</Table>
<Table>
<Caption>
SHARES VALUE
---------------------
COMMERCIAL BANKS (Continued)
UnionBanCal Corp. .................... 6,610 $ 380,339
Wachovia Corp. ....................... 10,202 475,311
Wells Fargo & Co. .................... 8,353 491,908
-----------
5,054,246
-----------
COMMERCIAL SERVICES & SUPPLIES (1.4%)
Block (H&R), Inc. .................... 3,674 203,429
Cendant Corp. (a)..................... 8,675 193,192
IKON Office Solutions, Inc. .......... 4,882 57,901
United Stationers, Inc. (a)........... 6,126 250,676
Viad Corp. ........................... 13,541 338,525
-----------
1,043,723
-----------
COMMUNICATIONS EQUIPMENT (1.2%)
Cisco Systems, Inc. (a)............... 28,843 700,596
Motorola, Inc. ....................... 2,457 34,570
QUALCOMM, Inc. ....................... 1,793 96,697
Scientific-Atlanta, Inc. ............. 2,333 63,691
-----------
895,554
-----------
COMPUTERS & PERIPHERALS (3.3%)
Dell, Inc. (a)........................ 5,647 191,772
Hewlett-Packard Co. .................. 41,372 950,315
International Business Machines
Corp. ............................... 10,959 1,015,680
Storage Technology Corp. (a).......... 2,751 70,838
Western Digital Corp. (a)............. 18,477 217,844
-----------
2,446,449
-----------
CONSUMER FINANCE (0.1%)
MBNA Corp. ........................... 3,027 75,221
-----------
CONTAINERS & PACKAGING (0.3%)
Bemis Co., Inc. ...................... 4,452 222,600
-----------
DIVERSIFIED FINANCIAL SERVICES (3.6%)
Citigroup, Inc. ...................... 50,510 2,451,755
Principal Financial Group, Inc.
(The)................................ 6,343 209,763
-----------
2,661,518
-----------
DIVERSIFIED TELECOMMUNICATION (4.3%)
ALLTEL Corp. ......................... 10,729 499,757
AT&T Corp. ........................... 5,852 118,796
BellSouth Corp. ...................... 25,592 724,253
SBC Communications, Inc. ............. 22,790 594,135
Sprint Corp. (FON Group).............. 31,343 514,652
Verizon Communications, Inc. ......... 19,985 701,074
-----------
3,152,667
-----------
ELECTRIC UTILITIES (4.0%)
Duquesne Light Holdings, Inc. ........ 1,583 29,032
Edison International, Inc. (a)........ 49,878 1,093,824
Exelon Corp. ......................... 12,749 846,024
Great Plains Energy, Inc. ............ 13,263 422,029
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-170
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
ELECTRIC UTILITIES (Continued)
OGE Energy Corp. ..................... 2,140 $ 51,767
PG&E Corp. (a)........................ 2,882 80,033
TXU Corp. ............................ 17,448 413,866
-----------
2,936,575
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS (1.7%)
Arrow Electronics, Inc. (a)........... 11,719 271,178
Avnet, Inc. (a)....................... 22,992 498,007
Benchmark Electronics, Inc. (a)....... 5,277 183,692
Sanmina-SCI Corp. (a)................. 24,749 312,085
-----------
1,264,962
-----------
ENERGY EQUIPMENT & SERVICES (0.2%)
Schlumberger Ltd. .................... 2,663 145,719
-----------
FOOD & STAPLES RETAILING (0.8%)
SUPERVALU, Inc. ...................... 21,923 626,779
-----------
FOOD PRODUCTS (1.4%)
Archer-Daniels-Midland Co. ........... 16,765 255,163
ConAgra Foods, Inc. .................. 13,358 352,518
Sara Lee Corp. ....................... 2,739 59,464
Tyson Foods, Inc. Class A............. 25,069 331,913
-----------
999,058
-----------
GAS UTILITIES (0.4%)
Sempra Energy......................... 5,277 158,627
UGI Corp. ............................ 4,684 158,787
-----------
317,414
-----------
HEALTH CARE EQUIPMENT & SUPPLIES (0.1%)
Fisher Scientific International, Inc.
(a).................................. 2,578 106,652
-----------
HEALTH CARE PROVIDERS & SERVICES (1.4%)
Health Net, Inc. (a).................. 13,184 431,117
Humana, Inc. (a)...................... 10,378 237,137
McKesson Corp. ....................... 11,640 374,343
-----------
1,042,597
-----------
HOTEL RESTAURANTS & LEISURE (0.2%)
Harrah's Entertainment, Inc. ......... 2,642 131,492
-----------
HOUSEHOLD DURABLES (1.9%)
Black & Decker Corp. (The)............ 909 44,832
Fortune Brands, Inc. ................. 7,927 566,701
KB HOME............................... 4,291 311,183
NVR, Inc. (a)......................... 351 163,566
Whirlpool Corp. ...................... 4,209 305,784
-----------
1,392,066
-----------
HOUSEHOLD PRODUCTS (2.3%)
Procter & Gamble Co. (The)............ 17,213 1,719,234
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
---------------------
INDUSTRIAL CONGLOMERATES (2.2%)
Carlisle Cos., Inc. .................. 2,007 $ 122,146
General Electric Co. ................. 37,473 1,160,914
Tyco International Ltd. .............. 12,033 318,874
-----------
1,601,934
-----------
INSURANCE (5.5%)
ACE, Ltd. ............................ 16,229 672,205
Allstate Corp. (The).................. 10,111 434,975
AmerUs Group Co. ..................... 11,171 390,650
Berkley (W.R.) Corp. ................. 15,393 537,985
Fidelity National Financial, Inc. .... 26,224 1,016,967
First American Corp. ................. 23,365 695,576
Protective Life Corp. ................ 9,596 324,729
-----------
4,073,087
-----------
INTERNET & CATALOG RETAIL (0.1%)
Netflix, Inc. (a)..................... 1,558 85,207
-----------
INTERNET SOFTWARE & SERVICES (0.7%)
EarthLink, Inc. (a)................... 13,055 130,550
United Online, Inc. (a)............... 5,999 100,723
VeriSign, Inc. (a).................... 16,759 273,172
-----------
504,445
-----------
IT SERVICES (1.1%)
CheckFree Corp. (a)................... 2,056 56,848
Computer Sciences Corp. (a)........... 7,259 321,066
Convergys Corp. (a)................... 15,200 265,392
Electronic Data Systems Corp. ........ 5,553 136,271
-----------
779,577
-----------
LEISURE EQUIPMENT & PRODUCTS (1.3%)
Eastman Kodak Co. .................... 37,330 958,261
-----------
MACHINERY (0.2%)
Briggs & Stratton Corp. .............. 889 59,919
Eaton Corp. .......................... 820 88,543
-----------
148,462
-----------
MEDIA (4.3%)
Fox Entertainment Group, Inc. Class A
(a).................................. 1,676 48,855
PanAmSat Corp. (a).................... 10,481 225,970
Regal Entertainment Group Class A..... 18,447 378,533
Time Warner, Inc. (a)................. 71,078 1,278,693
Viacom, Inc. Class B.................. 11,529 511,657
Walt Disney Co. (The)................. 31,232 728,643
-----------
3,172,351
-----------
MULTILINE RETAIL (4.2%)
Federated Department Stores, Inc. .... 40,727 1,919,464
May Department Stores Co. (The)....... 28,815 837,652
Sears, Roebuck & Co. ................. 7,217 328,301
-----------
3,085,417
-----------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-171
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
---------------------
MULTI-UTILITIES & UNREGULATED POWER (0.6%)
ONEOK, Inc. .......................... 13,097 $ 289,182
Westar Energy, Inc. .................. 8,132 164,673
-----------
453,855
-----------
OFFICE ELECTRONICS (0.1%)
Xerox Corp. (a)....................... 2,732 37,702
-----------
OIL & GAS (8.2%)
Amerada Hess Corp. ................... 508 27,010
ChevronTexaco Corp. .................. 21,328 1,842,526
ConocoPhillips........................ 6,777 444,368
ExxonMobil Corp. ..................... 11,096 454,936
Marathon Oil Corp. ................... 49,486 1,637,492
Occidental Petroleum Corp. ........... 8,754 369,769
Sunoco, Inc. ......................... 24,138 1,234,659
-----------
6,010,760
-----------
PAPER & FOREST PRODUCTS (0.5%)
Georgia-Pacific Corp. ................ 570 17,482
Louisiana-Pacific Corp. (a)........... 4,683 83,732
Rayonier, Inc. ....................... 5,391 223,780
Weyerhaeuser Co. ..................... 1,067 68,288
-----------
393,282
-----------
PHARMACEUTICALS (8.1%)
Abbott Laboratories................... 4,571 213,009
Bristol-Myers Squibb Co. ............. 38,009 1,087,057
Endo Pharmaceuticals Holdings, Inc.
(a).................................. 3,199 61,613
Johnson & Johnson..................... 20,464 1,057,170
King Pharmaceuticals, Inc. (a)........ 15,759 240,482
Kos Pharmaceuticals, Inc. (a)......... 917 39,468
Merck & Co., Inc. .................... 31,897 1,473,641
Pfizer, Inc. ......................... 44,471 1,571,161
Pharmaceutical Resources, Inc. (a).... 502 32,705
Valeant Pharmaceuticals
International........................ 2,871 72,206
Wyeth................................. 3,492 148,235
-----------
5,996,747
-----------
REAL ESTATE (0.9%)
CBL & Associates Properties, Inc. .... 3,064 173,116
Equity Office Properties Trust........ 11,307 323,946
General Growth Properties, Inc. ...... 3,012 83,583
Simon Property Group, Inc. ........... 1,039 48,147
-----------
628,792
-----------
ROAD & RAIL (0.4%)
Burlington Northern Santa Fe Corp. ... 2,840 91,874
CSX Corp. ............................ 1,300 46,722
Norfolk Southern Corp. ............... 2,991 70,737
Union Pacific Corp. .................. 1,767 122,771
-----------
332,104
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
---------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (4.0%)
Intel Corp. .......................... 88,106 $ 2,837,013
Texas Instruments, Inc. .............. 4,544 133,503
-----------
2,970,516
-----------
SOFTWARE (3.1%)
Computer Associates International,
Inc. ................................ 554 15,146
Electronic Arts, Inc. (a)............. 608 29,050
Microsoft Corp. ...................... 69,442 1,912,433
Oracle Corp. (a)...................... 18,004 237,653
Take-Two Interactive Software, Inc.
(a).................................. 2,465 71,017
-----------
2,265,299
-----------
SPECIALTY RETAIL (2.2%)
Advance Auto Parts, Inc. (a).......... 235 19,129
Barnes & Noble, Inc. (a).............. 6,667 219,011
Blockbuster, Inc. Class A............. 10,520 188,834
Claire's Stores, Inc. ................ 3,522 66,354
Gap, Inc. (The)....................... 7,099 164,768
Home Depot, Inc. (The)................ 1,272 45,143
RadioShack Corp. ..................... 1,565 48,014
Rent-A-Center, Inc. (a)............... 10,982 328,142
Sherwin-Williams Co. (The)............ 15,621 542,674
-----------
1,622,069
-----------
THRIFTS & MORTGAGE FINANCE (1.9%)
Fannie Mae............................ 10,946 821,607
Flagstar Bancorp, Inc. ............... 2,172 46,524
Washington Mutual, Inc. .............. 14,048 563,606
-----------
1,431,737
-----------
TOBACCO (2.1%)
Altria Group, Inc. ................... 23,448 1,276,040
R.J. Reynolds Tobacco Holdings,
Inc. ................................ 4,293 249,638
-----------
1,525,678
-----------
WIRELESS TELECOMMUNICATION SERVICES (0.9%)
Nextel Communications, Inc. Class A
(a).................................. 22,579 633,567
-----------
Total Common Stocks
(Cost $65,874,070)................... 72,928,730
-----------
<Caption>
CONVERTIBLE PREFERRED STOCKS (0.4%)
AUTOMOBILES (0.2%)
Ford Motor Co. Capital Trust II
6.5%................................. 2,261 126,277
General Motors Corp.
5.25% Series B....................... 2,600 69,862
-----------
196,139
-----------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-172
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
SHARES VALUE
---------------------
x
OFFICE ELECTRONICS (0.2%)
Xerox Corp. 6.25%..................... 971 $ 125,987
-----------
Total Convertible Preferred Stocks
(Cost $273,490)...................... 322,126
-----------
Total Investments
(Cost $66,147,560) (b)............... 99.4% 73,250,856(c)
Cash and Other Assets,
Less Liabilities..................... 0.6 445,470
------- -----------
Net Assets............................ 100.0% $73,696,326
======= ===========
</Table>
- ------------
(a) Non-income producing security.
(b) The cost for federal income tax purposes is $67,602,029.
(c) At December 31, 2003 net unrealized appreciation was $5,648,827, based on
cost for federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $10,317,470 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $4,668,643.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-173
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $66,147,560).......... $ 73,250,856
Cash..................................... 350,112
Receivables:
Dividends.............................. 109,718
Fund shares sold....................... 67,634
------------
Total assets..................... 73,778,320
------------
LIABILITIES:
Payables:
Adviser................................ 30,064
Professional........................... 16,435
Administrator.......................... 12,025
Shareholder communication.............. 10,119
Custodian.............................. 8,815
NYLIFE Distributors.................... 733
Fund shares redeemed................... 621
Accrued expenses......................... 3,182
------------
Total liabilities................ 81,994
------------
Net assets............................... $ 73,696,326
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class.......................... $ 67,249
Service Class.......................... 3,963
Additional paid-in capital............... 79,257,089
Accumulated net realized loss on
investments............................ (12,735,271)
Net unrealized appreciation on
investments............................ 7,103,296
------------
Net assets............................... $ 73,696,326
============
Initial Class
Net assets applicable to outstanding
shares............................... $ 69,597,702
============
Shares of capital stock outstanding.... 6,724,918
============
Net asset value per share
outstanding.......................... $ 10.35
============
Service Class
Net assets applicable to outstanding
shares............................... $ 4,098,624
============
Shares of capital stock outstanding.... 396,301
============
Net asset value per share
outstanding.......................... $ 10.34
============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends............................... $ 1,491,176
Interest................................ 1,166
-----------
Total income...................... 1,492,342
-----------
Expenses:
Advisory................................ 304,459
Administration.......................... 121,784
Professional............................ 45,657
Custodian............................... 44,052
Shareholder communication............... 28,364
Directors............................... 5,175
Service................................. 2,088
Amortization of organization expense.... 1,394
Miscellaneous........................... 20,450
-----------
Total expenses.................... 573,423
-----------
Net investment income..................... 918,919
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) from:
Security transactions................... (1,998,115)
Futures transactions.................... 30,241
-----------
Net realized loss on investments.......... (1,967,874)
-----------
Net change in unrealized depreciation on:
Security transactions................... 16,915,276
Futures transactions.................... 4,780
-----------
Net unrealized gain on investments........ 16,920,056
-----------
Net realized and unrealized gain on
investments............................. 14,952,182
-----------
Net increase in net assets resulting from
operations.............................. $15,871,101
===========
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-174
MAINSTAY VP SERIES FUND, INC.
AMERICAN CENTURY
INCOME & GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 918,919 $ 698,110
Net realized loss on investments and futures
transactions............................................ (1,967,874) (5,657,612)
Net change in unrealized depreciation on investments and
futures transactions.................................... 16,920,056 (9,476,798)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. 15,871,101 (14,436,300)
------------ ------------
Dividends to shareholders:
From net investment income:
Initial Class........................................... (871,258) (699,177)
Service Class........................................... (48,213) --
------------ ------------
Total dividends to shareholders....................... (919,471) (699,177)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 11,256,503 9,797,922
Service Class........................................... 3,871,091 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class........................................... 871,258 699,177
Service Class........................................... 48,213 --
------------ ------------
16,047,065 10,497,099
Cost of shares redeemed:
Initial Class........................................... (15,357,671) (8,208,712)
Service Class........................................... (97,938)
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 591,456 2,288,387
------------ ------------
Net increase (decrease) in net assets....................... 15,543,086 (12,847,090)
NET ASSETS:
Beginning of year........................................... 58,153,240 71,000,330
------------ ------------
End of year................................................. $ 73,696,326 $ 58,153,240
============ ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
SERVICE
INITIAL CLASS CLASS
------------------------------------------------------ ------------
JUNE 13,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
---------------------------------------------------------------------
Net asset value at beginning of
period............................. $ 8.14 $ 10.24 $ 11.28 $ 12.74 $ 10.91 $ 9.26
------- ------- ------- ------- ------- -------
Net investment income................ 0.14(b) 0.10 0.08 0.07 0.08 0.07(b)
Net realized and unrealized gain
(loss) on investments.............. 2.20 (2.10) (1.04) (1.44) 1.83 1.14
------- ------- ------- ------- ------- -------
Total from investment operations..... 2.34 (2.00) (0.96) (1.37) 1.91 1.21
------- ------- ------- ------- ------- -------
Less dividends and distributions:
From net investment income......... (0.13) (0.10) (0.08) (0.07) (0.08) (0.13)
From net realized gain on
investments...................... -- -- -- (0.02) -- --
------- ------- ------- ------- ------- -------
Total dividends and distributions.... (0.13) (0.10) (0.08) (0.09) (0.08) (0.13)
------- ------- ------- ------- ------- -------
Net asset value at end of period..... $ 10.35 $ 8.14 $ 10.24 $ 11.28 $ 12.74 $ 10.34
======= ======= ======= ======= ======= =======
Total investment return.............. 28.69% (19.52%) (8.50%) (10.73%) 17.59% 13.10%(c)
Ratios (to average net assets)/
Supplemental Data:
Net investment income.............. 1.51% 1.09% 0.81% 0.66% 0.89% 1.26%+(d)
Net expenses....................... 0.94% 0.92% 0.88% 0.90% 0.85% 1.19%+
Expenses (before reimbursement).... 0.94% 0.92% 0.88% 0.90% 0.92% 1.19%+
Portfolio turnover rate.............. 79% 71% 61% 59% 51% 79%
Net assets at end of period (in
000's)............................. $69,598 $58,153 $71,000 $75,189 $64,142 $ 4,099
</Table>
- ------------
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Total return is not annualized.
(d) Represents income earned for the year by the Initial Class shares less
service fee of 0.25%.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-175
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (96.4%)+
SHARES VALUE
---------------------
AEROSPACE & DEFENSE (2.5%)
United Technologies Corp........... 18,100 $ 1,715,337
-----------
CAPITAL MARKETS (11.3%)
Bear Stearns Cos., Inc. (The)...... 4,100 327,795
Goldman Sachs Group, Inc. (The).... 20,900 2,063,457
J.P. Morgan Chase & Co............. 37,800 1,388,394
Lehman Brothers Holdings, Inc...... 8,400 648,648
Merrill Lynch & Co., Inc........... 28,300 1,659,795
Morgan Stanley..................... 28,300 1,637,721
-----------
7,725,810
-----------
COMMERCIAL BANKS (5.4%)
Bank of America Corp............... 12,200 981,246
Comerica, Inc...................... 6,200 347,572
FleetBoston Financial Corp......... 32,100 1,401,165
U.S. Bancorp....................... 33,200 988,696
-----------
3,718,679
-----------
COMMERCIAL SERVICES & SUPPLIES (0.5%)
Pitney Bowes, Inc.................. 8,300 337,146
-----------
COMMUNICATIONS EQUIPMENT (4.7%)
3Com Corp. (a)..................... 30,500 249,185
Comverse Technology, Inc. (a)...... 30,700 540,013
Corning, Inc. (a).................. 68,400 713,412
Nokia Corp. ADR (b)................ 78,900 1,341,300
Tellabs, Inc. (a).................. 40,200 338,886
-----------
3,182,796
-----------
COMPUTERS & PERIPHERALS (1.0%)
International Business Machines
Corp.............................. 7,700 713,636
-----------
CONSUMER FINANCE (1.5%)
American Express Co................ 20,700 998,361
-----------
DIVERSIFIED FINANCIAL SERVICES (5.3%)
Citigroup, Inc..................... 63,946 3,103,939
Principal Financial Group (The).... 15,100 499,357
-----------
3,603,296
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES (2.9%)
SBC Communications, Inc............ 27,565 718,619
Sprint Corp. (FON Group)........... 25,700 421,994
Verizon Communications, Inc........ 22,982 806,209
-----------
1,946,822
-----------
ELECTRICAL EQUIPMENT (1.1%)
Emerson Electric Co................ 11,400 738,150
-----------
ENERGY EQUIPMENT & SERVICES (1.3%)
Schlumberger Ltd................... 16,600 908,352
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
------------------------
FOOD & STAPLES RETAILING (1.3%)
Kroger Co. (The) (a)............... 17,500 $ 323,925
Safeway, Inc. (a).................. 27,200 595,952
-----------
919,877
-----------
HEALTH CARE EQUIPMENT & SUPPLIES (2.6%)
Baxter International, Inc.......... 34,500 1,052,940
Becton, Dickinson & Co............. 17,300 711,722
-----------
1,764,662
-----------
HEALTH CARE PROVIDERS & SERVICES (0.9%)
McKesson Corp...................... 18,200 585,312
-----------
HOTELS, RESTAURANTS & LEISURE (2.9%)
Brinker International, Inc. (a).... 9,800 324,968
McDonald's Corp.................... 67,600 1,678,508
-----------
2,003,476
-----------
HOUSEHOLD DURABLES (4.0%)
Black & Decker Corp. (The)......... 6,800 335,376
Koninklijke Philips Electronics NV
ADR (b)........................... 68,000 1,978,120
Sony Corp. ADR (b)................. 11,300 391,771
-----------
2,705,267
-----------
HOUSEHOLD PRODUCTS (0.5%)
Kimberly-Clark Corp................ 5,600 330,904
-----------
INSURANCE (5.8%)
Allstate Corp. (The)............... 27,800 1,195,956
American International Group,
Inc............................... 18,458 1,223,396
Hartford Financial Services Group,
Inc. (The)........................ 5,800 342,374
Marsh & McLennan Cos., Inc......... 12,100 579,469
Travelers Property Casualty Corp.
Class A........................... 35,900 602,402
-----------
3,943,597
-----------
IT SERVICES (2.0%)
Automatic Data Processing, Inc..... 26,700 1,057,587
SunGard Data Systems, Inc. (a)..... 11,500 318,665
-----------
1,376,252
-----------
MACHINERY (3.0%)
Deere & Co......................... 19,000 1,235,950
Eaton Corp......................... 7,700 831,446
-----------
2,067,396
-----------
MEDIA (7.6%)
Gannett Co., Inc................... 7,200 641,952
Interpublic Group of Cos., Inc.
(The) (a)......................... 21,800 340,080
Liberty Media Corp. (a)............ 145,780 1,733,324
News Corp. Ltd. (The) ADR (b)...... 30,000 907,500
Viacom, Inc. Class B............... 35,700 1,584,366
-----------
5,207,222
-----------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-176
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
<Caption>
SHARES VALUE
------------------------
METALS & MINING (1.3%)
Alcoa, Inc......................... 22,600 $ 858,800
-----------
OFFICE ELECTRONICS (1.9%)
Xerox Corp. (a).................... 94,700 1,306,860
-----------
OIL & GAS (7.2%)
Anadarko Petroleum Corp............ 13,600 693,736
Apache Corp........................ 4,700 381,170
BP PLC ADR (b)..................... 20,700 1,021,545
ExxonMobil Corp.................... 54,882 2,250,162
Royal Dutch Petroleum Co. ADR
(b)............................... 10,700 560,573
-----------
4,907,186
-----------
PAPER & FOREST PRODUCTS (0.4%)
International Paper Co............. 6,500 280,215
-----------
PHARMACEUTICALS (2.9%)
Johnson & Johnson.................. 12,700 656,082
Pfizer, Inc........................ 22,340 789,272
Wyeth.............................. 12,100 513,645
-----------
1,958,999
-----------
ROAD & RAIL (1.2%)
Union Pacific Corp................. 11,300 785,124
-----------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (2.4%)
Intel Corp......................... 31,800 1,023,960
STMicroelectronics N.V............. 23,200 626,632
-----------
1,650,592
-----------
SOFTWARE (4.7%)
Cadence Design Systems, Inc. (a)... 57,100 1,026,658
Microsoft Corp..................... 78,300 2,156,382
-----------
3,183,040
-----------
SPECIALTY RETAIL (1.4%)
Abercrombie & Fitch Co. Class A
(a)............................... 11,600 286,636
Limited Brands..................... 38,400 692,352
-----------
978,988
-----------
TEXTILES, APPAREL & LUXURY GOODS (1.0%)
Jones Apparel Group, Inc........... 20,100 708,123
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
------------------------
THRIFTS & MORTGAGE FINANCE (1.1%)
Fannie Mae......................... 10,400 $ 780,624
-----------
TOBACCO (0.8%)
Altria Group, Inc.................. 10,300 560,526
-----------
WIRELESS TELECOMMUNICATION SERVICES (2.0%)
Sprint Corp. (PCS Group) (a)....... 86,300 485,006
Telefonaktiebolaget LM Ericsson AB
ADR (a)(b)........................ 50,200 888,540
-----------
1,373,546
-----------
Total Common Stocks
(Cost $58,005,144)................ 65,824,973
-----------
<Caption>
SHORT-TERM INVESTMENT (2.8%)
PRINCIPAL
AMOUNT
----------
FEDERAL AGENCY (2.8%)
Federal Farm Credit Bank
0.75%, due 1/2/2004............... $1,924,000 1,923,960
-----------
Total Short-Term Investment
(Cost $1,923,960)................. 1,923,960
-----------
Total Investments
(Cost $59,929,104) (c)............ 99.2% 67,748,933(d)
Cash and Other Assets,
Less Liabilities.................. 0.8 512,223
---------- -----------
Net Assets......................... 100.0% $68,261,156
========== ===========
</Table>
- ------------
(a) Non-income producing security.
(b) ADR--American Depositary Receipt.
(c) The cost for federal income tax purposes is $60,050,809.
(d) At December 31, 2003 net unrealized appreciation was $7,698,124, based on
cost for federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $8,840,343 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $1,142,219.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-177
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $59,929,104)........... $67,748,933
Cash...................................... 836
Receivables:
Investment securities sold.............. 912,828
Fund shares sold........................ 133,156
Dividends and interest.................. 84,086
-----------
Total assets...................... 68,879,839
-----------
LIABILITIES:
Payables:
Investment securities purchased......... 545,634
Adviser................................. 33,052
Administrator........................... 11,017
Shareholder communication............... 9,483
Custodian............................... 2,799
NYLIFE Distributors..................... 1,052
Fund shares redeemed.................... 16
Accrued expenses.......................... 15,630
-----------
Total liabilities................. 618,683
-----------
Net assets................................ $68,261,156
===========
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class........................... $ 61,146
Service Class........................... 5,932
Additional paid-in capital................ 69,632,572
Accumulated net realized loss on
investments............................. (9,258,323)
Net unrealized appreciation on
investments............................. 7,819,829
-----------
Net assets................................ $68,261,156
===========
Initial Class
Net assets applicable to outstanding
shares................................ $62,228,624
===========
Shares of capital stock outstanding..... 6,114,562
===========
Net asset value per share outstanding... $ 10.18
===========
Service Class
Net assets applicable to outstanding
shares................................ $ 6,032,532
===========
Shares of capital stock outstanding..... 593,220
===========
Net asset value per share outstanding... $ 10.17
===========
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 973,362
Interest................................ 25,992
-----------
Total income...................... 999,354
-----------
Expenses:
Advisory................................ 321,903
Administration.......................... 107,301
Professional............................ 40,292
Shareholder communication............... 24,711
Custodian............................... 15,935
Portfolio pricing....................... 5,681
Directors............................... 4,816
Service................................. 3,076
Amortization of organization expense.... 1,394
Miscellaneous........................... 11,750
-----------
Total expenses.................... 536,859
-----------
Net investment income..................... 462,495
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments.......... (162,229)
Net change in unrealized depreciation on
investments............................. 13,469,188
-----------
Net realized and unrealized gain on
investments............................. 13,306,959
-----------
Net increase in net assets resulting from
operations.............................. $13,769,454
===========
- ------------
(a) Dividends recorded net of foreign withholding taxes
in the amount of $16,572.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-178
MAINSTAY VP SERIES FUND, INC.
DREYFUS LARGE COMPANY
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
---------------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 462,495 $ 344,551
Net realized loss on investments.......................... (162,229) (8,761,547)
Net change in unrealized appreciation (depreciation) on
investments............................................. 13,469,188 (6,201,899)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. 13,769,454 (14,618,895)
------------ ------------
Dividends to shareholders:
From net investment income:
Initial Class........................................... (437,804) (343,958)
Service Class........................................... (36,919) --
------------ ------------
Total dividends to shareholders....................... (474,723) (343,958)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 12,652,974 12,435,563
Service Class........................................... 5,625,147 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class........................................... 437,804 343,958
Service Class........................................... 36,919 --
------------ ------------
18,752,844 12,779,521
Cost of shares redeemed:
Initial Class........................................... (13,712,644) (7,061,710)
Service Class........................................... (49,107) --
------------ ------------
Increase in net assets derived from capital share
transactions............................................ 4,991,093 5,717,811
------------ ------------
Net increase (decrease) in net assets....................... 18,285,824 (9,245,042)
NET ASSETS:
Beginning of year........................................... 49,975,332 59,220,374
------------ ------------
End of year................................................. $ 68,261,156 $ 49,975,332
============ ============
Accumulated undistributed net investment income at end of
year...................................................... $ -- $ 9,954
============ ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
--------------------------------------------------- -------------
JUNE 5,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
-------------------------------------------------------------------
Net asset value at beginning of
period............................. $ 8.01 $ 10.46 $ 11.29 $ 10.84 $ 10.23 $8.97
------- ------- ------- ------- ------- ---------
Net investment income................ 0.07(b) 0.06 0.07 0.07 0.08 0.03(b)
Net realized and unrealized gain
(loss) on investments.............. 2.17 (2.45) (0.56) 0.64 0.61 1.24
------- ------- ------- ------- ------- ---------
Total from investment operations..... 2.24 (2.39) (0.49) 0.71 0.69 1.27
------- ------- ------- ------- ------- ---------
Less dividends and distributions:
From net investment income......... (0.07) (0.06) (0.07) (0.07) (0.08) (0.07)
From net realized gain on
investments...................... -- -- (0.27) (0.19) -- --
------- ------- ------- ------- ------- ---------
Total dividends and distributions.... (0.07) (0.06) (0.34) (0.26) (0.08) (0.07)
------- ------- ------- ------- ------- ---------
Net asset value at end of period..... $ 10.18 $ 8.01 $ 10.46 $ 11.29 $ 10.84 $10.17
======= ======= ======= ======= ======= =========
Total investment return.............. 27.95% (22.86%) (4.51%) 6.59% 6.73% 14.13%(c)
Ratios (to average net assets)/
Supplemental Data:
Net investment income.............. 0.87% 0.63% 0.80% 0.78% 0.90% 0.62%+(d)
Net expenses....................... 0.99% 0.98% 0.99% 1.01% 0.95% 1.24%+
Expenses (before reimbursement).... 0.99% 0.98% 0.99% 1.01% 1.00% 1.24%+
Portfolio turnover rate.............. 73% 65% 74% 159% 121% 73%
Net assets at end of period (in
000's)............................. $62,229 $49,975 $59,220 $45,278 $30,608 $6,033
</Table>
- ------------
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Total return is not annualized.
(d) Represents income earned for the year by the Initial Class shares less
service fee of 0.25%.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-179
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (99.1%)+
SHARES VALUE
----------------------
AEROSPACE & DEFENSE (2.0%)
Lockheed Martin Corp. ............ 36,000 $ 1,850,400
United Technologies Corp. ........ 14,950 1,416,812
------------
3,267,212
------------
BIOTECHNOLOGY (5.0%)
Amgen, Inc. (a)................... 22,450 1,387,410
Biogen Idec, Inc. (a)............. 36,300 1,335,114
Genentech, Inc. (a)............... 12,700 1,188,339
Genzyme Corp. (a)................. 18,850 930,059
Gilead Sciences, Inc. (a)......... 41,200 2,395,368
MedImmune, Inc. (a)............... 32,150 816,610
------------
8,052,900
------------
CAPITAL MARKETS (3.3%)
Goldman Sachs Group, Inc. (The)... 20,900 2,063,457
Lehman Brothers Holdings, Inc..... 23,600 1,822,392
Merrill Lynch & Co., Inc.......... 24,350 1,428,128
------------
5,313,977
------------
COMMERCIAL BANKS (1.0%)
Bank of America Corp.............. 21,100 1,697,073
------------
COMMERCIAL SERVICES & SUPPLIES (2.9%)
Cendant Corp. (a)................. 208,000 4,632,160
------------
COMMUNICATIONS EQUIPMENT (4.2%)
Cisco Systems, Inc. (a)........... 209,900 5,098,471
JDS Uniphase Corp. (a)............ 445,800 1,627,170
------------
6,725,641
------------
COMPUTERS & PERIPHERALS (3.6%)
Dell, Inc. (a).................... 118,900 4,037,844
EMC Corp. (a)..................... 132,200 1,708,024
------------
5,745,868
------------
DIVERSIFIED FINANCIAL SERVICES (2.7%)
Citigroup, Inc.................... 90,933 4,413,888
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (2.3%)
Agilent Technologies, Inc. (a).... 88,800 2,596,512
Flextronics International Ltd.
(a).............................. 70,950 1,052,898
------------
3,649,410
------------
FOOD & STAPLES RETAILING (2.1%)
Wal-Mart Stores, Inc.............. 63,950 3,392,547
------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.9%)
Medtronic, Inc.................... 30,500 1,482,605
------------
HOTELS, RESTAURANTS & LEISURE (3.0%)
Carnival Corp..................... 23,900 949,547
Harrah's Entertainment, Inc....... 43,050 2,142,598
International Game Technology..... 47,250 1,686,825
------------
4,778,970
------------
</Table>
<Table>
<Caption>
SHARES VALUE
-------------------------
HOUSEHOLD DURABLES (1.0%)
Tempur-Pedic International, Inc.
(a).............................. 104,900 $ 1,625,950
------------
HOUSEHOLD PRODUCTS (1.1%)
Procter & Gamble Co. (The)........ 17,350 1,732,918
------------
INDUSTRIAL CONGLOMERATES (6.0%)
3M Co............................. 12,200 1,037,366
General Electric Co............... 277,050 8,583,009
------------
9,620,375
------------
INTERNET & CATALOG RETAIL (0.7%)
eBay, Inc. (a).................... 18,400 1,188,456
------------
IT SERVICES (2.5%)
Accenture Ltd. Class A (a)........ 37,100 976,472
DigitalNet Holdings, Inc. (a)..... 11,850 231,075
First Data Corp................... 69,750 2,866,027
------------
4,073,574
------------
MEDIA (13.9%)
Clear Channel Communications,
Inc.............................. 59,850 2,802,776
Comcast Corp. Class A (a)......... 48,250 1,509,260
Cox Radio, Inc. (a)............... 42,800 1,079,844
EchoStar Communications Corp.
Class A (a)...................... 32,300 1,098,200
Entercom Communications Corp.
(a).............................. 16,000 847,360
Lamar Advertising Co. (a)......... 46,200 1,724,184
Time Warner, Inc. (a)............. 216,550 3,895,734
Univision Communications, Inc.
Class A (a)...................... 33,750 1,339,537
Viacom, Inc. Class B.............. 93,750 4,160,625
Walt Disney Co. (The)............. 121,300 2,829,929
Westwood One, Inc. (a)............ 34,950 1,195,640
------------
22,483,089
------------
MULTILINE RETAIL (2.5%)
Family Dollar Stores, Inc. ....... 47,850 1,716,858
Kohl's Corp. (a).................. 34,450 1,548,183
Target Corp. ..................... 22,850 877,440
------------
4,142,481
------------
PHARMACEUTICALS (11.1%)
Abbott Laboratories............... 38,250 1,782,450
Johnson & Johnson................. 99,700 5,150,502
Merck & Co., Inc. ................ 38,550 1,781,010
Pfizer, Inc. ..................... 201,150 7,106,630
Wyeth............................. 48,200 2,046,090
------------
17,866,682
------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-180
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
-------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (17.3%)
Applied Materials, Inc. (a)....... 92,450 $ 2,075,502
ASML Holding N.V. ADR (a)(b)...... 58,600 1,174,930
Fairchild Semiconductor
International, Inc. (a).......... 121,200 3,026,364
Intel Corp. ...................... 211,650 6,815,130
International Rectifier Corp.
(a).............................. 14,800 731,268
Lam Research Corp. (a)............ 95,800 3,094,340
LSI Logic Corp. (a)............... 275,200 2,441,024
Micrel, Inc. (a).................. 70,650 1,100,727
National Semiconductor Corp.
(a).............................. 60,550 2,386,276
Taiwan Semiconductor Manufacturing
Co. Ltd. ADR (a)(b).............. 274,470 2,810,581
Texas Instruments, Inc. .......... 77,100 2,265,198
------------
27,921,340
------------
SOFTWARE (7.1%)
BEA Systems, Inc. (a)............. 63,150 776,745
Microsoft Corp. .................. 259,850 7,156,269
Oracle Corp. (a).................. 142,450 1,880,340
VERITAS Software Corp. (a)........ 45,600 1,694,496
------------
11,507,850
------------
</Table>
<Table>
<Caption>
SHARES VALUE
-------------------------
SPECIALITY RETAIL (1.5%)
Home Depot, Inc. (The)............ 70,050 $ 2,486,075
------------
THRIFTS & MORTGAGE FINANCE (1.4%)
Countrywide Financial Corp........ 29,466 2,234,996
------------
Total Investments
(Cost $144,878,115) (c).......... 99.1% 160,036,037(d)
Cash and Other Assets,
Less Liabilities................. 0.9 1,500,609
---------- ------------
100.0% $161,536,646
========== ============
</Table>
- ------------
(a) Non-Income producing security.
(b) ADR--American Depositary Receipt.
(c) The cost for federal income tax purposes is $149,679,925.
(d) At December 31, 2003 net unrealized appreciation was $10,356,112, based on
cost for federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $12,663,386 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,307,274.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-181
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $144,878,115)........ $ 160,036,037
Cash.................................... 818,368
Receivables:
Investment securities sold............ 2,470,076
Dividends............................. 123,780
Fund shares sold...................... 109,784
-------------
Total assets.................... 163,558,045
-------------
LIABILITIES:
Payables:
Investment securities purchased....... 1,853,249
Adviser............................... 66,363
Administrator......................... 26,545
Fund shares redeemed.................. 24,232
Custodian............................. 6,137
NYLIFE Distributors................... 1,312
Accrued expenses........................ 43,561
-------------
Total liabilities............... 2,021,399
-------------
Net assets.............................. $ 161,536,646
=============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class......................... $ 135,401
Service Class......................... 6,556
Additional paid-in capital.............. 262,974,683
Accumulated net realized loss on
investments........................... (116,737,916)
Net unrealized appreciation on
investments........................... 15,157,922
-------------
Net assets.............................. $ 161,536,646
=============
Initial Class
Net assets applicable to outstanding
shares.............................. $ 154,081,857
=============
Shares of capital stock outstanding... 13,540,082
=============
Net asset value per share
outstanding......................... $ 11.38
=============
Service Class
Net assets applicable to outstanding
shares.............................. $ 7,454,789
=============
Shares of capital stock outstanding... 655,623
=============
Net asset value per share
outstanding......................... $ 11.37
=============
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 1,325,139
Interest................................ 11,059
-----------
Total income...................... 1,336,198
-----------
Expenses:
Advisory................................ 669,824
Administration.......................... 267,930
Shareholder communication............... 62,096
Professional............................ 53,899
Custodian............................... 30,722
Directors............................... 8,555
Service................................. 3,940
Miscellaneous........................... 24,040
-----------
Total expenses.................... 1,121,006
Fees paid indirectly (b)................ (5,577)
-----------
Net expenses...................... 1,115,429
-----------
Net investment income..................... 220,769
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments.......... 10,629,970
Net change in unrealized depreciation on
investments............................. 22,421,255
-----------
Net realized and unrealized gain on
investments............................. 33,051,225
-----------
Net increase in net assets resulting from
operations.............................. $33,271,994
===========
</Table>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $7,983.
(b) New York Life Investment Management LLC has directed certain portfolio
trades to brokers who paid a portion of the expenses of the Portfolio for
the year ended December 31, 2003. The Portfolio's miscellaneous expenses
were reduced by $5,577 under this agreement.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-182
MAINSTAY VP SERIES FUND, INC.
EAGLE ASSET MANAGEMENT
GROWTH EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
-----------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income...................................... $ 220,769 $ 111,737
Net realized gain (loss) on investments.................... 10,629,970 (42,027,084)
Net change in unrealized appreciation (depreciation) on
investments.............................................. 22,421,255 (9,777,425)
------------ ------------
Net increase (decrease) in net assets resulting from
operations............................................... 33,271,994 (51,692,772)
------------ ------------
Dividends to shareholders:
From net investment income:
Initial Class............................................ (235,253) (91,427)
Service Class............................................ (6,121) --
------------ ------------
Total dividends to shareholders........................ (241,374) (91,427)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class............................................ 18,755,875 18,751,844
Service Class............................................ 7,216,238 --
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Initial Class............................................ 235,253 91,427
Service Class............................................ 6,121 --
------------ ------------
26,213,487 18,843,271
Cost of shares redeemed:
Initial Class............................................ (17,048,711) (27,977,940)
Service Class............................................ (187,372) --
------------ ------------
Increase (decrease) in net assets derived from capital
share transactions....................................... 8,977,404 (9,134,669)
------------ ------------
Net increase (decrease) in net assets....................... 42,008,024 (60,918,868)
NET ASSETS:
Beginning of year........................................... 119,528,622 180,447,490
------------ ------------
End of year................................................. $161,536,646 $119,528,622
============ ============
Accumulated undistributed net investment income at end of
year....................................................... $ -- $ 20,310
============ ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
---------------------------------------------------------------- -------------
JUNE 6,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
------------------------------------------------------------------------------------
Net asset value at beginning of
period.............................. $ 8.90 $ 12.41 $ 14.87 $ 18.55 $ 11.78 $ 10.18
-------- -------- -------- -------- -------- --------
Net investment income (loss)......... 0.02(b) 0.01 (0.01)(b) (0.02)(b) (0.01)(b) (0.00)(b)(c)
Net realized and unrealized gain
(loss) on investments............... 2.48 (3.51) (2.45) (1.69) 7.71 1.20
-------- -------- -------- -------- -------- --------
Total from investment operations..... 2.50 (3.50) (2.46) (1.71) 7.70 1.20
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income.......... (0.02) (0.01) -- -- (0.00)(c) (0.01)
From net realized gain on
investments....................... -- -- -- (1.97) (0.93) --
-------- -------- -------- -------- -------- --------
Total dividends and distributions.... (0.02) (0.01) -- (1.97) (0.93) (0.01)
-------- -------- -------- -------- -------- --------
Net asset value at end of period..... $ 11.38 $ 8.90 $ 12.41 $ 14.87 $ 18.55 $ 11.37
======== ======== ======== ======== ======== ========
Total investment return.............. 28.05% (28.21%) (16.56%) (9.97%) 65.50% 11.83%(d)
Ratios (to average net
assets)/Supplemental Data:
Net investment income (loss)........ 0.17% 0.07% (0.10%) (0.19%) (0.04%) (0.08%)+(e)
Net expenses........................ 0.83% 0.81% 0.80% 0.80% 0.85% 1.08%+
Expenses (before reimbursement)..... 0.83% 0.81% 0.80% 0.80% 0.87% 1.08%+
Portfolio turnover rate.............. 160% 168% 172% 363% 203% 160%
Net assets at end of period (in
000's).............................. $154,082 $119,529 $180,447 $218,190 $ 65,089 $ 7,455
</Table>
- ------------
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Less than one cent per share.
(d) Total return is not annualized.
(e) Represents income earned for the year by the Initial Class shares less
service fee of 0.25%.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-183
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 2003
- ------------
+ Percentages indicated are based on Portfolio net assets.
<Table>
<Caption>
COMMON STOCKS (96.7%)+
SHARES VALUE
---------------------
AEROSPACE & DEFENSE (1.7%)
Armor Holdings, Inc. (a)........... 10,900 $ 286,779
Engineered Support Systems,
Inc. ............................. 8,150 448,739
-----------
735,518
-----------
AIR FREIGHT & LOGISTICS (0.7%)
EGL, Inc. (a)...................... 16,900 296,764
-----------
AIRLINES (0.8%)
Skywest, Inc. ..................... 19,300 349,716
-----------
AUTOMOBILES (0.2%)
Thor Industries, Inc. ............. 1,500 84,330
-----------
BIOTECHNOLOGY (4.7%)
Affymetrix, Inc. (a)............... 13,700 337,157
Cell Therapeutics, Inc. (a)........ 24,500 213,150
Corixa Corp. (a)................... 34,500 208,380
ILEX Oncology, Inc. (a)............ 16,000 340,000
Ligand Pharmaceuticals, Inc. Class
B (a)............................. 18,400 270,296
QLT, Inc. (a)...................... 16,600 312,910
Techne Corp. (a)................... 8,800 332,464
-----------
2,014,357
-----------
BUILDING PRODUCTS (0.4%)
Simpson Manufacturing Co., Inc.
(a)............................... 3,300 167,838
-----------
CAPITAL MARKETS (1.3%)
Investment Technology Group, Inc.
(a)............................... 19,700 318,155
National Financial Partners
Corp. ............................ 8,000 220,400
-----------
538,555
-----------
COMMERCIAL BANKS (2.9%)
Greater Bay Bancorp................ 9,800 279,104
Nara Bancorp, Inc. ................ 4,900 133,770
Silicon Valley Bancshares (a)...... 6,800 245,276
Southwest Bancorp of Texas,
Inc. ............................. 5,700 221,445
Texas Regional Bancshares, Inc.
Class A........................... 9,060 335,220
-----------
1,214,815
-----------
COMMERCIAL SERVICES & SUPPLIES (9.6%)
Administaff, Inc. (a).............. 17,700 307,626
Bennett Environmental, Inc. (a).... 9,700 200,402
Bright Horizons Family Solutions,
Inc. (a).......................... 4,800 201,600
Charles River Associates, Inc.
(a)............................... 6,000 191,940
Corporate Executive Board Co. (The)
(a)............................... 12,200 569,374
CoStar Group, Inc. (a)............. 4,900 204,232
Exult, Inc. (a).................... 39,500 281,240
G&K Services, Inc. Class A......... 4,500 165,375
Gevity HR, Inc. ................... 9,300 206,832
Healthcare Services Group, Inc. ... 10,700 206,403
</Table>
<Table>
<Caption>
SHARES VALUE
------------------------
COMMERCIAL SERVICES & SUPPLIES (Continued)
Heidrick & Struggles International,
Inc. (a).......................... 10,700 $ 233,260
ITT Educational Services, Inc.
(a)............................... 6,900 324,093
Korn/Ferry International (a)....... 9,400 125,396
Navigant Consulting, Inc. (a)...... 14,100 265,926
Resources Connection, Inc. (a)..... 9,000 245,790
Universal Technical Institute, Inc.
(a)............................... 3,200 96,000
West Corp. (a)..................... 10,700 248,561
-----------
4,074,050
-----------
COMMUNICATIONS EQUIPMENT (3.1%)
Avocent Corp. (a).................. 9,900 361,548
KVH Industries, Inc. (a)........... 7,600 208,772
Packeteer, Inc. (a)................ 16,300 276,774
SeaChange International, Inc.
(a)............................... 14,800 227,920
Sierra Wireless (a)................ 16,500 253,770
-----------
1,328,784
-----------
COMPUTERS & PERIPHERALS (3.7%)
Advanced Digital Information Corp.
(a)............................... 32,000 448,000
Applied Films Corp. (a)............ 8,800 290,576
Avid Technology, Inc. (a).......... 4,300 206,400
Hutchinson Technology, Inc. (a).... 8,200 252,068
Lexar Media, Inc. (a).............. 22,500 392,175
-----------
1,589,219
-----------
CONSTRUCTION & ENGINEERING (0.7%)
Granite Construction, Inc. ........ 13,100 307,719
-----------
ELECTRICAL EQUIPMENT (0.4%)
II-VI, Inc. (a).................... 6,800 175,440
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS (2.3%)
Digital Theater Systems, Inc.
(a)............................... 8,100 199,989
FLIR Systems, Inc. (a)............. 4,700 171,550
Taser International, Inc. (a)...... 200 16,474
Trimble Navigation Ltd. (a)........ 8,800 327,712
Varian, Inc. (a)................... 6,700 279,591
-----------
995,316
-----------
ENERGY EQUIPMENT & SERVICES (2.0%)
Cal Dive International, Inc. (a)... 12,800 308,608
CARBO Ceramics, Inc. .............. 4,300 220,375
Unit Corp. (a)..................... 14,100 332,055
-----------
861,038
-----------
FOOD & STAPLES RETAILING (0.5%)
United Natural Foods, Inc. (a)..... 5,700 204,687
-----------
HEALTH CARE EQUIPMENT & SUPPLIES (5.4%)
Bio-Rad Laboratories, Inc. Class A
(a)............................... 5,900 340,253
Cooper Co., Inc. .................. 6,200 292,206
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-184
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
<Caption>
SHARES VALUE
------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (Continued)
Diagnostic Products Corp. ......... 5,100 $ 234,141
Integra LifeSciences Holdings
(a)............................... 9,700 277,711
Matthews International Corp. Class
A................................. 5,600 165,704
Molecular Devices Corp. (a)........ 13,500 256,365
Wilson Greatbatch Technologies,
Inc. (a).......................... 8,700 367,749
Wright Medical Group, Inc. (a)..... 11,900 362,236
-----------
2,296,365
-----------
HEALTH CARE PROVIDERS & SERVICES (7.0%)
Advisory Board Co. (The) (a)....... 7,100 247,861
AMERIGROUP Corp. (a)............... 9,100 388,115
Centene Corp. (a).................. 9,750 273,097
Molina Healthcare, Inc. (a)........ 8,200 206,886
Odyssey Healthcare, Inc. (a)....... 8,500 248,710
PAREXEL International Corp. (a).... 15,800 256,908
Pharmaceutical Product
Development, Inc (a).............. 8,100 218,457
Priority Healthcare Corp. Class B
(a)............................... 15,500 373,705
Renal Care Group, Inc. (a)......... 7,600 313,120
SFBC International, Inc. (a)....... 6,500 172,640
VistaCare, Inc. Class A (a)........ 7,600 267,140
-----------
2,966,639
-----------
HOTELS, RESTAURANTS & LEISURE (1.7%)
P.F. Chang's China Bistro,
Inc. (a).......................... 8,100 412,128
Shuffle Master, Inc. (a)........... 8,900 308,118
-----------
720,246
-----------
INTERNET & CATALOG RETAIL (2.3%)
1-800-FLOWERS.COM, Inc.
Class A (a)....................... 13,500 149,310
FindWhat.com (a)................... 8,800 165,000
Netflix, Inc. (a).................. 8,800 481,272
Overstock.com, Inc. (a)............ 8,800 174,768
-----------
970,350
-----------
INTERNET SOFTWARE & SERVICES (5.0%)
Digital Insight Corp. (a).......... 11,300 281,370
Digital River, Inc. (a)............ 14,000 309,400
eCollege.com (a)................... 5,900 108,914
NIC, Inc. (a)...................... 27,200 218,416
Retek, Inc. (a).................... 30,200 280,256
S1 International, Inc. (a)......... 25,400 204,470
Sohu.com, Inc. (a)................. 12,000 360,120
United Online, Inc. (a)............ 21,930 368,205
-----------
2,131,151
-----------
IT SERVICES (2.5%)
Forrester Research, Inc. (a)....... 9,420 168,335
ManTech International Corp.
Class A (a)....................... 6,900 172,155
MAXIMUS, Inc. (a).................. 7,100 277,823
</Table>
<Table>
<Caption>
SHARES VALUE
------------------------
IT SERVICES (Continued)
SRA International, Inc.
Class A (a)....................... 10,800 $ 465,480
-----------
1,083,793
-----------
MACHINERY (0.6%)
CLARCOR, Inc. ..................... 6,000 264,600
-----------
METALS & MINING (0.3%)
Schnitzer Steel Industries, Inc.
Class A........................... 2,500 151,250
-----------
MULTILINE RETAIL (0.6%)
Fred's, Inc. ...................... 8,600 266,428
-----------
OIL & GAS (1.5%)
Evergreen Resources, Inc. (a)...... 10,000 325,100
Patina Oil & Gas Corp. ............ 6,493 318,092
-----------
643,192
-----------
PERSONAL PRODUCTS (0.4%)
NBTY, Inc. (a)..................... 5,700 153,102
-----------
PHARMACEUTICALS (4.3%)
Bradley Pharmaceuticals, Inc.
(a)............................... 11,800 300,074
K-V Pharmaceutical Co.
Class A (a)....................... 12,500 318,750
Kos Pharmaceuticals, Inc. (a)...... 7,300 314,192
Medicines Co. (The) (a)............ 7,700 226,842
Medicis Pharmaceutical Corp.
Class A........................... 3,900 278,070
Noven Pharmaceuticals, Inc. (a).... 26,400 401,544
-----------
1,839,472
-----------
ROAD & RAIL (0.5%)
Werner Enterprises, Inc. .......... 11,500 224,135
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (8.2%)
Cabot Microelectronics Corp. (a)... 13,240 648,760
Cree, Inc. (a)..................... 18,600 329,034
Cymer, Inc. (a).................... 4,500 207,855
Integrated Circuit Systems, Inc.
(a)............................... 9,000 256,410
MKS Instruments, Inc. (a).......... 8,300 240,700
Microsemi Corp. (a)................ 14,700 361,326
Mykrolis Corp. (a)................. 12,600 202,608
O2Micro International Ltd. (a)..... 13,100 293,440
Power Integrations, Inc. (a)....... 9,100 304,486
Silicon Laboratories, Inc. (a)..... 5,700 246,354
Tessera Technologies, Inc. (a)..... 4,300 80,883
Varian Semiconductor Equipment
Associates, Inc. (a).............. 7,100 310,199
-----------
3,482,055
-----------
SOFTWARE (10.6%)
Altiris, Inc. (a).................. 6,700 244,416
Ascential Software Corp. (a)....... 8,700 225,591
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-185
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 2003
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
SHARES VALUE
------------------------
SOFTWARE (Continued)
Embarcadero Technologies, Inc.
(a)............................... 14,100 $ 224,895
FactSet Research Systems, Inc. .... 5,900 225,439
Informatica Corp. (a).............. 30,700 316,210
Jack Henry & Associates, Inc. ..... 9,700 199,626
Kronos, Inc. (a)................... 15,550 615,936
Macrovision Corp. (a).............. 17,600 397,584
Macromedia, Inc. (a)............... 14,000 249,760
Magma Design Automation, Inc. Class
A (a)............................. 12,100 282,414
Manhattan Associates, Inc. (a)..... 9,200 254,288
Micro Strategy, Inc. Class A (a)... 5,000 262,400
Quest Software, Inc. (a)........... 20,900 296,780
Take-Two Interactive Software, Inc.
(a)............................... 11,400 328,434
TIBCO Software, Inc. (a)........... 56,000 379,120
-----------
4,502,893
-----------
SPECIALTY RETAIL (7.4%)
Aeropostale, Inc. (a).............. 6,100 167,262
AnnTaylor Stores Corp. (a)......... 11,400 444,600
Christopher & Banks Corp........... 6,700 130,851
Cost Plus, Inc. (a)................ 7,525 308,525
Electronics Boutique Holdings Corp.
(a)............................... 7,500 171,675
GameStop Corp. Class A (a)......... 15,000 231,150
Group 1 Automotive, Inc. (a)....... 7,800 282,282
Guess?, Inc. (a)................... 19,000 229,330
Hibbett Sporting Goods, Inc. (a)... 8,000 238,400
Linens 'n Things, Inc. (a)......... 14,100 424,128
Steiner Leisure Ltd. (a)........... 10,900 155,870
Urban Outfitters, Inc. (a)......... 9,600 355,680
-----------
3,139,753
-----------
TEXTILES, APPAREL & LUXURY GOODS (2.1%)
Fossil, Inc. (a)................... 15,400 431,354
Kenneth Cole Productions, Inc.
Class A........................... 6,500 191,100
Timberland Co. (The) Class A (a)... 4,900 255,143
-----------
877,597
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
------------------------
WIRELESS TELECOMMUNICATION SERVICES (1.3%)
@Road, Inc. (a).................... 14,700 $ 195,510
Wireless Facilities, Inc. (a)...... 22,800 338,808
-----------
534,318
-----------
Total Common Stocks
(Cost $36,689,187)................ 41,185,485
-----------
<Caption>
SHORT-TERM INVESTMENT (6.1%)
PRINCIPAL
AMOUNT
----------
TIME DEPOSIT (6.1%)
Bank of New York Cayman
0.56%, due 1/2/04................. $2,600,000 2,600,000
-----------
Total Short-Term Investment
(Cost $2,600,000)................. 2,600,000
-----------
Total Investments
(Cost $39,289,187) (b)............ 102.8% 43,785,485(c)
Liabilities in Excess of Cash and
Other Assets...................... (2.8) (1,198,389)
--------- ---------
Net Assets......................... 100.0% $42,587,096
========== ===========
</Table>
- ------------
(a) Non-income producing security.
(b) The cost for federal income tax purposes is $39,417,096.
(c) At December 31, 2003 net unrealized appreciation was $4,368,389, 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 $5,804,932 and aggregate gross unrealized
depreciation for all investments in which there was an excess of cost over
market value of $1,436,543.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-186
MAINSTAY VP SERIES FUND, INC.
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2003
<Table>
ASSETS:
Investment in securities, at value
(identified cost $39,289,187)........... $43,785,485
Cash...................................... 11,336
Receivables:
Fund shares sold........................ 145,653
Investment securities sold.............. 65,831
Dividends and interest.................. 6,059
-----------
Total assets...................... 44,014,364
-----------
LIABILITIES:
Payables:
Investment securities purchased......... 1,367,129
Adviser................................. 21,491
Custodian............................... 8,624
Administrator........................... 7,164
Fund shares redeemed.................... 3,285
NYLIFE Distributors..................... 792
Accrued expenses.......................... 18,783
-----------
Total liabilities................. 1,427,268
-----------
Net assets................................ $42,587,096
===========
NET ASSETS CONSIST OF:
Capital stock (par value of $.01 per
share) 200 million shares authorized
Initial Class........................... $ 44,507
Service Class........................... 5,189
Additional paid-in capital................ 47,501,298
Accumulated net realized loss on
investments............................. (9,460,196)
Net unrealized appreciation on
investments............................. 4,496,298
-----------
Net assets................................ $42,587,096
===========
Initial Class
Net assets applicable to outstanding
shares................................ $38,146,220
===========
Shares of capital stock outstanding..... 4,450,689
===========
Net asset value per share outstanding... $ 8.57
===========
Service Class
Net assets applicable to outstanding
shares................................ $ 4,440,876
===========
Shares of capital stock outstanding..... 518,882
===========
Net asset value per share outstanding... $ 8.56
===========
</Table>
STATEMENT OF OPERATIONS
For the year ended December 31, 2003
<Table>
INVESTMENT INCOME:
Income:
Dividends (a)........................... $ 44,831
Interest................................ 11,301
-----------
Total income...................... 56,132
-----------
Expenses:
Advisory................................ 182,109
Administration.......................... 60,703
Custodian............................... 46,739
Professional............................ 35,662
Shareholder communication............... 12,591
Portfolio pricing....................... 7,077
Directors............................... 3,745
Service................................. 2,408
Amortization of organization expense.... 1,394
Miscellaneous........................... 11,442
-----------
Total expenses.................... 363,870
-----------
Net investment loss....................... (307,738)
-----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investments.......... (290,004)
Net change in unrealized depreciation on
investments............................. 10,267,407
-----------
Net realized and unrealized gain on
investments............................. 9,977,403
-----------
Net increase in net assets resulting from
operations.............................. $ 9,669,665
===========
</Table>
- ------------
(a) Dividends recorded net of foreign withholding taxes in the amount of $74.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-187
LORD ABBETT
DEVELOPING GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2003
and December 31, 2002
<Table>
<Caption>
2003 2002
-----------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss....................................... $ (307,738) $ (242,804)
Net realized loss on investments.......................... (290,004) (4,162,361)
Net change in unrealized appreciation (depreciation) on
investments............................................. 10,267,407 (4,702,967)
----------- ------------
Net increase (decrease) in net assets resulting from
operations.............................................. 9,669,665 (9,108,132)
----------- ------------
Capital share transactions:
Net proceeds from sale of shares:
Initial Class........................................... 12,625,133 10,479,950
Service Class........................................... 4,366,776 --
Cost of shares redeemed:
Initial Class........................................... (6,314,813) (10,276,624)
Service Class........................................... (97,683) --
----------- ------------
Increase in net assets derived from capital share
transactions............................................ 10,579,413 203,326
----------- ------------
Net increase (decrease) in net assets....................... 20,249,078 (8,904,806)
NET ASSETS:
Beginning of year........................................... 22,338,018 31,242,824
----------- ------------
End of year................................................. $42,587,096 $ 22,338,018
=========== ============
</Table>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<Table>
<Caption>
INITIAL CLASS SERVICE CLASS
------------------------------------------------------- -------------
JUNE 5,
2003(A)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
2003 2002 2001 2000 1999 2003
---------------------------------------------------------------------------
Net asset value at beginning of
period............................. $ 6.19 $ 8.71 $ 9.40 $ 11.94 $ 9.21 $ 7.20
------- ------- ------- ------- ------- ------
Net investment loss.................. (0.07)(b) (0.07)(b) (0.07)(b) (0.07)(b) (0.05)(b) (0.06)(b)
Net realized and unrealized gain
(loss) on investments.............. 2.45 (2.45) (0.62) (2.19) 2.81 1.42
------- ------- ------- ------- ------- ------
Total from investment operations..... 2.38 (2.52) (0.69) (2.26) 2.76 1.36
------- ------- ------- ------- ------- ------
Less distributions:
From net realized gain on
investments...................... -- -- -- (0.28) (0.03) --
------- ------- ------- ------- ------- ------
Net asset value at end of period..... $ 8.57 $ 6.19 $ 8.71 $ 9.40 $ 11.94 $ 8.56
======= ======= ======= ======= ======= ======
Total investment return.............. 38.49% (28.98%) (7.34%) (19.08%) 32.19% 18.83%(c)
Ratios (to average net assets)/
Supplemental Data:
Net investment loss................ (1.01%) (0.92%) (0.83%) (0.68%) (0.54%) (1.26%)+(d)
Net expenses....................... 1.19% 1.10% 1.08% 1.07% 0.95% 1.44%+
Expenses (before reimbursement).... 1.19% 1.10% 1.08% 1.07% 1.04% 1.44%+
Portfolio turnover rate.............. 103% 62% 49% 51% 59% 103%
Net assets at end of period (in
000's)............................. $38,146 $22,338 $31,243 $36,015 $32,100 $4,441
</Table>
- ------------
(a) Commencement of Operations.
(b) Per share data based on average shares outstanding during the period.
(c) Total return is not annualized.
(d) Represents income earned for the year by the Initial Class shares less
service fee of 0.25%.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
M-188
MAINSTAY VP SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-- Organization and Business:
- --------------------------------------------------------------------------------
MainStay VP Series Fund, Inc. (the "Fund") was incorporated under Maryland law
on June 3, 1983. The Fund is registered under the Investment Company Act of
1940, as amended ("Investment Company Act"), as an open-end diversified
management investment company.
The Portfolios commenced operations on the dates indicated below:
<Table>
<Caption>
COMMENCEMENT OF
OPERATIONS PORTFOLIOS
- --------------- ------------------------------------------------------------
July 2, 2001 Equity Income, Mid Cap Core, Mid Cap Growth and Small Cap
Growth Portfolios
May 1, 1998 American Century Income & Growth, Dreyfus Large Company
Value, Eagle Asset Management Growth Equity and Lord Abbett
Developing Growth Portfolios
October 1, 1996 Convertible Portfolio
May 1, 1995 High Yield Corporate Bond, International Equity and Value
Portfolios
January 29, Capital Appreciation, Cash Management, Government, Total
1993 Return and Indexed Equity Portfolios
January 23, Bond and Growth Equity Portfolios
1984
</Table>
The Portfolios (each separately a "Portfolio") are separate Portfolios of the
Fund. Shares of the Portfolios are currently offered only to New York Life
Insurance and Annuity Corporation ("NYLIAC"), a wholly-owned subsidiary of New
York Life Insurance Company ("New York Life"). NYLIAC allocates shares of the
Portfolios to, among others, NYLIAC Variable Annuity Separate Accounts-I, II and
III, VUL Separate Account-I and CSVUL Separate Account-I (collectively "Separate
Accounts"). The Separate Accounts are used to fund flexible premium deferred
variable annuity and variable life insurance policies.
On May 13, 2003, the Fund's Board of Directors adopted a Multiple Class Plan
under which the existing shares of each of the Fund's Portfolios, except the
Cash Management Portfolio, were re-classified as Initial Class shares, and a
second class of shares, the Service Class, was established. The classes differ
in that, pursuant to a plan adopted in accordance with Rule 12b-1 under the
Investment Company Act, Service Class shares pay a combined distribution and
service fee of 0.25% of average daily net assets to the distributor of its
shares. Effective June 2, 2003, new shareholders of the Portfolios are permitted
to invest only in the Service Class shares, however, existing Initial Class
shareholders are permitted to continue investing in the Initial Class shares.
The Service Class of each Portfolio commenced operations on the dates indicated
below:
<Table>
<Caption>
COMMENCEMENT OF
OPERATIONS PORTFOLIOS
- --------------- ------------------------------------------------------------
June 13, 2003 American Century Income & Growth Portfolio
June 6, 2003 Eagle Asset Management Growth Equity Portfolio
June 5, 2003 Capital Appreciation, Convertible, Equity Income, Growth
Equity, Indexed Equity, International Equity, Mid Cap Core,
Mid Cap Growth, Small Cap Growth, Dreyfus Large Company
Value and Lord Abbett Developing Growth Portfolios
June 4, 2003 Bond, Government, High Yield Corporate Bond, Total Return
and Value Portfolios
</Table>
M-189
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The investment objectives for each of the Portfolios of the Fund are as follows:
Bond: to seek the highest income over the long term consistent with
preservation of principal.
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.
Equity Income: to realize maximum long-term total return from a combination of
capital appreciation and income.
Government: to seek a high level of current income, consistent with safety of
principal.
Growth Equity: to seek long-term growth of capital, with income as a secondary
consideration.
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.
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.
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.
Mid Cap Core: to seek long-term growth of capital.
Mid Cap Growth: to seek long-term growth of capital.
Small Cap Growth: to seek long-term capital appreciation.
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.
American Century Income & Growth: to seek dividend growth, current income and
capital appreciation.
Dreyfus Large Company Value: capital appreciation.
Eagle Asset Management Growth Equity: to seek growth through long-term capital
appreciation.
Lord Abbett Developing Growth: to seek long-term growth of capital through a
diversified and actively-managed portfolio consisting of developing growth
companies, many of which are traded over the counter.
High Yield Corporate Bond Portfolio invests primarily in high yield bonds
(sometimes called "junk bonds"), which are generally considered speculative
because they present a greater risk of loss, including default, than higher
quality debt securities. These securities pay a premium--a high interest rate or
yield--because of the increased risk of loss. These securities can also be
subject to greater price volatility.
The ability of issuers of debt securities held by the Portfolios to meet their
obligations may be affected by economic developments in a specific industry or
region.
There are certain risks involved in investing in foreign securities that are in
addition to the usual risks inherent in domestic instruments. These risks
include those resulting from future adverse political and economic developments
and possible imposition of currency exchange blockages or other foreign
governmental laws or restrictions. 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.
M-190
MAINSTAY VP SERIES FUND, INC.
NOTE 2--Significant Accounting Policies:
- --------------------------------------------------------------------------------
Each Portfolio prepares its financial statements in accordance with generally
accepted accounting principles and follows the significant accounting policies
described below:
(A)
SECURITIES VALUATION. Equity securities are valued at the latest quoted sales
prices as of the close of trading on the New York Stock Exchange (generally 4:00
p.m. Eastern time) on the valuation date; such securities not traded on the
valuation date are valued at the mean of the latest quoted bid and asked prices.
Prices are taken from the primary market in which each security trades. Debt
securities are valued at prices supplied by a pricing agent or brokers selected
by the Fund's Administrator, whose prices reflect broker/dealer supplied
valuations and electronic data processing techniques if such prices are deemed
by the Fund's Administrator to be representative of market values at the regular
close of business of the Exchange. Options and futures contracts valued at the
last sale price on the market where such options or futures contracts are
principally traded. Temporary cash investments acquired over 60 days to maturity
are valued using the latest bid prices or using valuations based on a matrix
system (which considers such factors as security prices, yields, maturities, and
ratings), both as furnished by independent pricing services. Other temporary
cash investments are valued at amortized cost, which approximates market value.
Portfolio securities of Cash Management Portfolio are valued at their amortized
cost. Securities for which market quotations are not readily available are
valued by methods deemed by the Board of Directors to represent fair value.
Certain events may occur between the time that foreign markets close, on which
securities held by the International Equity Portfolio principally trade, and the
time at which the Portfolio's NAVs are calculated. Should the Administrator or
Adviser/Sub-Advisers conclude that such events may have affected the accuracy of
the last price reported on the local foreign market, the Administrator or
Adviser/Sub-Adviser may, pursuant to procedures adopted by the Portfolio's Board
of Directors, adjust the value of the local price to reflect the impact on the
price of such securities as a result of such events.
(B)
SECURITY TRANSACTIONS AND INVESTMENT INCOME. Each Portfolio records security
transactions on the trade date. Realized gains and losses on security
transactions are determined using the identified cost method. Dividend income is
recognized on the ex-dividend date and interest income is accrued as earned.
Discounts and premiums on securities, other than short-term securities,
purchased for all Portfolios are accreted and amortized, respectively, on the
constant yield method over the life of the respective securities or, in the case
of a callable security, over the period to the first date of call. Discounts and
premiums on short-term securities are accreted and amortized, respectively, on
the straight line method.
Investment income and realized and unrealized gains and losses on investments of
each Portfolio are allocated to separate classes of shares based upon their
relative net assets on the date the income is earned or realized and unrealized
gains and losses are incurred.
(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 and
International Equity Portfolios enter into foreign currency forward contracts in
order to hedge their foreign currency denominated investments and receivables
and payables against adverse movements in future foreign exchange rates.
M-191
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOREIGN CURRENCY FORWARD CONTRACTS (CONTINUED)
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 on forward contracts reflects the Portfolio's
exposure at valuation date to credit loss in the event of a counterparty's
failure to perform its obligations.
(D)
FUTURES CONTRACTS. A futures contract is an agreement to purchase or sell a
specified quantity of an underlying instrument at a specified future date and
price, or to make or receive a cash payment based on the value of a securities
index foreign currency or interest rate. 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.
(E)
REPURCHASE AGREEMENTS. The Portfolio's custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to determine that the
value, including accrued interest, exceeds the repurchase price. In the event of
the seller's default of the obligation to repurchase, the Portfolio has the
right to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings.
(F)
FOREIGN CURRENCY TRANSACTIONS. The books and records of the Fund are kept 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 end of the year. The realized and unrealized changes in net assets
arising from fluctuations in exchange rates and market prices of securities are
not separately presented. Accordingly, gains and losses from foreign currency
transactions are included in the reported net realized and unrealized gains
(losses) on investment transactions.
M-192
MAINSTAY VP SERIES FUND, INC.
FOREIGN CURRENCY TRANSACTIONS (CONTINUED)
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 valuation date exchange rates
are reflected in unrealized foreign exchange gains or losses. (See Note 7)
(G)
MORTGAGE DOLLAR ROLLS. Certain of the Portfolios may enter into mortgage dollar
roll ("MDR") transactions in which they sell mortgage-backed securities ("MBS")
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 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 could be inferior to what
was initially sold to the counterparty.
(H)
SECURITIES LENDING. The Portfolios may lend their securities to broker-dealers
and financial institutions. The loans are collateralized by 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. (See Note 7)
(I)
PURCHASED AND WRITTEN OPTIONS. Certain Portfolios may write covered call and put
options on their 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. A call option may be covered by the call writer's
owning the underlying security throughout the option period. A call option may
also be covered by the call writer's maintaining liquid assets valued at greater
than the exercise price of the call written, in a segregated account with its
custodian. When writing a call option, the Portfolios, in return for the premium
on the option, give up the opportunity to profit from a price increase in the
underlying securities above the exercise price, but, as long as the obligation
as a writer continues, have retained the risk of loss should the price of the
underlying security decline. After writing a put option, a Portfolio may incur a
loss equal to the difference between the exercise price of the option and the
sum of the market value of the underlying security plus the premium received
from the sale of the option.
M-193
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
PURCHASED AND WRITTEN OPTIONS (CONTINUED)
Certain Portfolios may purchase call and put options on their portfolio
securities or foreign currencies. A Portfolio may purchase call options to
protect against an increase in the price of the security or foreign currency it
anticipates purchasing. A 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. (See Note 7)
(J)
LOAN PARTICIPATIONS AND COMMITMENTS. The High Yield Corporate Bond Portfolio
invests in loan commitments and loan participations. Loan commitments and loan
participations are agreements to make money available to a borrower in a
specified amount, at a specified rate and within a specified time. The Portfolio
records an investment when the borrower withdraws money and records interest as
earned. The unfunded amounts are recorded in memorandum accounts. 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").
(K)
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 or
excise tax provision is required.
Investment income received by a Portfolio from foreign sources may be subject to
foreign income taxes. These foreign income taxes are withheld at the source.
(L)
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 and capital gain distributions, if any, are
declared and paid annually. 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.
(M)
ORGANIZATION COSTS. Costs incurred in connection with the initial organization
and registration of American Century Income & Growth, Dreyfus Large Company
Value and Lord Abbett Developing Growth Portfolios of the Fund were amortized
over a 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 Lord Abbett Developing Growth
Portfolios, paid by NYLIAC, aggregated approximately $64,500.
M-194
MAINSTAY VP SERIES FUND, INC.
(N)
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 where direct allocations of expenses can be made.
Expenses (other than expenses incurred under the Distribution and Service Plan)
are allocated to separate classes of shares based upon their relative net assets
on the date the expenses are incurred. The expenses borne by the Fund, including
those of related parties to the Fund, are shown on each Portfolio's Statement of
Operations.
(O)
USE OF ESTIMATES. The preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
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 Transactions:
- --------------------------------------------------------------------------------
(A)
Investment Advisory, Sub-Advisory and Administration Fees. New York Life
Investment Management LLC ("NYLIM"), an indirect wholly-owned subsidiary of New
York Life, serves as investment adviser to the Fund under an Investment Advisory
Agreement. Bond, Growth Equity, Indexed Equity and Mid Cap Core Portfolios are
advised by NYLIM. MacKay Shields, a registered investment adviser and an
indirect wholly-owned subsidiary of New York Life, serves as sub-adviser to
Capital Appreciation, Cash Management, Convertible, Equity Income, Government,
High Yield Corporate Bond, International Equity, Mid Cap Growth, Small Cap
Growth, Total Return and Value Portfolios, under a Sub-Advisory Agreement with
NYLIM. Pursuant to a Sub-Advisory Agreement with NYLIM, American Century
Investment Management, Inc. serves as sub-adviser to the American Century Income
& Growth Portfolio; The Dreyfus Corporation serves as sub-adviser to the Dreyfus
Large Company Value Portfolio; Eagle Asset Management, Inc. serves as
sub-adviser to the Eagle Asset Management Growth Equity Portfolio; and Lord,
Abbett & Co. serves as sub-adviser to the Lord Abbett Developing Growth
Portfolio.
NYLIM also serves as administrator for the Fund. NYLIM provides offices and
conducts clerical, recordkeeping and bookkeeping services, and keep most of the
financial and accounting records required to be maintained by the Portfolios.
The Fund, on behalf of each Portfolio, pays the Adviser and Administrator a
monthly fee for the services performed and the facilities furnished at an
approximate annual rate of the average daily net assets of each Portfolio as
follows:
<Table>
<Caption>
ADVISER ADMINISTRATOR
------- -------------
Bond Portfolio.............................................. 0.25% 0.20%
Capital Appreciation Portfolio.............................. 0.36% 0.20%
Cash Management Portfolio................................... 0.25% 0.20%
Convertible Portfolio....................................... 0.36% 0.20%
Equity Income Portfolio..................................... 0.70%* 0.00%
Government Portfolio........................................ 0.30% 0.20%
Growth Equity Portfolio..................................... 0.25% 0.20%
High Yield Corporate Bond Portfolio......................... 0.30% 0.20%
Indexed Equity Portfolio.................................... 0.10% 0.20%
International Equity Portfolio.............................. 0.60% 0.20%
Mid Cap Core Portfolio...................................... 0.85%* 0.00%
Mid Cap Growth Portfolio.................................... 0.75%* 0.00%
Small Cap Growth Portfolio.................................. 1.00%* 0.00%
Total Return Portfolio...................................... 0.32% 0.20%
Value Portfolio............................................. 0.36% 0.20%
American Century Income & Growth Portfolio.................. 0.50% 0.20%
Dreyfus Large Company Value Portfolio....................... 0.60% 0.20%
Eagle Asset Management Growth Equity Portfolio.............. 0.50% 0.20%
Lord Abbett Developing Growth Portfolio..................... 0.60% 0.20%
</Table>
- ----------
* This fee reflects Management fees, which includes both Advisory fees and
Administrative fees.
M-195
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
INVESTMENT ADVISORY, SUB-ADVISORY AND ADMINISTRATION FEES (CONTINUED)
Pursuant to the terms of the Sub-Advisory Agreements between NYLIM and the
sub-advisers, NYLIM pays the sub-advisers a monthly fee at an annual rate of
average daily net assets of that Portfolio as follows:
<Table>
Capital Appreciation Portfolio.............................. 0.36%
Cash Management Portfolio................................... 0.25%
Convertible Portfolio....................................... 0.36%
Equity Income Portfolio..................................... 0.35%
Government Portfolio........................................ 0.30%
High Yield Corporate Bond Portfolio......................... 0.30%
International Equity Portfolio.............................. 0.60%
Mid Cap Growth Portfolio.................................... 0.38%
Small Cap Growth Portfolio.................................. 0.50%
Total Return Portfolio...................................... 0.32%
Value Portfolio............................................. 0.36%
American Century Income & Growth Portfolio.................. 0.40%*
Dreyfus Large Company Value Portfolio....................... 0.45%**
Eagle Asset Management Growth Equity Portfolio.............. 0.40%***
Lord Abbett Developing Growth Portfolio..................... 0.50%
</Table>
- ----------
* On assets up to $100 million; 0.35% on assets from $100 million to $200
million; 0.30% on assets over $200 million.
** On assets up to $250 million; 0.40% on assets over $250 million.
*** On assets up to $200 million; 0.30% on assets over $200 million.
NYLIM has voluntarily agreed to assume the operating expenses of Equity Income,
Mid Cap Core, Mid Cap Growth and Small Cap Growth Portfolios, which on an
annualized basis exceed the percentages of average daily net assets indicated
below. Also listed below are the amounts NYLIM reimbursed the Portfolios for the
year ended December 31, 2003. It was not necessary for NYLIM to reimburse Equity
Income Portfolio and Mid Cap Growth for expenses for the year ended December 31,
2003. This agreement may be terminated by NYLIM at any time.
<Table>
Equity Income Portfolio..................................... 0.89% $ --
Mid Cap Core Portfolio...................................... 0.98% 82,921
Mid Cap Growth Portfolio.................................... 0.97% --
Small Cap Growth Portfolio.................................. 0.95% 153,602
</Table>
Included in the Statement of Operations for the year ended December 31, 2003 is
an amount of approximately $3,437 that was reimbursed by the Sub-Adviser for a
loss on a security acquired in violation of investment restrictions.
(B)
DISTRIBUTOR. NYLIFE Distributors Inc. ("NYLIFE Distributors"), an indirect
wholly-owned subsidiary of New York Life, serves as distributor (the
"Distributor") to the Service Class shares of all Portfolios offering such
shares, pursuant to a Distribution and Service Agreement.
(C)
DISTRIBUTION AND SERVICE FEES. With respect to the Service Class shares of all
Portfolios, except Cash Management Portfolio, the Fund has adopted a
Distribution and Service Plan in accordance with the provisions of Rule 12b-1
under the Investment Company Act. Under the Distribution and Service Plan, the
Distributor has agreed to provide, through its affiliates or independent third
parties, various distribution-related, shareholder and administrative support
services to Service Class shareholders. For its services, the Distributor is
entitled to a combined distribution and service fee accrued daily and paid
monthly at an annual rate of 0.25% of the average daily net assets attributable
to the Service Class of each Portfolio.
M-196
MAINSTAY VP SERIES FUND, INC.
(D)
DIRECTORS FEES. Directors, other than those affiliated with NYLIM, New York
Life, MacKay Shields 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. Beginning January 1, 2003,
the Audit Committee Chairman is receiving an additional annual retainer of
$12,000. The Fund allocates directors fees in proportion to the net assets of
the respective Portfolios.
(E)
CAPITAL. At December 31, 2003, NYLIAC was the beneficial owner of shares of the
following Portfolios with net asset values and percentages of net assets as
follows:
<Table>
Equity Income Portfolio..................................... $10,622,408 6.7%
Mid Cap Core Portfolio...................................... 9,479,152 11.4
Mid Cap Growth Portfolio.................................... 9,221,352 9.2
Small Cap Growth Portfolio.................................. 9,698,285 9.2
Lord Abbett Developing Growth Portfolio..................... 6,428,835 15.1
</Table>
(F)
OTHER. Fees for the cost of legal services provided to the Fund by the Office of
the General Counsel of NYLIM are charged to the Portfolios. For the year ended
December 31, 2003 these fees, which are included in Professional fees shown on
the Statement of Operations, are as follows:
<Table>
Bond Portfolio.............................................. $16,614
Capital Appreciation Portfolio.............................. 28,478
Cash Management Portfolio................................... 13,909
Convertible Portfolio....................................... 8,023
Equity Income Portfolio..................................... 3,607
Government Portfolio........................................ 14,305
Growth Equity Portfolio..................................... 24,302
High Yield Corporate Bond Portfolio......................... 30,442
Indexed Equity Portfolio.................................... 34,179
International Equity Portfolio.............................. 2,445
Mid Cap Core Portfolio...................................... 1,384
Mid Cap Growth Portfolio.................................... 1,754
Small Cap Growth Portfolio.................................. 2,018
Total Return Portfolio...................................... 16,467
Value Portfolio............................................. 11,410
American Century Income & Growth Portfolio.................. 1,928
Dreyfus Large Company Value Portfolio....................... 1,697
Eagle Asset Management Growth Equity Portfolio.............. 4,268
Lord Abbett Developing Growth Portfolio..................... 1,017
</Table>
NOTE 4--Restricted Securities:
- --------------------------------------------------------------------------------
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 does 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.
M-197
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
RESTRICTED SECURITIES (CONTINUED)
HIGH YIELD CORPORATE BOND PORTFOLIO
Restricted securities held at December 31, 2003:
<Table>
<Caption>
PRINCIPAL PERCENT
DATE(S) OF AMOUNT/ 12/31/03 OF
SECURITY ACQUISITION SHARES COST VALUE NET ASSETS
-------- ----------------- ---------- ----------- ----------- ----------
Calpine Gilroy, L.P.
10.00%, due 9/30/14................................ 11/26/03 $5,408,558 $ 5,423,025 $ 5,408,558 0.5%
Cherokee International LLC
Convertible Bond
12.00%, due 11/1/08................................ 10/14/99 770,000 723,635 308,000 0.0(a)
Colorado Prime Corp.
Common Stock....................................... 5/6/97-11/10/99 64,130 641 641 0.0(a)
Preferred Stock.................................... 5/6/97-11/10/99 1,509 5,504,719 393,836 0.0(a)
Conseco, Inc.
Bank debt, Term Loan A
7.25%, due 9/10/10................................. 10/22/03 2,692,308 2,654,538 2,692,308 0.2
Bank debt, Term Loan B
9.50%, due 9/10/10................................. 10/22/03 807,692 793,994 811,394 0.1
Fountain View, Inc.
Common Stock....................................... 9/4/03 1,690 17 17 0.0(a)
Globix Corp.
Common Stock....................................... 10/15/02 236,469 59,922 709,407 0.1
GT Group Telecom Services Corp.
Bank debt, Term Loan A
6.5625%, due 6/30/08............................... 1/30/01 3,225,213 1,257,884 323 0.0(a)
Bank debt, Term Loan B
6.625%, due 6/30/08................................ 1/30/01 2,304,787 905,264 230 0.0(a)
Micron Technology, Inc.
6.50%, due 9/30/05................................. 3/3/03-6/30/03 7,000,000 6,482,239 6,965,000 0.6
Mirant Corp.
Bank debt, Revolver
4.75%, due 7/15/04................................. 4/21/03 1,480,000 1,276,199 854,700 0.1
5.00%, due 7/15/05................................. 12/19/03 657,323 0(b) 511,068 0.0(a)
Morris Material Handling, Inc.
Common Stock....................................... 3/11/99-10/30/01 9,371 4,919 49,666 0.0(a)
Neenah Foundry Co.
Common Stock....................................... 10/21/03 739,786 184,947 369,893 0.0(a)
Warrants........................................... 10/8/03 744,004 172,569 364,562 0.0(a)
NEON Communications, Inc.
Common Stock....................................... 9/11/03 367,044 325,138 458,805 0.0(a)
Convertible Preferred Stock
12.00%............................................. 12/3/03 39,998 445,581 449,978 0.0(a)
Warrants........................................... 9/11/03 367,044 325,138 3,670 0.0(a)
Warrants, Class A.................................. 12/3/02 200,064 2,001 250,080 0.0(a)
Warrants, Redeemable Preferred..................... 12/3/02 240,062 2,401 2,401 0.0(a)
NRG Energy, Inc.
Credit Linked Deposit
1.07%, due 6/23/10................................. 12/30/03 625,000 621,876 637,500 0.1
Bank debt, Term Loan B
5.50%, due 6/23/10................................. 12/30/03 2,375,000 2,363,034 2,422,500 0.2
Owens Coming, Inc.
Bank debt, Revolver
3.62%, due 1/1/04.................................. 9/26/01-10/15/02 4,051,541 2,692,809 2,876,594 0.2
Pacific & Atlantic (Holdings), Inc.
Convertible Preferred Stock
7.50%, Class A..................................... 5/21/98-10/30/03 7,115 71 71 0.0(a)
Pacific Gas & Electric Co.
Bank debt, Revolver
8.375%, due 12/30/06............................... 4/12/02-6/27/03 9,875,000 9,897,746 9,924,375 0.9
Qwest Corp.
Bank debt, Term Loan
6.95%, due 6/30/10................................. 6/12/03 4,250,000 4,157,175 4,354,125 0.4
Qwest Services Corp.
Bank debt, Revolver
4.62%, due 5/3/05.................................. 1/24/03 55,898 49,937 55,647 0.0(a)
----------- ----------- ---
$46,327,419 $40,875,349 3.4%
=========== =========== ===
</Table>
- ------------
(a) Less than one tenth of a percent.
(b) Less than one dollar.
M-198
MAINSTAY VP SERIES FUND, INC.
NOTE 5--Federal Income Tax:
- --------------------------------------------------------------------------------
The following table discloses the current year reclassifications between
accumulated undistributed net investment income (loss), accumulated
undistributed net realized gain (loss) on investments and accumulated
undistributed net realized gain (loss) on foreign currency transactions and
paid-in capital arising from permanent differences; net assets at December 31,
2003, are not affected.
<Table>
<Caption>
ACCUMULATED
UNDISTRIBUTED
ACCUMULATED NET REALIZED
ACCUMULATED UNDISTRIBUTED GAIN (LOSS)
UNDISTRIBUTED NET REALIZED ON FOREIGN
NET INVESTMENT GAIN (LOSS) ON CURRENCY ADDITIONAL
INCOME (LOSS) INVESTMENTS TRANSACTIONS PAID-IN CAPITAL
-------------- -------------- ------------- ---------------
Bond Portfolio............................. $1,223,036 $(1,197,301) $ 0 $ (25,735)
Capital Appreciation Portfolio............. 6,199 0 0 (6,199)
Convertible Portfolio...................... 21,782 (20,943) 0 (839)
Eagle Asset Management Growth Equity
Portfolio................................ 295 0 0 (295)
Equity Income Portfolio.................... 2,882 126,217 0 (129,099)
Government Portfolio....................... 2,635,540 (2,635,540) 0 0
Growth Equity Portfolio.................... 279 329,403 0 (329,682)
High Yield Corporate Bond Portfolio........ 393,439 (393,439) 0 0
Indexed Equity Portfolio................... (8,325) 123,265 0 (114,940)
International Equity Portfolio............. 623,269 0 (623,269) 0
Mid Cap Core Portfolio..................... 2,883 27,355 0 (30,238)
Mid Cap Growth Portfolio................... 287,590 0 0 (287,590)
Small Cap Growth Portfolio................. 430,501 0 0 (430,501)
Total Return Portfolio..................... 235,484 (235,484) 0 0
American Century Income & Growth
Portfolio................................ 552 4,958 0 (5,510)
Dreyfus Large Company Value Portfolio...... 2,274 0 0 (2,274)
Lord Abbett Developing Growth Portfolio.... 307,738 0 0 (307,738)
</Table>
The reclassifications for the Portfolios are primarily due to foreign currency
gain (loss), reclassification of distributions, paydown gain (loss), real estate
investment trusts gain (loss), non deductible expenses (organization costs),
premium amortization adjustments and net operating losses.
Dividends to shareholders from net investment income and distributions to
shareholders from net realized gains shown in the Statement of Changes in Net
Assets for the years ended December 31, 2003 and December 31, 2002 represent
tax-based distributions of ordinary income and net long-term capital gain,
respectively, except for the Portfolio for which the tax components of the
distributions are shown below.
<Table>
<Caption>
2003 2002
--------------------------------------- ---------------------------------------
TAX-BASED TAX-BASED TAX-BASED TAX-BASED
DISTRIBUTIONS FROM DISTRIBUTIONS FROM DISTRIBUTIONS FROM DISTRIBUTIONS FROM
ORDINARY INCOME LONG-TERM GAINS ORDINARY INCOME LONG-TERM GAINS
------------------ ------------------ ------------------ ------------------
Bond Portfolio $23,137,251 $9,893,531 $ N/A $N/A
Cash Management Portfolio.......... 3,042,267 0 6,528,433 0
</Table>
M-199
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of December 31, 2003, the components of accumulated gain (loss) on a tax
basis were as follows:
<Table>
<Caption>
ACCUMULATED UNREALIZED TOTAL
ORDINARY CAPITAL AND APPRECIATION ACCUMULATED
INCOME OTHER LOSSES (DEPRECIATION) GAIN (LOSS)
---------- ------------- -------------- -------------
Bond Portfolio.................................. $ 0 $ 0 $ 8,624,777 $ 8,624,777
Capital Appreciation Portfolio.................. 639 (236,744,354) 110,970,373 (125,773,342)
Cash Management Portfolio....................... 4,788 0 0 4,788
Convertible Portfolio........................... 307,161 (34,844,161) 25,295,617 (9,241,383)
Equity Income Portfolio......................... 0 (2,503,256) 19,356,629 16,853,373
Government Portfolio............................ 87 (2,193,943) 2,407,400 213,544
Growth Equity Portfolio......................... 0 (171,991,835) 135,459,186 (36,532,649)
High Yield Corporate Bond Portfolio............. 1,006,584 (150,554,735) 56,760,648 (92,787,503)
Indexed Equity Portfolio........................ 0 (81,228,074) 90,181,880 8,953,806
International Equity Portfolio.................. 222,036 (6,753,828) 18,000,293 11,468,501
Mid Cap Core Portfolio.......................... 0 652,972 8,033,316 8,686,288
Mid Cap Growth Portfolio........................ 0 (7,981,117) 18,919,241 10,938,124
Small Cap Growth Portfolio...................... 0 (7,397,176) 20,794,719 13,397,543
Total Return Portfolio.......................... 182,693 (34,258,640) 47,763,272 13,687,325
Value Portfolio................................. 622 (54,927,296) 52,745,678 (2,180,996)
American Century Income & Growth Portfolio...... 0 (11,280,802) 5,648,827 (5,631,975)
Dreyfus Large Company Value Portfolio........... 0 (9,136,618) 7,698,124 (1,438,494)
Eagle Asset Management Growth Equity
Portfolio..................................... 0 (111,936,106) 10,356,112 (101,579,994)
Lord Abbett Developing Growth Portfolio......... 0 (9,332,287) 4,368,389 (4,963,898)
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is primarily due to wash sale loss deferrals, premium
amortization, real estate investment trusts basis adjustments and mark-to-market
of futures contracts.
At December 31, 2003, 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
after October 31, 2003 as if they arose on January 1, 2004.
<Table>
<Caption>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE THROUGH AMOUNT (000'S) DEFERRED (000'S)
----------------- -------------- ----------------
Capital Appreciation Portfolio.............................. 2009 $117,230
2010 97,959
2011 21,298
--------
$236,487 $ 257
======== ======
Convertible Portfolio....................................... 2009 $ 19,211
2010 15,633
--------
$ 34,844 $ 0
======== ======
Equity Income Portfolio..................................... 2010 $ 2,503 $ 0
======== ======
Government Portfolio........................................ 2007 $ 323
2008 1,870
--------
$ 2,193 $ 1
======== ======
Growth Equity Portfolio..................................... 2009 $ 17,081
2010 154,911
--------
$171,992 $ 0
======== ======
</Table>
M-200
MAINSTAY VP SERIES FUND, INC.
<Table>
<Caption>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE THROUGH AMOUNT (000'S) DEFERRED (000'S)
----------------- -------------- ----------------
High Yield Corporate Bond Portfolio......................... 2008 $ 14,184
2009 41,315
2010 24,586
2011 61,979
--------
$142,064 $8,491
======== ======
Indexed Equity Portfolio.................................... 2010 $ 66,906
2011 14,322
--------
$ 81,228 $ 0
======== ======
International Equity Portfolio.............................. 2009 $ 4,697
2010 2,057
--------
$ 6,754 $ 0
======== ======
Mid Cap Growth Portfolio.................................... 2009 $ 852
2010 4,269
2011 2,860
--------
$ 7,981 $ 0
======== ======
Small Cap Growth Portfolio.................................. 2009 $ 1,067
2010 5,777
2011 553
--------
$ 7,397 $ 0
======== ======
Total Return Portfolio...................................... 2009 $ 9,421
2010 24,838
--------
$ 34,259 $ 0
======== ======
Value Portfolio............................................. 2010 $ 46,441
2011 8,486
--------
$ 54,927 $ 0
======== ======
American Century Income & Growth Portfolio.................. 2008 $ 168
2009 3,852
2010 3,886
2011 3,150
--------
$ 11,056 $ 225
======== ======
Dreyfus Large Company Value Portfolio....................... 2010 8,082
2011 1,055
--------
$ 9,137 $ 0
======== ======
Eagle Asset Management Growth Equity Portfolio.............. 2009 $ 74,767
2010 37,086
--------
$111,853 $ 83
======== ======
Lord Abbett Developing Growth Portfolio..................... 2008 $ 3,407
2009 1,418
2010 3,082
2011 1,425
--------
$ 9,332 $ 0
======== ======
</Table>
The Convertible, Equity Income, Government, Growth Equity, International Equity,
Mid Cap Core, Total Return and Eagle Asset Management Growth Equity Portfolios
utilized $607,544, $2,699,637, $1,291,025, $19,494,791, $3,967,863, $2,766,801,
$868,237 and $1,331,598 respectively, of capital loss carryforwards during the
year ended December 31, 2003.
M-201
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Commitments and Contingencies:
- --------------------------------------------------------------------------------
As of December 31, 2003, High Yield Corporate Bond Portfolio had unfunded loan
commitments pursuant to the following loan agreements:
<Table>
<Caption>
UNFUNDED
BORROWER COMMITMENT
-------- ----------
Mirant Corp., due 7/15/05................................... $2,500,000
Owens Corning, Inc., due 12/31/04........................... 266,651
University City, Inc., due 6/30/07.......................... 5,000,000
----------
$7,766,651
==========
</Table>
These commitments are available until the maturity date of the respective
security.
NOTE 7--Portfolio Securities Loaned, Foreign Currency and Written Options:
- --------------------------------------------------------------------------------
As of December 31, 2003, the following Portfolios had securities on loan and
received collateral as follows:
<Table>
<Caption>
MARKET VALUE OF CASH NON-CASH
PORTFOLIO SECURITIES ON LOAN COLLATERAL COLLATERAL
- --------- ------------------ ----------- -----------
Capital Appreciation.................................... $15,389,820 $16,191,796 $ --
Convertible............................................. 18,181,610 18,663,660 --
Government.............................................. 107,322,263 109,750,567 3,170,709
High Yield.............................................. 65,633,824 68,246,341 389,224
International Equity.................................... 6,589,479 6,850,722 --
Total Return............................................ 12,687,240 13,070,703 258,449
</Table>
The cash collateral received for securities on loan was used to purchase highly
liquid short term investments in accordance with the lending procedures of the
Portfolios. Non-cash collateral consists of U.S. Treasury Securities.
As of December 31, 2003, the following Portfolio had Foreign Currency:
INTERNATIONAL EQUITY PORTFOLIO
<Table>
<Caption>
CURRENCY COST VALUE
- -------------------------------------- ---------- ----------
Euro E 364,760 $ 441,853 $ 460,090
Swiss Francs SF 340,781 266,659 275,546
Pound Sterling L 154,965 270,326 277,411
Yen Y 88,741,511 822,844 828,044
---------- ----------
$1,801,682 $1,841,091
========== ==========
</Table>
As of December 31, 2003, the following Portfolios had transactions in Written
Options:
CONVERTIBLE PORTFOLIO
<Table>
<Caption>
NUMBER
OF
CONTRACTS PREMIUM
--------- ---------
Options outstanding at December 31, 2002.................... 0 $ 0
Options--written............................................ (143) (31,030)
Options--exercised.......................................... 143 31,030
------ ---------
Options outstanding at December 31, 2003.................... 0 $ 0
====== =========
</Table>
M-202
MAINSTAY VP SERIES FUND, INC.
VALUE PORTFOLIO
<Table>
<Caption>
NUMBER
OF
CONTRACTS PREMIUM
--------- -----------
Options outstanding at December 31, 2002.................... (1,821) $ (213,051)
Options--written............................................ (5,566) (937,880)
Options--closed............................................. 6,135 984,183
Options--exercised.......................................... 319 69,221
Options--expired............................................ 295 35,325
------- -----------
Options outstanding at December 31, 2003.................... (638) $ (62,202)
======= ===========
</Table>
NOTE 8--Line of Credit:
- --------------------------------------------------------------------------------
The Portfolios, except Cash Management Portfolio, maintain a line of credit of
$160,000,000 with a syndicate of banks in order to secure a source of funds for
temporary purposes to meet unanticipated or excessive shareholder redemption
requests. These 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 among
the Portfolios based upon net assets and other factors. Interest on any
revolving credit loan is charged based upon the Federal Funds Advances rate.
There were no borrowings on this line of credit during the year ended December
31, 2003.
NOTE 9--Other Matters
- --------------------------------------------------------------------------------
New York Life Investment Management LLC (NYLIM) and mutual funds that NYLIM
advises, including The MainStay VP Series Funds, Inc. have received requests for
information from various government authorities and regulatory bodies regarding
market timing, late trading and other matters. We are cooperating fully in
responding to these requests. We have no reason to believe that NYLIM or any of
the mutual funds NYLIM advises has been targeted as the subject of any
governmental or regulatory enforcement action.
M-203
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 10--Purchases and Sales of Securities (in 000's):
- --------------------------------------------------------------------------------
During the year ended December 31, 2003, purchases and sales of securities,
other than securities subject to repurchase transactions and short-term
securities, were as follows:
<Table>
<Caption>
BOND CAPITAL APPRECIATION CONVERTIBLE EQUITY INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
---------------------------------------------------------------------------------------------------
U.S. Government securities..... $566,626 $437,040 $ -- $ -- $ -- $ -- $ -- $ --
All others..................... 248,234 282,393 228,853 244,399 237,175 179,265 69,977 34,077
--------------------------------------------------------------------------------------------
Total.......................... $814,860 $719,433 $228,853 $244,399 $237,175 $179,265 $69,977 $34,077
============================================================================================
</Table>
<Table>
<Caption>
MID CAP CORE MID CAP GROWTH SMALL CAP GROWTH TOTAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
---------------------------------------------------------------------------------------------------
U.S. Government securities..... $ -- $ -- $ -- $ -- $ -- $ -- $192,716 $157,262
All others..................... 105,828 82,879 76,999 18,702 81,676 36,492 201,572 194,082
------------------------------------------------------------------------------------------
Total.......................... $105,828 $82,879 $76,999 $18,702 $81,676 $36,492 $394,288 $351,344
==========================================================================================
</Table>
- --------------------------------------------------------------------------------
NOTE 11--Capital Share Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in capital shares for the years ended December 31, 2003 and the
year ended December 31, 2002 were as follows:
<Table>
<Caption>
BOND PORTFOLIO
-----------------------------------------------------
INITIAL CLASS SERVICE CLASS INITIAL CLASS
------------- ------------- -------------
JUNE 4, 2003*
YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2003 2002
---------------------------------------------------------------------------------------------------
Shares sold.................... 5,540 1,407 9,154
Shares issued in reinvestment
of dividends and
distributions................ 2,374 92 1,519
-----------------------------------------------------
7,914 1,499 10,673
Shares redeemed................ (6,831) (36) (4,033)
-----------------------------------------------------
Net increase (decrease)........ 1,083 1,463 6,640
=====================================================
<Caption>
CAPITAL APPRECIATION PORTFOLIO
------------------------------------------------------
INITIAL CLASS SERVICE CLASS INITIAL CLASS
------------- ------------- -------------
DECEMBER 31,
2003*
YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2003 2002
---------------------------------------------------------------------------------------------------
Shares sold.................... 2,349 757 9,113
Shares issued in reinvestment
of dividends and
distributions................ 98 1 61
------------------------------------------------------
2,447 758 9,174
Shares redeemed................ (5,159) (5) (14,527)
------------------------------------------------------
Net increase (decrease)........ (2,712) 753 (5,353)
======================================================
</Table>
<Table>
<Caption>
EQUITY INCOME PORTFOLIO GOVERNMENT PORTFOLIO
---------------------------------------------- ---------------------------------------------
INITIAL CLASS SERVICE CLASS INITIAL CLASS INITIAL CLASS SERVICE CLASS INITIAL CLASS
------------- -------------- ------------- ------------- ------------- -------------
JUNE 5, 2003* JUNE 4, 2003*
YEAR ENDED THROUGH YEAR ENDED YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2003 2002 2003 2003 2002
---------------------------------------------------------------------------------------------------
Shares sold.................... 4,051 1,635 7,855 9,239 1,264 19,804
Shares issued in reinvestment
of dividends and
distributions................ 113 13 103 1,575 57 1,082
------------------------------------------------------------------------------------------------
4,164 1,648 7,958 10,814 1,321 20,886
Shares redeemed................ (975) (14) (852) (16,499) (60) (3,298)
------------------------------------------------------------------------------------------------
Net increase (decrease)........ 3,189 1,634 7,106 (5,685) 1,261 17,588
================================================================================================
</Table>
- ------------
<Table>
* Commencement of Operations.
</Table>
M-204
MAINSTAY VP SERIES FUND, INC.
- --------------------------------------------------------------------------------
<Table>
<Caption>
HIGH YIELD INTERNATIONAL
GOVERNMENT GROWTH EQUITY CORPORATE BOND INDEXED EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
- --------------------------------------------------------------------------------------------------------------------
$515,458 $428,817 $ -- $ -- $ -- $ 3,018 $ -- $ -- $ -- $ --
46,837 32,450 531,915 537,067 547,881 351,908 72,232 36,020 94,178 77,261
- --------------------------------------------------------------------------------------------------------------------
$562,295 $461,267 $531,915 $537,067 $547,881 $354,926 $72,232 $36,020 $94,178 $77,261
====================================================================================================================
</Table>
<Table>
<Caption>
EAGLE ASSET
AMERICAN CENTURY DREYFUS MANAGEMENT LORD ABBETT
VALUE INCOME & GROWTH LARGE COMPANY VALUE GROWTH EQUITY DEVELOPING GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
- --------------------------------------------------------------------------------------------------------------------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
224,472 208,828 48,192 47,424 41,832 37,247 215,831 211,291 40,078 29,943
- --------------------------------------------------------------------------------------------------------------------
$224,472 $208,828 $48,192 $ 47,424 $41,832 $ 37,247 $215,831 $211,291 $40,078 $29,943
====================================================================================================================
</Table>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
CONVERTIBLE PORTFOLIO
---------------------------------------------
CASH MANAGEMENT PORTFOLIO INITIAL CLASS SERVICE CLASS INITIAL CLASS
--------------------------- ------------- ------------- -------------
JUNE 5, 2003*
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2002 2003 2003 2002
- -------------------------------------------------------------------------------
939,341 1,790,743 5,694 2,182 4,596
3,042 6,528 562 42 649
- -------------------------------------------------------------------------------
942,383 1,797,271 6,256 2,224 5,245
(1,100,735) (1,760,121) (1,857) (34) (2,691)
- -------------------------------------------------------------------------------
(158,352) 37,150 4,399 2,190 2,554
===============================================================================
</Table>
<Table>
<Caption>
GROWTH EQUITY PORTFOLIO HIGH YIELD CORPORATE BOND PORTFOLIO
---------------------------------------------- ---------------------------------------------
INITIAL CLASS SERVICE CLASS INITIAL CLASS INITIAL CLASS SERVICE CLASS INITIAL CLASS
------------- -------------- ------------- ------------- ------------- -------------
JUNE 4, 2003*
YEAR ENDED JUNE 5, 2003* YEAR ENDED YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 JUNE 30, 2003 2002 2003 2003 2002
- --------------------------------------------------------------------------------------------------
1,834 545 3,187 28,223 8,108 16,554
433 5 524 7,865 536 9,855
- --------------------------------------------------------------------------------------------------
2,267 550 3,711 36,088 8,644 26,409
(5,018) (8) (7,884) (11,843) (173) (16,827)
- --------------------------------------------------------------------------------------------------
(2,751) 542 (4,173) 24,245 8,471 9,582
==================================================================================================
</Table>
M-205
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 11--Capital Share Transactions (in 000's) (Continued):
- --------------------------------------------------------------------------------
<Table>
<Caption>
INDEXED EQUITY PORTFOLIO INTERNATIONAL EQUITY PORTFOLIO
------------------------------------------ ------------------------------------------
INITIAL SERVICE INITIAL INITIAL SERVICE INITIAL
CLASS CLASS CLASS CLASS CLASS CLASS
------------ ------------ ------------ ------------ ------------ ------------
JUNE 5, JUNE 5,
2003* 2003*
YEAR ENDED THROUGH YEAR ENDED YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2003 2002 2003 2003 2002
---------------------------------------------------------------------------------------
Shares sold.................... 4,377 1,752 11,762 21,236 748 20,582
Shares issued in reinvestment
of dividends and
distributions................ 656 19 969 125 11 93
---------------------------------------------------------------------------------------
5,033 1,771 12,731 21,361 759 20,675
Shares redeemed................ (4,970) (9) (14,820) (19,981) (4) (19,678)
---------------------------------------------------------------------------------------
Net increase (decrease)........ 63 1,762 (2,089) 1,380 755 997
=======================================================================================
</Table>
<Table>
<Caption>
SMALL CAP GROWTH PORTFOLIO TOTAL RETURN PORTFOLIO
------------------------------------------ ------------------------------------------
INITIAL SERVICE INITIAL INITIAL SERVICE INITIAL
CLASS CLASS CLASS CLASS CLASS CLASS
------------ ------------ ------------ ------------ ------------ ------------
JUNE 5, JUNE 4,
2003* 2003*
YEAR ENDED THROUGH YEAR ENDED YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2003 2002 2003 2003 2002
---------------------------------------------------------------------------------------
Shares sold.................... 5,047 1,563 3,403 1,696 765 1,720
Shares issued in reinvestment
of dividends and
distributions................ -- -- -- 611 12 996
---------------------------------------------------------------------------------------
5,047 1,563 3,403 2,307 777 2,716
Shares redeemed................ (890) (115) (652) (4,064) (16) (6,614)
---------------------------------------------------------------------------------------
Net increase (decrease)........ 4,157 1,448 2,751 (1,757) 761 (3,898)
=======================================================================================
</Table>
<Table>
<Caption>
DREYFUS LARGE COMPANY VALUE PORTFOLIO EAGLE ASSET MANAGEMENT GROWTH EQUITY PORTFOLIO
------------------------------------------ -----------------------------------------------
INITIAL SERVICE INITIAL INITIAL SERVICE INITIAL
CLASS CLASS CLASS CLASS CLASS CLASS
------------ ------------ ------------ ------------ ------------ -----------------
JUNE 5, JUNE 6,
2003* 2003*
YEAR ENDED THROUGH YEAR ENDED YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2003 2003 2002 2003 2003 2002
--------------------------------------------------------------------------------------------
Shares sold.................... 1,443 594 1,361 1,883 672 1,746
Shares issued in reinvestment
of dividends and
distributions................ 43 4 43 21 1 10
--------------------------------------------------------------------------------------------
1,486 598 1,404 1,904 673 1,756
Shares redeemed................ (1,609) (5) (829) (1,793) (17) (2,871)
--------------------------------------------------------------------------------------------
Net increase (decrease)........ (123) 593 575 111 656 (1,115)
============================================================================================
</Table>
- ------------
<Table>
* Commencement of Operations.
</Table>
M-206
MAINSTAY VP SERIES FUND, INC.
- --------------------------------------------------------------------------------
<Table>
<Caption>
MID CAP CORE PORTFOLIO MID CAP GROWTH PORTFOLIO
--------------------------------------------------------- ---------------------------------------------------------
INITIAL SERVICE INITIAL INITIAL SERVICE INITIAL
CLASS CLASS CLASS CLASS CLASS CLASS
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
JUNE 5, 2003* JUNE 5, 2003*
YEAR ENDED THROUGH YEAR ENDED YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, 2003 DECEMBER 31, 2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER 31, 2003 DECEMBER 31, 2002
- --------------------------------------------------------------------------------------------------------------------------
2,032 815 2,535 5,787 1,827 2,338
18 2 10 -- -- --
- --------------------------------------------------------------------------------------------------------------------------
2,050 817 2,545 5,787 1,827 2,338
(447) (5) (477) (483) (52) (310)
- --------------------------------------------------------------------------------------------------------------------------
1,603 812 2,068 5,304 1,775 2,028
==========================================================================================================================
</Table>
<Table>
<Caption>
VALUE PORTFOLIO AMERICAN CENTURY INCOME & GROWTH PORTFOLIO
--------------------------------------------------------- ----------------------------------------------------------
INITIAL SERVICE INITIAL INITIAL SERVICE INITIAL
CLASS CLASS CLASS CLASS CLASS CLASS
----------------- ----------------- ----------------- ----------------- ------------------ -----------------
JUNE 4, 2003* JUNE 13, 2003*
YEAR ENDED THROUGH YEAR ENDED YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, 2003 DECEMBER 31, 2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER 31, 2003 DECEMBER 31, 2002
- ---------------------------------------------------------------------------------------------------------------------------
2,419 999 4,131 1,254 402 1,073
380 12 486 84 4 86
- ---------------------------------------------------------------------------------------------------------------------------
2,799 1,011 4,617 1,338 406 1,159
(2,661) (6) (3,079) (1,754) (10) (950)
- ---------------------------------------------------------------------------------------------------------------------------
138 1,005 1,538 (416) 396 209
===========================================================================================================================
</Table>
<Table>
<Caption>
LORD ABBETT DEVELOPING GROWTH PORTFOLIO
---------------------------------------------------------
INITIAL SERVICE INITIAL
CLASS CLASS CLASS
----------------- ----------------- -----------------
JUNE 5, 2003*
YEAR ENDED THROUGH YEAR ENDED
DECEMBER 31, 2003 DECEMBER 31, 2003 DECEMBER 31, 2002
- --------------------------------------------------------------
1,658 531 1,357
-- -- --
- --------------------------------------------------------------
1,658 531 1,357
(817) (12) (1,333)
- --------------------------------------------------------------
841 519 24
==============================================================
</Table>
M-207
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
MainStay VP Series Fund, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Bond Portfolio, Capital
Appreciation Portfolio, Cash Management Portfolio, Convertible Portfolio, Equity
Income Portfolio, Government Portfolio, Growth Equity Portfolio, High Yield
Corporate Bond Portfolio, Indexed Equity Portfolio, International Equity
Portfolio, Mid Cap Core Portfolio, Mid Cap Growth Portfolio, Small Cap Growth
Portfolio, Total Return Portfolio, Value Portfolio, American Century Income and
Growth Portfolio, Dreyfus Large Company Value Portfolio, Eagle Asset Management
Growth Equity Portfolio and Lord Abbett Developing Growth Portfolio
(constituting MainStay VP Series Fund, Inc., hereafter referred to as the
"Fund") at December 31, 2003, the results of each of their operations for the
year then ended, the changes in each of their net assets for each of the two
years in the period then ended and the financial highlights for each of the
periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 2003 by correspondence with the custodians and brokers, provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 17, 2004
M-208
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
[INSERT REPORT HERE]
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, Registrant had
adopted a code of ethics (the "Code") that applies to Registrant's principal
executive office ("PEO") and principal financial officer ("PFO"). There were no
amendments to the Code during the period covered by the report. The Registrant
did not grant any waivers, including implicit waivers, from any provisions of
the Code to the PEO of PFO during the period covered by this report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Directors has determined that the registrant has at least
one "audit committee financial expert" (as defined in Item 3 of Form N-CSR)
serving on its Audit Committee. The Audit Committee financial expert is Roman
Weil. Mr. Weil is "independent" within the meaning of that term used in Form
N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees. The aggregate fees billed for each of the last two fiscal
years for professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for those fiscal years are $569,400 for 2002 and $656,000
for 2003.
(b) Audit-Related Fees. There were no aggregate fees billed in each of the
last two fiscal years for assurance and related services by the principal
accountant that are reasonably related to the performance of the audit of the
registrant's financial statements and are not reported under paragraph (a) of
this Item.
(c) Tax Fees. The aggregate fees billed in each of the last two fiscal
years for professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $112,100 for 2002 and $116,850 for
2003. These services primarily included preparation of federal, state and local
income tax returns. Additionally, services included the preparation of excise
tax returns and excise tax distribution requirements.
(d) All Other Fees. The aggregate fees billed during the last two fiscal
years for products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0 for 2002
and $6,000 for 2003. The fees for fiscal 2003 were for services for preparing
and providing a continuing education course to the Directors of the registrant.
(e) Pre-Approval Policies and Procedures.
(1) The registrant's Audit Committee has adopted pre-approval policies and
procedures (the "Procedures") to govern the Committee's pre-approval of (i) all
audit services and permissible non-audit services to be provided to the
registrant by its independent accountant, and (ii) all permissible non-audit
services to be provided by such independent accountant to the registrant's
investment adviser and to any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services to the
registrant (collectively, the "Service Affiliates") if the services directly
relate to the registrant's operations and financial reporting. In accordance
with the Procedures, the Audit Committee is responsible for the engagement of
the independent accountant to certify the registrant's financial statements for
each fiscal year. With respect to the pre-approval of non-audit services
provided to the registrant and its Service Affiliates, the Procedures provide
that the Committee may annually pre-approve a list of the types of services that
may be provided to the registrant or its Service Affiliates, or the Committee
may pre-approve such services on a project-by-project basis as they arise.
Unless a type of service has received general pre-approval, it will require
specific pre-approval by the Audit Committee if it is to be provided by the
independent accountant. The Procedures also permit the Audit Committee to
delegate authority to one or more of its members to pre-approve any proposed
non-audit services that have not been previously pre-approved by the Committee,
subject to the ratification by the full Audit Committee no later than its next
scheduled meeting. To date, the Audit Committee has not delegated such
authority.
(2) With respect to the services described in paragraphs (b) through
(d) of this Item 4, no amount was approved by the Audit Committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) No hours expended on the principal accountant's engagement to audit the
registrant's financial statements for the most recent fiscal year was attributed
to work performed by persons other than the principal accountant's full-time,
permanent employees.
(g) All non-audit fees billed by the registrant's accountant for services
rendered to the registrant for the fiscal years ended December 31, 2003 and
December 31, 2002 are disclosed in 4(b)-(d) above.
The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity controlling,
controlled by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of the
registrant approximately $134,000 for 2002 and $134,000 for 2003.
(h) The registrant's Audit Committee of the Board of Directors has
considered whether the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted
3
with or overseen by another investment adviser), and any entity controlling,
controlled by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the Disclosure Controls and Procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940) (the "Disclosure
Controls") as of a date within 90 days prior to the filing date (the "Filing
Date") of this report on Form N-CSR (the "Report"), the Registrant's principal
executive officer and financial officer have concluded that the Disclosure
Controls are reasonably designed to ensure that information required to be
disclosed by the Registrant in the Report is recorded, processed, summarized and
reported by the Filing Date, including ensuring that information required to be
disclosed in the Report is accumulated and communicated to the Registrant's
management, including the Registrant's principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required
disclosure.
(b) There were no significant changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company
Act of 1940) that occurred during the registrant's second fiscal half-year that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
4
ITEM 11. EXHIBITS.
(a)(1) The code of ethics referenced in Item 2 of this Report is filed as an
exhibit to this filing.
(a)(2) The certifications required by Rule 30a-2(a) of the Investment Company
Act of 1940 are filed as exhibits to this filing.
(b) The certifications required by Rule 30a-2(b) of the Investment Company Act
of 1940 and Section 906 of the Sarbanes-Oxley Act of 2002 are furnished as
exhibits to this filing.
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
MAINSTAY VP SERIES FUND, INC.
By: /s/ Gary E. Wendlandt
---------------------
GARY E. WENDLANDT
CHAIRMAN
Date: March 10, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ Gary E. Wendlandt
---------------------
GARY E. WENDLANDT
CHAIRMAN
Date: March 10, 2004
By: /s/Patrick J. Farrell
---------------------
PATRICK J. FARRELL
TREASURER AND
CHIEF FINANCIAL AND ACCOUNTING OFFICER
Date: March 10, 2004
EXHIBIT INDEX
(a)(1) Code of Ethics.
(a)(2) Certifications of principal executive officer and
principal financial officer as required by Rule 30a-2 under
the Investment Company Act of 1940.
(b) Certification of principal executive officer and principal
financial officer as required by Section 906 of the
Sarbanes-Oxley Act of 2002.
6