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)
Marguerite E.H. Morrison, Esq.
169 Lackawanna Avenue
Parsippany, NJ 07054
(Name and address of agent for service)
Registrant's telephone number, including area code: (973) 394-4437
Date of fiscal year end: December 31
Date of reporting period: 7/1/09 - 12/31/09
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
(MAINSTAY INVESTMENTS LOGO)
MAINSTAY VP SERIES FUND, INC.
Message from the President
and
Annual Report
December 31, 2009
NOT A PART OF THE ANNUAL REPORT
MESSAGE FROM
THE PRESIDENT
On the basis of total returns, 2009 was a good year for equity investors.
Domestic and international stocks showed strong advances, with growth stocks
outperforming value stocks. Although mid- and small-capitalization stocks
generally outperformed large-cap issues, returns at all capitalization levels
were above historical norms.
From a sector perspective, information technology was the front-runner, with
materials taking a close second. Even the weakest domestic equity
sectors--telecommunication services and utilities--provided positive returns for
the year.
Most fixed-income sectors also showed positive overall results. High-yield
corporate bonds were strong, followed by leveraged loans. Within the bond
market, an increased appetite for risk helped lower-quality securities move
ahead of longer-dated Treasury issues and the highest-rated corporate bonds.
For most investors, however, these positive results were only part of a much
larger investment picture. The historic events of 2008--including high-profile
bankruptcies and government bailouts--had a systemic impact in 2009.
To stimulate market liquidity, the Federal Open Market Committee maintained the
federal funds target rate in a historically low range between 0% and 0.25%
throughout 2009. In addition, the Federal Reserve expanded its efforts to ease
the money supply during 2009 by extending several of its lending and liquidity
facilities and by making direct purchases of longer-term Treasury securities.
The positive effects of these efforts became evident in early March, when the
market reversed course. Equity investors moved away from defensive positions
into cyclical issues that might benefit from an economic turnaround. The ensuing
stock-market recovery lasted through the end of the year, with lower-quality
stocks tending to advance faster than higher-quality issues.
Despite shifting market forces in 2009, the portfolio managers of MainStay VP
Series Fund, Inc., relied on time-tested investment principles to guide their
Portfolios. Rather than focusing on market psychology, they pursued their
investment objectives with a disciplined approach based on the investment
strategies and investment processes outlined in the Prospectus. Portfolio
managers of our long-term Portfolios focused less on short-term volatility than
on the results the Portfolios could achieve over full market cycles. And all of
our portfolio managers applied their experience, insight and Portfolio-specific
strategies, seeking to help our shareholders pursue well-defined long- or short-
range objectives.
While positive short-term results are always encouraging, past performance is no
guarantee of future results. We believe that investors may benefit from
appropriate diversification, gradual portfolio adjustments and ongoing risk-
reward assessments to keep their investments in line with their long-term
financial goals.
At MainStay VP Series Fund, we are proud to be part of your investment program,
and we hope that we can continue to serve you for many years to come.
Sincerely,
- -s- Stephen P. Fisher
Stephen P. Fisher
President
Not part of the Annual Report
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(MAINSTAY INVESTMENTS LOGO)
MAINSTAY VP SERIES FUND, INC.
MainStay VP Annual Report
December 31, 2009
The views expressed in this report and the information about
each Portfolio's holdings are for the period covered by this
report and are subject to change thereafter.
This page intentionally left blank
TABLE OF CONTENTS
<Table>
INDEX DEFINITIONS M-2
- --------------------------------------------
MAINSTAY VP BALANCED PORTFOLIO M-4
- --------------------------------------------
MAINSTAY VP BOND PORTFOLIO M-24
- --------------------------------------------
MAINSTAY VP CASH MANAGEMENT PORTFOLIO M-44
- --------------------------------------------
MAINSTAY VP COMMON STOCK PORTFOLIO M-57
- --------------------------------------------
MAINSTAY VP CONSERVATIVE ALLOCATION
PORTFOLIO M-74
- --------------------------------------------
MAINSTAY VP CONVERTIBLE PORTFOLIO M-86
- --------------------------------------------
MAINSTAY VP FLOATING RATE PORTFOLIO M-102
- --------------------------------------------
MAINSTAY VP GOVERNMENT PORTFOLIO M-124
- --------------------------------------------
MAINSTAY VP GROWTH ALLOCATION
PORTFOLIO M-140
- --------------------------------------------
MAINSTAY VP GROWTH EQUITY PORTFOLIO M-152
- --------------------------------------------
MAINSTAY VP HIGH YIELD CORPORATE BOND
PORTFOLIO M-166
- --------------------------------------------
MAINSTAY VP ICAP SELECT EQUITY
PORTFOLIO M-190
- --------------------------------------------
MAINSTAY VP INCOME BUILDER PORTFOLIO M-202
- --------------------------------------------
MAINSTAY VP INTERNATIONAL EQUITY
PORTFOLIO M-226
- --------------------------------------------
MAINSTAY VP LARGE CAP GROWTH
PORTFOLIO M-242
- --------------------------------------------
MAINSTAY VP MID CAP CORE PORTFOLIO M-254
- --------------------------------------------
MAINSTAY VP MODERATE ALLOCATION
PORTFOLIO M-270
- --------------------------------------------
MAINSTAY VP MODERATE GROWTH
ALLOCATION PORTFOLIO M-282
- --------------------------------------------
MAINSTAY VP S&P 500 INDEX PORTFOLIO M-294
- --------------------------------------------
MAINSTAY VP U.S. SMALL CAP PORTFOLIO M-314
- --------------------------------------------
NOTES TO FINANCIAL STATEMENTS M-328
- --------------------------------------------
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM M-360
- --------------------------------------------
PROXY VOTING POLICIES AND PROCEDURES M-361
- --------------------------------------------
SHAREHOLDER REPORTS AND QUARTERLY
PORTFOLIO DISCLOSURE M-361
- --------------------------------------------
BOARD MEMBERS AND OFFICERS M-362
mainstayinvestments.com M-1
INDEX DEFINITIONS
THE INFORMATION BELOW IS AN EXPLANATION OF THE VARIOUS INDICES, SERVICE
PROVIDERS AND REFERENCE RATES CITED THROUGHOUT THE PORTFOLIO INVESTMENT AND
PERFORMANCE COMPARISONS AND THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
SECTIONS THAT FOLLOW FROM PAGE M-4 THROUGH PAGE M-319. PLEASE USE THIS AS A
REFERENCE.
PLEASE NOTE THAT YOU CANNOT MAKE AN INVESTMENT DIRECTLY IN AN INDEX. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. RESULTS FOR SECURITIES INDICES
ASSUME REINVESTMENT OF ALL INCOME AND CAPITAL GAINS BUT DO NOT REFLECT FEES,
EXPENSES OR TAXES. SECURITIES IN EACH PORTFOLIO MAY NOT PRECISELY MATCH THOSE IN
THE INDEX, AND AS A RESULT, PERFORMANCE OF THE PORTFOLIO MAY DIFFER.
BALANCED COMPOSITE INDEX is an unmanaged index that consists of the Russell
Midcap(R) Value Index (60% weighted) and the Bank of America Merrill Lynch
Corporate & Government 1-10 Years Bond Index (40% weighted).
BANK OF AMERICA MERRILL LYNCH ALL US CONVERTIBLE INDEX is a market-
capitalization-weighted index of domestic corporate convertible securities. To
be included in the Index, bonds and preferred stocks must be convertible only to
common stock and have a market value or original par value of at least $50
million.
BANK OF AMERICA MERRILL LYNCH CORPORATE & GOVERNMENT 1-10 YEARS BOND INDEX is a
market-capitalization-weighted index that is made up of U.S. government and
fixed-coupon domestic investment-grade corporate bonds.
BANK OF AMERICA MERRILL LYNCH CORPORATE & GOVERNMENT MASTER INDEX is an
unmanaged index that consists of issues of the U.S. government and its agencies
as well as investment-grade corporate securities.
BARCLAYS CAPITAL U.S. AGGREGATE BOND INDEX is an unmanaged index that contains
the following other unmanaged Barclays Capital indices: the U.S. Government Bond
Index, the Corporate Bond Index, the Mortgage-Backed Securities Index and the
Asset-Backed Securities Index. To qualify for inclusion in the Barclays Capital
U.S. Aggregate Bond Index, securities must be U.S. dollar denominated and
investment-grade quality or higher, have at least one year to maturity and have
an outstanding par value of at least $250 million.
BARCLAYS CAPITAL U.S. GOVERNMENT BOND INDEX is an unmanaged index that consists
of U.S. government and agency issues as well as investment-grade fixed-rate debt
securities.
CREDIT SUISSE HIGH YIELD INDEX is an unmanaged market-weighted index that
includes publicly traded bonds rated below BBB by Standard & Poor's and below
Baa by Moody's.
CREDIT SUISSE LEVERAGED LOAN INDEX is an unmanaged index that represents
tradable, senior-secured, U.S. dollar denominated non-investment-grade loans.
LIBOR--LONDON INTERBANK OFFERED RATES are the rates that the most creditworthy
international banks dealing in Eurodollars charge each other for large loans.
These rates are widely used as reference rates in bank, corporate and government
lending agreements.
LIPPER INC. is an independent monitor of fund performance. Results are based on
total returns with all dividend and capital-gain distributions reinvested.
LIPPER MONEY MARKET FUNDS INDEX tracks the performance of the 30 largest money
market funds adjusted for the reinvestment of capital-gain and income
distributions.
LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE (L-VIPPAS) ranks
portfolios that invest in separate accounts of insurance companies. Rankings are
based on total returns with dividends and capital gains reinvested. Results do
not reflect any deduction of sales charges.
MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA AND FAR EAST INDEX
(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. Since June 2007, the MSCI EAFE(R) Index has
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.
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX (MSCI WORLD INDEX) is a free
float-adjusted market capitalization weighted index that is designed to measure
the equity market performance of developed markets. As of June 2009, the MSCI
World Index consisted of the following 23 developed market country indices:
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece,
Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway,
Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the
United States.
RUSSELL 1000(R) INDEX is an unmanaged index that measures the performance of the
large-cap segment of the U.S. equity universe. It is a subset of the Russell
3000(R) Index and includes approximately 1,000 of the largest securities based
on a combination of their market cap and current index membership.
RUSSELL 1000(R) GROWTH INDEX is an unmanaged index that measures the performance
of the large-cap growth segment of the U.S. equity universe. It includes those
Russell 1000(R) companies with higher price-to-book ratios and higher forecasted
growth values.
M-2
RUSSELL 2000(R) INDEX is an unmanaged index that measures the performance of the
small-cap segment of the U.S. equity universe. The Russell 2000(R) Index is a
subset of the Russell 3000(R) Index. It includes approximately 2,000 of the
smallest securities based on a combination of their market cap and current index
membership.
RUSSELL 2000(R) GROWTH INDEX is an unmanaged index that measures the performance
of the small-cap growth segment of the U.S. equity universe. It includes those
Russell 2000(R) companies with higher price-to-book ratios and higher forecasted
growth values.
RUSSELL 2500(TM) INDEX is an unmanaged index that measures the performance of
the small- to mid-cap segment of the U.S. equity universe, commonly referred to
as "smid" cap. The Russell 2500(TM) Index is a subset of the Russell 3000(R)
Index. It includes approximately 2500 of the smallest securities based on a
combination of their market cap and current index membership.
RUSSELL 3000(R) INDEX is an unmanaged index that measures the performance of the
largest 3,000 U.S. companies.
RUSSELL MIDCAP(R) INDEX is an unmanaged index that measures the performance of
the mid-cap segment of the U.S. equity universe. The Russell Midcap(R) Index is
a subset of the Russell 1000(R) Index. It includes approximately 800 of the
smallest securities based on a combination of their market cap and current index
membership.
RUSSELL MIDCAP(R) VALUE INDEX is an unmanaged index that measures the
performance of the mid-cap value segment of the U.S. equity universe. It
includes those Russell Midcap(R) Index companies with lower price-to-book ratios
and lower forecasted growth values.
"S&P 500(R)" is a registered trademark of the McGraw-Hill Companies, Inc., and
has been licensed for use. Standard & Poor's does not sponsor, endorse, sell or
promote the Portfolios in this report. The S&P 500(R) Index is an unman- aged
index and is widely regarded as the standard for measuring large-cap U.S. stock-
market performance.
S&P 500/CITIGROUP VALUE INDEX is an unmanaged index of stocks representing
approximately half of the market capitalization of the stocks in the S&P 500(R)
Index. On a growth-value spectrum, stocks in the S&P 500/Citigroup Value Index
have been identified as falling either wholly or partially within the value half
of the spectrum, based on multiple factors.
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.
TOTAL RETURN CORE COMPOSITE INDEX is an unmanaged index that consists of the
Russell 1000(R) Index and the Barclays Capital U.S. Aggregate Bond Index
weighted 60%/40%, respectively.
mainstayinvestments.com M-3
MAINSTAY VP BALANCED PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (5/2/05)
- --------------------------------------------------------------------
After Portfolio operating
expenses 23.07% 2.33%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MERRILL LYNCH
CORPORATE AND
GOVERNMENT 1-10
RUSSEL MIDCAP BALANCED COMPOSITE YEARS BOND
INITIAL CLASS VALUE INDEX INDEX INDEX
------------- ------------- ------------------ ---------------
05/02/05 10000 10000 10000 10000
12/31/05 10581 11481 10930 10132
12/31/06 11713 13802 12413 10547
12/31/07 12042 13606 12685 11325
12/31/08 9049 8375 9758 11790
12/31/09 11137 11240 12011 12463
</Table>
SERVICE CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (5/2/05)
- --------------------------------------------------------------------
After Portfolio operating expenses 22.76% 2.06%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MERRILL LYNCH
CORPORATE AND
GOVERNMENT 1-10
RUSSEL MIDCAP BALANCED COMPOSITE YEARS BOND
SERVICE CLASS VALUE INDEX INDEX INDEX
------------- ------------- ------------------ ---------------
05/02/05 10000 10000 10000 10000
10555 11481 10930 10132
11655 13802 12413 10547
11952 13606 12685 11325
8959 8375 9758 11790
12/31/09 10999 11240 12011 12463
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE
YEAR INCEPTION
Russell Midcap(R) Value Index(1) 34.21% 2.54%
Balanced Composite Index(1) 23.09 4.00
Bank of America Merrill Lynch Corporate
and Government 1-10 Years Bond
Index(1) 5.71 4.83
Average Lipper Variable Products Mixed-
Asset Target Allocation Growth
Portfolio(2) 24.27 3.03
</Table>
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
2. The Average Lipper Variable Products Mixed-Asset Target Allocation Growth
Portfolio is representative of portfolios that, by portfolio practice,
maintain a mix of between 60%-80% equity securities, with the remainder
invested in bonds, cash, and cash equivalents. Lipper Inc. is an independent
monitor of fund performance.
M-4 MainStay VP Balanced Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP BALANCED PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,153.10 $4.40 $1,021.10 $4.13
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,151.70 $5.75 $1,019.90 $5.40
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.81% for Initial Class and 1.06% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-5
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
<Caption>
COMMON STOCKS 59.8
- ------------- ----
U.S. Government & Federal Agencies 18.80
Corporate Bonds 16.10
Yankee Bonds 2.40
Mortgage-Backed Securities 1.20
Exchange Traded Fund 0.70
Other Assets, Less Liabilities 0.40
Short-Term Investment 0.40
Asset-Backed Security 0.20
</Table>
See Portfolio of Investments beginning on page M-10 for specific holdings within
these categories.
TOP TEN HOLDINGS OR ISSUERS HELD AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM
INVESTMENT)
<Table>
1. United States Treasury Notes,
0.875%-1.75%, due 1/31/11-1/31/14
2. Federal National Mortgage Association,
2.75%-5.50%, due 2/15/11-10/15/15
3. Federal Home Loan Mortgage Corporation,
1.50%-5.125%, due 11/23/10-9/27/13
4. Bank of America Corp., 5.65%, due 5/1/18
5. CIGNA Corp.
6. UnitedHealth Group, Inc.
7. Cliffs Natural Resources, Inc.
8. Annaly Capital Management, Inc.
9. Comcast Corp. Class A
10. Hewlett-Packard Co.
</Table>
M-6 MainStay VP Balanced Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY TONY H. ELAVIA OF MADISON SQUARE INVESTORS LLC, THE
PORTFOLIO'S SUBADVISOR AND THOMAS J. GIRARD OF NEW YORK LIFE INVESTMENTS,(1) THE
PORTFOLIO'S MANAGER.
HOW DID MAINSTAY VP BALANCED PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND ITS
BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Balanced Portfolio
returned 23.07% for Initial Class shares and 22.76% for Service Class shares.
Both share classes underperformed the 24.27% return of the average Lipper(2)
Variable Products Mixed-Asset Target Allocation Growth Portfolio, the 34.21%
return of the Russell Midcap(R) Value Index(2) and the 23.09% return of the
Portfolio's Balanced Composite Index for the 12 months ended December 31, 2009.
The Russell Midcap(R) Value Index is the Portfolio's broad-based securities-
market index.
WHAT NOTABLE FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO ITS PEERS
AND ITS BENCHMARK DURING THE REPORTING PERIOD?
In the equity portion of the Portfolio, performance trailed that of the Russell
Midcap(R) Value Index, primarily because of the Portfolio's significant holdings
in large cap stocks. In 2009, the benchmark--which includes only mid-cap
stocks--outperformed both large- and small-cap stocks by a wide margin.
The fixed-income portion of the Portfolio outperformed its benchmark, the Bank
of America Merrill Lynch U.S. Corporate and Government 1-10 Years Bond Index.(2)
The outperformance stemmed largely from increasing investment-grade corporate
bond exposure to an overweight position relative to the fixed-income benchmark
and from adding exposure to mortgages and commercial mortgage-backed securities.
Spreads(3) on all these securities tightened relative to Treasury securities,
and the spread tightening contributed to the positive performance in relation to
the fixed-income benchmark.
In relation to the Portfolio's Lipper peers, the benefit of investing in mid-cap
stocks was offset by the poor relative performance of value stocks, the absence
of foreign stock holdings, and an emphasis on high-quality bonds over higher-
yielding, lower-quality bonds.
DURING 2009, WHAT SECTORS WERE THE STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S
EQUITY PERFOR-MANCE AND WHAT SECTORS DETRACTED THE MOST?
In relation to the Russell Midcap(R) Value Index, the Portfolio's strongest
sector contributions came from a significantly underweight position in
financials--particularly banks and real estate investment trusts (REITs)--and
from overweight positions in information technology and health care.
The Portfolio's decision to underweight the materials sector relative to the
Russell Midcap(R) Value Index detracted from performance to a degree, as demand
for many basic materials increased during the reporting period.
WHAT OTHER POSITIONING DECISIONS IN THE EQUITY PORTION OF THE PORTFOLIO MADE
POSITIVE OR NEGATIVE CONTRIBUTIONS TO RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
During 2009, the Portfolio was biased toward securities that we believed were
inexpensively priced, according to such measures as free cash flow, book value,
and trailing and forward earnings. As a group, these securities performed well
and contributed positively to the Portfolio's performance.
The Portfolio benefited from holding a blend of value and growth stocks for much
of the reporting period, unlike the benchmark, which exclusively reflects the
performance of value stocks. Since growth was the better of the two styles in
2009, this aspect of the
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. The
principal risk of investing in value stocks is that they may never reach what
the portfolio manager believes is their full value or that they may even go down
in value. The Portfolio invests in mid-cap stocks, which may be more volatile
and less liquid than the securities of larger companies. The values of debt
securities fluctuate depending on various factors, including interest rates,
issuer creditworthiness, market conditions and maturities. The Portfolio invests
in foreign securities, which 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 principal risk of mortgage-related and asset-backed securities is
that the underlying debt may be prepaid ahead of schedule if interest rates
fall, thereby reducing the value of the Portfolio's investments. If interest
rates rise, there may be fewer prepayments, which would cause the average bond
maturity to rise and increase the potential for the Portfolio to lose money.
1. "New York Life Investments" is a service mark used by New York Life
Investment Management LLC.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
3. The terms "spread" and "yield spread" may refer to the difference in yield
between a security or type of security and comparable U.S. Treasury issues.
The terms may also refer to the difference in yield between two specific
securities or types of securities at a given time.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-7
Portfolio's positioning was beneficial. Throughout the year, the Portfolio was
tilted away from companies that employed significant leverage, and that decision
had a positive impact on the Portfolio's performance during 2009.
On the negative side, the Portfolio maintained a significant allocation to
large-cap securities, which detracted from performance when mid-cap stocks led
the market.
During the reporting period, the Portfolio, as is typical, was biased against
securities that had been trending down in favor of those that enjoyed positive
momentum. As a result, by last spring the Portfolio was significantly
underweight many of the lowest-quality securities with higher volatility
profiles. Unfortunately, these securities (which had fallen precipitously in the
previous six months) tended to appreciate the most during the rally beginning in
April.
Amid the volatility of 2009, we found that the costs associated with turning
positions over increased, which caused a drag on performance. Toward the end of
the reporting period, we saw indications that costs were on their way back down.
DURING 2009, WHICH STOCKS PROVIDED THE STRONGEST CONTRIBUTIONS TO ABSOLUTE
PERFOR-MANCE AND WHICH STOCKS DETRACTED THE MOST?
The strongest positive contributions to the Portfolio's absolute return came
from positions initiated or enlarged at or near the market bottom. Among these
were SL Green Realty, a REIT focusing on Manhattan office space (first purchased
in early May); Ashland, a chemical manufacturer (first purchased in April); and
Prudential Financial, a global financial services company (substantially
increased in early March).
The Portfolio's largest detractors from absolute performance were positions that
were closed before the full market rebound. These included diversified financial
services company Hartford Financial Services Group (position closed in early
March); energy and materials company Sunoco (closed in early May); and Wells
Fargo (also closed in early May).
WERE THERE ANY SIGNIFICANT EQUITY PURCHASES OR SALES DURING THE REPORTING
PERIOD?
During 2009, HMO provider UnitedHealth Group and petroleum refiner Valero Energy
were the two largest net purchases in the Portfolio. The largest net sales were
Liberty Media tracking stock and bank holding company Goldman Sachs. Although
these were the largest transactions, they were relatively small as a percent of
Portfolio assets. With trade activity occurring in literally hundreds of stocks,
no single purchase or sale transaction had a significant effect on the
Portfolio's overall performance.
HOW DID THE PORTFOLIO'S EQUITY SECTOR WEIGHTINGS CHANGE OVER THE COURSE OF 2009?
The Portfolio began the year significantly underweight in the financials and
utilities sectors, and the Portfolio's largest weighting increases came in these
two sectors. The largest weighting decreases were in information technology and
health care. All of these weighting changes were the result of our migration
from a core stance to a value orientation, which was more consistent with the
Portfolio's benchmark.
HOW WAS THE EQUITY PORTION OF THE PORTFOLIO POSITIONED AT THE END OF THE
REPORTING PERIOD?
Although allocations to financials and materials drew closer to benchmark
weightings over the course of 2009, both sectors remained modestly underweight
in the Portfolio. Similarly, while allocations to information technology and
telecommunication services were brought closer to benchmark levels, the
Portfolio remained slightly overweight in these sectors at the end of the
reporting period. In no instances would we describe the difference between the
Portfolio's weightings and those of the benchmark as large.
WHAT FACTORS AFFECTED THE FIXED-INCOME PORTION OF THE PORTFOLIO DURING THE
REPORTING PERIOD?
During the 12 months ended December 31, 2009, the economic environment was
extremely sluggish. It wasn't until the third quarter that the rate of gross
domestic product growth turned positive after four quarters of negative results.
Policy makers continued to struggle to find ways to stabilize financial markets
and provide support for a deteriorating economy. Early in the year, the Federal
Reserve expanded its program of direct security purchases, seeking to expand the
money supply; and the Obama administration quickly passed a stimulus package
totaling more than $780 billion.
Labor markets and consumer spending were generally weak, although they did show
some improvement throughout the year. Inflation remained tame. The Federal
Reserve remained accommodative. The Federal Open Market Committee kept the
federal funds target rate in a low range (from 0% to 0.25%) and stated that it
expected to keep the target rate low for an "extended period."
During the reporting period, U.S. Treasury yields rose as investors became more
optimistic that the worst of the financial crisis had passed and that economic
M-8 MainStay VP Balanced Portfolio
activity was likely to rebound. The Treasury yield curve(4) (specifically the
spread between 2-year and 10-year benchmark Treasury yields) steepened as market
participants became more concerned about inflation. After the equity markets
reached a low on March 9, 2009, stocks bounced back strongly, fueling an
increase in risk-taking. The riskier parts of the fixed-income market followed
suit, and credit spreads dramatically tightened.
DID YOU MAKE ANY SIGNIFICANT CHANGES TO THE FIXED-INCOME PORTION OF THE
PORTFOLIO IN 2009?
Early in the year, we added exposure in three areas: investment-grade corporate
bonds, agency pass-through securities and commercial mortgage-backed securities.
These positions were held for much of the reporting period. As we approached the
middle of the period, the overweight position in agency pass-through securities
relative to the Bank of America Merrill Lynch U.S. Corporate and Government 1-10
Years Bond Index was reduced. Late in the year, we increased the Portfolio's
overweight position in investment-grade corporate bonds.
HOW DID THE PORTFOLIO'S FIXED-INCOME POSITIONING AFFECT PERFORMANCE?
As stated earlier, all of these weighting changes helped the fixed-income
portion of the Portfolio outperform the Bank of America Merrill Lynch U.S.
Corporate and Government 1-10 Years Bond Index in 2009.
4. The yield curve is a line that plots the yields of various securities of
similar quality--typically U.S. Treasury issues--across a range of
maturities. The U.S. Treasury yield curve serves as a benchmark for other
debt and is used in economic forecasting.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP Balanced Portfolio on this page and the preceding
pages has not been audited.
mainstayinvestments.com M-9
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 38.7%+
ASSET-BACKED SECURITY 0.2%
- --------------------------------------------------------------
AUTOMOBILE 0.2%
Mercedes-Benz Auto
Receivables Trust Series
2009-1, Class A3
1.67%, due 1/15/14 $ 250,000 $ 249,977
-------------
Total Asset-Backed Security
(Cost $249,994) 249,977
-------------
CORPORATE BONDS 16.1%
- --------------------------------------------------------------
AEROSPACE & DEFENSE 1.0%
Boeing Co.
4.875%, due 2/15/20 290,000 290,786
Goodrich Corp.
4.875%, due 3/1/20 60,000 59,348
L-3 Communications Corp.
5.20%, due 10/15/19 (a) 150,000 148,370
Lockheed Martin Corp.
4.25%, due 11/15/19 300,000 289,579
5.50%, due 11/15/39 500,000 489,913
Northrop Grumman Corp.
5.05%, due 8/1/19 100,000 102,116
-------------
1,380,112
-------------
AUTO PARTS & EQUIPMENT 0.2%
Johnson Controls, Inc.
5.25%, due 1/15/11 250,000 262,351
-------------
BANKS 2.2%
v Bank of America Corp.
5.65%, due 5/1/18 1,400,000 1,421,857
BB&T Corp.
3.375%, due 9/25/13 500,000 503,941
Fifth Third Bancorp
4.50%, due 6/1/18 125,000 101,972
Keycorp
6.50%, due 5/14/13 100,000 103,214
Morgan Stanley
5.625%, due 9/23/19 200,000 201,462
8.00%, due 6/15/10 200,000 206,228
Wells Fargo & Co.
3.75%, due 10/1/14 500,000 498,527
-------------
3,037,201
-------------
BEVERAGES 0.4%
Anheuser-Busch Cos., Inc.
6.00%, due 4/15/11 250,000 263,622
Anheuser-Busch InBev
Worldwide, Inc.
3.00%, due 10/15/12 (a) 250,000 251,171
-------------
514,793
-------------
CHEMICALS 0.5%
Dow Chemical Co. (The)
5.70%, due 5/15/18 325,000 330,154
Eastman Chemical Co.
5.50%, due 11/15/19 150,000 149,531
EI du Pont de Nemours & Co.
4.625%, due 1/15/20 250,000 244,750
-------------
724,435
-------------
DIVERSIFIED FINANCIAL SERVICES 3.2%
American Express Co.
5.50%, due 9/12/16 400,000 408,666
Bear Stearns Cos., Inc. (The)
5.70%, due 11/15/14 412,000 453,337
Capital One Bank USA N.A.
8.80%, due 7/15/19 250,000 295,417
Citigroup, Inc.
5.85%, due 8/2/16 250,000 244,770
6.00%, due 8/15/17 350,000 349,866
General Electric Capital
Corp.
5.90%, due 5/13/14 600,000 648,643
General Electric Capital
Corp. (MTN)
6.00%, due 8/7/19 250,000 259,505
Goldman Sachs Group, Inc.
(The)
5.95%, due 1/18/18 275,000 290,393
HSBC Finance Corp.
7.00%, due 5/15/12 200,000 217,472
John Deere Capital Corp.
7.00%, due 3/15/12 450,000 499,202
JPMorgan Chase & Co.
2.625%, due 12/1/10 (b) 400,000 407,863
6.625%, due 3/15/12 350,000 382,082
-------------
4,457,216
-------------
ELECTRIC 1.6%
American Transmission
Systems, Inc.
5.25%, due 1/15/22 (a) 400,000 394,980
CenterPoint Energy Houston
Electric LLC
7.00%, due 3/1/14 175,000 199,248
Consolidated Edison Co. of
New York
7.50%, due 9/1/10 500,000 521,797
Duke Energy Ohio, Inc.
5.45%, due 4/1/19 200,000 210,766
Georgia Power Co.
4.25%, due 12/1/19 250,000 242,261
</Table>
+ Percentages indicated are based on Portfolio net assets.
V Among the Portfolio's 10 largest holdings or issuers held, as of December
31, 2009, excluding short-term investment. May be subject to change daily.
M-10 MainStay VP Balanced Portfolio The notes to the financial statements
are an integral part of, and should be read in conjunction with, the financial
statements.
<Table>
<Caption>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
ELECTRIC (CONTINUED)
Kansas City Power & Light Co.
7.15%, due 4/1/19 $ 250,000 $ 285,508
Peco Energy Co.
5.00%, due 10/1/14 275,000 295,417
-------------
2,149,977
-------------
ENVIRONMENTAL CONTROLS 0.2%
Republic Services, Inc.
5.50%, due 9/15/19 (a) 250,000 253,863
-------------
FINANCE--OTHER SERVICES 0.3%
National Rural Utilities
Cooperative Finance Corp.
2.625%, due 9/16/12 450,000 452,794
-------------
FOOD 0.5%
Campbell Soup Co.
6.75%, due 2/15/11 250,000 265,996
ConAgra Foods, Inc.
7.00%, due 4/15/19 120,000 135,817
Corn Products International,
Inc.
6.00%, due 4/15/17 230,000 232,214
Safeway, Inc.
5.00%, due 8/15/19 100,000 99,167
-------------
733,194
-------------
FOREST PRODUCTS & PAPER 0.1%
International Paper Co.
7.30%, due 11/15/39 150,000 159,129
-------------
GAS 0.1%
Sempra Energy
6.50%, due 6/1/16 125,000 135,564
-------------
HEALTH CARE--SERVICES 0.2%
Roche Holdings, Inc.
5.00%, due 3/1/14 (a) 300,000 320,951
-------------
HOUSEHOLD PRODUCTS & WARES 0.4%
Kimberly-Clark Corp.
5.00%, due 8/15/13 500,000 543,210
-------------
INSURANCE 0.6%
Lincoln National Corp.
6.25%, due 2/15/20 300,000 295,644
MetLife Global Funding I
5.125%, due 6/10/14 (a) 300,000 317,489
MetLife, Inc.
6.75%, due 6/1/16 125,000 139,980
Principal Financial Group,
Inc.
8.875%, due 5/15/19 90,000 103,817
-------------
856,930
-------------
LODGING 0.2%
Wyndham Worldwide Corp.
6.00%, due 12/1/16 300,000 279,478
-------------
MACHINERY--DIVERSIFIED 0.1%
Deere & Co.
5.375%, due 10/16/29 150,000 149,715
-------------
MEDIA 0.7%
CBS Corp.
4.625%, due 5/15/18 50,000 46,336
COX Communications, Inc.
8.375%, due 3/1/39 (a) 125,000 155,647
News America, Inc.
6.90%, due 3/1/19 100,000 112,677
TCM Sub LLC
3.55%, due 1/15/15 (a)(c) 400,000 391,822
Time Warner Cable, Inc.
6.75%, due 7/1/18 100,000 109,856
Time Warner, Inc.
6.50%, due 11/15/36 75,000 78,311
-------------
894,649
-------------
MISCELLANEOUS--MANUFACTURING 0.3%
ITT Corp.
4.90%, due 5/1/14 300,000 314,356
6.125%, due 5/1/19 100,000 107,982
-------------
422,338
-------------
OIL & GAS 0.1%
Marathon Oil Corp.
6.50%, due 2/15/14 150,000 165,925
-------------
PACKAGING & CONTAINERS 0.2%
Bemis Co., Inc.
5.65%, due 8/1/14 240,000 255,452
-------------
PHARMACEUTICALS 0.2%
GlaxoSmithKline Capital, Inc.
4.85%, due 5/15/13 200,000 214,690
-------------
PIPELINES 0.3%
Energy Transfer Partners,
L.P.
9.00%, due 4/15/19 150,000 178,797
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-11
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
PIPELINES (CONTINUED)
Plains All American Pipeline,
L.P.
8.75%, due 5/1/19 $ 200,000 $ 235,819
-------------
414,616
-------------
REAL ESTATE 0.1%
AMB Property, L.P.
6.625%, due 12/1/19 150,000 147,124
-------------
REAL ESTATE INVESTMENT TRUSTS 0.6%
AvalonBay Communities, Inc.
6.10%, due 3/15/20 100,000 102,116
Brandywine Operating
Partnership, L.P.
5.70%, due 5/1/17 350,000 313,943
ERP Operating, L.P.
5.25%, due 9/15/14 250,000 254,262
Hospitality Properties Trust
6.30%, due 6/15/16 170,000 157,233
-------------
827,554
-------------
RETAIL 0.2%
Home Depot, Inc.
5.25%, due 12/16/13 250,000 267,639
-------------
TELECOMMUNICATIONS 1.4%
AT&T Corp.
7.30%, due 11/15/11 300,000 330,321
Cellco Partnership/Verizon
Wireless Capital LLC
5.55%, due 2/1/14 500,000 542,639
Cisco Systems, Inc.
4.45%, due 1/15/20 350,000 343,345
Verizon Communications, Inc.
6.10%, due 4/15/18 700,000 760,836
-------------
1,977,141
-------------
TRANSPORTATION 0.2%
Burlington Northern Santa Fe
Corp.
4.70%, due 10/1/19 100,000 99,068
FedEx Corp.
8.00%, due 1/15/19 150,000 180,667
-------------
279,735
-------------
Total Corporate Bonds
(Cost $21,598,935) 22,277,776
-------------
MORTGAGE-BACKED SECURITIES 1.2%
- --------------------------------------------------------------
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) 1.2%
Banc of America Commercial
Mortgage, Inc.
Series 2006-2, Class A4
5.738%, due 5/10/45 272,000 267,302
Bear Stearns Commercial
Mortgage Securities
Series 2007-PW16, Class A4
1.00%, due 6/11/40 200,000 181,794
Citigroup Commercial Mortgage
Trust Series 2006-C5, Class
A4
5.431%, due 10/15/49 320,000 297,163
Commercial Mortgage
Pass-Through Certificates
Series 2006-C8, Class A4
5.306%, due 12/10/46 200,000 170,694
Greenwich Capital Commercial
Funding Corp.
Series 2007-GG9, Class A4
5.444%, due 3/10/39 210,000 185,544
JP Morgan Chase Commercial
Mortgage Securities Corp.
Series 2006-LDP7, Class A4
5.875%, due 4/15/45 200,000 192,728
Morgan Stanley Capital I
Series 2006-HQ8, Class A4
5.385%, due 3/12/44 200,000 192,871
Series 2007-HQ11, Class A4
5.447%, due 2/12/44 212,500 186,222
-------------
Total Mortgage-Backed
Securities
(Cost $1,704,654) 1,674,318
-------------
U.S. GOVERNMENT & FEDERAL AGENCIES 18.8%
- --------------------------------------------------------------
FEDERAL HOME LOAN BANK 0.3%
3.625%, due 5/29/13 400,000 419,455
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION 1.9%
1.50%, due 1/7/11 500,000 504,551
2.875%, due 11/23/10 450,000 459,608
3.25%, due 2/25/11 500,000 513,776
4.125%, due 9/27/13 350,000 373,016
4.75%, due 1/18/11 500,000 521,377
5.125%, due 4/18/11 200,000 211,087
-------------
2,583,415
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION 2.6%
2.75%, due 4/11/11 500,000 512,424
2.875%, due 12/11/13 350,000 357,008
3.625%, due 8/15/11 500,000 520,933
4.375%, due 10/15/15 350,000 372,345
4.50%, due 2/15/11 500,000 521,784
4.875%, due 5/18/12 500,000 539,595
5.375%, due 11/15/11 500,000 538,994
5.50%, due 3/15/11 200,000 211,360
-------------
3,574,443
-------------
</Table>
M-12 MainStay VP Balanced Portfolio The notes to the financial statements
are an integral part of, and should be read in conjunction with, the financial
statements.
<Table>
<Caption>
<Caption>
PRINCIPAL
AMOUNT VALUE
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
TENNESSEE VALLEY AUTHORITY 0.1%
5.25%, due 9/15/39 $ 150,000 $ 148,628
-------------
UNITED STATES TREASURY BOND 0.3%
4.50%, due 8/15/39 495,000 483,785
-------------
UNITED STATES TREASURY NOTES 13.6%
0.875%, due 1/31/11 2,265,000 2,272,078
0.875%, due 2/28/11 2,115,000 2,120,122
0.875%, due 3/31/11 775,000 776,423
0.875%, due 4/30/11 250,000 250,332
0.875%, due 5/31/11 2,420,000 2,422,931
1.00%, due 7/31/11 200,000 200,305
1.00%, due 12/31/11 500,000 498,594
1.125%, due 6/30/11 75,000 75,305
1.125%, due 12/15/12 4,825,000 4,747,703
1.375%, due 4/15/12 600,000 600,563
1.375%, due 5/15/12 3,416,000 3,416,000
1.375%, due 9/15/12 1,195,000 1,189,398
1.75%, due 1/31/14 275,000 269,779
-------------
18,839,533
-------------
Total U.S. Government &
Federal Agencies
(Cost $25,981,036) 26,049,259
-------------
YANKEE BONDS 2.4% (D)
- --------------------------------------------------------------
BANKS 0.5%
Barclays Bank PLC
5.00%, due 9/22/16 150,000 153,272
Commonwealth Bank of
Australia
3.75%, due 10/15/14 (a) 175,000 175,426
5.00%, due 10/15/19 (a) 175,000 173,745
Credit Suisse/New York NY
5.30%, due 8/13/19 225,000 231,069
-------------
733,512
-------------
FOOD 0.2%
Delhaize Group
5.875%, due 2/1/14 220,000 236,283
-------------
MINING 0.4%
Rio Tinto Finance USA, Ltd.
8.95%, due 5/1/14 450,000 539,236
-------------
OIL & GAS 0.7%
Petroleos Mexicanos
4.875%, due 3/15/15 (a) 200,000 199,260
Shell International Finance
B.V.
4.00%, due 3/21/14 350,000 365,236
4.30%, due 9/22/19 425,000 419,894
-------------
984,390
-------------
PHARMACEUTICALS 0.1%
Novartis Securities
Investment, Ltd.
5.125%, due 2/10/19 175,000 183,842
-------------
SOVEREIGN 0.1%
Svensk Exportkredit AB
3.25%, due 9/16/14 200,000 199,968
-------------
TELECOMMUNICATIONS 0.4%
Deutsche Telekom
International Finance B.V.
6.00%, due 7/8/19 250,000 266,918
Vodafone Group PLC
5.625%, due 2/27/17 200,000 212,433
-------------
479,351
-------------
Total Yankee Bonds
(Cost $3,177,287) 3,356,582
-------------
Total Long-Term Bonds
(Cost $52,711,906) 53,607,912
-------------
<Caption>
<Caption>
SHARES
COMMON STOCKS 59.8%
- --------------------------------------------------------------
ADVERTISING 0.1%
Clear Channel Outdoor
Holdings, Inc. Class A (e) 8,188 85,073
-------------
AEROSPACE & DEFENSE 1.3%
General Dynamics Corp. 3,861 263,204
L-3 Communications Holdings,
Inc. 1,608 139,816
Lockheed Martin Corp. 8,096 610,034
Northrop Grumman Corp. 14,043 784,301
-------------
1,797,355
-------------
AGRICULTURE 1.1%
Altria Group, Inc. 22,335 438,436
Archer-Daniels-Midland Co. 11,334 354,867
Lorillard, Inc. 4,577 367,213
Philip Morris International,
Inc. 7,094 341,860
-------------
1,502,376
-------------
AIRLINES 0.1%
Copa Holdings S.A. Class A 2,788 151,862
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-13
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
APPAREL 1.1%
Coach, Inc. 24,583 $ 898,017
NIKE, Inc. Class B 1,174 77,566
Polo Ralph Lauren Corp. 6,102 494,140
-------------
1,469,723
-------------
BANKS 2.4%
BancorpSouth, Inc. 12,148 284,992
Capital One Financial Corp. 19,023 729,342
Comerica, Inc. 103 3,046
Marshall & Ilsley Corp. 40,254 219,384
Popular, Inc. 97,519 220,393
Regions Financial Corp. 191,026 1,010,527
SunTrust Banks, Inc. 17,971 364,632
Wilmington Trust Corp. 634 7,824
Zions Bancorp 42,938 550,894
-------------
3,391,034
-------------
BEVERAGES 0.0%++
Central European Distribution
Corp.(e) 540 15,341
-------------
BIOTECHNOLOGY 0.3%
Amgen, Inc. (e) 4,916 278,098
OSI Pharmaceuticals, Inc. (e) 3,129 97,093
-------------
375,191
-------------
BUILDING MATERIALS 0.1%
Armstrong World Industries,
Inc. (e) 4,534 176,509
-------------
CHEMICALS 1.2%
Ashland, Inc. 23,572 933,923
Cabot Corp. 10,927 286,615
Huntsman Corp. 14,192 160,228
Lubrizol Corp. (The) 2,195 160,125
RPM International, Inc. 2,815 57,229
Sherwin-Williams Co. (The) 498 30,702
-------------
1,628,822
-------------
COMMERCIAL SERVICES 0.9%
Apollo Group, Inc. Class A
(e) 510 30,896
Brinks Home Security
Holdings, Inc. (e) 954 31,138
H&R Block, Inc. 10,818 244,703
Hillenbrand, Inc. 214 4,032
ITT Educational Services,
Inc. (e) 2,832 271,759
Moody's Corp. 385 10,318
R.R. Donnelley & Sons Co. 21,033 468,405
SAIC, Inc. (e) 6,252 118,413
Washington Post Co. Class B 72 31,651
Weight Watchers
International, Inc. 1,105 32,222
-------------
1,243,537
-------------
COMPUTERS 1.8%
Affiliated Computer Services,
Inc. Class A (e) 3,725 222,345
Dell, Inc. (e) 3,177 45,622
v Hewlett-Packard Co. 21,070 1,085,316
International Business
Machines Corp. 2,415 316,123
Lexmark International, Inc.
Class A (e) 4,950 128,601
Western Digital Corp. (e) 14,499 640,131
-------------
2,438,138
-------------
COSMETICS & PERSONAL CARE 1.1%
Colgate-Palmolive Co. 8,862 728,013
Procter & Gamble Co. (The) 14,116 855,853
-------------
1,583,866
-------------
DISTRIBUTION & WHOLESALE 0.4%
Tech Data Corp. (e) 11,716 546,669
-------------
DIVERSIFIED FINANCIAL SERVICES 2.6%
Ameriprise Financial, Inc. 5,498 213,432
BlackRock, Inc. 4,505 1,046,061
Discover Financial Services 34,908 513,497
Interactive Brokers Group,
Inc. (e) 995 17,632
JPMorgan Chase & Co. 16,529 688,764
T. Rowe Price Group, Inc. 9,953 529,997
TD Ameritrade Holding Corp.
(e) 33,472 648,687
-------------
3,658,070
-------------
ELECTRIC 5.6%
AES Corp. (The) (e) 48,123 640,517
Alliant Energy Corp. 9,839 297,728
Ameren Corp. 13,498 377,269
American Electric Power Co.,
Inc. 24,179 841,187
Consolidated Edison, Inc. 15,830 719,157
DPL, Inc. 2,705 74,658
DTE Energy Corp. 15,042 655,681
Duke Energy Corp. 61,642 1,060,859
FirstEnergy Corp. 6,562 304,805
FPL Group, Inc. 1,057 55,831
Hawaiian Electric Industries,
Inc. 7,010 146,509
Integrys Energy Group, Inc. 1,653 69,409
Mirant Corp. (e) 56,261 859,106
PG&E Corp. 14,518 648,229
Pinnacle West Capital Corp. 5,914 216,334
Progress Energy, Inc. 19,584 803,140
Westar Energy, Inc. 814 17,680
-------------
7,788,099
-------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.5%
Emerson Electric Co. 13,587 578,806
Hubbel, Inc. Class B 1,714 81,072
-------------
659,878
-------------
</Table>
M-14 MainStay VP Balanced Portfolio The notes to the financial statements
are an integral part of, and should be read in conjunction with, the financial
statements.
<Table>
<Caption>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
ELECTRONICS 0.2%
FLIR Systems, Inc. (e) 1,619 $ 52,974
Garmin, Ltd. 7,792 239,214
-------------
292,188
-------------
ENGINEERING & CONSTRUCTION 0.5%
Fluor Corp. 7,516 338,521
Shaw Group, Inc. (The) (e) 12,992 373,520
-------------
712,041
-------------
ENVIRONMENTAL CONTROLS 0.1%
Waste Connections, Inc. (e) 2,780 92,685
-------------
FOOD 1.0%
H.J. Heinz Co. 13,232 565,800
Safeway, Inc. 27,793 591,713
SUPERVALU, Inc. 17,759 225,717
-------------
1,383,230
-------------
FOREST PRODUCTS & PAPER 0.4%
International Paper Co. 20,433 547,196
-------------
GAS 1.3%
Energen Corp. 8,219 384,649
NiSource, Inc. 27,907 429,210
Sempra Energy 16,611 929,884
-------------
1,743,743
-------------
HEALTH CARE--PRODUCTS 0.4%
Hill-Rom Holdings, Inc. 1,891 45,365
Johnson & Johnson 7,402 476,763
-------------
522,128
-------------
HEALTH CARE--SERVICES 1.9%
v CIGNA Corp. 33,273 1,173,539
Humana, Inc. (e) 1,239 54,380
LifePoint Hospitals, Inc. (e) 4,507 146,522
Lincare Holdings, Inc. (e) 3,085 114,515
v UnitedHealth Group, Inc. 38,204 1,164,458
-------------
2,653,414
-------------
HOME BUILDERS 0.0%++
Thor Industries, Inc. 1,389 43,615
-------------
INSURANCE 4.2%
Allied World Assurance
Holdings, Ltd./Bermuda 7,609 350,547
American Financial Group,
Inc. 23,709 591,539
Arch Capital Group, Ltd. (e) 8,508 608,747
Aspen Insurance Holdings,
Ltd. 1,454 37,004
Assurant, Inc. 18,510 545,675
Axis Capital Holdings, Ltd. 24,404 693,318
Chubb Corp. (The) 323 15,885
Endurance Specialty Holdings,
Ltd. 8,708 324,199
Genworth Financial, Inc.
Class A (e) 23,235 263,717
MetLife, Inc. 21,230 750,480
Old Republic International
Corp. 3,494 35,080
OneBeacon Insurance Group,
Ltd. Class A 4,090 56,360
PartnerRe, Ltd. 1,501 112,065
Principal Financial Group,
Inc. 9,334 224,389
Protective Life Corp. 7,485 123,877
Prudential Financial, Inc. 3,568 177,544
Transatlantic Holdings, Inc. 3,471 180,874
Unitrin, Inc. 5,124 112,984
Unum Group 32,565 635,669
-------------
5,839,953
-------------
INTERNET 1.3%
AOL, Inc. (e) 2,456 57,176
eBay, Inc. (e) 23,847 561,358
Google, Inc. Class A (e) 1,291 800,394
IAC/InterActiveCorp (e) 5,073 103,895
Liberty Media Corp.
Interactive Class A (e) 25,944 281,233
-------------
1,804,056
-------------
IRON & STEEL 1.6%
AK Steel Holding Corp. 19,891 424,673
v Cliffs Natural Resources,
Inc. 24,740 1,140,266
Reliance Steel & Aluminum
Co. 14,322 618,997
-------------
2,183,936
-------------
MACHINERY--DIVERSIFIED 0.7%
Cummins, Inc. 19,745 905,505
Wabtec Corp. 583 23,810
-------------
929,315
-------------
MEDIA 3.1%
v Comcast Corp. Class A 65,039 1,096,557
Gannett Co., Inc. 24,826 368,666
Meredith Corp. 3,403 104,983
Time Warner Cable, Inc. 19,963 826,269
Time Warner, Inc. 33,389 972,955
Walt Disney Co. (The) 27,611 890,455
-------------
4,259,885
-------------
METAL FABRICATE & HARDWARE 0.6%
Precision Castparts Corp. 8,098 893,614
-------------
MISCELLANEOUS--MANUFACTURING 2.5%
Brink's Co. (The) 30 730
Carlisle Cos., Inc. 8,240 282,303
Dover Corp. 3,230 134,400
General Electric Co. 63,704 963,842
Honeywell International,
Inc. 3,457 135,514
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-15
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
MISCELLANEOUS--MANUFACTURING (CONTINUED)
ITT Corp. 16,566 $ 823,993
John Bean Technologies Corp. 1,638 27,862
Leggett & Platt, Inc. 5,668 115,627
Parker Hannifin Corp. 11,627 626,463
Trinity Industries, Inc. 18,765 327,262
-------------
3,437,996
-------------
OIL & GAS 6.5%
Chevron Corp. 13,438 1,034,592
Cimarex Energy Co. 3,643 192,970
ConocoPhillips 20,708 1,057,558
ENSCO International PLC,
Sponsored ADR (f) 24,378 973,657
Forest Oil Corp. (e) 23,682 526,924
Marathon Oil Corp. 15,384 480,288
Murphy Oil Corp. 13,404 726,497
Occidental Petroleum Corp. 12,086 983,196
Patterson-UTI Energy, Inc. 11,816 181,376
Plains Exploration &
Production Co. (e) 27,587 763,056
Questar Corp. 181 7,524
Rowan Cos., Inc. (e) 9,934 224,906
Tesoro Corp. 12,876 174,470
Unit Corp. (e) 16,622 706,435
Valero Energy Corp. 54,834 918,469
-------------
8,951,918
-------------
OIL & GAS SERVICES 0.2%
Helix Energy Solutions Group,
Inc. (e) 8,575 100,756
SEACOR Holdings, Inc. (e) 1,873 142,817
-------------
243,573
-------------
PACKAGING & CONTAINERS 0.1%
Crown Holdings, Inc. (e) 5,526 141,355
Sonoco Products Co. 2,075 60,694
-------------
202,049
-------------
PHARMACEUTICALS 1.2%
Abbott Laboratories 6,265 338,247
AmerisourceBergen Corp. 21,858 569,838
Forest Laboratories, Inc. (e) 7,171 230,261
Herbalife, Ltd. 115 4,665
King Pharmaceuticals, Inc.
(e) 25,740 315,830
Pfizer, Inc. 11,935 217,098
-------------
1,675,939
-------------
REAL ESTATE INVESTMENT TRUSTS 3.4%
v Annaly Capital
Management, Inc. 65,331 1,133,493
Apartment Investment &
Management Co. Class A 15,651 249,164
CapitalSource, Inc. 12,622 50,109
Duke Realty Corp. 33,823 411,626
HRPT Properties Trust 23,336 150,984
Macerich Co. (The) 21,033 756,136
Mack-Cali Realty Corp. 3,905 134,996
ProLogis 45,104 617,474
Public Storage 329 26,797
Senior Housing Properties
Trust 6,943 151,843
SL Green Realty Corp. 20,965 1,053,282
-------------
4,735,904
-------------
RETAIL 2.7%
Barnes & Noble, Inc. 1,884 35,928
Big Lots, Inc. (e) 24,154 699,983
BJ's Wholesale Club, Inc. (e) 8,528 278,951
Foot Locker, Inc. 26,315 293,149
Gap, Inc. (The) 27,926 585,050
RadioShack Corp. 35,586 693,927
Ross Stores, Inc. 14,964 639,112
Wal-Mart Stores, Inc. 7,877 421,025
Williams-Sonoma, Inc. 6,006 124,805
-------------
3,771,930
-------------
SAVINGS & LOANS 0.1%
New York Community Bancorp,
Inc. 14,151 205,331
-------------
SEMICONDUCTORS 0.7%
Integrated Device Technology,
Inc. (e) 15,767 102,013
Intel Corp. 45,990 938,196
LSI Corp. (e) 341 2,049
-------------
1,042,258
-------------
SOFTWARE 0.4%
IMS Health, Inc. 7,542 158,834
Microsoft Corp. 13,697 417,622
-------------
576,456
-------------
TELECOMMUNICATIONS 3.3%
Amdocs, Ltd. (e) 12,008 342,588
AT&T, Inc. 37,695 1,056,591
CenturyTel, Inc. 25,099 908,835
Cisco Systems, Inc. (e) 24,859 595,124
Sprint Nextel Corp. (e) 184,933 676,855
Verizon Communications, Inc. 29,616 981,178
-------------
4,561,171
-------------
TRANSPORTATION 0.8%
Expeditors International of
Washington, Inc. 2,432 84,463
Frontline, Ltd. 9,561 261,207
Overseas Shipholding Group,
Inc. 2,753 120,994
Ryder System, Inc. 3,151 129,727
</Table>
M-16 MainStay VP Balanced Portfolio The notes to the financial statements
are an integral part of, and should be read in conjunction with, the financial
statements.
<Table>
<Caption>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
TRANSPORTATION (CONTINUED)
Teekay Corp. 1,596 $ 37,043
Tidewater, Inc. 3,978 190,745
Union Pacific Corp. 5,120 327,168
-------------
1,151,347
-------------
Total Common Stocks
(Cost $73,926,103) 82,968,414
-------------
EXCHANGE TRADED FUND 0.7% (G)
- --------------------------------------------------------------
S&P 500 Index-SPDR Trust
Series 1 8,881 989,699
-------------
Total Exchange Traded Fund
(Cost $919,529) 989,699
-------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 0.4%
- --------------------------------------------------------------
REPURCHASE AGREEMENT 0.4%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$586,399 (Collateralized by
United States Treasury Bill
securities with a zero
coupon rate and a rate of
0.047% and maturity dates
of 2/18/10 and 3/18/10,
with a Principal Amount of
$600,000 and a Market Value
of $599,995) $ 586,399 586,399
------------
Total Short-Term Investment
(Cost $586,399) 586,399
------------
Total Investments
(Cost $128,143,937) (h) 99.6% 138,152,424
Other Assets, Less
Liabilities 0.4 523,566
----- ------------
Net Assets 100.0% $ 138,675,990
===== ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) May be sold to institutional investors
only under Rule 144A or securities
offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
(b) The debt is guaranteed under the
Federal Deposit Insurance Corporation
(FDIC) Temporary Liquidity Guarantee
Program and is backed by the full faith
and credit of the United States. The
expiration date of the FDIC's guarantee
is the earlier of the maturity date of
the debt or June 30, 2012.
(c) Illiquid security - The total market
value of this security at December 31,
2009 is $391,822, which represents 0.3%
of the Portfolio's net assets.
(d) Yankee Bond--dollar-denominated bond
issued in the United States by a
foreign bank or corporation.
(e) Non-income producing security.
(f) ADR -- American Depositary Receipt.
(g) Exchange Traded Fund--represents a
basket of securities that is traded on
an exchange.
(h) At December 31, 2009, cost is
$128,996,183 for federal income tax
purposes and net unrealized
appreciation is as follows:
</Table>
<Table>
Gross unrealized appreciation $13,716,431
Gross unrealized depreciation (4,560,190)
-----------
Net unrealized appreciation $ 9,156,241
===========
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-17
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
The following is a summary of the fair valuations according to inputs used as of
December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES IN
ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Long-Term Bonds
Asset-Backed Security $ -- $ 249,977 $ -- $ 249,977
Corporate Bonds -- 22,277,776 -- 22,277,776
Mortgage-Backed Securities -- 1,674,318 -- 1,674,318
U.S. Government & Federal Agencies -- 26,049,259 -- 26,049,259
Yankee Bonds -- 3,356,582 -- 3,356,582
----------- ----------- -------- ------------
Total Long-Term Bonds -- 53,607,912 -- 53,607,912
----------- ----------- -------- ------------
Common Stocks 82,968,414 -- -- 82,968,414
Exchange Traded Fund 989,699 -- -- 989,699
----------- ----------- -------- ------------
Short-Term Investment
Repurchase Agreement -- 586,399 -- 586,399
----------- ----------- -------- ------------
Total Investments in Securities $83,958,113 $54,194,311 $ -- $138,152,424
=========== =========== ======== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
M-18 MainStay VP Balanced Portfolio The notes to the financial statements
are an integral part of, and should be read in conjunction with, the financial
statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $128,143,937) $138,152,424
Receivables:
Investment securities sold 2,252,577
Dividends and interest 596,496
Fund shares sold 82,881
Other assets 231
------------
Total assets 141,084,609
------------
LIABILITIES:
Payables:
Investment securities purchased 2,226,376
Manager (See Note 3) 88,908
Professional fees 30,317
NYLIFE Distributors (See Note 3) 27,836
Fund shares redeemed 16,805
Custodian 9,995
Shareholder communication 6,167
Directors 404
Accrued expenses 1,811
------------
Total liabilities 2,408,619
------------
Net assets $138,675,990
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 143,014
Additional paid-in capital 158,417,831
------------
158,560,845
Accumulated undistributed net
investment income 1,844,311
Accumulated net realized loss on
investments and futures
transactions (31,737,653)
Net unrealized appreciation on
investments 10,008,487
------------
Net assets $138,675,990
============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 8,557,119
============
Shares of capital stock outstanding 878,803
============
Net asset value per share
outstanding $ 9.74
============
SERVICE CLASS
Net assets applicable to
outstanding shares $130,118,871
============
Shares of capital stock outstanding 13,422,555
============
Net asset value per share
outstanding $ 9.69
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-19
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends $ 1,632,306
Interest (a) 1,580,092
------------
Total income 3,212,398
------------
EXPENSES:
Manager (See Note 3) 954,059
Distribution and service--Service
Class (See Note 3) 298,683
Professional fees 50,184
Custodian 28,986
Shareholder communication 21,427
Directors 5,703
Miscellaneous 9,036
------------
Total expenses 1,368,078
------------
Net investment income 1,844,320
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on:
Security transactions (14,121,546)
Futures transactions 369,836
------------
Net realized loss on investments
and futures transactions (13,751,710)
------------
Net change in unrealized
appreciation (depreciation) on:
Investments 38,051,592
Futures contracts (91,344)
------------
Net change in unrealized
depreciation on investments and
futures contracts 37,960,248
------------
Net realized and unrealized gain on
investments and futures
transactions 24,208,538
------------
Net increase in net assets
resulting from operations $ 26,052,858
============
</Table>
(a) Interest recorded net of foreign withholding taxes in the amount of $1,131.
M-20 MainStay VP Balanced Portfolio The notes to the financial statements
are an integral part of, and should be read in conjunction with, the financial
statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 1,844,320 $ 3,719,059
Net realized loss on
investments and futures
transactions (13,751,710) (17,734,876)
Net change in unrealized
appreciation (depreciation)
on investments and futures
contracts 37,960,248 (32,793,470)
---------------------------
Net increase (decrease) in
net assets resulting from
operations 26,052,858 (46,809,287)
---------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (250,434) --
Service Class (3,468,689) --
---------------------------
(3,719,123) --
---------------------------
From net realized gain on investments:
Initial Class -- (27,301)
Service Class -- (469,960)
---------------------------
Total dividends and
distributions to
shareholders (3,719,123) (497,261)
---------------------------
Capital share transactions:
Net proceeds from sale of
shares 9,900,172 11,170,126
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 3,719,123 497,261
Cost of shares redeemed (23,882,814) (44,308,680)
---------------------------
Decrease in net assets
derived from capital
share transactions (10,263,519) (32,641,293)
---------------------------
Net increase (decrease)
in net assets 12,070,216 (79,947,841)
NET ASSETS:
Beginning of year 126,605,774 206,553,615
---------------------------
End of year $138,675,990 $126,605,774
===========================
Accumulated undistributed net
investment income at end of
year $ 1,844,311 $ 3,699,291
===========================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-21
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
-------------------------------------------------------
MAY 2, 2005**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
-------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of period $ 8.15 $ 10.89 $11.25 $ 10.46 $10.00
------ ------- ------ ------- ------
Net investment income 0.15 (a) 0.25 0.27 (a) 0.22 0.11
Net realized and
unrealized gain (loss)
on investments 1.73 (2.96) 0.05 0.90 0.47
------ ------- ------ ------- ------
Total from investment
operations 1.88 (2.71) 0.32 1.12 0.58
------ ------- ------ ------- ------
Less dividends and
distributions:
From net investment
income (0.29) -- (0.26) (0.22) (0.08)
From net realized gain
on investments -- (0.03) (0.42) (0.11) (0.04)
------ ------- ------ ------- ------
Total dividends and
distributions (0.29) (0.03) (0.68) (0.33) (0.12)
------ ------- ------ ------- ------
Net asset value at end of
period $ 9.74 $ 8.15 $10.89 $ 11.25 $10.46
====== ======= ====== ======= ======
Total investment return 23.07% (24.85%) 2.80% 10.70% 5.81%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 1.69% 2.44% 2.31% 2.26% 2.05%++
Net expenses 0.84% 0.83% 0.82% 0.85% 1.00%++
Portfolio turnover rate 176% 92% 83% 45% 76%
Net assets at end of
period (in 000's) $8,557 $ 7,232 $9,932 $13,577 $9,707
</Table>
<Table>
** Commencement of operations.
++ Annualized.
(a) Per share data based on average shares outstanding during the period.
(b) Total return is not annualized.
</Table>
M-22 MainStay VP Balanced Portfolio The notes to the financial statements
are an integral part of, and should be read in conjunction with, the financial
statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
----------------------------------------------------------------------------------------------------
MAY 2,
2005**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
----------------------------------------------------------------------------------------------------
2009 2008 2007 2006 2005
$ 8.11 $ 10.86 $ 11.22 $ 10.44 $ 10.00
-------- -------- -------- -------- --------
0.12 (a) 0.24 0.24 (a) 0.20 0.08
1.72 (2.96) 0.05 0.89 0.48
-------- -------- -------- -------- --------
1.84 (2.72) 0.29 1.09 0.56
-------- -------- -------- -------- --------
(0.26) -- (0.23) (0.20) (0.08)
-- (0.03) (0.42) (0.11) (0.04)
-------- -------- -------- -------- --------
(0.26) (0.03) (0.65) (0.31) (0.12)
-------- -------- -------- -------- --------
$ 9.69 $ 8.11 $ 10.86 $ 11.22 $ 10.44
======== ======== ======== ======== ========
22.76% (25.04%) 2.55% 10.42% 5.55%(b)
1.43% 2.18% 2.09% 2.01% 1.80%++
1.09% 1.08% 1.07% 1.10% 1.25%++
176% 92% 83% 45% 76%
$130,119 $119,374 $196,622 $175,576 $105,420
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-23
MAINSTAY VP BOND PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 7.77% 4.93% 6.16%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MERRILL LYNCH
CORPORATE & BARCLAYS CAPITAL
GOVERNMENT MASTER U.S. AGGREGATE
INITIAL CLASS INDEX BOND INDEX
------------- ----------------- ----------------
12/31/99 10000 10000 10000
10982 11195 11163
12000 12138 12105
13138 13467 13347
13732 14078 13894
14294 14662 14497
14606 15031 14849
15271 15606 15493
16266 16741 16572
16872 17570 17440
12/31/09 18183 18420 18475
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 7.50% 4.66% 5.89%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MERRILL LYNCH
CORPORATE & BARCLAY'S CAPITAL
GOVERNMENT MASTER U.S. AGGREGATE
SERVICE CLASS INDEX BOND INDEX
------------- ----------------- -----------------
12/31/99 10000 10000 10000
10955 11195 11163
11940 12138 12105
13039 13467 13347
13596 14078 13894
14117 14662 14497
14384 15031 14849
15001 15606 15493
15939 16741 16572
16492 17570 17440
12/31/09 17729 18420 18475
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Barclays Capital U.S. Aggregate Bond
Index(3) 5.93% 4.97% 6.33%
Bank of America Merrill Lynch Corporate
and Government Master Index(3) 4.84 4.67 6.30
Average Lipper Variable Products
Intermediate Investment Grade Debt
Portfolio(4) 12.21 4.46 5.68
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 4.91% and 6.15% for Initial
Class shares and 4.65% and 5.89% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 4, 2003, includes
the historical performance of Initial Class shares through June 3, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products Intermediate Investment Grade Debt
Portfolio is representative of portfolios that invest primarily in corporate
debt issues rated "A" or better or government issues. Lipper Inc. is an
independent monitor of fund performance.
M-24 MainStay VP Bond Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP BOND PORTFOLIO (UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,052.60 $2.79 $1,022.50 $2.75
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,051.30 $4.08 $1,021.20 $4.02
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.54% for Initial Class and 0.79% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-25
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
<Caption>
U.S. GOVERNMENT
& FEDERAL
AGENCIES 57.2
- -------------------------- --- ----
Corporate Bonds 26.20
Mortgage-Backed Securities 6.60
Yankee Bonds 4.90
Asset-Backed Securities 3.70
Short-Term Investments 0.70
Other Assets, Less Liabilities 0.60
Medium Term Note 0.10
</Table>
See Portfolio of Investments beginning on page M-29 for specific holdings within
these categories.
TOP TEN ISSUERS HELD AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENTS)
<Table>
1. United States Treasury Notes, 0.75%-4.25%,
due 5/31/11-11/15/19
2. Federal Home Loan Mortgage Corporation (Mortgage
Pass-Through Securities), 4.00%-7.00%,
due 7/1/17-11/1/39
3. Federal National Mortgage Association (Mortgage
Pass-Through Securities), 4.00%-7.50%, due
5/1/16-7/1/38
4. Government National Mortgage Association
(Mortgage Pass-Through Securities), 4.50%-7.00%,
due 7/15/31-5/15/39
5. Federal National Mortgage Association,
2.75%-5.50%, due 3/15/11-3/13/14
6. Federal Home Loan Mortgage Corporation,
3.75%-5.50%, due 4/18/11-7/18/16
7. United States Treasury Bonds, 4.375%-6.25%, due
8/15/23-11/15/39
8. Bear Stearns Commercial Mortgage Securities,
1.00%-5.793%, due 9/11/38-9/11/42
9. Bank of America Corp., 2.10%-5.65%, due
4/30/12-5/1/18
10. Goldman Sachs Group, Inc. (The), 1.625%-6.15%,
due 7/15/11-4/1/18
</Table>
M-26 MainStay VP Bond Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY DONALD F. SEREK AND THOMAS J. GIRARD OF NEW YORK LIFE
INVESTMENTS,(1) THE PORTFOLIO'S MANAGER.
HOW DID MAINSTAY VP BOND PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND ITS
BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Bond Portfolio returned
7.77% for Initial Class shares and 7.50% for Service Class shares. Both share
classes underperformed the 12.21% return of the average Lipper(2) Variable
Products Intermediate Investment Grade Debt Portfolio and outperformed the 5.93%
return of the Barclays Capital U.S. Aggregate Bond Index(2) for the 12 months
ended December 31, 2009. The Barclays Capital U.S. Aggregate Bond Index is the
Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE BOND MARKETS DURING 2009?
During the 12-month period ended December 31, 2009, the economic environment was
extremely sluggish. It wasn't until the third quarter that gross domestic
product (GDP) growth turned positive after four negative quarters. Policy makers
continued to struggle to find ways to stabilize financial markets and provide
support for a deteriorating economy. Early in the year, the Federal Reserve
expanded its program of direct security purchases, seeking to expand the money
supply; and the Obama administration quickly passed a stimulus package totaling
more than $780 billion.
Labor markets and consumer spending were generally weak (although they did show
some improvement as the year progressed), and inflation remained tame. Given the
economy's sluggish performance, the Federal Reserve continued to pursue a very
accommodative monetary policy. The Federal Open Market Committee kept the
federal funds target rate in a range from 0% to 0.25% and signaled its continued
intention to keep the target rate low for an "extended period."
During the year, U.S. Treasury yields rose as inves-tors became more optimistic
that the worst of the financial crisis had passed and that economic activity was
likely to rebound. The Treasury yield curve(3) (specifically the spread(4)
between 2-year and 10-year Treasury yields) steepened as market participants
became more concerned about inflation.
After equity markets reached a low in March, they rebounded strongly and fueled
an increase in risk-taking. The riskier parts of the fixed-income market
followed suit, and credit spreads dramatically tightened.
WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO ITS BENCHMARK?
During 2009, the Portfolio outperformed the Barclays Capital U.S. Aggregate Bond
Index largely as a result of moving to an overweight position relative to the
benchmark in investment-grade corporate bonds and commercial mortgage-backed
securities. Spreads on all of these asset classes tightened in relation to
Treasury securities, and the tightening contributed to the Portfolio's positive
performance in relation to the benchmark.
WHAT FACTORS PROMPTED YOU TO MAKE SIGNIFICANT DECISIONS FOR THE PORTFOLIO IN
2009?
Market psychology probably had the most significant impact on the performance of
the Portfolio. As the
Investments in bonds are subject to interest rate, credit and inflation risk and
can lose principal value when interest rates rise. A portion of income may be
subject to state and local taxes or the alternative minimum tax. Investments in
loan participation interests are subject to the risk that there may not be a
readily available market, which in some cases could result in the Portfolio
disposing of such securities at a substantial discount from face value or
holding such securities until maturity. 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 issuer 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 Portfolio's use of
investment practices such as mortgage dollar rolls presents certain risks. The
principal risk of mortgage dollar roll transactions is that the security the
Portfolio receives at the end of the transaction may be worth less than the
security the Portfolio sold to the same counterparty at the beginning of the
transaction. The Portfolio may experience a portfolio turnover rate of more than
100%. Portfolio turnover measures the amount of trading a portfolio does during
the year. Portfolios with high turnover rates (over 100%) often have higher
transaction costs that are paid by those Portfolios. The Portfolio's use of
securities lending presents the risk of default by the borrower, which may
result in a loss to the Portfolio.
1. "New York Life Investments" is a service mark used by New York Life
Investment Management LLC.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
3. The yield curve is a line that plots the yields of various securities of
similar quality--typically U.S. Treasury issues--across a range of
maturities. The U.S. Treasury yield curve serves as a benchmark for other
debt and is used in economic forecasting.
4. The terms "spread" and "yield spread" may refer to the difference in yield
between a security or type of security and comparable U.S. Treasury issues.
The term may also refer to the difference in yield between two specific
securities or types of securities at a given time.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-27
equity market stabilized and it became increasingly apparent that the financial
system was not going to collapse, risk-taking began to increase because asset
valuations looked attractive and it appeared that the worst of the economic
crisis had passed. With spreads on fixed-income securities at all-time wide
levels and money flowing back into the fixed-income markets, we identified
opportunities to add exposure in the investment-grade bond market and the
commercial mortgage-backed securities market. By adding exposure to these
sectors, the Portfolio was able to outperform the Barclays Capital U.S.
Aggregate Bond Index as spreads tightened during the course of the year.
HOW DID THE CHANGING SECTOR WEIGHTINGS AFFECT THE PORTFOLIO'S RELATIVE
PERFORMANCE IN 2009?
As noted above, increases in sector weightings in the investment-grade corporate
and commercial-mortgage backed sectors added to performance relative to the
benchmark. Also during the reporting period, a decrease in the Portfolio's
allocation to mortgage-backed securities and an underweight position relative to
the benchmark hurt the Portfolio's relative performance.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP Bond Portfolio on this page and the preceding
pages has not been audited.
M-28 MainStay VP Bond Portfolio
PORTFOLIO OF INVESTMENTS+++ DECEMBER 31, 2009
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 98.7%+
ASSET-BACKED SECURITIES 3.7%
- ---------------------------------------------------------------
AUTOMOBILE 0.4%
Harley-Davidson Motorcycle
Trust Series 2007-3, Class
B
6.04%, due 8/15/14 $ 1,000,000 $ 1,036,485
Mercedes-Benz Auto
Receivables Trust Series
2009-1, Class A3
1.67%, due 1/15/14 1,500,000 1,499,865
-------------
2,536,350
-------------
CREDIT CARDS 0.4%
Nordstrom Private Label
Credit Card
Series 2007-1, Class A
4.92%, due 5/15/13 (a) 3,000,000 3,025,690
-------------
DIVERSIFIED FINANCIAL SERVICES 0.3%
Marriott Vacation Club Owner
Trust Series 2007-2A, Class
A
5.808%, due 10/20/29 (a) 2,410,939 2,361,614
-------------
HOME EQUITY 2.6%
Chase Funding Mortgage Loan
Asset-Backed Certificates
Series 2002-2, Class 1A5
5.833%, due 4/25/32 418,464 310,193
CIT Group Home Equity Loan
Trust Series 2003-1, Class
A4
3.93%, due 3/20/32 685,962 603,108
Citicorp Residential Mortgage
Securities, Inc.
Series 2006-1, Class A3
5.706%, due 7/25/36 (b) 923,412 886,038
Citifinancial Mortgage
Securities, Inc.
Series 2003-3, Class AF5
4.553%, due 8/25/33 (b) 754,761 675,357
Citigroup Mortgage Loan
Trust, Inc.
Series 2006-WF2, Class A2C
5.852%, due 5/25/36 889,426 521,301
Countrywide Asset-Backed
Certificates
Series 2006-S8, Class A3
5.555%, due 4/25/36 1,488,347 573,547
Series 2006-S5, Class A3
5.762%, due 6/25/35 1,664,071 420,443
Series 2007-S1, Class A3
5.81%, due 11/25/36 786,362 323,715
Credit-Based Asset Servicing
and Securitization LLC
Series 2007-CB2, Class A2C
5.623%, due 2/25/37 1,000,000 437,225
Series 2007-CB4, Class A2B
5.723%, due 4/25/37 (b) 500,000 250,049
Equity One ABS, Inc.
Series 2003-4, Class AF6
4.833%, due 10/25/34 (b) 1,500,000 1,422,591
JPMorgan Mortgage Acquisition
Corp.
Series 2007-CH1, Class AF3
5.532%, due 11/25/36 1,000,000 815,078
Series 2007-CH2, Class AF3
5.552%, due 1/25/37 1,000,000 451,454
Series 2007-CH1, Class AF1B
5.935%, due 11/25/36 293,403 290,307
Series 2006-WF1, Class A6
6.00%, due 7/25/36 984,034 554,372
Morgan Stanley Mortgage Loan
Trust Series 2006-17XS,
Class A3A
5.651%, due 10/25/46 2,000,000 1,072,360
Popular ABS Mortgage Pass-
Through Trust Series 2005-
5, Class AF3
5.086%, due 11/25/35 (b) 3,175,000 3,089,003
Renaissance Home Equity Loan
Trust Series 2006-1, Class
AF4
6.011%, due 5/25/36 (b) 5,000,000 2,803,083
Residential Asset Mortgage
Products, Inc.
Series 2003-RZ5, Class A7
4.97%, due 9/25/33 (b) 733,695 605,750
Residential Funding Mortgage
Securities II, Inc.
Series 2007-HSA3, Class 1A3
6.03%, due 5/25/37 (b) 3,750,000 2,296,725
Saxon Asset Securities Trust
Series 2003-1, Class AF5
5.455%, due 6/25/33 (b) 1,357,771 1,073,564
-------------
19,475,263
-------------
Total Asset-Backed Securities
(Cost $37,507,582) 27,398,917
-------------
CORPORATE BONDS 26.2%
- ---------------------------------------------------------------
AEROSPACE & DEFENSE 2.1%
Boeing Co.
4.875%, due 2/15/20 2,300,000 2,306,235
</Table>
+ Percentages indicated are based on Fund net assets.
V Among the Portfolio's 10 largest issuers held, as of December 31, 2009,
excluding short-term investments. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-29
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
AEROSPACE & DEFENSE (CONTINUED)
Goodrich Corp.
4.875%, due 3/1/20 $ 400,000 $ 395,654
L-3 Communications Corp.
5.20%, due 10/15/19 (a) 1,200,000 1,186,963
Lockheed Martin Corp.
4.25%, due 11/15/19 2,000,000 1,930,526
5.50%, due 11/18/39 3,500,000 3,429,388
Northrop Grumman Corp.
5.05%, due 8/1/19 780,000 796,502
7.75%, due 3/1/16 2,375,000 2,807,597
Raytheon Co.
5.375%, due 4/1/13 1,000,000 1,081,673
6.40%, due 12/15/18 1,175,000 1,335,554
-------------
15,270,092
-------------
AGRICULTURE 0.1%
Archer-Daniels-Midland Co.
5.45%, due 3/15/18 1,000,000 1,065,124
-------------
AUTO MANUFACTURERS 0.1%
DaimlerChrysler N.A. Holding
Corp.
6.50%, due 11/15/13 1,000,000 1,096,235
-------------
BANKS 3.3%
American Express Bank FSB
6.00%, due 9/13/17 2,000,000 2,075,056
v Bank of America Corp.
2.10%, due 4/30/12 (c) 3,000,000 3,027,693
5.65%, due 5/1/18 6,050,000 6,144,453
BB&T Corp.
3.375%, due 9/25/13 3,000,000 3,023,643
Fifth Third Bancorp
4.50%, due 6/1/18 850,000 693,411
JPMorgan Chase Bank N.A.
6.00%, due 10/1/17 1,550,000 1,659,545
KeyBank N.A.
5.80%, due 7/1/14 290,000 282,261
Mercantile-Safe Deposit &
Trust Co.
5.70%, due 11/15/11 750,000 773,477
Morgan Stanley
5.625%, due 9/23/19 800,000 805,848
PNC Bank N.A.
6.875%, due 4/1/18 1,000,000 1,061,422
SunTrust Bank
5.20%, due 1/17/17 875,000 826,056
Wachovia Bank N.A.
6.60%, due 1/15/38 850,000 897,157
Wells Fargo & Co.
3.75%, due 10/1/14 2,750,000 2,741,898
-------------
24,011,920
-------------
BEVERAGES 0.8%
Anheuser-Busch InBev
Worldwide, Inc.
3.00%, due 10/15/12 (a) 2,000,000 2,009,370
4.125%, due 1/15/15 (a) 1,400,000 1,421,491
8.20%, due 1/15/39 (a) 1,625,000 2,054,812
Coca-Cola Enterprises, Inc.
5.00%, due 8/15/13 500,000 538,013
-------------
6,023,686
-------------
CHEMICALS 0.8%
Dow Chemical Co. (The)
5.70%, due 5/15/18 2,750,000 2,793,609
Eastman Chemical Co.
5.50%, due 11/15/19 1,000,000 996,878
EI du Pont de Nemours & Co.
4.625%, due 1/15/20 2,000,000 1,957,998
-------------
5,748,485
-------------
COMMERCIAL SERVICES 0.1%
McKesson Corp.
5.25%, due 3/1/13 375,000 396,795
-------------
DIVERSIFIED FINANCIAL SERVICES 4.2%
American Express Credit Corp.
7.30%, due 8/20/13 1,500,000 1,685,821
Capital One Bank USA N.A.
8.80%, due 7/15/19 4,000,000 4,726,668
Citigroup, Inc.
6.00%, due 8/15/17 2,750,000 2,748,947
6.125%, due 5/15/18 3,000,000 3,016,224
General Electric Capital
Corp.
5.625%, due 5/1/18 3,000,000 3,074,223
5.875%, due 1/14/38 1,000,000 925,883
6.00%, due 6/15/12 1,500,000 1,616,861
v Goldman Sachs Group, Inc.
(The)
1.625%, due 7/15/11 (c) 3,000,000 3,026,832
5.70%, due 9/1/12 1,000,000 1,075,662
6.15%, due 4/1/18 2,000,000 2,140,998
JPMorgan Chase & Co.
4.60%, due 1/17/11 2,000,000 2,069,168
Morgan Stanley
6.75%, due 4/15/11 2,000,000 2,118,966
Pricoa Global Funding I
4.625%, due 6/25/12 (a) 2,700,000 2,795,661
-------------
31,021,914
-------------
</Table>
M-30 MainStay VP Bond Portfolio The notes to the financial statements are
an integral part of, and should be read in conjunction with, the financial
statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
ELECTRIC 2.6%
American Transmission
Systems, Inc.
5.25%, due 1/15/22 (a) $ 2,500,000 $ 2,468,625
Arizona Public Service Co.
5.50%, due 9/1/35 1,275,000 1,083,000
Carolina Power & Light Co.
6.125%, due 9/15/33 500,000 524,644
CenterPoint Energy Houston
Electric LLC
7.00%, due 3/1/14 1,250,000 1,423,202
Duke Energy Carolinas LLC
7.00%, due 11/15/18 2,000,000 2,331,122
Entergy Mississippi, Inc.
5.15%, due 2/1/13 500,000 520,971
Georgia Power Co.
4.25%, due 12/1/19 1,750,000 1,695,829
IES Utilities, Inc.
Series B
6.75%, due 3/15/11 500,000 525,699
Kansas City Power & Light Co.
7.15%, due 4/1/19 900,000 1,027,827
Peco Energy Co.
5.00%, due 10/1/14 750,000 805,682
5.35%, due 3/1/18 1,500,000 1,576,399
Pepco Holdings, Inc.
6.45%, due 8/15/12 2,125,000 2,280,699
South Carolina Electric & Gas
Co.
6.50%, due 11/1/18 600,000 677,518
Union Electric Co.
5.30%, due 8/1/37 800,000 720,852
6.70%, due 2/1/19 1,500,000 1,656,076
-------------
19,318,145
-------------
ENVIRONMENTAL CONTROLS 0.3%
Republic Services, Inc.
5.50%, due 9/15/19 (a) 2,000,000 2,030,904
-------------
FINANCE--OTHER SERVICES 0.2%
National Rural Utilities
Cooperative Finance Corp.
2.625%, due 9/16/12 1,800,000 1,811,176
-------------
FOOD 1.3%
ConAgra Foods, Inc.
7.00%, due 4/15/19 1,080,000 1,222,350
Corn Products International,
Inc.
6.00%, due 4/15/17 2,100,000 2,120,215
Kellogg Co.
4.15%, due 11/15/19 2,605,000 2,524,870
Kroger Co. (The)
7.70%, due 6/1/29 1,000,000 1,171,614
Safeway, Inc.
5.00%, due 8/15/19 750,000 743,753
6.25%, due 3/15/14 1,750,000 1,921,965
-------------
9,704,767
-------------
FOREST PRODUCTS & PAPER 0.2%
International Paper Co.
7.30%, due 11/15/39 1,225,000 1,299,555
-------------
GAS 0.2%
Sempra Energy
6.50%, due 6/1/16 1,300,000 1,409,862
-------------
HEALTH CARE--SERVICES 0.4%
Roche Holdings, Inc.
5.00%, due 3/1/14 (a) 2,700,000 2,888,560
-------------
INSURANCE 1.4%
American General Finance
Corp.
5.20%, due 12/15/11 1,100,000 944,891
CIGNA Corp.
7.00%, due 1/15/11 500,000 523,886
Lincoln National Corp.
6.25%, due 2/15/20 2,850,000 2,808,618
MetLife Global Funding I
5.125%, due 6/10/14 (a) 2,700,000 2,857,402
MetLife, Inc.
6.75%, due 6/1/16 1,000,000 1,119,841
Principal Financial Group,
Inc.
8.875%, due 5/15/19 810,000 934,350
Principal Life Income Funding
Trust 5.20%, due 11/15/10 1,000,000 1,033,052
-------------
10,222,040
-------------
LODGING 0.3%
Wyndham Worldwide Corp.
6.00%, due 12/1/16 2,650,000 2,468,724
-------------
MACHINERY--DIVERSIFIED 0.3%
Deere & Co.
5.375%, due 10/16/29 1,100,000 1,097,911
6.95%, due 4/25/14 1,000,000 1,154,344
-------------
2,252,255
-------------
MEDIA 1.5%
CBS Corp.
4.625%, due 5/15/18 950,000 880,389
Comcast Cable Communications
Holdings, Inc.
8.375%, due 3/15/13 766,000 882,966
COX Communications, Inc.
8.375%, due 3/1/39 (a) 1,150,000 1,431,956
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-31
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
MEDIA (CONTINUED)
News America, Inc.
6.90%, due 3/1/19 $ 3,600,000 $ 4,056,354
TCM Sub LLC
3.55%, due 1/15/15 (a)(d) 2,900,000 2,840,712
Time Warner, Inc.
6.50%, due 11/15/36 1,000,000 1,044,140
-------------
11,136,517
-------------
MISCELLANEOUS--MANUFACTURING 0.5%
ITT Corp.
4.90%, due 5/1/14 2,250,000 2,357,674
6.125%, due 5/1/19 1,000,000 1,079,815
-------------
3,437,489
-------------
OIL & GAS 0.5%
Marathon Oil Corp.
6.50%, due 2/15/14 1,250,000 1,382,705
Motiva Enterprises LLC
5.20%, due 9/15/12 (a) 600,000 616,524
Pemex Project Funding Master
Trust 5.75%, due 3/1/18 2,000,000 2,022,252
-------------
4,021,481
-------------
PACKAGING & CONTAINERS 0.2%
Bemis Co., Inc.
5.65%, due 8/1/14 1,460,000 1,554,002
-------------
PHARMACEUTICALS 0.4%
Eli Lilly & Co.
6.57%, due 1/1/16 1,225,000 1,362,153
GlaxoSmithKline Capital, Inc.
4.85%, due 5/15/13 1,500,000 1,610,174
-------------
2,972,327
-------------
PIPELINES 0.4%
Energy Transfer Partners,
L.P.
9.00%, due 4/15/19 1,020,000 1,215,819
Plains All American Pipeline,
L.P.
8.75%, due 5/1/19 1,450,000 1,709,686
-------------
2,925,505
-------------
REAL ESTATE 0.2%
AMB Property, L.P.
6.625%, due 12/1/19 1,250,000 1,226,036
-------------
REAL ESTATE INVESTMENT TRUSTS 0.6%
AvalonBay Communities, Inc.
6.625%, due 9/15/11 439,000 464,498
Brandywine Operating
Partnership, L.P.
5.70%, due 5/1/17 2,772,000 2,486,431
Hospitality Properties Trust
6.30%, due 6/15/16 1,250,000 1,156,125
Liberty Property, L.P.
8.50%, due 8/1/10 500,000 513,408
-------------
4,620,462
-------------
RETAIL 0.1%
Home Depot, Inc.
5.875%, due 12/16/36 350,000 337,840
Yum! Brands, Inc.
6.875%, due 11/15/37 500,000 540,247
-------------
878,087
-------------
TELECOMMUNICATIONS 2.3%
AT&T, Inc.
6.55%, due 2/15/39 2,000,000 2,107,324
Cellco Partnership/Verizon
Wireless Capital LLC
5.55%, due 2/1/14 3,000,000 3,255,834
8.50%, due 11/15/18 1,500,000 1,860,573
Cisco Systems, Inc.
4.45%, due 1/15/20 2,850,000 2,795,804
Embarq Corp.
7.995%, due 6/1/36 250,000 268,925
SBC Communications, Inc.
5.10%, due 9/15/14 1,500,000 1,613,490
5.875%, due 2/1/12 2,500,000 2,703,500
Verizon Communications, Inc.
7.35%, due 4/1/39 2,000,000 2,320,220
-------------
16,925,670
-------------
TRANSPORTATION 0.5%
Burlington Northern Santa Fe
Corp.
4.70%, due 10/1/19 2,000,000 1,981,364
FedEx Corp.
8.00%, due 1/15/19 1,300,000 1,565,774
-------------
3,547,138
-------------
TRUCKING & LEASING 0.3%
TTX Co.
5.00%, due 4/1/12 (a) 2,050,000 2,021,337
-------------
Total Corporate Bonds
(Cost $184,919,303) 193,306,290
-------------
MEDIUM TERM NOTE 0.1%
- ---------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES 0.1%
Morgan Stanley
6.625%, due 4/1/18 600,000 648,701
-------------
Total Medium Term Note
(Cost $615,288) 648,701
-------------
</Table>
M-32 MainStay VP Bond Portfolio The notes to the financial statements are
an integral part of, and should be read in conjunction with, the financial
statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
MORTGAGE-BACKED SECURITIES 6.6%
- ---------------------------------------------------------------
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) 6.6%
Banc of America Commercial
Mortgage, Inc.
Series 2006-2, Class A4
5.738%, due 5/10/45 $ 3,600,000 $ 3,537,817
Banc of America Funding Corp.
Series 2006-7, Class T2A3
5.695%, due 10/25/36 1,000,000 567,681
Bear Stearns Adjustable Rate
Mortgage Trust
Series 2005-8, Class A4
5.102%, due 8/25/35 (a) 500,000 441,881
v Bear Stearns Commercial
Mortgage Securities
Series 2007-PW16, Class A4
1.00%, due 6/11/40 (e) 1,700,000 1,545,250
Series 2006-PW11, Class A3
5.456%, due 3/11/39 (e) 1,000,000 993,347
Series 2006-PW11, Class AM
5.456%, due 3/11/39 (e) 500,000 425,983
Series 2006-PW13, Class A3
5.518%, due 9/11/41 1,000,000 997,885
Series 2006-PW12, Class AAB
5.694%, due 9/11/38 (e) 1,000,000 1,025,040
Series 2007-T28, Class A3
5.793%, due 9/11/42 (e) 5,000,000 5,011,379
Citigroup Commercial Mortgage
Trust
Series 2006-C5, Class A4
5.431%, due 10/15/49 3,700,000 3,435,942
Commercial Mortgage
Pass-Through Certificates
Series 2006-C8, Class A4
5.306%, due 12/10/46 1,900,000 1,621,591
Credit Suisse Mortgage
Capital Certificates
Series 2006-C1, Class AM
5.548%, due 2/15/39 (e) 5,000,000 4,096,914
Greenwich Capital Commercial
Funding Corp.
Series 2007-GG9, Class A4
5.444%, due 3/10/39 2,000,000 1,767,089
JP Morgan Chase Commercial
Mortgage Securities Corp.
Series 2007-CB20, Class A3
5.819%, due 2/12/51 1,000,000 971,905
Series 2006-LDP7, Class A4
5.875%, due 4/15/45 (e) 2,000,000 1,927,279
Series 2007-LD12, Class A3
5.99%, due 2/15/51 (e) 1,000,000 980,098
LB-UBS Commercial Mortgage
Trust
Series 2007-C6, Class AAB
5.855%, due 7/15/40 1,000,000 966,517
Series 2007-C6, Class A3
5.933%, due 7/15/40 1,000,000 914,252
Merrill Lynch Mortgage Trust
Series 2005-LC1, Class A3
5.289%, due 1/12/44 2,500,000 2,588,661
Series 2007-C1, Class A3
5.828%, due 6/12/50 2,240,000 2,175,123
Merrill Lynch/Countrywide
Commercial Mortgage Trust
Series 2006-4, Class A3
5.172%, due 12/12/49 2,080,000 1,838,567
Series 2007-8, Class A2
5.92%, due 8/12/49 (e) 1,000,000 979,559
Morgan Stanley Capital I
Series 2006-HQ8, Class A4
5.385%, due 3/12/44 (e) 2,000,000 1,928,714
Series 2007-HQ11, Class A4
5.447%, due 2/12/44 1,500,000 1,314,510
Series 2007-IQ14, Class AAB
5.654%, due 4/15/49 1,000,000 970,356
Series 2006-HQ9, Class AM
5.773%, due 7/12/44 1,000,000 820,888
Structured Adjustable Rate
Mortgage
Loan Trust
Series 2006-8, Class 4A3
5.694%, due 9/25/36 (e) 1,000,000 632,319
TBW Mortgage-Backed
Pass-Through Certificates
Series 2006-6, Class A2B
5.66%, due 1/25/37 2,000,000 985,339
Wachovia Bank Commercial
Mortgage Trust
Series 2006-C29, Class AM
5.339%, due 11/15/48 2,000,000 1,613,031
Series 2006-C28, Class A4
5.572%, due 10/15/48 2,200,000 2,036,391
-------------
Total Mortgage-Backed
Securities
(Cost $52,345,927) 49,111,308
-------------
U.S. GOVERNMENT & FEDERAL AGENCIES 57.2%
- ---------------------------------------------------------------
V FEDERAL HOME LOAN MORTGAGE CORPORATION 2.3%
3.75%, due 6/28/13 6,900,000 7,271,751
4.75%, due 1/19/16 2,000,000 2,156,940
5.125%, due 4/18/11 3,000,000 3,166,311
5.50%, due 7/18/16 4,000,000 4,472,624
-------------
17,067,626
-------------
V FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) 17.0%
4.00%, due 12/31/21 TBA (f) 2,000,000 2,012,188
4.00%, due 1/1/39 2,408,135 2,324,719
4.00%, due 9/1/39 3,981,264 3,842,957
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-33
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) (CONTINUED)
4.50%, due 4/1/22 $ 972,849 $ 1,008,834
4.50%, due 5/1/22 61,433 63,360
4.50%, due 4/1/23 1,914,163 1,971,806
4.50%, due 6/1/24 1,915,936 1,971,237
4.50%, due 9/1/35 1,576,084 1,578,218
4.50%, due 1/1/39 827,871 826,746
4.50%, due 2/1/39 1,977,497 1,974,811
4.50%, due 4/1/39 1,630,820 1,628,441
4.50%, due 6/1/39 2,965,163 2,960,839
4.50%, due 11/1/39 7,990,017 7,978,365
5.00%, due 10/1/20 922,446 969,835
5.00%, due 12/1/20 2,938,820 3,089,796
5.00%, due 1/1/21 491,431 515,602
5.00%, due 5/1/21 852,922 896,740
5.00%, due 8/1/35 783,830 805,304
5.00%, due 8/1/37 3,730,458 3,829,742
5.00%, due 4/1/38 251,369 258,045
5.00%, due 9/1/38 7,375,208 7,571,081
5.50%, due 12/1/18 761,552 810,674
5.50%, due 9/1/21 919,994 976,461
5.50%, due 9/1/22 1,136,194 1,203,623
5.50%, due 8/1/37 1,604,072 1,682,187
5.50%, due 9/1/37 8,769,296 9,196,342
5.50%, due 1/1/38 8,042,881 8,434,552
5.50%, due 6/1/38 3,644,245 3,821,507
5.50%, due 8/1/38 3,868,688 4,056,867
5.50%, due 10/1/38 3,823,329 4,009,302
5.50%, due 12/1/38 10,581,165 11,095,850
5.50%, due 1/1/39 3,368,999 3,533,063
6.00%, due 7/1/21 2,173,093 2,324,479
6.00%, due 8/1/36 4,587,446 4,877,029
6.00%, due 2/1/37 708,918 753,669
6.00%, due 9/1/37 4,531,933 4,813,762
6.00%, due 11/1/37 1,950,474 2,071,769
6.00%, due 10/1/38 8,373,115 8,886,805
6.50%, due 7/1/17 174,605 188,134
6.50%, due 11/1/35 235,543 253,503
6.50%, due 8/1/37 702,716 752,855
6.50%, due 11/1/37 1,793,433 1,921,394
7.00%, due 1/1/33 1,010,188 1,111,606
7.00%, due 9/1/33 322,884 355,235
-------------
125,209,334
-------------
V FEDERAL NATIONAL MORTGAGE ASSOCIATION 2.5%
2.75%, due 3/13/14 6,600,000 6,656,054
4.625%, due 10/15/13 6,000,000 6,501,714
4.875%, due 5/18/12 2,000,000 2,158,382
5.50%, due 3/15/11 $ 3,000,000 $ 3,170,403
-------------
18,486,553
-------------
v FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 5.7%
4.00%, due 10/1/20 726 733
4.00%, due 3/1/22 365,308 368,088
4.50%, due 5/1/24 6,245,306 6,437,278
5.00%, due 1/1/21 165,039 173,466
5.00%, due 4/1/23 1,976,452 2,068,723
5.00%, due 3/1/34 2,073,483 2,134,499
5.00%, due 4/1/34 5,688,522 5,855,919
5.00%, due 2/1/36 2,910,833 2,992,852
5.00%, due 5/1/37 14,740 15,143
5.00%, due 2/1/38 337,159 346,377
5.00%, due 3/1/38 809,431 831,561
5.00%, due 4/1/38 7,992,943 8,211,467
5.00%, due 5/1/38 1,239,840 1,273,737
5.00%, due 7/1/38 966,984 993,421
5.50%, due 5/1/16 61,190 65,173
5.50%, due 1/1/21 20,326 21,644
5.50%, due 12/1/21 77,197 81,911
5.50%, due 1/1/22 480,604 509,950
5.50%, due 2/1/22 40,536 42,954
5.50%, due 7/1/35 487,257 511,823
5.50%, due 7/1/37 1,743,538 1,827,082
6.00%, due 1/1/36 17,008 18,066
6.00%, due 3/1/36 802,847 852,774
6.50%, due 10/1/36 1,302,253 1,397,480
6.50%, due 1/1/37 2,585,731 2,774,812
6.50%, due 8/1/37 319,017 341,997
6.50%, due 10/1/37 1,243,862 1,333,458
7.00%, due 9/1/37 338,789 371,724
7.00%, due 10/1/37 24,704 27,105
7.00%, due 11/1/37 24,798 27,209
7.50%, due 7/1/28 100,823 113,682
-------------
42,022,108
-------------
v GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 4.9%
4.50%, due 9/15/35 387,016 388,928
4.50%, due 5/15/39 4,947,765 4,959,835
5.00%, due 1/15/39 434,681 447,842
5.00%, due 3/15/39 5,046,053 5,198,833
5.50%, due 7/15/35 458,724 483,043
5.50%, due 8/15/35 444,083 467,626
5.50%, due 5/15/36 504,306 529,938
5.50%, due 7/15/36 300,898 316,191
5.50%, due 5/15/37 31,296 32,842
5.50%, due 11/15/37 645,246 677,135
</Table>
M-34 MainStay VP Bond Portfolio The notes to the financial statements are
an integral part of, and should be read in conjunction with, the financial
statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) (CONTINUED)
5.50%, due 6/15/38 $ 7,385,263 $ 7,746,783
5.50%, due 8/15/38 805,075 844,485
5.50%, due 12/15/38 126,375 132,572
6.00%, due 1/15/36 1,065,638 1,128,905
6.00%, due 11/15/37 495,661 524,546
6.00%, due 12/15/37 3,858,285 4,083,746
6.00%, due 9/15/38 3,078,341 3,255,811
6.00%, due 10/15/38 2,419,378 2,558,859
6.50%, due 1/15/36 512,878 546,200
6.50%, due 3/15/36 306,535 326,450
6.50%, due 6/15/36 611,930 651,687
6.50%, due 9/15/36 142,003 151,229
6.50%, due 7/15/37 648,606 690,441
7.00%, due 7/15/31 79,851 88,934
-------------
36,232,861
-------------
TENNESSEE VALLEY AUTHORITY 0.1%
5.25%, due 9/15/39 1,000,000 990,855
-------------
v UNITED STATES TREASURY BONDS 1.5%
4.375%, due 11/15/39 9,450,000 9,045,427
6.25%, due 8/15/23 1,300,000 1,552,687
-------------
10,598,114
-------------
v UNITED STATES TREASURY NOTES 23.2%
0.75%, due 11/30/11 850,000 844,455
0.875%, due 5/31/11 33,050,000 33,090,024
1.00%, due 12/31/11 17,000,000 16,952,196
1.125%, due 1/15/12 2,700,000 2,697,467
1.125%, due 12/15/12 19,075,000 18,769,419
1.375%, due 4/15/12 7,200,000 7,206,754
1.375%, due 5/15/12 11,000,000 11,000,000
1.875%, due 6/15/12 4,000,000 4,043,752
2.125%, due 11/30/14 10,265,000 10,022,027
2.25%, due 5/31/14 8,800,000 8,740,186
2.375%, due 10/31/14 19,145,000 18,937,085
2.625%, due 6/30/14 505,000 508,669
2.625%, due 2/29/16 4,375,000 4,256,053
3.25%, due 6/30/16 15,725,000 15,770,461
3.375%, due 11/15/19 15,675,000 15,077,469
4.25%, due 8/15/15 3,150,000 3,371,483
-------------
171,287,500
-------------
Total U.S. Government &
Federal Agencies
(Cost $416,646,539) 421,894,951
-------------
YANKEE BONDS 4.9% (G)
- ---------------------------------------------------------------
BANKS 1.1%
Barclays Bank PLC
5.00%, due 9/22/16 $ 1,250,000 $ 1,277,265
Commonwealth Bank of
Australia
3.75%, due 10/15/14 (a) 1,300,000 1,303,162
5.00%, due 10/15/19 (a) 1,300,000 1,290,680
Credit Suisse/New York NY
5.30%, due 8/13/19 1,025,000 1,052,649
Nordea Bank Sweden AB
5.25%, due 11/30/12 (a) 800,000 834,107
Westpac Banking Corp.
4.875%, due 11/19/19 2,500,000 2,467,513
-------------
8,225,376
-------------
BEVERAGES 0.5%
Diageo Capital PLC
5.75%, due 10/23/17 1,750,000 1,883,317
Molson Coors Capital Finance
ULC
4.85%, due 9/22/10 1,500,000 1,545,342
-------------
3,428,659
-------------
ELECTRIC 0.1%
E.ON International Finance
B.V.
6.65%, due 4/30/38 (a) 850,000 966,527
-------------
MINING 0.6%
Rio Tinto Finance USA, Ltd.
8.95%, due 5/1/14 3,750,000 4,493,629
-------------
OIL & GAS 0.7%
Petroleos Mexicanos
4.875%, due 3/15/15 (a) 800,000 797,040
Shell International Finance
B.V.
4.00%, due 3/21/14 750,000 782,648
4.30%, due 9/22/19 3,600,000 3,556,750
-------------
5,136,438
-------------
PHARMACEUTICALS 0.2%
Novartis Securities
Investment, Ltd.
5.125%, due 2/10/19 1,575,000 1,654,578
-------------
PIPELINES 0.4%
TransCanada Pipelines, Ltd.
4.00%, due 6/15/13 500,000 512,224
7.25%, due 8/15/38 1,000,000 1,178,967
7.625%, due 1/15/39 950,000 1,170,027
-------------
2,861,218
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-35
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
YANKEE BONDS (CONTINUED)
SOVEREIGN 0.2%
Svensk Exportkredit AB
3.25%, due 9/16/14 $ 1,425,000 $ 1,424,771
-------------
TELECOMMUNICATIONS 1.1%
Deutsche Telekom
International
Finance B.V.
6.00%, due 7/8/19 2,800,000 2,989,479
6.75%, due 8/20/18 1,920,000 2,149,591
Telecom Italia Capital S.A.
4.00%, due 1/15/10 375,000 375,289
5.25%, due 10/1/15 250,000 261,387
Telefonica Europe B.V.
7.75%, due 9/15/10 500,000 523,054
Vodafone Group PLC
5.625%, due 2/27/17 1,750,000 1,858,794
-------------
8,157,594
-------------
Total Yankee Bonds
(Cost $33,570,321) 36,348,790
-------------
Total Long-Term Bonds
(Cost $725,604,960) 728,708,957
-------------
SHORT-TERM INVESTMENTS 0.7%
- ---------------------------------------------------------------
COMMERCIAL PAPER 0.7%
Societe Generale North
America, Inc.
0.01%, due 1/4/10 (h) 5,175,000 5,174,996
-------------
Total Commercial Paper
(Cost $5,174,996) 5,174,996
-------------
REPURCHASE AGREEMENT 0.0%++
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/04/10
Proceeds at Maturity
$18,044 (Collateralized by
a United States Treasury
Bill with a rate of 0.047%
and a maturity date of
3/18/10, with a Principal
Amount of $20,000 and a
Market Value of $19,998). 18,044 18,044
-------------
Total Repurchase Agreement
(Cost $18,044) 18,044
-------------
Total Short-Term Investments
(Cost $5,193,040) 5,193,040
-------------
Total Investments
(Cost $730,798,000) (i) 99.4% 733,901,997
Other Assets, Less
Liabilities 0.6 4,113,504
----- ------------
Net Assets 100.0% $ 738,015,501
===== ============
</Table>
<Table>
+++ On a daily basis New York Life
Investments confirms that the value of
the Portfolio's liquid assets (liquid
portfolio securities and cash) is
sufficient to cover its potential senior
securities (e.g., futures, swaps,
options).
++ Less than one-tenth of a percent.
(a) May be sold to institutional investors
only under Rule 144A or securities
offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
(b) Subprime mortgage investment and other
asset-backed securities. The total market
value of the securities at December 31,
2009 is $13,102,160, which represents
1.8% of the Portfolio's net assets.
(c) The debt is guaranteed under the Federal
Deposit Insurance Corporation (FDIC)
Temporary Liquidity Guarantee Program and
is backed by the full faith and credit of
the United States. The expiration date
of the FDIC's guarantee is the earlier of
the maturity date of the debt or June 30,
2012.
(d) Illiquid security--The total market value
of this security at December 31, 2009 is
$2,840,712, which represents 0.4% of the
Portfolio's net assets.
(e) Floating rate--Rate shown is the rate in
effect at December 31, 2009.
(f) TBA--Security 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. The
market value of this security at December
31, 2009 is $2,012,188, which represents
0.3% of the Portfolio's net assets. All
or a portion of this security was
acquired under a mortgage dollar roll
agreement.
(g) Yankee Bond--dollar-denominated bond
issued in the United States by a foreign
bank or corporation.
(h) Interest rate presented is yield to
maturity.
(i) At December 31, 2009, cost is
$731,553,592 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 19,953,916
Gross unrealized depreciation (17,605,511)
------------
Net unrealized appreciation $ 2,348,405
============
</Table>
M-36 MainStay VP Bond Portfolio The notes to the financial statements are
an integral part of, and should be read in conjunction with, the financial
statements.
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES IN
ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Long-Term Bonds
Asset-Backed Securities $ -- $ 27,398,917 $ -- $ 27,398,917
Corporate Bonds -- 193,306,290 -- 193,306,290
Medium Term Note -- 648,701 -- 648,701
Mortgage-Backed Securities -- 49,111,308 -- 49,111,308
U.S. Government & Federal Agencies -- 421,894,951 -- 421,894,951
Yankee Bonds -- 36,348,790 -- 36,348,790
---------- ------------ ---------- ------------
Total Long-Term Bonds -- 728,708,957 -- 728,708,957
---------- ------------ ---------- ------------
Short-Term Investments
Commercial Paper -- 5,174,996 -- 5,174,996
Repurchase Agreement -- 18,044 -- 18,044
---------- ------------ ---------- ------------
Total Short-Term Investments -- 5,193,040 -- 5,193,040
---------- ------------ ---------- ------------
Total Investments in Securities $-- $733,901,997 $-- $733,901,997
========== ============ ========== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-37
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $730,798,000) $733,901,997
Receivables:
Interest 5,203,100
Fund shares sold 1,523,743
Other assets 1,224
------------
Total assets 740,630,064
------------
LIABILITIES:
Due to custodian 15,701
Payables:
Investment securities purchased 2,041,813
Manager (See Note 3) 306,411
Fund shares redeemed 95,535
NYLIFE Distributors (See Note 3) 50,393
Professional fees 45,756
Shareholder communication 35,495
Custodian 18,161
Directors 1,989
Accrued expenses 3,309
------------
Total liabilities 2,614,563
------------
Net assets $738,015,501
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 521,737
Additional paid-in capital 698,730,856
------------
699,252,593
Accumulated undistributed net
investment income 25,891,451
Accumulated undistributed net
realized gain on investments and
futures transactions 9,767,460
Net unrealized appreciation on
investments 3,103,997
------------
Net assets $738,015,501
============
INITIAL CLASS
Net assets applicable to
outstanding shares $515,185,816
============
Shares of capital stock outstanding 36,354,383
============
Net asset value per share
outstanding $ 14.17
============
SERVICE CLASS
Net assets applicable to
outstanding shares $222,829,685
============
Shares of capital stock outstanding 15,819,287
============
Net asset value per share
outstanding $ 14.09
============
</Table>
M-38 MainStay VP Bond Portfolio The notes to the financial statements are
an integral part of, and should be read in conjunction with, the financial
statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Interest (a) $29,390,767
-----------
EXPENSES:
Manager (See Note 3) 3,216,986
Distribution and service--Service
Class (See Note 3) 486,403
Shareholder communication 128,523
Professional fees 117,536
Custodian 51,436
Directors 28,761
Miscellaneous 33,782
-----------
Total expenses 4,063,427
-----------
Net investment income 25,327,340
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on:
Security transactions 11,681,596
Futures transactions (1,297,467)
-----------
Net realized gain on investments
and futures transactions 10,384,129
-----------
Net change in unrealized
depreciation on investments 11,774,992
-----------
Net realized and unrealized gain on
investments and futures
transactions 22,159,121
-----------
Net increase in net assets
resulting from operations $47,486,461
===========
</Table>
(a) Interest recorded net of foreign withholding taxes in
the amount of $8,542.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-39
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 25,327,340 $ 30,437,803
Net realized gain on
investments and futures
transactions 10,384,129 3,029,110
Net change in unrealized
appreciation
(depreciation) on
investments 11,774,992 (12,025,476)
-----------------------------
Net increase in net assets
resulting from operations 47,486,461 21,441,437
-----------------------------
Dividends and distributions
to shareholders:
From net investment
income:
Initial Class (21,915,205) (19,969,165)
Service Class (8,941,088) (7,722,294)
-----------------------------
(30,856,293) (27,691,459)
-----------------------------
From net realized gain on
investments:
Initial Class (1,792,095) (138,814)
Service Class (766,418) (55,726)
-----------------------------
(2,558,513) (194,540)
-----------------------------
Total dividends and
distributions to
shareholders (33,414,806) (27,885,999)
-----------------------------
Capital share transactions:
Net proceeds from sale of
shares 166,741,328 175,611,949
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 33,414,806 27,885,999
Cost of shares redeemed (110,257,248) (211,495,185)
-----------------------------
Increase (decrease) in
net assets derived from
capital share
transactions 89,898,886 (7,997,237)
-----------------------------
Net increase (decrease)
in net assets 103,970,541 (14,441,799)
NET ASSETS:
Beginning of year 634,044,960 648,486,759
-----------------------------
End of year $ 738,015,501 $ 634,044,960
=============================
Accumulated undistributed
net investment income at
end of year $ 25,891,451 $ 30,856,273
=============================
</Table>
M-40 MainStay VP Bond Portfolio The notes to the financial statements are
an integral part of, and should be read in conjunction with, the financial
statements.
This page intentionally left blank
mainstayinvestments.com M-41
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 13.82 $ 13.96 $ 13.60 $ 13.16 $ 13.31
-------- -------- -------- -------- --------
Net investment income 0.56 (a) 0.64 (a) 0.53 0.58 0.53 (a)
Net realized and
unrealized gain (loss)
on investments 0.51 (0.16) 0.35 0.02 (0.24)
-------- -------- -------- -------- --------
Total from investment
operations 1.07 0.48 0.88 0.60 0.29
-------- -------- -------- -------- --------
Less dividends and
distributions:
From net investment
income (0.67) (0.62) (0.52) (0.16) (0.44)
From net realized gain
on investments (0.05) (0.00)++ -- -- --
-------- -------- -------- -------- --------
Total dividends and
distributions (0.72) (0.62) (0.52) (0.16) (0.44)
-------- -------- -------- -------- --------
Net asset value at end of
year $ 14.17 $ 13.82 $ 13.96 $ 13.60 $ 13.16
======== ======== ======== ======== ========
Total investment return 7.77% 3.72% 6.52% 4.55% 2.18%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 3.97% 4.58% 4.89% 4.66% 3.96%
Net expenses 0.55% 0.54% 0.50% 0.52% 0.36%
Expenses (before
reimbursement) 0.55% 0.54% 0.50% 0.52% 0.51%
Portfolio turnover rate 158%(c) 304%(c) 265%(c) 166%(c) 277%(c)
Net assets at end of year
(in 000's) $515,186 $451,804 $508,892 $410,139 $377,607
</Table>
<Table>
++ Less than one cent per share.
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 2.03% and 1.77% for Initial Class shares and Service
Class shares, respectively for the year ended December 31, 2005.
(c) The portfolio turnover rates not including mortgage dollar rolls were 151%,
297%, 256%, 147% and 161% for the years ended December 31, 2009, 2008, 2007,
2006 and 2005, respectively.
</Table>
M-42 MainStay VP Bond Portfolio The notes to the financial statements are
an integral part of, and should be read in conjunction with, the financial
statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
-----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
2009 2008 2007 2006 2005
$ 13.75 $ 13.90 $ 13.55 $ 13.12 $ 13.29
-------- -------- -------- -------- -------
0.52 (a) 0.60 (a) 0.49 0.57 0.50 (a)
0.51 (0.15) 0.35 0.00 ++ (0.25)
-------- -------- -------- -------- -------
1.03 0.45 0.84 0.57 0.25
-------- -------- -------- -------- -------
(0.64) (0.60) (0.49) (0.14) (0.42)
(0.05) (0.00)++ -- -- --
-------- -------- -------- -------- -------
(0.69) (0.60) (0.49) (0.14) (0.42)
-------- -------- -------- -------- -------
$ 14.09 $ 13.75 $ 13.90 $ 13.55 $ 13.12
======== ======== ======== ======== =======
7.50% 3.47% 6.25% 4.29% 1.89%(b)
3.70% 4.34% 4.64% 4.41% 3.71%
0.80% 0.79% 0.75% 0.77% 0.61%
0.80% 0.79% 0.75% 0.77% 0.76%
158%(c) 304%(c) 265%(c) 166%(c) 277%(c)
$222,830 $182,241 $139,595 $103,352 $90,392
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-43
MAINSTAY VP CASH MANAGEMENT PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON(1) (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
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.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ---------------------------------------------------
After Portfolio operating
expenses 0.05% 2.91% 2.72%
7-DAY CURRENT YIELD: 0.01%(2)
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
LIPPER VARIABLE
MAINSTAY VP PRODUCTS MONEY LIPPER MONEY
CASH MANAGEMENT MARKET PORTFOLIO MARKET FUND
PORTFOLIO AVERAGE INDEX
--------------- ---------------- ------------
12/31/99 10000 10000 10000
10606 10599 10594
11013 10997 10997
11162 11142 11142
11236 11217 11211
11332 11314 11298
11668 11621 11599
12201 12153 12121
12793 12737 12699
13072 13024 13005
12/31/09 13078 13050 13037
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Lipper Variable Products Money Market
Portfolio Average(3) 0.19% 2.87% 2.70%
Lipper Money Market Funds Index(4) 0.24 2.90 2.69
</Table>
1. Performance figures reflect certain fee waivers, without which total returns
may have been lower. These voluntary waivers may be discontinued at any time.
Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 2.87% and 2.70% for Initial
Class shares for the five-year and ten-year periods, respectively.
2. As of December 31, 2009, MainStay VP Cash Management Portfolio had an
effective 7-day yield of 0.01% and a 7-day current yield of 0.01%. The
current yield is more reflective of the Portfolio's earnings than the total
return.
3. The Lipper Variable Products Money Market Portfolio Average is representative
of portfolios that invest in high-quality financial instruments rated in the
top two grades with dollar-weighted average maturities of less than 90 days.
These portfolios intend to keep constant net asset value. Lipper Inc. is an
independent monitor of fund performance.
4. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports. The Portfolio has selected the Lipper Variable Products Money
Market Portfolio Average as its primary benchmark in replacement of the
Lipper Money Market Funds Index because it believes that this Average is more
reflective of its investment style.
M-44 MainStay VP Cash Management Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP CASH MANAGEMENT PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,000.10 $1.76 $1,023.40 $1.79
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's net annualized expense ratio of 0.35%
multiplied by the average account value over the period, divided by 365 and
multiplied by 184 (to reflect the one-half year period). The table above
represents the actual expenses incurred during the one-half year period.
mainstayinvestments.com M-45
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
Commercial Paper 42.50
U.S. Government & Federal Agencies 32.00
Repurchase Agreements 14.60
Corporate Bonds 7.80
Asset-Backed Securities 2.70
Yankee Bond 0.40
Other Assets, Less Liabilities (0.00)
</Table>
See Portfolio of Investments beginning on page M-49 for specific holdings within
these categories.
++ Less than one-tenth percent.
M-46 MainStay VP Cash Management Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY DAVID CLEMENT, CFA, AND THOMAS J. GIRARD OF NEW YORK LIFE
INVESTMENTS,(1) THE PORTFOLIO'S MANAGER.
HOW DID MAINSTAY VP CASH MANAGEMENT PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the seven-day period ended December 31, 2009, Initial Class shares of
MainStay VP Cash Management Portfolio provided a current yield of 0.01% and an
effective yield of 0.01%. For the 12 months ended December 31, 2009, Initial
Class shares of MainStay VP Cash Management Portfolio returned 0.05%. The
Portfolio underperformed the 0.19% return of the average Lipper(2) Variable
Products Money Market Portfolio and the 0.24% return of the Lipper Money Market
Funds Index(2) for the 12 months ended December 31, 2009.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
The Portfolio underperformed its peers for two primary reasons. First, we
largely avoided the bank and finance sectors of the short-term markets for the
majority of the year. These sectors were among the least expensive and highest-
yielding money market sectors. Second, we maintained a shorter duration(3) early
in the reporting period, when market liquidity was reduced. We were concerned
that market dislocations from the fourth quarter of 2008 would carry over into
the first few months of 2009, possibly prompting increased redemptions. The
additional redemptions never materialized, and we eventually began to lengthen
the Portfolio's duration and obtain higher yields on longer-dated maturities, as
the short-term yield curve(4) was upward-sloping.
WHAT WAS THE PORTFOLIO'S DURATION STRATEGY DURING THE YEAR?
At the beginning of 2009, we began to slowly increase the duration of the
Portfolio to lock in higher yields for the remainder of the reporting period.
This decision was instrumental in allowing the Portfolio to maintain a higher
yield, because the yield curve was upward-sloping and short-term yields on
longer-dated maturities rallied during the year. A longer duration allowed these
higher yields to be maintained in the Portfolio for a longer period of time.
During 2009, we lengthened the Portfolio's duration from a range of 30 to 40
days to a range of 70 to 75 days.
WHAT DECISIONS DID YOU MAKE DURING THE REPORTING PERIOD TO IMPROVE THE
PORTFOLIO'S YIELD?
The Federal Open Market Committee kept the federal funds target rate in a range
from 0% to 0.25% throughout the reporting period. This prompted us to lengthen
the Portfolio's duration, which helped the Portfolio's yield. The lack of supply
among industrial names in the commercial-paper market prompted us to increase
the Portfolio's allocation to agencies and Treasury securities. This positioning
hurt the Portfolio's overall performance because commercial paper typically
offers higher yields than Treasury and agency securities. The shortfall was most
evident in our decision to avoid the bank and finance sectors until the last
three months of the reporting period. These were two of the cheaper and higher-
yielding sectors of the money markets, especially Yankee Banks (foreign banks
with operations in the United States).
DURING 2009, WHICH MARKET SEGMENTS WERE THE STRONGEST CONTRIBUTORS TO THE
PORTFOLIO'S PERFORMANCE AND WHICH MARKET SEGMENTS DETRACTED THE MOST?
The most significant positive contributors to the Portfolio's performance were
asset-backed securities; agency coupon debt, both callable and bullet issues;
and FDIC-backed floating-rate debt. FDIC-backed bonds included issues from Bank
of America, General Electric Capital and Suntrust Bank. The Farm Credit 0.65%
issue of 5/18/2010 is an example of a callable debenture. The Bank of America
Auto Trust (Series 2009-3A Class A1) is an example of an asset-backed security
deal.
An investment in the Portfolio is not insured 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 Portfolio can invest in foreign
securities, which may be subject to greater risks than U.S. investments,
including less-liquid trading markets, greater price volatility, political and
economic instability, less publicly available issuer information, and changes in
tax or currency laws or monetary policy. The Portfolio may invest in
derivatives, which may increase the volatility of the Portfolio and may result
in a loss to the Portfolio.
1. "New York Life Investments" is a service mark used by New York Life
Investment Management LLC
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
3. Duration is a measure of the price sensitivity of a fixed-income investment
to changes in interest rates. Duration is expressed as a number of years and
is considered a more accurate sensitivity gauge than average maturity.
4. The yield curve is a line that plots the yields of various securities of
similar quality--typically U.S. Treasury issues--across a range of
maturities. The U.S. Treasury yield curve serves as a benchmark for other
debt and is used in economic forecasting.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-47
Negative performers included repurchase agree-ments. We invested in repurchase
agreements to help manage the liquidity needs of the Portfolio, but the yields
we received on these instruments were at times less than those on alternative
investments that had higher demand and a similar maturity.
WERE THERE ANY OTHER SIGNIFICANT PURCHASES DURING THE REPORTING PERIOD?
Other positive performers included a Federal Home Loan Bank 0.5% issue due
10/29/10 and a Federal National Mortgage Association 2.875% issue due 10/12/10.
Several auto deals also did well for the Portfolio. Among them were Chrysler
Auto Securitization Trust (Series 2009-B Class A1) and Ally Auto Receivable
Trust (Series 2009-B Class A1).
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING 2009?
During the year, we increased the Portfolio's allocation to repurchase
agreements and Treasurys because we wanted more liquidity and because supply in
other sectors was scarce.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP Cash Management Portfolio on this page and the
preceding pages has not been audited.
M-48 MainStay VP Cash Management Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
PRINCIPAL AMORTIZED
AMOUNT COST
SHORT-TERM INVESTMENTS 100.0%+
- ---------------------------------------------------------------
ASSET-BACKED SECURITIES 2.7%
Ally Auto Receivables Trust
Series 2009-B, Class A1
0.305%, due 11/15/10 (a) $ 2,556,162 $ 2,556,162
Bank of America Auto Trust
Series 2009-3A, Class A1
0.296%, due 11/15/10 (a) 1,822,937 1,822,937
BMW Vehicle Lease Trust
Series 2009-1, Class A1
0.792%, due 6/15/10 3,405 3,405
Carmax Auto Owner Trust
Series 2009-2, Class A1
0.279%, due 11/15/10 2,192,158 2,192,158
Chrysler Financial Auto
Securitization Trust
Series 2009-B, Class A1
0.306%, due 12/8/10 (a) 2,999,607 2,999,607
CIT Equipment Collateral
Series 2009-VT1, Class A1
1.22%, due 6/15/10 (a) 849,054 849,054
CNH Equipment Trust
Series 2009-C, Class A1
0.421%, due 12/3/10 1,752,996 1,752,996
Ford Credit Auto Owner Trust
Series 2009-E, Class A1
0.295%, due 12/15/10 (a) 2,457,330 2,457,330
Series 2009-B, Class A1
0.988%, due 6/15/10 (a) 402,713 402,713
Honda Auto Receivables Owner
Trust
Series 2009-2, Class A1
1.318%, due 5/17/10 264,729 264,729
Huntington Auto Trust
Series 2009-1A, Class A1
1.989%, due 4/15/10 (a) 28,314 28,314
MMAF Equipment Finance LLC
Series 2009-AA, Class A1
0.398%, due 12/15/10 (a) 2,740,000 2,740,000
Nissan Auto Lease Trust
Series 2009-A, Class A1
1.043%, due 6/15/10 670,389 670,389
Nissan Auto Receivables Owner
Trust
Series 2009-A, Class A1
1.764%, due 4/15/10 132,540 132,540
World Omni Automobile Lease
Securitization Trust
Series 2009-A, Class A1
0.403%, due 11/15/10 1,596,843 1,596,843
-------------
20,469,177
-------------
COMMERCIAL PAPER 42.5%
Abbot Laboratories
0.08%, due 1/11/10 (a)(b) 7,500,000 7,499,833
0.09%, due 1/19/10 (a)(b) 4,000,000 3,999,820
American Honda Finance Corp.
0.13%, due 2/8/10 (b) 4,400,000 4,399,396
0.14%, due 2/2/10 (b) 3,000,000 2,999,627
Basin Electric Power
Cooperative
0.17%, due 1/26/10 (a)(b) 2,500,000 2,499,705
0.19%, due 2/17/10 (a)(b) 3,000,000 2,999,256
0.20%, due 2/11/10 (a)(b) 3,300,000 3,299,248
Becton, Dickinson & Co.
0.11%, due 1/21/10 (b) 8,000,000 7,999,511
0.11%, due 1/25/10 (b) 8,000,000 7,999,413
BNP Paribas Finance, Inc.
0.16%, due 1/12/10 (b) 8,000,000 7,999,609
0.16%, due 1/19/10 (b) 7,000,000 6,999,440
Brown-Forman Corp.
0.22%, due 1/5/10 (a)(b) 7,900,000 7,899,807
Campbell Soup Co.
0.50%, due 4/29/10 (a)(b) 13,000,000 12,978,694
0.60%, due 7/30/10 (a)(b) 3,000,000 2,989,500
Canadian Wheat Board
0.05%, due 1/22/10 (b) 5,000,000 4,999,854
Cargill, Inc.
0.13%, due 1/7/10 (a)(b) 10,000,000 9,999,783
0.13%, due 1/25/10 (a)(b) 8,500,000 8,499,263
Coca-Cola Co.
0.10%, due 1/20/10 (a)(b) 3,400,000 3,399,821
0.10%, due 1/26/10 (a)(b) 2,000,000 1,999,861
0.13%, due 2/3/10 (a)(b) 5,000,000 4,999,404
Danaher Corp.
0.14%, due 1/8/10 (a)(b) 6,000,000 5,999,837
Deutsche Bank Financial LLC
0.17%, due 1/20/10 (b) 5,000,000 4,999,551
Devon Energy Corp.
0.20%, due 1/21/10 (a)(b) 3,600,000 3,599,600
Duke Energy Corp.
0.29%, due 1/15/10 (a)(b) 2,700,000 2,699,696
Emerson Electric Co.
0.08%, due 1/7/10 (a)(b) 8,500,000 8,499,887
0.10%, due 1/6/10 (a)(b) 6,250,000 6,249,913
FPL Group Capital, Inc.
0.11%, due 1/5/10 (a)(b) 7,500,000 7,499,908
0.15%, due 1/11/10 (a)(b) 2,100,000 2,099,913
0.15%, due 1/26/10 (a)(b) 2,700,000 2,699,719
General Electric Capital
Corp.
0.09%, due 1/6/10 (b) 8,500,000 8,499,894
</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. mainstayinvestments.com
M-49
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL AMORTIZED
AMOUNT COST
COMMERCIAL PAPER (CONTINUED)
GlaxoSmithKline Finance PLC
0.11%, due 1/13/10 (a)(b) $ 6,000,000 $ 5,999,780
0.12%, due 1/6/10 (a)(b) 8,500,000 8,499,858
H.J. Heinz Financial Co.
0.25%, due 1/14/10 (a)(b) 2,600,000 2,599,765
Hewlett Packard Co.
0.11%, due 1/12/10 (a)(b) 8,500,000 8,499,714
0.11%, due 1/21/10 (a)(b) 7,000,000 6,999,572
HSBC Finance Corp.
0.15%, due 1/14/10 (b) 6,800,000 6,799,632
International Business
Machines Corp.
0.07%, due 1/22/10 (a)(b) 3,400,000 3,399,861
Johnson & Johnson
0.22%, due 7/26/10 (a)(b) 3,000,000 2,996,223
Microsoft Corp.
0.16%, due 5/26/10 (a)(b) 7,000,000 6,995,489
National Rural Utilities
Cooperative Finance Corp.
0.16%, due 1/19/10 (b) 8,500,000 8,499,320
Nestle Capital Corp.
0.07%, due 1/4/10 (a)(b) 8,500,000 8,499,950
0.10%, due 2/22/10 (a)(b) 4,200,000 4,199,393
NSTAR Electric Co.
0.10%, due 1/6/10 (b) 5,030,000 5,029,930
0.10%, due 1/12/10 (b) 2,700,000 2,699,918
Paccar Financial Corp.
0.10%, due 1/11/10 (b) 2,000,000 1,999,944
0.16%, due 3/25/10 (b) 5,000,000 4,998,156
PepsiAmericas, Inc.
0.13%, due 1/8/10 (a)(b) 5,200,000 5,199,869
Procter & Gamble
International Funding SCA
1.00%, due 2/2/10 (a)(b) 10,500,000 10,499,067
Societe Generale North
America, Inc.
0.17%, due 1/4/10 (b) 6,000,000 5,999,915
0.18%, due 1/20/10 (b) 8,500,000 8,499,193
Southern Co. Funding Corp.
0.11%, due 1/8/10 (a)(b) 9,000,000 8,999,808
0.11%, due 1/14/10 (a)(b) 8,500,000 8,499,662
United Parcel Service, Inc.
0.08%, due 1/11/10 (a)(b) 9,000,000 8,999,800
Virginia Electric and Power
Co.
0.30%, due 1/13/10 (b) 5,100,000 5,099,490
Wisconsin Energy Corp.
0.23%, due 1/8/10 (a)(b) 5,300,000 5,299,763
-------------
325,121,835
-------------
CORPORATE BONDS 7.8%
Bank of America Corp.
0.757%, due 12/2/10 (c)(d) 2,000,000 2,010,994
Bank of America N.A.
0.284%, due 9/13/10 (c)(d) 8,250,000 8,250,000
Citigroup, Inc.
0.807%, due 12/9/10 (c)(d) 7,000,000 7,040,731
General Electric Capital
Corp.
0.335%, due 3/11/11 (c)(d) 5,500,000 5,500,000
0.887%, due 12/9/10 (c)(d) 4,000,000 4,027,887
Goldman Sachs Group, Inc.
(The)
4.50%, due 6/15/10 5,700,000 5,796,422
KeyCorp
0.904%, due 12/15/10 (c)(d) 7,000,000 7,048,998
Praxair, Inc.
0.346%, due 5/26/10 (c) 7,000,000 7,000,000
Roche Holdings, Inc.
1.262%, due 2/25/10 (a)(c) 9,500,000 9,500,000
SunTrust Bank
0.904%, due 12/16/10 (c)(d) 3,500,000 3,525,538
-------------
59,700,570
-------------
REPURCHASE AGREEMENTS 14.6%
Bank of America N.A.
0.01%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$41,419,046 (Collateralized
by a United States Treasury
Bond, with a rate of 3.625%
and a maturity date of
4/15/28, with a Principal
Amount of $25,339,100 and a
Market Value of
$42,247,434) 41,419,000 41,419,000
Deutsche Bank Securities,
Inc.
0.00%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$30,000,000 (Collateralized
by United States Treasury
securities, with rates of
2.00% and 4.50% and
maturity dates of 9/30/10
and 5/15/38, with a
Principal Amount of
$30,354,200 and a Market
Value of $30,600,019) 30,000,000 30,000,000
Morgan Stanley Co.
0.00%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$40,000,000 (Collateralized
by a United States Treasury
Note, with a rate of 2.75%
and a maturity date of
2/15/19, with a Principal
Amount of $43,621,800 and a
Market Value of
$40,800,015) 40,000,000 40,000,000
-------------
111,419,000
-------------
</Table>
M-50 MainStay VP Cash Management Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL AMORTIZED
AMOUNT COST
U.S. GOVERNMENT & FEDERAL AGENCIES 32.0%
Federal Farm Credit Bank
0.151%, due 7/28/10 (c) $10,000,000 $ 10,000,000
2.75%, due 5/4/10 7,000,000 7,047,195
5.25%, due 9/13/10 14,000,000 14,451,678
Federal Farm Credit Bank
(Discount Notes)
0.40%, due 5/3/10 (b) 13,000,000 12,982,378
1.05%, due 3/18/10 (b) 11,000,000 10,999,656
Federal Home Loan Bank
0.141%, due 3/26/10 (c) 7,000,000 7,000,120
0.235%, due 2/19/10 (c) 12,750,000 12,752,248
0.50%, due 10/29/10 6,000,000 6,000,000
0.55%, due 8/4/10 6,000,000 6,001,526
0.60%, due 6/15/10 5,000,000 5,003,976
0.60%, due 6/25/10 1,000,000 1,000,499
0.80%, due 4/23/10 17,000,000 17,000,000
Federal Home Loan Bank
(Discount Notes)
0.41%, due 4/27/10 (b) 5,379,000 5,371,894
1.05%, due 2/26/10 (b) 7,000,000 6,999,804
1.10%, due 3/16/10 (b) 11,000,000 10,997,502
Federal Home Loan Mortgage
Corporation
2.875%, due 6/28/10 4,000,000 4,047,807
Federal Home Loan Mortgage
Corporation (Discount Note)
0.04%, due 2/8/10 (b) 8,500,000 8,499,641
Federal National Mortgage
Association
2.875%, due 10/12/10 4,000,000 4,074,148
3.25%, due 2/10/10 7,000,000 7,016,780
4.125%, due 5/15/10 4,000,000 4,056,247
Federal National Mortgage
Association (Discount Note)
0.04%, due 2/2/10 (b) 8,500,000 8,499,698
Inter-American Development
Bank (Discount Note)
0.152%, due 4/6/10 (b) 4,000,000 3,998,417
International Bank for
Reconstruction and
Development (Discount
Notes)
0.074%, due 2/1/10 (b) 4,395,000 4,394,735
0.10%, due 3/1/10 (b) 3,400,000 3,399,443
0.104%, due 2/16/10 (b) 3,430,000 3,429,562
0.125%, due 3/15/10 (b) 6,000,000 5,998,479
United States Treasury Bills
0.16%, due 7/1/10 (b) 1,000,000 999,196
0.24%, due 7/15/10 (b) 1,000,000 998,700
0.41%, due 6/10/10 (b) 5,600,000 5,589,796
0.478%, due 7/29/10 (b) 7,000,000 6,980,900
United States Treasury Notes
1.50%, due 10/31/10 11,700,000 11,805,003
2.00%, due 9/30/10 14,700,000 14,875,523
2.375%, due 8/31/10 5,800,000 5,877,768
2.875%, due 6/30/10 7,000,000 7,077,695
-------------
245,228,014
-------------
YANKEE BOND 0.4% (E)
Procter & Gamble
International Funding SCA
0.525%, due 2/8/10 (c) 3,300,000 3,300,000
-------------
Total Short-Term Investments
(Amortized Cost
$765,238,596) (f) 100.0% 765,238,596
Other Assets, Less
Liabilities (0.0)++ (120,313)
----- ------------
Net Assets 100.0% $ 765,118,283
===== ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) May be sold to institutional investors
only under Rule 144A or securities
offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
(b) Interest rate presented is yield to
maturity.
(c) Floating rate--Rate shown is the rate in
effect at December 31, 2009.
(d) The debt is guaranteed under the Federal
Deposit Insurance Corporation (FDIC)
Temporary Liquidity Guarantee Program and
is backed by the full faith and credit of
the United States. The expiration date
of the FDIC's guarantee is the earlier of
the maturity date of the debt or June 30,
2012.
(e) Yankee Bond--dollar-denominated bond
issued in the United States by a foreign
bank or corporation.
(f) The cost stated also represents the
aggregate cost for federal income tax
purposes.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-51
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
The following is a summary of the fair valuations according to inputs used as of
December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES IN
ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Short-Term Investments
Asset-Backed Securities $ -- $ 20,469,177 $ -- $ 20,469,177
Commercial Paper -- 325,121,835 -- 325,121,835
Corporate Bonds -- 59,700,570 -- 59,700,570
Repurchase Agreements -- 111,419,000 -- 111,419,000
U.S. Government & Federal Agencies -- 245,228,014 -- 245,228,014
Yankee Bond -- 3,300,000 -- 3,300,000
-------- ------------ -------- ------------
Total Investments in Securities $-- $765,238,596 $-- $765,238,596
======== ============ ======== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
The table below sets forth the diversification of MainStay VP Cash Management
Portfolio, investments by industry.
INDUSTRY DIVERSIFICATION
<Table>
<Caption>
AMORTIZED
COST PERCENT +
Agriculture $ 18,499,046 2.4%
Automobile 15,127,127 2.0
Banks 68,170,390 8.9
Beverages 23,498,762 3.1
Chemicals 7,000,000 0.9
Computers 18,899,147 2.5
Cosmetics & Personal Care 13,799,067 1.8
Diversified Financial Services 62,223,494 8.0
Electric 59,426,016 7.8
Electrical Components & Equipment 14,749,800 1.9
Food 31,267,303 4.0
Health Care--Products 28,495,147 3.7
Miscellaneous--Manufacturing 5,999,837 0.8
Multi-National 21,220,636 2.8
Oil & Gas 3,599,600 0.5
Other ABS 5,342,050 0.7
Pharmaceuticals 11,499,653 1.5
Repurchase Agreement 111,419,000 14.6
Software 6,995,489 0.9
Sovereign 4,999,854 0.7
Transportation 8,999,800 1.2
U.S. Government & Federal Agencies 224,007,378 29.3
------------ -----
765,238,596 100.0
Other Assets, Less Liabilities (120,313) (0.0)++
------------ -----
Net Assets $765,118,283 100.0%
============ =====
</Table>
+ Percentages indicated are based on Portfolio net assets.
++ Less than one-tenth of a percent.
M-52 MainStay VP Cash Management Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(amortized cost $653,819,596) $653,819,596
Repurchase agreements, at value
(identified cost $111,419,000) 111,419,000
Cash 679
Receivables:
Fund shares sold 823,878
Interest 732,396
Other assets 2,114
------------
Total assets 766,797,663
------------
LIABILITIES:
Payables:
Fund shares redeemed 1,325,720
Manager (See Note 3) 177,562
Shareholder communication 45,933
Professional fees 40,584
Custodian 17,477
Directors 2,713
Accrued expenses 2,267
Dividend payable 67,124
------------
Total liabilities 1,679,380
------------
Net assets $765,118,283
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 1.7 billion shares
authorized $ 7,650,714
Additional paid-in capital 757,406,657
------------
765,057,371
Accumulated undistributed net
investment income 60,912
------------
Net assets applicable to
outstanding shares $765,118,283
============
Shares of capital stock outstanding 765,071,374
============
Net asset value per share
outstanding $ 1.00
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-53
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Interest $4,561,350
----------
EXPENSES:
Manager (See Note 3) 4,188,315
Insurance guarantee (See Note 12) 271,301
Shareholder communication 219,339
Professional fees 182,303
Custodian 51,070
Directors 47,599
Miscellaneous 43,092
----------
Total expenses before waiver 5,003,019
Expense waiver from Manager (See
Note 3) (911,920)
----------
Net expenses 4,091,099
----------
Net investment income 470,251
----------
REALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 11,848
----------
Net increase in net assets resulting
from operations $ 482,099
==========
</Table>
M-54 MainStay VP Cash Management Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 470,251 $ 17,442,998
Net realized gain on
investments 11,848 53,414
-------------------------------
Net increase in net
assets resulting from
operations 482,099 17,496,412
-------------------------------
Dividends to shareholders:
From net investment
income (470,251) (17,444,630)
-------------------------------
Capital share transactions:
Net proceeds from sale of
shares 495,040,021 906,981,144
Net asset value of shares
issued to shareholders in
reinvestment of dividends 470,251 17,444,630
Cost of shares redeemed (826,291,881) (433,811,044)
-------------------------------
Increase (decrease) in
net assets derived
from capital share
transactions (330,781,609) 490,614,730
-------------------------------
Net increase (decrease)
in net assets (330,769,761) 490,666,512
NET ASSETS:
Beginning of year 1,095,888,044 605,221,532
-------------------------------
End of year $ 765,118,283 $1,095,888,044
===============================
Accumulated undistributed
net investment income at
end of year $ 60,912 $ --
===============================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-55
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ---------- -------- -------- --------
Net investment income 0.00 ++ 0.02 0.05 0.04 0.03
Net realized and
unrealized gain (loss)
on investments 0.00 ++ 0.00 ++ 0.00 ++ (0.00)++ 0.00 ++
-------- ---------- -------- -------- --------
Total from investment
operations 0.00 ++ 0.02 0.05 0.04 0.03
-------- ---------- -------- -------- --------
Less dividends:
From net investment
income (0.00)++ (0.02) (0.05) (0.04) (0.03)
-------- ---------- -------- -------- --------
Net asset value at end of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========== ======== ======== ========
Total investment return 0.05% 2.18% 4.86% 4.57% 2.96%(a)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 0.05% 2.02% 4.71% 4.50% 2.91%
Net expenses 0.41% 0.50% 0.50% 0.52% 0.30%
Expenses (before
waiver/reimbursement) 0.51% 0.50% 0.50% 0.52% 0.50%
Net assets at end of year
(in 000's) $765,118 $1,095,888 $605,222 $351,753 $306,900
</Table>
<Table>
++ Less than one cent per share.
(a) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 2.76% for the year ended December 31, 2005.
</Table>
M-56 MainStay VP Cash Management Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
MAINSTAY VP COMMON STOCK PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 22.40% 0.53% -1.34%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
S&P 500 RUSSELL 1000
INITIAL CLASS INDEX INDEX
------------- ------- ------------
12/31/99 10000 10000 10000
9666 9090 9221
8015 8009 8073
6071 6239 6325
7672 8029 8216
8508 8902 9153
9163 9340 9726
10672 10815 11230
11221 11409 11878
7138 7188 7412
12/31/09 8737 9090 9520
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 22.08% 0.27% -1.59%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
S&P 500 RUSSELL 1000
SERVICE CLASS INDEX INDEX
------------- ------- ------------
12/31/99 10000 10000 10000
9644 9090 9221
7976 8009 8073
6026 6239 6325
7597 8029 8216
8404 8902 9153
9025 9340 9726
10485 10815 11230
10997 11409 11878
6978 7188 7412
12/31/09 8519 9090 9520
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
S&P 500(R) Index(3) 26.46% 0.42% -0.95%
Russell 1000(R) Index(3) 28.43 0.79 -0.49
Average Lipper Variable Products Large-
Cap Core Portfolio(4) 27.98 0.26 -0.48
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 0.49% and -1.36% for Initial
Class shares and 0.26% and -1.60% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 5, 2003, includes
the historical performance of Initial Class shares through June 4, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products Large-Cap Core Portfolio is
representative of portfolios that, by portfolio practice, invest at least 75%
of their equity assets in companies with market capitalizations (on a three-
year weighted basis) above Lipper's U.S. diversified equity large-cap floor.
Large-cap core funds have more latitude in the companies in which they
invest. These funds typically have an average price-to-earnings ratio, price-
to-book ratio, and three-year sales-per-share growth value compared to the
S&P 500(R) Index. Lipper Inc. is an independent monitor of fund performance.
mainstayinvestments.com M-57
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP COMMON STOCK PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,216.80 $3.24 $1,022.30 $2.96
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,215.30 $4.63 $1,021.00 $4.23
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.58% for Initial Class and 0.83% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
M-58 MainStay VP Common Stock Portfolio
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
<Table>
Oil, Gas & Consumable Fuels 9.4%
Computers & Peripherals 8.3
Pharmaceuticals 5.1
Software 4.8
Health Care Providers & Services 4.3
Media 4.2
Diversified Telecommunication
Services 3.7
Diversified Financial Services 3.5
Insurance 3.3
Specialty Retail 3.0
Household Products 2.9
Capital Markets 2.8
Communications Equipment 2.7
Internet Software & Services 2.5
Food & Staples Retailing 2.4
Commercial Banks 2.3
Energy Equipment & Services 2.3
Semiconductors & Semiconductor
Equipment 2.1
Industrial Conglomerates 2.0
Aerospace & Defense 1.9
Multiline Retail 1.8
Beverages 1.6
Metals & Mining 1.6
Biotechnology 1.3
IT Services 1.3
Tobacco 1.3
Chemicals 1.2
Consumer Finance 1.2
Machinery 1.2
Food Products 1.1
Health Care Equipment & Supplies 1.1
Hotels, Restaurants & Leisure 1.1
Air Freight & Logistics 1.0%
Electric Utilities 0.8
Electrical Equipment 0.8
Household Durables 0.8
Paper & Forest Products 0.8
Electronic Equipment & Instruments 0.7
Gas Utilities 0.5
Commercial Services & Supplies 0.4
Diversified Consumer Services 0.4
Independent Power Producers & Energy
Traders 0.4
Real Estate Investment Trusts 0.4
Textiles, Apparel & Luxury Goods 0.4
Wireless Telecommunication Services 0.4
Exchange Traded Funds 0.3
Internet & Catalog Retail 0.3
Multi-Utilities 0.3
Personal Products 0.3
Road & Rail 0.3
Trading Companies & Distributors 0.3
Automobiles 0.2
Professional Services 0.2
Thrifts & Mortgage Finance 0.2
Construction & Engineering 0.1
Containers & Packaging 0.1
Distributors 0.1
Health Care Technology 0.0++
Leisure Equipment & Products 0.0++
Life Sciences Tools & Services 0.0++
Short-Term Investment 0.2
Other Assets, Less Liabilities 0.0++
-----
100.0%
-----
-----
</Table>
See Portfolio of Investments beginning on page M-62 for specific holdings
within these categories.
++ Less than one-tenth percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. Microsoft Corp.
2. Apple, Inc.
3. International Business Machines Corp.
4. Procter & Gamble Co. (The)
5. AT&T, Inc.
6. JPMorgan Chase & Co.
7. ExxonMobil Corp.
8. Pfizer, Inc.
9. Google, Inc. Class A
10. Hewlett-Packard Co.
</Table>
mainstayinvestments.com M-59
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY HARVEY FRAM, CFA, AND MIGENE KIM, CFA, OF MADISON SQUARE
INVESTORS LLC, THE PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP COMMON STOCK PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND ITS
BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Common Stock Portfolio
returned 22.40% for Initial Class shares and 22.08% for Service Class shares.
Both share classes underperformed the 27.98% return of the average Lipper(1)
Variable Products Large-Cap Core Portfolio and the 26.46% return of the S&P
500(R) Index(1) for the 12 months ended December 31, 2009. The S&P 500(R) Index
is the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO THE S&P 500(R)
INDEX DURING THE REPORTING PERIOD?
The primary reason for the Portfolio's underperformance was a significant change
in market sentiment. Going into March, the Portfolio was positioned to protect
against a serious recession or possibly even a depression by owning what we
believed to be highly conservative stocks in each sector. In the financials
sector, the Portfolio avoided stocks with any exposure to the credit crisis.
Starting on March 9, however, lower-quality stocks rose dramatically, causing
the bulk of the Portfolio's underperformance.
DURING 2009, WHICH SECTORS MADE THE STRONGEST CONTRIBUTIONS TO THE PORTFOLIO'S
RELATIVE PERFORMANCE AND WHICH SECTORS MADE THE WEAKEST CONTRIBUTIONS?
The strongest-contributing sectors to the Portfolio's performance relative to
the S&P 500(R) Index were information technology, materials and utilities. Of
these, information technology was by far the strongest, with stocks such as
Apple, Western Digital and Texas Instruments all benefiting from much stronger-
than-expected spending on technology equipment. Materials stocks performed
strongly when investors determined that demand was sustainable. Utilities, an
underweight sector in the Portfolio, underperformed the benchmark as investors
generally stayed away from defensive stocks.
The Portfolio's worst-performing sectors relative to the S&P 500(R) Index were
financials, consumer discretionary and industrials. In each case, underweight
positions in lower-quality stocks (such as Bank of America, Citigroup,
Amazon.com and Ford Motor) hurt the Portfolio's relative results in the rally
that began on March 9, 2009.
DURING THE REPORTING PERIOD, WHICH STOCKS WERE THE STRONGEST POSITIVE
CONTRIBUTORS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
In terms of absolute performance, information technology companies Apple,
Microsoft and International Business Machines made the strongest positive
contributions to the Portfolio's results in 2009. All three benefited from
increased information technology spending, but in different ways. Apple
benefited from rising demand for broadband wireless Internet access. Microsoft's
new Windows 7 operating system was extremely well received by the market.
International Business Machines benefited from increased spending on technology
hardware, software and services.
Major detractors from the Portfolio's absolute performance included personal
lines insurer Allstate, commercial bank Wells Fargo and oil, gas & consumable
fuels company ExxonMobil. The Portfolio held large positions in these stocks at
the beginning of the year, when the market as a whole--and financial stocks in
particular--were declining.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES AND SALES DURING 2009?
The Portfolio purchased several stocks during the year, including XTO Energy and
Medco Health Solutions. XTO Energy is an oil & gas exploration & production
company that the Portfolio started buying in May as energy prices began to
recover. In December, ExxonMobil announced an agreement to purchase the company
to gain access to XTO Energy's natural gas reserves. Medco Health Solutions is a
health care services company that we believe may benefit from the new health
care legislation.
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. The
principal risk of growth stocks is that investors expect growth companies to
increase their earnings at a rate that is generally higher than the rate
expected for nongrowth companies. If these expectations are not met, the market
price of the stock may decline significantly, even if earnings show an absolute
increase. Growth company stocks also typically lack the dividend yield that can
cushion stock prices in market downturns. The principal risk of investing in
value stocks is that they may never reach what the portfolio manager believes is
their full value or that they may even go down in value. The Portfolio may
experience a portfolio turnover rate of more than 100% and may generate taxable
short-term capital gains.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports. Not all MainStay VP
Portfolios and/or share classes are available under all policies.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
M-60 MainStay VP Common Stock Portfolio
Capital One Financial and Best Buy were among the stocks the Portfolio sold
during the reporting period. Capital One is a consumer finance company that
could see rising delinquencies if U.S. consumers continue to struggle. Best Buy
benefited from the bankruptcy of Circuit City, one of its chief competitors, but
then faced margin pressures as chains such as Wal-Mart Stores became more
serious competitors.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
We increased the Portfolio's weightings in the consumer discretionary and
materials sectors. Through tight inventory controls, consumer discretionary
companies have generated high levels of cash flow, despite low sales growth.
Materials stocks such as Freeport-McMoRan Copper & Gold and steel company Nucor
benefited as the economic recovery took hold in the United States and the
emerging markets.
The Portfolio decreased its weightings in the industrials and health care
sectors. As part of our defensive positioning, the Portfolio had held overweight
positions in many drug stocks, but later sold many of these stocks to position
the Portfolio more aggressively. Industrial stocks were also sold to increase
the Portfolio's weightings in more econom-
ically sensitive sectors, such as materials.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF 2009?
As of December 31, 2009, the Portfolio's largest overweight positions relative
to the S&P 500(R) Index were in information technology and consumer
discretionary. The Portfolio sought to take advantage of high levels of cash
flow in consumer discretionary companies. Information technology companies have
benefited from increased spending for wireless broadband devices and from the
success of Windows 7.
As of December 31, 2009, the Portfolio's most significantly underweight
positions were in industrials and consumer staples. Relative to other sectors in
the Portfolio's universe, we find both of these sectors expensive. In our
opinion, consumer staples stocks in particular have recently become more
expensive because of their perceived inflation resistance.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP Common Stock Portfolio on this page and the
preceding pages has not been audited.
mainstayinvestments.com M-61
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 99.5%+
- -----------------------------------------------------------
AEROSPACE & DEFENSE 1.9%
Alliant Techsystems, Inc. (a) 34 $ 3,001
Honeywell International,
Inc. 37,904 1,485,837
ITT Corp. 3,453 171,752
L-3 Communications Holdings,
Inc. 9,686 842,198
Lockheed Martin Corp. 61,404 4,626,791
Northrop Grumman Corp. 74,190 4,143,511
Precision Castparts Corp. 150 16,553
United Technologies Corp. 13,731 953,069
-------------
12,242,712
-------------
AIR FREIGHT & LOGISTICS 1.0%
FedEx Corp. 38,958 3,251,045
United Parcel Service, Inc.
Class B 56,760 3,256,321
-------------
6,507,366
-------------
AUTOMOBILES 0.2%
Ford Motor Co. (a) 149,112 1,491,120
-------------
BEVERAGES 1.6%
Coca-Cola Co. (The) 93,606 5,335,542
Coca-Cola Enterprises, Inc. 92,951 1,970,561
Pepsi Bottling Group, Inc.
(The) 745 27,938
PepsiCo, Inc. 49,820 3,029,056
-------------
10,363,097
-------------
BIOTECHNOLOGY 1.3%
Amgen, Inc. (a) 117,806 6,664,285
Biogen Idec, Inc. (a) 25,037 1,339,480
Genzyme Corp. (a) 2,685 131,592
Gilead Sciences, Inc. (a) 15 649
-------------
8,136,006
-------------
CAPITAL MARKETS 2.8%
Bank of New York Mellon Corp.
(The) 91,281 2,553,130
Charles Schwab Corp. (The) 228,231 4,295,307
Goldman Sachs Group, Inc.
(The) 15,160 2,559,614
Morgan Stanley 491 14,534
Northern Trust Corp. 61,820 3,239,368
Raymond James Financial,
Inc. 22,240 528,645
State Street Corp. 99,572 4,335,365
-------------
17,525,963
-------------
CHEMICALS 1.2%
Ashland, Inc. 19,208 761,021
CF Industries Holdings, Inc. 15,919 1,445,127
Dow Chemical Co. (The) 67,945 1,877,320
Eastman Chemical Co. 23,372 1,407,929
Lubrizol Corp. (The) 17,400 1,269,330
Monsanto Co. 8 654
RPM International, Inc. 8,034 163,331
Terra Industries, Inc. 19,108 615,087
-------------
7,539,799
-------------
COMMERCIAL BANKS 2.3%
BB&T Corp. 36,572 927,831
M&T Bank Corp. 3,320 222,075
PNC Financial Services Group,
Inc. 26,996 1,425,119
U.S. Bancorp 186,798 4,204,823
Wells Fargo & Co. 298,497 8,056,434
-------------
14,836,282
-------------
COMMERCIAL SERVICES & SUPPLIES 0.4%
Cintas Corp. 11,065 288,243
R.R. Donnelley & Sons Co. 65,997 1,469,753
Waste Management, Inc. 17,638 596,341
-------------
2,354,337
-------------
COMMUNICATIONS EQUIPMENT 2.7%
3Com Corp. (a) 37,634 282,255
Cisco Systems, Inc. (a) 331,245 7,930,005
CommScope, Inc. (a) 8,638 229,166
Harris Corp. 13,074 621,669
JDS Uniphase Corp. (a) 9,487 78,268
QUALCOMM, Inc. 176,951 8,185,753
Tellabs, Inc. (a) 3,212 18,244
-------------
17,345,360
-------------
COMPUTERS & PERIPHERALS 8.3%
v Apple, Inc. (a) 69,842 14,726,884
Dell, Inc. (a) 231,469 3,323,895
Diebold, Inc. 2,576 73,287
EMC Corp. (a) 305,940 5,344,772
v Hewlett-Packard Co. 200,031 10,303,597
v International Business
Machines Corp. 108,719 14,231,317
NetApp, Inc. (a) 427 14,684
QLogic Corp. (a) 156 2,944
Sun Microsystems, Inc. (a) 6,263 58,684
Teradata Corp. (a) 48,307 1,518,289
Western Digital Corp. (a) 72,257 3,190,147
-------------
52,788,500
-------------
CONSTRUCTION & ENGINEERING 0.1%
Jacobs Engineering Group,
Inc. (a) 1,787 67,209
Shaw Group, Inc. (The) (a) 20,673 594,349
URS Corp. (a) 42 1,870
-------------
663,428
-------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
V Among the Portfolio's 10 largest holdings, as of December 31, 2009,
excluding short-term investment. May be subject to change daily.
M-62 MainStay VP Common Stock Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
CONSUMER FINANCE 1.2%
American Express Co. 117,975 $ 4,780,347
Discover Financial Services 172,478 2,537,151
-------------
7,317,498
-------------
CONTAINERS & PACKAGING 0.1%
Bemis Co., Inc. 12,816 379,994
Temple-Inland, Inc. 3,287 69,389
-------------
449,383
-------------
DISTRIBUTORS 0.1%
Genuine Parts Co. 12,619 479,017
-------------
DIVERSIFIED CONSUMER SERVICES 0.4%
Apollo Group, Inc. Class A
(a) 29,402 1,781,173
H&R Block, Inc. 26,041 589,048
-------------
2,370,221
-------------
DIVERSIFIED FINANCIAL SERVICES 3.5%
Bank of America Corp. 471,238 7,096,844
Citigroup, Inc. 448,685 1,485,147
v JPMorgan Chase & Co. 324,531 13,523,207
-------------
22,105,198
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES 3.7%
v AT&T, Inc. 491,750 13,783,753
Qwest Communications
International, Inc. 63,269 266,362
U.C. Telecom, Inc. (a) 4,965 85,100
Verizon Communications, Inc. 275,686 9,133,477
-------------
23,268,692
-------------
ELECTRIC UTILITIES 0.8%
Entergy Corp. 5,503 450,366
Exelon Corp. 97,580 4,768,735
FPL Group, Inc. 1,092 57,679
-------------
5,276,780
-------------
ELECTRICAL EQUIPMENT 0.8%
Cooper Industries PLC Class A 70 2,985
Emerson Electric Co. 106,670 4,544,142
Hubbel, Inc. Class B 14,712 695,878
Rockwell Automation, Inc. 2,179 102,369
-------------
5,345,374
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.7%
Arrow Electronics, Inc. (a) 30,887 914,564
Avnet, Inc. (a) 39,076 1,178,532
Ingram Micro, Inc. Class A
(a) 42,138 735,308
Jabil Circuit, Inc. 55,593 965,651
Molex, Inc. 182 3,922
Tech Data Corp. (a) 9,743 454,608
-------------
4,252,585
-------------
ENERGY EQUIPMENT & SERVICES 2.3%
Cameron International Corp.
(a) 110 4,598
Diamond Offshore Drilling,
Inc. 2,890 284,434
ENSCO International PLC,
Sponsored ADR (b) 40,044 1,599,357
Helmerich & Payne, Inc. 27,146 1,082,582
Nabors Industries, Ltd. (a) 91,011 1,992,231
National Oilwell Varco, Inc. 78,539 3,462,785
Oceaneering International,
Inc. (a) 5,340 312,497
Patterson-UTI Energy, Inc. 39,721 609,717
Pride International, Inc. (a) 42,076 1,342,645
Rowan Cos., Inc. (a) 32,037 725,318
Schlumberger, Ltd. 28,635 1,863,852
Smith International, Inc. 21,928 595,784
Tidewater, Inc. 11,719 561,926
-------------
14,437,726
-------------
FOOD & STAPLES RETAILING 2.4%
Costco Wholesale Corp. 2,180 128,991
CVS Caremark Corp. 4,765 153,481
Safeway, Inc. 57,007 1,213,679
Sysco Corp. 48,789 1,363,165
Wal-Mart Stores, Inc. 130,854 6,994,146
Walgreen Co. 128,839 4,730,968
Whole Foods Market, Inc. (a) 13,565 372,359
-------------
14,956,789
-------------
FOOD PRODUCTS 1.1%
Archer-Daniels-Midland Co. 140,760 4,407,196
Campbell Soup Co. 7,645 258,401
Dean Foods Co. (a) 15,450 278,718
General Mills, Inc. 3,694 261,572
Hershey Co. (The) 2,617 93,662
Hormel Foods Corp. 5,519 212,206
Kraft Foods, Inc. Class A (a) 496 13,481
Sara Lee Corp. 8,276 100,802
Smithfield Foods, Inc. (a) 4,356 66,168
Tyson Foods, Inc. Class A 97,842 1,200,521
-------------
6,892,727
-------------
GAS UTILITIES 0.5%
Atmos Energy Corp. 10,300 302,820
Energen Corp. 11,540 540,072
National Fuel Gas Co. 86 4,300
Nicor, Inc. 5,542 233,318
ONEOK, Inc. 7,604 338,910
Questar Corp. 32,340 1,344,374
UGI Corp. 13,832 334,596
-------------
3,098,390
-------------
HEALTH CARE EQUIPMENT & SUPPLIES 1.1%
Beckman Coulter, Inc. 6,328 414,104
Boston Scientific Corp. (a) 1,985 17,865
CareFusion Corp. (a) 35,979 899,835
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-63
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES (CONTINUED)
Gen-Probe, Inc. (a) 54 $ 2,317
Hologic, Inc. (a) 16,800 243,600
Hospira, Inc. (a) 32,990 1,682,490
Kinetic Concepts, Inc. (a) 11,872 446,981
Medtronic, Inc. 67,062 2,949,387
Stryker Corp. 10,163 511,910
-------------
7,168,489
-------------
HEALTH CARE PROVIDERS & SERVICES 4.3%
Aetna, Inc. 56,509 1,791,335
AmerisourceBergen Corp. 72,228 1,882,984
Cardinal Health, Inc. 13,288 428,405
CIGNA Corp. 26,925 949,645
Community Health Systems,
Inc. (a) 11,817 420,685
Coventry Health Care, Inc.
(a) 48,029 1,166,625
Henry Schein, Inc. (a) 3,107 163,428
Humana, Inc. (a) 48,793 2,141,525
Lincare Holdings, Inc. (a) 16,823 624,470
McKesson Corp. 67,188 4,199,250
Medco Health Solutions, Inc.
(a) 82,030 5,242,537
UnitedHealth Group, Inc. 88,156 2,686,995
Universal Health Services,
Inc. Class B 2,982 90,951
WellPoint, Inc. (a) 89,245 5,202,091
-------------
26,990,926
-------------
HEALTH CARE TECHNOLOGY 0.0%++
IMS Health, Inc. 6,536 137,648
-------------
HOTELS, RESTAURANTS & LEISURE 1.1%
Carnival Corp. (a) 15,949 505,424
Chipotle Mexican Grill, Inc.
Class A (a) 10 881
Darden Restaurants, Inc. 28,239 990,342
McDonald's Corp. 19,220 1,200,097
Starbucks Corp. (a) 124,298 2,866,312
Starwood Hotels & Resorts
Worldwide, Inc. 6,100 223,077
WMS Industries, Inc. (a) 2,867 114,680
Wyndham Worldwide Corp. 50,733 1,023,285
Wynn Resorts, Ltd. 5,276 307,221
-------------
7,231,319
-------------
HOUSEHOLD DURABLES 0.8%
D.R. Horton, Inc. 77,551 842,979
Fortune Brands, Inc. 22,053 952,690
KB Home 199 2,722
Leggett & Platt, Inc. 50,079 1,021,612
Lennar Corp. Class A 36,181 462,031
Mohawk Industries, Inc. (a) 5,259 250,328
Newell Rubbermaid, Inc. 21,350 320,464
NVR, Inc. (a) 749 532,322
Pulte Homes, Inc. (a) 94,752 947,520
Toll Brothers, Inc. (a) 85 1,599
-------------
5,334,267
-------------
HOUSEHOLD PRODUCTS 2.9%
Kimberly-Clark Corp. 70,240 4,474,991
v Procter & Gamble Co.
(The) 230,594 13,980,914
-------------
18,455,905
-------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.4%
AES Corp. (The) (a) 119,595 1,591,809
Constellation Energy Group,
Inc. 32,527 1,143,975
-------------
2,735,784
-------------
INDUSTRIAL CONGLOMERATES 2.0%
3M Co. 55,393 4,579,339
Carlisle Cos., Inc. 11,845 405,810
General Electric Co. 521,701 7,893,336
-------------
12,878,485
-------------
INSURANCE 3.3%
Aflac, Inc. 99,296 4,592,440
American Financial Group,
Inc. 5,260 131,237
Assurant, Inc. 23,582 695,197
Chubb Corp. (The) 84,331 4,147,399
Everest Re Group, Ltd. 11,903 1,019,849
First American Corp. 6,471 214,255
HCC Insurance Holdings, Inc. 27,968 782,265
MetLife, Inc. 316 11,171
Principal Financial Group,
Inc. 24,739 594,725
Progressive Corp. (The) (a) 75,282 1,354,323
Reinsurance Group of America,
Inc. 4,917 234,295
Torchmark Corp. 23,861 1,048,691
Travelers Cos., Inc. (The) 97,733 4,872,967
Unum Group 55,204 1,077,582
-------------
20,776,396
-------------
INTERNET & CATALOG RETAIL 0.3%
Amazon.com, Inc. (a) 3,103 417,415
Expedia, Inc. (a) 45,411 1,167,517
-------------
1,584,932
-------------
INTERNET SOFTWARE & SERVICES 2.5%
eBay, Inc. (a) 203,040 4,779,562
v Google, Inc. Class A (a) 17,624 10,926,527
VeriSign, Inc. (a) 4,944 119,843
Yahoo!, Inc. (a) 15,952 267,674
-------------
16,093,606
-------------
IT SERVICES 1.3%
Affiliated Computer Services,
Inc. Class A (a) 3,684 219,898
Alliance Data Systems Corp.
(a) 62 4,005
Broadridge Financial
Solutions LLC 35,892 809,723
Computer Sciences Corp. (a) 48,792 2,807,004
</Table>
M-64 MainStay VP Common Stock Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
IT SERVICES (CONTINUED)
Convergys Corp. (a) 28,194 $ 303,085
DST Systems, Inc. (a) 42 1,829
Fiserv, Inc. (a) 4,875 236,340
Global Payments, Inc. 20,806 1,120,611
Hewitt Associates, Inc. Class
A (a) 18,449 779,655
Paychex, Inc. 122 3,738
SAIC, Inc. (a) 40,368 764,570
Total System Services, Inc. 22,306 385,225
Visa, Inc. Class A 7,715 674,754
Western Union Co. (The) 12,244 230,799
-------------
8,341,236
-------------
LEISURE EQUIPMENT & PRODUCTS 0.0%++
Mattel, Inc. 14,363 286,973
-------------
LIFE SCIENCES TOOLS & SERVICES 0.0%++
Charles River Laboratories
International, Inc. (a) 70 2,358
Pharmaceutical Product
Development, Inc. 124 2,907
-------------
5,265
-------------
MACHINERY 1.2%
Caterpillar, Inc. 51,448 2,932,021
Cummins, Inc. 8,047 369,035
Dover Corp. 29,679 1,234,943
Eaton Corp. 2,455 156,187
Harsco Corp. 20,698 667,097
Illinois Tool Works, Inc. 6,161 295,666
Lincoln Electric Holdings,
Inc. 5,507 294,404
Oshkosh Corp. 23,051 853,579
Snap-On, Inc. 2,460 103,960
SPX Corp. 8,038 439,679
-------------
7,346,571
-------------
MEDIA 4.2%
Comcast Corp. Class A 367,178 6,190,621
DIRECTV Class A (a) 145,613 4,856,194
Gannett Co., Inc. 524 7,781
Interpublic Group of Cos.,
Inc. (The) (a) 77,364 570,946
Marvel Entertainment, Inc.
(a) 30 1,622
McGraw-Hill Cos., Inc. (The) 17,670 592,122
Omnicom Group, Inc. 99,873 3,910,028
Scripps Networks Interactive
Class A 10,840 449,860
Time Warner Cable, Inc. 86,852 3,594,804
Time Warner, Inc. 159,301 4,642,031
Viacom, Inc. Class B (a) 32,291 960,012
Walt Disney Co. (The) 15,787 509,131
Washington Post Co. Class B 762 334,975
-------------
26,620,127
-------------
METALS & MINING 1.6%
Allegheny Technologies, Inc. 3,833 171,603
Cliffs Natural Resources,
Inc. 12,250 564,602
Commercial Metals Co. 6,984 109,299
Freeport-McMoRan Copper &
Gold, Inc. (a) 35,861 2,879,280
Nucor Corp. 90,120 4,204,098
Reliance Steel & Aluminum
Co. 16,241 701,936
Steel Dynamics, Inc. 48,319 856,213
Titanium Metals Corp. (a) 3,390 42,443
United States Steel Corp. 11,173 615,856
-------------
10,145,330
-------------
MULTI-UTILITIES 0.3%
Ameren Corp. 9,531 266,392
DTE Energy Corp. 8,005 348,938
Integrys Energy Group, Inc. 12,397 520,550
MDU Resources Group, Inc. 36,523 861,943
OGE Energy Corp. 3,007 110,928
PG&E Corp. 108 4,822
-------------
2,113,573
-------------
MULTILINE RETAIL 1.8%
Big Lots, Inc. (a) 22,376 648,456
Dollar Tree, Inc. (a) 12,353 596,650
Family Dollar Stores, Inc. 21,060 586,100
J.C. Penney Co., Inc. 66,909 1,780,449
Kohl's Corp. (a) 39,670 2,139,403
Macy's, Inc. 61,016 1,022,628
Nordstrom, Inc. 52,587 1,976,219
Sears Holdings Corp. (a) 6,115 510,297
Target Corp. 45,894 2,219,893
-------------
11,480,095
-------------
OIL, GAS & CONSUMABLE FUELS 9.4%
Apache Corp. 30,695 3,166,803
Chesapeake Energy Corp. 77,008 1,992,967
Chevron Corp. 102,743 7,910,184
Cimarex Energy Co. 16,093 852,446
ConocoPhillips 81,272 4,150,561
Devon Energy Corp. 33,638 2,472,393
Encore Acquisition Co. (a) 8,982 431,316
EOG Resources, Inc. 19,815 1,928,000
v ExxonMobil Corp. 188,797 12,874,068
Hess Corp. 88 5,324
Marathon Oil Corp. 138,915 4,336,926
Murphy Oil Corp. 30,222 1,638,032
Newfield Exploration Co.(a) 34,162 1,647,633
Occidental Petroleum Corp. 16,584 1,349,108
Peabody Energy Corp. 29,000 1,311,090
Plains Exploration &
Production Co. (a) 106 2,932
Tesoro Corp. 27,978 379,102
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-65
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
OIL, GAS & CONSUMABLE FUELS (CONTINUED)
Williams Cos., Inc. 149,137 $ 3,143,808
XTO Energy, Inc. 218,074 10,146,983
-------------
59,739,676
-------------
PAPER & FOREST PRODUCTS 0.8%
International Paper Co. 139,097 3,725,018
MeadWestvaco Corp. 49,778 1,425,144
-------------
5,150,162
-------------
PERSONAL PRODUCTS 0.3%
Alberto-Culver Co. 2,476 72,522
Estee Lauder Cos., Inc. (The)
Class A 36,614 1,770,653
-------------
1,843,175
-------------
PHARMACEUTICALS 5.1%
Abbott Laboratories 54,949 2,966,697
Bristol-Myers Squibb Co. 1,440 36,360
Eli Lilly & Co. 6,558 234,186
Endo Pharmaceuticals
Holdings, Inc. (a) 30,125 617,864
Forest Laboratories, Inc. (a) 96,984 3,114,156
Johnson & Johnson 143,337 9,232,336
King Pharmaceuticals, Inc.
(a) 59,810 733,869
Merck & Co., Inc. 75,834 2,770,974
v Pfizer, Inc. 682,967 12,423,170
Valeant Pharmaceuticals
International (a) 8,850 281,341
Watson Pharmaceuticals, Inc.
(a) 4,096 162,243
-------------
32,573,196
-------------
PROFESSIONAL SERVICES 0.2%
Manpower, Inc. 20,223 1,103,771
Robert Half International,
Inc. 202 5,400
-------------
1,109,171
-------------
REAL ESTATE INVESTMENT TRUSTS 0.4%
Public Storage 31,862 2,595,160
Simon Property Group, Inc. 2 159
-------------
2,595,319
-------------
ROAD & RAIL 0.3%
Burlington Northern Santa Fe
Corp. 8,475 835,804
Kansas City Southern (a) 3,199 106,495
Ryder System, Inc. 15,818 651,227
-------------
1,593,526
-------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.1%
Intel Corp. 266,637 5,439,395
Micron Technology, Inc. (a) 264,756 2,795,823
Novellus Systems, Inc. (a) 130 3,034
Texas Instruments, Inc. 196,709 5,126,237
-------------
13,364,489
-------------
SOFTWARE 4.8%
BMC Software, Inc. (a) 68 2,727
CA, Inc. 127,936 2,873,443
Compuware Corp. (a) 57,606 416,491
v Microsoft Corp. 596,719 18,193,963
Novell, Inc. (a) 14,868 61,702
Oracle Corp. 230,266 5,650,728
Sybase, Inc. (a) 20,909 907,451
Symantec Corp. (a) 150,463 2,691,783
Synopsys, Inc. (a) 150 3,342
-------------
30,801,630
-------------
SPECIALTY RETAIL 3.0%
Abercrombie & Fitch Co. Class
A 28,064 978,030
Advance Auto Parts, Inc. 24,630 997,022
Aeropostale, Inc. (a) 108 3,677
AutoNation, Inc. (a) 11,050 211,608
AutoZone, Inc. (a) 1,205 190,474
GameStop Corp. Class A (a) 2,264 49,672
Gap, Inc. (The) 153,048 3,206,356
Home Depot, Inc. (The) 64,047 1,852,880
Limited Brands, Inc. 85,804 1,650,869
Lowe's Cos., Inc. 226 5,286
Office Depot, Inc. (a) 77,525 500,036
PetSmart, Inc. 32,281 861,580
RadioShack Corp. 14,621 285,110
Ross Stores, Inc. 34,108 1,456,753
Sherwin-Williams Co. (The) 31,291 1,929,090
Staples, Inc. 178,333 4,385,209
Williams-Sonoma, Inc. 24,031 499,364
-------------
19,063,016
-------------
TEXTILES, APPAREL & LUXURY GOODS 0.4%
Coach, Inc. 22,789 832,482
NIKE, Inc. Class B 3,817 252,189
Phillips-Van Heusen Corp. 6,540 266,047
Polo Ralph Lauren Corp. 13,287 1,075,982
VF Corp. 2,701 197,821
-------------
2,624,521
-------------
THRIFTS & MORTGAGE FINANCE 0.2%
First Niagara Financial
Group, Inc. 58 807
Hudson City Bancorp, Inc. 78,189 1,073,535
-------------
1,074,342
-------------
TOBACCO 1.3%
Philip Morris International,
Inc. 150,406 7,248,065
Reynolds American, Inc. 22,531 1,193,467
-------------
8,441,532
-------------
TRADING COMPANIES & DISTRIBUTORS 0.3%
W.W. Grainger, Inc. 20,144 1,950,543
-------------
</Table>
M-66 MainStay VP Common Stock Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
WIRELESS TELECOMMUNICATION SERVICES 0.4%
Sprint Nextel Corp. (a) 518,228 $ 1,896,715
Telephone and Data Systems,
Inc. 24,046 815,640
-------------
2,712,355
-------------
Total Common Stocks
(Cost $587,915,769) 632,407,930
-------------
EXCHANGE TRADED FUND 0.3% (C)
- -----------------------------------------------------------
S&P 500 Index-SPDR Trust
Series 1 19,653 2,190,130
-------------
Total Exchange Traded Fund
(Cost $2,166,043) 2,190,130
-------------
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENT 0.2%
- -----------------------------------------------------------
REPURCHASE AGREEMENT 0.2%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 01/04/10
Proceeds at Maturity
$974,319 (Collateralized by
a United States Treasury
Bill with a rate of 0.047%
and a maturity date of
3/18/10, with a Principal
Amount of $995,000 and a
Market Value of $994,901) $974,318 $ 974,318
-------------
Total Short-Term Investment
(Cost $974,318) 974,318
-------------
Total Investments
(Cost $591,056,130) (d) 100.0% 635,572,378
Other Assets, Less
Liabilities 0.0++ 137,043
----- ------------
Net Assets 100.0% $ 635,709,421
===== ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) Non-income producing security.
(b) ADR--American Depositary Receipt.
(c) Exchange Traded Fund--represents a basket
of securities that is traded on an
exchange.
(d) At December 31, 2009, cost is
$614,082,530 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 65,174,720
Gross unrealized depreciation (43,684,872)
------------
Net unrealized appreciation $ 21,489,848
============
</Table>
The following is a summary of the fair valuations according to inputs used as of
December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES IN
ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Common Stocks $632,407,930 $ -- $-- $632,407,930
Exchange Traded Fund 2,190,130 -- -- 2,190,130
Short-Term Investment
Repurchase Agreement -- 974,318 -- 974,318
------------ -------- -------- ------------
Total Investments in Securities $634,598,060 $974,318 $ -- $635,572,378
============ ======== ======== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-67
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $591,056,130) $ 635,572,378
Receivables:
Dividends and interest 646,032
Fund shares sold 158,687
Other assets 1,115
-------------
Total assets 636,378,212
-------------
LIABILITIES:
Payables:
Manager (See Note 3) 294,592
Fund shares redeemed 268,833
Professional fees 36,235
Shareholder communication 32,873
Custodian 16,619
NYLIFE Distributors (See Note 3) 13,175
Directors 1,843
Accrued expenses 4,621
-------------
Total liabilities 668,791
-------------
Net assets $ 635,709,421
=============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 439,286
Additional paid-in capital 843,026,261
-------------
843,465,547
Accumulated undistributed net
investment income 9,852,615
Accumulated net realized loss on
investments (262,124,989)
Net unrealized appreciation on
investments 44,516,248
-------------
Net assets $ 635,709,421
=============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 573,296,261
=============
Shares of capital stock outstanding 39,597,314
=============
Net asset value per share
outstanding $ 14.48
=============
SERVICE CLASS
Net assets applicable to
outstanding shares $ 62,413,160
=============
Shares of capital stock outstanding 4,331,300
=============
Net asset value per share
outstanding $ 14.41
=============
</Table>
M-68 MainStay VP Common Stock Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends $ 13,534,722
Interest 296
-------------
Total income 13,535,018
-------------
EXPENSES:
Manager (See Note 3) 3,282,705
Distribution and
service--Service Class (See
Note 3) 133,096
Professional fees 105,302
Shareholder communication 95,572
Custodian 36,500
Directors 27,277
Miscellaneous 32,348
-------------
Total expenses 3,712,800
-------------
Net investment income 9,822,218
-------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investments (116,878,806)
Net change in unrealized
depreciation on investments 231,791,692
-------------
Net realized and unrealized gain
on investments 114,912,886
-------------
Net increase in net assets
resulting from operations $ 124,735,104
=============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-69
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
DECREASE IN NET ASSETS:
Operations:
Net investment income $ 9,822,218 $ 12,000,059
Net realized loss on
investments (116,878,806) (135,730,552)
Net change in unrealized
appreciation
(depreciation) on
investments 231,791,692 (243,427,858)
------------------------------
Net increase (decrease) in
net assets resulting from
operations 124,735,104 (367,158,351)
------------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (11,018,098) (11,991,028)
Service Class (969,797) (857,793)
------------------------------
(11,987,895) (12,848,821)
------------------------------
From net realized gain on investments:
Initial Class -- (108,148,699)
Service Class -- (9,443,368)
------------------------------
-- (117,592,067)
------------------------------
Total dividends and
distributions to
shareholders (11,987,895) (130,440,888)
------------------------------
Capital share transactions:
Net proceeds from sale of
shares 33,977,280 105,522,244
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 11,987,895 130,440,888
Cost of shares redeemed (159,594,680) (117,969,547)
------------------------------
Increase (decrease) in
net assets derived from
capital share
transactions (113,629,505) 117,993,585
------------------------------
Net decrease in net
assets (882,296) (379,605,654)
NET ASSETS:
Beginning of year 636,591,717 1,016,197,371
------------------------------
End of year $ 635,709,421 $ 636,591,717
==============================
Accumulated undistributed
net investment income at
end of year $ 9,852,615 $ 11,991,419
==============================
</Table>
M-70 MainStay VP Common Stock Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
This page intentionally left blank
mainstayinvestments.com M-71
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 12.06 $ 23.60 $ 24.51 $ 21.62 $ 20.52
-------- -------- -------- -------- --------
Net investment income 0.21 (a) 0.22 0.32 (a) 0.31 (a) 0.33 (a)
Net realized and
unrealized gain (loss)
on investments 2.48 (8.72) 1.01 3.26 1.25
-------- -------- -------- -------- --------
Total from investment
operations 2.69 (8.50) 1.33 3.57 1.58
-------- -------- -------- -------- --------
Less dividends and
distributions:
From net investment
income (0.27) (0.30) (0.32) (0.14) (0.22)
From net realized gain
on investments -- (2.74) (1.92) (0.54) (0.26)
-------- -------- -------- -------- --------
Total dividends and
distributions (0.27) (3.04) (2.24) (0.68) (0.48)
-------- -------- -------- -------- --------
Net asset value at end of
year $ 14.48 $ 12.06 $ 23.60 $ 24.51 $ 21.62
======== ======== ======== ======== ========
Total investment return 22.40% (36.39%) 5.14% 16.47% 7.70%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 1.66% 1.44% 1.26% 1.35% 1.58%
Net expenses 0.60% 0.56% 0.50% 0.52% 0.30%
Expenses (before
reimbursement) 0.60% 0.56% 0.50% 0.52% 0.50%
Portfolio turnover rate 100% 111% 105% 90% 83%
Net assets at end of year
(in 000's) $573,296 $585,158 $932,918 $950,660 $863,109
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 7.49% and 7.22% for Initial Class shares and Service
Class shares, respectively, for the year ended December 31, 2005.
</Table>
M-72 MainStay VP Common Stock Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2009 2008 2007 2006 2005
$ 12.00 $ 23.48 $ 24.41 $ 21.56 $ 20.49
------- ------- ------- ------- -------
0.17 (a) 0.23 0.25 (a) 0.25 (a) 0.28 (a)
2.47 (8.72) 1.02 3.24 1.23
------- ------- ------- ------- -------
2.64 (8.49) 1.27 3.49 1.51
------- ------- ------- ------- -------
(0.23) (0.25) (0.28) (0.10) (0.18)
-- (2.74) (1.92) (0.54) (0.26)
------- ------- ------- ------- -------
(0.23) (2.99) (2.20) (0.64) (0.44)
------- ------- ------- ------- -------
$ 14.41 $ 12.00 $ 23.48 $ 24.41 $ 21.56
======= ======= ======= ======= =======
22.08% (36.55%) 4.88% 16.18% 7.39%(b)
1.39% 1.18% 1.01% 1.11% 1.33%
0.85% 0.81% 0.75% 0.77% 0.55%
0.85% 0.81% 0.75% 0.77% 0.75%
100% 111% 105% 90% 83%
$62,413 $51,434 $83,279 $65,138 $47,311
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-73
MAINSTAY VP CONSERVATIVE ALLOCATION PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON(1) (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES, OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (2/13/06)
- --------------------------------------------------------------------
After Portfolio operating expenses 22.28% 3.90%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MORGAN STANLEY BARCLAYS CAPITAL
S&P 500(R) CAPITAL INTERNATIONAL U.S AGGREGATE
INITIAL CLASS INDEX EAFE(R) INDEX* BOND INDEX
------------- ---------- --------------------- ----------------
2/13/2006 10000 10000 10000 10000
12/31/2006 10820 11386 12152 10457
12/31/2007 11631 12012 13509 11185
12/31/2008 9489 7568 7649 11771
12/31/2009 11604 9570 10080 12469
</Table>
SERVICE CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (2/13/06)
- --------------------------------------------------------------------
After Portfolio operating expenses 21.93% 3.64%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MORGAN STANLEY BARCLAYS CAPITAL
S&P 500(R) CAPITAL INTERNATIONAL U.S AGGREGATE
SERVICE CLASS INDEX EAFE(R) INDEX* BOND INDEX
------------- ---------- --------------------- ----------------
2/13/2006 10000 10000 10000 10000
12/31/2006 10797 11386 12152 10457
12/31/2007 11577 12012 13509 11185
12/31/2008 9422 7568 7649 11771
12/31/2009 11488 9570 10080 12469
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE
YEAR INCEPTION
S&P 500(R) Index(2) 26.46% -1.12%
Morgan Stanley Capital International
EAFE Index(2) 31.78 0.20
Barclays Capital U.S. Aggregate Bond
Index(2) 5.93 5.85
Average Lipper Variable Products Mixed-
Asset Target Allocation Conservative
Portfolio(3) 19.44 1.73
</Table>
1. Performance figures reflect certain fee waivers and/or expense limitations,
without which total returns may have been lower. These fee waivers and/or
expense limitations are contractual and may be modified or terminated only
with the approval of the Board of Directors. New York Life Investment
Management LLC may recoup the amount of certain management fee waivers or
expense reimbursements from the Portfolio pursuant to the agreement if such
action does not cause the Portfolio to exceed existing expense limitations
and the recoupment is made within the term of the agreement. Any recoupment
amount is generally applied within a fiscal year. This agreement expires on
August 1, 2010.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
3. The Average Lipper Variable Products Mixed-Asset Target Allocation
Conservative Portfolio is representative of portfolios that, by portfolio
practice, maintain a mix of between 20%-40% equity securities, with the
reminder invested in bonds, cash and cash equivalents. Lipper Inc. is an
independent monitor of fund performance.
M-74 MainStay VP Conservative Allocation Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP CONSERVATIVE ALLOCATION
PORTFOLIO (UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,133.80 $0.27 $1,025.00 $0.26
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,132.00 $1.61 $1,023.70 $1.53
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.05% for Initial Class and 0.30% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period. In addition to the fees
and expenses which the Portfolio bears directly, the Portfolio indirectly
bears a pro rata share of the fees and expenses of the Underlying
Portfolio/Funds in which it invests. Such indirect expenses are not included
in the above-reported expense figures.
mainstayinvestments.com M-75
INVESTMENT OBJECTIVES OF UNDERLYING PORTFOLIOS/FUNDS AS OF DECEMBER 31, 2009
(UNAUDITED)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
<Caption>
CURRENT INCOME 53.5
- -------------- ----
Growth of Capital 26.60
Total Return 16.50
Capital Appreciation 3.40
Other Assets, Less Liabilities (0.00)
</Table>
See Portfolio of Investments on page M-80 for specific holdings within these
categories.
++ Less than one-tenth of a percent.
M-76 MainStay VP Conservative Allocation Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY PORTFOLIO MANAGERS TONY H. ELAVIA AND JONATHAN SWANEY OF
MADISON SQUARE INVESTORS LLC, THE PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP CONSERVATIVE ALLOCATION PORTFOLIO PERFORM RELATIVE TO ITS
PEERS AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Conservative Allocation
Portfolio returned 22.28% for Initial Class shares and 21.93% for Service Class
shares. Both share classes outperformed the 19.44% return of the average
Lipper(1) Variable Products Mixed-Asset Target Allocation Conservative Portfolio
and underperformed the 26.46% return of the S&P 500(R) Index(1) for the 12
months ended December 31, 2009. The S&P 500(R) Index is the Portfolio's broad-
based securities-market index.
WHAT FACTORS INFLUENCED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
Since high-grade fixed-income securities substantially underperformed equities
in 2009 (and the Portfolio's benchmark contains only stocks), the required
allocation to investment-grade bonds detracted from performance relative to the
S&P 500(R) Index. Even so, the Portfolio's performance relative to the S&P
500(R) Index and its Lipper peers was strengthened by holdings of below-
investment-grade debt, exposure to non-large-cap stocks and strong security
selection within a few of the Portfolio's Underlying Portfolios/Funds.
DURING 2009, HOW DID YOU DETERMINE THE PORTFOLIO'S ALLOCATIONS AMONG THE
UNDERLYING PORTFOLIOS/FUNDS?
In managing the Portfolio, we consider a variety of information, including the
portfolio-level characteristics of the Underlying Portfolios/Funds, such as
capitalization, style biases and sector exposures. We also examine the
attributes of the holdings of the Underlying Portfolios/Funds, such as valuation
metrics, earnings data and technical indicators. Finally,
we evaluate the historical success of the managers responsible for the
Underlying Portfolios/Funds. In general, we seek Underlying Equity
Portfolios/Funds that we believe have a track record of capable portfolio
management, that occupy attractively valued market segments and that invest in
companies with fairly priced securities and strong price and earnings momentum.
During 2009, these techniques proved relatively successful. It's difficult to
credit any one factor as having a disproportionate effect on the Portfolio's
performance. In response to atypically wide credit spreads,(2) however, we
increased the Portfolio's allocation to Underlying Portfolios/Funds with
investments in high-yield bonds, and this strategy stands out to some degree.
WERE THERE ANY CHANGES IN THE PORTFOLIO'S ALLOCATIONS AMONG UNDERLYING
PORTFOLIOS/FUNDS DURING 2009?
During 2009, the Portfolio made five primary allocation changes. First, assets
were shifted away from MainStay VP Bond Portfolio into MainStay VP Floating Rate
Portfolio, MainStay VP High Yield Corporate Bond Portfolio and MainStay 130/30
High Yield Fund last winter. All three of these targeted Underlying
Portfolios/Funds invest in lower-quality debt instruments. This strategy had a
positive impact on performance as credit spreads contracted, and the move was
partially unwound in November 2009.
Second, we lowered the Portfolio's average equity market capitalization during
the year through purchases of MainStay VP Mid Cap Core Portfolio, MainStay VP
U.S. Small Cap Portfolio and MainStay Epoch U.S. All Cap Fund. So far, the
impact of this strategy has been muted because performance among lower-cap
stocks was not substantially different from the performance of large-cap stocks
in the latter months of 2009, when the strategy was implemented.
Third, we reduced the Portfolio's bias toward growth equities through sales of
MainStay VP Growth Equity Portfolio, MainStay VP Large Cap Growth Portfolio, and
MainStay 130/30 Growth Fund. This may have reduced excess returns by a small
amount as growth stocks generally outperformed value stocks in the final months
of the year.
Fourth, we reduced the Portfolio's position in MainStay VP Common Stock
Portfolio, with the proceeds directed primarily to MainStay 130/30 Core Fund.
This move also has had relatively little impact on the Portfolio's performance
because both Under-lying Portfolios/Funds generated a similar level of return
after the trade.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
2. The terms "spread" and "yield spread" may refer to the difference in yield
between a security or type of security and comparable U.S. Treasury issues.
The terms may also refer to the difference in yield between two specific
securities or types of securities at a given time.
THE DISCLOSURE AND FOOTNOTES ON THE NEXT TWO PAGES ARE AN INTEGRAL PART OF THE
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH IT.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-77
Fifth, in an effort to further diversify the Portfolio across management styles,
we moved assets from MainStay ICAP Equity Fund and MainStay VP ICAP Select
Equity Portfolio and redirected them in part into MainStay MAP Fund. Through the
end of 2009, this move did not have a substantial impact on performance.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS
HAD THE STRONGEST TOTAL RETURNS AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD
THE WEAKEST TOTAL RETURNS?
In 2009, MainStay VP U.S. Small Cap Portfolio posted the highest total return of
any of the Underlying Equity Portfolios/Funds in which the Portfolio invested.
MainStay VP Large Cap Growth Portfolio had the second-highest total return.
Among the Underlying Equity Portfolios/Funds in which the Portfolio invested,
MainStay VP International Equity Portfolio and MainStay 130/30 Core Fund posted
the lowest total returns.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS TO THE
PORTFOLIO'S OVERALL PERFORMANCE AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS
WERE PARTICULARLY WEAK?
Substantial positions in MainStay VP Large Cap Growth Portfolio and MainStay VP
Common Stock Portfolio had the greatest positive impact on the Portfolio's
performance. No Underlying Equity Portfolios/Funds in which the Portfolio
invested generated negative returns. However, weak performance within MainStay
VP Common Stock Portfolio and MainStay 130/30 Core Fund meant that the
allocations made to these Portfolios/Funds resulted in disappointingly small
contributions to return.
WHAT KEY FACTORS AFFECTED THE BOND MARKETS DURING 2009?
Conditions were highly favorable for fixed-income investing during 2009.
Interest rates on Treasury notes and bonds were generally stable as the Federal
Open Market Committee maintained the targeted federal funds rate in a range
between 0% and 0.25% and the Federal Reserve purchased bonds directly to bring
down longer-dated borrowing costs. Indications that the economy may have been in
recovery
brought relief to credit markets in 2009, and spreads narrowed dramatically.
Bank loans also performed quite well as liquidity issues within that market
improved.
HOW DID YOU MANAGE THE PORTFOLIO'S UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS IN
THIS ENVIRONMENT?
After observing the historic widening of credit spreads in 2008, we anticipated
an eventual recovery and implemented a bias toward lower-quality credit
instruments. We maintained this bias throughout much of the reporting period. It
was a strategy that paid off handsomely as high-yield bonds outper-
formed investment-grade debt by a wide margin. Spreads neared their historical
averages and default risks remained high, so we unwound the bias near the end of
the reporting period.
IN 2009, WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS WERE THE STRONGEST
PERFORMERS AND WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS WERE PARTICULARLY
WEAK?
The best-performing Underlying Fixed Income Portfolios/Funds in which the
Portfolio invested were MainStay 130/30 High Yield Fund and MainStay VP High
Yield Corporate Bond Portfolio, both of which invest in lower-quality debt
instruments. Among the Portfolio's worst-performing Underlying Fixed Income
Portfolios/Funds were MainStay Intermediate Term Bond Fund and MainStay VP Bond
Portfolio. Both, however, posted meaningfully positive performance.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING PAGE AND THE NEXT PAGE ARE AN
INTEGRAL PART OF THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE
CAREFULLY READ IN CONJUNCTION WITH IT.
M-78 MainStay VP Conservative Allocation Portfolio
MainStay VP Conservative Allocation Portfolio is a "fund of funds" that invests
in other MainStay VP Portfolios and other MainStay mutual funds ("Underlying
Portfolios/Funds"). The cost of investing in the Portfolio may be higher than
the cost of investing in a mutual fund that invests directly in individual
stocks and bonds. By investing in the Portfolio, clients will directly bear the
Portfolio's fees and expenses and will indirectly bear the fees and expenses
charged by the Underlying Portfolios/Funds in which the Portfolio invests. In
addition, the use of a fund-of-funds structure could affect the timing, amount
and character of distributions to the client and may increase taxes payable by
the client.
The Portfolio's performance depends on the advisor's skill in determining the
asset-class allocations and the mix and related performance of the Underlying
Portfolios/Funds. The performance of the Underlying Portfolios/Funds may be
lower than the performance of the asset class or classes the Underlying
Portfolios/Funds were selected to represent.
The Portfolio may invest more than 25% of its assets in one Underlying
Portfolio/Fund, which may significantly affect the Portfolio's net asset value.
The Portfolio, through its investment in the Underlying Portfolios/Funds, may be
subject to the investment risks of the Underlying Portfolios/Funds, including
the following:
- - Stocks and bonds can decline because of adverse issuer, market, regulatory or
economic developments.
- - High-yield securities carry higher risks, and some of the investments of
Underlying Portfolios/Funds have speculative characteristics and present a
greater risk of loss than higher-quality debt securities. High-yield
securities can also be subject to greater price volatility.
- - Stocks of small companies may be subject to higher price volatility,
significantly lower trading volume and greater spreads between bid and ask
prices than stocks of larger companies. Furthermore, small-cap companies may
be more vulnerable to adverse business or market developments than larger
companies, and the product lines of small companies may be more limited than
those of larger-capitalization companies.
- - Stocks of mid-cap companies may be more volatile and less liquid than the
securities of larger companies.
- - 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.
- - When interest rates rise, the prices of fixed-income securities in the
Underlying Portfolios/Funds will generally fall. On the other hand, when
interest rates fall, the prices of fixed-income securities in the Underlying
Portfolios/Funds will generally rise.
- - Short sales involve costs and risk. If a security sold short increases in
price, an Underlying Fund may have to cover its short position at a higher
price than the short-sale price, resulting in a loss. When borrowing a
security for delivery to a buyer, the Underlying Fund may also be required to
pay a premium and other transaction costs, which would increase the cost of
the security sold short.
- - The Underlying Floating Rate Portfolio is generally considered to have
speculative characteristics. Investments in this Underlying Portfolio may
involve the risk of default on principal and interest. Investments in the
Underlying Floating Rate Portfolio may also involve risks associated with
collateral impairment, nondiversification, borrower industry concentration and
limited liquidity.
- - AN INVESTMENT IN AN UNDERLYING PORTFOLIO/FUND THAT IS A MONEY MARKET FUND IS
NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
EACH OF THE UNDERLYING MONEY MARKET PORTFOLIOS/FUNDS IN WHICH THE PORTFOLIO
MAY INVEST SEEKS TO MAINTAIN A VALUE OF $1.00 PER SHARE, IT IS POSSIBLE THAT
THE PORTFOLIO MAY LOSE MONEY ON INVESTMENTS IN THESE UNDERLYING MONEY MARKET
PORTFOLIOS/FUNDS.
Before making an investment in the Portfolio, you should consider all the risks
associated with it.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING TWO PAGES ARE AN INTEGRAL PART OF
THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH IT.
Information about MainStay VP Conservative Allocation Portfolio on this page and
the preceding pages has not been audited.
mainstayinvestments.com M-79
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
<Caption>
SHARES VALUE
AFFILIATED INVESTMENT COMPANIES 100.0%+
- -------------------------------------------------------------
EQUITY FUNDS 40.0%
MainStay 130/30 Core Fund
Class I (a) 2,524,894 $ 17,295,527
MainStay 130/30 Growth Fund
Class I (a)(b) 320,856 2,560,431
MainStay 130/30 International
Fund Class I 778,174 4,925,842
MainStay Epoch Global Choice
Fund Class I 54,642 753,509
MainStay Epoch U.S. All Cap
Fund Class I 49,107 995,888
MainStay ICAP Equity Fund
Class I 392,138 12,411,165
MainStay ICAP International
Fund Class I 172,997 4,918,317
MainStay MAP Fund Class I 321,180 8,957,722
MainStay VP Common Stock
Portfolio Initial Class 797,612 11,547,957
MainStay VP Growth Equity
Portfolio Initial Class 25,941 571,842
MainStay VP ICAP Select Equity
Portfolio Initial Class 1,162,034 12,438,627
MainStay VP International
Equity Portfolio Initial
Class 359,570 4,540,116
MainStay VP Large Cap Growth
Portfolio Initial Class
(a)(b) 1,470,413 18,933,229
MainStay VP Mid Cap Core
Portfolio Initial Class 1,777,188 17,117,768
MainStay VP U.S. Small Cap
Portfolio Initial Class (b) 185,108 1,379,269
-------------
119,347,209
-------------
FIXED INCOME FUNDS 60.0%
MainStay 130/30 High Yield
Fund Class I (a) 1,172,993 13,102,337
MainStay Intermediate Term
Bond Fund Class I 1,884,003 19,292,193
MainStay VP Bond Portfolio
Initial Class (a) 7,709,994 109,259,993
MainStay VP Floating Rate
Portfolio
Initial Class (a) 3,133,466 27,955,898
MainStay VP High Yield
Corporate Bond Portfolio
Initial Class 1,031,715 9,318,530
-------------
178,928,951
-------------
Total Investments
(Cost $284,468,457) (c) 100.0% 298,276,160
Other Assets, Less Liabilities (0.0)++ (142,223)
----- ------------
Net Assets 100.0% $ 298,133,937
===== ============
</Table>
<Table>
+ Percentages indicated are based on
Portfolio net assets.
++ Less than one-tenth of a percent.
(a) The Portfolio's ownership exceeds 5% of
the outstanding shares of the Underlying
Portfolios/Funds share class.
(b) Non-income producing Underlying
Portfolio/ Fund.
(c) At December 31, 2009, cost is
$288,735,453 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $14,525,632
Gross unrealized depreciation (4,984,925)
-----------
Net unrealized appreciation $ 9,540,707
===========
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Affiliated Investment Companies
Equity Funds $119,347,209 $-- $-- $119,347,209
Fixed Income Funds 178,928,951 -- -- 178,928,951
------------ -------- -------- ------------
Total Investments in Securities $298,276,160 $ -- $ -- $298,276,160
============ ======== ======== ============
</Table>
(a) For detailed descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
M-80 MainStay VP Conservative Allocation Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in affiliated investment
companies, at value (identified
cost $284,468,457) $298,276,160
Cash 398,005
Receivables:
Fund shares sold 98,342
Other assets 414
------------
Total assets 298,772,921
------------
LIABILITIES:
Payables:
Investment securities purchased 398,005
Fund shares redeemed 138,764
NYLIFE Distributors (See Note 3) 61,095
Professional fees 21,593
Shareholder communication 13,862
Custodian 3,373
Directors 798
Accrued expenses 1,494
------------
Total liabilities 638,984
------------
Net assets $298,133,937
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 288,579
Additional paid-in capital 305,184,419
------------
305,472,998
Accumulated undistributed net
investment income 8,805,460
Accumulated net realized loss on
investments (29,952,224)
Net unrealized appreciation on
investments 13,807,703
------------
Net assets $298,133,937
============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 6,826,743
============
Shares of capital stock outstanding 658,035
============
Net asset value per share
outstanding $ 10.37
============
SERVICE CLASS
Net assets applicable to
outstanding shares $291,307,194
============
Shares of capital stock outstanding 28,199,840
============
Net asset value per share
outstanding $ 10.33
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-81
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividend distributions from
affiliated
investment companies $ 9,053,436
------------
EXPENSES:
Distribution and service--Service
Class (See Note 3) 600,069
Professional fees 54,150
Shareholder communication 46,821
Directors 10,623
Custodian 4,891
Miscellaneous 11,526
------------
Total expenses 728,080
------------
Net investment income 8,325,356
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on:
Affiliated investment company
transactions (21,840,493)
Capital gain distributions from
affiliated investment companies 497,671
------------
Net realized loss on investments
from affiliated investment
companies (21,342,822)
------------
Net change in unrealized
depreciation on investments 62,163,269
------------
Net realized and unrealized gain on
investments and investments 40,820,447
------------
Net increase in net assets
resulting from operations $ 49,145,803
============
</Table>
M-82 MainStay VP Conservative Allocation Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
<Caption>
2009 2008
INCREASE IN NET ASSETS:
Operations:
Net investment income $ 8,325,356 $ 6,364,938
Net realized loss on
investments from affiliated
investment company
transactions (21,342,822) (1,908,639)
Net change in unrealized
appreciation (depreciation)
on investments 62,163,269 (49,521,242)
---------------------------
Net increase (decrease) in
net assets resulting from
operations 49,145,803 (45,064,943)
---------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (165,727) (5,382)
Service Class (7,517,855) (9,969)
---------------------------
(7,683,582) (15,351)
---------------------------
From net realized gain on investments:
Initial Class (93,468) (31,727)
Service Class (4,538,183) (1,768,904)
---------------------------
(4,631,651) (1,800,631)
---------------------------
Total dividends and
distributions to
shareholders (12,315,233) (1,815,982)
---------------------------
Capital share transactions:
Net proceeds from sale of
shares 73,304,368 114,938,936
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 12,315,233 1,815,982
Cost of shares redeemed (37,743,281) (39,773,030)
---------------------------
Increase in net assets
derived from capital
share transactions 47,876,320 76,981,888
---------------------------
Net increase in net
assets 84,706,890 30,100,963
NET ASSETS:
Beginning of year 213,427,047 183,326,084
---------------------------
End of year $298,133,937 $213,427,047
===========================
Accumulated undistributed net
investment income at end of
year $ 8,805,460 $ 7,683,563
===========================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-83
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
---------------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------
2009 2008 2007 2006
Net asset value at beginning of
period $ 8.89 $ 11.01 $10.68 $10.00
------ ------- ------ ------
Net investment income 0.34 (a) 0.32 (a) 0.30 0.19 (a)
Net realized and unrealized
gain (loss) on investments 1.63 (2.35) 0.50 0.63
------ ------- ------ ------
Total from investment
operations 1.97 (2.03) 0.80 0.82
------ ------- ------ ------
Less dividends and
distributions:
From net investment income (0.31) (0.01) (0.30) (0.11)
From net realized gain on
investments (0.18) (0.08) (0.17) (0.03)
------ ------- ------ ------
Total dividends and
distributions (0.49) (0.09) (0.47) (0.14)
------ ------- ------ ------
Net asset value at end of
period $10.37 $ 8.89 $11.01 $10.68
====== ======= ====== ======
Total investment return 22.28% (18.41%) 7.49% 8.20%(b)
Ratios (to average net
assets)/Supplemental Data:
Net investment income 3.54% 3.16% 3.28% 2.04%++
Net expenses (c) 0.05% 0.06% 0.09% 0.25%++
Expenses (before
reimbursement/recoupment)
(c) 0.05% 0.06% 0.08% 0.28%++
Portfolio turnover rate 38% 44% 11% 23%
Net assets at end of period (in
000's) $6,827 $ 3,984 $2,644 $1,480
</Table>
<Table>
** Commencement of operations.
++ Annualized.
++ Less than one cent per share.
(a) Per share data based on average shares outstanding during the period.
(b) Total return is not annualized.
(c) In addition to the fees and expenses which the Portfolio bears directly, the
Portfolio indirectly bears a pro-rata share of the fees and expenses of the
Underlying Portfolios/Funds in which it invests. Such indirect expenses are
not included in the above expense ratios.
</Table>
M-84 MainStay VP Conservative Allocation Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------
2009 2008 2007 2006
$ 8.86 $ 10.99 $ 10.67 $ 10.00
-------- -------- -------- -------
0.33 (a) 0.30 (a) 0.26 0.18 (a)
1.61 (2.35) 0.51 0.62
-------- -------- -------- -------
1.94 (2.05) 0.77 0.80
-------- -------- -------- -------
(0.29) (0.00)++ (0.28) (0.10)
(0.18) (0.08) (0.17) (0.03)
-------- -------- -------- -------
(0.47) (0.08) (0.45) (0.13)
-------- -------- -------- -------
$ 10.33 $ 8.86 $ 10.99 $ 10.67
======== ======== ======== =======
21.93% (18.62%) 7.23% 7.97% (b)
3.39% 2.95% 3.48% 1.96% ++
0.30% 0.31% 0.34% 0.50% ++
0.30% 0.31% 0.33% 0.53% ++
38% 44% 11% 23%
$291,307 $209,443 $180,682 $64,642
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-85
MAINSTAY VP CONVERTIBLE PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 46.08% 5.31% 3.70%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MERRILL LYNCH
ALL US
CONVERTIBLE SECURITIES
INITIAL CLASS INDEX
------------- ----------------------
12/31/99 10000 10000
9498 9000
9292 8600
8557 7862
10459 9997
11098 10957
11829 11068
13064 12489
15005 13055
9841 8391
12/31/09 14375 12513
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 45.71% 5.05% 3.44%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MERRILL LYNCH
ALL US
CONVERTIBLE SECURITIES
SERVICE CLASS INDEX
------------- ----------------------
12/31/99 10000 10000
9477 9000
9248 8600
8496 7862
10360 9997
10966 10957
11658 11068
12843 12489
14715 13055
9626 8391
12/31/09 14027 12513
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Bank of America Merrill Lynch All US
Convertible Index(3) 49.13% 2.69% 2.27%
Average Lipper Convertible Securities
Fund(4) 41.09 2.53 3.33
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 5.29% and 3.69% for Initial
Class shares and 5.04% and 3.44% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 5, 2003, includes
the historical performance of Initial Class shares through June 4, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Convertible Securities Fund is representative of
portfolios that invest primarily in convertible bonds and/or convertible
preferred stock. Lipper Inc. is an independent monitor of fund performance.
M-86 MainStay VP Convertible Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP CONVERTIBLE PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,237.20 $3.44 $1,022.10 $3.11
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,235.70 $4.90 $1,020.80 $4.43
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.61% for Initial Class and 0.87% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-87
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(COMPOSITION PIE CHART)
<Table>
<Caption>
CONVERTIBLE BONDS 77.8
- ----------------- ----
Convertible Preferred Stocks 10.60
Common Stocks 10.30
Short-Term Investment 0.80
Other Assets, Less Liabilities 0.50
</Table>
See Portfolio of Investments beginning on page M-91 for specific holdings within
these categories.
TOP TEN HOLDINGS OR ISSUERS HELD AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM
INVESTMENT)
<Table>
1. Schlumberger, Ltd., Series B, 2.125%,
due 6/1/23
2. Core Laboratories, L.P., 0.25%, due
10/31/11
3. Teva Pharmaceutical Finance Co. B.V.,
Series D, 1.75%, due 2/1/26
4. Covanta Holding Corp., 1.00%, due 2/1/27
5. Merck & Co., Inc.
6. Medtronic, Inc., 1.625%, due 4/15/13
7. Transocean, Inc., Series C, 1.50%, due
12/15/37
8. Bank of America Corp., Series L, 7.25%
9. Intel Corp., 3.25%, due 8/1/39
10. Chesapeake Energy Corp., 2.50%, due
5/15/37
</Table>
M-88 MainStay VP Convertible Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY EDWARD SILVERSTEIN, CFA, OF MACKAY SHIELDS LLC, THE
PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP CONVERTIBLE PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND ITS
BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Convertible Portfolio
returned 46.08% for Initial Class shares and 45.71% for Service Class shares.
Both share classes outperformed the 41.09% return of the average Lipper(1)
Convertible Securities Fund but underperformed the 49.13% return of the Bank of
America Merrill Lynch All US Convertible Index(1) for the 12 months ended
December 31, 2009. The Bank of America Merrill Lynch All US Convertible Index is
the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
The most significant factor influencing the Portfolio's performance relative to
the Bank of America Merrill Lynch All US Convertible Index in 2009 was the
dramatic advance of speculative-grade bonds, which make up nearly 60% of the
Index. After experienc-
ing dramatic declines in 2008 as investors fled risk, speculative-grade bonds
increased 82.25% in 2009, compared to a 25.50% rise for investment-grade
convertibles. The Portfolio's underperformance of
the Bank of America Merrill Lynch All US Convert-
ible Index was largely due to a lower weighting in speculative-grade securities
than the Index. Most
of the Portfolio's peers were also underweight in speculative-grade bonds. The
performance of underlying stocks of companies with convertible bonds outstanding
also helped strengthen the performance of convertible securities in 2009.
DURING THE REPORTING PERIOD, WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO
THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH SECTORS WERE PARTICULARLY WEAK?
The Portfolio's strongest-contributing sectors in terms of absolute performance
were wireless communi-cations, energy and industrials. In wireless
communications, the Portfolio benefited from two cell-phone tower leasing
companies, SBA Communications and Crown Castle International, whose convertible
bonds rose sharply when investors recognized that the sell-off in 2008 was
unwarranted given the companies' fundamental business and healthy cash flow. In
energy, the convertible bonds of oil services companies Schlumberger and
Transocean performed well, as crude oil prices recovered from a low of $30 per
barrel to more than $60. Among industrials, the convertible bonds of cable
company General Cable and distributor and wholesaler Wesco performed well as
investor fears about an economic collapse subsided and credit spreads for these
bonds narrowed considerably.
The Portfolio's weakest sector contributions came from airlines, retail and
health care. The Portfolio's convertible bond position in UAL, more commonly
know as United Airlines, performed poorly as rising fuel prices and slumping
demand for airline travel weighed on the company's common stock and convertible
bonds. The Portfolio's position in Spartan Stores performed poorly as consumers
spent less to pay off accumulated debt. The Portfolio's health care holdings
generally underperformed the market, as investors shunned defensive sectors and
sought securities more likely to benefit from an economic recovery.
DURING THE REPORTING PERIOD, WHICH HOLDINGS WERE THE STRONGEST CONTRIBUTORS TO
THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH HOLDINGS WERE PARTICULARLY WEAK?
The Portfolio's strongest absolute performer was a position in the convertible
preferred shares of pharmaceutical company Schering-Plough. The shares advanced
when Merck & Co. offered to purchase Schering-Plough at a premium. The purchase
was completed, and the Portfolio ended up receiving shares of Merck in the
transaction. Chesapeake
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings.
Convertible securities tend to be subordinate to other debt securities issued by
the same company. Also, issuers of convertible securities are often not as
strong financially as those issuing securities with higher credit ratings and
thus may be more vulnerable to changes in the economy. If an issuer stops making
interest payments and/or principal payments on its convertible securities, these
securities may become worthless and the Portfolio could lose its entire
investment. The values of debt securities fluctuate depending on various factors
including interest rates, issuer creditworthiness, liquidity, market conditions
and maturities. High-yield debt securities ("junk bonds") are generally
considered speculative because they present a greater risk of loss, including
default, 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 experience a portfolio turnover rate of more than
100% and may generate taxable short-term capital gains.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-89
Energy's convertible bonds also rose as the price of natural gas rebounded from
multiyear lows and investors became more comfortable with the com-pany's
liquidity position. The convertible bonds of Transocean rose in 2009, as the
price of oil recov-ered partially from its steep sell-off at the end of 2008.
With the price of oil well over $50 per barrel, investors appeared to reason
that exploration activity was unlikely to decline as severely as earlier
predictions had suggested.
The Portfolio's weakest contributors to absolute performance included Comtech
Telecommunications, whose common stock and convertible bonds fell sharply when
the company announced that first-quarter earnings would fall short of analysts'
expectations. The Portfolio's position in pharmaceutical giant Johnson & Johnson
also declined as investors moved away from defensive sectors and securities.
Biotechnology holding Amgen succumbed to the same fate as Johnson & Johnson when
investors ignored more-defensive health care holdings as riskier asset classes
gained favor. Amgen also came under some pressure during the year because of
safety concerns for some drugs in its core anemia franchise.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
In the first half of 2009, we initiated a sizeable position in the convertible
bonds of Core Laboratories, an energy services company whose main business is
analyzing oil and gas reservoirs to assess their economic viability and
determine the best extraction methods. We believed that the bonds offered
significant upside potential and downside protection. During the first half of
the year, we also purchased convertible bonds of Lions Gate Entertainment to
take advantage of the bonds' very high yield to maturity. We believed that the
company's significant asset value would offer a measure of downside support.
Significant sales during 2009 included Sotheby's and Comtech Telecommunications.
We sold the Portfolio's position in the convertible bonds of Sotheby's after the
bonds and underlying common shares appreciated significantly and we no longer
believed that they offered a compelling yield to maturity. The Comtech
Telecommunications sale followed the announcement that the company would not
meet earnings estimates.
WERE THERE ANY CHANGES IN THE PORTFOLIO'S SECTOR WEIGHTINGS DURING 2009?
Relative to the Bank of America Merrill Lynch All US Convertible Index, the
Portfolio made slight additions to its positions in energy and basic materials.
Energy has been an overweight position relative to the benchmark throughout the
year, while our additions to basic materials took the Portfolio's position in
the sector from a slight underweight to a slight overweight by year-end.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF 2009?
As of December 31, 2009, the Portfolio was overweight relative to the Bank of
America Merrill Lynch All US Convertible Index in energy, slightly underweight
in health care and underweight in financials and utilities.
The opinions expressed are those of the portfolio manager as of the date of this
report and are subject to change. There is no guarantee that any forecasts made
will come to pass. This material does not constitute investment advice and is
not intended as an endorsement of any specific investment.
Information about MainStay VP Convertible Portfolio on this page and the
preceding pages has not been audited.
M-90 MainStay VP Convertible Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CONVERTIBLE SECURITIES 88.4%+
CONVERTIBLE BONDS 77.8%
- ----------------------------------------------------------------
AEROSPACE & DEFENSE 2.6%
L-3 Communications Corp.
3.00%, due 8/1/35 (a) $ 4,360,000 $ 4,599,800
3.00%, due 8/1/35 943,000 994,865
Triumph Group, Inc.
2.625%, due 10/1/26 4,603,000 5,034,531
-------------
10,629,196
-------------
AIRLINES 1.4%
UAL Corp.
4.50%, due 6/30/21 6,345,000 5,631,188
-------------
AUTO MANUFACTURERS 1.0%
Ford Motor Co.
4.25%, due 11/15/16 3,382,000 4,257,093
-------------
AUTO PARTS & EQUIPMENT 1.0%
BorgWarner, Inc.
3.50%, due 4/15/12 3,243,000 4,106,449
-------------
BIOTECHNOLOGY 4.0%
Amgen, Inc.
0.125%, due 2/1/11 (a) 2,992,000 2,969,560
0.125%, due 2/1/11 1,231,000 1,221,767
Enzon Pharmaceuticals, Inc.
4.00%, due 6/1/13 4,446,000 5,212,935
Incyte Corp., Ltd.
4.75%, due 10/1/15 (a) 5,209,000 6,823,790
-------------
16,228,052
-------------
COAL 2.7%
Patriot Coal Corp.
3.25%, due 5/31/13 (a) 3,072,000 2,480,640
Peabody Energy Corp.
4.75%, due 12/15/66 8,441,000 8,567,615
-------------
11,048,255
-------------
COMMERCIAL SERVICES 2.6%
Alliance Data Systems Corp.
1.75%, due 8/1/13 6,646,000 6,803,842
PHH Corp.
4.00%, due 9/1/14 (a) 3,396,000 3,217,710
United Rentals, Inc.
4.00%, due 11/15/15 721,000 800,310
-------------
10,821,862
-------------
COMPUTERS 1.9%
EMC Corp.
1.75%, due 12/1/11 6,512,000 7,944,640
-------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.7%
General Cable Corp.
0.875%, due 11/15/13 3,328,000 2,920,320
-------------
ELECTRONICS 3.8%
Fisher Scientific
International, Inc.
3.25%, due 3/1/24 5,630,000 7,501,975
Merix Corp.
4.00%, due 5/15/13 3,644,000 3,671,330
TTM Technologies, Inc.
3.25%, due 5/15/15 4,232,000 4,242,580
-------------
15,415,885
-------------
ENERGY--ALTERNATE SOURCES 2.8%
v Covanta Holding Corp.
1.00%, due 2/1/27 11,425,000 10,725,218
Energy Conversion Devices,
Inc.
3.00%, due 6/15/13 1,089,000 701,044
-------------
11,426,262
-------------
ENTERTAINMENT 1.4%
Lions Gate Entertainment
Corp.
2.938%, due 10/15/24 1,805,000 1,737,313
3.625%, due 3/15/25 4,128,000 3,931,920
-------------
5,669,233
-------------
ENVIRONMENTAL CONTROLS 0.8%
Waste Connections, Inc.
3.75%, due 4/1/26 2,832,000 3,058,560
-------------
FOOD 2.0%
Great Atlantic & Pacific Tea
Co.
6.75%, due 12/15/12 4,950,000 4,523,062
Spartan Stores, Inc.
3.375%, due 5/15/27 (a) 4,469,000 3,541,683
3.375%, due 5/15/27 254,000 201,295
-------------
8,266,040
-------------
HEALTH CARE--PRODUCTS 4.7%
China Medical Technologies,
Inc.
4.00%, due 8/15/13 9,395,000 6,001,056
Conmed Corp.
2.50%, due 11/15/24 2,554,000 2,416,722
</Table>
+ Percentages indicated are based on Portfolio net assets.
V Among the Portfolio's 10 largest holdings or issuers held, as of December
31, 2009,
excluding short-term investment. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-91
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CONVERTIBLE BONDS (CONTINUED)
HEALTH CARE--PRODUCTS (CONTINUED)
v Medtronic, Inc.
1.625%, due 4/15/13 (a) $ 1,260,000 $ 1,321,425
1.625%, due 4/15/13 8,833,000 9,263,609
-------------
19,002,812
-------------
HOME BUILDERS 0.6%
D.R. Horton, Inc.
2.00%, due 5/15/14 2,234,000 2,485,325
-------------
INTERNET 1.0%
At Home Corp.
4.75%, due 12/31/49
(b)(c)(d)(e) 2,335,418 234
VeriSign, Inc.
3.25%, due 8/15/37 4,525,000 4,044,219
-------------
4,044,453
-------------
IRON & STEEL 4.6%
Allegheny Technologies, Inc.
4.25%, due 6/1/14 4,263,000 5,856,296
ArcelorMittal
5.00%, due 5/15/14 2,670,000 4,435,537
Steel Dynamics, Inc.
5.125%, due 6/15/14 3,046,000 3,872,228
United States Steel Corp.
4.00%, due 5/15/14 2,449,000 4,601,059
-------------
18,765,120
-------------
MEDIA 0.8%
Central European Media
Enterprises, Ltd.
3.50%, due 3/15/13 (a) 4,380,000 3,361,650
-------------
MINING 1.3%
Alcoa, Inc.
5.25%, due 3/15/14 1,259,000 3,271,826
Sterlite Industries India,
Ltd.
4.00%, due 10/30/14 1,800,000 1,899,000
-------------
5,170,826
-------------
MISCELLANEOUS--MANUFACTURING 0.4%
Ingersoll-Rand Co.
4.50%, due 4/15/12 746,000 1,534,895
-------------
OIL & GAS 5.6%
v Chesapeake Energy Corp.
2.50%, due 5/15/37 10,205,000 9,184,500
St. Mary Land & Exploration
Co.
3.50%, due 4/1/27 3,719,000 3,695,756
v Transocean, Inc.
Series C
1.50%, due 12/15/37 10,509,000 10,167,458
-------------
23,047,714
-------------
OIL & GAS SERVICES 8.6%
Cameron International Corp.
2.50%, due 6/15/26 5,793,000 7,827,791
v Core Laboratories, L.P.
0.25%, due 10/31/11 9,821,000 12,644,538
v Schlumberger, Ltd.
Series B
2.125%, due 6/1/23 9,077,000 14,863,587
-------------
35,335,916
-------------
PHARMACEUTICALS 6.7%
BioMarin Pharmaceutical, Inc.
1.875%, due 4/23/17 5,767,000 6,192,316
Cephalon, Inc.
2.50%, due 5/1/14 3,169,000 3,553,241
Isis Pharmaceuticals, Inc.
2.625%, due 2/15/27 5,014,000 5,114,280
v Teva Pharmaceutical
Finance Co. B.V.
Series D
1.75%, due 2/1/26 10,117,000 12,519,788
-------------
27,379,625
-------------
REAL ESTATE INVESTMENT TRUSTS 1.5%
Host Hotels & Resorts, L.P.
2.50%, due 10/15/29 (a) 3,722,000 3,996,498
Macerich Co. (The)
3.25%, due 3/15/12 (a) 2,456,000 2,308,640
-------------
6,305,138
-------------
SEMICONDUCTORS 6.4%
Advanced Micro Devices, Inc.
6.00%, due 5/1/15 2,610,000 2,362,050
v Intel Corp.
3.25%, due 8/1/39 (a) 8,176,000 9,433,060
Microchip Technology, Inc.
2.125%, due 12/15/37 2,484,000 2,530,575
Micron Technology, Inc.
4.25%, due 10/15/13 1,088,000 2,392,240
ON Semiconductor Corp.
2.625%, due 12/15/26 4,618,000 5,154,842
Teradyne, Inc.
4.50%, due 3/15/14 918,000 1,941,570
Verigy, Ltd.
5.25%, due 7/15/14 (a) 1,889,000 2,304,580
-------------
26,118,917
-------------
</Table>
M-92 MainStay VP Convertible Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CONVERTIBLE BONDS (CONTINUED)
SOFTWARE 1.6%
Sybase, Inc.
3.50%, due 8/15/29 (a) $ 3,355,000 $ 3,992,450
SYNNEX Corp.
4.00%, due 5/15/18 (a) 2,147,000 2,675,699
-------------
6,668,149
-------------
TELECOMMUNICATIONS 5.0%
Anixter International, Inc.
1.00%, due 2/15/13 2,946,000 2,850,255
CommScope, Inc.
3.25%, due 7/1/15 4,673,000 5,555,029
SBA Communications Corp.
1.875%, due 5/1/13 5,610,000 5,785,312
Virgin Media, Inc.
6.50%, due 11/15/16 (a) 5,205,000 6,193,950
-------------
20,384,546
-------------
TRANSPORTATION 0.3%
DryShips, Inc.
5.00%, due 12/1/14 1,151,000 1,179,775
-------------
Total Convertible Bonds
(Cost $290,723,971) 318,207,896
-------------
<Caption>
<Caption>
SHARES
CONVERTIBLE PREFERRED STOCKS 10.6%
- ----------------------------------------------------------------
BANKS 3.6%
v Bank of America Corp.
7.25% Series L 11,050 9,712,950
Wells Fargo & Co.
7.50% Series L 5,600 5,140,800
-------------
14,853,750
-------------
CHEMICALS 1.3%
Celanese Corp.
4.25% 128,444 5,243,084
-------------
DIVERSIFIED FINANCIAL SERVICES 1.5%
Affiliated Managers Group,
Inc.
5.10% 91,000 3,599,050
Citigroup, Inc.
7.50% 24,000 2,504,160
-------------
6,103,210
-------------
LEISURE TIME 0.4%
Callaway Golf Co.
7.50% (a) 12,900 1,589,925
-------------
MINING 2.2%
Freeport-McMoRan Copper &
Gold, Inc.
6.75% 28,345 3,265,344
Vale Capital II
6.75% 26,300 2,202,625
Vale Capital, Ltd.
5.50% 66,400 3,582,280
-------------
9,050,249
-------------
OIL & GAS 0.4%
Whiting Petroleum Corp.
6.25% 10,100 1,814,566
-------------
TELECOMMUNICATIONS 1.2%
Crown Castle International
Corp.
6.25% 78,900 4,694,550
-------------
Total Convertible Preferred
Stocks
(Cost $43,378,724) 43,349,334
-------------
Total Convertible Securities
(Cost $334,102,695) 361,557,230
-------------
COMMON STOCKS 10.3%
- ----------------------------------------------------------------
APPAREL 0.7%
Iconix Brand Group, Inc. (f) 240,600 3,043,590
-------------
COSMETICS & PERSONAL CARE 0.7%
Procter & Gamble Co. (The) 48,300 2,928,429
-------------
DIVERSIFIED FINANCIAL SERVICES 0.2%
Morgan Stanley 22,700 671,920
-------------
ENGINEERING & CONSTRUCTION 0.4%
McDermott International, Inc.
(f) 65,000 1,560,650
-------------
HEALTH CARE--PRODUCTS 0.5%
Boston Scientific Corp. (f) 214,700 1,932,300
-------------
OIL & GAS 0.8%
Forest Oil Corp. (f) 26,200 582,950
Frontier Oil Corp. 54,300 653,772
Transocean, Ltd. (f) 24,000 1,987,200
-------------
3,223,922
-------------
OIL & GAS SERVICES 1.9%
Baker Hughes, Inc. 39,700 1,607,056
Gulf Island Fabrication, Inc. 13,100 275,493
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-93
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
OIL & GAS SERVICES (CONTINUED)
Halliburton Co. 143,492 $ 4,317,674
ION Geophysical Corp. (f) 269,900 1,597,808
-------------
7,798,031
-------------
PHARMACEUTICALS 2.6%
v Merck & Co., Inc. 291,853 10,664,309
-------------
RETAIL 0.8%
Costco Wholesale Corp. 57,692 3,413,636
-------------
SOFTWARE 1.1%
Microsoft Corp. 146,100 4,454,589
-------------
TRANSPORTATION 0.6%
Tidewater, Inc. 49,600 2,378,320
-------------
Total Common Stocks
(Cost $47,408,864) 42,069,696
-------------
<Caption>
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 0.8%
- ----------------------------------------------------------------
REPURCHASE AGREEMENT 0.8%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$3,322,546 (Collateralized
by a United States Treasury
Bill with a zero coupon
rate and a maturity date of
2/18/10, with a Principal
Amount of $3,390,000 and a
Market Value of $3,390,000) $ 3,322,544 3,322,544
-------------
Total Short-Term Investment
(Cost $3,322,544) 3,322,544
-------------
Total Investments
(Cost $384,834,103) (g) 99.5% 406,949,470
Other Assets, Less
Liabilities 0.5 1,879,812
----- ------------
Net Assets 100.0% $ 408,829,282
===== ============
</Table>
<Table>
(a) May be sold to institutional investors
only under Rule 144A or securities
offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
(b) Illiquid security--The total market value
of this security at December 31, 2009 is
$234, which represents less than one-
tenth of a percent of the Portfolio's net
assets.
(c) Issue in default.
(d) Restricted security.
(e) Fair valued security--The total market
value of this security at December 31,
2009 is $234, which represents less than
one-tenth of a percent of the Portfolio's
net assets.
(f) Non-income producing security.
(g) At December 31, 2009, cost is
$384,575,607 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 48,186,527
Gross unrealized depreciation (25,812,664)
------------
Net unrealized appreciation $ 22,373,863
============
</Table>
M-94 MainStay VP Convertible Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Convertible Securities
Convertible Bonds (b) $ -- $318,207,662 $234 $318,207,896
Convertible Preferred Stocks 43,349,334 -- -- 43,349,334
----------- ------------ ---- ------------
Total Convertible Securities 43,349,334 318,207,662 234 361,557,230
----------- ------------ ---- ------------
Common Stocks 42,069,696 -- -- 42,069,696
----------- ------------ ---- ------------
Short-Term Investment
Repurchase Agreement -- 3,322,544 -- 3,322,544
----------- ------------ ---- ------------
Total Investments in Securities $85,419,030 $321,530,206 $234 $406,949,470
----------- ------------ ---- ------------
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
(b) The level 3 security valued at $234 is held in Internet within the
Convertible Bonds Section of the Portfolio of Investments.
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
BALANCE CHANGE IN NET NET BALANCE
AS OF ACCRUED REALIZED UNREALIZED TRANSFERS TRANSFERS AS OF
INVESTMENTS DECEMBER 31, DISCOUNTS GAIN APPRECIATION NET NET IN TO OUT OF DECEMBER 31,
IN SECURITIES 2008 (PREMIUMS) (LOSS) (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3 2009
Convertible Bonds $234 $-- $-- $-- $-- $-- $-- $-- $234
---- --- --- --- --- --- --- --- ----
Total $234 $-- $-- $-- $-- $-- $-- $-- $234
---- --- --- --- --- --- --- --- ----
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
INVESTMENTS
STILL HELD AT
INVESTMENTS DECEMBER 31,
IN SECURITIES 2009 (A)
Convertible Bonds $--
---
Total $--
---
</Table>
(a) Included in "Net change in unrealized appreciation (depreciation) on
investments" in the Statement of Operations.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-95
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $384,834,103) $406,949,470
Receivables:
Dividends and interest 2,079,191
Fund shares sold 563,899
Other assets 504
------------
Total assets 409,593,064
------------
LIABILITIES:
Payables:
Fund shares redeemed 443,111
Manager (See Note 3) 203,661
NYLIFE Distributors (See Note 3) 46,875
Professional fees 43,513
Shareholder communication 17,183
Custodian 6,112
Directors 1,084
Accrued expenses 2,243
------------
Total liabilities 763,782
------------
Net assets $408,829,282
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 392,435
Additional paid-in capital 404,484,416
------------
404,876,851
Accumulated undistributed net
investment income 12,940,920
Accumulated net realized loss on
investments (31,103,856)
Net unrealized appreciation on
investments 22,115,367
------------
Net assets $408,829,282
============
INITIAL CLASS
Net assets applicable to
outstanding shares $181,366,262
============
Shares of capital stock outstanding 17,358,607
============
Net asset value per share
outstanding $ 10.45
============
SERVICE CLASS
Net assets applicable to
outstanding shares $227,463,020
============
Shares of capital stock outstanding 21,884,877
============
Net asset value per share
outstanding $ 10.39
============
</Table>
M-96 MainStay VP Convertible Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Interest (a) $ 10,735,109
Dividends 5,119,910
------------
Total income 15,855,019
------------
EXPENSES:
Manager (See Note 3) 1,920,683
Distribution and service--Service
Class
(See Note 3) 413,462
Professional fees 86,656
Shareholder communication 59,789
Custodian 18,107
Directors 13,757
Miscellaneous 17,105
------------
Total expenses 2,529,559
------------
Net investment income 13,325,460
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments (17,591,802)
Net change in unrealized
depreciation on investments 125,260,453
------------
Net realized and unrealized gain on
investments 107,668,651
------------
Net increase in net assets
resulting from operations $120,994,111
============
</Table>
(a) Interest recorded net of foreign withholding taxes in the
amount of $8,719.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-97
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 13,325,460 $ 7,851,497
Net realized loss on
investments (17,591,802) (11,117,882)
Net change in unrealized
appreciation (depreciation)
on investments 125,260,453 (137,545,923)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 120,994,111 (140,812,308)
----------------------------
Dividends and distributions
to shareholders:
From net investment income:
Initial Class (3,413,090) (4,106,988)
Service Class (3,613,593) (3,197,163)
----------------------------
(7,026,683) (7,304,151)
----------------------------
From net realized gain on
investments:
Initial Class -- (23,846,875)
Service Class -- (20,542,959)
----------------------------
-- (44,389,834)
----------------------------
Total dividends and
distributions to
shareholders (7,026,683) (51,693,985)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 68,157,853 54,630,911
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 7,026,683 51,693,985
Cost of shares redeemed (37,266,165) (57,364,829)
----------------------------
Increase in net assets
derived from capital
share transactions 37,918,371 48,960,067
----------------------------
Net increase (decrease)
in net assets 151,885,799 (143,546,226)
NET ASSETS:
Beginning of year 256,943,483 400,489,709
----------------------------
End of year $408,829,282 $ 256,943,483
============================
Accumulated undistributed net
investment income at end of
year $ 12,940,920 $ 6,642,143
============================
</Table>
M-98 MainStay VP Convertible Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
This page intentionally left blank
mainstayinvestments.com M-99
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 7.29 $ 13.98 $ 12.75 $ 11.82 $ 11.26
-------- -------- -------- -------- --------
Net investment income 0.38 (a) 0.27 0.28 0.22 (a) 0.21 (a)
Net realized and
unrealized gain (loss)
on investments 2.98 (5.13) 1.63 1.02 0.53
-------- -------- -------- -------- --------
Total from investment
operations 3.36 (4.86) 1.91 1.24 0.74
-------- -------- -------- -------- --------
Less dividends and
distributions:
From net investment
income (0.20) (0.27) (0.32) (0.31) (0.18)
From net realized gain
on investments -- (1.56) (0.36) -- --
-------- -------- -------- -------- --------
Total dividends and
distributions (0.20) (1.83) (0.68) (0.31) (0.18)
-------- -------- -------- -------- --------
Net asset value at end of
year $ 10.45 $ 7.29 $ 13.98 $ 12.75 $ 11.82
======== ======== ======== ======== ========
Total investment return 46.08% (34.42%) 14.86% 10.44% 6.59%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 4.30% 2.32% 1.64% 1.80% 1.87%
Net expenses 0.66% 0.65% 0.62% 0.63% 0.53%
Expenses (before
reimbursement) 0.66% 0.65% 0.62% 0.63% 0.62%
Portfolio turnover rate 73% 107% 119% 76% 100%
Net assets at end of year
(in 000's) $181,366 $135,743 $242,925 $246,179 $262,352
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 6.50% and 6.24% for Initial Class shares and Service
Class shares, respectively, for the year ended December 31, 2005.
</Table>
M-100 MainStay VP Convertible Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
-----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
2009 2008 2007 2006 2005
$ 7.26 $ 13.92 $ 12.71 $ 11.80 $ 11.24
-------- -------- -------- -------- -------
0.36 (a) 0.25 0.18 0.19 (a) 0.19 (a)
2.95 (5.11) 1.68 1.00 0.53
-------- -------- -------- -------- -------
3.31 (4.86) 1.86 1.19 0.72
-------- -------- -------- -------- -------
(0.18) (0.24) (0.29) (0.28) (0.16)
-- (1.56) (0.36) -- --
-------- -------- -------- -------- -------
(0.18) (1.80) (0.65) (0.28) (0.16)
-------- -------- -------- -------- -------
$ 10.39 $ 7.26 $ 13.92 $ 12.71 $ 11.80
======== ======== ======== ======== =======
45.71% (34.58%) 14.57% 10.16% 6.32%(b)
4.03% 2.12% 1.39% 1.55% 1.62%
0.91% 0.90% 0.87% 0.88% 0.78%
0.91% 0.90% 0.87% 0.88% 0.87%
73% 107% 119% 76% 100%
$227,463 $121,201 $157,565 $120,515 $97,786
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-101
MAINSTAY VP FLOATING RATE PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (5/2/05)
- --------------------------------------------------------------------
After Portfolio operating expenses 33.54% 2.94%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
CREDIT SUISSE
LEVERAGED LOAN
INITIAL CLASS INDEX
------------- --------------
05/02/05 10000 10000
10210 10392
10822 11154
11103 11364
8575 8097
12/31/09 11450 11729
</Table>
SERVICE CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (5/2/05)
- --------------------------------------------------------------------
After Portfolio operating expenses 33.21% 2.68%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
CREDIT SUISSE
LEVERAGED LOAN
SERVICE CLASS INDEX
------------- --------------
05/02/05 10000 10000
12/31/05 10191 10392
12/31/06 10775 11154
12/31/07 11027 11364
12/31/08 8495 8097
12/31/09 11316 11729
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE
YEAR INCEPTION
Credit Suisse Leveraged Loan Index(1) 44.86% 3.47%
Average Lipper Loan Participation
Fund(2) 41.02 2.61
</Table>
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
2. The Average Lipper Loan Participation Fund is representative of portfolios
that invest primarily in participation interests in collateralized senior
corporate loans that have floating or variable rates. Lipper Inc. is an
independent monitor of fund performance.
M-102 MainStay VP Floating Rate Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP FLOATING RATE PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,081.00 $3.46 $1,021.90 $3.36
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,079.70 $4.77 $1,020.60 $4.63
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.66% for Initial Class and 0.91% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-103
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(COMPOSITION PIE CHART)
<Table>
<Caption>
FLOATING RATE
LOANS 79.9
- ------------------------- --- ----
Short-Term Investments 12.60
Corporate Bonds 6.90
Foreign Floating Rate Loans 4.20
Yankee Bond 0.40
Common Stock 0.00
Other Assets, Less Liabilities (4.00)
</Table>
See Portfolio of Investments beginning on page M-107 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN ISSUERS HELD AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENTS)
<Table>
1. UPC Broadband Holding B.V.,
1.985%-3.735%, due 12/31/14-12/30/16
2. CSC Holdings, Inc., 2.004%-8.625%, due
3/29/16-2/15/19
3. HCA, Inc., 1.751%-8.50%, due
11/16/12-4/15/19
4. Community Health Systems, Inc., 2.506%,
due 7/25/14
5. Rockwood Specialties Group, Inc., 6.00%,
due 5/15/14
6. DirecTV Holdings LLC, 1.731%-5.25%, due
4/13/13
7. Intelsat Corp., 2.735%, due 1/3/14
8. Graphic Packaging International, Inc.,
2.284%-3.036%, due 5/16/14
9. Graham Packaging Co., L.P., 2.50%-6.75%,
due 10/7/11-4/5/14
10. Reynolds Group Holdings Inc., 6.25%, due
11/5/15
</Table>
M-104 MainStay VP Floating Rate Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY ROBERT H. DIAL OF NEW YORK LIFE INVESTMENTS,(1) THE
PORTFOLIO'S MANAGER.
HOW DID MAINSTAY VP FLOATING RATE PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Floating Rate Portfolio
returned 33.54% for Initial Class shares and 33.21% for Service Class shares.
Both share classes underperformed the 41.02% return of the average Lipper(2)
Loan Participation Fund and the 44.86% return of the Credit Suisse Leveraged
Loan Index(2) for the 12 months ended December 31, 2009. The Credit Suisse
Leveraged Loan Index is the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE LEVERAGED LOAN MARKET IN 2009?
The leveraged loan market advanced in all four quarters of 2009, with much of
the movement led by lower-rated and distressed securities and loans in default.
Strong demand continued through much of the year, but slowed in the fourth
quarter when new-issue activity revived. Sensing the potential for greater
supply, the market rally lost some of its momentum at year-end. Continued yield
compression in the leveraged-loan asset class prompted relative-value investors
to look elsewhere for compelling investment opportunities.
Defaults spiked in the fourth quarter, primarily because a few large issuers
missed payments or filed for bank-ruptcy. The 2009 annual default rate, measured
by prin-cipal amount, was 9.6%, which was high by historical standards, but
significantly lower than earlier forecasts. Improved economic fundamentals,
unanticipated amendment activity to existing loan facilities and bond-market
refinancing opportunities all helped keep the default rate in check. These
developments also allayed investor concerns about loan issuers.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE YEAR?
In 2009, the Portfolio underperformed its benchmark and its peers largely
because of the rally during the second and third quarters in unrated credits and
loans rated CCC and below.(3) Throughout the report-ing period, the Portfolio
remained underweight in these riskier credits, and this positioning detracted
from the Portfolio's relative performance.
WHAT WAS THE PORTFOLIO'S DURATION(4) STRATEGY DURING THE REPORTING PERIOD?
The Portfolio generally invests in floating-rate loans that have an effective
duration of less than three months. The floating-rate loans may have final
maturities of seven to nine years but have underlying interest rate contracts
typically linked to LIBOR(2) that reset every 30, 60, 90 or 180 days. The
weighted average reset figure for the Portfolio at December 31, 2009, was 44
days. This means that as short-term interest rates changed, the Portfolio's
yield on average would have changed within 44 days to reflect the prevailing
short-term interest rates.
WHAT MAJOR DECISIONS HELPED OR HURT THE PORTFOLIO'S PERFORMANCE DURING 2009?
When loan prices dropped materially during the first quarter of 2009, the
Portfolio benefited from an intentional underweight in riskier credits (unrated
credits and loans rated CCC and below) relative to the Credit Suisse Leveraged
Loan Index. The Portfolio also benefited from a meaningful cash position. When
CCC-rated credits rallied during the second and third quarters, however, the
Portfolio's more conservative positioning prevented the Portfolio from advancing
as fast as the market.
The values of debt securities fluctuate depending on various factors, including
interest rates, issuer creditworthiness, liquidity, market conditions and
maturities. Floating-rate loans are generally considered to have speculative
characteristics that may involve risk of default on principal and interest and
collateral impairment. Investments in fixed-income securities are subject to the
risk that interest rates could rise, causing the value of the Portfolio's
securities and share price to decline. 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.
1. "New York Life Investments" is a service mark used by New York Life
Investment Management LLC.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
3. Debt rated CCC by Standard & Poor's is deemed by Standard & Poor's to be
currently vulnerable to nonpayment and is dependent upon favorable business,
financial and economic conditions for the obligor. It is the opinion of
Standard and Poor's that in the event of adverse business, financial or
economic conditions, the obligor is not likely to have the capacity to meet
its financial commitment on the obligation. When applied to Portfolio
holdings, ratings are based solely on the creditworthiness of the loans and
bonds in the Portfolio and are not meant to represent the safety or security
of the Portfolio.
4. Duration is a measure of the price sensitivity of a fixed-income investment
to changes in interest rates. Duration is expressed as a number of years and
is considered a more accurate sensitivity gauge than average maturity.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-105
HOW DID THE PORTFOLIO'S WEIGHTINGS CHANGE DURING 2009?
Cash levels in the Portfolio were intentionally
high during the first quarter of 2009. As the market environment stabilized, we
reduced cash levels
in favor of floating-rate loans and other debt instruments.
The opinions expressed are those of the portfolio manager as of the date of this
report and are subject to change. There is no guarantee that any forecasts made
will come to pass. This material does not constitute investment advice and is
not intended as an endorsement of any specific investment.
Information about MainStay VP Floating Rate Portfolio on this page and the
preceding pages has not been audited.
M-106 MainStay VP Floating Rate Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
LONG-TERM INVESTMENTS 91.4%+
COMMON STOCK 0.0%++
- --------------------------------------------------------------
PRINTING, PUBLISHING, & BROADCASTING 0.0%++
SuperMedia, Inc. 3,538 $ 123,830
-------------
Total Common Stock
(Cost $245,931) 123,830
-------------
<Caption>
PRINCIPAL
AMOUNT
CORPORATE BONDS 6.9%
- --------------------------------------------------------------
AEROSPACE & DEFENSE 0.1%
Spirit Aerosystems, Inc.
7.50%, due 10/1/17 (b) $ 435,000 428,475
-------------
BEVERAGE, FOOD & TOBACCO 0.5%
Del Monte Corp.
7.50%, due 10/15/19 (b) 1,500,000 1,545,000
Dole Food Co., Inc.
8.00%, due 10/1/16 (b) 750,000 761,250
-------------
2,306,250
-------------
BROADCASTING & ENTERTAINMENT 0.2%
v CSC Holdings, Inc.
8.625%, due 2/15/19 (b) 700,000 753,375
-------------
CHEMICALS, PLASTICS & RUBBER 0.5%
Ashland, Inc.
9.125%, due 6/1/17 (b) 650,000 713,375
Nalco Co.
8.25%, due 5/15/17 (b) 1,200,000 1,275,000
-------------
1,988,375
-------------
CONTAINERS, PACKAGING & GLASS 2.0%
Ball Corp.
7.125%, due 9/1/16 2,000,000 2,050,000
Crown Americas LLC/Crown
Americas Capital Corp. II
7.625%, due 5/15/17 (b) 1,200,000 1,245,000
Greif, Inc.
7.75%, due 8/1/19 650,000 663,000
Silgan Holdings, Inc.
7.25%, due 8/15/16 2,000,000 2,055,000
Solo Cup Co.
10.50%, due 11/1/13 (b) 2,000,000 2,130,000
-------------
8,143,000
-------------
DIVERSIFIED NATURAL RESOURCES, PRECIOUS METALS & MINERALS 0.2%
Boise Paper Holdings LLC /
Boise Finance Co.
9.00%, due 11/1/17 (b) 1,000,000 1,036,250
-------------
DIVERSIFIED/CONGLOMERATE SERVICE 0.5%
Corrections Corp. of America
7.75%, due 6/1/17 2,000,000 2,060,000
-------------
ECOLOGICAL 0.3%
Clean Harbors, Inc.
7.625%, due 8/15/16 1,150,000 1,165,812
-------------
HEALTHCARE, EDUCATION & CHILDCARE 0.2%
v HCA, Inc.
8.50%, due 4/15/19 (b) 800,000 862,000
-------------
HOTELS, MOTELS, INNS & GAMING 0.6%
Ameristar Casinos, Inc.
9.25%, due 6/1/14 (b) 1,590,000 1,649,625
MGM Mirage, Inc.
10.375%, due 5/15/14 (b) 200,000 217,000
11.125%, due 11/15/17 (b) 550,000 609,125
-------------
2,475,750
-------------
LEISURE, AMUSEMENT, MOTION PICTURES & ENTERTAINMENT 0.1%
Cinemark USA, Inc.
8.625%, due 6/15/19 (b) 600,000 624,000
-------------
MACHINERY (NON-AGRICULTURE, NON-CONSTRUCT & NON-ELECTRONIC)
0.2%
CPM Holdings, Inc.
10.625%, due 9/1/14 (b) 725,000 764,875
-------------
PRINTING & PUBLISHING 0.2%
Nielsen Finance LLC
11.625%, due 2/1/14 700,000 786,625
-------------
TELECOMMUNICATIONS 1.3%
American Tower Corp.
7.25%, due 5/15/19 (b) 2,000,000 2,230,000
GCI, Inc.
7.25%, due 2/15/14 1,595,000 1,581,044
Sprint Capital Corp.
8.375%, due 3/15/12 1,500,000 1,552,500
-------------
5,363,544
-------------
Total Corporate Bonds
(Cost $26,908,100) 28,758,331
-------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
V Among the Portfolio's 10 largest issuers held, as of December 31, 2009,
excluding short-term investments. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-107
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS 79.9% (C)
- --------------------------------------------------------------
AEROSPACE & DEFENSE 2.8%
Hexcel Corp.
1st Lien Term Loan
6.50%, due 5/21/14 $2,573,097 $ 2,579,529
Oshkosh Truck Corp.
Term Loan B
6.268%, due 12/6/13 4,147,073 4,135,151
Spirit Aerosystems, Inc.
Term Loan B
2.034%, due 9/30/13 1,642,638 1,589,252
Transdigm, Inc.
Term Loan
2.249%, due 6/23/13 3,000,000 2,869,287
Vought Aircraft Industries,
Inc.
Term Loan
7.50%, due 12/22/11 418,733 418,733
-------------
11,591,952
-------------
AUTOMOBILE 4.0%
Allison Transmission, Inc.
Term Loan B
3.014%, due 8/7/14 1,913,731 1,751,542
Dana Corp.
Term Loan B
7.25%, due 1/30/15 2,286,847 2,186,798
Ford Motor Co.
Term Loan
3.287%, due 12/16/13 4,183,475 3,859,255
Goodyear Tire & Rubber Co.
(The)
2nd Lien Term Loan
2.34%, due 4/30/14 3,500,000 3,229,478
Key Safety Systems, Inc.
1st Lien Term Loan
2.484%, due 3/8/14 1,458,641 1,068,455
Sensata Technologies Finance
Co. LLC
Term Loan
2.031%, due 4/26/13 1,930,000 1,711,669
Tenneco, Inc.
Tranche B Credit Linked
Deposit
5.735%, due 3/17/14 1,250,000 1,175,000
Tower Automotive Corp.
Term Loan
4.556%, due 7/31/13 (d) 1,268,905 494,873
TRW Automotive, Inc.
Term Loan B3
5.00%, due 5/30/16 1,000,000 1,001,250
-------------
16,478,320
-------------
BEVERAGE, FOOD & TOBACCO 3.4%
American Seafoods Group LLC
Term Loan A
4.001%, due 9/30/11 (d) 576,578 521,803
BF Bolthouse HoldCo LLC
1st Lien Term Loan
5.50%, due 12/17/12 691,034 668,921
2nd Lien Term Loan
9.00%, due 12/16/13 170,000 160,650
Constellation Brands, Inc.
New Term Loan B
1.75%, due 6/5/13 1,500,000 1,444,125
Dean Foods Co.
Tranche B Term Loan
1.63%, due 4/2/14 4,421,020 4,201,547
Dole Food Co., Inc.
Credit Link Deposit
0.284%, due 4/12/13 390,494 393,097
Tranche B Term Loan
8.00%, due 4/12/13 592,138 596,085
Tranche C Term Loan
8.00%, due 4/12/13 1,881,562 1,894,106
Michael Foods, Inc.
Term Loan B
6.503%, due 5/1/14 3,100,359 3,119,736
Reddy Ice Group, Inc.
Term Loan
1.983%, due 8/12/12 (d) 1,500,000 1,326,000
-------------
14,326,070
-------------
BROADCASTING & ENTERTAINMENT 8.1%
Charter Communications
Operating LLC
Term Loan
7.25%, due 3/6/14 3,979,849 4,049,496
v CSC Holdings, Inc.
Incremental B-2 Term Loan
2.004%, due 3/29/16 4,422,008 4,316,985
v DirecTV Holdings LLC
Term Loan B
1.731%, due 4/13/13 1,214,113 1,184,140
Term Loan C
5.25%, due 4/13/13 3,469,868 3,470,489
Discovery Communications
Holdings LLC
Term Loan B
2.251%, due 5/14/14 2,925,000 2,846,999
Term Loan C
5.25%, due 5/14/14 1,651,300 1,664,717
Entravision Communications
Corp.
Term Loan
5.54%, due 3/29/13 847,395 810,675
</Table>
M-108 MainStay VP Floating Rate Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
BROADCASTING & ENTERTAINMENT (CONTINUED)
Gray Television, Inc.
Term Loan B
3.79%, due 12/31/14 $1,712,019 $ 1,482,322
Insight Midwest Holdings LLC
Term Loan A
1.54%, due 10/7/13 1,653,846 1,552,548
Initial Term Loan
2.29%, due 4/7/14 1,342,415 1,275,294
LodgeNet Entertainment Corp.
Term Loan
2.26%, due 4/4/14 689,526 624,021
Mediacom Broadband Group (FKA MCC Iowa)
Tranche E Term Loan
(zero coupon), due 1/3/16 1,000,000 1,006,250
Tranche D1 Term Loan
1.97%, due 1/31/15 1,940,000 1,796,440
Nexstar Broadcasting, Inc.
Mission Term Loan B
5.00%, due 10/1/12 993,110 925,248
Nexstar Term Loan B
5.00%, due 10/1/12 938,868 874,712
Univision Communications,
Inc.
Initial Term Loan
2.501%, due 9/29/14 3,000,000 2,601,000
Weather Channel
Term Loan B
7.25%, due 9/14/15 2,994,950 3,012,919
-------------
33,494,255
-------------
BUILDINGS & REAL ESTATE 0.8%
Armstrong World Industries,
Inc.
Term Loan
1.982%, due 10/2/13 383,101 370,331
CB Richard Ellis Services,
Inc.
Term Loan B
6.00%, due 12/20/13 2,558,182 2,430,273
Central Parking Corp.
Letter of Credit Term Loan
0.163%, due 5/22/14 94,828 72,069
Term Loan
2.563%, due 5/22/14 261,129 198,458
LNR Property Corp.
Initial Tranche B Term Loan
3.48%, due 7/12/11 394,546 278,154
-------------
3,349,285
-------------
CHEMICALS, PLASTICS & RUBBER 7.1%
Celanese U.S. Holdings LLC
Synthetic Letter of Credit
0.235%, due 4/2/14 571,429 541,190
Dollar Term Loan
2.037%, due 4/2/14 3,368,143 3,186,169
Gentek, Inc.
Term Loan
7.00%, due 10/29/14 570,201 574,715
Hexion Specialty Chemicals,
Inc.
Term Loan C1
2.563%, due 5/6/13 1,589,677 1,381,429
Term Loan C2
2.563%, due 5/6/13 344,431 299,310
Huntsman International LLC
Tranche B Term Loan
1.981%, due 4/21/14 1,448,883 1,365,831
INEOS U.S. Finance LLC
Tranche A4 Term Loan
7.001%, due 12/17/12 482,918 424,967
Tranche B2 Term Loan
7.501%, due 12/16/13 223,894 202,064
Tranche C2 Term Loan
8.001%, due 12/16/14 223,832 202,009
ISP Chemco, Inc.
Term Loan B
2.00%, due 6/4/14 2,069,578 1,928,158
Lyondell Chemical Co.
DIP Term Loan
5.794%, due 4/6/10 3,996,055 4,125,927
Nalco Co.
Term Loan
7.25%, due 5/13/16 1,990,000 2,014,875
Polymer Group, Inc.
Tranche 2 Extending
7.00%, due 11/21/14 2,053,757 2,053,757
v Rockwood Specialties
Group, Inc.
Tranche H
6.00%, due 5/15/14 4,931,372 4,971,440
Solutia, Inc.
Term Loan
7.25%, due 2/28/14 3,479,179 3,525,776
Texas Petrochemicals L.P.
Incremental Term Loan B
2.875%, due 6/27/13 305,104 269,508
Term Loan B
2.875%, due 6/27/13 903,927 798,468
Univar, Inc.
Opco Term Loan
3.231%, due 10/10/14 1,893,068 1,743,199
-------------
29,608,792
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-109
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
CONTAINERS, PACKAGING & GLASS 4.5%
Crown Americas LLC
Term B Dollar Loan
1.983%, due 11/15/12 $1,920,000 $ 1,870,401
v Graham Packaging Co.,
L.P.
New Term Loan B
2.50%, due 10/7/11 236,034 231,867
Term Loan C
6.75%, due 4/5/14 4,354,807 4,374,765
v Graphic Packaging
International, Inc.
Term Loan B
2.284%, due 5/16/14 1,692,737 1,626,350
Term Loan C
3.036%, due 5/16/14 3,116,112 3,023,495
v Reynolds Group Holdings
Inc.
Dollar Term Loan
6.25%, due 11/5/15 4,500,000 4,516,875
Smurfit-Stone Container
Enterprises, Inc.
Tranche B Term Loan
2.50%, due 11/1/11 (e) 2,102,229 2,068,944
Tranche C Term Loan
2.50%, due 11/1/11 (e) 192,685 189,794
Tranche C1 Term Loan
2.50%, due 11/1/11 (e) 58,257 57,383
Revolver
2.842%, due 11/2/09 (e) 447,216 442,744
Canadian Revolver
3.063%, due 11/1/09 (e) 148,437 146,952
Offering Credit Link
Deposit
4.50%, due 11/1/10 (e) 89,830 88,407
-------------
18,637,977
-------------
DIVERSIFIED NATURAL RESOURCES, PRECIOUS METALS & MINERALS 1.3%
Boise Paper Holdings LLC
Term Loan B
5.75%, due 2/24/14 1,474,828 1,482,202
Georgia-Pacific Corp.
Term Loan B
2.234%, due 12/20/12 986,992 951,831
New Term Loan B
2.256%, due 12/20/12 2,229,485 2,150,060
New Term Loan C
3.501%, due 12/20/14 973,839 967,266
-------------
5,551,359
-------------
DIVERSIFIED/CONGLOMERATE MANUFACTURING 1.4%
Goodyear Engineered Products
Delayed Draw Term Loan
2.74%, due 7/31/14 122,500 99,837
Term Loan B
2.74%, due 7/31/14 855,313 697,080
Mueller Water Products, Inc.
Term Loan B
5.278%, due 5/24/14 1,138,025 1,113,131
Terex Corp.
Term Loan
4.001%, due 7/13/13 3,989,975 3,870,276
-------------
5,780,324
-------------
DIVERSIFIED/CONGLOMERATE SERVICE 3.9%
Affiliated Computer Services,
Inc.
Term Loan B2
2.231%, due 3/20/13 1,794,036 1,776,334
Term Loan B1
2.233%, due 3/20/13 1,369,869 1,356,353
Dealer Computer Services,
Inc.
1st Lien Term Loan
2.251%, due 10/26/12 2,285,831 2,100,107
2nd Lien Term Loan
5.751%, due 10/26/13 250,000 212,500
First Data Corp.
Term Loan B1
2.983%, due 9/24/14 1,940,114 1,718,617
Term Loan B3
2.999%, due 9/24/14 994,911 879,874
Language Line, LLC
Term Loan B
5.50%, due 11/4/15 2,000,000 1,983,750
ServiceMaster Co.
Delayed Draw Term Loan
2.74%, due 7/24/14 90,104 80,681
Term Loan
2.744%, due 7/24/14 904,794 810,168
SunGard Data Systems, Inc.
Tranche B
(zero coupon), due 2/26/16 1,000,000 972,000
Incremental Term Loan
1.985%, due 2/28/14 2,889,361 2,723,673
VeriFone, Inc.
Term Loan B
2.99%, due 10/31/13 675,000 634,500
Verint Systems, Inc.
Term Loan B
3.49%, due 5/25/14 (d) 932,172 871,581
-------------
16,120,138
-------------
ECOLOGICAL 1.4%
Big Dumpster Merger Sub, Inc.
Delayed Draw Term Loan B
2.49%, due 2/5/13 (d) 279,149 207,268
Term Loan B
2.49%, due 2/5/13 (d) 662,980 492,263
</Table>
M-110 MainStay VP Floating Rate Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
ECOLOGICAL (CONTINUED)
Duratek, Inc.
Term Loan B
4.01%, due 6/7/13 $ 790,323 $ 769,577
EnergySolutions LLC
Synthetic Letter of Credit
0.24%, due 6/7/13 117,393 113,578
Term Loan
4.01%, due 6/7/13 1,647,277 1,604,036
IESI Corp.
Term Loan
1.983%, due 1/20/12 2,000,000 1,910,000
Synagro Technologies, Inc.
Term Loan B
2.23%, due 4/2/14 975,000 793,406
-------------
5,890,128
-------------
ELECTRONICS 0.5%
Flextronics International,
Ltd.
Term Loan B
2.54%, due 10/1/12 977,500 923,738
Freescale Semiconductor, Inc.
Term Loan B
1.985%, due 11/29/13 1,446,136 1,263,561
-------------
2,187,299
-------------
FINANCE 0.6%
Hertz Corp. (The)
Letter of Credit
0.253%, due 12/21/12 221,464 209,481
Tranche B Term Loan
2.021%, due 12/21/12 1,203,498 1,138,381
MSCI, Inc.
Term Loan
2.756%, due 11/20/14 982,456 966,491
Rental Services Corp.
2nd Lien Term Loan
3.79%, due 11/30/13 119,378 111,121
-------------
2,425,474
-------------
GROCERY 1.4%
Giant Eagle, Inc.
Term Loan
1.812%, due 11/7/12 (d) 379,368 341,431
Roundy's Supermarkets, Inc.
Extended Term Loan
6.25%, due 11/3/13 2,191,810 2,175,371
SUPERVALU, Inc.
Term Loan A
1.156%, due 6/2/11 1,570,988 1,523,017
Term Loan B
1.531%, due 6/1/12 1,987,106 1,905,128
-------------
5,944,947
-------------
HEALTHCARE, EDUCATION & CHILDCARE 11.3%
Accellent, Inc.
Term Loan
2.506%, due 11/22/12 466,136 438,168
AGA Medical Corp.
Tranche B Term Loan
2.28%, due 4/26/13 (d) 916,105 794,721
Alliance Healthcare Services,
Inc.
Term Loan B
5.50%, due 1/4/16 2,450,000 2,415,291
AMR HoldCo, Inc.
Term Loan
2.235%, due 2/10/12 804,692 772,504
Bausch and Lomb, Inc.
Delayed Draw Term Loan
3.501%, due 4/24/15 570,551 542,023
Term Loan
3.501%, due 4/24/15 2,349,474 2,232,000
Biomet, Inc.
Term Loan B
3.25%, due 3/25/15 2,937,362 2,800,933
v Community Health Systems,
Inc.
Delayed Draw Term Loan
2.506%, due 7/25/14 257,721 242,758
New Term Loan B
2.506%, due 7/25/14 5,042,280 4,749,546
DaVita, Inc.
Tranche B1 Term Loan
1.748%, due 10/5/12 2,767,981 2,679,560
Fresenius Medical Care
Holdings, Inc.
Term Loan
1.627%, due 3/31/13 777,856 745,964
Gentiva Health Services, Inc.
Term Loan B
2.018%, due 3/31/13 (d) 644,022 599,343
v HCA, Inc.
Term Loan A
1.751%, due 11/19/12 693,651 661,570
Term Loan B
2.501%, due 11/18/13 3,681,571 3,512,218
Health Management Associates,
Inc.
Term Loan B
2.001%, due 2/28/14 3,719,159 3,459,283
HealthSouth Corp.
Term Loan B
2.51%, due 3/11/13 557,845 527,860
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-111
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
HEALTHCARE, EDUCATION & CHILDCARE (CONTINUED)
HealthSouth Corp. (continued)
Extended Term Loan
4.01%, due 3/15/14 $ 459,130 $ 442,831
Life Technologies Corp.
Term Loan B
5.25%, due 11/21/15 2,265,561 2,276,889
Mylan Laboratories, Inc.
Term Loan B
3.551%, due 10/2/14 2,880,000 2,808,720
Quintiles Transnational Corp.
Term Loan B
2.251%, due 3/31/13 960,083 910,159
Royalty Pharma Finance Trust
Term Loan B
2.501%, due 4/16/13 2,957,916 2,872,876
Rural/Metro Operating
Company, LLC
Term Loan
6.00%, due 12/9/14 510,000 511,275
Select Medical Corp.
Extended Term Loan B
4.017%, due 8/22/14 723,558 700,645
Sun Healthcare Group, Inc.
Synthetic Letter of Credit
0.151%, due 4/21/14 275,862 257,586
Term Loan B
2.395%, due 4/21/14 1,310,266 1,223,461
Vanguard Health Holding Co.
LLC
Replacement Term Loan
2.481%, due 9/23/11 3,445,855 3,371,769
Warner Chilcott PLC
Tranche A
5.50%, due 10/30/14 949,153 949,888
Tranche B1
5.75%, due 4/30/15 1,099,639 1,100,491
Tranche B2
5.75%, due 4/30/15 2,419,005 2,420,880
-------------
47,021,212
-------------
HOME AND OFFICE FURNISHINGS, HOUSEWARES & DURABLE CONSUMER
PRODUCTS 1.3%
Jarden Corp.
Term Loan B1
2.001%, due 1/24/12 211,736 203,266
Term Loan B2
2.001%, due 1/24/12 773,278 744,280
Additional Term Loan
2.751%, due 1/24/12 1,396,137 1,357,493
Term Loan B4
3.501%, due 1/26/15 490,757 484,990
Simmons Bedding Co.
Tranche D Term Loan
10.50%, due 12/19/11 2,764,482 2,723,015
-------------
5,513,044
-------------
HOTELS, MOTELS, INNS & GAMING 1.4%
Las Vegas Sands, Inc.
Delayed Draw Term Loan
2.01%, due 5/23/14 805,339 703,090
Term Loan B
2.01%, due 5/23/14 2,405,430 2,100,027
Penn National Gaming, Inc.
Term Loan B
1.99%, due 10/3/12 3,274,964 3,164,434
-------------
5,967,551
-------------
LEISURE, AMUSEMENT, MOTION PICTURES & ENTERTAINMENT 3.2%
AMC Entertainment, Inc.
Term Loan
1.732%, due 1/28/13 2,101,859 1,982,170
Bombardier Recreational
Products, Inc.
Term Loan
3.276%, due 6/28/13 (d) 389,608 277,595
Cedar Fair, L.P.
U.S. Term Loan
2.231%, due 8/30/12 369,386 364,461
U.S. Term B Extended
4.231%, due 8/30/14 1,477,918 1,455,222
Cinemark USA, Inc.
Term Loan
2.026%, due 10/5/13 1,935,000 1,837,559
Metro-Goldwyn-Mayer Studios,
Inc.
Tranche B Term Loan
20.50%, due 4/8/12 962,500 614,625
Regal Cinemas Corp.
Term Loan
4.001%, due 10/27/13 4,143,989 4,120,965
Six Flags Theme Parks, Inc.
Tranche B Term Loan
2.49%, due 4/30/15 982,500 954,253
Universal City Development
Partners, Ltd.
Term Loan B
6.50%, due 11/6/14 1,500,000 1,501,875
-------------
13,108,725
-------------
MACHINERY (NON-AGRICULTURE, NON-CONSTRUCT & NON-ELECTRONIC)
1.9%
Baldor Electric Co.
Term Loan B
5.25%, due 1/31/14 2,322,797 2,316,506
</Table>
M-112 MainStay VP Floating Rate Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
MACHINERY (NON-AGRICULTURE, NON-CONSTRUCT & NON-ELECTRONIC)
(CONTINUED)
Gleason Corp.
1st Lien Term Loan
2.02%, due 6/30/13 (d) $ 920,750 $ 888,524
Manitowoc Co., Inc. (The)
Term Loan B
7.50%, due 11/6/14 2,170,924 2,099,284
RBS Global, Inc.
Term Loan B2
2.50%, due 7/19/13 2,035,667 1,872,814
Term Loan B
2.786%, due 7/19/13 934,426 875,441
-------------
8,052,569
-------------
MINING, STEEL, IRON & NON-PRECIOUS METALS 1.1%
Aleris International, Inc.
Term Loan B1
(zero coupon), due 12/19/13
(e) 449,287 13,479
German C1
4.25%, due 12/19/13 (e) 623,136 464,236
DIP Term Loan
5.20%, due 2/15/10 (f) 329,752 336,621
Roll-Up DIP Term Loan
12.50%, due 2/15/10 972,038 563,782
Novelis, Inc.
New Canadian Term Loan
2.24%, due 7/6/14 1,138,077 1,037,479
New U.S. Term Loan
2.249%, due 7/6/14 1,289,699 1,175,698
Walter Energy, Inc.
Term Loan
2.484%, due 10/3/12 929,992 898,992
-------------
4,490,287
-------------
OIL & GAS 1.6%
Dresser, Inc.
Term Loan
2.521%, due 5/4/14 1,702,789 1,582,378
2nd Lien Term Loan
6.001%, due 5/4/15 800,000 750,000
Energy Transfer Equity L.P.
Term Loan B
1.984%, due 11/1/12 3,000,000 2,943,750
IFM Colonial Pipeline 2 LLC
Term Loan B
2.27%, due 2/27/12 982,310 943,017
Targa Resources, Inc.
Synthetic Letter of Credit
0.158%, due 10/31/12 109,798 109,798
Term Loan
2.231%, due 10/31/12 136,534 135,778
-------------
6,464,721
-------------
PERSONAL & NONDURABLE CONSUMER PRODUCTS (MANUFACTURING ONLY)
1.3%
JohnsonDiversey, Inc.
Term Loan B
5.50%, due 11/24/15 2,735,000 2,752,094
Mega Bloks, Inc.
Term Loan B
9.75%, due 7/26/12 (d) 957,500 483,538
Visant Corp.
Term Loan C
2.235%, due 10/4/11 2,197,540 2,139,854
-------------
5,375,486
-------------
PERSONAL TRANSPORTATION 0.3%
United Airlines, Inc.
Term Loan B
2.313%, due 2/1/14 1,387,472 1,085,003
-------------
PERSONAL, FOOD & MISCELLANEOUS SERVICES 0.7%
Aramark Corp.
Synthetic Letter of Credit
0.12%, due 1/27/14 192,331 181,953
Term Loan
2.126%, due 1/27/14 2,963,929 2,804,001
-------------
2,985,954
-------------
PRINTING & PUBLISHING 2.8%
Cenveo Corp.
Delayed Draw Term Loan
4.753%, due 6/21/13 26,162 25,333
Term Loan C
4.753%, due 6/21/13 1,733,448 1,678,555
Dex Media East LLC
Replacement Term Loan
2.24%, due 10/24/14 (e) 763,451 626,984
F&W Publications, Inc. (aka
New Publishing Acquisition,
Inc.)
Tranche B Term Loan
(zero coupon), due 8/5/12
(e) 1,098,549 472,376
Hanley Wood LLC
New Term Loan B
2.533%, due 3/8/14 661,583 281,173
Lamar Media Corp.
Series E
5.50%, due 3/31/13 962,500 963,302
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-113
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
PRINTING & PUBLISHING (CONTINUED)
Lamar Media Corp. (continued)
Series F
5.50%, due 3/31/14 $1,985,000 $ 1,994,925
MediaNews Group, Inc.
Term Loan C
4.731%, due 8/2/13 360,513 109,956
Merrill Communications LLC
Term Loan
8.50%, due 12/24/12 1,867,789 1,475,553
Nielsen Finance LLC
Dollar Term Loan
2.235%, due 8/9/13 2,095,862 1,957,011
Penton Media, Inc.
Term Loan B
2.528%, due 2/1/13 (d) 1,215,625 803,832
R.H. Donnelley, Inc.
Tranche D2 Term Loan
6.75%, due 6/30/11 (e) 823,502 751,034
SuperMedia, Inc.
Exit Term Loan
11.00%, due 12/31/15 763,133 746,438
-------------
11,886,472
-------------
RETAIL STORE 3.0%
Michaels Stores, Inc.
New Term Loan B
2.563%, due 10/31/13 935,072 841,857
Term Loan B2
4.813%, due 7/31/16 1,258,396 1,181,993
Neiman Marcus Group, Inc.
(The)
Term Loan B
2.255%, due 4/6/13 1,538,938 1,389,991
Pantry, Inc. (The)
Delayed Draw Term Loan B
1.74%, due 5/15/14 207,127 192,887
Term Loan B
1.74%, due 5/15/14 719,410 669,951
Petco Animal Supplies, Inc.
Term Loan B
2.501%, due 10/25/13 2,028,074 1,922,324
Pilot Travel Centers LLC
Term Loan B
(zero coupon), due 11/24/15
(d) 1,000,000 1,003,990
QVC, Inc.
Tranche 3-J
4.249%, due 6/30/11 3,500,000 3,440,938
Yankee Candle Co., Inc. (The)
Term Loan B
2.24%, due 2/6/14 1,891,673 1,767,768
-------------
12,411,699
-------------
TELECOMMUNICATIONS 2.3%
v Intelsat Corp.
Term Loan B2-A
2.735%, due 1/3/14 1,649,000 1,551,091
Term Loan B2-B
2.735%, due 1/3/14 1,648,496 1,550,617
Term Loan B2-C
2.735%, due 1/3/14 1,648,496 1,550,617
MetroPCS Wireless, Inc.
Term Loan B
2.54%, due 11/4/13 2,969,310 2,828,267
Windstream Corp.
Tranche B-2
(zero coupon), due 12/17/15 2,000,000 1,946,786
-------------
9,427,378
-------------
TEXTILES & LEATHER 0.4%
Springs Windows Fashions LLC
Term Loan B
3.063%, due 12/31/12 (d) 424,785 378,590
St. Johns Knits
International, Inc.
Term Loan B
9.25%, due 3/23/12 (d) 899,565 764,630
William Carter Co. (The)
Term Loan
1.737%, due 7/14/12 723,475 694,536
-------------
1,837,756
-------------
UTILITIES 6.1%
AES Corp.
Term Loan
3.29%, due 8/10/11 1,000,000 980,000
Bosque Power Co. LLC
Term Loan
5.481%, due 1/16/15 494,594 354,459
BRSP LLC
Term Loan B
7.50%, due 6/04/14 2,832,603 2,761,788
Calpine Corp.
1st Priority Term Loan
3.135%, due 3/29/14 3,981,015 3,760,069
Coleto Creek Power, L.P.
Synthetic Letter of Credit
0.151%, due 6/28/13 346,432 311,211
Term Loan
2.995%, due 6/28/13 595,136 534,630
</Table>
M-114 MainStay VP Floating Rate Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
UTILITIES (CONTINUED)
Covanta Energy Corp.
Funded Letter of Credit
0.151%, due 2/28/14 $ 494,845 $ 465,155
Term Loan B
1.75%, due 2/10/14 977,513 918,862
Dynegy Holdings, Inc.
Synthetic Letter of Credit
3.99%, due 4/2/13 2,425,532 2,315,372
Term Loan B
3.99%, due 4/2/13 72,793 69,487
InfrastruX Group, Inc.
Delayed Draw Term Loan
8.00%, due 11/5/12 1,667,770 1,484,315
Kgen LLC
1st Lien Term Loan
2.00%, due 2/18/14 454,688 428,543
Synthetic Letter of Credit
2.063%, due 2/8/14 281,250 265,078
Mackinaw Power Holdings LLC
Term Loan B
1.779%, due 6/22/15 (d) 1,448,980 1,345,740
Mirant North America LLC
Term Loan
1.981%, due 1/3/13 687,932 661,274
NRG Energy, Inc.
Synthetic Letter of Credit
0.151%, due 2/1/13 1,007,587 956,956
Term Loan B
1.996%, due 2/1/13 1,714,922 1,628,747
Texas Competitive Electric
Holdings Co. LLC
Term Loan B2
3.735%, due 10/10/14 965,127 784,165
Term Loan B3
3.735%, due 10/10/14 1,969,886 1,586,743
TPF Generation Holdings LLC
Synthetic Letter of Credit
0.151%, due 12/15/13 301,388 284,686
Synthetic Revolver
2.10%, due 12/15/11 94,479 89,243
Term Loan B
2.231%, due 12/15/13 779,949 736,726
2nd Lien Term Loan C
4.485%, due 12/15/14 500,000 426,250
TPF II LC LLC
Term Loan B
3.001%, due 10/15/14 (d) 769,533 738,751
USPF Holdings LLC
Term Loan
1.982%, due 4/11/14 (d) 1,057,729 1,031,286
Synthetic Letter of Credit
2.001%, due 4/11/14 (d) 300,000 292,500
-------------
25,212,036
-------------
Total Floating Rate Loans
(Cost $344,810,800) 332,226,213
-------------
FOREIGN FLOATING RATE LOANS 4.2% (C)
- --------------------------------------------------------------
BROADCASTING & ENTERTAINMENT 1.3%
v UPC Broadband Holding
B.V.
Term Loan N
1.985%, due 12/31/14 1,296,576 1,211,218
Term Loan T
3.735%, due 12/30/16 4,203,424 4,075,220
-------------
5,286,438
-------------
CHEMICALS, PLASTICS & RUBBER 0.4%
Brenntag Holding GmbH and Co.
Term Loan B2
1.982%, due 1/20/14 1,270,095 1,212,940
Acquisition Term Loan
2.005%, due 1/20/14 685,600 654,748
-------------
1,867,688
-------------
FINANCE 0.3%
Ashtead Group PLC
Term Loan
2.063%, due 8/31/11 1,353,000 1,309,028
-------------
HOME AND OFFICE FURNISHINGS, HOUSEWARES & DURABLE CONSUMER
PRODUCTS 0.1%
Sunbeam Corp. (Canada), Ltd.
Term Loan
2.001%, due 1/24/12 263,312 256,071
-------------
PRINTING & PUBLISHING 0.4%
Yell Group PLC
New Term Loan B1
3.981%, due 7/31/14 2,112,868 1,542,393
-------------
RETAIL STORE 0.8%
Dollarama Group, L.P.
Replacement Term Loan B
2.031%, due 11/18/11 3,438,740 3,369,965
-------------
TELECOMMUNICATIONS 0.9%
Intelsat Subsidiary Holding
Co.
Tranche B Term Loan
2.735%, due 7/3/13 951,607 903,234
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-115
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FOREIGN FLOATING RATE LOANS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
Telesat Canada
U.S. Delayed Draw Term Loan
3.24%, due 10/31/14 $ 233,595 $ 222,749
U.S. Term Loan B
3.24%, due 10/31/14 2,719,574 2,593,307
-------------
3,719,290
-------------
Total Foreign Floating Rate
Loans
(Cost $18,334,145) 17,350,873
-------------
YANKEE BOND 0.4% (A)
- --------------------------------------------------------------
MINING, STEEL, IRON & NON-PRECIOUS METALS 0.4%
Teck Resources, Ltd.
10.25%, due 5/15/16 1,599,000 1,862,835
-------------
Total Yankee Bond
(Cost $1,655,602) 1,862,835
-------------
Total Long-Term Investments
(Cost $391,954,578) 380,322,082
-------------
SHORT-TERM INVESTMENTS 12.6%
- --------------------------------------------------------------
COMMERCIAL PAPER 7.7%
Cargill, Inc.
0.11%, due 1/11/10 (b)(g) 6,168,000 6,167,811
Emerson Electric Co.
0.08%, due 1/5/10 (b)(g) 4,000,000 3,999,964
FPL Group Capital, Inc.
0.12%, due 1/15/10 (b)(g) 5,000,000 4,999,767
0.13%, due 1/8/10 (b)(g) 2,750,000 2,749,930
Nestle Capital Corp.
0.07%, due 1/25/10 (b)(g) 6,606,000 6,605,692
Southern Co. Funding Corp.
0.11%, due 1/14/10 (b)(g) 4,356,000 4,355,827
0.12%, due 1/11/10 (b)(g) 3,312,000 3,311,890
-------------
Total Commercial Paper
(Cost $32,190,881) 32,190,881
-------------
FEDERAL AGENCIES 3.6%
Federal Home Loan Bank
0.03%, due 4/1/10 (h) 5,000,000 4,998,090
Federal Home Loan Bank
(Discount Note)
0.02%, due 1/22/10 (g) 2,000,000 1,999,977
International Bank for
Reconstruction and
Development (Discount Note)
0.01%, due 1/4/10 (g) 7,945,000 7,945,000
-------------
Total Federal Agencies
(Cost $14,941,857) 14,943,067
-------------
REPURCHASE AGREEMENT 1.3%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$5,165,052
(Collateralized by a United
States Treasury Bill with a
zero coupon rate and a
maturity date of 1/14/10,
with a Principal Amount of
$5,270,000 and a Market
Value of $5,270,000) 5,165,049 5,165,049
-------------
Total Repurchase Agreement
(Cost $5,165,049) 5,165,049
-------------
Total Short-Term Investments
(Cost $52,297,787) 52,298,997
-------------
Total Investments
(Cost $444,252,365) (i) 104.0% 432,621,079
Other Assets, Less
Liabilities (4.0) (16,703,571)
----- ------------
Net Assets 100.0% $ 415,917,508
===== ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) Yankee Bond--dollar-denominated bond
issued in the United States by a foreign
bank or corporation.
(b) May be sold to institutional investors
only under Rule 144A or securities
offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
(c) Floating Rate Loan--generally pays
interest at rates which are periodically
re-determined at a margin above the
London Inter-Bank Offered Rate ("LIBOR")
or other short-term rates. The rate shown
is the rate(s) in effect at December 31,
2009. Floating Rate Loans are generally
considered restrictive in that the
Portfolio is ordinarily contractually
obligated to receive consent from the
Agent Bank and/or borrower prior to
disposition of a Floating Rate Loan.
(d) Illiquid security. The total market
value of these securities at December 31,
2009 is $13,658,259, which represents
3.3% of the Portfolio's net assets.
(e) Issue in default.
(f) This security has additional commitments
and contingencies. Principal amount and
value exclude unfunded commitment.
(g) Interest rate presented is yield to
maturity.
(h) Floating rate--Rate shown is the rate in
effect at December 31, 2009.
(i) At December 31, 2009, cost is
$443,432,254 for federal income tax
purposes and net unrealized depreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 820,111
Gross unrealized depreciation (11,631,286)
------------
Net unrealized depreciation $(10,811,175)
============
</Table>
M-116 MainStay VP Floating Rate Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
<Caption>
QUOTED
PRICES IN
ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Long-Term Investments
Common Stock $ -- $ 123,830 $ -- $ 123,830
Corporate Bonds -- 28,758,331 -- 28,758,331
Floating Rate Loans -- 332,226,213 -- 332,226,213
Foreign Floating Rate Loans -- 17,350,873 -- 17,350,873
Yankee Bond -- 1,862,835 -- 1,862,835
---------- ------------ ---------- ------------
Total Long-Term Investments -- 380,322,082 -- 380,322,082
---------- ------------ ---------- ------------
Short-Term Investments
Commercial Paper -- 32,190,881 -- 32,190,881
Federal Agencies -- 14,943,067 -- 14,943,067
Repurchase Agreement -- 5,165,049 -- 5,165,049
---------- ------------ ---------- ------------
Total Short-Term Investments -- 52,298,997 -- 52,298,997
---------- ------------ ---------- ------------
Total Investments in Securities $-- $432,621,079 $-- $432,621,079
========== ============ ========== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-117
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $444,252,365) $432,621,079
Cash 2,148,090
Unrealized appreciation on unfunded
commitments 12,534
Receivables:
Interest 1,433,075
Investment securities sold 1,222,247
Fund shares sold 922,279
Other assets 425
------------
Total assets 438,359,729
------------
LIABILITIES:
Payables:
Investment securities purchased 21,984,657
Manager (See Note 3) 203,650
Fund shares redeemed 98,784
NYLIFE Distributors (See Note 3) 64,062
Professional fees 60,512
Shareholder communication 17,127
Custodian 9,181
Directors 1,046
Accrued expenses 3,202
------------
Total liabilities 22,442,221
------------
Net assets $415,917,508
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 466,186
Additional paid-in capital 441,524,297
------------
441,990,483
Accumulated undistributed net
investment income 52,624
Accumulated net realized loss on
investments (14,506,847)
Net unrealized depreciation on
investments (11,631,286)
Net unrealized appreciation on
unfunded commitments 12,534
------------
Net assets $415,917,508
============
INITIAL CLASS
Net assets applicable to
outstanding shares $106,754,376
============
Shares of capital stock outstanding 11,965,727
============
Net asset value per share
outstanding $ 8.92
============
SERVICE CLASS
Net assets applicable to
outstanding shares $309,163,132
============
Shares of capital stock outstanding 34,652,893
============
Net asset value per share
outstanding $ 8.92
============
</Table>
M-118 MainStay VP Floating Rate Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Interest $13,409,205
-----------
EXPENSES:
Manager (See Note 3) 1,838,463
Distribution and service--Service
Class
(See Note 3) 575,996
Professional fees 98,680
Shareholder communication 55,429
Custodian 26,302
Directors 12,824
Miscellaneous 23,833
-----------
Total expenses 2,631,527
-----------
Net investment income 10,777,678
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments (3,044,137)
Net change in unrealized
depreciation on investments and
unfunded commitments 70,599,898
-----------
Net realized and unrealized gain on
investments and unfunded
commitments 67,555,761
-----------
Net increase in net assets resulting
from operations $78,333,439
===========
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-119
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 10,777,678 $ 14,224,275
Net realized loss on
investments (3,044,137) (10,247,589)
Net change in unrealized
depreciation on investments
and unfunded commitments 70,599,898 (68,610,464)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 78,333,439 (64,633,778)
----------------------------
Dividends to shareholders:
From net investment income:
Initial Class (2,827,510) (3,123,347)
Service Class (7,927,689) (11,121,362)
----------------------------
Total dividends to
shareholders (10,755,199) (14,244,709)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 170,904,194 38,702,743
Net asset value of shares
issued to shareholders in
reinvestment of dividends 10,755,199 14,244,709
Cost of shares redeemed (36,053,319) (106,868,019)
----------------------------
Increase (decrease) in
net assets derived from
capital share
transactions 145,606,074 (53,920,567)
----------------------------
Net increase (decrease)
in net assets 213,184,314 (132,799,054)
NET ASSETS:
Beginning of year 202,733,194 335,532,248
----------------------------
End of year $415,917,508 $ 202,733,194
============================
Accumulated undistributed net
investment income at end of
year $ 52,624 $ --
============================
</Table>
M-120 MainStay VP Floating Rate Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
This page intentionally left blank
mainstayinvestments.com M-121
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
----------------------------------------------------------
MAY 2, 2005**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
----------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of period $ 6.93 $ 9.47 $ 9.86 $ 9.91 $ 10.00
-------- ------- ------- ------- -------
Net investment income 0.30 0.46 0.64 0.62 0.32
Net realized and
unrealized gain (loss)
on investments 1.99 (2.54) (0.39) (0.05) (0.09)
-------- ------- ------- ------- -------
Total from investment
operations 2.29 (2.08) 0.25 0.57 0.23
-------- ------- ------- ------- -------
Less dividends:
From net investment
income (0.30) (0.46) (0.64) (0.62) (0.32)
-------- ------- ------- ------- -------
Net asset value at end of
period $ 8.92 $ 6.93 $ 9.47 $ 9.86 $ 9.91
======== ======= ======= ======= =======
Total investment return 33.54% (22.77%) 2.60% 5.99% 2.10%(a)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 3.70% 5.29% 6.57% 6.37% 4.76%++
Net expenses 0.68% 0.69% 0.67% 0.70% 0.84%++
Portfolio turnover rate 17% 7% 9% 6% 11%
Net assets at end of
period (in 000's) $106,754 $52,378 $55,132 $51,569 $25,060
</Table>
<Table>
** Commencement of operations.
++ Annualized.
(a) Total return is not annualized.
</Table>
M-122 MainStay VP Floating Rate Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
-------------------------------------------------------------
MAY 2, 2005**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
-------------------------------------------------------------
2009 2008 2007 2006 2005
$ 6.93 $ 9.47 $ 9.86 $ 9.91 $ 10.00
-------- -------- -------- -------- -------
0.28 0.44 0.61 0.60 0.31
1.99 (2.54) (0.39) (0.05) (0.09)
-------- -------- -------- -------- -------
2.27 (2.10) 0.22 0.55 0.22
-------- -------- -------- -------- -------
(0.28) (0.44) (0.61) (0.60) (0.31)
-------- -------- -------- -------- -------
$ 8.92 $ 6.93 $ 9.47 $ 9.86 $ 9.91
======== ======== ======== ======== =======
33.21% (22.97%) 2.34% 5.73% 1.91%(a)
3.44% 5.09% 6.32% 6.12% 4.51%++
0.93% 0.94% 0.92% 0.95% 1.09%++
17% 7% 9% 6% 11%
$309,163 $150,355 $280,400 $232,856 $92,528
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-123
MAINSTAY VP GOVERNMENT PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 1.61% 4.86% 5.78%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
BARCLAYS CAPITAL
U.S. GOVERNMENT
INITIAL CLASS BOND INDEX
------------- ----------------
12/31/99 10000 10000
11222 11324
11967 12143
13146 13539
13393 13858
13838 14340
14168 14720
14743 15232
15728 16551
17270 18601
12/31/09 17548 18192
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 1.36% 4.60% 5.52%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
BARCLAYS CAPITAL
U.S. GOVERNMENT
SERVICE CLASS BOND INDEX
------------- ----------------
12/31/99 10000 10000
11194 11324
11907 12143
13048 13539
13261 13858
13668 14340
13953 14720
14483 15232
15413 16551
16881 18601
12/31/09 17111 18192
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Barclays Capital U.S. Government Bond
Index(3) -2.20% 4.87% 6.17%
Average Lipper Variable Products General
U.S. Government Portfolio(4) 5.99 4.12 5.63
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 4.83% and 5.77% for Initial
Class shares and 4.59% and 5.52% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 4, 2003, includes
the historical performance of Initial Class shares through June 3, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products General U.S. Government Portfolio is
representative of portfolios that invest primarily in U.S. government and
agency issues. Lipper Inc. is an independent monitor of fund performance.
M-124 MainStay VP Government Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP GOVERNMENT PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,022.60 $2.96 $1,022.30 $2.96
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,021.30 $4.23 $1,021.00 $4.23
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.58% for Initial Class and 0.83% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-125
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
<Caption>
U.S. GOVERNMENT
& FEDERAL
AGENCIES 95.7
- ----------------------------- ----
Short-Term Investment 19.10
Asset-Backed Securities 1.50
Mortgage-Backed Securities 1.20
Municipal Bond 0.40
Other Assets, Less Liabilities (17.90)
</Table>
See Portfolio of Investments beginning on page M-130 for specific holdings
within these categories.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. United States Treasury Note, 4.75%, due
8/15/17
2. Government National Mortgage Association
(Mortgage Pass-Through Security), 6.00%,
due 7/1/36 TBA
3. Government National Mortgage Association
(Mortgage Pass-Through Security), 6.50%,
due 12/1/33 TBA
4. Federal National Mortgage Association
(Mortgage Pass-Through Security), 5.50%,
due 6/1/33
5. Government National Mortgage Association
(Mortgage Pass-Through Security), 5.00%,
due 3/1/38 TBA
6. Federal National Mortgage Association
(Mortgage Pass-Through Security), 5.00%,
due 5/1/36
7. Government National Mortgage Association
(Mortgage Pass-Through Security), 5.50%,
due 8/1/36 TBA
8. Federal National Mortgage Association,
5.375%, due 6/12/17
9. Federal National Mortgage Association
(Mortgage Pass-Through Security), 5.00%,
due 2/1/36
10. Federal National Mortgage Association
(Mortgage Pass-Through Security), 5.50%,
due 4/1/36
</Table>
M-126 MainStay VP Government Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY GARY GOODENOUGH AND JAMES RAMSAY, CFA, OF MACKAY SHIELDS
LLC, THE PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP GOVERNMENT PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND ITS
BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Government Portfolio
returned 1.61% for Initial Class shares and 1.36% for Service Class shares. Both
share classes underperformed the 5.99% return of the average Lipper(1) Variable
Products General U.S. Government Portfolio but outper-formed the -2.20% return
of the Barclays Capital U.S. Government Bond Index(1) for the 12 months ended
December 31, 2009. The Barclays Capital U.S. Government Bond Index is the
Portfolio's broad-based securities-market index.
WHAT KEY FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
The Portfolio likely benefited relative to its peers and the benchmark from
overweight positions in mortgage-backed securities issued by government-
sponsored and government-related entities and overweight positions in bank
debentures guaranteed by the Federal Deposit Insurance Corporation (FDIC).
During 2009, we also introduced incremental yield by emphasizing higher-coupon
mortgage securities and by maintaining a small position in asset-backed
securities. Finally, a modest amount of trading activity, aside from mortgage
dollar rolls, minimized transaction costs. Peers that outperformed the Portfolio
may have been more biased to a steeper Treasury yield curve,(2) may have had
more exposure to Treasury inflation-protected securities (TIPS), and may have
been more active in non-government-related sectors, such as nonagency
securitizations of residential mortgages.
HOW DID THE PORTFOLIO'S DURATION(3) STRATEGY AFFECT ITS PERFORMANCE IN 2009?
The Portfolio maintained an intermediate duration close to 4.0 years. We fine-
tuned the duration around this point by first estimating the median duration of
peer portfolios, then tactically leaning the Portfolio's duration in the
direction we believed interest rates were likely to move over the near- to
medium-term. Given the general trend toward higher Treasury yields during 2009,
peer portfolios with shorter durations would have had an advantage.
WHAT MAJOR MARKET TRENDS AFFECTED THE PORTFOLIO'S PERFORMANCE DURING 2009?
The Federal Reserve expanded its program of direct purchase of securities during
the reporting period. Policy makers intended to purchase $300 billion of longer-
term Treasurys, $1.25 trillion of agency mortgage-backed securities and $200
billion of agency debt. The Treasury also expanded its liquidity facilities,
such as the Term Asset-Backed Securities Loan Facility (TALF), to support the
secondary markets crucial to consumer and business lending. Given the size of
these initiatives and the liquidity they would impart, investors expected risk
premiums to contract for spread(4) product (securities that trade at a spread to
comparable-duration Treasurys to compensate for embedded risk). Newly enacted
fiscal stimulus was also a catalyst for narrower spreads.
To take advantage of the government's actions, the Portfolio maintained healthy
exposures to spread sectors that had the advantage of a government seal,
including agency mortgage pass-throughs and federally-guaranteed bank
debentures. We suspected, however, that the market's sudden appetite for risk
The values of debt securities fluctuate depending on various factors, including
interest rates, issuer creditworthiness, liquidity, market conditions and
maturities. Investments in the Portfolio are not guaranteed, even though the
principal or income of some of the Portfolio's investments is guaranteed by the
U.S. government or its agencies or instrumentalities. The principal risk of
mortgage dollar rolls is that the security the Portfolio receives at the end of
the transaction may be worth less than the security the Portfolio sold to the
same counterparty at the beginning of the transaction. The principal risk of
mortgage-related and asset-backed securities is that the underlying debt may be
prepaid ahead of schedule if interest rates fall, thereby reducing the value of
the Portfolio's investments. If interest rates rise, there may be fewer
prepayments, which would cause the average bond maturity to rise and increase
the potential for the Portfolio to lose money. The principal risk of
transactions involving when-issued securities is that the security will be worth
less when it is issued or received than the price the Portfolio agreed to pay
when it made the commitment. 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 Portfolio may experience a portfolio turnover of more
than 100% and may generate taxable short-term capital gains.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
2. The yield curve is a line that plots the yields of various securities of
similar quality--typically U.S. Treasury issues--across a range of
maturities. The U.S. Treasury yield curve serves as a benchmark for other
debt and is used in economic forecasting.
3. Duration is a measure of the price sensitivity of a fixed-income investment
to changes in interest rates. Duration is expressed as a number of years and
is considered a more accurate sensitivity gauge than average maturity.
4. The terms "spread" and "yield spread" may refer to the difference in yield
between a security or type of security and comparable U.S. Treasury issues.
The terms may also refer to the difference in yield between two specific
securities or types of securities at a given time.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-127
might have been an overreaction should a swift economic recovery not be
forthcoming. With that view, we positioned the Portfolio for a flatter yield
curve. (The yield curve flattens when the difference between short- and long-
term yields decreases.)
Interest-rate volatility quieted under the Federal Reserve's resolve to maintain
the federal funds target rate in a near-zero range. This gave us the confidence
to weight mortgage-backed securities at levels neutral to the Barclays Capital
U.S. Government Bond Index and to emphasize higher-coupon securities within
the sector that offered better-than-average yields.
The higher yield helped compensate for the risk
of unpredictable cash flows. That risk is diminished when interest-rate
volatility is subdued and Treasurys remain range-bound.
WHICH FIXED-INCOME SECTORS MADE THE STRONGEST CONTRIBUTIONS TO THE PORTFOLIO'S
PERFORMANCE DURING THE REPORTING PERIOD?
The Portfolio's sizeable exposure to short-term bank debentures guaranteed by
the FDIC was a positive contributor to performance, as spreads tightened toward
levels consistent with debentures issued by such government-sponsored
enterprises as the Federal National Mortgage Association (Fannie Mae) and the
Federal Home Loan Mortgage Corporation (Freddie Mac).
The Portfolio benefited by maintaining the majority of its agency pass-through
exposure in the center of the coupon stack--or coupons of 5% to 6.5%--for
securities backed by 30-year mortgages. Within that range, we favored higher
coupons for their better yield. We also overweighted securities backed by 15-
year mortgages for their superior convexity.(5)
We kept the Portfolio's residential mortgage exposure straightforward,
maintaining the bulk of the position in agency residential mortgage pass-
throughs. The Portfolio strengthened its results by de-emphasizing
collateralized mortgage obligations (CMOs), because the market appeared to
prefer liquid securities over structured products during the reporting period.
An overweight position in asset-backed securities also contributed positively to
the Portfolio's results as the sector rebounded from the illiquidity that had
characterized earlier periods.
WHAT INVESTMENT DECISIONS DETRACTED FROM THE PORTFOLIO'S PERFORMANCE DURING THE
REPORTING PERIOD?
We had positioned the Portfolio for a narrowing spread between 2-year and 10-
year benchmark Treasurys. Unfortunately, this positioning hurt per-formance when
the yield spread widened on the market's anticipation of faster economic growth
and higher inflation.
The Portfolio's allocation to Treasury inflation-
protected securities (TIPS) may have been lower than that of its peers. This
positioning detracted from the Portfolio's results when TIPS outperformed
nominal Treasurys on renewed sponsorship. The tight spread between inflation-
protected yields and nominal Treasury yields attracted investors to TIPS despite
slack in labor markets and modest manufacturing capacity. Gradually rising oil
prices since February may have also reinforced the trade.
The Portfolio's emphasis on mortgage-backed securities issued by the Government
National Mortgage Association (Ginnie Mae) was a slight detractor from
performance when the securities' prepayment rates accelerated with the purchase
of delinquent loans by mortgage service providers.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
We introduced a bias toward a shallower yield-curve by adding exposure in the
10-year maturity segment of the curve and by subtracting exposure from the 2-
year maturity segment. Both sides of the trade were executed using Treasury
futures. The yield-curve slope steepened as the consensus economic outlook
improved, and the trade detracted from the Portfolio's performance. We unwound
the trade late in 2009.
During 2009, we shifted exposure from mortgage pass-throughs issued by Fannie
Mae to similar-coupon securities issued by Ginnie Mae. We viewed the pricing
relationship of the Ginnie Mae/Fannie Mae swap as oversold. The swap had become
considerably less costly on concerns about deteriorating Ginnie Mae technicals
(such as too much supply and too little foreign demand) and a widening gap
between Ginnie Mae and Fannie Mae prepayment rates. The Ginnie Mae/Fannie Mae
spread, however, was slow to normalize, and the trade detracted from the
Portfolio's performance.
5. Convexity is a measure of the relationship between bond prices and yields. It
shows how duration will change as interest rates vary. Convexity may help
measure and manage the market risk of a fixed-income portfolio.
M-128 MainStay VP Government Portfolio
During the reporting period, we sold Treasury securities to purchase mortgage-
backed securities. The trade enhanced the Portfolio's yield while also
positioning the Portfolio for tighter mortgage spreads as the Federal Reserve
and the U.S. Treasury expanded their sponsorship of the sector.
In the last four months of 2009, we reduced the Portfolio's allocation to bank
debentures guaranteed by the FDIC by selling at what we believed to be
attractive prices after spreads had sharply tightened. We redeployed the
proceeds into mortgage-backed securities.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
Perhaps the most significant changes were reductions in Treasury securities and
agency debentures. These reductions were used to fund purchases of mortgage-
backed securities.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF 2009?
Relative to our estimate of the median peer portfolio, MainStay VP Government
Portfolio was underweight U.S. Treasurys and agency debentures as of Decem-ber
31, 2009. As of the same date, the Portfolio was overweight residential
mortgage-backed securities backed by single- and multi-family properties.
The Portfolio was also slightly overweight in asset-backed securities. Under
narrowing spreads, the Portfolio benefited relative to its peers from an
underweight position in nominal Treasurys and from overweight positions in
mortgage- and asset-backed securities. The Portfolio's exposure to agency deben-
tures was skewed toward longer-dated securities.
This overweight met resistance as the yield curve steepened during the reporting
period. The Portfolio was adversely affected by its underweight in TIPS, which
outperformed nominal Treasurys.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP Government Portfolio on this page and the
preceding pages has not been audited.
mainstayinvestments.com M-129
PORTFOLIO OF INVESTMENTS+++ DECEMBER 31, 2009
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 98.8%+
ASSET-BACKED SECURITIES 1.5%
- ----------------------------------------------------------------
CREDIT CARDS 0.2%
Chase Issuance Trust
Series 2006-C4, Class C4
0.523%, due 1/15/14 (a) $ 855,000 $ 822,183
-------------
DIVERSIFIED FINANCIAL SERVICES 0.4%
Massachusetts RRB Special
Purpose Trust
Series 2001-1, Class A
6.53%, due 6/1/15 1,231,547 1,340,523
-------------
HOME EQUITY 0.4%
Citicorp Residential Mortgage
Securities, Inc.
Series 2006-3, Class A3
5.61%, due 11/25/36 (b) 574,951 563,826
Series 2006-1, Class A3
5.706%, due 7/25/36 (b) 946,497 908,189
-------------
1,472,015
-------------
UTILITIES 0.5%
Atlantic City Electric
Transition Funding LLC
Series 2002-1, Class A4
5.55%, due 10/20/23 1,650,000 1,787,500
-------------
Total Asset-Backed Securities
(Cost $5,256,011) 5,422,221
-------------
MORTGAGE-BACKED SECURITIES 1.2%
- ----------------------------------------------------------------
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) 1.2%
Banc of America Commercial
Mortgage, Inc.
Series 2005-5, Class A2
5.001%, due 10/10/45 1,359,927 1,369,525
Citigroup Mortgage Loan
Trust, Inc.
Series 2006-AR6, Class 1A1
6.03%, due 8/25/36 1,212,900 961,205
Four Times Square Trust
Series 2006-4TS, Class A
5.401%, due 12/13/28 (c) 530,000 449,949
GS Mortgage Securities Corp.
II
Series 2001-ROCK, Class A1
6.22%, due 5/3/18 (c) 222,465 224,474
Mortgage Equity Conversion
Asset Trust
Series 2007-FF2, Class A
0.92%, due 2/25/42
(a)(c)(d)(e) 1,399,749 1,307,086
-------------
Total Mortgage-Backed
Securities
(Cost $4,718,326) 4,312,239
-------------
MUNICIPAL BOND 0.4%
- ----------------------------------------------------------------
TEXAS 0.4%
Harris County Texas
Industrial Development
Corp.
Solid Waste Deer Park
5.683%, due 3/1/23 (a) 1,280,000 1,280,922
-------------
Total Municipal Bond
(Cost $1,282,557) 1,280,922
-------------
U.S. GOVERNMENT & FEDERAL AGENCIES 95.7%
- ----------------------------------------------------------------
FANNIE MAE (COLLATERALIZED MORTGAGE OBLIGATION) 0.3%
Series 2006-B1, Class AB
6.00%, due 6/25/16 986,437 1,025,430
-------------
FANNIE MAE GRANTOR TRUST (COLLATERALIZED MORTGAGE OBLIGATION)
0.8%
Series 2003-T1, Class B
4.491%, due 11/25/12 2,660,000 2,762,254
-------------
FANNIE MAE STRIP (COLLATERALIZED MORTGAGE OBLIGATIONS) 0.1%
Series 360, Class 2, IO
5.00%, due 8/1/35 (f) 1,572,894 349,519
Series 361, Class 2, IO
6.00%, due 10/1/35 (f) 284,097 63,198
-------------
412,717
-------------
FEDERAL HOME LOAN BANK 4.6%
5.00%, due 11/17/17 3,150,000 3,407,415
5.125%, due 8/14/13 3,725,000 4,100,484
5.50%, due 7/15/36 8,250,000 8,463,328
-------------
15,971,227
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION 0.4%
4.75%, due 11/17/15 1,395,000 1,509,345
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) 6.6%
3.00%, due 8/1/10 809,772 815,184
4.342%, due 3/1/35 (a) 79,739 82,340
5.00%, due 1/1/20 2,335,397 2,458,292
</Table>
+ Percentages indicated are based on Portfolio net assets.
v Among the Portfolio's 10 largest holdings or issuers held as of December 31,
2009,
excluding short-term investments. May be subject to change daily.
M-130 MainStay VP Government Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) (CONTINUED)
5.00%, due 6/1/33 $ 4,583,477 $ 4,722,217
5.00%, due 8/1/33 2,442,580 2,514,839
5.00%, due 5/1/36 1,647,829 1,691,685
5.045%, due 6/1/35 (a) 1,668,462 1,756,027
5.50%, due 1/1/21 1,559,558 1,660,155
5.50%, due 1/1/33 6,096,834 6,415,648
5.656%, due 2/1/37 (a) 616,281 646,963
6.50%, due 4/1/37 449,835 481,931
-------------
23,245,281
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION 8.6%
2.50%, due 5/15/14 5,350,000 5,339,503
2.75%, due 3/13/14 5,925,000 5,975,321
4.625%, due 5/1/13 3,285,000 3,455,919
v 5.375%, due 6/12/17 8,425,000 9,341,303
6.625%, due 11/15/30 4,900,000 5,888,859
-------------
30,000,905
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 33.4%
2.329%, due 11/1/34 (a) 426,019 434,587
3.622%, due 4/1/34 (a) 727,944 751,639
4.50%, due 7/1/18 6,314,212 6,581,310
4.50%, due 11/1/18 4,988,201 5,199,208
4.50%, due 7/1/20 TBA (g) 1,700,000 1,748,345
4.50%, due 6/1/23 8,100,005 8,348,989
5.00%, due 11/1/17 3,445,163 3,630,765
5.00%, due 9/1/20 463,030 486,672
5.00%, due 6/1/35 4,057,816 4,177,226
5.00%, due 8/1/35 TBA (g) 960,000 985,050
5.00%, due 1/1/36 859,432 883,648
v 5.00%, due 2/1/36 8,276,183 8,509,382
v 5.00%, due 5/1/36 10,350,443 10,642,089
5.50%, due 11/1/17 2,282,012 2,429,910
5.50%, due 6/1/19 1,526,223 1,627,046
5.50%, due 11/1/19 1,663,966 1,773,888
5.50%, due 4/1/21 3,233,075 3,442,612
5.50%, due 6/1/21 509,714 540,838
v 5.50%, due 6/1/33 10,628,463 11,170,958
5.50%, due 12/1/33 6,488,615 6,819,804
5.50%, due 6/1/34 1,681,332 1,767,150
5.50%, due 3/1/35 2,964,811 3,116,140
5.50%, due 12/1/35 TBA (g) 1,340,755 1,408,352
v 5.50%, due 4/1/36 8,068,060 8,474,825
5.50%, due 1/1/37 896,429 940,083
5.50%, due 7/1/37 708,718 742,678
5.50%, due 8/1/37 1,681,692 1,766,477
6.00%, due 12/1/16 158,728 170,107
6.00%, due 1/1/33 985,647 1,053,410
6.00%, due 3/1/33 951,983 1,016,836
6.00%, due 9/1/34 142,420 151,899
6.00%, due 9/1/35 2,570,266 2,736,671
6.00%, due 10/1/35 331,838 353,097
6.00%, due 4/1/36 3,320,505 3,533,225
6.00%, due 6/1/36 3,692,491 3,922,118
6.00%, due 11/1/36 2,400,075 2,549,330
6.00%, due 4/1/37 953,534 1,008,065
6.50%, due 10/1/31 299,208 323,519
6.50%, due 7/1/32 165,844 179,216
6.50%, due 2/1/37 613,932 658,154
6.50%, due 8/1/47 729,912 776,900
-------------
116,832,218
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(COLLATERALIZED MORTGAGE OBLIGATION) 0.9%
Series 2006-32, Class A
5.079%, due 1/16/30 2,951,950 3,095,926
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 20.8%
5.00%, due 4/15/34 4,150,267 4,296,677
v 5.00%, due 3/1/38 TBA
(g) 10,440,000 10,699,371
5.50%, due 6/15/33 2,409,429 2,542,433
5.50%, due 12/15/35 1,620,038 1,705,923
v 5.50%, due 8/1/36 TBA
(g) 9,160,000 9,595,100
6.00%, due 8/15/32 636,392 679,236
6.00%, due 10/15/32 903,075 964,733
v 6.00%, due 7/1/36 TBA
(g) 22,370,000 23,635,292
6.50%, due 7/15/28 111,005 120,068
6.50%, due 8/15/28 152,453 164,909
6.50%, due 7/15/32 600,536 646,872
v 6.50%, due 12/1/33 TBA
(g) 16,655,000 17,706,347
-------------
72,756,961
-------------
HVIDE VAN OMMEREN TANKERS LLC 1.2%
Series I
7.54%, due 12/14/23 (h) 1,845,000 2,195,550
Series II
7.54%, due 12/14/23 (h) 1,828,000 2,175,320
-------------
4,370,870
-------------
OVERSEAS PRIVATE INVESTMENT CORPORATION 2.3%
5.142%, due 12/15/23 (h) 7,749,919 8,144,158
-------------
TENNESSEE VALLEY AUTHORITY 3.9%
4.65%, due 6/15/35 (h) 4,395,000 3,930,084
4.75%, due 8/1/13 5,300,000 5,703,770
6.25%, due 12/15/17 (h) 3,485,000 3,974,984
-------------
13,608,838
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-131
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
UNITED STATES TREASURY BONDS 3.0%
4.50%, due 8/15/39 (g) $ 1,415,000 $ 1,382,942
6.875%, due 8/15/25 3,220,000 4,086,885
8.75%, due 8/15/20 3,460,000 4,894,820
-------------
10,364,647
-------------
UNITED STATES TREASURY NOTES 8.1%
2.00%, due 7/15/14 T.I.P.S.
(i) 3,440,430 3,644,706
v 4.75%, due 8/15/17 22,900,000 24,848,286
-------------
28,492,992
-------------
UNITED STATES TREASURY STRIP PRINCIPAL 0.7%
(zero coupon), due 8/15/28 5,615,000 2,280,734
-------------
Total U.S. Government &
Federal Agencies
(Cost $329,345,389) 334,874,503
-------------
Total Long-Term Bonds
(Cost $340,602,283) 345,889,885
-------------
SHORT-TERM INVESTMENT 19.1%
- ----------------------------------------------------------------
REPURCHASE AGREEMENT 19.1%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$66,689,350 (Collateralized
by a United States Treasury
Bill with a
zero coupon rate and a
maturity date of 2/18/10,
with a Principal Amount of
$68,025,000 and a Market
Value of $68,025,000) 66,689,312 66,689,312
-------------
Total Short-Term Investment
(Cost $66,689,312) 66,689,312
-------------
Total Investments
(Cost $407,291,595) (j) 117.9% 412,579,197
Other Assets, Less
Liabilities (17.9) (62,611,818)
----- ------------
Net Assets 100.0% $ 349,967,379
===== ============
</Table>
<Table>
+++ On a daily basis New York Life
Investments confirms that the value of
the Portfolio's liquid assets (liquid
portfolio securities and cash) is
sufficient to cover its potential senior
securities (e.g., futures, swaps,
options).
(a) Floating rate--Rate shown is the rate in
effect at December 31, 2009.
(b) Subprime mortgage investment and other
asset-backed securities. The total market
value of the securities at December 31,
2009 is $1,472,015, which represents 0.4%
of the Portfolio's net assets.
(c) May be sold to institutional investors
only under Rule 144A or securities
offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
(d) Illiquid security--The total market value
of this security at December 31, 2009 is
$1,307,086, which represents 0.4% of the
Portfolio's net assets.
(e) Fair valued security--The total market
value of this security at December 31,
2009 is $1,307,086, which represents 0.4%
of the Portfolio's net assets.
(f) Collateralized Mortgage Obligation
Interest Only Strip - Pays a fixed or
variable rate of interest based on
mortgage loans or mortgage pass-through
securities. The principal amount of the
underlying pool represents the notional
amount on which the current interest is
calculated. The value of these stripped
securities may be particularly sensitive
to changes in prevailing interest rates
and are typically more sensitive to
changes in prepayment rates than
traditional mortgage-backed securities.
(g) 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. The
market value of these securities at
December 31, 2009 is $67,160,799, which
represents 19.2% of the Portfolio's net
assets. All or a portion of these
securities were acquired under a mortgage
dollar roll agreement.
(h) United States Government Guaranteed
Security.
(i) Treasury Inflation Protected Security -
Pays a fixed rate of interest on a
principal amount that is continuously
adjusted for inflation based on the
Consumer Price Index-Urban Consumers.
(j) At December 31, 2009, cost is
$407,291,595 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 9,427,840
Gross unrealized depreciation (4,140,238)
-----------
Net unrealized appreciation $ 5,287,602
===========
</Table>
M-132 MainStay VP Government Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Long-Term Bonds
Asset-Backed Securities $ -- $ 5,422,221 $ -- $ 5,422,221
Mortgage-Backed Securities -- 3,005,153 1,307,086 4,312,239
Municipal Bond -- 1,280,922 -- 1,280,922
U.S. Government & Federal Agencies -- 334,874,503 -- 334,874,503
-------- ------------ ---------- ------------
Total Long-Term Bonds -- 344,582,799 1,307,086 345,889,885
-------- ------------ ---------- ------------
Short-Term Investment
Repurchase Agreement -- 66,689,312 -- 66,689,312
-------- ------------ ---------- ------------
Total Investments in Securities $-- $411,272,111 $1,307,086 $412,579,197
======== ============ ========== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
BALANCE CHANGE IN NET NET
AS OF ACCRUED REALIZED UNREALIZED TRANSFERS TRANSFERS
INVESTMENTS DECEMBER 31, DISCOUNTS GAIN APPRECIATION NET NET IN TO OUT OF
IN SECURITIES 2008 (PREMIUMS) (LOSS) (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3
Long-Term Bonds
Mortgage-Backed
Securities
Commercial Mortgage
Loans
(Collateralized
Mortgage
Obligations) $1,422,948 $636 $1,790 $(16,404) $-- $(101,884) $-- $--
---------- ---- ------ -------- --- --------- --- ---
Total $1,422,948 $636 $1,790 $(16,404) $-- $(101,884) $-- $--
========== ==== ====== ======== === ========= === ===
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
BALANCE INVESTMENTS
AS OF STILL HELD AT
INVESTMENTS DECEMBER 31, DECEMBER 31,
IN SECURITIES 2009 2009 (A)
Long-Term Bonds
Mortgage-Backed
Securities
Commercial Mortgage
Loans
(Collateralized
Mortgage
Obligations) $1,307,086 $(19,953)
---------- --------
Total $1,307,086 $(19,953)
========== ========
</Table>
(a) Included in "Net change in unrealized appreciation (depreciation) on
investments" in the Statement of Operations.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-133
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $340,602,283) $345,889,885
Repurchase agreement, at value
(identified cost $66,689,312) 66,689,312
Receivables:
Interest 2,019,185
Fund shares sold 218,247
Investment securities sold 61,848
Other assets 821
------------
Total assets 414,879,298
------------
LIABILITIES:
Payables:
Investment securities purchased 64,597,980
Manager (See Note 3) 150,249
Fund shares redeemed 62,751
NYLIFE Distributors (See Note 3) 39,040
Professional fees 37,661
Shareholder communication 12,401
Custodian 8,953
Directors 1,054
Accrued expenses 1,830
------------
Total liabilities 64,911,919
------------
Net assets $349,967,379
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 306,150
Additional paid-in capital 327,591,186
------------
327,897,336
Accumulated undistributed net
investment income 11,678,047
Accumulated undistributed net
realized gain on investments and
futures transactions 5,104,394
Net unrealized appreciation on
investments 5,287,602
------------
Net assets $349,967,379
============
INITIAL CLASS
Net assets applicable to
outstanding shares $167,267,277
============
Shares of capital stock outstanding 14,581,975
============
Net asset value per share
outstanding $ 11.47
============
SERVICE CLASS
Net assets applicable to
outstanding shares $182,700,102
============
Shares of capital stock outstanding 16,032,984
============
Net asset value per share
outstanding $ 11.40
============
</Table>
M-134 MainStay VP Government Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Interest $ 14,340,241
------------
EXPENSES:
Manager (See Note 3) 1,947,091
Distribution and service--Service
Class
(See Note 3) 504,919
Professional fees 89,328
Shareholder communication 77,326
Custodian 27,492
Directors 17,842
Miscellaneous 21,668
------------
Total expenses 2,685,666
------------
Net investment income 11,654,575
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on:
Security transactions 6,463,425
Futures transactions (1,335,480)
------------
Net realized gain on investments
and futures transactions 5,127,945
------------
Net change in unrealized
appreciation on investments (11,691,678)
------------
Net realized and unrealized loss on
investments and futures
transactions (6,563,733)
------------
Net increase in net assets
resulting from operations $ 5,090,842
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-135
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 11,654,575 $ 12,667,253
Net realized gain on
investments and futures
transactions 5,127,945 7,193,024
Net change in unrealized
appreciation on investments (11,691,678) 13,961,268
----------------------------
Net increase in net assets
resulting from operations 5,090,842 33,821,545
----------------------------
Dividends and distributions to shareholders:
From net investment income:
Initial Class (6,340,122) (5,950,768)
Service Class (6,522,185) (5,681,330)
----------------------------
(12,862,307) (11,632,098)
----------------------------
From net realized gain on investments:
Initial Class (168,814) --
Service Class (183,586) --
----------------------------
(352,400) --
----------------------------
Total dividends and
distributions to
shareholders (13,214,707) (11,632,098)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 64,572,878 206,450,367
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 13,214,707 11,632,098
Cost of shares redeemed (143,278,348) (76,338,228)
----------------------------
Increase (decrease) in
net assets derived from
capital share
transactions (65,490,763) 141,744,237
----------------------------
Net increase (decrease)
in net assets (73,614,628) 163,933,684
NET ASSETS:
Beginning of year 423,582,007 259,648,323
----------------------------
End of year $ 349,967,379 $423,582,007
============================
Accumulated undistributed net
investment income at end of
year $ 11,678,047 $ 12,862,291
============================
</Table>
M-136 MainStay VP Government Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
This page intentionally left blank
mainstayinvestments.com M-137
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 11.72 $ 11.02 $ 10.85 $ 10.53 $ 10.63
-------- -------- -------- -------- --------
Net investment income (a) 0.36 0.44 0.51 0.47 0.40
Net realized and
unrealized gain (loss)
on investments (0.17) 0.60 0.21 (0.04) (0.15)
-------- -------- -------- -------- --------
Total from investment
operations 0.19 1.04 0.72 0.43 0.25
-------- -------- -------- -------- --------
Less dividends and
distributions:
From net investment
income (0.43) (0.34) (0.55) (0.11) (0.35)
From net realized gain
on investments (0.01) -- -- -- --
-------- -------- -------- -------- --------
Total dividends and
distributions (0.44) (0.34) (0.55) (0.11) (0.35)
-------- -------- -------- -------- --------
Net asset value at end of
year $ 11.47 $ 11.72 $ 11.02 $ 10.85 $ 10.53
======== ======== ======== ======== ========
Total investment return 1.61% 9.80% 6.69% 4.06% 2.38%(b)
Ratios (to average net
assets)/ Supplemental
Data:
Net investment income 3.12% 3.91% 4.61% 4.45% 3.75%
Net expenses 0.56% 0.57% 0.56% 0.57% 0.43%
Expenses (before
reimbursement) 0.56% 0.57% 0.56% 0.57% 0.56%
Portfolio turnover rate 141%(c) 72%(c) 15% 83%(c) 171%(c)
Net assets at end of year
(in 000's) $167,267 $206,744 $170,115 $189,235 $231,485
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 2.23% and 1.97% for Initial Class shares and Service
Class shares, respectively, for the year ended December 31, 2005.
(c) The portfolio turnover rates not including mortgage dollar rolls are 24%, 50%,
25% and 46% for the years ended December 31, 2009, 2008, 2006 and 2005,
respectively.
</Table>
M-138 MainStay VP Government Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
Service Class
---------------------------------------------------------------
Year ended December 31,
- ---------------------------------------------------------------------
2009 2008 2007 2006 2005
$ 11.66 $ 10.97 $ 10.81 $ 10.50 $ 10.61
-------- -------- ------- ------- -------
0.33 0.40 0.48 0.45 0.38
(0.17) 0.62 0.20 (0.05) (0.16)
-------- -------- ------- ------- -------
0.16 1.02 0.68 0.40 0.22
-------- -------- ------- ------- -------
(0.41) (0.33) (0.52) (0.09) (0.33)
(0.01) -- -- -- --
-------- -------- ------- ------- -------
(0.42) (0.33) (0.52) (0.09) (0.33)
-------- -------- ------- ------- -------
$ 11.40 $ 11.66 $ 10.97 $ 10.81 $ 10.50
======== ======== ======= ======= =======
1.36% 9.53% 6.42% 3.80% 2.08%(b)
2.87% 3.59% 4.36% 4.20% 3.50%
0.81% 0.82% 0.81% 0.82% 0.68%
0.81% 0.82% 0.81% 0.82% 0.81%
141%(c) 72%(c) 15% 83%(c) 171%(c)
$182,700 $216,838 $89,533 $69,104 $58,267
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-139
MAINSTAY VP GROWTH ALLOCATION PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON(1) (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (2/13/06)
- -----------------------------------------------
After Portfolio operating
expenses 28.04% -0.21%
</Table>
(After Portfolio operating expenses)
(Performance Graph)
<Table>
<Caption>
MORGAN STANLEY
S&P 500(R) CAPITAL INTERNATIONAL
INITIAL CLASS INDEX* EAFE(R) INDEX*
------------- ---------- ---------------------
2/13/2006 10000 10000 10000
12/31/2006 11242 11386 12152
12/31/2007 12412 12012 13509
12/31/2008 7748 7568 7649
12/31/2009 9920 9570 10080
</Table>
SERVICE CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (2/13/06)
- -----------------------------------------------
After Portfolio operating
expenses 27.72% -0.46%
</Table>
(After Portfolio operating expenses)
(Performance Graph)
<Table>
<Caption>
MORGAN STANLEY
S&P 500(R) CAPITAL INTERNATIONAL
SERVICE CLASS INDEX* EAFE(R) INDEX*
------------- ---------- ---------------------
2/13/2006 10000 10000 10000
12/31/2006 11218 11386 12152
12/31/2007 12355 12012 13509
12/31/2008 7691 7568 7649
12/31/2009 9823 9570 10080
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE
YEAR INCEPTION
S&P 500(R) Index(2) 26.46% -1.12%
Morgan Stanley Capital International
EAFE Index(2) 31.78 0.20
Average Lipper Variable Products Multi-
Cap Core Portfolio(3) 31.30 -2.39
</Table>
1. Performance figures reflect certain fee waivers and/or expense limitations,
without which total returns may have been lower. These fee waivers and/or
expense limitations are contractual and may be modified or terminated only
with the approval of the Board of Directors. New York Life Investment
Management LLC may recoup the amount of certain management fee waivers or
expense reimbursements from the Portfolio pursuant to the agreement if such
action does not cause the Portfolio to exceed existing expense limitations
and the recoupment is made within the term of the agreement. Any recoupment
amount is generally applied within a fiscal year. This agreement expires on
August 1, 2010.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
3. The Average Lipper Variable Products Multi-Cap Core Portfolio is
representative of portfolios that, by portfolio practice, invest in a variety
of market-capitalization ranges without concentrating 75% of their equity
assets in any one market-capitalization range over an extended period of
time. Multi-cap core funds typically have an average price-to-earnings ratio,
price-to-book ratio, and three-year sales-per-share growth value compared to
the S&P SuperComposite 1500(R) Index. Lipper Inc. is an independent monitor
of fund performance.
M-140 MainStay VP Growth Allocation Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP GROWTH ALLOCATION
PORTFOLIO (UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,215.40 $0.17 $1,025.10 $0.15
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,213.90 $1.56 $1,023.80 $1.43
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.03% for Initial Class and 0.28% Service Class) multiplied by the average
account value over the period, divided by 365 and multiplied by 184 (to
reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period. In addition to the fees
and expenses which the Portfolio bears directly, the Portfolio indirectly
bears a pro rata share of the fees and expenses of the Underlying
Portfolio/Funds in which it invests. Such indirect expenses are not included
in the above-reported expense figures.
mainstayinvestments.com M-141
INVESTMENT OBJECTIVES OF UNDERLYING PORTFOLIOS/FUNDS AS OF DECEMBER 31, 2009
(UNAUDITED)
(COMPOSITION PIE CHART)
<Table>
Growth of Capital 65.70
Total Return 24.00
Capital Appreciation 10.40
Other Assets, Less Liabilities (0.10)
</Table>
See Portfolio of Investments on page M-146 for specific holdings within these
categories.
M-142 MainStay VP Growth Allocation Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY PORTFOLIO MANAGERS TONY H. ELAVIA AND JONATHAN SWANEY OF
MADISON SQUARE INVESTORS LLC, THE PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP GROWTH ALLOCATION PORTFOLIO PERFORM RELATIVE TO ITS PEERS
AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Growth Allocation
Portfolio returned 28.04% for Initial Class shares and 27.72% for Service Class
shares. Both share classes underperformed the 31.30% return of the average
Lipper(1) Variable Products Multi-Cap Core Portfolio and outperformed the 26.46%
return of the S&P 500(R) Index(1) for the 12 months ended December 31, 2009. The
S&P 500(R) Index is the Portfolio's broad-based securities-market index.
WHAT FACTORS INFLUENCED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
The Portfolio's performance relative to its Lipper
peers and the S&P 500(R) Index was partially attribut-
able to exposure to non-large-cap stocks and strong
security selection within a few of the Portfolio's
Underlying Portfolios/Funds.
DURING 2009, HOW DID YOU DETERMINE THE PORTFOLIO'S ALLOCATIONS AMONG THE
UNDERLYING PORTFOLIOS/FUNDS?
In managing the Portfolio, we consider a variety of information, including the
portfolio-level characteristics of the Underlying Portfolios/Funds, such as
capitalization, style biases and sector exposures. We also examine the
attributes of the holdings of the Under-
lying Portfolios/Funds, such as valuation metrics, earnings data and technical
indicators. Finally, we evaluate the historical success of the managers
responsible for the Underlying Portfolios/Funds. In general, we seek Underlying
Equity Portfolios/Funds that we believe have a track record of capable portfolio
management, that occupy attractively valued market segments and that invest in
companies with fairly priced securities and strong price and earnings momentum.
During 2009, these techniques had little cumulative impact on performance,
neither adding to nor detracting from value.
WERE THERE ANY CHANGES IN THE PORTFOLIO'S ALLOCATIONS AMONG UNDERLYING
PORTFOLIOS/FUNDS DURING 2009?
During 2009, the Portfolio made four primary allocation changes. First, we
lowered the Portfolio's average equity market capitalization during the year
through purchases of MainStay VP Mid Cap Core Portfolio, MainStay VP U.S. Small
Cap Portfolio and MainStay Epoch U.S. All Cap Fund. So far, the impact of this
strategy has been muted because performance among the lower-cap stocks was not
substantially different from the performance of large-cap stocks
in the latter months of 2009, when the strategy was implemented.
Second, we reduced the Portfolio's bias toward growth equities through sales of
MainStay VP Growth Equity Portfolio, MainStay VP Large Cap Growth Portfolio and
MainStay 130/30 Growth Fund. This may have reduced excess returns by a small
amount as growth stocks generally outperformed value stocks in the final months
of the year.
Third, we reduced the Portfolio's position in Main-
Stay VP Common Stock Portfolio, with the proceeds directed primarily to MainStay
130/30 Core Fund. This move also has had relatively little impact on the Port-
folio's performance because both Underlying Portfo-
lios/Funds generated a similar level of return after the trade.
Fourth, in an effort to further diversify the Portfolio across management
styles, we moved assets from MainStay ICAP Equity Fund and MainStay VP ICAP
Select Equity Portfolio and redirected them in part into MainStay MAP Fund.
Through the end of 2009, this move did not have a substantial impact on
performance.
WHICH OF THE PORTFOLIO'S UNDERLYING PORTFOLIOS/FUNDS HAD THE STRONGEST TOTAL
RETURNS AND WHICH UNDERLYING PORTFOLIOS/FUNDS HAD THE WEAKEST TOTAL RETURNS?
In 2009, MainStay VP U.S. Small Cap Portfolio posted the highest total return of
any of the Underlying Equity Portfolios/Funds in which the Portfolio invested.
MainStay VP Large Cap Growth Portfolio had the second-highest total return.
Among the Underlying Equity Portfolios/Funds in which the Portfolio invested,
MainStay VP International Equity Portfolio and MainStay 130/30 Core Fund posted
the lowest total returns.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
THE DISCLOSURE AND FOOTNOTES ON THE NEXT TWO PAGES ARE AN INTEGRAL PART OF THE
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH IT.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-143
WHICH UNDERLYING PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS TO THE
PORTFOLIO'S OVERALL PERFORMANCE AND WHICH UNDERLYING PORTFOLIOS/FUNDS WERE
PARTICULARLY WEAK?
Substantial positions in MainStay VP Large Cap Growth Portfolio and MainStay VP
Common Stock Portfolio had the greater positive impact on the Portfolio's
performance. No Underlying Equity Portfolios/Funds in which the Portfolio
invested generated negative returns. However, weak performance within MainStay
VP Common Stock Portfolio and MainStay 130/30 Core Fund meant that the
allocations made to these Portfolios/Funds resulted in disappointingly small
contributions to return.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING PAGE AND THE NEXT PAGE ARE AN
INTEGRAL PART OF THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE
CAREFULLY READ IN CONJUNCTION WITH IT.
M-144 MainStay VP Growth Allocation Portfolio
MainStay VP Growth Allocation Portfolio is a "fund of funds" that invests in
other MainStay VP Portfolios and other MainStay mutual funds ("Underlying
Portfolios/Funds"). The cost of investing in the Portfolio may be higher than
the cost of investing in a mutual fund that invests directly in individual
stocks and bonds. By investing in the Portfolio, clients will directly bear the
Portfolio's fees and expenses and will indirectly bear the fees and expenses
charged by the Underlying Portfolios/Funds in which the Portfolio invests. In
addition, the use of a fund-of-funds structure could affect the timing, amount
and character of distributions to the client and may increase taxes payable by
the client.
The Portfolio's performance depends on the Subadvisor's skill in determining the
asset-class allocations and the mix and related performance of the Underlying
Portfolios/Funds. The performance of the Underlying Portfolios/Funds may be
lower than the performance of the asset class or classes the Underlying
Portfolios/Funds were selected to represent.
The Portfolio may invest more than 25% of its assets in one Underlying
Portfolio/Fund, which may significantly affect the Portfolio's net asset value.
The Portfolio, through its investment in the Underlying Portfolios/Funds, may be
subject to the risks of the Underlying Portfolios/Funds, including the
following:
- - Stocks and bonds can decline because of adverse issuer, market, regulatory or
economic developments.
- - The principal risk of growth stocks is that investors expect growth companies
to increase their earnings at a certain rate that is generally higher than the
rate expected for nongrowth companies. If these expectations are not met, the
market price of the stock may decline significantly, even if earnings showed
an absolute increase. Growth company stocks also typically lack the dividend
yield that can cushion stock prices in market downturns.
- - Stocks of small companies may be subject to higher price volatility,
significantly lower trading volume and greater spreads between bid and ask
prices than stocks of larger companies. Furthermore, small-cap companies may
be more vulnerable to adverse business or market developments than larger
companies, and the product lines of small companies may be more limited than
those of larger capitalization companies.
- - Stocks of mid-cap companies may be more volatile and less liquid than the
securities of larger companies.
- - 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.
- - Short sales involve costs and risk. If a security sold short increases in
price, an Underlying Fund may have to cover its short position at a higher
price than the short-sale price, resulting in a loss. When borrowing a
security for delivery to a buyer, the Underlying Fund may also be required to
pay a premium and other transaction costs, which would increase the cost of
the security sold short.
- - AN INVESTMENT IN AN UNDERLYING PORTFOLIO/FUND THAT IS A MONEY MARKET FUND IS
NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
EACH OF THE UNDERLYING MONEY MARKET PORTFOLIOS/FUNDS IN WHICH THE PORTFOLIO
MAY INVEST SEEKS TO MAINTAIN A VALUE OF $1.00 PER SHARE, IT IS POSSIBLE THAT
THE PORTFOLIO MAY LOSE MONEY ON INVESTMENTS IN THESE UNDERLYING MONEY MARKET
PORTFOLIOS/FUNDS.
Before making an investment in the Portfolio, you should consider all the risks
associated with it.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING TWO PAGES ARE AN INTEGRAL PART OF
THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH IT.
Information about MainStay VP Growth Allocation Portfolio on this page and the
preceding pages has not been audited.
mainstayinvestments.com M-145
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
AFFILIATED INVESTMENT COMPANIES 100.1%+
- -------------------------------------------------------------
EQUITY FUNDS 100.1%
MainStay 130/30 Core Fund
Class I (a) 3,598,689 $ 24,651,021
MainStay 130/30 Growth Fund
Class I (a)(b) 472,448 3,770,131
MainStay 130/30 International
Fund Class I (a) 2,237,377 14,162,596
MainStay Epoch Global Choice
Fund Class I (a) 154,155 2,125,796
MainStay Epoch U.S. All Cap
Fund Class I 21,662 439,296
MainStay ICAP Equity Fund
Class I 567,431 17,959,200
MainStay ICAP International
Fund Class I 498,005 14,158,286
MainStay MAP Fund Class I 616,169 17,184,964
MainStay VP Common Stock
Portfolio Initial Class 1,075,658 15,573,545
MainStay VP Growth Equity
Portfolio Initial Class 74,699 1,646,669
MainStay VP ICAP Select Equity
Portfolio Initial Class 1,744,167 18,669,891
MainStay VP International
Equity Portfolio Initial
Class (a) 1,038,324 13,110,397
MainStay VP Large Cap Growth
Portfolio Initial Class
(a)(b) 2,510,760 32,328,877
MainStay VP Mid Cap Core
Portfolio Initial Class (a) 3,238,655 31,194,526
MainStay VP U.S. Small Cap
Portfolio Initial Class
(a)(b) 655,530 4,884,462
-------------
Total Investments
(Cost $215,074,859) (c) 100.1% 211,859,657
Other Assets, Less Liabilities (0.1) (242,497)
----- ------------
Net Assets 100.0% $ 211,617,160
===== ============
</Table>
<Table>
+ Percentages indicated are based on
Portfolio net assets.
(a) The Portfolio's ownership exceeds 5% of
the outstanding shares of the Underlying
Portfolios/Funds share class.
(b) Non-income producing Underlying
Portfolio/Fund.
(c) At December 31, 2009, cost is
$218,993,333 for federal income tax
purposes and net unrealized depreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 7,931,952
Gross unrealized depreciation (15,065,628)
------------
Net unrealized depreciation $ (7,133,676)
============
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Affiliated Investment Companies--Equity
Funds $211,859,657 $ -- $ -- $211,859,657
------------ -------- -------- ------------
Total Investments in Securities $211,859,657 $ -- $-- $211,859,657
============ ======== ======== ============
</Table>
(a) For detailed descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
M-146 MainStay VP Growth Allocation Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in affiliated investment
companies, at value (identified
cost $215,074,859) $211,859,657
Cash 29,318
Receivables:
Fund shares sold 68,428
Other assets 278
------------
Total assets 211,957,681
------------
LIABILITIES:
Payables:
Fund shares redeemed 235,693
NYLIFE Distributors (See Note 3) 39,318
Investment securities purchased 29,317
Professional fees 20,721
Shareholder communication 10,393
Custodian 3,136
Directors 580
Accrued expenses 1,363
------------
Total liabilities 340,521
------------
Net assets $211,617,160
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 245,450
Additional paid-in capital 254,107,483
------------
254,352,933
Accumulated undistributed net
investment income 2,294,336
Accumulated net realized loss on
investments (41,814,907)
Net unrealized depreciation on
investments (3,215,202)
------------
Net assets $211,617,160
============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 24,773,530
============
Shares of capital stock outstanding 2,866,653
============
Net asset value per share
outstanding $ 8.64
============
SERVICE CLASS
Net assets applicable to
outstanding shares $186,843,630
============
Shares of capital stock outstanding 21,678,395
============
Net asset value per share
outstanding $ 8.62
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-147
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividend distributions from
affiliated
investment companies $ 2,774,165
------------
EXPENSES:
Distribution and service--Service
Class (See Note 3) 383,079
Professional fees 45,610
Shareholder communication 31,814
Directors 7,548
Custodian 2,951
Miscellaneous 8,808
------------
Total expenses 479,810
------------
Net investment income 2,294,355
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on:
Affiliated investment company
transactions (36,164,213)
Capital gain distributions from
affiliated investment companies 11,707
------------
Net realized loss on investments
from affiliated investment
companies (36,152,506)
------------
Net change in unrealized
depreciation on investments 79,285,564
------------
Net realized and unrealized gain on
investments and investments 43,133,058
------------
Net increase in net assets
resulting from operations $ 45,427,413
============
</Table>
M-148 MainStay VP Growth Allocation Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 2,294,355 $ 1,651,117
Net realized gain (loss) on
investments from affiliated investment
company transactions (36,152,506) 541,500
Net change in unrealized appreciation
(depreciation) on investments 79,285,564 (85,424,794)
-----------------------------
Net increase (decrease) in net assets
resulting from operations 45,427,413 (83,232,177)
-----------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (493,803) (137,311)
Service Class (3,337,200) (888,878)
-----------------------------
(3,831,003) (1,026,189)
-----------------------------
From net realized gain on investments:
Initial Class (405,537) (434,580)
Service Class (3,070,349) (3,777,429)
-----------------------------
(3,475,886) (4,212,009)
-----------------------------
Total dividends and distributions to
shareholders (7,306,889) (5,238,198)
-----------------------------
Capital share transactions:
Net proceeds from sale of shares 34,962,763 66,691,315
Net asset value of shares issued to
shareholders in reinvestment of
dividends and distributions 7,306,889 5,238,198
Cost of shares redeemed (19,453,418) (18,578,086)
-----------------------------
Increase in net assets derived from
capital share transactions 22,816,234 53,351,427
-----------------------------
Net increase (decrease) in net
assets 60,936,758 (35,118,948)
NET ASSETS:
Beginning of year 150,680,402 185,799,350
-----------------------------
End of year $211,617,160 $150,680,402
=============================
Accumulated undistributed net investment
income at end of year $ 2,294,336 $ 3,831,002
=============================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-149
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006
Net asset value at
beginning of period $ 7.02 $ 11.69 $ 11.10 $10.00
------- ------- ------- ------
Net investment income 0.12 (a) 0.11 (a) 0.07 0.08 (a)
Net realized and
unrealized gain (loss)
on investments 1.83 (4.50) 1.11 1.17
------- ------- ------- ------
Total from investment
operations 1.95 (4.39) 1.18 1.25
------- ------- ------- ------
Less dividends and
distributions:
From net investment
income (0.18) (0.07) (0.14) (0.08)
From net realized gain
on investments (0.15) (0.21) (0.45) (0.07)
------- ------- ------- ------
Total dividends and
distributions (0.33) (0.28) (0.59) (0.15)
------- ------- ------- ------
Net asset value at end of
period $ 8.64 $ 7.02 $ 11.69 $11.10
======= ======= ======= ======
Total investment return 28.04% (37.58%) 10.41% 12.42%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 1.56% 1.14% 0.75% 0.90%++
Net expenses (c) 0.06% 0.07% 0.07% 0.24%++
Expenses (before
reimbursement) (c) 0.06% 0.07% 0.09% 0.24%++
Portfolio turnover rate 47% 42% 16% 61%
Net assets at end of
period (in 000's) $24,774 $15,699 $17,160 $7,312
</Table>
** Commencement of operations.
++ Annualized.
(a) Per share data based on average shares outstanding during the period.
(b) Total return is not annualized.
(c) In addition to the fees and expenses which the Portfolio bears directly, the
Portfolio indirectly bears a pro-rata share of the fees and expenses of the
Underlying Portfolios/Funds in which it invests. Such indirect expenses are
not included in the above expense ratios.
M-150 MainStay VP Growth Allocation Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------
2009 2008 2007 2006
$ 7.00 $ 11.67 $ 11.08 $ 10.00
-------- -------- -------- -------
0.10 (a) 0.09 (a) 0.05 0.07 (a)
1.83 (4.50) 1.10 1.15
-------- -------- -------- -------
1.93 (4.41) 1.15 1.22
-------- -------- -------- -------
(0.16) (0.05) (0.11) (0.07)
(0.15) (0.21) (0.45) (0.07)
-------- -------- -------- -------
(0.31) (0.26) (0.56) (0.14)
-------- -------- -------- -------
$ 8.62 $ 7.00 $ 11.67 $ 11.08
======== ======== ======== =======
27.72% (37.75%) 10.14% 12.18%(b)
1.29% 0.90% 0.52% 0.72%++
0.31% 0.32% 0.32% 0.49%++
0.31% 0.32% 0.34% 0.49%++
47% 42% 16% 61%
$186,844 $134,981 $168,639 $74,594
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-151
MAINSTAY VP GROWTH EQUITY PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 34.18% 0.86% -4.15%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
RUSSELL 1000 S&P 500
INITIAL CLASS GROWTH INDEX INDEX
------------- ------------ -------
12/31/99 10000 10000 10000
8928 7758 9090
6855 6173 8009
4742 4452 6239
6022 5776 8029
6272 6140 8902
6800 6463 9340
7102 7050 10815
7982 7883 11409
4879 4853 7188
12/31/09 6547 6658 9090
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 33.85% 0.60% -4.39%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
RUSSELL 1000 S&P 500
SERVICE CLASSU GROWTH INDEX INDEX
-------------- ------------ -------
12/31/99 10000 10000 10000
8903 7758 9090
6819 6173 8009
4705 4452 6239
5961 5776 8029
6193 6140 8902
6695 6463 9340
6975 7050 10815
7820 7883 11409
4768 4853 7188
12/31/09 6382 6658 9090
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Russell 1000(R) Growth Index(3) 37.21% 1.63% -3.99%
S&P 500(R) Index(3) 26.46 0.42 -0.95
Average Lipper Variable Products Large-Cap Growth
Portfolio(4) 37.97 1.22 -2.73
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 0.77% and -4.19% for Initial
Class shares and 0.55% and -4.42% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 5, 2003, includes
the historical performance of Initial Class shares through June 4, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products Large-Cap Growth Portfolio is
representative of portfolios that, by portfolio practice, invest at least 75%
of their equity assets in companies with market capitalizations (on a three-
year weighted basis) above Lipper's U.S. diversified equity large-cap floor.
Large-cap growth funds typically have an above-average price-to-earnings
ratio, price-to-book ratio, and three-year sales-per-share growth value
compared to the S&P 500(R) index. Lipper Inc. is an independent monitor of
fund performance.
M-152 MainStay VP Growth Equity Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP GROWTH EQUITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,218.70 $3.80 $1,021.80 $3.47
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,217.20 $5.20 $1,020.50 $4.74
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
0.68% for Initial Class and 0.93% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-153
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
<Table>
Computers & Peripherals 10.1%
Communications Equipment 7.8
Machinery 7.3
Software 6.9
Biotechnology 5.3
Pharmaceuticals 5.2
Internet Software & Services 4.9
Household Products 4.7
Oil, Gas & Consumable Fuels 3.5
Beverages 3.4
Capital Markets 3.3
Semiconductors & Semiconductor
Equipment 3.3
Health Care Equipment & Supplies 3.1
Hotels, Restaurants & Leisure 2.7
Health Care Providers & Services 2.5
Internet & Catalog Retail 2.5
Road & Rail 2.4
Energy Equipment & Services 2.0
IT Services 2.0
Aerospace & Defense 1.3
Textiles, Apparel & Luxury Goods 1.3
Food & Staples Retailing 1.1
Metals & Mining 1.1
Chemicals 1.0
Consumer Finance 1.0
Food Products 1.0
Media 1.0
Tobacco 1.0
Wireless Telecommunication Services 1.0
Diversified Financial Services 0.9
Specialty Retail 0.9
Containers & Packaging 0.5
Short-Term Investment 3.2
Other Assets, Less Liabilities 0.8
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-157 for specific holdings
within these categories.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. Microsoft Corp.
2. Google, Inc. Class A
3. Apple, Inc.
4. International Business Machines Corp.
5. QUALCOMM, Inc.
6. Cisco Systems, Inc.
7. Hewlett-Packard Co.
8. McDonald's Corp.
9. Mylan, Inc.
10. Abbott Laboratories
</Table>
M-154 MainStay VP Growth Equity Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY MACKAY SHIELDS LLC, THE PORTFOLIO'S FORMER SUBADVISOR, AND
HARISH KUMAR, PHD, CFA, OF MADISON SQUARE INVESTORS LLC, THE PORTFOLIO'S
SUBADVISOR.(1)
HOW DID MAINSTAY VP GROWTH EQUITY PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Growth Equity Portfolio
returned 34.18% for Initial Class shares and 33.85% for Service Class shares.
Both share classes underperformed the 37.97% return of the average Lipper(2)
Variable Prod-
ucts Large-Cap Growth Portfolio and the 37.21% return of the Russell 1000(R)
Growth Index(2) for the 12 months ended December 31, 2009. The Russell 1000(R)
Growth Index is the Portfolio's broad-based securities-market index.
WERE THERE ANY IMPORTANT CHANGES IN THE PORTFOLIO'S STRUCTURE OR DAY-TO-DAY
PORTFOLIO MANAGEMENT DURING THE REPORTING PERIOD?
In connection with a larger initiative by MacKay Shields to reposition and
rationalize its investment capabilities, the Board of Directors of the Fund
approved the replacement of MacKay Shields with Madison Square Investors as the
Subadviser to the Portfolio, effective June 29, 2009. For the period from
January 1, 2009, to June 28, 2009, the Portfolio's performance figures
referenced above reflect the performance of the Portfolio while it was managed
by its former subadvisor, MacKay Shields.
Effective June 29, 2009, the Portfolio changed its investment objective,
principal investment strategy, investment process and principal risks. Effective
November 20, 2009, the Portfolio changed its name from MainStay VP Capital
Appreciation Portfolio to MainStay VP Growth Equity Portfolio.
WHAT MAJOR FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
For the first six months of 2009, the Portfolio's underperformance resulted
largely from the market's quick rotation away from defensive sectors and into
ones that were seen as more likely to benefit from
an economic recovery. The Portfolio's defensive posi-
tioning hurt performance relative to its benchmark and its peers.
During the last six months of 2009, the Portfolio's underperformance of the
Russell 1000(R) Growth Index came primarily from stock selection in the health
care and consumer staples sectors.
DURING THE REPORTING PERIOD, WHICH SECTORS
WERE STRONG CONTRIBUTORS TO THE PORTFOLIO'S PERFORMANCE AND WHICH SECTORS WERE
WEAK CONTRIBUTORS?
During the first six months of 2009, the strongest contributing sectors to the
Portfolio's performance relative to the Russell 1000(R) Growth Index were
information technology, energy and industrials. During the first half of the
year, the Portfolio's weakest-contributing sectors were utilities, finan-
cials and consumer staples.
During the last six months of 2009, information technology, consumer
discretionary and industrials were the Portfolio's strongest-contributing
sectors on an absolute basis. During the second half of the year, utilities,
materials and telecommunication services were weak contributors on an absolute
basis.
DURING THE REPORTING PERIOD, WHICH STOCKS WERE STRONG CONTRIBUTORS TO THE
PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS WERE PARTICULARLY WEAK?
During the first six months of 2009, computer & peripherals manufacturer Apple
was the biggest contributor to the Portfolio's absolute return, followed by
Blackberry device and software provider Research In Motion and computer
solutions company International Business Machines. Weak contributors
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. The
principal risk of growth stocks is that investors expect growth companies to
increase their earnings at a rate that is generally higher than the rate
expected for nongrowth companies. If these expectations are not met, the market
price of the stock may decline significantly, even if earnings showed an
absolute increase. Growth company stocks also typically lack the dividend yield
that can cushion stock prices in market downturns. The Portfolio may experience
a portfolio turnover rate of more than 100% and may generate taxable short-term
gains. 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.
1. During the reporting period, New York Life Investments delegated day-to-day
portfolio management responsibilities to MacKay Shields from January 1, 2009,
to June 29, 2009, and to Madison Square Investors beginning on June 29, 2009.
"New York Life Investments" is a service mark used by New York Life
Investment Management LLC.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-155
during the first half of the year included railroad operator Norfolk Southern,
biotechnology company Celgene and battery, flashlight and personal care products
company Energizer Holdings.
During the second half of 2009, the strongest contributors to the Portfolio's
absolute performance were information technology companies Apple, Microsoft and
Google. Major detractors from the Portfolio's absolute performance during the
second half of the year included diversified financial services company
IntercontinentalExchange, food & staples retailer CVS Caremark and health care
equipment & supplies company St. Jude Medical.
DURING 2009, DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES?
During the first half of 2009, significant purchases included home-improvement
retailer Lowe's, airfreight & logistics company United Parcel Service and
industrial conglomerate 3M. During the first half of 2009, the Portfolio sold
its position in auto-parts retailer AutoZone and trimmed its position in bever-
age company Coca-Cola. During the first half of the year, the Portfolio also
sold its positions in Goldman Sachs, Wells Fargo and U.S. Bancorp.
During the second half of 2009, the Portfolio initiated new positions in
biotechnology company Amgen and pharmaceutical company Mylan. During the second
half of the year the Portfolio eliminated the remain-
der of its position in Coco-Cola and sold its shares
of aerospace & defense company United Technologies.
HOW DID THE PORTFOLIO'S SECTOR AND INDUSTRY GROUP WEIGHTINGS CHANGE OVER THE
COURSE OF 2009?
In the first half of 2009, the Portfolio sought to increase cyclical exposure
and decrease defensive positioning. To that end, the Portfolio increased
exposure to the consumer discretionary and industrials sectors and decreased
exposure to consumer staples and health care.
In the second half of 2009, the Portfolio slightly increased its weightings
relative to Russell 1000(R) Growth Index in the communications equipment
and machinery industry groups and decreased its weightings in the chemicals and
life sciences tools & services industry groups.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF 2009?
As of December 31, 2009, the Portfolio was over-
weight in the information technology and energy sectors. This positioning helped
the Portfolio's per-
formance during the year. As of the same date, the Portfolio was underweight in
the materials and con-
sumer staples sectors, and this positioning hurt the Portfolio's performance.
The opinions expressed are those of the respondents as of the date of this
report with respect to the period managed by such portfolio manager and are
subject to change. There is no guarantee that any forecasts made will come to
pass. This material does not constitute investment advice and is not intended as
an endorsement of any specific investment.
Information about MainStay VP Growth Equity Portfolio on this page and the
preceding pages has not been audited.
M-156 MainStay VP Growth Equity Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 96.0%+
- ----------------------------------------------------------------
AEROSPACE & DEFENSE 1.3%
Precision Castparts Corp. 55,350 $ 6,107,872
-------------
BEVERAGES 3.4%
Diageo PLC, Sponsored ADR (a) 60,596 4,205,968
PepsiCo, Inc. 188,786 11,478,189
-------------
15,684,157
-------------
BIOTECHNOLOGY 5.3%
Amgen, Inc. (b) 203,713 11,524,044
Celgene Corp. (b) 110,950 6,177,696
Gilead Sciences, Inc. (b) 166,121 7,189,717
-------------
24,891,457
-------------
CAPITAL MARKETS 3.3%
Blackstone Group (The), L.P. 270,055 3,543,122
Goldman Sachs Group, Inc.
(The) 29,302 4,947,350
Greenhill & Co., Inc. 42,643 3,421,674
Invesco, Ltd. 155,927 3,662,725
-------------
15,574,871
-------------
CHEMICALS 1.0%
Celanese Corp. Series A 72,276 2,320,060
Mosaic Co. (The) 40,040 2,391,589
-------------
4,711,649
-------------
COMMUNICATIONS EQUIPMENT 7.8%
Brocade Communications
Systems, Inc. (b) 309,561 2,361,951
v Cisco Systems, Inc. (b) 589,649 14,116,197
Juniper Networks, Inc. (b) 215,420 5,745,251
v QUALCOMM, Inc. 306,303 14,169,577
-------------
36,392,976
-------------
COMPUTERS & PERIPHERALS 10.1%
v Apple, Inc. (b) 80,922 17,063,213
v Hewlett-Packard Co. 253,627 13,064,327
v International Business
Machines Corp. 108,721 14,231,579
NetApp, Inc. (b) 89,457 3,076,426
-------------
47,435,545
-------------
CONSUMER FINANCE 1.0%
American Express Co. 117,695 4,769,001
-------------
CONTAINERS & PACKAGING 0.5%
Packaging Corp. of America 101,685 2,339,772
-------------
DIVERSIFIED FINANCIAL SERVICES 0.9%
JPMorgan Chase & Co. 97,949 4,081,535
-------------
ENERGY EQUIPMENT & SERVICES 2.0%
FMC Technologies, Inc. (b) 105,100 6,078,984
Transocean, Ltd. (b) 40,099 3,320,197
-------------
9,399,181
-------------
FOOD & STAPLES RETAILING 1.1%
Costco Wholesale Corp. 83,760 4,956,079
-------------
FOOD PRODUCTS 1.0%
General Mills, Inc. 67,905 4,808,353
-------------
HEALTH CARE EQUIPMENT & SUPPLIES 3.1%
Baxter International, Inc. 142,486 8,361,078
Hospira, Inc. (b) 122,780 6,261,780
-------------
14,622,858
-------------
HEALTH CARE PROVIDERS & SERVICES 2.5%
Medco Health Solutions, Inc.
(b) 183,336 11,717,004
-------------
HOTELS, RESTAURANTS & LEISURE 2.7%
v McDonald's Corp. 202,713 12,657,400
-------------
HOUSEHOLD PRODUCTS 4.7%
Colgate-Palmolive Co. 92,205 7,574,641
Energizer Holdings, Inc. (b) 88,651 5,432,533
Procter & Gamble Co. (The) 148,244 8,988,034
-------------
21,995,208
-------------
INTERNET & CATALOG RETAIL 2.5%
Amazon.com, Inc. (b) 55,890 7,518,323
Priceline.com, Inc. (b) 18,819 4,111,951
-------------
11,630,274
-------------
INTERNET SOFTWARE & SERVICES 4.9%
Baidu, Inc., ADR (a)(b) 6,480 2,664,770
v Google, Inc. Class A (b) 32,318 20,036,514
-------------
22,701,284
-------------
IT SERVICES 2.0%
Accenture PLC Class A 113,114 4,694,231
Cognizant Technology
Solutions Corp. Class A (b) 102,372 4,637,452
-------------
9,331,683
-------------
MACHINERY 7.3%
Danaher Corp. 99,656 7,494,131
Deere & Co. 92,824 5,020,850
Flowserve Corp. 49,140 4,645,204
Illinois Tool Works, Inc. 130,239 6,250,170
</Table>
+ Percentages indicated are based on Portfolio net assets.
v Among the Portfolio's 10 largest holdings, as of December 31, 2009,
excluding short-term investment. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-157
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
MACHINERY (CONTINUED)
Ingersoll-Rand PLC 174,159 $ 6,224,443
Joy Global, Inc. 91,522 4,721,620
-------------
34,356,418
-------------
MEDIA 1.0%
Discovery Communications,
Inc. Class A (b) 150,672 4,621,110
-------------
METALS & MINING 1.1%
Freeport-McMoRan Copper &
Gold, Inc. (b) 26,215 2,104,802
United States Steel Corp. 51,838 2,857,311
-------------
4,962,113
-------------
OIL, GAS & CONSUMABLE FUELS 3.5%
Apache Corp. 44,288 4,569,193
Petroleo Brasileiro S.A., ADR
(a) 85,960 4,098,573
Southwestern Energy Co. (b) 156,264 7,531,924
-------------
16,199,690
-------------
PHARMACEUTICALS 5.2%
v Abbott Laboratories 218,906 11,818,735
v Mylan, Inc. (b) 671,446 12,374,750
-------------
24,193,485
-------------
ROAD & RAIL 2.4%
Union Pacific Corp. 173,430 11,082,177
-------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 3.3%
Lam Research Corp. (b) 166,329 6,521,760
Teradyne, Inc. (b) 196,793 2,111,589
Texas Instruments, Inc. 265,742 6,925,237
-------------
15,558,586
-------------
SOFTWARE 6.9%
v Microsoft Corp. 698,976 21,311,778
Oracle Corp. 445,103 10,922,828
-------------
32,234,606
-------------
SPECIALTY RETAIL 0.9%
Urban Outfitters, Inc. (b) 125,833 4,402,897
-------------
TEXTILES, APPAREL & LUXURY GOODS 1.3%
Coach, Inc. 167,197 6,107,706
-------------
TOBACCO 1.0%
Lorillard, Inc. 58,656 4,705,971
-------------
WIRELESS TELECOMMUNICATION SERVICES 1.0%
American Tower Corp. Class A
(b) 110,128 4,758,631
-------------
Total Common Stocks
(Cost $397,489,549) 448,991,549
-------------
<Caption>
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 3.2%
- ----------------------------------------------------------------
REPURCHASE AGREEMENT 3.2%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$14,820,454 (Collateralized
by a United States Treasury
Bill with a zero coupon
rate and a maturity date of
2/18/10, with a Principal
Amount of $15,120,000 and a
Market Value of
$15,120,000) $14,820,446 14,820,446
-------------
Total Short-Term Investment
(Cost $14,820,446) 14,820,446
-------------
Total Investments
(Cost $412,309,995) (c) 99.2% 463,811,995
Other Assets, Less
Liabilities 0.8 3,700,989
===== ============
Net Assets 100.0% $ 467,512,984
===== ============
</Table>
<Table>
(a) ADR--American Depositary Receipt.
(b) Non-income producing security.
(c) At December 31, 2009, cost is $413,335,748 for federal income tax purposes and
net unrealized appreciation is as follows:
</Table>
<Table>
Gross unrealized appreciation $57,180,350
Gross unrealized depreciation (6,704,103)
-----------
Net unrealized appreciation $50,476,247
===========
</Table>
M-158 MainStay VP Growth Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Common Stocks $448,991,549 $ -- $ -- $448,991,549
Short-Term Investment
Repurchase Agreement -- 14,820,446 -- 14,820,446
------------ ----------- -------- ------------
Total Investments in Securities $448,991,549 $14,820,446 $-- $463,811,995
============ =========== ======== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-159
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $412,309,995) $463,811,995
Receivables:
Investment securities sold 19,984,892
Dividends and interest 294,201
Fund shares sold 9,452
Other assets 724
------------
Total assets 484,101,264
------------
LIABILITIES:
Payables:
Investment securities purchased 15,986,890
Manager (See Note 3) 239,759
Fund shares redeemed 221,272
Shareholder communication 85,924
Professional fees 34,937
NYLIFE Distributors (See Note 3) 9,370
Custodian 5,320
Directors 1,280
Accrued expenses 3,528
------------
Total liabilities 16,588,280
------------
Net assets $467,512,984
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 212,157
Additional paid-in capital 513,149,244
------------
513,361,401
Accumulated undistributed net
investment income 2,221,971
Accumulated net realized loss on
investments and foreign currency
transactions (99,572,388)
Net unrealized appreciation on
investments 51,502,000
------------
Net assets $467,512,984
============
INITIAL CLASS
Net assets applicable to
outstanding shares $423,086,004
============
Shares of capital stock outstanding 19,192,710
============
Net asset value per share
outstanding $ 22.04
============
SERVICE CLASS
Net assets applicable to
outstanding shares $ 44,426,980
============
Shares of capital stock outstanding 2,023,029
============
Net asset value per share
outstanding $ 21.96
============
</Table>
M-160 MainStay VP Growth Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends (a) $ 5,091,453
Interest 4,257
------------
Total income 5,095,710
------------
EXPENSES:
Manager (See Note 3) 2,482,031
Shareholder communication 134,633
Professional fees 108,063
Distribution and service--Service
Class (See Note 3) 96,039
Directors 18,108
Custodian 13,288
Miscellaneous 21,712
------------
Total expenses 2,873,874
------------
Net investment income 2,221,836
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Security transactions (10,349,121)
Foreign currency transactions 139
------------
Net realized loss on investments
and foreign currency transactions (10,348,982)
------------
Net change in unrealized
depreciation on investments 129,367,301
------------
Net realized and unrealized gain on
investments and foreign currency
transactions 119,018,319
------------
Net increase in net assets
resulting from operations $121,240,155
============
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$17,919.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-161
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 2,221,836 $ 2,312,050
Net realized loss on
investments and foreign
currency transactions (10,348,982) (43,331,437)
Net change in unrealized
appreciation (depreciation)
on investments 129,367,301 (224,408,886)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 121,240,155 (265,428,273)
----------------------------
Dividends to shareholders:
From net investment income:
Initial Class (2,207,215) (2,857,612)
Service Class (104,825) (130,025)
----------------------------
Total dividends to
shareholders (2,312,040) (2,987,637)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 14,743,786 19,676,349
Net asset value of shares
issued to shareholders in
reinvestment of dividends 2,312,040 2,987,637
Cost of shares redeemed (55,110,983) (113,994,895)
----------------------------
Decrease in net assets
derived from capital
share transactions (38,055,157) (91,330,909)
----------------------------
Net increase (decrease)
in net assets 80,872,958 (359,746,819)
NET ASSETS:
Beginning of year 386,640,026 746,386,845
----------------------------
End of year $467,512,984 $ 386,640,026
============================
Accumulated undistributed net
investment income at end of
year $ 2,221,971 $ 2,312,036
============================
</Table>
M-162 MainStay VP Growth Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
This page intentionally left blank
mainstayinvestments.com M-163
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 16.52 $ 27.23 $ 24.26 $ 23.31 $ 21.51
-------- -------- -------- -------- --------
Net investment income
(loss) 0.12 0.10 (a) 0.13 0.05 0.07 (a)
Net realized and
unrealized gain (loss)
on investments 5.51 (10.68) 2.88 0.99 1.73
-------- -------- -------- -------- --------
Total from investment
operations 5.63 (10.58) 3.01 1.04 1.80
-------- -------- -------- -------- --------
Less dividends:
From net investment
income (0.11) (0.13) (0.04) (0.09) (0.00)++
-------- -------- -------- -------- --------
Net asset value at end of
year $ 22.04 $ 16.52 $ 27.23 $ 24.26 $ 23.31
======== ======== ======== ======== ========
Total investment return 34.18% (38.87%) 12.39% 4.45% 8.41%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income
(loss) 0.57% 0.43% 0.40% 0.13% 0.33%
Net expenses 0.68% 0.64% 0.60% 0.62% 0.37%
Expenses (before waiver) 0.68% 0.64% 0.60% 0.62% 0.60%
Portfolio turnover rate 157% 54% 85% 28% 22%
Net assets at end of year
(in 000's) $423,086 $350,412 $681,500 $738,278 $835,933
</Table>
<Table>
++ Less than one cent per share.
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 8.16% and 7.88% for Initial Class shares and Service
Class shares, respectively, for the year ended December 31, 2005.
</Table>
M-164 MainStay VP Growth Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2009 2008 2007 2006 2005
$ 16.45 $ 27.07 $ 24.14 $ 23.21 $ 21.47
------- ------- ------- ------- -------
0.05 0.04 (a) 0.04 (0.03) 0.02 (a)
5.51 (10.60) 2.89 1.00 1.72
------- ------- ------- ------- -------
5.56 (10.56) 2.93 0.97 1.74
------- ------- ------- ------- -------
(0.05) (0.06) -- (0.04) --
------- ------- ------- ------- -------
$ 21.96 $ 16.45 $ 27.07 $ 24.14 $ 23.21
======= ======= ======= ======= =======
33.85% (39.03%) 12.11% 4.19% 8.10%(b)
0.32% 0.18% 0.15% (0.12%) 0.08%
0.93% 0.89% 0.85% 0.87% 0.62%
0.93% 0.89% 0.85% 0.87% 0.85%
157% 54% 85% 28% 22%
$44,427 $36,228 $64,887 $60,806 $58,556
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-165
MAINSTAY VP HIGH YIELD CORPORATE BOND PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 42.82% 5.04% 7.08%
</Table>
(After Portfolio operating expenses)
(Performance Graph)
<Table>
<Caption>
CREDIT SUISSE
HIGH YIELD
INITIAL CLASS INDEX
------------- -------------
12/31/99 10000 10000
9413 9479
9876 10029
10079 10340
13744 13229
15492 14811
15948 15146
17868 16950
18281 17399
13873 12845
12/31/09 19814 19810
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 42.47% 4.78% 6.82%
</Table>
(After Portfolio operating expenses)
(Performance Graph)
<Table>
<Caption>
CREDIT SUISSE
HIGH YIELD
SERVICE CLASS INDEX
------------- -------------
12/31/99 10000 10000
9392 9479
9831 10029
10010 10340
13618 13229
15313 14811
15720 15146
17569 16950
17930 17399
13573 12845
12/31/09 19338 19810
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Credit Suisse High Yield Index(3) 54.22% 5.99% 7.07%
Average Lipper Variable Products High
Current Yield Portfolio(4) 43.48 4.19 4.60
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 5.02% and 7.07% for Initial
Class shares and 4.78% and 6.82% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 4, 2003, includes
the historical performance of Initial Class shares through June 3, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products High Current Yield Portfolio is
representative of portfolios that aim at high (relative) current yield from
fixed-income securities, have no quality or maturity restrictions, and tend
to invest in lower-grade debt issues. Lipper Inc. is an independent monitor
of fund performance.
M-166 MainStay VP High Yield Corporate Bond Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP HIGH YIELD CORPORATE BOND
PORTFOLIO (UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,165.60 $3.33 $1,022.10 $3.11
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,164.10 $4.69 $1,020.90 $4.38
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.61% for Initial Class and 0.86% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-167
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(COMPOSITION PIE CHART)
See Portfolio of Investments beginning on page M-171 for specific holdings
within these categories.
TOP TEN ISSUERS HELD AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. Ford Motor Credit Co. LLC, 5.70%-12.00%,
due 1/15/10-12/15/16
2. HCA, Inc., 1.751%-9.875%, due
9/1/10-4/15/19
3. Georgia-Pacific Corp., 7.00%-8.875%, due
5/15/11-5/15/31
4. Charter Communications Operating LLC,
2.26%-10.38%, due 4/30/12-4/30/14
5. American Real Estate Partners,
L.P./American Real Estate Finance Corp.,
7.125%-8.125%, due 6/1/12-2/15/13
6. GMAC LLC, 6.75%-8.00%, due
3/2/11-11/1/31
7. Intelsat Subsidiary Holding Co., Ltd.,
8.50%-8.875%, due 1/15/13-1/15/15
8. Texas Competitive Electric Holdings Co.
LLC, 3.735%, due 10/10/14
9. Chesapeake Energy Corp., 6.50%-7.50%,
due 6/15/14-11/15/20
10. Nova Chemicals Corp., 6.50%-8.375%, due
1/15/12-11/1/16
</Table>
M-168 MainStay VP High Yield Corporate Bond Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY J. MATTHEW PHILO, CFA, OF MACKAY SHIELDS LLC, THE
PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP HIGH YIELD CORPORATE BOND PORTFOLIO PERFORM RELATIVE TO ITS
PEERS AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP High Yield Corporate Bond
Portfolio returned 42.82% for Initial Class shares and 42.47% for Service Class
shares. Both share classes underperformed the 43.48% return of the average
Lipper(1) Variable Products High Current Yield Portfolio and the 54.22% return
of the Credit Suisse High Yield Index(1) for the 12 months ended December 31,
2009. The Credit Suisse High Yield Index is the Portfolio's broad-based
securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
The Portfolio's performance relative to its benchmark and peers resulted from
our bottom-up investment process. This process focuses on individual companies
to determine risk-group weightings in the context of historical yield
spreads.(2) Because we anticipated prolonged economic weakness, we positioned
the Portfolio conservatively during the reporting period. The Portfolio's
largest industry exposures were in defensive areas, such as health care, energy
and utilities. Within each industry, the Portfolio's investments were focused on
what we believed were higher-quality companies. This conservative stance
detracted from the Portfolio's relative performance during the 12-month
reporting period, since lower-quality high-yield credits tended to outperform
higher-quality high-yield securities.
WHAT STRATEGIC DECISIONS AFFECTED THE PORTFOLIO'S PERFORMANCE DURING 2009?
Perhaps the most important decision was to position the Portfolio conservatively
in defensive sectors, despite the market's increasing appetite for risk. Our
investments were focused on what we believed to be higher-quality companies
within any given industry, and our overall outlook did not change much during
the year. We continued to believe that the economy was much weaker than the
market seemed to reflect.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE YEAR?
During 2009, the Portfolio added positions in financial services company Harley-
Davidson Funding and insurance broker and risk-management company
Willis Group Holdings. Both are large, high-quality companies whose bonds were
trading at extremely attractive valuations. The Portfolio also purchased bonds
of Tyson Foods, one of the nation's largest meat processors. All of these
purchases had a positive impact on the Portfolio's performance in 2009.
The Portfolio's position in bank debt of telecommunications company Alltel was
retired by the company following the acquisition of Alltel by Verizon. The
Portfolio sold its holdings in aviation company Hawker Beechcraft at a loss.
HOW DID THE PORTFOLIO'S INDUSTRY WEIGHTINGS CHANGE DURING 2009?
During the reporting period, we increased the Portfolio's already overweight
position in the transportation industry. Most auto companies were expecting that
further recovery would come from increased production to replenish inventories
that were depleted by strong "cash for clunkers" related sales.
The Portfolio maintained an overweight position in health care, but we reduced
some of the Portfolio's exposure to the sector when price appreciation made
sales prudent. The Portfolio reduced positions in the media and information
technology industries during the reporting period.
The values of debt securities fluctuate depending on various factors, including
interest rates, issuer creditworthiness, liquidity, market conditions and
maturities. Investments in common stocks and other equity securities are
particularly subject to the risk of changing economic, stock market, industry
and company conditions and the risks inherent in management's ability to
anticipate such changes that can adversely affect the value of the Portfolio's
holdings. High-yield debt 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.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
2. The terms "spread" and "yield spread" may refer to the difference in yield
between a security or type of security and comparable U.S. Treasury issues.
The terms may also refer to the difference in yield between two specific
securities or types of securities at a given time.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-169
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF 2009?
As of December 31, 2009, the Portfolio remained underweight credit risk--low-
quality non-investment-
grade bonds--relative to the Credit Suisse High Yield Index. Many of the recent
additions to the Portfolio have been higher-quality non-investment-grade (or BB-
rated) securities.(3)
3. 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.
The opinions expressed are those of the portfolio manager as of the date of this
report and are subject to change. There is no guarantee that any forecasts made
will come to pass. This material does not constitute investment advice and is
not intended as an endorsement of any specific investment.
Information about MainStay VP High Yield Corporate Bond Portfolio on this page
and the preceding pages has not been audited.
M-170 MainStay VP High Yield Corporate Bond Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 89.2%+
CONVERTIBLE BONDS 0.3%
- -------------------------------------------------------------------
INTERNET 0.0%++
At Home Corp.
0.525%, due 12/28/18
(a)(b)(c)(d) $ 1,869,975 $ 187
4.75%, due 12/31/49
(a)(b)(c)(d) 9,032,054 903
--------------
1,090
--------------
REAL ESTATE INVESTMENT TRUSTS 0.1%
Host Hotels & Resorts,
L.P.
3.25%, due 4/15/24 (e) 1,290,000 1,296,450
--------------
RETAIL 0.2%
Asbury Automotive Group,
Inc.
3.00%, due 9/15/12 3,365,000 2,961,200
--------------
Total Convertible Bonds
(Cost $3,606,105) 4,258,740
--------------
CORPORATE BONDS 73.1%
- -------------------------------------------------------------------
ADVERTISING 0.7%
Interpublic Group of Cos.,
Inc.
6.25%, due 11/15/14 5,620,000 5,395,200
Jostens Intermediate
Holding Corp.
7.625%, due 10/1/12 750,000 753,750
Lamar Media Corp.
Series B
6.625%, due 8/15/15 1,945,000 1,867,200
6.625%, due 8/15/15 715,000 693,550
7.25%, due 1/1/13 245,000 244,387
9.75%, due 4/1/14 2,445,000 2,698,669
--------------
11,652,756
--------------
AEROSPACE & DEFENSE 0.3%
BE Aerospace, Inc.
8.50%, due 7/1/18 2,660,000 2,819,600
L-3 Communications Corp.
6.125%, due 7/15/13 1,815,000 1,833,150
--------------
4,652,750
--------------
AGRICULTURE 0.5%
Alliance One
International, Inc.
10.00%, due 7/15/16 (e) 2,615,000 2,745,750
Reynolds American, Inc.
7.625%, due 6/1/16 2,110,000 2,300,273
7.75%, due 6/1/18 2,585,000 2,810,619
--------------
7,856,642
--------------
AIRLINES 0.3%
DAE Aviation Holdings,
Inc.
11.25%, due 8/1/15 (e) 4,215,000 3,561,675
Delta Air Lines, Inc.
(Escrow Shares)
(zero coupon), due
12/27/49 (b)(f) 3,395,000 47,530
2.875%, due 2/6/24
(b)(f) 2,325,000 33,945
2.875%, due 2/18/49
(b)(e)(f) 1,355,000 19,783
8.00%, due 6/3/23 (b)(f) 2,560,000 37,376
8.00%, due 6/3/49 (b)(f) 3,375,000 49,275
8.30%, due 12/15/29
(b)(f) 3,660,000 51,240
9.25%, due 3/15/49
(b)(f) 2,450,000 34,300
9.75%, due 5/15/49
(b)(f) 350,000 4,900
10.00%, due 8/15/49
(b)(f) 2,630,000 36,820
10.375%, due 12/15/22
(b)(f) 3,275,000 45,850
10.375%, due 2/1/49
(b)(f) 5,180,000 72,520
Northwest Airlines, Inc.
(Escrow Shares)
7.625%, due 11/15/23
(b)(f) 3,847,600 24,432
7.875%, due 12/31/49
(b)(f) 3,986,900 20,333
8.70%, due 3/15/49
(b)(f) 155,000 790
8.875%, due 6/1/49
(b)(f) 1,996,000 10,180
9.875%, due 3/15/37
(b)(f) 2,108,000 10,751
10.00%, due 2/1/49
(b)(f) 7,315,600 37,310
--------------
4,099,010
--------------
APPAREL 0.4%
Unifi, Inc.
11.50%, due 5/15/14 5,688,000 5,552,910
--------------
AUTO MANUFACTURERS 0.7%
Ford Holdings LLC
9.30%, due 3/1/30 1,710,000 1,573,200
Ford Motor Co.
6.50%, due 8/1/18 1,125,000 949,219
Harley-Davidson Funding
Corp.
5.25%, due 12/15/12 (e) 255,000 260,665
6.80%, due 6/15/18 (e) 7,510,000 7,489,107
--------------
10,272,191
--------------
AUTO PARTS & EQUIPMENT 2.4%
Affinia Group, Inc.
9.00%, due 11/30/14 1,570,000 1,522,900
10.75%, due 8/15/16 (e) 2,770,000 3,001,987
Allison Transmission, Inc.
11.25%, due 11/1/15
(e)(g) 1,893,500 1,978,708
American Tire
Distributors, Inc.
6.54%, due 4/1/12 (h) 775,000 643,250
10.75%, due 4/1/13 1,855,000 1,697,325
</Table>
+ Percentages indicated are based on Portfolio net assets.
v Among the Portfolio's 10 largest issuers held, as of December 31, 2009,
excluding short-term investment. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-171
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
AUTO PARTS & EQUIPMENT (CONTINUED)
FleetPride Corp.
11.50%, due 10/1/14 (e) $ 5,900,000 $ 5,398,500
Goodyear Tire & Rubber Co.
(The)
7.857%, due 8/15/11 3,550,000 3,669,812
8.625%, due 12/1/11 5,460,000 5,664,750
10.50%, due 5/15/16 3,025,000 3,342,625
Johnson Controls, Inc.
5.25%, due 1/15/11 2,180,000 2,287,703
7.70%, due 3/1/15 620,000 683,606
Lear Corp. (Escrow Shares)
8.75%, due 12/1/16 (d) 2,681,000 7,038
Tenneco Automotive, Inc.
8.625%, due 11/15/14 650,000 655,688
10.25%, due 7/15/13 3,590,000 3,711,162
TRW Automotive, Inc.
8.875%, due 12/1/17 (e) 3,050,000 3,172,000
--------------
37,437,054
--------------
BANKS 1.8%
CapitalSource, Inc.
12.75%, due 7/15/14 (e) 5,650,000 6,045,500
v GMAC LLC
6.75%, due 12/1/14 (e) 8,808,000 8,367,600
6.875%, due 9/15/11 (e) 2,650,000 2,610,250
7.25%, due 3/2/11 (e) 2,601,000 2,574,990
8.00%, due 11/1/31 (e) 8,270,000 7,443,000
Zions BanCorp.
7.75%, due 9/23/14 1,235,000 1,089,887
--------------
28,131,227
--------------
BEVERAGES 0.6%
Constellation Brands, Inc.
7.25%, due 9/1/16 965,000 979,475
7.25%, due 5/15/17 2,845,000 2,884,119
8.375%, due 12/15/14 1,310,000 1,395,150
Cott Beverages, Inc.
8.375%, due 11/15/17 (e) 3,955,000 4,083,537
--------------
9,342,281
--------------
BIOTECHNOLOGY 0.2%
Talecris Biotherapeutics
Holdings Corp.
7.75%, due 11/15/16 (e) 2,985,000 3,029,775
--------------
BUILDING MATERIALS 1.4%
Building Materials Corp.
of America
7.75%, due 8/1/14 2,895,000 2,866,050
Compression Polymers Corp.
10.50%, due 7/1/13 1,760,000 1,663,200
Goodman Global, Inc.
13.50%, due 2/15/16 3,480,000 3,849,750
Texas Industries, Inc.
7.25%, due 7/15/13 10,510,000 10,326,075
USG Corp.
9.75%, due 8/1/14 (e) 2,705,000 2,887,587
--------------
21,592,662
--------------
CHEMICALS 1.6%
Georgia Gulf Corp.
9.00%, due 1/15/17 (e) 3,545,000 3,580,450
Johnsondiversey, Inc.
8.25%, due 11/15/19 (e) 1,500,000 1,518,750
Mosaic Global Holdings,
Inc.
7.625%, due 12/1/16 (e) 1,640,000 1,792,579
Nalco Co.
8.25%, due 5/15/17 (e) 575,000 610,938
Olin Corp.
8.875%, due 8/15/19 2,770,000 2,970,825
Phibro Animal Health Corp.
10.00%, due 8/1/13 (e) 3,655,000 3,810,337
13.00%, due 8/1/14 (e) 1,840,000 1,858,400
Terra Capital, Inc.
7.75%, due 11/1/19 (e) 4,530,000 4,847,100
Tronox Worldwide
LLC/Tronox Finance Corp.
9.50%, due 12/1/12 (b) 5,620,000 4,608,400
--------------
25,597,779
--------------
COAL 0.3%
Peabody Energy Corp.
6.875%, due 3/15/13 1,710,000 1,729,238
7.375%, due 11/1/16 845,000 871,406
7.875%, due 11/1/26 2,235,000 2,271,319
--------------
4,871,963
--------------
COMMERCIAL SERVICES 2.2%
Cardtronics, Inc.
9.25%, due 8/15/13 4,215,000 4,336,181
Corrections Corp. of
America
6.25%, due 3/15/13 1,030,000 1,035,150
7.75%, due 6/1/17 1,455,000 1,498,650
El Comandante Capital
Corp.
(Escrow Shares)
(zero coupon), due
12/31/50 (c)(d) 2,412,000 173,664
Great Lakes Dredge & Dock
Corp.
7.75%, due 12/15/13 4,854,000 4,829,730
iPayment, Inc.
9.75%, due 5/15/14 6,280,000 5,220,250
Knowledge Learning Corp.,
Inc.
7.75%, due 2/1/15 (e) 7,845,000 7,531,200
Lender Processing
Services, Inc.
8.125%, due 7/1/16 3,380,000 3,595,475
</Table>
M-172 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
COMMERCIAL SERVICES (CONTINUED)
Quebecor World, Inc.
(Litigation Recovery
Trust--Escrow Shares)
6.50%, due 8/1/49 (c)(d) $ 150,000 $ 7,800
9.75%, due 1/15/49
(c)(d)(e) 8,530,000 443,560
Quintiles Transnational
Corp.
9.50%, due 12/30/14
(e)(g) 3,895,000 3,914,475
Service Corp.
International
7.625%, due 10/1/18 2,210,000 2,187,900
--------------
34,774,035
--------------
COMPUTERS 0.3%
SunGard Data Systems, Inc.
4.875%, due 1/15/14 1,030,000 960,475
10.625%, due 5/15/15 3,425,000 3,771,781
--------------
4,732,256
--------------
DISTRIBUTION & WHOLESALE 0.3%
ACE Hardware Corp.
9.125%, due 6/1/16 (e) 4,815,000 5,097,881
--------------
DIVERSIFIED FINANCIAL SERVICES 1.7%
AmeriCredit Corp.
8.50%, due 7/1/15 4,832,000 4,566,240
Cemex Finance LLC
9.50%, due 12/14/16 (e) 3,060,000 3,205,350
Ford Motor Credit Co.
9.875%, due 8/10/11 2,930,000 3,067,775
Janus Capital Group, Inc.
6.125%, due 9/15/11 1,275,000 1,280,922
6.50%, due 6/15/12 285,000 282,903
6.95%, due 6/15/17 2,675,000 2,521,332
LaBranche & Co., Inc.
11.00%, due 5/15/12 3,270,000 3,143,288
Nuveen Investments, Inc.
5.00%, due 9/15/10 3,820,000 3,781,800
Premium Asset Trust/GEFA
0.513%, due 9/28/10
(e)(h) 4,245,000 4,117,650
--------------
25,967,260
--------------
ELECTRIC 4.2%
AES Corp. (The)
8.75%, due 5/15/13 (e) 605,000 620,125
9.75%, due 4/15/16 (e) 4,265,000 4,670,175
AES Eastern Energy, L.P.
Series 1999-A
9.00%, due 1/2/17 6,623,796 6,648,635
Calpine Construction
Finance Co., L.P and
CCFC Finance Corp.
8.00%, due 6/1/16 (e) 8,935,000 9,203,050
Calpine Corp.
7.25%, due 10/15/17 (e) 10,177,000 9,769,920
Energy Future Holdings
Corp.
10.875%, due 11/1/17 5,265,000 4,304,138
ESI Tractebel Acquisition
Corp.
Class B
7.99%, due 12/30/11 743,000 739,285
Ipalco Enterprises, Inc.
7.25%, due 4/1/16 (e) 1,280,000 1,283,200
8.625%, due 11/14/11 795,000 830,775
NRG Energy, Inc.
7.25%, due 2/1/14 4,775,000 4,834,688
7.375%, due 2/1/16 345,000 345,431
Orion Power Holdings, Inc.
12.00%, due 5/1/10 3,125,000 3,203,125
PNM Resources, Inc.
9.25%, due 5/15/15 2,825,000 2,969,781
Public Service Co. of New
Mexico
7.95%, due 5/15/18 2,305,000 2,412,872
Reliant Energy Mid-
Atlantic Power Holdings
LLC
Series C
9.681%, due 7/2/26 1,190,000 1,222,725
Reliant Energy, Inc.
7.625%, due 6/15/14 1,700,000 1,683,000
7.875%, due 6/15/17 11,025,000 10,832,062
--------------
65,572,987
--------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.5%
Belden, Inc.
7.00%, due 3/15/17 2,240,000 2,181,200
9.25%, due 6/15/19 (e) 4,810,000 5,080,563
--------------
7,261,763
--------------
ENERGY--ALTERNATE SOURCES 0.3%
Headwaters, Inc.
11.375%, due 11/1/14 (e) 4,510,000 4,701,675
Salton Sea Funding Corp.
Series E
8.30%, due 5/30/11 (d) 1,909 1,976
--------------
4,703,651
--------------
ENTERTAINMENT 2.4%
American Casino &
Entertainment Properties
LLC
11.00%, due 6/15/14 (e) 4,575,000 3,854,437
FireKeepers Development
Authority
13.875%, due 5/1/15 (e) 1,115,000 1,265,525
Isle of Capri Casinos,
Inc.
7.00%, due 3/1/14 2,920,000 2,598,800
Jacobs Entertainment, Inc.
9.75%, due 6/15/14 5,985,000 5,581,012
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-173
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
ENTERTAINMENT (CONTINUED)
Mohegan Tribal Gaming
Authority
8.00%, due 4/1/12 $ 2,986,000 $ 2,541,833
Peninsula Gaming LLC
8.375%, due 8/15/15 (e) 1,665,000 1,660,838
10.75%, due 8/15/17 (e) 2,445,000 2,457,225
Penn National Gaming, Inc.
6.75%, due 3/1/15 7,310,000 7,063,287
8.75%, due 8/15/19 (e) 1,025,000 1,048,063
Pinnacle Entertainment,
Inc.
7.50%, due 6/15/15 1,015,000 933,800
8.25%, due 3/15/12 920,000 920,000
8.625%, due 8/1/17 (e) 3,490,000 3,559,800
Speedway Motorsports, Inc.
8.75%, due 6/1/16 2,985,000 3,149,175
United Artists Theatre
Circuit, Inc.
Series BA7
9.30%, due 7/1/15 (c)(d) 687,641 412,585
--------------
37,046,380
--------------
ENVIRONMENTAL CONTROLS 0.7%
Clean Harbors, Inc.
7.625%, due 8/15/16 2,805,000 2,843,569
Geo Sub Corp.
11.00%, due 5/15/12 8,780,000 8,011,750
--------------
10,855,319
--------------
FINANCE--AUTO LOANS 2.7%
v Ford Motor Credit Co.
LLC
5.70%, due 1/15/10 2,115,000 2,115,076
7.25%, due 10/25/11 8,545,000 8,629,527
7.50%, due 8/1/12 3,130,000 3,156,474
7.875%, due 6/15/10 4,635,000 4,705,021
8.00%, due 6/1/14 10,630,000 10,914,756
8.00%, due 12/15/16 155,000 155,206
10.60%, due 6/15/11 (h) 5,535,000 5,479,650
12.00%, due 5/15/15 1,510,000 1,751,038
General Motors Acceptance
Corp. LLC
6.75%, due 12/1/14 5,080,000 4,825,223
--------------
41,731,971
--------------
FINANCE--OTHER SERVICES 1.4%
v American Real Estate
Partners, L.P./American
Real Estate
Finance Corp.
7.125%, due 2/15/13 13,150,000 13,413,000
8.125%, due 6/1/12 7,680,000 7,833,600
--------------
21,246,600
--------------
FOOD 1.3%
American Stores Co.
8.00%, due 6/1/26 4,495,000 4,101,687
ASG Consolidated LLC/ASG
Finance, Inc.
11.50%, due 11/1/11 2,885,000 2,892,213
M-Foods Holding, Inc.
9.75%, due 10/1/13 (e) 2,605,000 2,705,944
Michael Foods, Inc.
8.00%, due 11/15/13 260,000 266,175
Stater Brothers Holdings
7.75%, due 4/15/15 1,405,000 1,426,075
Tyson Foods, Inc.
7.85%, due 4/1/16 1,910,000 1,957,750
8.25%, due 10/1/11 1,185,000 1,267,950
10.50%, due 3/1/14 5,655,000 6,460,837
--------------
21,078,631
--------------
FOREST PRODUCTS & PAPER 2.3%
Bowater, Inc.
9.375%, due 12/15/21 (b) 7,854,700 1,934,220
Domtar Corp.
7.875%, due 10/15/11 6,570,000 6,865,650
v Georgia-Pacific Corp.
7.00%, due 1/15/15 (e) 2,185,000 2,212,312
7.125%, due 1/15/17 (e) 1,231,000 1,246,388
7.25%, due 6/1/28 4,180,000 3,887,400
7.375%, due 12/1/25 1,310,000 1,251,050
7.75%, due 11/15/29 64,000 63,200
8.00%, due 1/15/24 3,469,000 3,538,380
8.125%, due 5/15/11 6,780,000 7,119,000
8.875%, due 5/15/31 6,895,000 7,308,700
Georgia-Pacific LLC
9.50%, due 12/1/11 595,000 642,600
--------------
36,068,900
--------------
HAND & MACHINE TOOLS 0.1%
Baldor Electric Co.
8.625%, due 2/15/17 750,000 766,875
Thermadyne Holdings Corp.
10.50%, due 2/1/14 1,590,000 1,504,538
--------------
2,271,413
--------------
HEALTH CARE--PRODUCTS 1.6%
Biomet, Inc.
10.00%, due 10/15/17 4,835,000 5,252,019
11.625%, due 10/15/17 4,220,000 4,663,100
Hanger Orthopedic Group,
Inc.
10.25%, due 6/1/14 5,215,000 5,527,900
Invacare Corp.
9.75%, due 2/15/15 4,890,000 5,097,825
</Table>
M-174 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
HEALTH CARE--PRODUCTS (CONTINUED)
ReAble Therapeutics
Finance LLC/ReAble
Therapeutics
Finance Corp.
11.75%, due 11/15/14 $ 5,065,000 $ 5,254,937
--------------
25,795,781
--------------
HEALTH CARE--SERVICES 3.2%
Centene Corp.
7.25%, due 4/1/14 2,660,000 2,633,400
Community Health Systems,
Inc.
8.875%, due 7/15/15 6,105,000 6,318,675
DaVita, Inc.
6.625%, due 3/15/13 3,950,000 3,959,875
v HCA, Inc.
5.75%, due 3/15/14 2,770,000 2,603,800
6.30%, due 10/1/12 5,123,000 5,123,000
6.375%, due 1/15/15 1,661,000 1,567,569
6.75%, due 7/15/13 3,095,000 3,048,575
7.875%, due 2/1/11 400,000 411,500
8.50%, due 4/15/19 (e) 1,470,000 1,583,925
8.75%, due 9/1/10 3,510,000 3,593,363
9.00%, due 12/15/14 440,000 439,214
9.875%, due 2/15/17 (e) 1,035,000 1,143,675
Healthsouth Corp.
8.125%, due 2/15/20 3,090,000 3,043,650
Psychiatric Solutions,
Inc.
7.75%, due 7/15/15 2,490,000 2,409,075
Skilled Healthcare Group,
Inc.
11.00%, due 1/15/14 1,904,000 2,013,480
Sun Healthcare Group, Inc.
9.125%, due 4/15/15 4,095,000 4,207,612
Vanguard Health Holding
Co. II LLC
9.00%, due 10/1/14 4,935,000 5,113,894
--------------
49,214,282
--------------
HOLDING COMPANY--DIVERSIFIED 0.3%
Leucadia National Corp.
8.125%, due 9/15/15 4,480,000 4,569,600
--------------
HOUSEHOLD PRODUCTS & WARES 0.4%
Jarden Corp.
7.50%, due 5/1/17 3,605,000 3,595,988
Libbey Glass, Inc.
12.35%, due 6/1/11 (h) 3,500,000 3,430,000
--------------
7,025,988
--------------
INSURANCE 2.1%
AIG SunAmerica Global
Financing VI
6.30%, due 5/10/11 (e) 2,690,000 2,675,708
Crum & Forster Holdings
Corp.
7.75%, due 5/1/17 11,475,000 10,915,594
HUB International
Holdings, Inc.
9.00%, due 12/15/14 (e) 9,160,000 8,747,800
Lumbermens Mutual Casualty
Co.
8.45%, due 12/1/97
(b)(e) 555,000 5,550
9.15%, due 7/1/26 (b)(e) 12,235,000 122,350
USI Holdings Corp.
4.148%, due 11/15/14
(e)(h) 2,080,000 1,708,200
9.75%, due 5/15/15 (e) 4,050,000 3,690,562
Willis North America, Inc.
5.625%, due 7/15/15 395,000 386,844
6.20%, due 3/28/17 4,215,000 4,178,431
--------------
32,431,039
--------------
INTERNET 0.4%
Expedia, Inc.
7.456%, due 8/15/18 1,100,000 1,200,375
8.50%, due 7/1/16 (e) 4,795,000 5,184,594
--------------
6,384,969
--------------
IRON & STEEL 0.4%
Allegheny Ludlum Corp.
6.95%, due 12/15/25 4,420,000 4,004,675
Allegheny Technologies,
Inc.
8.375%, due 12/15/11 85,000 89,402
9.375%, due 6/1/19 2,600,000 2,992,738
--------------
7,086,815
--------------
LEISURE TIME 0.2%
Town Sports International
Holdings, Inc.
11.00%, due 2/1/14 5,570,000 3,369,850
--------------
LODGING 1.4%
Boyd Gaming Corp.
7.75%, due 12/15/12 1,210,000 1,223,613
Gaylord Entertainment Co.
6.75%, due 11/15/14 505,000 469,650
MGM Mirage Inc.
13.00%, due 11/15/13 (e) 2,675,000 3,069,562
San Pasqual Casino
8.00%, due 9/15/13 (e) 1,815,000 1,697,025
Seminole Hard Rock
Entertainment,
Inc./Seminole Hard Rock
International LLC
2.799%, due 3/15/14
(e)(h) 3,760,000 3,097,300
Sheraton Holding Corp.
7.375%, due 11/15/15 2,580,000 2,667,075
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-175
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
LODGING (CONTINUED)
Starwood Hotels & Resorts
Worldwide, Inc.
6.25%, due 2/15/13 $ 2,575,000 $ 2,655,469
7.875%, due 5/1/12 4,224,000 4,556,640
Wynn Las Vegas LLC
6.625%, due 12/1/14 3,165,000 3,058,181
--------------
22,494,515
--------------
MACHINERY--DIVERSIFIED 0.2%
Briggs & Stratton Corp.
8.875%, due 3/15/11 3,640,000 3,817,450
--------------
MEDIA 3.1%
v Charter Communications
Operating LLC
10.00%, due 4/30/12 (e) 9,374,000 9,631,785
10.38%, due 4/30/14 (e) 6,405,000 6,581,137
CSC Holdings, Inc.
8.50%, due 4/15/14 (e) 6,575,000 7,002,375
CW Media Holdings, Inc.
13.50%, due 8/15/15
(e)(g) 1,665,000 1,752,413
HSN, Inc.
11.25%, due 8/1/16 5,075,000 5,696,688
ION Media Networks, Inc.
9.041%, due 1/15/13
(b)(e) 2,045,073 33,232
Morris Publishing Group
LLC
7.00%, due 8/1/13 (b) 7,300,000 2,135,250
Rainbow National Services
LLC
8.75%, due 9/1/12 (e) 2,940,000 2,995,125
10.375%, due 9/1/14 (e) 8,515,000 8,983,325
Vertis, Inc.
18.50%, due 10/1/12 (g) 3,630,717 2,795,652
Ziff Davis Media, Inc.
8.801%, due 7/15/11
(c)(d) 1,148,747 275,699
--------------
47,882,681
--------------
METAL FABRICATE & HARDWARE 0.3%
Mueller Water Products,
Inc.
7.375%, due 6/1/17 2,705,000 2,502,125
Neenah Foundary Co.
9.50%, due 1/1/17 5,355,000 2,764,519
--------------
5,266,644
--------------
MINING 0.8%
Freeport-McMoRan Copper &
Gold, Inc.
8.25%, due 4/1/15 1,375,000 1,498,750
8.375%, due 4/1/17 10,650,000 11,661,750
--------------
13,160,500
--------------
MISCELLANEOUS--MANUFACTURING 1.4%
Actuant Corp.
6.875%, due 6/15/17 3,030,000 2,882,288
Koppers, Inc.
7.875%, due 12/1/19 (e) 3,805,000 3,843,050
RBS Global, Inc./Rexnord
Corp.
9.50%, due 8/1/14 4,845,000 4,857,112
Sally Holdings LLC
9.25%, due 11/15/14 5,900,000 6,121,250
SPX Corp.
7.625%, due 12/15/14 4,095,000 4,217,850
--------------
21,921,550
--------------
OFFICE FURNISHINGS 0.2%
Interface, Inc.
9.50%, due 2/1/14 2,765,000 2,720,069
--------------
OIL & GAS 9.6%
Atlas Energy Operating Co.
LLC/Atlas Energy Finance
Corp.
12.125%, due 8/1/17 2,580,000 2,928,300
Berry Petroleum Co.
10.25%, due 6/1/14 3,915,000 4,257,562
Chaparral Energy, Inc.
8.50%, due 12/1/15 5,480,000 4,836,100
8.875%, due 2/1/17 3,000,000 2,647,500
v Chesapeake Energy
Corp.
6.50%, due 8/15/17 9,215,000 9,030,700
6.625%, due 1/15/16 3,465,000 3,430,350
6.875%, due 11/15/20 1,130,000 1,090,450
7.50%, due 6/15/14 1,910,000 1,948,200
Comstock Resources, Inc.
6.875%, due 3/1/12 3,565,000 3,573,912
Continental Resources,
Inc.
8.25%, due 10/1/19 (e) 3,620,000 3,801,000
Denbury Resources, Inc.
7.50%, due 4/1/13 1,298,000 1,304,490
7.50%, due 12/15/15 3,065,000 3,057,338
Forest Oil Corp.
7.25%, due 6/15/19 4,955,000 4,893,062
7.75%, due 5/1/14 95,000 96,188
8.00%, due 12/15/11 3,885,000 4,050,112
Frontier Oil Corp.
6.625%, due 10/1/11 3,350,000 3,370,938
Hilcorp Energy I,
L.P./Hilcorp
Finance Co.
7.75%, due 11/1/15 (e) 3,520,000 3,449,600
9.00%, due 6/1/16 (e) 2,895,000 2,938,425
Holly Corp.
9.875%, due 6/15/17 (e) 4,060,000 4,273,150
</Table>
M-176 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
OIL & GAS (CONTINUED)
KCS Energy, Inc.
7.125%, due 4/1/12 $ 3,395,000 $ 3,403,488
Linn Energy LLC
9.875%, due 7/1/18 3,930,000 4,175,625
11.75%, due 5/15/17 (e) 3,820,000 4,287,950
Mariner Energy, Inc.
7.50%, due 4/15/13 3,115,000 3,099,425
8.00%, due 5/15/17 1,570,000 1,507,200
Newfield Exploration Co.
6.625%, due 9/1/14 6,425,000 6,489,250
6.625%, due 4/15/16 5,060,000 5,072,650
7.125%, due 5/15/18 35,000 35,350
Parker Drilling Co.
9.625%, due 10/1/13 6,770,000 6,956,175
Penn Virginia Corp.
10.375%, due 6/15/16 2,400,000 2,616,000
PetroHawk Energy Corp.
10.50%, due 8/1/14 3,615,000 3,949,387
Petroquest Energy, Inc.
10.375%, due 5/15/12 6,370,000 6,370,000
Plains Exploration &
Production Co.
7.00%, due 3/15/17 175,000 171,938
7.625%, due 6/1/18 172,000 175,870
10.00%, due 3/1/16 4,640,000 5,080,800
Pride International, Inc.
7.375%, due 7/15/14 3,710,000 3,830,575
Range Resources Corp.
7.375%, due 7/15/13 4,025,000 4,095,437
8.00%, due 5/15/19 2,980,000 3,188,600
SandRidge Energy, Inc.
8.00%, due 6/1/18 (e) 2,820,000 2,770,650
Stone Energy Corp.
6.75%, due 12/15/14 4,640,000 4,141,200
8.25%, due 12/15/11 1,085,000 1,080,931
United Refining Co.
10.50%, due 8/15/12 2,315,000 2,181,888
W&T Offshore, Inc.
8.25%, due 6/15/14 (e) 3,155,000 2,997,250
Whiting Petroleum Corp.
7.00%, due 2/1/14 4,995,000 5,013,731
7.25%, due 5/1/12 765,000 768,825
7.25%, due 5/1/13 1,855,000 1,868,913
--------------
150,306,485
--------------
OIL & GAS SERVICES 0.4%
Allis-Chalmers Energy,
Inc.
9.00%, due 1/15/14 2,118,000 2,022,690
Complete Production
Services, Inc.
8.00%, due 12/15/16 3,815,000 3,762,544
--------------
5,785,234
--------------
PACKAGING & CONTAINERS 1.8%
Ball Corp.
6.875%, due 12/15/12 6,870,000 6,955,875
7.125%, due 9/1/16 2,790,000 2,859,750
7.375%, due 9/1/19 2,805,000 2,882,137
Crown Americas LLC / Crown
Americas Capital Corp.
7.625%, due 11/15/13 660,000 681,450
Owens-Brockway Glass
Container, Inc.
6.75%, due 12/1/14 4,035,000 4,125,787
7.375%, due 5/15/16 1,750,000 1,806,875
8.25%, due 5/15/13 1,815,000 1,864,913
Plastipak Holdings, Inc.
10.625%, due 8/15/19 (e) 3,603,000 3,972,307
Silgan Holdings, Inc.
7.25%, due 8/15/16 2,295,000 2,358,113
--------------
27,507,207
--------------
PHARMACEUTICALS 0.8%
Catalent Pharma Solutions,
Inc.
10.25%, due 4/15/15 (g) 6,565,056 5,924,963
NBTY, Inc.
7.125%, due 10/1/15 3,455,000 3,463,637
Valeant Pharmaceuticals
International
8.375%, due 6/15/16 (e) 1,585,000 1,632,550
Warner Chilcott Corp.
8.75%, due 2/1/15 1,125,000 1,174,219
--------------
12,195,369
--------------
PIPELINES 2.9%
ANR Pipeline Co.
7.375%, due 2/15/24
11.50%, beginning
11/1/11 395,000 450,605
9.625%, due 11/1/21 7,515,000 9,961,441
Cedar Brakes II LLC
9.875%, due 9/1/13 (e) 3,474,824 3,537,858
Copano Energy LLC
8.125%, due 3/1/16 2,260,000 2,282,600
Copano Energy LLC/Copano
Energy Finance Corp.
7.75%, due 6/1/18 5,145,000 5,157,863
El Paso Natural Gas Co.
7.50%, due 11/15/26 1,435,000 1,574,128
7.625%, due 8/1/10 3,975,000 3,966,287
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-177
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
PIPELINES (CONTINUED)
MarkWest Energy Partners,
L.P./MarkWest Energy
Finance Corp.
Series B
6.875%, due 11/1/14 $ 4,050,000 $ 3,867,750
8.50%, due 7/15/16 6,065,000 6,171,137
8.75%, due 4/15/18 830,000 854,900
Northwest Pipeline Corp.
7.125%, due 12/1/25 2,195,000 2,287,183
Regency Energy
Partners/Regency Energy
Finance Corp.
8.375%, due 12/15/13 1,981,000 2,050,335
Southern Natural Gas Co.
7.35%, due 2/15/31 1,190,000 1,299,232
Tennessee Gas Pipeline Co.
7.625%, due 4/1/37 1,005,000 1,128,627
--------------
44,589,946
--------------
REAL ESTATE INVESTMENT TRUSTS 1.7%
Host Hotels & Resorts,
L.P.
6.875%, due 11/1/14 2,145,000 2,158,406
Host Marriott, L.P.
6.375%, due 3/15/15 2,675,000 2,621,500
Series Q
6.75%, due 6/1/16 9,400,000 9,353,000
Omega Healthcare
Investors, Inc.
7.00%, due 4/1/14 5,200,000 5,148,000
Trustreet Properties, Inc.
7.50%, due 4/1/15 6,700,000 6,928,557
--------------
26,209,463
--------------
RETAIL 1.9%
AmeriGas Partners,
L.P./AmeriGas Eagle
Finance Corp.
7.125%, due 5/20/16 995,000 995,000
Asbury Automotive Group,
Inc.
7.625%, due 3/15/17 675,000 636,188
8.00%, due 3/15/14 550,000 540,375
AutoNation, Inc.
2.284%, due 4/15/13 (h) 2,500,000 2,378,125
7.00%, due 4/15/14 2,945,000 3,040,713
Limited Brands, Inc.
6.125%, due 12/1/12 900,000 922,500
8.50%, due 6/15/19 (e) 2,110,000 2,294,625
Penske Auto Group, Inc.
7.75%, due 12/15/16 7,609,000 7,361,707
Rite Aid Corp.
9.375%, due 12/15/15 155,000 136,400
9.50%, due 6/15/17 2,353,000 2,047,110
Star Gas Partners,
L.P./Star Gas Finance
Co.
Series B
10.25%, due 2/15/13 5,010,000 5,072,625
Susser Holdings LLC/Susser
Finance Corp.
10.625%, due 12/15/13 3,375,000 3,518,437
Wendy's International,
Inc.
6.25%, due 11/15/11 1,065,000 1,102,275
--------------
30,046,080
--------------
SOFTWARE 0.5%
Open Solutions, Inc.
9.75%, due 2/1/15 (e) 2,670,000 2,052,563
SS&C Technologies, Inc.
11.75%, due 12/1/13 5,405,000 5,729,300
--------------
7,781,863
--------------
TELECOMMUNICATIONS 4.2%
Alcatel-Lucent USA, Inc.
6.45%, due 3/15/29 9,845,000 7,051,481
American Tower Corp.
7.25%, due 5/15/19 (e) 1,545,000 1,722,675
CC Holdings GS V LLC/Crown
Castle GS III Corp.
7.75%, due 5/1/17 (e) 8,745,000 9,313,425
Crown Castle International
Corp.
7.125%, due 11/1/19 6,580,000 6,514,200
9.00%, due 1/15/15 940,000 1,001,100
DigitalGlobe, Inc.
10.50%, due 5/1/14 (e) 2,820,000 3,017,400
GCI, Inc.
7.25%, due 2/15/14 3,645,000 3,613,106
8.625%, due 11/15/19 (e) 4,835,000 4,877,306
GeoEye, Inc.
9.625%, due 10/1/15 (e) 2,950,000 3,034,813
iPCS, Inc.
2.406%, due 5/1/13 (h) 1,525,000 1,425,875
Lucent Technologies, Inc.
6.50%, due 1/15/28 3,410,000 2,425,363
PAETEC Holding Corp.
9.50%, due 7/15/15 180,000 173,250
Qwest Communications
International, Inc.
7.25%, due 2/15/11 290,000 291,450
Qwest Corp.
7.50%, due 10/1/14 1,655,000 1,719,131
8.875%, due 3/15/12 4,820,000 5,181,500
</Table>
M-178 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
SBA Telecommunications,
Inc.
8.25%, due 8/15/19 (e) $ 3,905,000 $ 4,139,300
Sprint Nextel Corp.
8.375%, due 8/15/17 9,160,000 9,343,200
--------------
64,844,575
--------------
TEXTILES 0.9%
INVISTA
9.25%, due 5/1/12 (e) 14,065,000 14,275,975
--------------
TRANSPORTATION 0.6%
KAR Holdings, Inc.
8.75%, due 5/1/14 2,175,000 2,242,969
10.00%, due 5/1/15 6,060,000 6,484,200
--------------
8,727,169
--------------
TRUCKING & LEASING 0.2%
Greenbrier Cos., Inc.
8.375%, due 5/15/15 3,540,000 2,924,925
--------------
Total Corporate Bonds
(Cost $1,116,011,397) 1,140,834,071
--------------
FOREIGN BOND 0.4%
- -------------------------------------------------------------------
MEDIA 0.4%
Shaw Communications, Inc.
7.50%, due 11/20/13 C$ 5,470,000 5,924,661
--------------
Total Foreign Bond
(Cost $4,325,149) 5,924,661
--------------
LOAN ASSIGNMENTS & PARTICIPATIONS 5.7% (I)
- -------------------------------------------------------------------
AEROSPACE & DEFENSE 0.2%
DAE Aviation Holdings,
Inc.
Tranche B2 Term Loan
4.03%, due 7/31/14 $ 1,916,391 1,753,498
Tranche B1 Term Loan
4.04%, due 7/31/14 1,963,893 1,796,962
--------------
3,550,460
--------------
AUTO MANUFACTURERS 0.5%
Ford Motor Co.
Term Loan
3.287%, due 12/16/13 8,857,872 8,171,387
--------------
COMMERCIAL SERVICES 0.3%
Lender Processing
Services, Inc.
Term Loan A
2.49%, due 7/2/13 5,100,000 5,023,500
--------------
COMPUTERS 0.3%
SunGard Data Systems, Inc.
Tranche A
1.985%, due 2/28/14 4,454,139 4,198,721
--------------
DIVERSIFIED FINANCIAL SERVICES 0.6%
DaimlerChrysler Financial
Services Americas LLC
2nd Lien Term Loan
6.74%, due 8/3/12 10,195,000 9,515,330
--------------
ELECTRIC 1.2%
Calpine Corp.
First Priority Term Loan
3.135%, due 3/29/14 2,204,135 2,081,806
v Texas Competitive
Electric Holdings Co.
LLC
Term Loan B2
3.735%, due 10/10/14 10,425,038 8,470,343
Term Loan B3
3.735%, due 10/10/14 9,213,870 7,421,772
--------------
17,973,921
--------------
HEALTH CARE--SERVICES 1.1%
Community Health Systems,
Inc.
Delayed Draw
Term Loan
2.506%, due 7/25/14 592,534 558,134
Term Loan
2.506%, due 7/25/14 8,299,180 7,817,362
v HCA, Inc.
Term Loan A
1.751%, due 11/16/12 1,960,763 1,870,078
Term Loan B
2.50%, due 11/18/13 7,570,101 7,221,877
--------------
17,467,451
--------------
MACHINERY 0.0%++
BHM Technologies LLC
Exit Term Loan B
8.50%, due 11/26/13
(c)(d) 1,853,638 246,534
--------------
MEDIA 0.9%
v Charter Communications
Operating LLC
Replacement Term Loan
2.26%, due 4/28/13 7,054,282 6,604,572
Nielsen Finance LLC
Class A Term Loan
2.235%, due 8/9/13 7,859,846 7,339,131
--------------
13,943,703
--------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-179
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LOAN ASSIGNMENTS & PARTICIPATIONS (CONTINUED)
RETAIL 0.3%
Toys 'R' Us (Delaware),
Inc.
Term Loan
5.231%, due 1/19/13 $ 4,500,000 $ 4,185,000
--------------
TELECOMMUNICATIONS 0.3%
Qwest Corp.
Term Loan B
6.95%, due 6/30/10 4,250,000 4,247,344
--------------
Total Loan Assignments &
Participations
(Cost $94,036,521) 88,523,351
--------------
YANKEE BONDS 9.7% (J)
- -------------------------------------------------------------------
BUILDING MATERIALS 0.2%
Lafarge S.A.
6.50%, due 7/15/16 3,245,000 3,440,336
--------------
CHEMICALS 1.0%
v Nova Chemicals Corp.
6.50%, due 1/15/12 5,405,000 5,432,025
7.56%, due 11/15/13 (h) 6,430,000 5,883,450
8.375%, due 11/1/16 (e) 3,695,000 3,750,425
--------------
15,065,900
--------------
COMMERCIAL SERVICES 0.5%
National Money Mart Co.
10.375%, due 12/15/16
(e) 7,825,000 8,001,062
--------------
ELECTRIC 0.2%
Intergen N.V.
9.00%, due 6/30/17 (e) 2,865,000 2,986,763
--------------
ELECTRONICS 0.2%
NXP B.V./NXP Funding LLC
7.875%, due 10/15/14 3,499,000 3,175,343
--------------
ENTERTAINMENT 0.4%
Galaxy Entertainment
Finance Co., Ltd.
9.875%, due 12/15/12 (e) 6,015,000 6,015,000
--------------
FOREST PRODUCTS & PAPER 0.6%
PE Paper Escrow GmbH
12.00%, due 8/1/14 (e) 2,735,000 3,022,175
Smurfit Capital Funding
PLC
7.50%, due 11/20/25 7,545,000 6,432,112
--------------
9,454,287
--------------
HEALTH CARE--PRODUCTS 0.5%
DJO Finance LLC/DJO
Finance Corp.
10.875%, due 11/15/14 7,440,000 7,849,200
--------------
INSURANCE 0.9%
Allied World Assurance Co.
Holdings, Ltd.
7.50%, due 8/1/16 5,515,000 5,889,154
Fairfax Financial
Holdings, Ltd.
7.375%, due 4/15/18 3,015,000 3,018,769
7.75%, due 7/15/37 135,000 125,719
8.30%, due 4/15/26 4,645,000 4,494,037
--------------
13,527,679
--------------
LEISURE TIME 0.3%
Willis Group Holdings,
Ltd. (Trinity
Acquisition, Ltd.)
12.875%, due 12/31/16
(c)(d)(e) 3,350,000 4,557,203
--------------
MEDIA 1.5%
Quebecor Media, Inc.
7.75%, due 3/15/16 10,679,000 10,652,302
Sun Media Corp.
7.625%, due 2/15/13 1,550,000 1,412,438
Videotron Ltee
9.125%, due 4/15/18 (e) 7,280,000 8,008,000
9.125%, due 4/15/18 3,550,000 3,905,000
--------------
23,977,740
--------------
OIL & GAS SERVICES 0.3%
Expro Finance Luxembourg
SCA
8.50%, due 12/15/16 (e) 5,590,000 5,548,075
--------------
PHARMACEUTICALS 0.2%
Angiotech Pharmaceuticals,
Inc.
4.006%, due 12/1/13 (h) 3,165,000 2,690,250
--------------
TELECOMMUNICATIONS 2.6%
v Intelsat Subsidiary
Holding Co., Ltd.
8.50%, due 1/15/13 13,435,000 13,703,700
8.875%, due 1/15/15 (e) 1,415,000 1,457,450
8.875%, due 1/15/15 1,415,000 1,464,525
Millicom International
Cellular S.A.
10.00%, due 12/1/13 8,365,000 8,657,775
Nortel Networks, Ltd.
10.125%, due 7/15/13 (b) 1,065,000 761,475
10.75%, due 7/15/16 (b) 6,075,000 4,343,625
Virgin Media Finance PLC
8.375%, due 10/15/19 5,325,000 5,478,094
9.50%, due 8/15/16 4,930,000 5,293,587
--------------
41,160,231
--------------
</Table>
M-180 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
YANKEE BONDS (CONTINUED)
TRANSPORTATION 0.3%
CEVA Group PLC
10.00%, due 9/1/14 (e) $ 3,370,000 $ 3,201,500
Kansas City Southern de
Mexico S.A. de C.V.
7.375%, due 6/1/14 1,380,000 1,345,500
--------------
4,547,000
--------------
Total Yankee Bonds
(Cost $143,187,350) 151,996,069
--------------
Total Long-Term Bonds
(Cost $1,361,166,522) 1,391,536,892
--------------
<Caption>
SHARES
COMMON STOCKS 0.2%
- -------------------------------------------------------------------
AIRLINES 0.0%++
Delta Air Lines, Inc. (f) 1,693 19,266
--------------
AUTO PARTS & EQUIPMENT 0.1%
Lear Corp. (f) 17,990 1,216,844
--------------
COMMERCIAL SERVICES 0.0%++
World Color Press, Inc.
(f) 57,198 531,941
--------------
MACHINERY 0.0%++
BHM Technologies Holdings,
Inc. (c)(d)(f) 172,016 1,720
--------------
MEDIA 0.0%++
Adelphia Contingent Value
Vehicle (c)(d)(f) 2,207,279 22,073
--------------
SOFTWARE 0.0%++
QuadraMed Corp. (d)(f) 72,760 610,457
--------------
TELECOMMUNICATIONS 0.1%
Loral Space &
Communications, Ltd. (f) 43,456 1,373,644
Remote Dynamics, Inc. (f) 4 0 (k)
--------------
1,373,644
--------------
Total Common Stocks
(Cost $13,958,981) 3,775,945
--------------
CONVERTIBLE PREFERRED STOCK 0.2%
- -------------------------------------------------------------------
SOFTWARE 0.2%
QuadraMed Corp.
5.50% (a)(d) 278,000 3,762,452
--------------
Total Convertible
Preferred Stock
(Cost $6,646,200) 3,762,452
--------------
PREFERRED STOCKS 0.3%
- -------------------------------------------------------------------
MACHINERY 0.0%++
BHM Technologies Holdings,
Inc.
10.00% (c)(d)(f) 2,059 21
--------------
REAL ESTATE INVESTMENT TRUSTS 0.3%
Sovereign Real Estate
Investment Corp.
12.00% (d)(e) 4,700 5,281,625
--------------
Total Preferred Stocks
(Cost $6,397,288) 5,281,646
--------------
<Caption>
<Caption>
NUMBER OF
WARRANTS
WARRANTS 0.1%
- -------------------------------------------------------------------
AUTO COMPONENTS 0.1%
Lear Corp.
Strike Price $0.01
Expires 11/9/14 (d)(f) 10,508 664,106
--------------
COMMERCIAL SERVICES 0.0%++
World Color Press, Inc.
Strike Price $13.00
Expires 7/20/14 (f) 32,417 136,151
Strike Price $16.30
Expires 7/20/14 (f) 32,417 94,982
--------------
Total Warrants
(Cost $1,912,589) 895,239
--------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-181
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
<Caption>
NUMBER OF
WARRANTS VALUE
<Caption>
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENT 8.2%
- -------------------------------------------------------------------
REPURCHASE AGREEMENT 8.2%
State Street Bank and
Trust Co. 0.005%, dated
12/31/09
due 1/4/10
Proceeds at Maturity
$127,357,391
(Collateralized by a
United States Treasury
Bill with a zero coupon
rate and a maturity date
of 1/14/10, with a
Principal Amount of
$129,905,000
and a Market Value of
$129,905,000) $127,357,320 $ 127,357,320
--------------
Total Short-Term
Investment
(Cost $127,357,320) 127,357,320
--------------
Total Investments
(Cost $1,517,438,900)
(l) 98.2% 1,532,609,494
Other Assets, Less
Liabilities 1.8 27,554,788
----- ------------
Net Assets 100.0% $1,560,164,282
===== ============
</Table>
<Table>
++ Less
than
one-
tenth of
a
percent.
(a) Restric-
ted
secu-
rity.
(b) Issue in
default.
(c) Fair
valued
secu-
rity.
The
total
market
value of
these
securi-
ties at
December
31, 2009
is
$6,141,-
949,
which
repre-
sents
0.4% of
the
Portfo-
lio's
net
assets.
(d) Illiquid
secu-
rity.
The
total
market
value of
these
securi-
ties at
December
31, 2009
is
$16,469-
,603,
which
repre-
sents
1.1% of
the
Portfo-
lio's
net
assets.
(e) May be
sold to
institu-
tional
inves-
tors
only
under
Rule
144A or
securi-
ties
offered
pursuant
to
Section
4(2) of
the
Securi-
ties Act
of 1933,
as
amended.
(f) Non-
income
produc-
ing
secu-
rity.
(g) PIK
("Pay-
ment in
Kin-
d")--in-
terest
or
dividend
payment
is made
with
addi-
tional
securi-
ties.
(h) Floating
rate---
Rate
shown is
the rate
in
effect
at
December
31,
2009.
(i) Floating
Rate
Loan---
gener-
ally
pays
interest
at rates
which
are
periodi-
cally
re-
deter-
mined at
a margin
above
the
London
Inter-
Bank
Offered
Rate
("LIBO-
R") or
other
short-
term
rates.
The rate
shown is
the
rate(s)
in
effect
at
December
31,
2009.
Floating
Rate
Loans
are
gener-
ally
consid-
ered
restric-
tive in
that the
Portfo-
lio is
ordi-
narily
contrac-
tually
obli-
gated to
receive
consent
from the
Agent
Bank
and/or
borrower
prior to
disposi-
tion of
a
Floating
Rate
Loan.
(j) Yankee
Bond---
dollar-
denomi-
nated
bond
issued
in the
United
States
by a
foreign
bank or
corpora-
tion.
(k) Less
than one
dollar.
(l) At
December
31,
2009,
cost is
$1,522,-
169,238
for
federal
income
tax
purposes
and net
unreal-
ized
appreci-
ation is
as
follows:
</Table>
<Table>
Gross
unre-
alized
appre-
cia-
tion $ 81,755,350
Gross
unre-
alized
depre-
cia-
tion (71,315,094)
------------
Net
unre-
alized
appre-
cia-
tion $ 10,440,256
============
</Table>
The following abbreviation is used in the above portfolio:
C$ -- Canadian Dollar
M-182 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Long-Term Bonds
Convertible Bonds (b) $ -- $ 4,257,650 $ 1,090 $ 4,258,740
Corporate Bonds (c) -- 1,139,520,763 1,313,308 1,140,834,071
Foreign Bond -- 5,924,661 -- 5,924,661
Loan Assignments & Participations (d) -- 88,276,817 246,534 88,523,351
Yankee Bonds (e) -- 147,438,866 4,557,203 151,996,069
----------- -------------- ---------- --------------
Total Long-Term Bonds -- 1,385,418,757 6,118,135 1,391,536,892
----------- -------------- ---------- --------------
Common Stocks (f) 3,752,152 -- 23,793 3,775,945
Convertible Preferred Stock 3,762,452 -- -- 3,762,452
Preferred Stocks (g) 5,281,625 -- 21 5,281,646
Warrants 895,239 -- -- 895,239
Short-Term Investment
Repurchase Agreement -- 127,357,320 -- 127,357,320
----------- -------------- ---------- --------------
Total Investments in Securities $13,691,468 $1,512,776,077 $6,141,949 $1,532,609,494
=========== ============== ========== ==============
</Table>
<Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
(b) The level 3 security valued at $1,090 is held in Internet within the
Convertible Bonds section of the Portfolio of Investments.
(c) The level 3 securities valued at $625,024, $412,585, and $275,699 are held in
Commercial Services, Entertainment and Media, respectively, within the
Corporate Bonds section of the Portfolio of Investments.
(d) The level 3 security valued at $246,534 is held in Machinery within the Loan
Assignments & Participations section of the Portfolio of Investments.
(e) The level 3 security valued at $4,557,203 is held in Leisure Time within the
Yankee Bonds section of the Portfolio of Investments.
(f) The level 3 securities valued at $1,720 and $22,073 are held in Machinery and
Media, respectively, within the Common Stocks section of the Portfolio of
Investments.
(g) The level 3 security valued at $21 is held in Machinery within the Preferred
Stocks section of the Portfolio of Investments.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-183
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
BALANCE CHANGE IN NET NET
AS OF ACCRUED UNREALIZED TRANSFERS TRANSFERS
INVESTMENTS IN DECEMBER 31, DISCOUNTS REALIZED APPRECIATION NET NET IN TO OUT OF
SECURITIES 2008 (PREMIUMS) GAIN (LOSS) (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3
Long-Term Bonds
Convertible Bonds
Internet $ 1,090 $ -- $ -- $ -- $ -- $ -- $ -- $ --
Corporate Bonds
Commercial
Services 173,664 -- -- 451,360 -- -- -- --
Entertainment 460,734 15,433 17,370 (704) -- (80,248) -- --
Media 1,152,124 1,255 108,671 (837,355) 109,880 (258,876) -- --
Loan Assignments &
Participations
Machinery 2,244,442 (609,027) (1,292,556) 1,578,287 7,036,313 (8,710,925) -- --
Yankee Bonds
Leisure Time -- -- -- 1,207,203 3,350,000 -- -- --
Common Stocks
Advertising 33 -- (33) -- -- -- -- --
Commercial
Services 16,274 -- (5,090,593) 5,074,319 -- -- -- --
Machinery 1,720 -- -- -- -- -- -- --
Media 1,413,205 -- (4,655,813) 3,264,681 -- -- -- --
Preferred Stocks
Machinery 21 -- -- -- -- -- -- --
Warrants
Media 11,201 -- (979) (10,222) -- -- -- --
---------- --------- ------------ ----------- ----------- ----------- -------- --------
Total $5,474,508 $(592,339) $(10,913,933) $10,727,569 $10,496,193 $(9,050,049) $-- $--
========== ========= ============ =========== =========== =========== ======== ========
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
INVESTMENTS
BALANCE STILL
AS OF HELD AT
INVESTMENTS IN DECEMBER 31, DECEMBER 31,
SECURITIES 2009 2009 (A)
Long-Term Bonds
Convertible Bonds
Internet $ 1,090 $ --
Corporate Bonds
Commercial
Services 625,024 451,360
Entertainment 412,585 (15,433)
Media 275,699 (685,223)
Loan Assignments &
Participations
Machinery 246,534 (4,024,872)
Yankee Bonds
Leisure Time 4,557,203 1,207,203
Common Stocks
Advertising -- --
Commercial
Services -- --
Machinery 1,720 --
Media 22,073 --
Preferred Stocks
Machinery 21 --
Warrants
Media -- --
---------- -----------
Total $6,141,949 $(3,066,965)
========== ===========
</Table>
(a) Included in "Net change in unrealized appreciation (depreciation) on
investments" in the Statement of Operations.
M-184 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $1,517,438,900) $1,532,609,494
Cash denominated in foreign
currencies (identified cost
$360,846) 392,264
Receivables:
Dividends and interest 24,818,712
Investment securities sold 3,205,437
Fund shares sold 1,225,067
Other assets 1,943
--------------
Total assets 1,562,252,917
--------------
LIABILITIES:
Unrealized depreciation on
unfunded commitments 135,000
Payables:
Fund shares redeemed 867,600
Manager (See Note 3) 736,767
NYLIFE Distributors (See Note 3) 179,375
Professional fees 69,344
Shareholder communication 67,125
Custodian 23,100
Directors 4,220
Accrued expenses 6,104
--------------
Total liabilities 2,088,635
--------------
Net assets $1,560,164,282
==============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 300 million shares
authorized $ 1,732,677
Additional paid-in capital 1,658,858,469
--------------
1,660,591,146
Accumulated undistributed net
investment income 98,842,153
Accumulated net realized loss on
investments and foreign currency
transactions (214,336,396)
Net unrealized appreciation on
investments 15,170,594
Net unrealized depreciation on
unfunded commitments (135,000)
Net unrealized appreciation on
translation of other assets and
liabilities in foreign
currencies 31,785
--------------
Net assets $1,560,164,282
==============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 700,294,542
==============
Shares of capital stock
outstanding 77,535,008
==============
Net asset value per share
outstanding $ 9.03
==============
SERVICE CLASS
Net assets applicable to
outstanding shares $ 859,869,740
==============
Shares of capital stock
outstanding 95,732,708
==============
Net asset value per share
outstanding $ 8.98
==============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-185
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Interest $109,541,980
Dividends 436,581
Income from securities
loaned--net 78
------------
Total income 109,978,639
------------
EXPENSES:
Manager (See Note 3) 7,065,650
Distribution and service--Service
Class (See Note 3) 1,595,905
Shareholder communication 228,862
Professional fees 209,423
Custodian 67,044
Directors 53,189
Miscellaneous 56,675
------------
Total expenses 9,276,748
------------
Net investment income 100,701,891
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on:
Security transactions (88,983,101)
Foreign currency transactions (20,995)
------------
Net realized loss on investments
and foreign currency transactions (89,004,096)
------------
Net change in unrealized
appreciation (depreciation) on:
Investments and unfunded
commitments 423,687,160
Translation of other assets and
liabilities in foreign
currencies 31,698
------------
Net change in unrealized
depreciation on investments,
unfunded commitments and foreign
currency transactions 423,718,858
------------
Net realized and unrealized gain on
investments, unfunded commitments
and foreign currency transactions 334,714,762
------------
Net increase in net assets
resulting from operations $435,416,653
============
</Table>
M-186 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 100,701,891 $ 101,475,331
Net realized loss on
investments and foreign
currency transactions (89,004,096) (50,137,423)
Net change in unrealized
depreciation on
investments, unfunded
commitments and foreign
currency transactions 423,718,858 (365,844,238)
-------------------------------
Net increase (decrease)
in net assets resulting
from operations 435,416,653 (314,506,330)
-------------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (47,978,241) (60,036,628)
Service Class (53,876,110) (49,201,753)
-------------------------------
Total dividends to
shareholders (101,854,351) (109,238,381)
-------------------------------
Capital share transactions:
Net proceeds from sale of
shares 312,411,274 105,325,443
Net asset value of shares
issued to shareholders in
reinvestment of dividends 101,854,351 109,238,381
Cost of shares redeemed (125,228,237) (323,313,584)
-------------------------------
Increase (decrease) in
net assets derived
from capital share
transactions 289,037,388 (108,749,760)
-------------------------------
Net increase (decrease)
in net assets 622,599,690 (532,494,471)
NET ASSETS:
Beginning of year 937,564,592 1,470,059,063
-------------------------------
End of year $1,560,164,282 $ 937,564,592
===============================
Accumulated undistributed
net investment income at
end of year $ 98,842,153 $ 100,424,076
===============================
</Table>
mainstayinvestments.com M-187
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 6.79 $ 10.08 $ 10.55 $ 9.59 $ 9.90
-------- -------- -------- -------- ----------
Net investment income (a) 0.67 0.76 0.80 0.72 0.73
Net realized and
unrealized gain (loss)
on investments 2.22 (3.16) (0.55) 0.44 (0.46)
Net realized and
unrealized gain (loss)
on foreign currency
transactions 0.00++ (0.00)++ (0.00)++ (0.00)++ 0.02
-------- -------- -------- -------- ----------
Total from investment
operations 2.89 (2.40) 0.25 1.16 0.29
-------- -------- -------- -------- ----------
Less dividends:
From net investment
income (0.65) (0.89) (0.72) (0.20) (0.60)
-------- -------- -------- -------- ----------
Net asset value at end of
year $ 9.03 $ 6.79 $ 10.08 $ 10.55 $ 9.59
======== ======== ======== ======== ==========
Total investment return 42.82% (24.11%) 2.31% 12.04% 2.94%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 8.23% 8.20% 7.53% 7.20% 7.39%
Net expenses 0.62% 0.59% 0.55% 0.56% 0.45%
Expenses (before
reimbursement) 0.62% 0.59% 0.55% 0.56% 0.55%
Portfolio turnover rate 43% 24% 45% 48% 45%
Net assets at end of year
(in 000's) $700,295 $506,827 $866,747 $969,910 $1,022,911
</Table>
<Table>
++ Less than one cent per share.
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 2.85% and 2.58% for Initial Class shares and Service
Class shares, respectively for the year ended December 31, 2005.
</Table>
M-188 MainStay VP High Yield Corporate Bond Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
2009 2008 2007 2006 2005
$ 6.76 $ 10.03 $ 10.51 $ 9.56 $ 9.88
-------- -------- -------- -------- --------
0.65 0.73 0.77 0.69 0.71
2.21 (3.14) (0.55) 0.44 (0.47)
0.00++ (0.00)++ (0.00)++ (0.00)++ 0.02
-------- -------- -------- -------- --------
2.86 (2.41) 0.22 1.13 0.26
-------- -------- -------- -------- --------
(0.64) (0.86) (0.70) (0.18) (0.58)
-------- -------- -------- -------- --------
$ 8.98 $ 6.76 $ 10.03 $ 10.51 $ 9.56
======== ======== ======== ======== ========
42.47% (24.30%) 2.05% 11.76% 2.66%(b)
7.90% 7.99% 7.28% 6.95% 7.14%
0.87% 0.84% 0.80% 0.81% 0.70%
0.87% 0.84% 0.80% 0.81% 0.80%
43% 24% 45% 48% 45%
$859,870 $430,738 $603,312 $509,917 $400,109
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-189
MAINSTAY VP ICAP SELECT EQUITY PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON(1) (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 29.41% 1.66% 1.96%
</Table>
(After Portfolio operating expenses)
(PERFORMANCE GRAPH)
<Table>
<Caption>
S&P 500 S&P 500/CITIGROUP
INITIAL CLASS INDEX VALUE INDEX
------------- ------- -----------------
12/31/99 10000 10000 10000
12/31/00 10659 9090 10608
12/31/01 10178 8009 9366
12/31/02 7852 6239 7413
12/31/03 10046 8029 9770
12/31/04 11188 8902 11304
12/31/05 11797 9340 11962
12/31/06 14074 10815 14450
12/31/07 15039 11409 14738
12/31/08 9386 7188 8957
12/31/09 12146 9090 10854
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 29.09% 1.41% 1.71%
</Table>
(After Portfolio operating expenses)
(PERFORMANCE GRAPH)
<Table>
<Caption>
S&P 500 S&P 500/CITIGROUP
SERVICE CLASS2 INDEX VALUE INDEX
-------------- ------- -----------------
12/31/99 10000 10000 10000
12/31/00 10632 9090 10608
12/31/01 10128 8009 9366
12/31/02 7793 6239 7413
12/31/03 9948 8029 9770
12/31/04 11051 8902 11304
12/31/05 11626 9340 11962
12/31/06 13836 10815 14450
12/31/07 14748 11409 14738
12/31/08 9182 7188 8957
12/31/09 11852 9090 10854
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
S&P 500(R) Index(3) 26.46% 0.42% -0.95%
S&P 500/Citigroup Value Index(3) 21.18 -0.81 0.82
Average Lipper Variable Products Large-Cap Core
Portfolio(4) 27.98 0.26 -0.48
</Table>
1. Performance figures reflect certain fee waivers, without which total returns
may have been lower. These contractual fee waivers expired on April 30, 2009.
Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these nonrecurring reimbursements had not been
made, the total returns would have been 1.66% and 1.96% for Initial Class
shares and 1.41% and 1.71% for Service Class shares for the five-year and
ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 5, 2003, includes
the historical performance of Initial Class shares through June 4, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products Large-Cap Core Portfolio is
representative of portfolios that, by portfolio practice, invest at least 75%
of their equity assets in companies with market capitalizations (on a three-
year weighted basis) above Lipper's U.S. Diversified Equity large-cap floor.
Large-cap value funds typically have a below-average price-to-earnings ratio,
price-to-book ratio, and three-year sales-per-share growth value compared to
the S&P 500(R) Index. Lipper Inc. is an independent monitor of fund
performance.
M-190 MainStay VP ICAP Select Equity Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP ICAP SELECT EQUITY
PORTFOLIO (UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,204.40 $4.50 $1,021.10 $4.13
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,202.90 $5.89 $1,019.90 $5.40
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.81% for Initial class and 1.06% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-191
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
<Table>
<Caption>
Pharmaceuticals 13.8%
Commercial Banks 9.5
Semiconductors & Semiconductor
Equipment 8.0
Oil, Gas & Consumable Fuels 6.7
Machinery 5.8
Beverages 5.3
Aerospace & Defense 4.1
Energy Equipment & Services 4.1
Road & Rail 4.1
Specialty Retail 4.0
Wireless Telecommunication Services 3.7
Metals & Mining 3.6
Computers & Peripherals 3.5
Diversified Financial Services 3.4
Media 3.3
Health Care Equipment & Supplies 3.1
Auto Components 2.7
Consumer Finance 2.5
Electronic Equipment & Instruments 2.1
Insurance 2.1
IT Services 1.6
Industrial Conglomerates 1.0
Short-Term Investment 1.9
Other Assets, Less Liabilities 0.1
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-195 for specific holdings
within these categories.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. Pfizer, Inc.
2. PepsiCo, Inc.
3. Merck & Co., Inc.
4. Texas Instruments, Inc.
5. CSX Corp.
6. Honeywell International, Inc.
7. Halliburton Co.
8. Lowe's Cos., Inc.
9. Sanofi-Aventis, Sponsored ADR
10. Caterpillar, Inc.
</Table>
M-192 MainStay VP ICAP Select Equity Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY JEROLD K. SENSER, CFA, AND THOMAS R. WENZEL, CFA, OF
INSTITUTIONAL CAPITAL LLC (ICAP), THE FUND'S SUBADVISOR.
HOW DID MAINSTAY VP ICAP SELECT EQUITY PORTFOLIO PERFORM RELATIVE TO ITS PEERS
AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP ICAP Select Equity
Portfolio returned 29.41% for Initial Class shares and 29.09% for Service Class
shares. Both share classes outperformed the 27.98% return of the average
Lipper(1) Variable Products Large-Cap Core Portfolio and the 26.46% return of
the S&P 500(R) Index(1) for the 12 months ended December 31, 2009. The S&P
500(R) Index is the Portfolio's broad-based securities-market index.
WHAT FACTORS INFLUENCED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
The Portfolio outperformed the S&P 500(R) Index largely because of favorable
stock selection in the health care, energy and industrials sectors. Strong
contributions in these sectors more than offset the Portfolio's weaker stock
selection in the financials, materials and telecommunication services sectors.
DURING THE REPORTING PERIOD, WHICH SECTORS PROVIDED THE STRONGEST CONTRIBUTIONS
TO THE PORTFOLIO'S RELATIVE PERFORMANCE AND WHICH SECTORS DETRACTED THE MOST?
In 2009, the strongest sector contribution to the Portfolio's performance
relative to the S&P 500(R) Index came from health care, followed by energy
and industrials. The sectors that detracted the most from the Portfolio's
relative performance were financials, information technology and consumer
discretionary. Even so, the Portfolio's information technology and consumer
discretionary holdings provided positive absolute performance for the year.
DURING 2009, WHICH STOCKS MADE THE STRONGEST CONTRIBUTIONS TO THE PORTFOLIO'S
ABSOLUTE PERFORMANCE AND WHICH STOCKS WERE PARTICULARLY WEAK?
On an absolute basis, the Portfolio's strongest individual contributor during
the reporting period was financial services firm JPMorgan Chase. Health care
company Schering-Plough, which rose on merger news during the period, was the
second-strongest absolute contributor. Semiconductor manufacturer Texas
Instruments rounded out the top three. Texas Instruments' stock price rose as
the likelihood of an economic recovery improved.
Major detractors from the Portfolio's absolute perfor-
mance included health care company Johnson & Johnson, diversified entertainment
giant News Corp. and telecommunications company Vodafone Group PLC. We sold the
Portfolio's position in Johnson & Johnson when we believed that other stocks had
become more attractive. The News Corp. position was also eliminated during the
reporting period.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
In a period characterized by financial deleveraging and relatively weak economic
activity, we believed that strong companies would become stronger. In our
opinion, companies with strong balance sheets, good market positions and solid
operating characteristics would have the greatest potential to increase their
market share.
We added Intel, the world's largest semiconductor manufacturer, to the Portfolio
during 2009. We expected Intel to benefit from its substantial investments in
research and development, its launch of new products and the computer upgrade
cycle. During the year, the Portfolio also added Caterpillar,
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. The
Portfolio may invest in mid-cap stocks, which may be more volatile and less
liquid than the securities of larger companies. The principal risk of investing
in value stocks is that they may never reach what the portfolio manager believes
is their full value or that they may even go down in value. Because the
Portfolio invests in relatively few holdings, a larger percentage of its assets
may be invested in a particular issuer or in fewer companies than is typical of
other portfolios. The use of options and futures transactions involves risks and
special considerations which include, among others, correlation risk and
liquidity risk. 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. Investments in foreign companies in the form
of depository receipts, such as ADRs, may entail the special risks of
international investing, including currency exchange fluctuations, government
regulations and the potential for political and economic instability. Because of
its trading strategies, the Portfolio may have a portfolio turnover rate between
100% and 200%. Portfolios with high turnover rates often have higher transaction
costs and may generate taxable short-term capital gains.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-193
the world's largest manufacturer of construction and mining equipment. We felt
that Caterpillar's exposure to construction, mining, petroleum and other
cyclical sectors would add value in an economic recovery. We also felt that
Caterpillar would benefit from higher commodity prices and improved cost
controls.
Target, the second largest general merchandise retailer in the United States,
was eliminated from the Portfolio after the stock reached our price target. As
previously noted, the Portfolio eliminated its posi-
tions in Johnson & Johnson and News Corp. during the year.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE OVER THE COURSE OF 2009?
During the reporting period, the Portfolio increased its sector weightings in
industrials and financials from underweight to overweight. The Portfolio also
increased its weighting in health care from a slight overweight to a more
significant overweight.
The Portfolio decreased its allocations in the con-
sumer staples and information technology sectors,
moving from slightly underweight to more signifi-
cantly underweight. The Portfolio's consumer discre-
tionary weighting also decreased, from a significant overweight to a slight
overweight.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF 2009?
As of December 31, 2009, the Portfolio was over-
weight relative to the S&P 500(R) Index in the indus-
trials, health care and financials sectors. As of the same date, the Portfolio
was underweight in the con-
sumer staples, information technology and utilities sectors. These relative
weightings reflected our views on the relative attractiveness of individual
Portfolio holdings in these sectors.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP ICAP Select Equity Portfolio on this page and the
preceding pages has not been audited.
M-194 MainStay VP ICAP Select Equity Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 98.0%+
- ----------------------------------------------------------------
AEROSPACE & DEFENSE 4.1%
v Honeywell International,
Inc. 1,125,350 $ 44,113,720
--------------
AUTO COMPONENTS 2.7%
Johnson Controls, Inc. 1,090,750 29,712,030
--------------
BEVERAGES 5.3%
v PepsiCo, Inc. 955,200 58,076,160
--------------
COMMERCIAL BANKS 9.5%
BB&T Corp. 973,050 24,686,279
U.S. Bancorp 1,785,250 40,185,977
Wells Fargo & Co. 1,427,550 38,529,574
--------------
103,401,830
--------------
COMPUTERS & PERIPHERALS 3.5%
Hewlett-Packard Co. 729,199 37,561,040
--------------
CONSUMER FINANCE 2.5%
Capital One Financial Corp. 718,713 27,555,456
--------------
DIVERSIFIED FINANCIAL SERVICES 3.4%
JPMorgan Chase & Co. 898,464 37,438,995
--------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 2.1%
Corning, Inc. 1,207,650 23,319,722
--------------
ENERGY EQUIPMENT & SERVICES 4.1%
v Halliburton Co. 1,462,176 43,996,876
--------------
HEALTH CARE EQUIPMENT & SUPPLIES 3.1%
Covidien PLC 714,000 34,193,460
--------------
INDUSTRIAL CONGLOMERATES 1.0%
Textron, Inc. 568,400 10,691,604
--------------
INSURANCE 2.1%
Aon Corp. 582,950 22,350,303
--------------
IT SERVICES 1.6%
Accenture PLC Class A 407,450 16,909,175
--------------
MACHINERY 5.8%
v Caterpillar, Inc. 736,600 41,978,834
Cummins, Inc. 467,700 21,448,722
--------------
63,427,556
--------------
MEDIA 3.3%
Viacom, Inc. Class B (a) 1,209,900 35,970,327
--------------
METALS & MINING 3.6%
Newmont Mining Corp. 818,400 38,718,504
--------------
OIL, GAS & CONSUMABLE FUELS 6.7%
Marathon Oil Corp. 1,091,050 34,062,581
Occidental Petroleum Corp. 475,434 38,676,556
--------------
72,739,137
--------------
PHARMACEUTICALS 13.8%
v Merck & Co., Inc. 1,294,990 47,318,935
v Pfizer, Inc. 3,258,650 59,274,843
v Sanofi-Aventis, ADR (b) 1,105,550 43,414,949
--------------
150,008,727
--------------
ROAD & RAIL 4.1%
v CSX Corp. 927,500 44,974,475
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 8.0%
Intel Corp. 2,003,050 40,862,220
v Texas Instruments, Inc. 1,761,233 45,897,732
--------------
86,759,952
--------------
SPECIALTY RETAIL 4.0%
v Lowe's Cos., Inc. 1,878,650 43,941,624
--------------
WIRELESS TELECOMMUNICATION SERVICES 3.7%
Vodafone Group PLC, ADR (b) 1,758,000 40,592,220
--------------
Total Common Stocks
(Cost $943,635,859) 1,066,452,893
--------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
v Among the Portfolio's 10 largest holdings, as of December 31, 2009,
excluding short-term investment. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-195
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENT 1.9%
- ----------------------------------------------------------------
REPURCHASE AGREEMENT 1.9%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$20,116,751
(Collateralized by a
United States Treasury
Bill with a zero coupon
rate and a maturity date
of 2/18/10, with a
Principal Amount of
$20,520,000 and a Market
Value of $20,520,000) $20,116,740 $ 20,116,740
--------------
Total Short-Term Investment
(Cost $20,116,740) 20,116,740
--------------
Total Investments
(Cost $963,752,599) (c) 99.9% 1,086,569,633
Other Assets, Less
Liabilities 0.1 1,109,738
----- ------------
Net Assets 100.0% $1,087,679,371
===== ============
</Table>
<Table>
+ Percentages indicated are based on
Portfolio net assets.
(a) Non-income producing security.
(b) ADR--American Depositary Receipt.
(c) At December 31, 2009, cost is
$986,907,474 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $138,283,123
Gross unrealized depreciation (38,620,964)
------------
Net unrealized appreciation $ 99,662,159
============
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED
PRICES IN
ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Common Stocks $1,066,452,893 $ -- $ -- $1,066,452,893
Short-Term Investment
Repurchase Agreement -- 20,116,740 -- 20,116,740
-------------- ----------- -------- --------------
Total Investments in Securities $1,066,452,893 $20,116,740 $ -- $1,086,569,633
============== =========== ======== ==============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
M-196 MainStay VP ICAP Select Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $963,752,599) $1,086,569,633
Receivables:
Dividends and interest 2,231,834
Fund shares sold 305,098
Other assets 1,285
--------------
Total assets 1,089,107,850
--------------
LIABILITIES:
Payables:
Manager (See Note 3) 705,577
Fund shares redeemed 492,041
NYLIFE Distributors (See Note 3) 85,261
Shareholder communication 69,071
Professional fees 58,440
Custodian 8,279
Directors 2,976
Accrued expenses 6,834
--------------
Total liabilities 1,428,479
--------------
Net assets $1,087,679,371
==============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 1,018,926
Additional paid-in capital 1,385,245,653
--------------
1,386,264,579
Accumulated undistributed net
investment income 8,862,331
Accumulated net realized loss on
investments (430,264,573)
Net unrealized appreciation on
investments 122,817,034
--------------
Net assets $1,087,679,371
==============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 686,906,596
==============
Shares of capital stock
outstanding 64,171,766
==============
Net asset value per share
outstanding $ 10.70
==============
SERVICE CLASS
Net assets applicable to
outstanding shares $ 400,772,775
==============
Shares of capital stock
outstanding 37,720,796
==============
Net asset value per share
outstanding $ 10.62
==============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-197
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends (a) $ 15,251,086
Interest 4,032
-------------
Total income 15,255,118
-------------
EXPENSES:
Manager (See Note 3) 5,544,675
Distribution and
service--Service Class (See
Note 3) 593,454
Professional fees 143,392
Shareholder communication 135,966
Directors 30,454
Custodian 16,887
Miscellaneous 39,526
-------------
Total expenses before waiver 6,504,354
Expense waiver from Manager (See
Note 3) (108,778)
-------------
Net expenses 6,395,576
-------------
Net investment income 8,859,542
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments (153,422,397)
Net change in unrealized
depreciation on investments 326,482,871
-------------
Net realized and unrealized gain
on investments 173,060,474
-------------
Net increase in net assets
resulting from operations $ 181,920,016
=============
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$27,776.
M-198 MainStay VP ICAP Select Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE IN NET ASSETS:
Operations:
Net investment income $ 8,859,542 $ 12,711,015
Net realized loss on investments (183,074,2-
(153,422,397) 32)
Net change in unrealized depreciation (220,528,5-
on investments 326,482,871 27)
------------------------------
Net increase (decrease) in net assets (390,891,7-
resulting from operations 181,920,016 44)
------------------------------
Dividends and distributions to shareholders:
From net investment income:
Initial Class (8,840,272) (2,970,133)
Service Class (3,870,673) (1,049,152)
------------------------------
(12,710,945) (4,019,285)
------------------------------
From net realized gain on investments:
Initial Class -- (21,766,902)
Service Class -- (9,431,099)
------------------------------
-- (31,198,001)
------------------------------
Total dividends and distributions to
shareholders (12,710,945) (35,217,286)
------------------------------
Capital share transactions:
Net proceeds from sale of shares 58,794,455 111,725,466
Net asset value of shares issued in
connection with the acquisition of VP
Mid Cap Value Portfolio 283,971,931 --
Net asset value of shares issued in
connection with the acquisition of VP
Value Portfolio -- 641,916,334
Net asset value of shares issued to
shareholders in reinvestment of
dividends and distributions 12,710,945 35,217,286
Cost of shares redeemed (116,848,2-
(91,976,204) 97)
------------------------------
Increase in net assets derived from
capital share transactions 263,501,127 672,010,789
------------------------------
Net increase in net assets 432,710,198 245,901,759
NET ASSETS:
Beginning of year 654,969,173 409,067,414
------------------------------
End of year $1,087,679,3-
71 $654,969,173
==============================
Accumulated undistributed net investment
income at end of year $ 8,862,331 $ 12,710,920
==============================
</Table>
mainstayinvestments.com M-199
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
-------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 8.41 $ 14.22 $ 13.75 $ 11.61 $ 11.23
-------- -------- -------- -------- -------
Net investment income 0.11 0.05 0.11 0.19 (a) 0.15 (a)
Net realized and
unrealized gain (loss)
on investments 2.36 (5.38) 0.87 2.04 0.46
-------- -------- -------- -------- -------
Total from investment
operations 2.47 (5.33) 0.98 2.23 0.61
-------- -------- -------- -------- -------
Less dividends and
distributions:
From net investment
income (0.18) (0.06) (0.07) (0.03) (0.11)
From net realized gain
on investments -- (0.42) (0.44) (0.06) (0.12)
-------- -------- -------- -------- -------
Total dividends and
distributions (0.18) (0.48) (0.51) (0.09) (0.23)
-------- -------- -------- -------- -------
Net asset value at end of
year $ 10.70 $ 8.41 $ 14.22 $ 13.75 $ 11.61
======== ======== ======== ======== =======
Total investment return 29.41% (37.59%) 6.86% 19.31% 5.44%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 1.32% 1.98% 1.45% 1.50% 1.35%
Net expenses 0.80% 0.78% 0.80% 0.88%# 0.77%#
Expenses (before
waiver/reimbursement) 0.82% 0.83% 0.85% 0.94%# 0.91%#
Portfolio turnover rate 85% 152% 117% 130% 55%
Net assets at end of year
(in 000's) $686,907 $456,377 $250,237 $137,191 $66,657
</Table>
<Table>
# Includes fees paid indirectly which amounted to less than one-hundredth of a
percent and 0.01% of the average net assets for the years ended December 31,
2006 and 2005, respectively.
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 5.36% and 5.14% for Initial Class shares and Service
Class shares, respectively, for the year ended December 31, 2005.
</Table>
M-200 MainStay VP ICAP Select Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
2009 2008 2007 2006 2005
$ 8.36 $ 14.14 $ 13.71 $ 11.59 $ 11.21
-------- -------- -------- ------- -------
0.07 0.12 0.03 0.15 (a) 0.13 (a)
2.35 (5.43) 0.90 2.05 0.46
-------- -------- -------- ------- -------
2.42 (5.31) 0.93 2.20 0.59
-------- -------- -------- ------- -------
(0.16) (0.05) (0.06) (0.02) (0.09)
-- (0.42) (0.44) (0.06) (0.12)
-------- -------- -------- ------- -------
(0.16) (0.47) (0.50) (0.08) (0.21)
-------- -------- -------- ------- -------
$ 10.62 $ 8.36 $ 14.14 $ 13.71 $ 11.59
======== ======== ======== ======= =======
29.09% (37.75%) 6.59% 19.00% 5.21%(b)
1.04% 1.71% 1.18% 1.23% 1.10%
1.05% 1.03% 1.05% 1.13%# 1.02%#
1.07% 1.08% 1.10% 1.19%# 1.16%#
85% 152% 117% 130% 55%
$400,773 $198,592 $158,831 $46,349 $28,632
</Table>
mainstayinvestments.com M-201
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
MAINSTAY VP INCOME BUILDER PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 23.51% 2.51% 0.26%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
TOTAL RETURN BARCLAYS CAPITAL
MSCI WORLD RUSSELL 1000(R) S&P 500 CORE COMPOSITE U.S. AGGREGATE
INITIAL CLASS INDEX* INDEX INDEX INDEX BOND INDEX
------------- ---------- --------------- ------- -------------- ----------------
12/31/99 10000 10000 10000 10000 10000 10000
12/31/00 9564 8682 9221 9090 9988 11163
12/31/01 8542 7221 8073 8009 9583 12105
12/31/02 7127 5785 6325 6239 8669 13347
12/31/03 8529 7701 8216 8029 10329 13894
12/31/04 9072 8834 9153 8902 11218 14497
12/31/05 9662 9672 9726 9340 11758 14849
12/31/06 10579 11613 11230 10815 13043 15493
12/31/07 11374 12663 11878 11409 13877 16572
12/31/08 8312 7507 7412 7188 10759 17440
12/31/09 10267 9759 9520 9090 12858 18475
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 23.21% 2.24% 0.01%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
TOTAL RETURN BARCLAYS CAPITAL
MSCI WORLD RUSSELL 1000(R) S&P 500 CORE COMPOSITE U.S. AGGREGATE
SERVICE CLASS INDEX* INDEX INDEX INDEX BOND INDEX
------------- ---------- --------------- ------- -------------- ----------------
12/31/99 10000 10000 10000 10000 10000 10000
12/31/00 9539 8682 9221 9090 9988 11163
12/31/01 8498 7221 8073 8009 9583 12105
12/31/02 7073 5785 6325 6239 8669 13347
12/31/03 8444 7701 8216 8029 10329 13894
12/31/04 8960 8834 9153 8902 11218 14497
12/31/05 9514 9672 9726 9340 11758 14849
12/31/06 10392 11613 11230 10815 13043 15493
12/31/07 11145 12663 11878 11409 13877 16572
12/31/08 8124 7507 7412 7188 10759 17440
12/31/09 10010 9759 9520 9090 12858 18475
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
MSCI World Index(3) 29.99% 2.01% -0.24%
Russell 1000(R) Index(3) 28.43 0.79 -0.49
S&P 500(R) Index(3) 26.46 0.42 -0.95
Total Return Core Composite Index(3) 19.50 2.77 2.55
Barclays Capital U.S. Aggregate Bond
Index(3) 5.93 4.97 6.33
Average Lipper Variable Products Mixed-
Asset Target Allocation Growth
Portfolio(4) 24.27 2.21 1.84
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 2.45% and 0.24% for Initial
Class shares and 2.22% and 0.00% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 4, 2003, includes
the historical performance of Initial Class shares through June 3, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products Mixed-Asset Target Allocation Growth
Portfolio is representative of portfolios that, by portfolio practice,
maintain a mix of between 60%-80% equity securities, with the remainder
invested in bonds, cash, and cash equivalents. Lipper Inc. is an independent
monitor of fund performance.
M-202 MainStay VP Income Builder Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP INCOME BUILDER PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,163.40 $3.93 $1,021.60 $3.67
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,162.00 $5.29 $1,020.30 $4.94
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.72% for Initial Class and 0.97% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-203
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(COMPOSITION PIE CHART)
<Table>
Common Stocks 57.50
Corporate Bonds 17.00
Convertible Bonds 8.50
U.S. Government & Federal Agencies 6.50
Short-Term Investment 5.00
Yankee Bonds 1.30
Asset-Backed Securities 1.10
Convertible Preferred Stocks 1.10
Mortgage-Backed Securities 0.70
Other Assets, Less Liabilities 0.70
Foreign Government Bonds 0.30
Municipal Bonds 0.30
Futures Contracts 0.00
Loan Assignment & Participation 0.00
Preferred Stock 0.00
Warrants 0.00
</Table>
See Portfolio of Investments beginning on page M-209 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS OR ISSUERS HELD AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM
INVESTMENT)
<Table>
1. Federal National Mortgage Association (Mortgage
Pass-Through Securities), 4.50%-6.50%, due
4/1/18-4/1/37
2. Imperial Tobacco Group PLC
3. Diageo PLC
4. InBev N.V.
5. Nestle S.A. Registered
6. Government National Mortgage Association
(Mortgage Pass-Through Securities), 5.00%-6.50%,
due 4/15/29-3/1/38
7. Federal Home Loan Mortgage Corporation (Mortgage
Pass-Through Securities), 3.00%-5.50%, due
8/1/10-6/1/35
8. Altria Group, Inc.
9. Lorillard, Inc.
10. BCE, Inc.
</Table>
M-204 MainStay VP Income Builder Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY DAN ROBERTS AND MICHAEL KIMBLE OF MACKAY SHIELDS LLC
("MACKAY SHIELDS"), THE PORTFOLIO'S CO-SUBADVISOR, AND WILLIAM W. PRIEST, CFA,
ERIC SAPPENFIELD, AND MICHAEL WELHOELTER, CFA, OF EPOCH INVESTMENT PARTNERS,
INC. ("EPOCH") THE PORTFOLIO'S CO-SUBADVISOR.(1)
HOW DID MAINSTAY VP INCOME BUILDER PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Income Builder Portfolio
returned 23.51%
for Initial Class shares and 23.21% for Service Class shares. Both share classes
underperformed the 24.27% return of the average Lipper(2) Variable Products
Mixed-Asset Target Allocation Growth Portfolio, the 29.99% return of the MSCI
World Index(2) and the 28.43% return of the Russell 1000(R) Index(2) for the 12
months ended December 31, 2009. The MSCI World Index is the Portfolio's broad-
based securities-market index.
WERE THERE ANY SIGNIFICANT CHANGES IN THE PORTFOLIO MANAGEMENT OR INVESTMENT
APPROACH OF THE PORTFOLIO DURING THE REPORTING PERIOD?
In connection with a larger initiative by New York Life Investments to
reposition and rationalize the lineup of MainStay VP Portfolios, the Board of
Directors of the Fund approved the replacement of Mac-
Kay Shields with Epoch as the Co-Subadviser for the equity portion of the
Portfolio, effective June 29, 2009. The Board also approved the restructuring of
the portfolio management team for the Portfolio as of that date to add Dan
Roberts and Michael Kimble of MacKay Shields as portfolio managers responsible
for the overall asset allocation decisions for the Portfolio. For the period
from January 1, 2009, to June 28, 2009, the Portfolio's performance figures
referenced above reflect the performance of the Portfolio while the entire
Portfolio was subadvised by MacKay Shields.
Effective August 14, 2009, the Portfolio amended its principal investment
strategy to reflect Epoch's global equity yield strategy for equity investments,
changed its primary benchmark index from the Russell 1000(R) Index to the MSCI
World Index and changed its prin-
cipal risks. Effective November 20, 2009, the Port-
folio changed its name from MainStay VP Total Return Portfolio to MainStay VP
Income Builder
Portfolio. For the period from January 1, 2009, to August 14, 2009, the
Portfolio's relative performance figures discussed herein are compared to the
previous benchmark index and relative performance
figures thereafter are compared to the current benchmark. For additional
information about these changes and their implementation, please refer to the
Supplement dated July 1, 2009, to the Prospectus for the Fund, dated May 1,
2009.
DURING 2009, WHICH SECTORS IN THE EQUITY PORTION OF THE PORTFOLIO WERE THE
STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S PERFORMANCE AND WHICH SECTORS WERE
WEAK CONTRIBUTORS?
During the first six months of 2009, the strongest sector contributors to the
Portfolio's equity
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. The
principal risk of growth stocks is that investors expect growth companies to
increase their earnings at a certain rate that is generally higher than the rate
expected for nongrowth companies. If these expectations are not met, the market
price of the stock may decline significantly, even if earnings showed an
absolute increase. The principal risk of investing in value stocks is that they
may never reach what the subadvisor believes is their full value or that they
may even go down in value.
The values of debt securities fluctuate depending on various factors, including
interest rates, issuer creditworthiness, liquidity, market conditions and
maturities. High-yield debt 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 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. Convertible securities
tend to be subordinate to other debt securities issued by the same company.
Also, issuers of convertible securities are often not as strong as those issuing
securities with higher credit ratings and thus may be more vulnerable to changes
in the economy. If an issuer stops making interest payments and/or principal
payments on its convertible securities, these securities may become worthless
and the Portfolio could lose its entire investment. 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 principal risk of mortgage-related and
asset-backed securities is that the underlying debt may be prepaid ahead of
schedule if interest rates fall, thereby reducing the value of the Portfolio's
investments. If interest rates rise, there may be fewer prepayments, which would
cause the average bond maturity to rise and increase the potential for the
Portfolio to lose money. The principal risk of mortgage dollar rolls is that the
security the Portfolio receives at the end of the transaction may be worth less
than the security the Portfolio sold to the same counterparty at the beginning
of the transaction. The Portfolio may experience a portfolio turnover rate of
more than 100% and may generate taxable short-term capital gains.
1. During the reporting period, New York Life Investments delegated day-to-day
portfolio management responsibilities for the equity portion of the Portfolio
to MacKay Shields from January 1, 2009, to June 29, 2009, and to Epoch
beginning on June 29, 2009. "New York Life Investments" is a service mark
used by New York Life Investment Management LLC.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-205
performance on an absolute basis and relative to the Russell 1000(R) Index were
energy, industrials and information technology. The Portfolio benefited from
strong security selection in energy and industrials and from an overweight
position in information technology. During the first six months of the reporting
period, consumer staples was the Portfolio's weakest sector in both absolute and
relative terms. Health care was weak in absolute terms, and utilities was weak
relative to the Russell 1000(R) Index. The Portfolio's consumer staples holdings
were hurt when investors moved from defensive to cyclical stocks.
In the second half of 2009, the sectors that made the strongest contributions to
the Portfolio's returns relative to the MSCI World Index were utilities,
industrials and telecommunication services. During the second half of the year,
the weakest-contributing sectors were information technology, health care and
mater-
ials. Despite the information technology sector's strong advance during the
latter half of the reporting period, these stocks do not typically pay
significant dividends and are not a key source of equity returns in our
strategy.
DURING 2009, WHICH STOCKS WERE STRONG CONTRIBUTORS TO THE ABSOLUTE PERFORMANCE
OF THE EQUITY PORTION OF THE PORTFOLIO AND WHICH STOCKS WERE PARTICULARLY WEAK
CONTRIBUTORS?
During the first six months of 2009, computer and electronic device manufacturer
Apple was the strongest contributor to the Portfolio's absolute performance,
followed by Blackberry device and software maker Research In Motion and IT
services company International Business Machines. During the first half of the
year, the Portfolio's worst-performing stock
on an absolute basis was railroad operator Norfolk Southern. Biotechnology
company Celgene was also a laggard, when the company's largest product, a cancer
treatment drug, experienced slowing sales. Shares of Citigroup and U.S. Bancorp
also moved dramatically lower during the first half of the reporting period.
During the second half of 2009, oil, gas & consumable fuels company ExxonMobil
was a negative performer in absolute terms, but our position performed better
than the MSCI World Index and the Portfolio was significantly underweight
relative to the benchmark in the stock. Belgium-based beverage company Anheuser-
Busch InBev Worldwide provided positive absolute performance and was overweight
in the Portfolio relative to the benchmark. Telecommunications company
Windstream provided positive absolute performance and was heavily overweight
relative to the MSCI World Index.
During the second half of the year, the Portfolio's three worst-performing
stocks on an absolute basis also had the greatest negative impact on the
Portfolio's relative performance. They were pharmaceutical company AstraZeneca
PLC of the U.K., insurance company Arthur J. Gallagher in the United States, and
water and wastewater utility and infrastructure manager United Utilities in the
U.K. AstraZeneca PLC provided positive absolute returns but underperformed the
MSCI World Index. Arthur J. Gallagher provided negative absolute returns and
underperformed the benchmark. United Utilities provided positive results but
underperformed the MSCI World Index in the second half of 2009.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT EQUITY PURCHASES OR SALES DURING 2009?
During the first six months of 2009, the Portfolio added to its energy holdings
with purchases of oil-services companies Schlumberger and Transocean. During the
same period, the Portfolio also added
a position in diversified manufacturing company Ingersoll-Rand.
During the first half of the year, the Portfolio sold its position in
biotechnology company Celgene, when slowing sales of the company's largest
product put pressure on the stock price. The Portfolio also sold its position in
design and engineering software maker Autodesk. The company posted a loss for
its first fiscal quarter of 2010 (or the three months ended April 30, 2009).
During the second half of 2009, the Portfolio purchased Imperial Tobacco PLC
which has historically generated strong free cash flow from its sales of tobacco
products. The Portfolio also purchased shares of Anheuser-Busch InBev Worldwide
to take advantage of the company's strong free cash flow arising and
management's commitment to enhancing shareholder yield. A third purchase was
Diageo PLC, a global brewer with world-class brands and strong free cash flow.
During the second half of 2009, the Portfolio's largest sales were IT services
company International Business Machines, aerospace & defense company United
Technologies and computer and electronic device manufacturer Apple. While all
three were great companies, they did not exhibit the free cash flow the
Portfolio seeks to capture. All three stocks were sold as part of the
Portfolio's transition in portfolio management.
M-206 MainStay VP Income Builder Portfolio
HOW DID SECTOR WEIGHTINGS IN THE EQUITY PORTION OF THE PORTFOLIO CHANGE DURING
2009?
At the end of June 2009, the Portfolio was underweight relative to the Russell
1000(R) Index in energy, utilities and financials. As of the same date, the
Portfolio was overweight relative to the Russell 1000(R) Index in consumer
staples and health care.
During the second half of the year, the Portfolio significantly increased its
utility and telecommunication services holdings from underweight to overweight
relative to the MSCI World Index. The Portfolio increased its weighting in
consumer staples from neutral relative to the benchmark to overweight.
During the second half of the year, the Portfolio reduced its positions in
information technology, health care and industrials from overweight to
underweight relative to the MSCI World Index.
HOW WAS THE EQUITY PORTION OF THE PORTFOLIO POSITIONED AS OF DECEMBER 31, 2009?
As of December 31, 2009, the equity portion of the Portfolio was significantly
overweight relative to the MSCI World Index in utilities, telecommunication
services and consumer staples. In all three cases, the weighting effects were
negative, but in utilities and telecommunication services, stock selection
provided an overall positive impact on relative performance.
As of the same date, the equity portion of the Portfolio was significantly
underweight relative to the MSCI World Index in financials and information
technology and was underweight in materials. All three of these positioning
decisions detracted from the Portfolio's relative performance.
WHAT FACTORS AFFECTED THE FIXED-INCOME PORTION OF THE PORTFOLIO DURING 2009?
During the first six months of the reporting period, the bond market found
comfort in early signs of economic recovery, and it gradually gravitated toward
cyclical portions of the market. The broad-based change in attitude from the
latter stages of 2008 provided a favorable backdrop for the resurgence of
higher-risk assets, especially credit-related products like corporate bonds.
During the last six months of the reporting period, the Portfolio was
repositioned to take better advantage of the economic and market outlook. Should
the
rate of economic recovery remain modest over the coming months, increased
strength in the capital markets could support corporate securities. With these
possibilities in view, the Portfolio positioned itself for higher-yields and the
potential for greater capital gains.
DID THE FIXED-INCOME PORTION OF THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES
DURING THE REPORTING PERIOD?
During the first six months of the reporting period, the fixed-income portion of
the Portfolio shifted exposure from mortgage pass-through securities issued by
Fannie Mae to similar-coupon securities issued by Ginnie Mae. Because of the
pricing relationship of these securities, we viewed the trade as oversold. The
trade had become considerably less costly on concerns about deteriorating Ginnie
Mae technicals (such as too much supply and too little foreign demand) and a
widening gap between Ginnie Mae and Fannie Mae prepayment rates.
The Portfolio's expanded commitment to mortgage pass-through securities aided
performance as pass-through spreads(3) tightened nearly 45 basis points to
comparable-duration Treasurys during the first six months of the reporting
period. (A basis point is one hundredth of a percentage point.) The Ginnie Mae/
Fannie Mae spread, however, was slow to normalize, and the trade modestly
detracted from the Portfolio's performance.
The Portfolio bought several commercial mortgage-backed securities to bring its
weighting into line with the Portfolio's fixed-income benchmark, the Barclays
Capital U.S. Aggregate Bond Index.(2) Although declining commercial property
fundamentals remained a concern, there was some optimism that government
intervention to enhance liquidity might be a more potent force. Indeed, spreads
in the commercial mortgage-backed securities sector tightened during the latter
stages of the first six months of the reporting period.
During the last six months of the reporting period, the Portfolio increased its
high-yield bond allocation from just over 3% of the Portfolio to the maximum
level of 8%. In pursuit of higher risk, the Portfolio increased its convertible-
bond allocation from less than 6% to a total of 9% of Portfolio assets.
3. The terms "spread" and "yield spread" may refer to the difference in yield
between a security or type of security and comparable U.S. Treasury issues.
The terms may also refer to the difference in yield between two specific
securities or types of securities at a given time.
mainstayinvestments.com M-207
WERE THERE ANY OTHER SIGNIFICANT CHANGES IN THE PORTFOLIO'S OVERALL ALLOCATIONS
DURING THE REPORTING PERIOD?
From an overall allocation perspective, the Portfolio increased its cash-market
equity holdings from approximately 48% to 60% of total assets. The Portfolio
also added an equity futures overlay of nearly 10% of the Portfolio's net assets
to gain further exposure to the equity markets.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP Income Builder Portfolio on this page and the
preceding pages has not been audited.
M-208 MainStay VP Income Builder Portfolio
PORTFOLIO OF INVESTMENTS+++ DECEMBER 31, 2009
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 35.7%+
ASSET-BACKED SECURITIES 1.1%
- ---------------------------------------------------------------
AIRLINES 0.2%
Continental Airlines, Inc.
Series A
7.25%, due 11/10/19 $ 450,000 $ 457,875
-------------
AUTOMOBILE 0.1%
Superior Wholesale Inventory
Financing Trust
Series 2007-AE1, Class A
0.343%, due 1/15/12 (a) 215,000 214,987
-------------
CREDIT CARDS 0.6%
Chase Issuance Trust
Series 2006-C4, Class C4
0.533%, due 1/15/14 (a) 780,000 750,062
Citibank Credit Card
Issuance Trust
Series 2006-C4, Class C4
0.474%, due 1/9/12 (a) 855,000 854,788
Murcie Lago International,
Ltd.
Series 2006-1X, Class A
0.476%, due 3/27/11
(a)(b)(c) 137,541 137,216
-------------
1,742,066
-------------
DIVERSIFIED FINANCIAL SERVICES 0.0%++
USXL Funding LLC
Series 2006-1A, Class A
5.379%, due 4/15/14 (c)(d) 62,131 62,134
-------------
HOME EQUITY 0.2%
Citicorp Residential
Mortgage Securities, Inc.
Series 2006-3, Class A3
5.61%, due 11/25/36 (e) 255,054 250,118
Series 2006-1, Class A3
5.706%, due 7/25/36 (e) 415,535 398,717
-------------
648,835
-------------
Total Asset-Backed
Securities
(Cost $3,170,055) 3,125,897
-------------
CONVERTIBLE BONDS 8.5%
- ---------------------------------------------------------------
AEROSPACE & DEFENSE 0.2%
L-3 Communications Corp.
3.00%, due 8/1/35 292,000 308,060
Triumph Group, Inc.
2.625%, due 10/1/26 217,000 237,344
-------------
545,404
-------------
AUTO PARTS & EQUIPMENT 0.4%
BorgWarner, Inc.
3.50%, due 4/15/12 834,000 1,056,052
-------------
BIOTECHNOLOGY 0.1%
Enzon Pharmaceuticals, Inc.
4.00%, due 6/1/13 231,000 270,848
-------------
COAL 0.1%
Peabody Energy Corp.
4.75%, due 12/15/66 187,000 189,805
-------------
COMMERCIAL SERVICES 0.1%
Alliance Data Systems Corp.
1.75%, due 8/1/13 193,000 197,584
-------------
COMPUTERS 0.5%
EMC Corp.
1.75%, due 12/1/11 1,151,000 1,404,220
-------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.1%
General Cable Corp.
0.875%, due 11/15/13 206,000 180,765
-------------
ELECTRONICS 0.4%
Fisher Scientific
International, Inc.
3.25%, due 3/1/24 687,000 915,427
TTM Technologies, Inc.
3.25%, due 5/15/15 201,000 201,503
-------------
1,116,930
-------------
ENERGY--ALTERNATE SOURCES 0.2%
Covanta Holding Corp.
1.00%, due 2/1/27 637,000 597,984
-------------
ENVIRONMENTAL CONTROLS 0.1%
Waste Connections, Inc.
3.75%, due 4/1/26 231,000 249,480
-------------
HOUSEWARES 0.4%
Newell Rubbermaid, Inc.
5.50%, due 3/15/14 542,000 1,026,413
-------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
v Among the Portfolio's 10 largest holdings or issuers held, as of December
31, 2009,
excluding short-term investment. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-209
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CONVERTIBLE BONDS (CONTINUED)
IRON & STEEL 0.7%
Allegheny Technologies
4.25%, due 6/1/14 $ 877,000 $ 1,204,779
ArcelorMittal
5.00%, due 5/15/14 278,000 461,827
Steel Dynamics, Inc.
5.125%, due 6/15/14 134,000 170,348
United States Steel Corp.
4.00%, due 5/15/14 112,000 210,420
-------------
2,047,374
-------------
LEISURE TIME 0.4%
Carnival Corp.
2.00%, due 4/15/21 1,008,000 1,044,540
-------------
MINING 0.7%
Alcoa, Inc.
5.25%, due 3/15/14 299,000 777,026
Newmont Mining Corp.
1.25%, due 7/15/14 854,000 1,069,635
-------------
1,846,661
-------------
MISCELLANEOUS--MANUFACTURING 0.9%
Danaher Corp.
(zero coupon), due 1/22/21 1,034,000 1,142,570
Ingersoll-Rand Co.
4.50%, due 4/15/12 80,000 164,600
Textron, Inc.
4.50%, due 5/1/13 630,000 1,018,237
-------------
2,325,407
-------------
OIL & GAS 0.4%
Chesapeake Energy Corp.
2.50%, due 5/15/37 506,000 455,400
St. Mary Land & Exploration
Co.
3.50%, due 4/1/27 315,000 313,031
Transocean, Inc.
Series A
1.625%, due 12/15/37 425,000 422,875
-------------
1,191,306
-------------
OIL & GAS SERVICES 1.4%
Cameron International Corp.
2.50%, due 6/15/26 1,070,000 1,445,837
Core Laboratories, L.P.
0.25%, due 10/31/11 444,000 571,650
Schlumberger, Ltd.
Series B
2.125%, due 6/1/23 1,076,000 1,761,950
-------------
3,779,437
-------------
PHARMACEUTICALS 0.9%
ALZA Corp.
(zero coupon), due 7/28/20 1,113,000 1,036,481
Teva Pharmaceutical Finance
Co. B.V.
Series D
1.75%, due 2/1/26 1,166,000 1,442,925
-------------
2,479,406
-------------
RETAIL 0.1%
Costco Wholesale Corp.
(zero coupon), due 8/19/17 242,000 325,188
-------------
SEMICONDUCTORS 0.1%
Microchip Technology, Inc.
2.125%, due 12/15/37 120,000 122,250
ON Semiconductor Corp.
2.625%, due 12/15/26 150,000 167,438
Teradyne, Inc.
4.50%, due 3/15/14 47,000 99,405
-------------
389,093
-------------
SOFTWARE 0.3%
Sybase, Inc.
3.50%, due 8/15/29 (d) 649,000 772,310
SYNNEX Corp.
4.00%, due 5/15/18 (d) 93,000 115,901
-------------
888,211
-------------
Total Convertible Bonds
(Cost $22,431,948) 23,152,108
-------------
CORPORATE BONDS 17.0%
- ---------------------------------------------------------------
AEROSPACE & DEFENSE 0.7%
BAE Systems Holdings, Inc.
5.20%, due 8/15/15 (d) 1,325,000 1,365,000
L-3 Communications Corp.
5.20%, due 10/15/19 (d) 580,000 573,699
-------------
1,938,699
-------------
AGRICULTURE 0.2%
Cargill, Inc.
4.375%, due 6/1/13 (d) 300,000 311,926
Lorillard Tobacco Co.
8.125%, due 6/23/19 165,000 181,399
-------------
493,325
-------------
AIRLINES 0.9%
Continental Airlines, Inc.
7.875%, due 1/2/20 1,380,972 1,184,183
Northwest Airlines, Inc.
7.027%, due 11/1/19 1,545,868 1,368,093
-------------
2,552,276
-------------
</Table>
M-210 MainStay VP Income Builder Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
AUTO MANUFACTURERS 0.2%
Ford Motor Co.
6.625%, due 10/1/28 $ 500,000 $ 386,250
Harley-Davidson Funding
Corp.
6.80%, due 6/15/18 (d) 180,000 179,499
-------------
565,749
-------------
BANKS 2.3%
AgriBank FCB
9.125%, due 7/15/19 570,000 626,403
BAC Capital Trust VI
5.625%, due 3/8/35 800,000 640,358
Bank of America Corp.
6.50%, due 8/1/16 475,000 510,778
8.00%, due 12/29/49 1,000,000 962,740
Citigroup, Inc.
8.125%, due 7/15/39 550,000 620,756
GMAC LLC
8.00%, due 11/1/31(d) 928,000 835,200
Goldman Sachs Group, Inc.
(The)
6.75%, due 10/1/37 1,075,000 1,104,978
USB Capital IX
6.189%, due 10/29/49 135,000 108,506
Wells Fargo & Co.
7.98%, due 3/29/49 800,000 802,000
-------------
6,211,719
-------------
BEVERAGES 0.4%
Anheuser-Busch InBev
Worldwide, Inc.
5.375%, due 1/15/20 (d) 1,200,000 1,224,311
-------------
BIOTECHNOLOGY 0.5%
Amgen, Inc.
5.85%, due 6/1/17 1,250,000 1,365,939
-------------
BUILDING MATERIALS 0.4%
U.S. Concrete, Inc.
8.375%, due 4/1/14 800,000 481,000
USG Corp.
6.30%, due 11/15/16 630,000 563,850
-------------
1,044,850
-------------
CHEMICALS 1.2%
Chevron Phillips Chemica
7.00%, due 6/15/14 (d) 1,080,000 1,188,023
-------------
Dow Chemical Co. (The)
5.90%, due 2/15/15 470,000 505,051
8.55%, due 5/15/19 1,390,000 1,658,471
-------------
3,351,545
-------------
COMMERCIAL SERVICES 0.3%
Quebecor World, Inc.
(Litigation Trust)
9.75%, due 1/15/49
(b)(c)(f) 70,000 3,640
United Rentals North
America, Inc.
7.75%, due 11/15/13 800,000 752,000
-------------
755,640
-------------
COMPUTERS 0.1%
Unisys Corp.
14.25%, due 9/15/15 (d) 280,000 326,200
-------------
DIVERSIFIED FINANCIAL SERVICES 1.5%
Cantor Fitzgerald, L.P.
7.875%, due 10/15/19 (d) 800,000 782,924
Citigroup, Inc.
8.50%, due 5/22/19 252,500 291,575
General Electric Capital
Corp.
6.375%, due 11/15/67 1,175,000 1,019,312
6.875%, due 1/10/39 270,000 278,825
JPMorgan Chase & Co.
7.90%, due 4/29/49 1,300,000 1,340,898
Merrill Lynch & Co., Inc.
5.00%, due 2/3/14 300,000 303,606
-------------
4,017,140
-------------
ELECTRIC 0.8%
Ameren Energy Generating Co.
6.30%, due 4/1/20 120,000 117,834
DTE Energy Co.
7.625%, due 5/15/14 270,000 301,416
Energy Future Holdings Corp.
11.25%, due 11/1/17 (g) 1,060,000 749,950
Entergy Gulf States
Louisiana LLC
5.59%, due 10/1/24 1,025,000 1,024,410
-------------
2,193,610
-------------
ENTERTAINMENT 0.3%
Mohegan Tribal Gaming
Authority
6.125%, due 2/15/13 945,000 757,181
-------------
FOOD 0.2%
Smithfield Foods, Inc.
7.75%, due 7/1/17 500,000 461,250
-------------
FOREST PRODUCTS & PAPER 0.8%
Boise Cascade LLC
7.125%, due 10/15/14 860,000 775,075
International Paper Co.
7.30%, due 11/15/39 700,000 742,603
9.375%, due 5/15/19 500,000 614,585
-------------
2,132,263
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-211
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
HEALTH CARE--SERVICES 0.5%
CIGNA Corp.
8.50%, due 5/1/19 $ 435,000 $ 494,282
Highmark, Inc.
6.80%, due 8/15/13 (c)(d) 835,000 873,649
-------------
1,367,931
-------------
INSURANCE 2.3%
Allstate Corp. (The)
6.50%, due 5/15/67 1,725,000 1,492,125
American General Finance
Corp.
6.90%, due 12/15/17 1,350,000 937,378
Hartford Financial Services
Group, Inc.
6.10%, due 10/1/41 1,725,000 1,378,589
Hartford Life, Inc.
7.65%, due 6/15/27 245,000 223,737
Liberty Mutual Group, Inc.
7.80%, due 3/7/87 (d) 1,195,000 985,875
Progressive Corp. (The)
6.70%, due 6/15/37 1,450,000 1,283,060
-------------
6,300,764
-------------
MEDIA 0.8%
Comcast Corp.
5.70%, due 7/1/19 800,000 839,235
ION Media Networks, Inc.
9.041%, due 1/15/13
(d)(g)(h) 23,884 388
Morris Publishing Group LLC
7.00%, due 8/1/13 (h) 49,000 14,333
Time Warner Cable, Inc.
8.25%, due 2/14/14 680,000 794,747
Time Warner, Inc.
7.70%, due 5/1/32 485,000 569,552
Ziff Davis Media, Inc.
8.875%, due 7/15/11 (b)(c) 13,104 3,145
-------------
2,221,400
-------------
MINING 0.4%
Alcoa, Inc.
5.90%, due 2/1/27 440,000 396,645
Century Aluminum Co.
8.00%, due 5/15/14 606,000 590,850
-------------
987,495
-------------
MISCELLANEOUS--MANUFACTURING 0.2%
RBS Global, Inc./Rexnord
Corp.
9.50%, due 8/1/14 575,000 576,438
-------------
OIL & GAS 0.4%
ConocoPhillips
6.50%, due 2/1/39 1,000,000 1,109,842
Pemex Project Funding Master
Trust
6.625%, due 6/15/35 75,000 71,411
-------------
1,181,253
-------------
OIL & GAS SERVICES 0.2%
Basic Energy Services, Inc.
7.125%, due 4/15/16 500,000 416,250
-------------
PHARMACEUTICALS 0.2%
Pfizer, Inc.
6.20%, due 3/15/19 410,000 455,765
-------------
PIPELINES 0.7%
NGPL Pipeco LLC
7.119%, due 12/15/17 (d) 690,000 761,396
Oneok, Inc.
6.00%, due 6/15/35 610,000 569,328
Panhandle Eastern Pipeline
Co., L.P.
6.20%, due 11/1/17 430,000 454,670
-------------
1,785,394
-------------
REAL ESTATE INVESTMENT TRUSTS 0.4%
HCP, Inc.
5.65%, due 12/15/13 370,000 370,644
Health Care Property
Investors, Inc.
6.00%, due 1/30/17 585,000 550,545
ProLogis
7.375%, due 10/30/19 200,000 197,281
-------------
1,118,470
-------------
RETAIL 0.0%++
CVS Caremark Corp.
5.789%, due 1/10/26 (b)(d) 62,748 59,102
-------------
SAVINGS & LOANS 0.1%
Pipeline Funding Co. LLC
7.50%, due 1/15/30 (d) 200,000 189,116
-------------
Total Corporate Bonds
(Cost $44,164,556) 46,051,075
-------------
</Table>
M-212 MainStay VP Income Builder Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FOREIGN GOVERNMENT BONDS 0.3%
- ---------------------------------------------------------------
FOREIGN SOVEREIGN 0.3%
Republic of Panama
9.375%, due 4/1/29 $ 555,000 $ 738,150
Republic of Venezuela
6.00%, due 12/9/20 217,000 119,350
-------------
Total Foreign Government
Bonds
(Cost $783,796) 857,500
-------------
LOAN ASSIGNMENT & PARTICIPATION 0.0%++ (I)
- ---------------------------------------------------------------
MACHINERY 0.0%++
BHM Technologies LLC
Exit Term Loan B
8.50%, due 11/26/13 (b)(c) 31,175 4,146
-------------
Total Loan Assignment &
Participation
(Cost $71,520) 4,146
-------------
MORTGAGE-BACKED SECURITIES 0.7%
- ---------------------------------------------------------------
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) 0.7%
Banc of America Commercial
Mortgage, Inc.
Series 2007-2, Class A4
5.867%, due 4/10/49 290,000 249,919
Bayview Commercial Asset
Trust
Series 2006-4A, Class A1
0.476%, due 12/25/36
(a)(c)(d) 218,929 147,039
Bear Stearns Commercial
Mortgage Securities
Series 2007-PW16, Class A4
5.908%, due 6/11/40 (a) 290,000 263,601
Citigroup Commercial
Mortgage Trust
Series 2008-C7, Class A4
6.299%, due 12/10/49 (a) 150,000 134,692
Four Times Square Trust
Series 2006-4TS, Class A
5.401%, due 12/13/28 (d) 480,000 407,501
Mortgage Equity Conversion
Asset Trust
Series 2007-FF2, Class A
0.95%, due 2/25/42
(a)(b)(c)(d) 484,881 452,781
Timberstar Trust
Series 2006-1, Class A
5.668%, due 10/15/36 (d) 160,000 156,800
-------------
Total Mortgage-Backed
Securities
(Cost $1,885,135) 1,812,333
-------------
MUNICIPAL BONDS 0.3%
- ---------------------------------------------------------------
TEXAS 0.2%
Harris County Texas
Industrial Development
Corp.
Solid Waste Deer Park
5.683%, due 3/1/23 (a) 395,000 395,284
-------------
WEST VIRGINIA 0.1%
Tobacco Settlement Finance
Authority of West Virginia
7.467%, due 6/1/47 455,000 361,311
-------------
Total Municipal Bonds
(Cost $850,000) 756,595
-------------
U.S. GOVERNMENT & FEDERAL AGENCIES 6.5%
- ---------------------------------------------------------------
FANNIE MAE (COLLATERALIZED MORTGAGE OBLIGATION) 0.1%
Series 2006-B1, Class AB
6.00%, due 6/25/16 241,129 250,661
-------------
V FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) 1.1%
3.00%, due 8/1/10 141,710 142,657
4.316%, due 3/1/35 (a) 483,420 499,187
5.00%, due 8/1/33 415,659 427,955
5.043%, due 6/1/35 (a) 616,557 648,916
5.50%, due 1/1/21 1,115,253 1,187,190
-------------
2,905,905
-------------
V FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 3.2%
4.50%, due 4/1/18 365,747 381,219
4.50%, due 6/1/23 1,671,176 1,722,545
5.50%, due 4/1/21 1,267,426 1,349,569
5.50%, due 6/1/34 920,046 967,007
6.00%, due 9/1/35 1,763,889 1,883,485
6.00%, due 10/1/35 1,249,337 1,329,372
6.00%, due 4/1/37 855,154 904,058
6.50%, due 10/1/31 191,921 207,514
-------------
8,744,769
-------------
FREDDIE MAC (COLLATERALIZED MORTGAGE OBLIGATION) 0.1%
Series 2632, Class NH
3.50%, due 6/15/13 349,881 355,345
-------------
FREDDIE MAC REFERENCE REMIC
(COLLATERALIZED MORTGAGE OBLIGATION) 0.2%
Series R001, Class AE
4.375%, due 4/15/15 456,335 468,130
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-213
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
V GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 1.1%
5.00%, due 3/1/38 TBA (j) $ 1,540,000 $ 1,578,260
6.00%, due 4/15/29 307,988 328,739
6.00%, due 8/15/32 600,409 640,830
6.50%, due 12/1/33 TBA (j) 370,000 393,356
-------------
2,941,185
-------------
UNITED STATES TREASURY BOND 0.7%
4.50%, due 8/15/39 1,880,000 1,837,407
-------------
Total U.S. Government &
Federal Agencies
(Cost $16,918,567) 17,503,402
-------------
YANKEE BONDS 1.3% (K)
- ---------------------------------------------------------------
BANKS 0.1%
Royal Bank of Scotland PLC
(The)
4.875%, due 8/25/14 (d) 310,000 314,243
-------------
BEVERAGES 0.1%
Coca-Cola HBC Finance B.V.
5.125%, due 9/17/13 245,000 262,180
-------------
BUILDING MATERIALS 0.0%++
Asia Aluminum Holdings, Ltd.
8.00%, due 12/23/11 (d)(h) 440,000 68,750
-------------
COAL 0.0%++
Raspadskaya Securities, Ltd.
7.50%, due 5/22/12 120,000 121,020
-------------
INSURANCE 0.1%
Nippon Life Insurance Co.
4.875%, due 8/9/10 (d) 250,000 250,952
-------------
MEDIA 0.3%
BSKYB Finance UK PLC
6.50%, due 10/15/35 (d) 760,000 775,148
-------------
MINING 0.2%
Novelis, Inc.
7.25%, due 2/15/15 500,000 476,250
-------------
OIL & GAS 0.5%
Citic Resources Finance,
Ltd.
6.75%, due 5/15/14 (d) 200,000 195,000
Gazprom International S.A.
7.201%, due 2/1/20 (d) 348,200 354,728
Petronas Capital, Ltd.
5.25%, due 8/12/19 (d) 390,000 390,183
TNK-BP Finance S.A.
7.50%, due 7/18/16 (d) 285,000 292,125
-------------
1,232,036
-------------
Total Yankee Bonds
(Cost $3,725,091) 3,500,579
-------------
Total Long-Term Bonds
(Cost $94,000,668) 96,763,635
-------------
<Caption>
SHARES
COMMON STOCKS 57.5%
- ---------------------------------------------------------------
AEROSPACE & DEFENSE 1.2%
BAE Systems PLC 272,050 1,567,778
Meggitt PLC 394,650 1,655,533
-------------
3,223,311
-------------
AGRICULTURE 5.2%
v Altria Group, Inc. 140,950 2,766,848
British American Tobacco PLC 49,800 1,615,542
v Imperial Tobacco Group
PLC 109,550 3,452,489
v Lorillard, Inc. 34,000 2,727,820
Philip Morris International,
Inc. 55,450 2,672,136
Reynolds American, Inc. 17,500 926,975
-------------
14,161,810
-------------
APPAREL 0.4%
VF Corp. 15,300 1,120,572
-------------
BANKS 0.6%
Banco Santander S.A. 45,600 749,203
Westpac Banking Corp. 44,700 1,006,162
-------------
1,755,365
-------------
BEVERAGES 2.9%
Coca-Cola Co. (The) 14,900 849,300
Coca-Cola Enterprises, Inc. 40,200 852,240
v Diageo PLC, Sponsored
ADR (l) 46,500 3,227,565
v InBev N.V. 59,000 3,048,182
-------------
7,977,287
-------------
CHEMICALS 1.8%
Air Liquide S.A. 17,500 2,065,760
BASF A.G 25,550 1,584,776
E.I. du Pont de Nemours &
Co. 32,650 1,099,325
-------------
4,749,861
-------------
COMMERCIAL SERVICES 0.3%
Automatic Data Processing,
Inc. 19,100 817,862
-------------
</Table>
M-214 MainStay VP Income Builder Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
DISTRIBUTION & WHOLESALE 0.6%
Genuine Parts Co. 40,050 $ 1,520,298
-------------
DIVERSIFIED FINANCIAL SERVICES 0.5%
Federated Investors, Inc.
Class B 27,400 753,500
Redecard S.A. 42,300 697,011
-------------
1,450,511
-------------
ELECTRIC 7.2%
Duke Energy Corp. 134,900 2,321,629
Enel S.p.A. 277,300 1,610,256
Fortum Oyj 31,900 864,204
National Grid PLC 197,500 2,158,892
NSTAR 24,350 896,080
OGE Energy Corp. 48,500 1,789,165
Progress Energy, Inc. 20,050 822,251
RWE A.G 17,000 1,652,019
SCANA Corp. 20,050 755,484
Scottish & Southern Energy
PLC 74,700 1,395,940
Southern Co. (The) 47,450 1,581,034
TECO Energy, Inc. 71,000 1,151,620
Terna S.p.A. 325,800 1,401,849
Westar Energy, Inc. 53,500 1,162,020
-------------
19,562,443
-------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.6%
Emerson Electric Co. 41,500 1,767,900
-------------
ENGINEERING & CONSTRUCTION 0.7%
Vinci S.A. 35,050 1,963,152
-------------
ENVIRONMENTAL CONTROLS 0.4%
Waste Management, Inc. 35,850 1,212,089
-------------
FOOD 2.1%
H.J. Heinz Co. 27,650 1,182,314
Kellogg Co. 29,750 1,582,700
v Nestle S.A. Registered 61,550 2,990,271
-------------
5,755,285
-------------
FOOD SERVICES 0.5%
Compass Group PLC 179,550 1,282,390
-------------
GAS 1.6%
Nicor, Inc. 28,600 1,204,060
NiSource, Inc. 87,750 1,349,595
Vectren Corp. 30,150 744,102
WGL Holdings, Inc. 30,850 1,034,709
-------------
4,332,466
-------------
HEALTH CARE--PRODUCTS 1.0%
Johnson & Johnson 41,500 2,673,015
-------------
HOUSEHOLD PRODUCTS & WARES 1.1%
Kimberly-Clark Corp. 25,800 1,643,718
Tupperware Brands Corp. 29,900 1,392,443
-------------
3,036,161
-------------
INSURANCE 1.1%
Arthur J. Gallagher & Co. 46,100 1,037,711
MetLife, Inc. 20,950 740,583
SCOR SE 43,350 1,082,796
-------------
2,861,090
-------------
IRON & STEEL 0.3%
Nucor Corp. 16,200 755,730
-------------
MACHINERY 0.0%++
BHM Technologies Holdings,
Inc. (b)(c) 2,893 29
-------------
MEDIA 1.9%
Pearson PLC 134,000 1,926,336
Shaw Communications, Inc. 79,000 1,636,879
Vivendi S.A. 49,400 1,458,371
-------------
5,021,586
-------------
METAL FABRICATE & HARDWARE 0.5%
Assa Abloy AB 68,250 1,306,928
-------------
MINING 0.3%
BHP Billiton, Ltd.,
Sponsored ADR (l) 11,050 846,209
-------------
MISCELLANEOUS--MANUFACTURING 0.6%
Honeywell International,
Inc. 42,050 1,648,360
-------------
OFFICE EQUIPMENT/SUPPLIES
0.3%
Pitney Bowes, Inc. 30,700 698,732
-------------
OIL & GAS 4.9%
BP PLC, Sponsored ADR (l) 35,240 2,042,863
Canadian Oil Sands Trust 72,200 2,064,830
Chevron Corp. 14,900 1,147,151
Diamond Offshore Drilling,
Inc. 20,250 1,993,005
ExxonMobil Corp. 10,550 719,404
Royal Dutch Shell PLC Class
A, ADR (l) 33,710 2,026,308
StatoilHydro A.S.A.,
Sponsored ADR (l) 63,900 1,591,749
Total S.A. 25,050 1,605,243
-------------
13,190,553
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-215
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
PACKAGING & CONTAINERS 0.3%
Bemis Co., Inc. 29,100 $ 862,815
-------------
PHARMACEUTICALS 2.5%
AstraZeneca PLC, Sponsored
ADR (l) 41,350 1,940,969
Bristol-Myers Squibb Co. 81,150 2,049,037
Merck & Co., Inc. 52,300 1,911,042
Roche Holding A.G.,
Genusscheine 4,760 809,753
-------------
6,710,801
-------------
PIPELINES 1.8%
Kinder Morgan Energy
Partners, L.P. 28,050 1,710,489
ONEOK, Inc. 34,900 1,555,493
Spectra Energy Corp. 79,050 1,621,315
-------------
4,887,297
-------------
REAL ESTATE INVESTMENT TRUSTS 0.2%
Ventas, Inc. 10,000 437,400
-------------
RETAIL 1.5%
McDonald's Corp. 26,200 1,635,928
Next PLC 48,950 1,631,986
Wal-Mart Stores, Inc. 15,300 817,785
-------------
4,085,699
-------------
SAVINGS & LOANS 0.6%
First Niagara Financial
Group, Inc. 57,700 802,607
Hudson City Bancorp, Inc. 58,250 799,772
-------------
1,602,379
-------------
SEMICONDUCTORS 1.0%
Microchip Technology, Inc. 29,650 861,629
Taiwan Semiconductor
Manufacturing Co, Ltd.,
Sponsored ADR (l) 160,750 1,838,980
-------------
2,700,609
-------------
SOFTWARE 1.1%
Microsoft Corp. 59,000 1,798,910
Oracle Corp. 48,100 1,180,374
-------------
2,979,284
-------------
TELECOMMUNICATIONS 8.8%
AT&T, Inc. 87,100 2,441,413
v BCE, Inc. 97,200 2,695,224
CenturyTel, Inc. 56,900 2,060,349
Chunghwa Telecom Co, Ltd.,
ADR (l) 43,500 807,795
France Telecom S.A. 88,550 2,210,864
Mobistar S.A. 16,220 1,109,210
Philippine Long Distance
Telephone Co., Sponsored
ADR (l) 29,000 1,643,430
Swisscom A.G 6,450 2,459,703
Telefonica S.A. 87,350 2,434,580
Verizon Communications,
Inc. 78,400 2,597,392
Vodafone Group PLC 1,047,250 2,425,117
Windstream Corp. 76,800 844,032
-------------
23,729,109
-------------
TRANSPORTATION 0.5%
FirstGroup PLC 184,500 1,258,677
-------------
WATER 0.6%
United Utilities Group PLC 213,700 1,700,320
-------------
Total Common Stocks
(Cost $142,379,529) 155,645,385
-------------
CONVERTIBLE PREFERRED STOCKS 1.1%
- ---------------------------------------------------------------
CHEMICALS 0.1%
Celanese Corp.
4.25% 7,200 293,904
-------------
DIVERSIFIED FINANCIAL SERVICES 0.2%
Affiliated Managers Group,
Inc.
5.10% 8,300 328,265
Citigroup, Inc.
7.50% 1,500 156,510
-------------
484,775
-------------
INSURANCE 0.3%
MetLife, Inc.
6.50% 34,250 822,000
-------------
LEISURE TIME 0.0%++
Callaway Golf Co.
7.50% (d) 600 73,950
-------------
MINING 0.3%
Freeport-McMoRan Copper &
Gold, Inc. 6.75% 2,600 299,520
Vale Capital II
6.75% 2,400 201,000
Vale Capital, Ltd.
5.50% 6,700 361,465
-------------
861,985
-------------
OIL & GAS 0.1%
Whiting Petroleum Corp.
6.25% 500 89,830
-------------
</Table>
M-216 MainStay VP Income Builder Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
TELECOMMUNICATIONS 0.1%
Crown Castle International
Corp.
6.25% 4,600 $ 273,700
-------------
Total Convertible Preferred
Stocks
(Cost $2,833,211) 2,900,144
-------------
PREFERRED STOCK 0.0%++
- ---------------------------------------------------------------
MACHINERY 0.0%++
BHM Technologies Holdings,
Inc.
10.00% (b)(c) 35 0 (m)
-------------
Total Preferred Stock
(Cost $0) 0 (m)
-------------
<Caption>
<Caption>
NUMBER OF
WARRANTS
WARRANTS 0.0%++
- ---------------------------------------------------------------
AIRLINES 0.0%++
Ryanair Holdings PLC Class A
Strike Price E0.000001
Expires 4/3/18 (d)(f) 24,050 115,670
-------------
Total Warrants
(Cost $92,835) 115,670
-------------
<Caption>
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 5.0%
- ---------------------------------------------------------------
REPURCHASE AGREEMENT 5.0%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$13,538,508
(Collateralized by United
States Treasury Bills with
rates ranging from 0.000%
to 0.047% and maturity
dates
ranging from 2/11/10 to
3/18/10, with a Principal
Amount of $13,815,000 and
a Market Value of
$13,814,538) $13,538,500 13,538,500
-------------
Total Short-Term Investment
(Cost $13,538,500) 13,538,500
-------------
Total Investments
(Cost $252,844,743) (p) 99.3% 268,963,334
Other Assets, Less
Liabilities 0.7 1,846,299
----- ------------
Net Assets 100.0% $ 270,809,633
===== ============
</Table>
<Table>
<Caption>
UNREALIZED
CONTRACTS APPRECIATION
LONG (DEPRECIATION) (N)
FUTURES CONTRACTS 0.0%++ (O)
- ---------------------------------------------------------
United States Treasury
Note
March 2010 (5 Year) 45 $(100,682)
United States Treasury
Note
March 2010 (10 Year) 45 (149,900)
Standard & Poor's 500
Index
Mini March 2010 500 293,750
---------
Total Futures Contracts
(Settlement Value
$38,110,117) $ 43,168
=====
</Table>
<Table>
+++ On a daily basis New York Life Investments
confirms that the value of the Portfolio's liquid
assets (liquid portfolio securities and cash) is
sufficient to cover its potential senior
securities (e.g., futures, swaps, options).
++ Less than one-tenth of a percent.
(a) Floating rate--Rate shown is the rate in effect at
December 31, 2009.
(b) Fair valued security. The total market value of
these securities at December 31, 2009 is $660,059,
which represents 0.2% of the Portfolio's net
assets.
(c) Illiquid security. The total market value of
these securities at December 31, 2009 is
$1,683,779, which represents 0.6% of the
Portfolio's net assets.
(d) May be sold to institutional investors only under
Rule 144A or securities offered pursuant to
Section 4(2) of the Securities Act of 1933, as
amended.
(e) Subprime mortgage investment and other asset-
backed securities. The total market value of the
securities at December 31, 2009 is $648,835, which
represents 0.2% of the Portfolio's net assets.
(f) Non-income producing security.
(g) PIK ("Payment in Kind")--interest or dividend
payment is made with additional securities.
(h) Issue in default.
(i) Floating Rate Loan--generally pays interest at
rates which are periodically re-determined at a
margin above the London Inter-Bank Offered Rate
("LIBOR") or other short-term rates. The rate
shown is the rate(s) in effect at December 31,
2009. Floating Rate Loans are generally considered
restrictive in that the Portfolio is ordinarily
contractually obligated to receive consent from
the Agent Bank and/or borrower prior to
disposition of a Floating Rate Loan.
(j) 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.
The market value of these securities at December
31, 2009 is $1,971,616, which represents 0.7% of
the Portfolio's net assets. All or a portion of
these securities were acquired under a mortgage
dollar roll agreement.
(k) Yankee Bond--dollar-denominated bond issued in the
United States by a foreign bank or corporation.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-217
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
(l) ADR--American Depositary Receipt.
(m) Less than one dollar.
(n) Represents the difference between the value of the
contracts at the time they were opened and the
value at December 31, 2009.
(o) At December 31, 2009, cash in the amount of
$2,353,500 is segregated as collateral for futures
contracts with the broker.
(p) At December 31, 2009, cost is $253,024,678 for
federal income tax purposes and net unrealized
appreciation is as follows:
</Table>
<Table>
Gross unrealized appreciation $19,104,987
Gross unrealized depreciation (3,166,331)
-----------
Net unrealized appreciation $15,938,656
===========
</Table>
The following abbreviation is used in the above portfolio:
E -- Euro
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets and liabilities.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE
MARKETS FOR SIGNIFICANT
IDENTICAL SIGNIFICANT OTHER UNOBSERVABLE
ASSETS OBSERVABLE INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Long-Term Bonds
Asset-Backed Securities (b) $ -- $ 2,988,681 $137,216 $ 3,125,897
Convertible Bonds -- 23,152,108 -- 23,152,108
Corporate Bonds (c) -- 45,985,188 65,887 46,051,075
Foreign Government Bonds -- 857,500 -- 857,500
Loan Assignments & Participations (d) -- -- 4,146 4,146
Mortgage-Backed Securities (e) -- 1,359,552 452,781 1,812,333
Municipal Bonds -- 756,595 -- 756,595
U.S. Government & Federal Agencies -- 17,503,402 -- 17,503,402
Yankee Bonds -- 3,500,579 -- 3,500,579
------------ ------------ -------- ------------
Total Long-Term Bonds -- 96,103,605 660,030 96,763,635
------------ ------------ -------- ------------
Common Stocks (f) 98,617,854 57,027,502 29 155,645,385
Convertible Preferred Stocks 2,900,144 -- -- 2,900,144
Preferred Stock (g) -- -- --(g) --(g)
Warrants -- 115,670 -- 115,670
------------ ------------ -------- ------------
Short-Term Investment
Repurchase Agreement -- 13,538,500 -- 13,538,500
------------ ------------ -------- ------------
Total Investments in Securities 101,517,998 166,785,277 660,059 268,963,334
------------ ------------ -------- ------------
Other Financial Instruments
Foreign Currency Forward Contracts
(h) -- 214,624 -- 214,624
Futures Contracts (i) 293,750 -- -- 293,750
------------ ------------ -------- ------------
Total Investments in Securities and
Other Financial Investments $101,811,748 $166,999,901 $660,059 $269,471,708
============ ============ ======== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
(b) The level 3 security valued at $137,216 is held in Credit Cards within the
Asset-Backed Securities section of the Portfolio of Investments.
(c) The level 3 securities valued at $3,640, $3,145 and $59,102 are held in
Commercial Services, Media and Retail, respectively, within the Corporate
Bonds section of the Portfolio of Investments.
(d) The level 3 security valued at $4,146 is held in Machinery within the Loan
Assignments & Participations section of the Portfolio of Investments.
(e) The level 3 security valued at $452,781 is held in Commercial Mortgage Loans
(Collateralized Mortgage Obligations) within the Mortgage-Backed Securities
section of the Portfolio of Investments.
(f) The level 3 security valued at $29 is held in Machinery within the Common
Stocks section of the Portfolio of Investments.
(g) The level 3 security valued at less than one dollar is held in Machinery
within the Preferred Stock section of the Portfolio of Investments.
(h) The value listed for these securities represents unrealized appreciation as
shown on Note 6 of the financial statements for foreign currency forward
contracts.
(i) The value listed for these securities reflects unrealized appreciation as
shown on the Portfolio of Investments.
M-218 MainStay VP Income Builder Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
LIABILITY VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Other Financial Instruments
Futures Contracts (a) $(250,582) $ -- $ -- $(250,582)
Foreign Currency Forward Contracts (b) -- (42,468) -- (42,468)
--------- -------- ----- ---------
Total Other Financial Instruments $(250,582) $(42,468) $-- $(293,050)
========= ======== ===== =========
</Table>
(a) The value listed for these securities reflects unrealized appreciation as
shown on the Portfolio of Investments.
(b) The value listed for these securities represents unrealized depreciation as
shown on Note 6 of the financial statements for foreign currency forward
contracts.
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
ASSET VALUATION INPUTS
<Table>
<Caption>
CHANGE IN
BALANCE AS OF ACCRUED UNREALIZED NET TRANSFERS NET TRANSFERS
INVESTMENTS IN DECEMBER 31, DISCOUNTS REALIZED APPRECIATION NET NET IN TO OUT OF
SECURITIES 2008 (PREMIUMS) GAIN (LOSS) (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3
LONG-TERM BONDS
Asset-Backed
Securities
Credit Cards $ 264,709 $ (130) $ (94) $ 30,190 $ -- $(157,459) $ -- $ --
Corporate Bonds
Commercial
Services -- -- -- 3,640 -- -- -- --
Diversified
Financial
Services 188,266 2 (32,977) 65,706 -- (220,997) -- --
Media 12,527 -- 2,229 (10,617) 1,236 (2,230) -- --
Retail -- (80) (60) 12,046 -- (2,377) 49,573 --
Loan Assignments &
Participations
Machinery 21,516 (10,233) (21,744) 26,318 118,017 (129,728) -- --
Mortgage-Backed
Securities
Commercial
Mortgage Loans
(Collateral-
ized Mortgage
Obligations) 607,759 -- -- 37,115 -- (35,293) -- (156,800)
Common Stocks
Machinery 29 -- -- -- -- -- -- --
Media 1 -- -- (1) -- -- -- --
Rights
Banks 19,074 -- (19,346) 16,750 -- (16,478) -- --
---------- --------- --------- --------- -------- ---------- ------- ----------
Total $1,113,881 $(10,441) $(71,992) $ 181,147 $119,253 $(564,562) $49,573 $(156,800)
========== ========= ========= ========= ======== ========== ======= ==========
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
BALANCE INVESTMENTS
AS OF STILL HELD AT
INVESTMENTS IN DECEMBER 31, DECEMBER 31,
SECURITIES 2009 2009 (A)
LONG-TERM BONDS
Asset-Backed
Securities
Credit Cards $137,216 $ 13,928
Corporate Bonds
Commercial
Services 3,640 3,640
Diversified
Financial
Services -- --
Media 3,145 (7,805)
Retail 59,102 12,046
Loan Assignments &
Participations
Machinery 4,146 (67,416)
Mortgage-Backed
Securities
Commercial
Mortgage Loans
(Collateral-
ized Mortgage
Obligations) 452,781 (6,691)
Common Stocks
Machinery 29 --
Media -- --
Rights
Banks -- --
-------- ---------
Total $660,059 $(52,298)
======== =========
</Table>
(a) Included in "Net change in unrealized appreciation (depreciation) on
investments" in the Statement of Operations.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-219
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $252,844,743) $268,963,334
Cash collateral on deposit at
broker 2,353,500
Cash denominated in foreign
currencies
(identified cost $474,800) 476,537
Cash 53,238
Receivables:
Dividends and interest 1,566,347
Fund shares sold 20,326
Investment securities sold 19,902
Other assets 480
Unrealized appreciation on foreign
currency forward contracts 214,624
------------
Total assets 273,668,288
------------
LIABILITIES:
Payables:
Investment securities purchased 2,066,771
Variation margin on futures
contracts 315,586
Manager (See Note 3) 130,816
Fund shares redeemed 117,024
Shareholder communication 77,610
Professional fees 70,618
Custodian 24,848
NYLIFE Distributors (See Note 3) 9,818
Directors 759
Accrued expenses 2,337
Unrealized depreciation on foreign
currency forward contracts 42,468
------------
Total liabilities 2,858,655
------------
Net assets $270,809,633
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 211,990
Additional paid-in capital 294,482,967
------------
294,694,957
Accumulated undistributed net
investment income 8,014,176
Accumulated net realized loss on
investments, futures
transactions, written option
transactions and foreign currency
transactions (48,232,883)
Net unrealized appreciation on
investments and futures contracts 16,161,759
Net unrealized appreciation on
translation of other assets and
liabilities in foreign currencies
and foreign currency forward
contracts 171,624
------------
Net assets $270,809,633
============
INITIAL CLASS
Net assets applicable to
outstanding shares $224,119,000
============
Shares of capital stock outstanding 17,534,164
============
Net asset value per share
outstanding $ 12.78
============
SERVICE CLASS
Net assets applicable to
outstanding shares $ 46,690,633
============
Shares of capital stock outstanding 3,664,789
============
Net asset value per share
outstanding $ 12.74
============
</Table>
M-220 MainStay VP Income Builder Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Interest $ 6,050,049
Dividends (a) 3,961,873
------------
Total income 10,011,922
------------
EXPENSES:
Manager (See Note 3) 1,437,056
Professional fees 129,845
Shareholder communication 108,621
Distribution and service--Service
Class (See Note 3) 101,667
Custodian 92,278
Directors 11,360
Miscellaneous 14,963
------------
Total expenses 1,895,790
------------
Net investment income 8,116,132
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Security transactions (19,642,295)
Futures transactions 1,040,384
Foreign currency transactions (68,192)
------------
Net realized loss on investments,
futures transactions and foreign
currency transactions (18,670,103)
------------
Net change in unrealized
depreciation on:
Investments 63,690,777
Futures contracts 43,168
Translation of other assets and
liabilities in foreign
currencies and foreign
currency forward contracts 185,994
------------
Net change in unrealized
depreciation on investments,
futures contracts and foreign
currency transactions 63,919,939
------------
Net realized and unrealized gain on
investments, futures transactions
and foreign currency transactions 45,249,836
------------
Net increase in net assets
resulting from operations $ 53,365,968
============
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$133,099.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-221
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 8,116,132 $ 8,717,217
Net realized loss on
investments, futures
transactions, written
option transactions and
foreign currency
transactions (18,670,103) (28,524,246)
Net change in unrealized
appreciation (depreciation)
on investments, futures
contracts and foreign
currency transactions 63,919,939 (84,419,472)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 53,365,968 (104,226,501)
----------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (7,478,197) (9,402,099)
Service Class (1,392,387) (1,499,195)
----------------------------
(8,870,584) (10,901,294)
----------------------------
From net realized gain on investments:
Initial Class -- (36,885,474)
Service Class -- (6,449,737)
----------------------------
-- (43,335,211)
----------------------------
Total dividends and
distributions to
shareholders (8,870,584) (54,236,505)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 7,465,746 10,853,857
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 8,870,584 54,236,505
Cost of shares redeemed (46,014,338) (83,245,016)
----------------------------
Decrease in net assets
derived from capital
share transactions (29,678,008) (18,154,654)
----------------------------
Net increase (decrease)
in net assets 14,817,376 (176,617,660)
NET ASSETS:
Beginning of year 255,992,257 432,609,917
----------------------------
End of year $270,809,633 $ 255,992,257
============================
Accumulated undistributed net
investment income at end of
year $ 8,014,176 $ 8,875,700
============================
</Table>
M-222 MainStay VP Income Builder Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
This page intentionally left blank
mainstayinvestments.com M-223
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 10.71 $ 18.40 $ 18.78 $ 17.48 $ 16.67
-------- -------- -------- -------- --------
Net investment income 0.37 (a) 0.47 0.47 (a) 0.37 (a) 0.33 (a)
Net realized and
unrealized gain (loss)
on investments 2.12 (5.40) 0.97 1.30 0.75
Net realized and
unrealized gain on
foreign currency
transactions 0.01 -- -- -- --
-------- -------- -------- -------- --------
Total from investment
operations 2.50 (4.93) 1.44 1.67 1.08
-------- -------- -------- -------- --------
Less dividends and
distributions:
From net investment
income (0.43) (0.56) (0.45) (0.12) (0.27)
From net realized gain
on investments -- (2.20) (1.37) (0.25) --
-------- -------- -------- -------- --------
Total dividends and
distributions (0.43) (2.76) (1.82) (0.37) (0.27)
-------- -------- -------- -------- --------
Net asset value at end of
year $ 12.78 $ 10.71 $ 18.40 $ 18.78 $ 17.48
======== ======== ======== ======== ========
Total investment return 23.51% (26.92%) 7.51% 9.50% 6.50%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 3.26% 2.55% 2.42% 2.06% 1.96%
Net expenses 0.71% 0.65% 0.58% 0.59% 0.37%
Expenses (before
reimbursement) 0.71% 0.65% 0.58% 0.59% 0.58%
Portfolio turnover rate 161%(c) 94%(c) 76% 61%(c) 76%(c)
Net assets at end of year
(in 000's) $224,119 $217,037 $373,886 $408,052 $451,605
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 6.27% and 5.99% for the Initial Class shares and
Service Class shares, respectively, for the year ended December 31, 2005.
(c) The portfolio turnover rates not including mortgage dollar rolls were 141%,
78%, 51% and 39% for the years ended December 31, 2009, 2008, 2006 and 2005,
respectively.
</Table>
M-224 MainStay VP Income Builder Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
Service Class
--------------------------------------------------------------
Year ended December 31,
- --------------------------------------------------------------------
2009 2008 2007 2006 2005
$ 10.67 $ 18.33 $ 18.72 $ 17.43 $ 16.64
------- ------- ------- ------- -------
0.35 (a) 0.40 0.42 (a) 0.33 (a) 0.29 (a)
2.10 (5.35) 0.97 1.29 0.73
0.01 -- -- -- --
------- ------- ------- ------- -------
2.46 (4.95) 1.39 1.62 1.02
------- ------- ------- ------- -------
(0.39) (0.51) (0.41) (0.08) (0.23)
-- (2.20) (1.37) (0.25) --
------- ------- ------- ------- -------
(0.39) (2.71) (1.78) (0.33) (0.23)
------- ------- ------- ------- -------
$ 12.74 $ 10.67 $ 18.33 $ 18.72 $ 17.43
======= ======= ======= ======= =======
23.21% (27.10%) 7.24% 9.23% 6.19%(b)
3.03% 2.30% 2.17% 1.81% 1.71%
0.96% 0.90% 0.83% 0.84% 0.62%
0.96% 0.90% 0.83% 0.84% 0.83%
161%(c) 94%(c) 76% 61%(c) 76%(c)
$46,691 $38,955 $58,724 $55,833 $48,909
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-225
MAINSTAY VP INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 19.36% 5.71% 3.09%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MSCI EAFE(R)
INITIAL CLASS INDEX
------------- ------------
12/31/99 10000 10000
12/31/00 8194 8583
12/31/01 7045 6743
12/31/02 6734 5668
12/31/03 8754 7855
12/31/04 10272 9445
12/31/05 11093 10724
12/31/06 14568 13549
12/31/07 15287 15062
12/31/08 11362 8528
12/31/09 13562 11238
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 19.06% 5.46% 2.84%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
MSCI EAFE(R)
SERVICE CLASS INDEX
------------- ------------
12/31/99 10000 10000
12/31/00 8175 8583
12/31/01 7011 6743
12/31/02 6685 5668
12/31/03 8670 7855
12/31/04 10148 9445
12/31/05 10934 10724
12/31/06 14323 13549
12/31/07 14993 15062
12/31/08 11116 8528
12/31/09 13235 11238
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Morgan Stanley Capital International EAFE Index(3) 31.78% 3.54% 1.17%
Average Lipper Variable Products International Core
Portfolio(4) 31.95 3.75 0.74
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 5.71% and 3.09% for Initial
Class shares and 5.45% and 2.84% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 5, 2003, includes
the historical performance of Initial Class shares through June 4, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products International Core Portfolio is
representative of portfolios that, by portfolio practice, invest at least 75%
of their equity assets in companies strictly outside of the U.S. core funds,
typically have an average price-to-cash flow ratio, price to book ratio, and
three-year sales-per-share growth value compared to the S&P/Citigroup World
ex-U.S. Broad Market Index. Lipper Inc. is an independent monitor of fund
performance.
M-226 MainStay VP International Equity Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP INTERNATIONAL EQUITY
PORTFOLIO (UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,167.10 $5.35 $1,020.30 $4.99
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,165.60 $6.71 $1,019.00 $6.26
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.98% for Initial Class and 1.23% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-227
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
(COMPOSITION PIE CHART)
<Table>
Common Stocks 92.90
Other Assets, Less Liabilities 3.20
Warrants 2.70
Short-Term Investment 0.90
Futures Contracts 0.30
</Table>
See Portfolio of Investments beginning on page M-231 for specific holdings
within these categories.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. Roche Holding A.G., Genusscheine
2. Tesco PLC
3. BP PLC, Sponsored ADR
4. Nestle S.A. Registered
5. Enagas
6. NTT DoCoMo, Inc.
7. Ryanair Holdings PLC Class A
8. Man Group PLC
9. Lloyds TSB Group PLC
10. Hannover Rueckversicherung A.G.
</Table>
M-228 MainStay VP International Equity Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY RUPAL J. BHANSALI OF MACKAY SHIELDS LLC, THE PORTFOLIO'S
SUBADVISOR.
HOW DID MAINSTAY VP INTERNATIONAL EQUITY PORTFOLIO PERFORM RELATIVE TO ITS PEERS
AND
ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP International Equity
Portfolio returned 19.36% for Initial Class shares and 19.06% for Service Class
shares. Both share classes underperformed the 31.95% return of the average
Lipper(1) Variable Products International Core Portfolio and the 31.78% return
of the Morgan Stanley Capital International (MSCI) EAFE(R) Index(1) for the 12
months ended December 31, 2009. The MSCI EAFE(R) Index is the Portfolio's broad-
based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE IN 2009?
During the 12 months ended December 31, 2009, international equity markets
started with a broad sell-off but then enjoyed an impressive rally on the belief
that the economy had bottomed. Our "quality at the right price" strategy led us
to favor companies with stable revenues, quality balance sheets and reasonable
valuations. Throughout the reporting period, we remained focused on the analysis
of individual business models, seeking quality companies at reasonable
valuations rather than basing our decisions on market perceptions. This strategy
directed the Portfolio toward health care, utilities and information technology
and away from investments in financials, materials and industrials.
The Portfolio's underperformance of the MSCI EAFE(R) Index resulted from
multiple factors. An underweight position in the materials sector detracted from
relative performance. Overweight positions in the telecom-munication services
sector and the pharmaceuticals industry--as well as stock selection in both of
those market segments--detracted from relative perfor-mance. On the positive
side, an overweight position and strong stock selection in the technology hard-
ware & equipment industry group contributed posi-
tively to the Portfolio's relative results, as did an underweight position in
the automobiles & compo-
nents industry group. Security selection in the diver-
sified financials industry group also contributed positively to the Portfolio's
performance relative to the MSCI EAFE(R) Index.
DURING THE REPORTING PERIOD, WHICH INDUSTRY GROUPS WERE THE STRONGEST
CONTRIBUTORS TO THE PORTFOLIO'S RELATIVE PERFORMANCE AND WHICH INDUSTRY GROUPS
DETRACTED THE MOST?
For 2009, the technology hardware & equipment, insurance and health care
equipment & services industry groups were the strongest contributors to the
Portfolio's performance relative to the MSCI EAFE(R) Index. Security selection
and overweight positions contributed to these results. Security selection in
the transportation industry group also contributed positively to the Portfolio's
relative performance.
The industry group that detracted the most from the Portfolio's performance in
2009 was telecommuni- cation services. Both an overweight position and security
selection contributed to this result. An under-weight position in the materials
industry group also detracted from the Portfolio's performance relative to its
benchmark. Other industry groups that detracted from relative performance were
banks and consumer services. An underweight position in banks hurt relative
performance when shares in this industry group reversed from a severely oversold
position.
DURING 2009, WHICH STOCKS WERE STRONG CONTRIBUTORS TO THE FUND'S ABSOLUTE
PERFORMANCE AND WHICH STOCKS WERE PARTICULARLY WEAK?
In absolute terms, Man Group was a strong con-tributor to the Portfolio's
performance. The com-
pany is based in the United Kingdom and provides alternative investment products
to private and institutional investors. There were no surprises related to Man
Group's earnings and the dividend remained at a relatively high level.
TNT N.V. outperformed as takeover speculation continued to influence the
company's stock price. The company collects, transports, stores, sorts and
distributes letters, printed matter, parcels, documents and freight items.
Germany-based reinsurer Hannover Rueckver-
sicherung A.G. was also a strong contributor.
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. 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.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-229
The company offers life, health, accident, damage, property and high-risk
specialty reinsurance. The company continued to meet or exceed earnings
expectations, and we found the stock's dividend
yield very attractive.
Eye-care company Alcon contributed positively to
the Portfolio's absolute performance. Alcon develops, manufactures and markets
pharmaceuticals, surgical equipment and devices, as well as contact lens care
and other care products for various eye conditions. Recent earnings results
illustrate the strength of the company's franchises in ophthalmic
pharmaceuticals and surgery.
The greatest individual detractor from the Portfolio's absolute performance in
2009 was Japanese telecom-
munication services provider NTT DoCoMo. While the operating environment in
Japan did not worsen, the company continued to spend on businesses in other
markets that are far more competitive. Manage-
ment announced recently that it will be returning cash to shareholders through
share buybacks. The Portfolio continued to hold the shares.
A second detractor was Takeda Pharmaceutical, a Japan-based drug concern. The
shares came under pressure after an FDA approval setback on a pro-posed diabetic
treatment option. Another detractor was Societe Television Francaise 1, which
operates the French station TF1. Like other media compa-
nies, Television Francaise suffered in the recent economic downturn when
advertising revenues fell precipitously.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING 2009?
During the reporting period we added UBS, Deutsche Boerse and Man Group. In our
view, these compa-
nies represent the highest quality within the financials sector. The market
sell-off early in the reporting period provided an opportunity to establish
positions in these companies.
The Portfolio either sold or trimmed back a number of positions in
telecommunication services, pharma-
ceuticals and utilities. Many stocks in these segments had surpassed our view of
the intrinsic value of the companies. Terna, the Italian electric transmission
company, was sold when the shares moved ahead of expectations. Pharmaceutical
company Novartis was also trimmed as the share price outperformed our growth
expectations (taking risks to the company's product pipeline into account).
Vodafone, the global telecommunications services company, was trimmed as what we
considered to be better opportunities presented themselves in the heavily
underweighted banks industry group.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF 2009?
As of December 31, 2009, the Portfolio held over-
weight positions in the pharmaceuticals, biotechnol-
ogy and food staples & retailing industries and in the utilities industry group.
At the same time, the Port-
folio was underweight in the materials, banks and automobiles & components
industry groups. At year-end, the Portfolio held a market-weight position in
energy.
Industry group and regional weightings result from our bottom-up research and
are not based on macro-
economic, regional or industry-group evaluations. That said, we continued to
find fewer compelling investment opportunities in Japan than we did in the rest
of Asia and Europe. As a result, the Portfolio remained underweight in Japan.
The opinions expressed are those of the portfolio manager as of the date of this
report and are subject to change. There is no guarantee that any forecasts made
will come to pass. This material does not constitute investment advice and is
not intended as an endorsement of any specific investment.
Information about MainStay VP International Equity Portfolio on this page and
the preceding pages has not been audited.
M-230 MainStay VP International Equity Portfolio
PORTFOLIO OF INVESTMENTS+++ DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 92.9%+
- --------------------------------------------------------------
AUSTRALIA 0.2%
BHP Billiton, Ltd.,
Sponsored ADR (Metals &
Mining) (a) 12,300 $ 941,934
-------------
BELGIUM 2.7%
Belgacom S.A.
(Diversified
Telecommunication
Services) 205,700 7,419,578
Mobistar S.A. (Wireless
Telecommunication
Services) 95,900 6,558,151
-------------
13,977,729
-------------
BERMUDA 1.4%
Esprit Holdings, Ltd.
(Specialty Retail) 1,083,685 7,132,268
-------------
CANADA 2.6%
Fairfax Financial
Holdings, Ltd.
(Insurance) 15,300 5,966,388
IGM Financial, Inc.
(Capital Markets) 44,900 1,820,729
Intact Financial Corp.
(Insurance) 39,800 1,413,749
Tim Hortons, Inc.
(Hotels, Restaurants &
Leisure) 136,600 4,196,546
-------------
13,397,412
-------------
DENMARK 0.3%
Novo-Nordisk A/S Class B
(Pharmaceuticals) 21,900 1,401,223
-------------
FINLAND 2.1%
Nokia Oyj, Sponsored ADR
(Communications
Equipment) (a) 488,700 6,279,795
Sampo Oyj (Insurance) 188,700 4,579,675
-------------
10,859,470
-------------
FRANCE 2.7%
BNP Paribas S.A.
(Commercial Banks) 47,740 3,767,336
Neopost S.A. (Office
Electronics) 54,700 4,519,368
Publicis Groupe (Media) 12,400 503,029
Total S.A. (Oil, Gas &
Consumable Fuels) 81,800 5,241,871
-------------
14,031,604
-------------
GERMANY 6.2%
Allianz SE (Insurance) 12,000 1,493,675
Allianz SE, ADR
(Insurance) (a) 189,300 2,356,785
Deutsche Boerse A.G.
(Diversified Financial
Services) 97,900 8,139,536
v Hannover
Rueckversicherung A.G.
(Insurance) (b) 240,995 11,312,146
Infineon Technologies
A.G. (Semiconductors &
Semiconductor
Equipment) (b) 449,100 2,479,287
Siemens A.G. (Industrial
Conglomerates) 29,600 2,714,999
Siemens A.G., Sponsored
ADR (Industrial
Conglomerates) (a) 42,500 3,897,250
-------------
32,393,678
-------------
GREECE 1.9%
Intralot S.A.-Integrated
Lottery Systems &
Services (Hotels,
Restaurants & Leisure) 273,500 1,589,917
OPAP S.A. (Hotels,
Restaurants & Leisure) 284,563 6,229,692
Piraeus Bank S.A.
(Commercial Banks) (b) 197,800 2,256,963
-------------
10,076,572
-------------
HONG KONG 2.3%
China Mobile, Ltd.,
Sponsored ADR (Wireless
Telecommunication
Services) (a) 144,400 6,704,492
CNOOC, Ltd., ADR (Oil,
Gas & Consumable Fuels)
(a) 24,800 3,855,160
HongKong Electric
Holdings
(Electric Utilities) 238,100 1,292,178
-------------
11,851,830
-------------
IRELAND 0.5%
Ryanair Holdings PLC,
Sponsored ADR
(Airlines) (a)(b) 101,350 2,718,207
-------------
ISRAEL 0.2%
Cellcom Israel, Ltd.
(Wireless
Telecommunication
Services) 27,900 894,474
-------------
ITALY 5.3%
Assicurazioni Generali
S.p.A. (Insurance) 146,312 3,922,787
ENI S.p.A. (Oil, Gas &
Consumable Fuels) 249,200 6,344,404
Intesa Sanpaolo S.p.A.
(Commercial
Banks) (b) 443,900 1,988,952
MediaSet S.p.A. (Media) 884,368 7,226,029
Mediolanum S.p.A.
(Insurance) 313,600 1,947,271
Milano Assicurazioni
S.p.A. (Insurance) 378,100 1,103,775
Snam Rete Gas S.p.A. (Gas
Utilities) 1,003,671 4,990,951
-------------
27,524,169
-------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
v Among the Portfolio's 10 largest holdings, as of December 31, 2009,
excluding short-term investment. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-231
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
JAPAN 17.2%
Astellas Pharma, Inc.
(Pharmaceuticals) 231,100 $ 8,608,168
Capcom Co., Ltd.
(Software) 63,400 1,042,023
Daito Trust Construction
Co., Ltd. (Real Estate
Management &
Development) 152,300 7,181,828
FamilyMart Co., Ltd.
(Food & Staples
Retailing) 74,500 2,195,624
Japan Tobacco, Inc.
(Tobacco) 1,839 6,205,079
Kose Corp. (Personal
Products) 59,900 1,209,401
Lawson, Inc. (Food &
Staples Retailing) 37,900 1,669,678
MISUMI Group, Inc.
(Trading Companies &
Distributors) 159,400 2,714,583
Nintendo Co., Ltd.
(Software) 45,800 10,857,634
Nintendo Co., Ltd., ADR
(Software) (a) 14,000 417,480
Nissin Foods Holdings
Co., Ltd. (Food
Products) 212,000 6,907,182
v NTT DoCoMo, Inc.
(Wireless
Telecommunication
Services) 10,356 14,426,117
OBIC Co., Ltd. (IT
Services) 24,360 3,974,075
Ono Pharmaceutical Co.,
Ltd. (Pharmaceuticals) 12,000 512,734
Ryohin Keikaku Co., Ltd.
(Multiline Retail) 52,400 1,903,309
Sankyo Co., Ltd. (Leisure
Equipment & Products) 80,700 4,020,000
Santen Pharmaceutical
Co., Ltd.
(Pharmaceuticals) 45,800 1,464,446
Shizuoka Bank, Ltd. (The)
(Commercial Banks) 292,900 2,538,278
Square Enix Holdings Co.,
Ltd. (Software) 204,000 4,279,505
Suruga Bank, Ltd.
(Commercial Banks) 343,900 2,982,986
Tokio Marine Holdings,
Inc. (Insurance) 148,700 4,036,229
-------------
89,146,359
-------------
MEXICO 1.0%
Grupo Televisa S.A.,
Sponsored ADR (Media)
(a) 251,000 5,210,760
-------------
NETHERLANDS 3.5%
Gemalto N.V. (Computers &
Peripherals) (b) 56,300 2,422,968
Koninklijke Ahold N.V.
(Food & Staples
Retailing) 631,800 8,382,064
TNT N.V. (Air Freight &
Logistics) 248,885 7,618,082
-------------
18,423,114
-------------
NORWAY 0.5%
StatoilHydro ASA (Oil,
Gas & Consumable Fuels) 98,800 2,464,445
-------------
SINGAPORE 2.3%
DBS Group Holdings, Ltd.
(Commercial Banks) 478,800 5,205,940
Singapore Post, Ltd. (Air
Freight & Logistics) 1,197,000 858,571
Singapore Technologies
Engineering, Ltd.
(Aerospace & Defense) 1,041,000 2,392,902
SMRT Corp., Ltd. (Road &
Rail) 2,791,400 3,788,155
-------------
12,245,568
-------------
SOUTH AFRICA 0.2%
Tiger Brands, Ltd. (Food
Products) 36,470 844,341
-------------
SPAIN 7.4%
Banco Popular Espanol
S.A. (Commercial Banks) 737,500 5,384,508
v Enagas (Gas
Utilities) 678,600 15,019,113
Gestevision Telecinco
S.A. (Media) 475,200 6,936,157
Grifols S.A.
(Biotechnology) 310,900 5,417,608
Indra Sistemas S.A. (IT
Services) 241,600 5,683,410
-------------
38,440,796
-------------
SWEDEN 0.4%
Scania AB Class B
(Machinery) 165,500 2,122,665
-------------
SWITZERLAND 12.4%
ABB, Ltd. (Electrical
Equipment) (b) 158,200 3,025,635
ABB, Ltd., Sponsored ADR
(Electrical Equipment)
(a)(b) 49,800 951,180
Actelion, Ltd. Registered
(Biotechnology) (b) 97,000 5,180,670
Credit Suisse Group A.G.,
Sponsored ADR (Capital
Markets) (a) 82,500 4,055,700
Lonza Group A.G. (Life
Sciences Tools &
Services) 43,300 3,036,686
v Nestle S.A.
Registered
(Food Products) 318,310 15,464,390
v Roche Holding A.G.,
Genusscheine
(Pharmaceuticals) 114,066 19,404,472
Schindler Holding A.G.
(Machinery) 22,600 1,733,785
Swiss Reinsurance
(Insurance) 54,600 2,615,932
Syngenta A.G. (Chemicals) 4,500 1,260,977
Syngenta A.G., ADR
(Chemicals) (a) 30,500 1,716,235
UBS A.G. (Capital
Markets) (b) 267,800 4,153,578
Zurich Financial Services
A.G. (Insurance) 7,800 1,695,928
-------------
64,295,168
-------------
UNITED KINGDOM 19.3%
Barclays PLC (Commercial
Banks) (b) 962,500 4,241,428
</Table>
M-232 MainStay VP International Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
Berkeley Group Holdings
PLC (Household
Durables) (b) 57,200 $ 752,090
BHP Billiton PLC (Metals
& Mining) 27,000 862,454
v BP PLC, Sponsored ADR
(Oil, Gas & Consumable
Fuels) (a) 289,600 16,788,112
Cobham PLC
(Aerospace & Defense) 1,065,616 4,295,376
De La Rue PLC (Commercial
Services & Supplies) 105,100 1,668,628
HSBC Holdings PLC,
Sponsored ADR
(Commercial Banks) (a) 28,600 1,632,774
Jardine Lloyd Thompson
Group PLC (Insurance) 173,200 1,351,514
v Lloyds TSB Group PLC
(Commercial Banks) (b) 14,533,272 11,667,218
v Man Group PLC
(Capital Markets) 2,466,900 12,134,863
Provident Financial PLC
(Consumer Finance) 87,400 1,308,889
Royal Dutch Shell PLC
Class A, ADR (Oil, Gas
& Consumable Fuels) (a) 166,400 10,002,304
Scottish & Southern
Energy PLC (Electric
Utilities) 575,860 10,761,258
St. James's Place PLC
(Insurance) 425,000 1,671,649
v Tesco PLC (Food &
Staples Retailing) 2,757,999 18,949,695
Ultra Electronics
Holdings (Aerospace &
Defense) 87,000 1,916,717
-------------
100,004,969
-------------
UNITED STATES 0.3%
Philip Morris
International, Inc.
(Tobacco) 34,800 1,677,011
-------------
Total Common Stocks
(Cost $463,169,672) 482,075,766
-------------
<Caption>
NUMBER OF
WARRANTS
WARRANTS 2.7%
- --------------------------------------------------------------
IRELAND 2.7%
v Ryanair Holdings PLC
Class A
Strike Price E 0.000001
Expires 4/18/18
(Airlines) (b)(c) 2,905,385 13,973,624
-------------
Total Warrants
(Cost $12,491,180) 13,973,624
-------------
<Caption>
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENT 0.9%
- --------------------------------------------------------------
REPURCHASE AGREEMENT 0.9%
UNITED STATES 0.9%
State Street Bank and
Trust Co. 0.005%, dated
12/31/09
due 1/4/10
Proceeds at Maturity
$4,896,806
(Collateralized by a
United States Treasury
Bill with a zero coupon
rate and a maturity
date of 2/18/10, with a
Principal Amount of
$4,995,000 and a Market
Value of $4,995,000)
(Capital Markets) $ 4,896,804 $ 4,896,804
-------------
Total Short-Term
Investment
(Cost $4,896,804) 4,896,804
-------------
Total Investments
(Cost $480,557,656) (f) 96.5% 500,946,194
Other Assets, Less
Liabilities 3.5 18,026,516
----- ------------
Net Assets 100.0% $ 518,972,710
===== ============
<Caption>
CONTRACTS UNREALIZED
LONG APPRECIATION (D)
FUTURES CONTRACTS 0.3%
- --------------------------------------------------------------
Dow Jones EURO STOXX 50
Index
March 2010 (10 Year)
(e) 580 $ 1,029,421
FTSE 100 Index
March 2010 (10 Year)
(e) 151 343,480
Topix Index
March 2010 (10 Year)
(e) 128 214,465
-------------
Total Futures Contracts
(Settlement Value
$50,218,397) $ 1,587,366
=============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-233
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
+++ On a daily basis New York Life
Investments confirms that the value of
the Portfolio's liquid assets (liquid
portfolio securities and cash) is
sufficient to cover its potential senior
securities (e.g., futures, swaps,
options).
(a) ADR -- American Depositary Receipt.
(b) Non-income producing security.
(c) May be sold to institutional investors
only under Rule 144A or securities
offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
(d) Represents the difference between the
value of the contracts at the time they
were opened and the value at December 31,
2009.
(e) At December 31, 2009, cash in the amount
of $3,335,712 is segregated as collateral
for futures contracts with the broker.
(f) At December 31, 2009, cost is
$485,440,113 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 44,617,258
Gross unrealized depreciation (29,111,177)
------------
Net unrealized appreciation $ 15,506,081
============
</Table>
The following abbreviation is used in the above portfolio:
E --Euro
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES IN
ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Common Stocks (b) $87,650,643 $394,425,123 $ -- $482,075,766
Warrants -- 13,973,624 -- 13,973,624
Short-Term Investment
Repurchase Agreement -- 4,896,804 -- 4,896,804
----------- ------------ -------- ------------
Total Investments in Securities 87,650,643 413,295,551 -- 500,946,194
----------- ------------ -------- ------------
Other Financial Instruments
Futures Contracts (c) 1,587,366 -- -- 1,587,366
Foreign Currency Forward Contracts (d) -- 308,609 -- 308,609
----------- ------------ -------- ------------
Total Other Financial Instruments 1,587,366 308,609 -- 1,895,975
----------- ------------ -------- ------------
Total Investments in Securities and Other
Financial Instruments $89,238,009 $413,604,160 $-- $502,842,169
=========== ============ ======== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
(b) Level 1 assets represent ADRs, securities listed under Canada, United States
and the following common stocks whose primary exchange is the New York Stock
Exchange: Cellcom Israel, Ltd. under Israel and UBS A.G. under Switzerland.
(c) The value listed for these securities reflects unrealized appreciation as
shown on the Portfolio of Investments.
(d) The value listed for these securities represents unrealized appreciation as
shown on Note 6 of the financial statements for foreign currency forward
contracts.
LIABILITY VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Other Financial Instruments
Foreign Currency Forward Contracts (a) $ -- $(539,977) $ -- $(539,977)
-------- --------- -------- ---------
Total Other Financial Instruments $-- $(539,977) $-- $(539,977)
======== ========= ======== =========
</Table>
(a) The value listed for these securities represents unrealized depreciation as
shown on Note 6 of the financial statements for foreign currency forward
contracts.
M-234 MainStay VP International Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
CHANGE IN
BALANCE AS OF ACCRUED REALIZED UNREALIZED
INVESTMENTS DECEMBER 31, DISCOUNTS GAIN APPRECIATION NET NET
IN SECURITIES 2008 (PREMIUMS) (LOSS) (DEPRECIATION) PURCHASES SALES
Rights $786,202 $-- $(794,426) $680,131 $-- $(671,907)
-------- --- --------- -------- --- ---------
Total $786,202 $-- $(794,426) $680,131 $-- $(671,907)
======== === ========= ======== === =========
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
NET NET INVESTMENTS STILL
INVESTMENTS TRANSFERS TRANSFERS BALANCE AS OF HELD AT DECEMBER
IN SECURITIES IN TO LEVEL 3 OUT OF LEVEL 3 DECEMBER 31, 2009 31, 2009 (A)
Rights $-- $-- $-- $--
--- --- --- ---
Total $-- $-- $-- $--
=== === === ===
</Table>
(a) Included in "Net change in unrealized appreciation (depreciation) on
investments" in the Statement of Operations.
The table below sets forth the diversification of MainStay VP International
Equity Portfolio investments by industry.
INDUSTRY DIVERSIFICATION
<Table>
<Caption>
VALUE PERCENT+
Aerospace & Defense $ 8,604,995 1.6%
Air Freight & Logistics 8,476,653 1.7
Airlines 16,691,831 3.2
Biotechnology 10,598,278 2.1
Capital Markets 27,061,674 5.2
Chemicals 2,977,212 0.6
Commercial Banks 41,666,383 8.0
Commercial Services &
Supplies 1,668,628 0.3
Communications Equipment 6,279,795 1.2
Computers & Peripherals 2,422,968 0.4
Consumer Finance 1,308,889 0.3
Diversified Financial
Services 8,139,536 1.6
Diversified Telecommunication
Services 7,419,578 1.4
Electric Utilities 12,053,436 2.4
Electrical Equipment 3,976,815 0.8
Food & Staples Retailing 31,197,061 6.0
Food Products 23,215,913 4.5
Gas Utilities 20,010,064 3.9
Hotels, Restaurants & Leisure 12,016,155 2.3
Household Durables 752,090 0.1
Industrial Conglomerates 6,612,249 1.2
Insurance 45,467,503 8.7
IT Services 9,657,485 1.9
Leisure Equipment & Products 4,020,000 0.8
Life Sciences Tools &
Services 3,036,686 0.6
Machinery 3,856,450 0.7
Media 19,875,975 3.8
Metals & Mining 1,804,388 0.4
Multiline Retail 1,903,309 0.4
Office Electronics 4,519,368 0.9
Oil, Gas & Consumable Fuels 44,696,296 8.5
Personal Products 1,209,401 0.2
Pharmaceuticals 31,391,043 6.0
Real Estate Management &
Development 7,181,828 1.4
Road & Rail 3,788,155 0.7
Semiconductors &
Semiconductor Equipment 2,479,287 0.5
Software 16,596,642 3.2
Specialty Retail 7,132,268 1.4
Tobacco 7,882,090 1.5
Trading Companies &
Distributors 2,714,583 0.5
Wireless Telecommunication
Services 28,583,234 5.6
------------ -----
500,946,194 96.5
Other Assets, Less
Liabilities 18,026,516 3.5
------------ -----
Net Assets $518,972,710 100.0%
============ =====
</Table>
<Table>
+ Percentages indicated are based on Portfolio net assets.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-235
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $480,557,656) $500,946,194
Cash denominated in foreign
currencies
(identified cost $18,293,204) 18,138,800
Foreign cash collateral on deposit
at broker (identified cost
$3,365,168) (See Note 6) 3,335,712
Receivables:
Investment securities sold 1,345,686
Dividends and interest 875,458
Fund shares sold 421,477
Variation margin on futures
contracts 36,853
Other assets 833
Unrealized appreciation on foreign
currency forward contracts 308,609
------------
Total assets 525,409,622
------------
LIABILITIES:
Payables:
Investment securities purchased 5,157,077
Manager (See Note 3) 390,714
Fund shares redeemed 135,772
Custodian 72,864
NYLIFE Distributors (See Note 3) 55,325
Professional fees 45,789
Shareholder communication 21,523
Variation margin on futures
contracts 1,746
Directors 1,500
Accrued expenses 14,625
Unrealized depreciation on foreign
currency forward contracts 539,977
------------
Total liabilities 6,436,912
------------
Net assets $518,972,710
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 412,520
Additional paid-in capital 577,237,258
------------
577,649,778
Accumulated undistributed net
investment income 16,797,492
Accumulated net realized loss on
investments, futures
transactions, written option
transactions and foreign currency
transactions (97,084,347)
Net unrealized appreciation on
investments and futures contracts 21,975,904
Net unrealized depreciation on
translation of other assets and
liabilities in foreign currencies
and foreign currency forward
contracts (366,117)
------------
Net assets $518,972,710
============
INITIAL CLASS
Net assets applicable to
outstanding shares $256,709,855
============
Shares of capital stock outstanding 20,331,037
============
Net asset value per share
outstanding $ 12.63
============
SERVICE CLASS
Net assets applicable to
outstanding shares $262,262,855
============
Shares of capital stock outstanding 20,920,920
============
Net asset value per share
outstanding $ 12.54
============
</Table>
M-236 MainStay VP International Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends (a) $ 17,120,261
Interest 14,086
------------
Total income 17,134,347
------------
EXPENSES:
Manager (See Note 3) 4,082,605
Distribution and service--Service
Class (See Note 3) 559,976
Custodian 215,802
Professional fees 113,408
Shareholder communication 82,568
Directors 20,543
Miscellaneous 46,754
------------
Total expenses 5,121,656
------------
Net investment income 12,012,691
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, WRITTEN OPTIONS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) on:
Security transactions (23,657,624)
Futures transactions 5,791
Written option transactions 531,544
Foreign currency transactions 5,203,983
------------
Net realized loss on investments,
futures transactions, written
option transactions and foreign
currency transactions (17,916,306)
------------
Net change in unrealized
depreciation on:
Investments 85,496,013
Futures contracts 1,587,366
Translation of other assets and
liabilities in foreign
currencies and foreign
currency forward contracts (260,628)
------------
Net change in unrealized
depreciation on investments,
futures contracts and foreign
currency transactions 86,822,751
------------
Net realized and unrealized gain on
investments, futures
transactions, written options and
foreign currency transactions 68,906,445
------------
Net increase in net assets
resulting from operations $ 80,919,136
============
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$2,016,395.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-237
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 12,012,691 $ 20,917,134
Net realized loss on
investments, futures
transactions, written
option transactions and
foreign currency
transactions (17,916,306) (60,887,388)
Net change in unrealized
appreciation (depreciation)
on investments, written
options, futures contracts
and foreign currency
transactions 86,822,751 (131,158,767)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 80,919,136 (171,129,021)
----------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (16,571,711) (4,305,860)
Service Class (15,834,103) (3,276,906)
----------------------------
(32,405,814) (7,582,766)
----------------------------
From net realized gain on investments:
Initial Class -- (35,576,759)
Service Class -- (32,683,689)
----------------------------
-- (68,260,448)
----------------------------
Total dividends and
distributions to
shareholders (32,405,814) (75,843,214)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 41,547,694 79,244,921
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 32,405,814 75,843,214
Cost of shares redeemed (70,237,568) (103,307,102)
----------------------------
Increase in net assets
derived from capital
share transactions 3,715,940 51,781,033
----------------------------
Net increase (decrease)
in net assets 52,229,262 (195,191,202)
NET ASSETS:
Beginning of year 466,743,448 661,934,650
----------------------------
End of year $518,972,710 $ 466,743,448
============================
Accumulated undistributed net
investment income at end of
year $ 16,797,492 $ 31,986,632
============================
</Table>
M-238 MainStay VP International Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
This page intentionally left blank
mainstayinvestments.com M-239
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 11.30 $ 18.29 $ 18.68 $ 14.39 $ 14.11
-------- -------- -------- -------- --------
Net investment income (a) 0.32 0.59 0.39 0.29 0.36
Net realized and
unrealized gain (loss)
on investments 1.74 (5.71) 0.62 4.38 0.90
Net realized and
unrealized gain (loss)
on foreign currency
transactions 0.13 0.31 (0.04) (0.16) (0.13)
-------- -------- -------- -------- --------
Total from investment
operations 2.19 (4.81) 0.97 4.51 1.13
-------- -------- -------- -------- --------
Less dividends and
distributions:
From net investment
income (0.86) (0.24) (0.13) (0.05) (0.24)
From net realized gain
on investments -- (1.94) (1.23) (0.17) (0.61)
-------- -------- -------- -------- --------
Total dividends and
distributions (0.86) (2.18) (1.36) (0.22) (0.85)
-------- -------- -------- -------- --------
Net asset value at end of
year $ 12.63 $ 11.30 $ 18.29 $ 18.68 $ 14.39
======== ======== ======== ======== ========
Total investment return 19.36% (25.67%) 4.93% 31.33% 7.99%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 2.75% 3.87% 1.99% 1.79% 2.52%
Net expenses 0.99% 0.96% 0.89% 0.92% 0.87%
Expenses (before
reimbursement) 0.99% 0.96% 0.89% 0.92% 0.91%
Portfolio turnover rate 83% 89% 54% 44% 54%
Net assets at end of year
(in 000's) $256,710 $244,533 $358,292 $355,382 $219,867
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 7.95% and 7.71% for Initial Class shares and Service
Class shares, respectively, for the year ended December 31, 2005.
</Table>
M-240 MainStay VP International Equity Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
2009 2008 2007 2006 2005
$ 11.22 $ 18.17 $ 18.59 $ 14.35 $ 14.08
-------- -------- -------- -------- --------
0.28 0.54 0.32 0.25 0.33
1.73 (5.67) 0.63 4.35 0.90
0.13 0.31 (0.03) (0.16) (0.13)
-------- -------- -------- -------- --------
2.14 (4.82) 0.92 4.44 1.10
-------- -------- -------- -------- --------
(0.82) (0.19) (0.11) (0.03) (0.22)
-- (1.94) (1.23) (0.17) (0.61)
-------- -------- -------- -------- --------
(0.82) (2.13) (1.34) (0.20) (0.83)
-------- -------- -------- -------- --------
$ 12.54 $ 11.22 $ 18.17 $ 18.59 $ 14.35
======== ======== ======== ======== ========
19.06% (25.86%) 4.67% 31.00% 7.74%(b)
2.47% 3.60% 1.68% 1.50% 2.27%
1.24% 1.21% 1.14% 1.17% 1.12%
1.24% 1.21% 1.14% 1.17% 1.16%
83% 89% 54% 44% 54%
$262,263 $222,210 $303,642 $217,511 $105,102
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-241
MAINSTAY VP LARGE CAP GROWTH PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON(1) (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 40.04% 3.08% -2.39%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
RUSSELL 1000(R) S&P 500(R)
INITIAL CLASS GROWTH INDEX INDEX
------------- --------------- ----------
12/31/99 10000 10000 10000
12/31/00 9004 7758 9090
12/31/01 7513 6173 8009
12/31/02 5394 4452 6239
12/31/03 6907 5776 8029
12/31/04 6746 6140 8902
12/31/05 7040 6463 9340
12/31/06 7549 7050 10815
12/31/07 9161 7883 11409
12/31/08 5607 4853 7188
12/31/09 7852 6658 9090
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 39.68% 2.83% -2.64%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
RUSSELL 1000(R) S&P 500(R)
SERVICE CLASS GROWTH INDEX INDEX
------------- --------------- ----------
12/31/99 10000 10000 10000
12/31/00 8975 7758 9090
12/31/01 7470 6173 8009
12/31/02 5350 4452 6239
12/31/03 6834 5776 8029
12/31/04 6658 6140 8902
12/31/05 6932 6463 9340
12/31/06 7415 7050 10815
12/31/07 8976 7883 11409
12/31/08 5481 4853 7188
12/31/09 7656 6658 9090
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Russell 1000(R) Growth Index(3) 37.21% 1.63% -3.99%
S&P 500(R) Index(3) 26.46 0.42 -0.95
Average Lipper Variable Products Large-Cap Growth Portfolio(4) 37.97 1.22 -2.73
</Table>
1. Performance figures reflect certain fee waivers, without which total returns
may have been lower. These voluntary waivers may be discontinued at any time.
Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these nonrecurring reimbursements had not been
made, the total returns would have been 3.07% and -2.40% for Initial Class
shares and 2.83% and -2.64% for Service Class shares for the five-year and
ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 6, 2003, includes
the historical performance of Initial Class shares through June 5, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products Large-Cap Growth Portfolio is
representative of portfolios that, by portfolio practice, invest at least 75%
of their equity assets in companies with market capitalizations (on a three-
year weighted basis) above Lipper's U.S. diversified equity large-cap floor.
Large-cap growth funds typically have an above-average price-to-earnings
ratio, price-to-book ratio, and three-year sales-per-share growth value,
compared to the S&P 500(R) index. Lipper Inc. is an independent monitor of
fund performance.
M-242 MainStay VP Large Cap Growth Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP LARGE CAP GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,238.30 $4.40 $1,021.30 $3.97
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,236.80 $5.81 $1,020.00 $5.24
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.78% for Initial Class and 1.03% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-243
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
<Table>
<Caption>
IT Services 10.7%
Computers & Peripherals 8.6
Communications Equipment 7.5
Internet Software & Services 6.7
Capital Markets 6.2
Oil, Gas & Consumable Fuels 6.0
Software 4.7
Internet & Catalog Retail 4.6
Diversified Financial Services 3.4
Health Care Providers & Services 3.4
Semiconductors & Semiconductor
Equipment 3.3
Food & Staples Retailing 3.2
Health Care Equipment & Supplies 3.2
Machinery 3.1
Chemicals 2.7
Pharmaceuticals 2.5
Road & Rail 2.4
Biotechnology 2.3
Multiline Retail 2.2
Energy Equipment & Services 2.0
Aerospace & Defense 1.9
Metals & Mining 1.9
Trading Companies & Distributors 1.1
Wireless Telecommunication Services 1.1
Air Freight & Logistics 0.9
Electrical Equipment 0.9
Hotels, Restaurants & Leisure 0.9
Specialty Retail 0.9
Short-Term Investment 1.9
Other Assets, Less Liabilities -0.2
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-247 for specific holdings
within these categories.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. Google, Inc. Class A
2. Apple, Inc.
3. Cognizant Technology Solutions Corp.
Class A
4. Visa, Inc. Class A
5. Medco Health Solutions, Inc.
6. Hewlett-Packard Co.
7. QUALCOMM, Inc.
8. Southwestern Energy Co.
9. Priceline.com, Inc.
10. Cisco Systems, Inc.
</Table>
M-244 MainStay VP Large Cap Growth Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY PORTFOLIO MANAGERS CLARK J. WINSLOW, JUSTIN H. KELLY, CFA,
AND R. BART WEAR, CFA, OF WINSLOW CAPITAL MANAGEMENT, INC., THE FUND'S
SUBADVISOR.
HOW DID MAINSTAY VP LARGE CAP GROWTH PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Large Cap Growth
Portfolio returned 40.04% for Initial Class shares and 39.68% for Service Class
shares. Both share classes outperformed the 37.97% return of the average
Lipper(1) Variable Products Large-Cap Growth Portfolio and the 37.21% return of
the Russell 1000(R) Growth Index(1) for the 12 months ended December 31, 2009.
The Russell 1000(R) Growth Index is the Portfolio's broad-based securities-
market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
Our process keeps the Portfolio's securities divided among three types of
earnings growth (consistent stable, quality cyclical and more rapid/newer) and
avoids a subset style bias. This process allowed the Portfolio to outperform its
benchmark and most of the Portfolio's peers. Much of the Portfolio's outper-
formance stemmed from our not-too-bearish posi- tioning early in the year, which
kept us from rash decisions and too many changes in the Portfolio once the
market began to rally. Our research skill allowed us to provide superior stock
selection, and we maintained strict adherence to our sell discipline. All of
these factors contributed to the Portfolio's outperformance.
DURING THE REPORTING PERIOD, WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO
THE PORTFOLIO'S RELATIVE PERFORMANCE AND WHICH SECTORS DETRACTED THE MOST?
The strongest-contributing sectors to the Portfolio's performance relative to
the Russell 1000(R) Growth Index were technology, financials and consumer
staples. The weakest-contributing sectors to the Portfolio's relative
performance were materials, health care and telecommunication services.
DURING THE REPORTING PERIOD, WHICH STOCKS WERE THE STRONGEST CONTRIBUTORS TO THE
PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED THE MOST?
The stocks that contributed the most to the Portfolio's performance on an
absolute basis were computer and electronic device manufacturer Apple,
information technology provider Cognizant Technology Solutions and online
service provider priceline.com. The three largest detractors on an absolute
basis were global biotechnology company Genzyme, mobile communications provider
NII Holdings and biopharmaceutical company Gilead Sciences.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING 2009?
The Portfolio purchased shares of JPMorgan Chase & Co. in January 2009, based on
the company's demonstrated management skills. We believed that the company would
gain market share as the economy improved.
We purchased Baidu.com, the leader in the rapidly growing Chinese online
advertising market, in the first quarter of 2009. We sold the position in the
third quarter on valuation concerns after the stock rose 175%.
We sold the Portfolio's positions in Apollo Group and ITT Education in the
second quarter of 2009. Although both companies beat consensus earnings
estimates, the stocks were affected by concerns over regulatory changes in the
for-profit education industry. We sold the Portfolio's position in Procter &
Gamble in the second quarter of 2009, when the cosmetics & personal care company
lowered its earnings outlook for 2010 because of competition from lower-priced
store brands.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE OVER THE COURSE OF 2009?
We moved from underweight positions relative to the Russell 1000(R) Growth Index
in information technol-
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. The
principal risk of growth stocks is that investors expect growth companies to
increase their earnings at a rate that is generally higher than the rate
expected for nongrowth companies. If these expectations are not met, the market
price of the stock may decline significantly even if earnings show an absolute
increase. Growth company stocks also typically lack the dividend yield that can
cushion stock prices in market downturns. 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.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-245
ogy and energy to overweight positions. We also repositioned the Portfolio's
financial holdings as the capital markets improved and risk-aversion declined.
We funded these changes primarily by reducing the Portfolio's overweight
position in health care to an underweight position and by trimming the
Portfolio's allocation to consumer staples, which was already underweight
relative to the Russell 1000(R) Growth Index.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2009?
As of December 31, 2009, the Portfolio was sub-stantially overweight relative to
the Russell 1000(R) Growth Index in information technology, energy and
financials and significantly underweight in consumer staples and health care. As
of the same date, the Portfolio was essentially in line with the benchmark's
weightings in all other sectors. Sector positioning contributed positively to
the Portfolio's performance during the year.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP Large Cap Growth Portfolio on this page and the
preceding pages has not been audited.
M-246 MainStay VP Large Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 98.3%+
- -------------------------------------------------------------
AEROSPACE & DEFENSE 1.9%
United Technologies Corp. 97,600 $ 6,774,416
-------------
AIR FREIGHT & LOGISTICS 0.9%
C.H. Robinson Worldwide,
Inc. 51,400 3,018,722
-------------
BIOTECHNOLOGY 2.3%
Celgene Corp. (a) 58,900 3,279,552
Gilead Sciences, Inc. (a) 112,800 4,881,984
-------------
8,161,536
-------------
CAPITAL MARKETS 6.2%
BlackRock, Inc. 26,700 6,199,740
Charles Schwab Corp. (The) 291,700 5,489,794
Goldman Sachs Group, Inc.
(The) 39,500 6,669,180
Invesco, Ltd. 145,000 3,406,050
-------------
21,764,764
-------------
CHEMICALS 2.7%
Ecolab, Inc. 70,100 3,125,058
Monsanto Co. 78,800 6,441,900
-------------
9,566,958
-------------
COMMUNICATIONS EQUIPMENT 7.5%
v Cisco Systems, Inc. (a) 384,100 9,195,354
Juniper Networks, Inc. (a) 201,900 5,384,673
v QUALCOMM, Inc. 248,900 11,514,114
-------------
26,094,141
-------------
COMPUTERS & PERIPHERALS 8.6%
v Apple, Inc. (a) 67,400 14,211,964
v Hewlett-Packard Co. 230,600 11,878,206
International Business
Machines Corp. 28,900 3,783,010
-------------
29,873,180
-------------
DIVERSIFIED FINANCIAL SERVICES 3.4%
IntercontinentalExchange,
Inc. (a) 29,400 3,301,620
JPMorgan Chase & Co. 208,200 8,675,694
-------------
11,977,314
-------------
ELECTRICAL EQUIPMENT 0.9%
First Solar, Inc. (a) 22,200 3,005,880
-------------
ENERGY EQUIPMENT & SERVICES 2.0%
FMC Technologies, Inc. (a) 52,900 3,059,736
Schlumberger, Ltd. 60,800 3,957,472
-------------
7,017,208
-------------
FOOD & STAPLES RETAILING 3.2%
Costco Wholesale Corp. 74,900 4,431,833
Wal-Mart Stores, Inc. 61,600 3,292,520
Walgreen Co. 90,400 3,319,488
-------------
11,043,841
-------------
HEALTH CARE EQUIPMENT & SUPPLIES 3.2%
Baxter International, Inc. 131,200 7,698,816
Mindray Medical
International, Ltd., ADR
(b) 101,850 3,454,752
-------------
11,153,568
-------------
HEALTH CARE PROVIDERS & SERVICES 3.4%
v Medco Health Solutions,
Inc. (a) 186,500 11,919,215
-------------
HOTELS, RESTAURANTS & LEISURE 0.9%
Carnival Corp. (a) 100,200 3,175,338
-------------
INTERNET & CATALOG RETAIL 4.6%
Amazon.com, Inc. (a) 38,200 5,138,664
Expedia, Inc. (a) 72,700 1,869,117
v Priceline.com, Inc. (a) 42,100 9,198,850
-------------
16,206,631
-------------
INTERNET SOFTWARE & SERVICES 6.7%
eBay, Inc. (a) 111,300 2,620,002
Equinix, Inc. (a) 57,700 6,124,855
v Google, Inc. Class A (a) 23,550 14,600,529
-------------
23,345,386
-------------
IT SERVICES 10.7%
Accenture PLC Class A 101,800 4,224,700
v Cognizant Technology
Solutions Corp. Class A (a) 281,400 12,747,420
Mastercard, Inc. Class A 31,700 8,114,566
v Visa, Inc. Class A 140,300 12,270,638
-------------
37,357,324
-------------
MACHINERY 3.1%
Danaher Corp. 110,900 8,339,680
Deere & Co. 43,400 2,347,506
-------------
10,687,186
-------------
METALS & MINING 1.9%
Cliffs Natural Resources,
Inc. 63,600 2,931,324
Freeport-McMoRan Copper &
Gold, Inc. (a) 45,100 3,621,079
-------------
6,552,403
-------------
MULTILINE RETAIL 2.2%
Kohl's Corp. (a) 79,300 4,276,649
Target Corp. 71,500 3,458,455
-------------
7,735,104
-------------
OIL, GAS & CONSUMABLE FUELS 6.0%
Occidental Petroleum Corp. 42,700 3,473,645
Petroleo Brasileiro S.A., ADR
(b) 79,000 3,766,720
v Southwestern Energy Co.
(a) 197,200 9,505,040
</Table>
+ Percentages indicated are based on Portfolio net assets.
V Among the Portfolio's 10 largest holdings, as of December 31, 2009,
excluding short-term investment. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-247
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
OIL, GAS & CONSUMABLE FUELS (CONTINUED)
Suncor Energy, Inc. 119,800 $ 4,230,138
-------------
20,975,543
-------------
PHARMACEUTICALS 2.5%
Teva Pharmaceutical
Industries, Ltd., Sponsored
ADR (b) 154,700 8,691,046
-------------
ROAD & RAIL 2.4%
Union Pacific Corp. 129,200 8,255,880
-------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 3.3%
Lam Research Corp. (a) 96,400 3,779,844
Linear Technology Corp. 102,300 3,124,242
Marvell Technology Group,
Ltd. (a) 217,500 4,513,125
-------------
11,417,211
-------------
SOFTWARE 4.7%
Adobe Systems, Inc. (a) 103,200 3,795,696
Microsoft Corp. 194,600 5,933,354
Oracle Corp. 273,900 6,721,506
-------------
16,450,556
-------------
SPECIALTY RETAIL 0.9%
O'Reilly Automotive, Inc. (a) 84,100 3,205,892
-------------
TRADING COMPANIES & DISTRIBUTORS 1.1%
Fastenal Co. 90,000 3,747,600
-------------
WIRELESS TELECOMMUNICATION SERVICES 1.1%
American Tower Corp. Class A
(a) 89,400 3,862,974
-------------
Total Common Stocks
(Cost $277,677,778) 343,036,817
-------------
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENT 1.9%
- -------------------------------------------------------------
REPURCHASE AGREEMENT 1.9%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$6,538,112
(Collateralized by a United
States
Treasury Bill with a zero
coupon rate and a maturity
date of 2/18/10, with a
Principal Amount of
$6,670,000 and a Market
Value of $6,670,000) $6,538,109 $ 6,538,109
-------------
Total Short-Term Investment
(Cost $6,538,109) 6,538,109
-------------
Total Investments
(Cost $284,215,887) (c) 100.2% 349,574,926
Other Assets, Less
Liabilities (0.2) (692,746)
----- ------------
Net Assets 100.0% $ 348,882,180
===== ============
</Table>
<Table>
(a) Non-income producing security.
(b) ADR--American Depositary Receipt.
(c) At December 31, 2009, cost is
$288,016,112 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $67,468,554
Gross unrealized depreciation (5,909,740)
-----------
Net unrealized appreciation $61,558,814
===========
</Table>
The following is a summary of the fair valuations according to inputs used as of
December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Common Stocks $343,036,817 $ -- $ -- $343,036,817
Short-Term Investment
Repurchase Agreement -- 6,538,109 -- 6,538,109
------------ ---------- -------- ------------
Total Investments in Securities $343,036,817 $6,538,109 $-- $349,574,926
============ ========== ======== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
M-248 MainStay VP Large Cap Growth Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $284,215,887) $349,574,926
Receivables:
Fund shares sold 315,811
Dividends and interest 190,349
Other assets 481
------------
Total assets 350,081,567
------------
LIABILITIES:
Payables:
Investment securities purchased 828,885
Manager (See Note 3) 216,861
Fund shares redeemed 74,513
Professional fees 30,390
NYLIFE Distributors (See Note 3) 24,261
Shareholder communication 15,252
Custodian 4,391
Directors 961
Accrued expenses 3,873
------------
Total liabilities 1,199,387
------------
Net assets $348,882,180
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 271,999
Additional paid-in capital 373,921,360
------------
374,193,359
Accumulated net realized loss on
investments and foreign currency
transactions (90,670,218)
Net unrealized appreciation on
investments 65,359,039
------------
Net assets $348,882,180
============
INITIAL CLASS
Net assets applicable to
outstanding shares $230,768,771
============
Shares of capital stock outstanding 17,922,214
============
Net asset value per share
outstanding $ 12.88
============
SERVICE CLASS
Net assets applicable to
outstanding shares $118,113,409
============
Shares of capital stock outstanding 9,277,662
============
Net asset value per share
outstanding $ 12.73
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-249
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends (a) $ 2,326,111
Interest 1,369
------------
Total income 2,327,480
------------
EXPENSES:
Manager (See Note 3) 2,196,365
Distribution and service--Service
Class
(See Note 3) 218,216
Professional fees 73,028
Shareholder communication 52,678
Directors 12,699
Custodian 12,593
Miscellaneous 26,732
------------
Total expenses before waiver 2,592,311
Expense waiver from Manager (See
Note 3) (41,635)
------------
Net expenses 2,550,676
------------
Net investment loss (223,196)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on:
Security transactions (17,838,792)
Foreign currency transactions (1,266)
------------
Net realized loss on investments
and foreign currency transactions (17,840,058)
------------
Net change in unrealized
depreciation on investments 118,741,471
------------
Net realized and unrealized gain on
investments and foreign currency
transactions 100,901,413
------------
Net increase in net assets
resulting from operations $100,678,217
============
</Table>
(a) Dividends recorded net of foreign withholding taxes in the
amount of $33,484.
M-250 MainStay VP Large Cap Growth Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss $ (223,196) $ (353,595)
Net realized loss on
investments and foreign
currency transactions (17,840,058) (33,611,146)
Net change in unrealized
appreciation (depreciation)
on investments 118,741,471 (113,250,140)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 100,678,217 (147,214,881)
----------------------------
Dividends to shareholders:
From net investment income:
Initial Class -- (175,654)
----------------------------
Total dividends to
shareholders -- (175,654)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 53,105,240 124,184,851
Net asset value of shares
issued to shareholders in
reinvestment of dividends -- 175,654
Cost of shares redeemed (58,699,753) (65,046,856)
----------------------------
Increase (decrease) in
net assets derived from
capital share
transactions (5,594,513) 59,313,649
----------------------------
Net increase (decrease)
in net assets 95,083,704 (88,076,886)
NET ASSETS:
Beginning of year 253,798,476 341,875,362
----------------------------
End of year $348,882,180 $ 253,798,476
============================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-251
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 9.19 $ 15.04 $ 12.39 $ 11.57 $ 11.09
-------- -------- -------- -------- --------
Net investment income
(loss) 0.00(a)++ (0.01)(a) 0.02 (a) 0.01 (a) 0.02 (a)
Net realized and
unrealized gain (loss)
on investments 3.69 (5.83) 2.63 0.83 0.46
-------- -------- -------- -------- --------
Total from investment
operations 3.69 (5.84) 2.65 0.84 0.48
-------- -------- -------- -------- --------
Less dividends:
From net investment
income -- (0.01) (0.00)++ (0.02) (0.00)++
-------- -------- -------- -------- --------
Net asset value at end of
year $ 12.88 $ 9.19 $ 15.04 $ 12.39 $ 11.57
======== ======== ======== ======== ========
Total investment return 40.15%(b) (38.80%) 21.35% 7.24% 4.35%(c)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income
(loss) 0.00%++ (0.05%) 0.11% 0.07% 0.28%
Net expenses 0.80% 0.76% 0.70% 0.79%# 0.64%#
Expenses (before
waiver/reimbursement) 0.81% 0.78% 0.72% 0.81%# 0.79%#
Portfolio turnover rate 68% 111% 82% 96% 205%
Net assets at end of year
(in 000's) $230,769 $184,911 $266,473 $181,657 $108,635
</Table>
<Table>
++ Less than one cent per share.
# Includes fees paid indirectly which amounted to 0.01% and less than one-
hundredth of a percent of average net assets for the years ended December 31,
2006 and 2005.
(a) Per share data based on average shares outstanding during the period.
(b) Total investment returns may reflect adjustments to conform to generally
accepted accounting principles.
(c) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 4.20% and 3.98% for the Initial Class shares and
Service Class shares, respectively, for the year ended December 31, 2005.
</Table>
M-252 MainStay VP Large Cap Growth Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2009 2008 2007 2006 2005
$ 9.11 $ 14.93 $ 12.33 $ 11.53 $ 11.07
-------- ------- ------- ------- -------
(0.03)(a) (0.04)(a) (0.02)(a) (0.02)(a) 0.00(a)++
3.65 (5.78) 2.62 0.82 0.46
-------- ------- ------- ------- -------
3.62 (5.82) 2.60 0.80 0.46
-------- ------- ------- ------- -------
-- -- -- (0.00)++ --
-------- ------- ------- ------- -------
$ 12.73 $ 9.11 $ 14.93 $ 12.33 $ 11.53
======== ======= ======= ======= =======
39.74% (b) (38.94%) 21.05% 6.97% 4.10%(c)
(0.26%) (0.29%) (0.13%) (0.18%) 0.03%
1.05% 1.01% 0.95% 1.04% # 0.89%#
1.06% 1.03% 0.97% 1.06% # 1.04%#
68% 111% 82% 96% 205%
$118,113 $68,887 $75,403 $39,592 $22,993
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-253
MAINSTAY VP MID CAP CORE PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE FIVE INCEPTION
TOTAL RETURNS YEAR YEARS (7/2/01)
- ----------------------------------------------------------------------------------
After Portfolio
operating expenses 36.93% 2.04% 4.90%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
RUSSELL MIDCAP
INITIAL CLASS INDEX
------------- --------------
07/02/01 10000 10000
12/31/01 9414 9626
12/31/02 8197 8068
12/31/03 11102 11300
12/31/04 13574 13585
12/31/05 15726 15304
12/31/06 18079 17640
12/31/07 18988 18627
12/31/08 10968 10904
12/31/09 15019 15318
</Table>
SERVICE CLASS(1) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE FIVE INCEPTION
TOTAL RETURNS YEAR YEARS (7/2/01)
- ----------------------------------------------------------------------------------
After Portfolio
operating expenses 36.58% 1.79% 4.63%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
RUSSELL MIDCAP
SERVICE CLASS INDEX
------------- --------------
07/02/01 10000 10000
12/31/01 9402 9626
12/31/02 8167 8068
12/31/03 11032 11300
12/31/04 13456 13585
12/31/05 15550 15304
12/31/06 17832 17640
12/31/07 18682 18627
12/31/08 10765 10904
12/31/09 14703 15318
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE SINCE
YEAR YEARS INCEPTION
Russell Midcap(R) Index(2) 40.48% 2.43% 5.15%
Average Lipper Variable Products Mid Cap
Core Portfolio(3) 37.77 1.74 4.86
</Table>
1. Performance for Service Class shares, first offered June 5, 2003, includes
the historical performance of Initial Class shares through June 4, 2003
adjusted to reflect the fees and expenses for Service Class shares.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
3. The Average Lipper Variable Products Mid Cap Core Portfolio is representative
of portfolios that, by portfolio practice, invest at least 75% of their
equity assets in companies with market capitalizations (on a three-year
weighted basis) below Lipper's U.S. diversified equity large-cap floor. Mid-
cap core funds have more latitude in the companies in which they invest.
These funds typically have an average price-to-earnings ratio, price-to-book
ratio, and three-year sales-per-share growth value, compared to the S&P
MidCap 400(R) Index. Lipper Inc. is an independent monitor of fund
performance.
M-254 MainStay VP Mid Cap Core Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP MID CAP CORE PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,266.30 $5.37 $1,020.50 $4.79
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,264.80 $6.79 $1,019.20 $6.06
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.94% for Initial Class and 1.19% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-255
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
<Table>
Insurance 8.1%
Specialty Retail 5.7
IT Services 5.5
Health Care Providers & Services 4.9
Chemicals 4.7
Energy Equipment & Services 4.7
Electronic Equipment & Instruments 4.2
Software 3.8
Machinery 3.6
Oil, Gas & Consumable Fuels 3.2
Household Durables 3.1
Real Estate Investment Trusts 3.1
Computers & Peripherals 2.4
Pharmaceuticals 2.4
Media 2.3
Independent Power Producers & Energy
Traders 2.1
Metals & Mining 2.1
Multiline Retail 2.0
Semiconductors & Semiconductor
Equipment 2.0
Capital Markets 1.7
Health Care Equipment & Supplies 1.7
Paper & Forest Products 1.6
Diversified Consumer Services 1.3
Food Products 1.3
Personal Products 1.3
Construction & Engineering 1.2
Electrical Equipment 1.2
Food & Staples Retailing 1.2
Internet Software & Services 1.2
Trading Companies & Distributors 1.1
Wireless Telecommunication Services 1.1
Professional Services 1.0
Aerospace & Defense 0.9
Commercial Services & Supplies 0.9
Gas Utilities 0.9
Multi-Utilities 0.9
Consumer Finance 0.8
Hotels, Restaurants & Leisure 0.8
Internet & Catalog Retail 0.8
Beverages 0.7
Commercial Banks 0.7
Diversified Telecommunication
Services 0.7
Life Sciences Tools & Services 0.6
Road & Rail 0.6
Thrifts & Mortgage Finance 0.6
Industrial Conglomerates 0.5
Textiles, Apparel & Luxury Goods 0.5
Auto Components 0.4
Communications Equipment 0.4
Containers & Packaging 0.3
Exchange Traded Funds 0.3
Air Freight & Logistics 0.2
Electric Utilities 0.2
Airlines 0.1
Building Products 0.1
Diversified Financial Services 0.1
Health Care Technology 0.1
Marine 0.0++
Short-Term Investment 0.0++
Other Assets, Less Liabilities 0.1
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-259 for specific holdings
within these categories.
++ Less than one-tenth percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. Micron Technology, Inc.
2. International Paper Co.
3. Western Digital Corp.
4. Public Storage
5. Quest Diagnostics, Inc.
6. Computer Sciences Corp.
7. Humana, Inc.
8. CA, Inc.
9. Annaly Capital Management, Inc.
10. BMC Software, Inc.
</Table>
M-256 MainStay VP Mid Cap Core Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY HARVEY FRAM, CFA, AND MIGENE KIM, CFA, OF MADISON SQUARE
INVESTORS LLC, THE PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP MID CAP CORE PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND ITS
BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Mid Cap Core Portfolio
returned 36.93% for Initial Class shares and 36.58% for Service Class shares.
Both share classes underperformed the 37.77% return of the average Lipper(1)
Variable Products Mid-Cap Core Portfolio and the 40.48% return of the Russell
Midcap(R) Index(1) for the 12 months ended December 31, 2009. The Russell
Midcap(R) Index is the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO THE RUSSELL
MIDCAP(R) INDEX DURING 2009?
The Portfolio's strategy is designed to maximize risk-adjusted return by
selecting attractively priced stocks with sustainable earnings and a history of
successful growth. Favoring companies with such characteristics generally
creates a tilt toward high quality. When the U.S. government intervened to
rescue the financial system in March 2009, the action set off an immediate and
sharp reduction in risk aversion. This, in turn, started a low-quality-led
market rally. Within the Russell Midcap(R) Index, low-priced stocks with low
returns on equity, low earnings and high betas(2) thrived, while our strategy
struggled in terms of relative performance.
DURING THE REPORTING PERIOD, WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO
THE PORTFOLIO'S RELATIVE PERFORMANCE AND WHICH SECTORS DETRACTED THE MOST?
In 2009, materials, industrials and information technology were the strongest-
contributing sectors
to the Portfolio's relative performance. Despite an underweight position in
materials, which was one of the strongest performers in the Russell Midcap(R)
Index, the strategy realized the highest contribution from the materials sector
through effective stock selection. The Portfolio's underweight position in
industrials helped relative performance, as the sector as a whole
underperformed. Information technology was the best-performing sector in the
Russell Mid-cap(R) Index, and the Portfolio benefited from an overweight
position in the sector.
The Portfolio's weakest-contributing sectors in 2009 were energy, health care
and consumer discretionary. The Portfolio was underweight in energy, which
delivered the second-best sector performance in the Russell Midcap(R) Index. The
Portfolio had a modest overweight position in health care. Although health care
stocks generally outperformed the Index as a whole, our stock selection within
the sector detracted from relative performance. The consumer discre-tionary
sector was the third-best performing sector
in the Russell Midcap(R) Index, and the Portfolio
had a significant overweight position in the sector. Unfortunately, our stock
selection in the consumer discretionary sector detracted from the Portfolio's
relative results.
DURING THE REPORTING PERIOD, WHICH STOCKS WERE THE STRONGEST CONTRIBUTORS TO THE
PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS WERE THE WEAKEST CONTRIBUTORS?
During 2009, the strongest-contributing stocks in the Portfolio were computer
hardware company Western Digital, motor vehicles and parts maker Oshkosh and
computer hardware manufacturer NetApp. All three stocks more than doubled in
value during the por-tion of the reporting period they were held in the
Portfolio.
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. Mid-cap
companies are generally less established than larger companies, and their
securities may be more volatile and less liquid than the securities of larger
companies. The principal risk of growth stocks is that investors expect growth
companies to increase their earnings at a certain rate that is generally higher
than the rate expected for nongrowth companies. If these expectations are not
met, the market price of the stock may decline significantly, even if earnings
showed an absolute increase. Growth company stocks also typically lack the
dividend yield that can cushion stock prices in market downturns. The principal
risk of investing in value stocks is that they may never reach what the
portfolio manager believes is their full value or they may go down in value. The
Portfolio may experience a portfolio turnover rate of more than 100%. Portfolio
turnover measures the amount of trading a portfolio does during the year.
Portfolios with high turnover rates (over 100%) often have higher transaction
costs that are paid by the Portfolio.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
2. Beta is a measure of volatility in relation to the market as a whole. A beta
higher than 1 indicates that a security or portfolio will tend to exhibit
higher volatility than the market. A beta lower than 1 indicates that a
security or portfolio will tend to exhibit lower volatility than the market.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-257
In term of absolute performance, the Portfolio's worst contributors in 2009 were
oil refining and marketing company Sunoco, drug maker Endo Pharmaceuticals and
property and casualty insurer W. R. Berkley. All three of these positions
provided negative returns for the reporting period.
DID OTHER FACTORS SIGNIFICANTLY AFFECT THE PORTFOLIO'S RELATIVE PERFORMANCE
DURING THE REPORTING PERIOD?
Although the Portfolio did not own Ford Motor during 2009, the stock's absence
from the Portfolio detracted more from performance relative to the Russell
Midcap(R) Index than any of the Portfolio's holdings. Since Ford Motor
outperformed the Russell Midcap(R) Index by a substantial margin, our model's
negative view of the stock detracted from the Port-
folio's relative results.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING 2009?
The Portfolio began purchasing shares of data processing company Hewitt
Associates in June and had amassed an overweight position relative to the
Russell Midcap(R) Index by the end of the year. We purchased the shares for
their valuation and the company's earnings momentum and consistency. The
position contributed positively to the Portfolio's performance in 2009. We
established a Portfolio position in technology distributor Tech Data in March,
and by year-end, the position was overweight relative to the benchmark. Our
model favored the stock's valuation and earnings/price momentum characteristics,
and the position added to the Portfolio's relative performance.
The Portfolio maintained an overweight position in semiconductor company Marvel
Technology through-out most of 2009. The stock more than tripled in price during
the year, and the Portfolio's overweight position added to relative performance.
As the price continued to climb, however, our model indicated that it had become
overvalued, and we eliminated the position in December. The Portfolio eliminated
its position in engineering and R&D services company Fluor by August of 2009.
The Portfolio began the year with an overweight position in the stock, but
trimmed back as earnings quality and momentum character-
istics deteriorated. The sales helped the Portfolio's performance relative to
the Russell Midcap(R) Index.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE OVER THE COURSE OF 2009?
Relative to the Russell Midcap(R) Index, we increased the Portfolio's overweight
positions in the consumer discretionary and health care sectors during the year.
We reduced the Portfolio's weightings in materials and telecommunication
services during the reporting period.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF 2009?
As of December 31, 2009, the Portfolio was over-weight relative to the Russell
Midcap(R) Index in materials and information technology. As of the same date,
the Portfolio's most significantly underweight sectors relative to the benchmark
were utilities and financials. Since both materials and information technology
stocks outperformed the Russell Midcap(R) Index, overweight positions in these
sectors helped relative performance. Utilities and financials were the two
worst-performing sectors in the Index during 2009, and both sectors were priced
at fairly high valuation levels as of year-end according to our cash-flow-based
measures.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP Mid Cap Core Portfolio on this page and the
preceding pages has not been audited.
M-258 MainStay VP Mid Cap Core Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 99.6%+
- ----------------------------------------------------------
AEROSPACE & DEFENSE 0.9%
ITT Corp. 27,056 $ 1,345,765
L-3 Communications Holdings,
Inc. 44,920 3,905,794
-------------
5,251,559
-------------
AIR FREIGHT & LOGISTICS 0.2%
UTI Worldwide, Inc. 70,075 1,003,474
-------------
AIRLINES 0.1%
Copa Holdings S.A. Class A 7,773 423,395
Delta Air Lines, Inc. (a) 45,008 512,191
-------------
935,586
-------------
AUTO COMPONENTS 0.4%
TRW Automotive Holdings Corp.
(a) 60,159 1,436,597
WABCO Holdings, Inc. 32,160 829,406
-------------
2,266,003
-------------
BEVERAGES 0.7%
Coca-Cola Enterprises, Inc. 189,949 4,026,919
Pepsi Bottling Group, Inc.
(The) 188 7,050
-------------
4,033,969
-------------
BUILDING PRODUCTS 0.1%
Lennox International, Inc. 23,466 916,113
-------------
CAPITAL MARKETS 1.7%
Investment Technology Group,
Inc. (a) 53,287 1,049,754
Raymond James Financial,
Inc. 177,332 4,215,182
SEI Investments Co. 31,262 547,710
TD Ameritrade Holding Corp.
(a) 224,855 4,357,690
-------------
10,170,336
-------------
CHEMICALS 4.7%
Ashland, Inc. 111,001 4,397,859
Cabot Corp. 128,479 3,370,004
CF Industries Holdings, Inc. 24,614 2,234,459
Cytec Industries, Inc. 58,616 2,134,795
Eastman Chemical Co. 79,961 4,816,851
Huntsman Corp. 318,541 3,596,328
Lubrizol Corp. (The) 32,914 2,401,076
Nalco Holding Co. 128,074 3,267,168
Terra Industries, Inc. 67,148 2,161,494
-------------
28,380,034
-------------
COMMERCIAL BANKS 0.7%
BOK Financial Corp. 19,818 941,751
CapitalSource, Inc. 480,623 1,908,073
City National Corp. 810 36,936
Cullen/Frost Bankers, Inc. 5,986 299,300
First Citizens BancShares,
Inc. Class A 428 70,196
M&T Bank Corp. 9,851 658,934
TCF Financial Corp. 6,955 94,727
-------------
4,009,917
-------------
COMMERCIAL SERVICES & SUPPLIES 0.9%
Brink's Co. (The) 21,390 520,633
Iron Mountain, Inc. (a) 9,040 205,750
R.R. Donnelley & Sons Co. 216,928 4,830,987
-------------
5,557,370
-------------
COMMUNICATIONS EQUIPMENT 0.4%
CommScope, Inc. (a) 52,546 1,394,046
EchoStar Corp. (a) 9,793 197,231
Tellabs, Inc. (a) 102,124 580,064
-------------
2,171,341
-------------
COMPUTERS & PERIPHERALS 2.4%
Diebold, Inc. 2,960 84,212
NetApp, Inc. (a) 144,303 4,962,580
Seagate Technology 82,572 1,501,985
Sun Microsystems, Inc. (a) 17,968 168,360
Teradata Corp. (a) 40,761 1,281,118
v Western Digital Corp. (a) 143,380 6,330,227
-------------
14,328,482
-------------
CONSTRUCTION & ENGINEERING 1.2%
Jacobs Engineering Group,
Inc. (a) 93,335 3,510,329
Shaw Group, Inc. (The) (a) 122,090 3,510,088
-------------
7,020,417
-------------
CONSUMER FINANCE 0.8%
Discover Financial Services 348,628 5,128,318
-------------
CONTAINERS & PACKAGING 0.3%
Crown Holdings, Inc. (a) 70,538 1,804,362
-------------
DIVERSIFIED CONSUMER SERVICES 1.3%
Apollo Group, Inc. Class A
(a) 80,137 4,854,699
Brinks Home Security
Holdings, Inc. (a) 49,514 1,616,137
Career Education Corp. (a) 40,536 944,894
H&R Block, Inc. 33,888 766,547
-------------
8,182,277
-------------
DIVERSIFIED FINANCIAL SERVICES 0.1%
Moody's Corp. 24,539 657,645
-------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
v Among the Portfolio's 10 largest holdings, as of December 31, 2009,
excluding short-term investment. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-259
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
DIVERSIFIED TELECOMMUNICATION SERVICES 0.7%
CenturyTel, Inc. 37,207 $ 1,347,266
Qwest Communications
International, Inc. 243,359 1,024,541
U.C. Telecom, Inc. (a) 106,487 1,825,187
-------------
4,196,994
-------------
ELECTRIC UTILITIES 0.2%
Edison International 3,273 113,835
PPL Corp. 33,274 1,075,083
-------------
1,188,918
-------------
ELECTRICAL EQUIPMENT 1.2%
General Cable Corp. (a) 31,423 924,465
Hubbel, Inc. Class B 90,802 4,294,934
Thomas & Betts Corp. (a) 61,906 2,215,616
-------------
7,435,015
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 4.2%
Arrow Electronics, Inc. (a) 161,376 4,778,343
Avnet, Inc. (a) 166,246 5,013,979
Dolby Laboratories, Inc.
Class A (a) 9,507 453,769
Ingram Micro, Inc. Class A
(a) 247,928 4,326,344
Jabil Circuit, Inc. 264,828 4,600,062
Tech Data Corp. (a) 83,986 3,918,787
Vishay Intertechnology, Inc.
(a) 255,502 2,133,442
-------------
25,224,726
-------------
ENERGY EQUIPMENT & SERVICES 4.7%
Diamond Offshore Drilling,
Inc. 17,587 1,730,913
ENSCO International PLC,
Sponsored ADR (b) 72,705 2,903,838
Helix Energy Solutions Group,
Inc. (a) 152,344 1,790,042
Helmerich & Payne, Inc. 43,512 1,735,259
Nabors Industries, Ltd. (a) 198,721 4,350,003
Oceaneering International,
Inc. (a) 12,594 737,001
Oil States International,
Inc. (a) 45,154 1,774,101
Patterson-UTI Energy, Inc. 270,550 4,152,942
Pride International, Inc. (a) 55,609 1,774,483
Rowan Cos., Inc. (a) 78,157 1,769,474
SEACOR Holdings, Inc. (a) 9,824 749,080
Seahawk Drilling, Inc. (a) 19,792 446,112
Tidewater, Inc. 18,717 897,480
Unit Corp. (a) 80,175 3,407,437
-------------
28,218,165
-------------
FOOD & STAPLES RETAILING 1.2%
Safeway, Inc. 219,660 4,676,562
Whole Foods Market, Inc. (a) 86,014 2,361,084
-------------
7,037,646
-------------
FOOD PRODUCTS 1.3%
Bunge, Ltd. 31,133 1,987,219
Dean Foods Co. (a) 9,439 170,280
Hormel Foods Corp. 22,779 875,853
Smithfield Foods, Inc. (a) 20,041 304,423
Tyson Foods, Inc. Class A 359,802 4,414,770
-------------
7,752,545
-------------
GAS UTILITIES 0.9%
Atmos Energy Corp. 35,786 1,052,108
Energen Corp. 12,767 597,496
ONEOK, Inc. 13,135 585,427
Questar Corp. 32,774 1,362,415
UGI Corp. 78,485 1,898,552
-------------
5,495,998
-------------
HEALTH CARE EQUIPMENT & SUPPLIES 1.7%
Beckman Coulter, Inc. 12,314 805,828
Hill-Rom Holdings, Inc. 122,900 2,948,371
Hologic, Inc. (a) 104,743 1,518,773
Hospira, Inc. (a) 81,206 4,141,506
Intuitive Surgical, Inc. (a) 3,902 1,183,555
-------------
10,598,033
-------------
HEALTH CARE PROVIDERS & SERVICES 4.9%
AmerisourceBergen Corp. 158,084 4,121,250
CIGNA Corp. 47,592 1,678,570
Community Health Systems,
Inc. (a) 3,346 119,118
Coventry Health Care, Inc.
(a) 153,066 3,717,973
Health Management Associates,
Inc. Class A (a) 1,510 10,978
Henry Schein, Inc. (a) 34,416 1,810,282
v Humana, Inc. (a) 127,225 5,583,905
Laboratory Corp. of America
Holdings (a) 56,015 4,192,162
Lincare Holdings, Inc. (a) 58,455 2,169,850
Omnicare, Inc. 7,345 177,602
v Quest Diagnostics, Inc. 96,509 5,827,213
-------------
29,408,903
-------------
HEALTH CARE TECHNOLOGY 0.1%
IMS Health, Inc. 18,473 389,041
-------------
HOTELS, RESTAURANTS & LEISURE 0.8%
Brinker International, Inc. 23,847 355,797
Darden Restaurants, Inc. 55,745 1,954,977
Hyatt Hotels Corp. Class A
(a) 11,309 337,121
International Speedway Corp.
Class A 22,673 645,047
MGM MIRAGE (a) 124,234 1,133,014
Panera Bread Co. Class A (a) 6,908 462,629
Scientific Games Corp. (a) 15,250 221,888
-------------
5,110,473
-------------
HOUSEHOLD DURABLES 3.1%
Black & Decker Corp. (The) 1,239 80,324
D.R. Horton, Inc. 358,758 3,899,700
</Table>
M-260 MainStay VP Mid Cap Core Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
HOUSEHOLD DURABLES (CONTINUED)
Fortune Brands, Inc. 90,929 $ 3,928,133
Garmin, Ltd. 125,774 3,861,262
KB Home 1,406 19,234
Leggett & Platt, Inc. 222,686 4,542,794
M.D.C. Holdings, Inc. 26,520 823,181
Mohawk Industries, Inc. (a) 11,079 527,360
NVR, Inc. (a) 1 711
Pulte Homes, Inc. (a) 99,114 991,140
Whirlpool Corp. 2,601 209,797
-------------
18,883,636
-------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 2.1%
AES Corp. (The) (a) 244,257 3,251,061
Calpine Corp. (a) 285,933 3,145,263
Constellation Energy Group,
Inc. 75,671 2,661,349
Mirant Corp. (a) 100,542 1,535,276
NRG Energy, Inc. (a) 54,000 1,274,940
RRI Energy, Inc. (a) 167,365 957,328
-------------
12,825,217
-------------
INDUSTRIAL CONGLOMERATES 0.5%
Carlisle Cos., Inc. 88,601 3,035,470
-------------
INSURANCE 8.1%
Allied World Assurance
Holdings, Ltd./Bermuda 69,417 3,198,041
American Financial Group,
Inc. 162,410 4,052,130
Aspen Insurance Holdings,
Ltd. 63,928 1,626,968
Assurant, Inc. 61,395 1,809,925
Axis Capital Holdings, Ltd. 137,601 3,909,244
Endurance Specialty Holdings,
Ltd. 77,633 2,890,277
Everest Re Group, Ltd. 34,529 2,958,445
HCC Insurance Holdings, Inc. 91,854 2,569,156
PartnerRe, Ltd. 61,049 4,557,918
Principal Financial Group,
Inc. 177,197 4,259,816
RenaissanceRe Holdings, Ltd. 52,676 2,799,729
StanCorp Financial Group,
Inc. 59,697 2,389,074
Torchmark Corp. 87,759 3,857,008
Transatlantic Holdings, Inc. 6,713 349,814
Unum Group 215,114 4,199,025
Validus Holdings, Ltd. 141,886 3,822,409
-------------
49,248,979
-------------
INTERNET & CATALOG RETAIL 0.8%
Expedia, Inc. (a) 180,497 4,640,578
NetFlix, Inc. (a) 1,539 84,860
-------------
4,725,438
-------------
INTERNET SOFTWARE & SERVICES 1.2%
IAC/InterActiveCorp (a) 105,276 2,156,053
Sohu.com, Inc. (a) 57,203 3,276,588
WebMD Health Corp. (a) 49,929 1,921,767
-------------
7,354,408
-------------
IT SERVICES 5.5%
Affiliated Computer Services,
Inc. Class A (a) 11,641 694,851
Amdocs, Ltd. (a) 161,715 4,613,729
Broadridge Financial
Solutions LLC 201,815 4,552,946
Cognizant Technology
Solutions Corp. Class A (a) 35,171 1,593,246
v Computer Sciences Corp.
(a) 99,880 5,746,096
Convergys Corp. (a) 94,665 1,017,649
DST Systems, Inc. (a) 10,140 441,597
Fiserv, Inc. (a) 13,268 643,233
Global Payments, Inc. 90,750 4,887,795
Hewitt Associates, Inc. Class
A (a) 99,439 4,202,292
NeuStar, Inc. Class A (a) 141,945 3,270,413
Paychex, Inc. 15,758 482,825
SAIC, Inc. (a) 60,842 1,152,348
-------------
33,299,020
-------------
LIFE SCIENCES TOOLS & SERVICES 0.6%
Bio-Rad Laboratories, Inc.
Class A (a) 11,596 1,118,550
Millipore Corp. (a) 32,149 2,325,980
-------------
3,444,530
-------------
MACHINERY 3.6%
Dover Corp. 80,631 3,355,056
Eaton Corp. 34,073 2,167,724
Harsco Corp. 939 30,264
Lincoln Electric Holdings,
Inc. 34,068 1,821,275
Navistar International Corp.
(a) 99,775 3,856,304
Oshkosh Corp. 123,386 4,568,984
Timken Co. (The) 102,909 2,439,972
Toro Co. (The) 57,699 2,412,395
Trinity Industries, Inc. 35,309 615,789
Valmont Industries, Inc. 5,452 427,710
-------------
21,695,473
-------------
MARINE 0.0%++
Kirby Corp. (a) 7,500 261,225
-------------
MEDIA 2.3%
Clear Channel Outdoor
Holdings, Inc. Class A (a) 10,490 108,991
CTC Media, Inc. (a) 49,350 735,315
DISH Network Corp. Class A 755 15,681
Gannett Co., Inc. 10,688 158,717
Interpublic Group of Cos.,
Inc. (The) (a) 356,376 2,630,055
John Wiley & Sons, Inc. Class
A 10,684 447,446
Marvel Entertainment, Inc.
(a) 7,830 423,447
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-261
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
MEDIA (CONTINUED)
McGraw-Hill Cos., Inc. (The) 145,532 $ 4,876,777
Scripps Networks Interactive
Class A 48,124 1,997,146
Warner Music Group Corp. (a) 53,993 305,600
Washington Post Co. Class B 5,154 2,265,699
-------------
13,964,874
-------------
METALS & MINING 2.1%
Commercial Metals Co. 192,780 3,017,007
Reliance Steel & Aluminum
Co. 102,674 4,437,570
Schnitzer Steel Industries,
Inc. Class A 31,310 1,493,487
Steel Dynamics, Inc. 139,796 2,477,185
Titanium Metals Corp. (a) 21,955 274,877
Walter Industries, Inc. 17,306 1,303,315
-------------
13,003,441
-------------
MULTI-UTILITIES 0.9%
Integrys Energy Group, Inc. 55,873 2,346,107
MDU Resources Group, Inc. 127,588 3,011,077
-------------
5,357,184
-------------
MULTILINE RETAIL 2.0%
Big Lots, Inc. (a) 13,705 397,171
Dollar Tree, Inc. (a) 12,860 621,138
Family Dollar Stores, Inc. 59,563 1,657,638
J.C. Penney Co., Inc. 68,628 1,826,191
Macy's, Inc. 33,726 565,248
Nordstrom, Inc. 142,568 5,357,705
Sears Holdings Corp. (a) 23,041 1,922,772
-------------
12,347,863
-------------
OIL, GAS & CONSUMABLE FUELS 3.2%
Alpha Natural Resources, Inc.
(a) 78,026 3,384,768
Cimarex Energy Co. 85,604 4,534,444
Encore Acquisition Co. (a) 16,671 800,541
EXCO Resources, Inc. 1,578 33,501
Frontier Oil Corp. 841 10,126
Murphy Oil Corp. 62,371 3,380,508
Newfield Exploration Co. (a) 96,890 4,673,005
Overseas Shipholding Group,
Inc. 4,581 201,335
Quicksilver Resources, Inc.
(a) 47,887 718,784
St. Mary Land & Exploration
Co. 44,365 1,519,058
Teekay Corp. 58 1,346
Tesoro Corp. 8,701 117,898
-------------
19,375,314
-------------
PAPER & FOREST PRODUCTS 1.6%
v International Paper Co. 239,749 6,420,478
MeadWestvaco Corp. 105,099 3,008,985
-------------
9,429,463
-------------
PERSONAL PRODUCTS 1.3%
Estee Lauder Cos., Inc. (The)
Class A 107,946 5,220,268
Herbalife, Ltd. 72,894 2,957,310
-------------
8,177,578
-------------
PHARMACEUTICALS 2.4%
Endo Pharmaceuticals
Holdings, Inc. (a) 191,182 3,921,143
Forest Laboratories, Inc. (a) 163,740 5,257,692
King Pharmaceuticals, Inc.
(a) 159,227 1,953,715
Valeant Pharmaceuticals
International (a) 114,127 3,628,097
Watson Pharmaceuticals, Inc.
(a) 928 36,758
-------------
14,797,405
-------------
PROFESSIONAL SERVICES 1.0%
Manpower, Inc. 85,745 4,679,962
Robert Half International,
Inc. 41,187 1,100,929
-------------
5,780,891
-------------
REAL ESTATE INVESTMENT TRUSTS 3.1%
v Annaly Capital
Management, Inc. 317,570 5,509,840
Duke Realty Corp. 264,121 3,214,353
Hospitality Properties Trust 4,554 107,975
Host Hotels & Resorts, Inc.
(a) 113,371 1,323,040
HRPT Properties Trust 17,387 112,494
Nationwide Health Properties,
Inc. 10,930 384,517
Plum Creek Timber Co., Inc. 48,719 1,839,629
v Public Storage 75,363 6,138,316
-------------
18,630,164
-------------
ROAD & RAIL 0.6%
Con-Way, Inc. 1,307 45,627
J.B. Hunt Transport Services,
Inc. 3,899 125,821
Landstar System, Inc. 25,004 969,405
Ryder System, Inc. 56,330 2,319,106
-------------
3,459,959
-------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.0%
Advanced Micro Devices, Inc.
(a) 804 7,783
Cypress Semiconductor Corp.
(a) 62,343 658,342
Integrated Device Technology,
Inc. (a) 146,538 948,101
v Micron Technology, Inc.
(a) 635,695 6,712,939
Xilinx, Inc. 153,621 3,849,742
-------------
12,176,907
-------------
SOFTWARE 3.8%
v BMC Software, Inc. (a) 134,773 5,404,397
v CA, Inc. 245,829 5,521,319
Compuware Corp. (a) 416,480 3,011,151
Intuit, Inc. (a) 76,854 2,360,186
McAfee, Inc. (a) 3,927 159,318
MICROS Systems, Inc. (a) 41,090 1,275,023
Novell, Inc. (a) 89,712 372,305
Sybase, Inc. (a) 109,643 4,758,506
-------------
22,862,205
-------------
</Table>
M-262 MainStay VP Mid Cap Core Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
SPECIALTY RETAIL 5.7%
Abercrombie & Fitch Co. Class
A 20,761 $ 723,521
Advance Auto Parts, Inc. 65,337 2,644,842
Aeropostale, Inc. (a) 24,063 819,345
AutoZone, Inc. (a) 3,397 536,964
Barnes & Noble, Inc. 7,935 151,320
Bed Bath & Beyond, Inc. (a) 37,771 1,459,094
Dick's Sporting Goods, Inc.
(a) 61,879 1,538,931
Foot Locker, Inc. 10,981 122,328
Guess?, Inc. 1,810 76,563
Limited Brands, Inc. 252,928 4,866,335
Office Depot, Inc. (a) 485,343 3,130,462
Penske Auto Group, Inc. (a) 27,448 416,661
PetSmart, Inc. 146,450 3,908,750
Ross Stores, Inc. 108,351 4,627,671
Sherwin-Williams Co. (The) 36,183 2,230,682
Signet Jewelers, Ltd. (a) 140,299 3,748,789
TJX Cos., Inc. 22,253 813,347
Williams-Sonoma, Inc. 135,434 2,814,319
-------------
34,629,924
-------------
TEXTILES, APPAREL & LUXURY GOODS 0.5%
Coach, Inc. 65,371 2,388,002
Polo Ralph Lauren Corp. 7,810 632,454
-------------
3,020,456
-------------
THRIFTS & MORTGAGE FINANCE 0.6%
Hudson City Bancorp, Inc. 252,436 3,465,946
-------------
TRADING COMPANIES & DISTRIBUTORS 1.1%
MSC Industrial Direct Co. 21,123 992,781
W.W. Grainger, Inc. 51,729 5,008,919
WESCO International, Inc. (a) 28,566 771,568
-------------
6,773,268
-------------
WIRELESS TELECOMMUNICATION SERVICES 1.1%
NII Holdings, Inc. (a) 74,978 2,517,761
Telephone and Data Systems,
Inc. 114,933 3,898,527
United States Cellular Corp.
(a) 4,023 170,616
-------------
6,586,904
-------------
Total Common Stocks
(Cost $528,054,669) 602,486,802
-------------
EXCHANGE TRADED FUNDS 0.3% (C)
- ----------------------------------------------------------
S&P 500 Index-SPDR Trust
Series 1 7,822 871,684
S&P MidCap 400 Index--MidCap
SPDR Trust Series 1 6,596 869,089
-------------
Total Exchange Traded Funds
(Cost $1,680,355) 1,740,773
-------------
<Caption>
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 0.0%++
- ----------------------------------------------------------
REPURCHASE AGREEMENT 0.0%++
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$45,715
(Collateralized by a United
States
Treasury Bill with a rate
of 0.047%
and a maturity date of
3/18/10,
with a Principal Amount of
$50,000
and a Market Value of
$49,995) $ 45,715 45,715
-------------
Total Short-Term Investment
(Cost $45,715) 45,715
-------------
Total Investments
(Cost $529,780,739) (d) 99.9% 604,273,290
Other Assets, Less
Liabilities 0.1 854,375
----- ------------
Net Assets 100.0% $ 605,127,665
===== ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) Non-income producing security.
(b) ADR--American Depositary Receipt.
(c) Exchange Traded Fund--represents a basket
of securities that is traded on an
exchange.
(d) At December 31, 2009, cost is
$541,970,742 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 79,102,032
Gross unrealized depreciation (16,799,484)
-------------
Net unrealized appreciation $ 62,302,548
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-263
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
The following is a summary of the fair valuations according to inputs used as of
December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Common Stocks $602,486,802 $ -- $-- $602,486,802
Exchange Traded Funds 1,740,773 -- -- 1,740,773
Short-Term Investment
Repurchase Agreement -- 45,715 -- 45,715
------------ ------- ---------- ------------
Total Investments in Securities $604,227,575 $45,715 $ -- $604,273,290
============ ======= ========== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
M-264 MainStay VP Mid Cap Core Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $529,780,739) $ 604,273,290
Receivables:
Investment securities sold 4,339,097
Dividends and interest 640,314
Fund shares sold 199,141
Other assets 370
-------------
Total assets 609,452,212
-------------
LIABILITIES:
Payables:
Investment securities purchased 3,282,698
Fund shares redeemed 447,713
Manager (See Note 3) 429,712
Shareholder communication 54,174
NYLIFE Distributors (See Note 3) 53,830
Professional fees 37,792
Custodian 13,516
Directors 1,592
Accrued expenses 3,520
-------------
Total liabilities 4,324,547
-------------
Net assets $ 605,127,665
=============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 629,914
Additional paid-in capital 655,343,094
-------------
655,973,008
Accumulated undistributed net
investment income 2,075,987
Accumulated net realized loss on
investments and foreign currency
transactions (127,413,881)
Net unrealized appreciation on
investments 74,492,551
-------------
Net assets $ 605,127,665
=============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 348,594,819
=============
Shares of capital stock outstanding 36,191,551
=============
Net asset value per share
outstanding $ 9.63
=============
SERVICE CLASS
Net assets applicable to
outstanding shares $ 256,532,846
=============
Shares of capital stock outstanding 26,799,884
=============
Net asset value per share
outstanding $ 9.57
=============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-265
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends $ 4,946,686
Interest 410
------------
Total income 4,947,096
------------
EXPENSES:
Manager (See Note 3) 2,350,116
Distribution and service--Service
Class
(See Note 3) 289,438
Professional fees 107,908
Shareholder communication 92,950
Custodian 20,917
Directors 10,451
Miscellaneous 13,239
------------
Total expenses 2,885,019
------------
Net investment income 2,062,077
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on:
Security transactions (24,878,227)
Foreign currency transactions (9)
------------
Net realized loss on investments
and foreign currency transactions (24,878,236)
------------
Net change in unrealized
depreciation on investments 111,914,079
------------
Net realized and unrealized gain on
investments and foreign currency
transactions 87,035,843
------------
Net increase in net assets
resulting from operations $ 89,097,920
============
</Table>
M-266 MainStay VP Mid Cap Core Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 2,062,077 $ 1,218,968
Net realized loss on
investments and foreign
currency transactions (24,878,236) (78,670,448)
Net change in unrealized
appreciation (depreciation)
on investments 111,914,079 (71,387,918)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 89,097,920 (148,839,398)
----------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (965,845) (536,200)
Service Class (239,781) (49,307)
----------------------------
(1,205,626) (585,507)
----------------------------
From net realized gain on investments:
Initial Class -- (19,449,178)
Service Class -- (16,091,529)
----------------------------
-- (35,540,707)
----------------------------
Total dividends and
distributions to
shareholders (1,205,626) (36,126,214)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 131,404,171 39,132,907
Net asset value of shares
issued in connection with
the acquisition of MainStay
VP Mid Cap Growth Portfolio 227,149,817 --
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 1,205,626 36,126,214
Cost of shares redeemed (43,211,017) (59,656,070)
----------------------------
Increase in net assets
derived from capital
share transactions 316,548,597 15,603,051
----------------------------
Net increase (decrease)
in net assets 404,440,891 (169,362,561)
NET ASSETS:
Beginning of year 200,686,774 370,049,335
----------------------------
End of year $605,127,665 $ 200,686,774
============================
Accumulated undistributed net
investment income at end of
year $ 2,075,987 $ 1,208,607
============================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-267
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 7.07 $ 14.86 $ 15.68 $ 13.72 $ 13.12
-------- -------- -------- -------- --------
Net investment income 0.07 (a) 0.06 0.04 0.07 0.07
Net realized and
unrealized gain (loss)
on investments 2.54 (6.29) 0.82 1.99 2.02
-------- -------- -------- -------- --------
Total from investment
operations 2.61 (6.23) 0.86 2.06 2.09
-------- -------- -------- -------- --------
Less dividends and
distributions:
From net investment
income (0.05) (0.04) (0.07) -- (0.08)
From net realized gain
on investments -- (1.52) (1.61) (0.10) (1.41)
-------- -------- -------- -------- --------
Total dividends and
distributions (0.05) (1.56) (1.68) (0.10) (1.49)
-------- -------- -------- -------- --------
Net asset value at end of
year $ 9.63 $ 7.07 $ 14.86 $ 15.68 $ 13.72
======== ======== ======== ======== ========
Total investment return 36.93% (42.24%) 5.03% 14.96% 15.86%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 0.84% 0.54% 0.25% 0.51% 0.54%
Net expenses 0.94% 0.93% 0.91% 0.93% 0.94%
Portfolio turnover rate 192% 173% 166% 166% 159%
Net assets at end of year
(in 000's) $348,595 $108,882 $202,966 $199,356 $159,762
</Table>
<Table>
++ Less than one cent per share.
(a) Per share data based on average shares outstanding during the period.
</Table>
M-268 MainStay VP Mid Cap Core Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
2009 2008 2007 2006 2005
$ 7.02 $ 14.75 $ 15.59 $ 13.68 $ 13.10
-------- ------- -------- -------- -------
0.05 (a) 0.03 0.00 ++ 0.04 0.04
2.52 (6.24) 0.81 1.97 2.00
-------- ------- -------- -------- -------
2.57 (6.21) 0.81 2.01 2.04
-------- ------- -------- -------- -------
(0.02) (0.00)++ (0.04) -- (0.05)
-- (1.52) (1.61) (0.10) (1.41)
-------- ------- -------- -------- -------
(0.02) (1.52) (1.65) (0.10) (1.46)
-------- ------- -------- -------- -------
$ 9.57 $ 7.02 $ 14.75 $ 15.59 $ 13.68
======== ======= ======== ======== =======
36.58% (42.38%) 4.77% 14.67% 15.57%
0.61% 0.29% 0.01% 0.26% 0.37%
1.19% 1.18% 1.16% 1.18% 1.19%
192% 173% 166% 166% 159%
$256,533 $91,805 $167,083 $132,240 $89,991
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-269
MAINSTAY VP MODERATE ALLOCATION PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON(1) (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (2/13/06)
- -----------------------------------------------
After Portfolio operating
expenses 24.22% 2.74%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
BARCLAYS CAPITAL
S&P 500(R) MSCI EAFE(R) U.S. AGGREGATE
INITIAL CLASS INDEX INDEX BOND INDEX
------------- ---------- ------------ ----------------
2/13/2006 10000 10000 10000 10000
12/31/2006 10993 11386 12152 10457
12/31/2007 11953 12012 13509 11185
12/31/2008 8943 7568 7649 11771
12/31/2009 11108 9570 10080 12469
</Table>
SERVICE CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (2/13/06)
- -----------------------------------------------
After Portfolio operating
expenses 23.99% 2.50%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
BARCLAYS CAPITAL
S&P 500(R) MSCI EAFE(R) U.S. AGGREGATE
SERVICE CLASS INDEX INDEX BOND INDEX
------------- ---------- ------------ ----------------
2/13/2006 10000 10000 10000 10000
12/31/2006 10969 11386 12152 10457
12/31/2007 11897 12012 13509 11185
12/31/2008 8877 7568 7649 11771
12/31/2009 11007 9570 10080 12469
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE
YEAR INCEPTION
S&P 500(R) Index(2) 26.46% -1.12%
Morgan Stanley Capital International
EAFE Index(2) 31.78 0.20
Barclays Capital U.S. Aggregate Bond
Index(2) 5.93 5.85
Average Lipper Variable Products Mixed-
Asset Target Allocation Moderate
Portfolio(3) 22.97 1.03
</Table>
1. Performance figures reflect certain fee waivers and/or expense limitations,
without which total returns may have been lower. These fee waivers and/or
expense limitations are contractual and may be modified or terminated only
with the approval of the Board of Directors. New York Life Investment
Management LLC may recoup the amount of certain management fee waivers or
expense reimbursements from the Portfolio pursuant to the agreement if such
action does not cause the Portfolio to exceed existing expense limitations
and the recoupment is made within the term of the agreement. Any recoupment
amount is generally applied within a fiscal year. This agreement expires on
August 1, 2010.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
3. The Average Lipper Variable Products Mixed-Asset Target Allocation Moderate
Portfolio is representative of portfolios that, by portfolio practice,
maintain a mix of between 40% and 60% equity securities, with the remainder
invested in bonds, cash, and cash equivalents. Lipper Inc. is an independent
monitor of fund performance.
M-270 MainStay VP Moderate Allocation Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP MODERATE ALLOCATION
PORTFOLIO (UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,160.20 $0.22 $1,025.00 $ 0.20
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,158.70 $1.58 $1,023.70 $1.48
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.04% for Initial Class and 0.29% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period. In addition to the fees
and expenses which the Portfolio bears directly, the Portfolio indirectly
bears a pro rata share of the fees and expenses of the Underlying
Portfolio/Funds in which it invests. Such indirect expenses are not included
in the above-reported expense figures.
mainstayinvestments.com M-271
INVESTMENT OBJECTIVES OF UNDERLYING PORTFOLIOS/FUNDS AS OF DECEMBER 31, 2009
(UNAUDITED)
(COMPOSITION PIE CHART)
<Table>
<Caption>
GROWTH OF
CAPITAL 39.5
- ----------------------- --- ----
Current Income 35.80
Total Return 19.50
Capital Appreciation 5.20
Other Assets, Less Liabilities 0.00
</Table>
See Portfolio of Investments on page M-276 for specific holdings within these
categories.
++ Less than one-tenth of a percent.
M-272 MainStay VP Moderate Allocation Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY PORTFOLIO MANAGERS TONY H. ELAVIA AND JONATHAN SWANEY OF
MADISON SQUARE INVESTORS LLC, THE PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP MODERATE ALLOCATION PORTFOLIO PERFORM RELATIVE TO ITS PEERS
AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Moderate Allocation
Portfolio returned 24.22% for Initial Class shares and 23.99% for Service Class
shares. Both share classes outperformed the 22.97% return of the average
Lipper(1) Variable Products Mixed-Asset Target Allocation Moderate Portfolio and
underperformed the 26.46% return of the S&P 500(R) Index(1) for the 12 months
ended December 31, 2009. The S&P 500(R) Index is the Portfolio's broad-based
securities-market index.
WHAT FACTORS INFLUENCED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
Since high-grade fixed-income securities substantially underperformed equities
in 2009 (and the Portfolio's benchmark contains only stocks), the required
allocation to investment-grade bonds detracted from performance relative to the
S&P 500(R) Index. Even so, the Portfolio's performance relative to the S&P
500(R) Index and its Lipper peers was strengthened by holdings of below-
investment-grade debt, exposure to non-large-cap stocks and strong security
selection within a few of the Portfolio's Underlying Portfolios/Funds.
DURING 2009, HOW DID YOU DETERMINE THE PORTFOLIO'S ALLOCATIONS AMONG THE
UNDERLYING PORTFOLIOS/FUNDS?
In managing the Portfolio, we consider a variety of information, including the
portfolio-level characteristics of the Underlying Portfolios/Funds, such as
capitalization, style biases and sector exposures. We also examine the
attributes of the holdings of the Underlying Portfolios/Funds, such as valuation
metrics, earnings data and technical indicators. Finally, we evaluate the
historical success of the managers responsible for the Underlying
Portfolios/Funds. In general, we seek Underlying Equity Portfolios/Funds that we
believe have a track record of capable portfo-
lio management, that occupy attractively valued market segments and that invest
in companies with fairly priced securities and strong price and earnings
momentum. During 2009, these techniques proved relatively successful. It's
difficult to credit any one factor as having a disproportionate effect on the
Portfolio's performance. In response to atypically wide credit spreads,(2)
however, we increased the Portfolio's allocation to Underlying Portfolios/Funds
with investments in high-yield bonds, and this strategy stands out to some
degree.
WERE THERE ANY CHANGES IN THE PORTFOLIO'S ALLOCATIONS AMONG UNDERLYING
PORTFOLIOS/FUNDS DURING 2009?
During 2009, the Portfolio made five primary allocation changes. First, assets
were shifted away from MainStay VP Bond Portfolio into MainStay VP Floating Rate
Portfolio, MainStay VP High Yield Corporate Bond Portfolio and MainStay 130/30
High Yield Fund last winter. All three of these Underlying Portfolios/Funds
invest in lower-quality debt instru-
ments. This strategy had a positive impact on per-
formance as credit spreads contracted, and the move was partially unwound in
November 2009.
Second, we lowered the Portfolio's average equity market capitalization during
the year through purchases of MainStay VP Mid Cap Core Portfolio, MainStay VP
U.S. Small Cap Portfolio and MainStay Epoch U.S. All Cap Fund. So far, the
impact of this strategy has been muted because performance among lower-cap
stocks was not substantially different from the performance of large-cap stocks
in the latter months of 2009, when the strategy was implemented.
Third, we reduced the Portfolio's bias toward growth equities through sales of
MainStay VP Growth Equity Portfolio, MainStay VP Large Cap Growth Portfolio, and
MainStay 130/30 Growth Fund. This may have reduced excess returns by a small
amount as growth stocks generally outperformed value stocks in the final months
of the year.
Fourth, we reduced the Portfolio's position in MainStay VP Common Stock
Portfolio, with the proceeds directed primarily to MainStay 130/30 Core Fund.
This move also has had relatively little impact
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
2. The terms "spread" and "yield spread" may refer to the difference in yield
between a security or type of security and comparable U.S. Treasury issues.
The terms may also refer to the difference in yield between two specific
securities or types of securities at a given time.
THE DISCLOSURE AND FOOTNOTES ON THE NEXT TWO PAGES ARE AN INTEGRAL PART OF THE
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH IT.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-273
on the Portfolio's performance because both Underlying Portfolios/Funds
generated a similar level of return after the trade.
Fifth, in an effort to further diversify the Portfolio across management styles,
we moved assets from MainStay ICAP Equity Fund and MainStay VP ICAP Select
Equity Portfolio and redirected them in part into MainStay MAP Fund. Through the
end of 2009, this move did not have a substantial impact on performance.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE STRONGEST TOTAL RETURNS AND
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE WEAKEST TOTAL RETURNS?
In 2009, MainStay VP U.S. Small Cap Portfolio posted the highest total return of
any of the Underlying Equity Portfolios/Funds in which the Portfolio invested.
MainStay VP Large Cap Growth Portfolio had the second-highest total return.
Among the Underlying Equity Portfolios/Funds in which the Portfolio invested,
MainStay VP International Equity Portfolio and MainStay 130/30 Core Fund posted
the lowest total returns.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS TO THE
PORTFOLIO'S OVERALL PERFORMANCE AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS
WERE PARTICULARLY WEAK?
Substantial positions in MainStay VP Large Cap Growth Portfolio and MainStay MAP
Fund had the greatest positive impact on the Portfolio's performance. No
Underlying Equity Portfolios/Funds in which the Portfolio invested generated
negative returns. However, weak performance within MainStay VP Common Stock
Portfolio and MainStay 130/30 Core Fund meant that the allocations made to these
Portfolios/Funds resulted in disappointingly small contributions to return.
WHAT KEY FACTORS AFFECTED THE BOND MARKETS DURING 2009?
Conditions were highly favorable for fixed-income investing during 2009.
Interest rates on Treasury notes and bonds were generally stable as the Federal
Open Market Committee maintained the targeted federal funds rate in a range
between 0% and 0.25% and the Federal Reserve purchased bonds directly to bring
down longer-dated borrowing costs. Indications that the economy may have been be
in recovery brought relief to credit markets in 2009, and spreads narrowed
dramatically. Bank loans also performed quite well as liquidity issues within
that market improved.
HOW DID YOU MANAGE THE PORTFOLIO'S UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS IN
THIS ENVIRONMENT?
After observing the historic widening of credit spreads in 2008, we anticipated
an eventual recovery and implemented a bias toward lower-quality credit
instruments. We maintained this bias throughout much of the reporting period. It
was a strategy that paid off handsomely as high-yield bonds outper-
formed investment-grade debt by a wide margin. Spreads neared their historical
averages and default risks remained high, so we unwound the bias near the end of
the reporting period.
IN 2009, WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS WERE THE STRONGEST
PERFORMERS AND WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS WERE PARTICULARLY
WEAK?
The best-performing Underlying Fixed Income Portfolios/Funds in which the
Portfolio invested were MainStay 130/30 High Yield Fund and MainStay VP High
Yield Corporate Bond Portfolio, both of which invest in lower-quality debt
instruments. Among the Portfolio's worst-performing Underlying Fixed Income
Portfolios/Funds were MainStay Intermediate Term Bond Fund and MainStay VP Bond
Portfolio. Both, however, posted meaningfully positive performance.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING PAGE AND THE NEXT PAGE ARE AN
INTEGRAL PART OF THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE
CAREFULLY READ IN CONJUNCTION WITH IT.
M-274 MainStay VP Moderate Allocation Portfolio
MainStay VP Moderate Allocation Portfolio is a "fund of funds" that invests in
other MainStay VP Portfolios and other MainStay mutual funds ("Underlying
Portfolios/Funds"). The cost of investing in the Portfolio may be higher than
the cost of investing in a mutual fund that invests directly in individual
stocks and bonds. By investing in the Portfolio, clients will directly bear the
Portfolio's fees and expenses and will indirectly bear the fees and expenses
charged by the Underlying Portfolios/Funds in which the Portfolio invests. In
addition, the use of a fund-of-funds structure could affect the timing, amount
and character of distributions to the client and may increase taxes payable by
the client.
The Portfolio's performance depends on the Subadvisor's skill in determining the
asset-class allocations and the mix and related performance of the Underlying
Portfolios/Funds. The performance of the Underlying Portfolios/Funds may be
lower than the performance of the asset class or classes the Underlying
Portfolios/Funds were selected to represent.
The Portfolio may invest more than 25% of its assets in one Underlying
Portfolio/Fund, which may significantly affect the Portfolio's net asset value.
The Portfolio, through its investment in the Underlying Portfolios/Funds, may be
subject to the risks of the Underlying Portfolios/Funds, including the
following:
- - Stocks and bonds can decline because of adverse issuer, market, regulatory or
economic developments.
- - High-yield securities carry higher risks, and some of the investments of the
Underlying Portfolios/Funds have speculative characteristics and present a
greater risk of loss than higher-quality debt securities. High-yield
securities can also be subject to greater price volatility.
- - Stocks of small companies may be subject to higher price volatility,
significantly lower trading volume and greater spreads between bid and ask
prices than stocks of larger companies. Furthermore, small-cap companies may
be more vulnerable to adverse business or market developments than larger
companies, and the product lines of small companies may be more limited than
those of larger capitalization companies.
- - Stocks of mid-cap companies may be more volatile and less liquid than the
securities of larger companies.
- - 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.
- - When interest rates rise, the prices of fixed-income securities in the
Underlying Portfolios/Funds will generally fall. On the other hand, when
interest rates fall, the prices of fixed-income securities in the Underlying
Portfolios/Funds will generally rise.
- - Short sales involve costs and risk. If a security sold short increases in
price, an Underlying Fund may have to cover its short position at a higher
price than the short-sale price, resulting in a loss. When borrowing a
security for delivery to a buyer, the Underlying Fund may also be required to
pay a premium and other transaction costs, which would increase the cost of
the security sold short.
- - The Underlying Floating Rate Portfolio is generally considered to have
speculative characteristics. This Underlying Portfolio may involve the risk of
default on principal and interest. The Underlying Floating Rate Portfolio may
also involve risks associated with collateral impairment, nondiversification,
borrower industry concentration and limited liquidity.
- - AN INVESTMENT IN AN UNDERLYING PORTFOLIO/FUND THAT IS A MONEY MARKET FUND IS
NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
EACH OF THE UNDERLYING MONEY MARKET PORTFOLIOS/FUNDS IN WHICH THE PORTFOLIO
MAY INVEST SEEKS TO MAINTAIN A VALUE OF $1.00 PER SHARE, IT IS POSSIBLE THAT
THE PORTFOLIO MAY LOSE MONEY ON INVESTMENTS IN THESE UNDERLYING MONEY MARKET
PORTFOLIOS/FUNDS.
Before making an investment in the Portfolio, you should consider all the risks
associated with it.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING TWO PAGES ARE AN INTEGRAL PART OF
THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH IT.
Information about MainStay VP Moderate Allocation Portfolio on this page and the
preceding pages has not been audited.
mainstayinvestments.com M-275
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
AFFILIATED INVESTMENT COMPANIES 100.0%+
- -------------------------------------------------------------
EQUITY FUNDS 59.9%
MainStay 130/30 Core Fund
Class I (a) 5,438,707 $ 37,255,140
MainStay 130/30 Growth Fund
Class I (a)(b) 586,270 4,678,431
MainStay 130/30 International
Fund Class I (a) 2,324,650 14,715,032
MainStay Epoch Global Choice
Fund Class I (a) 156,641 2,160,080
MainStay Epoch U.S. All Cap
Fund Class I 69,937 1,418,319
MainStay ICAP Equity Fund
Class I 808,176 25,578,774
MainStay ICAP International
Fund Class I 513,796 14,607,211
MainStay MAP Fund Class I 787,255 21,956,547
MainStay VP Common Stock
Portfolio Initial Class 1,673,430 24,228,193
MainStay VP Growth Equity
Portfolio Initial Class 50,428 1,111,644
MainStay VP ICAP Select Equity
Portfolio Initial Class 2,435,745 26,072,667
MainStay VP International
Equity Portfolio Initial
Class (a) 1,071,657 13,531,276
MainStay VP Large Cap Growth
Portfolio Initial Class
(a)(b) 3,047,738 39,243,067
MainStay VP Mid Cap Core
Portfolio Initial Class (a) 3,714,732 35,780,075
MainStay VP S&P 500 Index
Portfolio Initial Class 29,648 669,486
MainStay VP U.S. Small Cap
Portfolio Initial Class (b) 120,493 897,811
-------------
263,903,753
-------------
FIXED INCOME FUNDS 40.1%
MainStay 130/30 High Yield
Fund Class I (a) 1,157,214 12,926,081
MainStay Intermediate Term
Bond Fund Class I 1,861,904 19,065,901
MainStay VP Bond Portfolio
Initial Class (a) 7,616,243 107,931,432
MainStay VP Floating Rate
Portfolio Initial Class (a) 3,090,827 27,575,481
MainStay VP High Yield
Corporate Bond Portfolio
Initial Class 1,017,547 9,190,561
-------------
176,689,456
-------------
Total Investments
(Cost $429,521,090) (c) 100.0% 440,593,209
Other Assets, Less Liabilities 0.0++ 107,787
----- ------------
Net Assets 100.0% $ 440,700,996
===== ============
</Table>
<Table>
+ Percentages indicated are based on
Portfolio net assets.
++ Less than one-tenth of a percent.
(a) The Portfolio's ownership exceeds 5% of
the outstanding shares of the Underlying
Portfolios/Funds share class.
(b) Non-income producing Underlying
Portfolio/Fund.
(c) At December 31, 2009, cost is
$433,722,797 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 17,665,246
Gross unrealized depreciation (10,794,834)
------------
Net unrealized appreciation $ 6,870,412
============
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Affiliated Investment Companies
Equity Funds $263,903,753 $ -- $ -- $263,903,753
Fixed Income Funds 176,689,456 -- -- 176,689,456
------------ -------- -------- ------------
Total Investments in Securities $440,593,209 $-- $-- $440,593,209
============ ======== ======== ============
</Table>
(a) For detailed descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
M-276 MainStay VP Moderate Allocation Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in affiliated investment
companies, at value (identified
cost $429,521,090) $440,593,209
Receivables:
Investment securities sold 267,358
Fund shares sold 255,029
Other assets 567
------------
Total assets 441,116,163
------------
LIABILITIES:
Due to custodian 267,358
Payables:
NYLIFE Distributors (See Note 3) 88,585
Professional fees 23,310
Shareholder communication 20,128
Fund shares redeemed 8,764
Custodian 3,864
Directors 1,185
Accrued expenses 1,973
------------
Total liabilities 415,167
------------
Net assets $440,700,996
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 448,634
Additional paid-in capital 469,846,513
------------
470,295,147
Accumulated undistributed net
investment income 10,264,838
Accumulated net realized loss on
investments (50,931,108)
Net unrealized appreciation on
investments 11,072,119
------------
Net assets $440,700,996
============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 19,223,622
============
Shares of capital stock outstanding 1,952,000
============
Net asset value per share
outstanding $ 9.85
============
SERVICE CLASS
Net assets applicable to
outstanding shares $421,477,374
============
Shares of capital stock outstanding 42,911,391
============
Net asset value per share
outstanding $ 9.82
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-277
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividend distributions from
affiliated
investment companies $ 10,804,855
------------
EXPENSES:
Distribution and service--Service
Class (See Note 3) 844,259
Shareholder communication 67,391
Professional fees 65,992
Directors 15,317
Custodian 4,958
Miscellaneous 15,993
------------
Total expenses 1,013,910
------------
Net investment income 9,790,945
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on:
Affiliated investment company
transactions (40,429,805)
Capital gain distributions from
affiliated investment companies 473,968
------------
Net realized loss on investments
from affiliated investment
companies (39,955,837)
------------
Net change in unrealized
depreciation on investments 108,466,308
------------
Net realized and unrealized gain on
investments and investments 68,510,471
------------
Net increase in net assets
resulting from operations $ 78,301,416
============
</Table>
M-278 MainStay VP Moderate Allocation Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE IN NET ASSETS:
Operations:
Net investment income $ 9,790,945 $ 7,139,984
Net realized gain (loss) on
investments from affiliated
investment company
transactions (39,955,837) 1,052,703
Net change in unrealized
appreciation (depreciation)
on investments 108,466,308 (103,519,057)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 78,301,416 (95,326,370)
----------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (459,029) (55,782)
Service Class (9,359,081) (764,780)
----------------------------
(9,818,110) (820,562)
----------------------------
From net realized gain on
investments:
Initial Class (345,847) (181,795)
Service Class (7,632,211) (4,153,218)
----------------------------
(7,978,058) (4,335,013)
----------------------------
Total dividends and
distributions to
shareholders (17,796,168) (5,155,575)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 99,883,315 143,456,587
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 17,796,168 5,155,575
Cost of shares redeemed (37,844,661) (41,666,841)
----------------------------
Increase in net assets
derived from capital
share transactions 79,834,822 106,945,321
----------------------------
Net increase in net
assets 140,340,070 6,463,376
NET ASSETS:
Beginning of year 300,360,926 293,897,550
----------------------------
End of year $440,700,996 $ 300,360,926
============================
Accumulated undistributed net
investment income at end of
year $ 10,264,838 $ 9,818,073
============================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-279
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
---------------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------
2009 2008 2007 2006
Net asset value at beginning of
period $ 8.30 $ 11.32 $ 10.86 $10.00
------- ------- ------- ------
Net investment income 0.20 0.21 0.22 0.18 (a)
Net realized and unrealized gain
(loss) on investments 1.80 (3.06) 0.74 0.82
------- ------- ------- ------
Total from investment operations 2.00 (2.85) 0.96 1.00
------- ------- ------- ------
Less dividends and distributions:
From net investment income (0.26) (0.04) (0.26) (0.11)
From net realized gain on
investments (0.19) (0.13) (0.24) (0.03)
------- ------- ------- ------
Total dividends and distributions (0.45) (0.17) (0.50) (0.14)
------- ------- ------- ------
Net asset value at end of period $ 9.85 $ 8.30 $ 11.32 $10.86
======= ======= ======= ======
Total investment return 24.22% (25.18%) 8.73% 9.93%(b)
Ratios (to average net
assets)/Supplemental Data:
Net investment income 3.00% 2.56% 2.50% 1.96%++
Net expenses (c) 0.05% 0.06% 0.06% 0.15%++
Expenses (before reimbursement)
(c) 0.05% 0.06% 0.07% 0.15%++
Portfolio turnover rate 40% 46% 10% 62%
Net assets at end of period (in
000's) $19,224 $12,681 $11,750 $5,370
</Table>
<Table>
** Commencement of operations.
++ Annualized.
(a) Per share data based on average shares outstanding during the period.
(b) Total return is not annualized.
(c) In addition to the fees and expenses which the Portfolio bears directly, the
Portfolio indirectly bears a pro-rata share of the fees and expenses of the
Underlying Portfolios/Funds in which it invests. Such indirect expenses are
not included in the above expense ratios.
</Table>
M-280 MainStay VP Moderate Allocation Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------
2009 2008 2007 2006
$ 8.28 $ 11.30 $ 10.85 $ 10.00
-------- -------- -------- --------
0.19 0.19 0.20 0.14 (a)
1.78 (3.06) 0.72 0.83
-------- -------- -------- --------
1.97 (2.87) 0.92 0.97
-------- -------- -------- --------
(0.24) (0.02) (0.23) (0.09)
(0.19) (0.13) (0.24) (0.03)
-------- -------- -------- --------
(0.43) (0.15) (0.47) (0.12)
-------- -------- -------- --------
$ 9.82 $ 8.28 $ 11.30 $ 10.85
======== ======== ======== ========
23.99% (25.38%) 8.46% 9.69%(b)
2.76% 2.21% 2.29% 1.55%++
0.30% 0.31% 0.31% 0.40%++
0.30% 0.31% 0.32% 0.40%++
40% 46% 10% 62%
$421,477 $287,680 $282,148 $132,965
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-281
MAINSTAY VP MODERATE GROWTH ALLOCATION PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON(1) (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES, OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (2/13/06)
- --------------------------------------------------------------------
After Portfolio operating expenses 28.42% 1.55%
</Table>
(After Portfolio operating expenses)
(LINE GRAPH)
<Table>
<Caption>
BARCLAYS CAPITAL
S&P 500(R) MSCI EAFE(R) U.S. AGGREGATE
INITIAL CLASS INDEX* INDEX* BOND INDEX
------------- ---------- ------------ ----------------
2/13/2006 10000 10000 10000 10000
12/31/2006 11192 11386 12152 10457
12/31/2007 12245 12012 13509 11185
12/31/2008 8266 7568 7649 11771
12/31/2009 10616 9570 10080 12469
</Table>
SERVICE CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
AVERAGE ANNUAL ONE INCEPTION
TOTAL RETURNS YEAR (2/13/06)
- --------------------------------------------------------------------
After Portfolio operating expenses 28.10% 1.30%
</Table>
(After Portfolio operating expenses)
(LINE GRAPH)
<Table>
<Caption>
BARCLAYS CAPITAL
S&P 500(R) MSCI EAFE(R) U.S. AGGREGATE
SERVICE CLASS INDEX* INDEX* BOND INDEX
------------- ---------- ------------ ----------------
2/13/2006 10000 10000 10000 10000
12/31/2006 11169 11386 12152 10457
12/31/2007 12188 12012 13509 11185
12/31/2008 8209 7568 7649 11771
12/31/2009 10516 9570 10080 12469
</Table>
<Table>
<Caption>
BENCHMARK ONE SINCE
PERFORMANCE YEAR INCEPTION
S&P 500(R) Index(2) 26.46% -1.12%
Morgan Stanley
Capital
International EAFE
Index(2) 31.78 0.20
Barclays Capital
U.S. Aggregate Bond
Index(2) 5.93 5.85
Average Lipper
Variable Products
Mixed-Asset Target
Allocation Growth
Portfolio(3) 24.27 -0.04
</Table>
1. Performance figures reflect certain fee waivers and/or expense limitations,
without which total returns may have been lower. These fee waivers and/or
expense limitations are contractual and may be modified or terminated only
with the approval of the Board of Directors. New York Life Investment
Management LLC may recoup the amount of certain management fee waivers or
expense reimbursements from the Portfolio pursuant to the agreement if such
action does not cause the Portfolio to exceed existing expense limitations
and the recoupment is made within the term of the agreement. Any recoupment
amount is generally applied within a fiscal year. This agreement expires on
August 1, 2010.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
3. The Average Lipper Variable Products Mixed-Asset Target Allocation Growth
Portfolio is representative of portfolios that, by portfolio practice,
maintain a mix of between 60%-80% equity securities, with the remainder
invested in bonds, cash, and cash equivalents. Lipper Inc. is an independent
monitor of fund performance.
M-282 MainStay VP Moderate Growth Allocation Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP MODERATE GROWTH ALLOCATION
PORTFOLIO (UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,192.80 $0.22 $1,025.00 $0.20
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,191.30 $1.60 $1,023.70 $1.48
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.04% for Initial Class and 0.29% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period. In addition to the fees
and expenses which the Portfolio bears directly, the Portfolio indirectly
bears a pro rata share of the fees and expenses of the Underlying
Portfolio/Funds in which it invests. Such indirect expenses are not included
in the above-reported expense figures.
mainstayinvestments.com M-283
INVESTMENT OBJECTIVES OF UNDERLYING PORTFOLIOS/FUNDS AS OF DECEMBER 31, 2009
(UNAUDITED)
(COMPOSITION PIE CHART)
<Table>
Growth of Capital 52.40
Total Return 20.70
Current Income 18.80
Capital Appreciation 8.10
Other Assets, Less Liabilities 0.00
</Table>
See Portfolio of Investments on page M-288 for specific holdings within these
categories.
++ Less than one-tenth of a percent.
M-284 MainStay VP Moderate Growth Allocation Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY PORTFOLIO MANAGERS TONY H. ELAVIA AND JONATHAN SWANEY OF
MADISON SQUARE INVESTORS LLC, THE PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP MODERATE GROWTH ALLOCATION PORTFOLIO PERFORM RELATIVE TO ITS
PEERS AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP Moderate Growth
Allocation Portfolio returned 28.42% for Initial Class shares and 28.10% for
Service Class shares. Both share classes outper-
formed the 24.27% return of the average Lipper(1) Variable Products Mixed-Asset
Target Allocation Growth Portfolio and the 26.46% return of the S&P 500(R)
Index(1) for the 12 months ended December 31, 2009. The S&P 500(R) Index is the
Portfolio's broad-based securities-market index.
WHAT FACTORS INFLUENCED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING 2009?
Since high-grade fixed-income securities substantially underperformed equities
in 2009 (and the Portfolio's benchmark contains only stocks), the required
allocation to investment-grade bonds detracted from performance relative to the
S&P 500(R) Index. Even so, the Portfolio's performance relative to the S&P
500(R) Index and its Lipper peers was strengthened by holdings of below-
investment-grade debt, exposure to non-large-cap stocks and strong security
selection within a few of the Portfolio's Underlying Portfolios/Funds.
DURING 2009, HOW DID YOU DETERMINE THE PORTFOLIO'S ALLOCATIONS AMONG THE
UNDERLYING PORTFOLIOS/FUNDS?
In managing the Portfolio, we consider a variety of information, including the
portfolio-level characteristics of the Underlying Portfolios/Funds, such as
capitalization, style biases and sector exposures. We also examine the
attributes of the holdings of the Underlying Portfolios/Funds, such as valuation
metrics, earnings data and technical indicators. Finally, we evaluate the
historical success of the managers responsible for the Underlying
Portfolios/Funds. In general, we seek Underlying Equity Portfolios/Funds that we
believe have a track record of capable portfolio management, that occupy
attractively valued market segments and that invest in companies with fairly
priced securities and strong price and earnings momentum. During 2009, these
techniques had little cumulative impact on performance, neither adding to nor
detracting from the Portfolio's value.
WERE THERE ANY CHANGES IN THE PORTFOLIO'S ALLOCATIONS AMONG UNDERLYING
PORTFOLIOS/FUNDS DURING 2009?
During 2009, the Portfolio made five primary allocation changes. First, assets
were shifted away from MainStay VP Bond Portfolio into MainStay VP Floating Rate
Portfolio, MainStay VP High Yield Corporate Bond Portfolio and MainStay 130/30
High Yield Fund last winter. All three of these targeted Underlying
Portfolios/Funds invest in lower-quality debt instruments. This strategy had a
positive impact on performance as credit spreads contracted, and the move was
partially unwound in November 2009.
Second, we lowered the Portfolio's average equity market capitalization during
the year through purchases of MainStay VP Mid Cap Core Portfolio, MainStay VP
U.S. Small Cap Portfolio and MainStay Epoch U.S. All Cap Fund. So far, the
impact of this strategy has been muted because performance among lower-cap
stocks was not substantially different from the performance of large-cap stocks
in the latter months of 2009, when the strategy was implemented.
Third, we reduced the Portfolio's bias toward growth equities through sales of
MainStay VP Growth Equity Portfolio, MainStay VP Large Cap Growth Portfolio, and
MainStay 130/30 Growth Fund. This may have reduced excess returns by a small
amount as growth stocks generally outperformed value stocks in the final months
of the year.
Fourth, we reduced the Portfolio's position in MainStay VP Common Stock
Portfolio, with the proceeds directed primarily to MainStay 130/30 Core Fund.
This move also has had relatively little impact on the Portfolio's performance
because both Underlying Portfolios/Funds generated a similar level of return
after the trade.
Fifth, in an effort to further diversify the Portfolio across management styles,
we moved assets from MainStay ICAP Equity Fund and MainStay VP ICAP Select
Equity Portfolio and redirected them in part into MainStay MAP Fund. Through the
end of 2009, this move did not have a substantial impact on performance.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
THE DISCLOSURE AND FOOTNOTES ON THE NEXT TWO PAGES ARE AN INTEGRAL PART OF THE
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH IT.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-285
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS
HAD THE STRONGEST TOTAL RETURNS AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD
THE WEAKEST TOTAL RETURNS?
In 2009, MainStay VP U.S. Small Cap Portfolio posted the highest total return of
any of the Underlying Equity Portfolios/Funds in which the Portfolio invested.
MainStay VP Large Cap Growth Portfolio had the second-highest total return.
Among the Underlying Equity Portfolios/Funds in which the Portfolio invested,
MainStay VP International Equity Portfolio and MainStay 130/30 Core Fund posted
the lowest total returns.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS TO THE
PORTFOLIO'S OVERALL PERFORMANCE AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS
WERE PARTICULARLY WEAK?
Substantial positions in MainStay VP Large Cap Growth Portfolio and MainStay VP
Common Stock Portfolio had the greatest positive impact on the Portfolio's
performance. No Underlying Equity Portfolios/Funds in which the Portfolio
invested generated negative returns. However, weak performance within MainStay
VP Common Stock Portfolio and MainStay 130/30 Core Fund meant that the
allocations made to these Portfolios/Funds resulted in disappointingly small
contributions to return.
WHAT KEY FACTORS AFFECTED THE BOND MARKETS DURING 2009?
Conditions were highly favorable for fixed-income investing during 2009.
Interest rates on Treasury notes and bonds were generally stable as the Federal
Open Market Committee maintained the targeted federal funds rate in a range
between 0% and 0.25% and the Federal Reserve purchased bonds directly to bring
down longer-dated borrowing costs. Indications that the economy may have been in
recovery brought relief to credit markets in 2009, and spreads narrowed
dramatically. Bank loans also performed quite well as liquidity issues within
that market improved.
HOW DID YOU MANAGE THE PORTFOLIO'S UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS IN
THIS ENVIRONMENT?
After observing the historic widening of credit spreads in 2008, we anticipated
an eventual recovery and implemented a bias toward lower-quality credit
instruments. We maintained this bias throughout much of the reporting period. It
was a strategy that paid off handsomely as high-yield bonds outperformed
investment-grade debt by a wide margin. Spreads neared their historical averages
and default risks remained high, so we unwound the bias near the end of the
reporting period.
IN 2009, WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS WERE THE STRONGEST
PERFORMERS AND WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS WERE PARTICULARLY
WEAK?
The best-performing Underlying Fixed Income Portfolios/Funds in which the
Portfolio invested were MainStay 130/30 High Yield Fund and MainStay VP High
Yield Corporate Bond Portfolio, both of which invest in lower-quality debt
instruments. Among the Portfolio's worst-performing Underlying Fixed Income
Portfolios/Funds were MainStay Intermediate Term Bond Fund and MainStay VP Bond
Portfolio. Both, however, posted meaningfully positive performance.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING PAGE AND THE NEXT PAGE ARE AN
INTEGRAL PART OF THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE
CAREFULLY READ IN CONJUNCTION WITH IT.
M-286 MainStay VP Moderate Growth Allocation Portfolio
MainStay VP Moderate Growth Allocation Portfolio is a "fund of funds" that
invests in other MainStay VP Portfolios and other MainStay mutual funds
("Underlying Portfolios/Funds"). The cost of investing in the Portfolio may be
higher than the cost of investing in a mutual fund that invests directly in
individual stocks and bonds. By investing in the Portfolio, clients will
directly bear the Portfolio's fees and expenses and will indirectly bear the
fees and expenses charged by the Underlying Portfolios/Funds in which the
Portfolio invests. In addition, the use of a fund-of-funds structure could
affect the timing, amount and character of distributions to the client and may
increase taxes payable by the client.
The Portfolio's performance depends on the Subadvisor's skill in determining the
asset-class allocations and the mix and related performance of the Underlying
Portfolios/Funds. The performance of the Underlying Portfolios/Funds may be
lower than the performance of the asset class or classes the Underlying
Portfolios/Funds were selected to represent.
The Portfolio may invest more than 25% of its assets in one Underlying
Portfolio/Fund, which may significantly affect the Portfolio's net asset value.
The Portfolio, through its investment in the Underlying Portfolios/Funds, may be
subject to the risks of the Underlying Portfolios/Funds, including the
following:
- - Stocks and bonds can decline because of adverse issuer, market, regulatory or
economic developments.
- - The principal risk of growth stocks is that investors expect growth companies
to increase their earnings at a certain rate that is generally higher than the
rate expected for nongrowth companies. If these expectations are not met, the
market price of the stock may decline significantly, even if earnings showed
an absolute increase. Growth company stocks also typically lack the dividend
yield that can cushion stock prices in market downturns.
- - High-yield securities carry higher risks, and some of the investments of the
Underlying Portfolios/Funds have speculative characteristics and present a
greater risk of loss than higher-quality debt securities. High-yield
securities can also be subject to greater price volatility.
- - Stocks of small companies may be subject to higher price volatility,
significantly lower trading volume and greater spreads between bid and ask
prices than stocks of larger companies. Furthermore, small-cap companies may
be more vulnerable to adverse business or market developments than larger
companies, and the product lines of small companies may be more limited than
those of larger-capitalization companies.
- - Stocks of mid-cap companies may be more volatile and less liquid than the
securities of larger companies.
- - 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.
- - When interest rates rise, the prices of fixed-income securities in the
Underlying Portfolios/Funds will generally fall. On the other hand, when
interest rates fall, the prices of fixed-income securities in the Underlying
Portfolios/Funds will generally rise.
- - Short sales involve costs and risk. If a security sold short increases in
price, an Underlying Fund may have to cover its short position at a higher
price than the short-sale price, resulting in a loss. When borrowing a
security for delivery to a buyer, the Underlying Fund may also be required to
pay a premium and other transaction costs, which would increase the cost of
the security sold short.
- - The Underlying Floating Rate Portfolio is generally considered to have
speculative characteristics. This Underlying Portfolio may involve the risk of
default on principal and interest. The Underlying Floating Rate Portfolio may
also involve risks associated with collateral impairment, nondiversification,
borrower industry concentration and limited liquidity.
- - AN INVESTMENT IN AN UNDERLYING PORTFOLIO/FUND THAT IS A MONEY MARKET FUND IS
NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
EACH OF THE UNDERLYING MONEY MARKET PORTFOLIOS/FUNDS IN WHICH THE PORTFOLIO
MAY INVEST SEEKS TO MAINTAIN A VALUE OF $1.00 PER SHARE, IT IS POSSIBLE THAT
THE PORTFOLIO MAY LOSE MONEY ON INVESTMENTS IN THESE UNDERLYING MONEY MARKET
PORTFOLIOS/FUNDS.
Before making an investment in the Portfolio, you should consider all the risks
associated with it.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING TWO PAGES ARE AN INTEGRAL PART OF
THE PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH IT.
Information about MainStay VP Moderate Growth Allocation Portfolio on this page
and the preceding pages has not been audited.
mainstayinvestments.com M-287
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
AFFILIATED INVESTMENT COMPANIES 100.0%+
- ------------------------------------------------------------
EQUITY FUNDS 79.8%
MainStay 130/30 Core Fund
Class I (a) 5,856,130 $ 40,114,491
MainStay 130/30 Growth Fund
Class I (a)(b) 742,665 5,926,466
MainStay 130/30 International
Fund Class I (a) 3,451,070 21,845,274
MainStay Epoch Global Choice
Fund Class I (a) 235,736 3,250,794
MainStay Epoch U.S. All Cap
Fund Class I 72,610 1,472,530
MainStay ICAP Equity Fund
Class I 959,300 30,361,840
MainStay ICAP International
Fund Class I 763,867 21,716,752
MainStay MAP Fund Class I 992,815 27,689,601
MainStay VP Common Stock
Portfolio Initial Class 1,722,137 24,933,372
MainStay VP Growth Equity
Portfolio Initial Class 178,251 3,929,374
MainStay VP ICAP Select Equity
Portfolio Initial Class 2,945,653 31,530,823
MainStay VP International
Equity Portfolio Initial
Class (a) 1,592,395 20,106,373
MainStay VP Large Cap Growth
Portfolio Initial Class
(a)(b) 4,069,998 52,405,821
MainStay VP Mid Cap Core
Portfolio Initial Class (a) 5,501,378 52,988,936
MainStay VP S&P 500 Index
Portfolio Initial Class 14,833 334,960
MainStay VP U.S. Small Cap
Portfolio Initial Class
(a)(b) 1,018,732 7,590,743
-------------
346,198,150
-------------
FIXED INCOME FUNDS 20.2%
MainStay 130/30 High Yield
Fund Class I (a) 1,135,461 12,683,099
MainStay Intermediate Term
Bond Fund Class I 558,475 5,718,779
MainStay VP Bond Portfolio
Initial Class (a) 2,285,471 32,387,900
MainStay VP Floating Rate
Portfolio Initial Class (a) 3,070,794 27,396,756
MainStay VP High Yield
Corporate Bond Portfolio
Initial Class 1,015,813 9,174,901
-------------
87,361,435
-------------
Total Investments
(Cost $437,546,868) (c) 100.0% 433,559,585
Other Assets, Less Liabilities 0.0++ 91,122
----- ------------
Net Assets 100.0% $ 433,650,707
===== ============
</Table>
<Table>
+ Percentages indicated are based on
Portfolio net assets.
++ Less than one-tenth of a percent.
(a) The Portfolio's ownership exceeds 5% of
the outstanding shares of the Underlying
Portfolios/Funds share class.
(b) Non-income producing Underlying
Portfolio/Fund.
(c) At December 31, 2009, cost is
$441,745,822 for federal income tax
purposes and net unrealized depreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 16,007,501
Gross unrealized depreciation (24,193,738)
------------
Net unrealized depreciation $ (8,186,237)
============
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Affiliated Investment Companies
Equity Funds $346,198,150 $ -- $ -- $346,198,150
Fixed Income Funds 87,361,435 -- -- 87,361,435
------------ ------------- ------------- ------------
Total Investments in Securities $433,559,585 $ -- $ -- $433,559,585
============ ============= ============= ============
</Table>
(a) For detailed descriptions, see the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
M-288 MainStay VP Moderate Growth Allocation Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in affiliated investment
companies, at value (identified
cost $437,546,868) $433,559,585
Cash 643,281
Receivables:
Fund shares sold 244,181
Other assets 585
------------
Total assets 434,447,632
------------
LIABILITIES:
Payables:
Investment securities purchased 643,281
NYLIFE Distributors (See Note 3) 84,229
Professional fees 23,135
Fund shares redeemed 20,393
Shareholder communication 19,248
Custodian 3,615
Directors 1,174
Accrued expenses 1,850
------------
Total liabilities 796,925
------------
Net assets $433,650,707
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 469,575
Additional paid-in capital 497,363,419
------------
497,832,994
Accumulated undistributed net
investment income 7,632,598
Accumulated net realized loss on
investments (67,827,602)
Net unrealized depreciation on
investments (3,987,283)
------------
Net assets $433,650,707
============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 30,850,442
============
Shares of capital stock outstanding 3,333,635
============
Net asset value per share
outstanding $ 9.25
============
SERVICE CLASS
Net assets applicable to
outstanding shares $402,800,265
============
Shares of capital stock outstanding 43,623,846
============
Net asset value per share
outstanding $ 9.23
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-289
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividend distributions from
affiliated investment
companies $ 8,429,014
------------
EXPENSES:
Distribution and service--Service
Class
(See Note 3) 821,577
Professional fees 65,625
Shareholder communication 63,522
Directors 15,385
Custodian 5,050
Miscellaneous 15,068
------------
Total expenses 986,227
------------
Net investment income 7,442,787
------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Affiliated investment company
transactions (58,673,659)
Capital gain distributions from
affiliated investment companies 189,848
------------
Net realized loss on investments
from affiliated investment
companies (58,483,811)
------------
Net change in unrealized
depreciation on investments 141,298,611
------------
Net realized and unrealized gain on
investments and investments 82,814,800
------------
Net increase in net assets
resulting from operations $ 90,257,587
============
</Table>
M-290 MainStay VP Moderate Growth Allocation Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 7,442,787 $ 5,873,308
Net realized gain (loss) on
investments from affiliated
investment company
transactions (58,483,811) 3,519,071
Net change in unrealized
appreciation (depreciation)
on investments 141,298,611 (151,894,384)
----------------------------
Net increase (decrease) in
net assets resulting from
operations 90,257,587 (142,502,005)
----------------------------
Dividends and distributions to
shareholders:
From net investment income:
Initial Class (755,100) (156,487)
Service Class (8,995,783) (1,558,362)
----------------------------
(9,750,883) (1,714,849)
----------------------------
From net realized gain on investments:
Initial Class (565,414) (417,048)
Service Class (7,378,241) (5,858,541)
----------------------------
(7,943,655) (6,275,589)
----------------------------
Total dividends and
distributions to
shareholders (17,694,538) (7,990,438)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 67,371,228 131,479,266
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 17,694,538 7,990,438
Cost of shares redeemed (39,409,686) (39,005,050)
----------------------------
Increase in net assets
derived from capital
share transactions 45,656,080 100,464,654
----------------------------
Net increase (decrease)
in net assets 118,219,129 (50,027,789)
NET ASSETS:
Beginning of year 315,431,578 365,459,367
----------------------------
End of year $433,650,707 $ 315,431,578
============================
Accumulated undistributed net
investment income at end of
year $ 7,632,598 $ 9,750,846
============================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-291
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
--------------------------------------------------------
2009 2008 2007 2006
Net asset value at
beginning of period $ 7.55 $ 11.51 $ 11.04 $ 10.00
------- ------- ------- -------
Net investment income 0.19 (a) 0.18 (a) 0.17 0.16 (a)
Net realized and
unrealized gain (loss)
on investments 1.93 (3.92) 0.88 1.03
------- ------- ------- -------
Total from investment
operations 2.12 (3.74) 1.05 1.19
------- ------- ------- -------
Less dividends and
distributions:
From net investment
income (0.24) (0.06) (0.22) (0.10)
From net realized gain
on investments (0.18) (0.16) (0.36) (0.05)
------- ------- ------- -------
Total dividends and
distributions (0.42) (0.22) (0.58) (0.15)
------- ------- ------- -------
Net asset value at end of
period $ 9.25 $ 7.55 $ 11.51 $ 11.04
======= ======= ======= =======
Total investment return 28.42% (32.49%) 9.40% 11.92%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 2.35% 1.83% 1.78% 1.70%++
Net expenses (c) 0.05% 0.06% 0.05% 0.13%++
Expenses (before waiver)
(c) 0.05% 0.06% 0.07% 0.13%++
Portfolio turnover rate 45% 43% 15% 46%
Net assets at end of
period (in 000's) $30,850 $21,525 $21,772 $10,468
</Table>
<Table>
** Commencement of operations.
++ Annualized.
(a) Per share data based on average shares outstanding during the period.
(b) Total return is not annualized.
(c) In addition to the fees and expenses which the Portfolio bears directly, the
Portfolio indirectly bears a pro-rata share of the fees and expenses of the
Underlying Portfolios/Funds in which it invests. Such indirect expenses are
not included in the above expense ratios.
</Table>
M-292 MainStay VP Moderate Growth Allocation Portfolio The notes to the
financial statements are an integral part of, and should be read in conjunction
with, the financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
----------------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
----------------------------------------------------------
2009 2008 2007 2006
$ 7.53 $ 11.49 $ 11.03 $ 10.00
-------- -------- -------- --------
0.17 (a) 0.16 (a) 0.14 0.13 (a)
1.93 (3.92) 0.87 1.04
-------- -------- -------- --------
2.10 (3.76) 1.01 1.17
-------- -------- -------- --------
(0.22) (0.04) (0.19) (0.09)
(0.18) (0.16) (0.36) (0.05)
-------- -------- -------- --------
(0.40) (0.20) (0.55) (0.14)
-------- -------- -------- --------
$ 9.23 $ 7.53 $ 11.49 $ 11.03
======== ======== ======== ========
28.10% (32.65%) 9.13% 11.69%(b)
2.08% 1.59% 1.54% 1.39%++
0.30% 0.31% 0.30% 0.38%++
0.30% 0.31% 0.32% 0.38%++
45% 43% 15% 46%
$402,800 $293,907 $343,687 $163,754
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-293
MAINSTAY VP S&P 500 INDEX PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON(1) (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ----------------------------------------------------
After Portfolio operating
expenses 26.26% 0.24% -1.17%
</Table>
(After Portfolio operating expenses)
(LINE GRAPH)
<Table>
<Caption>
S&P 500(R)
INITIAL CLASS INDEX
------------- ----------
12/31/99 10000 10000
12/31/00 9068 9090
12/31/01 7970 8009
12/31/02 6199 6239
12/31/03 7947 8029
12/31/04 8781 8902
12/31/05 9200 9340
12/31/06 10621 10815
12/31/07 11176 11409
12/31/08 7039 7188
12/31/09 8888 9090
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ----------------------------------------------------
After Portfolio operating
expenses 25.95% -0.01% -1.42%
</Table>
(After Portfolio operating expenses)
(LINE GRAPH)
<Table>
<Caption>
S&P 500(R)
SERVICE CLASS INDEX
------------- ----------
12/31/99 10000 10000
12/31/00 9046 9090
12/31/01 7931 8009
12/31/02 6153 6239
12/31/03 7869 8029
12/31/04 8673 8902
12/31/05 9061 9340
12/31/06 10435 10815
12/31/07 10953 11409
12/31/08 6882 7188
12/31/09 8667 9090
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
S&P 500(R) Index(3) 26.46% 0.42% -0.95%
Average Lipper Variable Products S&P 500 Index Objective
Portfolio(4) 26.10 0.08 -1.29
</Table>
1. Performance figures reflect certain fee waivers, without which total returns
may have been lower. These voluntary waivers may be discontinued at any time.
Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these non-recurring reimbursements had not
been made, the total returns would have been 0.20% and -1.19% for Initial
Class shares and -0.03% and -1.43% for Service Class shares for the five-year
and ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 5, 2003, includes
the historical performance of Initial Class shares through June 4, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports.
4. The Average Lipper Variable Products S&P 500 Index Objective Portfolio is
representative of passively managed limited-expense (management fee no higher
than 0.50%) portfolios designed to replicate the performance of the S&P
500(R) Index on a reinvested basis. Lipper Inc. is an independent monitor of
fund performance.
M-294 MainStay VP S&P 500 Index Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP S&P 500 INDEX PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid during the six-months ended December 31, 2009. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,224.20 $1.63 $1,023.70 $1.48
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,222.70 $3.03 $1,022.50 $2.75
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.29% for Initial Class and 0.54% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-295
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
<Table>
<Caption>
Oil, Gas & Consumable Fuels 9.1%
Pharmaceuticals 6.1
Computers & Peripherals 5.6
Diversified Financial Services 4.1
Software 4.1
Diversified Telecommunication
Services 2.7
Media 2.7
Aerospace & Defense 2.6
Capital Markets 2.6
Commercial Banks 2.6
Beverages 2.5
Food & Staples Retailing 2.5
Communications Equipment 2.4
Household Products 2.4
Semiconductors & Semiconductor
Equipment 2.4
Insurance 2.3
Industrial Conglomerates 2.1
Health Care Providers & Services 2.0
Electric Utilities 1.9
Health Care Equipment & Supplies 1.9
Internet Software & Services 1.9
Chemicals 1.8
Specialty Retail 1.8
Energy Equipment & Services 1.7
Biotechnology 1.5
Food Products 1.5
IT Services 1.5
Machinery 1.5
Tobacco 1.5
Hotels, Restaurants & Leisure 1.4
Multi-Utilities 1.3
Real Estate Investment Trusts 1.1
Metals & Mining 1.0
Air Freight & Logistics 0.9
Road & Rail 0.9
Multiline Retail 0.8
Consumer Finance 0.7
Electronic Equipment & Instruments 0.6
Internet & Catalog Retail 0.6
Commercial Services & Supplies 0.5
Electrical Equipment 0.5
Textiles, Apparel & Luxury Goods 0.5
Automobiles 0.4
Life Sciences Tools & Services 0.4
Household Durables 0.3
Personal Products 0.3
Wireless Telecommunication Services 0.3
Auto Components 0.2
Construction & Engineering 0.2
Containers & Packaging 0.2
Diversified Consumer Services 0.2
Paper & Forest Products 0.2
Airlines 0.1
Construction Materials 0.1
Distributors 0.1
Gas Utilities 0.1
Independent Power Producers & Energy
Traders 0.1
Leisure Equipment & Products 0.1
Office Electronics 0.1
Professional Services 0.1
Thrifts & Mortgage Finance 0.1
Trading Companies & Distributors 0.1
Building Products 0.0++
Health Care Technology 0.0++
Real Estate Management & Development 0.0++
Short-Term Investments 6.2
Futures Contracts 0.1
Other Assets, Less Liabilities -0.1
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-299 for specific holdings
within these categories.
++ Less than one-tenth percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENTS)
<Table>
1. ExxonMobil Corp.
2. Microsoft Corp.
3. Apple, Inc.
4. Johnson & Johnson
5. Procter & Gamble Co. (The)
6. International Business Machines Corp.
7. AT&T, Inc.
8. JPMorgan Chase & Co.
9. General Electric Co.
10. Chevron Corp.
</Table>
M-296 MainStay VP S&P 500 Index Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY PORTFOLIO MANAGER FRANCIS J. OK AND LEE BAKER OF MADISON
SQUARE INVESTORS LLC, THE PORTFOLIO'S SUBADVISOR.
HOW DID MAINSTAY VP S&P 500 INDEX PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP S&P 500 Index Portfolio
returned 26.26% for Initial Class shares and 25.95% for Service Class shares.
Initial Class shares outperformed and Service Class shares underperformed the
26.10% return of the average Lipper(1) Variable Products S&P 500 Index Objective
Portfolio. Both share classes underperformed the 26.46% return of the S&P 500(R)
Index for the 12 months ended December 31, 2009. The S&P 500(R) Index is the
Portfolio's broad-based securities-market index.
DURING THE 12-MONTH REPORTING PERIOD, WHICH S&P 500(R) INDEX INDUSTRY GROUPS HAD
THE HIGHEST TOTAL RETURNS AND WHICH INDUSTRY GROUPS HAD THE LOWEST TOTAL
RETURNS?
For the 12 months ended December 31, 2009, the S&P 500(R) Index industry groups
with the highest total returns were automobiles & components, tech-
nology hardware & equipment and semiconductors
& semiconductor equipment. Over the same period, the industry groups with the
lowest total returns were banks, food & staples retailing and household
& personal products.
DURING THE REPORTING PERIOD, WHICH INDUSTRIES MADE THE STRONGEST CONTRIBUTIONS
TO THE PORTFOLIO'S PERFORMANCE AND WHICH INDUSTRIES WERE THE GREATEST
DETRACTORS?
On the basis of impact, which takes weightings and total returns into account,
the industry that made the greatest positive contribution to the Portfolio's
performance during 2009 was computers & periph-
erals. Software was the next-strongest industry con-
tributor, followed by Internet software & services. All three of these strong-
contributing industries provided positive total returns. Over the same period,
the in-
dustries that made the weakest contributions to the Portfolio's performance were
commercial banks, bio-
technology and construction materials.
DURING THE REPORTING PERIOD, WHICH STOCKS IN THE S&P 500(R) INDEX HAD THE
HIGHEST TOTAL RETURNS AND WHICH S&P 500(R) INDEX STOCKS HAD THE LOWEST TOTAL
RETURNS?
During 2009, the S&P 500(R) Index securities with the strongest total returns
were insurance company XL Capital, Ltd., health care services company Tenet
Healthcare and semiconductor company Advanced Micro Devices. The S&P 500(R)
Index securities with the lowest total returns for the year were commercial
banks Marshall & Ilsley and Huntington Bancshares and diversified financial
services company Citigroup.
DURING THE REPORTING PERIOD, WHICH S&P 500(R) STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S PERFORMANCE AND WHICH STOCKS WERE THE GREATEST
DETRACTORS?
On the basis of impact, which takes weightings and total returns into account,
the Portfolio's top contributors were information technology companies Apple,
Google and Microsoft. The weakest-performing stocks by contribution were oil,
gas & consumable fuels company ExxonMobil, diversified financial services
company Citigroup and commercial bank Wells Fargo & Co.
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. 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. Index
portfolios generally seek to reflect the performance of an index or an
allocation among indices, unlike other portfolios, whose objectives may, in some
cases, involve seeking to outperform an index or other benchmark. The Portfolio
seeks to track the performance and weightings of stocks in the S&P 500(R) Index.
The Index itself, however, may change from time to time as companies merge,
divest units, add to their market capitalization or face financial difficulties.
In addition, Standard & Poor's may occasionally adjust the Index to better
reflect the companies that it believes are most representative of the makeup of
the U.S. economy. "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard &
Poor's 500" and "500" are trademarks of The McGraw-Hill Companies, Inc., and
have been licensed for use by New York Life Investments. "New York Life
Investments" is a service mark used by New York Life Investment Management LLC.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-297
WERE THERE ANY CHANGES TO THE S&P 500(R) INDEX IN 2009?
During 2009, Standard & Poor's added 27 companies to the S&P 500(R) Index and
made 27 corresponding deletions. Significant additions to the Index included IT
services company Visa and solar module manufacturer First Solar. Notable
deletions from the Index included pharmaceuticals manufacturer Wyeth and health
care equipment & supplies company Covidien PLC.
The opinions expressed are those of the portfolio managers as of the date of
this report and are subject to change. There is no guarantee that any forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
Information about MainStay VP S&P 500(R) Index Portfolio on this page and the
preceding pages has not been audited.
M-298 MainStay VP S&P 500 Index Portfolio
PORTFOLIO OF INVESTMENTS+++ DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 93.8%+
- ----------------------------------------------------------------
AEROSPACE & DEFENSE 2.6%
Boeing Co. (The) 63,759 $ 3,451,275
General Dynamics Corp. 33,857 2,308,032
Goodrich Corp. 10,916 701,353
Honeywell International,
Inc. 67,352 2,640,198
ITT Corp. 16,105 801,063
L-3 Communications Holdings,
Inc. 10,199 886,803
Lockheed Martin Corp. 28,069 2,114,999
Northrop Grumman Corp. 27,699 1,546,989
Precision Castparts Corp. 12,364 1,364,367
Raytheon Co. 33,891 1,746,064
Rockwell Collins, Inc. 13,791 763,470
United Technologies Corp. 82,528 5,728,269
-------------
24,052,882
-------------
AIR FREIGHT & LOGISTICS 0.9%
C.H. Robinson Worldwide,
Inc. 14,884 874,137
Expeditors International of
Washington, Inc. 18,814 653,410
FedEx Corp. 27,421 2,288,283
United Parcel Service, Inc.
Class B 87,129 4,998,591
-------------
8,814,421
-------------
AIRLINES 0.1%
Southwest Airlines Co. 65,084 743,910
-------------
AUTO COMPONENTS 0.2%
Goodyear Tire & Rubber Co.
(The) (a) 21,374 301,374
Johnson Controls, Inc. 58,905 1,604,572
-------------
1,905,946
-------------
AUTOMOBILES 0.4%
Ford Motor Co. (a) 292,471 2,924,710
Harley-Davidson, Inc. 20,645 520,254
-------------
3,444,964
-------------
BEVERAGES 2.5%
Brown-Forman Corp. Class B 9,713 520,325
Coca-Cola Co. (The) 203,956 11,625,492
Coca-Cola Enterprises, Inc. 27,860 590,632
Constellation Brands, Inc.
Class A (a) 17,565 279,810
Dr. Pepper Snapple Group,
Inc. 22,290 630,807
Molson Coors Brewing Co.
Class B 13,861 625,963
Pepsi Bottling Group, Inc.
(The) 12,734 477,525
PepsiCo, Inc. 137,347 8,350,698
-------------
23,101,252
-------------
BIOTECHNOLOGY 1.5%
Amgen, Inc. (a) 89,356 5,054,869
Biogen Idec, Inc. (a) 25,548 1,366,818
Celgene Corp. (a) 40,666 2,264,283
Cephalon, Inc. (a) 6,531 407,600
Genzyme Corp. (a) 23,048 1,129,582
Gilead Sciences, Inc. (a) 79,513 3,441,323
-------------
13,664,475
-------------
BUILDING PRODUCTS 0.0%++
Masco Corp. 31,542 435,595
-------------
CAPITAL MARKETS 2.6%
Ameriprise Financial, Inc. 22,371 868,442
Bank of New York Mellon Corp.
(The) 105,695 2,956,289
Charles Schwab Corp. (The) 83,566 1,572,712
E*TRADE Financial Corp. (a) 130,524 228,417
Federated Investors, Inc.
Class B 7,821 215,077
Franklin Resources, Inc. 13,234 1,394,202
Goldman Sachs Group, Inc.
(The) 45,278 7,644,738
Invesco, Ltd. 37,614 883,553
Janus Capital Group, Inc. 15,840 213,048
Legg Mason, Inc. 14,355 432,947
Morgan Stanley 119,308 3,531,517
Northern Trust Corp. 21,183 1,109,989
State Street Corp. 43,413 1,890,202
T. Rowe Price Group, Inc. 22,641 1,205,633
-------------
24,146,766
-------------
CHEMICALS 1.8%
Air Products & Chemicals,
Inc. 18,504 1,499,934
Airgas, Inc. 7,213 343,339
CF Industries Holdings, Inc. 4,305 390,808
Dow Chemical Co. (The) 100,671 2,781,540
E.I. du Pont de Nemours &
Co. 79,296 2,669,896
Eastman Chemical Co. 6,435 387,644
Ecolab, Inc. 20,935 933,282
FMC Corp. 6,340 353,518
International Flavors &
Fragrances, Inc. 6,975 286,952
Monsanto Co. 47,829 3,910,021
PPG Industries, Inc. 14,724 861,943
Praxair, Inc. 26,928 2,162,588
Sigma-Aldrich Corp. 10,668 539,054
-------------
17,120,519
-------------
COMMERCIAL BANKS 2.6%
BB&T Corp. 60,353 1,531,156
Comerica, Inc. 13,347 394,671
Fifth Third Bancorp 70,905 691,324
First Horizon National Corp.
(a) 19,615 262,845
Huntington Bancshares, Inc. 63,145 230,479
KeyCorp 77,661 431,019
</Table>
+ Percentages indicated are based on portfolio net assets.
V Among the Portfolio's 10 largest holdings, as of December 31, 2009, excluding
short-term investments. May be subject to change daily.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-299
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
COMMERCIAL BANKS (CONTINUED)
M&T Bank Corp. 7,238 $ 484,150
Marshall & Ilsley Corp. 46,032 250,874
PNC Financial Services Group,
Inc. 40,747 2,151,034
Regions Financial Corp. 105,033 555,625
SunTrust Banks, Inc. 43,822 889,148
U.S. Bancorp 167,819 3,777,606
Wells Fargo & Co. 449,862 12,141,775
Zions Bancorp 12,176 156,218
-------------
23,947,924
-------------
COMMERCIAL SERVICES & SUPPLIES 0.5%
Avery Dennison Corp. 9,966 363,659
Cintas Corp. 11,658 303,691
Iron Mountain, Inc. (a) 15,919 362,316
Pitney Bowes, Inc. 18,283 416,121
R.R. Donnelley & Sons Co. 18,187 405,025
Republic Services, Inc. 28,476 806,156
Stericycle, Inc. (a) 7,406 408,589
Waste Management, Inc. 42,962 1,452,545
-------------
4,518,102
-------------
COMMUNICATIONS EQUIPMENT 2.4%
Cisco Systems, Inc. (a) 506,334 12,121,636
Harris Corp. 11,586 550,914
JDS Uniphase Corp. (a) 19,745 162,896
Juniper Networks, Inc. (a) 46,339 1,235,861
Motorola, Inc. (a) 202,905 1,574,543
QUALCOMM, Inc. 147,012 6,800,775
Tellabs, Inc. (a) 33,958 192,882
-------------
22,639,507
-------------
COMPUTERS & PERIPHERALS 5.6%
v Apple, Inc. (a) 79,287 16,718,457
Dell, Inc. (a) 152,128 2,184,558
EMC Corp. (a) 179,014 3,127,375
Hewlett-Packard Co. 208,703 10,750,291
v International Business
Machines Corp. 115,622 15,134,920
Lexmark International, Inc.
Class A (a) 6,903 179,340
NetApp, Inc. (a) 29,994 1,031,494
QLogic Corp. (a) 10,142 191,380
SanDisk Corp. (a) 20,048 581,191
Sun Microsystems, Inc. (a) 66,596 624,004
Teradata Corp. (a) 15,027 472,299
Western Digital Corp. (a) 19,862 876,907
-------------
51,872,216
-------------
CONSTRUCTION & ENGINEERING 0.2%
Fluor Corp. 15,900 716,136
Jacobs Engineering Group,
Inc. (a) 10,894 409,723
Quanta Services, Inc. (a) 18,495 385,436
-------------
1,511,295
-------------
CONSTRUCTION MATERIALS 0.1%
Vulcan Materials Co. 11,049 581,951
-------------
CONSUMER FINANCE 0.7%
American Express Co. 104,363 4,228,789
Capital One Financial Corp. 39,489 1,514,008
Discover Financial Services 47,418 697,519
SLM Corp. (a) 41,336 465,857
-------------
6,906,173
-------------
CONTAINERS & PACKAGING 0.2%
Ball Corp. 8,256 426,835
Bemis Co., Inc. 9,547 283,069
Owens-Illinois, Inc. (a) 14,808 486,739
Pactiv Corp. (a) 11,665 281,593
Sealed Air Corp. 14,001 306,062
-------------
1,784,298
-------------
DISTRIBUTORS 0.1%
Genuine Parts Co. 14,145 536,944
-------------
DIVERSIFIED CONSUMER SERVICES 0.2%
Apollo Group, Inc. Class A
(a) 11,283 683,524
DeVry, Inc. 5,446 308,952
H&R Block, Inc. 29,339 663,648
-------------
1,656,124
-------------
DIVERSIFIED FINANCIAL SERVICES 4.1%
Bank of America Corp. 874,644 13,172,139
Citigroup, Inc. 1,716,339 5,681,082
CME Group, Inc. 5,836 1,960,604
IntercontinentalExchange,
Inc. (a) 6,468 726,356
v JPMorgan Chase & Co. 346,862 14,453,740
Leucadia National Corp. (a) 16,803 399,743
Moody's Corp. 17,221 461,523
NASDAQ OMX Group, Inc. (The)
(a) 12,955 256,768
NYSE Euronext 22,983 581,470
-------------
37,693,425
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES 2.7%
v AT&T, Inc. 519,394 14,558,614
CenturyTel, Inc. 26,115 945,624
Frontier Communications
Corp. 27,614 215,665
Qwest Communications
International, Inc. 131,047 551,708
Verizon Communications, Inc. 250,026 8,283,361
Windstream Corp. 39,007 428,687
-------------
24,983,659
-------------
</Table>
M-300 MainStay VP S&P 500 Index Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
ELECTRIC UTILITIES 1.9%
Allegheny Energy, Inc. 14,996 $ 352,106
American Electric Power Co.,
Inc. 41,929 1,458,710
Duke Energy Corp. 114,628 1,972,748
Edison International 28,602 994,777
Entergy Corp. 16,579 1,356,825
Exelon Corp. 57,857 2,827,471
FirstEnergy Corp. 26,757 1,242,863
FPL Group, Inc. 36,274 1,915,993
Northeast Utilities 15,495 399,616
Pepco Holdings, Inc. 19,520 328,912
Pinnacle West Capital Corp. 8,946 327,245
PPL Corp. 33,093 1,069,235
Progress Energy, Inc. 24,605 1,009,051
Southern Co. (The) 70,215 2,339,564
-------------
17,595,116
-------------
ELECTRICAL EQUIPMENT 0.5%
Emerson Electric Co. 66,007 2,811,898
First Solar, Inc. (a) 4,246 574,909
Rockwell Automation, Inc. 12,551 589,646
Roper Industries, Inc. 8,011 419,536
-------------
4,395,989
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.6%
Agilent Technologies, Inc.
(a) 30,288 941,048
Amphenol Corp. Class A 15,153 699,766
Corning, Inc. 136,544 2,636,665
FLIR Systems, Inc. (a) 13,397 438,350
Jabil Circuit, Inc. 16,749 290,930
Molex, Inc. 12,015 258,923
-------------
5,265,682
-------------
ENERGY EQUIPMENT & SERVICES 1.7%
Baker Hughes, Inc. 27,205 1,101,258
BJ Services Co. 25,900 481,740
Cameron International Corp.
(a) 21,506 898,951
Diamond Offshore Drilling,
Inc. 6,101 600,460
FMC Technologies, Inc. (a) 10,729 620,565
Halliburton Co. 79,138 2,381,262
Nabors Industries, Ltd. (a) 24,868 544,361
National Oilwell Varco, Inc. 36,719 1,618,941
Rowan Cos., Inc. (a) 10,055 227,645
Schlumberger, Ltd. 105,372 6,858,664
Smith International, Inc. 21,721 590,160
-------------
15,924,007
-------------
FOOD & STAPLES RETAILING 2.5%
Costco Wholesale Corp. 38,442 2,274,613
CVS Caremark Corp. 124,148 3,998,807
Kroger Co. (The) 57,107 1,172,407
Safeway, Inc. 35,680 759,627
SUPERVALU, Inc. 18,786 238,770
Sysco Corp. 51,935 1,451,064
Wal-Mart Stores, Inc. 187,807 10,038,284
Walgreen Co. 86,770 3,186,195
Whole Foods Market, Inc. (a) 12,412 340,709
-------------
23,460,476
-------------
FOOD PRODUCTS 1.5%
Archer-Daniels-Midland Co. 56,373 1,765,039
Campbell Soup Co. 16,662 563,176
ConAgra Foods, Inc. 38,858 895,677
Dean Foods Co. (a) 15,937 287,503
General Mills, Inc. 28,660 2,029,414
H.J. Heinz Co. 27,701 1,184,495
Hershey Co. (The) 14,587 522,069
Hormel Foods Corp. 6,169 237,198
J.M. Smucker Co. (The) 10,505 648,684
Kellogg Co. 22,290 1,185,828
Kraft Foods, Inc. Class A (a) 130,113 3,536,471
McCormick & Co., Inc. 11,529 416,543
Sara Lee Corp. 61,495 749,009
Tyson Foods, Inc. Class A 26,782 328,615
-------------
14,349,721
-------------
GAS UTILITIES 0.1%
EQT Corp. 11,481 504,246
Nicor, Inc. 3,998 168,316
Questar Corp. 15,383 639,471
-------------
1,312,033
-------------
HEALTH CARE EQUIPMENT & SUPPLIES 1.9%
Baxter International, Inc. 52,901 3,104,231
Becton, Dickinson & Co. 20,813 1,641,313
Boston Scientific Corp. (a) 132,562 1,193,058
C.R. Bard, Inc. 8,473 660,047
CareFusion Corp. (a) 15,710 392,907
DENTSPLY International, Inc. 13,396 471,137
Hospira, Inc. (a) 14,150 721,650
Intuitive Surgical, Inc. (a) 3,352 1,016,729
Medtronic, Inc. 97,412 4,284,180
St. Jude Medical, Inc. (a) 29,337 1,079,015
Stryker Corp. 24,782 1,248,269
Varian Medical Systems, Inc.
(a) 11,015 516,053
Zimmer Holdings, Inc. (a) 18,686 1,104,529
-------------
17,433,118
-------------
HEALTH CARE PROVIDERS & SERVICES 2.0%
Aetna, Inc. 38,044 1,205,995
AmerisourceBergen Corp. 25,284 659,154
Cardinal Health, Inc. 31,906 1,028,649
CIGNA Corp. 24,107 850,254
Coventry Health Care, Inc.
(a) 13,112 318,491
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-301
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
HEALTH CARE PROVIDERS & SERVICES (CONTINUED)
DaVita, Inc. (a) 8,970 $ 526,898
Express Scripts, Inc. (a) 24,185 2,090,793
Humana, Inc. (a) 14,962 656,682
Laboratory Corp. of America
Holdings (a) 9,317 697,284
McKesson Corp. 23,526 1,470,375
Medco Health Solutions, Inc.
(a) 41,878 2,676,423
Patterson Cos., Inc. (a) 8,218 229,940
Quest Diagnostics, Inc. 13,636 823,342
Tenet Healthcare Corp. (a) 38,649 208,318
UnitedHealth Group, Inc. 101,978 3,108,289
WellPoint, Inc. (a) 40,230 2,345,007
-------------
18,895,894
-------------
HEALTH CARE TECHNOLOGY 0.0%++
IMS Health, Inc. 16,133 339,761
-------------
HOTELS, RESTAURANTS & LEISURE 1.4%
Carnival Corp. (a) 38,359 1,215,597
Darden Restaurants, Inc. 12,303 431,466
International Game Technology 26,136 490,573
Marriott International, Inc.
Class A 22,309 607,920
McDonald's Corp. 94,788 5,918,563
Starbucks Corp. (a) 65,245 1,504,550
Starwood Hotels & Resorts
Worldwide, Inc. 16,516 603,990
Wyndham Worldwide Corp. 15,736 317,395
Wynn Resorts, Ltd. 6,094 354,853
Yum! Brands, Inc. 41,045 1,435,344
-------------
12,880,251
-------------
HOUSEHOLD DURABLES 0.3%
Black & Decker Corp. (The) 5,332 345,673
D.R. Horton, Inc. 24,387 265,087
Fortune Brands, Inc. 13,298 574,474
Harman International
Industries, Inc. 6,127 216,160
Leggett & Platt, Inc. 13,364 272,626
Lennar Corp. Class A 14,152 180,721
Newell Rubbermaid, Inc. 24,548 368,465
Pulte Homes, Inc. (a) 27,940 279,400
Whirlpool Corp. 6,518 525,742
-------------
3,028,348
-------------
HOUSEHOLD PRODUCTS 2.4%
Clorox Co. (The) 12,303 750,483
Colgate-Palmolive Co. 43,634 3,584,533
Kimberly-Clark Corp. 36,454 2,322,484
v Procter & Gamble Co.
(The) 257,176 15,592,581
-------------
22,250,081
-------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.1%
AES Corp. (The) (a) 58,625 780,299
Constellation Energy Group,
Inc. 17,661 621,137
-------------
1,401,436
-------------
INDUSTRIAL CONGLOMERATES 2.1%
3M Co. 62,123 5,135,708
v General Electric Co. 937,167 14,179,337
Textron, Inc. 23,888 449,333
-------------
19,764,378
-------------
INSURANCE 2.3%
Aflac, Inc. 41,070 1,899,488
Allstate Corp. (The) 47,080 1,414,283
American International Group,
Inc. (a) 11,929 357,631
Aon Corp. 24,033 921,425
Assurant, Inc. 10,254 302,288
Chubb Corp. (The) 29,976 1,474,220
Cincinnati Financial Corp. 14,406 378,013
Genworth Financial, Inc.
Class A (a) 43,261 491,012
Hartford Financial Services
Group, Inc. (The) 33,606 781,676
Lincoln National Corp. 27,034 672,606
Loews Corp. 31,659 1,150,805
Marsh & McLennan Cos., Inc. 46,305 1,022,414
MetLife, Inc. 71,860 2,540,251
Principal Financial Group,
Inc. 28,001 673,144
Progressive Corp. (The) (a) 59,187 1,064,774
Prudential Financial, Inc. 41,178 2,049,017
Torchmark Corp. 7,326 321,978
Travelers Cos., Inc. (The) 47,939 2,390,239
Unum Group 29,135 568,715
XL Capital, Ltd. Class A 30,023 550,322
-------------
21,024,301
-------------
INTERNET & CATALOG RETAIL 0.6%
Amazon.com, Inc. (a) 29,348 3,947,893
Expedia, Inc. (a) 18,615 478,592
Priceline.com, Inc. (a) 3,887 849,309
-------------
5,275,794
-------------
INTERNET SOFTWARE & SERVICES 1.9%
Akamai Technologies, Inc. (a) 14,965 379,063
eBay, Inc. (a) 99,300 2,337,522
Google, Inc. Class A (a) 21,217 13,154,116
VeriSign, Inc. (a) 17,020 412,565
Yahoo!, Inc. (a) 104,510 1,753,678
-------------
18,036,944
-------------
IT SERVICES 1.5%
Affiliated Computer Services,
Inc. Class A (a) 8,654 516,557
Automatic Data Processing,
Inc. 44,520 1,906,346
</Table>
M-302 MainStay VP S&P 500 Index Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
IT SERVICES (CONTINUED)
Cognizant Technology
Solutions Corp. Class A (a) 26,043 $ 1,179,748
Computer Sciences Corp. (a) 13,439 773,146
Fidelity National Information
Services, Inc. 28,741 673,689
Fiserv, Inc. (a) 13,647 661,607
Mastercard, Inc. Class A 8,425 2,156,632
Paychex, Inc. 28,296 866,989
SAIC, Inc. (a) 26,903 509,543
Total System Services, Inc. 17,461 301,551
Visa, Inc. Class A 39,306 3,437,703
Western Union Co. (The) 60,725 1,144,666
-------------
14,128,177
-------------
LEISURE EQUIPMENT & PRODUCTS 0.1%
Eastman Kodak Co. (a) 23,708 100,048
Hasbro, Inc. 10,926 350,288
Mattel, Inc. 32,085 641,058
-------------
1,091,394
-------------
LIFE SCIENCES TOOLS & SERVICES 0.4%
Life Technologies Corp. (a) 15,786 824,503
Millipore Corp. (a) 4,899 354,443
PerkinElmer, Inc. 10,316 212,406
Thermo Fisher Scientific,
Inc. (a) 35,828 1,708,637
Waters Corp. (a) 8,304 514,516
-------------
3,614,505
-------------
MACHINERY 1.5%
Caterpillar, Inc. 55,062 3,137,983
Cummins, Inc. 17,710 812,181
Danaher Corp. 22,833 1,717,042
Deere & Co. 37,112 2,007,388
Dover Corp. 16,342 679,991
Eaton Corp. 14,552 925,798
Flowserve Corp. 4,944 467,356
Illinois Tool Works, Inc. 34,132 1,637,995
PACCAR, Inc. 31,945 1,158,645
Pall Corp. 10,248 370,978
Parker Hannifin Corp. 14,189 764,503
Snap-On, Inc. 5,102 215,610
Stanley Works (The) 7,100 365,721
-------------
14,261,191
-------------
MEDIA 2.7%
CBS Corp. Class B 59,406 834,654
Comcast Corp. Class A 251,271 4,236,429
DIRECTV Class A (a) 84,460 2,816,741
Gannett Co., Inc. 20,751 308,152
Interpublic Group of Cos.,
Inc. (The) (a) 42,971 317,126
McGraw-Hill Cos., Inc. (The) 27,646 926,417
Meredith Corp. 3,219 99,306
New York Times Co. (The)
Class A (a) 10,218 126,294
News Corp. Class A 197,859 2,708,690
Omnicom Group, Inc. 27,305 1,068,991
Scripps Networks Interactive
Class A 7,887 327,311
Time Warner Cable, Inc. 30,928 1,280,110
Time Warner, Inc. 102,470 2,985,976
Viacom, Inc. Class B (a) 53,261 1,583,450
Walt Disney Co. (The) 163,925 5,286,581
Washington Post Co. Class B 548 240,901
-------------
25,147,129
-------------
METALS & MINING 1.0%
AK Steel Holding Corp. 9,670 206,455
Alcoa, Inc. 85,775 1,382,693
Allegheny Technologies, Inc. 8,669 388,111
Cliffs Natural Resources,
Inc. 11,508 530,404
Freeport-McMoRan Copper &
Gold, Inc. (a) 38,084 3,057,764
Newmont Mining Corp. 43,220 2,044,738
Nucor Corp. 27,627 1,288,800
Titanium Metals Corp. (a) 7,502 93,925
United States Steel Corp. 12,579 693,354
-------------
9,686,244
-------------
MULTI-UTILITIES 1.3%
Ameren Corp. 20,790 581,081
CenterPoint Energy, Inc. 34,157 495,618
CMS Energy Corp. 20,173 315,909
Consolidated Edison, Inc. 24,633 1,119,077
Dominion Resources, Inc. 52,422 2,040,264
DTE Energy Corp. 14,454 630,050
Integrys Energy Group, Inc. 6,756 283,684
NiSource, Inc. 24,339 374,334
PG&E Corp. 32,768 1,463,091
Public Service Enterprise
Group, Inc. 44,412 1,476,699
SCANA Corp. 9,747 367,267
Sempra Energy 21,687 1,214,038
TECO Energy, Inc. 18,895 306,477
Wisconsin Energy Corp. 10,276 512,053
Xcel Energy, Inc. 40,084 850,583
-------------
12,030,225
-------------
MULTILINE RETAIL 0.8%
Big Lots, Inc. (a) 7,304 211,670
Family Dollar Stores, Inc. 12,181 338,997
J.C. Penney Co., Inc. 20,713 551,173
Kohl's Corp. (a) 26,902 1,450,825
Macy's, Inc. 36,870 617,941
Nordstrom, Inc. 14,562 547,240
Sears Holdings Corp. (a) 4,304 359,169
Target Corp. 66,012 3,193,000
-------------
7,270,015
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-303
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
OFFICE ELECTRONICS 0.1%
Xerox Corp. 76,257 $ 645,134
-------------
OIL, GAS & CONSUMABLE FUELS 9.1%
Anadarko Petroleum Corp. 43,135 2,692,487
Apache Corp. 29,686 3,062,705
Cabot Oil & Gas Corp. 9,168 399,633
Chesapeake Energy Corp. 57,019 1,475,652
v Chevron Corp. 176,596 13,596,126
ConocoPhillips 130,195 6,649,059
CONSOL Energy, Inc. 15,862 789,928
Denbury Resources, Inc. (a) 22,056 326,429
Devon Energy Corp. 38,975 2,864,662
El Paso Corp. 62,214 611,564
EOG Resources, Inc. 22,143 2,154,514
v ExxonMobil Corp. 417,765 28,487,395
Hess Corp. 25,731 1,556,725
Marathon Oil Corp. 62,115 1,939,230
Massey Energy Co. 7,454 313,143
Murphy Oil Corp. 16,756 908,175
Noble Energy, Inc. 15,225 1,084,324
Occidental Petroleum Corp. 71,229 5,794,479
Peabody Energy Corp. 23,650 1,069,217
Pioneer Natural Resources
Co. 10,171 489,937
Range Resources Corp. 13,901 692,965
Southwestern Energy Co. (a) 30,307 1,460,797
Spectra Energy Corp. 56,740 1,163,737
Sunoco, Inc. 10,369 270,631
Tesoro Corp. 12,336 167,153
Valero Energy Corp. 49,747 833,262
Williams Cos., Inc. 51,162 1,078,495
XTO Energy, Inc. 50,937 2,370,099
-------------
84,302,523
-------------
PAPER & FOREST PRODUCTS 0.2%
International Paper Co. 38,001 1,017,667
MeadWestvaco Corp. 15,153 433,830
Weyerhaeuser Co. 18,545 800,031
-------------
2,251,528
-------------
PERSONAL PRODUCTS 0.3%
Avon Products, Inc. 37,475 1,180,462
Estee Lauder Cos., Inc. (The)
Class A 10,433 504,540
Mead Johnson Nutrition Co. 18,101 791,014
-------------
2,476,016
-------------
PHARMACEUTICALS 6.1%
Abbott Laboratories 136,152 7,350,847
Allergan, Inc. 26,990 1,700,640
Bristol-Myers Squibb Co. 150,225 3,793,181
Eli Lilly & Co. 88,739 3,168,870
Forest Laboratories, Inc. (a) 26,493 850,690
v Johnson & Johnson 242,850 15,641,969
King Pharmaceuticals, Inc.
(a) 21,935 269,142
Merck & Co., Inc. 268,849 9,823,742
Mylan, Inc. (a) 27,354 504,134
Pfizer, Inc. 710,299 12,920,339
Watson Pharmaceuticals, Inc.
(a) 9,346 370,195
-------------
56,393,749
-------------
PROFESSIONAL SERVICES 0.1%
Dun & Bradstreet Corp. 4,560 384,727
Equifax, Inc. 11,206 346,153
Monster Worldwide, Inc. (a) 11,129 193,645
Robert Half International,
Inc. 13,425 358,850
-------------
1,283,375
-------------
REAL ESTATE INVESTMENT TRUSTS 1.1%
Apartment Investment &
Management Co. Class A 10,366 165,027
AvalonBay Communities, Inc. 7,142 586,430
Boston Properties, Inc. 12,177 816,711
Equity Residential 24,314 821,327
HCP, Inc. 25,717 785,397
Health Care REIT, Inc. 10,808 479,010
Host Hotels & Resorts, Inc.
(a) 56,493 659,273
Kimco Realty Corp. 35,275 477,271
Plum Creek Timber Co., Inc. 14,392 543,442
ProLogis 41,811 572,392
Public Storage 11,906 969,744
Simon Property Group, Inc. 25,177 2,009,125
Ventas, Inc. 13,746 601,250
Vornado Realty Trust 13,851 968,739
-------------
10,455,138
-------------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.0%++
CB Richard Ellis Group, Inc.
Class A (a) 23,830 323,373
Forestar Real Estate Group,
Inc. (a) 1 22
-------------
323,395
-------------
ROAD & RAIL 0.9%
Burlington Northern Santa Fe
Corp. 23,007 2,268,950
CSX Corp. 34,444 1,670,190
Norfolk Southern Corp. 32,281 1,692,170
Ryder System, Inc. 4,946 203,627
Union Pacific Corp. 44,275 2,829,172
-------------
8,664,109
-------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.4%
Advanced Micro Devices, Inc.
(a) 49,750 481,580
Altera Corp. 26,005 588,493
Analog Devices, Inc. 25,620 809,080
Applied Materials, Inc. 118,503 1,651,932
Broadcom Corp. Class A (a) 37,963 1,193,936
</Table>
M-304 MainStay VP S&P 500 Index Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONTINUED)
Intel Corp. 486,037 $ 9,915,155
KLA-Tencor Corp. 15,131 547,137
Linear Technology Corp. 19,669 600,691
LSI Corp. (a) 57,628 346,344
MEMC Electronic Materials,
Inc. (a) 19,921 271,324
Microchip Technology, Inc. 16,131 468,767
Micron Technology, Inc. (a) 76,532 808,178
National Semiconductor Corp. 20,690 317,799
Novellus Systems, Inc. (a) 8,478 197,877
NVIDIA Corp. (a) 49,090 917,001
Teradyne, Inc. (a) 15,432 165,585
Texas Instruments, Inc. 109,946 2,865,193
Xilinx, Inc. 24,288 608,657
-------------
22,754,729
-------------
SOFTWARE 4.1%
Adobe Systems, Inc. (a) 46,111 1,695,963
Autodesk, Inc. (a) 20,308 516,026
BMC Software, Inc. (a) 16,264 652,186
CA, Inc. 35,190 790,367
Citrix Systems, Inc. (a) 16,107 670,212
Compuware Corp. (a) 20,237 146,314
Electronic Arts, Inc. (a) 28,876 512,549
Intuit, Inc. (a) 27,864 855,703
McAfee, Inc. (a) 13,896 563,761
v Microsoft Corp. 679,940 20,731,371
Novell, Inc. (a) 31,342 130,069
Oracle Corp. 344,837 8,462,300
Red Hat, Inc. (a) 16,465 508,769
Salesforce.com, Inc. (a) 9,646 711,585
Symantec Corp. (a) 71,557 1,280,155
-------------
38,227,330
-------------
SPECIALTY RETAIL 1.8%
Abercrombie & Fitch Co. Class
A 7,716 268,903
AutoNation, Inc. (a) 8,341 159,730
AutoZone, Inc. (a) 2,625 414,934
Bed Bath & Beyond, Inc. (a) 23,151 894,323
Best Buy Co., Inc. 29,978 1,182,932
GameStop Corp. Class A (a) 14,525 318,678
Gap, Inc. (The) 41,799 875,689
Home Depot, Inc. (The) 149,224 4,317,050
Limited Brands, Inc. 23,602 454,102
Lowe's Cos., Inc. 129,188 3,021,707
O'Reilly Automotive, Inc. (a) 11,981 456,716
Office Depot, Inc. (a) 24,286 156,645
RadioShack Corp. 11,097 216,392
Ross Stores, Inc. 10,991 469,426
Sherwin-Williams Co. (The) 8,356 515,147
Staples, Inc. 63,450 1,560,235
Tiffany & Co. 10,916 469,388
TJX Cos., Inc. 36,821 1,345,808
-------------
17,097,805
-------------
TEXTILES, APPAREL & LUXURY GOODS 0.5%
Coach, Inc. 28,117 1,027,114
NIKE, Inc. Class B 34,188 2,258,801
Polo Ralph Lauren Corp. 5,038 407,977
VF Corp. 7,796 570,979
-------------
4,264,871
-------------
THRIFTS & MORTGAGE FINANCE 0.1%
Guaranty Financial Group,
Inc. (a) 1 0 (b)
Hudson City Bancorp, Inc. 41,720 572,816
People's United Financial,
Inc. 30,486 509,116
-------------
1,081,932
-------------
TOBACCO 1.5%
Altria Group, Inc. 183,104 3,594,332
Lorillard, Inc. 14,101 1,131,323
Philip Morris International,
Inc. 167,652 8,079,150
Reynolds American, Inc. 14,891 788,776
-------------
13,593,581
-------------
TRADING COMPANIES & DISTRIBUTORS 0.1%
Fastenal Co. 11,686 486,605
W.W. Grainger, Inc. 5,508 533,340
-------------
1,019,945
-------------
WIRELESS TELECOMMUNICATION SERVICES 0.3%
American Tower Corp. Class A
(a) 35,228 1,522,202
MetroPCS Communications, Inc.
(a) 23,036 175,764
Sprint Nextel Corp. (a) 262,218 959,718
-------------
2,657,684
-------------
Total Common Stocks
(Cost $629,246,406) 873,417,402 (c)
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-305
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
<Caption>
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS 6.2%
- ----------------------------------------------------------------
REPURCHASE AGREEMENT 0.1%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$561,059 (Collateralized by
United States Treasury
Bills with a rate ranging
from zero coupon to 0.047%
and a maturity date ranging
from 1/14/10 to 3/18/10,
with a Principal Amount of
$575,000 and a Market Value
of $574,994) $ 561,058 $ 561,058
-------------
Total Repurchase Agreement
(Cost $561,058) 561,058
-------------
U.S. GOVERNMENT 6.1%
United States Treasury Bills
0.112%, due 4/8/10 (d) 800,000 799,833
0.174%, due 1/21/10 (d)(e) 8,000,000 7,999,896
0.521%, due 1/7/10 (d) 47,800,000 47,799,952
-------------
Total U.S. Government
(Cost $56,592,481) 56,599,681
-------------
Total Short-Term Investments
(Cost $57,153,539) 57,160,739
-------------
Total Investments
(Cost $686,399,945) (g) 100.0% 930,578,141
Other Assets, Less
Liabilities (0.0)++ (53,403)
----- ------------
Net Assets 100.0% $ 930,524,738
===== ============
</Table>
<Table>
<Caption>
CONTRACTS UNREALIZED
LONG APPRECIATION (f)
FUTURES CONTRACTS 0.1%
- --------------------------------------
Standard
&
Poor's
500
Index
Mini
March
2010 1,015 $945,175
--------
Total
Futur-
es
Con-
tracts
(Set-
tle-
ment
Value
$56,3-
68,02-
5) (c) $945,175
========
</Table>
<Table>
+++ On a daily basis New York Life Investments confirms that the value of
the Portfolio's liquid assets (liquid portfolio securities and cash)
is sufficient to cover its potential senior securities (e.g., futures,
swaps, options).
++ Less than one-tenth of a percent.
(a) Non-income producing security.
(b) Less than one dollar.
(c) The combined market value of common stocks and settlement value of
Standard & Poor's 500 Index futures contracts represents 99.9% of net
assets.
(d) Interest rate presented is yield to maturity.
(e) Represents a security, or a portion thereof, which is segregated, or
partially segregated as collateral for futures contracts.
(f) Represents the difference between the value of the contracts at the
time they were opened and the value at December 31, 2009.
(g) At December 31, 2009, cost is $711,779,025 for federal income tax
purposes and net unrealized appreciation is as follows:
</Table>
<Table>
Gross
unre-
alized
appre-
cia-
tion $ 334,959,039
Gross
unre-
alized
depre-
cia-
tion (116,159,923)
-------------
Net
unre-
alized
appre-
cia-
tion $ 218,799,116
=============
</Table>
M-306 MainStay VP S&P 500 Index Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
The following is a summary of the fair valuations according to inputs used as of
December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in Securities (a)
Common Stocks $873,417,402 $ -- $ -- $873,417,402
Short-Term Investments
Repurchase Agreement -- 561,058 -- 561,058
U.S. Government -- 56,599,681 -- 56,599,681
------------ ----------- ---------- ------------
Total Short-Term Investments -- 57,160,739 -- 57,160,739
------------ ----------- ---------- ------------
Total Investments in Securities 873,417,402 57,160,739 930,578,141
------------ ----------- ---------- ------------
Other Financial Instruments
Futures Contracts (b) 945,175 -- -- 945,175
------------ ----------- ---------- ------------
Total Other Financial Instruments 945,175 -- -- 945,175
------------ ----------- ---------- ------------
Total Investments and Other Financial
Instruments $874,362,577 $57,160,739 $-- $931,523,316
============ =========== ========== ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
(b) The value listed for these securities reflects unrealized appreciation as
shown on the Portfolio of Investments.
At December 31, 2009, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3).
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-307
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $686,399,945) $ 930,578,141
Receivables:
Dividends and interest 1,178,209
Investment securities sold 1,002,622
Fund shares sold 117,455
Other assets 1,445
-------------
Total assets 932,877,872
-------------
LIABILITIES:
Payables:
Investment securities purchased 1,093,607
Variation margin on futures
contracts 577,939
Fund shares redeemed 319,156
Manager (See Note 3) 197,418
NYLIFE Distributors (See Note 3) 46,744
Professional fees 45,020
Shareholder communication 35,718
Custodian 10,924
Directors 2,602
Accrued expenses 24,006
-------------
Total liabilities 2,353,134
-------------
Net assets $ 930,524,738
=============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 412,346
Additional paid-in capital 851,843,177
-------------
852,255,523
Accumulated undistributed net
investment income 15,842,638
Accumulated net realized loss on
investments and futures
transactions (182,696,794)
Net unrealized appreciation on
investments and futures contracts 245,123,371
-------------
Net assets $ 930,524,738
=============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 709,736,274
=============
Shares of capital stock outstanding 31,429,984
=============
Net asset value per share
outstanding $ 22.58
=============
SERVICE CLASS
Net assets applicable to
outstanding shares $ 220,788,464
=============
Shares of capital stock outstanding 9,804,643
=============
Net asset value per share
outstanding $ 22.52
=============
</Table>
M-308 MainStay VP S&P 500 Index Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends (a) $ 18,697,253
Interest 14,646
------------
Total income 18,711,899
------------
EXPENSES:
Manager (See Note 3) 2,452,273
Distribution and service--Service
Class (See Note 3) 470,283
Professional fees 131,989
Shareholder communication 126,128
Directors 36,547
Custodian 29,072
Miscellaneous 56,929
------------
Total expenses before waiver 3,303,221
Expense waiver from Manager
(See Note 3) (408,712)
------------
Net expenses 2,894,509
------------
Net investment income 15,817,390
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on:
Security transactions (42,142,269)
Futures transactions 13,207,257
------------
Net realized loss on investments
and futures transactions (28,935,012)
------------
Net change in unrealized
appreciation on:
Investments 208,971,191
Futures contracts 606,917
------------
Net change in unrealized
appreciation on investments and
futures contracts 209,578,108
------------
Net realized and unrealized gain on
investments and futures
transactions 180,643,096
------------
Net increase in net assets
resulting from operations $196,460,486
============
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of $73.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-309
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 15,817,390 $ 22,711,808
Net realized loss on
investments and futures
transactions (28,935,012) (16,866,966)
Net change in unrealized
appreciation on
investments and futures
contracts 209,578,108 (506,377,469)
------------------------------
Net increase (decrease) in
net assets resulting from
operations 196,460,486 (500,532,627)
------------------------------
Dividends to shareholders:
From net investment income:
Initial Class (17,673,412) (20,326,838)
Service Class (4,818,930) (5,002,202)
------------------------------
Total dividends to
shareholders (22,492,342) (25,329,040)
------------------------------
Capital share transactions:
Net proceeds from sale of
shares 34,656,962 76,256,052
Net asset value of shares
issued to shareholders in
reinvestment of dividends 22,492,342 25,329,040
Cost of shares redeemed (110,551,622) (201,274,955)
------------------------------
Decrease in net assets
derived from capital
share transactions (53,402,318) (99,689,863)
------------------------------
Net increase (decrease)
in net assets 120,565,826 (625,551,530)
NET ASSETS:
Beginning of year 809,958,912 1,435,510,442
------------------------------
End of year $ 930,524,738 $ 809,958,912
==============================
Accumulated undistributed
net investment income at
end of year $ 15,842,638 $ 22,550,659
==============================
</Table>
M-310 MainStay VP S&P 500 Index Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
This page intentionally left blank
mainstayinvestments.com M-311
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 18.35 $ 30.05 $ 29.01 $ 25.25 $ 24.38
-------- -------- ---------- ---------- ----------
Net investment income (a) 0.39 0.51 0.53 0.44 0.41
Net realized and
unrealized gain (loss)
on investments 4.40 (11.61) 1.00 3.47 0.76
-------- -------- ---------- ---------- ----------
Total from investment
operations 4.79 (11.10) 1.53 3.91 1.17
-------- -------- ---------- ---------- ----------
Less dividends:
From net investment
income (0.56) (0.60) (0.49) (0.15) (0.30)
-------- -------- ---------- ---------- ----------
Net asset value at end of
year $ 22.58 $ 18.35 $ 30.05 $ 29.01 $ 25.25
======== ======== ========== ========== ==========
Total investment return 26.26% (37.01%) 5.22% 15.45% 4.77%(b)
Ratios (to average net
assets)/Supplemental
Data:
Net investment income 1.99% 2.04% 1.73% 1.66% 1.68%
Net expenses 0.30% 0.30% 0.28% 0.35% 0.19%
Expenses (before waiver) 0.35% 0.35% 0.33% 0.35% 0.34%
Portfolio turnover rate 15% 5% 4% 5% 5%
Net assets at end of year
(in 000's) $709,736 $630,244 $1,134,325 $1,241,402 $1,227,193
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) Included nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 4.62% and 4.35% for Initial Class shares and Service
Class shares, respectively, for the year ended December 31, 2005.
</Table>
M-312 MainStay VP S&P 500 Index Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
2009 2008 2007 2006 2005
$ 18.30 $ 29.91 $ 28.90 $ 25.18 $ 24.34
-------- -------- -------- -------- --------
0.34 0.45 0.45 0.38 0.35
4.38 (11.54) 0.99 3.44 0.74
-------- -------- -------- -------- --------
4.72 (11.09) 1.44 3.82 1.09
-------- -------- -------- -------- --------
(0.50) (0.52) (0.43) (0.10) (0.25)
-------- -------- -------- -------- --------
$ 22.52 $ 18.30 $ 29.91 $ 28.90 $ 25.18
======== ======== ======== ======== ========
25.95% (37.17%) 4.96% 15.16% 4.47%(b)
1.74% 1.79% 1.49% 1.41% 1.43%
0.55% 0.55% 0.53% 0.60% 0.44%
0.60% 0.60% 0.58% 0.60% 0.59%
15% 5% 4% 5% 5%
$220,788 $179,715 $301,185 $274,579 $214,208
</Table>
;The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-313
MAINSTAY VP U.S. SMALL CAP PORTFOLIO
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. BECAUSE OF MARKET VOLATILITY, CURRENT PERFORMANCE
MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, AND AS A RESULT, WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE TABLES AND GRAPHS DO
NOT REFLECT ANY DEDUCTION OF SALES CHARGES, MORTALITY AND EXPENSE CHARGES,
CONTRACT CHARGES OR ADMINISTRATIVE CHARGES. PLEASE REFER TO THE PERFORMANCE
SUMMARY APPROPRIATE FOR YOUR POLICY. FOR PERFORMANCE INFORMATION CURRENT TO THE
MOST RECENT MONTH-END, PLEASE CALL 800-598-2019 OR VISIT WWW.NEWYORKLIFE.COM.
INITIAL CLASS AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 41.02% 5.04% -0.02%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
RUSSELL 2500(R) RUSSELL 2000(R)
INITIAL CLASS INDEX* GROWTH INDEX*
------------- --------------- ---------------
12/31/99 10000 10000 10000
12/31/00 8092 10427 7757
12/31/01 7498 10554 7041
12/31/02 5325 8676 4910
12/31/03 7375 12624 7294
12/31/04 7807 14934 8338
12/31/05 8748 16144 8684
12/31/06 9853 18754 9843
12/31/07 13410 19012 10536
12/31/08 7078 12018 6476
12/31/09 9981 16151 8708
</Table>
SERVICE CLASS(2) AS OF 12/31/09
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS(1) YEARS(1)
- ----------------------------------------------------------------------------------
After Portfolio operating expenses 40.68% 4.77% -0.27%
</Table>
(After Portfolio operating expenses)
<Table>
<Caption>
RUSSELL 2500(R) RUSSELL 2000(R)
SERVICE CLASS INDEX* GROWTH INDEX*
------------- --------------- ---------------
12/31/99 10000 10000 10000
12/31/00 8070 10427 7757
12/31/01 7459 10554 7041
12/31/02 5284 8676 4910
12/31/03 7300 12624 7294
12/31/04 7709 14934 8338
12/31/05 8613 16144 8684
12/31/06 9677 18754 9843
12/31/07 13138 19012 10536
12/31/08 6917 12018 6476
12/31/09 9731 16151 8708
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Russell 2500(TM) Index(3) 34.39% 1.58% 4.91%
Russell 2000(R) Growth Index(3) 34.47 0.87 -1.37
Average Lipper Variable Products Small-Cap Growth
Portfolio(4) 35.86 1.04 -0.67
</Table>
1. Performance figures shown for the five-year and ten-year periods ended
December 31, 2009 reflect nonrecurring reimbursements from affiliates for
printing and mailing costs. If these nonrecurring reimbursements had not been
made, the total returns would have been 5.05% and -0.01% for Initial Class
shares and 4.77% and -0.27% for Service Class shares for the five-year and
ten-year periods, respectively.
2. Performance for Service Class shares, first offered June 5, 2003, includes
the historical performance of Initial Class shares through June 4, 2003
adjusted to reflect the fees and expenses for Service Class shares.
3. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices mentioned
in the reports. The Portfolio selected the Russell 2500(TM) Index as its
primary benchmark index in replacement of the Russell 2000(R) Growth Index in
connection with a change in subadvisor.
4. The Average Lipper Variable Products Small-Cap Growth Portfolio is
representative of portfolios that, by portfolio practice, invest at least 75%
of their equity assets in companies with market capitalizations (on a three-
year weighted basis) below Lipper's U.S. Diversified Equity small-cap
ceiling. Small-cap growth funds typically have an above-average price-to-
earnings ratio, price-to-book ratio, and three-year sales-per-share growth
value compared to the S&P SmallCap 600(R) Index. Lipper Inc. is an
independent monitor of fund performance.
M-314 MainStay VP U.S. Small Cap Portfolio
COST IN DOLLARS OF A $1,000 INVESTMENT IN MAINSTAY VP U.S. SMALL CAP PORTFOLIO
(UNAUDITED)
- --------The example below is intended to describe the fees and expenses borne by
shareholders during the six-month period from July 1, 2009, to December 31,
2009, and the impact of those costs on your investment.
EXAMPLE
As a shareholder of the Portfolio, you incur two types of costs: (1) transaction
costs, including redemption fees, exchange fees, and sales charges (loads) on
purchases (as applicable), and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, and other Portfolio expenses (as
applicable). This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Portfolio and to compare these costs with the
ongoing costs of investing in other Portfolios. The example is based on an
investment of $1,000 made at the beginning of the six-month period and held for
the entire period from July 1, 2009, to December 31, 2009. Shares are only sold
in connection with variable life and annuity contracts and the example does not
reflect any contract level or transactional fees or expenses. If these costs had
been included, your costs would have been higher.
This example illustrates your Portfolio's ongoing costs in two ways:
- - ACTUAL EXPENSES
The second and third data columns in the table below provide information about
actual account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the
expenses that you paid during the six-months ended December 31, 2009. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
- - HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The fourth and fifth data columns in the table below provide information about
hypothetical account values and hypothetical expenses based on the Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balances or expenses you paid for the six-month period shown. You may use this
information to compare the ongoing costs of investing in the Portfolio with the
ongoing costs of investing in other Portfolios. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other Portfolios.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees, if applicable, exchange fees, or sales charges (loads).
Therefore, the fourth and fifth data columns of the table are useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
ENDING ACCOUNT
ENDING ACCOUNT VALUE (BASED
VALUE (BASED ON HYPOTHETICAL
BEGINNING ON ACTUAL EXPENSES 5% ANNUALIZED EXPENSES
ACCOUNT RETURNS AND PAID RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 7/1/09 12/31/09 PERIOD(1) 12/31/09 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,159.30 $6.04 $1,019.60 $5.65
- --------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,157.90 $7.51 $1,018.20 $7.02
- --------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(1.11% for Initial Class and 1.38% for Service Class) multiplied by the
average account value over the period, divided by 365 and multiplied by 184
(to reflect the one-half year period). The table above represents the actual
expenses incurred during the one-half year period.
mainstayinvestments.com M-315
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2009 (UNAUDITED)
<Table>
<Caption>
Insurance 7.2%
Health Care Equipment & Supplies 5.4
Machinery 5.3
Chemicals 5.1
Multi-Utilities 4.8
Software 4.8
Thrifts & Mortgage Finance 4.7
Household Durables 4.6
Capital Markets 4.1
Specialty Retail 4.1
Commercial Banks 3.9
Communications Equipment 3.6
Aerospace & Defense 3.5
Electric Utilities 3.1
Electronic Equipment & Instruments 3.0
Containers & Packaging 2.6
Wireless Telecommunication Services 2.5
Health Care Providers & Services 2.4
Gas Utilities 2.3
Pharmaceuticals 2.2
Real Estate Investment Trusts 2.2
Electrical Equipment 1.7
Textiles, Apparel & Luxury Goods 1.7
Biotechnology 1.5
IT Services 1.5
Diversified Consumer Services 1.4
Energy Equipment & Services 1.2
Household Products 1.2
Distributors 1.1
Professional Services 1.1
Food Products 0.9
Oil, Gas & Consumable Fuels 0.8
Semiconductors & Semiconductor
Equipment 0.8
Hotels, Restaurants & Leisure 0.7
Building Products 0.5
Internet Software & Services 0.5
Health Care Technology 0.3
Beverages 0.1
Airlines 0.0++
Computers & Peripherals 0.0++
Short-Term Investment 2.3
Other Assets, Less Liabilities -0.7
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-320 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2009 (EXCLUDING SHORT-TERM INVESTMENT)
<Table>
1. Silgan Holdings, Inc.
2. Washington Federal, Inc.
3. Sybase, Inc.
4. ONEOK, Inc.
5. Ventas, Inc.
6. Platinum Underwriters Holdings, Ltd.
7. Waddell & Reed Financial, Inc. Class A
8. Federated Investors, Inc. Class B
9. Endo Pharmaceuticals Holdings, Inc.
10. AGCO Corp.
</Table>
M-316 MainStay VP U.S. Small Cap Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
QUESTIONS ANSWERED BY LORD, ABBETT & CO. ("LORD, ABBETT"), THE PORTFOLIO'S
FORMER SUBADVISOR, AND DAVID PEARL, CFA, WILLIAM PRIEST, CFA, AND MICHAEL
WELHOELTER, CFA, OF EPOCH INVESTMENT PARTNERS, INC. ("EPOCH"), THE PORTFOLIO'S
SUBADVISOR.(1)
HOW DID MAINSTAY VP U.S. SMALL CAP PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2009?
For the 12 months ended December 31, 2009, MainStay VP U.S. Small Cap Portfolio
returned 41.02% for Initial Class shares and 40.68% for Service Class shares.
Both share classes outperformed the 35.86% return of the average Lipper(2)
Variable Products Small-Cap Growth Portfolio, the 34.39% return of the Russell
2500(TM) Index(2) and the 34.47% return of the Russell 2000(R) Growth Index(2)
for the 12 months ended December 31, 2009. The Russell 2500(TM) Index is the
Portfolio's broad-based securities-market index.
WERE THERE ANY SIGNIFICANT CHANGES IN PORTFOLIO'S DAY-TO-DAY PORTFOLIO
MANAGEMENT OR INVESTMENT APPROACH DURING 2009?
In connection with a larger initiative by New York Life Investments to
reposition and rationalize the lineup of MainStay VP Portfolios, the Board of
Directors of the Fund approved the replacement Lord, Abbett with Epoch as the
Subadvisor to the Portfolio, effective June 29, 2009. For the period from
January 1, 2009, to June 28, 2009, the Portfolio's per-
formance figures referenced above reflect the perfor-
mance of the Portfolio while it was managed by its former subadvisor, Lord,
Abbett.
Effective August 14, 2009, the Portfolio amended its principal risks and changed
its primary benchmark index from the Russell 2000(R) Growth Index to the Russell
2500(TM) Index. Effective September 9, 2009, the Portfolio changed its principal
investment strategy and investment process. Effective November 20, 2009, the
Portfolio changed its name from MainStay VP Developing Growth Portfolio to
MainStay VP U.S. Small Cap Portfolio. For the period from January 1, 2009, to
August 14, 2009, the Portfolio's relative performance figures discussed herein
are compared to the previous benchmark index and relative performance figures
thereafter are compared to the current benchmark. For additional information
about these changes and their implementation, please refer to the Supplements
dated June 29, 2009, and August 26, 2009, to the Prospectus for the Fund dated
May 1, 2009.
WHAT ACCOUNTED FOR THE PORTFOLIO'S PERFORMANCE RELATIVE TO ITS BENCHMARK DURING
THE REPORTING PERIOD?
During the first six months of 2009, the Portfolio's holdings in the information
technology sector were the primary contributor to the Portfolio's strong
performance relative to the Russell 2000(R) Growth Index. Stock selection in the
industrials sector also added to relative performance. The most significant
detractor from the Portfolio's relative performance during the first half of
2009 was stock selection in the consumer staples sector, followed by stock
selection in telecommunication services.
During the second half of 2009, the Portfolio under-
performed relative to its new benchmark, the Russell 2500(TM) Index. In a
momentum-led market where lower-quality, high-beta(3) companies performed par-
ticularly well, the new Subadvisor's conservative stock selection with a focus
on free-cash-flow- generating companies was a drag on relative performance.
Investments in common stocks and other equity securities are particularly
subject to the risk of changing economic, stock market, industry and company
conditions and the risks inherent in management's ability to anticipate such
changes that can adversely affect the value of the Portfolio's holdings. Stocks
of small-capitalization companies may be subject to greater price volatility,
significantly lower trading volumes, cyclical, static or moderate growth
prospects and greater spreads between bid and ask prices than stocks of larger
companies. Small-capitalization companies may be more vulnerable to adverse
business or market developments than large-capitalization companies. The
principal risk of investing in value stocks is that they may never reach what
the portfolio manager believes is their full value or that they may even go down
in value. The Portfolio may experience a portfolio turnover rate of more than
100% and may generate taxable short-term capital gains.
1. During the reporting period, New York Life Investments delegated day-to-day
portfolio management responsibilities to Lord, Abbett from January 1, 2009,
to June 29, 2009, and to Epoch beginning on June 29, 2009. "New York Life
Investments" is a service mark used by New York Life Investment Management
LLC.
2. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indices and other indices, averages
and service providers mentioned in the reports.
3. Beta is a measure of volatility in relation to the market as a whole. A beta
higher than 1 indicates that a security or portfolio will tend to exhibit
higher volatility than the market. A beta lower than 1 indicates that a
security or portfolio will tend to exhibit lower volatility than the market.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-317
DURING 2009, WHICH SECTORS WERE STRONG CONTRIBUTORS TO THE PORTFOLIO'S RELATIVE
PERFORMANCE AND WHICH SECTORS WERE PARTICULARLY WEAK?
During the first half of 2009, the Portfolio benefited from an overweight
position relative to the Russell 2000(R) Growth Index in information technology.
Industrials was also a strong contributor, despite negative absolute
performance. Energy, another overweight sector, followed with positive relative
and absolute performance. During the first half of 2009, the weakest-
contributing sectors to the Portfolio's relative performance were
telecommunication services, consumer staples and materials.
Every sector in the Portfolio with the exception of health care posted positive
double-digit returns for the six-month period. Overall, however, both the
Portfolio's conservative stock selection (particularly in consumer
discretionary, health care and information technology), an overweight position
in health care and an average 4.3% cash position caused the Port-
folio to lag the benchmark. Stock selection and a modest overweight within
utilities helped relative performance as did the Portfolio's overweight position
on average in telecommunication services.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS WERE STRONG CONTRIBUTORS TO
THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS WERE PARTICULARLY WEAK?
During the first six months of 2009, strong absolute performers included energy
demand response company EnerNOC, wireless enterprise network provider Aruba
Networks and computer components maker Synaptics. Weak absolute performers
during the first half of the year included solar-panel product maker Energy
Conversion Devices, heart monitor maker CardioNet and Internet-based consumer-
banking company Bankrate.
During the second half of 2009, the three strongest individual contributors to
the Portfolio's absolute performance were communications equipment company 3Com
Corp., which received an acquisition bid from Hewlett-Packard; thrift
institution Washington Federal; and storage, beauty and personal-care product
maker and distributor Tupperware Brands, which benefited from exposure to
emerging markets. All three were new purchases during the second half of 2009.
The three greatest detractors from absolute performance
in the second half of the year were Synaptics, a developer and maker of computer
accessories; homebuilder KB Home; and marine contractor Cal Dive International.
All three of these stocks provided negative returns for the six months ended
December 31, 2009.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
During the first six months of 2009, significant purchases included online
gaming company Shanda Interactive Entertainment and postsecondary education
provider Strayer Education. Significant sales during the first half of the year
included online movie rental provider Netflix, which was sold at a profit as the
company continued to gain market share from competitors, including Blockbuster.
In addition to being one of the Portfolio's largest purchases, Shanda
Interactive Entertainment was also a significant sale. The Portfolio sold the
stock at a profit during the first half of 2009.
During the second half of the year, the Portfolio added new positions in a
diversified group of financial companies. The additions included asset managers
Federated Investors and Waddell & Reed Financial as well as insurance and
reinsurance companies such as Arthur J. Gallagher & Co. and The Hanover
Insurance Group. Among the positions the Portfolio sold during the second half
of the year were retailers Aeropostale, Dick's Sporting Goods and True Religion
Apparel. Many retailers had experienced a significant rebound in their stock
prices, and the Portfolio sought what the Subadvisor believed to be better
opportunities among other retailers and other segments of the consumer
discretionary sector.
WERE THERE ANY NOTABLE CHANGES IN THE PORTFOLIO'S SECTOR WEIGHTINGS DURING THE
REPORTING PERIOD?
During the first six months of 2009, the Portfolio increased its weightings in
information technology and consumer discretionary. Both sector positions were
overweight at midyear. Over the same period, the Portfolio substantially reduced
its weighting in health care and decreased its consumer staples position from
overweight to significantly underweight relative to the Russell 2000(R) Growth
Index.
During the second half of 2009, the Portfolio moved from an underweight to an
overweight position relative to the Russell 2500(TM) Index in financials and
utilities. Over the same period, exposure to the financials sector increased.
The Portfolio moved from an overweight position in the information technology
sector to an underweight position. In addition, the Portfolio lowered its weight
in health care and increased its allocation to materials, bringing these
positions closer to benchmark weightings. The
M-318 MainStay VP U.S. Small Cap Portfolio
Portfolio's consumer discretionary weighting did not change significantly during
the second half of 2009.
HOW WAS THE PORTFOLIO POSITIONED AT THE END
OF 2009?
As of December 31, 2009, the Portfolio was over-
weight in financials and utilities. As of the same date, the Portfolio was
underweight in industrials
and information technology.
The opinions expressed are those of the responders as of the date of this report
with respect to the period managed by such portfolio manager and are subject to
change. There is no guarantee that any forecasts made will come to pass. This
material does not constitute investment advice and is not intended as an
endorsement of any specific investment.
Information about MainStay VP U.S. Small Cap Portfolio on this page and the
preceding pages has not been audited.
mainstayinvestments.com M-319
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 98.4%+
- -------------------------------------------------------------
AEROSPACE & DEFENSE 3.5%
Alliant Techsystems, Inc.
(a) 32,300 $ 2,851,121
Curtiss-Wright Corp. 70,250 2,200,230
DigitalGlobe, Inc. (a) 3,800 91,960
Hexcel Corp. (a) 102,000 1,323,960
-------------
6,467,271
-------------
AIRLINES 0.0%++
Allegiant Travel Co. (a) 1,642 77,453
-------------
BEVERAGES 0.1%
Hansen Natural Corp. (a) 5,200 199,680
-------------
BIOTECHNOLOGY 1.5%
Alkermes, Inc. (a) 187,850 1,767,668
Allos Therapeutics, Inc. (a) 40,800 268,056
Onyx Pharmaceuticals, Inc.
(a) 26,200 768,708
-------------
2,804,432
-------------
BUILDING PRODUCTS 0.5%
Masco Corp. 72,800 1,005,368
-------------
CAPITAL MARKETS 4.1%
v Federated Investors,
Inc. Class B 138,750 3,815,625
v Waddell & Reed
Financial, Inc. Class A 126,050 3,849,567
-------------
7,665,192
-------------
CHEMICALS 5.1%
International Flavors &
Fragrances, Inc. 48,950 2,013,803
Methanex Corp. 134,350 2,618,482
Nalco Holding Co. 106,950 2,728,294
Sensient Technologies Corp. 78,500 2,064,550
-------------
9,425,129
-------------
COMMERCIAL BANKS 3.9%
Investors Bancorp, Inc. (a) 192,600 2,107,044
Sterling Bancshares, Inc. 169,950 871,844
Texas Capital Bancshares,
Inc. (a) 109,000 1,521,640
UMB Financial Corp. 68,350 2,689,572
-------------
7,190,100
-------------
COMMUNICATIONS EQUIPMENT 3.6%
3Com Corp. (a) 426,850 3,201,375
ADC Telecommunications, Inc.
(a) 249,700 1,550,637
Harmonic, Inc. (a) 282,050 1,785,376
Infinera Corp. (a) 10,000 88,700
-------------
6,626,088
-------------
CONTAINERS & PACKAGING 2.6%
v Silgan Holdings, Inc. 84,450 4,887,966
-------------
DISTRIBUTORS 1.1%
Genuine Parts Co. 54,950 2,085,902
-------------
DIVERSIFIED CONSUMER SERVICES 1.4%
Service Corp. International 324,300 2,656,017
-------------
ELECTRIC UTILITIES 3.1%
DPL, Inc. 90,000 2,484,000
Westar Energy, Inc. 148,300 3,221,076
-------------
5,705,076
-------------
ELECTRICAL EQUIPMENT 1.7%
Energy Conversion Devices,
Inc. (a) 7,600 80,332
Woodward Governor Co. 117,700 3,033,129
-------------
3,113,461
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 3.0%
DTS, Inc. (a) 97,724 3,343,138
Jabil Circuit, Inc. 124,950 2,170,382
-------------
5,513,520
-------------
ENERGY EQUIPMENT & SERVICES 1.2%
Cal Dive International, Inc.
(a) 297,678 2,250,446
-------------
FOOD PRODUCTS 0.9%
Corn Products International,
Inc. 59,850 1,749,416
-------------
GAS UTILITIES 2.3%
v ONEOK, Inc. 95,600 4,260,892
-------------
HEALTH CARE EQUIPMENT & SUPPLIES 5.4%
Haemonetics Corp. (a) 36,700 2,024,005
Inverness Medical
Innovations, Inc. (a) 64,100 2,660,791
SonoSite, Inc. (a) 115,750 2,735,172
Teleflex, Inc. 50,500 2,721,445
-------------
10,141,413
-------------
HEALTH CARE PROVIDERS & SERVICES 2.4%
Bio-Reference Laboratories,
Inc. (a) 48,250 1,890,917
DaVita, Inc. (a) 43,540 2,557,540
-------------
4,448,457
-------------
HEALTH CARE TECHNOLOGY 0.3%
Phase Forward, Inc. (a) 31,496 483,464
-------------
HOTELS, RESTAURANTS & LEISURE 0.7%
Multimedia Games, Inc. (a) 22,720 136,547
Shuffle Master, Inc. (a) 136,892 1,127,990
-------------
1,264,537
-------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
v Among the Portfolio's 10 largest holdings, as of December 31, 2009, excluding
short-term investment. May be subject to change daily.
M-320 MainStay VP U.S. Small Cap Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
HOUSEHOLD DURABLES 4.6%
KB Home 207,100 $ 2,833,128
Ryland Group, Inc. 113,600 2,237,920
Tupperware Brands Corp. 73,200 3,408,924
-------------
8,479,972
-------------
HOUSEHOLD PRODUCTS 1.2%
Church & Dwight Co., Inc. 37,250 2,251,762
-------------
INSURANCE 7.2%
Arthur J. Gallagher & Co. 128,800 2,899,288
Hanover Insurance Group,
Inc. (The) 65,000 2,887,950
v Platinum Underwriters
Holdings, Ltd. 100,650 3,853,888
Validus Holdings, Ltd. 137,100 3,693,474
-------------
13,334,600
-------------
INTERNET SOFTWARE & SERVICES 0.5%
Constant Contact, Inc. (a) 34,200 547,200
OpenTable, Inc. (a) 17,900 455,734
-------------
1,002,934
-------------
IT SERVICES 1.5%
NeuStar, Inc. Class A (a) 121,850 2,807,424
-------------
MACHINERY 5.3%
Actuant Corp. Class A 47,100 872,763
v AGCO Corp. (a) 116,650 3,772,461
Kennametal, Inc. 85,250 2,209,680
Wabtec Corp. 71,700 2,928,228
-------------
9,783,132
-------------
MULTI-UTILITIES 4.8%
CMS Energy Corp. 162,650 2,547,099
NSTAR 76,950 2,831,760
Vectren Corp. 146,200 3,608,216
-------------
8,987,075
-------------
OIL, GAS & CONSUMABLE FUELS 0.8%
Southern Union Co. 64,350 1,460,745
-------------
PHARMACEUTICALS 2.2%
Auxilium Pharmaceuticals,
Inc. (a) 8,900 266,822
v Endo Pharmaceuticals
Holdings, Inc. (a) 184,400 3,782,044
-------------
4,048,866
-------------
PROFESSIONAL SERVICES 1.1%
IHS, Inc. Class A (a) 36,250 1,986,863
-------------
REAL ESTATE INVESTMENT TRUSTS 2.2%
v Ventas, Inc. 93,300 4,080,942
-------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.8%
MEMC Electronic Materials,
Inc. (a) 105,650 1,438,953
-------------
SOFTWARE 4.8%
Rovi Corp. (a) 57,400 1,829,338
Solera Holdings, Inc. 46,700 1,681,667
v Sybase, Inc. (a) 101,700 4,413,780
THQ, Inc. (a) 184,600 930,384
-------------
8,855,169
-------------
SPECIALTY RETAIL 4.1%
Aeropostale, Inc. (a) 42,400 1,443,720
GameStop Corp. Class A (a) 148,450 3,256,993
Monro Muffler Brake, Inc. 60,750 2,031,480
PetSmart, Inc. 33,500 894,115
-------------
7,626,308
-------------
TEXTILES, APPAREL & LUXURY GOODS 1.7%
Fossil, Inc. (a) 14,900 500,044
Warnaco Group, Inc. (The)
(a) 64,887 2,737,583
-------------
3,237,627
-------------
THRIFTS & MORTGAGE FINANCE 4.7%
First Niagara Financial
Group, Inc. 198,750 2,764,612
Hudson City Bancorp, Inc. 120,350 1,652,406
v Washington Federal, Inc. 228,800 4,424,992
-------------
8,842,010
-------------
WIRELESS TELECOMMUNICATION SERVICES 2.5%
NTELOS Holdings Corp. 59,500 1,060,290
Syniverse Holdings, Inc. (a) 205,968 3,600,321
-------------
4,660,611
-------------
Total Common Stocks
(Cost $173,170,731) 182,906,273
-------------
<Caption>
<Caption>
NUMBER OF
WARRANTS
WARRANTS 0.0%++
- -------------------------------------------------------------
COMPUTERS & PERIPHERALS 0.0%++
Lantronix, Inc.
Strike Price $0.01
Expires 2/9/11 (a)(b) 120 1
-------------
Total Warrants
(Cost $0) 1
-------------
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-321
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2009 (CONTINUED)
<Table>
<Caption>
<Caption>
NUMBER OF
WARRANTS
<Caption>
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENT 2.3%
- -------------------------------------------------------------
REPURCHASE AGREEMENT 2.3%
State Street Bank and Trust
Co.
0.005%, dated 12/31/09
due 1/4/10
Proceeds at Maturity
$4,255,364
(Collateralized by a
United States Treasury
Bill with a zero coupon
rate and a maturity date
of 2/18/10, with a
Principal Amount of
$4,345,000 and a Market
Value of $4,345,000) $4,255,361 $ 4,255,361
-------------
Total Short-Term Investment
(Cost $4,255,361) 4,255,361
-------------
Total Investments
(Cost $177,426,092) (c) 100.7% 187,161,635
Other Assets, Less
Liabilities (0.7) (1,237,505)
----- ------------
Net Assets 100.0% $ 185,924,130
===== ============
</Table>
<Table>
++ Less than one-
tenth of a
percent.
(a) Non-income
producing
security.
(b) Fair valued
security. The
total market
value of this
security at
December 31,
2009 is $1,
which represents
less than one-
tenth of a
percent of the
Portfolio's net
assets.
(c) At December 31,
2009, cost is
$178,024,432 for
federal income
tax purposes and
net unrealized
appreciation is
as follows:
</Table>
<Table>
Gross unrealized
appreciation $16,797,225
Gross unrealized
depreciation (7,660,022)
-----------
Net unrealized
appreciation $ 9,137,203
===========
</Table>
The following is a summary of the fair valuations according to inputs used as of
December 31, 2009, for valuing the Portfolio's assets.
ASSET VALUATION INPUTS
<Table>
<Caption>
QUOTED PRICES
IN ACTIVE SIGNIFICANT
MARKETS FOR OTHER SIGNIFICANT
IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
Investments in
Securities (a)
Common Stocks $182,906,273 $ -- $ -- $182,906,273
Warrants (b) -- -- 1 1
Short-Term
Investment
Repurchase
Agreement -- 4,255,361 -- 4,255,361
------------ ---------- ------------- ------------
Total
Investments in
Securities $182,906,273 $4,255,361 $ 1 $187,161,635
============ ========== ============= ============
</Table>
(a) For detailed industry descriptions, see the Portfolio of Investments.
(b) The level 3 security valued at $1 is held in Computers & Peripherals within
the Warrants section of the Portfolio of Investments.
Following is a reconciliation of investments in which significant unobservable
inputs (Level 3) were used in determining value:
ASSET VALUATION INPUTS
<Table>
<Caption>
BALANCE CHANGE IN NET NET BALANCE
AS OF ACCRUED REALIZED UNREALIZED TRANSFERS TRANSFERS AS OF
INVESTMENTS DECEMBER 31, DISCOUNTS GAIN APPRECIATION NET NET IN TO OUT OF DECEMBER 31,
IN SECURITIES 2008 (PREMIUMS) (LOSS) (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3 2009
Warrants $1 $-- $-- $-- $-- $-- $-- $-- $1
-- --- --- --- --- --- --- --- --
Total $1 $-- $-- $-- $-- $-- $-- $-- $1
== === === === === === === === ==
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
INVESTMENTS
STILL HELD AT
INVESTMENTS DECEMBER 31,
IN SECURITIES 2009 (A)
Warrants $--
---
Total $--
===
</Table>
(a) Included in "Net change in unrealized appreciation (depreciation) on
investments" in the Statement of Operations.
M-322 MainStay VP U.S. Small Cap Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009
<Table>
ASSETS:
Investment in securities, at value
(identified cost $177,426,092) $187,161,635
Receivables:
Investment securities sold 2,575,336
Dividends and interest 238,094
Fund shares sold 102,704
Other assets 91
------------
Total assets 190,077,860
------------
LIABILITIES:
Payables:
Investment securities purchased 3,474,480
Fund shares redeemed 396,257
Manager (See Note 3) 124,102
Shareholder communication 76,027
Professional fees 49,592
NYLIFE Distributors (See Note 3) 22,904
Custodian 6,800
Directors 418
Accrued expenses 3,150
------------
Total liabilities 4,153,730
------------
Net assets $185,924,130
============
NET ASSETS CONSIST OF:
Capital stock (par value of $.01
per share) 200 million shares
authorized $ 253,135
Additional paid-in capital 234,984,015
------------
235,237,150
Accumulated undistributed net
investment income 67,952
Accumulated net realized loss on
investments (59,116,515)
Net unrealized appreciation on
investments 9,735,543
------------
Net assets $185,924,130
============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 76,142,790
============
Shares of capital stock outstanding 10,218,910
============
Net asset value per share
outstanding $ 7.45
============
SERVICE CLASS
Net assets applicable to
outstanding shares $109,781,340
============
Shares of capital stock outstanding 15,094,615
============
Net asset value per share
outstanding $ 7.27
============
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-323
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
<Table>
INVESTMENT INCOME:
INCOME:
Dividends (a) $ 713,410
Interest 553
-----------
Total income 713,963
-----------
EXPENSES:
Manager (See Note 3) 583,011
Distribution and service--Service
Class
(See Note 3) 117,564
Professional fees 88,763
Shareholder communication 74,603
Custodian 17,749
Directors 2,654
Miscellaneous 16,538
-----------
Total expenses 900,882
-----------
Net investment loss (186,919)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 5,169,516
Net change in unrealized
depreciation on investments 20,585,979
-----------
Net realized and unrealized gain on
investments 25,755,495
-----------
Net increase in net assets resulting
from operations $25,568,576
===========
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of $3,957.
M-324 MainStay VP U.S. Small Cap Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
<Table>
<Caption>
<Caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss $ (186,919) $ (218,190)
Net realized gain (loss) on
investments 5,169,516 (22,451,196)
Net change in unrealized
appreciation (depreciation)
on investments 20,585,979 (23,008,793)
---------------------------
Net increase (decrease) in
net assets resulting from
operations 25,568,576 (45,678,179)
---------------------------
Distributions to shareholders:
From net realized gain on investments:
Initial Class -- (5,389,734)
Service Class -- (11,811,221)
---------------------------
Total distributions to
shareholders -- (17,200,955)
---------------------------
Capital share transactions:
Net proceeds from sale of
shares 20,647,806 19,402,654
Net asset value of shares
issued in connection with
the acquisition of MainStay
VP Small Cap Growth
Portfolio 107,146,056 --
Net asset value of shares
issued to shareholders in
reinvestment of
distributions -- 17,200,955
Cost of shares redeemed (15,858,842) (23,910,712)
---------------------------
Increase in net assets
derived from capital
share transactions 111,935,020 12,692,897
---------------------------
Net increase (decrease)
in net assets 137,503,596 (50,186,237)
NET ASSETS:
Beginning of year 48,420,534 98,606,771
---------------------------
End of year $185,924,130 $ 48,420,534
===========================
Accumulated undistributed net
investment income at end of
year $ 67,952 $ --
===========================
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-325
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2009 2008 2007 2006 2005
Net asset value at
beginning of year $ 5.28 $ 14.98 $ 11.45 $ 10.17 $ 9.07
------- ------- ------- ------- -------
Net investment loss (a) (0.00)++ (0.01) (0.03) (0.04) (0.05)
Net realized and
unrealized gain (loss)
on investments 2.17 (6.90) 4.18 1.32 1.15
------- ------- ------- ------- -------
Total from investment
operations 2.17 (6.91) 4.15 1.28 1.10
------- ------- ------- ------- -------
Less distributions:
From net realized gain
on investments -- (2.79) (0.62) -- --
------- ------- ------- ------- -------
Net asset value at end of
year $ 7.45 $ 5.28 $ 14.98 $ 11.45 $ 10.17
======= ======= ======= ======= =======
Total investment return 41.10% (b) (47.22%) 36.10% 12.64% 12.04% (c)
Ratios (to average net
assets)/Supplemental
Data:
Net investment loss (0.02%) (0.13%) (0.23%) (0.34%) (0.59%)
Net expenses 1.08% 0.95% 0.92% 0.96% # 0.90% #
Expenses (before
reimbursement) 1.08% 0.95% 0.92% 0.97% # 1.03% #
Portfolio turnover rate 186% 279% 179% 228% 130%
Net assets at end of year
(in 000's) $76,143 $14,963 $36,128 $27,772 $27,614
</Table>
<Table>
++ Less than one cent per share.
# Includes fees paid indirectly which amounted to 0.01% and 0.02% of average net
assets for the years ended December 31, 2006 and 2005, respectively.
(a) Per share data based on average shares outstanding during the period.
(b) Total investment returns may reflect adjustments to conform to generally
accepted accounting principles.
(c) Includes nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
return would have been 11.94% and 11.64% for Initial Class shares and Service
Class shares, respectively, for the year ended December 31, 2005.
</Table>
M-326 MainStay VP U.S. Small Cap Portfolio The notes to the financial
statements are an integral part of, and should be read in conjunction with, the
financial statements.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
Service Class
--------------------------------------------------------------
Year ended December 31,
- --------------------------------------------------------------------
2009 2008 2007 2006 2005
$ 5.17 $ 14.80 $ 11.35 $ 10.10 $ 9.04
-------- ------- ------- ------- -------
(0.02) (0.04) (0.07) (0.07) (0.08)
2.12 (6.80) 4.14 1.32 1.14
-------- ------- ------- ------- -------
2.10 (6.84) 4.07 1.25 1.06
-------- ------- ------- ------- -------
-- (2.79) (0.62) -- --
-------- ------- ------- ------- -------
$ 7.27 $ 5.17 $ 14.80 $ 11.35 $ 10.10
======== ======= ======= ======= =======
40.62% (b) (47.35%) 35.76% 12.36% 11.73% (c)
(0.39%) (0.38%) (0.48%) (0.59%) (0.84%)
1.33% 1.20% 1.17% 1.21% # 1.15% #
1.33% 1.20% 1.17% 1.22% # 1.28% #
186% 279% 179% 228% 130%
$109,781 $33,458 $62,478 $31,805 $22,995
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-327
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
January 23, 1984 Bond and Common Stock
Portfolios
- --------------------------------------------------
January 29, 1993 Cash Management, Government,
Growth Equity, Income Builder
and S&P 500 Index Portfolios
- --------------------------------------------------
May 1, 1995 High Yield Corporate Bond and
International Equity
Portfolios
- --------------------------------------------------
October 1, 1996 Convertible Portfolio
- --------------------------------------------------
May 1, 1998 ICAP Select Equity, Large Cap
Growth and U.S. Small Cap
Portfolios
- --------------------------------------------------
July 2, 2001 Mid Cap Core Portfolio
- --------------------------------------------------
May 2, 2005 Balanced and Floating Rate
Portfolios
- --------------------------------------------------
February 13, 2006 Conservative Allocation,
Growth Allocation, Moderate
Allocation and Moderate
Growth Allocation Portfolios
- --------------------------------------------------
</Table>
The Portfolios (each separately a "Portfolio") are separate series of the Fund.
Shares of the Portfolios are currently offered 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, the "Separate
Accounts"). The Separate Accounts are used to fund flexible premium deferred
variable annuity contracts and variable life insurance policies. Shares of the
Portfolios are also offered to the Asset Allocation Portfolios (as defined
below), which may invest in and own shares in any of the Portfolios or other
MainStay Funds.
On May 13, 2003, the Fund's Board of Directors ("Board") 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 (as defined below) of their shares. Contract owners of variable
annuity contracts purchased after June 2, 2003 are permitted to invest only in
the Service Class shares.
The Service Class of each Portfolio commenced operations on the dates indicated
below:
<Table>
<Caption>
COMMENCEMENT OF
OPERATIONS PORTFOLIOS
June 4, 2003 Bond, Government, High Yield
Corporate Bond and Income
Builder Portfolios
- --------------------------------------------------
June 5, 2003 Common Stock, Convertible,
Growth Equity, ICAP Select
Equity, International Equity,
Mid Cap Core, S&P 500 Index
and U.S. Small Cap Portfolios
- --------------------------------------------------
June 6, 2003 Large Cap Growth Portfolio
- --------------------------------------------------
May 2, 2005 Balanced and Floating Rate
Portfolios
- --------------------------------------------------
February 13, 2006 Conservative Allocation,
Growth Allocation, Moderate
Allocation and Moderate
Growth Allocation Portfolios
- --------------------------------------------------
</Table>
Effective at the opening of the U.S. financial markets on June 29, 2009, the
Fund's Board appointed Epoch Investment Partners, Inc. ("Epoch") as a co-
subadvisor to the Income Builder Portfolio to manage the Portfolio's equity
investments and appointed MacKay Shields LLC ("MacKay Shields") as the co-
subadvisor responsible for the overall asset allocation decisions for the
Portfolio.
Effective June 29, 2009, the Income Builder Portfolio modified its principal
investment strategy, investment process and primary benchmark index, and amended
its principal risks. Effective November 20, 2009, the Income Builder Portfolio
changed its name from Total Return Portfolio, a diversified fund.
Effective at the opening of the U.S. financial markets on June 29, 2009, the
Board appointed Madison Square Investors LLC ("Madison Square Investors") as
interim subadvisor to the Growth Equity Portfolio. Effective June 29, 2009, the
Growth Equity Portfolio modified its investment objective, principal investment
strategy, investment process and principal risks. Effective October 16, 2009,
the Growth Equity Portfolio's shareholders approved the retention of Madison
Square Investors as the Portfolio's subadvisor. Effective November 20, 2009, the
Growth Equity Portfolio changed its name from Capital Appreciation Portfolio, a
diversified fund.
Effective at the opening of the U.S. financial markets on June 29, 2009, the
Board appointed Epoch as subadvisor to the U.S. Small Cap Portfolio. Effective
August 14, 2009, the U.S. Small Cap Portfolio modified its investment objective,
principal investment strategy, investment process and primary benchmark, and
amended its principal risks. Effective November 20, 2009, the U.S. Small Cap
Portfolio changed its name from Developing Growth Portfolio, a diversified fund.
M-328 MainStay VP Series Fund, Inc.
The investment objectives for each of the Portfolios of the Fund are as follows:
BALANCED: to seek high total return.
BOND: to seek the highest income over the long term consistent with preservation
of principal.
CASH MANAGEMENT: to seek as high a level of current income as is considered
consistent with the preservation of capital and liquidity.
COMMON STOCK: to seek long-term growth of capital, with income as a secondary
consideration.
CONSERVATIVE ALLOCATION: to seek current income and, secondarily, long-term
growth of capital.
CONVERTIBLE: to seek capital appreciation together with current income.
FLOATING RATE: to seek to provide high current income.
GOVERNMENT: to seek a high level of current income, consistent with safety of
principal.
GROWTH ALLOCATION: to seek long-term growth of capital.
GROWTH EQUITY: to seek long-term growth of capital.
HIGH YIELD CORPORATE BOND: to seek maximum current income through investment in
a diversified portfolio of high yield, high risk debt securities. Capital
appreciation is a secondary objective.
ICAP SELECT EQUITY: to seek a superior total return.
INCOME BUILDER: to realize current income consistent with reasonable opportunity
for future growth of capital and income.
INTERNATIONAL EQUITY: to provide long-term growth of capital commensurate with
an acceptable level of risk by investing in a portfolio consisting primarily of
non-U.S. equity securities. Current income is a secondary objective.
LARGE CAP GROWTH: to seek long-term growth of capital.
MID CAP CORE: to seek long-term growth of capital.
MODERATE ALLOCATION: to seek long-term growth of capital and, secondarily,
current income.
MODERATE GROWTH ALLOCATION: to seek long-term growth of capital and,
secondarily, current income.
S&P 500 INDEX: to seek to provide investment results that correspond to the
total return performance (reflecting reinvestment of dividends) of common stocks
in the aggregate, as represented by the S&P 500(R) Index.
U.S. SMALL CAP: to seek long-term capital appreciation by investing primarily in
securities of small-cap companies.
The Conservative Allocation, Growth Allocation, Moderate Allocation and Moderate
Growth Allocation Portfolios (collectively, the "Asset Allocation Portfolios")
operate as "funds-of-funds." The Asset Allocation Portfolios may invest in other
Portfolios of the Fund as well as funds of Eclipse Funds and The MainStay Funds,
each a Massachusetts business trust, ICAP Funds, Inc. and Eclipse Funds Inc.,
each a Maryland corporation and MainStay Funds Trust, a Delaware statutory
trust, for which New York Life Investment Management LLC also serves as manager
(the "Underlying Portfolios/Funds").
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
Each Portfolio prepares its financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP") and
follows the significant accounting policies described below.
(A) VALUATION OF CASH MANAGEMENT PORTFOLIO SHARES. The Cash Management
Portfolio seeks to maintain a net asset value ("NAV") of $1.00 per share,
although there is no assurance that it will be able to do so on a continuous
basis, and it has adopted certain investment, portfolio and dividend and
distribution policies designed to enable it to do so. An investment in the Cash
Management Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
(B) SECURITIES VALUATION. 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 each day the Portfolios are open for
business ("valuation date"). Securities that are not traded on the valuation
date are valued at the mean of the latest quoted bid and ask prices. Prices
normally are taken from the principal market in which each security trades.
Debt securities are valued at prices supplied by a pricing agent or broker
selected by the Portfolio's Manager (as defined in Note 3(A)), in consultation
with the Portfolio's Subadvisor (as defined in Note 3(A)), if any, whose prices
reflect broker/dealer supplied valuations and electronic data processing
techniques, if such prices are deemed by the Portfolio's Manager, in
consultation with the Portfolio's Subadvisor, if any, to be representative of
market values, at the regular close of trading of the New York Stock Exchange on
each valuation date. Investments in other mutual funds are valued at their NAVs
at the close of the New York Stock Exchange on the valuation date.
Investments in money market funds are valued daily at their NAV. Portfolio
securities held by the Cash Management Portfolio are valued at their amortized
cost, which approximates market value. The amortized cost method involves
valuing a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of the difference between such cost and the
value on maturity date.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Loan assignments, participations and commitments are valued at the average of
bid quotations obtained from a pricing service. The Portfolios have engaged an
independent pricing service to provide market value quotations from dealers in
loans. Options and futures contracts are valued at the last posted settlement
price on the market where such options or futures contracts are principally
traded. Foreign currency forward contracts are valued at their fair market
values determined on the basis of the mean between the last current bid and ask
prices based on dealer or exchange quotations.
Temporary cash investments acquired over 60 days prior 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 which mature in 60 days or less ("short-term investments") are
valued at amortized cost.
Securities for which market quotations are not readily available are valued by
methods deemed in good faith by the Fund's Board to represent fair value. Equity
and non-equity securities which may be valued in this manner include, but are
not limited to: (i) a security the trading for which has been halted or
suspended; (ii) a debt security that has recently gone into default and for
which there is not a current market quotation; (iii) a security of an issuer
that has entered into a restructuring; (iv) a security that has been de-listed
from a national exchange; (v) a security the market price of which is not
available from an independent pricing source or, if so provided, does not, in
the opinion of a Portfolio's Manager or Subadvisor (if applicable), reflect the
security's market value; and (vi) a security where the trading on that
security's principal market is temporarily closed at a time when, under normal
conditions, it would be open. At December 31, 2009, the Convertible, Government,
High Yield Corporate Bond, Income Builder and U.S. Small Cap Portfolios held
securities with values of $234, $1,307,086, $6,141,949, $660,059 and $1,
respectively, that were valued in such a manner.
Certain events may occur between the time that foreign markets close, on which
securities held by certain of the Portfolios, including the International Equity
Portfolio, principally trade and the time at which the Portfolios' NAVs are
calculated. These events may include, but are not limited to, situations
relating to a single issue in a market sector, significant fluctuations in U.S.
or foreign markets, natural disasters, armed conflicts, governmental actions or
other developments not tied directly to the securities markets. Should the
Manager or Subadvisor conclude that such events may have affected the accuracy
of the last price reported on the local foreign market, the Manager or
Subadvisor may, pursuant to procedures adopted by the Fund's Board, adjust the
value of the local price to reflect the impact on the price of such securities
as a result of such events. Additionally, international equity securities are
also fair valued whenever the movement of a particular index exceeds certain
thresholds. In such cases, the securities are fair valued by applying factors
provided by a third party vendor in accordance with the Portfolios' policies and
procedures. At December 31, 2009, all foreign equity securities held by all the
Portfolios were fair valued.
"Fair value" is defined as the price that a Portfolio would receive upon selling
an investment in an orderly transaction to an independent buyer in the principal
or most advantageous market of the investment. Fair value measurements are
determined within a framework which has established a three-tier hierarchy which
maximizes the use of observable market data and minimizes the use of
unobservable inputs to establish classification of fair value measurements for
disclosure purposes. "Inputs" refer broadly to the assumptions that market
participants would use in pricing the asset or liability, including assumptions
about risk, such as the risk inherent in a particular valuation technique used
to measure fair value using a pricing model and/or the risk inherent in the
inputs for the valuation technique. Inputs may be observable or unobservable.
Observable inputs are inputs that reflect the assumptions market participants
would use in pricing the asset or liability developed based on market data
obtained from sources independent of the reporting entity. Unobservable inputs
are inputs that reflect the reporting entity's own assumptions about the
assumptions market participants would use in pricing the asset or liability
developed based on the information available in the circumstances. The inputs or
methodology used for valuing securities may not be an indication of the risks
associated with investing in those securities. The three-tier hierarchy of
inputs is summarized in the three broad Levels listed below.
- - Level 1--quoted prices in active markets for identical investments
- - Level 2--other significant observable inputs (including quoted prices for
similar investments in active markets, interest rates and yield curves,
prepayment speeds, credit risks, etc.)
- - Level 3--significant unobservable inputs (including the Portfolio's own
assumptions about the assumptions that market participants would use in
determining the fair value of investments)
The aggregate value by input level, as of December 31, 2009, for each
Portfolio's investments is included at the end of each Portfolio's respective
Portfolio of Investments.
The valuation techniques used by the Portfolios to measure fair value during the
year ended December 31, 2009, maximized the use of observable inputs and
minimized the use of unobservable inputs. The Portfolios may have utilized some
of the following fair value techniques: multi-dimensional relational pricing
models, option adjusted
M-330 MainStay VP Series Fund, Inc.
spread pricing and estimating the price that would have prevailed in a liquid
market for an international equity security given information available at the
time of evaluation, when there are significant events after the close of local
foreign markets. For the year ended December 31, 2009, there have been no
changes to the fair value methodologies.
Generally, securities are considered illiquid if they cannot be sold or disposed
of in the ordinary course of business at approximately the prices at which they
are valued. Their illiquidity might prevent the sale of such securities at a
time when the Manager or Subadvisor, if any, might wish to sell, and these
securities could have the effect of decreasing the overall level of a
Portfolio's liquidity. Further, the lack of an established secondary market may
make it more difficult to value illiquid securities, requiring a Portfolio to
rely on judgments that may be somewhat subjective in determining value, which
could vary from the amount that a Portfolio could realize upon disposition.
Difficulty in selling illiquid securities may result in a loss or may be costly
to Portfolio. Under the supervision of the Board, the Manager or Subadvisor, if
any, determines the liquidity of a Portfolio's investments; in doing so, the
Manager or Subadvisor, if any, may consider various factors, including (1) the
frequency of trades and quotations, (2) the number of dealers and prospective
purchasers, (3) the dealer undertakings to make a market, and (4) the nature of
the security and the market in which it trades (e.g., the time needed to dispose
of the security, the method of soliciting offers and the mechanics of transfer).
Illiquid securities generally will be valued in such manner as the Board in good
faith deems appropriate to reflect their fair market value.
(C) 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 of 1986, as amended (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 the Portfolios from foreign sources may be subject
to foreign income taxes. These foreign income taxes are withheld at the source.
Management evaluates its tax positions to determine if the tax positions taken
meet the minimum recognition threshold in connection with accounting for
uncertainties in income tax positions taken or expected to be taken for the
purposes of measuring and recognizing tax liabilities in the financial
statements. Recognition of tax benefits of an uncertain tax position is required
only when the position is "more likely than not" to be sustained assuming
examination by taxing authorities. Management has analyzed the Portfolios' tax
positions taken on federal income tax returns for all open tax years (current
and prior three tax years), and has concluded that no provision for federal
income tax is required in the Portfolios' financial statements. The Portfolios'
federal and state income and federal excise tax returns for tax years for which
the applicable statutes of limitations have not expired are subject to
examination by the Internal Revenue Service and state departments of revenue.
(D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions
are recorded on the ex-dividend date. For the Cash Management and Floating Rate
Portfolios, dividends are declared daily and paid monthly and distributions of
net realized capital gains, if any, are declared and paid annually. Each of the
other Portfolios intends to declare and pay dividends of net investment income
and distributions of net realized capital gain and currency gains, if any, at
least once a year. All dividends and distributions are reinvested in shares of
the Portfolio, at NAV. Dividends and distributions to shareholders are
determined in accordance with federal income tax regulations and may differ from
generally accepted accounting principles in the United States of America.
(E) 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, net of any foreign tax withheld at the
source, and interest income is accrued as earned using the effective interest
rate method. Dividends and distributions received by the Asset Allocation
Portfolios from the Underlying Portfolios/Funds are recorded on the ex-dividend
date. Discounts and premiums on securities purchased, other than short-term
investments, for all Portfolios are accreted and amortized, respectively, on the
effective interest rate 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 investments 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 the separate classes of shares pro rata based
upon their relative net assets on the date the income is earned or realized and
unrealized gains and losses are incurred.
(F) EXPENSES. Expenses of 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, further
discussed in Note 3(C), which are charged directly to the Service Class shares)
are allocated to separate classes of shares pro rata based upon their relative
NAVs on the date the expenses are incurred. The expenses borne by each
Portfolio, including those of
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
related parties to the Portfolios, are shown on each Portfolio's Statement of
Operations.
In addition, each Asset Allocation Portfolio bears a pro rata share of the fees
and expenses of the Underlying Portfolios/Funds in which it invests. Because the
Underlying Portfolios/Funds have varied expense and fee levels and the Asset
Allocation Portfolios may own different proportions of the Underlying
Portfolios/Funds at different times, the amount of fees and expenses incurred
indirectly by each Asset Allocation Portfolio may vary.
(G) USE OF ESTIMATES. In preparing financial statements in conformity with
GAAP, management makes estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
(H) PURCHASED AND WRITTEN OPTIONS. Certain Portfolios may write covered call
and put options on their portfolio securities or foreign currencies. These
securities are subject to equity price risk in the normal course of investing in
these transactions. Premiums received are recorded as assets, and the market
value of the written options are recorded as liabilities. The liabilities are
subsequently adjusted and unrealized appreciation or depreciation is recorded to
reflect the current value of the options written. Premiums received from writing
options that expire are treated as realized gains. Premiums received from
writing options that are exercised or are cancelled 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, in exchange for the premium, a Portfolio foregoes the opportunity for
capital appreciation above the exercise price should the price of the underlying
security or foreign currency increase. 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. When writing a
covered call option, a Portfolio, in return for the premium on the option, gives
up the opportunity to profit from a price increase in the underlying securities
above the exercise price. However, as long as the obligation as the writer
continues, the Portfolio has retained the risk of loss should the price of the
underlying security decline. After writing a put option, a Portfolio may incur
risk exposure 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. However, each Portfolio's activities in
purchased and written options have minimal counterparty risk as they are
conducted through regulated exchanges that guarantee the futures against default
by a counterparty.
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. A Portfolio
may also purchase options to seek to enhance returns. 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 Income Builder
and the International Equity Portfolios write covered call options to try to
realize greater return on the sale of a stock. These Portfolios write put
options to help protect against unanticipated adverse developments. The maximum
risk exposure for any purchased option is limited to the premium initially paid
for the option. (See Note 6.)
(I) REPURCHASE AGREEMENTS. Each Portfolio may enter into repurchase agreements
to earn income. The Portfolios may enter into repurchase agreements only with
financial institutions that are deemed by the Manager or Subadvisor, if any, to
be creditworthy, pursuant to guidelines established by the Fund's Board. During
the term of any repurchase agreement, the Manager will continue to monitor the
creditworthiness of the seller. Repurchase agreements are considered under the
Investment Company Act to be collateralized loans by a Portfolio to the seller
secured by the securities transferred to the Portfolio.
When a Portfolio invests in repurchase agreements, the Portfolio's custodian
takes possession of the collateral pledged for investments in the repurchase
agreement. 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 on 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, such as 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 and
possible realized loss to the Portfolios.
(J) LOAN ASSIGNMENTS, PARTICIPATIONS AND COMMITMENTS. The Floating Rate, High
Yield Corporate Bond and Income Builder Portfolios invest in loan assignments
and participations. Loan assignments and loan participations ("loans") are
agreements to make money available (a "commitment") to a borrower in a specified
amount, at a specified rate and within a specified time.
M-332 MainStay VP Series Fund, Inc.
Such loans are typically senior, secured and collateralized in nature. The
Portfolios record an investment when the borrower withdraws money and record
interest as earned. These loans pay interest at rates that are periodically
reset by reference to a base lending rate plus a spread. These base lending
rates are generally the prime rate offered by a designated U.S. bank or the
London InterBank Offered Rate ("LIBOR").
The loans in which the Portfolios invest are generally readily marketable, but
may be subject to some restrictions on resale. For example, a Portfolio may be
contractually obligated to receive approval from the agent bank and/or borrower
prior to the sale of these investments.
A Portfolio assumes the credit risk of the borrower, the selling participant and
any other persons interpositioned between the Portfolio and the borrower
("intermediate participants"). In the event that the borrower, selling
participant or intermediate participants become insolvent or enter into
bankruptcy, the Portfolio may incur certain costs and delays in realizing
payment, or may suffer a loss of principal and/or interest.
Unfunded commitments represent the remaining obligation of the Portfolio to the
borrower. At any point in time, up to the maturity date of the issue, the
borrower may demand the unfunded portion. The unfunded amounts are marked to
market and recorded in the Statement of Assets and Liabilities. (See Note 5.)
(K) 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 financial
instrument (i.e., foreign currency, interest rate, security, or securities
index.) The Portfolios are subject to equity price risk and interest price risk
in the normal course of investing in these transactions. The Portfolios enter
into futures contracts for hedging purposes, managing the duration and yield
curve profile, market exposure or to enhance income. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized appreciation or depreciation 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. A 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 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, interest rates and the underlying hedged assets, and the possible
inability of counterparties to meet the terms of their contracts. However, each
Portfolio's activities in futures contracts have minimal counterparty risk as
they are conducted through regulated exchanges that guarantee the futures
against default by the counterparty. The Bond Portfolio, Government Portfolio,
Income Builder Portfolio and International Equity Portfolio invest in futures
contracts to help manage the duration and yield curve of the portfolio. The
Balanced Portfolio and the S&P 500 Index Portfolio invest in futures contracts
to provide an efficient means of maintaining liquidity while being fully
invested in the market. A Portfolio's investment in futures contracts and other
derivatives may increase the volatility of the Portfolio's NAV and may result in
a loss to the Portfolio.
(L) FOREIGN CURRENCY FORWARD CONTRACTS. Certain Portfolios may enter into
foreign currency forward contracts, which are agreements to buy or sell
currencies of different countries on a specified future date at a specified
rate. These Portfolios are subject to foreign currency exchange rate risk in the
normal course of investing in these transactions. During the period the forward
contract is open, changes in the value of the contract are recognized as
unrealized appreciation or depreciation 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. Cash movement occurs on settlement date. 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 Income Builder and International
Equity Portfolios enter into foreign currency forward contracts to reduce
currency risk versus the benchmark or for trade settlement.
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 a Portfolio's
involvement in these financial instruments. Risks arise from the possible
movements in the foreign exchange rates underlying these instruments. While a
Portfolio may enter into forward contracts to reduce currency exchange risks,
changes in currency exchange rates may result in poorer overall performance for
the Portfolio than if it had not engaged in such transactions. Exchange rate
movements can be large, depending on the currency, and can last for extended
periods of time, affecting the value of a Portfolio's assets. Moreover, there
may be an imperfect correlation between a Portfolio's holdings of securities
denominated in a particular currency and forward contracts entered into by the
Portfolio. Such imperfect correlation may prevent the Portfolio from achieving
the intended hedge or expose the
mainstayinvestments.com M-333
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Portfolio to the risk of currency exchange loss. The unrealized appreciation and
depreciation 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. (See Note 6.)
(M) FOREIGN CURRENCY TRANSACTIONS. The books and records of the Portfolios are
kept in U.S. dollars. Prices of securities denominated in 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; and
(ii) purchases and sales of investment securities, income and expenses--at the
date of such transactions.
The assets and liabilities of the Portfolios that are denominated in foreign
currency amounts are presented at the exchange rates and market values at the
close of the period. 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.
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 as recorded
on the Portfolio's books, and the U.S. dollar equivalent amount actually
received or paid. Net currency gains or losses from valuing such 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 6.)
(N) MORTGAGE DOLLAR ROLLS. Certain Portfolios may enter into mortgage dollar
roll ("MDR") transactions in which they sell mortgage-backed securities ("MBS")
from their portfolios 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.
During the roll period, a Portfolio foregoes principal and interest paid on the
securities. The Portfolio is compensated by the difference between the current
sales price and the forward price for the future as well as by the earnings on
the cash proceeds of the initial sale. MDRs may be renewed without physical
delivery of the securities subject to the contract. The Portfolios maintain
liquid assets from their 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 period, while substantially similar, could be inferior to what was
initially sold to the counterparty.
(O) SECURITIES LENDING. In order to realize additional income, each Portfolio
other than the Cash Management, Conservative Allocation, Growth Allocation,
Moderate Allocation and Moderate Growth Allocation Portfolios may engage in
securities lending, subject to the limitations set forth in the Investment
Company Act. In the event the Portfolios do engage in securities lending, the
Portfolios will lend through their custodian, State Street Bank and Trust
Company ("State Street"). State Street will manage the Portfolios' cash
collateral in accordance with the Lending Agreement between the Portfolios and
State Street, and indemnify the Portfolio against counterparty risk. The loans
will be collateralized by cash or securities at least equal at all times to the
market value of the securities loaned. Collateral will consist of U.S.
Government securities, cash equivalents or irrevocable letters of credit. 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 may also record a realized gain or loss on securities
deemed sold due to the borrower's inability to return securities on loan. The
Portfolios will 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 will 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.
Although the Portfolios and New York Life Investments have temporarily suspended
securities lending, the Portfolios and New York Life Investments reserve the
right to reinstitute lending when deemed appropriate. The Portfolios had no
portfolio securities on loan as of December 31, 2009.
(P) RIGHTS AND WARRANTS. A right is a certificate that permits the holder to
purchase a certain number of shares, or a fractional share, of a new stock from
the issuer at a specific price. A warrant is an instrument that entitles the
holder to buy an equity security at a specific price for a specific period of
time. The Portfolios enter into rights and warrants when securities are acquired
through a corporate action. With respect to warrants in international markets,
the securities are only purchased when the underlying security can not be
purchased due to the many restrictions an industry and/or country might place on
foreign investors. These investments can provide a greater potential for
M-334 MainStay VP Series Fund, Inc.
profit or loss than an equivalent investment in the underlying security. Prices
of these investments do not necessarily move in tandem with the prices of the
underlying securities, and are speculative investments.
There is risk involved in the purchase of rights and warrants in that these
investments are speculative investments. The Portfolio could also loose the
entire value of the investment in warrants if the warrant is not exercised by
the date of its expiration. The International Equity Portfolio invests in
warrants when the underlying security can not be purchased due to restrictions
an industry and/or country places on foreign investors. The High Yield Corporate
Bond, Income Builder and U.S. Small Cap Portfolios invest in warrants if they
are acquired through corporate actions.
(Q) 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 Convertible and
High Yield Corporate Bond Portfolios may not have the right to demand that such
securities be registered. Disposal of these securities may involve time-
consuming negotiations and expenses and it may be difficult to obtain a prompt
sale at an acceptable price. (See Note 7.)
(R) CONCENTRATION OF RISK. The High Yield Corporate Bond Portfolio invests in
high-yield securities (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 investors a
premium--a higher interest rate or yield--because of the increased risk of loss.
These securities can also be subject to greater price volatility.
The Floating Rate, High Yield Corporate Bond, and Income Builder Portfolios may
invest in floating rate loans. The floating rate loans in which the Portfolios
principally invest are usually rated less than investment grade and are
generally considered speculative because they present a greater risk of loss,
including default than higher quality debt securities. These securities pay
investors a higher interest rate because of the increased risk of loss. Although
certain floating rate loans are collateralized, there is no guarantee that the
value of the collateral will be sufficient to repay the loan. In a recession or
serious credit event, the Portfolios' NAVs could go down and you could lose
money.
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 currency fluctuations, future adverse political or
economic developments and possible imposition of currency exchange blockages or
other foreign governmental laws or restrictions. These risks are likely to be
greater in emerging markets than in developed markets. The ability of issuers of
debt securities held by the Portfolios to meet their obligations may be affected
by economic or political developments in a specific country, industry or region.
(S) INDEMNIFICATIONS. Under the Fund's organizational documents, its officers
and directors are indemnified against certain liabilities that may arise out of
performance of their duties to the Fund. Additionally, in the normal course of
business, the Portfolios enter into contracts with third-party service providers
that contain a variety of representations and warranties and which provide
general indemnifications. The Portfolios' maximum exposure under these
arrangements is unknown, as this would involve future claims that may be made
against the Portfolios that have not yet occurred. Based on experience,
management is of the view that the risk of loss in connection with these
potential indemnification obligations is remote. However, there can be no
assurance that material liabilities related to such obligations will not arise
in the future, which could adversely impact the Portfolios.
(T) QUANTITATIVE DISCLOSURE OF DERIVATIVE HOLDINGS. The following tables show
additional disclosures about the Balanced, Bond, Government, High Yield
Corporate Bond, Income Builder, International Equity, S&P 500, and U.S. Small
Cap Portfolios' derivative and hedging activities, including how such activities
are accounted for and their effect on the Portfolio's financial positions,
performance and cash flows. These derivatives are not accounted for as hedging
instruments.
Fair value of Derivatives as of December 31, 2009:
BALANCED PORTFOLIO
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2009.
REALIZED GAIN (LOSS)
<Table>
<Caption>
STATEMENT OF EQUITY INTEREST
OPERATIONS CONTRACTS RATE
LOCATION RISK RISK TOTAL
Futures Contracts Net realized gain
(loss) on futures
transactions $391,028 $(21,192) $369,836
-------------------------------
Total Realized
Gain (Loss) $391,028 $(21,192) $369,836
===============================
</Table>
CHANGE IN UNREALIZED DEPRECIATION
<Table>
<Caption>
STATEMENT OF EQUITY INTEREST
OPERATIONS CONTRACTS RATE
LOCATION RISK RISK TOTAL
Futures Contracts Net change in
unrealized
depreciation on
futures contracts $(91,344) $-- $(91,344)
-------------------------------
Total Change in
Unrealized
Depreciation $(91,344) $-- $(91,344)
===============================
</Table>
mainstayinvestments.com M-335
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
EQUITY INTEREST
CONTRACTS RATE
RISK RISK TOTAL
Futures Contracts (2) 88 12 100
============================
</Table>
(1) Amount disclosed represents the weighted average held during the twelve-
month period.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
BOND PORTFOLIO
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2009.
REALIZED LOSS
<Table>
<Caption>
STATEMENT OF INTEREST
OPERATIONS RATE
LOCATION RISK TOTAL
FUTURES CONTRACTS Net realized
loss on futures
transactions $(1,297,467) $(1,297,467)
-------------------------
Total Realized Loss $(1,297,467) $(1,297,467)
=========================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
INTEREST
RATE
RISK TOTAL
Futures Contracts (2) 194 194
================
</Table>
(1) Amount disclosed represents the weighted average held during the twelve-
month period.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
GOVERNMENT PORTFOLIO
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2009.
REALIZED LOSS
<Table>
<Caption>
STATEMENT OF INTEREST
OPERATIONS RATE
LOCATION RISK TOTAL
Futures Contracts Net realized
loss on futures
transactions $(1,335,480) $(1,335,480)
-------------------------
Total Realized Loss $(1,335,480) $(1,335,480)
=========================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
INTEREST
RATE
RISK TOTAL
Futures Contracts (2) (186) (186)
================
</Table>
(1) Amount disclosed represents the weighted average held during the twelve-
month period.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
HIGH YIELD CORPORATE BOND PORTFOLIO
Fair Value of Derivatives Instruments as of December 31, 2009
ASSET DERIVATIVES
<Table>
<Caption>
STATEMENT OF ASSETS EQUITY
AND LIABILITIES CONTRACTS
LOCATION RISK TOTAL
Warrants Investment in
securities, at value $895,239 $895,239
--------------------
Total Fair Value $895,239 $895,239
====================
</Table>
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2009.
REALIZED LOSS
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Warrants Net realized
loss on security
transactions $(29) $(29)
-----------------
Total Realized Loss $(29) $(29)
=================
</Table>
CHANGE IN UNREALIZED DEPRECIATION
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Warrants Net change in unrealized
depreciation on security
transactions $(1,027,572) $(1,027,572)
-------------------------
Total Change in
Unrealized
Depreciation $(1,027,572) $(1,027,572)
=========================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
EQUITY
CONTRACTS
RISK TOTAL
Warrants (2) 70,088 70,088
==================
</Table>
(1) Amount disclosed represents the weighted average held during the twelve-
month period.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
M-336 MainStay VP Series Fund, Inc.
INCOME BUILDER PORTFOLIO
Fair Value of Derivatives Instruments as of December 31, 2009
ASSET DERIVATIVES
<Table>
<Caption>
FOREIGN
STATEMENT OF ASSETS EXCHANGE EQUITY INTEREST
AND LIABILITIES CONTRACTS CONTRACTS RATE
LOCATION RISK RISK RISK TOTAL
Warrants Investment in securities,
at value $ -- $115,670 $-- $115,670
Futures Contracts Net Assets--Unrealized
appreciation on
investments and futures
contracts (a) -- 293,750 -- 293,750
Forward Contracts Unrealized appreciation on
foreign currency forward
contracts 214,624 -- -- 214,624
----------------------------------------------------
Total Fair Value $214,624 $409,420 $-- $624,044
====================================================
</Table>
LIABILITY DERIVATIVES
<Table>
<Caption>
FOREIGN
STATEMENT OF ASSETS EXCHANGE EQUITY INTEREST
AND LIABILITIES CONTRACTS CONTRACTS RATE
LOCATION RISK RISK RISK TOTAL
Futures Contracts Net Assets--Unrealized
depreciation on
investments and futures
contracts (a) $ -- $-- $(250,582) $(250,582)
Forward Contracts Unrealized depreciation
on foreign currency
forward contracts (42,468) -- -- (42,468)
------------------------------------------------------
Total Fair Value $(42,468) $ -- $(250,582) $(293,050)
======================================================
</Table>
(a) Includes cumulative appreciation (depreciation) of futures contracts
reported in Portfolio of Investments. Only current day's variation margin is
reported within the Statement of Assets & Liabilities.
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2009.
REALIZED GAIN (LOSS)
<Table>
<Caption>
FOREIGN
STATEMENT OF EXCHANGE EQUITY INTEREST
OPERATIONS CONTRACTS CONTRACTS RATE
LOCATION RISK RISK RISK TOTAL
Purchased Options Net realized gain on
security transactions $ -- $ 118,243 $ -- $ 118,243
Rights Net realized loss on
security transactions -- (55,587) -- (55,587)
Warrants Net realized loss on
security transactions -- (10,230) -- (10,230)
Futures Contracts Net realized gain on
futures transactions -- 976,838 63,546 1,040,384
Forward Contracts Net realized gain on
foreign currency
transactions 45,624 -- -- 45,624
-------------------------------------------------------
Total Realized Gain (Loss) $45,624 $1,029,264 $63,546 $1,138,434
=======================================================
</Table>
mainstayinvestments.com M-337
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
<Table>
<Caption>
FOREIGN
STATEMENT OF EXCHANGE EQUITY INTEREST
OPERATIONS CONTRACTS CONTRACTS RATE
LOCATION RISK RISK RISK TOTAL
Rights Net change in unrealized
depreciation on security
transactions $ -- $(19,074) $ -- $(19,074)
Warrants Net change in unrealized
appreciation on security
transactions -- 20,307 -- 20,307
Futures Contracts Net change in unrealized
appreciation
(depreciation) on futures
contracts -- 293,750 (250,582) 43,168
Forward Contracts Net change in unrealized
appreciation on
translation of other
assets and liabilities in
foreign currencies and
foreign currency forward
contracts 177,281 -- -- 177,281
-----------------------------------------------------
Total Change in
Appreciation
(Depreciation) $177,281 $294,983 $(250,582) $221,682
=====================================================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
FOREIGN
EXCHANGE EQUITY INTEREST
CONTRACTS CONTRACTS RATE
RISK RISK RISK TOTAL
Purchased Options (2) -- 1,116 -- 1,116
Rights (2) -- 29,655 -- 29,655
Warrants (2) -- 20,539 -- 20,539
Futures Contracts (2) -- 493 (17) 476
Forward Contracts Long (3) $ 1,763,190 -- -- $ 1,763,190
Forward Contracts Short (3) $(8,698,039) -- -- $(8,698,039)
=========================================================
</Table>
(1) Amount disclosed represents the weighted average held during the twelve-
month period.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
(3) Amount(s) represent(s) notional amount.
INTERNATIONAL EQUITY PORTFOLIO
Fair Value of Derivatives Instruments as of December 31, 2009
ASSET DERIVATIVES
<Table>
<Caption>
FOREIGN
STATEMENT OF ASSETS EXCHANGE EQUITY
AND LIABILITIES CONTRACTS CONTRACTS
LOCATION RISK RISK TOTAL
Warrants Investment in securities, at
value $ -- $13,973,624 $13,973,624
Futures Contracts Net Assets--Unrealized
appreciation on investments
and futures contracts (a) -- 1,587,366 1,587,366
Forward Contracts Unrealized appreciation on
foreign currency forward
contracts 308,609 308,609
-------------------------------------------
Total Fair Value $308,609 $15,560,990 $15,869,599
===========================================
</Table>
M-338 MainStay VP Series Fund, Inc.
LIABILITY DERIVATIVES
<Table>
<Caption>
FOREIGN
STATEMENT OF ASSETS EXCHANGE EQUITY
AND LIABILITIES CONTRACTS CONTRACTS
LOCATION RISK RISK TOTAL
Forward Contracts Unrealized depreciation on
foreign currency forward
contracts $(539,977) $ -- $(539,977)
---------------------------------------
Total Fair Value $(539,977) $-- $(539,977)
=======================================
</Table>
(a) Includes cumulative appreciation (depreciation) of futures contracts
reported in Portfolio of Investments. Only current day's variation margin is
reported within the Statement of Assets & Liabilities.
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2009.
REALIZED GAIN (LOSS)
<Table>
<Caption>
FOREIGN
STATEMENT OF EXCHANGE EQUITY
OPERATIONS CONTRACTS CONTRACTS
LOCATION RISK RISK TOTAL
Purchased Options Net realized loss on security
transactions $ -- $ (410,269) $ (410,269)
Rights Net realized loss on security
transactions -- (1,663,014) (1,663,014)
Futures Contracts Net realized gain on futures
transactions -- 5,791 5,791
Written Options Net realized gain on written
option transactions -- 531,544 531,544
Forward Contracts Net realized gain on foreign
currency transactions 3,685,611 -- 3,685,611
--------------------------------------------
Total Realized Gain (Loss) $3,685,611 $(1,535,948) $ 2,149,663
============================================
</Table>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
<Table>
<Caption>
FOREIGN
STATEMENT OF EXCHANGE EQUITY
OPERATIONS CONTRACTS CONTRACTS
LOCATION RISK RISK TOTAL
Rights Net change in unrealized
depreciation on security
transactions $ -- $ (786,202) $ (786,202)
Warrants Net change in unrealized
appreciation on security
transactions -- 1,385,662 1,385,662
Futures Contracts Net change in unrealized
appreciation on futures
contracts -- 1,587,366 1,587,366
Forward Contracts Net change in unrealized
depreciation on translation
of other assets and
liabilities in foreign
currencies and foreign
currency forward contracts (650,544) -- (650,544)
-----------------------------------------
Total Change in Appreciation
(Depreciation) $(650,544) $2,186,826 $1,536,282
=========================================
</Table>
mainstayinvestments.com M-339
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
FOREIGN
EXCHANGE EQUITY
CONTRACTS CONTRACTS
RISK RISK TOTAL
Purchased Options
(2) -- 3,096 3,096
Rights (2) -- 3,210,214 3,210,214
Warrants (2) -- 1,479,316 1,479,316
Futures Contracts
(2) -- 823 823
Written Options (2) -- (1,123) (1,123)
Forward Contracts
Long (3) $ 58,330,539 -- $ 58,330,539
Forward Contracts
Short (3) $(46,229,272) -- $(46,229,272)
=============================================
</Table>
(1) Amount disclosed represents the weighted average held during the twelve-
month period.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
(3) Amount(s) represent(s) notional amount.
S&P 500 INDEX PORTFOLIO
Fair Value of Derivatives Instruments as of December 31, 2009
ASSET DERIVATIVES
<Table>
<Caption>
STATEMENT OF
ASSETS EQUITY
AND LIABILITIES CONTRACTS
LOCATION RISK TOTAL
Futures Contracts Net
Assets--Unreal-
ized appreciation
on futures
contracts (a) $945,175 $945,175
-----------------------
Total Fair Value $945,175 $945,175
=======================
</Table>
(a) Includes cumulative appreciation (depreciation) of futures contracts
reported in Portfolio of Investments. Only current day's variation margin is
reported within the Statement of Assets & Liabilities.
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2009.
REALIZED GAIN
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Futures Contracts Net realized
gain on futures
transactions $13,207,257 $13,207,257
-------------------------------
Total Realized Gain $13,207,257 $13,207,257
===============================
</Table>
CHANGE IN UNREALIZED APPRECIATION
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Futures Contracts Net change in
unrealized
appreciation on
futures contracts $606,917 $606,917
--------------------
Total Change in
Appreciation $606,917 $606,917
====================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
EQUITY
CONTRACTS
RISK TOTAL
Futures Contracts (2) 754 754
====================
</Table>
(1) Amount disclosed represents the weighted average held during the twelve-
month period.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
U.S. SMALL CAP PORTFOLIO
Fair Value of Derivatives Instruments as of December 31, 2009
ASSET DERIVATIVES
<Table>
<Caption>
STATEMENT OF
ASSETS AND EQUITY
LIABILITIES CONTRACTS
LOCATION RISK TOTAL
Warrants Investment in
securities, at value $1 $1
-----------------
Total Fair Value $1 $1
=================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR
SHARES/UNITS (1)
<Table>
<Caption>
EQUITY
CONTRACTS
RISK TOTAL
Warrants (2) 120 120
=================
</Table>
(1) Amount disclosed represents the weighted average held during the twelve-
month period.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
NOTE 3--FEES AND RELATED PARTY TRANSACTIONS:
(A) INVESTMENT ADVISORY, SUBADVISORY AND ADMINISTRATION FEES. New York Life
Investment Management LLC ("New York Life Investments" or "Manager"), a
registered investment adviser and an indirect, wholly-owned subsidiary of New
York Life, serves as investment manager to the Portfolios under an Amended and
Restated
M-340 MainStay VP Series Fund, Inc.
Management Agreement ("Management Agreement"). New York Life Investments manages
the Bond, Cash Management and Floating Rate Portfolios and the fixed income
portion of the Balanced Portfolio directly without the use of a subadvisor.
Madison Square Investors, a registered investment adviser and an indirect,
wholly-owned subsidiary of New York Life Investments, serves as Subadvisor to
the following Portfolios: Common Stock, Conservative Allocation, Growth
Allocation, Mid Cap Core, Moderate Allocation, Moderate Growth Allocation, S&P
500 Index, and the equity portion of Balanced, under the terms of a Subadvisory
Agreement with New York Life Investments. On June 23, 2009, at a meeting of the
Board, the Board approved the termination of the Subadvisory Agreement between
the Manager and MacKay Shields with respect to the Growth Equity Portfolio,
effective at the opening of the U.S. financial markets on June 29, 2009. Madison
Square Investors now serves as Subadvisor to the Growth Equity Portfolio and is
responsible for the day-to-day portfolio management of the Growth Equity
Portfolio under the terms of a Subadvisory Agreement with New York Life
Investments. For the period from June 29, 2009, through October 16, 2009,
Madison Square Investors served as subadvisor to the Growth Equity Portfolio
pursuant to an interim subadvisory agreement that was substantially similar to
the Subadvisory Agreement.
On June 23, 2009, the Board approved the termination of the Subadvisory
Agreement between the Manager and Lord, Abbet & Co. LLC with respect to the U.S.
Small Cap Portfolio, effective prior to the opening of the U.S. financial
markets on June 29, 2009. On the same date, the Board approved the termination
of the Subadvisory Agreement between the Manager and MacKay Shields with respect
to the equity portion of the Income Builder Portfolio, effective at the opening
of the U.S. financial markets on June 29, 2009. Epoch, a registered investment
adviser, now serves as Subadvisor to the U.S. Small Cap Portfolio and the equity
portion of the Income Builder Portfolio under the terms of a Subadvisory
Agreement with New York Life Investments.
MacKay Shields, a registered investment adviser and an indirect, wholly-owned
subsidiary of New York Life, serves as Subadvisor to the following Portfolios:
Convertible, Government, High Yield Corporate Bond, International Equity and the
fixed-income portion of Income Builder, under the terms of a Subadvisory
Agreement with New York Life Investments. MacKay Shields is also responsible for
the overall asset allocation decisions of the Income Builder Portfolio.
Institutional Capital LLC ("ICAP"), a registered investment adviser and an
indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the
ICAP Select Equity Portfolio under the terms of a Subadvisory Agreement with New
York Life Investments.
Winslow Capital Management, Inc. ("Winslow"), a registered investment adviser,
serves as the Subadvisor to the Large Cap Growth Portfolio under the terms of a
Subadvisory Agreement with New York Life Investments.
Pursuant to the terms of Subadvisory Agreements between New York Life
Investments and the Subadvisors, New York Life Investments pays for the services
of each Subadvisor.
As Manager, New York Life Investments also serves as administrator for the Fund.
New York Life Investments provides offices, conducts clerical, recordkeeping and
bookkeeping services, and keeps most of the financial and accounting records
required to be maintained by the Portfolios. These administrative services are
provided pursuant to the Management Agreements referenced above.
State Street, 1 Lincoln Street, Boston, Massachusetts, 02111, provides sub-
administration and sub-accounting services to the Portfolios pursuant to an
agreement with New York Life Investments. These services include calculating the
daily NAVs of the Portfolios, maintaining the general ledger and sub-ledger
accounts for the calculation of the Portfolios' respective NAVs, and assisting
New York Life Investments in conducting various aspects of the Portfolios'
administrative operations. For providing these services to the Portfolios, State
Street is compensated by New York Life Investments.
The Fund, on behalf of each Portfolio, pays New York Life Investments in its
capacity as the Portfolios' investment manager and administrator, the monthly
fee for the services performed and the facilities furnished at an approximate
annual percentage of the average daily net assets of each Portfolio set forth in
the table below. Where indicated, New York Life Investments has contractually or
voluntarily agreed to waive fees and/or reimburse expenses with respect to
certain Portfolios. The contractual waivers/reimbursements may be modified or
terminated only with the approval of the Board, and the voluntary
waivers/reimbursements may be discontinued at any time. Under each of the
respective contractual expense limitation agreements, New York Life Investments
may recoup the amount of certain management fee waivers or expense
reimbursements from each Portfolio pursuant to the applicable agreements, if
such action does not cause a Portfolio to exceed existing expense limitations
and the recoupment is made within the term of the agreement. Any recoupment
amount is generally applied within a fiscal year. The contractual expense
limitation agreements expire on April 30, 2010. Voluntary waivers/reimbursements
are not subject to recoupment.
<Table>
<Caption>
ANNUAL RATE
Balanced Portfolio 0.75%(a)
- ------------------------------------------------
Bond Portfolio 0.50%(b)
- ------------------------------------------------
Cash Management Portfolio 0.45%(c)
</Table>
mainstayinvestments.com M-341
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
ANNUAL RATE
- ------------------------------------------------
Common Stock Portfolio 0.55%(d)
- ------------------------------------------------
Conservative Allocation Portfolio 0.00%(e)
- ------------------------------------------------
Convertible Portfolio 0.60%(f)
- ------------------------------------------------
Floating Rate Portfolio 0.60%
- ------------------------------------------------
Government Portfolio 0.50%(b)
- ------------------------------------------------
Growth Allocation Portfolio 0.00%(e)
- ------------------------------------------------
Growth Equity Portfolio 0.61%(f)
- ------------------------------------------------
High Yield Corporate Bond Portfolio 0.57%(g)
- ------------------------------------------------
ICAP Select Equity Portfolio 0.80%(h)
- ------------------------------------------------
Income Builder Portfolio 0.57%(i)
- ------------------------------------------------
International Equity Portfolio 0.89%(j)
- ------------------------------------------------
Large Cap Growth Portfolio 0.75%(k)
- ------------------------------------------------
Mid Cap Core Portfolio 0.85%(l)
- ------------------------------------------------
Moderate Allocation Portfolio 0.00%(e)
- ------------------------------------------------
Moderate Growth Allocation
Portfolio 0.00%(e)
- ------------------------------------------------
S&P 500 Index Portfolio 0.30%(m)
- ------------------------------------------------
U.S. Small Cap Portfolio 0.80%(n)
- ------------------------------------------------
</Table>
(a) On assets up to $1 billion and 0.70% on assets in excess of $1 billion.
(b) On assets up to $500 million, 0.475% from $500 million to $1 billion and
0.45% on assets in excess of $1 billion.
(c) On assets up to $500 million and 0.40% from $500 million to $1 billion and
0.35% on assets in excess of $1 billion. For the year ended December 31,
2009, New York Life Investments waived its fees in the amount of $911,920,
which may not be recouped by New York Life Investments.
(d) On assets up to $500 million, 0.525% from $500 million to $1 billion and
0.50% on assets in excess of $1 billion.
(e) New York Life Investments has contractually agreed to waive other fees
and/or reimburse the Asset Allocation Portfolios for certain expenses so
that net annual operating expenses for the Initial Class and Service Class
shares (excluding underlying fund expenses) do not exceed 0.25% and 0.50%,
respectively.
(f) On assets up to $1 billion and 0.50% on assets in excess of $1 billion.
(g) On assets up to $1 billion, 0.55% from $1 billion to $5 billion and 0.525%
on assets in excess of $5 billion.
(h) On assets up to $250 million, 0.75% from $250 million to $1 billion and
0.74% on assets in excess of $1 billion. From May 1, 2008 through April 30,
2009, New York Life Investments contractually agreed to waive a portion of
the management fee for the ICAP Select Equity Portfolio to 0.75% on assets
up to $250 million, 0.70% from $250 million to $1 billion and 0.69% in
excess of $1 billion. For the year ended December 31, 2009, New York Life
Investments waived its fees in the amount of $108,778, which may not be
recouped by New York Life Investments.
(i) On assets up to $1 billion and 0.55% on assets in excess of $1 billion.
(j) On assets up to $500 million and 0.85% on assets in excess of $500 million.
(k) On assets up to $500 million, 0.725% from $500 million to $1 billion and
0.70% on assets in excess of $1 billion. On behalf of the Large Cap Growth
Portfolio, the Subadvisory Agreement between New York Life Investments and
Winslow includes breakpoints based on the aggregation of assets of all New
York Life Investments-managed mutual funds subadvised by Winslow. As a
result of the potential benefits received from this arrangement, New York
Life Investments may provide a management fee waiver as breakpoints are
reached. New York Life Investments may recoup the amount of certain
management fee waivers or expense reimbursements from the Large Cap Growth
Portfolio pursuant to the agreement if such action does not cause the
Portfolio to exceed the existing expense limitation and the recoupment is
made within one year after the year in which New York Life Investments
incurred the expense. For the year ended December 31, 2009, New York Life
Investments waived $41,635, which may not be recouped by New York Life
Investments.
(l) On assets up to $1 billion and 0.80% on assets in excess of $1 billion.
(m) On assets up to $1 billion, 0.275% from $1 billion to $2 billion, 0.265%
from $2 billion to $3 billion and 0.25% on assets in excess of $3 billion.
Effective May 1, 2008, New York Life Investments voluntarily agreed to waive
a portion of its management fee for the S&P 500 Index Portfolio to 0.25% on
assets up to $1 billion, 0.225% from $1 billion to $2 billion, 0.215% from
$2 billion to $3 billion and 0.20% on assets in excess of $3 billion. For
the year ended December 31, 2009, the Manager waived its fees in the amount
of $408,712, which may not be recouped by New York Life Investments.
(n) On assets up to $200 million, 0.75% from $200 million to $500 million,
0.725% from $500 million to $1 billion and 0.70% on assets in excess of $1
billion.
(B) DISTRIBUTOR. NYLIFE Distributors LLC ("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 the 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 shares of each Portfolio.
M-342 MainStay VP Series Fund, Inc.
(D) CAPITAL. At December 31, 2009, the Asset Allocation Portfolios held the
following percentages of outstanding shares of affiliated investment companies:
<Table>
<Caption>
CONSERVATIVE ALLOCATION PORTFOLIO
MainStay 130/30 Core Fund Class I 6.95%
- ----------------------------------------------
MainStay 130/30 Growth Fund Class I 5.69
- ----------------------------------------------
MainStay 130/30 High Yield Fund Class I 8.02
- ----------------------------------------------
MainStay 130/30 International Fund
Class I 4.31
- ----------------------------------------------
MainStay Epoch Global Choice Fund Class
I 1.93
- ----------------------------------------------
MainStay Epoch U.S. All Cap Fund Class
I 0.38
- ----------------------------------------------
MainStay ICAP Equity Fund Class I 1.68
- ----------------------------------------------
MainStay ICAP International Fund Class
I 0.96
- ----------------------------------------------
MainStay Intermediate Term Bond Fund
Class I 3.77
- ----------------------------------------------
MainStay MAP Fund Class I 1.36
- ----------------------------------------------
MainStay VP Bond Portfolio Initial
Class 21.21
- ----------------------------------------------
MainStay VP Common Stock Portfolio
Initial Class 2.01
- ----------------------------------------------
MainStay VP Floating Rate Portfolio
Initial Class 26.19
- ----------------------------------------------
MainStay VP Growth Equity Portfolio
Initial Class 0.14
- ----------------------------------------------
MainStay VP High Yield Corporate Bond
Portfolio Initial Class 1.33
- ----------------------------------------------
MainStay VP ICAP Select Equity
Portfolio Initial Class 1.81
- ----------------------------------------------
MainStay VP International Equity
Portfolio Initial Class 1.77
- ----------------------------------------------
MainStay VP Large Cap Growth Portfolio
Initial Class 8.20
- ----------------------------------------------
MainStay VP Mid Cap Core Portfolio
Initial Class 4.91
- ----------------------------------------------
MainStay VP U.S. Small Cap Portfolio
Initial Class 1.81
- ----------------------------------------------
</Table>
<Table>
<Caption>
GROWTH ALLOCATION PORTFOLIO
MainStay 130/30 Core Fund Class I 9.91%
- ----------------------------------------------
MainStay 130/30 Growth Fund Class I 8.38
- ----------------------------------------------
MainStay 130/30 International Fund
Class I 12.38
- ----------------------------------------------
MainStay Epoch Global Choice Fund Class
I 5.46
- ----------------------------------------------
MainStay Epoch U.S. All Cap Fund Class
I 0.17
- ----------------------------------------------
MainStay ICAP Equity Fund Class I 2.41
- ----------------------------------------------
MainStay ICAP International Fund Class
I 2.75
- ----------------------------------------------
MainStay MAP Fund Class I 2.61
- ----------------------------------------------
MainStay VP Common Stock Portfolio
Initial Class 2.72
- ----------------------------------------------
MainStay VP Growth Equity Portfolio
Initial Class 0.39
- ----------------------------------------------
MainStay VP ICAP Select Equity
Portfolio Initial Class 2.72
- ----------------------------------------------
MainStay VP International Equity
Portfolio Initial Class 5.11
- ----------------------------------------------
MainStay VP Large Cap Growth Portfolio
Initial Class 14.01
- ----------------------------------------------
MainStay VP Mid Cap Core Portfolio
Initial Class 8.95
- ----------------------------------------------
MainStay VP U.S. Small Cap Portfolio
Initial Class 6.41
- ----------------------------------------------
</Table>
<Table>
<Caption>
MODERATE ALLOCATION PORTFOLIO
MainStay 130/30 Core Fund Class I 14.97%
- ----------------------------------------------
MainStay 130/30 Growth Fund Class I 10.40
- ----------------------------------------------
MainStay 130/30 High Yield Fund Class I 7.91
- ----------------------------------------------
MainStay 130/30 International Fund
Class I 12.87
- ----------------------------------------------
MainStay Epoch Global Choice Fund Class
I 5.54
- ----------------------------------------------
MainStay Epoch U.S. All Cap Fund Class
I 0.55
- ----------------------------------------------
MainStay ICAP Equity Fund Class I 3.44
- ----------------------------------------------
MainStay ICAP International Fund Class
I 2.84
- ----------------------------------------------
MainStay Intermediate Term Bond Fund
Class I 3.73
- ----------------------------------------------
MainStay MAP Fund Class I 3.34
- ----------------------------------------------
MainStay VP Bond Portfolio Initial
Class 20.95
- ----------------------------------------------
MainStay VP Common Stock Portfolio
Initial Class 4.23
- ----------------------------------------------
MainStay VP Floating Rate Portfolio
Initial Class 25.83
- ----------------------------------------------
MainStay VP Growth Equity Portfolio
Initial Class 0.26
- ----------------------------------------------
MainStay VP High Yield Corporate Bond
Portfolio Initial Class 1.31
- ----------------------------------------------
MainStay VP ICAP Select Equity
Portfolio Initial Class 3.80
- ----------------------------------------------
MainStay VP International Equity
Portfolio Initial Class 5.27
- ----------------------------------------------
MainStay VP Large Cap Growth Portfolio
Initial Class 17.01
- ----------------------------------------------
MainStay VP Mid Cap Core Portfolio
Initial Class 10.26
- ----------------------------------------------
MainStay VP S&P 500 Index Portfolio
Initial Class 0.09
- ----------------------------------------------
MainStay VP U.S. Small Cap Portfolio
Initial Class 1.18
- ----------------------------------------------
</Table>
<Table>
<Caption>
MODERATE GROWTH ALLOCATION PORTFOLIO
MainStay 130/30 Core Fund Class I 16.12%
- ----------------------------------------------
MainStay 130/30 Growth Fund Class I 13.18
- ----------------------------------------------
MainStay 130/30 High Yield Fund Class I 7.76
- ----------------------------------------------
MainStay 130/30 International Fund
Class I 19.10
- ----------------------------------------------
MainStay Epoch Global Choice Fund Class
I 8.34
- ----------------------------------------------
MainStay Epoch U.S. All Cap Fund Class
I 0.57
- ----------------------------------------------
MainStay ICAP Equity Fund Class I 4.08
- ----------------------------------------------
MainStay ICAP International Fund Class
I 4.22
- ----------------------------------------------
MainStay Intermediate Term Bond Fund
Class I 1.12
- ----------------------------------------------
MainStay MAP Fund Class I 4.21
- ----------------------------------------------
MainStay VP Bond Portfolio Initial
Class 6.29
- ----------------------------------------------
MainStay VP Common Stock Portfolio
Initial Class 4.35
- ----------------------------------------------
MainStay VP Floating Rate Portfolio
Initial Class 25.66
- ----------------------------------------------
MainStay VP Growth Equity Portfolio
Initial Class 0.93
- ----------------------------------------------
MainStay VP High Yield Corporate Bond
Portfolio Initial Class 1.31
- ----------------------------------------------
MainStay VP ICAP Select Equity
Portfolio Initial Class 4.59
- ----------------------------------------------
MainStay VP International Equity
Portfolio Initial Class 7.83
- ----------------------------------------------
</Table>
mainstayinvestments.com M-343
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
MODERATE GROWTH ALLOCATION PORTFOLIO
(CONTINUED)
MainStay VP Large Cap Growth Portfolio
Initial Class 22.71%
- ----------------------------------------------
MainStay VP Mid Cap Core Portfolio
Initial Class 15.20
- ----------------------------------------------
MainStay VP S&P 500 Index Portfolio
Initial Class 0.05
- ----------------------------------------------
MainStay VP U.S. Small Cap Portfolio
Initial Class 9.97
- ----------------------------------------------
</Table>
(E) OTHER. Fees for a portion of the cost of legal services provided to the
Fund by the Office of the General Counsel of New York Life Investments are
charged to the Portfolios in proportion to the net assets of each respective
Portfolio. For the year ended December 31, 2009, these fees, which are included
in Professional Fees shown on the Statement of Operations, are as follows:
<Table>
Balanced Portfolio $ 3,365
- -----------------------------------------------
Bond Portfolio 17,127
- -----------------------------------------------
Cash Management Portfolio 27,356
- -----------------------------------------------
Common Stock Portfolio 15,781
- -----------------------------------------------
Conservative Allocation Portfolio 6,496
- -----------------------------------------------
Convertible Portfolio $ 8,479
- -----------------------------------------------
Floating Rate Portfolio 8,174
- -----------------------------------------------
Government Portfolio 10,366
- -----------------------------------------------
Growth Allocation Portfolio 4,597
- -----------------------------------------------
Growth Equity Portfolio 10,690
- -----------------------------------------------
High Yield Corporate Bond Portfolio 33,421
- -----------------------------------------------
ICAP Select Equity Portfolio 18,120
- -----------------------------------------------
Income Builder Portfolio 6,646
- -----------------------------------------------
International Equity Portfolio 12,150
- -----------------------------------------------
Large Cap Growth Portfolio 7,743
- -----------------------------------------------
Mid Cap Core Portfolio 6,524
- -----------------------------------------------
Moderate Allocation Portfolio 9,403
- -----------------------------------------------
Moderate Growth Allocation Portfolio 9,347
- -----------------------------------------------
S&P 500 Index Portfolio 21,430
- -----------------------------------------------
U.S. Small Cap Portfolio 1,634
- -----------------------------------------------
</Table>
NOTE 4--FEDERAL INCOME TAX:
At December 31, 2009, the components of accumulated gain (loss) on a tax basis
were as follows:
<Table>
<Caption>
ACCUMULATED OTHER UNREALIZED TOTAL
ORDINARY CAPITAL TEMPORARY APPRECIATED/ ACCUMULATED
INCOME GAIN (LOSS) DIFFERENCES (DEPRECIATION) GAIN (LOSS)
Balanced Portfolio $ 1,844,311 $ (30,624,081) $ (261,326) $ 9,156,241 $ (19,884,855)
- -----------------------------------------------------------------------------------------------------------------------
Bond Portfolio 35,618,099 1,243,857 -- 1,900,952 38,762,908
- -----------------------------------------------------------------------------------------------------------------------
Cash Management Portfolio 60,912 -- -- -- 60,912
- -----------------------------------------------------------------------------------------------------------------------
Common Stock Portfolio 9,852,615 (239,098,589) -- 21,489,848 (207,756,126)
- -----------------------------------------------------------------------------------------------------------------------
Conservative Allocation Portfolio 8,805,460 (2,215,631) (23,469,596) 9,540,706 (7,339,061)
- -----------------------------------------------------------------------------------------------------------------------
Convertible Portfolio 12,947,291 (31,362,352) (6,371) 22,373,863 3,952,431
- -----------------------------------------------------------------------------------------------------------------------
Floating Rate Portfolio 148,144 (14,874,202) (548,276) (10,798,641) (26,072,975)
- -----------------------------------------------------------------------------------------------------------------------
Government Portfolio 17,508,800 -- (256,756) 4,817,999 22,070,043
- -----------------------------------------------------------------------------------------------------------------------
Growth Allocation Portfolio 2,294,336 (4,350,103) (33,546,330) (7,133,676) (42,735,773)
- -----------------------------------------------------------------------------------------------------------------------
Growth Equity Portfolio 2,176,297 (98,500,960) -- 50,476,246 (45,848,417)
- -----------------------------------------------------------------------------------------------------------------------
High Yield Corporate Bond
Portfolio 101,581,388 (207,797,957) (4,543,383) 10,333,088 (100,426,864)
- -----------------------------------------------------------------------------------------------------------------------
ICAP Select Equity Portfolio 8,862,331 (376,195,259) (30,914,439) 99,662,159 (298,585,208)
- -----------------------------------------------------------------------------------------------------------------------
Income Builder Portfolio 8,226,260 (47,758,713) (70,693) 15,717,822 (23,885,324)
- -----------------------------------------------------------------------------------------------------------------------
International Equity Portfolio 16,566,124 (92,201,890) -- 16,958,698 (58,677,068)
- -----------------------------------------------------------------------------------------------------------------------
Large Cap Growth Portfolio -- (86,869,993) -- 61,558,814 (25,311,179)
- -----------------------------------------------------------------------------------------------------------------------
Mid Cap Core Portfolio 2,071,202 (115,219,093) -- 62,302,548 (50,845,343)
- -----------------------------------------------------------------------------------------------------------------------
Moderate Allocation Portfolio 10,264,838 (6,242,916) (40,486,485) 6,870,412 (29,594,151)
- -----------------------------------------------------------------------------------------------------------------------
Moderate Growth Allocation
Portfolio 7,632,598 (8,189,436) (55,439,211) (8,186,237) (64,182,286)
- -----------------------------------------------------------------------------------------------------------------------
S&P 500 Index Portfolio 15,836,994 (156,366,895) -- 218,799,116 78,269,215
- -----------------------------------------------------------------------------------------------------------------------
U.S. Small Cap Portfolio 67,952 (58,518,175) -- 9,137,203 (49,313,020)
- -----------------------------------------------------------------------------------------------------------------------
</Table>
M-344 MainStay VP Series Fund, Inc.
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is primarily due to wash sale loss deferrals, adjustments on real
estate investment trusts, straddle loss deferrals, partnership investments,
return of capital on investments and marked to market on foreign currency
forward contracts and futures contracts.
The other temporary differences are primarily due to post-October loss
deferrals, loss deferrals from related party transactions and interest income
written-off on defaulted securities.
The following table discloses the current year reclassifications between
accumulated undistributed net investment income (loss), accumulated net realized
gain (loss) on investments and additional paid-in-capital, arising from
permanent differences; net assets at December 31, 2009 are not affected.
<Table>
<Caption>
ACCUMULATED
ACCUMULATED UNDISTRIBUTED
UNDISTRIBUTED NET NET REALIZED ADDITIONAL
INCOME (LOSS) GAIN (LOSS) PAID-IN-CAPITAL
Balanced Portfolio $ 19,823 $ (19,823) $ --
- ------------------------------------------------------------------------
Bond Portfolio 564,131 (564,131) --
- ------------------------------------------------------------------------
Cash Management
Portfolio 60,912 (60,912) --
- ------------------------------------------------------------------------
Common Stock
Portfolio 26,873 (26,873) --
- ------------------------------------------------------------------------
Conservative
Allocation
Portfolio 480,123 (480,123) --
- ------------------------------------------------------------------------
Floating Rate
Portfolio 30,145 (30,145) --
- ------------------------------------------------------------------------
Government Portfolio 23,488 (23,488) --
- ------------------------------------------------------------------------
Growth Allocation
Portfolio (18) 18 --
- ------------------------------------------------------------------------
Growth Equity
Portfolio 139 (139) --
- ------------------------------------------------------------------------
High Yield Corporate
Bond Portfolio (429,463) 429,463 --
- ------------------------------------------------------------------------
ICAP Select Equity
Portfolio 2,814 (24,587,881) 24,585,067
- ------------------------------------------------------------------------
Income Builder
Portfolio (107,072) 107,072 --
- ------------------------------------------------------------------------
International Equity
Portfolio 5,203,983 (5,203,983) --
- ------------------------------------------------------------------------
Large Cap Growth
Portfolio 223,196 56,880,222 (57,103,418)
- ------------------------------------------------------------------------
Mid Cap Core
Portfolio 10,929 (696,350) 685,421
- ------------------------------------------------------------------------
Moderate Allocation
Portfolio 473,930 (473,930) --
- ------------------------------------------------------------------------
Moderate Growth
Allocation
Portfolio 189,848 (189,848) --
- ------------------------------------------------------------------------
S&P 500 Index
Portfolio (33,069) 33,069 --
- ------------------------------------------------------------------------
U.S. Small Cap
Portfolio 254,871 (313,040) 58,169
- ------------------------------------------------------------------------
</Table>
The reclassifications for the Portfolios are primarily due to reclassifications
of AIG Fair Fund litigation settlements, tender offers, distributions/dividends
paid, distributions of income and gain/(loss) from real estate investment
trusts, expiration of capital loss carry forward, foreign currency gain/(loss),
income distributions from underlying investments, mortgage dollar roll income,
net operating losses, other temporary book/tax differences from acquired funds,
passive foreign investment companies, paydowns and straddles.
At December 31, 2009, for federal income tax purposes, capital loss
carryforwards, as shown in the table below, were available to the extent
provided by the regulations to offset future realized gains of each respective
Portfolio through the years indicated. Accordingly, no capital gains
distributions are expected to be paid to shareholders until net gains have been
realized in excess of such amounts. Additionally, as shown in the table below,
certain Portfolios intend to elect, to the extent provided by the regulations,
to treat certain qualifying capital and currency losses that arose after October
31, 2009, as if they arose on January 1, 2010.
<Table>
<Caption>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE AMOUNTS DEFERRED
THROUGH (000'S) (000'S)
Balanced Portfolio 2016 $ 14,127
2017 16,497
- -----------------------------------------------------------------
Total $ 30,624 $ 261
- -----------------------------------------------------------------
Common Stock Portfolio 2016 $129,047 $ --
2017 110,052 --
- -----------------------------------------------------------------
Total $239,099 $ --
- -----------------------------------------------------------------
Convertible Portfolio 2016 $ 2,746
2017 28,616
- -----------------------------------------------------------------
Total $ 31,362 $ --
- -----------------------------------------------------------------
Conservative Allocation
Portfolio 2017 $ 2,216
- -----------------------------------------------------------------
Total $ 2,216 $ 283
- -----------------------------------------------------------------
Floating Rate Portfolio 2013 $ 283
2014 223
2015 529
2016 10,397
2017 3,442
- -----------------------------------------------------------------
Total $ 14,874 $ 453
- -----------------------------------------------------------------
Government Portfolio $ -- $ 257
- -----------------------------------------------------------------
Growth Allocation
Portfolio 2017 $ 4,350
- -----------------------------------------------------------------
Total $ 4,350 $ 1,479
- -----------------------------------------------------------------
Growth Equity Portfolio 2011 $ 1,045
2012 37,973
2016 32,599
2017 26,884
- -----------------------------------------------------------------
Total $ 98,501 $ --
- -----------------------------------------------------------------
High Yield Corporate Bond
Portfolio 2010 $ 11,423
2011 61,979
2016 40,705
2017 93,691
- -----------------------------------------------------------------
Total $207,798 $ 2,996
- -----------------------------------------------------------------
ICAP Select Equity
Portfolio 2015 $ 56,889
2016 120,021
2017 199,285
- -----------------------------------------------------------------
Total $376,195 $30,914
- -----------------------------------------------------------------
</Table>
mainstayinvestments.com M-345
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE AMOUNTS DEFERRED
THROUGH (000'S) (000'S)
Income Builder Portfolio 2016 $ 17,055
2017 30,704
- -----------------------------------------------------------------
Total $ 47,759 $
- -----------------------------------------------------------------
International Equity
Portfolio 2016 $ 53,102
2017 39,100
- -----------------------------------------------------------------
Total $ 92,202 $ --
- -----------------------------------------------------------------
Large Cap Growth
Portfolio 2010 37,086
2012 294
2014 941
2016 17,703
2017 30,846
- -----------------------------------------------------------------
Total $ 86,870 $ --
- -----------------------------------------------------------------
Mid Cap Core Portfolio 2016 $ 61,275
2017 53,944
- -----------------------------------------------------------------
Total $115,219 $ --
- -----------------------------------------------------------------
Moderate Allocation
Portfolio 2017 $ 6,243 $ --
- -----------------------------------------------------------------
Total $ 6,243 $ 1,092
- -----------------------------------------------------------------
Moderate Growth
Allocation Portfolio 2017 $ 8,189 --
- -----------------------------------------------------------------
Total $ 8,189 $ 4,530
- -----------------------------------------------------------------
S&P 500 Index Portfolio 2010 $ 50,908
2011 14,323
2012 1,932
2013 17,352
2014 29,971
2016 18,017
2017 23,864
- -----------------------------------------------------------------
Total $156,367 $ --
- -----------------------------------------------------------------
U.S. Small Cap Portfolio 2015 $ 27,634
2016 28,045
2017 2,839
- -----------------------------------------------------------------
Total $ 58,518 $ --
- -----------------------------------------------------------------
</Table>
The ICAP Select Equity Portfolio acquired $68,087,555 of capital losses in its
reorganization with the Mid Cap Value Portfolio (see Note 14).
The Mid Cap Core Portfolio acquired $21,162,676 of capital losses in its
reorganization with the Mid Cap Growth Portfolio (see Note 14).
The U.S. Small Cap Portfolio acquired $41,331,991 of capital losses in its
reorganization with the Small Cap Growth Portfolio (see Note 14).
The Large Cap Growth Portfolio had $56,878,956 of capital loss carryforwards
that expired during the year ended December 31, 2009.
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, 2009 and December 31, 2008, represent
tax-based distributions of ordinary income and net long-term capital gain,
respectively, except for the Portfolios for which the tax components of the
distributions are shown below.
<Table>
<Caption>
2009 2008
----------------------------------------- -----------------------------------------
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
Balanced Portfolio $ -- $ -- $ 10 $ 497,251
- -----------------------------------------------------------------------------------------------------------------------------
Bond Portfolio 33,414,806 -- 27,885,999 --
- -----------------------------------------------------------------------------------------------------------------------------
Common Stock Portfolio 11,987,895 -- 39,292,658 91,148,230
- -----------------------------------------------------------------------------------------------------------------------------
Conservative Allocation Portfolio 7,683,585 4,631,648 218,087 1,597,895
- -----------------------------------------------------------------------------------------------------------------------------
Convertible Portfolio 7,026,683 -- 17,798,694 33,895,291
- -----------------------------------------------------------------------------------------------------------------------------
Government Portfolio 12,862,318 352,389 11,632,098 --
- -----------------------------------------------------------------------------------------------------------------------------
Growth Allocation Portfolio 3,831,021 3,475,868 1,266,880 3,971,318
- -----------------------------------------------------------------------------------------------------------------------------
ICAP Select Equity Portfolio 12,710,945 -- 24,956,125 10,261,161
- -----------------------------------------------------------------------------------------------------------------------------
Income Builder Portfolio 8,870,584 -- 17,428,824 36,807,681
- -----------------------------------------------------------------------------------------------------------------------------
International Equity Portfolio 32,405,814 -- 23,340,950 52,502,264
- -----------------------------------------------------------------------------------------------------------------------------
Mid Cap Core Portfolio 1,205,626 -- 17,530,574 18,595,640
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
M-346 MainStay VP Series Fund, Inc.
<Table>
<Caption>
2009 2008
----------------------------------------- -----------------------------------------
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
Moderate Allocation Portfolio $ 9,818,148 $7,978,020 $ 1,283,679 $ 3,871,896
- -----------------------------------------------------------------------------------------------------------------------------
Moderate Growth Allocation Portfolio 9,750,883 7,943,655 2,120,324 5,870,114
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Small Cap Portfolio -- -- 14,527,491 2,673,464
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
NOTE 5--COMMITMENTS AND CONTINGENCIES:
As of December 31, 2009, the following Portfolios had unfunded loan commitments
pursuant to the following loan agreements:
FLOATING RATE PORTFOLIO
<Table>
<Caption>
UNFUNDED UNREALIZED
BORROWER COMMITMENT APPRECIATION
Aleris International, Inc.
DIP Term Loan due 2/15/10 $494,627 $12,534
- -------------------------------------------------------
Total $12,534
- -------------------------------------------------------
</Table>
HIGH YIELD CORPORATE BOND PORTFOLIO
<Table>
<Caption>
UNFUNDED UNREALIZED
BORROWER COMMITMENT DEPRECIATION
Lender Processing Services,
Inc. Revolver due 7/2/13 $1,500,00 $(135,000)
- -------------------------------------------------------
Total $(135,000)
- -------------------------------------------------------
</Table>
NOTE 6--FOREIGN CURRENCY TRANSACTIONS, FOREIGN CURRENCY FORWARD CONTRACTS AND
WRITTEN OPTIONS:
As of December 31, 2009, the following Portfolios held foreign currency:
HIGH YIELD CORPORATE BOND PORTFOLIO
<Table>
<Caption>
CURRENCY COST VALUE
Canadian Dollar CAD 410,250 USD 360,846 USD 392,264
- ---------------------------------------------------------------
Total USD360,846 USD392,264
- ---------------------------------------------------------------
</Table>
INCOME BUILDER PORTFOLIO
<Table>
<Caption>
CURRENCY COST VALUE
Australian Dollar AUD 18,720 USD 16,623 USD 16,815
- --------------------------------------------------------------------------
Canadian Dollar CAD 58,697 55,848 56,123
- --------------------------------------------------------------------------
Euro EUR 207,470 296,858 297,418
- --------------------------------------------------------------------------
Japanese Yen JPY799,986 8,862 8,590
- --------------------------------------------------------------------------
Pound Sterling GBP 55,913 89,331 90,311
- --------------------------------------------------------------------------
Singapore Dollar SGD 2,660 1,875 1,893
- --------------------------------------------------------------------------
Swiss Franc CHF 5,572 5,403 5,387
- --------------------------------------------------------------------------
Total USD 474,800 USD 476,537
- --------------------------------------------------------------------------
</Table>
INTERNATIONAL EQUITY PORTFOLIO
<Table>
<Caption>
CURRENCY COST VALUE
Australian Dollar AUD 1,100,480 USD 994,558 USD 988,506
- --------------------------------------------------------------------------------
Canadian Dollar CAD 103,405 97,768 98,872
- --------------------------------------------------------------------------------
Danish Krone DKK 1,508,369 292,529 290,582
- --------------------------------------------------------------------------------
Euro EUR 6,041,078 8,718,632 8,660,187 (a)
- --------------------------------------------------------------------------------
Hong Kong Dollar HKD 602 78 78
- --------------------------------------------------------------------------------
Japanese Yen JPY 360,148,866 3,981,512 3,866,955 (a)
- --------------------------------------------------------------------------------
Mexican Peso MXN 4,291,902 323,862 328,077
- --------------------------------------------------------------------------------
Norwegian Krone NOK 51,601 8,579 8,912
- --------------------------------------------------------------------------------
Pound Sterling GBP 1,752,737 2,838,471 2,831,022 (a)
- --------------------------------------------------------------------------------
Singapore Dollar SGD 115,265 83,494 82,048
- --------------------------------------------------------------------------------
Swedish Krona SEK 832,479 114,194 116,355
- --------------------------------------------------------------------------------
Swiss Franc CHF 4,347,708 4,204,695 4,202,918
- --------------------------------------------------------------------------------
Total USD 21,658,372 USD 21,474,512
- --------------------------------------------------------------------------------
</Table>
(a) A portion of this amount is segregated as collateral for futures contracts.
mainstayinvestments.com M-347
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of December 31, 2009, the following Portfolios held foreign currency forward
contracts:
INCOME BUILDER PORTFOLIO
<Table>
<Caption>
CONTRACT CONTRACT UNREALIZED
AMOUNT AMOUNT APPRECIATION/
COUNTERPARTY SOLD PURCHASED (DEPRECIATION)
Foreign Currency Sale
Contracts:
- ----------------------------------------------------------------------------------------------------------
Australian Dollar vs. U.S. ANZ Securities
Dollar, expiring 1/7/10 Limited (Melbourne) AUD 1,900,000 USD 1,682,640 USD(23,691)
- ----------------------------------------------------------------------------------------------------------
Chase Manhattan
Euro vs. U.S. Dollar,
expiring 1/7/10 Frankfurt EUR 25,550,000 36,671,915 44,780
- ----------------------------------------------------------------------------------------------------------
Japanese Yen vs. U.S. Sumitomo Mitsui
Dollar, expiring 1/7/10 Banking JPY 495,000,000 5,484,765 169,844
- ----------------------------------------------------------------------------------------------------------
Pound Sterling vs. U.S.
Dollar, expiring 1/7/10 JPMorgan Chase Bank GBP 5,300,000 8,541,692 (18,777)
- ----------------------------------------------------------------------------------------------------------
Net unrealized appreciation
on foreign currency
forward contracts USD 172,156
- ----------------------------------------------------------------------------------------------------------
</Table>
INTERNATIONAL EQUITY PORTFOLIO
<Table>
<Caption>
CONTRACT CONTRACT UNREALIZED
AMOUNT AMOUNT APPRECIATION/
COUNTERPARTY SOLD PURCHASED (DEPRECIATION)
Foreign Currency Sale Contracts:
- --------------------------------------------------------------------------------------------------------------------
Canadian vs. Pound Sterling, expiring
1/19/10 HSBC Bank USA CAD 3,992,500 GBP 2,433,413 USD 112,621
- --------------------------------------------------------------------------------------------------------------------
Euro vs. Australian Dollar, expiring
1/12/10 HSBC Bank USA EUR 2,073,604 AUD 3,530,000 195,988
- --------------------------------------------------------------------------------------------------------------------
Swiss Franc vs. Japanese Yen,
expiring 1/15/10 HSBC Bank USA CHF 12,800,000 JPY 1,103,552,000 (524,931)
- --------------------------------------------------------------------------------------------------------------------
Swiss Franc vs. Swedish Krona,
expiring 1/22/10 HSBC Bank USA 11,465,000 SEK 79,189,902 (15,046)
- --------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on
foreign currency forward contracts USD (231,368)
- --------------------------------------------------------------------------------------------------------------------
</Table>
During the year ended December 31, 2009, the following Portfolio had
transactions in the following written options:
INTERNATIONAL EQUITY PORTFOLIO
<Table>
<Caption>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
Options Outstanding at
December 31, 2008 -- $ --
- ----------------------------------------------------
Options--Written 5,737 531,544
- ----------------------------------------------------
Options--Canceled in Closing
Transactions (5,737) (531,544)
- ----------------------------------------------------
Options Outstanding at
December 31, 2009 -- $ --
- ----------------------------------------------------
</Table>
M-348 MainStay VP Series Fund, Inc.
NOTE 7--RESTRICTED SECURITIES:
As of December 31, 2009, the following Portfolios held restricted securities:
CONVERTIBLE PORTFOLIO
<Table>
<Caption>
DATE OF PRINCIPAL 12/31/09 PERCENT OF
ACQUISITION AMOUNT COST VALUE NET ASSETS
At Home Corp.
Convertible Bond 4.75%, due 12/31/49 5/4/01 $2,335,418 $-- $234 0.0%++
- -------------------------------------------------------------------------------------------------------------
</Table>
++ Less than one-tenth of a percent.
HIGH YIELD CORPORATE BOND PORTFOLIO
<Table>
<Caption>
PRINCIPAL
DATE(S) OF AMOUNT/ 12/31/09 PERCENT OF
ACQUISITION SHARES COST VALUE NET ASSETS
At Home Corp.
Convertible Bond 0.525%, due
12/28/18 8/31/01 $1,869,975 $ -- $ 187 0.0%++
Convertible Bond 4.75%, due 12/31/49 8/27/01 9,032,054 58,488 903 0.0++
- ------------------------------------------------------------------------------------------------------------------
QuadraMed Corp.
Convertible Preferred Stock 5.50% 6/16/04-2/1/06 278,000 6,646,200 3,762,452 0.2
- ------------------------------------------------------------------------------------------------------------------
Total $6,704,688 $3,763,542 0.2%
- ------------------------------------------------------------------------------------------------------------------
</Table>
++ Less than one-tenth of a percent.
NOTE 8--CUSTODIAN:
State Street is the custodian of the cash and the securities of the Portfolios.
Custodial fees are charged to the Portfolios based on the market value of
securities in the Portfolios and the number of certain cash transactions
incurred by the Portfolios.
NOTE 9--LINE OF CREDIT:
The Portfolios, except for the Cash Management Portfolio, and certain affiliated
funds maintain a line of credit with a syndicate of banks in order to secure a
source of funds for temporary purposes to meet unanticipated or excessive
shareholder redemption requests.
Effective September 2, 2009, the line of credit was reduced from $160,000,000 to
$125,000,000 and the commitment fee rate was increased from an annual rate of
0.08% to an annual rate of 0.10% of the average commitment amount, plus a 0.04%
up-front payment, payable regardless of usage, to The Bank of New York Mellon,
which serves as agent to the syndicate. The commitment fee and upfront payment
are allocated among the funds and the Portfolios based upon net assets and other
factors. Interest on any revolving credit loan is charged based upon the Federal
Funds Advances rate or the one month LIBOR rate, whichever is higher. There were
no borrowings made or outstanding with respect to the Portfolios on the line of
credit during the year ended December 31, 2009.
NOTE 10--PURCHASES AND SALES OF SECURITIES (IN 000S):
During the year ended December 31, 2009, purchases and sales of securities,
other than short-term securities and securities subject to repurchase
transactions, were as follows:
<Table>
<Caption>
CONSERVATIVE
COMMON ALLOCATION
BALANCED PORTFOLIO BOND PORTFOLIO STOCK PORTFOLIO PORTFOLIO
-------------------- ----------------------- -------------------- -------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ 54,459 $ 57,842 $ 552,738 $ 600,249 $ -- $ -- $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
All Others 168,304 163,429 625,576 424,473 600,101 710,841 137,948 93,343
- ---------------------------------------------------------------------------------------------------------------------------
Total $222,763 $221,271 $1,178,314 $1,024,722 $600,101 $710,841 $137,948 $93,343
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
mainstayinvestments.com M-349
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
GROWTH
CONVERTIBLE FLOATING RATE ALLOCATION
PORTFOLIO PORTFOLIO GOVERNMENT PORTFOLIO PORTFOLIO
-------------------- ---------------------- -------------------- -------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ -- $ -- $ 8,542 $ -- $521,387 $491,073 $ -- $ --
- ----------------------------------------------------------------------------------------------------------------------------
All Others 272,481 227,682 256,802 45,823 14,033 67,265 99,715 81,751
- ----------------------------------------------------------------------------------------------------------------------------
Total $272,481 $227,682 $265,344 $45,823 $535,420 $558,338 $99,715 $81,751
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
GROWTH EQUITY HIGH YIELD CORPORATE ICAP SELECT INCOME
PORTFOLIO BOND PORTFOLIO EQUITY PORTFOLIO BUILDER PORTFOLIO
-------------------- -------------------- -------------------- --------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ -- $ -- $ -- $ -- $ -- $ -- $ 89,739 $130,499
- ---------------------------------------------------------------------------------------------------------------------------
All Others 614,828 645,112 781,705 484,213 593,365 588,340 297,074 278,746
- ---------------------------------------------------------------------------------------------------------------------------
Total $614,828 $645,112 $781,705 $484,213 $593,365 $588,340 $386,813 $409,245
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INTERNATIONAL LARGE CAP MID CAP CORE MODERATE
EQUITY PORTFOLIO GROWTH PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO
-------------------- -------------------- -------------------- --------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
All Others 362,985 363,151 195,091 198,295 606,061 512,605 213,246 140,875
- ---------------------------------------------------------------------------------------------------------------------------
Total $362,985 $363,151 $195,091 $198,295 $606,061 $512,605 $213,246 $140,875
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MODERATE GROWTH S&P 500 INDEX U.S. SMALL CAP
ALLOCATION PORTFOLIO PORTFOLIO PORTFOLIO
-------------------- -------------------- --------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ -- $ -- $ -- $ -- $ -- $ --
- ---------------------------------------------------------------------------------------------------------------
All Others 193,514 157,762 124,977 154,631 131,141 124,746
- ---------------------------------------------------------------------------------------------------------------
Total $193,514 $157,762 $124,977 $154,631 $131,141 $124,746
- ---------------------------------------------------------------------------------------------------------------
</Table>
NOTE 11--CAPITAL SHARE TRANSACTIONS:
Transactions in capital shares for the year ended December 31, 2009, and the
year ended December 31, 2008, were as follows:
BALANCED PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 120,271 $ 1,005,907
Shares issued to shareholders
in reinvestment of dividends 26,133 250,434
Shares redeemed (154,843) (1,325,004)
----------------------
Net decrease (8,439) $ (68,663)
======================
Year ended December 31, 2008:
Shares sold 142,183 $ 1,370,491
Shares issued to shareholders
in reinvestment of
distributions 3,367 27,301
Shares redeemed (170,597) (1,612,493)
----------------------
Net decrease (25,047) $ (214,701)
======================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,025,223 $ 8,894,265
Shares issued to
shareholders in
reinvestment of dividends 363,369 3,468,689
Shares redeemed (2,683,660) (22,557,810)
-------------------------
Net decrease (1,295,068) $(10,194,856)
=========================
Year ended December 31,
2008:
Shares sold 972,129 $ 9,799,635
Shares issued to
shareholders in
reinvestment of
distributions 58,212 469,960
Shares redeemed (4,415,462) (42,696,187)
-------------------------
Net decrease (3,385,121) $(32,426,592)
=========================
</Table>
M-350 MainStay VP Series Fund, Inc.
BOND PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 7,707,660 $ 109,185,957
Shares issued to
shareholders in
reinvestment of dividends
and distributions 1,672,245 23,707,301
Shares redeemed (5,709,399) (79,505,662)
---------------------------
Net increase 3,670,506 $ 53,387,596
===========================
Year ended December 31,
2008:
Shares sold 7,506,622 $ 104,835,197
Shares issued to
shareholders in
reinvestment of dividends
and distributions 1,537,820 20,107,978
Shares redeemed (12,812,028) (177,917,008)
---------------------------
Net decrease (3,767,586) $ (52,973,833)
===========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 4,079,516 $ 57,555,371
Shares issued to
shareholders in
reinvestment of dividends
and distributions 688,489 9,707,505
Shares redeemed (2,202,533) (30,751,586)
-------------------------
Net increase 2,565,472 $ 36,511,290
=========================
Year ended December 31,
2008:
Shares sold 5,046,444 $ 70,776,752
Shares issued to
shareholders in
reinvestment of dividends
and distributions 597,789 7,778,021
Shares redeemed (2,432,500) (33,578,177)
-------------------------
Net increase 3,211,733 $ 44,976,596
=========================
</Table>
CASH MANAGEMENT PORTFOLIO
<Table>
<Caption>
INITIAL CLASS (AT $1 PER SHARE) SHARES
Year ended December 31, 2009:
Shares sold 495,01-
3,225
Shares issued to shareholders in
reinvestment of dividends 470,187
Shares redeemed (826,2-
46,338)
========
Net decrease (330,7-
62,926)
========
Year ended December 31, 2008:
Shares sold 906,94-
5,592
Shares issued to shareholders in 17,443-
reinvestment of dividends ,922
Shares redeemed (433,7-
91,350)
========
Net increase 490,59-
8,164
========
</Table>
COMMON STOCK PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 2,475,234 $ 28,065,456
Shares issued to
shareholders in
reinvestment of dividends 797,209 11,018,098
Shares redeemed (12,204,498) (153,415,868)
---------------------------
Net decrease (8,932,055) $(114,332,314)
===========================
Year ended December 31,
2008:
Shares sold 5,089,064 $ 96,317,385
Shares issued to
shareholders in
reinvestment of dividends
and distributions 9,653,373 120,139,727
Shares redeemed (5,747,261) (107,237,637)
---------------------------
Net increase 8,995,176 $ 109,219,475
===========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 487,862 $ 5,911,824
Shares issued to shareholders
in reinvestment of
dividends 70,461 969,797
Shares redeemed (513,743) (6,178,812)
-----------------------
Net increase 44,580 $ 702,809
=======================
Year ended December 31, 2008:
Shares sold 479,346 $ 9,204,859
Shares issued to shareholders
in reinvestment of
dividends and distributions 831,454 10,301,161
Shares redeemed (571,263) (10,731,910)
-----------------------
Net increase 739,537 $ 8,774,110
=======================
</Table>
CONSERVATIVE ALLOCATION PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 298,517 $ 2,868,578
Shares issued to shareholders
in reinvestment of dividends
and distributions 25,541 259,195
Shares redeemed (114,171) (1,118,443)
----------------------
Net increase 209,887 $ 2,009,330
======================
Year ended December 31, 2008:
Shares sold 350,430 $ 3,522,442
Shares issued to shareholders
in reinvestment of dividends
and distributions 4,201 37,109
Shares redeemed (146,558) (1,459,381)
----------------------
Net increase 208,073 $ 2,100,170
======================
</Table>
mainstayinvestments.com M-351
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 7,313,368 $ 70,435,790
Shares issued to
shareholders in
reinvestment of dividends
and distributions 1,192,424 12,056,038
Shares redeemed (3,939,578) (36,624,838)
-------------------------
Net increase 4,566,214 $ 45,866,990
=========================
Year ended December 31,
2008:
Shares sold 10,871,439 $111,416,494
Shares issued to
shareholders in
reinvestment of dividends
and distributions 201,929 1,778,873
Shares redeemed (3,876,611) (38,313,649)
-------------------------
Net increase 7,196,757 $ 74,881,718
=========================
</Table>
CONVERTIBLE PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,278,605 $ 11,107,557
Shares issued to
shareholders in
reinvestment of dividends 345,996 3,413,090
Shares redeemed (2,874,052) (24,170,551)
-------------------------
Net decrease (1,249,451) $ (9,649,904)
=========================
Year ended December 31,
2008:
Shares sold 890,495 $ 10,902,856
Shares issued to
shareholders in
reinvestment of dividends
and distributions 3,914,482 27,953,863
Shares redeemed (3,577,503) (41,038,246)
-------------------------
Net increase (decrease) 1,227,474 $ (2,181,527)
=========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 6,438,013 $ 57,050,296
Shares issued to
shareholders in
reinvestment of dividends 368,031 3,613,593
Shares redeemed (1,611,021) (13,095,614)
-------------------------
Net increase 5,195,023 $ 47,568,275
=========================
Year ended December 31,
2008:
Shares sold 3,592,705 $ 43,728,055
Shares issued to
shareholders in
reinvestment of dividends
and distributions 3,338,073 23,740,122
Shares redeemed (1,560,744) (16,326,583)
-------------------------
Net increase 5,370,034 $ 51,141,594
=========================
</Table>
FLOATING RATE PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 4,928,329 $41,070,636
Shares issued to shareholders
in reinvestment of
dividends 337,256 2,827,510
Shares redeemed (856,801) (6,601,655)
-----------------------
Net increase 4,408,784 $37,296,491
=======================
Year ended December 31, 2008:
Shares sold 2,120,141 $17,770,490
Shares issued to shareholders
in reinvestment of
dividends 366,391 3,123,347
Shares redeemed (751,455) (6,289,146)
-----------------------
Net increase 1,735,077 $14,604,691
=======================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 15,584,510 $ 129,833,558
Shares issued to
shareholders in
reinvestment of dividends 944,981 7,927,689
Shares redeemed (3,569,118) (29,451,664)
---------------------------
Net increase 12,960,373 $ 108,309,583
===========================
Year ended December 31,
2008:
Shares sold 2,382,175 $ 20,932,253
Shares issued to
shareholders in
reinvestment of dividends 1,292,339 11,121,362
Shares redeemed (11,591,286) (100,578,873)
---------------------------
Net decrease (7,916,772) $ (68,525,258)
===========================
</Table>
GOVERNMENT PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,680,434 $ 19,605,006
Shares issued to
shareholders in
reinvestment of dividends
and distributions 563,196 6,508,936
Shares redeemed (5,295,255) (61,743,296)
-------------------------
Net decrease (3,051,625) $(35,629,354)
=========================
Year ended December 31,
2008:
Shares sold 5,333,910 $ 60,163,623
Shares issued to
shareholders in
reinvestment of dividends 547,408 5,950,761
Shares redeemed (3,689,396) (41,549,483)
-------------------------
Net increase 2,191,922 $ 24,564,901
=========================
</Table>
M-352 MainStay VP Series Fund, Inc.
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 3,878,696 $ 44,967,872
Shares issued to
shareholders in
reinvestment of dividends
and distributions 583,738 6,705,771
Shares redeemed (7,032,556) (81,535,052)
-------------------------
Net decrease (2,570,122) $(29,861,409)
=========================
Year ended December 31,
2008:
Shares sold 13,021,383 $146,286,744
Shares issued to
shareholders in
reinvestment of dividends 525,481 5,681,337
Shares redeemed (3,105,358) (34,788,745)
-------------------------
Net increase 10,441,506 $117,179,336
=========================
</Table>
GROWTH ALLOCATION PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 792,472 $ 5,618,241
Shares issued to shareholders
in reinvestment of dividends
and distributions 107,908 899,341
Shares redeemed (271,372) (2,079,389)
----------------------
Net increase 629,008 $ 4,438,193
======================
Year ended December 31, 2008:
Shares sold 822,672 $ 8,092,274
Shares issued to shareholders
in reinvestment of dividends
and distributions 79,264 571,891
Shares redeemed (132,219) (1,229,771)
----------------------
Net increase 769,717 $ 7,434,394
======================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 3,963,597 $ 29,344,522
Shares issued to
shareholders in
reinvestment of dividends
and distributions 770,433 6,407,548
Shares redeemed (2,340,183) (17,374,029)
-------------------------
Net increase 2,393,847 $ 18,378,041
=========================
Year ended December 31,
2008:
Shares sold 6,032,465 $ 58,599,041
Shares issued to
shareholders in
reinvestment of dividends
and distributions 647,987 4,666,307
Shares redeemed (1,849,075) (17,348,315)
-------------------------
Net increase 4,831,377 $ 45,917,033
=========================
</Table>
GROWTH EQUITY PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 578,773 $ 11,557,350
Shares issued to
shareholders in
reinvestment of dividends 106,186 2,207,215
Shares redeemed (2,704,197) (48,831,277)
--------------------------
Net decrease (2,019,238) $ (35,066,712)
==========================
Year ended December 31,
2008:
Shares sold 636,420 $ 13,937,490
Shares issued to
shareholders in
reinvestment of dividends 163,223 2,857,612
Shares redeemed (4,617,085) (103,589,364)
--------------------------
Net decrease (3,817,442) $ (86,794,262)
==========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 174,626 $ 3,186,436
Shares issued to shareholders
in reinvestment of
dividends 5,059 104,825
Shares redeemed (359,162) (6,279,706)
-----------------------
Net decrease (179,477) $ (2,988,445)
=======================
Year ended December 31, 2008:
Shares sold 259,398 $ 5,738,859
Shares issued to shareholders
in reinvestment of
dividends 7,456 130,025
Shares redeemed (461,798) (10,405,531)
-----------------------
Net decrease (194,944) $ (4,536,647)
=======================
</Table>
HIGH YIELD CORPORATE BOND PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 9,207,646 $ 71,453,124
Shares issued to
shareholders in
reinvestment of dividends 5,548,202 47,978,241
Shares redeemed (11,871,036) (93,894,520)
---------------------------
Net increase 2,884,812 $ 25,536,845
===========================
Year ended December 31,
2008:
Shares sold 5,750,002 $ 50,614,727
Shares issued to
shareholders in
reinvestment of dividends 8,419,736 60,036,628
Shares redeemed (25,534,986) (238,410,654)
---------------------------
Net decrease (11,365,248) $(127,759,299)
===========================
</Table>
mainstayinvestments.com M-353
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 29,659,194 $240,958,150
Shares issued to
shareholders in
reinvestment of dividends 6,261,315 53,876,110
Shares redeemed (3,918,386) (31,333,717)
-------------------------
Net increase 32,002,123 $263,500,543
=========================
Year ended December 31,
2008:
Shares sold 6,092,355 $ 54,710,716
Shares issued to
shareholders in
reinvestment of dividends 6,928,207 49,201,753
Shares redeemed (9,445,468) (84,902,930)
-------------------------
Net increase 3,575,094 $ 19,009,539
=========================
</Table>
ICAP SELECT EQUITY PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 2,922,969 $ 27,167,247
Shares issued in connection
with the acquisition of VP
Mid Cap Value Portfolio 14,393,443 152,721,845
Shares issued to
shareholders in
reinvestment of dividends 850,858 8,840,272
Shares redeemed (8,241,391) (71,653,407)
-------------------------
Net increase 9,925,879 $117,075,957
=========================
Year ended December 31,
2008:
Shares sold 5,089,584 $ 58,326,226
Shares issued in connection
with the acquisition of VP
Value Portfolio 36,783,525 514,529,339
Shares issued to
shareholders in
reinvestment of dividends
and distributions 2,801,658 24,737,035
Shares redeemed (8,031,366) (92,832,130)
-------------------------
Net increase 36,643,401 $504,760,470
=========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 3,435,034 $ 31,627,208
Shares issued in connection
with the acquisition of VP
Mid Cap Value Portfolio 12,458,841 131,250,086
Shares issued to
shareholders in
reinvestment of dividends 375,115 3,870,673
Shares redeemed (2,316,826) (20,322,797)
-------------------------
Net increase 13,952,164 $146,425,170
=========================
Year ended December 31,
2008:
Shares sold 4,451,840 $ 53,399,240
Shares issued in connection
with the acquisition of VP
Value Portfolio 9,163,348 127,386,995
Shares issued to
shareholders in
reinvestment of dividends
and distributions 1,194,688 10,480,251
Shares redeemed (2,272,931) (24,016,167)
-------------------------
Net increase 12,536,945 $167,250,319
=========================
</Table>
INCOME BUILDER PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 265,008 $ 2,921,976
Shares issued to
shareholders in
reinvestment of dividends 616,870 7,478,197
Shares redeemed (3,609,490) (40,556,894)
-------------------------
Net decrease (2,727,612) $(30,156,721)
=========================
Year ended December 31,
2008:
Shares sold 311,538 $ 4,876,748
Shares issued to
shareholders in
reinvestment of dividends
and distributions 4,295,654 46,287,573
Shares redeemed (4,660,713) (72,768,401)
-------------------------
Net decrease (53,521) $(21,604,080)
=========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 393,411 $ 4,543,770
Shares issued to shareholders
in reinvestment of
dividends 115,165 1,392,387
Shares redeemed (493,112) (5,457,444)
-----------------------
Net increase 15,464 $ 478,713
=======================
Year ended December 31, 2008:
Shares sold 374,719 $ 5,977,109
Shares issued to shareholders
in reinvestment of
dividends and distributions 739,953 7,948,932
Shares redeemed (669,014) (10,476,615)
-----------------------
Net increase 445,658 $ 3,449,426
=======================
</Table>
M-354 MainStay VP Series Fund, Inc.
INTERNATIONAL EQUITY PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,631,983 $ 18,436,368
Shares issued to
shareholders in
reinvestment of dividends 1,313,622 16,571,711
Shares redeemed (4,252,920) (47,333,588)
-------------------------
Net decrease (1,307,315) $(12,325,509)
=========================
Year ended December 31,
2008:
Shares sold 2,866,018 $ 43,016,922
Shares issued to
shareholders in
reinvestment of dividends
and distributions 3,718,710 39,882,619
Shares redeemed (4,537,458) (67,531,895)
-------------------------
Net increase 2,047,270 $ 15,367,646
=========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,957,868 $ 23,111,326
Shares issued to
shareholders in
reinvestment of dividends 1,263,497 15,834,103
Shares redeemed (2,098,635) (22,903,980)
-------------------------
Net increase 1,122,730 $ 16,041,449
=========================
Year ended December 31,
2008:
Shares sold 2,229,625 $ 36,227,999
Shares issued to
shareholders in
reinvestment of dividends
and distributions 3,374,637 35,960,595
Shares redeemed (2,515,786) (35,775,207)
-------------------------
Net increase 3,088,476 $ 36,413,387
=========================
</Table>
LARGE CAP GROWTH PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 2,278,082 $ 24,344,939
Shares redeemed (4,466,773) (49,178,748)
-------------------------
Net decrease (2,188,691) $(24,833,809)
=========================
Year ended December 31,
2008:
Shares sold 6,511,383 $ 78,988,780
Shares issued to
shareholders in
reinvestment of dividends 18,035 175,654
Shares redeemed (4,140,334) (53,210,446)
-------------------------
Net increase 2,389,084 $ 25,953,988
=========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 2,679,486 $ 28,760,301
Shares redeemed (960,329) (9,521,005)
-------------------------
Net increase 1,719,157 $ 19,239,296
=========================
Year ended December 31,
2008:
Shares sold 3,538,432 $ 45,196,071
Shares redeemed (1,031,722) (11,836,410)
-------------------------
Net increase 2,506,710 $ 33,359,661
=========================
</Table>
MID CAP CORE PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 14,327,505 $122,174,244
Net asset value of shares
issued in connection with
the acquisition of
MainStay VP Mid Cap Growth
Portfolio 10,462,490 96,324,910
Shares issued to
shareholders in
reinvestment of dividends 103,720 965,845
Shares redeemed (4,104,829) (29,612,158)
-------------------------
Net increase 20,788,886 $189,852,841
=========================
Year ended December 31,
2008:
Shares sold 1,987,636 $ 23,297,309
Shares issued to
shareholders in
reinvestment of dividends
and distributions 2,747,599 19,985,378
Shares redeemed (2,993,426) (36,753,521)
-------------------------
Net increase 1,741,809 $ 6,529,166
=========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,175,441 $ 9,229,927
Net asset value of shares
issued in connection with
the acquisition of
MainStay VP Mid Cap Growth
Portfolio 14,294,324 130,824,907
Shares issued to
shareholders in
reinvestment of dividends 25,895 239,781
Shares redeemed (1,767,825) (13,598,859)
-------------------------
Net increase 13,727,835 $126,695,756
=========================
Year ended December 31,
2008:
Shares sold 1,439,258 $ 15,835,598
Shares issued to
shareholders in
reinvestment of dividends
and distributions 2,232,639 16,140,836
Shares redeemed (1,926,669) (22,902,549)
-------------------------
Net increase 1,745,228 $ 9,073,885
=========================
</Table>
mainstayinvestments.com M-355
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MODERATE ALLOCATION PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 541,309 $ 4,780,564
Shares issued to shareholders
in reinvestment of dividends
and distributions 83,941 804,876
Shares redeemed (201,270) (1,730,306)
----------------------
Net increase 423,980 $ 3,855,134
======================
Year ended December 31, 2008:
Shares sold 614,253 $ 6,186,918
Shares issued to shareholders
in reinvestment of dividends
and distributions 28,486 237,577
Shares redeemed (152,588) (1,482,782)
----------------------
Net increase 490,151 $ 4,941,713
======================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 10,566,980 $ 95,102,751
Shares issued to
shareholders in
reinvestment of dividends
and distributions 1,775,727 16,991,292
Shares redeemed (4,188,335) (36,114,355)
-------------------------
Net increase 8,154,372 $ 75,979,688
=========================
Year ended December 31,
2008:
Shares sold 13,388,030 $137,269,669
Shares issued to
shareholders in
reinvestment of dividends
and distributions 591,027 4,917,998
Shares redeemed (4,189,214) (40,184,059)
-------------------------
Net increase 9,789,843 $102,003,608
=========================
</Table>
MODERATE GROWTH ALLOCATION PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 685,166 $ 5,505,028
Shares issued to shareholders
in reinvestment of
dividends and distributions 147,589 1,320,514
Shares redeemed (351,240) (2,848,596)
-----------------------
Net increase 481,515 $ 3,976,946
=======================
Year ended December 31, 2008:
Shares sold 1,059,599 $10,309,979
Shares issued to shareholders
in reinvestment of
dividends and distributions 74,459 573,536
Shares redeemed (173,071) (1,671,819)
-----------------------
Net increase 960,987 $ 9,211,696
=======================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 7,431,564 $ 61,866,200
Shares issued to
shareholders in
reinvestment of dividends
and distributions 1,833,137 16,374,024
Shares redeemed (4,660,672) (36,561,090)
-------------------------
Net increase 4,604,029 $ 41,679,134
=========================
Year ended December 31,
2008:
Shares sold 12,136,030 $121,169,287
Shares issued to
shareholders in
reinvestment of dividends
and distributions 964,351 7,416,902
Shares redeemed (3,986,464) (37,333,231)
-------------------------
Net increase 9,113,917 $ 91,252,958
=========================
</Table>
S&P 500 INDEX PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,001,800 $ 17,597,886
Shares issued to
shareholders in
reinvestment of dividends 822,449 17,673,412
Shares redeemed (4,734,687) (89,158,779)
--------------------------
Net decrease (2,910,438) $ (53,887,481)
==========================
Year ended December 31,
2008:
Shares sold 2,158,402 $ 53,949,343
Shares issued to
shareholders in
reinvestment of dividends 1,054,817 20,326,838
Shares redeemed (6,625,700) (167,128,559)
--------------------------
Net decrease (3,412,481) $ (92,852,378)
==========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 915,221 $ 17,059,076
Shares issued to
shareholders in
reinvestment of dividends 224,749 4,818,930
Shares redeemed (1,158,370) (21,392,843)
-------------------------
Net increase (decrease) (18,400) $ 485,163
=========================
Year ended December 31,
2008:
Shares sold 896,314 $ 22,306,709
Shares issued to
shareholders in
reinvestment of dividends 260,285 5,002,202
Shares redeemed (1,402,705) (34,146,396)
-------------------------
Net decrease (246,106) $ (6,837,485)
=========================
</Table>
M-356 MainStay VP Series Fund, Inc.
U.S. SMALL CAP PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,796,632 $ 11,520,187
Net asset value of shares
issued in connection with
the acquisition of
MainStay VP Small Cap
Growth Portfolio 7,069,240 50,312,188
Shares redeemed (1,478,518) (9,896,864)
-------------------------
Net increase 7,387,354 $ 51,935,511
=========================
Year ended December 31,
2008:
Shares sold 388,741 $ 4,670,439
Shares issued to
shareholders in
reinvestment of
distributions 958,722 5,389,734
Shares redeemed (927,957) (10,387,447)
-------------------------
Net increase (decrease) 419,506 $ (327,274)
=========================
</Table>
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2009:
Shares sold 1,441,030 $ 9,127,619
Net asset value of shares
issued in connection with
the acquisition of
MainStay VP Small Cap
Growth Portfolio 8,178,980 56,833,868
Shares redeemed (996,481) (5,961,978)
-------------------------
Net increase 8,623,529 $ 59,999,509
=========================
Year ended December 31,
2008:
Shares sold 1,367,975 $ 14,732,215
Shares issued to
shareholders in
reinvestment of
distributions 2,146,391 11,811,221
Shares redeemed (1,265,718) (13,523,265)
-------------------------
Net increase 2,248,648 $ 13,020,171
=========================
</Table>
NOTE 12--MONEY MARKET GUARANTEE PROGRAM:
The following discussion pertains only to the Cash Management Portfolio.
The Portfolio participated in the U.S. Treasury Department's Temporary Money
Market Fund Guarantee Program (the "Program"). The Program sought to guarantee
the NAVs of certain shares of participating money market funds as of September
19, 2008. To the extent that funds were available in the Program, any shares
held by an investor in the Portfolios as of the close of business on September
19, 2008 were insured against loss during the duration of the Program--September
19, 2008 through September 18, 2009. The total cost of these payments equaled
approximately 0.03% of the applicable assets of the Portfolio. This expense was
borne by the Portfolio without regard to any expense limitation then in effect.
NOTE 13--OTHER MATTERS:
On May 27, 2009, New York Life Investments settled charges by the Securities and
Exchange Commission ("SEC") relating to the MainStay Equity Index Fund (the
"Equity Index Fund"), an S&P 500 index fund created in 1990 and sold through
2002, at which time it was closed to new investors and new investments. The
Equity Index Fund is a series of The MainStay Funds, a separate registrant in
the MainStay Group of Funds, and is managed by New York Life Investments. The
settlement relates to the period from March 12, 2002 through June 30, 2004,
during which time the SEC alleged that New York Life Investments failed to
provide Equity Index Fund's board with information necessary to evaluate the
cost of a guarantee provided to shareholders of the Fund, and that prospectus
and other disclosures misrepresented that there was no charge to the Fund or its
shareholders for the guarantee. New York Life Investments, without admitting or
denying the allegations, consented to the entry of and administrative cease and
desist order finding violations of Sections 15(c) and 34 (b) of the Investment
Company Act, Section 206(2) of the Investment Advisers Act, and requiring a
civil penalty of $800,000, disgorgement of $3,950,075 (which represents a
portion of its management fees relating to the Fund for the relevant period) as
well as interest of $1,350,709. These amounts, totaling approximately $6.101
million, are being distributed to shareholders who held shares of the Equity
Index Fund between March 2002 and June 2004, without any material financial
impact to New York Life Investments. The Equity Index Fund is not a portfolio of
the Fund.
NOTE 14--FUND ACQUISITIONS:
At a meeting held on June 23, 2009, the Board approved plans of reorganization
whereby ICAP Select Equity Portfolio, Mid Cap Core Portfolio, and U.S. Small Cap
Portfolio (formerly the Developing Growth Portfolio) would acquire the assets,
including the investments, and assume the liabilities of Mid Cap Value
Portfolio, Mid Cap Growth Portfolio, and Small Cap Growth Portfolio,
respectively. Each of these reorganizations was conducted in connection with a
larger initiative involving a number of funds in the MainStay Group of Funds,
including these Portfolios, that was designed to reposition, rationalize, and
streamline the MainStay Group of Funds to reduce duplication among funds and
strengthen the fund lineup overall. With respect to each reorganization, New
York Life Investments believed that shareholders of the acquired Portfolio would
benefit over the longer term from the potential for asset growth of the
acquiring Portfolio. In the case of the reorganization of the Mid Cap Value
Portfolio with and into the ICAP Select Equity Portfolio, New York Life
Investments believed that shareholders of the Mid Cap Value Portfolio also would
have an improved potential for greater investment returns over the longer term
as shareholders of the ICAP Select Equity Portfolio because of the portfolio
management
mainstayinvestments.com M-357
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
expertise of ICAP, the Subadvisor of the ICAP Select Equity Portfolio. In the
case of the reorganization of the Mid Cap Growth Portfolio with and into the Mid
Cap Core Portfolio, New York Life Investments believed that shareholders of the
Mid Cap Growth Portfolio also would benefit over the longer term from the better
coverage of the mid cap universe that consolidating to a single mid cap strategy
with a more "core," or central, investment style is expected to provide for
shareholders. In the case of the reorganization of the Small Cap Growth
Portfolio with and into the U.S. Small Cap Portfolio, shareholders of the Small
Cap Growth Portfolio were offered a materially identical investment strategy
(following the repositioning of their Portfolio) that had a lower management fee
and lower total Portfolio operating expenses. In evaluating each of these
reorganizations, the Board considered the recommendations of New York Life
Investments among several other factors.
On November 20, 2009, ICAP Select Equity Portfolio acquired the assets,
including the investments, and assumed the liabilities of Mid Cap Value
Portfolio. This transaction was completed after shareholders of Mid Cap Value
Portfolio approved the plan of reorganization on October 16, 2009. The aggregate
net assets of ICAP Select Equity Portfolio immediately before the acquisition
were $793,903,292 and the combined net assets after the acquisition were
$1,077,875,223.
The acquisition was accomplished by a tax-free exchange of the following:
<Table>
<Caption>
SHARES VALUE
Mid Cap Value Portfolio
Initial Class 19,779,053 $152,721,845
Service Class 17,024,645 131,250,086
- -------------------------------------------------------
</Table>
In exchange for the Mid Cap Value Portfolio shares and net assets, ICAP Select
Equity Portfolio issued 14,393,443 Initial Class shares and 12,458,841 Service
Class shares.
Mid Cap Value Portfolio's net assets after adjustments for any permanent book-
to-tax differences at the acquisition date were as follows, which include the
following amounts of capital stock, unrealized appreciation and accumulated net
realized loss:
<Table>
<Caption>
UNREALIZED ACCUMULATED NET UNDISTRIBUTED NET
TOTAL NET ASSETS CAPITAL STOCK APPRECIATION REALIZED LOSS INVESTMENT LOSS
Mid Cap Value Portfolio $283,971,931 $376,073,252 $825,808 $(92,887,298) $(39,831)
- ---------------------------------------------------------------------------------------------------------------------
</Table>
Assuming the acquisition had been completed on January 1, 2009, the beginning of
the annual reporting period of ICAP Select Equity Portfolio, ICAP Select Equity
Portfolio's pro forma results of operations for the year ended December 31,
2009, are as follows:
<Table>
- -------------------------------------------------
Net investment income $ 13,096,217
- -------------------------------------------------
Net gain on investments $220,720,197
- -------------------------------------------------
Net increase in net assets
resulting from operations $233,816,414
- -------------------------------------------------
</Table>
Because the combined investment portfolios have been managed as a single
integrated portfolio since the acquisition was completed, it is not practicable
to separate the amounts of revenue and earnings of the Mid Cap Value Portfolio
that have been included in ICAP Select Equity Portfolio's Statement of
Operations since December 31, 2008.
On November 20, 2009, Mid Cap Core Portfolio acquired the assets, including the
investments, and assumed the liabilities of Mid Cap Growth Portfolio. This
transaction was completed after shareholders of Mid Cap Growth Portfolio
approved the plan of reorganization on October 16, 2009. The aggregate net
assets of Mid Cap Core Portfolio immediately before the acquisition were
$341,696,417 and the combined net assets after the acquisition were
$568,846,234.
The acquisition was accomplished by a tax-free exchange of the following:
<Table>
<Caption>
SHARES VALUE
Mid Cap Growth Portfolio
Initial Class 10,145,077 $ 96,324,910
Service Class 14,054,465 130,824,907
- -------------------------------------------------------
</Table>
In exchange for the Mid Cap Growth Portfolio shares and net assets, Mid Cap Core
Portfolio issued 10,462,490 Initial Class shares and 14,294,324 Service Class
shares.
Mid Cap Growth Portfolio's net assets after adjustments for any permanent book-
to-tax differences at the acquisition date were as follows, which include the
following amounts of capital stock, unrealized appreciation and accumulated net
realized loss:
<Table>
<Caption>
UNREALIZED ACCUMULATED NET UNDISTRIBUTED NET
TOTAL NET ASSETS CAPITAL STOCK APPRECIATION REALIZED LOSS INVESTMENT INCOME
Mid Cap Growth Portfolio $227,149,817 $324,043,497 $13,585,265 $(111,234,966) $756,021
- --------------------------------------------------------------------------------------------------------------------
</Table>
M-358 MainStay VP Series Fund, Inc.
Assuming the acquisition had been completed on January 1, 2009, the beginning of
the annual reporting period of Mid Cap Core Portfolio, Mid Cap Core Portfolio's
pro forma results of operations for the year ended December 31, 2009, are as
follows:
<Table>
- --------------------------------------------------
Net investment income $ 1,792,665
- --------------------------------------------------
Net gain on investments $138,794,931
- --------------------------------------------------
Net increase in net assets resulting
from operations $140,587,596
- --------------------------------------------------
</Table>
Because the combined investment portfolios have been managed as a single
integrated portfolio since the acquisition was completed, it is not practicable
to separate the amounts of revenue and earnings of the Mid Cap Growth Portfolio
that have been included in Mid Cap Core Portfolio's Statement of Operations
since December 31, 2008.
On November 20, 2009, U.S. Small Cap Portfolio acquired the assets, including
the investments, and assumed the liabilities of Small Cap Growth Portfolio.
Shareholders of Small Cap Growth Portfolio were not asked to vote on the
reorganization, in accordance with the Articles of Incorporation and By-Laws of
the Fund, applicable state law, and the Investment Company Act and Rule 17a-8
thereunder. The aggregate net assets of U.S. Small Cap Portfolio immediately
before the acquisition were $70,834,200 and the combined net assets after the
acquisition were $177,980,256.
The acquisition was accomplished by a tax-free exchange of the following:
<Table>
<Caption>
SHARES VALUE
Small Cap Growth Portfolio
Initial Class 9,032,192 $50,312,188
Service Class 10,434,867 56,833,868
- ------------------------------------------------------
</Table>
In exchange for the Small Cap Growth Portfolio shares and net assets, U.S. Small
Cap Portfolio issued 7,069,240 Initial Class shares and 8,178,980 Service Class
shares.
Small Cap Growth Portfolio's net assets after adjustments for any permanent
book-to-tax differences at the acquisition date were as follows, which include
the following amounts of capital stock, unrealized appreciation and accumulated
net realized loss:
<Table>
<Caption>
UNREALIZED ACCUMULATED NET UNDISTRIBUTED NET
TOTAL NET ASSETS CAPITAL STOCK APPRECIATION REALIZED LOSS INVESTMENT LOSS
Small Cap Growth Portfolio $107,146,056 $147,902,456 $995,506 $(41,390,160) $(361,746)
- ---------------------------------------------------------------------------------------------------------------------
</Table>
Assuming the acquisition had been completed on January 1, 2009, the beginning of
the annual reporting period of U.S. Small Cap Portfolio, U.S. Small Cap
Portfolio's pro forma results of operations for the year ended December 31,
2009, are as follows:
<Table>
- -------------------------------------------------
Net investment loss $ (469,022)
- -------------------------------------------------
Net gain on investments $42,986,565
- -------------------------------------------------
Net increase in net assets resulting
from operations $42,517,543
- -------------------------------------------------
</Table>
Because the combined investment portfolios have been managed as a single
integrated portfolio since the acquisition was completed, it is not practicable
to separate the amounts of revenue and earnings of the Small Cap Growth
Portfolio that have been included in U.S. Small Cap Portfolio's Statement of
Operations since December 31, 2008.
NOTE 15--SUBSEQUENT EVENTS:
In connection with the preparation of the financial statements of the Fund as of
and for the year ended December 31, 2009, events and transactions subsequent to
December 31, 2009 through February 16, 2010, the date the financial statements
were issued, have been evaluated by the Fund's management for possible
adjustment and/or disclosure. No subsequent events requiring financial statement
adjustment or disclosure have been identified.
mainstayinvestments.com M-359
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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 Balanced Portfolio, Bond Portfolio,
Cash Management Portfolio, Common Stock Portfolio, Conservative Allocation
Portfolio, Convertible Portfolio, Floating Rate Portfolio, Government Portfolio,
Growth Allocation Portfolio, Growth Equity Portfolio (formerly Capital
Appreciation Portfolio), High Yield Corporate Bond Portfolio, ICAP Select Equity
Portfolio, Income Builder Portfolio (formerly Total Return Portfolio),
International Equity Portfolio, Large Cap Growth Portfolio, Mid Cap Core
Portfolio, Moderate Allocation Portfolio, Moderate Growth Allocation Portfolio,
S&P 500 Index Portfolio and U.S. Small Cap Portfolio (formerly Developing Growth
Portfolio) (constituting MainStay VP Series Fund, Inc., hereafter referred to as
the "Fund") at December 31, 2009, 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 the standards of the
Public Company Accounting Oversight Board (United States). Those standards
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, 2009 by correspondence with the
custodian, agent banks, brokers and transfer agents of the underlying funds,
provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 16, 2010
M-360 MainStay VP Series Fund, Inc.
SPECIAL MEETING OF SHAREHOLDERS
Pursuant to notice, a special meeting of shareholders of the MainStay VP Growth
Equity Portfolio (formerly MainStay VP Capital Appreciation Portfolio) was held
on October 16, 2009 at the offices of New York Life Investments in Parsippany,
New Jersey. The purpose of the meeting was to approve a Subadvisory Agreement
between New York Life Investments and Madison Square Investors LLC to appoint
Madison Square Investors LLC as the Subadvisor to the Portfolio.
No other business came before the special meeting. The proposal to appoint
Madison Square Investors LLC was approved by the shareholders of the Portfolio
as shown below:
<Table>
<Caption>
VOTES
VOTES FOR AGAINST ABSTENTIONS TOTAL
20,161,701 1,041,636 365,122 21,568,459
- ------------------------------------------------------------
</Table>
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that New York Life Investments uses
to vote proxies related to the Portfolios' securities is available without
charge, upon request, (i) by calling 800-598-2019 and (ii) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
The Fund is required to file with the SEC the proxy voting records for each
Portfolio for the 12-month period ending June 30 on Form N-PX. The most recent
Form N-PX or relevant Portfolio proxy voting record is available free of charge
upon request by calling 800-598-2019 or on the SEC's website at www.sec.gov.
SHAREHOLDER REPORTS AND QUARTERLY PORTFOLIO DISCLOSURE
Each Portfolio is required to file its complete schedule of portfolio holdings
with the SEC for its first and third fiscal quarters on Form N-Q. The
Portfolios' Forms N-Q are available without charge, on the SEC's website at
www.sec.gov or by calling New York Life Investments at 800-598-2019. You can
also obtain and review copies of a Form N-Q by (i) visiting the SEC's Public
Reference Room in Washington, DC (information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330); (ii) sending your
request and a duplicating fee to the SEC's Public Reference Room, Washington, DC
20549-0102; or (iii) sending your request electronically to publicinfo@sec.gov.
mainstayinvestments.com M-361
BOARD MEMBERS AND OFFICERS (UNAUDITED)
The Board Members oversee the MainStay Group of Funds (which is comprised of
Funds that are series of The MainStay Funds, Eclipse Funds, Eclipse Funds Inc.,
ICAP Funds, Inc. MainStay Funds Trust, and MainStay VP Series Fund, Inc.)
(collectively, the "Fund Complex"), the Manager and when applicable, the
Subadvisor(s). Each Board member serves until his or her successor is elected
and qualified or until his or her resignation, death or removal. The Retirement
Policy provides that a Board Member shall tender his or her resignation upon
reaching age 72. A Board Member reaching the age of 72 may continue for
additional one-year periods with the approval of the Board's Nominating and
Governance Committee.
Officers serve a term of one year and are elected annually by the Board Members.
The business address of each Board Member and officer listed below is 51 Madison
Avenue, New York, New York 10010.
The Statement of Additional Information applicable to the Fund includes
additional information about the Board Members and is available without charge,
upon request, by calling 800-MAINSTAY (624-6782).
<Table>
<Caption>
TERM OF
OFFICE,
POSITION(S)
HELD NUMBER OF
WITH THE FUND FUNDS IN FUND OTHER
NAME AND COMPLEX AND COMPLEX DIRECTORSHIPS
DATE OF LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
BIRTH SERVICE DURING PAST FIVE YEARS BOARD MEMBER BOARD MEMBER
------------------------------------------------------------------------------------------------
INTERESTED BOARD MEMBER*
JOHN Y. Indefinite; Member of the Board of 65 None
KIM ECLIPSE Managers, President and
9/24/60 TRUST: Chief Executive Officer
Trustee since (since 2008) of New York
2008 (2 Life Investment Management
funds); LLC and New York Life
ECLIPSE FUNDS Investment Management
INC.: Holdings LLC; Member of
Director the Board of Managers,
since 2008 MacKay Shields LLC (since
(21 funds); 2008); Chairman of the
ICAP FUNDS, Board, Institutional
INC.: Capital LLC, Madison
Director Capital LLC, McMorgan &
since 2008 (4 Company LLC, Chairman and
funds); Chief Executive Officer,
MAINSTAY NYLIFE Distributors LLC
TRUST: and Chairman of the Board
Trustee since of Managers, NYLCAP
2008 (14 Manager, LLC (since 2008);
funds); President, Prudential
MAINSTAY Retirement, a business
FUNDS TRUST: unit of Prudential
Trustee since Financial, Inc. (2002 to
April 2009 (4 2007)
funds); and
MAINSTAY VP
SERIES FUND,
INC.:
Director
since 2008
(20
portfolios).
- -------------------------------------------------------------------------------------------------
</Table>
* This Board Member is considered to be an "interested person" of the
MainStay Group of Funds within the meaning of the 1940 Act because of his
affiliation with New York Life Insurance Company. New York Life Investment
Management LLC, Madison Square Investors LLC, MacKay Shields LLC,
Institutional Capital LLC, Epoch Investment Partners, Inc., Markston
International, LLC, Winslow Capital Management, Inc., NYLIFE Securities LLC
and/or NYLIFE Distributors LLC, as described in detail above in the column
entitled "Principal Occupation(s) During the Past Five Years."
M-362 MainStay VP Series Fund, Inc.
<Table>
<Caption>
TERM OF
OFFICE,
POSITION(S)
HELD NUMBER OF
WITH THE FUND FUNDS IN FUND OTHER
NAME AND COMPLEX AND COMPLEX DIRECTORSHIPS
DATE OF LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
BIRTH SERVICE DURING PAST FIVE YEARS BOARD MEMBER BOARD MEMBER
------------------------------------------------------------------------------------------------
NON-INTERESTED BOARD MEMBERS
SUSAN B. Indefinite; President, Strategic 65 Trustee, Legg Mason
KERLEY ECLIPSE Management Advisors LLC Partners Funds, Inc.,
8/12/51 TRUST: (since 1990) since 1991 (59 portfolios)
Chairman
since 2005,
and Trustee
since 2000 (2
funds);
ECLIPSE FUNDS
INC.:
Chairman
since 2005
and Director
since 1990
(21 funds);
ICAP FUNDS,
INC.:
Chairman and
Director
since 2006 (4
funds);
MAINSTAY
TRUST:
Chairman and
Board Member
since 2007;
MAINSTAY
FUNDS TRUST:
Chairman and
Trustee since
April 2009 (4
funds); and
MAINSTAY VP
SERIES FUND,
INC.:
Chairman and
Director
since 2007
(20
portfolios).
- -------------------------------------------------------------------------------------------------
ALAN R. Indefinite; Retired; Partner, Ernst & 65 Trustee, State Farm
LATSHAW ECLIPSE Young LLP (2002 to 2003); Associates Funds Trusts
3/27/51 TRUST: Partner, Arthur Andersen since 2005 (4 portfolios);
Trustee and LLP (1989 to 2002); Trustee, State Farm Mutual
Audit Consultant to the MainStay Fund Trust since 2005 (15
Committee Funds Audit and Compliance portfolios); Trustee,
Financial Committee (2004 to 2006) State Farm Variable
Expert since Product Trust since 2005
2007 (2 (9 portfolios)
funds);
ECLIPSE FUNDS
INC.:
Director and
Audit
Committee
Financial
Expert since
2007 (21
funds);
ICAP FUNDS,
INC.:
Director and
Audit
Committee
Financial
Expert since
2007 (4
funds);
MAINSTAY
TRUST:
Trustee and
Audit
Committee
Financial
Expert since
2006 (14
funds);
MAINSTAY
FUNDS TRUST:
Trustee and
Audit
Committee
Financial
Expert since
April 2009 (4
funds); and
MAINSTAY VP
SERIES FUND,
INC.:
Director and
Audit
Committee
Financial
Expert since
2007 (20
portfolios).
- -------------------------------------------------------------------------------------------------
</Table>
mainstayinvestments.com M-363
<Table>
<Caption>
TERM OF
OFFICE,
POSITION(S)
HELD NUMBER OF
WITH THE FUND FUNDS IN FUND OTHER
NAME AND COMPLEX AND COMPLEX DIRECTORSHIPS
DATE OF LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
BIRTH SERVICE DURING PAST FIVE YEARS BOARD MEMBER BOARD MEMBER
------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
PETER Indefinite; Independent Consultant; 65 None
MEENAN ECLIPSE President and Chief
12/5/41 TRUST: Executive Officer,
Trustee since Babson--United, Inc.
2002 (2 (financial services firm)
funds); (2000 to 2004);
ECLIPSE FUNDS Independent Consultant
INC.: (1999 to 2000); Head of
Director Global Funds, Citicorp
since 2002 (1995 to 1999)
(21 funds);
ICAP FUNDS,
INC.:
Director
since 2006 (4
funds);
MAINSTAY
TRUST:
Trustee since
2007 (14
funds);
MAINSTAY
FUNDS TRUST:
Trustee since
April 2009 (4
funds); and
MAINSTAY VP
SERIES FUND,
INC.:
Director
since 2007
(20
portfolios).
- -------------------------------------------------------------------------------------------------
RICHARD Indefinite; Managing Director, ICC 65 None
H. NOLAN, ECLIPSE Capital Management;
JR. TRUST: President--Shields/Alli-
11/16/46 Trustee since ance, Alliance Capital
2007 (2 Management (1994 to 2004)
funds);
ECLIPSE FUNDS
INC.:
Director
since 2007
(21 funds);
ICAP FUNDS,
INC.:
Director
since 2007 (4
funds);
MAINSTAY
TRUST:
Trustee since
2007 (14
funds);
MAINSTAY
FUNDS TRUST:
Trustee since
April 2009 (4
funds); and
MAINSTAY VP
SERIES FUND,
INC.:
Director
since 2006
(20
portfolios).
- -------------------------------------------------------------------------------------------------
RICHARD Indefinite; Chairman and Chief 65 None
S. ECLIPSE Executive Officer Somerset
TRUTANIC TRUST: & Company (financial
2/13/52 Trustee since advisory firm) (since
2007 (2 2004); Managing Director
funds); The Carlyle Group (private
ECLIPSE FUNDS investment firm) (2002 to
INC.: 2004); Senior Managing
Director Director, Partner and
since 2007 Board Member, Groupe
(21 funds); Arnault S.A. (private
ICAP FUNDS, investment firm) (1999 to
INC.: 2002)
Director
since 2007 (4
funds);
MAINSTAY
TRUST:
Trustee since
1994 (14
funds);
MAINSTAY
FUNDS TRUST:
Trustee since
April 2009 (4
funds); and
MAINSTAY VP
SERIES FUND,
INC.:
Director
since 2007
(20
portfolios).
- -------------------------------------------------------------------------------------------------
</Table>
M-364 MainStay VP Series Fund, Inc.
<Table>
<Caption>
TERM OF
OFFICE,
POSITION(S)
HELD NUMBER OF
WITH THE FUND FUNDS IN FUND OTHER
NAME AND COMPLEX AND COMPLEX DIRECTORSHIPS
DATE OF LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
BIRTH SERVICE DURING PAST FIVE YEARS BOARD MEMBER BOARD MEMBER
------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
ROMAN L. Indefinite; V. Duane Rath Professor 65 None
WEIL ECLIPSE Emeritus of Accounting,
5/22/40 TRUST: Chicago Booth School of
Trustee and Business, University of
Audit Chicago; President, Roman
Committee L. Weil Associates, Inc.
Financial (consulting firm)
Expert since
2007 (2
funds);
ECLIPSE FUNDS
INC.:
Director and
Audit
Committee
Financial
Expert since
2007 (21
funds);
ICAP FUNDS,
INC.:
Director and
Audit
Committee
Financial
Expert since
2007 (4
funds);
MAINSTAY
TRUST:
Trustee and
Audit
Committee
Financial
Expert since
2007 (14
funds);
MAINSTAY
FUNDS TRUST:
Trustee since
April 2009 (4
funds); and
MAINSTAY VP
SERIES FUND,
INC.:
Director
since 1994
and Audit
Committee
Financial
Expert since
2003 (20
portfolios).
- -------------------------------------------------------------------------------------------------
JOHN A. Indefinite; Retired. Managing Director 65 Trustee, Direxion Funds
WEISSER ECLIPSE of Salomon Brothers, Inc. (34 portfolios) and
10/22/41 TRUST: (1971 to 1995) Direxion Insurance Trust
Trustee since (3 portfolios) since 2007;
2007 (2 Trustee, Direxion Shares
funds); ETF Trust, since 2008 (22
ECLIPSE FUNDS portfolios)
INC.:
Director
since 2007
(21 funds);
ICAP FUNDS,
INC.:
Director
since 2007 (4
funds);
MAINSTAY
TRUST:
Trustee since
2007 (14
funds);
MAINSTAY
FUNDS TRUST:
Trustee since
April 2009 (4
funds); and
MAINSTAY VP
SERIES FUND,
INC.:
Director
since 1997
(20
portfolios).
- -------------------------------------------------------------------------------------------------
</Table>
mainstayinvestments.com M-365
At a meeting of the Board Members held on June 18, 2009, the following
individuals were appointed to serve as Officers of the MainStay Group of
Funds.
<Table>
<Caption>
POSITIONS(S)
HELD
WITH THE
NAME AND FUNDS
DATE OF AND LENGTH OF PRINCIPAL OCCUPATION(S)
BIRTH SERVICE DURING PAST FIVE YEARS
--------------------------------------------------------------------------------
OFFICERS
JACK R. Treasurer and Assistant Treasurer, New York Life Investment
BENIN- Principal Management Holdings LLC (since July 2008); Managing
TENDE Financial and Director, New York Life Investment Management LLC
5/12/64 Accounting (since 2007); Treasurer and Principal Financial and
Officer since Accounting Officer, MainStay VP Series Fund, Inc. and
2007 ICAP Funds, Inc. (since 2007), and MainStay Funds
Trust (since April 2009); Vice President, Prudential
Investments (2000 to 2007); Assistant Treasurer,
JennisonDryden Family of Funds, Target Portfolio
Trust, The Prudential Series Fund and American Skandia
Trust (2006 to 2007); Treasurer and Principal
Financial Officer, The Greater China Fund (2007)
- ---------------------------------------------------------------------------------
JEFFREY Vice Managing Director, Compliance (since 2009), Director
A. President and and Associate General Counsel, New York Life
ENGELSMAN Chief Investment Management LLC (2005 to 2008); Assistant
9/28/67 Compliance Secretary, NYLIFE Distributors LLC (2006 to 2008);
Officer since Vice President and Chief Compliance Officer, ICAP
January 2009 Funds, Inc. (since January 2009), and MainStay Funds
Trust (since April 2009); Assistant Secretary, The
MainStay Funds and ICAP Funds, Inc. (2006 to 2008);
Assistant Secretary, Eclipse Funds, Eclipse Funds,
Inc., and MainStay VP Series Fund, Inc. (2005 to
2008); Director and Senior Counsel, Deutsche Asset
Management (1999 to 2005)
- ---------------------------------------------------------------------------------
STEPHEN President President and Chief Operating Officer, NYLIFE
P. FISHER since 2007 Distributors LLC (since 2008); Chairman of the Board,
2/22/59 NYLIM Service Company (since 2008); Senior Managing
Director and Chief Marketing Officer, New York Life
Investment Management LLC (since 2005); Managing
Director--Retail Marketing, New York Life Investment
Management LLC (2003 to 2005); President, MainStay VP
Series Fund, Inc. and ICAP Funds, Inc. (since 2007),
and MainStay Funds Trust (since April 2009); Managing
Director, UBS Global Asset Management (1999 to 2003)
- ---------------------------------------------------------------------------------
SCOTT T. Vice Director, New York Life Investment Management LLC
HAR- Presiden- (including predecessor advisory organizations) (since
RINGTON t -- Adminis- 2000); Executive Vice President, New York Life Trust
2/8/59 tration since Company and New York Life Trust Company, FSB (since
2005 2006); Vice President--Administration, MainStay VP
Series Fund, Inc. (since 2005), ICAP Funds, Inc.
(since 2006) and MainStay Funds Trust (since April
2009)
- ---------------------------------------------------------------------------------
MARGUER- Chief Legal Vice President, Associate General Counsel and
ITE E. H. Officer since Assistant Secretary, New York Life Insurance Company
MORRISON 2008 and (since 2008); Managing Director, Associate General
3/26/56 Secretary Counsel and Assistant Secretary, New York Life
since 2004 Investment Management LLC (since 2004); Managing
Director and Secretary, NYLIFE Distributors LLC;
Secretary, NYLIM Service Company (since 2008);
Assistant Secretary, New York Life Investment
Management Holdings LLC (since 2008); Chief Legal
Officer (since 2008) and Secretary, MainStay VP Series
Fund, Inc. (since 2004), ICAP Funds, Inc. (since 2006)
and MainStay Funds Trust (since April 2009); Chief
Legal Officer--Mutual Funds and Vice President and
Corporate Counsel, The Prudential Insurance Company of
America (2000 to 2004)
- ---------------------------------------------------------------------------------
</Table>
* The Officers listed above are considered to be "interested persons" of the
MainStay Group of Funds within the meaning of the 1940 Act because of their
affiliation with New York Life Insurance Company, New York Life Investment
Management LLC, Madison Square Investors LLC, MacKay Shields LLC,
Institutional Capital LLC, Epoch Investment Partners, Inc., Markston
International, LLC, Winslow Capital Management, Inc., NYLIFE Securities LLC
and/or NYLIFE Distributors LLC, as described in detail above in the column
captioned "Principal Occupation(s) During Past Five Years." Officers are
elected annually by the Boards to serve a one year term.
M-366 MainStay VP Series Fund, Inc.
MAINSTAY VP PORTFOLIOS
MAINSTAY VP OFFERS A WIDE RANGE OF PORTFOLIOS. THE FULL ARRAY OF MAINSTAY VP
OFFERINGS IS LISTED HERE, WITH INFORMATION ABOUT THE MANAGER, SUBADVISORS, LEGAL
COUNSEL, AND INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
EQUITY PORTFOLIOS
MAINSTAY VP COMMON STOCK PORTFOLIO
MAINSTAY VP GROWTH EQUITY PORTFOLIO
MAINSTAY VP ICAP SELECT EQUITY PORTFOLIO
MAINSTAY VP INTERNATIONAL EQUITY PORTFOLIO
MAINSTAY VP LARGE CAP GROWTH PORTFOLIO
MAINSTAY VP MID CAP CORE PORTFOLIO
MAINSTAY VP S&P 500 INDEX PORTFOLIO
MAINSTAY VP U.S. SMALL CAP PORTFOLIO
BLENDED PORTFOLIOS
MAINSTAY VP BALANCED PORTFOLIO
MAINSTAY VP CONVERTIBLE PORTFOLIO
MAINSTAY VP INCOME BUILDER PORTFOLIO
INCOME PORTFOLIOS
MAINSTAY VP BOND PORTFOLIO
MAINSTAY VP CASH MANAGEMENT PORTFOLIO
MAINSTAY VP FLOATING RATE PORTFOLIO
MAINSTAY VP GOVERNMENT PORTFOLIO
MAINSTAY VP HIGH YIELD CORPORATE BOND PORTFOLIO
ASSET ALLOCATION PORTFOLIOS
MAINSTAY VP CONSERVATIVE ALLOCATION PORTFOLIO
MAINSTAY VP GROWTH ALLOCATION PORTFOLIO
MAINSTAY VP MODERATE ALLOCATION PORTFOLIO
MAINSTAY VP MODERATE GROWTH ALLOCATION PORTFOLIO
MANAGER
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
NEW YORK, NEW YORK
SUBADVISORS
MACKAY SHIELDS LLC*
NEW YORK, NEW YORK
MADISON SQUARE INVESTORS LLC*
NEW YORK, NEW YORK
INSTITUTIONAL CAPITAL LLC*
CHICAGO, ILLINOIS
EPOCH INVESTMENT PARTNERS, INC.
NEW YORK, NEW YORK
WINSLOW CAPITAL MANAGEMENT, INC.
MINNEAPOLIS, MINNESOTA
DISTRIBUTOR
NYLIFE DISTRIBUTORS LLC
PARSIPPANY, NEW JERSEY
CUSTODIAN
STATE STREET BANK AND TRUST COMPANY
BOSTON, MASSACHUSETTS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PRICEWATERHOUSECOOPERS LLP
LEGAL COUNSEL
DECHERT LLP
Some Portfolios may not be available in all products.
* An affiliate of New York Life Investment Management LLC.
(NEW YORK LIFE INVESTMENT MANAGEMENT LLC LOGO)
<Table>
<Caption>
-----------------------------------------------------
Not FDIC insured. No bank guarantee. May lose value.
</Table>
NYLIFE DISTRIBUTORS LLC, 169 LACKAWANNA AVENUE,
PARSIPPANY, NEW JERSEY 07054
This report may be distributed only when preceded or accompanied
by a current Fund prospectus.
New York Life Investment Management LLC is the investment
manager to the MainStay VP Series Fund, Inc.
mainstayinvestments.com
(C) 2010 by NYLIFE Distributors LLC. All rights reserved.
You may obtain copies of the Prospectus and the Statement of
Additional Information free of charge, upon request, by calling
toll-free 800-598-2019 or writing to New York Life Insurance
and Annuity Corporation, 51 Madison Avenue, New York, NY 10010.
Not a part of the Annual Report
(RECYCLE LOGO) MSVP11-02/10
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the Registrant has adopted a
code of ethics (the "Code") that applies to the Registrant's principal executive
officer ("PEO") and principal financial officer ("PFO"). Schedule II of the Code
was amended during the period to designate a new Chief Compliance Officer. A
copy of the Code is filed herewith. The Registrant did not grant any waivers,
including implicit waivers, from any provisions of the Code to the PEO or PFO
during the period covered by this report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Directors has determined that the Registrant has two audit
committee financial experts serving on its Audit Committee. The Audit Committee
financial experts are Alan R. Latshaw and Roman L. Weil. Messrs. Latshaw and
Weil are "independent" within the meaning of that term under the Investment
Company Act of 1940.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The aggregate fees billed for the fiscal year ended December 31, 2009 for
professional services rendered by PricewaterhouseCoopers LLP ("PwC") for the
audit of the Registrant's annual financial statements or services that are
normally provided by PwC in connection with statutory and regulatory filings or
engagements for that fiscal year were $776,895.
The aggregate fees billed for the fiscal year ended December 31, 2008 for
professional services rendered by PwC for the audit of the Registrant's annual
financial statements or services that are normally provided by PwC in connection
with statutory and regulatory filings or engagements for that fiscal year were
$883,940.
(b) Audit-Related Fees
The aggregate fees billed for assurance and related services by PwC 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 were: (i) $0
for the fiscal year ended December 31, 2009, and (ii) $17,500 for the fiscal
year ended December 31, 2008. These audit-related services include review of
financial highlights for Registrant's registration statements and issuance of
consents to use the auditor's reports.
(c) Tax Fees
The aggregate fees billed for professional services rendered by PwC for tax
compliance, tax advice, and tax planning were: (i) $97,800 during the fiscal
year ended December 31, 2009, and (ii) $99,300 during the fiscal year ended
December 31, 2008. These services primarily included preparation of federal,
state and local income tax returns and excise tax returns, as well as services
relating to excise tax distribution requirements.
(d) All Other Fees
The aggregate fees billed for products and services provided by PwC, other than
the services reported in paragraphs (a) through (c) of this Item were: (i) $0
during the fiscal year ended December 31, 2009, and (ii) $0 during the fiscal
year ended December 31, 2008.
(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 Audit
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 Audit 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
Audit 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) Less than fifty percent of PwC's engagement to audit the Registrant's
financial statements for the most recent fiscal year was attributable to work
performed by persons other than PwC's full-time, permanent employees.
(g) All non-audit fees billed by PwC for services rendered to the Registrant for
the fiscal years ended December 31, 2009 and December 31, 2008 are disclosed in
4(b)-(d) above.
The aggregate non-audit fees billed by PwC for services rendered to the
Registrant's 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 were
approximately: (i) $0 for the fiscal year ended December 31, 2009, and (ii)
$17,500 for the fiscal year ended December 31, 2008.
(h) The Registrant's Audit Committee has determined that the non-audit services
rendered by PwC for the fiscal year ended December 31, 2009 to the Registrant's
investment adviser and any entity controlling, controlled by, or under common
control with the Registrant's investment adviser that provides ongoing services
to the Registrant that were not required to be pre-approved by the Audit
Committee because they did not relate directly to the operations and financial
reporting of the registrant were compatible with maintaining the respective
independence of PwC during the relevant time period.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The Schedule of Investments is included as part of Item 1 of this report.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not Applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Since the Registrant's last response to this Item, there have been no material
changes to the procedures by which shareholders may recommend nominees to the
Registrant's Board of Directors.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the Registrant's 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 Form N-CSR (the "Report"), the
Registrant's principal executive officer and principal 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 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 second fiscal quarter of the period covered by this
report that has materially affected, or is reasonably likely to materially
affect, the Registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(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) Certifications of principal executive officer and principal financial
officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
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/ Stephen P. Fisher
---------------------------------
Stephen P. Fisher
President and Principal Executive
Officer
Date: March 5, 2010
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/ Stephen P. Fisher
---------------------------------
Stephen P. Fisher
President and Principal Executive
Officer
Date: March 5, 2010
By: /s/ Jack R. Benintende
---------------------------------
Jack R. Benintende
Treasurer and Principal Financial
and Accounting Officer
Date: March 5, 2010
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.